LABOR LEGISLATION AND CASE LAW

M.A (H.R.M)
Semester-III, Paper-III

Lesson Writers

Dr. V. Tulasi Das Dr. M. Rama Satyanarayana

Associate Professor Faculty
Dept. of HRM Dept. of HRM
Acharaya Nagarjuna University Acharaya Nagarjuna University

Dr. Madhu Babu Kavala Dr. V. Naga Nirmala

Faculty Faculty
Dept. of HRM Dept. of HRM
Acharaya Nagarjuna University Acharaya Nagarjuna University

Lesson Writer & Editor

Dr. Nagaraju Battu
Associate Professor
Dept. of HRM, ANU

Director
Dr. NAGARAJU BATTU
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M.A. (H.R.M): Labor Legislation and Case Law

First Edition: 2023

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©Acharya Nagarjuna University

This book is exclusively prepared for the use of students of M.A (HRM) Centre
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 FOREWORD

Since its establishment in 1976, Acharya Nagarjuna University has been forging
ahead in the path of progress and dynamism, offering a variety of courses and research
contributions. I am extremely happy that by gaining ‘A’ grade from the NAAC in the year
2016, Acharya Nagarjuna University is offering educational opportunities at the UG, PG
levels apart from research degrees to students from over 443 affiliated colleges spread
over the two districts of Guntur and Prakasam.

The University has also started the Centre for Distance Education in 2003-04 with
the aim of taking higher education to the door step of all the sectors of the society. The
centre will be a great help to those who cannot join in colleges, those who cannot
afford the exorbitant fees as regular students, and even to housewives desirous of
pursuing higher studies. Acharya Nagarjuna University has started offering B.A., and
B.Com courses at the Degree level and M.A., M.Com., M.Sc., M.B.A., and L.L.M., courses
at the PG level from the academic year 2003-2004 onwards.

To facilitate easier understanding by students studying through the distance mode,

these self-instruction materials have been prepared by eminent and experienced teachers.
The lessons have been drafted with great care and expertise in the stipulated time by these
teachers. Constructive ideas and scholarly suggestions are welcome from students and
teachers involved respectively. Such ideas will be incorporated for the greater efficacy
ofthis distance mode of education. For clarification of doubts and feedback, weekly classes
and contact classes will be arranged at the UG and PG levels respectively.

It is my aim that students getting higher education through the Centre for Distance
Education should improve their qualification, have better employment opportunities
and in turn be part of country’s progress. It is my fond desire that in the years to come, the
Centre for Distance Education will go from strength to strength in the form of new
courses and by catering to larger number of people. My congratulations to all the
Directors, Academic Coordinators, Editors and Lesson- writers of the Centre who have
helped in these endeavors.

Prof. P. Raja Sekhar

Vice-Chancellor
Acharya Nagarjuna University
 M.A (H.R.M) Semester-III
Paper-III
303HM21 - LABOR LEGISLATION AND CASE LAW
SYLLABUS

UNIT – I
Industrial Jurisprudence: Concept and Objectives; Classification and Principles of labour
Legislation: Growth of Labour Legislation in India; Indian Constitution and Labour Legislation:
Labour Legislation and Judicial Activism; International Labour Organisation (ILO)
Conventions: Recommendations and their impact on Labour Legislation; Social Justice:
Concept and its Role in Labour Legislation: Natural Justice: Concept and Principles of Natural
Justice.

UNIT – II
The Factories Act, 1948 and A.P. Factories Rules 1950;
The A.P. National and Festival Holidays Act, 1974 and its Rules.
The Mines Act, 1952 and its Rules:
The Plantation Labour Act, 1951

UNIT – III
Wage legislation
The Payment of Wages Act, 1936,
The Minimum wages Act, 1948,
The Payment of Bonus Act, 1965

UNIT – IV
Social Security Legislation
The Workmen’s compensation Act, 1923,
The Employee State Insurance Act, 1948,
The Employee Provident Fund Act 1952,
The Payment of Gratuity Act 1972.

UNIT – V
The Andhra Pradesh Shops and Establishments Act, 1988;
The Employment Exchanges (Compulsory6 Notification of Vacancies) Act, 1959.
 CASE LAW
1. The Factories Act, 1948

1. Chintaman Rao Vs. State of Madhya Pradesh

Reported in A.I.R., 1958 Sc 388.
2. J.K. Industgries Limited etc., Vs. the Chief Inspector of Factories and Boilers and Others
etc., Reported in 1996 LLR 961 (SC)
3. Ardeshir H. Bhiwandiwala Vs. State of Bombay.
Reported in A.I.R. 1962 SC (29)

2. The Contract Labour (Regulations and Abolition) Act, 1970

4. Gammon India Limited Vs. Union of India 1974(11) LLJ 489 (SC)
Reported in 1974 (1), LLJ 489 (SC).
5. Hindustan Steel Works Construction Limited Vs. The Commissioner of Labour and
Others, Reported in 1996 LLR., 865 (SC).
6. Steel Authority of India Ltd., and Others Vs. National Union Water Front Workers and
Others. Reported in 2001 – II – LLJ (SC – 1087)

Prescribed Books:

1. Sharma, A.M: Industrial Jurisprudence, Himalaya Publishing House, Mumbai,2002.

2. Agarwal, S.L: Labour Relations Law in India , Macmillan company of India Ltd., New
Delhi , 1990.
3. Vaid, K.N: Labour Welfare In India , Sri Ram Centre for Industrial Relations, New Delhi
4. Government of India , Report of the Royal Commission on Labour, New Delhi .
5. Government of India Report on the National Commission on Labour, I&II, New Delhi .
6. Malik, P.L : Industrial Law, Eastern Book Company, Lucknow , 1999.
7. Vaidyanathan, N: ILO Conventions and India , Menerva Associates, Calcutta , 1975.
8. Sinha, G.P & Sinha. P.R.N: Industrial Relations and Labour Legislations, Oxford and
IBH Publishing Co., New Delhi , 1980.
9. Sharma A.M: Aspects of Labour Welfare and Social Security, Himalaya Publishing
House, Mumbai, 2002.
10. Goswamy, V.G: Labour and Industrial Relations Law, Cetnral Law Agency, Allahabad ,
2004.
11. Prabhakara Rao, D.V.R.S.R: Contract Labour: Abolition and Absorption , law Publishing
House, Allahabad .
12. Jagannadha Rao, V: Andhra Pradesh Factories Rules, 1950.
13. B.D.Singh(2007) Labour Laws for Managers Excel Books , New Delhi

JOURNALS;
1. Labour Law Reporter
2. Labour Law Journal
3. Indian Labour Year Book
4. Supreme Court of India Judgements
 CONTENTS
LESSON Page No.

1 Industrial Jurisprudence 1.1 – 1.12

2 Indian Constituion And Labor Legislation 2.1 – 2.13

3 ILO Conventions 3.1 – 3.12

4 Social Justice And Natural Justice 4.1 – 4.15

5 Factories Act 1948 5.1 – 5.21

6 The Andhra Pradesh Factories And Establishments (National, 6.1 – 6.11

Festival And Other Holidays) ACT 1974, ACT No.32 of
1974

7 Mines ACT 1952 7.1 – 7.13

8 8.1 – 8.13
Plantations Labour Act, 1951

9 Wage Legislations 9.1 – 9.18

10 Payment of Wages ACT, 1936 10.1 – 10.16

11 The Minimum Wages ACT, 1948 11.1 – 11.15

12 Payment of Bonus ACT, 1965 12.1 – 12.13

13 Workmen Compensation ACT 1923 13.1 – 13.17

14 Employee State Insurance ACT 1948 14.1 – 14.21

15 Employees Provident Fund 15.1 – 15.22

16 Payment of Gratuity ACT, 1972 16.1 – 16.13

17 AP Shops and Establishment ACT 17.1 – 17.17

18 Employment Exchange ACT 1959 18.1 – 18.07

 LESSON-1

INDUSTRIAL JURISPRUDENCE
Learning objectives

✓ To understand the evolution of Industrial Jurisprudence in India

✓ To Learn the Origin of Labor legislation
✓ To Study the Classification of Labour Legislations
✓ To Know the Principles of Labor Legislation
✓ To Outline and Principles and Growth Labor Legislations

Structure
1.1 Introduction
1.2 Second Industrial Revolution
1.1.1 Banks And Industrial Financiers
1.1.2 Communication and Banking in the Industrial Revolution
1.2 Evil Impact of Industrial Revolution of India
1.2.1 Economic Evils
1.2.2 Social evils
1.3 Labour Problems in India
1.4 Evolution of Industrial Jurisprudence in India
1.5 Development of Labour Laws
1.6 Labor Legislation
1.6.1 Industrial Revolution and the need for Labour Legislations
1.7 Origin of Labour Legislations
1.8 The Classification of Labour Legislations
1.8.1 The Regulative Labour Legislations
1.8.2 The Protective Labour Legislations
1.8.3 Wage-Related Labour Legislations
1.8.4 Social Security Labour Legislations
1.8.5 Welfare Labour Legislations
1.9 Principles of Labor Legislation
1.10 Growth of Labor Legislation
1.12 Summary
1.13 Key words
1.14 Self Assessment questions
1.15 Suggested Readings

1.1 Introduction
The twentieth century witnessed the development of Industrial Jurisprudence in the
country. The growth of industrial jurisprudence can significantly be noticed not only from the
increase in labour and industrial legislation but also from a large number of industrial law
issues decided by the SC and HC. This has directly affected a large population of the country
consisting of industrialists, workmen and their families. A constitution inspired by the vision
of social justice is committed to the cause of upliftment of labour. Well balanced industrial
development leads to increased productivity which in turn is a factor of national progress.
Labour makes a significant contribution in this respect.

The study of labour law is not confined to mastering the rules and regulations relation
Centre for Distance Education 1.2 Acharya Nagarjuna University

to the employment of the workforce. Its wings spread wider.

It has its aim on the societal impulses on, and state reactions to the complex
socioeconomic, human and political problems arising out of the constant conflicts between
different classes. The economic liberalization process started in the nineties had a definite
impact on the labour laws in the country. In this backdrop, this course is an attempt to study
the laws relating to industrial relations in the country

To cope with these problems, industrial legislations were enacted in india. To keep
pace with the changing socio-economic conditions in India, the legislature as well as the
courts had to check the unfavorable growth of the industrial legislations. Industrial legislation
finds its origin from industrial jurisprudence, which is a development of the 20th century
world. In India, industrial jurisprudence prevailed before independence, but it was in the
elementary form.

Industrial revolution was the emanating factor behind the growth of the industrial
jurisprudence Industrial Revolution

The Industrial revolution brought with it the most inhuman aspect of human life. It
saw the exploitation of a man by a man. The maximization of profit, even at the cost of the
life of the labourers, was the paramount goal of the employer. ‘Freedom of contract’ was the
evident result.
The employer was free to fire the employee, at his arbitrariness. Thus, the employees were
always at the loss. To protect the interest of the employees, the legislature and courts in India
took a giant step to give birth to the industrial jurisprudence in India through the enactments
and the later through the judgements.

The scope of industrial jurisprudence not only to covers the protection of interests of
the employees but it also aims at securing a cordial relationship between the employers and
employees is a working unit

ILO came into existence in 1919 From slave-master to earner-workers-

employees Freedom of contract Labourers problem
The industrial revolution marked a period of development in the latter half of the 18th
century that transformed largely rural, agrarian societies in Europe and America into
industrialized, urban ones.

Goods that had once been painstakingly crafted by hand started to be produced in
mass quantities by machines in factories

Fueled by the game-changing use of steam power, the Industrial Revolution began in
Britain and spread to the rest of the world, including the United States, by the 1830s and 40s
Modern historians often refer to this period as the First Industrial Revolution, to set it apart
from a second period of industrialization that took place from the late 19th to early 20th
centuries and saw rapid advances in the steel electric and automobile industries 1752-19th
century starting first industrial revolution period

1.2 Second Industrial Revolution

By the end of the 19th century, with the co-called Second Industrial Revolution
underway, the United States would also transition from a largely agrarian society to an
Industrial Jurisprudence 1.3 Labor Legislations and Law

increasingly urbanised one, with all the attendant problems. By the mid-19th century,
industrialization was well-established throughout the western part of Europe and America’s
northeastern region. By the early 20th century, the US had become the world’s leading
industrial nation.

1.2.1 Banks And Industrial Financiers

Banks and industrial financiers rose to new prominent during the period, as well as a
factory system dependent on owners and managers. A stock exchange was established in
london in the 1790s.

1.2.2 Communication and Banking in the Industrial Revolution

The latter part of the industrial Revolution also saw key advances in communication
methods, as people increasingly saw the need to communicate efficiently over long distances.
In 1837, British inventors William Cooke and Charles Wheatstone patented the first
commercial telegraph system.

Cooke and Wheatstone’s system would be used for railroad signaling, as the speed of
the new trains had created a need for more sophisticated means of communication

In 1776, Scottish social philosopher Adam Smith(1723-1790),who is regarded as the

founder of modern economics, published The Wealth of Nations.

In it, Smith promoted an economic system based on free enterprise, the private ownership of
means of production, and lack of government interference.

Though many people in Britain had begun moving to the cities from rural areas before
the Industrial Revolution, this process accelerated dramatically with industrialization, as the
rise of large factories turned small towns as the rise of cities over the span of decades. This
rapid urbanization brought significant challenger, as overcrowded cities suffered from
pollution, inadequate sanitation and a lack of clean drinking water. Meanwhile, even as
industrialization increased economic output overall and improved the standard of living for
the middle and upper classes, poor and working class people continued to struggle.

The mechanization of labor created by technological innovation handmade working in

factories increasingly tedious (and sometimes dangerous), and many workers were forced to
work along hours for pitifully low wages.

The word “luddite” refers to a person who is opposed to technological change.

The term is derived from a group of early 19th century English workers who attacked
factories and destroyed machinery as a means of protest
They were supposedly led by a man named Ned Ludd

Positive and Negatives of the Industrial Revolution are Complex

On one hand, unsafe working conditions were widespread and pollution from coal and
gas are legacies we still struggle with today. On the other, the move to cities and inventions
that made clothing, communication and transportation more affordable and accessible to the
masses changed the course of world history.

Regardless of these questions, the Industrial Revolution had a transformative

economic, social and cultural impact, and played an integral role in laying the foundation for
Centre for Distance Education 1.4 Acharya Nagarjuna University

modern society. with it the most inhuman aspect of the human life It saw the exploitation of a
man by a man The maximization of profit, even at the cost of the life of the labourers, was
paramount goal of the employer. ‘Freedom of contract’ was evident result

The employer was free to fire the employee, at his arbitrariness. Thus the employees
were always at the loss. After the IR some problems, such as working hours, wages,
unemployment, accidents, employment of women and children etc, arose. Children and
women were hired for less pay About two-third workers in some factories were
children workers were worked from 12 to 14 hours a day under terrible conditions To keep
the children awake, mill supervisors beat them They found half an hour for lunch and an hour
for dinner

1.3 Evil Impact of Industrial Revolution of India

As per the economic policy of the British government, they never wanted to make
India an industrial base, rather they wanted to make India a supplier of raw materials for their
industries. Instead of promoting industries in India, they continued to de-industrialize and
treat roughly the Indian economy. Further with the initiation of industrial revolution in
England, the British government continued its efforts to further exploit the Indian economy
As a result, in 1947, when the British left, India represented an insolvent economy, a sick
society and the present danger of the evil effects of neocolonialism However, the evil impact
of industrial revolution can be classified into social evils and economic evils.

1.3.1 Economic Evils

The artisans lost the psychological satisfaction that they derived in producing goods
themselves. In the industries, they had to produce only a part of the finished goods. The
labourers were underpaid. They could just earn from hand to mouth The wages were
sufficient to provide them with the daily bread, but at the cost of other necessities of their life
not secure The term of employment was arbitrariness The employers were free to exercise
their in discharging the labourers periodic unemployment and under-employment

1.3.2 Social evils

The overcrowded cities, due to the large-scale migration of the village population in
the cites led to the industrial slums and acute housing problems It had its adverse impact on
the health of the workers and also led to the sanitation problems in the cities The working
condition in the factories was hazardous Moreover, the long hours of duty, with no rest and
no facility of recreation disfigured the welfare of the workers. The machines were taken care
of by the factory owners, with the little regard for the safety of the workers. Workers were
exposed to serious accidents caused by the improperly managed machines in the factory.
These accidents were not taken seriously by the factory owner The victims of such accidents
did not have any right to compensation. Due to the inadequate wages, the wives and children
of the workers were exposed to the exploitation by the factory owners. They were employed
at low wages without regard to their physical conditions

1.4 Labour Problems in India

The factory owners paid their sole attention towards the maintenance of the machines
irrespective of the health and working conditions of the workers. The employers neglected
the conditions of the workers as the manual labour was abundantly available to them. The
workers were underpaid. They could not raise their voice. They were illiterate and poor, so
were ignorant of their rights. Taking the advantage of this situation, the employers dictated
Industrial Jurisprudence 1.5 Labor Legislations and Law

their own terms The government also did not interfere in the matter as it was deemed to be a
freedom of contract The situation worsened further The government could not just see it as a
neutral player and it had to interfere Moreover, some of the philanthropic agencies like the
Servants of India Society and Social Service League raised their voices against the power.

1. Later some industrial social workers also raised voice against these problems
2. Initially, they lacked in the resources and bargaining power but they were successful
in mobilizing the public voice against these problems
3. Later, the factory owners also realised the seriousness of the problem and also that a
contended worker will add to the productivity of the factory.
4. Later, the government also, could not confine itself to a neutral spectator
5. The government also realised that it was in the interest of the national economy as
well as the labourers that constitute a bulk of the population in India.
6. Thus the drive for the welfare of the labourers and for the protection of the Indian
economy compelled the government to intervene in the situation

1.5 Evolution of Industrial Jurisprudence in India

The evolution of Industrial Jurisprudence in India can be traced to the period of post
Independence. Before the Independence, the industrial jurisprudence existed in an elementary
form To protect the interest of the employees, the legislature and courts in India took a giant
step to give birth to the industrial jurisprudence in India through the enactments and the later
through the judgments. The scope of industrial jurisprudence not only covers the protection
of interests of the employees but it also aims at securing a cordial relationship between the
employers and employees in a working unit.

Further, a non-cooperation movement saw its birth that is also called swadeshi
movement, which emphasized on the use of indigenous goods and boycott of the foreign
goods. The history of labor legislation in India is interwoven with the history of british
colonialism. The industrial/labor legislations enacted by the British were primarily intended
to protect the interests of the British employers. Considerations of British political economy
were naturally paramount in shaping some of these early laws.

1.6 Development of Labour Laws

Labor law arose due to the demands of workers for better conditions, the right to
organize, and the simultaneous demands of the employers to restrict the powers of workers in
many organizations and to keep labor costs low Industrial law distinguishes itself from other
branches of law

It is the body of legal enactment and judicial principles which deals with employment
and non-employment, wages, working conditions, industrial relations, social securities and
labour welfare of employees.

It is in effect a state intervention to put restrictions on employers on one hand and

workmen on the other hand to prevent exploitation to attain industrial peace.
Industrial legislation aims at protecting the workers from exploitation and strengthen the
values of industrial relations

The main concept of industrial legislation is to fasten together both labour and capital
in order to create an atmosphere in which they are indivisible whole in the production.
Peaceful industrial atmosphere is the objective of all the legislations through which the
Centre for Distance Education 1.6 Acharya Nagarjuna University

interest of the employer and the employees are protected

The legislation provides an effective tool to settle industrial disputes and tries to
provide a safe and healthy industrial atmosphere. It also aims at extending more and more
welfare activities and providing social securities.

The ultimate aim is to obtain proper growth of industries. With the development of
industries two distinct class, size workman and employed are emerging

The self employed independent person is the thing of the part So labour is sold and
purchased on a massive scale. This is required because they have to purchase commodities
for their livelihood from the sale of their labour. Everyone has to live in the new industrial
culture.

Almost every nation including India is not free from the evils of industrialization like
poverty, low standard of living drinking, gambling, immoral traffic, growing slums, etc The
workers are exposed to industrial accidents and industrial sickness. It is also a great concern
for the society as a whole, and government in particular, the workers have to adjust with this
industrial atmosphere and industrial discipline along with the new surroundings.

The rule and regulations bring about certain amount of compulsion for the curtailment
of the freedom they were enjoying as free citizens

The ordinary civil laws cannot deal with the problems of industrial workers.
Therefore, there is a need for separate industrial legislation to regulate the matters connected
with the industry. Ist is to achieve certain specific objectives relating to industrial activities.
The large industries have several types of machines and workers are exposed to risk
of accidents. It is necessary to protect their interest at the time of distress with suitable
legislations

It has been widely accepted that labour legislation should be based on social justice
and humanitarian aspects. The legislation cannot ignore the local problems and conditions.

ILO has laid down certain principles to be adopted in industrial and labour
legislations social justice, social welfare, national economy and international standard are the
guiding principles of labour legislations.

World today has democratic set up in almost all the countries. People expect that it is
the duty of government to protect the weak from exploitation by strong and powerful The
industrial worker being economically weak, will be exploited by the powerful employers if
protection is not provided to them.

State is the supreme authority for law making protection of people through suitable
legislations should be the objective of all progressive governments. So the state should
encourage the industrial workers and employers to settle their problems with mutual
consultation and equal partners in production

In industrial conflicts the introduction of collective bargaining, mediation, arbitration,

adjudication etc, are the outcome of the thinking of the modern governments to maintain
industrial peace by mutual consultation
Industrial Jurisprudence 1.7 Labor Legislations and Law

The government by various legislations has provided support to both workers and
employers in their efforts to maintain industrial peace and dignity of labour

The right of social security, and other measures that can improve the status of the workers
reflects in several labour legislations

It was always a concern for all those who were interested in labour matters about the
plights of unorganized workers, children and women

The wanted to prevent exploitation of these worker by introducing protective

legislations to control and fix minimum wages and working conditions

The principle of labour legislation is always based on the past and present
circumstances and the requirement of the society

This standard fixed by legislations will change only after passing future legislation on
the same subject. Labour laws have to be implemented in it true spirit and discretion cannot
be exercised by the law administrators

When it is necessary to adopt flexible laws the power to change such laws are always
vested with the government. In doing so, the Act itself gives power to the government to
change the provisions in accordance with future requirements

1.7 Labor Legislation

Law comes into existence to cater to the growing needs of society, which may be
caused by technological, economic, political, social changes. Law is a dynamic concept. Law
is like a citadel which requires regular repairs, revamping and replacement. "Life and Laws
have moved together in history and it must do in future". It is in this perspective that the
Labour Legislations have to be studied

1.7.1 Industrial Revolution and the need for Labor Legislations

Society evolves institutions to abhor vacuum created by changes. Industrial
Revolution is a epoch-making event, which completely changes the lifestyles of society from
agricultural and pastoral to industrial and materialistic one. The industrial society brought
about, in its wake, excessive exploitation of the working classes by the employer who took
advantage of the individual dispensability of the worker and wanted maximum profit on his
investment. The golden rule of capitalism that "Risk and Right" go together provided them
with prerogatives to "hire and fire".

The other legal concepts which were then available were those of Master and Servant
and carrot and stick etc. The principle of common law was in operation. The law of contract
used to govern the relation between worker and the employer in which individual contact was
struck, the terns of contract were usually verbal and mostly used in cases of breaches, leading
to prosecution and imprisonment of workers. Labor and Migration Act was another
legislation which gave rise to the "Indentured labour system". Anti-Combination legislations
were in vague treating 'combination' of workers as act of criminal conspiracy. Longer hours
of work, abysmally low wages, no safety and welfare provisions, and no insurance - the
exploitation at large. State was adopting the policy of Laissez-faire (let not interfere) and
employers abused workers, taking advantage of the situation.
Centre for Distance Education 1.8 Acharya Nagarjuna University

Every society on its onwards march revises, reviews, refurbishes and reinvents its
legal concept and civilized ways of living. The changes brought about by the industrial
revolution created some gaps and it became the responsibility of the society to fill-up those
gaps. Society went for certain social devices to take care of the gaps, which are known as
labor legislation.

The labour legislations are the products of Industrial Revolution and they have come
into being to take care of the aberrations created by it. They are different from common
legislations, because they come to alleviate special disorders created by specific
circumstances. Therefore, they are specific and not general in orientation, philosophy and
concept.

1.8 Origin Of Labour Legislations

The origin of labor legislation is the history of continuous and relentless struggle for
emancipation of working class from cloches of aggressive capitalism. The struggle was
between two unequal’s. The contract between capital and labor could never be struck on
equitable terms. The social scientists interpreted this struggle in different ways. The point,
however, was to change it. The change contemplated was one of transforming a slave into
partner and thereby bridle the power of capital to impose its own terms on the workmen.

Various factors helped this process to take place. The struggle was not easy.
Numerous forces, directly and indirectly, hastened the pace facilitating the passing of labour
friendly legislation.

1.9 The Classification of Labour Legislations

On the basis of specific objectives which it has sought to achieve, the labour legislations can
be classified into following categories-
(1) Regulative
(2) Protective
(3) Wage-Related
(4) Social Security
(5) Welfare both inside and outside the workplace

1.9.1 The Regulative Labour Legislations

The main objective of the regulative legislations is to regulate the relations between
employees and employers and to provide for methods and manners of settling industrial
disputes. Such laws also regulate the relationship between the workers and their trade unions,
the rights and obligations of the organizations of employers and workers as well as their
mutual relationships.

1. The Trade Unions Act, 1926

2. The Industrial Disputes Act,1947
3. Industrial Relations Legislations enacted by states of Maharashtra, MP, Gujarat, UP
etc.
4. Industrial Employment (Standing Orders) Act, 1946.

1.9.2 The Protective Labour Legislations

Under this category come those legislations whose primary purpose is to protect
labour standards and improve the working conditions. Laws laying down the minimum
Industrial Jurisprudence 1.9 Labor Legislations and Law

labour standards in the areas of hours of work, supply, employment of children and women
etc. in the factories, mines, plantations, transport, shops and other establishments are included
in this category. Some of these are the following :

1. Factories Act,1948
2. The Mines Act,1952
3. The Plantations Labour Act,1951
4. The Motor Transport Workers Act,1961
5. The Shops and Establishments Acts
6. Beedi and Cigar Workers Act 1966

1.9.3 Wage-Related Labour Legislations

Legislations laying down the methods and manner of wage payment as well as the
minimum wages come under this category:

1. The Payment of Wages Act,1936

2. The Minimum Wages Act, 1948
3. The Payment of Bonus Act, 1965
4. The Equal Remuneration Act, 1976

1.9.4 Social Security Labour Legislations

They cover those legislations which intend to provide to the workmen social security
benefits under certain contingencies of life and work.

1. The Workmen's Compensation Act, 1923

2. The Employees' State Insurance Act, 1948
3. The Coal Mines PF Act, 1948.
4. The Employees PF and Miscellaneous Provisions Act, 1952
5. The Maternity Benefit Act, 1961
6. Payment of Gratuity Act, 1972

Chapter V A of the Industrial Disputes Act 1947 is also, in a manner of speaking, of the
character of social security in so far as its provides for payment or lay-off, retrenchment and
closure compensation.

1.9.5 Welfare Labour Legislations

Legislations coming under this category aim at promoting the general welfare of the
workers and improve their living conditions. Though, in a sense all labotar-laws can be said
to be promoting the welfare of the workers and improving their living conditions and though
many of the protective labour laws also contain chapters on labour welfare, the laws coming
under this category have the specific aim of providing for the improvements in living
conditions of workers. They also carry the term "Welfare" in their titles.

1. Limestone and Dolomite Mines Labour Welfare Fund Act, 1972.

2. The Mica Mines Welfare Fund Act, 1946
3. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour
4. Welfare Fund Act, 1976
5. The Cine Workers Welfare Fund Act, 1981.
6. In addition, some state governments have also enacted legislations for welfare funds.
7. Beedi Workers Welfare Fund Act, 1976
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1.10 Principles of Labor Legislation

1. An harmonious environment Cooperation between the worker and the
employers Rational remuneration and Appropriate working conditioning
2. From the modest to the welfare state, the socio-economic conditions have faced
drastic changes, not only in India but also across the world
3. The principal concern of the pre-independence industrial jurisprudence was the
inadequacy of the working condition of the workers at the factories
4. There was hardly any deal with social justice to the working class. It was only after
the commencement of our constitution, that the adequate provisions for social justice
to the workers were inserted. Before independence, India was not only a great
agricultural country, but also a manufacturing country.
5. But the British government, as a matter of their policies always intended to discourage
the Indian industries
6. This led to a widespread nationalism in India which laid emphasis on the boycott of
the foreign goods.

1.11 Growth of Labor Legislation

Labor legislation regards individuals as workers, whereas the general legislation
regards him a citizen. The principles governing labour legislations are more influenced by the
postulates of social justice than general justice. Workers are the weaker class of industrial
society and have suffered long at the hands of employers. Therefore, these sets of legislations
go out of way in protecting workers and securing justice to them. The influences of
'discriminative justice' and ' distributive justice' can be clearly seen over them. All the labour
legislations are heavily skewed towards labour and they are specifically designed like that.

Labour legislation seeks to deal with problems arising out of occupational status of
the individual. Consequently, such problems as hours of work, wages, working conditions,
trade unions, industrial disputes etc. come to be the main, subject matter of labour
legislations. Thus, the behaviour of the individual or his groups is the function of labour
legislation as of any other legislation. But under labor legislation, the individual is affected in
the capacity of a worker or an employer. Therefore, the persons who are neither the
employers nor the workers are least affected directly by labor legislation. To make the point
clear, a few example are necessary. A legislation regarding working conditions such as the
factory legislation or laws regarding payment of wages or compensation for work injury or
employment of women or children impinge upon the individuals as workers and the
employers. Orr the contrary, a law regarding ownership of property or a law relating to the
marriage or sales tax affects him as a citizen.

Individuals have different roles to perform and different laws are designed for
regulating the different roles. It is the role-relation that determines whether a particular
legislation falls under the category of labour legislation, social legislation or general
legislation. All these legislations try to meet the specific objectives of their respective target
groups- that is
(a) to provide subsistence,
(b) to aim at abundance,
(c) to encourage equality, and
(d) to maintain security.
Industrial Jurisprudence 1.11 Labor Legislations and Law

As labour legislations are to regulate the conditions of labour, in the industrial milieu,
it is required to be adjusted as per the changing requirements of industry. This has to be done
more frequently than the general legislation where changes are not that swift. Unless ' labour
legislations are subjected to frequent revision and not left to continue as they are, they
become obsolete and irrelevant. The Indian Labour Legislations are the best example. Most
of them have become outdated as the required revisions have not been affected and gaps have
been created between the expectation of industrial so the institution of labour legislation.

1.12 Objectives of The Labour Legislations

Labour legislation in India has sought to achieve the following objectives:
(1) Establishment of justice- Social, Political and Economic
(2) Provision of opportunities to all workers, irrespective of caste, creed, religion,
beliefs, for the development of their personality.
(3) Protection of weaker section in the community.
(4) Maintenance of Industrial Peace.
(5) Creation of conditions for economic growth.
(6) Protection and improvement of labour standards.
(7) Protect workers from exploitation:
(8) Guarantee right of workmen to combine and form association or unions.
(9) Ensure right of workmen to bargain collectively for the betterment of their
service conditions
(10) Make state interfere as protector of social well being than to remain an onlooker.
(11) Ensure human rights and human dignity.

Proper regulation of employee-employer relationship is a condition precedent for

planned, progressive and purposeful development of any society. The objectives of labour
legislation is a developing concept and require ceaseless efforts to achieve them on
continuous basis.

1.13 Summary
The evolution of labour jurisprudence is the culmination of the incessant struggle
waged by the workers', all over the world for just and better conditions of work as well as
security of their hub. Labour legislations have now acquired the status of a separate branch of
jurisprudence because of its special features and changing juristic ideas. Therefore, an idea
about its concept, origin, development, objectives and classification etc. will be of immense
help to comprehend its principles.

1.14 Key words

Labor laws- Labour law arose due to the demands of workers for better conditions, the right
to organize, and the simultaneous demands of the employers to restrict the powers of workers
in many organisations and to keep labour costs low Industrial law distinguishes itself from
other branches of law.

Labor Legislation- Law comes into existence to cater to the growing needs of society, which
may be caused by technological, economic, political, social changes. Law is a dynamic
concept. Law is like a citadel which requires regular repairs, revamping and replacement.
"Life and Laws have moved together in history and it must do in future".

The Regulative Labor Legislations- The main objective of the regulative legislations is to
regulate the relations between employees and employers and to provide for methods and
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manners of settling industrial disputes.

The Protective Labor Legislations- Under this category come those legislations whose
primary purpose is to protect labor standards and improve the working conditions. Laws
laying down the minimum labor standards in the areas of hours of work, supply, employment
of children and women etc. in the factories, mines, plantations, transport, shops and other
establishments are included in this category

Welfare Labor Legislations- Legislations coming under this category aim at promoting the
general welfare of the workers and improve their living conditions. Though, in a sense all
labor-laws can be said to be promoting the welfare of the workers and improving their living_
conditions and though many of the protective labour laws also contain chapters on labour
welfare

1.15 Self Assessment Questions

1. Briefly discuss the Evolution of Industrial Jurisprudence in India ?
2. Examine the Origin of Labor Legislation in India?
3. Describe the Classification of Labor Legislation in India?
4. Explain the Principles and Growth of Labor Legislations in India?

1.16 Suggested Readings

1. Labor Laws (2011) I.A Saiyed Himalaya Publishing House
2.Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
3. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
4. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers
5. Commercial Labour Laws Edition 2022 Commercial Law Publishers House.
6.Srivastava S.C(2022) Industrial Relations and Labour Laws
Sixth Edition Vikas Publishing House Pvt Ltd
7.Padhi P.K (2021) Labour and Industrial Laws Forth Edition PHI Learning
8.V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House
9.Commercial’s New Labour& Industrial Code along with Draft Rules 3rd Edition 2022
10. Hardbound, Justice M.R. Mallik (2021) Labour & Industrial Law Manual Professional
Book Publishers

Dr.Nagaraju Battu
 LESSON -2

INDIAN CONSTITUION AND LABOR LEGISLATION

Learning Objectives
✓ To Study the Fundamental Rights and Labour Legislations
✓ To Know the Directive Principles and State Policy and Labour Legislations
✓ To focus on the Judicial Wisdom Of The Courts And Labour Legislations
✓ To elaborate the Judicial activism or Judicial Intervention

Structure
2.1 Introduction
2.2 Fundamental Rights and Labour Legislations
2.3 Directive Principles and State Policy and Labor Legislations
2.4 Judicial Wisdom Of The Courts And Labour Legislations
2.5 Judicial Activism
2.6 Judicial activism or Judicial Intervention
2.7 Summary
2.8 Key words
2.9 Self assessment questions
2.10 Suggested Readings

2.1 Introduction
To be called civilized, a society has to concede to its working class the right to live
with dignity and security as human beings. This thinking fords expression in the Universal
Declaration of Human Rights, the preambles of League of Nations and United Nations,
Organisation. The aspiration of the working class finds expressions, at national level, in the
Constitution of the nation.

After India became independent, it adopted a Constitution on the 26 Apr 1949. Indian
Constitution is a unique basic national document. Besides providing basic principles for
governance, it presents the aspirations of the Weaker Section of Society, specially the
working classes. It is also a strange phenomenon of history that national freedom struggle and
struggle of working class emancipation coincided and our leaders fought for both- the
betterment of worker's lots and India's freedom. During this period, they made some promises
and pledges to the working classes, which were to be redeemed after independence. The
redemption of all those promises and pledges get expression in our Constitution.

Constitution is the supreme law of a nation and all legislations draw their inspiration
from it. Constitution is a document of social revolution casting an obligation on every
instrumentality including the judiciary to transform the status quo ante into a new human
order in which justice, social, economic and political will inform all institutions of national
life and there should be equality of status and opportunity to all. The trinity of Indian
Constitution, the Preamble, the Fundamental Rights and the Directive Principles of State
Policy, embody the fundamental principles, which provide guide to all legislations, including
the labour legislations. This constitutional trinity assures its citizens to provide "Socialistic
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Pattern of Society" and create "Welfare State" and all legislations, specially the Labour
legislations, are deeply influenced by them.

The importance and utility of the Preamble has been pointed out in several decisions
of our Supreme Court. Though, by itself, it is not enforceable by the court of law, the
preamble states the objectives which the Constitution seeks to establish and promote.

The Preamble to our Constitution serves two purposes.

(1). It indicates the source from which it derives its authority
(2). It starts the objectives which it seeks to establish and promote.

The preamble states to secure to all its citizens:

1. Justice, Social, Economic and Political
2. Liberty of thought, expression, belief, faith and worship
3. Equality of status and of opportunity

Fraternity, assuring the dignity of the individual and unity and integrity of nation These
principles enshrined in Preamble of our constitution provide the bedrock for framing all
labour and social. legislation and their progressive and creative interpretation in favour of
working classes. These principles run through our labour legislations like invisible golden
threads and provide them strength and stamina to meet the aspirations of working classes;
whether it is protective legislations, social security legislations, welfare legislations or even
industrial relations legislations, they all heavily lean towards working classes due to the
philosophy provided in the preamble.

2.2 Fundamental Rights and Labour Legislations

Part III (Article 14 to 35) deal with Fundamental Rights. They can be grouped together under
as
(1). The Right to Equality (Article 14 to 18)
(2). The Right to Freedom (Article 19 to 22)
(3). The Right against Exploitation (Article 23 to 24)
(4). The Right to Freedom of Religion (Article 25 to 30)
(5). Cultural and Educational Rights (Articles 29-30)
(6). The Right to Constitutional Remedies (Articles 32 to 35)

Since the Fundamental Rights have been guaranteed to protect the public from
repressive state actions, judicial decisions tend to expand the scope of word 'State' as defined
by Article 12 of the Constitution. A liberal interpretation is made of the words "other
authorities" so as to include any instrumentality or agency of the Government whether an
individual or a corporation like Life Insurance Corporation (Som Prakash Rakhi vs. Union of
India-SC 1981) or society like the Indian Statistical Institute registered under the Societies
Registration Act, 1960,or a company like Steel Authority of India. All have to fulfil the tests
laid down by the court in their dealings with their employees (Ajay Hasia vs.Kahlid Mujid-
SC 1981).

Fundamental Rights are subject to reasonable restrictions. Therefore, Article 14,

dealing with the right to equality and equal protection of law is subject to reasonable
classification as absolute equality is impossibility. In Charanjit Lal Choudhary vs. Union of
India-SC 1951, it is observed "The guarantee... forbids class Iegislation but does not forbid
classification which rests upon reasonable grounds of distinction". Classification can be on
Indian Constitution and Labor Legislations 2.3 Labor Legislations and Law

the basis of age, sex (provisions under Factories Act,1948, Sections 26,27 etc. for children
and women), nature of trade profession or occupation framing rules for recruitment or
promotions of public servants to secure efficiency (Gangaram vs. Union of India-SC. 1970),
fixing of different minimum wages for different industries (Chandra Boarding vs. State of
Mysore-SC. 1970). To be valid, the classification must be operational and not arbitrary. In the
case, Bharatiya Dak Tar Mazdoor Munch vs. Union .of India, SC 1987, it was held that
Classification of employees of P&T deptt. into regular employees and casual employees for
the purpose of paying the latter less than minimum payable to regular employees is not
tenable and violative of Article 14 and 16 of Constitution. It also amounts to exploitation of
labour and is opposed to clause (2) of Article 38 which provides that the State in particular
strive, to"minimise inequality in income".

Article 16 (1) and (2) of the Constitution guarantees equality of opportunity to all the
citizens in matter of appointment to any office or any other employment under the State.
Clauses (3), (4) &(5) lay down, by way exceptions, reasonable classification and provisions
for backwards and for religious institutions.

Article 19 in its various sub clauses provide Article 19 in its various sub clauses
provides, inter alia, freedom of association; freedom to carry on trade or business and
freedom of speech, which are relevant to labour legislation.

Article 21 proclaims that "no person shall be deprived of his life or personal liberty
except according to procedures established by law". With passage of time, and compelling
social needs, however, the courts have given a very liberal and wide interpretation of the
terms "life" or "Personal Liberty". In Bandhua Mukti Morcha vs. union of India-SC 1984, it
was held that Article 21 assures a citizen the right to live with human dignity free from
exploitation. The Govt. is bound to ensure observance of social welfare and labour laws
enacted to secure for workmen a life compatible with human dignity. Again in Ogla Tellis12-
Dec-06 vs. Bombay Municipal Corporations - S.C. 1985, this was affirmed.

Article 23 and 24 guarantee the right against exploitation. Clause(1) of Article 23,
prohibits traffic in human beings; and any form of forced labour and makes them punishable
offence. In People's Union for Democratic Rights vs. Union of India Sc. 1983, it was held
that labour or services for a remuneration less than a minimum wages amounts to "forced
labour". In this case, a letter written to Justice Bhagwati regarding the working conditions of
construction workers engaged in building structures connected with Asian Games was
entertained as Writ Petition, setting aside the technicalities of locus - standi and other
procedures. The court held that when judicial redressal is sought for legal injury suffered by a
person or persons who by reason of poverty, disability or socially or economically
disadvantaged position are unable to approach the court and the attention of the court is
drawn to such legal injury by a member of public, even by a letter, the same will be
entertained by the court as a writ petition to bring justice within the reach of the poor masses.

In Bandhua Mukti Morcha vs. Union of India (SC 1984) S.C. held that Government
was bound to ensure observance of social welfare and labour laws enacted to secure to
workmen a life of basic human dignity. So also, Neerja Choudhary vs. State of MP SC -
1984, held that wherever it is found that any workman is forced to provide labour for no
remuneration or nominal remuneration, the presumption would be that he is a bonded labour,
unless the employer or the state government proves otherwise. Similarly, the Court said that
the plainest requirement of Article 21 and 23 is that bonded labour not only be identified and
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redressed but also suitably rehabilitated.

Article 24 of the Constituion prohibits the employment of children below the age of
14 years in factories, mines or any other hazardous work. The idea is to protect the health and
well being of children. However, the article does not prohibit the employment of children in
easy and less strenuous work.

Articles 32 to 35 guarantee the right to constitutional remedies, as right without a

remedy is a meaningless formality. It is the remedy which makes the right real. In view of
this, the S.C. has evolved the innovative strategy by encouraging Public Interest Litigation
aimed at providing easy access to justice to the poor and weaker sections of Indian Society
(generally labourers) and giving a powerful tool to public sprited individuals and social
action groups to combat exploitation and injustice. In the cases like People's Union for
Democratic Rights, Bandhua Mukti Morcha etc., the S.C. departed from traditional principles
of locus standi to entertain even the letter by a member of public as writ petition to give relief
to poor and illiterate workmen.

2.3 Directive Principles and State Policy and Labour Legislations

Articles 36 to 51 form Part IV of the Constitution and they deal with the goal of
economic democracy the socio-political content of political freedom and the concept of
Welfare State. Though earlier decisions of the Supreme Court paid scant attention to the
Directives on the ground that they are not enforceable in law courts, Iater decisions, specially
from Keshavanand Bharati case, onwards, the following propositions have come before the
courts for consideration.

(1). There is no disharmony between Directive Principles and Fundamental Rights. They
supplement each other.
(2). Even Fundamental Rights can not be ensured unless Directive Principles are
implemented.
(3). Parliament is competent to amend or abrogate any Fundamental Right to enable state to
implement Directives.

In Minerva Mills vs. Union of India, it was held that Directive Principles and
Fundamental Rights should be harmonised without considering Directives as inferior and
subservient to Fundamental Rights. Similarly a law which is inconsistent with
Directives should be regarded as unreasonable while any action taken to give effect to any of
the Directives should be regarded .as reasonable (Kasturi vs. State of J . & K. - S.C. 1992).
Against this back drop, some of the Directives which are the backbone of labour
jurisprudence, may be examined.

Article 38 – (a) directs the state to promote welfare of the people by securing and
protecting a social order in which justice social, economic and political, shall inform all the
institutions of national life.
(b) directs that State shall, in particular, strive to minimise inequality in income and
endeavour to eliminate inequality in status, facilities and opportunities amongst individuals as
well as groups of people in different areas and vocations.

Articles 39 - declares that the state shall, in particular, direct its policy towards
securing that citizens, men and women equally, have the right to an adequate means of
livelihood. that the ownership and the control of the material resources of the community are
Indian Constitution and Labor Legislations 2.5 Labor Legislations and Law

so distributed as to best subserve the common good. that the operation of the economic
system does not result in concentration of wealth and means of production to the common
detriment. that there is equal pay for equal work for both men and women. the health and
strength of the workers, men and women and the tender age of the children not abused and
that the citizens are not forced by economic necessity to enter the avocations unsuited to their
health and strength. the children are given opportunities and facilities to develop in a healthy
manner and in condition of freedom and dignity and are protected against exploitation against
moral and material abandonment.

Article 41 - directs that the State shall within the limit of its economic capacity and
development make effective provision for securing right to work, to education, and to public
assistance in case of unemployment old age, sickness and disablement and in other cases of
undeserved want.
Article 42 - directs the state to make provision for securing just and humane conditions of
work and for maternity relief.

Article 43 - directs that the state shall endeavour to secure, by suitable legislation or
economic organisation or in any other way to all workers, agricultural, industrial or other
living wage, conditions of work ensuring a decent. standard of life and full enjoyment of
leisure and social and cultural opportunities and, in particular, the state shall endeavour to
promote cottage industries on an individual or cooperative basis in rural areas.

Certainly these Articles envisage labour legislation as reasonable restrictions upon

certain fundamental rights, ,specially freedom of business. Thus an employer must pay
minimum bonus even during a year of loss. - (Jalan Trading vs. Aney SC 1979).

Article 43A - inserted in Constitution (42nd Amendment) directs that the state shall
take steps, by suitable legislations, or in any other way, to secure the participation of workers
in management of undertakings, establishments or other organizations engaged in any
industry. This would mean that workers would no longer be hired labourers, but partners,
(Hindustan Tin Works vs. Employers - SC 1979, Gujarat Steel Tubes vs. Mazdoor Sabha -
SC 1980) interested in the success of the enterprise and would have share in the profits.

All these are fine. But while inserting Article 5IA - Fundamental Duties, no mention
was made of their duty nor even moral obligation to refrain from slowing down, striking etc.
without observing legal formalities.

2.4 Judicial Wisdom Of The Courts And Labour Legislations

It is interesting to note the judicial wisdom displayed by Indian Courts in making a
harmonious construction of Fundamental Rights and Directive Principles is simply unique.
This has helped the courts to uphold legislation aimed at social justice on the ground that
such a legislation was in line with Directive Principles which are reasonable restrictions on
certain fundamental rights. Thus such legislation would be in public interest. In this matter of
relative importance of the Fundamental Rights and

Directive Principles there has been one important controversy between legislature and
judiciary. This was in regard to property as fundamental right which appeared to clash with
social justice as prescribed in Directive Principles. The controversy finally got resolved in the
Constitutional amendment-(44th) which deleted ownership of property from Fundamental
Rights and made it a legal right.
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A number of leading cases covering various aspects of labour laws ranging from the
validity of minimum wages to public interest Iitigation, clearly show that the courts always
considered the economic uplift of workers as something vital for the progress of the country.
The Courts have been firm in ensuring that there is no violation of labour laws enacted for the
benefits of the working classes. While deciding cases involving industrial disputes, the courts
have always had in mind the Constitutional directives and have treated them as reasonable
restrictions on Fundamental Rights. In fact, the concept of reasonable restrictions runs like a
golden thread through the entire fabric of Constituion and amply reflected in labour
legislations. Labour jurisprudence related to adjudication proceedings has been put on firm
footing in the last five decades. Since the welfare of the workers is the primary concern of
especially Part IV of the Constitution, industrial adjudication has always kept the needs of
social justice in mind. Every department of labour jurisprudence . has thus been inspired and
guided by the provisions of the Constitution of India, especially those contained in Part IV.

The right to just and humane conditions of work also contain provisions for medical
care and the safety of the workers together with other essential physical well-being, even
leisure. In many pronouncements, (Manohar Lal vs. State of Punjab – SC 1961 and many
others) the courts recognise the right to appropriate leisure time through well regulated and
limited hours of work, rest intervals during working hours, weekly holidays, earned leave and
other leaves with wages.
To ensure and to regulate all these rights, proper labour legislations are required. It should be
noted that the norms and the standards prescribed in the various enactments are the minimum.
It is open to the employers and the workers to negotiate or the industrial courts to adjudicate
improvements, wherever required. Whether it is bonded labour, child labour, sweated labour,
contract labour or sexual harassment of female employers, courts have intervened going out
of way and directed the executive and legislature to make suitable arrangements for their
safety, security and welfare. In Air India Case SC 1997, Courts have gone beyond legislation
and recommended the absorption of contract labour with the permanent establishment. In
Vishakha vs. State of Rajasthan SC 1997 has recommended steps for prevention of sexual
harassment to working women and directed establishments to follow certain ground rules.

In Indian conditons, unless the right to job-security is given to the workers, the right
to just and humane conditions of work would prove futile, as an unscrupulous employer may
force workers to abandon certain of their rights for fear of losing their jobs. Indian laws make
it impossible for an employer to terminate the service of a workman whenever he so pleases.
An employer can no longer wrongfully dismiss a workman and pay only monetary
compensation without the liability of reinstatement. To-day, judicial proceedings can compel
the employer to reinstate a workman, even if an employer does not wish to do that. Through
various judgements, (for example Bharat Bank Ltd. Delhi vs, their employees - SC - 1950)
the court made the significant statement that the industrial tribunal "has not merely to
interpret or give effect to the contractual rights and obligations by the parties" but can create
new rights and obligations between them that are necessary for maintaining industrial peace.

2.5 Judicial Activism

Judicial activism happens when the courts have power to review the State action.
Article 13 read with Articles 32 and 226 of the Indian Constitution gives the power of judicial
review to the higher judiciary to declare, any legislative, executive or administrative action,
void if it is in contravention with the Constitution. The power of judicial review is a basic
structure of the Indian Constitution.
Indian Constitution and Labor Legislations 2.7 Labor Legislations and Law

Article 32 of the Indian Constitution gives right to every individual to move directly
to the Supreme Court of India for the enforcement of his or her fundamental right. Article 32
confers power on the Supreme Court to issue any order or writ for the enforcement of any of
the fundamental rights. The Supreme Court in Fertilizer Corporation Kamgar Union v. Union
Of India held that the power of the Supreme Court under Article 32 is an integral part of the
basic structure of the Indian Constitution “because it is meaningless to confer fundamental
rights without providing an effective remedy for their enforcement, if and when they are
violated.” It cannot be suspended even during emergency. An appropriate writ/order under
Article 32 for the enforcement of Articles 17, 23 and 24 can be passed against a private
individual also.

Increasingly, the Supreme Court has interpreted Article 32 in a very liberal manner in
many cases in order to enforce fundamental rights even against the private entities
performing public functions.

Article 226 of the Indian Constitution gives power to the High Courts to issue any
appropriate order or writ for the enforcement of fundamental right and other legal rights. In
this context, the jurisdiction of High Court under Article 226 seems wider than the
jurisdiction of Supreme Court under Article 32. Both Articles 32 and 226 are basic structure
of the Indian Constitution. Article 227 further gives power of supervisory control to the High
Court over the subordinate courts, special courts and tribunals.

Furthermore, the Supreme Court has power to grant special leave to appeal from any
judgment, decree, determination, sentence or order in any cause or matter passed by any court
or tribunal under Article 136 of the Indian Constitution confers special power on. The
Supreme Court exercises its special power in those cases where gross injustice happens or
substantial question of law is involved.

Power under Article 136 is discretionary one and can be exercised to decide the case
on justice, equity and good conscience. However it should be used with proper care and
caution. In Pritam Singh v. The State, the Supreme Court said that wide discretionary power
under Article 136 should be exercised sparingly and in exceptional cases only. In Tirupati
Balaji Developers Pvt. Ltd. v. State of Bihar, the Supreme Court said that Article 136 does
not confer a right of appeal on a party but vests a vast discretion in the Supreme Court meant
to be exercised on the considerations of justice, call of duty and eradicating injustice.

Again, curative petition has been invented by the higher judiciary in order to prevent
abuse of process or to cure gross miscarriage of justice. It is also maintainable in case of
violation of the principles of natural justice. The apex court in Rupa Hura judgment in 2002
said that the Bench considering curative petitions should have the three top judges of the
Supreme Court. One of the most important constitutional provisions giving extraordinary
power to the Supreme Court is

Article 142 of the Indian Constitution. This provision empowers the Supreme Court to
pass suitable decree or order for doing complete justice in any pending matter before it.
Despite the fact that the law-making power in India lies primarily with the Parliament only,
the Supreme Court is able to legislate under Article 142 of the Indian Constitution. This
provision is responsible for the judicial legislation in India. However, the judicial legislation
is being done only when there is vacuum in law on the concerned subject tmatter. The
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directions or rules issued by the Supreme Court under Article 142 would remain into force
until the Parliament makes proper legislation on the subject matter. It means that the court
understands the fact that appropriate law-making body is the Parliament only. For Parliament
has more resources the Supreme Court to pass suitable legislation on the subject-matter

In Vishaka v. State of Rajasthan, the Supreme Court held that in the “absence of
enacted law to provide for the effective enforcement of the basic human right of gender
equality and guarantee against sexual harassment and abuse, more particularly against sexual
harassment at work places, we lay down the guidelines and norms specified hereinafter for
due observance at all workplaces or other institutions, until a legislation is enacted for the
purpose. This is done in exercise of
the power available under Article 32 of the Constitution for enforcement of the fundamental
rights and it is further emphasized that this would be treated as the law declared by this Court
under Article 141 of the Constitution

Considering the importance of Article 32 read with Article 142, it becomes necessary
for the judiciary that it should perform its constitutional obligation where there is no
legislation on the certain field and implement the rule of law.10 Again, the Supreme Court in
Kalyan Chandra Sarkar v. Rajesh Ranjan, acknowledged the importance of Article 142 of the
Indian Constitution and said that the court has power under Article 142 to issue directions
and guidelines for implementing and protecting the fundamental rights in the absence of any
enactment. The court reiterated that any such direction, filling up the vacuum of legislation, is
the law of the land. However, the Parliament has power to replace such directions e.g. the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013 replaced the Vishakha Guidelines for prevention of sexual harassment issued by the
Hon’ble Supreme Court of India in the year of 1997.

Judicial activism and shift from locus standi to public interest litigation Access to
justice is a fundamental aspect of rule of law. If the justice is not accessible to all,
establishment of the rule of law is not possible. The individuals fail to reach justice system
due to various reasons including lack of basic necessities, illiteracy, poverty, discrimination,
privacy, poor infrastructure of the justice system, etc.

The Supreme Court of India has recognised in many landmark judgments that access
to justice is a fundamental right. Indian Judiciary has played an active role in ensuring access
to justice for the indigent persons, members belonging to socially and educationally
backward classes, victims of human trafficking or victims of beggar, transgender, etc. Since
Independence, the Courts in India have been adopting innovative ways for redressing the
grievances of the disadvantaged persons. In many cases, the Supreme Court exercised its
epistolary jurisdiction13 and took Suo motto actions on mere postal letters disclosing the
human rights violations in society. Human rights violations, which published in the
newspapers, were taken into judicial consideration. The court entertains the petitions which
are being filed by the public spirited persons in the public interest. By doing so, the superior
courts have liberated themselves from the shackles of the principle of locus standi and given
the birth to the Public interest litigation in India.

The shift from locus standi to public interest litigation made the judicial process
“more participatory and democratic.”S.P. Sathe says: “The traditional paradigm of judicial
process meant for private law adjudication had to be replaced by a new paradigm that was
polycentric and even legislative. While under the traditional paradigm, a judicial decision was
Indian Constitution and Labor Legislations 2.9 Labor Legislations and Law

binding on the parties (res judicata) and was binding in persona, the judicial decision under
public interest litigation bound not only the parties to the litigation but all those similarly
situated.” The Supreme Court in People’s Union for Democratic Rights v. Union of India16
held that public interest litigation is different from the traditional adversarial justice system.
The court said that public interest litigation is intended to promote public interest. Public
interest litigation has been invented to bring justice to poor and socially or economically
disadvantaged sections of the society. The violations of constitutional or legal rights of such
large number of persons should not go unnoticed. In Fertilizer Corporation Kamgar Union v.
Union of India, the court held that public interest litigation is part of the participative justice.

Furthermore, the Supreme Court in Bandhua Mukti Morcha v. Union of India has
justified the public interest litigation on the basis of “vast areas in our population of illiteracy
and poverty, of social and economic backwardness, and of an insufficient awareness and
appreciation of individual and collective rights”. The Supreme Court of India in Sheela Barse
v. Union of India said: “The compulsions for the judicial innovation of the technique of a
public interest action is the constitutional promise of a social and economic transformation to
usher-in an egalitarian social-order and a welfare-State”. While passing any order under
public interest litigation, the intention of the court is to enforce constitution and rule of law in
the society.

One of the landmark cases relating to the public interest litigation was Hussainara
Khatoon (I) v. State of Bihar. A series of articles exposing the plight of under trial prisoners
in the State of Bihar was published in a prominent newspaper. Many of the under trial
prisoners had already served the maximum sentence without even being charged for the
offence. A writ petition drawing the Court’s attention to the issue was filed by an advocate.
While accepting it as public interest involved, the Supreme Court held that right to speedy
trial is a fundamental right under Article 21 of the Indian Constitution. The court directed the
State to provide free legal facilities to the under trials so that they could get bail or final
release.

In another case of Sheela Barse v. State of Maharashtra, a letter alleging custodial

violence of women prisoners in jail was addressed to the Supreme Court. The letter was
written by a journalist who had interviewed some women prisoners in jail. Treating the letter
as a writ petition, the Supreme Court took cognizance and issued directions to the concerned
authority. Similarly, epistolary jurisdiction was exercised by the Supreme Court in Sunil
Batra v. Delhi Administration when a prisoner’s letter was treated as writ petition. The
prisoner alleged in the
letter that Head Warder brutally assaulted another prisoner. The Court said that the
technicalities cannot stop the court from protecting the civil liberties of the individuals. In
Municipal Council, Ratlam v. Vardichand, the Court admitted the writ petition filed by a
group of citizens who sought directions against the local Municipal Council for removal of
open drains.

The Court said that if the “centre of gravity of justice is to shift as indeed the
Preamble to the Constitution mandates, from the traditional individualism of locus standi to
the community orientation of public interest litigation, the court must consider the issues as
there is need to focus on the ordinary men.”

Similarly, a petition seeking court’s directions for protecting the lives of the people
who made use of the water flowing in the river Ganga, was accepted as public interest
Centre for Distance Education 2.10 Acharya Nagarjuna University

litigation by the Supreme Court of India in the case of M.C Mehta v. Union of India. In this
case, the court directed the local bodies to take effective measures to prevent pollution of the
water in the river Ganga.

In Parmanand Katara v. Union of India, a writ petition seeking court’s directions, in

order to provide immediate medical treatment to the persons injured in road or other
accidents without going through the technicalities of the criminal procedure, was filed by an
advocate. The Supreme Court accepted the application of the advocate and directed the
medical establishments accordingly. Another good example of public interest litigation is S.P.
Gupta v. Union of India.

In this case, the court recognized the locus standi of bar associations to file writs by
way of public interest litigation. It was said that questioning the executive’s policy of
arbitrarily transferring High Court judges is in the public interest. Explaining the significance
of public interest litigation, the court observed that: “It must now be regarded as well-settled
law where a person who has suffered a legal wrong or a legal injury or whose legal right or
legally protected interest is violated, is unable to approach the court on account of some
disability or it is not practicable for him to move the court for some other sufficient reasons,
such as his socially or economically disadvantaged position, some other person can invoke
the assistance of the court for the purpose of providing judicial redress to the person wronged
or injured, so that the legal wrong or injury caused to such person does not go un-redressed
and justice is done to him.”
However, the public interest litigation should not be abused by anyone.It cannot be allowed
to be used for creating nuisance or for obstructing administration of justice.

Judicial activism and fundamental rights jurisprudence In India, the judiciary has
developed the fundamental rights jurisprudence while giving the liberal interpretation to the
‘right to life and personal liberty’. In its landmark judgments, the Supreme Court recognized
prisoners’ rights including access to court and legal facilities, right to meet his or her family
relatives and friends, freedom of speech and expression, right to compensation,34 mental
privacy, etc.

The judiciary in India is again responsible for the fundamental right to live in healthy
environment, implementing Precautionary and Polluter Principles as basic features of the
sustainable development, the application of doctrine of public trust for the protection and
preservation of natural resources, etc.

The Supreme Court recognized the fundamental right to education to children. In

Bandhua Mukti Morcha v. Union of India, the Supreme Court held that right to education is
implicit in and flows from the right to life guaranteed under Article 21. The Hon’ble Supreme
Court of India in Mohini Jain v. State of Karnataka40 said that the cumulative effect of
Articles 21, 38, Articles 39 (a) and (b), 41 and 45 bind the State to provide education to all of
its citizens.41 The Supreme Court declared that the right to education flows directly from
right to life. The right to life under Article 21 and the dignity of an individual cannot be
assured unless it is accompanied by the right to education.

Finally, the Court announced that the State Government is under an obligation to
make endeavor to provide educational facilities at all levels to its citizens. The Constitutional
validity of right to education was again discussed by the Supreme Court in J.P. Unnikrishnan
v. State of A.P. The Supreme Court held that the right to education under Article 21 must be
Indian Constitution and Labor Legislations 2.11 Labor Legislations and Law

read with the directive principles in Part IV of the Indian Constitution. The Court said that
right to education means: “
(a) every child/citizen of this country has a right to free education until he completes the age
of fourteen years and
(b) after a child/citizen completes the age of 14 years, his right to education is circumscribed
by the limits of the economic capacity of the State and its developments.”

By the Constitution (Eighty-sixth Amendment) Act of 2002, three new provisions i.e.,
Article 21A, new Article 45 and 51-A(k) were inserted into the Indian Constitution.
Currently, Right of Children to Free and Compulsory Education Act, 2009 enforces
fundamental right to education in India.

Due to judicial intervention only, the government was directed to rehabilitate the
children of prostitutes.45 It was ordered that the children of prostitutes should not be allowed
to live with their mothers in the undesirable surroundings of prostitute homes. They require
accommodation and rehabilitation in reformatory homes. Increasingly, the Supreme Court of
India in Vishal Jeet v. Union of India, again issued directions to the government to
rehabilitate such children.In Bachpan Bachao Andolan v. Union of India, the Supreme Court
directed the government to prohibit the employment of children in circuses in order to
implement the fundamental right to education. The government was ordered to raid in theses
circuses to free children. The court directed the government to provide shelter and
rehabilitation to all rescued children at care and protective homes until they attain the age of
18 years.

2.6 Judicial activism or Judicial Intervention

At many places, the Parliament has accused the judiciary on the ground of judicial
intervention. Parliament has said that the judiciary overreaches its constitutional power.

In Prakash Singh v. Union of India,48 the petitioners sought directions against the
Union of India and State Governments to constitute various Commissions and Boards laying
down the
policies and ensuring that police perform their duties and functions free from any pressure
and also for separation of investigation work from that of law and order.

Similarly, in Vineet Narain v. Union of India, the Supreme Court invoked Articles 32
and 142 of the Indian Constitution and issued directions to the government in order to bring
transparency and accountability in the Central Bureau of Investigation (CBI). On May 11,
2016, the Hon’ble Supreme Court of India in Swaraj Abhiyan-(I) v. Union of India & Ors.,
directed the Ministry of Agriculture in the Union of India to update and revise the Drought
Management Manual. The apex court also directed the Union government to set up a
National Disaster Mitigation Fund within three months.

Nevertheless, Finance Minister, Arun Jaitley expressed the difficulty to create a third
fund outside the National Disaster Response Fund and the State Disaster Response Fund,
keeping in view that the Appropriation Bill is being passed. He also raised concern about
India’s budget-making being subject to judicial review.

Recently, on 16 October 2015 the Constitution Bench of Supreme Court in Supreme

Court Advocates-on-Record-Association v. Union of India, in a majority of 4:1 declared the
National Judicial Appointments Commission (NJAC) Act and the Constitutional Amendment
Centre for Distance Education 2.12 Acharya Nagarjuna University

unconstitutional as violating judicial independence.

The Court said that the existing collegium system relating to appointment and transfer
of judges would again become “operative.” Justice Khehar said that the absolute
independence of judiciary, from other organs of governance, protects the rights of the people.

The Supreme Court’s rulings on National Eligibility-cum-Entrance Test (NEET) i.e.,

single test for admissions in medical courses, reformation in Board for the Control of Cricket
in India (BCCI), filling up the judges’ post, etc. have been considered as the judicial
intervention by the government.

There is no dispute on the fact that the judiciary should also self regulate itself. It
should also put some restraints on its powers, whenever it is required. The Supreme Court in
Divisional Manager, Aravali Golf Course v. Chander Has observed that: “Judges must know
their limits and must not try to run the Government.

They must have modesty and humility, and not behave like Emperors. There is broad
separation of powers under the Constitution and each organ of the State-the legislature, the
executive and the judiciary- must have respect for the others and must not encroach into each
other’s domains.”

However, it is submitted that NJAC decision should not be read as if the judiciary has
crossed its Laxmanrekha. The Supreme Court is also welcoming the full-fledged debate on
the existing collegiums system and wants it to be updated. Indian Constitution has given the
special status to the Supreme Court and High Courts. Indian higher judiciary has power to
review any legislative, executive and administrative action of the State. The Higher Courts in
India entertain the petitions which are being filed by the public spirited persons in the public
interest. Again, one should not forget that it is all because of the judicial activism that the
indigent persons, members belonging to socially and educationally backward classes, victims
of human trafficking or victims of beggar, transgender, etc. have somehow been provided
with the adequate legal assistance in the process of the enforcement of their fundamental
rights. Furthermore, Article 142 of the Indian Constitution gives the Supreme Court a power
to pass suitable decree or order for doing complete justice in any pending matter

2.7 Summary
It is noteworthy that to safeguard their basic rights workers' all over the world had to
struggle continuously and thus bring about a new turn to judicial thinking. Today, the rights
of labour are set forth in the positive laws of almost every nation, yet much is still to be done
so that in practice, all workers can enjoy the fruits of their labour and live a decent and
dignified life in civilised Society. As we have seen, the Constitution of India has gone out of
way to protect rights and privileges of workers, ensuring a decent and dignified life. But a lot
is required to be done for the workers of unorganised sector - bonded labour, child labour,
female labour,labourers of sweated industry and agricultural labour. The Constitution has the
inherent potency, but its instrumentalities have not come-up to the expectation and have
failed the Constitution. Therefore, even after five decades of independence, laborer’s in these
areas are exploited, despite best intentions of the Constitution. Much is required to be done.
Indian Constitution and Labor Legislations 2.13 Labor Legislations and Law

2.8 Key words

Judicial activism- happens when the courts have power to review the State action. Article 13
read with Articles 32 and 226 of the Indian Constitution gives the power of judicial review to
the higher judiciary to declare, any legislative, executive or administrative action, void if it is
in contravention with the Constitution

Constitution- Constitution is the supreme law of a nation and all legislations draw their
inspiration from it. Constitution is a document of social revolution casting an obligation on
every instrumentality including the judiciary to transform the status quo ante into a new
human order in which justice, social, economic and political will inform all institutions of
national life and there should be equality of status and opportunity to all

Fundamental Rights - Fundamental Rights have been guaranteed to protect the public from
repressive state actions, judicial decisions tend to expand the scope of word 'State' as defined
by Article 12 of the Constitution.

Judicial wisdom- It is interesting to note the judicial wisdom displayed by Indian Courts in
making a harmonious construction of Fundamental Rights and Directive Principles is simply
unique. This has helped the courts to uphold legislation aimed at social justice on the ground
that such a legislation was in line with Directive Principles which are reasonable restrictions
on certain fundamental rights.

2.9 Self Assessment Questions

1. Briefly discuss the Fundamental Rights and Labour Legislations
2. Examine the Fundamental Rights and Labour Legislations
3. Elaborate Directive Principles and State Policy and Labour Legislations
4. Describe the Judicial Wisdom Of The Courts And Labour Legislations
5. Differentiate between the Judicial activism or Judicial Intervention

2.10 Suggested Readings

1. Labor Laws (2011) I.A Saiyed Himalaya Publishing House
2.Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
3. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
4. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers
5. Commercial Labour Laws Edition 2022 Commercial Law Publishers House.
6.SrivastavaS.C(2022) Industrial Relations and Labour Laws
Sixth Edition Vikas Publishing House Pvt Ltd
7.Padhi P.K (2021) Labour and Industrial Laws Forth Edition PHI Learning
8.V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House
9.Commercial’s New Labour& Industrial Code along with Draft Rules 3rd Edition 2022
10. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers
 LESSON -3

ILO CONVENTIONS
Learning Objectives

✓ To study ILO Conventions

✓ To Know the Recommendations of ILO
✓ To Outline International Labor conference

Structure
3.1 Introduction
3.2 ILO conventions
3.3 Fundamental Conventions
3.3.1 Freedom of Association and Protection of the Right to Organise Convention,
1948 (No. 87)
3.3.2 Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
3.3.3 Forced Labour Convention, 1930 (No. 29)
3.3.4 Abolition of Forced Labour Convention, 1957 (No. 105)
3.3.5 Minimum Age Convention, 1973 (No. 1383
3.3.6 The General Conference of the International Labour Organization
3.3.7 Equal Remuneration Convention, 1951 (No. 100)
3.3.8 Discrimination (Employment and Occupation) Convention, 1958 (No. 111)
3.3.9 Occupational Safety and Health Convention, 1981 (No. 155)
3.3.10 Promotional Framework for Occupational Safety and Health Convention, 2006
(No. 187)
3.4 Recommendations of ILO
3.4.1 International labour Conference
3.4.2 Governing Body
3.5 Summary
3.6 Key words
3.7 Self Assessment Questions
3.8 Suggested Readings

3.1 Introduction
The ILO was created in 1919 under the treaty of Versailles. After the world war one,
the urgent need to placate the labour class was felt, which was increasingly becoming a
powerful social strata of the society. ILO was constituted to give a pragmatic approach to the
ideal that Universal and long lasting peace could only be achieved when it based on social
justice.

The drafting of the constitution took place between the months of January to April in
the year 1919. A labour commission, headed by Samuel Gompers (head of the American
Federation of Labour (AFL) in the United States) was constituted for the purpose by the
peace conference. The meetings of the commission took place in Paris and then in Versailles.
The commission had the composition of members of nine countries, namely:- Belgium, Cuba,
Czechoslovakia, France, Italy, Japan, Poland, the United Kingdom and the United States.

The commission ended up establishing a tripartite organisation, first of its kind in the
Centre for Distance Education 3.2 Acharya Nagarjuna University

world, which brought together governments, employers and workers in its executive bodies.
The rules that formed the part of the constitution were made on basis of the ideas tested
within the confines of the International Association for Labour Legislation, founded in Basel
in 1901.

The first time that an advocacy for an organization of international standing began was by
two industrialists, namely Robert Owen (1771-1853) of Wales and Daniel Legrand (1783-
1859) of France

The ILO was created after taking into account many factors, primarily relating to
security, humanitarian, political and economic issues. These have been enshrined in the
preamble of the ILO constitution.

The socio-political situation at the time of creation of ILO was grossly unjust to an
average labourer. There was an ideological understanding amongst all the major
industrialized nations that there is a pressing need to create a body which addresses the
troubles being faced by the working class. The importance of social justice was felt in
securing peace. Along with this, the industrial nations were also toying with the idea of
globalisation. The importance of economic interdependence was being propagated and the
need for cooperation to maintain an equitable working atmosphere was promulgated in all
countries competing for markets.

Reflecting these ideas, the Preamble states

Whereas universal and lasting peace can be established only if it is based upon social
justice; And whereas conditions of labour exist involving such injustice hardship and
privation to large numbers of people as to produce unrest so great that the peace and harmony
of the world are imperiled; and an improvement of those conditions is urgently required;
Whereas also the failure of any nation to adopt humane conditions of labour is an obstacle in
the way of other nations which desire to improve the conditions in their own countries.

The areas of improvement listed in the Preamble remain relevant today, for example:

1. Regulation of the hours of work including the establishment of a maximum working

day and week;
2. Regulation of labour supply, prevention of unemployment and provision of an
adequate living wage;
3. Protection of the worker against sickness, disease and injury arising out of his
employment;
4. Protection of children, young persons and women;
5. Provision for old age and injury, protection of the interests of workers when employed
in countries other than their own;
6. Recognition of the principle of equal remuneration for work of equal value;
7. Recognition of the principle of freedom of association;
8. Organization of vocational and technical education, and other measures

3.2 ILO conventions

International labor standards are legal instruments drawn up by the ILO's constituents
(governments, employers and workers) and setting out basic principles and rights at work.
They are either Conventions (or Protocols), which are legally binding international treaties
that may be ratified by member states, or Recommendations, which serve as non-binding
ILO Conventions 3.3 Labor Legislations and Law

guidelines. In many cases, a Convention lays down the basic principles to be implemented by
ratifying countries, while a related Recommendation supplements the Convention by
providing more detailed guidelines on how it could be applied. Recommendations can also be
autonomous, i.e. not linked to a Convention.

Conventions and Recommendations are drawn up by representatives of governments,

employers and workers and are adopted at the annual International Labor Conference. Once a
standard is adopted, member states are required under article 19(6) of the ILO Constitution,
to submit it to their competent authority (normally Parliament) within a period of twelve
months for consideration. In the case of Conventions, this means consideration for
ratification. If it is ratified, a Convention generally comes into force for that country one year
after the date of ratification. Ratifying countries undertake to apply the Convention in
national law and practice and to report on its application at regular intervals. Technical
assistance is provided by the ILO, if necessary. In addition, representation and complaint
procedures can be initiated against countries for violations of a Convention that they have
ratified (see applying and promoting ILS).

3.3 Fundamental Conventions

The ILO Governing Body had initially identified eight “fundamental” Conventions,
covering subjects that were considered to be fundamental principles and rights at work:
freedom of association and the effective recognition of the right to collective bargaining; the
elimination of all forms of forced or compulsory labour; the effective abolition of child
labour; and the elimination of discrimination in respect of employment and occupation. These
principles were also covered by the ILO Declaration on Fundamental Principles and Rights at
Work (1998) . Following the adoption of the Protocol of 2014 to the Forced Labour
Convention, 1930, a ninth ILO instrument was then considered as "fundamental". At the
110th Session of the International Labour Conference in June 2022, the ILC adopted a
Resolution on the inclusion of a safe and healthy working environment in the ILO’s
framework of fundamental principles and rights at work . As a result, the ILO Declaration on
Fundamental Principles and Rights at Work, 1998, has been amended to this effect and the
Occupational Safety and Health Convention, 1981 (No. 155) and the Promotional Framework
for Occupational Safety and Health Convention, 2006 (No. 187) are now considered as
fundamental Conventions within the meaning of the 1998 Declaration, as amended in 2022.

3.3.1 Freedom of Association and Protection of the Right to Organise Convention, 1948
(No. 87)
The General Conference of the International Labour Organisation,

1. Having been convened at San Francisco by the Governing Body of the International
Labour Office, and having met in its Thirty-first Session on 17 June 1948;
2. Having decided to adopt, in the form of a Convention, certain proposals concerning
freedom of association and protection of the right to organise, which is the seventh
item on the agenda of the session;
3. Considering that the Preamble to the Constitution of the International Labour
Organisation declares "recognition of the principle of freedom of association" to be a
means of improving conditions of labor and of establishing peace;
4. Considering that the Declaration of Philadelphia reaffirms that "freedom of
expression and of association are essential to sustained progress";
Centre for Distance Education 3.4 Acharya Nagarjuna University

5. Considering that the International Labour Conference, at its Thirtieth Session,

unanimously adopted the principles which should form the basis for international
regulation;
6. Considering that the General Assembly of the United Nations, at its Second Session,
endorsed these principles and requested the International Labour Organisation to
continue every effort in order that it may be possible to adopt one or several
international Conventions;
7. adopts this ninth day of July of the year one thousand nine hundred and forty-eight the
following Convention, which may be cited as the Freedom of Association and
Protection of the Right to Organize Convention, 1948:

3.3.2 Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
1. The General Conference of the International Labour Organisation,
2. Having been convened at Geneva by the Governing Body of the International Labor
Office, and having met in its Thirty-second Session on 8 June 1949, and
3. Having decided upon the adoption of certain proposals concerning the application of
the principles of the right to organise and to bargain collectively, which is the fourth
item on the agenda of the session, and
4. Having determined that these proposals shall take the form of an international
Convention,
5. adopts this first day of July of the year one thousand nine hundred and forty-nine the
following Convention, which may be cited as the Right to Organise and Collective
Bargaining Convention, 1949:

3.3.3 Forced Labour Convention, 1930 (No. 29)

1. The original text of the Forced Labour Convention, 1930 (No. 29) made reference to a
transitional period during which recourse to forced or compulsory labour might be
had subject to specific conditions, as set out in Article 1, paragraphs 2 and 3, and
Articles 3 to 24.
2. Over the years, the Governing Body, the International Labour Conference but also the
ILO supervisory bodies, such as the Committee of Experts on the Application of
Conventions and Recommendations, acknowledged that these provisions, commonly
known as “transitional provisions” were no longer applicable. In 2014, the
International Labour Conference adopted a Protocol to Convention No.29, which
expressly provided for the deletion of the transitional provisions. The text below
reflects this deletion. The original text of the Forced Labour Convention, 1930 (No.
29)

3.3.4 Abolition of Forced Labour Convention, 1957 (No. 105)

1. The General Conference of the International Labour Organisation,
2. Having been convened at Geneva by the Governing Body of the International Labour
Office, and having met in its Fortieth Session on 5 June 1957, and
3. Having considered the question of forced labour, which is the fourth item on the
agenda of the session, and
4. Having noted the provisions of the Forced Labour Convention, 1930, and
5. Having noted that the Slavery Convention, 1926, provides that all necessary measures
shall be taken to prevent compulsory or forced labour from developing into conditions
analogous to slavery and that the Supplementary Convention on the Abolition of
Slavery, the Slave Trade and Institutions and Practices Similar to Slavery, 1956,
provides for the complete abolition of debt bondage and serfdom, and
ILO Conventions 3.5 Labor Legislations and Law

6. Having noted that the Protection of Wages Convention, 1949, provides that wages
shall be paid regularly and prohibits methods of payment which deprive the worker of
a genuine possibility of terminating his employment, and
7. Having decided upon the adoption of further proposals with regard to the abolition of
certain forms of forced or compulsory labour constituting a violation of the rights of
man referred to in the Charter of the United Nations and enunciated by the Universal
Declaration of Human Rights, and
8. Having determined that these proposals shall take the form of an international
Convention, adopts this twenty-fifth day of June of the year one thousand nine
hundred and fifty-seven the following Convention, which may be cited as the
Abolition of Forced Labour Convention, 1957

3.3.5 Minimum Age Convention, 1973 (No. 138)

1. The General Conference of the International Labour Organisation,
2. Having been convened at Geneva by the Governing Body of the International Labour
Office, and having met in its Fifty-eighth Session on 6 June 1973, and
3. Having decided upon the adoption of certain proposals with regard to minimum age
for admission to employment, which is the fourth item on the agenda of the session,
and
4. Noting the terms of the Minimum Age (Industry) Convention, 1919, the Minimum
Age (Sea) Convention, 1920, the Minimum Age (Agriculture) Convention, 1921, the
Minimum Age (Trimmers and Stokers) Convention, 1921, the Minimum Age (Non-
Industrial Employment) Convention, 1932, the Minimum Age (Sea) Convention
(Revised), 1936, the Minimum Age (Industry) Convention (Revised), 1937, the
Minimum Age (Non-Industrial Employment) Convention (Revised), 1937, the
Minimum Age (Fishermen) Convention, 1959, and the Minimum Age (Underground
Work) Convention, 1965, and
5. Considering that the time has come to establish a general instrument on the subject,
which would gradually replace the existing ones applicable to limited economic
sectors, with a view to achieving the total abolition of child labour, and
6. Having determined that these proposals shall take the form of an international
Convention, adopts this twenty-sixth day of June of the year one thousand nine
hundred and seventy-three the following Convention, which may be cited as the
Minimum Age Convention, 1973:
7. Worst Forms of Child Labour Convention, 1999 (No. 182)

3.3.6 The General Conference of the International Labour Organization

1. Having been convened at Geneva by the Governing Body of the International Labour
Office, and having met in its 87th Session on 1 June 1999, and
2. Considering the need to adopt new instruments for the prohibition and elimination of
the worst forms of child labour, as the main priority for national and international
action, including international cooperation and assistance, to complement the
Convention and the Recommendation concerning Minimum Age for Admission to
Employment, 1973, which remain fundamental instruments on child labour, and
3. Considering that the effective elimination of the worst forms of child labour requires
immediate and comprehensive action, taking into account the importance of free basic
education and the need to remove the children concerned from all such work and to
provide for their rehabilitation and social integration while addressing the needs of
their families, and
Centre for Distance Education 3.6 Acharya Nagarjuna University

4. Recalling the resolution concerning the elimination of child labour adopted by the
International Labour Conference at its 83rd Session in 1996, and
5. Recognizing that child labour is to a great extent caused by poverty and that the long-
term solution lies in sustained economic growth leading to social progress, in
particular poverty alleviation and universal education, and
6. Recalling the Convention on the Rights of the Child adopted by the United Nations
General Assembly on 20 November 1989, and
7. Recalling the ILO Declaration on Fundamental Principles and Rights at Work and its
Follow-up, adopted by the International Labour Conference at its 86th Session in
1998, and
8. Recalling that some of the worst forms of child labour are covered by other
international instruments, in particular the Forced Labour Convention, 1930, and the
United Nations Supplementary Convention on the Abolition of Slavery, the Slave
Trade, and Institutions and Practices Similar to Slavery, 1956, and
9. Having decided upon the adoption of certain proposals with regard to child labour,
which is the fourth item on the agenda of the session, and
10. Having determined that these proposals shall take the form of an international
Convention;
11. adopts this seventeenth day of June of the year one thousand nine hundred and ninety-
nine the following Convention, which may be cited as the Worst Forms of Child
Labour Convention, 1999.

3.3.7 Equal Remuneration Convention, 1951 (No. 100)

1. The General Conference of the International Labour Organisation,
2. Having been convened at Geneva by the Governing Body of the International Labour
Office, and having met in its Thirty-fourth Session on 6 June 1951, and
3. Having decided upon the adoption of certain proposals with regard to the principle of
equal remuneration for men and women workers for work of equal value, which is the
seventh item on the agenda of the session, and
4. Having determined that these proposals shall take the form of an international
Convention,
5. adopts this twenty-ninth day of June of the year one thousand nine hundred and fifty-
one the following Convention, which may be cited as the Equal Remuneration
Convention, 1951

3.3.8 Discrimination (Employment and Occupation) Convention, 1958 (No. 111)

1. The General Conference of the International Labour Organisation,
2. Having been convened at Geneva by the Governing Body of the International Labour
Office, and having met in its Forty-second Session on 4 June 1958, and
3. Having decided upon the adoption of certain proposals with regard to discrimination
in the field of employment and occupation, which is the fourth item on the agenda of
the session, and
4. Having determined that these proposals shall take the form of an international
Convention, and
5. Considering that the Declaration of Philadelphia affirms that all human beings,
irrespective of race, creed or sex, have the right to pursue both their material well-
being and their spiritual development in conditions of freedom and dignity, of
economic security and equal opportunity, and
6. Considering further that discrimination constitutes a violation of rights enunciated by
the Universal Declaration of Human Rights,
ILO Conventions 3.7 Labor Legislations and Law

7. adopts this twenty-fifth day of June of the year one thousand nine hundred and fifty-
eight the following Convention, which may be cited as the Discrimination
(Employment and Occupation) Convention, 1958:

3.3.9 Occupational Safety and Health Convention, 1981 (No. 155)

1. The General Conference of the International Labour Organisation,
2. Having been convened at Geneva by the Governing Body of the International Labour
Office, and having met in its Sixty-seventh Session on 3 June 1981, and
3. Having decided upon the adoption of certain proposals with regard to safety and
health and the working environment, which is the sixth item on the agenda of the
session, and
4. Having determined that these proposals shall take the form of an international
Convention,
5. adopts this twenty-second day of June of the year one thousand nine hundred and
eighty-one the following Convention, which may be cited as the Occupational Safety
and Health Convention, 1981:

3.3.10 Promotional Framework for Occupational Safety and Health Convention, 2006
(No. 187)
1. The General Conference of the International Labour Organization,
2. Having been convened at Geneva by the Governing Body of the International Labour
Office, and having met in its Ninety-fifth Session on 31 May 2006,
3. Recognizing the global magnitude of occupational injuries, diseases and deaths, and
the need for further action to reduce them, and
4. Recalling that the protection of workers against sickness, disease and injury arising
out of employment is among the objectives of the International Labour Organization
as set out in its Constitution, and
5. Recognizing that occupational injuries, diseases and deaths have a negative effect on
productivity and on economic and social development, and
6. Noting paragraph III(g) of the Declaration of Philadelphia, which provides that the
International Labour Organization has the solemn obligation to further among the
nations of the world programmes which will achieve adequate protection for the life
and health of workers in all occupations, and
7. Mindful of the ILO Declaration on Fundamental Principles and Rights at Work and its
Follow-Up, 1998, and
8. Noting the Occupational Safety and Health Convention, 1981 (No. 155), the
Occupational Safety and Health Recommendation, 1981 (No. 164), and other
instruments of the International Labour Organization relevant to the promotional
framework for ocupational safety and health, and
9. Recalling that the promotion of occupational safety and health is part of the
International Labour Organization's agenda of decent work for all, and
10. Recalling the Conclusions concerning ILO standards-related activities in the area of
occupational safety and health - a global strategy, adopted by the International Labour
Conference at its 91st Session (2003), in particular relating to ensuring that priority be
given to occupational safety and health in national agendas, and
11. Stressing the importance of the continuous promotion of a national preventative safety
and health culture, and
12. Having decided upon the adoption of certain proposals with regard to occupational
safety and health, which is the fourth item on the agenda of the session, and
Centre for Distance Education 3.8 Acharya Nagarjuna University

13. Having determined that these proposals shall take the form of an international
Convention;
14. adopts this fifteenth day of June of the year two thousand and six the following
Convention, which may be cited as the Promotional Framework for Occupational
Safety and Health Convention, 2006.

3.4 Recommendations of ILO

3.4.1 International labour Conference
The meet up of the members of ILO annually in Geneva is called the international labour
conference (also known as international parliament of labour). Two government delegates
represent each member state. All the delegates have been given equal right of expression. It
working is described under Article 3 of the ILO constitution as The meetings of the General
Conference of representatives of the Members shall be held from time to time as occasion
may require, and at least once in every year. It shall be composed of four representatives of
each of the Members, of whom two shall be Government delegates and the two others shall
be delegates representing respectively the employers and the workpeople of each of the
Members. The International Labour Conference has following important tasks The crafting
and adoption of international labour standards in the form of Conventions and
Recommendations.
1.
2. The Conference supervises the application of Conventions and Recommendations at
the national level.
3. The Conference also examines the Global Report prepared by the office as a
procedural act required by the declaration.
4. The Conference acts as a stage for the discussion of questions relating to social and
labour issues. The central theme of discussion each year is the report presented by
ILO’s director general.
5. It passes resolutions for setting up guidelines for ILO’s future deliberations and
activities.

3.4.2 Governing Body

It is the executive wing of the ILO. The governing body meets thrice a year (March,
June and November) to decide ILO’s policy, elect the director- general, adopts the draft
programmes and budgetary requirements, which are put in front of the conference.
The functioning of the governing body has been explained under Article 7 of the ILO
constitution -
The Governing Body shall consist of fifty-six person
1. Twenty-eight (28) representing governments,
2. Fourteen (14) representing the employers, and
3. Fourteen (14) representing the workers.

In an organization as big as ILO, it is of high importance that the work being done should
not go out of the desired path . For this, the working needs to be evaluated in a timely
manner. This evaluation ensures that the ILO agenda of decent work and social justice is
being forwarded. It is critically important also because the decision making process depends
upon it, which leads to genration and sharing of knowledge in the ILO. The effectiveness of
result delivery of the steps taken by ILO could be gauged efficaciously through a system of
evaluation.
ILO Conventions 3.9 Labor Legislations and Law

a) The United Nations has set out norms for developing a policy of evaluation. The main
pointers of the policy are to

i. Reinforce knowledge-generation sharing of the ILO’s substantive work, and the processes,
approaches and institutional arrangements for implementing such work;
ii. Strengthen the complementarity between evaluation and other oversight and monitoring
functions within the Office;
iii. Clarify standards for engaging constituents in evaluation; and
iv. Clarify the division of responsibilities in the ILO for carrying out an evaluation.

b) The ILO evaluation Policy (2005) is a document which lays down the reason of evaluation,
types of evaluation and methods of evaluation. The objectives of the evaluation policy are
given as to -

i. Improve Office-wide transparency and accountability for impact of ILO actions to support
its
constituents;
ii. Strengthen the decision-making process by the policy organs and senior management
based on sound assessment of effectiveness, efficiency, relevance, impact and sustainability
of ILO activities;
iii. Contribute feedback for learning and ongoing improvement of the ILO’s work.

Furthermore, the ILO carries out evaluation of its works at the primary level of
governance and also amongst the decentralised levels. These evaluations are looked after by
the evaluation office (EVAL). The types of evaluation mentioned in the document area.
Strategy and policy evaluation - main purpose is to review major institutional policies and
assess impact, effectiveness and benefits of ILO core strategies. This evaluation is done at
least once per year.

b. Country programme evaluation - This kind of evaluation assesses the extent to which
significant impacts are being made towards decent growth. Also, being at the country level, it
feeds into the tripartite dialogue of the importance of ILO dialogue at the country level. It is
done once every year, but with a rider that all regions need to be covered atleast once every
four years.

c. Thematic evaluation - This is an annual evaluation which is aimed at assessing

effectiveness and impact of specific means of actions and interventions. It also creates cross-
cutting lessons to innovate and feed organizational learning on operational strategies.

d. Project evaluation - It assesses projects for relevance, efficiency, effectiveness,

sustainability and contribution to broader impact. Planning and implementation of evaluation
is the responsibility of the person to whom the project manager reports. There is no
earmarked time limit. However they are midterm or final-term or as they are set out to be in
the evaluation plan.

e. Organizational review (self-evaluation) is an important form of evaluation where relevance

of the programme activities in relation to actual performance against planned outcome is
measured. This is important because through this we get timely information and management
decision in achieving planned outcomes against target and indicators. This self-evaluation is
biennial. ILO provides accessibility to its evaluation data on its websites and maintains
Centre for Distance Education 3.10 Acharya Nagarjuna University

transparency.

After completion of the evaluation reports, they are compiled in the form of Independent
high-level strategy, policy and country programme evaluations. The Annual Evaluation
Report (AER) and the official management response from the office.

These reports have a high importance because they serve as a model for formulating
decisions by the governing body. Also, they are the precursor to the follow up by the high-
level evaluations held by Evaluation Advisory Committee, set up by the Director-General.
Apart form the centralized evaluation carried out by the governing body, there is
decentralized evaluation carried out by the Evaluation Office (EVAL). Eval also collects data
regarding to management response and reports to Governing Body every November. The
response contains analysis of the participation and contribution of members of the tripartite.
EVAL has also laid down guidelines for ensuring that the recommendations based on the
evaluation are in proper order.

Recommendations should -
a) Be numbered in the report, and limited – ideally not more than 12
b) Be formulated in a clear and concise manner
c) Be relevant and useful
d) Be supported by evidence and follow logically from findings and conclusions
e) Link to the programme indicators when feasible
f) Not be too general but specific to the strategy/country programme evaluated
g) Specify who is called upon to act
h) Specify action needed to remedy the situation
i) Distinguish priority or importance (high, medium, low)
j) Specify the recommended time frame for follow-up
k) Acknowledge whether there are resource implication

Likewise, It is the duty of the ILO to ensure that the recommendations made in such
manner are of the highest quality. They should be of such a form that takes cues from the
beneficial practices so that they could be inculcated in future programmes. They should be
easily accessible as well. Good practices, which is the term used by ILO for successful
practices has been defined by ILO in the following words-

learned may become an “emerging good practice” when it additionally shows proven
marked results or benefits and is determined by the evaluator to be considered for replication
or up-scaling to other ILO projects.

An emerging good practice should demonstrate clear potential for substantiating a

cause-effect relationship and may also show potential for replicability and broader
application. It can derive from comparison and analysis of activities across multiple settings
and policy sources or emerge from a simple, technically specific intervention.

The criteria to be followed by the evaluators for creation of the lesson of findings

a) A lesson learned can refer to a positive experience, in the case of successful results; or to a
negative experience, in the case of malfunctioning processes, weaknesses or undesirable
influences.
ILO Conventions 3.11 Labor Legislations and Law

b) A lesson learned should specify the context from which it is derived, establish potential
relevance beyond that context, and indicate where it might be applied.

c) A lesson learned explains how or why something did or did not work by establishing clear
causal factors and effects. Whether the lesson signals a decision or process to be repeated or
avoided – the overall aim is to capture lessons that management can use in future contexts to
improve projects and programmes.

d) A lesson learned should indicate how well it contributes to the broader goals of the project
or programme and establish, when possible, if those goals align appropriately with the needs
of beneficiaries or targeted groups.
e) Each of the following criteria should be considered, included and adequately explained,
when appropriate: Context; Challenges; Links to Project Goals; Impact on Beneficiaries;
Challenges/Successes; and any Causal Factors.

The Evaluation findings are utilized in the following manner.-

The collaboration between PARDEV (Partnering for Development) and EVAL (evaluation
office) creates a process of appraisal meant for incorporating institutional knowledge. This
knowledge is derived from independent evaluation

Findings data for research and organizational learning: The raw data being collected
in this form is very useful as it gives important contribution towards analysing administrative
and technical concerns. The ILO officials have access to the i-track database. This database
has contains the summaries of the full evaluation reports.

They are also available on the EVAL public websites.

Technical cooperation strategies are made in accordance to the data sets of recommendations.
These recommendations also help in forming the source of data which is deliberated upon for
future high-level thematic evaluation.

The evaluations that are made independently are made to go through a mandatory
management response exercise. Upon recieving these independent evaluations, the line
management must decide whether the recommendations are to be accepted or not. If they are
accepted, the line management must also report the action taken on the basis of the
recommedations. The results of these exercise are presented to the EVAL, which reviews it.
They are then compiled for the Annual Evaluation Report presented to the Governing Body.
Evaluations are also made at the country/regional level, for which the recommendation
response are presented to the Evaluation Advisory Committee (EAC) by the respective line
management. All the bodies concerned with respect to the recommendations are addressed in
the EAC quarterly meetings.

3.5 Summary
International Labour Organisation (ILO) is a nodal agency coming under the ambit of
the United Nations (UN). Its primary objective is to deal with issues related to labour,
namely, maintaining international labour standards, ensuring social protection and providing
work opportunities to all. Established in 1919, it works towards setting up labour standards,
developing policies and chalking out programmes promoting decent work for all men and
women. The ILO functions with a unique tripartite structure, that brings together
governments’, employers’ and workers’ representatives. – The International Labour
Centre for Distance Education 3.12 Acharya Nagarjuna University

Organisation (ILO) works towards providing such a decent work and productive employment
to the labour force worldwide. This is done with a view of reducing poverty rates and
achieving just globalization throughout. ILO functions on the basis of an underlying
requirement of cooperation between governments’, employers’ and workers’ organizations.
Their cooperation is required for smooth functioning of the organization and ameliorating
social and economic growth. The ILO sets labour standards, develop policies and devise
programmes after taking into consideration the views put forward by all these members.

3.6 Key words

Fundamental Conventions- The ILO Governing Body had initially identified eight
“fundamental” Conventions, covering subjects that were considered to be fundamental
principles and rights at work: freedom of association and the effective recognition of the right
to collective bargaining; the elimination of all forms of forced or compulsory labour; the
effective abolition of child labour; and the elimination of discrimination in respect of
employment and occupation.

ILO conventions- International labour standards are legal instruments drawn up by the ILO's
constituents (governments, employers and workers) and setting out basic principles and rights
at work.

ILO Constitution - Article 3 of the ILO constitution as The meetings of the General
Conference of representatives of the Members shall be held from time to time as occasion
may require, and at least once in every year.

Governing Body- It is the executive wing of the ILO. The governing body meets thrice a
year (March, June and November) to decide ILO’s policy, elect the director- general, adopts
the draft programmes and budgetary requirements, which are put in front of the conference.

3.7 Self Assessment Questions

1. Briefly Explain the ILO Conventions
2. Outline the Recommendations of ILO
3. Describe the International Labor conference?

3.8Suggested Readings
1. Labor Laws (2011) I.A Saiyed Himalaya Publishing House
2.Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
3. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
4. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers
5. Commercial Labour Laws Edition 2022 Commercial Law Publishers House.
6.SrivastavaS.C(2022) Industrial Relations and Labour Laws
Sixth Edition Vikas Publishing House Pvt Ltd
7. Padhi P.K (2021) Labour and Industrial Laws Forth Edition PHI Learning
8. V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House
9. Commercial’s New Labour& Industrial Code along with Draft Rules 3rd Edition 2022
10. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers
Dr.Nagaraju Battu
 LESSON -4

SOCIAL JUSTICE AND NATURAL JUSTICE

Learning Objectives

✓ To Study the Social Justice

✓ To Discuss the Natural Justice
✓ To Focus on Origin and rules of Natural Justice
✓ To know the John Rawl’s theory of Justice
✓ To Understand the History and Evolution of Social Justice

Structure
4.1 Introduction
4.2 Equal Treatment for Equals
4.3 Recognition of Special Needs
4.4 Just Distribution
4.5 John Rawls’ Theory Of Justice
4.6 Pursuing Social Justice
4.7 History and Evolution of Social Justice
4.7.1 Social Justice and the Government
4.8 Five Principles of Social Justice
4.9 Origin of Natural Justice
4.10 Principles of Natural Justice
4.11 Purpose of the principles
4.12 Rules of Natural Justice
4.12.1 NEMO JUDEX IN CAUSA SUA
4.12.1(a) Personal bias
4.12.1(b) Pecuniary bias
4.12.1(c) Subject matter bias
4.12.1(d) Departmental bias
4.12.1(e) Policy notion bias
4.12.1(f) Bias on the account of the obstinacy
4.12.2 AUDI ALTERAM PARTEM
4.12.3 REASONED DECISION
4.13 Summary
4.14 Key words
4.15 Self Assessment questions
4.16 Suggested Readings

4.1 Introduction
All cultures and traditions have grappled with questions of justice although they may
have interpreted the concept in different ways. For instance, in ancient Indian society, justice
was associated with dharma and maintaining dharma or a just social order, was considered to
be a primary duty of kings. In China, Confucius, the famous philosopher argued that kings
should maintain justice by punishing wrong doers and rewarding the virtuous. In fourth
century B.C. Athens (Greece), Plato discussed issues of justice in his book The Republic.
Through a long dialogue between Socrates and his young friends, Glaucon and Adeimantus,
Plato examined why we should be concerned about justice. The young people ask Socrates
why we should be just. They observe that people who were unjust seemed to be much better
Centre for Distance Education 4.2 Acharya Nagarjuna University

off than those who were just. Those who twisted rules to serve their interests, avoided paying
taxes and were willing to lie and be deceitful, were often more successful than those who
were truthful and just. If one were smart enough to avoid being caught then it would seem
that being unjust is better than being just. You may have heard people expressing similar
sentiments even today.

Socrates reminds these young people that if everyone were to be unjust, if everyone
manipulated rules to suit their own interests, no one could be sure of benefiting from
injustice. Nobody would be secure and this was likely to harm all of them. Hence, it is in our
own long-term interest to obey the laws and be just. Socrates clarified that we need to
understand clearly what justice means in order to figure out why it is important to be just. He
explained that justice does not only mean doing good to our friends and harm to our enemies,
or pursuing our own interests. Justice involves the well-being of all people. Just as a doctor is
concerned with the well-being of his/her patients, similarly the just ruler or the just
government must be concerned with the well-being of the people. Ensuring the well-being of
the people includes giving each person his due. The idea that justice involves giving each
person his due continues to be an important part of our present day understanding of justice.
However, our understanding of what is due to a person has changed from the time of Plato.
Today, our understanding of what is just is closely linked to our understanding of what is due
to each person as a human being. According to the German philosopher Immanuel Kant,
human beings possess dignity. If all persons are granted dignity then what is due to each of
them is that they have the opportunity to develop their talents and pursue their chosen goals.
Justice requires that we give due and equal consideration to all individuals.

4.2 Equal Treatment for Equals

Although there might be broad agreement in modern society about the equal
importance of all people, it is not a simple matter to decide how to give each person his/her
due. A number of different principles have been put forward in this regard. One of the
principles is the principle of treating equals equally. It is considered that all individuals share
certain characteristics as human beings. Therefore they deserve equal rights and equal
treatment. Some of the important rights which are granted in most liberal democracies today
include civil rights such as the rights of life, liberty and property, political rights like the right
to vote, which enable people to participate in political processes, and certain social rights
which would include the right to enjoy equal opportunities with other members of the society.

Apart from equal rights, the principle of treating equals equally would require that
people should not be discriminated against on grounds of class, caste, race or gender. They
should be judged on the basis of their work and actions and not on the basis of the group to
which they belong. Therefore, if two persons from different castes perform the same kind of
work, whether it be breaking stones or delivering Pizzas, they should receive the same kind
of reward. If a person gets one hundred rupees for some work and another receives only
seventy five rupees for the same work because they belong to Justice Social Justice 56
Political Theory different castes, then it would be unfair or unjust. Similarly, if a male teacher
in a school gets a higher salary than a female teacher, then this difference would also be
unjustifiable and wrong. Proportionate Justice However, equal treatment is not the only
principle of justice. There could be circumstances in which we might feel that treating
everybody equally would be unjust. How, for instance, would you react if it was decided in
your school that all those who did an exam should get equal marks because they are all
students of the same school and did the same exam? Here you might think it would be more
fair if students were awarded marks according to the quality of their answer papers and also,
Social Justice and Natural Justice 4.3 Labor Legislations and Law

possibly, the degree of effort they had put in. In other words, provided everybody starts from
the same base line of equal rights, justice in such cases would mean rewarding people in
proportion to the scale and quality of their effort. Most people would agree that although
people should get the same reward for the same work, it would be fair and just to reward
different kinds of work differently if we take into account factors such as the effort required,
the skills required, the possible dangers involved in that work, and so on. If we use these
criteria we may find that certain kinds of workers in our society are not paid a wage which
takes such factors sufficiently into account. For instance, miners, skilled craftsmen, or people
in sometimes dangerous but socially useful professions like policemen, may not always get a
reward which is just if we compare it to what some others in society may be earning. For
justice in society, the principle of equal treatment needs to be balanced with the principle of
proportionality.

4.3 Recognition of Special Needs

A third principle of justice which we recognize is for a society to take into account
special needs of people while distributing rewards or duties. This would be considered a way
of promoting social justice. In terms of their basic status and rights as members of the society
justice may require that people be treated equally. But even nondiscrimination between
people and rewarding them proportionately to their efforts might not be enough to ensure that
people enjoy equality in other aspects of their lives in society nor that the society as a whole
is just. The principle of taking account of the special needs of people does not necessarily
contradict the principle of equal treatment so much as extend it because the principle of
treating equals equally could imply that people who are not equal in certain important
respects could be treated differently.

People with special needs or disabilities could be considered unequal in some

particular respect and deserving of special help. But it is not always easy to get agreement
regarding which inequalities of people should be recognised for providing them special help.
Physical disabilities, age or lack of access to good education or health care, are some of the
factors which are considered grounds for special treatment in many countries. It is believed
that if people who enjoy very different standard of living and opportunities are treated equally
in all respects with those who have been deprived of even the basic minimum needs to live a
healthy and productive life, the result is likely to be an unequal society, not an egalitarian and
just one. In our country, lack of access to good education or health care and other such
facilities is often found combined with People with special needs or disabilities could be
considered unequal in some particular respect and deserving of special help. But it is not
always easy to get agreement regarding which inequalities of people should be recognised for
providing them special help. Physical disabilities, age or lack of access to good education or
health care, are some of the factors which are considered grounds for special treatment in
many countries. It is believed that if people who enjoy very different standard of living and
opportunities are treated equally in all respects with those who have been deprived of even
the basic minimum needs to live a healthy and productive life, the result is likely to be an
unequal society, not an egalitarian and just one. In our country, lack of access to good
education or health care and other such facilities is often found combined with Our discussion
of different principles of justice has indicated that governments might sometimes find it
difficult to harmonise the three principles of justice which have been discussed — equal
treatment for equals, recognition of different efforts and skills while determining rewards and
burdens, and provision of minimum standard of living and equal opportunities to the needy.
Pursuing equality of treatment by itself might sometimes work against giving due reward to
merit. Emphasizing rewarding merit as the main principle of justice might mean that
Centre for Distance Education 4.4 Acharya Nagarjuna University

marginalized sections would be at a disadvantage in many areas because they have not had
access to facilities such as good nourishment or education. Different groups in the country
might favour different policies depending upon which principle of justice they emphasize. It
then becomes a function of governments to harmonize the different principles to promote a
just society.

4.4 Just Distribution

To achieve social justice in society, governments might have to do more than just
ensure that laws and policies treat individuals in a fair manner. Social justice also concerns
the just distribution of goods and services, whether it is between nations or between different
groups and individuals within a society. If there are serious economic or social inequalities in
a society, it might become necessary to try and redistribute some of the important resources
of the society to provide something like a level playing field for citizens. Therefore, within a
country social justice would require not only that people be treated equally in terms of the
laws and policies of the society but also that they enjoy some basic equality of life conditions
and opportunities. This is seen as necessary for each person to be able to pursue his/her
objectives and express himself. In our country for instance, the Constitution abolished the
practice of untouchability to promote social equality and ensure that people belonging to
‘lower’ castes have access to temples, jobs and basic necessities like water. Different state
governments have also taken some measures to redistribute important resources like land in a
more fair manner by instituting land reforms. Differences of opinion on matters such
whether, and how, to distribute resources and ensure equal access to education and jobs
arouse fierce passions in society and even sometimes provoke violence. People believe the
future of themselves and their families may be at stake. We have only to remind ourselves
about the anger and even violence which has sometimes been roused by proposals to reserve
seats in educational institutions or in government employment in our country. As students of
political theory however we should be able to calmly examine the issues involved in terms of
our understanding of the principles of justice. Can schemes to help the disadvantaged be
justified in terms of a theory of justice? In the next section, we will discuss the theory of just
distribution put forward by the well-known political philosopher, John Rawls. Rawls has
argued that there could indeed be a rational justification for acknowledging the need to
provide help to the least privileged members of a society.

4.5 John Rawls’ Theory Of Justice

If people are asked to chose the kind of society in which they would like to live, they
are likely to chose one in which the rules and organization of society allot them a privileged
position. We cannot expect everyone to put aside their personal interests and think of Justice
Political Theory the good of society, especially if they believe that their decision is going to
have an impact on the kind of life and opportunities their children will have in the future.
Indeed, we often expect parents to think of and support what is best for their children. But
such perspectives cannot form the basis of a theory of justice for a society. So how do we
reach a decision that would be both fair and just?

John Rawls has tried to answer this question. He argues that the only way we can
arrive at a fair and just rule is if we imagine ourselves to be in a situation in which we have to
make decisions about how society should be organized although we do not know which
position we would ourselves occupy in that society. That is, we do not know what kind of
family we would be born in, whether we would be born into an ‘upper’ caste or ‘lower’ caste
family, rich or poor, privileged or disadvantaged. Rawls argues that if we do not know, in this
sense, who we will be and what options would be available to us in the future society, we will
Social Justice and Natural Justice 4.5 Labor Legislations and Law

be likely to support a decision about the rules and organization of that future society which
would be fair for all the members.

Rawls describes this as thinking under a ‘veil of ignorance’. He expects that in such a
situation of complete ignorance about our possible position and status in society, each person
would decide in the way they generally do, that is, in terms of their own interests. But since
no one knows who he would be, and what is going to benefit him, each will envisage the
future society from the point of view of the worst-off. It will be clear to a person who can
reason and think for himself, that those who are born privileged will enjoy certain special
opportunities. But, what if they have the misfortune of being born in a disadvantaged section
of society where few opportunities would be available to them? Hence, it would make sense
for each person, acting in his or her own interest, to try to think of rules of organization that
will ensure reasonable opportunities to the weaker sections. The attempt will be to see that
important resources, like education, health, shelter, etc., are available to all persons, even if
they are not part of the upper class. It is of course not easy to erase our identities and to
imagine oneself under a veil of ignorance. But then it is equally difficult for most people to
be self sacrificing and share their good fortune with strangers. That is why we habitually
associate self sacrifice with heroism. Given these human failings and limitations, it is better
for us to think of a framework that does not require extraordinary actions. The merit of the
‘veil of ignorance’ position is that it expects people to just be their usual rational selves: they
are expected to think for themselves and choose what they regard to be in their interest. The
pertinent thing however is that when they choose under the ‘veil of ignorance’ they will find
that it is in their interest to think from the position of the worst-off.

Wearing the imagined veil of ignorance is the first step in arriving at a system of fair
laws and policies. It will be evident that rational persons will not only see things from the
perspective of the worst-off, they will also try to ensure that the policies they frame benefit
the society as a whole. Both things have to go hand-in-hand. Since no one knows what
position they will occupy in the future society, each will seek rules that protect them in case
they happen to be born among the worst-off. But it would make sense if they also try to
ensure that their chosen policy does not also make those who are better-off weaker because it
is also possible that they could be born into a privileged position in the future society.
Therefore, it would be in the interests of all that society as a whole should benefit from the
rules and policies that are decided and not just any particular section. Such fairness would be
the outcome of rational action, not benevolence or generosity.

Rawls therefore argues that rational thinking, not morality, could lead us to be fair and
judge impartially regarding how to distribute the benefits and burdens of a society. In his
example, there are no goals or norms of morality that are given to us in advance and we
remain free to determine what is best for ourselves. It is this belief which makes Rawls’
theory an important and compelling way to approach the question of fairness and justice.

4.6 Pursuing Social Justice

If in a society deep and persistent divisions exist between those who enjoy greater
wealth and property, and the power which goes with such ownership, and those who are
excluded and deprived, we would say that social justice is lacking there. We are not talking
here merely about the different standards of living which may be enjoyed by different
individuals in a society. Justice does not require absolute equality and sameness in the way in
which people live. But a society would be considered unjust if the differences between rich
and poor are so great that they seem to be living in different worlds altogether, and if the
Centre for Distance Education 4.6 Acharya Nagarjuna University

relatively deprived have no chance at all to improve their condition however hard they may
work. In other words, a just society should provide people with the basic minimum conditions
to enable them to live healthy and secure lives and develop their talents as well as equal
opportunities to pursue their chosen goals in society.

How can we decide what are the basic minimum conditions of life needed by people?
Various methods of calculating the basic needs of people have been devised by different
governments and by international organizations like the World Health Organization. But in
general it is agreed that the basic amount of nourishment needed to remain healthy, housing,
supply of clean drinking water, education and a minimum wage would constitute an
important part of these basic conditions. Providing people with their basic needs is considered
to be one of the responsibilities of a democratic government. However, providing such basic
conditions of life to all citizens may pose a heavy burden on governments, particularly in
countries like India which have a large number of poor people.

Even if we all agree that states should try and help the most disadvantaged members
of the society to enjoy some degree of equality with others, disagreements could still arise
regarding the best methods of achieving this goal. A debate is currently going on in our
society, as well as in other parts of the world, about whether promoting open competition
through free markets would be the best way of helping the disadvantaged without harming
the better off members of a society, or whether the government should take on the
responsibility of providing a basic minimum to the poor, if necessary even through a
redistribution of resources. In our country these different approaches are being supported by
different political groups who debate the relative merits of different schemes for helping
marginalized sections of the population such as the rural or urban poor

Free Markets versus State Intervention Supporters of free markets maintain that as far
as possible, individuals should be free to own property and enter into contracts and
agreements with others regarding prices and wages and profits. They should be free to
compete with each other to gain the greatest amount of benefit. This is a simple description of
a free market. Supporters of the free market believe that if markets are left free of state
interference the sum of market transactions would ensure overall a just distribution of
benefits and duties in society. Those with merit and talent would be rewarded accordingly
while the incompetent would get a lesser reward. They would maintain that whatever be the
outcome of market distribution it would be just.

However, not all free market supporters today would support absolutely unregulated
markets. Many would now be willing to accept certain restrictions, for instance, states could
step in to ensure a basic minimum standard of living to all people so that they are able to
compete on equal terms. But they might argue that even here the most efficient way of
providing people with basic services might be to allow markets in health care, education, and
such services, to develop. In other words, private agencies should be encouraged to provide
such services while state policies should try to empower people to buy those services. It
might also be necessary for the state to give special help to the old and the sick who cannot
compete. But apart from this, the role of the state should only be to maintain a framework of
laws and regulations to ensure that competition between individuals remains free of coercion
and other obstacles. They maintain that a free market is the basis of a fair and just society.
The market, it is said, does not care about the caste or religion of the person; it does not see
whether you are a man or a woman. It is neutral and concerned with the talents and skills that
Social Justice and Natural Justice 4.7 Labor Legislations and Law

you have. If you have the merit, then nothing else matters.

One of the arguments put forward in favour of market distribution is that it gives us
more choices. There is no doubt that the market system gives us more choices as consumers.
We can choose the rice we eat and the school we go to, provided that we have the means to
pay for them. But regarding basic goods and services what is important is the availability of
good quality goods and services at a cost people can afford. If private agencies do not find
this profitable for them, they may prefer not to enter that particular market, or to provide
cheap and substandard services. That is why there may be few private schools in remote rural
areas and the few which have been set up may be of low quality. The same would be true of
health care or housing. In such situations the government might have to step in.

Another argument often heard in defense of free markets and private enterprise is that
the quality of services they provide is often superior to that provided in government
institutions. But the cost of such services may put them out of the reach of the poor. Private
business tends to go where business would be most profitable and hence free markets
eventually tend to work in the interest of the strong, the wealthy and the powerful. The result
may be to deny, rather than extend, opportunities for those who are relatively weak and
disadvantaged. Arguments can be put forward on both sides of the debate but free markets
often exhibit a tendency to work in favour of the already privileged. This is why many argue
that to ensure social justice the state should step in to see that basic facilities are made
available to all the members of a society.

In a democratic society disagreements about issues of distribution and justice are

inevitable and even healthy because they force us to examine different points of view and
rationally defend our own views. Politics is about the negotiation of such disagreements
through debate. In our own country many kinds of social and economic inequalities exist and
much remains to be done if they are to be reduced. Studying the different principles of justice
should help us to discuss the issues involved and come to an agreement regarding the best
way of pursuing justice.

Social justice refers to a political and philosophical theory that focuses on the concept
of fairness in relations between individuals in society and equal access to wealth,
opportunities, and social privileges.

4.7 History and Evolution of Social Justice

The concept of social justice first arose in the 19th century during the Industrial
Revolution as attempts were made to promote more egalitarian societies and reduce the
exploitation of certain marginalized groups due to the vast disparity between the rich and
poor at the time. Social justice initially focused on issues such as the distribution of capital,
property, and wealth due to the extreme levels of inequality and economic distress prevalent
at the time, resulting from the European social class structure.

Today, social justice has shifted towards a stronger emphasis on human rights and
improving the lives of disadvantaged and marginalized groups that have historically faced
discrimination in society. Many of these groups have been discriminated against on the basis
of factors such as sex, age, wealth, ethnicity, heritage, social status, religion, and others.
Social justice often leads to efforts to redistribute wealth to some of the underprivileged
groups through providing income, jobs, and education support and opportunities.
Centre for Distance Education 4.8 Acharya Nagarjuna University

4.7.1 Social Justice and the Government

While activists and advocates significantly influence the widespread emphasis on
social justice in the world today, the actual implementation of social justice policies is often
left to administrators, such as the government, non-profit organizations, foundations, or
agencies within the bureaucracy. Such organizations are responsible for shaping public
policies to address social justice issues, and as a result, political factors influence the extent to
which social justice plays a role in the policies shaped by the government and administrators
of the day.

Social justice initiatives can be pursued through many different types of government
programs via wealth and income redistribution, government subsidies, protected legal status
in employment, and even legalized discrimination against privileged groups through fines and
taxes or even through purges historically. Social justice initiatives are commonly seen in
socialist and communist countries, which integrates them into their economic policies, as well
as in the platforms of left-leaning political parties within democracies.

4.8 Five Principles of Social Justice

There are five main principles of social justice that are paramount to understanding the
concept better. Namely, these are access to resources, equity, participation, diversity, and
human rights.

1.Access to Resources
Access to resources is an important principle of social justice and refers to the extent
to which different socioeconomic groups receive equal access to give everyone an equal start
in life. Many societies offer a multitude of resources and services for their citizens, such as
healthcare, food, shelter, education, and recreational opportunities. However, unequal access
to such services often exists.

For example, individuals from wealthy households among the upper and upper-
middle classes are often better able to afford to attend good schools and access post-
secondary education, which leads to a greater chance of obtaining jobs with higher income in
the future. In contrast, those from the lower classes face fewer opportunities. It, in turn, limits
access to education for future generations and continues the cycle of facing disadvantages.

2. Equity
Equity refers to how individuals are given tools specific to their needs and
socioeconomic status in order to move towards similar outcomes. It contrasts with equality,
where everyone is offered the same tools to move towards the same outcome.

As such, often, things that are equal are not equitable due to the more advanced needs of
some individuals and groups. Social justice, integrated with addressing equity issues, might
include advancing policies that provide support to overcome systemic barriers.

3. Participation
Participation refers to how everyone in society is given a voice and opportunity to
verbalize their opinions and concerns and have a role in any decision-making that affects
their livelihood and standard of living. Social injustice occurs when a small group of
individuals makes decisions for a large group, while some people are unable to voice their
opinions.
Social Justice and Natural Justice 4.9 Labor Legislations and Law

4. Diversity
Understanding diversity and appreciating the value of cultural differences are
especially important because policymakers are often better able to construct policies that take
into consideration differences that exist among different societal groups. It is important to
recognize that some groups face more barriers in society, and by considering the inequities,
policymakers and civil servants will be in a stronger position to expand opportunities for
marginalized or disadvantaged groups.

Discrimination in employment on the basis of factors such as race, gender, ethnicity, sex, age,
and other characteristics are constant issues in society, and enforcing policies to countermand
discriminatory practices are one way in which diversity is taken into consideration.

5. Human Rights
Human rights are one of the most important principles of social justice and form a
foundational part of the concept. Human rights and social justice are certainly interrelated,
and it is impossible for one to exist without the other.

Human rights are fundamental to societies that respect the civil, economic, political,
cultural, and legal rights of individuals and governments, organizations, and individuals must
be held responsible if they fail to ensure the upholding of these rights. They are extremely
important in many societies and are recognized internationally through institutions such as
the International Criminal Court and the United Nations Human Rights Council.

4.9 Origin of Natural Justice

The principle of natural justice is a very old concept and it originated at an early age.
The people of Greek and roman were also familiar with this concept. In the days of Kautilya,
arthashastra and Adam were acknowledged the concept of natural justice. According to the
Bible, in the case of Eve and Adam, when they ate the fruit of knowledge, they were
forbidden by the god. Before giving the sentence, eve was given a fair chance to defend
himself and the same process was followed in the case of Adam too.

Later on, the concept of natural justice was accepted by the English jurist. The word
natural justice is derived from the Roman word ‘jus-naturale’ and ‘lex-naturale’ which
planned the principles of natural justice, natural law and equity.

“Natural justice is a sense of what is wrong and what is right.”

In India, this concept was introduced at an early time. In the case of Mohinder Singh
Gill vs. Chief Election Commissioner, the court held that the concept of fairness should be in
every action whether it is judicial, quasi-judicial, administrative and or quasi-administrative
work.

4.10 Principles of Natural Justice

Principle of Natural Justice is derived from the word ‘Jus Natural’ of the Roman law
and it is closely related to Common law and moral principles but is not codified. It is a law of
nature which is not derived from any statute or constitution. The principle of natural justice is
adhered to by all the citizens of civilized State with Supreme importance. In the ancient days
of fair practice, at the time when industrial areas ruled with a harsh and rigid law to hire and
Centre for Distance Education 4.10 Acharya Nagarjuna University

fire, the Supreme court gave its command with the passage of duration and establishment of
social, justice and economy statutory protection for the workmen.

Natural justice simply means to make a sensible and reasonable decision making
procedure on a particular issue. Sometimes, it doesn’t matter what is the reasonable decision
but in the end, what matters is the procedure and who all are engaged in taking the reasonable
decision. It is not restricted within the concept of ‘fairness’ it has different colours and shades
which vary from the context.

Basically, natural justice consists of 3 rules.

The first one is “Hearing rule” which states that the person or party who is affected by
the decision made by the panel of expert members should be given a fair opportunity to
express his point of view to defend himself.

Secondly, “Bias rule” generally expresses that panel of expert should be biased free
while taking the decision. The decision should be given in a free and fair manner which can
fulfil the rule of natural justice.

And thirdly, “Reasoned Decision” which states that order, decision or judgement of the court
given by the Presiding authorities with a valid and reasonable ground.

4.11 Purpose of the principles

1. To provide equal opportunity of being heard.
2. Concept of Fairness.
3. To fulfil the gaps and loopholes of the law.
4. To protect the Fundamental Rights.
5. Basic features of the Constitution.
6. No miscarriage of Justice.

The principles of natural justice should be free from bias and parties should be given fair
opportunity to be heard and all the reasons and decision taken by the court should be
informed by the court to the respective parties.

Supreme court said that arriving at a reasonable and justifiable judgement is the purpose
of judicial and administrative bodies. The main purpose of natural justice is to prevent the act
of miscarriage of justice.

A committee i.e. “Ministers Power” gave 3 essentials procedure related to the principles
of natural justice.

1. No one should be a judge in his own matter.

2. No one can be condemned unheard.
3. The party is entitled to know each and every reason and the decision taken by the
authority.
Social Justice and Natural Justice 4.11 Labor Legislations and Law

When it can be claimed?

Natural justice can be claimed when acting judicially or quasi-judicial like panchayat
and tribunals etc. as well. It includes the concept of fairness, basic moral principles and
various different kinds of biases and why the natural justice is required and what all special
cases or situation it includes where the principles of natural justice will not be applicable.

In the case of the Province of Bombay vs. Khushaldas Advani, it was said that natural
justice will be applicable on statutory as it is a basic principle of Natural justice which leads
to fairness and justice.

1. Effect of function
2. Administrative action.
3. Civil consequences.
4. The doctrine of Legitimate exception.
5. Fairness in action.
6. Disciplinary proceeding.

In the case of Board of high school vs. Ghanshyam, a student was caught while cheating
in the examination hall and he was debarred due to the act. Supreme Court held that student
cannot file a Public Interest Litigation against the examination board.

High water mark case- Eurasian equipment and company limited vs. State of West
Bengal: Under this case, all the executive engineers were blacklisted. Supreme Court held
that without giving a valid and reasonable ground you cannot blacklist anyone and further he
should be given a fair opportunity of being heard.

4.12 Rules of Natural Justice

NEMO JUDEX IN CAUSA SUA
AUDI ALTERAM PARTEM
REASONED DECISION

4.12.1 NEMO JUDEX IN CAUSA SUA

“No one should be a judge in his own case” because it leads to rule of biases. Bias means an
act which leads to unfair activity whether in a conscious or unconscious stage in relation to
the party or a particular case. Therefore, the necessity of this rule is to make the judge
impartial and given judgement on the basis of evidence recorded as per the case.

Type of Bias
1. Personal Bias.
2. Pecuniary Bias.
3. Subject matter Bias.
4. Departmental Bias.
5. Policy notion Bias.
6. Bias on the account of obstinacy.

4.12.1(a) Personal bias

Personal bias arises from a relation between the party and deciding authority. Which
lead the deciding authority in a doubtful situation to make an unfair activity and give
judgement in favour of his person. Such equations arise due to various forms of personal and
Centre for Distance Education 4.12 Acharya Nagarjuna University

professional relations.

In order to challenge the administrative action successfully on the ground of personal

bias, it is necessary to give a reasonable reason for bias.

Supreme court held that one of the members of the panel of selection committee his
brother was a candidate in the competition but due to this, the whole procedure of selection
cannot be quashed.

Here, to avoid the act of biases at the turn of his brother respective panel member
connected with the candidate can be requested to go out from the panel of the selection
committee. So, a fair and reasonable decision can be made. Ramanand Prasad Singh vs. UOI.

4.12.1(b) Pecuniary bias

If any of the judicial body has any kind of financial benefit, how so ever small it may
be will lead to administrative authority to biases.

4.12.1(c) Subject matter bias

When directly or indirectly the deciding authority is involved in the subject matter of
a particular case.

Muralidhar vs. Kadam Singh The court refused to quash the decision of Election tribunal on
the ground that the chairman’s wife was a member of Congress party whom the petitioner
defeated.

4.12.1(d) Departmental bias

The problem or issue of departmental bias is very common in every administrative
process and it is not checked effectively and on every small interval period it will lead to
negative concept of fairness will get vanished in the proceeding.

4.12.1(e) Policy notion bias

Issues arising out of preconceived policy notion is a very dedicated issue. The
audience sitting over there does not expect judges to sit with a blank sheet of paper and give a
fair trial and decision over the matter.

4.12.1(f) Bias on the account of the obstinacy

Supreme court has discovered new criteria of biases through the unreasonable
condition. This new category emerged from a case where a judge of Calcutta High Court
upheld his own judgement in appeal. A direct violation of the rules of bias is done because no
judge can sit in appeal against in his own case.

4.12.2 AUDI ALTERAM PARTEM

It simply includes 3 Latin word which basically means that no person can be
condemned or punished by the court without having a fair opportunity of being heard.

In many jurisdictions, a bulk of cases are left undecided without giving a fair
opportunity of being heard.

The literal meaning of this rule is that both parties should be given a fair chance to
Social Justice and Natural Justice 4.13 Labor Legislations and Law

present themselves with their relevant points and a fair trial should be conducted.

This is an important rule of natural justice and its pure form is not to penalize anyone
without any valid and reasonable ground. Prior notice should be given to a person so he can
prepare to know what all charges are framed against him. It is also known as a rule of fair
hearing. The components of fair hearing are not fixed or rigid in nature. It varies from case to
case and authority to authority.

Components
Issuance of notice
Valid and proper notice should be given to the required parties of the matter to
further proceed with the procedure of fair trial method. Even if the statute does not include
the provision of issue of notice then it will be given prior to making decisions. This was held
in the case of Fazalbhai vs. custodian.

In the case of Kanda vs. Government of Malaya, the court held that notice must
directly and clearly specify on the matter of bias, facts and circumstances against which
needs to be taken. It’s one of the rights of the individual to defend himself so he should be
familiar with the relevant matter so he may contradict the statement and safeguard himself.

The notice should be with regard to the charges framed against the accused person
and proceeding to be held. He can only be punished on the charges which are mentioned in
the notice, not for any other charges.

Right to present the case and evidence

After receiving the notice he must be given a reasonable time period to prepare and
present his case in a real and effective manner. The refusal should not be done on the
unreasonable ground or due to arbitrary.

Right to Cross Examination

Right of fair hearing includes the right to cross-examination the statement made by
the parties. If tribunals denied the right to cross-examination then it will violate the principles
of natural justice. And all the necessary copies of documents should be given and failure of
that will also encroach the principle. The department should make available officers who are
involved in the procedure of investigating and do cross-examination. Cross-examination is
defined under Section 137 of the Indian Evidence Act, 1872 (amended).

In certain exceptional cases, the right to cross-examination can be denied or rejected.

Hari Nath Mishra vs. Rajendra Medical College, under this case a male student was charged
off some indecent behaviour towards a female student. So, here the right to cross-
examination was denied for the male student as it will lead to embracement for the female
student and it will not also lead to violation of natural justice.

Sometimes it becomes very necessary to keep the identity confidential as there is a

threat of life and property. And the same situation was faced in the case Gurubachan Singh
vs. the State of Bombay.

In the case of Ludhiana food product, the court held that If the party itself refuse to
cross-examine the witness then it will not fall under miscarriage of natural justice.
Centre for Distance Education 4.14 Acharya Nagarjuna University

Right of Legal representative

In the process of enquiry, every party has the right to have a legal representative.
Each party will be presented by the legally trained person and no one can deny (A.K.Roy).
Similarly, the department has the same right to direct its officer even though there are
investigating officer in conducting an adjudicating proceeding (Sanghi textile processor vs.
Commissioner).

Exceptions
1. During the Emergency period
2. Public interest
3. Express statutory provision
4. Nature of the case is not of a serious kind
5. If it doesn’t affect the status of the individual
6. Applicability
7. Natural justice is applicable to some of the following points:-
8. Court- except to ex-parte
9. Tribunals
10. Authority entrusted with discretion but subject to legal limitations

4.12.3 REASONED DECISION

Basically, it has 3 grounds on which it relies:-

1. The aggrieved party has the chance to demonstrate before the appellate and revisional
court that what was the reason which makes the authority to reject it.
2. It is a satisfactory part of the party against whom the decision is made.
3. The responsibility to record reasons works as obstacles against arbitrary action by the
judicial power vested in the executive authority.

4.13 Summary
The principles of natural justice have been adopted and followed by the judiciary to
protect public rights against the arbitrary decision by the administrative authority. One can
easily see that the rule of natural justice include the concept of fairness: they stay alive and
support to safeguard the fair dealing. So at all the stages of the procedure if any authority is
given off the judicial function is not purely accepted but the main motive of the principal is to
prevent the miscarriage of justice. It is supreme to note that any decision or order which
violates the natural justice will be declared as null and void in nature, hence one must carry in
mind that the principles of natural justice are essential for any administrative settlement to be
held valid. The principle of natural justice is not confined to restricted walls the applicability
of the principle but depends upon the characteristics of jurisdiction, grant to the
administrative authority and upon the nature of rights affected of the individual.

4.14 Key words

Social justice- It also concerns the just distribution of goods and services, whether it is
between nations or between different groups and individuals within a society.

Rawls theory- describes this as thinking under a ‘veil of ignorance’. He expects that in such
a situation of complete ignorance about our possible position and status in society, each
person would decide in the way they generally do, that is, in terms of their own interests

Natural justice- The word natural justice is derived from the Roman word ‘jus-naturale’ and
Social Justice and Natural Justice 4.15 Labor Legislations and Law

‘lex-naturale’ which planned the principles of natural justice, natural law and equity.

NEMO JUDEX IN CAUSA SUA- “No one should be a judge in his own case” because it
leads to rule of biases. Bias means an act which leads to unfair activity whether in a
conscious or unconscious stage in relation to the party or a particular case. Therefore, the
necessity of this rule is to make the judge impartial and given judgement on the basis of
evidence recorded as per the case.

AUDI ALTERAM PARTEM - This is an important rule of natural justice and its pure form
is not to penalize anyone without any valid and reasonable ground. Prior notice should be
given to a person so he can prepare to know what all charges are framed against him. It is
also known as a rule of fair hearing. The components of fair hearing are not fixed or rigid in
nature. It varies from case to case and authority to authority.

REASONED DECISION- The aggrieved party has the chance to demonstrate before the
appellate and revisional court that what was the reason which makes the authority to reject it.
It is a satisfactory part of the party against whom the decision is made.
The responsibility to record reasons works as obstacles against arbitrary action by the judicial
power vested in the executive authority.

4.15 Self Assessment Questions

1. Briefly Explain the Principles of social Justice?
2. Elaborate the Principles of Natural Justice?
3. Outline the Origin and Rules of Natural Justice?
4. Examine the John Rawl’s theory of Justice?
5. Evaluate the History and Evolution of Social Justice?

4.16 Suggested Readings

1. Labor Laws (2011) I.A Saiyed Himalaya Publishing House
2.Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
3. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
4. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers
5. Commercial Labour Laws Edition 2022 Commercial Law Publishers House.
6.SrivastavaS.C(2022) Industrial Relations and Labour Laws
Sixth Edition Vikas Publishing House Pvt Ltd
7.Padhi P.K (2021) Labour and Industrial Laws Forth Edition PHI Learning
8.V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House
9.Commercial’s New Labour& Industrial Code along with Draft Rules 3rd Edition 2022
10. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers

Dr.Nagaraju Battu
 LESSON- 5

FACTORIES ACT 1948

Objectives of the Lesson

 To discuss the General Duties of Occupier

 To Understand the General Duties of Manufacturers
 To Know the Power of Inspectors
 To Learn the AP Factories Act 1950

Structure
5.1 Introduction
5.2. References to time of day
5.3 . Power to declare different departments
5.4. Power to exempt during public emergency
5.5. Approval, licensing and registration of factories
5.6. Notice by occupier
5.7 The Inspecting Staff
5.7A. General duties of the occupier
5.7B. General duties of manufacturers
5.8. Inspectors
5.9. Powers of Inspectors.
5.10. Certifying surgeons
5.11 Health
5.12. Disposal of wastes and effluents
5.13. Ventilation and temperature
5.14. Dust and fume
5.15. Artificial humidification
5.16. Overcrowding
5.17. Lighting
5.18. Drinking water
5.19. Latrines and urinals
5.20. Spittoons
5.21. Fencing of machinery
5.22. Work on or near machinery in motion
5.23. Employment of young persons on dangerous machines
5.24. Striking gear and devices for cutting off power
5.25. Self-acting machines
5.26. Casing of new machinery
5.27. Prohibition of employment of women and children near cotton-openers.
5.28. Hoists and lifts
5.29. Lifting machines, chains, ropes and lifting tackles.
5.30. Revolving machinery
5.31 AP Factories Rules 1950
5.32 Summary
5.33 Key words
5.34Self Assessment Questions
5.35 Suggested Readings
Centre for Distance Education 5.2 Acharya Nagarjuna University

5.1 Introduction
1. Short title, extent and commencement.(1) This Act may be called the Factories Act,
1948.
(2) It extends to the whole of India
(3) It shall come into force on the 1st day of April 1949.
2. Interpretation.—In this Act, unless there is anything repugnant in the subject or context,—
(a) “adult” means a person who has completed his eighteenth year of age;
(b) “adolescent” means a person who has completed his fifteenth year of age but has not
completed his eighteenth year;
[(bb) “calendar year” means the period of twelve months beginning with the first day of
January in any year;]
(c) “child” means a person who has not completed his fifteenth year of age;
[(ca) “competent person”, in relation to any provision of this Act, means a person or an
institution recognized as such by the Chief Inspector for the purposes of carrying out tests,
examinations and inspections required to be done in a factory under the provisions of this Act
having regard to—
(i) the qualifications and experience of the person and facilities available at his disposal; or
(ii) the qualifications and experience of the persons employed in such institution and facilities
available therein, with regard to the conduct of such tests, examinations and inspections, and
more than one person or institution can be recognized as a competent person in relation to a
factory;
(cb) “hazardous process” means any process or activity in relation to an industry specified
in the First Schedule where, unless special care is taken, raw materials used therein or the
intermediate or finished products, bye-products, wastes or effluents thereof would—
(i) cause material impairment to the health of the persons engaged in or connected therewith,
or
(ii) result in the pollution or the general environment:
Provided that the State Government may, by notification in the Official Gazette, amend the
First Schedule by way of addition, omission or variation of any industry specified in the said
Schedule;]
(d) “young person” means a person who is either a child or an adolescent;
(e) “day” means a period of twenty-four hours beginning at midnight;
(f) “week” means a period of seven days beginning at midnight on Saturday night or such
other night as may be approved in writing for a particular area by the Chief Inspector of
Factories;
(g) “power” means electrical energy, or any other form of energy which is mechanically
transmitted and is not generated by human or animal agency;
(h) “prime mover” means any engine, motor or other appliance which generates or otherwise
provides power;
(i) “transmission machinery” means any shaft, wheel, drum, pulley, system of pulleys,
coupling, clutch, driving belt or other appliance or device by which the motion of a prime
mover transmitted or received by any machinery or appliance;
(j) ”machinery” includes prime movers, transmission machinery and all other appliances
whereby power is generated, transformed, transmitted or applied;
(k) “manufacturing process” means any process for—
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning,
breaking up, demolishing, or otherwise treating or adapting any article or substance with a
view to its use, sale, transport, delivery or disposal; or
(ii) pumping oil, water, sewage or any other substance; or
(iii) generating, transforming or transmitting power; or
 Social Justice and Natural Justice 5.3 Labor Legislations and Law

[(iv) composing types for printing, printing by letter press, lithography, photogravure or other
similar process or book binding;
(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels;
(vi) preserving or storing any article in cold storage;
(l) “worker” means a person employed, directly or by or through any agency (including a
contractor) with or without the knowledge of the principal employer, whether for
remuneration or not], in any manufacturing process, or in cleaning any part of the machinery
or premises used for manufacturing process, or in any other kind of work incidental to, or
connected with, the manufacturing process, or the subject of the manufacturing process [but
does not include any member of the armed forces of the Union];
(m) “factory” means any premises including the precincts thereof—
(i) whereon ten or more workers are working, or were working on any day of the preceding
twelve months, and in any part of which a manufacturing process is being carried on with the
aid of power, or is ordinarily so carried on, or
(ii) whereon twenty or more workers are working, or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is being carried
on without the aid of power, or is ordinarily so carried on,—but does not include a mine
subject to the operation of [the Mines Act, 1952 (35 of 1952)], or [a mobile mobile unit
belonging to the armed forces of the Union, railway running shed or a hotel, restaurant
operating place

5.2. References to time of day

In this Act references to time of day are references to Indian Standard Time, being
five and a half hours ahead of Greenwich Mean Time: Provided that for any area in which
Indian Standard Time is not ordinarily observed the State Government may make rules—
(a) specifying the area,
(b) defining the local mean time ordinarily observed therein, and
(c) permitting such time to be observed in all or any of the factories situated in the area.

5.3. Power to declare different departments

It has to be separate factories or two or more factories to be a single factory.—The
State Government may, [on its own or] on an application made in this behalf by an occupier,
direct, by an order in [and subject to such conditions as it may deem fit that for all or any of
the purposes of this Act different departments or branches of a factory of the occupier
specified in the application shall be treated as separate factories or that two or more factories
of the occupier specified in the application shall be treated as a single factory:

Provided that no order under this section shall be made by the State Government on its own
motion unless an opportunity of being heard is given to the occupier.

5.4. Power to exempt during public emergency.

In any case of public emergency the State Government may, by notification in the
Official Gazette, exempt any factory or class or description of factories from all or any of the
provisions of this Act 4[except section 67] for such period and subject to such conditions as it
may think fit:

Provided that no such notification shall be made for a period exceeding three months at a
time. For the purposes of this section “public emergency” means a grave emergency whereby
the security of India or of any part of the territory thereof is threatened, whether by war or
external aggression or internal disturbance.]
Centre for Distance Education 5.4 Acharya Nagarjuna University

5.5. Approval, licensing and registration of factories

(1) The State Government may make rules—
(a) requiring, for the purposes of this Act, the submission of plans of any class or description
of factories to the Chief Inspector or the State Government;]
[(aa)] requiring, the previous permission in writing of the State Government or the Chief
Inspector to be obtained for the site on which the factory is to be situated and for the
construction or extension of any factory or class or description of factories;
(b) requiring for the purpose of considering applications for such permission the submission
of plans and specifications;
(c) prescribing the nature of such plans and specifications and by whom they shall be
certified;
(d) requiring the registration and licensing of factories or any class or description of factories,
and prescribing the fees payable for such registration and licensing and for the renewal of
licenses;
(e) requiring that no license shall be granted or renewed unless the notice specified insection
7 has been given.
(2) If on an application for permission referred to in 8[clause (aa)] of sub-section (1)
accompanied by the plans and specifications required by the rules made under clause (b) of
that sub-section, sent to the State Government or Chief Inspector by registered post, no order
is communicated to the applicant within three months from the date on which it is so sent, the
permission applied for in the said application shall be deemed to have been granted

5.6. Notice by occupier

(1) The occupier shall, at least fifteen days before he begins to occupy or use any premises as
a factory, send to the Chief Inspector a written notice containing—
(a) the name and situation of the factory;
(b) the name and address of the occupier;
[(bb) the name and address of the owner of the premises or building (including the precincts
there of referred to in section 93;]
(c) the address to which communications relating to the factory may be sent;
(d) the nature of the manufacturing process—
(i) carried on in the factory during the last twelve months in the case of factories in existence
on the date of the commencement of this Act; and
(ii) to be carried on in the factory during the next twelve months in the case of all factories;
[(e) the total rated horse power installed or to be installed in the factory, which shall not
include the rated horse power of any separate stand-by plant;]
(f) the name of the manager of the factory for the purposes of this Act;
(g) the number of workers likely to be employed in the factory;
(h) the average number of workers per day employed during the last twelve months in the
case of a factory in existence on the date of the commencement of this Act;

(i) such other particulars as may be prescribed.

(2) In respect of all establishments which come within the scope of the Act for the first time,
the occupier shall send a written notice to the Chief Inspector containing the particulars
specified in sub-section (1) within thirty days from the date of the commencement of this Act.

(3) Before a factory engaged in a manufacturing process which is ordinarily carried on for
less than one hundred and eighty working days in the year resumes working, the occupier
 Social Justice and Natural Justice 5.5 Labor Legislations and Law

shall send a written notice to the Chief Inspector containing the particulars specified in sub-
section (1) [at least thirty days]before the date of the commencement of work.

(4) Whenever a new manager is appointed, the occupier shall send to the 5[Inspector a
written notice and to the Chief Inspector a copy thereof] within seven days from the date on
which such person takes over charge.

(5) During any period for which no person has been designated as manager of a factory or
during which the person designated does not manage the factory, any person found acting as
manager, or if no such person is found, the occupier himself, shall be deemed to be the
manager of the factory for the purposes of this Act

5.7 The Inspecting Staff

5.7A. General duties of the occupier.
(1) Every occupier shall ensure, so far as is reasonably practicable, the health, safety and
welfare of all workers while they are at work in the factory.
(2) Without prejudice to the generality of the provisions of sub-section (1), the matters to
which such duty extends, shall include—
(a) the provision and maintenance of plant and systems of work in the factory that are safe
and without risks to health;
(b) the arrangements in the factory for ensuring safety and absence of risks to health in
connection with the use, handling, storage and transport of articles and substances;
(c) the provisions of such information, instruction, training and supervision as are necessary
to ensure the health and safety of all workers at work;
(d) the maintenance of all places of work in the factory in a condition that is safe and without
risks to health and the provision and maintenance of such means of access to, and egress
from, such places as are safe and without such risks;
(e) the provision, maintenance or monitoring of such working environment in the factory for
the workers that is safe, without risks to health and adequate as regards facilities and
arrangements for
their welfare at work.
(3) Except in such cases as may be prescribed, every occupier shall prepare, and, as often as
may be appropriate, revise, a written statement of his general policy with respect to the health
and safety of the workers at work and the organization and arrangements for the time being in
force for carrying out that policy, and to bring the statement and any revision thereof to the
notice of all the workers in such manners may be prescribed.

5.7B. General duties of manufacturers

IT as regards articles and substances for use in factories.
(1) Every person who designs, manufactures, imports or supplies any article for use in any
factory, shall—
(a) ensure, so far as is reasonably practicable, that the article is so designed and constructed
as to
be safe and without risks to the health of the workers when properly used;
(b) carry out or arrange for the carrying out of such tests and examination as may be
considered
necessary for the effective implementation of the provisions of clause (a);
(c) take such steps as may be necessary to ensure that adequate information will be
available—
(i) in connection with the use of the article in any factory;
Centre for Distance Education 5.6 Acharya Nagarjuna University

(ii) about the use for which it is designed and tested; and
(iii) about any conditions necessary to ensure that the article, when put to such use, will be
safe, and without risks to the health of the workers: Provided that where an article is designed
or manufactured outside India, it shall be obligatory on the part of the importer to see—
(a) that the article conforms to the same standards if such article is manufactured in India, or
(b) if the standards adopted in the country outside for the manufacture of such article is above
the standards adopted in India, that the article conforms to such standards.
(2) Every person, who undertakes to design or manufacture any article for use in any factory,
may carry out or arrange for the carrying out of necessary research with a view to the
discovery and, so far as is reasonably practicable, the elimination or minimization of any
risks to the health or safety of the workers to which the design or article may give rise
(3) Nothing contained in sub-sections (1) and (2) shall be construed to require a person to
repeat the testing, examination or research which has been carried out otherwise than by him
or at his instance in so far as it is reasonable for him to rely on the results thereof for the
purposes of the said sub-sections.
(4) Any duty imposed on any person by sub-sections (1) and (2) shall extend only to things
done in the course of business carried on by him and to matters within his control.
(5) Where a person designs, manufactures, imports or supplies an article on the basis of a
written undertaking by the user of such article to take the steps specified in such undertaking
to ensure, so far as is reasonably practicable, that the article will be safe and without risks to
the health of the workers when properly used, the undertaking shall have the effect of
relieving the person designing, manufacturing, importing or supplying the article from the
duty imposed by clause (a) of sub-section (1) to such extent as is reasonable having regard to
the terms of the undertaking.
(6) For the purposes of this section, an article is not to be regarded as properly used if it is
used without regard to any information or advice relating to its use which has been made
available by the person who has designed, manufactured, imported or supplied the article.
Explanation.—For the purposes of this section, “article” shall include plant and machinery.

5.8. Inspectors
(1) The State Government may, by notification in the Official Gazette, appoint such persons
as possess the prescribed qualification to be Inspectors for the purposes of this Act and may
assign to them such local limits as it may think fit.

(2) The State Government may, by notification in the Official Gazette, appoint any person to
be a Chief Inspector who shall, in addition to the powers conferred on a Chief Inspector
under this Act, exercise the powers of an Inspector throughout the State.

[(2A) The State Government may, by notification in the Official Gazette, appoint as many
Additional Chief Inspectors, Joint Chief Inspectors and Deputy Chief Inspectors and as many
other officers as it thinks fit to assist the Chief Inspector and to exercise such of the powers of
the Chief Inspector as may be specified in such notification.

(2B) Every Additional Chief Inspector, Joint Chief Inspector, Deputy Chief Inspector and
every other officer appointed under sub-section (2A) shall, in addition to the powers of a
Chief Inspector specified in the notification by which he is appointed, exercise the power of
an Inspector throughout the State.]

(3) No person shall be appointed under sub-section (1), sub-section (2)[, sub-section (2A)] or
sub-section (5) or, having been so appointed, shall continue to hold office, who is or becomes
 Social Justice and Natural Justice 5.7 Labor Legislations and Law

directly or indirectly interested in a factory or in any process or business carried on therein or

in any patent or machinery connected therewith.

(4) Every District Magistrate shall be an Inspector for his district.

(5) The State Government may also, by notification as aforesaid, appoint such public officers
as it thinks fit to be additional Inspectors for all or any of the purposes of this Act, within
such local limits as it may assign to them respectively.

(6) In any area where there are more Inspectors than one the State Government may, by
notification as aforesaid, declare the powers, which such Inspectors shall respectively
exercise and the Inspector to whom the prescribed notices are to be sent.

(7)[Every Chief Inspector, Additional Chief Inspector, Joint Chief Inspector, Deputy Chief
Inspector, Inspector and every other officer appointed under this section] shall be deemed to
be a public servant within the meaning of the Indian Penal Code (45 of 1860), and shall be
officially subordinate to such authority as the State Government may specify in this behalf.

5.9. Powers of Inspectors.

Subject to any rules made in this behalf, an Inspector may, within the local limits for
which he is appointed,

(a) enter, with such assistants, being persons in the service of the Government, or any local or
other public authority, [or with an expert] as he thinks fit, any place which is used, or which
he has reason to believe is used, as a factory;

(b) make examination of the premises, plant, machinery, article or substance;

(c) inquire into any accident or dangerous occurrence, whether resulting in bodily injury,
disability or not, and take on the spot or otherwise statements of any person which he may
consider necessary for such inquiry;

(d) require the production of any prescribed register or any other document relating to the
factory;

(e) seize, or take copies of, any register, record or other document or any portion thereof, as
he may consider necessary in respect of any offence under this Act, which he has reason to
believe, has been committed;

(f) direct the occupier that any premises or any part thereof, or anything lying therein, shall be
left undisturbed (whether generally or in particular respects) for so long as is necessary for
the purpose of any examination under clause (b);

(g) take measurements and photographs and make such recordings as he considers necessary
for the purpose of any examination under clause (b), taking with him any necessary
instrument or
equipment;

(h) in case of any article or substance found in any premises, being an article or substance
which appears to him as having caused or is likely to cause danger to the health or safety of
Centre for Distance Education 5.8 Acharya Nagarjuna University

the workers, direct it to be dismantled or subject it to any process or test (but not so as to
damage or destroy it unless the same is, in the circumstances necessary, for carrying out the
purposes of this Act), and take possession of any such article or substance or a part thereof,
and detain it for so long as is necessary for such examination; exercise such other powers as
may be prescribed.

5.10. Certifying surgeons

(1) The State Government may appoint qualified medical practitioners tobe certifying
surgeons for the purposes of this Act within such local limits or for such factory or class or
description of factories as it may assign to them respectively.
(2) A certifying surgeon may, with the approval of the State Government, authorize any
qualified medical practitioner to exercise any of his powers under this Act for such period as
the certifying surgeon may specify and subject to such conditions as the State Government
may think fit to impose, and references in this Act to a certifying surgeon shall be deemed to
include references to any qualified medical practitioner when so authorized.

(3) No person shall be appointed to be, or authorized to exercise the powers of, a certifying
surgeon, or having been so appointed or authorized, continue to exercise such powers, who is
or becomes the occupier of a factory or is or becomes directly or indirectly interested therein
or in any process or business carried on therein on in any patent or machinery connected
therewith or is otherwise in the employ of the factory:

[Provided that the State Government may, by order in writing and subject to such conditions
as maybe specified in the order, exempt any person or class of persons from the provisions of
this sub-section inrespect of any factory or class or description of factories.]

(4) The certifying surgeon shall carry out such duties as may be prescribed in connection
with—
(a) the examination and certification of young persons under this Act;
b) the examination of persons engaged in factories in such dangerous occupations or
processes as may be prescribed;
(c) the exercising of such medical supervision as may be prescribed for any factory or class or
description of factories where—
(i) cases of illness have occurred which it is reasonable to believe are due to the nature of the
manufacturing process carried on, or other conditions of work prevailing, therein;
(ii) by reason of any change in the manufacturing process carried on or in the substances used
there in or by reason of the adoption of any new manufacturing process or of any new
substance
for use in a manufacturing process, there is a likelihood of injury to the health of workers
employed in that manufacturing process;
(iii) young persons are, or are about to be, employed in any work which is likely to cause
injury to their health

5.11 Health
Cleanliness.(1) Every factory shall be kept clean and free from effluvia arising from any
drain, privy or other nuisance, and in particular—
(a) accumulation of dirt and refuse shall be removed daily by sweeping or by any other
effective method from the floors and benches of workrooms and from staircases and
passages, and disposed of in a suitable manner;
(b) the floor of every workroom shall be cleaned at least once in every week by washing,
 Social Justice and Natural Justice 5.9 Labor Legislations and Law

using disinfectant, where necessary, or by some other effective method;

(c) where a floor is liable to become wet in the course of any manufacturing process to such
extent as is capable of being drained, effective means of drainage shall be provided and
maintained;
(d) all inside walls and partitions, all ceilings or tops of rooms and all walls, sides and tops of
passages and staircases shall—
(i) where they are [painted otherwise than with washable water-paint] or varnished, be
repainted or revarnished at least once in every period of five years;
[(ia) where they are painted with washable water-paint, be repainted with at least one coat of
such paint at least once in every period of three years and washed at least once in every
period of six months;]
(ii) where they are painted or varnished or where they have smooth impervious surfaces, be
cleaned at least once in every period of fourteen months by such method as may be
prescribed;
(iii) in any other case, be kept whitewashed, or colour washed, and the whitewashing or
colour washing shall be carried out at least once in every period of fourteen months;
[(dd) all doors and window frames and other wooden or metallic framework and shutters
shall be kept painted or varnished and the painting or varnishing shall be carried out at least
once in every period of five years;]
(e) the dates on which the processes required by clause (d) are carried out shall be entered in
the prescribed register.

5.12. Disposal of wastes and effluents

[(1) Effective arrangements shall be made in every factory for the treatment of wastes and
effluents due to the manufacturing process carried on therein, so as to render them innocuous,
and for their disposal.
(2) The State Government may make rules prescribing the arrangements to be made under
sub-section (1) or requiring that the arrangements made in accordance with sub-section (1)
shall be approved by such authority as may be prescribed.

5.13. Ventilation and temperature

(1) Effective and suitable provision shall be made in ever factory for securing and
maintaining in every workroom—
(a) adequate ventilation by the circulation of fresh air, and
(b) such a temperature as will secure to workers therein reasonable conditions of comfort and
prevent injury to health; and in particular,
(i) walls and roofs shall be of such material and so designed that such temperature shall not
be exceeded bill kept as tow as practicable;
(ii) where the nature of the work carried on in the factory involves, or is likely to involve the
production of excessively high temperatures, such adequate measures as are practicable shall
be taken to protect the workers therefrom, by separating the process which produces such
temperatures from the workroom, by insulating the hot parts or by other effective means.
(2) The State Government may prescribe a standard of adequate ventilation and reasonable
temperature for any factory or class or description of factories or parts thereof and direct that
4 [proper measuring instruments, at such places and in such position as may be specified,
shall be provided and such records, as may be prescribed, shall be maintained.
(3) If it appears to the Chief Inspector that excessively high temperatures in any factory can
be reduced by the adoption of suitable measures, he may, without prejudice to the rules made
under sub-section (2), serve on the occupier, an order in writing specifying the measures
which, in his opinion, should be adopted, and requiring them to be carried out before a
Centre for Distance Education 5.10 Acharya Nagarjuna University

specified date.

5.14. Dust and fume

(1) In every factory in which, by reason of the manufacturing process carried on, there is
given off any dust or fume or other impurity of such a nature and to such an extent as is likely
to be injurious or offensive to the workers employed therein, or any dust in substantial
quantities, effective measures shall be taken to prevent its inhalation and accumulation in any
workroom, and if any exhaust appliance is necessary for this purpose, it shall be applied as
near as possible to the point of origin of the dust, fume or other impurity, and such point shall
be enclosed so far as possible.

(2) In any factory no stationary internal combustion engine shall be operated unless the
exhaust is
conducted into the open air, and no other internal combustion engine shall be operated in any
room unless effective measures have been taken to prevent such accumulation of fumes
therefrom as are likely to be injurious to workers employed in the room.

5.15. Artificial humidification

(1) In respect of all factories in which the humidity of the air is artificially increased, the State
Government may make rules,
(a) prescribing standards of humidification;
(b) regulating the methods used for artificially increasing the humidity of the air;
(c) directing prescribed tests for determining the humidity of the air to be correctly carried
out and recorded;
(d) prescribing methods to be adopted for securing adequate ventilation and cooling of the air
in the workrooms.
(2) In any factory in which the humidity of the air is artificially increased, the water used for
the purpose shall be taken from a public supply, or other source of drinking water, or shall be
effectively purified before it is so used.
(3) If it appears to an Inspector that the water used in a factory for increasing humidity which
is req uired to be effectively purified under sub-section (2) is not effectively purified he may
serve on the manager of the factory an order in writing, specifying the measures which in his
opinion should be adopted, and requiring them to be carried out before specified date.

5.16. Overcrowding
(1) No room in any factory shall be overcrowded to an extent injurious to the health of the
workers employed therein.
(2) Without prejudice to the generality of sub-section (1) there shall be in every workroom of
a factory in existence on the date of the commencement of this Act at least 1[9.9 cubic
meters] and of a factory built after the commencement of this Act at least 2[14.2 cubic
meters] of space for every worker employed therein, and for the purposes of this sub-section
no account shall be taken of any space which is more than 3[4.2 meters] above the level of
the floor of the room.
(3) If the Chief Inspector by order in writing so requires, there shall be posted in each
workroom of a factory a notice specifying the maximum number of workers who may, in
compliance with the provisions of this section, be employed in the room.
(4) The Chief Inspector may by order in writing exempt, subject to such conditions, if any, as
he may think fit to impose, any workroom from the provisions of this section, if he is
satisfied that compliance therewith in respect of the room is unnecessary in the interest of the
health of the workers employed therein.
Social Justice and Natural Justice 5.11 Labor Legislations and Law

5.17. Lighting
(1) In every part of a factory where workers are working of passing there shall be provided
and maintained sufficient and suitable lighting, natural or artificial, or both.
(2) In every factory all glazed windows and skylights used for the lighting of the workrooms
shall be kept clean on both the inner and outer surfaces and, so far as compliance with the
provisions of any rulesmade under sub-section (3) of section 13 will allow, free from
obstruction.
(3) In every factory effective provision shall, so far as is practicable, be made for the
prevention of—
(a) glare, either directly from a source of light or by reflection from a smooth or polished
surface:
(b) the formation of shadows to such an extent as to cause eye-strain or the risk of accident to
any worker.
(4) The State Government may prescribe standards of sufficient and suitable lighting for
factories or for any class or description of factories or for any manufacturing process.

5.18. Drinking water

(1) In every factory effective arrangements shall be made to provide and maintain at suitable
points conveniently situated for all workers employed therein a sufficient supply of
wholesome drinking water

(2) All such points shall be legibly marked “drinking water” in a language understood by a
majority of the workers employed in the factory, and no such point shall be situated within
1[six meters of any washing place, urinal, latrine, spittoon, open drain carrying sullage or
effluent or any other source of contamination] unless a shorter distance is approved in writing
by the Chief Inspector.

(3) In every factory wherein more than two hundred and fifty workers are ordinarily
employed, provision shall be made for cool drinking water during hot weather by effective
means and for distribution thereof.

(4) In respect of all factories or any class or description of factories the State Government
may make rules for securing compliance with the provisions of sub-sections (1), (2) and (3)
and for the examination by prescribed authorities of the supply and distribution of drinking
water in factories.

5.19. Latrines and urinals.

(1) In every factory
(a) sufficient latrine and urinal accommodation of prescribed types shall be provided
conveniently situated and accessible to workers at all times while they are at factory;
(b) separate enclosed accommodation shall be provided for male and female workers;
(c) such accommodation shall be adequately lighted and ventilated, and no latrine or urinal
shall, unless specially exempted in writing by the Chief Inspector, communicate with any
work room except through an intervening open space or ventilated passage;
(d) all such accommodation shall be maintained in a clean and sanitary condition at all times;
(e) sweepers shall be employed whose primary duty it would be to keep clean latrines, urinals
and washing places.
(2) In every factory wherein more than two hundred and fifty workers are ordinarily
employed—
Centre for Distance Education 5.12 Acharya Nagarjuna University

(a) all latrine and urinal accommodation shall be of prescribed sanitary types;
(b) the floors and internal walls, up to a height of 2[ninety centimeters], of the latrines and
urinals and the sanitary blocks shall be laid in glazed tiles or otherwise finished to provide a
smooth polished impervious surface;
(c) without prejudice to the provisions of clauses (d) and (e) of sub-section (1), the floors,
portions of the walls and blocks so laid or finished and the sanitary pans of latrines and
urinals shall be thoroughly washed and cleaned at least once in every seven days with
suitable detergents or disinfectants or with both.
(3) The State Government may prescribe the number of latrines and urinals to be provided in
any
factory in proportion to the numbers of male and female workers ordinarily employed therein,
and
provide for such further mailers in respect of sanitation in factories, including the obligation
of workers in this regard, as it considers necessary in the interest of the health of the workers
employed therein.

5.20. Spittoons
(1) In every factory there shall be provided a sufficient number of spittoons inconvenient
places and they shall be maintained in a clean and hygienic condition.
(2) The State Government may make rules prescribing the type and the number of spittoons
to be
provided and their location in any factory and provide for such further matters relating to
their
maintenance in a clean and hygienic condition.

5.21. Fencing of machinery

(1) In every factory the following, namely:
(i) every moving part of a prime mover and every flywheel connected to a prime mover,
whether the prime mover or flywheel is in the engine house or not;
(ii) the headrace and tailrace of every water-wheel and water turbine:
(iii) any part of a stock-bar which projects beyond the head stock of a lathe; and
(iv) unless they are in such position or of such construction as to be safe to every person
employed in the factory as they would be if they were securely fenced, the following,
namely:—
(a) every part of an electric generator, a motor or rotary converter;
(b) every part of transmission machinery; and
(c) every dangerous part of any other machinery; shall be securely fenced by safeguards of
substantial construction which
1. [shall be constantly maintained and kept in position] while the parts of machinery the y are
fencing are in motion or in use:
2. [Provided that for the purpose of determining whether any part of machinery is in such
position or is of such construction as to be safe as aforesaid, account shall not be taken of any
occasion when—

(i) it is necessary to make an examination of any part of the machinery aforesaid while it is in
motion or, a s a result of such examination, to carry out lubrication or other adjusting
operation while the machinery is in motion, being an examination or operation which it is
necessary to be carried out while that part of the machinery is in motion, or

(ii) in the case of any part of a transmission machinery used in such process as may be
Social Justice and Natural Justice 5.13 Labor Legislations and Law

prescribed (being a process of a continuous nature the carrying on of which shall be, or is
likely to be,
substantially interfered with by the stoppage of that part of the machinery), it is necessary to
make an examination of such part of the machinery while it is in motion or, as a result of such
examination, to carry out any mounting or shipping of belts or lubrication or other adjusting
operation while the machinery is in motion, and such examination or operation is made or
carried out in accordance with the provisions of sub-section (1) of section 22.]

(2) The State Government may by rules prescribe such further precautions as it may consider
necessary in respect of any particular machinery or part thereof, or exempt, subject to such
condition as may be prescribed, for securing the safety of the workers, any particular
machinery or part thereof from the provisions of this section.

5.22. Work on or near machinery in motion

(1)[Where in any factory it becomes necessary to examine any part of machinery referred to
in section 21, while the machinery is in motion, or, as a result of such examination, to carry
out—
(a) in a case referred to in clause (i) of the proviso to sub-section (1) of section 21, lubrication
or other adjusting operation; or
(b) in a case referred to in clause (ii) of the proviso aforesaid, any mounting or shipping of
belts or lubrication or other adjusting operation,
while the machinery is in motion, such examination or operation shall be made or carried out
only by a specially trained adult male worker wearing tight fitting clothing (which shall be
supplied by the occupier) whose name has been recorded in the register prescribed in this
behalf and who has been furnished with a certificate of this appointment, and while he is so
engaged,
(a) such worker shall not handle a belt at a moving pulley unless—
(i) the belt is not more than fifteen centimeters in width;
(ii) the pulley is normally for the purpose of drive and not merely a fly-wheel or balance
wheel (in which case a belt is not permissible);
(iii) the belt joint is either laced or flush with the belt;
(iv) the belt, including the joint and the pulley rim, are in good repair;
(v) there is reasonable clearance between the pulley and any fixed plant or structure;
(vi) secure foothold and, where necessary, secure handhold, are provided for the operator;
(vii) Any ladder in use for carrying out any examination or operation aforesaid is securely
fixed or lashed or is firmly held by a second person;]

(b) without prejudice to any other provision of this Act relating to the fencing of machinery,
every set screw, bolt and key on any revolving shaft, spindle, wheel or pinion, and all spur,
worm and other toothed or friction gearing in motion with which such worker would
otherwise be liable to come into contact, shall be securely fenced to prevent such contact.

[(2) No woman or young person shall be allowed to clean, lubricate or adjust any part of a
prime mover or of any transmission machinery while the prime mover or transmission
machinery is in motion, or to clean, lubricate or adjust any part of any machine if the
cleaning, lubrication or adjustment thereof would expose the woman or young person to risk
of injury from any moving part either of that machine or of any adjacent machinery.]

(3) The State Government may, by notification in the Official Gazette, prohibit, in any
specified factory or class or description of factories, the cleaning, lubricating or adjusting by
Centre for Distance Education 5.14 Acharya Nagarjuna University

any person of specified parts of machinery when those parts are in motion.

5.23. Employment of young persons on dangerous machines

(1) No young person [shall be required or allowed to work] at any machine to which this
section applies, unless he has been fully instructed as to the dangers arising in connection
with the machine and the precautions to be observed and—
(a) has received sufficient training in work at the machine, or
(b) is under adequate supervision by a person who has a thorough knowledge and experience
of
the machine.
(2) Sub-section (1) shall apply to such machines as may be prescribed by the State
Government, being machines which in its opinion are of such a dangerous character that
young persons ought not to work at them unless the foregoing requirements are complied
with.

5.24. Striking gear and devices for cutting off power

(1) In every factory—
(a) suitable striking gear or other efficient mechanical appliance shall be provided and
maintained and used to move driving belts to and from fast and loose pulleys which form part
of the transmission machinery, and such gear or appliances shall be so constructed, placed
and maintained as to prevent the belt from creeping back on the fast pulley;
(b) driving belts when not in use shall not be allowed to rest or ride upon shafting in motion

(2) In every factory suitable devices for cutting off power in emergencies from running
machinery shall be provided and maintained in every workroom:
Provided that in respect of factories in operation before the commencement of this Act, the
provisions of this sub-section shall apply only to workrooms in which electricity is used as
power.

[(3) When a device, which can inadvertently shift from “off” to “on” position, is provided in
a factory to cut off power, arrangements shall be provided for locking the device in safe
position to prevent accidental starting of the transmission machinery or other machines to
which the device is fitted].

5.25. Self-acting machines

No traversing part of a self-acting machine in any factory and no
material carried thereon shall, if the space over which it runs is a space over which any
person is liable to pass, whether in the course of his employment or otherwise, be allowed to
run on its outward or inward traverse within a distance of [forty-five centimeters] from any
fixed structure which is not part of the machine:
Provided that the Chief Inspector may permit the continued use of a machine installed before
the commencement of this Act which does not comply with the requirements of this section
on such conditions for ensuring safety as he may think fit to impose.

5.26. Casing of new machinery

(1) In all machinery driven by power and installed in any factory after the commencement of
this Act,

(a) every set screw, bolt or key on any revolving shaft, spindle, wheel or pinion shall be
so sunk, encased or otherwise effectively guarded as to prevent danger;
Social Justice and Natural Justice 5.15 Labor Legislations and Law

(b) all spur, worm and other toothed or friction gearing which does not require frequent
adjustment while in motion shall be completely encased, unless it is so situated as to be as
safe astound be if it were completely encased.

(2) Whoever sells or lets on hire or, as agent of a seller or hirer, causes or procures to be sold
or let on hire, for use in a factory any machinery driven by power which does not comply
with the provisions of[sub-section (1) or any rules made under sub-section (3)], shall be
punishable with imprisonment for a term which may extend to three months or with fine
which may extend to five hundred rupees or with both.

[(3) The State Government may make rules specifying further safeguards to be provided in
respect of any other dangerous part of any particular machine or class or description of
machines.]

5.27. Prohibition of employment of women and children near cotton-openers.

No woman or child shall be employed in any part of a factory for pressing cotton in
which a cotton opener is at work: Provided that if the feed-end of a cotton-opener is in a room
separated from the delivery end by a partition extending to the roof or to such height as the
Inspector may in any particular case specify inwriting, women and children may be employed
on the side of the partition where the feed-end is situated.

5.28. Hoists and lifts

(1) In every factory—
(a) every hoist and lift shall be—
(i) of good mechanical construction, sound material and adequate strength;
(ii) properly maintained, and shall be thoroughly examined by a competent person at least
once in every period of six months, and a register shall be kept containing the prescribed
particulars of very such examination;
(b) every hoist way and lift way shall be sufficiently protected by an enclosure fitted with
gates, and the hoist or lift and every such enclosure shall be so constructed as to prevent any
person or thing from being trapped between any part of the hoist or lift and any fixed
structure or moving part;
(c) the maximum safe working load shall be plainly marked on every hoist or lift, and no load
greater than such load shall be carried thereon;
(d) the cage of every hoist or lift used for carrying persons shall be fitted with a gate on each
side from which access is afforded to a landing;
(e) every gate referred to in clause (b) or clause (d) shall be fitted with interlocking or other
efficient device to secure that the gate cannot be opened except when the cage is at the
landing and that the cage cannot be moved unless the gate is closed.
(2) The following additional requirement shall apply to hoists and lifts used for carrying
persons and installed or reconstructed in a factory after the commencement of this Act,
namely:—
(a) where the cage is supported by rope or chain, there shall be at least two ropes of chains
separately connected with the cage and balance weight, and each rope or chain with its
attachments shall be capable of carrying the whole weight of the cage together with its
maximum load;
(b) efficient devices shall be provided and maintained capable of supporting the cage together
with its maximum load in the event of breakage of the ropes, chains or attachments;
(c) an efficient automatic device shall be provided and maintained to prevent the cage from
Centre for Distance Education 5.16 Acharya Nagarjuna University

overrunning.
(3) The Chief Inspector may permit the continued, use of a hoist of lift installed in a factory
before
the commencement of this Act which does not fully comply with the provisions of sub-
section (1) upon such conditions for ensuring safely as he may think fit to impose.
(4) The State Government may, if in respect of any class or description of hoist or lift, it is of
opinion that it would be unreasonable to enforce any requirement of sub-sections (1) and (2),
by order direct that such requirement shall not apply to such class or description of hoist or
lift.
[Explanation.—For the purposes of this section, no lifting machine or appliance shall be
deemed to be a hoist or lift unless it has a platform or cage, the direction or movement of
which is restricted by a guide or guides.]

5.29. Lifting machines, chains, ropes and lifting tackles

(1) In any factory the following provisions shall be complied with in respect of every lifting
machine (other than a hoist and lift) and every chain, rope and lifting tackle for the purpose of
raising or lowering persons, goods or materials:
(a) all parts, including the working gear, whether fixed or movable, of every lifting machine
and every chain, rope or lifting tackle shall be
(i) of good construction, sound material and adequate strength and free from defects;
(ii) properly maintained; and
(iii) thoroughly examined by a competent person at least once in every period of
twelvemonths, or at such intervals as the Chief Inspector may specify in writing; and a
register shall be kept containing the prescribed particulars of every such examination;
(b) no lifting machine and no chain, rope or lifting tackle shall, except for the purpose of test
be loaded beyond the safe working load which shall be plainly marked thereon together with
an identification mark and duly entered in the prescribed register; and where this is not
practicable, a table showing the safe working loads of every kind and size of lifting machine
or chain, rope or lifting tackle in use shall be displayed in prominent positions on the
premises;

5.30. Revolving machinery

(1) In every factory] in which the process of grinding is carried on there shall be permanently
affixed to or placed near each machine in use a notice indicating the maximum safe working
peripheral speed of every grindstone or abrasive wheel, the speed of the shaft or spindle upon
which the wheel is mounted, and the diameter of the pulley upon such shaft or spindle
necessary to secure such safe working peripheral speed.

(2) The speeds indicated in notices under sub-section (1) shall not be exceeded.

(3) Effective measures shall be taken in every factory to ensure that the safe working
peripheral speed of every revolving vessel, cage, basket, fly-wheel, pulley, disc or similar
appliance driven by power is not exceeded.

5.31 AP Factories Rules 1950

The following draft of an amendment to the Andhra Pradesh Factories Rules,1950 which it is
proposed to be made in exercise of the powers conferred under section112 of the Factories
Act, 1948 (Act No.63 of 1948) is hereby published for general information as required under
sub section (1) of section 115 of the said Act.
Social Justice and Natural Justice 5.17 Labor Legislations and Law

Notice is hereby given that the said draft will be taken into consideration by the Government
on or after forty five (45) days from the date of its publication in the Andhra Pradesh Gazette
and that any objections or suggestions which may be received from any person with respect
thereto within the aforesaid period will be considered by the Government of Andhra Pradesh.

The objections or suggestions if any should be addressed to the Secretary to Government,

Labour, Employment, Training and Factories (Lab.II) Department, Government of Andhra
Pradesh through Director of Factories, Andhra Pradesh ,Hyderabad.

A Safety Officer
(1) Qualification
(a) A person shall not be eligible for appointment as Safety Officer unless he -
(i) Possesses a recognized degree in any branch of engineering or technology and has had
practical experience of working in a factory in supervisory capacity for a period of not less
than two years (or)A recognized diploma in any branch of engineering or technology and has
had practical experience of Working in a factory in a supervisory capacity for a period of not
less than five years (or)a recognized Degree in physics or chemistry and has had practical
experience of working in a factory in supervisory capacity for a period of not less than three
years. The practical experience for the purpose of this sub rule shall necessarily be in
manufacturing or maintenance or Safety Department of a factory

(ii) Possesses a full time degree or diploma or certificate in industrial safety or equivalent of
duration not less than one Year awarded by any university incorporated under the Central or
State legislations or Department of Technical Education or Board of Technical education of
any State Government of India duly following the guidelines as specified in the Annexure at
the end of this Rule.

(iii) has adequate knowledge of Telugu and the language spoken by majority of the workers
in the region in which the factory where he is to be appointed is situated.

(b) Notwithstanding the provisions contained in clause (a), any person who possesses
recognized degree or diploma in engineering or technology and has had experience of not less
than 5 years in a Department of the Central or State Government which deals with the
administration of the Factories Act, 1948 or the Indian Dock Laborers Act,1934; or Possesses
a recognized degree or diploma in engineering or technology and has had experience of not
less than 5 years, full time, on training, education, or research in the field of industrial safety
and occupational Health in any institution of central or state government, shall also be
eligible for appointment as a Safety Officer. Provided that the Chief Inspector may subject to
such conditions as he may specify, grant exemption from the requirements of this sub-rule, if
in his opinion, a suitable person possessing the necessary qualifications and experience is not
available for appointment:

Provided further that every person who has been working as a Safety Officer after
being appointed as per the prescribed procedure and after his appointment was notified to and
taken on record by the Chief Inspector as on date of commencement of this rule, shall
continue to be a safety officer under this rule irrespective of whether he satisfies the above
criteria prescribed in sub rule (a) or (b) above.
Centre for Distance Education 5.18 Acharya Nagarjuna University

(3) Recruitment
(i) Selection for appointment to the post(s) of Safety Officer(s) shall be made from among the
candidates applying for the post(s) by a committee appointed by the Occupier of the factory

(ii) The appointment when made shall be notified by the Occupier to the Chief Inspector of
Factories giving the details of the qualifications, age, pay, previous experience and other
relevant particulars of the officer appointed and the terms and conditions of his service. The
Chief Inspector may call for further additional information if not satisfied with the
information furnished by the occupier. The Chief Inspector ratify the appointment of the
Safety Officer in the factory in writing within 30 days from the date of receipt of the
information or the additional information, as the case may be, furnished by the occupier.

Provided that any person who has already been ratified once for the post of Safety Officer or
Chief safety Officer in any factory situated in the state of Andhra Pradesh is eligible for
appointment as Safety Officer / Chief Safety Officer in any other factory carrying out the
similar manufacturing activity and in such cases, the occupier shall send an intimation in
writing duly referring the same to the Chief Inspector of Factories for the purpose of this sub
rule.

(4) Conditions of Service

(a) Wherever more than one safety officer is to be appointed in a factory as required by this
rule, one of them shall be designated as the Chief Safety Officer by a committee appointed by
the occupier and shall have a status higher than that of the others. The Chief Safety Officer
shall be in overall charge of the safety functions as envisaged in sub-rule (5) and other safety
officers working under his control.

(b) The Chief Safety Officer or the Safety Officer in the case of factories where only one
Safety Officer is required to be appointed shall be given the status of a senior executive and
he shall work directly under the control of the Chief Executive of the factory. All other Safety
Officers shall be given appropriate status to enable them to discharge their functions
effectively.

(c) The scale of pay and the allowance to be granted to the Safety Officer and the Chief
Safety Officer, and the conditions of their service shall be the same as those of the officers of
the corresponding status in the factory. In no case they shall be less than the total emoluments
being paid by a State Government to an Inspector of Factories at the minimum of his scale of
pay, in case of a safety officer and to that of a Deputy Chief Inspector of Factories in case of
a Chief
Safety Officer

(d) The conditions of service of Safety officer shall be the same as those of the other
members of the executive staff of corresponding status in the factory.

(e) The services of a Safety Officer shall not be dispensed with, or he shall not be reverted,
without the written concurrence of the Director of Factories, Hyderabad who shall record
reasons therefore.

(f) No punishment such as withholding of increments, including stoppage at any efficiency

bar, reduction to a lower state in the time scale, suspension dismissal or termination of
service, except censure shall be imposed by the management on a Safety officer, except with
Social Justice and Natural Justice 5.19 Labor Legislations and Law

the previous concurrence of the Director of Factories.

(g) A Safety Officer, who has been dismissed from service or whose services have been
terminated in any other manner than as provided in clause (iv) above may within 30days from
the date of receipt of the order by him, appeal to the State Government against the order of
punishment made by the management with the concurrence of the

Director of Factories and the decision of the State Government thereon shall be final.
Provided that when the management terminates the service or probation of a safety officer the
reasons for such a termination of service or probation shall be reported to the State
Government or such authority, as may be, empowered by them in this behalf.

(5) Duties
The duties of the Safety Officer shall be to advise and assist the factory management
in the fulfillment of its obligation, statutory or otherwise, concerning prevention of personal
injuries and maintaining a safe working environment. These duties shall include the
following namely;
(i) to advise the concerned department in a factory in planning and organizing measures
necessary for the effective control of personal injuries.
(ii) to check and evaluate the effectiveness of the action taken or proposed to be taken to
prevent personal injuries;
(iii) to advise on safety aspects in all job studies, and to carry out detailed job safety studies
of selected jobs;
(iv) to advise the purchasing and stores department in ensuring high quality and availability
of personal protective equipment;
(v) to provide advice on matters related to carrying out plant safety inspections;
(vi) to carry out plant safety inspections in order to observe the physical conditions of work
and the work practices and procedures followed by the workers and to render advice on
measures to be adopted for removing unsafe physical conditions and preventing unsafe
actions by workers;
(vii) to render advice on matters related to reporting and investigation of industrial accidents
and diseases;
(viii) to investigate all reportable accidents;
(ix) to investigate the case of industrial diseases contracted and dangerous occurrence sunder
Rule 96;
(x) to advise on the maintenance of such records as are necessary relating to accidents,
dangerous occurrences and industrial diseases;
(xi) to promote setting up of safety committees and act as adviser and catalyst to such
committees;
(xii) to be instrumental in designing and implementing the various creative initiatives in
association with the concerned departments like campaigns, competitions, contests another
activities which will develop and maintain the interest of the workers and enhance the
workers participation in occupational safety and health management.
(xiii) to design and conduct either independently or in collaboration with the training
department, suitable training and educational programmes towards occupational safety and
health management.
(xiv) to coordinate with qualitative and quantitative risk assessment studies with either
internal or external resources and follow up the compliance of all the
recommendations/suggestions;
(xv)to coordinate all third party inspections/survey/investigations/testing and examinations
Centre for Distance Education 5.20 Acharya Nagarjuna University

either statutory or otherwise aimed towards management of occupational safety and health;
(xvi) to advise the management of the factory in fulfilling obligations under all occupations
Safety and health related legislations applicable
(6) Facilities: An occupier of the factory shall provide each Safety Officer with such
facilities, equipment, staff, information etc., as are necessary to enable him to discharge his
duties effectively but not less than those recommended if any by the Chief Inspector, from
time to time.
(7) Prohibition of Performance of other duties: No Safety officer shall be required or
permitted to do any work which is inconsistent with or detrimental to the performance ofthe
duties prescribed in sub-rule (5)

(8) Safety Officer’s Report

Every Chief Safety officer or Safety officer where there is no Chief safety officer,
working in a factory as required under this rule, shall submit through the occupier of his
factory, a report in writing with all relevant details to the Chief inspector of Factories, in the
month of January every year, on the activities/initiatives taken up during the preceding
calendar year and the progress achieved.

5.32 Summary
Labour law arose due to the demands of workers for better conditions, the right to
organize, and the simultaneous demands of employers to restrict the powers of workers in
many organizations and to keep labour costs low. Employers' costs can increase due to
workers organizing to win higher wages, or by laws imposing costly requirements, such as
health and safety or equal opportunities conditions. Workers' organizations, such as trade
unions, can also transcend purely industrial disputes, and gain political power - which some
employers may oppose. The state of labour law at any one time is therefore both the product
of, and a component of, struggles between different interests in society

5.33 Key words

Inspectors-The State Government may, by notification in the Official Gazette, appoint such
persons as possess the prescribed qualification to be Inspectors for the purposes of this Act
and may assign to them such local limits as it may think fit

Worker- means a person employed, directly or by or through any agency (including a

contractor) with or without the knowledge of the principal employer, whether for
remuneration or not], in any manufacturing process, or in cleaning any part of the machinery
or premises used for a manufacturing process, or in any other kind of work incidental to, or
connected with, the manufacturing process, or the subject of the manufacturing process [but
does not include any member of the armed forces of the Union];

Transmission machinery means any shaft, wheel, drum, pulley, system of pulleys, coupling,
clutch, driving belt or other appliance or device by which the motion of a prime mover is
transmitted to or received by any machinery or appliance.

Manufacturing process” means any process for—making, altering, repairing, ornamenting,

finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating
or adapting any article or substance with a viewto its use, sale, transport, delivery or disposal;

Competent person- in relation to any provision of this Act, means a person or an institution
recognized as such by the Chief Inspector for the purposes of carrying out tests, examinations
Social Justice and Natural Justice 5.21 Labor Legislations and Law

and inspections required to be done in a factory under the provisions of this Act having
regard to—
(i) the qualifications and experience of the person and facilities available at his disposal; or
(ii) the qualifications and experience of the persons employed in such institution

5.34 Self Assessment Questions

1. Briefly Discuss the General Duties of Occupier
2. Explain the General Duties of Manufacturers
3. Examine the Power of Inspectors
4. Outline the A.P Factories Act 1950

5.35 Suggested Readings

1. Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
2. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
3. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual
Professional Book Publishers
4. Padhi P.K(2021) Labour and Industrial Laws Forth Edition PHI Learning
5. Ayusawa Iwao (2022), Frederick, International Labor Legislations, Forgotten Books.
6. Dr.O.P.Gupta & Dr.Vijaya Gupta (2022), Labor Legislations, SBPD Publishing
House.
7. Kumara, VenugopalaG.S.(2022), Employee Relations and Legislations, Current
Publications.
8. Kumara Venugopala G.S(2022), Business & Company Legislations, The Universal
Law Publishing Limited.
9. V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House

Dr.V.Tulasi Das
 LESSON-6

THE ANDHRA PRADESH FACTORIES AND

ESTABLISHMENTS (NATIONAL, FESTIVAL AND OTHER
HOLIDAYS) ACT,1974 ACT No.32 of 1974

Learning objectives

✓ To study the Power of Inspectors

✓ To Know the Exemption of the Holidays
✓ To Learn the Rights and privileges under other laws
✓ To Understand the Payment of Wages Under the Act (1974)

Structure

6.1 Introduction
6.2. Short title, extent and commencement
6.3. Definitions
6.4. Grant of National, Festival and other holidays
6.5. Employer to send statement to Inspector
6.6. Wages
6.7. Inspectors
6.8. Powers of Inspectors
6.9. Recovery of wages for holidays
6.10. Penalties
6.11. Penalty for obstructing Inspector
6.12. Exemptions
6.13. Rights and privileges under other laws, etc., not affected
6.14. Power to make rules
6.15. Notification of Paid Holidays (1974 Calendar with Festivals Used
6.16. Payment of Wages Under the Act (1974 Calendar with Festivals Used)
6.17. Key Takeaways
6.18. Summary
6.19. Key words
6.20. Self Assessment Questions
6.21. Suggested Readings

6.1 Introduction
An Act to provide for the grant of National, festival and other holidays to persons
employed in factories and establishments in the State of Andhra Pradesh.

Be it enacted by the Legislature of the State of Andhra Pradesh in the Twenty fifth
Year of the Republic of India, as follows:

6.2. Short title, extent and commencement :-

(1) This Act may be called the Andhra PradeshFactories and Establishments (National, Festival
and other Holidays) Act, 1974
 Centre for Distance Education 6.2 Acharya Nagarjuna University

(2) It extends to the whole of the State of Andhra Pradesh.

(3) It shall come into force on such date as the Government may, by notification appoint.

6.3. Definitions :- In this Act, unless the context otherwise requires

(a) "day means a period of twenty four hours beginning at midnight.

(b) "employee" means any person (including an apprentice) employed in any factory or
establishment to do any skilled or unskilled, manual, supervisory, technical or clerical work
for hire or reward, whether the terms of employment be expressed or implied; and includes
any other person employed in any factory or establishment whom the Government, may by
notification, declare to be an employee for the purposes of this Act;

(c) "employer" when used in relation to a factory or establishment means a person who has the
ultimate control over the affairs of such factory or establishment and where the affairs of any
such factory or establishment are entrusted to any other person (whether called a managing
agent, manager, superintendent or by any other name) such other person.

(d) "establishment" means any establishment as defined in Clause (10) of Sectio n 2 of the
Andhra Pradesh Shops and Establishments Act, 1966 (Andhra Pradesh Act 15 of 1966) and
includes any other establishment which the Government may,by notification, declare to be an
establishment for the purposes of this Act.

(e) "factory" means any factory as defined in Clause (m) of Section 2 of the Factories Act, 1948
(Central Act 68 of 1948),or any place which is deemed to be a factory under sub clause (2) of
Section 85 of the Act;

(f) " Government" means the State Government

(g) "Inspector" means an Inspector appointed under sub section (1) of Section 6;

(h) "notification" means a notification published in the I Andhra Pradesh Gazette and the word
"notified" shall be construed accordingly;

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

(j) "wages" means all remuneration capable of being expressed in terms of money, which would,
if the terms of employment, express or implied, were fulfilled, be payable to an employee in
respect of his employment or of the work done by him in such employment and includes

(i) such allowances (including dearness allowance) as the employee is for the time being entitled
to;

(ii) the value of any house accommodation, or of supply of light, water, medical attendance or
other amenity or of any service or of any concessional supply of foodgrains or other articles,
but does not include

(a) any bonus;

 AP Factories & Establishment 6.3 Labor Legislations and Law

(b) any contribution paid or payable by the employer to any pension or provident funds, or for the
benefit of the employee under any law for the time being in force;

(c) any gratuity payable on the termination of his service;

(d) any sum paid to the employee to defray special expenses entitled on him by the nature of his
employment.

(e) any travelling concession.

6.4 . Grant of National, Festival and other holidays

(1) Every employee shall be allowed in each calendar year a holiday of one whole day on the
26th January *[the 1st May], the 15th August and the 2nd October and * [four other
holidays]each of one whole day for such festivals as may be notified by the Government or
by such other authority as may be prescribed:

[Provided that it shall be open for any employer to declare, with the consent of the employees in
any factory or establishment and under intimation to the Government or prescribed authority,
a substituted holiday in lieu of any of the festival holidays aforesaid.]

(2) Notwithstanding anything in this Act, the Government may, having due regard to any
emergency or special circumstances prevailing in the State or any part thereof, notify any
other whole day as a holiday to be allowed in any calendar year, to such employees or class
of employees as they may deem fit.

6.5. Employer to send statement to Inspector

Every employer shall send to the Inspector having jurisdiction over the area in which
the factory or establishment is situated and display in the premises of such factory or
establishment, a statement showing the holidays allowed in each calendar year under Section
3, in such form, within such time and in such manner as may be prescribed.

6.6. Wages
(1) Notwithstanding any contract to the contrary, every employee shall be paid wages
for each of the holidays allowed to him under Section 3.

[Provided that no wages for any such holiday shall be allowed in respect of any employee,
who has not put in atleast thirty days work within a continuous period of ninety days
immediately preceding that holiday or who is on leave with wages during any period
including any such holiday.

(2) (a) Notwithstanding anything contained in Section 3, any employee may be required by
the employer to work on any holiday allowed under that section if the employer has, not less
than twenty four hours before such holiday

(i) served in the prescribed manner on the employee a notice in writing requiring him to work
as aforesaid; and

(ii) sent to the Inspector having jurisdiction over the area in which the factory or
establishment is situated and displayed in the premises of the factory or establishment a copy
Centre for Distance Education 6.4 Acharya Nagarjuna University

of such notice.

(b) Where an employee works on any holiday allowed under Section 3, he shall, at his option,
be entitled to

(i) twice the wages; or

(ii) wages for such day and to avail himself of a substituted holiday with wages on one of the
three days immediately before or after the day on which he so works.

Provided that an employee who is paid wages by the day or at piece rates shall be entitled to
be paid wages for any holiday allowed under Section 3 only at a rate equivalent to the daily
average of his wages to be calculated in the prescribed manner.

6.7. Inspectors
(1) The Government may, by notification, appoint such persons or such class of persons as
they think fit to be Inspectors for the purposes of this Act for such local limits as the
Government may specify.

(2) Every Inspector shall be deemed to be a public servant within the meaning of Section 21
of the Indian Penal Code (Central Act 45 of 1860)

6.8. Powers of Inspectors

An Inspector, may, subject to any rules made by the Government in this behalf, within the
local limits for which he is appointed -

(a) enter, at all reasonable times and with such assistants if any, who are persons in the
service of the Government or any local authority as he thinks fit to take with him, any place
which is, or which he has reason to believe, is a factory or an establishment;

(b) make such examination of the premises and of any prescribed registers, records and
notices and take on the spot or otherwise, the evidence of such person as he may deem
necessary for carrying out the purpose of this Act;

(c) exercise such other powers as may be necessary for carrying out the purposes of this Act;

Provided that no one shall be required under this section to answer any question or give any
evidence tending to incriminate himself.

6.9. Recovery of wages for holidays

(1) Where any employer defaults in payment of the wages to the employee for each
of the holidays allowed under this Act, the employee himself or any trade union of which he
is a member or any Inspector under this Act, or any authorized representative of the
employee, may apply to the authority specified in Section 15 of the Payment of Wages
Act,1936 (Central Act 4 of 1936)

(2) The provisions of Sections 15,15 A, 16,17,17 A. * [and 18] of the Payment of
Wages Act, 1936 shall, as far as may be, apply to all claims arising out of default in payment
AP Factories & Establishment 6.5 Labor Legislations and Law

of the wages of employees for the holidays allowed under this Act.

6.10. Penalties
Any employer who contravenes any of the provisions of Section 3 or Section 5 shall
be punished with fine which, for the first offence, may extend to [one hundred and fifty
rupees] and for a second and subsequent offences may extend to [seven hundred and fifty
rupees].

6.11. Penalty for obstructing Inspector

Whoever willfully obstructs an Inspector in the exercise of any power conferred on
him by or under this Act, or fails to produce on demand in writing by an Inspector any
register, record or notice in his custody which may be required to be kept in pursuance of this
Act, or of any rule made there under, shall be punished with imprisonment for a term which
may extend to three months or with fine which may extend to five hundred rupees or with
both.

10-A. Cognizance of offences :- No Court shall take cognizance of any offence punishable
under this Act, except on a complaint made by, or with the previous sanction in writing of, an
Inspector, within six months from the date on which the offence comes to the knowledge of
the Inspector.]

6.12. Exemptions
(1) Nothing in this Act shall apply to

(a) any employee in a position of management;

(b) any employee whose work involves travelling;

(c) any factory or establishment under the control of the Central or any State Government,
local authority, Reserve Bank of India, a railway administration operating any railway as
defined in clause (20) of article 366 of the Constitution, or a cantonment authority; or

(d) any mine or oil field.

(2) The Government may, by notification and for reasons to be specified therein, exempt
either permanently or for any specified period, any factory or establishment or class of
factories or establishments or persons or class of persons from all or any of the provisions of
this Act subject to such conditions as the Government may deem fit.

6.13. Rights and privileges under other laws, etc., not affected
Nothing contained in this Act shall affect any rights or privileges, which any
employee is entitled to, on the date on which this Act came into force, under any other law,
award, agreement or settlement, contract, custom or usage if such rights or privileges are
more favorable to him than those to which he would be entitled under this Act.
Centre for Distance Education 6.6 Acharya Nagarjuna University

6.14. Power to make rules

(1) The Government may, by notification make rules for carrying out all or any of the
purposes of this Act.

(2) In making a rule under this Act, the Government may provide that a contravention thereof
shall be punished with fine which may extend to fifty rupees.

(3) Every rule made under this Act shall, immediately after it is made, be laid before each
House of the State Legislature if it is in session, and if it is not in session, in the session
immediately following, for a total period of fourteen days which may be comprised in one
session, or in two successive sessions, and if, before the expiration of the session in which it
is so laid or the session immediately following both Houses agree in making any modification
in the rule or in the annulment of the rule, the rule shall, from the date on which the
modification or annulment is notified, have effect only in such modified form or shall stand
annulled, as the case may be, so however that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.

Andhra Pradesh Factories And Establishments National Festival And Other Holidays
Rules 1974Andhra Pradesh Factories and Establishments Act (Used The 1974 Calendar with
Festivals)The Andhra Pradesh Factories and Establishments Act used the 1974 calendar with
festivals as the basis to grant national and festival holidays to people employed in industries in the
state of Andhra Pradesh. As per the Act, the minimum number of paid holidays is 8 days in a
calendar year.

Some Definitions Covered by the Act (1974 Calendar with Festivals Used)

According to the Andhra Pradesh Factories Act of 1974 that used the 1974 calendar with
festivals to determine paid holidays, a day refers to the period of twenty-four hours beginning at
midnight
An employer is a person who controls the affairs of the factory or establishment. This act
covers the cases where the affairs of the factory or establishment are entrusted to a managing agent,
manager, or superintendent

As per the Act that used the 1974 calendar with festivals as the basis for deciding paid
holidays, an employee is any person working in a factory or an establishment performing skilled or
unskilled work, manual, supervisory, technical, or clerical work for wages, compensation and
allowance.

According to the Act, even an apprentice is considered an employee

The term establishment is defined by the Andhra Pradesh Shops and Establishments Act of
1966. The term establishment also includes any other place which the Government declares to be
an establishment for the purposes of this Act

The term factory is defined by the Factories Act of 1968. The term factory also refers to any
place which is deemed to be a factory under the same Act

The government refers to the State Government

The term inspector is used for a person appointed under subsection (1) of Section
AP Factories & Establishment 6.7 Labor Legislations and Law

6Notification refers to the notice published in the Andhra Pradesh Gazette

According to the Andhra Pradesh Factories and Establishments Act that used the 1974
calendar with festivals for determining paid holidays, wages refer to all the remuneration capable of
being expressed in terms of money that is payable to the employees if the terms of employment are
fulfilled. Wages include dearness allowance and the value of accommodation, electricity, water,
medical facilities, food grains, and other facilities provided at a concessional rate. Wages don't
include bonuses and contributions made by the employer to the pension fund, provident fund, or for
the benefit of the employees. Any gratuity that is paid on the termination of service is also not a part
of wages. Amount paid to the employees in lieu of special expenses that they are entitled to due to
the nature of their employment and concessions for travel are also not included in wages.

Andhra Pradesh Factories And Establishments Rules (1974 Calendar with Festivals
Used)The Governor of Andhra Pradesh made rules in accordance with the aforementioned Act.
These rules were called the Andhra Pradesh Factories And Establishments Rules and they used the
1974 calendar with festivals as the basis to decide on paid holidays

The Andhra Pradesh Factories And Establishments Rules that used the 1974 calendar with
festivals to decide paid holidays did not affect any rights or privileges than the employees were
entitled to in case such rights or privileges were more favorable to the employees that those
conferred by the Act

The said Act that used the 1974 calendar with festivals to determine holidays did not apply
to employees who were working as managers and employees who traveled for the purpose of work.
The rules didn't apply to factories or establishments under the control of the Central or State
Government, local authority, Reserve Bank of India, and railway administration. People working in
mines and oil fields too did not benefit as a result of this Act

The government could exempt either permanently or for any specified period, a factory or
an establishment, a class of factories or establishments, and persons or class of persons from all or
any of the provisions of the Andhra Pradesh Factories And Establishments Rules that used the 1974
calendar with festivals subject to the certain conditions

6.15 Notification of Paid Holidays (1974 Calendar with Festivals Used)

Under the Andhra Pradesh Factories and Establishments Act that used the 1974 calendar
with festivals for determining holidays, the Deputy Commissioner of Labour could notify the
organizations of employers and employees of five festival holidays other than 26th January, 15th
August and 2nd October.

The Act that used the 1974 calendar with festivals as the basis to decide paid holidays stated that if
most of the employees or the employees' union in any factory or establishment chose to have the 1st
of May as one of five holidays, they had to submit their request in writing to the Deputy
Commissioner of Labour of the area before the end of November each year.

The Deputy Commissioner of Labour would have to consider the request and notify the
employees and employers of the five holidays by the 10th of December of each year in accordance
with Andhra Pradesh Factories and Establishments Act that used the 1974 calendar with festivals to
determine paid holidays.
Centre for Distance Education 6.8 Acharya Nagarjuna University

6.16 Payment of Wages Under the Act (1974 Calendar with Festivals Used)
In accordance with the Andhra Pradesh Factories and Establishments Act that used the
1974 calendar with festivals for deciding paid holidays, every employee will be allowed in each
calendar year a holiday on 26th January, 15th August, and 2nd October. 1st of May will be declared
a holiday if the employees so desire. In addition to these holidays, four other holidays will be
declared for other festivals.

The festival holidays can also be substituted by other holidays provided the employees
agree and the employer informs the state government. Under the Act that used the 1974 calendar
with festivals as the basis for deciding holidays, the government due to emergency or special
circumstances in the state can declare a holiday in any calendar year.

Employers have to send a statement to the Inspector having jurisdiction over the area in
which the factory or establishment is situated and display on the premises of such a factory or
establishment a notice showing the holidays allowed in each calendar year in accordance with the
Andhra Pradesh Factories and Establishments Act that used the 1974 calendar with festivals for
deciding paid holidays.

All employees have to be paid wages for the holidays granted to them. However,
employees have to be paid wages for holidays only if they have worked at least thirty days in a span
of ninety days immediately preceding the holiday. Employees who are on paid leave for a period of
time preceding the holiday are not entitled to a paid holiday.

Any employee may be required by the employer to work on a holiday that has been
declared provided the employer has had less than twenty-four hours notice before such a holiday.
The employees however have to be given the notice to work in writing. The notice has to be sent to
the Inspector having jurisdiction over the area in which the factory or establishment is situated. It
also has to be displayed on the premises of the factory or establishment.

When employees work on holidays, the Act that used the 1974 calendar with festivals as
the basis for determining paid holidays, states that employees are entitled to twice the wages. They
can also take a paid holiday on one of the three days immediately before or after the day on which
they work. Employees who are paid daily wages are entitled to wages for any holiday at a rate that
is equivalent to the daily average of their wages.

Any employer who violates Section 3 and Section 5 of the Andhra Pradesh Factories and
Establishments Act that used the 1974 calendar with festivals to decide paid holidays will be
punished with a fine which can amount to Rs 150 for the first offense. For second and subsequent
offenses the fine may extend to seven hundred and fifty rupees.

Appointing Inspectors and Conferring Powers Under the Act (1974 Calendar with
Festivals Used)Under Andhra Pradesh Factories and Establishments Act that used the 1974
calendar with festivals as the basis for determining paid holidays, the Government can appoint
inspectors who are considered public servants for the purpose of implementing the Act. Inspectors
are bound by the rules made by the Government and ensure that the holidays and wages in the local
area within their jurisdiction are in accordance with the Act.

The inspectors have the authority to enter a factory or an establishment along with their
assistants who are employees of the government or local authorities at all reasonable times. They
can examine the premises, registers, records, and notices and gather evidence from people on the
AP Factories & Establishment 6.9 Labor Legislations and Law

spot to make sure that the employees are granted holidays and paid wages in accordance with the
Andhra Pradesh Factories and Establishments Act that used the 1974 calendar with festivals to
determine paid holidays.

Even though the inspectors can exercise their powers for implementing the Act that used
the 1974 calendar with festivals to decide paid holidays, people cannot be compelled to answer any
question or give any evidence that can incriminate them. If anybody obstructs the inspectors while
they are trying to enforce the Act that used the 1974 calendar with festivals to determine paid
holidays, they will be punished with a prison term of up to three months or with a fine of up to five
hundred rupees or both. The inspectors can make a complaint to the court in writing within 6
months from the time an offense comes to their notice and the court will issue a verdict on the
same.

Recovery of Wages in Case of Default Under the Act (1974 Calendar with Festivals
Used)If any employer doesn't pay wages to the employees for each of the holidays allowed under
the Andhra Pradesh Factories and Establishments Act that used the 1974 calendar with festivals to
determine holidays, the employees or any trade union of which they are members can claim wages
for the holidays allowed under this Act. It is even possible for an Inspector or any authorized
representative to claim wages for the employees for the holidays allowed under the Act that used
the 1974 calendar with festivals as the basis for determining holidays.

6.17 Key Takeaways

Andhra Pradesh Factories and Establishments Act used the 1974 calendar with festivals for
deciding on paid holidays The Act clearly stated the minimum number of holidays that the factory
workers were entitled to in a calendar year. According to the Act, the workers were entitled to at
least 8 holidays in a calendar year
Andhra Pradesh Factories and Establishments Act that used the 1974 calendar with festivals
as the basis for deciding paid holidays stated that every employee would be allowed in each
calendar year a holiday the whole day on 26th January, 15th August, and 2nd October. 1st May
would be declared as a holiday if the employees so desire. In addition to these holidays, four other
holidays would be declared for other festivals
The Act stated that the Deputy Commissioner of Labour could notify the organizations of
employers and employees of the five festival holidays other than 26th January, 15th August, and
2nd October
The Act that used the 1974 calendar with festivals to decide paid holidays declared that all
employees had to be paid wages for all the holidays granted to them
Andhra Pradesh Factories And Establishments National Festival and Other Holidays Act ordered
the Government to appoint inspectors who were considered public servants for the purpose of
implementing the Act
Andhra Pradesh Factories and Establishments Act that used the 1974 calendar with festivals
for deciding paid holidays allowed for the recovery of wages in case of default

6.18 Summary
There have been several instances of factory workers being denied holidays by their
employers even though the state governments declare holidays on certain days. There are also
instances of the workers demanding holidays when they are not entitled to them. Many years ago
there was a dispute between the owners of a well-known factory and the employees. The state
government declared a paid holiday for the workers on election day. However, the factory owners
decided that there was no need for all the shift workers to be granted a paid holiday since it was
Centre for Distance Education 6.10 Acharya Nagarjuna University

possible for some of the workers to show up at work and still vote once their shift was over. The
workers decided not to show up at work on election day. The management responded by informing
the workers that they would not be paid since they had taken a holiday without the management's
consent. When the matter went to court, the judge ruled in favor of the management. A case like
this highlights the importance of the Andhra Pradesh Factories and Establishments Act that used the
1974 calendar with festivals to determine paid holidays that the workers are entitled to. If factories
and establishments follow the rules, there will be no dispute between the workers and the
management.

6.19 Key words

Employee- means any person (including an apprentice) employed in any factory or
establishment to do any skilled or unskilled, manual, supervisory, technical or clerical work
for hire or reward, whether the terms of employment be expressed or implied

Establishment- means any establishment as defined in Clause (10) of Section n 2 of the

Andhra Pradesh Shops and Establishments Act, 1966 (Andhra Pradesh Act 15 of 1966) and
includes any other establishment which the Government may, by notification, declare to be
an establishment for the purposes of this Act.

Employer- when used in relation to a factory or establishment means a person who has the
ultimate control over the affairs of such factory or establishment and where the affairs of any
such factory or establishment are entrusted to any other person (whether called a managing
agent, manager, superintendent or by any other name) such other person.

Factory- means any factory as defined in Clause (m) of Section 2 of the Factories Act, 1948
(Central Act 68 of 1948),or any place which is deemed to be a factory under sub clause (2) of
Section 85 of the Act;

6.20 Self Assessment Questions

1. Briefly Discuss about the Power of inspectors
2. Explain about the Exemption of the Holidays
3. Describe the Rights and privileges under other laws
4. Explain the Payments of wages Under the Act (1974).

6.21 Suggested Readings

1. Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
2. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
3. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual
Professional Book Publishers
4. Padhi P.K(2021) Labour and Industrial Laws Forth Edition PHI Learning
5. Ayusawa Iwao (2022), Frederick, International Labor Legislations, Forgotten Books.
6. Dr.O.P.Gupta & Dr.Vijaya Gupta (2022), Labor Legislations, SBPD Publishing
House.
7. Kumara, VenugopalaG.S.(2022), Employee Relations and Legislations, Current
Publications.
8. Kumara Venugopala G.S(2022), Business & Company Legislations, The Universal
Law Publishing Limited.
AP Factories & Establishment 6.11 Labor Legislations and Law

9. V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House

Dr.V.Tulai Das
 LESSON – 7
MINES ACT 1952

Learning objectives

✓ To understand the Functions of the Inspectors

✓ To Learn the Power of special officer to enter, measures,
✓ To Discuss the functions of Committee
✓ To study the Powers of Committee
✓ To Focus on the Duties and responsibilities of owners, agents and managers

Structure

7.1 Section 1. Short title, extent and commencement

7.2 Section 2 -Definitions.
7.3 Section 3 -Act not to apply in certain cases
7.4 Section 4- References to time of day
7.5 Section 5 -Chief Inspector and Inspectors
7.6 Section 6 -Functions of Inspectors.
7.7 Section 7-Powers of Inspectors of Mines
7.8 Section 8 -Powers of special officer to enter, measure, etc.
7.9 Section 9- Facilities to be afforded to Inspectors
7.10 Section 10- Secrecy of information obtained
7.11 Section 11- Certifying surgeons
7.12 Section 12- Committees
7.13 Section 13-Functions of the Committee
7.14 Section 14-Powers, etc., of the Committees
7.15 Section 15- Recovery of expenses
7.16 Section 16-Notice to be given of mining operations
7.17 Section 17-Managers
7.18 Section 18-Duties and responsibilities of owners, agents and managers
7.19 Section 19-Drinking water

7.1 Section 1- Short title, extent and commencement

(1) This Act may be called the Mines Act, 1952.
(2) It extends to the whole of India
(3) It shall come into force on such date2 or dates as the Central Government may, by
notification in the Official Gazette, appoint, and different dates may be appointed for
different provisions of this Act and for different States but not later than 3lst December,
1953.

7.2 Section 2-Definitions

[(1)] In this Act, unless the context otherwise requires,--
(b) "adult" means a person who has completed his eighteenth year;
3[(c) "agent", when used in relation to a mine, means every person, whether appointed as
such or not, who, acting or purporting to act on behalf of the owner, takes part in the
management, control, supervision or direction of the mine or of any part thereof;]
Centre for Distance Education 7.2 Acharya Nagarjuna University

(d) Chief Inspector means the Chief Inspector of Mines appointed under this Act;
4[(e) "Committee" means a committee constituted under section 12;]
(f) "day" means a period of twenty-four hours beginning at midnight;
(g) "district magistrate" means, in a presidency-town, the person appointed by the Central
Government to perform the duties of a district magistrate under this Act in that town;

5[(h) a person is said to be "employed" in a mine who works as the manager or who works
under appointment by the owner, agent or manager of the mine or with the knowledge of the
manager, whether for wages or not--

(i) in any mining operation (including the concomitant operations of handling and transport
of minerals up to the point of dispatch and of gathering sand and transport thereof to the
mine);

(ii) in operations or services relating to the development of the mine including construction of
plan therein but excluding construction of buildings, roads, wells and any building work not
directly connected with any existing or future mining operations;

(iii) in operating, servicing, maintaining or repairing any part of any machinery used in or
about the mine;

(iv) in operations, within the premises of the mine, of loading for dispatch of minerals;

(v) in any office of the mine;

(vi) in any welfare, health, sanitary or conservancy, services required to be provided under
this Act, or watch and ward, within the premises of the mine excluding residential area; or

(vii) in any kind of work whatsoever which is preparatory or incidental to, or connected with,
mining operations;] "Inspector" means an Inspector of Mines appointed under this Act, and
includes a district magistrate when exercising any power or performing any duty of an
Inspector which he is empowered by this Act to exercise or perform;
[(j) "mine" means any excavation where any operation for the purpose of searching for or
obtaining minerals has been or is being carried on and includes--

(i) all borings, bore holes, oil wells and accessory crude conditioning plants, including the
pipe conveying mineral oil within the oilfields;

(ii) all shafts, in or adjacent to and belonging to a mine, whether in the course of being sunk
or not;

(iii) all levels and inclined planes in the course of being driven;

(iv) all open cast workings;

(v) all conveyors or aerial rope ways provided for the bringing into or removal from a mine
of minerals or other articles or for the removal of refuse therefrom;

(vi) all admits, levels, planes, machinery, works, railways, tramways and sidings in or
adjacent to and belonging to a mine;
Mines Act 1952 7.3 Labor Legislations and Law

(vii) all protective works being carried out in or adjacent to a mine;

(viii) all workshops and stores situated within the precincts of a mine and under the same
management and used primarily for the purposes connected with that mine or a number of
mines under the same management;

(ix) all power stations, transformer sub-stations, convertor stations, rectifier stations and
accumulator storage stations for supplying electricity solely or mainly for the purpose of
working the mine or a number of mines under the same management;

(x) any premises for the time being used for depositing sand or other material for use in a
mine or for depositing refuse from a mine or in which any operations in connection with such
sand, refuse or other material is being carried on, being premises exclusively occupied by the
owner of the mine;

(xi) any premises in or adjacent to and belonging to a mine on which any process ancillary to
the getting, dressing or preparation for sale of minerals or of coke is being carried on;]

(jj) "minerals" means all substances which can be obtained from the earth by mining, digging,
drilling, dredging, hydraulicing, quarrying or by any other operation and includes mineral oils
(which in turn include natural gas and petroleum);

(k) "office of the mine" means an office at the surface of the mine concerned;
[(kk) "open cast working" means a quarry, that is to say, an excavation where any operation
for the purpose of searching for or obtaining minerals has been or is being carried on, not
being a shaft or an excavation which extends below superjacent ground;]

(l) "owner", when used in relation to a mine, means any person who is the immediate
proprietor or lessee or occupier of the mine or of any part thereof and in the case of a mine
the business whereof is being carried on by a liquidator or receiver, such liquidator or
receiver but does not include a person who merely receives a royalty, rent or fine from the
mine, or is merely the proprietor of the mine, subject to any lease, grant or licence for the
working thereof, or is merely the owner of the soil and not interested in the minerals of the
mine; but 11[any contractor or sub-lessee] for the working of a mine or any part thereof shall
be subject to this Act in like manner as if he were an owner, but not so as to exempt the
owner from any liability; (m) "prescribed" means prescribed by rules, regulations or bye-
laws, as the case may be;

[(n) "qualified medical practitioner" means a medical practitioner who possesses any
recognised medical qualification as defined in clause (h) of section 2 of the Indian Medical
Council Act, 1956 (102 of 1956) and who is enrolled on a State medical register as defined in
clause (k) of that section;]

(o) "regulations", "rules" and "bye-laws" mean respectively regulations, rules and bye-laws
made under this Act;

(p) where work of the same kind is carried out by two or more sets of persons working during
different periods of the day each of such sets is called a "relay" 13[and each of such periods is
called a "shift"]; (pp) "reportable injury" means any injury other than a serious bodily injury
which involves, or in all probability will involve, the enforced absence of the injured person
Centre for Distance Education 7.4 Acharya Nagarjuna University

from work for a period of seventy-two hours or more;]

[(q) "serious bodily injury" means any injury which involves, or in all probability will
involve, the permanent loss of any part or section of a body or the use of any part or section
of a body, or the permanent loss of or injury to the sight or hearing or any permanent physical
incapacity or the fracture of any bone or one or more joints or bones of any phalanges of hand
or foot;

(r) "week" means a period of seven days beginning at midnight on Saturday night or such
other night as may be approved in writing for a particular area by the Chief Inspector or an
Inspector.]
[(2) A person working or employed in or in connection with a mine is said to be working or
employed--
(a) "below ground" if he is working or employed--
(i) in a shaft which has been or is in the course of being sunk; or
(ii) in any excavation which extends below superjacent ground; and
(b) "above ground" if he is working in an open cast working or in any other manner not
specified in clause (a)

7.3 Section 3- Act not to apply in certain cases

3. Act not to apply in certain cases.--(1) The provisions of this Act, except those contained in
2[sections 7,8,9,40,45 and 46] shall not apply to--

(a) any mine or part thereof in which excavation is being made for prospecting purposes only
and not for the purpose of obtaining minerals for use or sale:

Provided that--
(i) not more than twenty persons are employed on any one day in connection with any such
excavation;
(ii) the depth of the excavation measured from its highest to its lowest point nowhere exceeds
six metres or, in the case of an excavation for coal, fifteen metres; and

(iii) no part of such excavation extends below superjacent ground; or

(b) any mine engaged in the extraction of kankar, murrum, laterite, boulder, gravel, shingle,
ordinary sand (excluding moulding sand, glass sand and other mineral sands), ordinary clay
(excluding kaolin, china clay, white clay or fire clay), building stone, 3[slate], road metal,
earth, fullers earth, 3[, marl, chalk] and lime stone:

Provided that--

(i) the workings do not extend below superjacent ground; or

(ii) where it is an open cast working--
(a) the depth of the excavation measured from its highest to its lowest point nowhere exceeds
six metres;
(b) the number of persons employed on any one day does not exceed fifty; and
(c) explosives are not used in connection with the excavation.

(2) Notwithstanding anything contained in sub-section (1), the Central Government may, if it
is satisfied that, having regard to the circumstances obtaining in relation to a mine or part
Mines Act 1952 7.5 Labor Legislations and Law

thereof or group or class of mines, it is necessary or desirable so to do, by notification in the

Official Gazette, declare that any of the provisions of this Act, not set out in sub-section (1),
shall apply to any such mine or part thereof or group or class of mines or any class of persons
employed therein.

(3) Without prejudice to the provisions contained in sub-section (2), if at any time any of the
conditions specified in the proviso to clause (a) or clause (b) of sub-section (1) is not fulfilled
in relation to any mine referred to in that sub-section, the provisions of this Act notset out in
sub-section (1), shall become immediately applicable, and it shall be the duty of the owner,
agent or manager of the mine to inform the prescribed authority in the prescribed manner and
within the prescribed time about the non-fulfilment.]

7.4 Section 4- References to time of day

In this Act, references to time of day are references to Indian standard time, being five
and a half hours ahead of Greenwich mean time:
Provided that, for any area in which Indian standard time is not ordinarily observed, the
Central Government may make rules--

(a) specifying the area;

(b) defining the local mean time ordinarily observed therein; and
(c) permitting such time to be observed in all or any of the mines situated in the area.

7.5 Section 5 -Chief Inspector and Inspectors

(1)The Central Government may, by notification in the Official Gazette, appoint such a
person as possesses the prescribed qualifications to be Chief Inspector of Mines for all the
territories to which this Act extends and such persons as possess the prescribed qualifications
to be Inspectors of Mines subordinate to the Chief Inspector.

(2) No person shall be appointed to be Chief Inspector or an Inspector, or having been

appointed shall continue to hold such office, who is or becomes directly or indirectly
interested in any mine or mining rights in India.
(3) The district magistrate may exercise the powers and perform the duties of an Inspector
subject to the general or special orders of the Central Government:
Provided that nothing in this sub-section shall be deemed to empower a district magistrate to
exercise any of the powers conferred by 1[section 22 or section 22A] or section 61.

(4)The Chief Inspector and all Inspectors shall be deemed to be public servants within the
meaning of the Indian Penal Code (45 of 1860

7.6 Section 6- Functions of Inspectors.

6. Functions of Inspectors.--

(1) The Chief Inspector may, with the approval of the Central Government and subject to
such restrictions or conditions as he may think fit to impose, by order in writing, authorise
any Inspector named or any class of Inspectors specified in the order to exercise such of the
powers of the Chief Inspector under this Act (other than those relating to appeals) as he may
specify.

(2)The Chief Inspector may, by order in writing, prohibit or restrict the exercise by any
Inspector named or any class of Inspectors specified in the order of any power conferred on
Centre for Distance Education 7.6 Acharya Nagarjuna University

Inspectors under this Act.

(3)Subject to the other provisions contained in this section, the Chief Inspector shall declare
the local area or areas within which or the group or class of mines with respect to which
Inspectors shall exercise their respective powers.]

7.7 Section 7. Powers of Inspectors of Mines

(1)The Chief Inspector and any Inspector may--

(a) make such examination and inquiry as he thinks fit in order to ascertain whether the
provisions of this Act and of the regulations, rules and bye-laws and of any orders made
thereunder are observed in the case of any mine;

(b) with such assistants, if any, as he thinks fit, enter, inspect and examine any mine or any
part thereof at any time by day or night:
Provided that the power conferred by this clause shall not be exercised in such a manner as
unreasonably to impede or obstruct the working of any mine;

(c) examine into, and make inquiry respecting, the state and condition of any mine or any part
thereof, the ventilation of the mine, the sufficiency of the bye-laws for the time being in force
relating to the mine, and all matters and things connected with or relating to the health, safety
and welfare of the persons employed in the mine, and take whether on the precincts of the
mine or elsewhere, statements of any person which he may consider necessary for carrying
out the purposes of this Act;

(d) exercise such other powers as may be prescribed by regulations made by the Central
Government in' this behalf:

Provided that no person shall be compelled under this sub-section to answer any question or
make any statement tending to incriminate himself.

(2) The Chief Inspector and any Inspector may, if he has reason to believe, as a result of any
inspection, examination or inquiry under this section, that an offence under this Act has been
or is being committed, search any place and take possession 1[of any material or any plan,
section, register or other record] appertaining to the mine, and the provisions of the 2[Code of
Criminal Procedure, 1973 (2 of 1974)] shall so far as may be applicable, 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 3[section 94] of that Code.

7.8 Section 8- Powers of special officer to enter, measure, etc.

Any person in the service of the Government duly authorised in this behalf by a
special order in writing of the Chief Inspector or of an Inspector may, for the purpose of
surveying, leveling or measuring any mine 1[or any output therefrom], after giving not less
than three days' notice to the manager of such mine, enter the mine and may survey, level or
measure the mine or any part thereof 1[or any output therefrom] at any time by day or night:

Provided that, where in the opinion of the Chief Inspector or of an Inspector an emergency
exists, he may, by order in writing, authorise any such person to enter the mine for any of the
aforesaid purposes without giving any such notice.
Mines Act 1952 7.7 Labor Legislations and Law

7.9 Section 9- Facilities to be afforded to Inspectors

Every owner, agent and manager of a mine shall afford the Chief Inspector and every
Inspector and every person authorised under section 8 all reasonable facilities for making any
entry, inspection, survey, measurement, examination or inquiry under this Act.
Section 9A. Facilities to be provided for occupational health survey

[9A. Facilities to be provided for occupational health survey.—

(1) The Chief Inspector or an Inspector or other officer authorised by him in writing in this
behalf may, at any time during the normal working hours of the mine or at any time by day or
night as may be necessary, undertake safety and occupational health survey in a mine after
giving notice in writing to the manager of the mine; and the owner, agent or manager of the
mine shall afford all necessary facilities (including facilities for the examination and testing
of plant and machinery, for the collection of samples and other data pertaining to the survey
and for the transport and examination of any person employed in the mine chosen for the
survey) to such Inspector or officer.

(2) Every person employed in a mine who is chosen for examination in any safety and
occupational health survey under sub-section (1) shall present himself for such examination
and at such place as may be necessary and shall furnish all information regarding his work
and health in connection with the said survey.

(3) The time spent by any person employed in a mine who is chosen for examination in the
safety and occupational health survey, shall be counted towards his working time, so however
that any overtime shall be paid at the ordinary rate of wages.

Explanation.--For the purposes of this sub-section, "ordinary rate of wages" means the basic
wages plus any dearness allowance and underground allowance and compensation in cash
including such compensation, if any, accruing through the free issue of foodgrains and edible
oils as persons employed in a mine may, for the time being, be entitled to, but does not
include a bonus (other than a bonus given as incentive for production) or any compensation
accruing through the provision of amenities such as free housing, free supply of coal, medical
and educational facilities, sickness allowance, supply of kerosene oil, baskets, tools and
uniforms.

(4) Any person who, on examination under sub-section (2), is found medically unfit to
discharge the duty which he was discharging in a mine immediately before such presentation
shall be entitled to undergo medical treatment at the cost of the owner, agent and manager
with full wages during the period of such treatment.

(5) If, after the medical treatment, the person referred to in sub-section (4) is declared
medically unfit to discharge the duty which he was discharging in a mine immediately before
presenting himself for the said examination and such unfitness is directly ascribable to his
employment in the mine before such presentation, the owner, agent and manager shall
provide such person with an alternative employment in the mine for which he is medically fit:
Provided that where no such alternative employment is immediately available, such person
shall be paid by the owner, agent and manager disability allowance determined in accordance
with the rates prescribed in this behalf:

Provided further that where such person decides to leave his employment in the mine, he
Centre for Distance Education 7.8 Acharya Nagarjuna University

shall be paid by the owner, agent and manager a lump sum amount by way of disability
compensation determined in accordance with the rates prescribed in this behalf.

(6) The rates under the provisos to sub-section (5) shall be determined having regard to the
monthly wages of the employees, the nature of disabilities and other related factors.]

7.10 Section 10- Secrecy of information obtained

(1) All copies of, and extracts from, registers or other records appertaining to any
mine and all other information acquired by the Chief Inspector or an Inspector or by any one
assisting him, in the course of the inspection 1[or survey] of any mine under this Act or
acquired by any person authorised under section 8 1[or section 9A] in the exercise of his
duties thereunder, shall be regarded as confidential and shall not be disclosed to any person or
authority unless the Chief Inspector or the Inspector considers disclosure necessary to ensure
the health, safety or welfare of any person employed in the mine or in any other mine
adjacent thereto.
(2) Nothing in sub-section (1) shall apply to the disclosure of any such information (if so
required) to--

(a) any Court;

2[(b) a Committee or court of inquiry constituted or appointed under section 12 or section 24

as the case may be;]

(c) an official superior or the owner, agent or manager of the mine concerned;

(d) a Commissioner for workmen's compensation appointed under the Workmen's

Compensation Act, 1923 (8 of 1923);

3[(e) the Controller, Indian Bureau of Mines;

(f) any registered or recognised trade union;
(g) such other officer, authority or organisation as may be specified in this behalf by the
Central Government.]

(3) If the Chief Inspector, or an Inspector or any other person referred to in sub-section (1)
discloses, contrary to the provisions of this section, any such information as aforesaid without
the consent of the Central Government, he shall be punishable with imprisonment for a term
which may extend to one year, or with fine, or with both.

(4) No court shall proceed to the trial of any offence under this section except with the
previous sanction of the Central Government.

7.11 Section 11- Certifying surgeons

(1) The Central Government may appoint qualified medical practitioners to be certifying
surgeons for the purposes of this Act within such local limits or for such mine or class or
description of mines as it may assign to them respectively.
(2) Subject to such conditions as the Central Government may think fit to impose, a certifying
surgeon may, with the approval of the Central Government, authorise any qualified medical
practitioner to exercise all or any of his powers under this Act for such period as the
certifying surgeon may specify, and references to a certifying surgeon shall be deemed to
include references to any qualified medical practitioner when so authorised.
Mines Act 1952 7.9 Labor Legislations and Law

(3) No person shall be appointed to be, or authorised to exercise the powers of, a certifying
surgeon, or, having been so appointed or authorised, continue to exercise such powers, who is
or becomes the owner, agent or manager of a mine, or is or becomes directly or indirectly
interested therein, or in any process or business carried on therein or in any patent or
machinery connected therewith, or is otherwise in the employment of the mine.

(4) The certifying surgeon shall carry out such duties as may be prescribed in connection
with--
(b) the examination of persons engaged in a mine in such dangerous occupations or processes
as may be prescribed;
(c) the exercise of such medical supervision as may be prescribed for any mine or class or
description of mines where-

(i) cases of illness have occurred which it is reasonable to believe are due to the nature of
any process carried on or other conditions of work prevailing in the mine

7.12 Section 12- Committees

(1)The Central Government shall, with effect from such date as that Government may, by
notification in the Official Gazette, specify in this behalf, constitute for the purposes of this
Act, a Committee consisting of--
(a) a person in the service of the Government, not being the Chief Inspector or an Inspector,
appointed by the Central Government to act as Chairman;
(b) the Chief Inspector of Mines;
(c) two persons to represent the interests of miners appointed by the Central Government;
(d) two persons to represent the interests of owners of mines appointed by the Central
Government;
(e) two qualified mining engineers not directly employed in the mining industry, appointed
by the Central Government:

Provided that one at least of the persons appointed under clause (c) shall be for representing
the interests of workers in coal mines and one at least of the persons appointed under clause
(d) shall be for representing the interests of owners of coal mines.

(2) Without prejudice to the generality of sub-section (1), the Central Government may
constitute one or more Committees to deal with specific matters relating to any part of the
territories to which this Act extends or to a mine or a group of mines and may appoint
members thereof and the provisions of sub-section
(1) (except the proviso thereto) shall apply for the constitution of any Committee under this
sub-section as they apply for the constitution of a Committee under that sub-section.

(3) No act or proceeding of a Committee shall be invalid by reason only of the existence of
any vacancy among its members or any defect in the constitution thereof.

7.13 Section 13-Functions of the Committee

(1) The Committee constituted under sub-section (1) of section 12 shall--
(a) consider proposals, for making rules and regulations under this Act and make appropriate
recommendations to the Central Government;
(b) enquire into such accidents or other matters as may be referred to it by the Central
Government from time to time and make reports thereon; and
Centre for Distance Education 7.10 Acharya Nagarjuna University

(c) subject to the provisions of sub-section (2), hear and decide such appeals or objections
against notices or orders under this Act or the regulations, rules or bye-laws thereunder, as
are required to be referred to it by this Act or as maybe prescribed.

(2) The Chief Inspector shall not take part in the proceedings of the Committee with respect
to any appeal or objection against an order or notice made or issued by him or act in relation
to any matter pertaining to such appeal or objection as a member of the Committee.

7.14 Section 14-Powers, etc., of the Committees

(1)A Committee constituted under section 12 may exercise such of the powers of an
Inspector under this Act as it thinks necessary or expedient to exercise for the purposes of
discharging its functions under this Act.
(2) A Committee constituted under section 12 shall, for the purposes of discharging its
functions, have the same powers as are vested in a court under the Code of Civil Procedure,
1908 (5 of 1908) when trying a suit in respect of the following matters, namely:--
(a) discovery and inspection;
(b) enforcing the attendance of any person and examining him on oath;
(c) compelling the production of documents; and
(d) such other matters as may be prescribed.

7.15 Section 15- Recovery of expenses

The Central Government may direct that the expenses of any inquiry conducted by
1[a Committee constituted under section12] shall be borne in whole or in part by the owner or
agent of the mine concerned, and the amount so directed to be paid may, on application by
the Chief Inspector or an Inspector to a magistrate having jurisdiction at the place where the
mine is situated or where such owner or agent is for the time being resident, be recovered by
the distress and sale of any movable property within the limits of the magistrate's jurisdiction
belonging to such owner or agent:

Provided that the owner or his agent has not paid the amount within six weeks from the date
of receiving the notice from the Central Government or the Chief Inspector of Mines.

7.16 Section 16-Notice to be given of mining operations

(1) The owner, agent or manager of a mine shall, before the commencement of any mining
operation, give to the Chief Inspector, the 1[Controller], Indian Bureau of Mines and the
district magistrate of the district in which the mine is situate, notice in writing in such form
and containing such particulars relating to the mine as may be prescribed.
(2) Any notice given under sub-section (1) shall be so given as to reach the persons
concerned at least one month before the commencement of any mining operation.

7.17 Section -17 Managers

(1) Save as may be otherwise prescribed, every mine shall be under a sole manager who shall
have the prescribed qualification and the owner or agent of every mine shall appoint a person
having such qualification to be the manager:
Provided that the owner or agent may appoint himself as manager if he possesses the
prescribed qualifications.
(2) Subject to any instructions given to him by or on behalf of the owner or agent of the mine,
the manager shall be responsible for the overall management, control, supervision and
direction of the mine and all such instructions when given by the owner or agent shall be
confirmed in writing forthwith.
Mines Act 1952 7.11 Labor Legislations and Law

(3) Except in case of an emergency, the owner or agent of a mine or anyone on his behalf
shall not give, otherwise than through the manager, instructions affecting the fulfilment of his
statutory duties, to a person, employed in a mine, who is responsible to the manager.

7.18 Section 18-Duties and responsibilities of owners, agents and managers

1[18. Duties and responsibilities of owners, agents and managers.--(1) The owner and agent
of every mine shall each be responsible for making financial and other provisions and for
taking such other steps as may be necessary for compliance with the provisions of this Act
and the regulations, rules, bye-laws and orders made thereunder.

(2) The responsibility in respect of matters provided for in the rules made under clauses (d),
(e) and (p) of section 58 shall be exclusively carried out by the owner and agent of the mine
and by such person (other than the manager) whom the owner or agent may appoint for
securing compliance with the aforesaid provisions.

(3) If the carrying out of any instructions given under sub-section (2) or given otherwise than
through the manager under sub-section (3) of section 17, results in the contravention of the
provisions of this Act or of the regulations, rules, bye-laws or orders made thereunder, every
person giving such instructions shall also be liable for the contravention of the provisions
concerned.

(4) Subject to the provisions of sub-sections (1), (2) and (3), the owner, agent and manager of
every mine shall each be responsible to see that all operations carried on in connection with
the mine are conducted in accordance with the provisions of this Act and of the regulations,
rules, bye-laws and orders made thereunder.

(5) In the event of any contravention by any person whosoever of any of the provisions of
this Act or of the regulations, rules, bye-laws or orders made thereunder except those which
specifically require any person to do any act or thing or prohibit any person from doing an act
or thing, besides the person who contravenes, each of the following persons shall also be
deemed to be guilty of such contravention unless he proves that he had used due diligence to
secure compliance with the provisions and had taken reasonable means to prevent such
contravention:--

(i) the official or officials appointed to perform duties of supervision in respect of the
provisions contravened;
(ii) the manager of the mine;
(iii) the owner and agent of the mine;
(iv) the person appointed, if any, to carry out the responsibility under sub-section (2):
Provided that any of the persons aforesaid may not be proceeded against if it appears on
inquiry and investigation, that he is not prima facie liable.
(6) It shall not be a defense in any proceedings brought against the owner or agent of a mine
under this section that the manager and other officials have been appointed in accordance
with the provisions of this Act or that a person to carry the responsibility under sub-section
(2) has been appointed.]

7.19 Section 19-Drinking water

1[(1) In every mine effective arrangements shall be made to provide and maintain at suitable
points conveniently situated a sufficient supply of cool and wholesome drinking water for all
Centre for Distance Education 7.12 Acharya Nagarjuna University

persons employed therein:

Provided that in the case of persons employed below ground the Chief Inspector may, in lieu
of drinking water being provided and maintained at suitable points, permit any other effective
arrangements to be made for such supply.]

(2) All such points shall be legibly marked `DRINKING WATER' in a language understood
by a majority of the persons employed in the mine and no such point shall be situated within
2[six meters] of any washing place urinal or latrine unless a shorter distance is approved in
writing by the Chief Inspector.

(3) In respect of all mines or any class or description of mines, the Central Government may
make rules for securing compliance with the provisions of sub-sections (1) and (2) and for the
examination by prescribed authorities of the supply and distribution of drinking water.

7.20 Section -20 Conservancy

(1) There shall be provided, separately for males and females in every mine, a sufficient
number of latrines and urinals of prescribed types so situated as to be convenient and
accessible to persons employed in the mine at all times.
(2) All latrines and urinals provided under sub-section (1) shall be adequately lighted,
ventilated and at all times maintained in a clean and sanitary condition.
(3) The Central Government may specify the number of latrines and urinals to be provided in
any mine, in proportion to the number of males and females employed in the mine and
provide for such other matters in respect of sanitation in mines (including the obligations in
this regard of persons employed in the mine) as it may consider necessary in the interests of
the health of the persons so employed.

7.21 Summary
The act is administered by the ministry of Labour and employment. The mines act,
1952 contains provisions for measures relating to the health, safety and welfare of workers in
the coal, metalliferous and oil mines. The act prescribes the duties of the owner to manage
mines and mining operation and the health and safety in mines. It also prescribes the number
of working hours in mines, the minimum wages rates, and other related matters.

7.21 Key words

Agent- when used in relation to a mine, means every person, whether appointed as such or
not, who, acting or purporting to act on behalf of the owner, takes part in the management,
control, supervision or direction of the mine or of any part thereof;]

District magistrate- means, in a presidency-town, the person appointed by the Central

Government to perform the duties of a district magistrate under this Act in that town;

Qualified Medical Practitioner- means a medical practitioner who possesses any

recognised medical qualification as defined in clause (h) of section 2 of the Indian Medical
Council Act, 1956 (102 of 1956) and who is enrolled on a State medical register as defined in
clause (k) of that section;]

Owner- when used in relation to a mine, means any person who is the immediate proprietor
or lessee or occupier of the mine or of any part thereof and in the case of a mine the business
whereof is being carried on by a liquidator or receiver, such liquidator or receiver10
Mines Act 1952 7.13 Labor Legislations and Law

week" means a period of seven days beginning at midnight on Saturday night or such other
night as may be approved in writing for a particular area by the Chief Inspector or an
Inspector.]

7.22 Self Assessment Questions

1. Briefly Discuss the Functions of Inspectors
2. Explain the Power of Special officer
3. Describe the Functions of Committee
4. Examine the Duties and responsibilities of owners, agents and managers

7.23 Suggested Readings

1. Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
2. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
3. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual
Professional Book Publishers
4. Padhi P.K(2021) Labour and Industrial Laws Forth Edition PHI Learning
5. Ayusawa Iwao (2022), Frederick, International Labor Legislations, Forgotten Books.
6. Dr.O.P.Gupta & Dr.Vijaya Gupta (2022), Labor Legislations, SBPD Publishing
House.
7. Kumara, VenugopalaG.S.(2022), Employee Relations and Legislations, Current
Publications.
8. Kumara Venugopala G.S(2022), Business & Company Legislations, The Universal
Law Publishing Limited.
9. V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House
 LESSON-8
PLANTATIONS LABOUR ACT, 1951
Learning Objectives
✓ To study welfare Activities
✓ To Understand the Hours and Limitations of Employment
✓ To Know the Penalties and Procedures
Structure
8.1 Introduction
8.2. Short title, extent, commencement and application
8.3. Definitions
8.4 Inspecting Staff
8.5 Provisions as To Health
8.6 Welfare
8.6.1 Canteens
8.6.2 Creches
8.6.3 Recreational facilities
8.6.4 Educational facilities
8.6.5 Housing facilities
8.6.6 Power to make rules relating to housing
8.7 Hours And Limitation Of Employment
8.7.1 Weekly hours
8.7.2 Weekly holidays
8.7.3 Daily intervals for rest.
8.7.4 Spread-over
8.7.5 Notice of period of work
8.7.6 Prohibition of employment of young children
8.7.7 Night work for women and children
8.7.8 Certificate of fitness.
8.8 Leave With Wages
8.8.1 Wages during leave period
8.8.2 Sickness and maternity benefits.
8.9 Penalties And Procedure
8.9.1 Obstruction
8.9.2 Use of false certificate of fitness
8.9.3 Contravention of provisions regarding employment of labour
8.9.4 Other offences
8.9.5 Enhanced penalty after previous conviction
8.9.6 Exemption of employer from liability in certain cases
8.9.7 Cognizance of offences.
8.9.8 Limitation of prosecutions
8.10 Summary
8.11 Key words
8.12 Self Assessment Questions
8.13 Suggested Readings
Centre for Distance Education 8.2 Acharya Nagarjuna University

8.1 Introduction
An Act to provide for the welfare of labour, and to regulate the conditions of work, in
plantations.
BE it enacted by Parliament as follows:--
8.2. Short title, extent, commencement and application.--(1) This Act may be called the
Plantations Labour Act, 1951.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date as the Central Government may, by notification in
the Official Gazette, appoint.
(4) It applies in the first instance to all tea, coffee, rubber and cinchona plantations, but any
State Government may, subject to the previous approval of the Central Government, by
notification in the Official Gazette, apply it to any other class of plantations within that State.
8.3 .Definitions.-- In this Act, unless the context otherwise requires,--
(a) "adolescent" means a person who has completed his fifteenth year but has not completed
his eighteenth year;
(b) "adult" means a person who has completed his eighteenth year;
(c) "child" means a person who has not completed his fifteenth years";
(d) "day" means a period of twenty-four hours beginning at midnight;
(e) "employer" when used in relation to a plantation means the person who has the ultimate
control over the affairs of the plantations, and where the affairs of any plantation are
entrusted to any other person (whether called a managing agent, manager, superintendent or
by any other name) such other person shall be deemed to be the employer in relation to that
plantation;
(f) "plantation" means any land used or intended to be used for growing tea, coffee, rubber or
cinchona which admeasures twenty- five acres or more and whereon thirty or more persons
are employed, or were employed on any day of the preceding twelve months, and in any State
where the provisions of this Act have been applied by notification under sub-section (4) of
section 1 to any other class of plantations, means also any land used or intended to be used
for growing the plant mentioned in such notification and whereon thirty or more persons are
employed, orwere employed on any day of the preceding twelve months;
(g) "prescribed" means prescribed by rules made under this Act;
(h) "qualified medical practitioner" means a person having a certificate granted by an
authority specified in the Schedule to the Indian Medical Degrees Act, 1916 (VII of 1916), or
in the Schedules to the Indian Medical CouncilAct, 1933 (XXVII of 1933) and also persons
having certificates granted under the different State (Provincial)
Medical Council Acts;
(i) "wages" has the meaning assigned to it in clause (h) of section 2 of the Minimum Wages
Act, 1948 (XI of 1948);
Plantation Labor Act 1952 8.3 Labor Legislations and Law

(j) "week" means period of seven days beginning at midnight on Saturday night or such other
night as may be fixed
(j) "week" means period of seven days beginning at midnight on Saturday night or such other
night as may be fixed by the State Government in relation to plantation in any area after such
consultation as may be prescribed with reference to the plantations concerned in that area;
(k) "worker" means a person employed in a plantation for hire or reward, whether directly or
through any agency, to do any work, skilled, unskilled, manual or clerical, but does not
include--
(a) a medical officer at the plantations;
(b) any person whose monthly wages exceed three hundred rupees; or
(c) a person employed in a plantation primarily in a management capacity notwithstanding
that his monthly wages do not exceed rupees three hundred;
(l) "young person" means a person who is either a child or an adolescent.
3.Reference to time of day.--In this Act, reference to time of day are references to Indian
Standard time being five and a half hours ahead of Greenwich Mean time:
Provided that for any area in which the Indian Standard time is not ordinarily observed, the
State Government may
make rules --
(a) specifying the area;
(b) defining the local mean time ordinarily observed therein and
(c) permitting such time to be observed in all or any of the plantations situated in that area.
8.4 Inspecting Staff
Chief inspector and inspectors.--(1) The State Government may, by notification in the
Official Gazette, appoint for the State a duly qualified person to be the chief inspector or
plantations and so many duly qualified persons to be inspectors or plantations subordinate to
the chief inspector as it thinks fit.
(2) Subject to such rules as may be made in this behalf by the State Government, the chief
inspector may declare the local area or areas within which, or the plantations with respect to
which, inspectors shall exercise their powers under this Act, and may himself exercise the
powers of an inspector within such limits as may be assigned to him by the State
Government.
(3) The chief inspector and all inspectors shall be deemed to be public servants within the
meaning of the Indian Penal Code (Act XLV of 1860).
Powers and functions of inspectors.--Subject to any rules made by the State Government in
this behalf, an inspector may within the local limits for which he is appointed--
(a) make such examination and inquiry as he thinks fit in order to ascertain whether the
provisions of this Act and of the rules made thereunder are being observed in the case of any
plantation;
Centre for Distance Education 8.4 Acharya Nagarjuna University

(b) with such assistants, if any, as he thinks fit, enter, inspect and examine any plantation or
part thereof at any reasonable time for purpose of carrying out the objects of this Act;
(c) examine the crops grown in any plantation or any worker employed therein or require the
production of any register or other document maintained in pursuance of this Act, and take on
the spot or otherwise statements of any person which he may consider necessary for carrying
out the purposes of this Act;
(d) exercise such other powers as may be prescribed:
(d) exercise such other powers as may be prescribed:
Provided that no person shall be compelled under this section to answer any question or make
any statement tending to incriminate himself.
Facilities to be afforded to inspectors.
Every employer shall afford the inspector all reasonable facilities for making any
entry , inspection , examination or inquiry under this Act.
Certifying surgeons
(1) The State Government may appoint qualified medical practitioners to be certifying
surgeons for the purposes of this Act within such local limits or for such plantation or class of
plantations as it may assign to them respectively.
(2) The certifying surgeon shall carry out such duties as may be prescribed in connection
with--
(a) the examination and certification of workers;
(b) the exercise of such medical supervisions as may be prescribed where adolescents and
children are, or are to be, employed in any work in any plantation which is likely to clause
injury to their health.
8.5 Provisions As To Health
Drinking water
In every plantation effective arrangements shall be made by the employer to provide
and maintain at convenient places in the plantation a sufficient supply of wholesale drinking
water for all workers.
Conservancy
(1) There shall be provided separately for makes and females in every plantation a sufficient
number of latrines and urinals of prescribed type so situated as to be convenient and
accessible to workers employed therein.
(2) All latrines and urinals provided under sub-section (1) shall be maintained in a clean and
sanitary condition.
Medical facilities
(1) In every plantation there shall be provided and maintained so as to be readily available
such medical facilities for the workers as may be prescribed by the State Government.
Plantation Labor Act 1952 8.5 Labor Legislations and Law

(2) If in any plantation medical facilities are not provided and maintained as required by sub-
section (1) the chief inspector may cause to be provided and maintained therein such medical
facilities, and recover the cost there of from the defaulting employer.
(3) For the purposes of such recovery the chief inspector may certify the costs to be recovered
to the collector, who may recover the amount as an arrear of land-revenue.
8.6 Welfare
8.6.1 Canteens
(1) The State Government may make rules requiring that in every plantation wherein one
hundred and fifty workers, are ordinary employed, one or more canteens shall be provided
and maintained by the employer for the case of the workers.
(2) Without prejudice to the generality of the foregoing power, such rules provide for--
(a) the date by which the canteen shall be provided;
(b) the number of canteens that shall be provided and the standards in respect of construction,
accommodation, furniture and other equipment of the canteens ;furniture and other equipment
of the canteens;
(c) the food-stuffs which may be served therein and the charges which may be made there
for;
(d) the constitution of a managing committee for the canteen and the representation of the
workers in the management of the canteen;
(e) the delegation to the chief inspector, subject to such conditions as may be prescribed, of
the power to make rules under clause (c).
8.6.2 Creches
(1) In every plantation wherein fifty or more women workers are employed or were employed
on any day of the preceding twelve months, there shall be provided and maintained by the
employer suitable rooms for the use of children of such women who are below the age of six
years.
(2) Such rooms shall--
(a) provide adequate accommodation;
(b) the adequately lighted and ventilated;
(c) be maintained in a clean and sanitary condition; and
(d) be under the charge of a woman trained in the care of children and infants.
(3) The State Government may make rules prescribing the location and the standards of such
rooms in respect of their construction and accommodation and the equipment and amenities
to be provided therein.
8.6.2 Recreational facilities
The State Government may make rules requiring every employer to make provisions
in his plantation for such recreational facilities for the workers and children employed therein
as may be prescribed.
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8.6.3 Educational facilities

Where the children between the ages of six and twelve of workers employed in any
plantation exceed twenty-five in number, the State Government may make rules requiring
every employer to provide educational facilities for the children in such manner and of such
standard as may prescribed.
8.6.4 Housing facilities
It shall be the duty of every employer to provide and maintain for every worker and his
family residing in the plantation necessary housing accommodation.
8.6.5 Power to make rules relating to housing
The State Government may make rules for the purpose of giving effect to the provisions of
section 15 and, in particular providing for--
(a) the standard and specification of the accommodation to be provided;
(b) the selection and preparation of sites for the construction of houses and the size of such
plot;
(c) the constitution of advisory boards consisting of representatives of the State Government,
the employer and the workers for consultation in regard to matters connected with housing
and the exercise by them of such powers, functions and duties in relation thereto as may be
specified;
(d) the fixing of rent, if any, for the housing accommodation provided for workers;
(e) the allotment to workers and their families of housing accommodation and of suitable
strips of vacant land adjoining such accommodation for the purpose of maintaining kitchen
gardens, the definition of what constitutes the family of a worker for the purposes of section
15, and for the eviction of workers and their families from such accommodation;
(f) access to the public to those parts of the plantation wherein the workers are housed.
8.6.6 Other facilities
The State Government may make rules requiring that in every plantation the employer
shall provide the workers with such number and type of umbrellas, blankets, rain coats or
other like amenities for the protection of workers from rain or cold as may be prescribed.
8.6.7 Welfare officers
(1) In every plantation wherein three hundred or more workers are ordinarily employed the
employer shall company such number of welfare officers as may be prescribed.
(2) The State Government may prescribe the duties, qualifications and conditions of service
of officers employe under sub-section (1)
8.7 Hours And Limitation Of Employment
8.7.1
8.7.2 Weekly holidays
(1) The State Government may by rules made in this behalf--
(a) provide for a day of rest in every period of seven days which shall be allowed to all
workers;
Plantation Labor Act 1952 8.7 Labor Legislations and Law

(b) provide for payment for work done on a day of rest at a rate not less than the overtime rate
prevailing in the area, and where there is no such rate as may be fixed by the State
Government in this behalf.
(2) Notwithstanding anything contained in clause (a) of sub- section (1) Where a worker is
willing to work on any day of rest which is not a closed holiday in the plantation, nothing
contained in this section shall prevent him from doing so:
Provided that in so doing a worker does not work for more than ten days consecutively
without a holiday for a whole day intervening.
Explanation 1.-- Where on any day a worker has been prevented from working in any
plantation by reason of tempest, fire, rain or other natural causes, that day, may, if he so
desires, be treated as his day of rest for the relevant period of seven days within the meaning
of sub-section (1).
Explanation 2.--Nothing contained in this section shall apply to any worker whose total
period of employment including any day spent on leave is less than six days.
8.7.3 Daily intervals for rest.
The period of work on each day shall be so fixed that no period shall exceed five
hours and that no worker shall work for more than five hours before he has had an interval for
rest for at least half an hour.
8.7.4 Spread-over
The period of work of an adult worker in a plantation shall be so arranged that
inclusive of this interval for rest under section 19 it shall not spread-over more than twelve
hours including the time spent in waiting for work on any day.
8.7.5 Notice of period of work
(1) There shall be displayed and correctly maintained in every plantation a notice of periods
of work in such form and manner as may be prescribed showing clearly for every day the
periods during which the workers may be required to work.
(2) Subject to the other provisions contained in this Act, no worker shall be required or
allowed to work in any plantation otherwise than in accordance with the notice of periods of
work displayed in the plantation.
(3) An employer may refuse to employ a worker for any day if on that day he turns up for
work more than half an hour after the time fixed for the commencement of the day's work.
8.7.6 Prohibition of employment of young children
No child who has not completed his twelfth years shall be required or allowed to work
in any plantation.
8.7.7 Night work for women and children
Except with the permission of the State Government, no woman or child worker shall
be employed in any plantation otherwise than between the hours of 6 A.M. And 7 P.M.:
Provided that nothing in this section shall be deemed to apply to midwives and nurses
employed as such in any plantation.
.Non-adult workers to carry tokens.-- No child who has completed his twelfth year and no
adolescent shall be required or allowed to work if any plantation unless-
Centre for Distance Education 8.8 Acharya Nagarjuna University

(a) a certificate of fitness granted with reference to him under section 27 is in the custody of
the employer; and
(b) such child or adolescent carries with him while he is at work a token giving a reference to
such certificate.
8.7.8 Certificate of fitness
(1) A certifying surgeon, shall on the application of any young person or his parent or
guardian ac companied by a document signed by the employer or any other person on his
behalf that such person will be employed in the plantation if certified to be fit for work, or on
the application of the employer or any other person on his behalf with reference to any young
person intending to work, examine such person and ascertain his fitness for work either as a
child or as an adolescent.
(2) A certificate of fitness granted under this section shall be valid for a period of twelve
months from the date thereof, but may be renewed.
(3) Any fee payable for a certificate under this section shall be paid by the employer and shall
not be recoverable from the young person, his parents or guardian.
Power to require medical examination.--An inspector may, if he thinks necessary so to do,
cause any young person employed in a plantation to be examined by a certifying surgeon.
8.8 Leave With Wages
(1) The provisions of this Chapter shall not operate to the prejudice of any rights towhich a
worker may be entitled under any other law or under the terms of any award, agreement, or
contract of service:
Provided that where such agreement or contract of service provides in section 30, include
weekly holidays or holidays for festivals or other similar occasions.
Explanation.- For the purposes of this Chapter leave shall not , except as provided in section
30, include weekly holidays or holidays for festivals or other similar occasions.
Annual leave with wages.--(1) Every worker shall be allowed leave with wages for a number
of days calculated
at the rate of--
(a) if an adult, one day for every twenty days of work performed by him, and
(b) if a young person, one day for every fifteen days of work performed by him:
Provided that a period of leave shall be inclusive of any holiday which may occur during
such periods.
(2) If a worker does not in any one period of twelve months take the whole of the leave
allowed to him under subsection (1).any leave not taken by him shall be added to the leave t
be allowed to him under that sub-section in succeeding period of twelve months.
(3) A worker shall cease to earn any leave under this section when the earned leaved due to
him amounts to thirty days.
Plantation Labor Act 1952 8.9 Labor Legislations and Law

8.8.1 Wages during leave period

(1) For the leave allowed to a worker under section 30 he shall be paid at the rate equal to the
daily average of his total full-time wages, exclusive of any overtime earnings and bonus, if
any, but inclusive of dearness allowances and the cash equivalent of any advantages accruing
by the concessional supply by the employer of food grains for the day on which he worked.
(2) A worker who has been allowed leave for any period less, than four days in the case of an
adult and five days in the case of a young person under section 30 shall, before his leave
begins, be paid his wages for the period of the leave allowed.
8.8.2 Sickness and maternity benefits.
(1) Subject to any rules that may be made in this behalf, every worker shall be entitled to
obtained from his employer.--
(a) in the case of sickness certified by a qualified medical practitioner, sickness allowance,
and
(b) if a woman, in the case of confinement or expected confinement, maternity allowance.
at such rate, for such period and at such intervals as may be prescribed.
(2) The State Government may make rules regulating the payment of sickness or maternity
allowance and any such rules may specify the circumstances in which such allowance shall
not be payable or shall cease to be payable, and in framing any rules under this section the
State Government shall have due regard to the medical facilities that maybe provided by the
employer in any plantation.
8.9 Penalties And Procedure
8.9.1 Obstruction
(1) Whoever obstructs an inspector in the discharge of his duties under this Act or refuses or
wailfully neglects to afford the inspector any reasonable facility or making any inspection,
examination or inquiry authorized by or under this Act in relation to any plantation, shall be
punishable with imprisonment for a term which may extend to three months, or with fine
which may extend to five hundred rupees, or with both.
(2) Whoever willfully refuses to produce on the demand of an inspector any register or other
document kept in pursuance of this Act or prevents or attempts to prevent or does anything
which he has reason to believe is likely to prevent any person from appearing before or being
examined by an inspector acting in pursuance of his duties under this Act, shall be punishable
with imprisonment for a term which may extend to three months or with fine which may
extend to five hundred rupees, or with both.
8.9.2 Use of false certificate of fitness
Whoever knowingly uses or attempts to use as a certificate of fitness granted to
himself under section 27 a certificate to another person under that section, or having been
granted a certificate of fitness to himself, knowingly allows it to be used, or allows an attempt
to use it to be made by another person, shall be punishable with imprisonment which may
extend to one month, or with fine which may extent to fifty rupees, or with both.
8.9.3 Contravention of provisions regarding employment of labour
Whoever, except at otherwise permitted by or under this Act, contravenes any
provision of this Act or of any rules made there under, prohibiting, restricting or regulating
the employment of persons in a plantation, shall be punishable with imprisonment for a term
Centre for Distance Education 8.10 Acharya Nagarjuna University

which may extend to three months or with the fine which may extend to five hundred rupees,
or with both.
8.9.4 Other offences
Whoever contravenes any of the provisions of this Act or of any rules made there
under for which no other penalty is elsewhere provided by or under this Act shall be
punishable with imprisonment for a term which no other penalty is elsewhere provided by or
under this Act shall be punishable with imprisonment for a term which may extend to three
months, or with fine which may extend to five hundred rupees, or with both.
8.9.5 Enhanced penalty after previous conviction
If any person who has been convicted of any offence punishable under this Act is
again guilty of an offence involving a contravention of the same provision, he shall be
punishable on a subsequent conviction with imprisonment which may extend to six months or
with fine which may extend to one thousand rupees, or with both:
Provided that for the purposes of this section no cognizance shall be taken of any conviction
made more than two years before the commission of the offence which is being punished.
8.9.6 Exemption of employer from liability in certain cases
Where an employer charged with an offence under this Act, alleges that another
person is the actual offender, he shall be entitled upon complaint made by him in this behalf,
to have, on giving to the prosecutor in this behalf three clear days notice in writing of his
intention so to do, that other person brought before the court on the day appointed for the
hearing of the case and if, after the commission of the offence has been proved, the employer
proves to the satisfaction of the court that--
(a) he has used due diligence to enforce the execution of the relevant provisions of this Act;
and
(b) that the other person committed the offence in question without his knowledge, consent or
connivance: the said other person shall be convicted of the offence and shall be liable to the
like punishment as if he were the employer and the employer shall be acquitted:
Provided that---
(a) the employer may be examined on oath his evidence and that of any witness whom he
calls in his support shall be subject to cross-examination on behalf of the person he charges to
be the actual offender and by the prosecutor, and
(b) if, in spite of due diligence, the person alleged as the actual offender cannot be brought
before the court on the day appointed for the hearing of the case, the court shall adjourn the
hearing thereof from time to time so, however,
that the total period of such adjournment does not exceed three months, and if, by the end of
the said period, the person alleged as the actual offender cannot still be brought before the
court, the court shall proceed to hear the case against the employer.
8.9.7 Cognizance of offences.
No court shall take cognizance of any offence under this Act except on complaint
made by, or with the previous sanction in writing of, the chief inspector and no court inferior
to that of a presidency magistrate or a magistrate of the second class shall try any offence
punishable under this Act.
Plantation Labor Act 1952 8.11 Labor Legislations and Law

8.9.8 Limitation of prosecutions

No court shall take cognizance of an offence punishable under this Act unless the
complaint thereof has been made or is made within three months from the date on which the
alleged commission of the offence came to the knowledge of an inspector:
Provided that where the offence consists of disobeying a written order made by an inspector,
complaint there of may be made within six months of the date on which the offence is
alleged to have been committed.
Power to give directions.---The Central Government may give directions to the Government
of any State as to the carrying into execution in the State of the provisions contained in this
Act.
Power to exempt.----The State Government may, by order in writing, exempt, subject to such
conditions and restrictions as it may think fit to impose, any employer or class of employers
from all or any of the provisions of this Act:
Provided that no such exemption shall be granted except with the previous approval of the
Central Government.
.General power to make rules.---(1) The State Government may, subject to the condition of
previous publication, make rules to carry out the purposes of this Act:
Provided that the date to be specified under clause (3) of section 23 of the General Clauses
Act, 1897 (X of 1897)shall not be less than six weeks from the date on which the draft of the
proposed rules was published.
(2) In particular and without prejudice to the generality of the foregoing power, any such
rules may provide for---
(a) the qualifications required in respect of the chief inspector and inspector;
(b) the powers which may be exercised by inspectors and the areas in which and the manner
in which such powers may be exercised;
(c) the medical supervision which may be exercised by certifying surgeons;
(d) the examination by inspectors or other persons of the supply and distribution of drinking
water in plantations;
(e) appeals from any order of the chief inspector or inspector and the form in which, the time
within which and the authorities to which, such appeals may be preferred;
(f) the time within which housing, recreational, educational or other facilities required by this
Act to be provided and maintained may be so provided;
(g) the types of latrines and urinals that should be maintained in plantations;
(h) the medical recreational and educational facilities that should be provided in plantations;
(i) the form and manner in which notices of period or work shall be displayed and
maintained.
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(j) the registers which should be maintained by employers and the returns, whether occasional
or periodical, as in the opinion of the state Government may be required for the purposes of
this Act; and
(k) the hours of work for a normal working day for the purpose of wages and the overtime.
(3) All rules made under this Act shall, if made by any Government, other than the Central
Government, be subject to the previous approval of the Central Government.
8.10 Summary
With the employment of over 1 million, the Plantation industry in India is among the
largest private employers in India. It is spread across the States of Assam, Kerala, Tamil
Nadu and West Bengal. The Plantation workforce, however, has been among the most
exploited workforce in the organized sector. Their wages are amongst the lowest when
compared to other workers and working and living conditions most dismal. Most of the
plantations are located in remote and 'isolated areas. Workers are mainly dependent on the
Plantations as there is hardly any other employment avenue. Workers are illiterate and
migrants with no awareness or information about their rights. The fact that plantation areas
do not come under the purview of rural development and antipoverty programmes has also
prevented conditions from im proving.
In 1951, the Parliament passed the Plantations Labour Act [PLA] which sought to
provide for the welfare of labour and to regulate the conditions of workers in plantations.
Under this law, the State Governments have been empowered to take all feasible steps to
improve the lot of the plantation workers. The passing of PLA brought some improvements
in the plantations sector. It also helped in creating conditions for organising the workers and
the rise of trade unions. However, the potential benefits promised under the PLA remain
unachieved mainly due to ignorance of workers about their rights under the law.
8.11 Key words
Plantation- means any land used or intended to be used for growing tea, coffee, rubber or
cinchona which admeasures twenty- five acres or more and whereon thirty or more persons
are employed, or were employed on any day of the preceding twelve months, and in any State
where the provisions of this Act.
Spread-over-The period of work of an adult worker in a plantation shall be so arranged that
inclusive of this interval for rest under section 19 it shall not spread-over more than twelve
hours including the time spent in waiting for work on any day.
Weekly hours- save as otherwise expressly provided in this Act, no adult worker shall be
required or allowed to work on any plantation in excess of fifty-four hours a week and no
adolescent or child for more than forty hours a week
Cognizance of offences- No court shall take cognizance of any offence under this Act except
on complaint made by, or with the previous sanction in writing of, the chief inspector and no
court inferior to that of a presidency magistrate or a magistrate of the second class shall try
any offence punishable under this Act.
8.12 Self Assessment Questions
1. Briefly Explain the Welfare Activities in Plantation Labor Act 1951?
2. Examine the Hours and Limitations of Employment of Plantation Labor Act 1951?
Plantation Labor Act 1952 8.13 Labor Legislations and Law

3. Explain the Penalties and Procedures of Plantation Labor Act 1951?

8.13 Suggested Readings
1. Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
2. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
3. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual
Professional Book Publishers
4. Padhi P.K(2021) Labour and Industrial Laws Forth Edition PHI Learning
5. Ayusawa Iwao (2022), Frederick, International Labor Legislations, Forgotten Books.
6. Dr.O.P.Gupta & Dr.Vijaya Gupta (2022), Labor Legislations, SBPD Publishing
House.
7. Kumara, VenugopalaG.S.(2022), Employee Relations and Legislations, Current
Publications.
8. Kumara Venugopala G.S(2022), Business & Company Legislations, The Universal
Law Publishing Limited.
9. V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House

Dr.V.Tulasi Das
 LESSON - 9

WAGE LEGISLATIONS
Learning Objectives

✓ To know the wages

✓ To read the wage legislations
✓ To learn about the wage concepts
✓ To study the wage policy

Structure

9.1 Introduction

9.2 Wage Concepts

9.3 Wage Policy

9.4 Objectives of Sound Wage Policy

9.5 Factors Considered to Form a Sound Wage Policy

9.6 Agents that Affect Wages and Salary

9.7 Factors Influencing the Determination of Wage Rates

9.8 Factors to Consider for Determining Wage and Salary Structure of Workers

9.9 Summary

9.10 Keywords

9.11 Self - Assessment Questions

9.12 Suggested Readings

9.1 Introduction
Sound wage theories address questions such as adequacy of wages, fairness and equity, hard
working conditions and efforts, compensation against inflation, and additional employee
commitment as he grows up in the growing family.

Minimum wages have been defined as “the minimum amount of remuneration that an
employer is required to pay wage earners for the work performed during a given period,
which cannot be reduced by collective agreement or an individual contract”.

This definition refers to the binding nature of minimum wages, regardless of the method of
fixing them. Minimum wages can be set by statute, decision of a competent authority, a wage
Centre for Distance Education 9.2 Acharya Nagarjuna University

board, a wage council, or by industrial or labour courts or tribunals. Minimum wages can also
be set by giving the force of law to provisions of collective agreements.

The purpose of minimum wages is to protect workers against unduly low pay. They help
ensure a just and equitable share of the fruits of progress to all, and a minimum living wage
to all who are employed and in need of such protection. Minimum wages can also be one
element of a policy to overcome poverty and reduce inequality, including those between men
and women, by promoting the right to equal remuneration for work of equal value.

The purpose of a minimum wage, which sets a floor, should also be distinguished from
collective bargaining, which can be used to set wages above an existing floor.

The importance of the Minimum wage act 1948 is to prevent employee exploitation and
ensure a decent living for a worker. The Act provides that the government will fix the
minimum wage rate and revise it every five years. It appoints advisory committees to
consider the proposals.

There are three kinds of wages minimum wage, fair wage & living wage.

9.2 Wage Concepts

Three concepts of wages are commonly used in discussions on wage policy, and the same
concepts were also explained by the Fair Wages Committee, namely:

1. Minimum Wage

2. Living Wage and

3. Fair Wage
These are broadly based on the needs of the workers and the capacity of employers to pay, as
also on the general economic conditions prevailing in a country.

1. Minimum Wage
A minimum wage is said to be a wage which is sufficient to satisfy at least the minimum
needs, of at least a frugal and steady workers. According to the Committee on Fair Wages,
the minimum wage is an irreducible or minimum amount regarded necessary for the bare
sustenance of the worker and his family and for the preservation of his efficiency at work.

In most countries, like ours, Minimum Wages Legislation has fixed minimum wages for
specified occupations, especially where sweating and exploitation of labour had been
prevalent. In fixing a minimum wage both the need of the workers and the capacity of the
industry to pay are taken into account. From the social point of view, an industry which
cannot even afford to pay a basic minimum wage has no justification for existence in the
long-run.

There is also a distinction between above subsistence or minimum wage and a statutory
minimum wage. The former is a wage which would sufficient to cover the bare physical need
of a worker and his family, that is a rate which has got to be paid to the worker irrespective of
"the capacity of the industry to pay. If an industry is unable to pay to its workmen at least a
Wage Legislation 9.3 Labor Legislations and Law
bare Minimum Wage, it has no right to exist. The statutory minimum wage, however, is the,
minimum which is prescribed by the statute and it may be higher than the bare substance or
minimum wage, providing for some measure of education, medical requirement and
amenities above F.W. committee's report.

The passing of the Minimum Wage Act, 1948 is a landmark in the history of labour
legislation in the country which, recognizes that the wages cannot be left to be determined
entirely by market forces. The whole philosophy under lying the enactment of Minimum
Wage Act is to prevent exploitation of labour through the payment of unduly low wages. The
statutory minimum is the minimum which is prescribed by the relevant provision of the
Minimum Wage Act 1948. The main object of the Act is to prevent 'sweated' labour as well
as exploitation unorganized labour. If proceed on the basis that it is the duty of the state that
at least Minimum Wages are paid to the employees irrespective of the capacity of the
industry or the unit to pay the same.

In Kanta Devi and others V/S State of Haryana and others and Electric Construction and
Employment Co. Ltd Vs State of Haryana and others the

S.C. held that even if an industry creates a different category of workers outside the
recognized categories of workers in respect of whom minimum wages are fixed under the
M.W. Act, such as the category of learnes created in the present cases, it will not be permitted
to pay less than the minimum for the lowest level employee in that industry namely in
unskilled workman. The basic idea is to avoid exploitation by the management by creating
different category outside the recognized categories of workers. In Sandeep Kumar and
others V/s State of U.P, where five persons were working as junior engineers in a project
place under the control of executive officer, city board Ghaziabad engaged in the work of
slum clearance. The project financed by the state of UP and World Bank fund. They were
working on daily rate basis and on an average-received Rs. 1000 per month. No other
benefits were given even they did not get any payment for the holiday. However,
similarly qualified engineers when employed for similar work on regular basis are paid a
minimum grade pay of Rs. 1400. The Supreme Court held that there is no justification to
discriminate between the two categories and directed pay Rs. 1400 per month instead of Rs.
1000.

In Mahatma Rhule Agricultural University, Vs Nasik Zilla Sheth Kamgar union and others.
Supreme Court held that the status of permanency cannot be granted when there are not posts.
There can be no justification in the state government not making available the required funds.
The state administration cannot shrink it responsibility of ensuring proper education in
schools and college on the plea of lack of resources. It is for the authorities running the
administration to find out wages and means of securing funds for the purpose! There
universities are imparting education; it is necessary for them, to maintain the agricultural field
and to carry on experiments. To maintain agricultural fields, they required daily wagers. As
the daily wagers were required the state Govt, cannot say that they would not pay the daily
wagers what is due to them.
Centre for Distance Education 9.4 Acharya Nagarjuna University

In Ahmad Nagar Zilla Sheth Mazdoor Union V/s Dinkar Rao Kalyan Rao Jagdale,
(connected with the above mentioned case) it has been held by the Supreme court there
continuance every year of seasonal work obviously during the period when work was
available, does not constitute a permanent status unless there exists posts and regularization is
done. Under these circumstances the tribunal and the high court are not right in holding, that
the respondents are entitled to be absorbed on regular basis as regular employees. Therefore,
their orders were set aside. However, the Supreme Court made it clear that the appellant shall
take the services of all the workmen existing as on date as and when the work is available and
during the period of seasonal operation. As and when the vacancies arise, regularization of
the employees should be made in order of their seniority and till the employees are
regularized, they are not to be retrenched.

I State of Haryana Vs Tilakraj and others - where daily wages filed petition in the high court
claiming that they were entitled to regularization in view of their long period of service put in
by them and also claimed same salary as paid to regular employees since the nature of work
done by them was similar. The petition was allowed by the high court with the following
observation:

"The petitioners would be entitled to the relief, but again not the regular pay scale which their
regular counter parts are receiving. The petitioners would be entitled to the minimum of the
pay scale with D.A. alone".

In appeal the Supreme Court observed that the principle of equal pay for equal work is not
always easy to apply. There are inherent difficulties in comprising and evaluating the work
done by different person indifferent or" organizations, or even in the same organization. This
is a concept, which requires for its applicability complete and whole sale identity between
group of employees claiming identical pay scales and the other group of employees who have
already earned such pay scales. The problem about equal pay cannot always be translated into
a mathematical formula.

A scale of pay is attached to definite post and in case of a daily wager he holds no posts. The
respondent workers cannot be held to hold any post to claim even any comparison with the
regular and permanent staff any or all purposes including a claim for equal pay and
allowances. To claim a relief on the basis of equality, it is for the claimants to substantiate a
clear-cut basis of equivalence and a resultant hostile discrimination before becoming eligible
to claim rights on par with the other group viz-a-viz an alleged discrimination. The impugned
judgements of the high court is clearly indefensible hence set aside. However, the appellant
state ha s to ensure that the minimum wages are prescribed for such workers and are paid to
them.

As a matter of fact, minimum wage are fixed to provide necessaries of life which include
food, clothes, shelter, education and medical care the concept of 'necessaries' is depend upon
the standard of living of persons concerned in a particular area or region. It is therefore left to
the government to prescribe minimum wages keeping in view various factors as indicated
above sec. 3,4,5 authorise the appropriate government to fix the minimum rate of wages. In
Wage Legislation 9.5 Labor Legislations and Law
other words if the wages fixed by contract are found to below, authority is conferred on the
app government to increase them so as to bring them to the level of what the said government
regards as the M.W. in the particular scheduled employment in the particular area concerned.

2. Living Wage
The term living wage has not been defined under the provision of the Minimum Wages Act.
However, "an instance of statutory definition of living wage is provided in South Australian
Act 1912 which states the living wage" means a sum sufficient for the normal and reasonable
needs of the average employee living in a locality where the worker under consideration is
done or is to be done". In the famous Harvester case, The Commonwealth Arbitration Court
ha s visualized a living wage as a sum which is adequate to satisfy the normal needs of the
average employee regarded as human being in a civilized community.

The living wage, according to the Committee on Fair Wage represented the higher level of
wage and, naturally, it would include all amenities which a citizen living in modern civilized
society is entitled to when the economy of the country is sufficiently advanced and the
employer is able to meet the expending aspirations of his workers. As the traditional doctrine
interprets it, living wages as is "a will" the wish which floats a little further ahead an arm's
length out of reach. It pursuit belongs to the same category as "sparing the circle".

In Hindustan Time Ltd. V/S Their Workman K.C. Das Gupta J. wistfully observed: "While
the industrial adjudication will be happy to fix a wage structure which would give the
workmen generally a living wage, economic consideration make that only a dream for future,
that is why the industrial tribunals in this country generally confine their horizon to the target
of fixing a fair wage".

In a latter case viz, All India Reserve Bank Employee Association V/S Reserve Bank of
India. In the same strain, Hidayatullah J. remarked. "Our political aim is living wage" though
in actual practice living wage has been an ideal which has eluded our efforts like an ever
receding horizon and will so remain for some time to come. Our general wage structure has at
best reached the lower levels of fair wage though some employers are paying higher wage
then the general average".

Chief Justice Subha Rao, In Hindustan Antibiotic Ltd. V/S Their Workman, has however
struck an optimistic rote their prosperity in the country would help to improve the conditions
of labour and "the standard of life of the labour can be progressively raised from the state of
minimum wage. Passing through need found wage fair to living wage".

Directive Principles enshrined in the constitution make it the duty of the state to strive and
secure living wage for the working class. This however cannot be achieved at one stroke for,
the interests of the industry and its survival is an important as the betterment of the standard
of living of the working class. All the same unless there is a continuous and progressive trend
towards securing better living conditions for labour which would , necessarily in its turn cell
for a determination of progressive higher minimum wage. It is only likely that the goal may
never be reached.
Centre for Distance Education 9.6 Acharya Nagarjuna University

In short, the living wage is a political ideal to be achieved and it means and includes salary,
pay or remuneration for the work done, which is quite essential for providing necessaries of
life, such as food cloth and shelter including maintenance of health, education, frugal
comforts and certain means of recreation which are quite essential for the person to lead his
life in society as human being. The concept of living wage may vary from country to country,
place to place because it depends upon the price level of necessaries of life and it is
determined by the socioeconomic conditions of a particular country. Living wage, are without
which working people cannot live and perform their duties as a citizen. It may be recalled
that as regards living wage the committee observed that this concept has influenced the
fixation of wages in all economically advanced countries and was very old and well
established one.

2. Fair Wage
It is a wage which should offer an employee incentive to work and produce enough in
quantity, without sacrificing quality, so that the payment of such a wage is justifiable by the
industry. The living wage for a worker should be such as to include not merely the cost of
maintenance for himself but also for supporting his family.

As such, living wage should include provision for the following:

i. Bare necessaries such as food, clothing and shelter.

ii. A measure of frugal comfort includes –

(a) education for children,

(b) protection against ill-health,

(c) requirements of essential social needs, and

(d) a measure of insurance against the more important misfortunes including old age.

iii. Some margin for self-development and recreation.

The concept of living wage, to be realistic, should be linked with economic conditions and
the size of the family. While determining expenditure under various heads, attention should
be paid to the changes in the cost of living as prices fluctuate from time to time.

Fair wage is a mean between the living wage & the minimum wage. Express Newspaper Ltd.
V/S Union of India Das Gupta J. defined 'fair wage' "which may roughly be said to
approximate to the need based minimum, in the sense of a wage which is adequate to cover
the normal needs of the average employee regarded is a human being in a civilized society.

Fair wage is a mean between the living wage & the minimum wage. Express Newspaper Ltd.
V/S Union of India Das Gupta J. defined 'fair wage' "which may roughly be said to
approximate to the need based minimum, in the sense of a wage which is adequate to cover
the normal needs of the average employee regarded is a human being in a civilized society.
Wage Legislation 9.7 Labor Legislations and Law
In Express Newspaper (P) Ltd. V/S Union of India Bhagwati described fair wage as a mean
between the living wage and minimum wage. Marshall would consider the rate of wage
prevailing in an occupation as 'fair' if it is about on level with the average payment for tasks
in other trades which are of equal difficulties and disagreeableness which require equally rare
natural abilities and an equally expensive training.

In All India Reserve Bank of Employees 'Association V/S R.B.I. Ltd. The court said that the
Fair wage is thus related to fair workload and the earning capacity. It is a step lower than the
living wage.

The concept of fair wage therefore, involves a rate sufficiently high to enable the worker to
provide a standard family with food, shelter, clothing, medical care and education of children
appropriate to his status in life but not at a rate exceeding the wage coming capacity of the
class of establishment concerned.

A fair wage is thus related to the earning capacity and workload. It must however is realized
that fair wage is only living wage by, which is meant a wage which, is sufficient to provide
not only, the essentials above mentioned but a fair measure of frugal comfort wish an ability
to provide for old age and evil days. Thus while the lower limit of fair wage must ability be
minimum wage, the upper limit is equally set by what may broadly be called the capacity of
industry to pay. This will not depend not only of the economic position of the industry but
also on its future prospects. Between these two limits, the actual wage will depend on a
consideration of certain factor viz:

➢ Productivity of labour
➢ The prevailing rate of wage
➢ The level of national income and its distribution and
➢ The place of industry in the economy of the country

In actual calculation of the fair wage, the Committee on Fair Wage observed that it was not
possible to assign any definite weight to these factors.

The comm. on F.W. also recognized that the concepts of F.W. by it could not be viewed in
any since they would from time to time depending on the economics and social development
in the country.

9.3 Wage Policy

The term wage policy refers to legislation or government action undertaken to regulate the
level or structure of wage, or both, for the purpose of achieving specific objectives of social
and economic policy. It involves all systematic efforts of the government in relation to a
national wage and salary system, legislations, and so on to regulate the levels or structures of
wages and salaries with a view to achieving economic and social objectives of the
government.

The first step towards the evolution of wage policy was the enactment of the payment of
Wages Act, 1936. The main objective of the Act is to prohibit any delay or withholding of
wages legitimately due to the employees. The next step was the passing of the Industrial
Centre for Distance Education 9.8 Acharya Nagarjuna University

Disputes Act, 1947, authorizing all the State governments to set up industrial tribunals that
would look into disputes relating to remuneration.

Another notable development that led to the evolution of wage policy was the enactment of
the Minimum Wages Act, 1948. The purpose of the Act is the fixation of minimum rates of
wages to workers in sweated industries such as woolen, carpet making, flour mills, tobacco
manufacturing, oil mills, plantations, quarrying, mica, agriculture, and the like.

The Act was amended several times to make it applicable to more and more Industries. Then
the Equal Remuneration Act, 1976, which prohibits discrimination in matters relating to
remuneration on the basis of religion, region or sex was enacted. The Constitution of India
committed the government to evolve a wage policy. Successive five-year plans have also
devoted necessary attention to the need for a wage policy.

Following the recommendations of the First and Second Plans, the Government of India
constituted wage boards for important industries in the country. A wage board is a tripartite
body comprising representations from the government, owners, and employees. Technically
speaking, a wage board can only make recommendations, and wage policies are normally
implemented through persuasion.

In spite of legislations, tribunals, and boards, disparities in wages and salaries still persist.

Some of the disparities are:

a) Employees of MNCs are paid much more than their counterparts in host countries for
identical work.
b) Different industries have different wage and salary structures resulting in disparities
in remuneration for identical work.
c) Wide gaps exist between wages and salaries of employees in the organized sector and
of those in the unorganized sector, the latter earning much less than the former.
d) Differences exist between earnings of employees in the government sector and those
in the private sector.
e) Within the government sector, salary differences exist among employees of different
departments.

The disparities are glaring. If an illiterate supervisor in leather processing unit can earn Rs.
12,000 plus per month and a half-yearly bonus, how much can a university professor earn?
Rs. 10,000 and no bonus? If an auto driver can earn Rs. 3000 per month, how much should a
temporary lecturer in a college earn? Rs.5000 per month? And remain temporary forever. A
sweeper in L&T is an Income tax assessed but a BE or an MBBS degree holder works for Rs.
800 per month in a small-scale unit or Rs. 1200 in a private nursing home, respectively.

In order to correct such disparities, the Government of India appointed a Committee headed
by Mr Bhootalingam in 1979. The committee was to suggest regional and integrated wage
policy covering all sectors of the economy. Soon after the committee submitted its report, it
was criticized as anti-labor and impracticable.
Wage Legislation 9.9 Labor Legislations and Law
Recent wage practices in India in the organized sector are such that dearness allowances are
paid to neutralise at least partially, price increases, bonus paid as per the Bonus Act, and
fringe benefits given under this Employees’ State Insurance Act and the Employees’
Provident Fund” Act. Wage Boards have attempted to settle wage disputes, taking into
account the principle of fair wages first set forth by the Report of Committee on Fair Wages.

The Fair Wages Committee recommended that the “minimum wage should represent the
lower limit of the fair wage, the upper limit being the capacity of industry to pay”. Between
these two limits, the Committee suggested that the fair wage should depend upon –

i) Productivity of labour;
ii) Prevailing rates of wages in the same and similar occupations in the same neighboring
localities;
iii) Level of the national income and its distribution, and
iv) Place of the industry concerned in the economy of the country. The Committees’
recommendations are similar to the requirements laid down above.

9.4 Objectives of Sound Wage Policy

The objectives of a sound/ideal wage and salary policy are manifold.

A sound wage policy promotes industrial relations, protects against price rise, and serves
many more purposes:

1. Establish good labour relations

2. Decide on appropriate wages

3. Decide wages based on the individual’s capability

4. Develop a pre-determined scheme for payment of wages

5. Establish linkages of wage payment with performances

6. Maintain parity of wages with other organizations

7. Provide for incentive payment

8. Guarantee minimum wages

9. Provide for neutralization of price rise

10. Develop wage structures that can attract talent.

9.5 Factors Considered to Form a Sound Wage Policy

A sound wage policy is to adopt a job evaluation programme in order to establish fair
differentials in wages based upon differences in job contents.

Beside the basic factors provided by a job description and job evaluation, those that are
usually taken into consideration for wage and salary administration are:
Centre for Distance Education 9.10 Acharya Nagarjuna University

i) The organizations ability to pay

ii) Supply and demand of labour
iii) The prevailing market rate
iv) The cost of living
v) Living wage
vi) Psychological and sociological factors
vii) Levels of skills available in the market

I. Organizations Ability to Pay

Wage increases should be given by those organizations which can afford them. Companies
that have good sales and, therefore, high profits tend to pay higher those which running at a
loss or earning low profits because of higher cost of production or low sales. In the short run,
the economic influence on the ability to pay is practically nil.

All employers, irrespective of their profits or losses, must pay not less than their competitors.
In the long run, the ability to pay is important. During the time of prosperity pay high wages
to carry on profitable operations and because of their increased ability to pay. But during the
period of depression, wages are cut because the funds are not available. Marginal firms and
nonprofit organization pay relatively low wages because of low or non-profits.

II. Supply and Demand of Labor

The labour market conditions or supply and demand forces operate at the national, regional
and local levels, and determine organizational wage structure and level. If the demand for
certain skills is high and supply is low, the result is a rise in the price to be paid to these
skills.

If the demand for manpower skill is minimal, the wages will be relatively low. The supply
and demand compensation criterion is very closely related to the prevailing pay, comparable
wage and on going wage concepts.

III. Prevailing Market Rate

This is known as the ‘comparable wage’ or ‘going wage rate’, and is the widely used
criterion. An organization compensation policy generally tends to conform to the wage rate
payable by the industry and the community. This is done for several reasons.

First, competition demand that competitors adhere to the same relative wage level. Second,
various government laws and judicial decisions make the adoption of uniform wage rates an
attractive proposition. Third, trade union encourages this practice so that their members can
have equal pay, equal work and geographical differences may be eliminated.

Fourth, a functionally related firm in the same industry requires essentially the same quality
of employees, with same skill and experience. This results in a considerable uniformity in
wage and salary rates. Finally, if the same or about the same general rates of wages are not
paid to the employees as are paid by the organizations competitors, it will not be able to
attract and maintain the sufficient quantity and quality of manpower.
Wage Legislation 9.11 Labor Legislations and Law
Some companies pay on a high side of the market in order to obtain goodwill or to ensure an
adequate supply of labour, while other organizations pay lower wages because economically
they have to or because by lowering hiring requirements they can keep jobs adequately
manned.

IV. The Cost of Living

The cost of living pay criterion is usually regarded as an automatic minimum equity pay
criterion. This criterion calls for pay adjustments based on increases or decreases in an
acceptable cost of living index. In recognition of the influence of the cost of living, ‘escalator
clauses’ is written into labour contracts.

When the cost of living increases, workers and trade unions demand adjusted wages to offset
the erosion of real wages. However, when living costs are stable or decline, the management
does not resort to this argument as a reason for wage reductions.

V. The Living Wage

This criterion means that wages paid should be adequate to enable an employee to maintain
himself and his family at a reasonable level of existence. However, employers do not
generally favour using the concepts of a living wage as a guide to wage determination
because they prefer to base the wages of an employee on his contribution rather than on his
need. Also, they feel that the level of living prescribed in a workers budge is open to
argument since it is based on subjective opinion.

VI. Psychological and Social Factors

These determine in a significant measure how hard a person will work for the compensation
received or what pressures he will exert to get his, compensation increased. Psychologically,
persons perceive the level of wages as a measure of success in life; people may feel secure;
have an inferiority complex, seem inadequate or feel the reverse of all these.

They may not take pride in their work, or in the wages they get. Therefore, these things
should not be overlooked by the management in establishing wage rate. Sociologically and
ethically, people feel that “equal work should carry equal that wages should be commensurate
with their efforts, that they are not exploited, and that no distinction is made on the basis of
caste, colour, sex or religion.” To satisfy the conditions of equity, fairness and justice, a
management should take these factors into consideration.

VII. Skill Levels Available in the Market

With the rapid growth of industries, business, trade, there is shortage of skilled resources. The
technological development, automation has been affecting the skill levels at faster rates. Thus
the wage levels of skilled employees are constantly changing and an organization has to keep
its level up to suit the market needs.

9.6 Agents that Affect Wages and Salary

The agents which affect wages and salary can be divided into two parts as under:

1. External Agents
The external agents that influence the wages and salaries are as follows
Centre for Distance Education 9.12 Acharya Nagarjuna University

(i) Skill Levels Available in the Market

Today skilled resources falling short due to the rapid growth of industries, business and trade.
The technological development and automation has been affecting the skill levels at a faster
rate. Thus, the wage levels of skilled employees are constantly changing and an organisation
has to keep its level-up to suit the market needs.

(ii) Trade Union’s Bargaining Power:

In general manner, can effective and more powerful the trade union, the higher the wages. A
strike or a threat of a strike is the most powerful weapon used by it.

Sometimes trade unions force wages up faster than increases in productivity would allow and
become responsible for unemployment or higher prices and inflation. However, for those left
on the pay-roll, a real profit is often achieved as a consequence of a trade union’s stronger
bargaining power.

(iii) Psychological and Social Factors

These factors determine in a significant measure how hard a person will work for the
compensation received or what pressures he will exert to get his compensation increased.
Psychologically, persons perceive the level of wages as a measure of success in life; they feel
that care brings in them.

Therefore, these things should not be overlooked by the management in establishing wage
rates. Sociologically and ethically, people feel that “equal work should carry equal wages.”

(iv) Supply and Demand of Labour

It is a main factor that greatly affects wages and salaries. Generally, the demand for certain
skills is high and the supply is low, the result is a rise in the price to be paid for these skills.
In case the labour supply is scarce; the wages will be higher likewise these will be lower
wages when labour supply is beyond limit.

In the same way, if there is a great demand for labour expertise, wages rise; but if the demand
for manpower skill is minimal, the wages will be relatively low.

(v) Prevailing Market Rate

An organisation’s compensation policies generally tend to conform to the wage rates payable
by the industry and the community. Some companies pay on the high side of the market for
obtaining goodwill or for ensuring an adequate supply of labour, while other organisations
pay lower wages due to economically they have to do so or because by lowering hiring
requirements they can keep jobs adequately mannered. It is also referred to as the
‘comparable wage’ or ‘gain wage rate’.
Wage Legislation 9.13 Labor Legislations and Law
(vi) Cost of Living
The cost of living pay criterion is usually regarded as an auto minimum equity pay criterion.
This criterion calls for pay adjustments based on increases or decreases in an acceptable cost
of living index.

(vii) Living Wage

According to this criterion wages paid should be adequate to enable an employee to maintain
himself and his family at reasonable level of existence. However, employers do not in
accordance with the favour using the concept of a living wage as a guide to wage
determination the reason is they prefer to base the wages of an employee on his contribution
rather than on his requirement.

2. Internal Agents
The important internal agents that affect wage and salary are as follows:

(i) Organisation’s Ability to Pay

Generally, the economic influence on the ability to pay is practically nil in the short-run. All
employers, irrespective of their profits or losses must pay no less than their competitors and
need to pay more if they wish to attract and keep workers.

Marginal firms and non-profit organisations (like hospitals and educational institutions) pay
relatively low wages because of low or no profits. Wage increases should be given by those
organisations which can afford to do so.

(ii) Job Requirements

In general aspect the more difficult a job is, higher are the wages. Measures of job difficulty
are frequently used when the relative value of one job to another in an organisation is to be
ascertained. Jobs are graded according to the relative skill, effort, responsibility and job
conditions required.

(iii) Productivity
Output per man hour is the basis for the measurement of salary under this criterion. It is not
due to labour efforts alone. The reason is various factors like technological improvements,
better organisation and management, the development of better methods of production by
labour and management, greater ingenuity and skill by labour are all responsible for the
increase in productivity.

Thus, although theoretically it is a sound compensation criterion, operationally many

problems and complications arise because of definitional measurement and conceptual issues.

(iv) Managerial Attitudes

This is the last but not the least effective factor that affects wages and salaries. The
managerial attitudes have a decisive influence on the wage structure and wage level.

The reason of judgment is exercised in many areas of wage and salary administration
including whether the firm should pay below average or above average rates, what job factors
should be used to reflect job worth, the weight to be given for performance or length of
Centre for Distance Education 9.14 Acharya Nagarjuna University

service and so forth, both the structure and level of wages are bound to be affected
accordingly. These sort of matters are required the approval of the top executives in its
sphere.

9.7 Factors Influencing the Determination of Wage Rates

The eight factors influencing the determination of wage rates are as follows:

1. Ability to Pay
2. Demand and Supply
3. Prevailing Market Rates
4. Cost of Living
5. Bargaining of Trade Unions
6. Productivity
7. Government Regulations
8. Cost of Training.
The wage payment is an important factor influencing labour and management relations.
Workers are very much concerned with the rates of wages as their standard of living is
connected with the amount of remuneration they get. Managements, generally, do not come
forward to pay higher wages because cost of production will go up and profits will decrease
to the extent.

Following factors influence the determination of wage rate

1. Ability to Pay
The ability of an industry to pay will influence wage rate to be paid, if the concern is running
into losses, then it may not be able to pay higher wage rates. A profitable enterprise may pay
more to attract good workers. During the period of prosperity, workers are paid higher wages
because management wants to share the profits with labour.

2. Demand and Supply

The labour market conditions or demand and supply forces to operate at the national and
local levels and determine the wage rates. When the demand for a particular type of skilled
labour is more and supply is less than the wages will be more. One the other hand, if supply
is more demand on the other hand, is less then persons will be available at lower wage rates
also.

According to Mescon,” the supply and demand compensation criterion is very closely related
to the prevailing pay comparable wage and on-going wage concepts since, in essence to all
these remuneration standards are determined by immediate market forces and factors.

3. Prevailing Market Rates

No enterprise can ignore prevailing wage rates. The wage rates paid in the industry or other
concerns at the same place will form a base for fixing wage rates. If a unit or concern pays
Wage Legislation 9.15 Labor Legislations and Law
low rates then workers leave their jobs whenever they get a job somewhere else. It will not be
possible to retain good workers for long periods.

4. Cost of Living
In many industries wages are linked to enterprise cost of living which ensures a fair wages to
workers. The wage rates are directly influenced by cost of living of a place. The workers will
accept a wage which may ensure them a minimum standard of living.

Wages will also be adjusted according to price index number. The increase in price index will
erode the purchasing power of workers and they will demand higher wages. When the prices
are stable, then frequent wage increases may not be required

5. Bargaining of Trade Unions

The wage rates are also influenced by the bargaining power of trade unions. Stronger the
trade union, higher will be the wage rates. The strength of a trade union is judged by its
membership, financial position and type of leadership.

6. Productivity
Productivity is the contribution of the workers in order to increase output. It also measures
the contribution of other factors of production like machines, materials, and management
.Wage increase is sometimes associated with increase in productivity. Workers may also be
offered additional bonus, etc., if productivity increases beyond a certain level. It is common
practice to issue productivity bonus in industrial units.

7. Government Regulations
To improve the working conditions of workers, government may pass a legislation for fixing
minimum wages of workers. This may ensure them, a minimum level of living. In under
developed countries bargaining power of labour is weak and employers try to exploit workers
by paying them low wages. In India, Minimum Wages Act, 1948 was passed empower
government to fix minimum wages of workers. Similarly, many other important legislation
passed by government help to improve the wage structure.

8. Cost of Training
In determining, the wages of the workers, in different occupations, allowances must be made
for all the exercises incurred on training and time devoted for it.

9.8 Factors to Consider for Determining Wage and Salary Structure of Workers
The following factors should be taken into consideration in determining wage and salary
structure of workers:

(i) Labour Unions:

The labour unions attempt to work and influence the wages primarily by regulating or
affecting the supply of labour. The unions exert their influence for a higher wage and
allowances through collective bargaining with the representatives of the management.

If they fail in their attempt to raise the wage and other allowances through collective
bargaining, they resort to strike and other methods where by the supply of labour is restricted.
Centre for Distance Education 9.16 Acharya Nagarjuna University

This exerts a kind of influence on the employees to concerned test partially the demands of
the labour unions.

(ii) Personal perception of wage:

Whether the wage is adequate and equitable depends not only upon the amount that is paid
but also upon the perceptions and the views of the recipients of the wage. Even though the
wage is above the going wage rate in the community if it is lower than that of fellow worker
deemed inferior, it will be regarded as inequitable in the eyes of the recipients of the wage. A
man’s perception of the equity of his wage will undoubtedly affect his behaviour in joining
and continuing in the organisation.

(iii) Cost of living:

Another important factor affecting the wage is the cost of living adjustments of wages. This
approach tends to vary money wage depending upon the variations in the cost of living index
following rise or fall in the general price level and consumer price index. It is an essential
ingredient of long term labour contracts unless provision is made to reopen the wage clause
periodically.

There are measurement problems both in ascertaining productivity and cost of living
increases. This problem may lead to lack of understanding and unanimity on the part of the
management and the workers.

(iv) Government legislation

The laws passed and the labour policies formed by the Government have an important
influence on wages and salaries paid by the employees. Wages and salaries can’t be fixed
below the level prescribed by the government. The laws on minimum wages, hours of work,
equal pay for equal work, payment of dearness and other allowances, payment of bonus, etc.
have been enacted and enforced to bring about a measure of fairness in compensating the
working class.

(v) Ability to pay

Labour unions have often demanded an increase in wages on the basis that the firm is
prosperous and able to pay. However, the fundamental determinants of the wage rate for the
individual firm emanate for supply and demand. If the firm is marginal and cannot afford to
pay competitive rates, its employees will generally leave it for better paying jobs. However,
this adjustment is neither immediate nor perfect because of problems of labour immobility
and lack of perfect knowledge of alternatives. If the firm is highly successful, there is little
need to pay for more than the competitive rates to obtain personnel.

(vi) Supply and demand

As stated earlier, the wage is a price for the services rendered by a worker or employee. The
firm desires these services, and it must pay a price that will bring forth the supply, which is
controlled by the individual worker or by a group of workers acting together through their
unions. The practical result of the operation of this law of supply and demand is the creation
of “going- wage rate”.
Wage Legislation 9.17 Labor Legislations and Law
It is not practicable to draw demand and supply curves for each job in an organisation even
though, theoretically, a separate curve exists for each job. But, in general, if anything works
to decrease the supply of labour such as restriction by a particular labour union, there will be
a tendency to increase the wage. The reverse of each situation is likely to result in a decrease
in employee wage, provided other factors, such is those discussed below, do not intervene.

(vii) Productivity
Increasingly there is a trend towards gearing wage increases to productivity increases.
Productivity is the key factor in the operations of a company. High wages and low costs are
possible only when productivity increases appreciably. The above factors exercise a kind of
general influence on wage rates. In addition, there are several factors which do affect the
individual difference in wage rates.

The most important factors which affect the individual differences in wage rates are:

(a) Worker’s capacity and age;

(b) Educational qualifications;

(c) Worker experience;

(d) Hazards involved in work;

(e) Promotion possibilities;

(f) The prevailing wage in the community;

(g) Stability of employment;

(h) Demand for the product; and

(i) Profits or surplus earned by the organisation.

9.9 Summary
The Minimum Wages Act, 1948 was enacted to safeguard the rights and interests of the
workers working in some scheduled class of employment which is laid down under the Act.
The Act seeks to provide equal employment opportunities and adequate remuneration for
maintaining a decent standard of livelihood for the workers. These laws specify the minimum
amount that employers may pay their employees for doing a specified type of work.

Wage legislations are leading the the Code on Wages, Industrial Relations Code, Social
Security Code and the Occupational Safety, Health and Working Conditions Code — are set
to replace 29 labour laws. Over 90% of India’s 50 crore workers are in the unorganised
sector. And through these codes the government wants to ensure that all of them enjoy the
benefits of labour laws related to minimum wages and social security

9.10 Keywords
1. Wage legislation - It means specify the minimum amount that employers may pay their
employees for doing a specified type of work.
Centre for Distance Education 9.18 Acharya Nagarjuna University

2. Wage - A wage is money that is paid by an employer to an employee in exchange for

work.

3. Wage policy - It means wage policy refers to legislation or government action undertaken
to regulate the level or structure of wage, or both, for the purpose of achieving specific
objectives of social and economic policy.

9.11 Self - Assessment Questions

1. Discuss the development of wage legislation in India?

2. Converse the wage concepts?

3. Explain the wage determination factors in industry?

4. Elucidate the Factors Considered to form a Sound Wage Policy?

9.12 Suggested Readings

1. Code On Wages, 2019 With Code On Wages (Central Advisory) Rules, 2021, Bare
Act Commercial Law Publishers, 2022 Edition, commercial ISBN: 978-93-89564-08-
2.
2. Handbook on Labour Wage Code,30 June 2021 by Saurabh Munjal, Handbook on
Labour Wage Code Vaibhav Munjal, Bloomsbury Professional India publishers,
ISBN-10 - 9389714559, ISBN-13 - 978-9389714555.
3. Wealth on MinimalWage Living on Less, by James W Stemer,
ISBN:9780793122400,
4. Labour Laws and Industrial Relations, ,by Dr. Ganesh Kumar Jha, 10 October 2022,
Publisher Notion Press, ISBN-13 979-8888334607.
5. Industrial Relations and Labour Laws by S C Srivastava, Year 2022.

Dr.K.Madhu Babu
 LESSON - 10

PAYMENT OF WAGES ACT, 1936

Learning Objectives

✓ To Study the Objectives of Payment of Wages Act, 1936

✓ To Learn the Importance of Payment of Wages Act, 1936

✓ To Understand the Highlights of the Payment of Wages Act

Structure

10.1 Introduction

10.2 The objective of the Payment of Wages Act, 1936

10.3 Importance of Payment of Wages Act, 1936

10.4 Payment of Wages Act, 1936

10.5 Salient Features of the Act

10.6 Highlights of the Payment of Wages Act

10.7 Summary

10.8 Keywords

10.9 Self - Assessment Questions

10.10 Suggested Readings

10.1 Introduction
The Payment of Wages Act, 1936 regulates the payment of wages of certain classes of
employed persons. It extends to the whole of India and it came into force on 28th March
1937. The essential goal for the advent of the Payment of Wages Act, 1936, is to keep away
from needless put off within side the charge of wages and to save you unauthorized
deductions from the wages. There are three kinds of wages minimum wage, fair wage &
living wage covered under this Act.

The essential goal for the advent of the Payment of Wages Act, 1936, is to keep away from
needless delay withinside the charge of wages and to save you unauthorized deductions from
the wages. There are three kinds of wages minimum wage, fair wage & living wage covered
under this Act.

This act applies to an employed person whose wage does not exceed twenty-four thousand
rupees per month. A wage-period shall not exceed one month.
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The total amount of fine imposed in a wage-period on any employed person shall not exceed
an amount equal to three percent of the wages. A fine shall not be imposed on any employed
person who is under the age of fifteen years.

The total amount of deductions from the wages of an employed person shall not exceed:
seventy-five percent, if the deductions include payments to co-operative societies, fifty
percent, in any other case.

10.2 The objective of the Payment of Wages Act, 1936

Wages and several other essential terms are defined in Section 2 of the Payment of Wages
Act, 1936, as follows:

➢ Appropriate Administration
➢ Appropriate government, according to section 2(i) of the Act, means:
➢ Railways, air transportation, mines, and oilfields are all under the federal
government’s control.
➢ In all other circumstances, the State Government is in charge.

The Act’s principal goal is to prohibit improper wage deductions and eliminate unnecessary
wage delays. Everyone who works in a factory, on a railway, or as a subcontractor on a
railway, and everyone who works in industrial or other facilities needs to follow the payment
of wages Act. The State Government may extend the provisions to any class of employees in
any establishment or class of establishments by issuing a notification. The Act provides for
the regular and timely payment of wages (on or before the 7th day or the 10th day once the
wage period has exceeded 1000 workers) and the prevention of improper deductions from
wages and arbitrary fines.

10.3 Importance of Payment of Wages Act, 1936

The policy primarily targets individuals in the industry who earn less than INR 24000 per
month. The Act further stipulates that a worker cannot contract out of any privilege or right
conferred upon him by the Act. The major goal of the Act is to control the timely payment of
a few types of employees who operate in the industry. If there is a problem or a grievance,
prompt and effective action may be taken to resolve the claims and difficulties with the help
of this act. There are provisions in the statute for a remedy for wages earned while working in
the office. Still, it does not include any procedures for any form of investigation into the
office if there is a dispute.

1. What does the legislation mean by wage period fixation

The Payment of Wages Act, 1936 is applicable to each individual who works in the industry.
The act ensures the salary of the employees will be done within one month only. The salary
term cannot exceed one month under any circumstances. As a result, it is obvious that
payment of wages under the act can be chosen on a day-to-day, week-to-week, month-to-
month, or fortnightly basis. It indicates that wages should be paid on time and without delay,
and if they aren’t, the employer or their representatives will be held responsible.
Payment of Wages Act 1936 10.3 Labor Legislations and Law
2. Wage deduction and advantage to the Employee
A deduction is made for the employee’s loss, which would be applied to his salary. The
government permits these deductions for acts performed by employees in various industries.
Deductions are used to subtract a specified amount from an employee’s salary. As a result,
when the employer pays his employee’s salary, he deducts only what is required by law, not
what is convenient for him. The deductions are imperative based on the law and are
beneficial to the employee. To get a better understanding of the notion, consider what cannot
be referred to as a deduction under the Payment of Wages Act of 1936:

➢ If the company has halted the employee’s increment,

➢ If the employee has been placed on leave,
➢ If the person was demoted because of poor performance.
➢ Only when the organisation has reasonable grounds, can the grounds mentioned above
be used.

3. Different types of deductions

With the authorisation of the proper authority, fines can be imposed on both the employee
and the employer. The employer may impose a fine on the employee following the act’s rules
and regulations, and is done for the benefit of both the employer and the employee.

Fines should not be imposed on the worker until he clarifies and explains the demonstration
or omission he made. The total amount of the fine should not exceed 3% of his annual salary.
This increases the importance of the Payment of Wages Act, 1936.

10.4 Payment of Wages Act, 1936

1. Short title, extent, commencement and application.— (1) This Act may be called the
Payment of Wages Act, 1936.

It applies to the payment of wages to persons employed in any factory 9 [industrial

establishment or commercial establishment] and to persons employed (otherwise than in a
factory) upon any railway by a railway administration or, either directly or through a sub-
contractor, by a person fulfilling a contract with a railway administration.

2. Definitions.—In this Act, unless there is anything repugnant in the subject or context,

Sec 2(i) “commercial establishment” means a commercial establishment as defined in the

West Pakistan Industrial and Commercial (Standing Orders) Ordinance, 1968
(W.P.Ordinance VI of 1968).

Sec (ia) "factory" means a factory as defined in clause (j) of section 2 of the Factories Act,
1934

Sec (ii) "industrial establishment" means any—

(a) tramway or motor omnibus service;

(b) dock, wharf or jetty;

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(c) inland steam-vessel;

(d) mine, quarry or oil-field;

(e) plantation;

(f) workshop or other establishment in which articles are produced, adapted or manufactured,
with a view to their use, transport or sale;

(g) establishment of a contractor who, directly or indirectly, employs persons to do any

skilled or unskilled, manual or clerical labour for hire or reward in connection with the
execution of a contract to which he is a party, and includes the premises in which, or the site
at which, any process connected with such execution is carried on;

(iii) "plantation" means any estate which is maintained for the purpose of growing cinchona,
rubber, coffee or tea, and on which twenty-five or more persons are employed for that
purpose;

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

(v) "railway administration" has the meaning assigned to it in clause (6) of section 3

(vi) "wages" means all remuneration, capable of being expressed in terms of money, which
would, if the terms of the contract of employment, express or implied, were fulfilled, be
payable, whether conditionally upon the regular attendance, good work or conduct or other
behaviour of the person employed, or otherwise, to a person employed in respect of his
employment or of work done in such employment, and includes any bonus or other additional
remuneration of the nature aforesaid which would be so payable and any sum payable to such
person by reason of the termination of his employment.

3. Responsibility for payment of wages.— Every employer 23[including a contractor,] shall

be responsible for the payment to persons employed by him of all wages required to be paid
under this Act:

Provided that, in the case of persons employed (otherwise than by a contractor)—

a) in factories, if a person has been named as the manager of the factory under clause (e)
of sub-section (1) of section 9 of the Factories Act, 1934 ,
b) in industrial establishments, if there is a person responsible to the employer for the
supervision and control of the industrial establishment,
c) upon railways(otherwise than in factories), if the employer is the railway
administration and the railway administration has nominated a person in this behalf
for the local area concerned, the person so named, the person so responsible to the
employer, or the person so nominated, as the case may be, shall be responsible for
such payment.
Payment of Wages Act 1936 10.5 Labor Legislations and Law
4. Fixation of wage-periods.— (1) Every person responsible for the payment of wages under
section 3 shall fix periods (in this Act referred to as wage-periods) in respect of which such
wages shall be payable. (2) No wage-period shall exceed one month.

5. Time of payment of wages.— (1) The wages of every person employed upon or in

a) any railway, factory or industrial establishment [or commercial establishment] upon

or in which less than one thousand persons are employed, shall be paid before the
expiry of the seventh day,
b) any other railway, factory or industrial establishment [or commercial establishment],
shall be paid before the expiry of the tenth day, after the last day of the wage-period in
respect of which the wages are payable.

(2) Where the employment of any person is terminated by or on behalf of the employer, the
wages earned by him shall be paid before the expiry of the second working day from the day
on which his employment is terminated.

(3) The[Government] may, by general or special order, exempt, to such extent and subject to
such conditions as may be specified in the order, the person responsible for the payment of
wages to persons employed upon any railway (otherwise than in a factory) from the operation
of this section in respect of the wages of any such persons or class of such persons.

(4) All payments of wages shall be made on a working day.

6. Wages to be paid in current coin or currency notes.— All wages shall be paid in current
coin or currency notes or in both.

7. Deductions which may be made from wages.— (1) Notwithstanding the provisions of
sub-section (2) of section 47 of the Indian Railways Act, 1890, the wages of an employed
person shall be paid to him without deductions of any kind except those authorised by or
under this Act.

(2) Deductions from the wages of an employed person shall be made only in accordance with
the provisions of this Act, and may be of the following kinds only, namely:

a) fines;
b) deductions for absence from duty;
c) deductions for damage to or loss of goods expressly entrusted to the employed person
for custody, or for loss of money for which he is required to account, where such
damage or loss is directly attributable to his neglect or default;
d) deductions for house-accommodation supplied by the employer;
e) deductions for such amenities and services supplied by the employer as
the[Government] may, by general or special order, authorize
f) deductions for recovery of advances or for adjustment of over-payments of wages;
g) deductions of income-tax payable by the employed person;
h) deductions required to be made by order of a Court or other authority competent to
make such order;
Centre for Distance Education 10.6 Acharya Nagarjuna University

i) deductions for subscriptions to, and for re-payment of advances from any provident
fund to which the Provident Funds Act, 192532, applies or any recognised provident
fund as defined in section 33[ clause (37) of section 2 of the IncomeTax Ordinance,
1979], or any provident fund approved in this behalf by the [Government], during the
continuance of such approval;
j) deductions for payments to co-operative societies approved by the 37[Government] or
to a scheme of insurance maintained by the concern office.

8. Fines.— (1) No fine shall be imposed on any employed person save in respect of such acts
and omissions on his part as the employer, with the previous approval of the[Government] or
of the prescribed authority, may have specified by notice under sub-section.

(2) A notice specifying such acts and omissions shall be exhibited in the prescribed manner
on the premises in which the employment is carried on or in the case of persons employed
upon a railway (otherwise than in a factory), at the prescribed place or places.

(3) No fine shall be imposed on any employed person until he has been given an opportunity
of showing cause against the fine, or otherwise than in accordance with such procedure as
may be prescribed for the imposition of fines.

(4) The total amount of fine which may be imposed in any one wage-period on any employed
person shall not exceed an amount equal to [three percent] of the wages payable to him in
respect of that wage-period.

(5) No fine shall be imposed on any employed person who is under the age of fifteen years.

(6) No fine imposed on any employed person shall be recovered from him by installments or
after the expiry of sixty days from the day on which it was imposed.

(7) Every fine shall be deemed to have been imposed on the day of the act or omission in
respect of which it was imposed.

(8) All fines and all realisations thereof shall be recorded in a register to be kept by the person
responsible for the payment of wages under section 3 in such form as may be prescribed; and
all such realisations shall be applied only to such purposes beneficial to the persons employed
in the factory or establishment as are approved by the prescribed authority.

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

(2) The amount of such deduction shall in no case bear to the wages payable to the employed
person in respect of the wage-period for which the deduction is made a larger proportion than
the period for which he was absent bears to the total period, within such wage period, during
which by the terms of his employment, he was required to work:

Provided that, subject to any rules made in this behalf by the [Government], if ten or more
employed persons acting in concert absent themselves without due notice (that is to say
Payment of Wages Act 1936 10.7 Labor Legislations and Law
without giving the notice which is required under the terms of their contracts of employment)
and without reasonable cause, such deduction from any such person may include such
amount not exceeding his wages for eight days as may by any such terms be due to the
employer in lieu of due notice.

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

(2) All such deductions and all realisations thereof shall be recorded in a register to be kept
by the person responsible for the payment of wages under section 3 in such form as may be
prescribed.

11. Deductions for services rendered.— A deduction under clause (d) or clause (e) of sub-
section (2) of section 7 shall not be made from the wages of an employed person unless the
house-accommodation, amenity or service has been accepted by him, as a term of
employment or otherwise, and such deduction shall not exceed an amount equivalent to the
value of the house-accommodation amenity or service supplied and, in the case of a
deduction under the said clause (e), shall be subject to such conditions as the [Government]
may impose.

12. Deductions for recovery of advances.— Deductions under clause (f) of sub-section (2)
of section 7 shall be subject to the following conditions, namely:—

a) recovery of an advance of money given before employment began shall be made from
the first payment of wages in respect of a complete wage-period, but no recovery shall
be made of such advances given for travelling-expenses;
b) recovery of advances of wages not already earned shall be subject to any rules made
by the [Government] regulating the extent to which such advances may be given and
the installments by which they may be recovered.

13. Deductions for payments to co-operative societies and insurance schemes.—

Deductions under clause (j) [and clause (k)] of sub-section (2) of section 7 shall be subject to
such conditions as the [Government] may impose.

14. Inspectors.— (1) An Inspector of Factories appointed under sub-section (1) of section 10
of the Factories Act, 1934, shall be an Inspector for the purposes of this Act in respect of all
factories within the local limits assigned to him.

(2) The[Government] may appoint 55Inspectors for the purposes of this Act in respect of all
persons employed upon a railway (otherwise than in a factory) to whom this Act applies.

(3) The [Government] may, by notification in the[Official Gazette], appoint such other
persons as it thinks fit to be Inspectors for the purposes of this Act, and may define the local
Centre for Distance Education 10.8 Acharya Nagarjuna University

limits within which and the class of factories and industrial establishments in respect of
which they shall exercise their functions.

(4) An Inspector may, at all reasonable hours, enter on any premises, and make such
examination of any register or document relating to the calculation or payment of wages and
take on the spot or otherwise such evidence of any person, and exercise such other powers of
inspection, as he may deem necessary for carrying out the purposes of this Act.

(5) Every Inspector shall be deemed to be a public servant within the meaning of the Penal
Code, 1860.

15. Claims arising out of deductions from wages or delay in payment of .wages and
penalty for malicious or vexatious claims.— (1) The[Government] may, by notification in
the[Official Gazette]appoint any Commissioner for Workmen's Compensation or other
officer with experience as a Judge of a Civil Court or as a stipendiary Magistrate to be the
authority to hear and decide for any specified area all claims arising out of deductions from
the wages, [or non-payment of dues relating to provident fund or gratuity payable under any
law, ] or delay in the payment of wages, of persons employed or paid in that area.

(2) Where contrary to the provisions of this Act any deduction has been made from the wages
of an employed person, or any payment of wages[or of any dues relating to provident fund or
gratuity payable under any law,] has been delayed, such person himself, or any legal
practitioner or any official of a registered trade union authorised in writing to act on his
behalf, or any Inspector under this Act,[or any of the heirs of an employed person who has
died,] or any other person acting with the permission of the authority appointed under
subsection (1), may apply to such authority for a direction under sub-section (3):

Provided that every such application shall be presented within[three years] from the date on
which the deduction from the wages was made or from the date on which the payment of the
wages was due to be made, as the case may be:

Provided further that any application may be admitted after the said period of [three years]
when the applicant satisfies the authority that he had sufficient cause for not making the
application within such period.

(3) When any application under sub-section (2) is entertained, the authority shall hear the
applicant and the employer or other person responsible for the payment of wages under
Section 3, or give them an opportunity of being heard, and, after such further inquiry (if any)
as may be necessary, may, without prejudice to any other penalty to which such employer or
other person is liable under this Act, direct the refund to the employed person[or, if the
applicant is one of the heirs of an employed person, the payment to such applicant,] of the
amount deducted, or the payment of the delayed wages[or of any dues relating to provident
fund or gratuity payable under any law], together with the payment of such compensation as
the authority may think fit, not exceeding ten times the amount deducted in the former case
and not exceeding[one thousand rupees] in the latter:
Payment of Wages Act 1936 10.9 Labor Legislations and Law
Provided that no direction for the payment of compensation shall be made In the case of
delayed wages if the authority is satisfied that the delay was due to—

a) a bona fide error or bona fide dispute as to the amount payable to the employed
person, or
b) the occurrence of an emergency, or the existence of exceptional circumstances, such
that the person responsible for the payment of the wages was unable, though
exercising reasonable diligence, to make prompt payment, or
c) the failure of the employed person to apply for or accept payment.

(4) If the authority hearing any application under this section is satisfied that it was either
malicious or vexatious, the authority may direct that a penalty not exceeding[five hundred]
rupees be paid to the employer or other person responsible for the payment of wages by the
person presenting the application .

(5) Any amount directed to be paid under this section maybe recovered—

a) if the authority is a Magistrate, by the authority as if it were a fine imposed by him as

Magistrate, and
b) if the authority is not a Magistrate, [by the authority as an arrear of land-revenue, or,
in the prescribed manner, by the authority by distress and sale of the moveable
property belonging to the person by whom the amount is to be paid, or by attachment
and sale of the immoveable property belonging to such person.

16. Single application in respect of claims from unpaid group.— (1) Employed persons
are said to belong to the same unpaid group if they are borne on the same establishment and if
their wages for the same wage period or periods have remained unpaid after the day fixed by
section 5.

(2) A single application may be presented under section 15 on behalf or in respect of any
number of employed persons belonging to the same unpaid group, and in such case the
maximum compensation that may be awarded under sub-section (3) of section 15 shall be
73[one thousand] rupees per head.

(3) The authority may deal with any number of separate pending applications, presented
under section 15 in respect of persons belonging to the same unpaid group, as a single
application presented under sub-section (2) of this section, and the provisions of that sub-
section shall apply accordingly.

17. Appeal.— (1) An appeal against a direction made under [sub-section (3) or subsection
(4)] of section 15 may be preferred, within thirty days of the date on which the direction was
made, before the [Labour Court constituted under the [Punjab Industrial Relations Act, 2010
(XIX of 2010)], within whose jurisdiction the cause of action to which the appeal relates
arose]
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18. Powers of authorities appointed under section 15.— Every authority appointed under
sub-section (1) of section 15 shall have all the powers of a Civil Court under the Code of
Civil Procedure, 1908, for the purpose of taking evidence and of enforcing the attendance of
witnesses and compelling the production of documents, and every such authority shall be
deemed to be a Civil Court for all the purposes of section 195 and of Chapter XXXV of the
Code of Criminal Procedure, 1898 .

19. Power to recover from employer in certain cases.— When the authority referred to in
section 15 or the Court referred to in section 17 is unable to recover from any person (other
than an employer) responsible under section 3 for the payment of wages any amount directed
by such authority under section 15 or section 17 to be paid by such person, the authority shall
recover the amount from the employer of the employed person concerned.

20. Penalty for offences under the Act.— (1) Whoever being responsible for the payment of
wages to an employed person contravenes any of the provisions of any of the following
sections, namely, section 5 and sections 7 to 13, both inclusive, shall be punishable with fine
which may extend to[ten thousand] rupees. (2) Whoever contravenes the provisions of
section 4, section 6 or section 25 shall be punishable with fine which may extend to [five
thousand] rupees.

21. Procedure in trial of offences.— (1) No Court shall take cognizance of a complaint
against any person for an offence under sub-section (1) of section 20 unless an application in
respect of the facts constituting the offence has been presented under section 15 and has been
granted wholly or in part and the authority empowered under the latter section or the
appellate Court granting such application has sanctioned the making of the complaint.

(2) Before sanctioning the making of a complaint against any person for an offence under
sub-section ( 1) of section 20, the authority empowered under section 15 or the appellate
Court, as the case may be, shall give such person an opportunity of showing cause against the
granting of such sanction, and the sanction shall not be granted if such person satisfies the
authority or Court that his default was due to

a) a bona fide error or bona fide dispute as to the amount payable to the employed
person, or
b) the occurrence of an emergency, or the existence of exceptional circumstances, such
that the person responsible for the payment of the wages was unable, though
exercising reasonable diligence, to make prompt payment, or
c) the failure of the employed person to apply for or accept payment.

22. Bar of suits.— No Court shall entertain any suit for the recovery of wages or of any
deduction from wages in so far as the sum so claimed—

a) forms the subject of an application under section 15 which has been presented by the
plaintiff and which is pending before the Authority appointed under that section or of
an appeal under section 17; or
b) has formed the subject of a direction under section 15 in favour of the plaintiff; or
Payment of Wages Act 1936 10.11 Labor Legislations and Law
c) has been adjudged, in any proceeding under section 15, not to be owed to the plaintiff;
or
d) could have been recovered by an application under section 15.

23. Contracting out.— Any contract or agreement, whether made before or after the
commencement of this Act, whereby an employed person relinquishes any right conferred by
this Act shall be null and void in so far as it purports to deprive him of such right.

25. Publicity of the Act.– The person responsible for the payment of wages to persons
employed in the factory, industrial establishment or commercial establishment shall, at a
prominent place in the factory, industrial establishment or commercial establishment, display
a notice containing the abstracts of this Act and the rules made under it in English and Urdu,
as may be prescribed.

26. Rule-making power.— (1) The 94[Government] may make rules to regulate the
procedure to be followed by the authorities and Courts referred to in sections 15 and 17.

(2) The[Government] may, by notification in the[ Official Gazette], make rules for the
purpose of carrying into effect the provisions of this Act.

(3) In particular and without prejudice to the generality of the foregoing power, rules made
under sub-section (2) may—

a. require the maintenance of such records, registers, returns and notices as are necessary
for the enforcement of the Act and prescribe the form thereof;
b. require the display in a conspicuous place on premises where employment is carried
on of notices specifying rates of wages payable to persons employed on such
premises;
c. provide for the regular inspection of the weights, measures and weighing machines
used by employers in checking or ascertaining the wages of persons employed by
them;
d. prescribe the manner of giving notice of the days on which wages will be paid;
e. prescribe the authority competent to approve under sub-section (1) of section 8 acts
and omissions in respect of which fines may be imposed;
f. prescribe the procedure for the imposition of fines under section 8 and for the making
of the deductions referred to in section 10;
g. prescribe the conditions subject to which deductions may be made under the proviso
to sub-section (2) of section 9;
h. prescribe the authority competent to approve the purposes on which the proceeds of
fines shall be expended;
i. prescribe the extent to which advances may be made and the installments by which
they may be recovered with reference to clause (b) of section 12;
j. regulate the scales of costs which may be allowed in proceedings under this Act;
k. prescribe the amount of court-fees payable in respect of any proceedings under this
Act ;and
l. prescribe the abstracts to be contained in the notices required by section 25.
Centre for Distance Education 10.12 Acharya Nagarjuna University

(4) In making any rule under this section the[Government] may provide that a contravention
of the rule shall be punishable with fine which may extend to [five thousand] rupees.

(5) All rules made under this section shall be subject to the condition of previous publication,
and the date to be specified under clause (3) of section 23 of the General Clauses Act, 1897,
shall not be less than three months from the date on which the draft of the proposed rules was
published.

10.5 Salient Features of the Act

1. Obligations of Employers
Every employer is responsible for the payment of wages to all the employees that he
employs. Additionally, apart from the Employer, all the person so named / person so
responsible to the employer / the person so nominated shall also be responsible for such
payment.

2. Wage Period
Every person responsible for Wage Payment shall fix periods in respect of which such wages
shall be payable. No wage-period shall exceed one month.

3. Time and Mode of Payment of Wages

Every establishment having employees in excess of 1,000 person shall pay the wages before
the expiry of the 10th day. All other employers shall make the Wage payment by the expiry
of 07th day.

Employers shall make the payment of wages in current currency notes i.e. cash or via Bank
transfer.

4. Deductions from Wages

Employers shall ensure that wages are paid to all employees without deduction of any kind
except those authorized by or under this Act.

A. Deduction includes the reduction of wages for the following:

➢ Fines
➢ Absence from duty
➢ Damage to or loss of goods including loss of money where such damage or loss is
directly attributable to employee’s neglect or default
➢ Recovery of advances / loans and the interest due in respect thereof
➢ Adjustment of over-payments of wages
➢ Payments made by the employed person to the employer or his agent shall also be
deemed to be a deduction from wages.

B. Deductions does not include following penalties (provided the rules w.r.t. penalty are in
conformity with the requirements as specified by the State Government):

➢ Withholding of increment or promotion

➢ Reduction to a lower post
➢ Suspension
Payment of Wages Act 1936 10.13 Labor Legislations and Law
5. Compliance Requirements
➢ Maintenance of Registers
➢ Employers shall maintain Registers and records giving the following details

➢ Particulars of persons employed

➢ Work performed by Employees
➢ Wages paid to employees and deductions made from their wages
➢ All these Registers are required to be preserved for a period of 03 Years.

6. Display of Notice of Abstracts

All Employers shall display Notice containing such abstracts of this Act and of the rules
made thereunder in English and in the language of the majority of the persons employed in
the factory. It includes the following:

➢ List of acts and omissions approved under Rule 12

➢ Rates of wages payable to employees (excluding those in supervisor / manager
positions).

10.6 Highlights of the Payment of Wages Act

1) This act applies to an employed person whose wage does not exceed twenty-four thousand
rupees per month.

2) A wage-period shall not exceed one month.

3) The total amount of fine imposed in a wage-period on any employed person shall not
exceed an amount equal to three percent of the wages.

4) A fine shall not be imposed on any employed person who is under the age of fifteen years.

5) If the authority is satisfied that the application is either malicious or vexatious, it may
direct the person who presented the application to pay a penalty not exceeding three hundred
seventy-five rupees to the employer.

6) If a person who is required to nominate or designate a person under section 3

(responsibility for payment of wages) fails to do so, such person shall be punishable with a
maximum fine of three thousand rupees.

7) If a person willfully obstructs an inspector or refuses to produce any register or document

demanded by the inspector or refuses to afford an inspector any reasonable facility for
making the inspection shall be punishable with a fine which shall not be less than one
thousand five hundred rupees but may extend to seven thousand five hundred rupees.

8) If any person is convicted again of an offence involving contravention of the same

provision, then he shall be punishable with imprisonment for a term or with fine which shall
not be less than three thousand seven hundred fifty rupees but may extend to twenty-two
thousand five hundred rupees.
Centre for Distance Education 10.14 Acharya Nagarjuna University

9) If any person fails or willfully neglects to pay the wages by the date fixed by the authority,
he shall be punishable with an additional fine which may extend to seven hundred fifty
rupees for each day for which such neglect continues.

10) Industrial or other establishment includes the following:

➢ Tramway or motor transport service engaged in carrying passengers or goods or both

for hire or reward.
➢ Air transport service other than such service which is exclusively employed in the
military, naval or air forces or the civil aviation department.
➢ Dock, wharf, or jetty.
➢ Inland vessel, mechanically propelled.
➢ Mine, quarry, or oilfield.
➢ Plantation
➢ Any workshop or establishment is included if it involves the production, adaption, or
manufacturing of articles for use, transport, or sale.
➢ Any establishment in which work relating to the construction, development, or
maintenance of buildings, roads, bridges or canals, navigation, irrigation, or
distribution of electricity or any other form of power is being carried on.
➢ Any other establishment notified by the appropriate government.

11) Wages shall be paid before the expiry of the seventh day and tenth day if the person is
employed in an establishment in which less than one thousand persons and more than one
thousand are employed respectively.

➢ If a person is employed on a dock, wharf or jetty or in a mine, the balance of wages

shall be paid before the expiry of the seventh day from the day of such completion.
➢ If the employment of any person is terminated by the employer, the wages shall be
paid before the expiry of the second working day.
➢ If the employment of any person is terminated due to the closure of the establishment,
the wages shall be paid before the expiry of the second day.

12) The total amount of deductions from the wages of an employed person shall not exceed:

➢ seventy-five percent, if the deductions include payments to co-operative societies.

➢ fifty percent, in any other case.

13) The appropriate government may appoint the following as the authority to hear and
decide the claims related to the deductions or delay in wages:

➢ Any commissioner for Workmen's Compensation or

➢ Regional Labour Commissioner (central) or
➢ Assistant Labour Commissioner (central) with at least two years’ experience or
➢ Assistant Labour Commissioner (state) with at least two years’ experience or
➢ A presiding officer of any Labour Court or Industrial Tribunal constituted under the
Industrial Disputes Act, 1947 or under any corresponding law or
➢ Judge of a Civil Court or a Judicial Magistrate.
Payment of Wages Act 1936 10.15 Labor Legislations and Law
14) The authority may direct the employer:

➢ To refund the deducted amount together with the compensation not exceeding ten
times the amount deducted.
➢ To pay the delayed wages together with the compensation not exceeding three
thousand rupees but not less than one thousand five hundred rupees.
➢ The authority may direct the employer to pay the maximum compensation of two
thousand rupees, even if the amount deducted or delayed wages are paid before the
disposal of the application.

15) If a person who is required to maintain records or registers or to furnish any information
or return, does the following, then he shall be punishable with fine which shall not be less
than one thousand five hundred rupees but may extend to seven thousand five hundred
rupees:

➢ Fails to maintain such a register or record.

➢ Willfully refuses to furnish such information or furnishes false information or return
or refuses to answer some information that is required to be furnished under this act.

10.7 Summary

The act has established various rules and regulations for the betterment and effective
operation of the industry. The legislation allows workers to work freely without fear of being
hampered by pay or salary delays. The code has paved the road for employees to work with
dignity, and the necessary mechanisms have been established. The act’s provisions aid in the
development of trust between the employer and the employee, allowing for optimum
production to be attained through employee motivation. The notion of wage payment and
deductions under the code is critical to the industry’s operating and producing intended
output and ensuring that the benefit is supplied to the employee.

10.8 Keywords
1. Employed Person - Includes the legal representative of a deceased employed person.

2. Employer - Includes the legal representative of a deceased employer.

3. Appeal - In the following situation the parties whoever dissatisfied can appeal to the
district court.

10.9 Self - Assessment Questions

1. Define the wage, discuss the importance of payment of wages Act, 1938?

2. Explain the main features of payment of wages Act, 1938?

3. Discuss the highlights of the payment of wages Act, 1938?

4. What are the objectives and deductions of payment of wages Act, 1938?
Centre for Distance Education 10.16 Acharya Nagarjuna University

10.10 Suggested Readings

1. The Payment of Wages Act, 1936, by Lexis, Publisher Universal LexisNexis, January
2021.
2. Industrial Relations and Labour Laws, by S.C. Srivastava, Publisher: S Chand And
Company Ltd, ISBN: 9789354539961, 9354539963, Year 2022.
3. New Labour & Industrial Laws – Complete coverage of the new Codes (Code on
Wages, IR Code, Social Security), by Taxmann, Publisher Taxmann Publications
Private Limited, ISBN-13 978-9356226487, Year 2023.
4. Industrial Relations and Labour Laws, by Piyali Ghosh and Shefali Nandan,
Publisher McGraw Hill Education, ISBN-13 - 978-9339203047

Dr.K.Madhu Babu
 LESSON - 11

THE MINIMUM WAGES ACT, 1948

Learning Objectives

✓ To know the minimum wage

✓ To learn about the main provisions of minimum wage
✓ To read the importance of minimum wage
✓ To study the wage determination factors

Structure

11.1 Introduction

11.2 Currently Applicable Provisions

11.3 Purpose of Minimum Wage Act, 1948

11.4 The Objective of the Minimum Wages Act

11.5 Fixation and Revision of Minimum rates

11.6 Non - Standard Workers' Right on Minimum Wage - Platform Workers

11.7 Minimum Wage Regulations under State Law

11.8 Regular Pay

11.9 Non - Standard Workers' Rights on Regular Pay - Platform Workers

11.10 Regular Pay Under State Laws

11.11 The Minimum Wages Act, 1948 - An evolutionary panorama

11.12 The Minimum Wage Fixing Convention, 1970

11.13 Reasons for the Need of Enactment of the Minimum Wages Act 1948

11.14 Important Sections in this Act

11.15 Summary

11.16 Keywords

11.17 Self - Assessment Questions

11.18 Suggested Readings

11.1 Introduction
Last year (2020), the Indian Parliament combined 25 labour laws into three codes, i.e., the
Social Security Code, the Code on Industrial Relations and the Code on Occupational Safety,
Centre for Distance Education 11.2 Acharya Nagarjuna University

Health and Working Conditions. The Code on Wages, enacted in 2019, also amalgamated
four relevant labour laws.

The Four new Labour Codes were supposed to be effective from 01 April 2021 however
considering the rise in COVID cases and the potential impact of the new Codes on per
employee costs for enterprises, the Government has delayed implementation of new Codes to
a future date. The Central and State Governments have yet to notify the rules. The new legal
provisions will be effective only, once notified.

11.2 Currently Applicable Provisions

Minimum wage rates in India are fixed under the Minimum Wages Act, 1948. Since labour is
a concurrent subject under the Indian Constitution, minimum wage rates are determined both
by the Central Government and the Provincial Governments. Minimum wage rates in India
are declared at the national, state, sectoral and skill/occupational levels. Minimum wage rates
may be established for any region, occupation and sector. Also, the minimum wage is
established for trainees, youth and piece-rate workers. The minimum wage is determined by
considering the cost of living.

The minimum rate of wages may consist of a basic rate of wages and a cost of living
allowance; or a basic rate of wages, with or without the cost of living allowance, and the cash
value of concessions in respect of the supply of essential commodities at concession rates (if
authorized); or an all-inclusive rate allowing for the basic rate, the cost of living allowance
and the cash value of the concessions (if any).

While fixing or revising minimum rates of wages, different minimum rates of wages may be
fixed for different scheduled employments; different classes of work in the same scheduled
employment; adults, adolescents, children and apprentices; and different localities. The
minimum wage rates may be fixed by hour, day, month or any such other larger wage period
as may be prescribed.

Under the Minimum Wages Act, both the Central and State Governments may notify the
scheduled employments and fix/revise minimum wage rates for these scheduled
employments. The scheduled employments include both the agricultural and non-agricultural
employments. Both the Central and State Governments are empowered to notify any
employment (industry/sector) in the schedule where the number of employees is 1000 or
more and fix the rates of minimum wages in respect of the employees employed therein.

Minimum wage is announced for 45 scheduled employments in the Central Sphere while the
State level minimum wage is determined by every state keeping in view the sectors more
dominant in the State. Minimum wage is revised while considering the following five
elements: three consumption units per earner; minimum food requirement of 2700 calories
per average adult; cloth requirement of 72 yards per annum per family; house rent
corresponding to the minimum area provided under the Government's Industrial Housing
Scheme; fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the
total minimum wage; and children education, medical requirement, minimum recreation
including festivals/ceremonies and provision for old age, marriage etc. should further
Minimum Wages Act 1948 11.3 Labor Legislations and Law
constitute 25% of the total minimum wage (the last component added by the Supreme Court
in Reptakos Brett Vs Workmen case in 1991). Minimum wages may be reviewed at different
intervals however such intervals cannot exceed five years.

The Minimum Wages Act provides for two methods of fixation/revision of minimum wages.
Under the Committee Method, committees and sub-committees are set up by the Government
to hold inquiries and make recommendations with regard to the fixation and revision of
minimum wages. Under the Notification method, government proposals are published in the
Official Gazette for information of the persons likely to be affected and specify a date (not
less than two months from the date of the notification) on which the proposals will be taken
into consideration.

After considering the advice of the Committees/Sub-committees (Committee method) and all
the representations received by the specified date (Notification method), the appropriate
Government, by notification in the Official Gazette, fixes/revises the minimum wage in
respect of the concerned scheduled employment which come into force on expiry of three
months from the date of its issue.

In protecting the real wages against inflationary effects, the Central government provides for
linking of Variable Dearness Allowance to the Consumer Price Index for industrial workers
(CPI-IW). Most states provide for variable dearness allowance in revising the minimum
wage. VDA is revised periodically twice a year effective from 1st April and 1st October.

Compliance with labour legislation including payment of minimum wages to workers is

ensured by the labour inspectors, as are appointed under section 19 of the Minimum Wages
Act 1948. In the event of non-compliance, fines, imprisonment and payment of arrears can be
applied as per law. Section 22 of the Minimum Wages Act stipulates that violators may be
punished to pay a fine (which may be extended to 500 rupees) or imprisonment, which may
extend to a period of six months or both. The Authority (magistrate) may also require
payment of arrears to the worker along with compensation for delay in payment of due
wages. However, such extra compensation should not exceed 10 times the due amount.
Similarly, an employer who fails to maintain a register or record as required under the law is
liable for a fine of up to 500 rupees.

If a worker receives wages, which are less than the government declared minimum wages,
he/she may file a complaint with the labour inspectorate. The complaint can be filed by the
worker or through a legal practitioner, or an official of the registered trade union. The claims
for any unpaid/due wages must be filed within 6 months of their becoming due.

The Code proposes that the central government fixes a floor wage, taking into account the
living standards of workers. The central government may set different floor level wages for
different geographical areas. The central government may also obtain the advice of the
Central Advisory Board (tripartite plus advisory body with representation from the worker,
employer and government groups as well independent persons) and may consult with state
governments. Moreover, 33% of the total members of both the central and state Boards must
be women. The Boards have the mandate to advise the respective governments on various
Centre for Distance Education 11.4 Acharya Nagarjuna University

issues including (i) fixation of minimum wages, and (ii) increasing employment opportunities
for women.

The minimum wages notified by the central or state governments must be higher than the
floor level wage. Where the existing minimum wages are higher than the floor wage, these
cannot be reduced.

The Wage Code prohibits employers from paying workers less than the minimum wages.
Minimum wages notified by the government are either time based (number of hours of work)
or per piece. The minimum wages must be revised and reviewed by the central or state
governments at an interval of not more than 5 years. While fixing minimum wages, the
central or state governments may take into account various factors such as (i) skill of
workers, and (ii) arduous nature of work.

The Code on Wages Bill, 2019 was passed by the Lok Sabha on July 30, 2019, and Rajya
Sabha on 02 August 2019.

The Wage Code regulates wage and bonus payments in all employment. The Code combines
the provision of the following four laws: (i) the Payment of Wages Act, 1936, (ii) the
Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal
Remuneration Act, 1976. The Wage Code repeals the above 4 laws.

11.3 Purpose of Minimum Wage Act, 1948

The importance of the Minimum wage act 1948 is to prevent employee exploitation and
ensure a decent living for a worker. The Act provides that the government will fix the
minimum wage rate and revise it every five years. It appoints advisory committees to
consider the proposals. The government must follow the guidelines and implement them as
soon as possible. In many cases, this means announcing the changes to the law before the
public.

➢ The Act was introduced in 1948, and it was amended in 2000

➢ The changes included a change in the floor level for minimum wages
➢ Currently, the minimum wage floor in India is 115, but the law also gives exceptions
for certain employees
➢ The lowest floors are in Andhra Pradesh, Kerala, and Gujarat
➢ In addition to this, the new law provides for higher minimum wages for workers with
disabilities

The act requires the government to consult with the committee and the representatives of the
people affected by the minimum wage.

➢ The committee determines the minimum rate of the act

➢ The government must publish it in the official newspapers and enforce it within three
months
➢ The government must inform the affected parties of the proposed minimum wage by
publishing the decision in a national daily
➢ In case of non-payment of wages, the authority must pay ten times the difference
Minimum Wages Act 1948 11.5 Labor Legislations and Law
11.4 The Objective of the Minimum Wages Act
The Minimum wage Act 1948 accommodates fixing wage rates (time, piece, ensured time,
additional time) for any industry.

1. While fixing hours for an ordinary working day according to the demonstration, ought to
ensure the accompanying:

➢ The number of hours to be fixed for an ordinary working day should have at least one
stretch/break
➢ One three-day weekend from a whole week ought to be given to the representative for
rest
➢ Installation for the day chosen to be given for rest ought to be paid at a rate at the very
least the additional time rate

2) If a representative is engaged with work that classifies his service in at least two booked
vocations, the worker’s pay will incorporate a particular compensation pace of all work for
the number of hours devoted at each undertaking.

3) The business must keep records of all workers’ work, wages, and receipts.

4) Appropriate legislatures will characterize and dole out the errand of review and choose
examiners for the equivalent.

11.5 Fixation and Revision of Minimum rates

The Minimum Wages Act, 1948, for the most part, indicates the lowest pay permitted by law
rates on an everyday basis and stretches out to the whole nation. It is overhauled every five
years, but there is an arrangement to increment the dearness allowance every two years. ILC
first suggested the standards for fixing and amending minimum wages.

Update of the lowest pay permitted by law rates depends on a ‘typical cost for many everyday
items list’, and wages can be fixed for a whole state, some portion of the state, class or
classes, and occupations relating to these classifications. The obsession with wages depends
on the standards referenced and a compensation board (different for various industries).

Under the Minimum Wages Act, State and Central Governments can fix and reexamine the
least wages.

• The demonstration determines that the “suitable” government ought to improve the
wages; for example, if the wages to be fixed are according to any power of the Central
Government or Railway organisation, then the Central government fixes it
• Assuming that the compensation rate is to be fixed or amended for planned work, the
separate state legislatures set it
• The Centre fixes the National floor level Minimum Wage that is lower than most
states’ individual least wages
• The vagueness and cross-over in the locale of government levels have caused
discussions and contentions
Centre for Distance Education 11.6 Acharya Nagarjuna University

• One of such discussions spins around fixing wage paces of MGNREGA plot and a
business ensure drive by the Central Government.

11.6 Non - Standard Workers' Right on Minimum Wage - Platform Workers

Minimum wages are applicable only to employees. However, the law allows the
appropriate (central or state government) to include in the list of e mployees any
"person declared to be an employee by the appropriate Government". Hence, the wages
can be announced by the central and state governments for platform workers.

The Code on Wages, 2019 (enacted in August 2019) provides for the procedure to set
minimum wages. The law also requires employers to pay minimum wages to
employees. Employee is defined as "any person (other than an apprentice engaged
under the Apprentices Act, 1961), employed on wages by an establishment to do any
skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial,
administrative, technical or clerical work for hire or reward, whether the terms of
employment be express or implied, and also includes a person declared to be an
employee by the appropriate Government, but does not include any member of the
Armed Forces of India".
The Code on Wages entitles only employees to the bonus payment. Service agreement
may also provide for a bonus payment to incentivize service delivery.
Under the Wage Code, it is the responsibility of Inspector-cum-Facilitator to inspect all
such establishments where workers are employed. On inspection of record or filing of a
complaint by a worker, proceedings can be initiated against an employer. However,
since platform workers are regarded as independent contractors, these are not covered
under the Wage Code.
Wage Codes provides for penalties where compliance with the law is lacking. The fine
ranges between 20,000 to 100,000 Indian rupees. Since platform economy workers are
considered independent contractors, their contracts/service agreements are governed
under the Indian Contract Act, 1872.

11.7 Minimum Wage Regulations under State Law

MINIMUM WAGES REGULATIONS IN ANDHRA PRADESH
Employees of establishments under the Shops and Establishments Act are entitled to
payments without any deductions other than those authorized. No fine can be imposed on any
employee unless they have made certain acts or omissions that were specified by the
employer with previous approval from the government. These acts and omissions should be
mentioned to a worker by notice.

Similarly, no fine can be imposed on any employee without giving them an opportunity of
explaining against the fines unless specified by law. The total amount of fine which may be
imposed in any one wage period on any employee cannot exceed 3% of the wage payable. A
fine cannot be imposed on a worker under 15. Law also states that the fines imposed on an
employee cannot be recovered after the expiry of sixty days from the day on which it was
imposed.

Deductions on account of absence are allowed however the deduction should match the days
of absence during a wage period. The deduction for damage of goods cannot exceed 50 per
cent of the amount of damaged goods. A notice must be served to the workers, with an
Minimum Wages Act 1948 11.7 Labor Legislations and Law
opportunity to explain, prior to any such deduction. Deductions for recovery of an advance of
money given before employment began can be made from the first payment of wages.
However, no recovery can be made of such advance given for travelling expenses.

11.8 Regular Pay

Wages means all remuneration capable of being expressed in terms of money, which would,
if the terms of the contract of employment express or implied were fulfilled, be payable to a
person employed in respect of his employment or of work done in such employment. It,
however, does not include the value of any house-accommodation, supply of light, water,
medical attendance, or any other prescribed amenity or service; any pension or provident
fund, or social insurance scheme, contributions paid by the employer; travelling allowances
or concessions; reimbursement for special expenses incurred by the employee; or gratuity
payable on discharge.

In accordance with the Minimum Wage Act, the employer is obliged to pay wages on regular
and timely basis at least once a month. Wage period may be fixed on hourly, daily, weekly
or monthly basis. The employer is under obligation to pay wages in cash on a working day
before the expiry of the 7th day after the last day of the wage period (in establishments with
less than 1000 workers). In other establishment, i.e., those hiring more than 1,000 workers,
wages must be paid before expiry of 10th day after the last day of the wage period. If the
employment of a worker is terminated by or on behalf of the employer, the outstanding wages
are paid within two days of employment termination. Wage periods can't be fixed for
duration longer than one month.

Minimum wages are generally payable in cash however if it is customary to pay wages
wholly or partly in kind, the appropriate Government may authorize the payment of minimum
wages either wholly or partly in kind.

Payment of Wages Act 1936 required that all wages be paid in current coin or currency notes
or in both (in legal tender). An employer may, after obtaining the written authorization by the
worker, pay worker the wages either by cheque or by crediting the wages in bank account. A
2017 amendment in the 1936 Act, applicable from 28 December 2016, now allows the
employer to pay wages in coins or currency notes; or by check; or by crediting the wages in
worker’s account. The amended Act has withdrawn the requirement of taking prior
authorization from worker about mode of wage payment. The relevant (central or state)
government may however specify certain industrial or other establishments requiring those to
pay either by check or bank transfer.

Workers are entitled to the wages without any kind of deduction except in cases prescribed
by the Payment of Wages Act 1936. It may include deductions as fine; for absence; for
damage or loss of goods or money; for house accommodation supplied by employer; for
recovery of advances or loans; for income-tax; and any other kind of deduction that is made
by order of a Court or other authority competent to make such order.

The Wage Code proposed that wages are paid in (i) coins, (ii) currency notes, (iii) by cheque,
(iv) by crediting to the bank account, or (v) through electronic mode.
Centre for Distance Education 11.8 Acharya Nagarjuna University

The wages can be paid by the employer on (i) daily, (ii) weekly, (iii) fortnightly, or (iv)
monthly basis. The industrial or commercial establishments may be required by notification
to pay wages through cheque or by crediting the wages directly in the worker’s bank account.

The Wage Code also specifies the time limit for payment of wages. For daily wagers, the
wages must be paid at the end of daily shift. In the weekly wage period, the wages must be
paid on the last working day of the week; for fortnightly wage period, the wages must be paid
within 2 days at the end of fortnight. For monthly wage period, the wages must be paid
within 7 days of the end of working month.

Under the Wage Code, workers’ wages may be deducted on certain grounds including: (i)
fines, deductions for loss of goods or money due to the worker’s neglect (ii) absence from
duty, (iii) accommodation given by the employer or other amenities, (iv) recovery of loans
and advances given to the employee, among others, (v) deductions for payment of trade union
fees or contribution to social security schemes, or (vi) deductions of income tax. The total
deductions should not exceed 50% of the worker’s total wage.

The Wage Code also has provision on determination and payment of bonus. All such worker
who have worked at least 30 working days in a year with an establishment and whose wages
do not exceed a specific monthly amount, as notified by the central or state government, will
be entitled to an annual bonus. The bonus will be at least: (i) 8.33% of his/her wages, or (ii)
Rs 100, whichever is higher. In addition to the minimum bonus (where the allocable surplus
exceeds the minimum bonus), the employer is required to distribute a part of the gross profits
amongst the workers. It is distributed in proportion to the annual wages of a worker. The
worker can receive a maximum bonus of 20% of his annual wages.

The Code on Wages Bill, 2019 was passed by the Lok Sabha on July 30, 2019 and Rajya
Sabha on 02 August 2019.

The Wage Code regulates wage and bonus payments in all employment. The Code combines
the provision of the following four laws: (i) the Payment of Wages Act, 1936, (ii) the
Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal
Remuneration Act, 1976. The Wage Code repeals the above 4 laws.

11.9 Non - Standard Workers' Rights on Regular Pay - Platform Workers

The payment system in the platform economy is quite varied. Some platforms apply an
hourly rate, others offer a specific amount per delivery, ride or task. The platforms do not ask
for a service fee. However, it is often required that workers use their own equipment or
means of transport to perform their worker duties.

This varies per platform. For independent contractors, offering bonuses is legally allowed in
any way, shape or form. Uber offers Quest and Boost incentives/bonuses. Quest promotions
allow drivers/partners to earn extra money for reaching certain trip goals in a set amount of
time (a week). Select drivers/partners receive weekday and weekend boosts as well.
Minimum Wages Act 1948 11.9 Labor Legislations and Law
For independent contractors, applying deductions is legally allowed in any way, shape or
form. Deductions from payment on account of service fees are covered under the Indian
Contracts Act 1872.

11.10 Regular Pay Under State Laws

REGULAR PAY IN ANDHRA PRADESH

Every employer is responsible for the payment by him to employees of all wages and sums,
required to be paid under this Act. Every employer must fix periods in which wages are
payable. No wage period can be more than one month. The wages of every employee must be
paid before the end of the fifth day after the last day of the wage period. Where the service of
any employee is terminated by the employer, the employee should receive their wage before
the expiration of two days from termination.

In organizations with less than 1000 workers, contract labourers should be paid their wages
within 7 days after their wage cycle. In other organizations, this payment should be paid
before the 10th day. All payments of wages must be made on a working day at the work
premises and during the working time. This date and time should be notified to the workers in
advance. In case the work ends before the average wage period, contract workers should be
paid within 48 hours of the last working day.

Wages due to every worker must be paid to such workers directly or to another person
authorized by the worker. Wages must be paid without any deductions of any kind except
those specified by the State Government by general or special order. Employers are supposed
to display a notice with all the payable wages at a visible place at the establishment. A
representative of the principal employer should be present every time the contractor is giving
out the wages. The contractor should ensure that such an authorized representative is present.
The principal employer may also ensure written slips of all disbursed wages.

11.11 The Minimum Wages Act, 1948 - An evolutionary panorama

The evolution of Indian labour legislation is obviously interlaced with the history of British
colonialism. British political economy was considered natural paramount in modelling some
of the early laws. In the initial phases it was very difficult to get adequate regular Indian
workers to run British organizations and hence labour laws became essential. These were
obviously in order to protect the interests of British bosses. Although this was a case, attitude
of Indian legislators, as it turned towards being independent from the clutches of British
empire, has been very constructive and pro-welfare state. The importance of the minimum
wages as an instrument of social protection was already high lightened in the ILO
constitution adopted in the year 1919 as a part of treaty of Versailles after the end of World
War 1. The preamble of this constitution recalls, “the High Contracting parties, moved by
sentiments of justice and humanity as well as by the desire to secure permanent peace has
called for the provision of an adequate living wage alongside other measures to improve the
condition of labour.
Centre for Distance Education 11.10 Acharya Nagarjuna University

The concept of minimum wages first evolved with reference to remuneration of workers in
those industries where the level of wages was substantially low as compared to the wages for
similar types of labour in other industries.

First of all, at the International Labour Conference in 1928, a Draft Convention was adopted
on the subject of minimum wages. In India in 1929 Royal Commission on Labour was
adopted which considered the subject of minimum wages.

The Minimum wages Act was enacted to fulfill the aspiration of the workers as contained in
the resolution based on the Geneva Convention held in 1928, which reads:

“If the labourers are to be secured the enjoyment of minimum wages and they are to be
protected against exploitation by their employers, it is absolutely necessary that restraint
should be imposed upon their freedom of contract and such restrictions cannot be in any
sense be said to be unreasonable. On the other hand, the employers cannot be heard to
complain if they are compelled to pay minimum wages to their labourers even though the
labourers on account of their poverty and helplessness are willing to work on lesser wages”.

The fact that an employer might find it difficult to carry on the business on the basis of
minimum wages is an irrelevant consideration.( Held in U.Uchinoyi / vs/ State of Kerala.
1961, I.LLJ 631.)

The question of establishing statutory wage fixing machinery in India was first discussed in
1929 by the Royal Commission on Labour which was appointed and this commission
considered the subject of minimum wages. The question of establishing statutory wage fixing
machinery in India was again discussed at the third and fourth meetings of the Standing
Labour Committee held in May 1943 and January 1944 respectively, and at successive
sessions of the tripartite labour conference in September 1943, October 1944, and November
1945. The last of these, approved in principle, the enactment of the minimum wages
legislation. On 11 April 1946, a minimum wages Bill, was introduced, but the passage of bill
was considerably delayed by the constitutional changes in India. It reached the statute book
only in March 1948.

11.12 The Minimum Wage Fixing Convention, 1970

“Minimum wages should be established for groups of wage earners where, in consultation
with employers’ and workers’ organizations, the competent national authority finds it
appropriate. Minimum wages, where they exist, should have the force of law and should not
be subject to abatement; failure to pay minimum wages should be subject to penal or other
sanctions.”

The purpose of seeking employment is to sell labour to earn wages so as to attain a ‘decent’
or ‘dignified’ standard of living. The wage or income that a worker obtains from his/her work
is therefore, what enables him/her to achieve a fair standard of living. One seeks a fair wage
both to fulfill one’s basic needs and to feel reassured that one receives a fair portion of the
wealth in return for one’s work to generate for the society. Society has a duty to ensure a fair
wage for every worker, to ward off starvation and poverty, to promote the growth of human
Minimum Wages Act 1948 11.11 Labor Legislations and Law
resource, to ensure social justice without which likely threats to law and order may
undermine economic progress.

If ‘labour’ is to be defined, which is the central issue in focus, for which an amount is fixed;
labour is defined by prominent persons such as:- S.E.Thomas , who says that , “Labour
consists of all human effort of the body or of mind, which is undertaken in the expectation of
reward”. Mr.Jevons states that,” Labour is any exertion of mind or of body or both,
undertaken partly or wholly with a view to some good than the pleasure derived directly from
work”.

Thus, labour in broad sense of the term may be defined as any hand or brain work which is
undertaken for a monetary consideration.

11.13 Reasons for the Need of Enactment of the Minimum Wages Act 1948
(i) In a free competitive market, the level of wages payable to workers is determined by the
forces of demand and supply. In a welfare state the protection of the interests of the workers
is one of the aims of legislation which is enacted in the labour field. The same is true with
regard to the Minimum Wages Act enacted by the Indian parliament.

In the case of, ‘People’s Union for Democratic rights/vs/ Union of India’, it was stated that,
“The Minimum Wages Act is, as is all other legislation, a welfare measure to alleviate the
suffering of sections of the society labouring under economic distress. However, knowledge
of one’s rights or the capacity or strength to enforce it often doesnot exist among the relevant
classes. It is through public interest litigation, a strategic aim of legal aid movement, that the
problems of the poor are now coming forefront and the entire theatre of law is changing.”

(ii) The Indian labour class besides being illiterate is by an large not organized to protect its
interests in a competitive market where supply of labour is always excess of demand. Under
such conditions the labour class is left to itself and is unable to protect its legitimate interests.

In a country which is still underdeveloped, the exploitation of labour in certain industries can
become a common feature due to reasons that unemployment and few avenues for gainful
employment which forces the labourers to accept the employment even on starvation wages.

Therefore, the Act was enacted to secure the welfare of workers in a competitive market by
providing for a minimum limit of wages in certain employments.

(iii) The object of this Act is to “prevent exploitation of the workers” and for this purpose, it
aims at fixation of minimum wages which the employer must pay. What the act purports to
achieve is to prevent exploitation of labour and for that purpose, authorises appropriate
government to take steps to prescribe minimum rates of wages in Scheduled industries. What
is being prescribed is minimum rates of wages which a welfare state assumes every employer
should pay before employment of any labourer. It is only with regard to certain specified
industries that the provisions for the payment of statutory minimum wages have been laid
down. The legislature undoubtedly intended to apply the Act to those industries or localities,
in which, by reason of causes such as unorganized labour or absence of machinery for the
regulation of wages which are paid to workers, were in the light of the general level of wages
Centre for Distance Education 11.12 Acharya Nagarjuna University

and they were subsistence inadequate. The provisions of the Act were intended to achieve the
object of doing social justice of workers employed in the scheduled employment by
prescribing minimum rates of wages to them.

(iv) As pronounced in judgement of the case of , ‘Hydro(Engineers) P. Ltd /vs/ Workmen.

AIR 1969 SC182. “The Act contemplates that minimum wage rates must ensure not the mere
physical need of the worker which would keep the worker just above starvation but ensure for
the worker not only subsistence and that of his family but to preserve the worker’s efficiency
as of a workman. It should, therefore, provide not merely the bare subsistence of life but the
preservation of workers’ health and for some measure of education, medical requirements
and amenities”.

(v) In the case of “Edward Mills co .Ltd, Beawer vs State of Ajmer(1954) II L.L.J 686, it is
decided that the object of the Minimum wages Act as, “ The object of this Act is to prevent
exploitation of the workers and for this purpose, it aims at fixation of minimum wages which
the employer must pay”.

(vi) In the case of, “ M/S Bhikua Yamasa Kshatriaya vs Sangamner Akola taluka beedi
Kamgar Union , AIR 1963, S.C. 806, it was decided that , “The legislature undoubtedly
intended to apply the Act to those industries or localities in which, by reason of causes such
as unorganized labour or absence of machinery for regulation of wages, the wages paid to
workers were in light of general level of wages and subsistence level inadequate”.

Like other branches of labour legislation, the security of industrial peace and efficiency may
be kept in view when giving effect to the provisions of this Act.

In the view of the fulfillment of the purpose of welfare state, it was upheld in the case of ‘
Patel Ishwarbhai Prahladbhai /vs/ Taluka Development Officer (1983) I Lab 7C 237 S.C. ,
that , “ Every person who provides labour or service to another is entitled at least to a
minimum wages.”.

(vii) The judgment in the case of “ Crown Aluminium Works vs Their workmen AIR 1958
SC 30” , states the motivation of the legislature for enactment of the minimum wages Act,
1948, in the following words, “ In developing country like ours which faces the problem of
unemployment on a very large scale, it is not unlikely that labour may offer to work even on
starvation wages. The policy of the Act, therefore, is to prevent employment of sweated
labour in general interest and , so in prescribing the minimum wage rates, the capacity of the
employer need not be considered as the state assumes that every employer must pay
minimum wages for the employee’s labour”.

Therefore, the entire scheme of the Act is a pointer towards the direction of ensuring
minimum wages to workers engaged in certain specific industries.

11.14 Important Sections in this Act

1. Object of the Act
To provide for fixing minimum rates of wages in certain employments.
Minimum Wages Act 1948 11.13 Labor Legislations and Law
2. Fixation of Minimum Rates of Wages
The appropriate government to fix minimum rates of wages. The employees employed in
para 1 or B of Schedule either at 2 or either part of notification u/s 27.

To make review at such intervals not exceeding five years the minimum rates or so fixed and
revised the minimum rates.

3. Government can also fix Minimum Wages for Section - 3

➢ Time work
➢ Piece work at piece rate
➢ Piece work for the purpose of securing to such employees on a time work basis
➢ Overtime work done by employees for piece work or time rate workers.

4. Minimum Rates of Wages under Section - 4

Such as Basic rates of wages etc. Variable DA and Value of other concessions etc.

5. Procedure for fixing and revising Minimum Rates of Wages Section - 5

Appointing Committee issue of Notification etc.

a. Overtime
To be fixed by the hour, by the day or by such a longer wage-period works on any day in
excess of the number of hours constituting normal working day. Payment for every hour or
for part of an hour so worked in excess at the overtime rate double of the ordinary rate of (1½
times or for agriculture labour).

6. Composition of Committee Section - 9

Representation of employer and employee in schedule employer in equal number and
independent persons not exceeding 1/3rd or its total number one such person to be appointed
by the Chairman.

7. Payment of Minimum Rates of Wages Section - 12

Employer to pay to every employee engated in schedule employment at a rate not less than
minimum rates of wages as fixed by Notification by not making deduction other than
prescribed.

8. Fixing Hours for Normal Working Section - 13

➢ Shall constitute a normal working day inclusive of one or more specified intervals.
➢ To provide for a day of rest in every period of seven days with remuneration.
➢ To provide for payment for work on a day of rest at a rate not less than the overtime
rate.

9. Wages of workers who works for less than normal working days Section - 15
Save as otherwise hereinafter provided, be entitled to receive wages in respect of work done
by him on that day as if he had worked for a full normal working day.
Centre for Distance Education 11.14 Acharya Nagarjuna University

10. Wages for two class of work Section - 16

Where an employee does two or more classes of work to each of which a different minimum
rate of wages is applicable, wages at not less than the minimum rate in respect of each such
class. Claims by employees To be filed by before authority constituted under the Act within 6
months. Compensation upto 10 times on under or non-payment of wages

11. Minimum time rate wages for piece work Section - 17

Not less than minimum rates wages as fixed .

12. Maintenance of registers and records under Section - 18

➢ Register of Fines – Form I Rule 21(4)
➢ Annual Returns – Form III Rule 21 (4-A)
➢ Register for Overtime – Form IV Rule 25
➢ Register of Wages–Form X, Wages slip–Form XI, Muster Roll–Form V Rule 26
➢ Representation of register – for three year Rule 26-A

13. Penalties under Section - 20

Offence - For paying less than minimum rates of wages.

Punishment - Imprisonment upto 6 months or with fine upto Rs.500/-

Offence - For contravention of any provisions pertaining to fixing hours for normal working
day etc.

Punishment - Imprisonment upto 6 months or with fine upto Rs.500/-

11.15 Summary
The minimum wage act 1948 is significant for employers and employees. It will help reduce
the chances of exploitation and help the worker provide for his family. In addition to this, the
act specifies that the government has the power to fix the minimum rate. Its regulations also
require the government to review the rates every five years. This process is very complicated,
but the legislation outlines the critical points. The law is necessary to reduce the risk of
exploitation, and each citizen must know about this act to have the perfect position in the
company.

11.16 Keywords
1. Minimum wages means legally enforceable lowest limit of wage in a given industry in a
given State fixed by a process invoking the authority of the State.

2. Formulation of wage policy - In India as it gave the definition for three levels of wages
viz; a minimum wage, a fair wage and a living wage.

3.NFLMW- National Floor level Minimum Wages influenced the trend of minimum wage
fixation in general as well as the actual wages.

11.17 Self - Assessment Questions

1. Define minimum wage and discuss about its importance?
Minimum Wages Act 1948 11.15 Labor Legislations and Law
2. Explain the main provisions of minimum wages act, 1948?

3. Discuss about wage determination factors of minimum wages?

4. Elucidate the minimum wage regulatory system as per state law?

11.18 Suggested Readings

1. The Minimum Wages Act, 1948, by Universal New India, 1 January 2020.
2. New Industrial & Labour Codes by Law, by Kharbanda & Kharbanda, Publisher: Law
Publishing House, Year 2021.
3. Law & Practice on Minimum Wages Commentaries on Minimum Wages Act, 1948,
by S. B. Rao & V. Kharbanda, Publisher: Law Publishing House, Book Code:
9788189639204, Year 2022.
4. Labour and Industrial Law, by P L Malik, 20th Edition 2023.
5. Source: Section 40, 41, 42, 45, Andhra Pradesh Shops and Establishments Act, 1988
6. Source: 3-6 & 11 of the Minimum Wages Act 1948; §3-7 of the Payment of Wages
Act 1936, amended in 2017
7. Source: Section 63-73 of Andhra Pradesh Contract Labour (Regulation and Abolition)
Rules, 1971;
8. Section 35, 36, 38, Andhra Pradesh Shops and Establishments Act, 1988

Dr.K.Madhu Babu
 LESSON - 12

PAYMENT OF BONUS ACT, 1965

Learning Objectives

✓ To study the Payment of Bonus Act 1965

✓ To learn the Scope And Coverage Of The Payment Of Bonus Act, 1965

✓ To understand the Calculation for Bonus Payable

✓ To Know the Types of Bonus Payments

Structure

12.1 Introduction

12.2 History of Payment Of Bonus Act, 1965

12.3 Scope and Coverage of The Payment Of Bonus Act, 1965

12.4 Understanding the Act

12.5 Why Do Companies Give Bonuses

12.6 Calculation for Bonus Payable

12.7 Types of Bonus Payments

12.8 Eligibility for Bonus Under The Act

12.9 Disqualification from Bonus Under The Act

12.10 Rights of Employer And Employee

12.11Payment of Bonus Rules

12.12 Summary

12.13 Keywords

12.14 Self -Assessment Questions

12.15 Suggested Readings

12.1 Introduction
A bonus is a financial reward that is given to an employee beyond their normal salary or
wages. It can be given as an incentive to encourage certain behavior or to reward good
performance.
Centre for Distance Education 12.2 Acharya Nagarjuna University

A bonus is a financial reward that is given to an employee beyond their normal salary or
wages. It can be given as an incentive to encourage certain behavior or to reward good
performance. Bonuses can take various forms, including cash, stock, or stock options, and
can be given to individuals, teams, or the entire company. Incentive bonuses include signing
bonuses for new hires, referral bonuses for employees who refer successful candidates, and
retention bonuses to encourage employee loyalty. Performance bonuses are given for
exceptional work and can be given as annual bonuses, spot bonuses, or milestone bonuses.
The Internal Revenue Service (IRS) considers bonuses as taxable income, so employees
need to report them when filing their taxes.

A bonus is a financial compensation that is above and beyond the normal payment
expectations of its recipient. Companies may award bonuses to both entry-level employees
and to senior-level executives. While bonuses are traditionally given to exceptional workers,
employers sometimes dole out bonuses company-wide to stave off jealousy among staffers.

Bonuses may be dangled as incentives to prospective employees and they can be given to
current employees to reward performance and increase employee retention. Companies can
distribute bonuses to its existing shareholders through a bonus issue, which is an offer of
free additional shares of the company's stock.

12.2 History Of Payment Of Bonus Act, 1965

The tradition of paying bonuses in India seems to have started during World War I, when
some textile mills gave their employees a 10% wage increase as a war bonus in 1917. In
certain cases of labour disputes, the claim for bonus payment was also included. The Full
Bench of the Labour Appellate Tribunal established a bonus calculation formula in 1950. In
1959, a demand was made to change the formula.

It was decided at the second and third meetings of the eighteenth Session of the Standing
Labour Committee (G.O.I) in New Delhi in March/April 1960 to appoint a Commission to
look into the issue of bonuses and develop appropriate norms. The Government of India
established a Tripartite Commission to examine the issue of bonus payments based on
earnings to employees working in establishments in a detailed manner and make
recommendations to the Government.

The Commission's recommendations were adopted by the Indian government with some
modifications. The Payment of Bonus Act of 1965 was enacted to carry out these
recommendations, and it went into effect on September 25, 1965.

12.3 Scope And Coverage Of The Payment Of Bonus Act, 1965

The Bonus Payment Act covers the entire India. It covers any establishment with twenty or
more employees on any given day during the accounting year, as well as any factory as
specified by the factories act of 1948. Employee is defined in Section 2 (13) of the Act as
any person (other than an apprentice) employed on a salary or wage of not more than twenty
one thousand rupees per mensem in any industry to perform any skilled or unskilled manual,
supervisory, managerial, administrative, scientific, or clerical work for hire or compensation,
regardless of whether the terms of employment are express or implied.
Payment of Bonus Act 1965 12.3 Labor Legislations and Law
A. The Act does not apply to the following classes of employees:
1. Employees employed in:
a) Life Insurance Corporation of India
b) Industry carried on or under the authority of any department of Central Government
or a State Government or a Local Authority.
c) Indian Red Cross Society or any other institution of like nature including its
branches;
d) Universities and other educational institutions;
e) Hospital, Chambers of Commerce and Social Welfare Institutions established not for
purposes of profits;
f) employed through contractors on building operations;
g) Reserve Bank of India;
h) Industrial Finance Corporation of India, Deposit Insurance Corporation and other
financial corporations being set up financially assisted by the Government, and Unit
Trust of India, Agricultural Refinance Corporation, and Industrial Bank of India,
i) Seamen as defined in Sec. 3(42) of the Merchant Shipping Act, 1958;
j) Inland Water Transport establishment. (Section 32).

12.4 Understanding the Act

1. Objective Behind The Act
The objective of the Payment of Bonus Act, 1965 is to provide for the payment of bonus to
the persons employed in certain establishments on the basis of profits or production. The
object of the Payment of Bonus Act was very clearly described in Jalan Trading v Mill
Mazdoor Sabha 1, the Supreme Court observed that the purpose of the Bonus Act was to
maintain peace and harmony between labour and capital by allowing workers to share the
prosperity of the establishment and prescribing the maximum and minimum rates of bonus,
as well as the scheme of "set-off" and set - on to not only secure the labour's right in the
share of profits but also to ensure a reasonable degree of uniformity.

2. Understanding Bonus
In workplace settings, a bonus is a type of additional compensation an employer gives to an
employee that complements their base pay or salary. A company may use bonuses to reward
achievements, to show gratitude to employees who meet longevity milestones, or to entice
not-yet employees to join a company's ranks.

Bonuses can take various forms, including cash, stock, or stock options. They can be given
to individuals, teams, or the entire company. Companies may also offer incentive bonuses,
such as signing bonuses for new hires, referral bonuses for employees who refer successful
candidates, and retention bonuses to encourage employee loyalty. Performance bonuses are
given for exceptional work and can be given as annual bonuses, spot bonuses, or milestone
bonuses.

In the United States, bonuses are considered taxable income by the Internal Revenue Service
(IRS). This means that employees are required to report their bonuses as part of their taxable
income when they file their taxes. The employer is also required to report the bonus to the
Centre for Distance Education 12.4 Acharya Nagarjuna University

IRS and to withhold taxes from the employee's bonus payment at the time it is paid. The
amount of tax withheld from a bonus payment is based on the employee's tax bracket and the
tax laws in effect at the time the bonus is paid.

It's important for employees to be aware of the tax implications of bonuses, as failing to
report them can result in penalties and interest charges from the IRS. Employees should
keep good records of their bonus payments and consult with a tax professional if they have
any questions about how to report their bonuses on their tax return.

3. Incentive Bonus
Incentive bonuses include signing bonuses, referral bonuses, and retention bonuses. A
signing bonus is a monetary offer that companies extend to top-talent candidates to entice
them to accept a position—especially if they are being aggressively pursued by rival firms.
In theory, paying an initial bonus payment will result in greater company profits down the
line. Signing bonuses are routinely offered by professional sports teams attempting to lure
top-tier athletes away from competitive clubs.

Referral bonuses are presented to employees who recommend candidates for open positions,
which ultimately leads to the hiring of said candidates. Referral bonuses incentivize
employees to refer prospects with strong work ethics, sharp skills, and positive attitudes.

Companies offer retention bonuses to key employees, in an effort to encourage loyalty,

especially in downward economies or periods of organizational changes. This financial
incentive is an expression of gratitude that lets employees know their jobs are secure over
the long haul.

4 Holiday Bonuses
Some companies hand out bonuses specifically during the December holidays season.
Holiday bonuses can take various forms, such as cash, gift cards, or other types of gifts.
They can be given to individual employees or to the entire company. Some companies give
holiday bonuses to all of their employees, while others only give them to certain employees,
such as those who have been with the company for a certain length of time or who have
achieved certain performance goals.

Some countries have codified holidays bonuses as part of the labor law. Aguinaldo, for
example, is an annual Christmas bonus that businesses in Mexico are required by law to pay
to their employees. The payment, sometimes called the "thirteenth salary", must be made by
Dec. 20 of each year. It is usually equivalent to 15 days of the employee's salary. It is
typically given to all employees, regardless of their job title or length of service. Companies
that fail to make an aguinaldo payment may be fined as much as 5,000 times the legal daily
minimum wage.

Some other Latin American nations, such as Costa Rica and El Salvador, also require
employers to pay their employees an aguinaldo.
Payment of Bonus Act 1965 12.5 Labor Legislations and Law
5 Performance Bonuses
Performance bonuses reward employees for exceptional work. They are customarily offered
after the completion of projects or at the end of fiscal quarters or years. Performance
bonuses may be doled out to individuals, teams, departments, or to the company-wide staff.
A reward bonus may be either a one-time offer or a periodic payment. While reward bonuses
are usually given in cash, they sometimes take the form of stock compensation, gift cards,
time off, holiday turkeys, or simple verbal expressions of appreciation.

Examples of reward bonuses include annual bonuses, spot bonus awards, and milestone
bonuses. Spot bonuses, which reward employees who deserve special recognition, are
micro-bonus payments, typically valued at around $50. Workers who reach longevity
milestones—for example, 10 years of employment with a given firm—may be recognized
with additional compensation.

Some businesses build bonus structures into employee contracts, where any profits earned
during a fiscal year will be shared amongst the employees. In most cases, C-suite executives
are awarded larger bonuses than lower-level employees.

6. Bonus Inflation
While bonuses are traditionally issued to high-performing, profit-generating employees,
some companies opt to issue bonuses to lower-performing employees as well, even though
businesses that do this tend to grow more slowly and generate less money. Some businesses
resort to distributing across-the-board bonuses in an effort to quell jealousies and employee
backlash. After all, it's easier for management to pay bonuses to everyone than to explain to
inadequate performers why they were denied.

Furthermore, it can be difficult for an employer to accurately assess their employees'

performance success. For example, employees who fail to make their activity quotas may be
very hard workers. However, their performance may be hampered by any number of
conditions out of their control, such as unavoidable production delays or an economic
downturn.

7. Special Considerations
A. Bonuses in Lieu of Pay
Companies are increasingly replacing raises with bonuses—a trend that vexes many
employees. While employers can keep wage increases low by pledging to fill pay gaps with
bonuses, they are under no obligation to follow through. Because employers pay bonuses on
a discretionary basis, they may keep their fixed costs low by withholding bonuses during
slow years or recessionary periods. This approach is much more viable than increasing
salaries annually, only to cut wages during a recession.

B. Dividends and Bonus Shares

In addition to employees, shareholders may receive bonuses in the shape of dividends,
which are carved from the profits realized by the company. In lieu of cash dividends, a
company can issue bonus shares to investors. If the company is short on cash, the bonus
shares of company stock provide a way for it to reward shareholders who expect a regular
Centre for Distance Education 12.6 Acharya Nagarjuna University

income from owning the company's stock. The shareholders may then sell the bonus shares
to meet their cash needs or they can opt to hold onto the shares.

12.5 Why Do Companies Give Bonuses

Companies give bonuses to employees for a variety of reasons, such as to:

Encourage certain behavior: Bonuses can be used as an incentive to encourage employees to

perform at their best or to achieve certain goals.

a) Reward good performance: Bonuses can be given to recognize and reward

employees for exceptional performance or for meeting certain performance targets.
b) Show appreciation/Boost morale: Bonuses can be given as a way for companies to
show appreciation to their employees and boost morale.
c) Retain key employees: Companies may offer retention bonuses to key employees to
encourage them to stay with the company, especially during times of economic
uncertainty or organizational change.
d) Attract top talent: Companies may offer signing bonuses to top-talent candidates as
an incentive to accept a job offer, especially if they are being aggressively pursued
by rival firms.
e) Share company success: In addition to rewarding employees, companies may
distribute bonuses to shareholders through a special dividend or a bonus issue, which
is an offer of free additional shares of the company's stock.

Details of Payment of Bonus Act, 1965

To reward the employee of the organization by sharing the

Objective
profits earned and is linked to productivity

Applicable To Any establishment with 20 or more employees

Employees getting Rs. 21,000 per month or less (basis + DA,

Eligibility excluding other allowances) and have completed 30 working
days in that financial year

Salary / Wages only include basic and DA for bonus payment

Components of Bonus and the rest of allowances (eg, HRA, overtime, etc.) are
excluded

Should be paid at the minimum rate of 8.33% and maximum

Min / Max and time limits
rate of 20%. It needs to be paid within 8 months from the close
on bonus payments
of the accounting year
Payment of Bonus Act 1965 12.7 Labor Legislations and Law

Employees can be disqualified if they are dismissed on the

Disqualification of bonus
basis of fraud, misconduct, or any similar situation

12.6 Calculation for Bonus Payable

With a min rate of 8.33% and max rate of 20%, when wages or salary exceeds Rs. 7,000 or
the minimum wages fixed by the government, the bonus will be payable on Rs. 7,000 or
the minimum wages as fixed by govt., whichever is higher.

As per the amendment on the Payment of Bonus Bill passed in 2015, if the gross earning of
the employee is below Rs. 21,000, employers are liable to pay bonuses. The bonus will be
calculated as follows:

➢ If salary is equal to or less than Rs. 7,000, then the bonus will be 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 will be calculated on Rs. 7,000 by
using the formula: Bonus= 7,000 x 8.33 /100

Examples:
1. If A’s Salary (Basic + DA) is Rs. 6,000, then bonus payable will be: 6,000 x 8.33 / 100=
Rs. 500 per month (Rs. 6,000 per year)

2. If B’s Salary (Basic + DA) is Rs. 7,500, then bonus payable will be: 7,000 x 8.33 / 100=
Rs. 583 per month (Rs. 6,996 per year)

12.7 Types of Bonus Payments

Some bonuses are distributed quarterly, others yearly. Some are a one-time thing, others are
recurring. It all depends on what role you are in, what level you are at, what you contribute,
what your leadership is like, and what kind of company you work for (among many other
factors). Some of the common types of bonuses are given below-

Annual Bonus Spot Bonus

It is usually based on overall company A spot bonus is for people who go above and
performance. So you may get a large or small beyond their normal duty and is usually tied
bonus depending on how successful your to a task that was outside the scope of your
organization was that year as well as how big role. It’s generally a one-time thing, if not an
a part of that success you are. This can also be occasional occurrence depending on budget,
considered as ‘profit sharing’. priorities, and work efficiency.

Signing Bonus Retention Bonus

It is a one-time bonus provided when you A retention bonus is somewhat similar to a

sign on to a new role. Companies usually signing bonus and is given for retaining
offer signing bonuses when an employee is valuable employees. It’s generally given
moving to a new city for a job and the during an acquisition, merger or to make
Centre for Distance Education 12.8 Acharya Nagarjuna University

company wants to cover some of the cost. It someone stick around for an extra period of
is also a way for employers to make up for time if they were looking to leave.
salary demands they can’t meet.

Referral Bonus Holiday Bonus

A holiday bonus is another way to recognize

A referral bonus is given to current
employees for their hard work and to give
employees on referring great candidates for
them an extra boost during an especially
jobs at their company. It’s generally given
expensive time of the year. It’s often but not
when the candidate is hired and has stayed
always a set percentage of your annual salary
on for several months (usually 3-6 months).
(say anywhere from 5% to 10%)

12.8 Eligibility For Bonus Under The Act

The payment of bonus is a statutory right under the act and According to the Section 8 of the
act, any employer who has worked for a minimum of 30 days in an accounting year, shall be
eligible for a bonus.

In East Asiatic Co. Ltd. Vs Industrial Tribunal 3, it was held that a retrenched employee is
eligible for bonus if they worked for a min of 30 days and have a salary of 10,000 pm in a
year.

In the case of J. K. Ginning & Pressing Factory v. Second Labour Court, Akola & Others 4,
a factory employed ten seasonal employees, and the issue of their bonus eligibility arose.
The Bombay High Court ruled that the Act does not exclude such seasonal workers from
employment; the only criterion for eligibility is that they meet the Section 8 requirements.
As a result, even seasonal employees were deemed to be entitled to bonus payments under
the Act.

12.9 Disqualification From Bonus Under The Act

According to the sec 9 of the act an employee shall be disqualified from receiving bonus
under the Payment of Bonus Act, 1965, if he is dismissed from service for:

➢ Fraud, or
➢ Riotous or violent behavior while on the premises of the establishment, or
➢ Theft, misappropriation or sabotage of any property of the establishment

This provision is based on the recommendation of Bonus Commission, which stated that:

After all, bonus can only be shared by those workers who promote the stability and well-
being of the industry, not by those who positively exhibit disruptive tendencies. Bonuses,
without a doubt, impose a duty of good behaviour.

The appellant, a bus conductor working for a government of Tamil Nadu undertaking, was
dismissed from service in Pandian Roadways Corporation Ltd. vs. Presiding Officer 5.
Following that, the petitioner and management reached an agreement, and the petitioner as
Payment of Bonus Act 1965 12.9 Labor Legislations and Law
appointed as a new entrant. Following that, the petitioner claimed an bonus of rs 1,842 for the
duration after his re-appointment. the court ruled in the case that " If an employee is
dismissed from service, he is disqualified from receiving any bonus under the said Act, not
just the bonus for the accounting year," the court ruled.

In Gammon India Ltd Vs Niranjan Das 6, the court held that an employee who is dismissed
from service for fraud, riotous or aggressive behaviour on the premises of the company, or
who is guilty of theft, misappropriation, or sabotage of any establishment's property is
disqualified from receiving bonus for the accounting year under section 9 of the Payment of
Bonus Act, 1965. A dismissed employee who has been reinstated with back pay has evidently
not committed the above crimes and has not been fired. As a result, he is entitled to a bonus.

12.10 Rights Of Employer And Employee

A. The Said act defines the rights available to the employees as defined below:

➢ Right to claim bonus due under the Act, which allows them to make a request to the
government for payment and recovery of bonus amounts that are not paid to them
within one year of their due date
➢ The right to take any dispute to a Labour Court or Tribunal; however, it is necessary
to remember that employees who are not entitled to bonuses are unable to take their
case to a Labour Court or Tribunal.
➢ Right to seek clarity to obtain details about whatever products are in the name of the
business so that they can determine whether or not they are being fairly compensated
for their services.

B. The rights available to the Employer against any exploitation or the protection of their
business are given as below:

➢ Rights to bring any dispute to the Labour Court or the Tribunal over a request for an
interpretation of any clause of the Act.
➢ Right to deduct a fair amount from an employee's bonus on account of a bonus
already paid as a festival bonus or in the event of a monetary loss caused by the
employee's misbehaviour.
➢ Right to deduct the value of a bonus paid to an employee who has been fired for
misbehaviour, offensive behaviour, or obstructing the establishment's land.

1. Payment Of Minimum Bonus

Section 10 of the Act states that, regardless of whether the employer has some allocable
surplus in the accounting year, each employer must pay each employee a minimum bonus
equivalent to 8.33 percent of the employee's salary or wage earned during the accounting
year, or one hundred rupees, whichever is greater. However, if an employee is under the age
of fifteen at the start of the accounting year, the terms of this Section refer to that employee
as if the words "one hundred rupees" were replaced with "sixty rupees." Section 10 of the Act
does not contradict Articles 19 and 301 of the Constitution. Even if the employer loses money
during the fiscal year, he must pay the minimum bonus as according to section 10 of the act.
Centre for Distance Education 12.10 Acharya Nagarjuna University

In J.K. Chemicals Ltd. vs. Govt. of Maharashtra7 the court held that the company would not
be relieved from its liability to pay minimum bonus, if the bonus liability is negligible in
comparison to the loss incurred. If the employer's damages were not caused by employee
wrongdoing, the employer must pay the statutory minimum bonus.

2. Payment Of Maximum Bonus

If the allocable surplus for any accounting year referred to in Section 10 exceeds the amount
of the minimum bonus available to workers under that Section, the employer is allowed to
pay a bonus equal to each employee's salary or wage received during that accounting year. In
determining the allocable surplus under this Section, the amount set on or set off under the
provisions of Section 15 must be taken into account in accordance with those provisions.

3. Provisions Related To Bonus Under The Code On Wages, 2019

The chapter relating to bonus payments under the code on wages applies only to
establishments employing at least 20 workers on any day during the accounting year, similar
to the provisions of the Payment of Bonus Act, 1965.

An annual bonus would be paid to all workers whose salaries do not exceed a certain monthly
sum (to be determined by the federal or state governments). Bonuses are paid on the higher of
the minimum wage or the wage limit set by the relevant government. Along the lines of the
Payment of Bonus Act, the Code on wages lists disqualifications for receiving bonuses. It
should be noted, however, that the Code also states that removal from service due to a
conviction for sexual assault would be provided a ground for disqualification of bonus under
the Code.

4. Offences and penalties Under Payment of Bonus Act

In the event of a breach of the provisions of the Act or rules, the punishment is six months
imprisonment or Rs.1000 fine, or both.

If failure to comply with the directives or requisitions issued, the punishment is imprisonment
for six months or a fine of Rs.1000, or both.

Let’s say a company, firm, corporation, or group of individuals commits a crime.

In that instance, the company’s director, partner, principal, or officer in charge of the
company’s operations should get presumed guilty unless the individual can show that the
crime was committed without his knowledge or that he exercised all due diligence.

5. Classes of employees not entitled under the Act

The payment of Bonus Act does not apply to certain classes of employees, which include:

➢ Life Insurance Corporation,

➢ Universities and other educational institutions,
➢ The Unit Trust of India,
 Payment of Bonus Act 1965 12.11 Labor Legislations and Law
➢ Employees employed through contractors on building operations, to months employed
by the Reserve Bank of India,
➢ The Indian Red Cross Society institution of a like nature,
➢ The Industrial Finance Corporation of India,
➢ the National Bank for Agriculture and Rural Development,
➢ Institutions (including hospitals, commerce and social welfare institutions’ chambers)
were established not for purposes of profit,
➢ Financial Corporations,
➢ the Industrial Development Bank of India,
➢ Employees of inland water transport establishments passing through another country

6. Amendment to the Payment of Bonus Act, 1965

Year Of Eligibility Limit
S.No Calculation Ceiling (Rs. Per month)
Amendment (Rs. Per Month)

1. 1965 Rs. 1600 Rs.750

2. 1985 Rs.2500 Rs. 1600

3. 1995 Rs. 3500 Rs. 2500

4. 2007 Rs. 10000 Rs. 3500

7000 rupees Or, whichever is higher, the

5. 2015 Rs. 21000 minimum salary for scheduled work as
set by the competent government.

12.11Payment of Bonus Rules

In exercise of the powers conferred by section 38 of the Payment of Bonus Act, 1965 (31 of
1965), and in super session of the Payment of Bonus Rules, 1965, the Central Government
hereby makes the following rules, namely:

1. Short title and commencement. – (1) These rules may be called the Payment of Bonus
Rules, 1965.

(2) They shall come into force on the date of their publication in Official Gazette.

2. Definitions. – In these rules -

a) “form” means a form appended to these rules;
b) “act” means the Payment of Bonus Act, 1965 (21 of 1965).
c) “section” means a section of the Act.

3. Authority for granting permission for change of accounting year. – The prescribed
authority for the purposes of the proviso to paragraph (b) of sub-clause (iii) of clause (1) of
section 2 shall be -
Centre for Distance Education 12.12 Acharya Nagarjuna University

a) in case of an establishment in relation to which the Central Government is the

appropriate Government under the Act, the Chief Labour Commissioner (Central);
b) in any other case, the Labour Commissioner of the State in which the establishment is
situated.

4. Maintenance of registers.- Every employer shall prepare and maintain the following
registers, namely:-

a) a register showing the computation of the allocable surplus referred to in clause (4) of
section 2, in form A:
b) a register howing the set-on and set-off of the allocable surplus, under section 15, in
form B.
c) a register showing the details of the amount of bonus due to each of the employees,
the deductions under sections 17 and 18 and the amount actually disbursed, in Form
C.

5. Annual returns. – Every employer shall send a return in Form D to the Inspector so as to
reach him within 30 days after the expiry of the time limit specified in section 19 for payment
of bonus.

12.12 Summary
The Payment of Bonus Act of 1965 aims to legalise the practice of various establishments
paying bonuses. It provides a mechanism for calculating bonus based on profit and
performance. It allows workers to make more money than the minimum wage or salary. This
Act establishes various procedures for different types of businesses, such as banks and
government agencies, as well as businesses that are not corporations or firms. This Act also
establishes a rigorous redress process in addition to the procedure.

12.13 Keywords
1. A bonus is a financial compensation that is above and beyond the normal payment
expectations of its recipient.
2. Bonuses may be awarded by a company as an incentive or to reward good
performance.
3. Typical incentive bonuses a company can give employees include signing, referral,
and retention bonuses.
4. Companies have various ways they can award employee bonuses, including cash,
stock, and stock options.

12.14 Self -Assessment Questions

1. Discuss the meaning and definition of bonus Act,1965?

2. Explain the scope and coverage of bonus Act?

3. Elucidate the main provisions of bonus Act?

4. Converse the employee and employer rights and deductions of bonus Act?
Payment of Bonus Act 1965 12.13 Labor Legislations and Law
12.15 Suggested Readings
1. Labour Laws and Industrial Relations, ,by Dr. Ganesh Kumar Jha, 10 October 2022,
Publisher Notion Press, ISBN-13 979-8888334607.
2. Code On Wages, 2019 With Code On Wages (Central Advisory) Rules, 2021, Bare
Act Commercial Law Publishers, 2022 Edition, commercial ISBN: 978-93-89564-08-
2.
3. Industrial Relations and Labour Laws, by S.C. Srivastava, Publisher: S Chand And
Company Ltd, ISBN: 9789354539961, 9354539963, Year 2022.
4. Labour and Industrial Law, by P L Malik, 20th Edition 2023.
 LESSON -13

WORKMEN COMPENSATION ACT 1923

Learning Objectives

✓ To Understand the Inquiry procedure

✓ To Know the Amount of Compensation
✓ To Study the appointment of Commissioner
✓ To identify the power and Procedure of Commissioners
✓ To examine the appeals and recovery

Structure

13.1 Introduction
13.2 Short title, extent and commencement
13.3 Definitions
13.4 Employer's liability for compensation
13.5 Court of law in respect of any injury
13.6 Amount of compensation
13.7 Compensation to be paid when due and penalty for default
13.8 Method of calculating wages
13.9 Commutation of half-monthly payments
13.10 Distribution of compensation
13.11 Compensation not to be assigned, attached or charged
13.12. Notice and claim
13.13. Power to require from employers statements regarding fatal accidents
13.14 Reports of fatal accidents and serious bodily injuries
13.15 Medical Examination
13.16. Contracting
13.17. Remedies of employer against stranger
13.17.1 Insolvency of employer
13.17.2 Compensation to be first charge on assets transferred by employer
13.18 Special provisions relating to captains and other members of crew of aircrafts
13.19 Returns as to compensation
13.20 Contracting out
13.21 Penalties
13.22 Reference to Commissioners
13.23 Appointment of Commissioners
13.24 Power of Commissioner to require further deposit in cases of fatal accident
13.25 Powers and procedure of Commissioners
13.26 Appearance of parties
13.27 Method of recording evidence
13.28. Power to submit cases
13.29 Registration of agreements
13.30 Effect of failure to register agreement
13.31 Appeals
13.32. Recovery
13.33 Summary
13.34 Key words
Centre for Distance Education 13.2 Acharya Nagarjuna University

13.35 Self Assessment questions

13.36 Suggested Readings

13.1 Introduction
An Act to provide for the payment by certain classes of employers to their
*[Employees] of compensation for injury by accident.

Whereas it is expedient to provide for the payment by certain classes of employers to

their workmen of compensation for injury by accident;
It is hereby enacted as follow

13.2 Short title, extent and commencement

(1) This Act may be called the *[Employee's] Compensation Act, 1923.
(2) It extends to the whole of India .
(3) It shall come into force on the first day of July, 1924.

13.3 Definitions
(1) In this Act, unless there is anything repugnant in the subject or context,--
(a) Omitted by Act 8 of 1959
(b) "Commissioner" means a Commissioner for *[employee]'s Compensation appointed
under section 20;
(c) "compensation" means compensation as provided for by this Act;
(d) "dependant" means any of the following relatives of deceased *[employee], namely:--
(i) a widow, a minor legitimate or adopted son, an unmarried legitimate or adopted daughter
or a widowed mother; and
(ii) if wholly dependant on the earnings of the *[employee] at the time of his death, a son or a
daughter who has attained the age of 18 years and who is infirm;
(iii) if wholly or in part dependant on the earnings of the *[employee] at the time of his
death,--
(a) a widower,
(b) a parent other than a widowed mother,
(c) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or
illegitimate oradopted if married and a minor or if widowed and a minor,
(d) a minor brother or an unmarried sister or a widowed sister if a minor,
(e) a widowed daughter-in-law,
(f) a minor child of a pre-deceased son,
(g) a minor child of a pre-deceased daughter where no parent of the child is alive, or
(h) a paternal grandparent if no parent of the *[employee] is alive;

Explanation.--For the purposes of sub-clause (ii) and items (f) and (g) of sub-clause (iii),
references to a son, daughter or child include an adopted son, daughter or child respectively.
*[(dd) "employee" means a person, who is--
(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of
1989), not permanently employed in any administrative district or sub-divisional office of a
railway and not employed in any such capacity as is specified in Schedule II; or
(ii) (a) a master, seaman or other members of the crew of a ship,
(b) a captain or other member of the crew of an aircraft,
(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in
connection with a motor vehicle,
(d) a person recruited for work abroad by a company, and who is employed outside India in
Workmen Compensation Act 1923 13.3 Labor Legislations and Law
any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or
company, as the case may be, is registered in India; or

(iii) employed in any such capacity as is specified in Schedule II, whether the contract of
employment was made before or after the passing of this Act and whether such contract is
expressed or implied, oral or in writing; but does not include any person working in the
capacity of a member of the Armed Forces of the Union; and any reference to any employee
who has been injured shall, where the employee is dead, include a reference to his dependants
or any of them;]
(e) "employer" includes anybody of persons whether incorporated or not and any managing
agent of an employer and the legal representative of a deceased employer, and, when the
services of a *[employee] are temporarily lent or let on hire to another person by the person
with whom the *[employee] has entered into a contract of service or apprenticeship, means
such other person while the *[employee] is working for him;
(f) "managing agent" means any person appointed or acting as the representative of another
person for the purpose of carrying on such other person's trade or business, but does not
include an individual manager subordinate to an employer;
(ff) "minor" means a person who has not attained the age of eighteen years;
(g) "partial disablement" means, where the disablement is of a temporary nature, such
disablement as reduces the earning capacity of a *[employee] in any employment in which he
was engaged at the time of the accident resulting in the disablement, and, where the
disablement is of a permanent nature, such disablement as reduces his earning capacity in
every employment which he was capable of undertaking at that time: provided that every
injury specified [in Part II of Schedule I] shall be deemed to result in permanent partial
disablement;
(h) "prescribed" means prescribed by rules made under this Act;
(i) "qualified medical practitioner" means any person registered under any Central Act,
Provincial Act, or an Act of the Legislature of a State providing for the maintenance of a
register of medical practitioners, or, in any area where no such last-mentioned Act is in force,
any person declared by the State Government, by notification in the Official Gazette, to be a
qualified medical practitioner for the purposes of this Act;
(j) Omitted by Act 15 of 1933
(k) "seaman" means any person forming part of the crew of any ship, but does not include the
master of the ship;
(l) "total disablement" means such disablement, whether of a temporary or permanent nature,
as incapacitates a *[employee] for all work which he was capable of performing at the time of
the accident resulting in such disablement:
Provided that permanent total disablement shall be deemed to result from every injury
specified in Part I of Schedule I or from any combination of injuries specified in Part II
thereof where the aggregate percentage of the loss of earning capacity, as specified in the said
Part II against those injuries, amounts to one hundred per cent. or more;
(m) "wages", includes any privilege or benefit which is capable of being estimated in money,
other than a travelling allowance or the value of any travelling concession or a contribution
paid by the employer of a*[employee] towards any pension or provident fund or a sum paid
to a *[employee] to cover any special expenses entailed on him by the nature of his
employment;(n) Omitted by Act 45 of 2009

(2) The exercise and performance of the powers and duties of a local authority or of any
department acting on behalf of the Government shall, for the purposes of this Act, unless a
contrary intention appears, be deemed to be the trade or business of such authority or
Centre for Distance Education 13.4 Acharya Nagarjuna University

department.

(3) The Central Government or the State Government, by notification in the Official Gazette,
after giving not less than three months' notice of its intention so to do, may, by a like
notification, add to Schedule II any class of persons employed in any occupation which it is
satisfied is a hazardous occupation, and the provisions of this Act shall thereupon apply, in
case of a notification by the Central Government, within the territories to which the Act
extends, or, in the case of a notification by the State Government, within the State, to such
classes of persons:
Provided that in making addition, the Central Government or the State Government, as the
case may be, may direct that the provisions of this Act shall apply to such classes of persons
in respect of specified injuries only.

13.4. Employer's liability for compensation

(1) If personal injury is caused to a *[employee] by accident arising out of and in the course
of his employment, his employer shall be liable to pay compensation in accordance with the
provisions of this Chapter:
Provided that the employer shall not be so liable --
(a) in respect of any injury which does not result in the total or partial disablement of the
*[employee] for a period exceeding three days;
(b) in respect of any injury, not resulting in death or permanent total disablement caused by
an accident which is directly attributable to—
(i) the *[employee] having been at the time thereof under the influence of drink or drugs, or
(ii) the wilful disobedience of the *[employee] to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of *[employees], or
(iii) the wilful removal or disregard by the *[employee] of any safety guard or other device
which he knew to have been provided for the purpose of securing the safety of *[employee],
(c) Omitted by Act 5 of 1929.
(2) If an *[employee] employed in any employment specified in Part A of Schedule III
contracts any disease specified therein as an occupational disease peculiar to that
employment, or if a *[employee], whilst in the service of an employer in whose service he
has been employed for a continuous period of not less than six months (which period shall
not include a period of service under any other employer in the same kind of employment) in
any employment specified in Part B of Schedule III, contracts any disease specified therein as
an occupational disease peculiar to that employment, or if a *[employee] whilst in the service
of one or more employers in any employment specified in Part C of Schedule III for such
continuous period as the Central Government may specify in respect of each such
employment, contracts any disease specified therein as an occupational disease peculiar to
that employment, the contracting of the disease shall be deemed to be an injury by accident
within the meaning of this section and, unless the contrary is proved, the accident shall be
deemed to have arisen out of, and in the course of, the employment:
Provided that if it is proved,--

(a) that an *[employee] whilst in the service of one or more employers in any employment
specified in Part C of Schedule III has contracted a disease specified therein as an
occupational disease peculiar to that employment during a continuous period which is less
than the period specified under this sub-section for that employment; and

(b) that the disease has arisen out of and in the course of the employment, the contracting of
such disease shall be deemed to be an injury by accident within the meaning of this section:
Workmen Compensation Act 1923 13.5 Labor Legislations and Law
Provided further that if it is proved that a *[employee] who having served under any
employer in any employment specified in Part B of Schedule III or who having served under
one or more employers in any employment specified in Part C of that Schedule, for a
continuous period specified under this subsection for that employment and he has after the
cessation of such service contracted any disease specified in the said Part B or the said Part C,
as the case may be, as an occupational disease peculiar to the employment and that such
disease arose out of the employment, the contracting of the disease shall be deemed to be an
injury by accident within the meaning of this section.

(2A) If a *[employee] employed in any employment specified in Part C of Schedule III

contracts any occupational disease peculiar to that employment, the contracting whereof is
deemed to be an injury by accident within the meaning of this section, and such employment
was under more than one employer, all such employers shall be liable for the payment of the
compensation in such proportion as the Commissioner may, in the circumstances, deem just.

(3) The Central Government or the State Government, after giving, by notification in the
Official Gazette, not less than three months' notice of its intention so to do, may, by a like
notification, add any description of employment to the employments specified in Schedule III
and shall specify in the case of employments so added the diseases which shall be deemed for
the purposes of this section to be occupational diseases peculiar to those employments
respectively, and thereupon the provisions of sub-section(2) shall apply, in the case of a
notification by the Central Government, within the territories to which this Act extends or, in
case of a notification by the State Government, within the State as if such diseases had been
declared by this Act to be occupational diseases peculiar to those employments.

(4) Save as provided by sub-sections (2), (2A)] and (3) no compensation shall be payable to a
*[employee] in respect of any disease unless the disease is directly attributable to a specific
injury by accident arising out of and in the course of his employment.

(5) Nothing herein contained shall be deemed to confer any right to compensation on a
*[employee] in respect of any injury if he has instituted in a Civil Court a suit for damages in
respect of the injury against the employer or any other person; and no suit for damages shall
be maintainable by a *[employee] in any

13.5 Court of law in respect of any injury

(a) if he has instituted a claim to compensation in respect of the injury before a
Commissioner; or
(b) if an agreement has been come to between the *[employee] and his employer providing
for the payment of compensation in respect of the injury in accordance with the provisions of
this Act.

13.6 Amount of compensation

(1) Subject to the provisions of this Act, the amount of compensation shall be as follows,
namely:--
(a) where death results an from the injury: an amount equal to fifty per cent. of the monthly
wages of the deceased *[employee] multiplied by the relevant factor; or an amount of *[one
lakh and twenty thousand rupees], whichever is more;

(b) where permanent total disablement results from the injury : an amount equal to sixty per
cent. of the monthly wages of the injured *[employee] multiplied by the relevant factor;
Centre for Distance Education 13.6 Acharya Nagarjuna University

*[one lakh and twenty thousand rupees], whichever is more;

*[Provided that the Central Government may, by notification in the Official Gazette, from
time to time, enhance the amount of compensation mentioned in clauses (a) and (b).]
Explanation I.--For the purposes of clause (a) and clause (b), "relevant factor", in relation to a
*[employee] means the factor specified in the second column of Schedule IV against the
entry in the first column of that Schedule specifying the number of years which are the same
as the completed years of the age of the *[employee] on his last birthday immediately
preceding the date on which the compensation fell due.
Explanation II .- Omitted by Act 45 of 2009.

(c) where permanent partial disablement result from the injury:

(i) in the case of an injury specified in Part II of Schedule I, such percentage of the
compensation which would have been payable in the case of permanent total disablement as
is specified therein as being the percentage of the loss of earning capacity caused by that
injury; and
(ii) in the case of an injury not specified in Schedule I, such percentage of the compensation
payable in the case of permanent total disablement as is proportionate to the loss of earning
capacity (as assessed by the qualified medical practitioner) permanently caused by the injury;

Explanation I.--Where more injuries than one are caused by the same accident, the amount of
compensation payable under this head shall be aggregated but not so in any case as to exceed
the amount which would have been payable if permanent total disablement had resulted from
the injuries.

Explanation II.--In assessing the loss of earning capacity for the purpose of sub-clause (ii),
the qualified medical practitioner shall have due regard to the percentages of loss of earning
capacity in relation to different injuries specified in Schedule I;
(d) where temporary disablement, whether total or partial, results from the injury : a half
monthly payment of the sum equivalent to twenty-five per cent. of monthly wages of the
*[employee], to be paid in accordance with the provisions of sub-section (2).

(1A) Notwithstanding anything contained in sub-section (1), while fixing the amount of
compensation payable to a *[employee] is respect of an accident occurred outside India, the
Commissioner shall take into account the amount of compensation, if any, awarded to such
*[employee] in accordance with the law of the country in which the accident occurred and
shall reduce the amount fixed by him by the amount of compensation awarded to the
*[employee] in accordance with the law of that country.

*[(1B) The Central Government may, by notification in the Official Gazette, specify, for the
purposes of sub-section (I), such monthly wages in relation to an employee as it may consider
necessary.]
(2) The half-monthly payment referred to in clause (d) of sub-section (1) shall be payable on
the sixteenth day --
(i) from the date of disablement where such disablement lasts for a period of twenty-eight
days or more, or
(ii) after the expiry of a waiting period of three days from the date of disablement where such
disablement lasts for a period of less than twenty-eight days; and thereafter half-monthly
during the disablement or during a period of five years, whichever period is shorter:

Provided that--
Workmen Compensation Act 1923 13.7 Labor Legislations and Law

(a) there shall be deducted from any lump sum or half-monthly payments to which the
*[employee] is entitled the amount of any payment or allowance which the *[employee] has
received from the employer by way of compensation during the period of disablement prior
to the receipt of such lump sum or of the first half-monthly payment, as the case may be; and

(b) no half-monthly payment shall in any case exceed the amount, if any, by which half the
amount of the monthly wages of the *[employee] before the accident exceeds half the amount
of such wages which he is earning after the accident.
Explanation.--Any payment or allowance which the *[employee] has received from the
employer towards his medical treatment shall not be deemed to be a payment or allowance
received by him by way of compensation within the meaning of clause (a) of the proviso.
*[(2A) The employee shall be reimbursed the actual medical expenditure incurred by him for
treatment of injuries caused during course of employment.]

(3) On the ceasing of the disablement before the date on which any half-monthly payment
falls due there shall be payable in respect of that half-month a sum proportionate to the
duration of the disablement in that half-month.

(4) If the injury of the *[employee] results in his death, the employer shall, in addition to the
compensation under sub-section (1), deposit with the Commissioner a sum of *[not less than
five thousand rupees] for payment of the same to the eldest surviving dependant of the
*[employee] towards the expenditure of the funeral of such *[employee] or where the
*[employee] did not have a dependant or was not living with his dependant at the time of his
death to the person who actually incurred such expenditure.]
*[Provided that the Central Government may, by notification in the Official Gazette, from
time to time, enhance the amount specified in this sub-section.]

13.7 Compensation to be paid when due and penalty for default

(1) Compensation under section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent
claimed, he shall be bound to make provisional payment based on the extent of liability
which he accepts, and, such payment shall be deposited with the Commissioner or made to
the *[employee], as the case may be, without prejudice to the right of the*[employee] to
make any further claim.
(3) Where any employer is in default in paying the compensation due under this Act within
one month from the date it fell due, the Commissioner shall--
(a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest
thereon at the rate of twelve per cent. per annum or at such higher rate not exceeding the
maximum of the lending rates of any scheduled bank as may be specified by the Central
Government, by notification in the
Official Gazette, on the amount due; and
(b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in
addition to the amount of the arrears and interest thereon, pay a further sum not exceeding
fifty per cent, of such amount by way of penalty:
Provided that an order for the payment of penalty shall not be passed under clause (b) without
giving a reasonable opportunity to the employer to show cause why it should not be passed.
Centre for Distance Education 13.8 Acharya Nagarjuna University

13.8 Method of calculating wages

In this Act and for the purposes thereof the expression "monthly wages" means the
amount of wages deemed to be payable for a month's service (whether the wages are payable
by the month or by whatever other period or at piece rates), and calculated as follows,
namely:--
(a) where the *[employee] has, during a continuous period of not less than twelve
months immediately preceding the accident, been in the service of the employer who is liable
to pay compensation, the monthly wages of the *[employee] shall be one-twelfth of the total
wages which have fallen due for payment to him by the employer in the last twelve months of
that period;

(b) where the whole of the continuous period of service immediately preceding the
accident during which the *[employee] was in the service of the employer who is liable to
pay the compensation was less than one month, the monthly wages of the *[employee] shall
be the average monthly amount which, during the twelve months immediately preceding the
accident, was being earned by a *[employee] employed on the same work by the same
employer, or, if there was no *[employee] so employed, by a *[employee] employed on
similar work in the same locality;

(c) in other cases [including cases in which it is not possible for want of necessary
information to calculate the monthly wages under clause (b)], the monthly wages shall be
thirty times the total wages earned in respect of the last continuous period of service
immediately preceding the accident from the employer who is liable to pay compensation,
divided by the number of days comprising such period.
Explanation.--A period of service shall, for the purposes of this section be deemed to be
continuous which has not been interrupted by a period of absence from work exceeding
fourteen days.
(2)- omitted by Act 15 of 1933

Review
(1) Any half-monthly payment payable under this Act, either under an agreement
between the parties or under the order of a Commissioner, may be reviewed by the
Commissioner, on the application either of the employer or of the *[employee] accompanied
by the certificate of a qualified medical practitioner that there has been a change in the
condition of the workman or, subject to rules made under this Act, on application made
without such certificate.

(2) Any half-monthly payment may, on review under this section, subject to the
provisions of this Act, be continued, increased, decreased or ended, or if the accident is found
to have resulted in permanent disablement, be converted to the lump sum to which the
workman is entitled less any amount which he has already received by way of half-monthly
payments.

13.9 Commutation of half-monthly payments

Any right to receive half-monthly payments may, by agreement between the parties
or, if the parties cannot agree and the payments have been continued for not less than six
months, on the application of either party to the Commissioner, be redeemed by the payment
of a lump sum of such amount as may be agreed to by the parties or determined by the
Commissioner, as the case may be.
Workmen Compensation Act 1923 13.9 Labor Legislations and Law
13.10 Distribution of compensation
(1) No payment of compensation in respect of a *[employee] whose injury has
resulted in death, and no payment of a lump sum as compensation to a woman or a person
under a legal disability, shall be made otherwise than by deposit with the Commissioner, and
no such payment made directly by an employer shall be deemed to be a payment of
compensation:

Provided that, in the case of a deceased *[employee], an employer may make to any
dependant advances on account of compensation of an amount equal to three months' wages
of such *[employee] and so much of such amount] as does not exceed the compensation
payable to that dependant shall be deducted by the Commissioner from such compensation
and repaid to the employer.

13.11 Compensation not to be assigned, attached or charged

Save as provided by this Act no lump sum or half-monthly payment payable under this Act
shall in any way be capable of being assigned or charged or be liable to attachment or pass to
any person other than the *[employee] by operation of law nor shall any claim be set off
against the same.

13.12. Notice and claim

(1) No claim for compensation shall be entertained by a Commissioner unless notice
of the accident has been given in the manner hereinafter provided as soon as practicable after
the happening thereof and unless the claim is preferred before him within two years of the
occurrence of the accident or in case of death within two years from the date of death:
Provided that where the accident is the contracting of a disease in respect of which the
provisions of sub-section (2) of section 3 are applicable, the accident shall be deemed to have
occurred on the first of the days during which the *[employee] was continuously absent from
work in consequence of the disablement caused by the disease:

13.13. Power to require from employers statements regarding fatal accidents

(1) Where a Commissioner receives information from any source that a *[employee]
has died as a result of an accident arising out of and in the course of his employment, he may
send by registered post a notice to the *[employee]'s employer requiring him to submit,
within thirty days of the service of the notice, a statement, in the prescribed form, giving the
circumstances attending the death of the *[employee], and indicating whether, in the opinion
of the employer, he is or is not liable to deposit compensation on account of the death.

(2) If the employer is of opinion that he is liable to deposit compensation, he shall

make the deposit within thirty days of the service of the notice.

(3) If the employer is of opinion that he is not liable to deposit compensation, he shall
in his statement indicate the grounds on which he disclaims liability.

(4) Where the employer has so disclaimed liability, the Commissioner, after such
inquiry as he may think fit, may inform any of the dependants of the deceased *[employee]
that it is open to the dependants to prefer a claim for compensation, and may give them such
other further information as he may think fit.
Centre for Distance Education 13.10 Acharya Nagarjuna University

13.14 Reports of fatal accidents and serious bodily injuries

(1) Where, by any law for the time being in force, notice is required to be given to
any authority, by or on behalf of an employer, of any accident occurring on his premises
which results in death or serious bodily injury, the person required to give the notice shall,
within seven days of the death or serious bodily injury, send a report to the Commissioner
giving the circumstances attending the death or serious bodily injury: Provided that where the
State Government has so prescribed the person required to give the notice may instead of
sending such report to the Commissioner send it to the authority to whom he is required to
give the notice. Explanation.--"Serious bodily injury" means an injury which involves, or in
all probability will involve the permanent loss of the use of, or permanent injury to, any limb,
or the permanent loss of or injury to the sight or hearing, or the fracture of any limb, or the
enforced absence of the injured person from work for a period exceeding twenty days.

(2) The State Government may, by notification in the Official Gazette, extend the provisions
of subsection (1) to any class of premises other than those coming within the scope of that
sub-section, and may, by such notification, specify the persons who shall send the report to
the Commissioner.

(3) Nothing in this section shall apply to factories to which the Employees' State Insurance
Act, 1948 (34 of 1948), applies.

13.15 Medical Examination

(1) Where a *[employee] has given notice of an accident, he shall, if the employer, before the
expiry of three days from the time at which service of the notice has been effected offers to
have him examined free of charge by a qualified medical practitioner, submit himself for
such examination, and any *[employees] who is in receipt of a half-monthly payment under
this Act shall, if so required, submit himself for such examination from time to time:
Provided that a *[employee] shall not be required to submit himself for examination by a
medical practitioner otherwise than in accordance with rules made under this Act, or at more
frequent intervals than may be prescribed.

(2) If a *[employee], on being required to do so by the employer under subsection (1) or by

the Commissioner at any time, refuses to submit himself for examination by a qualified
medical practitioner or in any way obstructs the same, his right to compensation shall be
suspended during the continuance of such refusal or obstruction unless, in the case of refusal,
he was prevented by any sufficient cause from so submitting himself.

(3) If a *[employee], before the expiry of the period within which he is liable under sub-
section (1) to be required to submit himself for medical examination, voluntarily leaves
without having been so examined the vicinity of the place in which he was employed, his
right to compensation shall be suspended until he returns and offers himself for such
examination.

(4) Where a *[employee], whose right to compensation has been suspended under sub-section
(2) or subsection (3), dies without having submitted himself for medical examination as
required by either of those sub-sections, the Commissioner may, if he thinks fit, direct the
payment of compensation to the dependants of the deceased*[employee].

(5) Where under sub-section (2) or sub-section (3) a right to compensation is suspended, no
compensation shall be payable in respect of the period of suspension, and, if the period of
Workmen Compensation Act 1923 13.11 Labor Legislations and Law
suspension commences before the expiry of the waiting period referred to in clause (d) of
sub-section (1) of section 4, the waiting period shall be increased by the period during which
the suspension continues.

13.16. Contracting
Where any person (hereinafter in this section referred to as the principal) in the course
of or for the purposes of his trade or business contracts with any other person (hereinafter in
this section referred to as the contractor) for the execution by or under the contractor of the
whole or any part of any work which is ordinarily part of the trade or business of the
principal, the principal shall be liable to pay to any *[employee] employed in the execution of
the work any compensation which he would have been liable to pay if that *[employee] had
been immediately employed by him; and where compensation is claimed from the principal,
this Act shall apply as if references to the principal were substituted for references to the
employer except that the amount of compensation shall be calculated with reference to the
wages of the *[employee] under the employer by whom he is immediately employed.

13.17. Remedies of employer against stranger

Where a *[employee] has recovered compensation in respect of any injury caused
under circumstances creating a legal liability of some person other than the person by whom
the compensation was paid to pay damages in respect thereof, the person by whom the
compensation was paid and any person who has been called on to pay an indemnity under
section 12 shall be entitled to be indemnified by the person so liable to pay damages as
aforesaid.

13.16.1 Insolvency of employer

Where any employer has entered into a contract with any insurers in respect of any
liability under this Act to any *[employee], then in the event of the employer becoming
insolvent or making a composition or scheme of arrangement with his creditors or, if the
employer is a company, in the event of the company having commenced to be wound up, the
rights of the employer against the insurers as respects that liability shall, notwithstanding
anything in any law for the time being in force relating to insolvency or the winding up of
companies, be transferred to and vest in the *[employee], and upon any such transfer the
insurers shall have the same rights and remedies and be subject to the same liabilities as if
they were the employer, so, however, that the insurers shall not be under any greater liability
to the *[employee] than they would have been under the employer.

(2) If the liability of the insurers to the *[employee] is less than the liability of the employer
to the *[employee], the *[employee] may prove for the balance in the insolvency proceedings
or liquidation.

(3) Where in any case such as is referred to in sub-section (1) the contract of the employer
with the insurers is void or voidable by reason of non-compliance on the part of the employer
with any terms or conditions of the contract (other than a stipulation for the payment of
premia), the provisions of that subsection shall apply as if the contract were not void or
voidable, and the insurers shall be entitled to prove in the insolvency proceedings or
liquidation for the amount paid to the *[employee]:

13.17.2. Compensation to be first charge on assets transferred by employer

Where an employer transfers his assets before any amount due in respect of any
compensation, the liability wherefor accrued before the date of the transfer, has been paid,
Centre for Distance Education 13.12 Acharya Nagarjuna University

such amount shall, notwithstanding anything contained in any other law for the time being in
force, be a first charge on that part of the assets so transferred as consists of immovable
property. 15. Special provisions relating to masters and seamen.- This Act shall apply in the
case of *[employees] who are masters of ships or seamen subject to the following
modifications, namely:-- (1) The notice of the accident and the claim for compensation may,
except where the person injured is the master of the ship, be served on the master of the ship
as if he were the employer, but where the accident happened and the disablement commenced
on board the ship, it shall not be necessary for any seaman to give any notice of the accident.

(2) In the case of the death of a master or seaman, the claim for compensation shall be made
within one year after the news of the death has been received by the claimant or, where the
ship has been or is deemed to have been lost with all hands, within eighteen months of the
date on which the ship was, or is deemed to have been, so lost: Provided that the
Commissioner may entertain any claim to compensation in any case notwithstanding that the
claim has not been preferred in due time as provided in this sub-section, if he is satisfied that
the failure so to prefer the claim was due to sufficient cause.

(3) Where an injured master or seaman is discharged or left behind in any part of India or in
any foreign country any depositions taken by any Judge or Magistrate in that part or by any
Consular Officer in the foreign country and transmitted by the person by whom they are
taken to the Central Government or any State Government shall, in any proceedings for
enforcing the claim, be admissible in evidence—

(a) if the deposition is authenticated by the signature of the Judge, Magistrate or Consular
Officer before whom it is made;
(b) if the defendant or the person accused, as the case may be, had an opportunity by himself
or his agent to cross-examine the witness; and
(c) if the deposition was made in the course of a criminal proceeding, on proof that the
deposition was made in the presence of the person accused, and it shall not be necessary in
any case to prove the signature or official character of the person appearing to have signed
any such deposition and a certificate by such person that the defendant or the person accused
had an opportunity of cross-examining the witness and that the deposition if made in a
criminal proceeding was made in the presence of the person accused shall, unless the contrary
is proved, be sufficient evidence that he had that opportunity and that it was so made.
(4) No half-monthly payment shall be payable in respect of the period during which the
owner of the ship is, under any law in force for the time being relating to merchant shipping,
liable to defray the expenses of maintenance of the injured master or seaman.

13.18 Special provisions relating to captains and other members of crew of aircrafts
This Act shall apply in the case of *[employees] who are captains or other members
of the crew of aircrafts subject to the following modifications, namely:--

(1) The notice of the accident and the claim for compensation may, except where the person
injured is the captain of the aircraft, be served on the captain of the aircraft and if he were the
employer, but where the accident happened and the disablement commenced on board the
aircraft it shall not be necessary for any member of the crew to give notice of the accident.

(2) In the case of the death of the captain or other member of the crew, the claim for
compensation shall be made within one year after the news of the death has been received by
the claimant or, where the aircraft has been or is deemed to have been lost with all hands,
Workmen Compensation Act 1923 13.13 Labor Legislations and Law
within eighteen months of the date on which the aircraft was, or is deemed to have been, so
lost: Provided that the Commissioner may entertain any claim for compensation in any case
notwithstanding that the claim had not been preferred in due time as provided in this sub-
section, if he is satisfied that the failure so to prefer the claim was due to sufficient cause.

13.19 Returns as to compensation

The State Government may, by notification in the Official Gazette, direct that every
person employing *[employees], or that any specified class of such persons, shall send at
such time and in such form and to such authority, as may be specified in the notification, a
correct return specifying the number of injuries in respect of which compensation has been
paid by the employer during the previous year and the amount of such compensation together
with such other particulars as to the compensation as the State Government may direct.

13.20 Contracting out

Any contract or agreement whether made before or after the commencement of this
Act, whereby a *[employee] relinquishes any right of compensation from the employer for
personal injury arising out of or in the course of the employment, shall be null and void in so
far as it purports to remove or reduce the liability of any person to pay compensation under
this Act.

**17A. Every employer shall immediately at the time of employment of an employee, inform
the employee of his rights to compensation under this Act, in writing as well as through
electronic means, in English or Hindi or in the official language of the area of employment,
as may be understood by the employee.

13.21 Penalties
(1) Whoever-- (a) fails to maintain a notice-book which he is required to maintain under sub-
section (3) of section 10, or (b) fails to send to the Commissioner a statement which he is
required to send under sub-section (1) of section 10A, or (c) fails to send a report which
he is required to send under section 10B, or (d) fails to make a return which he is
required to make under section 16 or **(e) fails to inform the employee of his rights to
compensation as required under section 17A, shall be punishable with fine which **shall
not be less than fifty thousand rupees but which may extend to one lakh rupees.

(2) No prosecution under this section shall be instituted except by or with the previous
sanction of a Commissioner, and no Court shall take cognizance of any offence under
this section, unless complaint thereof is made within six months of the date on which the
alleged commission of the offence came to the knowledge of the Commissioner.

13.22 Reference to Commissioners

(1) If any question arises in any proceedings under this Act as to the liability of any
person to pay compensation (including any question as to whether a person injured is
or is not a *[employee]) or as to the amount or duration of compensation (including
any question as to the nature or extent of disablement), the question shall, in default of
agreement, be settled by a Commissioner.
(2) No Civil Court shall have jurisdiction to settle, decide or deal with any question
which is by or under this Act required to be settled, decided or dealt with by a
Commissioner or to enforce any liability incurred under this Act.
Centre for Distance Education 13.14 Acharya Nagarjuna University

13.23 Appointment of Commissioners

(1) The State Government may, by notification in the Official Gazette, appoint any person
*[who is or has been a member of a State Judicial Service for a period of not less than five
years or is or has been for not less than five years an advocate or a pleader or is or has been a
Gazetted officer for not less than five years having educational qualifications and experience
in personnel management, human resource development and industrial relations] to be a
Commissioner for *[employees'] Compensation for such area as may be specified in the
notification.

(2) Where more than one Commissioner has been appointed for any area, the State
Government may, by general or special order, regulate the distribution of business between
them.

(3) Any Commissioner may, for the purpose of deciding any matter referred to him for
decision under this Act, choose one or more persons possessing special knowledge of any
matter relevant to the matter under inquiry to assist him in holding the inquiry.

13.24 Power of Commissioner to require further deposit in cases of fatal accident

(1) Where any sum has been deposited by an employer as compensation payable in respect
of a *[employee] whose injury has resulted in death, and in the opinion of the
Commissioner such sum is insufficient, the Commissioner may, by notice in writing
stating his reasons, call upon the employer to show cause why he should not make a
further deposit within such time as may be stated in the notice.

(2) If the employer fails to show cause to the satisfaction of the Commissioner, the
Commissioner may make an award determining the total amount payable, and requiring
the employer to deposit the deficiency.

13.25 Powers and procedure of Commissioners

The Commissioner shall have all the powers of a Civil Court under the Code of Civil
Procedure, 1908 (5 of 1908), for the purpose of taking evidence on oath (which such
Commissioner is hereby empowered to impose) and of enforcing the attendance of witnesses
and compelling the production of documents and material objects, and the Commissioner
shall be deemed to be a Civil Court for all the purposes of section 195 and of Chapter XXVI
of the Code of Criminal Procedure, 1973 (2 of 1974).

13.26 Appearance of parties

Any appearance, application or act required to be made or done by any person before
or to a Commissioner (other than an appearance of a party which is required for the purpose
of his examination as a witness) may be made or done on behalf of such person by a legal
practitioner or by an official of an Insurance Company or a registered Trade Union or by an
Inspector appointed under sub-section (1) of section 8 of the Factories Act, 1948 (63 of
1948), or under sub-section (1) of section 5 of the Mines Act, 1952 (35 of 1952), or by any
other officer specified by the State Government in this behalf, authorized in writing by such
person, or, with the permission of the Commissioner, by any other person so authorized.

13.27 Method of recording evidence

The Commissioner shall make a brief memorandum of the substance of the evidence
of every witness as the examination of the witness proceeds, and such memorandum shall be
written and signed by the Commissioner with his own hand and shall form part of the record:
 Workmen Compensation Act 1923 13.15 Labor Legislations and Law
Provided that, if the Commissioner is prevented from making such memorandum, he shall
record the reason of his inability to do so and shall cause such memorandum to be made in
writing from his dictation and shall sign the same, and such memorandum shall form part of
the record: Provided further that the evidence of any medical witness shall be taken down as
nearly as may be word for word. *[25A. Time limit for disposal of cases relating to
compensation.

The Commissioner shall dispose of the matter relating to compensation under this Act within
a period of three months from the date of reference and intimate the decision in respect
thereof within the said period to the employee.] 26. Costs.- All costs, incidental to any
proceedings before a Commissioner, shall, subject to rules made under this Act, be in the
discretion of the Commissioner.

13.28. Power to submit cases

A Commissioner may, if he thinks fit, submit any question of law for the decision of the High
Court and, if he does so, shall decide the question in conformity with such decision.

13.29 Registration of agreements

(1) Where the amount of any lamp sum payable as compensation has been settled by
agreement whether by way of redemption of a half-monthly payment or otherwise, or
where any compensation has been so settled as being payable to a woman, or a person
under a legal disability a memorandum thereof shall be sent by the employer to the
Commissioner, who shall, on being satisfied as to its genuineness, record the
memorandum in a register in the prescribed manner.

13.30 Effect of failure to register agreement

Where a memorandum of any agreement the registration of which is required by section 28,
is not sent to the Commissioner as required by that section, the employer shall be liable to
pay the full amount of compensation which he is liable to pay under the provisions of this
Act, and notwithstanding anything contained in the proviso to sub-section (1) of section 4,
shall not, unless the Commissioner otherwise directs, be entitled to deduct more than half of
any amount paid to the *[employee] by way of compensation whether under the agreement or
otherwise.

13.31 Appeals
(1) An appeal shall lie to the High Court from the following orders of a Commissioner, namely:-
-
(a) an order awarding as compensation a lump sum whether by way of redemption of a half-
monthly payment or otherwise or disallowing a claim in full or in part for a lump sum; (aa) an
order awarding interest or penalty under section 4A;
(b) an order refusing to allow redemption of a half-monthly payment;
(c) an order providing for the distribution of compensation among the dependants of a deceased
*[employee], or disallowing any claim of a person alleging himself to be such dependant;
(d) an order allowing or disallowing any claim for the amount of an indemnity under the
provisions of sub-section (2) of section 12; or (e) an order refusing to register a memorandum
of agreement or registering the same or providing for the registration of the same subject to
conditions:
Centre for Distance Education 13.16 Acharya Nagarjuna University

13.32. Recovery
The Commissioner may recover as an arrear of land-revenue any amount payable by
any person under this Act, whether under an agreement for the payment of compensation or
otherwise, and the Commissioner shall be deemed to be a public officer within the meaning
of section 5 of the Revenue Recovery Act, 1890 (1 of 1890).

13.33 Summary
The Workmen’s Compensation Act 1923 is a social security scheme for workers. The
act came into force after the dangers labourers were exposed to come to the fore. Earlier,
there was the Compensation Act of 1884, where it was the employer’s responsibility to pay
compensation to workers only for accidents or injuries on roads. However, post realization
that it was not enough came the Workmen’s Compensation Act 1923. The Workmen’s
Compensation Act, 1923 says that the employer must look after the welfare of employees and
provide adequate compensation in case an employee meets with an accident and sustains
injuries at work premises during working hours. The foremost aim is to ensure that a worker
enjoys a sustainable life after an employment-related injury.

13.35 Key words

Total disablement means such disablement, whether of a temporary or permanent nature, as
incapacitates a *[employee] for all work which he was capable of performing at the time of
the accident resulting in such disablement

Partial disablement means, where the disablement is of a temporary nature, such

disablement as reduces the earning capacity of a *[employee] in any employment in which he
was engaged at the time of the accident resulting in the disablement, and, where the
disablement is of a permanent nature, such disablement as reduces his earning capacity in
every employment which he was capable of undertaking at that time: provided that every
injury specified [in Part II of Schedule I] shall be deemed to result in permanent partial
disablement;

Qualified medical practitioner means any person registered under any Central Act,
Provincial Act, or an Act of the Legislature of a State providing for the maintenance of a
register of medical practitioners, or, in any area where no such last-mentioned Act is in force,
any person declared by the State Government, by notification in the Official Gazette, to be a
qualified medical practitioner for the purposes of this Act;

Method of calculating wages- where the *[employee] has, during a continuous period of not
less than twelve months immediately preceding the accident, been in the service of the
employer who is liable to pay compensation, the monthly wages of the *[employee] shall be
one-twelfth of the total wages which have fallen due for payment to him by the employer in
the last twelve months of that period;

13.36 Self Assessment Questions

1. Briefly explain the Inquiry Procedure of Workmen compensation Act
2. Discuss the Amount of compensation procedure
3. Explain the procedure of appointment of Commissioner
4. Describe the power and Procedure of Commissioners
5. Elaborate the appeals and recovery Workmen compensation Act
Workmen Compensation Act 1923 13.17 Labor Legislations and Law
13.37 Suggested Readings
1. The Employees Compensation Act, 1923- Bare Act with Short Notes [2021
Edn.] December 2020 by Lexis (Author), Universal’s publication, New Delhi, India.

2. Employees’ compensation Act 1923 edition 2023 By commercial's (author),

Commercial law publishers’ (India) private limited.
3. Employees Compensation Act,1923 (Bare Act) Paperback – 1 January 202
by Editorial Board of Professional Book Publishers.
4. Handbook of Employee's Compensation Act, 1923 - 2020 Edition [Paperback]
Kharbanda and Kharbanda.
5. Workmen Compensation Act, 1923 with State Amendments alongwith allied Rules
see
6. Employees Compensation Act, 2009 Paperback – 1 January 2022 by Professional
book publishers.
7. Agarwal, S.L : Labour Relations Law in India, Macmillan Company of India Ltd.,
New Delhi , 1990.
8. Vaid, K.N : Labour Welfare In India , Sri Ram Centre for Industrial Relations, New
Delhi .
9. Malik, P.L : Industrial Law, Eastern Book Company, Lucknow , 1999.

Dr.M.Rama satyanarayana
 LESSON -14

EMPLOYEE STATE INSURANCE ACT 1948

Learning objectives

✓ To study the Establishment of ESI

✓ To Know the Powers of the standing committee
✓ To Identify the Duties of Medical Benefit Council
✓ To Examine the General provisions as to payment of contributions

Structure

14.0Introduction
14.1 Definitions
14.2. Establishment of Employees’ State Insurance Corporation
14.3 Term of office of the members of the Corporation
14.4 Eligibility for re-appointment or re-election
14.5 Authentication of orders, decisions, etc
14.6 Constitution of Standing Committee
14.7 Term of office of members of Standing Committee
14.8. Medical Benefit Council
14.9 Resignation of membership
14.10 Cessation of membership
14.11. Disqualification
14.12 Filling of vacancies
14.13 Fees and allowances
14.14 Principal officers
14.15 Staff
14.16 Powers of the Standing Committee
14.17 Corporation’s power to promote measures for health, etc., of insured persons
14.18 Meetings of Corporation, Standing Committee and Medical Benefit Council.
14.19 Supersession of the Corporation and Standing Committee
14.20 Duties of Medical Benefit Council
14.21 Duties of [Director-General and the Financial Commissioner
14.22 Acts of Corporation, etc., not invalid by reason of defect in constitution, etc.
14.23 Regional Board, Local Committees, Regional and Local Medical Benefit Councils
14.24 Employees’ State Insurance Fund
14.25Contributions
14.26 Principal employer to pay contributions in the first instance
14.27 Recovery of contributions from immediate employer
14.28 General provisions as to payment of contributions.
14.29 Method of payment of contribution
14.30 Recovery of contributions from immediate employer
14.31 General provisions as to payment of contributions
14.32 Method of payment of contribution
14.33 Issue of certificate to the Recovery Officer
14.34 Benefits
14.34.1 Sickness benefit
14.34.2 Maternity Benefit
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14.34.3 Disablement benefit.

14.34.4 Dependants’ benefit
14.34.5 . Occupational disease
14.34.6 Medical Benefit
14.35 Summary
14.36 Key words
14.37 Self Assessment questions
14.38 Suggested Readings

14.0Introduction
(1) This Act may be called the Employees’ State Insurance Act, 1948.

(2) It extends to [the whole of India

(3) It shall come into force on such date or dates as the Central Government may, by
notification in the Official Gazette, appoint, and different dates may be appointed for
different provisions of this Act and for different States or for different parts thereof.

(4) It shall apply, in the first instance, to all factories (including factories belonging to the
[Government]) other than seasonal factories.

Provided that nothing contained in this sub-section shall apply to a factory or establishment
belonging to or under the control of the Government whose employees are otherwise in
receipt of benefits substantially similar or superior to the benefits provided under this Act.

(5) The appropriate Government may, in consultation with the Corporation and [where the
appropriate Government is a State Government, with the approval of the Central
Government], after giving [one month’s] notice of its intention of so doing by notification in
the Official Gazette, extend the provisions of this Act or any of them, to any other
establishment, or class of establishments, industrial, commercial, agricultural or otherwise.

Provided that where the provisions of this Act have been brought into force in any
part of a State, the said provisions shall stand extended to any such establishment or class of
establishments within that part if the provisions have already been extended to similar
establishment or class of establishments in another part of that State.

(6) A factory or an establishment to which this Act applies shall continue to be governed by
this Act notwithstanding that the number of persons employed therein at any time falls below
the limit specified by or under this Act or the manufacturing process therein ceases to be
carried on with the aid of power.

14.1 Definitions
In this Act, unless there is anything repugnant in the subject or context,
(1) “appropriate Government ” means, in respect of establishments under the control of the
Central Government or [a railway administration] or a major port or a mine or oil-field, the
Central Government, and in all other cases, the [State] Government ;

confinement ” means labour resulting in the issue of a living child, or labour after twenty-six
weeks of pregnancy resulting in the issue of a child whether alive or dead ;
Employee State Insurance Act 1948 14.3 Labor Legislations and Law

“contribution ” means the sum of money payable to the Corporation by the principal
employer in respect of an employee and includes any amount payable by or on behalf of the
employee in accordance with the provisions of this Act ;

“ Corporation ” means the Employees’ State Insurance Corporation set up under this Act ;
[(6-A) “ dependant ” means any of the following relatives of a deceased insured person,
namely (i) a widow, a legitimate or adopted son who has not attained the age of twenty-five
years, an unmarried legitimate or adopted daughter ;
(ia) a widowed mother ;]
(ii) if wholly dependent on the earnings of the insured person at the time of his death, a
legitimate or adopted son or daughter who has attained the age of [twenty-five] and who is
infirm ;
(iii) if wholly or in part dependent on the earnings of the insured person at the time of his
death,
(a) a parent other than a widowed mother,
(b) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or
adopted or illegitimate if married and a minor or if widowed and a minor,
(c) a minor brother or an unmarried sister or a widowed sister if a minor,
(d) a widowed daughter-in-law,
(e) a minor child of a pre-deceased son,
(f) a minor child of a pre-deceased daughter where no parent of the child is alive, or
(g) a paternal grand-parent if no parent of the insured person is alive ;]

14.2. Establishment of Employees’ State Insurance Corporation

(1) With effect from such date as the Central Government may, by notification in the Official
Gazette, appoint in this behalf, there shall be established for the administration of the scheme
of Employees’ State Insurance in accordance with the provisions of this Act a Corporation to
be known as the Employees’ State Insurance Corporation.

(2) The Corporation shall be a body corporate by the name of Employees’ State Insurance
Corporation having perpetual succession and a common seal and shall by the said name sue
and be sued.
4. Constitution of Corporation. — The Corporation shall consist of the following members,
namely :
(a) a Chairman to be [appointed] by the Central Government ;
(b) a Vice-Chairman to be [appointed] by the Central Government
(c) not more than five persons to be [appointed] by the Central Government
(d) one person each representing each of the n[States] in which this Act is in force] to be
[appointed] by the State Government concerned ;
(e) one person to be [appointed] by the Central Government to represent the [Union
territories] ;
(f) [ten] persons representing employers to be [appointed] by the Central Government in
consultation with such organisations of employers as may be recognised for the purpose by
the Central Government ;
(g) [ten] persons representing employees to be [appointed] by the Central Government in
consultation with such organisations of employees as may be recognised for the purpose by
the Central Government ;
(h) two persons representing the medical profession to be [appointed] by the Central
Government in consultation with such organisations of medical practitioners as may be
Centre for Distance Education 14.4 Acharya Nagarjuna University

recognised for the purpose by the Central Government ;

[(i) three members of Parliament of whom two shall be members of the House of the People
(Lok Sabha) and one shall be a member of the Council of States (Rajya Sabha) elected
respectively by the members of the House of the People and the members of the Council of
States ; and
(j) the Director-General of the Corporation, ex-officio.]

14.3 Term of office of the members of the Corporation

(1) Save as otherwise expressly provided in this Act, the term of office of members of the
Corporation, other than [the members
referred to in clauses (a), (b), (c), (d) and (e) of section 4 and the ex-officio member,] shall be
four years commencing from the date on which their [appointment] or election is notified.

Provided that a member of the Corporation shall notwithstanding the expiry of the said
period of four years, continue to hold office until the [appointment] or election of his
successor is notified.

14.4 Eligibility for [re-appointment] or re-election

An outgoing member of the Corporation, the Standing Committee, or the Medical
Benefit Council shall be eligible for [reappointment] or re-election as the case may be.

14.5 Authentication of orders, decisions, etc.

All orders and decisions of the Corporation shall be authenticated by the signature of
the Director-General of the Corporation and all other instruments issued by the Corporation
shall be authenticated by the signature of the Director-general or such other officer of the
Corporation as may be authorised by him.

14.6 Constitution of Standing Committee

A Standing Committee of the Corporation shall be constituted from among its
members, consisting o(a) a Chairman [appointed] by the Central Government ;
(b) three members of the Corporation, [appointed] by the Central Government] ;
[(bb) three members of the Corporation representing such three State Governments thereon
as the Central Government may, by notification in the Official Gazette, specify from time to
time ;]
(c) [eight] members elected by the Corporation as follows : —
(ii) [three] members from among the members of the Corporation representing employers ;
(iii) [three] members from among the members of the Corporation representing employees ;
(iv) one member from among the members of the Corporation representing the medical
profession ; and
(v) one member from among the members of the Corporation elected by [Parliament]
[(d) the Director-General of the Corporation, ex-officio.

14.7Term of office of members of Standing Committee

(1) Save as otherwise expressly provided in this Act, the term of office of a member of the
Standing Committee, other than a member referred to in clause (a) or 3 [clause (b) or clause
(bb)] of section 8, shall be two years
from the date on which his election is notified :

Provided that a member of the Standing Committee shall, notwithstanding the expiry of the
said period of two years, continue to hold office until the election of his successor is notified :
Employee State Insurance Act 1948 14.5 Labor Legislations and Law

Provided further that a member of the Standing Committee shall cease to hold office when he
ceases to be a member of the Corporation. (2) A member of the Standing Committee referred
to in clause (a) or 3 [clause (b) or clause (bb)] of section 8 shall hold office during the
pleasure of the Central Government.

14.8. Medical Benefit Council

(1) The Central Government shall constitute a Medical Benefit Council consisting of —
[(a) the Director General, the Employees’ State Insurance Corporation, ex-officio as
Chairman ;
(b) the Director General, Health Services, ex-officio as Co-Chairman
(c) the Medical Commissioner of the Corporation, ex-officio ;
(d) one member each representing each of the 1
[States (other than Union territories)] in which this Act is in force to be 2 [appointed] by the
State Government concerned ;
(e) three members representing employers to be [appointed] by the Central Government in
consultation with such organisations of employers as may be recognised for the purpose by
the Central Government ;
(f) three members representing employees to be [appointed] by the Central Government in
consul-tation with such organisations of employees as may be recognised for the purpose by
the Central Government ; and
(g) three members, of whom not less than one shall be a woman, representing the medical
profession, to be [appointed] by the Central Government in consultation with such
organisations of medical practitioners as may be recognised for the purpose by the Central
Government.

(2) Save as otherwise expressly provided in this Act, the term of office of a member of the
Medical Benefit Council, other than a member referred to in any of the clauses (a) to (d) of
sub-section (1), shall be four years from the date on which his [appointment] is notified:
[Provided that a member of the Medical Benefit Council shall, notwithstanding the expiry of
the said period of four years continue to hold office until the [appointment] of his successor is
notified.

(3) A member of the Medical Benefit Council referred to in clauses (b) and (d) of subsection
(1) shall hold office during the pleasure of the Government [appointing] him.

14.9 Resignation of membership.

A member of the Corporation, the Standing Committee or the Medical Benefit
Council may resign his office by notice in writing to the Central Government and his seat
shall fall vacant on the acceptance of the resignation by that Government.

14.10 Cessation of membership

[(1)] A member of the Corporation, the Standing Committee or the Medical Benefit Council
shall cease to be a member of that body if he fails to attend three consecutive meetings
thereof
Provided that the Corporation, the Standing Committee or the Medical Benefit Council, as
the case may be, may, subject to rules made by the Central Government in this behalf, restore
him to membership.

(2) Where in the opinion of the Central Government any person [appointed] or elected to
Centre for Distance Education 14.6 Acharya Nagarjuna University

represent employers, employees or the medical profession on (sic.) the Corporation, the
Standing Committee or the Medical Benefit Council, as the case may be, has ceased to
represent
such employers, employees or the medical profession, the Central Government may, by
notification in the Official Gazette, declare that with effect from such date as may be
specified
therein such person shall cease to be a member of the Corporation, the Standing Committee
or the Medical Benefit Council, as the case may be.

(3) A person referred to in clause (i) of section 4 shall cease to be a member of the
Corporation when he ceases to be a Member of Parliament.

14.11. Disqualification
A person shall be disqualified for being chosen as or for being a member of the Corporation,
the Standing Committee or the Medical Benefit Council

(a) if he is declared to be of unsound mind by a competent Court ; or

(b) if he is an undischarged insolvent ; or
(c) if he has directly or indirectly by himself or by his partner any interest in subsisting
contract with, or any work being done for, the Corporation except as a medical practitioner
or as a share-holder (not being a Director) of a com-pany ; or
(d) if before or after the commencement of this Act, he has been convicted of an offence
involving moral turpitude.

14.12 Filling of vacancies

(1) Vacancies in the office of [appointed] or elected members of the Corporation, the
Standing Committee Medical Benefit Council shall be filled by [appointment] or election, as
the case may be.

(2) A member of the Corporation, the Standing Committee or the Medical Benefit Council
[appointed] or elected to fill a casual vacancy shall hold office only so long as the
member in whose place he is [appointed] or elected would have been entitled to hold office
if the vacancy had not occurred.

14.13 Fees and allowances

Members of the Corporation, the Standing Committee and the Medical Benefit Council shall
receive such fees and allowances as may from time to time be prescribed by the Central
Government.

14.14 Principal officers

[(1) The Central Government may, in consultation with the Corporation, appoint a Director-
General and a Financial Commissioner.
(2) The Director-General shall be the Chief Executive Officer of the Corporation.
(3) The Director-General and the Financial Commissioner] shall be whole-time officers of the
Corporation and shall not undertake any work unconnected with their office without the
sanction of the Central Government [and of the Corporation
(4) The Director-General or the Financial Commissioner] shall hold office for such period,
not exceeding five years, as may be specified in the order appointing him. An outgoing
[Director-General or Financial Commissioner] shall be eligible for re-appointment if he is
otherwise qualified.
Employee State Insurance Act 1948 14.7 Labor Legislations and Law
(5) The Director-General or the Financial Commissioner shall receive such salary and
allowances as may be prescribed by the Central Government.
(6) A person shall be disqualified from being appointed as or for being [the DirectorGeneral
or the Financial Commissioner] if he is subject to any of the disqualifications specified in
section 13.
(7) The Central Government may at any time remove the Director-General or the Financial
Commissioner] from office and shall do so if such removal is recommended by a resolution
of the Corporation passed at a special meeting called for the purpose and supported by the
votes of not less than two-third is of the total strength of the Corporation.

14.15 Staff
(1) The Corporation may employ such other staff of officers and servants as may be
necessary for the efficient transaction of its business provided that the sanction of the Central
Government shall be obtained for the creation of any post [the maximum monthly salary of
which [exceeds such salary as may be prescribed by the Central Government.

[(2) (a) The method of recruitment, salary and allowances, discipline and other conditions of
service of the members of the staff of the Corporation shall be such as may be specified in the
regulations made by the Corporation in accordance with the rules and orders applicable to the
officers and employees of the Central Government drawing corresponding scales of pay

Provided that where the Corporation is of the opinion that it is necessary to make a departure
from the said rules or orders in respect of any of the matters aforesaid, it shall obtain the prior
approval of the Central Government.

14.16 Powers of the Standing Committee

(1) Subject to the general superintendence and control of the Corporation, the Standing
Committee shall administer the affairs of the Corporation and may exercise any of the powers
and perform any of the functions of the Corporation.

(2) The Standing Committee shall submit for the consideration and decision of the
Corporation all such cases and matters as may be specified in the regulations made in this
behalf.
(3) The Standing Committee may, in its discretion, submit any other case or matter for the
decision of the Corporation.

14.17 Corporation’s power to promote measures for health, etc., of insured persons
The Corporation may, in addition to the scheme of benefits specified in this Act,
promote measures for the improvement of the health and welfare of insured persons and for
the rehabilitation and reemployment of insured persons who have been disabled or injured
and may incur in respect of such measures expenditure from the funds of the Corporation
within such limits as may be prescribed by the Central Government.

14.18 Meetings of Corporation, Standing Committee and Medical Benefit Council.

Subject to any rules made under this Act, the Corporation, the Standing Committee
and the Medical Benefit Council shall meet at such times and places and shall observe such
rules of
procedure in regard to transaction of business at their meetings as may be specified in the
regulations made in this behalf.
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14.19 Supersession of the Corporation and Standing Committee.

(1) If in the opinion of the Central Government, the Corporation or the Standing Committee
persistently makes default in performing the duties imposed on it by or under this Act or
abuses its powers, that Government may, by notification in the official Gazette, supersede the
Corporation, or in the case of the Standing Committee, supersede in consultation with the
Corporation, the Standing Committee :Provided that therefore issuing a notification under
this sub-section the Central Government shall give a reasonable opportunity to the
Corporation or the Standing Committee, as the case may be, to show cause why it should not
be superseded and shall consider the explanations and objections, if any, of the Corporation
or the Standing Committee, as the case may be.

(2) Upon the publication of a notification under sub-section (1) superseding the Corporation
or the Standing Committee, all the members of the Corporation or the Standing Committee,
as the case

14.20 Duties of Medical Benefit Council

The Medical Benefit Council shall —
(a) advise [the Corporation and the Standing Committee] on matters relating to the
administration of medical benefit, the certification for purposes of the grant of benefits and
other connected matters ;
(b) have such powers and duties of investigation as may be prescribed in relation to
complaints against medical practitioners in connection with medical treatment and attendance
; and
(c) perform such other duties in connection with medical treatment and attendance as may be
specified in the regulations.

14.21 Duties of Director-General and the Financial Commissioner

The [Director-general and the Financial Commissioner] shall exercise such powers and
discharge such duties as may be prescribed. They shall also perform such other functions as
may be specified in the regulations.

14.22 Acts of Corporation, etc., not invalid by reason of defect in constitution, etc.
No act of the Corporation, the Standing Committee or the Medical Benefit Council
shall be deemed to be invalid by reason of any defect in the constitution of the Corporation,
the Standing Committee or the Medical Benefit Council, or on the ground that any member
thereof was not entitled to hold or continue in office by reason of any disqualification or of
any irregularity in his [appointment] or election, or by reason of such act having been done
during the period of any vacancy in the office of any member of the Corporation, the
Standing Committee or the Medical Benefit Council.

14.23 Regional Board, Local Committees, Regional and Local Medical Benefit Councils
The Corporation may appoint Regional Boards, Local Committees and Regional and
Local Medical Benefit Councils in such areas and in such manner, and delegate to them such
powers and functions, as may be provided by the regulations

14.24 Employees’ State Insurance Fund

(1) All contributions paid under this Act and all other moneys received on behalf of the
Corporation shall be paid into a fund called the Employees’ State Insurance Fund which shall
be held and administered by the Corporation for the purposes of this Act.
(2) The Corporation may accept grants, donations and gifts from the Central or any
Employee State Insurance Act 1948 14.9 Labor Legislations and Law
[State]Government, Local authority, or any individual or body whether incorporated or not,
for all or any of the purposes of this Act.
[(3) Subject to the other provisions contained in this Act and to any rules or regulations made
in this behalf, all moneys accruing or payable to the said Fund shall be paid into the Reserve
Bank of India or such other bank as may be approved by the Central Government to the credit
of an account styled the Account of the Employees’ State Insurance Fund.

All employees to be insured. — Subject to the provisions of this Act, all employees in
factories or establishments to which this Act applies shall be insured in the manner provided
by this Act.

14.25Contributions
(1) The contribution payable under this Act in respect of an employee shall comprise
contribution payable by the employer (hereinafter referred to as the employer’s contribution)
and contribution payable by the employee (hereinafter referred to as the employee’s
contribution) and shall be paid to the Corporation.

[(2) The contributions shall be paid at such rates as may be prescribed by the Central
Government :
Provided that the rates so prescribed shall not be more than the rates which were in force
immediately before the commencement of the Employees’ State Insurance (Amendment)
Act, 1989 (29 of 1989).]

[(3) The wage period in relation to an employee shall be the unit in respect of which all
contributions shall be payable under this Act.]
(4) The contributions payable in respect of each [wage period] shall ordinarily fall due on the
last day of the [wage period], and where an employee is employed for part of the [wage
period], or is employed under two or more employers during the same [wage period] the
contributions shall fall due on such days as may be specified in the regulations.

[(5) (a) If any contribution payable under this Act is not paid by the principal employer on the
date on which such contribution has become due, he shall be liable to pay simple interest at
the rate of twelve per cent. per annum or at such higher rate as may be specified in the
regulations till the date of its actual payment :
Provided that higher interest specified in the regulations shall not exceed the lending rate of
interest charged by any scheduled bank.
(b) Any interest recoverable under clause (a) may be recovered as an arrear of land revenue
or under section 45-C to section 45-I.
Explanation. — In this sub-section “ scheduled bank ” means a bank for the time being
included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).]

14.26 Principal employer to pay contributions in the first instance

(1) The principal employer shall pay in respect of every employee, whether directly
employed by him or by or through an immediate employer, both the employer’s contribution
and the employee’s contribution.

(2) Notwithstanding anything contained in any other enactment but subject to the provisions
of this Act and the regulations, if any, made thereunder, the principal employer shall,in the
case of an employee directly employed by him (not being an exempted employee), be entitled
to recover from the employee the employee’s contribution by reduction from his wages and
Centre for Distance Education 14.10 Acharya Nagarjuna University

not otherwise :
Provided that no such deduction shall be made from any wages other than such as relate to
the period or part of the period in respect of which the contribution is payable] or in excess of
the sum representing the employee’s contribution for the period.

(3) Notwithstanding any contract to the contrary, neither the principal employer nor the
immediate employer shall be entitled to deduct the employer’s contribution from any wages
payable to an employee or otherwise to recover it from him.

(4) Any sum deducted by the principal employer from wages under this Act shall be
deemed to have been entrusted to him by the employee for the purpose of paying the
contribution in respect of which it was deducted.

(5) The principal employer shall bear the expenses of remitting the contributions to the
Corporation.

14.27 Recovery of contributions from immediate employer

(1) A principal employer, who has paid contribution in respect of an employee employed by
or through an immediate employer, shall be entitled to recover the amount of the contribution
so paid (that is to say the employer’s contribution as well as the employee’s contribution, if
any,) from the immediate employer, either by deduction from any amount payable to him by
the principal employer under any contract, or as a debt payable by the immediate employer.

[(1-A) The immediate employer shall maintain a register of employees employed by or

through him as provided in the regulations and submit the same to the principal employer
before the settlement of any amount payable under sub-section (1).]

(2) In the case referred to in sub-section (1), the immediate employer shall be entitled to
recover the employee’s contribution from the employee employed by or through him by
deduction from wages and not otherwise, subject to the conditions specified in the proviso to
subsection (2) of section 40.

14.28 General provisions as to payment of contributions.

(1) No employee’s contribution shall be payable by or on behalf of an employee whose
average daily wages [during a wage period are below 4[such wages as may be prescribed by
the Central Government.
Explanation. — The average daily wages of an employee shall be calculated [in such manner
as may be prescribed by the Central Government].

(2) Contribution (both the employer’s contribution and the employee’s contribution) shall be
payable by the principal employer for each [wage period] [in respect of the whole or part of
which wages are payable to the employee and not otherwise

14.29 Method of payment of contribution

Subject to the provisions of this Act, the Corporation may make regulations for any matter
relating or incidental to the payment and collection of contributions payable under this Act
and without prejudice to the generality of the foregoing power such regulations may provide
for —
(a) the manner and time of payment of contributions ;
Employee State Insurance Act 1948 14.11 Labor Legislations and Law
(b) in the case of an employee directly employed by him (not being an exempted
employee), be entitled to recover from the employee the employee’s contribution by
reduction from his wages and not otherwise :
(c) Provided that no such deduction shall be made from any wages other than such as
relate to the period or part of the period in respect of which the contribution is
payable] or in excess of the sum representing the employee’s contribution for the
period.
(d) (3) Notwithstanding any contract to the contrary, neither the principal employer nor
the
(e) immediate employer shall be entitled to deduct the employer’s contribution from any
wages
(f) payable to an employee or otherwise to recover it from him.
(g) (4) Any sum deducted by the principal employer from wages under this Act shall be
(h) deemed to have been entrusted to him by the employee for the purpose of paying the
contribution in respect of which it was deducted.
(i) (5) The principal employer shall bear the expenses of remitting the contributions to
the
Corporation.

14.30 Recovery of contributions from immediate employer

(1) A principal employer, who has paid contribution in respect of an employee employed by
or through an immediate employer, shall be entitled to recover the amount of the contribution
so paid (that is to say the employer’s contribution as well as the employee’s contribution, if
any,) from the immediate employer, either by deduction from any amount payable to him by
the principal employer under any contract, or as a debt payable by the immediate employer.
[(1-A) The immediate employer shall maintain a register of employees employed by or
through him as provided in the regulations and submit the same to the principal employer
before the settlement of any amount payable under sub-section (1).]

(2) In the case referred to in sub-section (1), the immediate employer shall be entitled to
recover the employee’s contribution from the employee employed by or through him by
deduction from wages and not otherwise, subject to the conditions specified in the proviso to
subsection (2) of section 40.

14.31 General provisions as to payment of contributions

(1) No employee’s contribution shall be payable by or on behalf of an employee whose
average daily wages [during a wage period are below 4[such wages as may be prescribed by
the Central Government.
Explanation. — The average daily wages of an employee shall be calculated [in such manner
as may be prescribed by the Central Government].

(2) Contribution (both the employer’s contribution and the employee’s contribution) shall be
payable by the principal employer for each [wage period] [in respect of the whole or part of
which wages are payable to the employee and not otherwise].

14.32 Method of payment of contribution

Subject to the provisions of this Act, the Corporation may make regulations for any matter
relating or incidental to the payment and collection of contributions payable under this Act
and without prejudice to the generality of the foregoing power such regulations may provide
for —
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(a) the manner and time of payment of contributions ;

14.33 Issue of certificate to the Recovery Officer

(1)Where any amount is in arrear under this Act, the authorised officer may issue, to the
Recovery Officer, a certificate under his signature specifying the amount of arrears and the
Recovery Officer, on receipt of such certificate, shall proceed to recover the amount specified
therein from the factory or establishment or, as the case may be, the principal or immediate
employer by one or more of the modes mentioned below : —
(a) attachment and sale of the movable or immovable property of the factory or establishment
or, as the case may be, the principal or immediate employer ;
(b) arrest of the employer and his detention in prison ;
(c) appointing a receiver for the management of the movable or immovable
properties of the factory or establishment, or, as the case may be, the employer :

14.34 Benefits
(1) Subject to the provisions of this Act, the insured persons, [their dependants or the persons
hereinafter mentioned, as the case may be,] shall be entitled to
the following benefits, namely : —
(a) periodical payments to any insured person in case of his sickness certified by a duly
appointed medical practitioner [or by any other person possessing such qualifications and
experience as the Corporation may, by regulations, specify in this behalf] (hereinafter
referred to as sickness benefit) ;

[(b) periodical payments to an insured woman in case of confinement or miscarriage or

sickness arising out of pregnancy, confinement, premature birth of child or miscarriage, such
woman being certified to be eligible for such payments by an authority specified in this
behalf by the regulations (hereinafter referred to as maternity benefit) ;]

(c) periodical payments to an insured person suffering from disablement as a result of an

employment injury sustained as an employee under this Act and certified to be eligible for
such payments by an authority specified in this behalf by the regulations (hereinafter referred
to as disablement benefit) ;

(d) periodical payments to such dependants of an insured person who dies as a result of an
employment injury sustained as an employee under this Act, as are entitled to compensation
under this Act (hereinafter referred to as dependants’ benefit) ;

(e) medical treatment for and attendance on insured persons (hereinafter referred to as
medical benefit) ; [and]

[(f) payment to the eldest surviving member of the family of an insured person who has died,
towards the expenditure on the funeral of the deceased insured person, or, where the insured
person did not have a family or was not living with his family at the time of his death, to the
person who actually incurs the expenditure on the funeral of the deceased insured person (to
be known as [funeral expenses].
Provided that the amount of such payment shall not exceed [such amount as may be
prescribed by the Central Government] and the claim for such payment shall be made within
three months of the death of the insured person or within such extended period as the
Corporation or any officer or authority authorised by it in this behalf may allow.]
Employee State Insurance Act 1948 14.13 Labor Legislations and Law
(2) The Corporation may, at the request of the appropriate Government, and subject to such
conditions as may be laid down in the regulations, extend the medical benefits to the family
of an insured person
When person eligible for sickness benefit
When person deemed available for sickness benefit.

14.34.1 Sickness benefit

The qualification of a person to claim sickness benefit, the conditions subject to which such
benefit may be given, the rate and period thereof shall be such as may be prescribed by the
Central Government.

14.34.2 Maternity Benefit

The qualification of an insured woman to claim maternity benefit, the conditions
subject to which such benefit may be given, the rates and period thereof shall be such as may
be prescribed by the Central Government.

14.34.3 Disablement benefit.

Subject to the provisions of this Act 4
(a) a person who sustains temporary disablement for not less than three days (excluding the
day of accident) shall be entitled to periodical payment [at such rates and for such periods and
subject to such conditions as may be prescribed by the Central Government] ;

(b) a person who sustains permanent disablement, whether total or partial, shall be entitled to
periodical payment 6[at such rates and for such periods and subject to such conditions as may
be prescribed by the Central Government].

Presumption as to accident arising in course of employment.

For the purposes of this Act, an accident arising in the course of [an employee’s]
employment shall be presumed, in the absence of evidence to the contrary, also to have arisen
out of that employment.

Accidents happening while acting in breach of regulations, etc.

An accident shall be deemed to arise out of and in the course of [an employee’s] employment
not withstanding that he is at the time of the accident acting in contravention of the provisions
of any law applicable to him, or of any orders given by or on behalf of his employer or that
he is acting without instructions from his employer, if —
(a) the accident would have been deemed so to have arisen had the act not been done in
contravention as aforesaid or without instructions from his employer, as the case may be ; and

(b) the act is done for the purpose of and in connection with the employer’s trade or business.

Accidents happening while travelling in employer’s transport.

(1) An accident happening while an [employee] is, with the express or implied permission
of his employer, travelling as a passenger by any vehicle to or from his place of work shall,
notwithstanding that he is under no obligation to his employer to travel by that vehicle, be
deemed to arise out of and in the course of his employment, if —
(a) the accident would have been deemed so to have arisen had he been under such obligation
; and
Centre for Distance Education 14.14 Acharya Nagarjuna University

(b) at the time of the accident, the vehicle —

(i) is being operated by or on behalf of his employer or some other person by whom it is
provided in pursuance of arrangements made with his employer ; and
(ii) is not being operated in the ordinary course of public transport service.
(2) In this section “ vehicle ” includes a vessel and an aircraft.

Accidents happening while meeting emergency

An accident happening to anemployee] in or about any premises at which he is for the

time being employed for the purpose of his employer’s trade or business shall be deemed to
arise out of and in the course of his employment, if it happens while he is taking steps, on an
actual or supposed emergency at those
premises, to rescue, succour or protect persons who are, or are thought to be or possibly to be,
injured or imperiled, or to avert or minimize serious damage to property.]

Accidents happening while commuting to the place of work and vice versa.
An accident occuring to an employee while commuting from his residence to the
place of employment for duty or from the place of employment to his residence after
performing duty, shall be deemed to have arisen out of and in the course of employment if
nexus between the circumstances, time and place in which the accident occured and the
employment is established.]

14.34.4 Dependants’ benefit

(1) If an insured person dies as a result of an employment injury sustained as an employee
under this Act (whether or not he was in receipt of any periodical payment for temporary
disablement in respect of the injury) dependants’ benefit shall be payable [at such rates and
for such periods and subject to such conditions as may be prescribed by the
Central Government] to his dependants specified in [sub-clause (i), sub-clause (i-a) and]
subclause (ii) of clause (6-A) of section 2.

(2) In case the insured person dies without leaving behind him the dependants as aforesaid,
the dependants’ benefit shall be paid to the other dependants of the deceased [at such rates
and for such periods and subject to such conditions as may be prescribed by the Central
Government.]

14.34.5 . Occupational disease

(1) If an employee employed in any establishment specified in Part A of the Third Schedule
contracts any disease specified therein as an occupational disease peculiar to that
employment, or if an employee employed in the employment specified in Part B of that
Schedule for a continuous period of not less than six months contracts any disease specified
therein as an occupational disease peculiar to that employment or if an employee employed in
any employment specified in Part C of that Schedule for such continuous period as
the Corporation may specify in respect of each such employment, contracts any disease
specified therein as an occupational disease peculiar to that employment, the contracting of
the disease shall, unless the contrary is proved, be deemed to be an “ employment injury ”
arising out of and in the course of employment.

(2) (i) Where the Central Government or a State Government, as the case may be, adds any
description of employment to the employment specified in Schedule III to the Workmen’s
Compensation Act, 1923* (8 of 1923) by virtue of the powers vested in it under sub-section
Employee State Insurance Act 1948 14.15 Labor Legislations and Law
(3) of Sec. 3 of the said Act, the said description of employment and the occupational
diseases specified under that sub-section as peculiar to that description of employment shall
be deemed to form part of the Third Schedule.

(ii) Without prejudice to the provisions of clause (i), the Corporation after giving, by
notification in the Official Gazette, not less than three months’ notice of its intention so to do,
may, by a like notification, add any description of employment to the employments specified
in the Third Schedule and shall specify in the case of employments so added the diseases
which
shall be deemed for the purposes of this section to be occupational diseases peculiar to those
employments respectively and thereupon the provisions of this Act shall apply, as if such
diseases
had been declared by this Act to be occupational diseases peculiar to those employments.

(3) Save as provided by sub-sections (1) and (2), no benefit shall be payable to an employee
in respect of any disease unless the disease is directly attributable to a specific injury by
accident arising out of and in the course of his employment.

(4) The provisions of section 51-A shall not apply to the cases to which this section apply.]

Bar against receiving or recovery of compensation or damages under any other law
An insured person or his dependants shall not be entitled to receive or recover,
whether from the employer of the insured person or from any other person, any compensation
or damages under the Workmen’s Compensation Act, 1923* (8 of 1923), or any other law for
the time being in force or otherwise, in respect of an employment injury sustained by the
insured person as an employee under this Act.]

Determination of question of disablement

Any question
(a) whether the relevant accident has resulted in permanent disablement ; or
(b) whether the extent of loss of earning capacity can be assessed provisionally or finally ; or
(c) whether the assessment of the proportion of the loss of earning capacity is provisional or
final ; or
(d) in the case of provisional assessment, as to the period for which such assessment shall
hold good, shall be determined by a medical board constituted in accordance with the
provisions of the regulations and any such question shall hereafter be referred to as the “
disablement question

References to medical boards and appeals to medical appeal tribunals and Employees’
Insurance Courts.
(1) The case of any insured person for permanent disablement benefit shall be referred by the
Corporation to a medical board for determination of the disablement question and if, on that
or any subsequent reference, the extent of loss of earning capacity of the insured person is
provisionally assessed, it shall again be so referred to the medical board not later than the end
of the period taken into account by the provisional assessment.

(2) If the insured person or the Corporation is not satisfied with the decision of the medical
board, the insured person or the Corporation may appeal in the prescribed manner and within
the prescribed time to
(i) the medical appeal tribunal constituted in accordance with the provisions of the
Centre for Distance Education 14.16 Acharya Nagarjuna University

regulations with a further right of appeal in the prescribed manner and within the prescribed
time to the Employees’ Insurance Court, or
(ii) the Employees’ Insurance Court directly Provided that no appeal by an insured person
shall lie under this sub-section if such person has applied for commutation of disablement
benefit on the basis of the decision of the medical board and received the commuted value of
such benefit :

Provided further that no appeal by the Corporation shall lie under this sub-section if the
Corporation paid the commuted value of the disablement benefit on the basis of the decision
of the medical board.

Review of decisions by medical board or medical appeal tribunal

(1) Any decision under this Act of a medical board or a medical appeal tribunal may be
reviewed at any time by the medical board or the medical appeal tribunal, as the case may be,
if it is satisfied by fresh evidence that the decision was given in consequence of the non-
disclosure or misrepresentation by the employee or any other person of a material fact
(whether the non-disclosure or misrepresentation was or was not fraudulent).

(2) Any assessment of the extent of the disablement resulting from the relevant employment
injury may also be reviewed by a medical board if it is satisfied that since the making of the
assessment there has been a substantial and unforeseen aggravation of the result of the
relevant injury :

Review of dependants’ benefit.

(1) Any decision awarding dependants’ benefit under this Act may be reviewed at any time
by the Corporation if it is satisfied by fresh evidence that the decision was given in
consequence of non-disclosure or misrepresentation by the claimant or any other person of a
material fact (whether the non-disclosure or misrepresentation was or was not fraudulent) or
that the decision is no longer in accordance with this Act due to any birth or death or due to
the marriage, re-marriage, or cessor or infirmity of, or attainment of the age of eighteen years
by, a claimant.

(2) Subject to the provisions of this Act, the Corporation may, on such review as aforesaid,
direct that the dependants’ benefit be continued, increased, reduced or discontinued.

14.34.6 Medical Benefit.

(1) An insured person or (where such medical benefit is extended to his family) a member of
his family whose condition requires medical treatment and attendance shall be entitled to
receive medical benefit.

(2) Such medical benefit may be given either in the form of out-patient treatment and
attendance in a hospital or dispensary, clinic or other institution or by visits to the home of
the insured person or treatment as in-patient in a hospital or other institution.

(3) A person shall be entitled to medical benefit during any [period] for which contributions
are payable in respect of him or in which he is qualified to claim sickness benefit or maternity
benefit [or is in receipt of such disablement benefit as does not disentitle him to medical
benefit under the regulations] :
Provided that a person in respect of whom contribution ceases to be payable under this Act
may be allowed medical benefit for such period and of such nature as may be provided under
Employee State Insurance Act 1948 14.17 Labor Legislations and Law
the
regulations :

[Provided further that an insured person who ceases to be in insurable employment on

account of permanent disablement shall continue, subject to payment of contribution and
such other conditions as may be prescribed by the Central Government, to receive medical
benefit till the date on which he would have vacated the employment on attaining the age of
superannuation had he not sustained such permanent disablement

[Provided also that an insured person who has attained the age of superannuation, a person
who retires under a Voluntary Retirement Scheme or takes premature retirement, and his
spouse shall be eligible to receive medical benefits subject to payment of contribution and
such other conditions as may be prescribed by the Central Government.

Provision of medical treatment by [State] Government.

(1) The [State]Government shall provide for insured persons and (where such benefit is
extended to their families) their families in the [State], reasonable medical, surgical and
obstetric treatment :

Provided that the [State] Government may, with the approval of the Corporation, arrange for
medical treatment at clinics of medical practitioners on such scale and subject to such terms
and conditions as may be agreed upon.

(2) Where the incidence of sickness benefit payment to insured persons in any 2[State] is
found to exceed the all-India average, the amount of such excess shall be shared between the
Corporation and the 1[State] Government in such proportion as may be fixed by agreement
between them :

Provided that the Corporation may in any case waive the recovery of the whole or any part of
the share which is to be borne by the [State] Government.

(3) The Corporation may enter into an agreement with a [State] Government in regard to the
nature and scale of the medical treatment that should be provided to insured persons and
(where such medical benefit is extended to the families) their families (including provision of
buildings, equipment, medicines, and staff) and for the sharing of the cost thereof and of any
excess in the incidence of sickness benefit to insured persons between the Corporation and
the[State] Government.

(4) In default of agreement between the Corporation and any [State] Government as
aforesaid, the nature and extent of the medical treatment to be provided by the
[State]Government and the proportion in which the cost thereof and of the excess in the
incidence of sickness benefit shall be shared between the Corporation and that Government,
shall be determined by an arbitrator (who shall be or shall have been a Judge of the [High
Court [of a State]]) appointed by the Chief Justice of India and the award of the arbitrator
shall be binding on the Corporation and the [State] Government.

Punishment for false statement.

Whoever, for the purpose of causing any increase in payment or benefit under this Act, or for
the purpose of causing any payment or benefit to be made where no payment or benefit is
authorised by or under this Act, or for the purpose of avoiding any payment to be made by
Centre for Distance Education 14.18 Acharya Nagarjuna University

himself under this Act or enabling any other person to avoid any such payment, knowingly
makes or causes to be made any false statement or false representation, shall be punishable
with imprisonment for a term which may extend to [six months] or with fine not exceeding
[two thousand] rupees, or with both.
[Provided that where an insured person is convicted under this section, he shall not be entitled
for any cash benefit under this Act for such period as may be prescribed by the Central
Government.]

Punishment for failure to pay contributions, etc.

If any person —
(a) fails to pay any contribution which under this Act he is liable to pay, or
(b) deducts or attempts to deduct from the wages of an employee the whole or any part of the
employer’s contribution, or
(c) in contravention of section 72 reduces the wages or any privileges or benefits admissible
to an employee, or
(d) in contravention of section 73 or any regulation dismisses, discharges, reduces or
otherwise punishes an employee, or
(e) fails or refuses to submit any return required by the regulations or makes a false return, or
(f) obstructs any Inspector or other official of the corporation in the discharge of his duties, or
(g) is guilty of any contravention of or non-compliance with any of the requirements of this
Act or the rules or the regulations in respect of which no special penalty is provided,[he shall
be punishable —
[(i) where he commits an offence under clause (a), with imprisonment for a term which may
extend to three years but —
(a) which shall not be less than one year, in case of failure to pay the employee’s contribution
which has been deducted by him from the employee’s wages and shall also be liable to fine
of ten thousand rupees ;
(b) which shall not be less than six months, in any other case and shall also be liable to fine of
five thousand rupees :
Provided that the Court may, for any adequate and special reasons to be recorded in the
judgment, impose a sentence of imprisonment for a lesser term ;
(ii) where he commits an offence under any of the clauses (b) to (g) (both inclusive), with
imprisonment for a term which may extend to one year or with fine which may extend to four
thousand rupees, or with both]

Enhanced punishment in certain cases after previous conviction.

Whoever, having been convicted by a Court of an offence punishable under this Act, commits
the same offence shall, for every such subsequent offence, be punishable with imprisonment
for a term which may extend to [two years and with fine of five thousand rupees]:

Provided that where such subsequent offence is for failure by the employer to pay any
contribution which under this Act, he is liable to pay, he shall, for every such subsequent
offence, be punishable with imprisonment for a term which may extend to [five years but
which shall not be less than two years and shall also be liable to fine of twenty-five thousand
rupees].

Power to recover damages.

(1) Where an employer fails to pay the amount due in respect of any contribution or any
Employee State Insurance Act 1948 14.19 Labor Legislations and Law
other amount payable under this Act, the Corporation may recover [from the employer by
way of penalty such damages, not exceeding the amount of arrears as may be specified in the
regulations]

Power of Court to make orders.

(1) Where an employer is convicted of an offence for failure to pay any contribution payable
under this Act, the Court may, in addition to awarding any punishment, by order, in writing,
require him within a period specified in the order (which the Court may if it thinks fit and on
application in that behalf, from time to time, extend), to pay the amount of contribution in
respect of which the offence was committed [and to furnish the
return relating to such contributions].

(2) Where an order is made under sub-section (1), the employer shall not be liable under this
Act in respect of the continuation of the offence during the period or extended period, if any,
allowed by the Court, but if, on the expiry of such period or extended period, as the case may
be,
the order of the Court has not been fully complied with, the employer shall be deemed to
have committed a further offence and shall be punishable with imprisonment in respect
thereof under section 85 and shall also be liable to pay fine which may extend to [one
thousand] rupees for every day after such expiry on which the order has not been complied
with.]

Prosecutions.
(1) No prosecution under this Act shall be instituted except by or with the previous sanction
of the Insurance Commissioner [or of such other officer of the Corporation
as may be authorised in this behalf by the [Director-General of the Corporation]].

[(2) No Court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the First
Class shall try any offence under this Act.

(3) No Court shall take cognizance of any offence under this Act, except on a complaint
made in writing in respect thereof .

Offences by companies
(1) If the person committing an offence under this Act is a company, every person, who at
the time the offence was committed was in charge of, and was responsible to the company for
the conduct of the business of the company, as well as thecompany, shall be deemed to be
guilty of the offence and shall be liable to be proceeded againstand punished accordingly :

Provided that nothing contained in this sub-section shall render any person liable to any
punishment, if he proves that the offence was committed without his knowledge or that he
exercised all due diligence to prevent the commission of such offence.
Notwithstanding anything contained in sub-section (1), where an offence under this Act has
been committed with the consent or connivance of, or is attributable to, any neglect on the
part of, any director or manager, secretary or other officer of the company, such director,
manager, secretary or other officer shall be deemed to be guilty of that offence and shall be
liable to be proceeded against and punished accordingly.
Centre for Distance Education 14.20 Acharya Nagarjuna University

14.35 Summary
The Employees’ State Insurance Scheme is an integrated measure of Social Insurance
embodied in the Employees’ State Insurance Act and it is designed to accomplish the task of
protecting ‘employees’ as defined in the Employees’ State Insurance Act, 1948 against the
impact of incidences of sickness, maternity, disablement and death due to employment injury
and to provide medical care to insured persons and their families. The ESI Scheme applies to
factories and other establishment’s viz. Road Transport, Hotels, Restaurants, Cinemas,
Newspaper, Shops, and Educational/Medical Institutions wherein 10 or more persons are
employed. However, in some States threshold limit for coverage of establishments is still 20.
Employees of the aforesaid categories of factories and establishments, drawing wages upto
Rs.15,000/- a month, are entitled to social security cover under the ESI AcT.

14.36 Key words

Contributions- The contribution payable under this Act in respect of an employee shall
comprise contribution payable by the employer (hereinafter referred to as the employer’s
contribution) and contribution payable by the employee (hereinafter referred to as the
employee’s contribution) and shall be paid to the Corporation.

Cessation of membership- A member of the Corporation, the Standing Committee or the

Medical Benefit Council shall cease to be a member of that body if he fails to attend three
consecutive meetings thereof
Provided that the Corporation, the Standing Committee or the Medical Benefit Council, as
the case may be, may, subject to rules made by the Central Government in this behalf, restore
him to membership.

Establishment of Employees’ State Insurance Corporation-With effect from such date as

the Central Government may, by notification in the Official Gazette, appoint in this behalf,
there shall be established for the administration of the scheme of Employees’ State Insurance
in accordance with the provisions of this Act a Corporation to be known as the Employees’
State Insurance Corporation.

14.37 Self Assessment questions

1. Briefly Explain the Establishment of ESI Act
2. Discuss the Power of Standing Committee in ESI Act
3. Describe the Duties of Medical Benefit Council
4. Examine the General provisions as to payment of contributions

14.38 Suggested Readings

1. The Employees State Insurance Act 1948 Bare Act with Amendments 2023 Edition
November 2022 by Government of India (Author).
2. Employees' State Insurance Act, 1948 along with Rules and Regulations 2020
by Lexis (Author), Universal’s publication, New Delhi, India.
3. Sinha, G.P. & Sinha,, P.R.N : Industrial Relations and Labour Legislations, Oxford
and IBH Publishing Co., New Delhi , 1980.
4. Goswamy, V.G : Labour and Industrial Relations Law, Central Law Agency,
Allahabad , 2004.
Employee State Insurance Act 1948 14.21 Labor Legislations and Law

5. Employees State Insurance Act, 1948 Paperback – 1 January 2019 by S.A.

Chari (Author), Asia law house, Hyderabad.

 LESSON -15

EMPLOYEES PROVIDENT FUND

Learning objectives

✓ To Understand the Procedure of Employees Fund Scheme

✓ To Know the Central board and Appointment of Officers
✓ To Learn the Appeals and Procedure of Tribunal
✓ To Examine the offences and Penalties of Employees Fund Scheme

Structure
15.1 Introduction
15.2. Definitions
15.3 Establishment to include all departments and branches
15.4. Power to add to Schedule I
15.5 Employees’ Provident Fund Schemes
15.6.Central Board
15.7 Executive Committee
15.8 Board of Trustees to body corporate
15.9 Appointment of officers
15.10 Delegation
15.11 Contributions and matters which may be provided for in Schemes
15.12. Employees’ Pension Scheme
15.13 Employees’ Deposit linked Insurance Scheme
15.14 Laying of schemes before Parliament
15.14 Laying of schemes before Parliament
15.15 Modification of scheme.
15.16. Determination of money due from employers
15.17 Review of orders passed under section 7A
15.18Determination of escaped amount
15.19Tribunal
15.20 Appeals to Tribunal
15.21 Procedure of Tribunals
15.22 Right of appellant to take assistance of legal practitioner and of Government, etc., to
appoint presenting officers.
15.23 Orders of Tribunal
15.24 Mode of recovery of moneys due from employers
15.25 Recovery of moneys by employers and contractors
15.26 Issue of certificate to the Recovery Officer
15.27 Recovery Officer to whom certificate is to be forwarded.
15.28 Validity of certificate and amendment thereof
15.29 Stay of proceedings under certificate and amendment or withdrawal thereof
15.30 Application of certain provisions of Income-tax Act
15.31 Fund to be recognised under Act 11 of 1922.
15.32 Inspectors
15.33 Penalties
15.34 Offences by companies
15.35 Power of court to make orders
Centre for Distance Education 15.2 Acharya Nagarjuna University

15.36 Special provisions relating to existing provident funds.

15.37 Act not to apply to certain establishments
15.38. Authorizing certain employers to maintain provident fund accounts
15.39. Power to exempt
15.40. Transfer of accounts
15.41 Protection of action taken in good faith.
15.42 Power of Central Government to give directions
15.43 Summary
15.44 Key words
15.45 Self Assessment questions
15.46 Suggested Readings

15.1 Introduction
1. Short title, extent and application
(1) This Act may be called the Employees’ Provident Funds and Miscellaneous Provisions
Act, 1952.]
(2) It extends to the whole of India
(3) Subject to the provisions contained in section 16, it applies
(a) to every establishment which is a factory engaged in any industry specified in Schedule I
and
in which [twenty] or more persons are employed, and
(b) to any other establishment employing [twenty] or more persons or class of such
establishments which the Central Government may, by notification in the Official Gazette,
specify int his behalf:

Provided that the Central Government may, after giving not less than two months’ notice of
its intention so to do, by notification in the Official Gazette, apply the provisions of this Act
to any establishment employing such number of persons less than [twenty] as may be
specified in the notification.

(4) Notwithstanding anything contained in sub-section (3) of this section or sub-section (1) of
section 16, where it appears to the Central Provident Fund Commissioner, whether on an
application made to him in this behalf or otherwise, that the employer and the majority of
employees in relation to any establishment have agreed that the provisions of this Act should
be made applicable to the establishment, he may, by notification in the Official Gazette,
apply the provisions of this Act to that establishment on and from the date of such agreement
or from any subsequent date specified in such agreement.]

(5) An establishment to which this Act applies shall continue to be governed by this Act
notwithstanding that the number of persons employed therein at any time falls below twenty.

15.2. Definitions
In this Act, unless the context otherwise requires,

[(a) “appropriate Government” means i) in relation to an establishment belonging to, or under

the control of, the Central Government or in relation to an establishment connected with a
railway company, a major port, amine or an oilfield or a controlled industry, [or in relation to
an establishment having departments or branches in more than one State,] the Central
Government; and
Employee Provident Fund 15.3 Labor Legislations and Law
(ii) in relation to any other establishment, the State Government

(aa) “authorized officer” means the Central Provident Fund Commissioner, Additional
Central Provident Fund Commissioner, Deputy Provident Fund Commissioner, Regional
Provident Fund
Commissioner or such other officer as may be authorized by the Central Government, by
notification in the Official Gazette

(b) “basic wages” means all emoluments which are earned by an employee while on duty or
on leave or on holidays with wages in either case] in accordance with the terms of the
contract of employment and which are paid or payable in cash to him, but does not include

(i) the cash value of any food concession;

(ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to
an employee on account of a rise in the cost of living), house-rent allowance, overtime
allowance, bonus commission or any other similar allowance payable to the employee in
respect of his employment or of work done in such employment;

(iii) any presents made by the employer;

(c) “contribution” means a contribution payable in respect of a member under a Scheme 4or
the contribution payable in respect of an employee to whom the Insurance Scheme applies];
(d) “controlled industry” means any industry the control of which by the Union has been
declared by a Central Act to be expedient in the public interest;

(e) “employer” means

(i) in relation to an establishment which is a factory, the owner or occupier of the factory,
including the agent of such owner or occupier, the legal representative of a deceased owner or
occupier and, where a person has been named as a manager of the factory under clause (f) of
sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948), the person so named; and

(ii) in relation to any other establishment, the person who, or the authority which, has the
ultimate control over the affairs of the establishment, and where the said affairs are entrusted
to manager, managing director or managing agent, such manager, managing director or
managing agent;]

(f) “employee” means any person who is employed for wages in any kind of work, manual or
otherwise, in or in connection with the work of[an establishment], and who gets his wages
directly or indirectly from the employer, and includes any person—
(i) employed by or through a contractor in or in connection with the work of the
Establishment

15.3 Establishment to include all departments and branches

For the removal of doubts, it is here by declared that where an establishment consists of
different departments or has branches, whether situate in the same place or in different places,
all such departments or branches shall be treated as parts of the same establishment.

3. Power to apply Act to an establishment which has a common provident fund with another
establishment.

Where immediately before this Act becomes applicable to an establishment there is

Centre for Distance Education 15.4 Acharya Nagarjuna University

inexistence a provident fund which is common to the employees employed in that

establishment and employees in any other establishment, the Central Government may, by
notification in Official Gazette, direct that the provisions of this Act shall also apply to such
other establishment.

15.4. Power to add to Schedule I

(1) The Central Government may, by notification in the OfficialGazette, add to Schedule I
any other industry in respect of the employees whereof it is of opinion that provident fund
scheme should be framed under this Act, and thereupon the industry so added shall be
deemed to be an industry specified in Schedule I for the purposes of this Act.

(2) All notifications under sub-section (1) shall be laid before Parliament, as soon as may be,
after they are issued.

15.5 Employees’ Provident Fund Schemes.

(1) The Central Government may, by notification in the Official Gazette, frame a Scheme to
be called the Employees’ Provident Fund Scheme for the establishment of provident funds
under this Act for employees or for any class of employees and specify the establishments or
class of establishments to which the said Scheme shall apply and there shall be established,
as soon as may be after the framing of the Scheme, a Fund in accordance with the provisions
of this Act and the Scheme. The Fund shall vest in, and be administered by, the Central Board
constituted under section5A.(1B) Subject to the provisions of this Act, a Scheme framed
under sub-section (1) may provide for allow any of the matters specified in Schedule II.]

[(2) A Scheme framed under sub-section (1) may provide that any of its provisions shall take
effect either prospectively or retrospectively on such date as may be specified in this behalf in
the Scheme.]

15.6.Central Board
(1) The Central Government may, by notification in the Official Gazette, constitute, with
effect from such date as may be specified therein, a Board of Trustees for the territories to
which this Act extends (hereinafter in this Act referred to as the Central Board) consisting of
the following
[persons as members] namely

(a) [a Chairman and a Vice-Chairman] to be appointed by the Central Government;

[(aa) the Central Provident Fund Commissioner, ex officio;]
(b) not more than five persons appointed by the Central Government from amongst its
officials;
(c) not more than fifteen persons representing Governments of such States as the Central
Government may specify in this behalf, appointed by the Central Government;
(d) ten persons representing employers of the establishments to which the Scheme applies,
appointed by the Central Government after consultation with such organisations of employers
as maybe recognized by the Central Government in this behalf; and
(e) ten persons representing employees in the establishments to which the Scheme applies,
appointed by the Central Government after consultation with such organizations of
employees as maybe recognized by the Central Government in this behalf.
(2) The terms and conditions subject to which a member of the Central Board may be
appointed and the time, place and procedure of the meetings of the Central Board shall be
such as may be provided for in the Scheme.
Employee Provident Fund 15.5 Labor Legislations and Law

(3) The Central Board shall subject to the provisions of section 6A and section 6C
administer the Fund vested in it in such manner as may be specified in the Scheme.

(4) The Central Board shall perform such other functions as it may be required to perform by
or under any provisions of the Scheme 8, the 9[Pension] Scheme and the Insurance Scheme].
[(5) The Central Board shall maintain proper accounts of its income and expenditure in such
form and in such manner as the Central Government may, after consultation with the
Comptroller and Auditor General of India, specify in the Scheme.
(6) The accounts of the Central Board shall be audited annually by the Comptroller and
Auditor General of India and any expenditure incurred by him in connection with such audit
shall be payable by the Central Board to the Comptroller and Auditor-General of India.
(7) The Comptroller and Auditor-General of India and any person appointed by him in
connection with the audit of the accounts of the Central Board shall have the same rights and
privileges and authority in connection with such audit as the Comptroller and Auditor-
General has, in connection with the audit of Government accounts and, in particular, shall
have the right to demand the production of books, accounts, connected vouchers, documents
and papers and inspect any of the offices of the Central Board.
(8) The accounts of the Central Board as certified by the Comptroller and Auditor-General of
India or any other person appointed by him in this behalf together with the audit report
thereon shall be forwarded to the Central Board which shall forward the same to the Central
Government along with its comments on the report of the Comptroller and Auditor-General.

(9) It shall be the duty of the Central Board to submit also to the Central Government an
annual reportof its work and activities and the Central Government shall cause a copy of the
annual report, the audited accounts together with the report of the Comptroller and Auditor-
General of India and the comments of the Central Board thereon to be laid before each House
of Parliament.

15.7 Executive Committee

(1) The Central Government may, by notification in the OfficialGazette, constitute, with
effect from such date as may be specified therein, an Executive Committee toassist the
Central Board in the performance of its functions.
(2) The Executive Committee shall consist of the following persons as members, namely:—
(a) a Chairman appointed by the Central Government from amongst the members of the
Central Board;
(b) two persons appointed by the Central Government from amongst the persons referred to
in clause (b) of sub-section (1) of section 5A;
(c) three persons appointed by the Central Government from amongst the persons referred to
in
clause (c) of sub-section (1) of section 5A;
(d) three persons representing the employers elected by the Central Board from amongst the
persons referred to in clause (d) of sub-section (1) of section 5A;
(e) three persons representing the employees elected by the Central Board from amongst the
persons referred to in clause (e) of sub-section (1) of section 5A;
(f) the Central Provident Fund Commissioner, ex officio.
(3) The terms and conditions subject to which a member of the Central Board may be
appointed or elected to the Executive Committee and the time, place and procedure of the
meetings of the Executive Committee shall be such as may be provided for in the Scheme].
Centre for Distance Education 15.6 Acharya Nagarjuna University

State Board
(1) The Central Government may, after consultation with the Government of any State, by
notification in the Official Gazette, constitute for that State a Board of Trustees (hereinafter
in this Act referred to as the State Board) in such manner as may be provided for in the
Scheme.
(2) A State Board shall exercise such powers and perform such duties as the Central
Government may assign to it from time to time.
(3) The terms and conditions subject to which a member of a State Board may be appointed
and the time, place and procedure of the meetings of a State Board shall be such as may be
provided for in the Scheme.

15.8 Board of Trustees to body corporate

Every Board of Trustees constituted under section 5Aor section 5B shall be a body corporate
under the name specified in the notification constituting it, having perpetual succession and a
common seal and shall by the said name sue and be sued.

15.9 Appointment of officers

(1) The Central Government shall appoint a Central Provident Fund Commissioner who shall
be the chief executive officer of the Central Board and shall be subject to the general control
and superintendence of that Board.
(2) The Central Government may also appoint [a Financial Adviser and Chief Accounts
Officers] to assist the Central Provident Fund Commissioner in the discharge of his duties.

Acts and proceedings of the Central Board or its Executive Committee or the State Board not
to be in validated on certain grounds.—No act done or proceeding taken by the Central Board
or the Executive Committee constituted under section 5AA or the State Board shall be
questioned on the ground merely of the existence of any vacancy in, or any defect in the
constitution of, the Central Board or the Executive Committee or the State Board, as the case
may be.

15.10 Delegation
The Central Board may delegate to the Executive Committee or to the Chairman of
the Board or to any of its officers and a State Board may delegate to its Chairman or to any of
its officers]subject to such conditions and limitations, if any, as it may specify, such of its
powers and functions under this Act as it may deem necessary for the efficient administration
of the Scheme The Pension] Scheme and the Insurance Scheme

15.11 Contributions and matters which may be provided for in Schemes

The contribution which shall be paid by the employer to the Fund shall be [ten per
cent. of the basic wages, [dearness allowance and retaining allowance (if any)] for the time
being payable to each of the employees[(whether employed by him directly or by or through
a contractor)], and the employees’ contribution shall be equal to the contribution payable by
the employer in respect of him and may, [if any employees of desires, be an amount
exceeding [ten per cent.]of his basic wages, dearness allowance and retaining allowance (if
any), subject to the condition that the employer shall not be under an obligation to pay any
contribution over and above his contribution payable under this section]:

Provided that in its application to any establishment or class of establishments which the
Central Government, after making such inquiry as it deems fit, may, by notification in the
Official Gazette specify, this section shall be subject to the modification that for the words
Employee Provident Fund 15.7 Labor Legislations and Law
ten per cent. at both the places where they occur, the words 10[twelve per cent.]shall be
substituted:

Provided further that where the amount of any contribution payable under this Act involves a
fraction of a rupee, the Scheme may provide for the rounding off of such fraction to the
nearest rupee, half of a rupee or quarter of a rupee

15.12. Employees’ Pension Scheme

(1) The Central Government may, by notification in the Official Gazette, frame a scheme to
be called the Employees’ Pension Scheme for the purpose of providing for—
(a) superannuation pension, retiring pension or permanent total disablement pension to the
employees of any establishment or class of establishments to which this Act applies; and
(b) widow or widower’s pension, children pension or orphan pension payable to the
beneficiaries of such employees.

(2) Notwithstanding anything contained in section 6, there shall be established, as soon as

may be after framing of the Pension Scheme, a Pension Fund into which there shall be paid,
from time to time, in respect of every employee who is a member of the Pension Scheme,—
(a) such sums from the employer’s contribution under section 6, not exceeding eight and one-
third per cent. of the basic wages, dearness allowance and retaining allowance, if any, of the
concerned employees, as may be specified in the Pension Scheme;
(b) such sums as are payable by the employers of exempted establishments under sub-section
(6) of section 17;
(c) the net assets of the Employees' Family Pension Fund as on the date of the establishment
of the Pension Fund;
(d) such sums as the Central Government may, after due appropriation by Parliament by law
in this behalf, specify.
(3) On the establishment of the Pension Fund, the Family Pension Scheme (hereinafter
referred to as the ceased scheme) shall cease to operate and all assets of the ceased scheme
shall vest in and shall stand transferred to, and all liabilities under the ceased scheme shall be
enforceable against, the Pension Fund and the beneficiaries under the ceased scheme shall be
entitled to draw the benefits, not less than the benefits they were entitled to under the ceased
scheme, from the Pension Fund.

(4) The Pension Fund shall vest in and be administered by the Central Board in such manner
as may be specified in the Pension Scheme.

(5) Subject to the provisions of this Act, the Pension Scheme may provide for all or any of
the matters specified in Schedule III.

(6) The Pension Scheme may provide that all or any of its provisions shall take effect either
prospectively or retrospectively on such date as may be specified in that behalf in that
Scheme.

(7) A Pension Scheme, framed under sub-section (1), shall be laid, as soon as may be after it
is made, before each House of Parliament, while it is in session, for a total period of thirty
days which may be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the successive sessions
aforesaid, both Houses agree in making any modification in the scheme or both Houses agree
that the scheme should not be made, the scheme shall thereafter have effect only in such
Centre for Distance Education 15.8 Acharya Nagarjuna University

modified form or be of no effect, as the may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything previously done under that
Scheme.

15.13 Employees’ Deposit linked Insurance Scheme

(1) The Central Government may, by notification in the Official Gazette, frame a scheme to
be called the Employees’ Deposit-linked Insurance Scheme for the purpose of providing life
insurance benefits to the employees of any establishment or class of establishments to which
this Act applies
(2) There shall be established, as soon as may be after the framing of the Insurance Scheme, a

Deposit-linked Insurance Fund into which shall be paid by the employer from time to time in
respect ofevery such employee in relation to whom he is the employer, such amount, not
being more than one percent. of the aggregate of the basic wages, dearness allowance and
retaining allowance (if any) for the time being payable in relation to such employee as the
Central Government may, by notification in the OfficialGazette, specify.

Explanation.—For the purposes of this sub-section, the expressions “dearness allowance” and
“relating allowance” have the same meanings as in section 6.

(4) (a) The employer shall pay into the Insurance Fund such further sums of money, not
exceeding one-fourth of the contribution which he is required to make under sub-section (2),
as the Central Government may, from time to time, determine to meet all the expenses in
connection with the administration of the Insurance Scheme other than the expenses towards
the cost of any benefits provided by or under that scheme.

(5) The Insurance Fund shall vest in the Central Board and be administered by it in such
manner as may be specified in the Insurance Scheme.

(6) The Insurance Scheme may provide for all or any of the matters specified in Schedule IV.

(7) The Insurance Scheme may provide that any of its provisions shall take effect either
prospectively or retrospectively on such date as may be specified in this behalf in that
Scheme.]

15.14 Laying of schemes before Parliament

Every scheme framed under section 5, section 6Aand section 6C shall be laid, as soon
as may be after it is framed, before each House of Parliament, while it is in session, for a total
period of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any modification in the scheme,
or both Houses agree that the scheme should not be framed, the scheme shall thereafter have
effect only in such modified form or be of no effect, as the case may be; so, however, that any
such modification or annulment shall be without prejudice to the validity of anything
previously done under that scheme.

15.15 Modification of scheme.

(1) The Central Government may, by notification in the Official
Gazette, add to 3[amend or vary, either prospectively or retrospectively, the Scheme, the
Family Pension Scheme or the Insurance Scheme, as the case may be.
Employee Provident Fund 15.9 Labor Legislations and Law

2) Every notification issued under sub-section (1) shall be laid, as soon as may be after it is
issued, before each House of Parliament, while it is in session, for a total period of thirty
days, which may be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the successive sessions
aforesaid, both Houses agree in making any modification in the notification, or both Houses
agree that the notification should not be issued, the notification shall thereafter have effect
only in such modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity ofany thing previously
done under that notification.

15.16. Determination of moneys due from employers

[(1) The Central Provident Fund Commissioner, any Additional Central Provident Fund
Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund
Commissioner, or any Assistant Provident Fund Commissioner may, by order,
(a) in a case where a dispute arises regarding the applicability of this Act to an establishment,
decide such dispute; and

(b) determine the amount due from any employer under any provision of this Act, the Scheme
or
the [Pension] Scheme or the Insurance Scheme, as the case may be,

and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary];
(2) The officer conducting the inquiry under sub-section
(1) shall, for the purposes of such inquiry, have the same powers as are vested in a court
under the Code of Civil Procedure, 1908 (5 of 1908), for trying a suit in respect of the
following matters, namely:—
(a) enforcing the attendance of any person or examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavit;
(d) issuing commissions for the examination of witnesses; and any such inquiry shall be
deemed to be a judicial proceeding within the meaning of sections 193 and228, and for the
purpose of section 196, of the Indian Penal Code (45 of 1860).
(3) No order shall be made under sub-section (1), unless 5 [the employer concerned] is given
reasonable opportunity of representing his case.

(3A) Where the employer, employee or any other person required to attend the inquiry under
sub-section (1) fails to attend such inquiry without assigning any valid reason or fails to
produce any document or to file any report or return when called upon to do so, the officer
conducting the inquiry may decide the applicability of the Act or determine the amount due
from any employer, as the case may be, on the basis of the evidence adduced during such
inquiry and other documents available on record.

(4) Where an order under sub-section (1) is passed against an employer ex parte, he may,
within three months from the date of communication of such order, apply to the officer for
setting aside such order and if he satisfies the officer that the show cause notice was not duly
served or that he was prevented by any sufficient cause from appearing when the inquiry was
held, the officer shall make an order setting aside his earlier order and shall appoint a date for
proceeding with the inquiry: Provided that no such order shall be set aside merely on the
ground that there has been an irregularity in the service of the show cause notice if the officer
Centre for Distance Education 15.10 Acharya Nagarjuna University

is satisfied that the employer had notice of the date of hearing and had sufficient time to
appear before the officer.

Explanation.—Where an appeal has been preferred under this Act against an order passed ex
portend such appeal has been disposed of otherwise than on the ground that the appellant has
withdrawn the appeal, no application shall lie under this sub-section for setting aside the ex
parte order.

15.17Review of orders passed under section 7A

(1) Any person aggrieved by an order made under sub-section (1) of section 7A, but from
which no appeal has been preferred under this Act, and who, from the discovery of new and
important matter or evidence which, after the exercise of due diligence was not within his
knowledge or could not be produced by him at the time when the order was made, or on
account of some mistake or error apparent on the face of the record or for any other sufficient
reason, desires to obtain a review of such order may apply for a review of that order to the
officer who passed the order:

Provided that such officer may also on his own motion review his order if he is satisfied that
it is
necessary so to do on any such ground.

(2) Every application for review under sub-section (1) shall be filed in such form and manner
and
within such time as may be specified in the Scheme.
(3) Where it appears to the officer receiving an application for review that there is no
sufficient ground for a review, he shall reject the application.(4) Where the officer is of
opinion that the application for review should be granted, he shall grant the same:

Provided that,—
(a) no such application shall be granted without previous notice to all the parties before him
to enable them to appear and be heard in support of the order in respect of which a review is
applied for, and
(b) no such application shall be granted on the ground of discovery of new matter or evidence
which the applicant alleges was not within his knowledge or could not be produced by him
when the order was made, without proof of such allegation.
(5) No appeal shall lie against the order of the officer rejecting an application for review, but
an appeal under this Act shall lie against an order passed under review as if the order passed
under review were the original order passed by him under section 7A.

15.18Determination of escaped amount

Where an order determining the amount due from an employer under section 7A or section
7B has been passed and if the officer who passed the order
has reason to believe that by reason of the omission or failure on the part of the employer
tomake any document or report available, or to disclose, fully and truly, all material facts
necessary fordetermining the correct amount due from the employer, any amount so due from
such employer forany period has escaped his notice;

15.19Tribunal
The Industrial Tribunal constituted by the Central Government undersub-section (1) of
section 7A of the Industrial Disputes Act, 1947 shall, on and from the commencement
Employee Provident Fund 15.11 Labor Legislations and Law
of Part XIV of Chapter VI of the Finance Act, 2017, be the Tribunal for the purposes of this
Act and thesaid Tribunal shall exercise the jurisdiction, powers and authority conferred on it
by or under this Act.

15.20 Appeals to Tribunal

(1) Any person aggrieved by a notification issued by the Central Government, or an order
passed by the Central Government or any authority, under the proviso tosub-section (3), or
sub-section (4), of section 1, or section 3, or sub-section (1) of section 7A, or section
7B[except an order rejecting an application for review referred to in sub-section (5) thereof],
or section7C, or section 14B, may prefer an appeal to a Tribunal against such notification or
order.

(2) Every appeal under sub-section (1) shall be filed in such form and manner, within such
time and be accompanied by such fees, as may be prescribed.

15.21Procedure of Tribunals
(1) A Tribunal shall have power to regulate its own procedure in all
matters arising out of the exercise of its powers or of the discharge of its functions including
the places at which the Tribunal shall have its sittings.
(2) A Tribunal shall, for the purpose of discharging its functions, have all the powers which
are vested in the officers referred to in section 7A and any proceeding before the Tribunal
shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and
for the purpose of section 196, of the Indian Penal Code (45 of 1860) and the Tribunal shall
be deemed to be a civil court for the all purposes of section 195 and Chapter XXVI of the
Code of Criminal Procedure, 1973 (2 of 1974).

15.22Right of appellant to take assistance of legal practitioner and of Government, etc.,

to appoint presenting officers.
(1) A person preferring an appeal to a Tribunal under this Act may either appear in person or
take the assistance of a legal practitioner of his choice to present his case before the Tribunal.

(2) The Central Government or a State Government or any other authority under this Act may
authorise one or more legal practitioners or any of its officers to act as presenting officers and
every person so authorised may present the case with respect to any appeal before a Tribunal.

15.23 Orders of Tribunal

(1) A Tribunal may after giving the parties to the appeal, an opportunity of being heard, pass
such orders thereon as it thinks fit, confirming, modifying or annulling the order appealed
against or may refer the case back to the authority which passed such order with such
directions as the Tribunal may think fit, for a fresh adjudication or order, as the case may be,
after taking additional evidence, if necessary.

(2) A Tribunal may, at any time within five years from the date of its order, with a view to
rectifying any mistake apparent from the record, amend any order passed by it under sub-
section (1) and shall make such amendment in the order if the mistake is brought to its notice
by the parties to the appeal:

Provided that an amendment which has the effect of enhancing the amount due from, or
otherwise increasing the liability of, the employer shall not be made under this sub-section,
unless the Tribunal has given notice to him of its intention to do so and has allowed him a
Centre for Distance Education 15.12 Acharya Nagarjuna University

reasonable opportunity of being heard.

(3) A Tribunal shall send a copy of every order passed under this section to the parties to the
appeal.
(4) Any order made by a Tribunal finally disposing of an appeal shall not be questioned in
any court of law.

15.24 Mode of recovery of moneys due from employers

Any amount due(a)from the employer in relation to [an establishment] to which any Scheme
or the Insurance Scheme] applies in respect of any contribution payable to the Fund or, as the
case may be, the Insurance Fund], damages recoverable under section 14B, accumulations
required to be transfer under sub-section (2) of section 15 5or under sub-section (5) of section
17] or any charges payable by him under any other provision of this Act or of any provision
of the Scheme or the Insurance Scheme]; or

(b) from the employer in relation to an exempted [establishment] in respect of any damages
recoverable under section 14B or any charges payable by him to the appropriate Government
under any provision of this Act or under any of the conditions specified under section 17 or
in respect of the contribution payable by him towards the [Pension] Scheme under the said
section 17],may, if the amount is in arrear, [be recovered 10[in the manner specified in
sections 8B to 8G]

15.25 Recovery of moneys by employers and contractors

The amount of contribution that is to say the employer’s contribution as well as the
employee’s contribution in pursuance of any Scheme and the employer’s contribution in
pursuance of the Insurance Scheme)], and any charges for meeting the cost of administering
the Fund paid or payable by an employer in respect of an employee employed by or through a
contractor may be recovered by such employer from the contractor, either by deduction from
any amount payable to the contractor, under any contract or as a debt payable by the
contractor.

(2) A contractor from whom the amounts mentioned in sub-section (1) may be recovered in
respect of any employee employed by or through him, may recover from such employee the
employee’s contribution [under any Scheme] by deduction from the basic wages, dearness
allowance and retaining allowance (if any) payable to such employee.
(3) Notwithstanding any contract to the contrary, no contractor shall be entitled to deduct the
employer’s contribution or the charges referred to in sub-section (1) from the basic wages,
dearness allowance, and retaining allowance (if any) payable to an employee employed by or
through him or otherwise to recover such contribution or charges from such employee
.Explanation.—In this section, the expressions, “dearness allowance” and “retaining
allowance” shall have the same meanings as in section 6.

15.26 Issue of certificate to the Recovery Officer.

(1) Where any amount is in arrear undersection8, the authorised officer may issue, to the
Recovery Officer, a certificate under his signature specifying the amount of arrears and the
Recovery Officer, on receipt of such certificate, shall proceed to recover the amount specified
therein from the establishment or, as the case may be, the employer by one or more of the
modes mentioned below:—
(a) attachment and sale of the movable or immovable property of the establishment or, as the
case may be, the employer;
(b) arrest of the employer and his detention in prison;
Employee Provident Fund 15.13 Labor Legislations and Law
(c) appointing a receiver for the management of the movable or immovable properties of the
establishment or, as the case may be, the employer:
Provided that the attachment and sale of any property under this section shall first be effected
against the proportion of the establishment and where such attachment and sale is insufficient
for recovering the whole of the amount of arrears specified in the certificate, the Recovery
Officer may take such proceedings against the property of the employer for recovery of the
whole or any part of such arrears.

(2) The authorized officer may issue a certificate under sub-section (1), notwithstanding that
proceedings for recovery of the arrears by any other mode have been taken.

15.27Recovery Officer to whom certificate is to be forwarded.

(1) The authorised officer may forward the certificate referred to in section 8B to the
Recovery Officer within whose jurisdiction the employer—
(a) carries on his business or profession or within whose jurisdiction the principal place of his
establishment is situate; or
(b) resides or any movable or immovable property of the establishment or the employer is
situate.
(2) Where an establishment or the employer has property within the jurisdiction of more than
one
Recovery Officers and the Recovery Officer to whom a certificate is sent by the authorized
officer—

(a) is not able to recover the entire amount by the sale of the property, movable or
immovable,
within his jurisdiction; or
(b) is of the opinion that, for the purpose of expediting or securing the recovery of the whole
or
any part of the amount, it is necessary so to do,
he may send the certificate or, where only a part of the amount is to be recovered, a copy of
the certificate certified in the prescribed manner and specifying the amount to be recovered to
the Recovery Officer within whose jurisdiction the establishment or the employer has
property or the employer resides, and thereupon that Recovery Officer shall also proceed to
recover the amount due under this section as if the certificate or the copy thereof had been the
certificate sent to him by the authorised officer.

15.28 Validity of certificate and amendment thereof

(1) When the authorized officer issues certificate to a Recovery Officer under section 8B, it
shall not be open to the employer to dispute before
the Recovery Officer the correctness of the amount, and no objection to the certificate on any
other ground shall also be entertained by the Recovery Officer.

(2) Notwithstanding the issue of a certificate to a Recovery Officer, the authorized officer
shall have power to withdraw the certificate or correct any clerical or arithmetical mistake in
the certificate by sending an intimation to the Recovery Officer.

(3) The authorised officer shall intimate to the Recovery Officer any order withdrawing or
cancelling certificate or any correction made by him under sub-section (2) or any amendment
made under sub-section (4) of section 8E.
Centre for Distance Education 15.14 Acharya Nagarjuna University

15.29 Stay of proceedings under certificate and amendment or withdrawal thereof.

Notwithstanding that a certificate has been issued to the Recovery Officer for the recovery of
any amount, the authorised officer may grant time for the payment of the amount, and
thereupon the Recovery Officer shall stay the proceedings until the expiry of the time so
granted.
(2) Where a certificate for the recovery of amount has been issued, the authorised officer
shall keep the Recovery Officer informed of any amount paid or time granted for payment,
subsequent to the issue of such certificate.
(3) Where the order giving rise to a demand of amount for which a certificate for recovery
has been issued has been modified in appeal or other proceeding under this Act, and, as a
consequence thereof, the demand is reduced but the order is the subject-matter of a further
proceeding under this Act, the authorised officer shall stay the recovery of such part of the
amount of the certificate as pertains to the said reduction for the period for which the appeal
or other proceeding remains pending.
(4) Where a certificate for the recovery of amount has been issued and subsequently the
amount of the outstanding demand is reduced as a result of an appeal or other proceeding
under this Act, the authorized officer shall, when the order which was the subject-matter of
such appeal or other proceeding has become
final and conclusive, amend the certificate or withdraw it, as the case may be.

15.30Application of certain provisions of Income-tax Act.

The provisions of the Second and Third Schedules to the Income-tax Act, 1961 (43 of 1961)
and the Income-tax (Certificate Proceedings) Rules,1962, as in force from time to time, shall
apply with necessary modifications as if the said provisions andthe rules referred to the
arrears of the amount mentioned in section 8 of this Act instead of to theincome-tax:

Provided that any reference in the said provisions and the rules to the “assessed” shall be
construed asa reference to an employer as defined in this Act.]

15.31 Fund to be recognised under Act 11 of 1922.

For the purposes of the Indian Income-tax Act,1922, the Fund shall be deemed to be a
recognized provident fund within the meaning of Chapter IXA ofthat Act:
[Provided that nothing contained in the said Chapter shall operate to render ineffective any
provision of the Scheme (under which the Fund is established) which is repugnant to any of
the provisions of that Chapter or of the rules made there under.]

Protection against attachment.

(1) The amount standing to the credit of any member in the Fund 2[or of any exempted
employee in a provident fund] shall not in any way be capable of being assigned or charged
and shall not be liable to attachment under any decree or order of any court in respect of any
debt or liability incurred by the member 2[or the exempted employee], and neither the official
assignee appointed under the Presidency-towns Insolvency Act, 1909 (3 of 1909), nor any
receiver
appointed under the Provincial Insolvency Act, 1920 (5 of 1920), shall be entitled to, or have
any claim on, any such amount.

(2) Any amount standing to the credit of a member in the Fund or of an exempted employee
in a provident fund at the time of his death and payable to his nominee under the Scheme or
the rules of the provident fund shall, subject to any deduction authorized by the said Scheme
Employee Provident Fund 15.15 Labor Legislations and Law
or rules, vest in the nominee and shall be free from any debt or other liability incurred by the
deceased or the nominee before the death of the member of the exempted employee [and
shall also not be liable to attachment under any decree or order of any court].
[ 3) The provisions of sub-section (1) and sub-section (2) shall, so far as may be, apply in
relation to the family pension or any other amount payable under the 6[Pension] Scheme
7[and also in relation to any amount payable under the Insurance Scheme] as they apply in
relation to any amount payable out of the Fund.

15.32 Inspectors
(1) The appropriate Government may, by notification in the Official Gazette, appoint such
persons as it thinks fit to be Inspectors for the purposes of this Act the Scheme the Pension
Scheme or the Insurance Scheme], and may define their jurisdiction.

(2) Any Inspector appointed under sub-section (1) may, for the purpose of inquiring into the
correctness of any information furnished in connection with this Act or with any 1Scheme or
the
Insurance Scheme] or for the purpose of ascertaining whether any of the provisions of this
Act or of any Scheme or the Insurance Scheme have been complied with in respect of an
establishment to which any Scheme or the Insurance Scheme] applies or for the purpose of
ascertaining whether the provisions of this Act or any Scheme or the Insurance Scheme] are
applicable to any establishment] to which the Scheme or the Insurance Scheme has not been
applied or for the purpose of determining whether the conditions subject to which exemption
was granted under section 17 are being complied with by the employer in relation to an
exempted establishment—
(a) require an employer or any contractor from whom any amount is recoverable under
section

to furnish such information as he may consider necessary

(b) 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

(c) examine, with respect to any matter relevant to any of the purposes 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 of any premises
connected therewith or whom the Inspector has reasonable cause to believe to be or to have
been, an employee in the establishment

[(d) make copies of, or take extracts from, any book, register or other document 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 document or portions thereof as he may consider relevant in respect of
that offence;]
(e) exercise such other powers as the [Scheme or the Insurance Scheme] may provide.

(2A) Any Inspector appointed under sub-section (1) may, for the purpose of inquiring into the
correctness of any information furnished in connection with the 10[Pension] Scheme or for
Centre for Distance Education 15.16 Acharya Nagarjuna University

the purpose of ascertaining whether any of the provisions of this Act or of the 10[Pension]
Scheme have been complied with in respect of an establishment to which the 10[Pension]
Scheme applies, exercise all or any of the powers conferred, on him under clause (a), clause
(b), clause (c) or clause (d) of sub-section (2).11[(2B)] The provisions of the Code of
Criminal Procedure, 1898 (5 of 1898) shall, so far as may be, apply to any search or seizure
under sub-section (2),or under sub-section (2A), as the case may be,] as they apply to any
search or seizure made under the authority of a warrant issued under section 98 of thesaid
Code (45 of 1960).]

15.33Penalties
(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act
the Scheme the Pension Scheme or the Insurance Scheme]] or of enabling any other person to
avoid such payment, knowingly makes or causes to be made any false statement or false
representation shall be punishable with imprisonment for a term which may extend to one
year, or with fine of five thousand rupees, or with both.]

[(1A) An employer who contravenes, or makes default in complying with, the provisions of
section 6or clause (a) of sub-section (3) of section 17 in so far as it relates to the payment of
inspection charges, or paragraph 38 of the Scheme in so far as it relates to the payment of
administrative charges, shall be punishable with imprisonment for a term which may extend
to 6 [three years] but

(a)which shall not be less than one year and a fine of ten thousand rupees] in case of default
in payment of the employees’ contribution which has been deducted by the employer from
the employees’ wages;

[(b) which shall not be less than six months and a fine of five thousand rupees, in any other
case;

Provided that the court may, for any adequate and special reasons to be recorded in the
judgment,
impose a sentence of imprisonment for a lesser term .

(1B) An employer who contravenes, or makes default in complying with, the provisions
ofsection6C, or clause (a) of sub-section (3A) of section 17 in so far as it relates to the
payment of inspection charges, shall be punishable with imprisonment for a term which may
extend to one year] but which shall not be less than six months and shall also be liable to fine
which may extend to [five thousand rupees Provided that the court may, for any adequate and
special reasons to be recorded in the judgment, impose a sentence of imprisonment for a
lesser term.

(2) 16[Subject to the provisions of this Act, the Scheme] 17[, the 3Pension Scheme or
theInsuranceScheme] may provide that any person who contravenes, or makes default in
complying with, any of the provisions thereof shall be punishable with imprisonment for a
term which may extend one year, or with fine which may extend to four thousand rupees, or
with both].

18[(2A) Whoever contravenes or makes default in complying with any provision of this Act
or of any condition subject to which exemption was granted under section 17 shall, if no
other penalty is elsewhere
Employee Provident Fund 15.17 Labor Legislations and Law

15.34Offences by companies
(1) If the person committing an offence under this Act 4theScheme or there is a company,
every person, who at the time the offence was committed was in charge of, and was
responsible to, the company for the conduct of the business of the company, as well as the
company, shall be deemed to be guilty of the offence and shall be liable to be proceeded
against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable
to any punishment, if he proves that the offence was committed without his knowledge or that
he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act 4,
the Scheme or the Pension] Scheme or the Insurance Scheme has been committed by a
company and it improved that the offence has been committed with the consent or
connivance of, or is attributable to, any neglect on the part of, any director or manager,
secretary or other officer of the company, such director, manager, secretary or other officer
shall be deemed to be guilty of that offence and shall be liable to be proceeded against and
punished accordingly.

Enhanced punishment in certain cases after previous conviction

Whoever, having been convicted by a Court of an offence punishable under this Act,
the Scheme or 5the Scheme or the Insurance Scheme], commits the same offence shall be
subject for every such subsequent offence to imprisonment for a term which may extend to
five years, but which shall not be less than two years, and shall also be liable to a fine of
twenty-five thousand rupees].

Certain offences to be cognizable

Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of

1898.) an offence relating to default in payment of contribution by the employer punishable
under this Act shall be cognizable.

Cognizance and trial of offences.

(1) No court shall take cognizance of any offence punishable under this Act, the
Scheme or the [Pension] Scheme or the Insurance Scheme] except on report in writing of the
facts constituting such offence made with the previous sanction of the Central Provident Fund
Commissioner or such other officer as may be authorized by the Central Government, by
notification in the Official Gazette, in this behalf, by an Inspector appointed under section 13.

15.35Power of court to make orders

(1) Where an employer is convicted of an offence of making default in the payment of any
contribution to the Fund 11,the [Pension]Fund or the Insurance Fund]] or in the transfer of
accumulations required to be transferred by him under sub-section (2) of section 15 or sub-
section (5) of section 17, the court may, in addition to awarding any punishment, by order in
writing require him within a period specified in the order (which the court may, if it thinks fit
and on application in that behalf, from time to time, extend), to pay the amount of
contribution or transfer the accumulations, as the case may be, in respect of which the offence
was committed.
Centre for Distance Education 15.18 Acharya Nagarjuna University

(2) Where an order is made under sub-section (1), the employer shall not be liable under this
Act in respect of the continuation of the offence during the period or extended period, if any,
allowed by the court, but if, on the expiry of such period or extended period, as the case may
be, the order of the court has not been fully complied with, the employer shall be deemed to
have committed a further offence and shall be punished with imprisonment in respect thereof
under section 14 and shall also be liable to pay fine which may extend to one hundred rupees
for every day after such expiry on which the order has not been complied with.]

15.36 Special provisions relating to existing provident funds.

(1) Subject to the provisions of section 17, every employee who is a subscriber to any
provident fund of 1an establishment to which this act applies shall, pending the application of
a Scheme to] the establishment in which he is employed, continue to be entitled to the
benefits accruing to him under the provident fund, and the provident fund shall continue to be
maintained in the same manner and subject to the same conditions as it would have been if
this Act had not been passed.

On the application of any Scheme to [an establishment], the accumulations in any provident
fund of the establishment standing to the credit of the employees who become members of
the Fund established under the Scheme] shall, notwithstanding anything to the contrary
contained in any law for the time being in force or in any deed or other instrument
establishing the provident fund but subject to the provisions, if any, contained in the Scheme,
be transferred to the Fund established under the Scheme, and shall be credited to the accounts
of the employees entitled thereto in the Fund.

15.37 Act not to apply to certain establishments.

[(1) This Act shall not apply
(a) to any establishment registered under the Co-operative Societies Act, 1912 (2 of 1912), or
under any other law for the time being in force in any State relating to co-operative societies,
employing less than fifty persons and working without the aid of power; or

[(b) to any other establishment belonging to or under the control of the Central Government
or a
State Government and whose employees are entitled to the benefit of contributory provident
fund or old age pension in accordance with any scheme or rule framed by the Central
Government or the State Government governing such benefits; or
(c) to any other establishment set up under any Central, Provincial or State Act and whose
employees are entitled to the benefits of contributory provident fund or old age pension in
accordance with any scheme or rule framed under that Act governing such benefits
[(2) If the Central Government is of opinion that having regard to the financial position of
any class of establishments or other circumstances of the case, it is necessary or expedient so
to do, it may, by notification in the Official Gazette, and subject to such conditions as may be
specified in the notification ,exempt [whether prospectively or retrospectively] that class of 9
establishments from the operation ofthis Act for such period as may be specified in the
notification.

15.38. Authorising certain employers to maintain provident fund accounts

(1) The Central Government may, on an application made to it in this behalf by the employer
and the majority of employees in relation to an establishment employing one hundred or more
persons, authorise the employer, by an order in writing, to maintain a provident fund account
in relation to the establishment, subject to such terms and conditions as may be specified in
Employee Provident Fund 15.19 Labor Legislations and Law
the Scheme

15.39. Power to exempt.

(1) The appropriate Government may, by notification in the OfficialGazette and subject to
such conditions as may be specified in the notification, exempt, whether prospectively or
retrospectively, from the operation] of all or any of the provisions of any Scheme

(a) any establishment] to which this Act applies if, in the opinion of the appropriate
Government, the rules of its provident fund with respect to the rates of contribution are not
less favourable than those specified in section 6 and the employees are also in enjoyment of
other provident fund benefits which on the whole are not less favourable to the employees
than the benefits provided under this Act or any Scheme in relation to the employees in any
other establishment] of similar character; or
(b) and establishment if the employees of such establishment are in enjoyment of benefits in
the nature of provident fund, pension or gratuity and the appropriate Government is of
opinion that such benefits, separately or jointly, are on the whole not less favorable to such
employees than the benefits provided under this Act or any Scheme in relation to employees
in any other establishment of a similar character:

Provided that no such exemption shall be made except after consultation with the Central
Board which on such consultation shall forward its views on exemption to the appropriate
Government within such time limit as may be specified in the Scheme.

15.40. Transfer of accounts.

(1) Where an employee employed in an establishment to which this Act applies leaves his
employment and obtains re-employment in another establishment to which this Act does not
apply, the amount of accumulations to the credit of such employee in the Fund, or as the case
may be, in the provident fund of the establishment left by him shall be transferred, within
such time as may be specified by the Central Government in this behalf, to the credit of his
account in the provident fund of the establishment in which he is re-employed, if the
employee so desires and the rules in relation to that provident fund permit such transfer.

(2) Where an employee employed in an establishment to which this Act does not apply leaves
his employment and obtains re-employment in another establishment to which this Act
applies, the amount of accumulations to the credit of such employee in the provident fund of
the establishment left by him may, If the employee so desires and the rules in relation to such
provident fund permit, be transferred to the credit of his account in the Fund or as the case
may be, in the provident fund of the establishment in which he is re-employed.]

Act to have effect notwithstanding anything contained in Act 31 of 1956

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith
contained in the Life Insurance Corporation Act, 1956.

Liability in case of transfer of establishment

Where an employer, in relation to an establishment, transfers that establishment in

whole or in part, by sale, gift, lease or license or in any other manner whatsoever, the
employer and the person to whom the establishment is so transferred shall jointly and
severally be liable to pay the contribution and other sums due from the employer under any
provision of this Act or the Scheme or the Pension Scheme or the Insurance Scheme], as the
Centre for Distance Education 15.20 Acharya Nagarjuna University

case may be, in respect of the period up to the date of such transfer: Provided that the liability
of the transferee shall be limited to the value of the assets obtained by him by such transfer.

15.41 Protection of action taken in good faith.

No suit, prosecution or other legal proceeding shall lie against the Central Government, a
State Government, the Presiding Officer of a Tribunal, any authority referred to in section
7A, an Inspector or any other person for anything which is in good faith done or intended to
be done in pursuance of this Act, the Scheme, or the Insurance Scheme.

Authorities and inspector to be public servant

The authorities referred to in section 7Aand every inspector shall be deemed to be a public
servant within the meaning of section 21 of the Indian Penal Code

Delegation of powers.

The appropriate Government may direct that any power or authority or jurisdiction
exercisable by it under this Act 6the Scheme 7the Pension Scheme or theInsuranceScheme
shall, in relation to such matters and subject to such conditions, if any, as may be specified
inthe direction, be exercisable also

(a) where the appropriate Government is the Central Government, by such officer or authority
subordinate to the Central Government or by the State Government or by such officer or
authority subordinate to the State Government, as may be specified in the notification; and

(b) where the appropriate Government is a State Government, by such officer or authority
subordinate to the State Government as may be specified in the notification.

15.42 Power of Central Government to give directions.

The Central Government may, from time to time, give such directions to the Central Board as
it may think fit for the efficient administration of this Act and when any such direction is
given, the Central Board shall comply with such direction.

Power to make rules

(1) The Central Government may, by notification in the Official Gazette, make rules to carry
out the provisions of this Act.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for all
or any of the following matters, namely

(b) the form and the manner in which, and the time within which, an appeal shall be filed
before a Tribunal and the fees payable for filing such appeal;
(c) the manner of certifying the copy of the certificate, to be forwarded to the Recovery
Officer
under sub-section (2) of section 8C; and
(d) any other matter, which has to be, or may be, prescribed by rules under this Act.

(3) Every rule made under this Act shall be laid, as soon as may be after it is made, before
each House of Parliament, while it is in session, for a total period of thirty days which may be
comprised in onesession or in two or more successive sessions, and if, before the expiry of
Employee Provident Fund 15.21 Labor Legislations and Law
the session immediately following the session or the successive sessions aforesaid, both
Houses agree in making any modification in the rule or both Houses agree that the rule
should not be made, the rule shall thereafter have effect only in such modified form or be of
no effect, as the case may be; so, however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.

Power to remove difficulties.

(1) If any difficulty arises in giving effect to the provisions of this Act, as amended by the
Employees’ Provident Funds and Miscellaneous Provisions(Amendment) Act, 1988 (33 of
1988), the Central Government may, by order published in the Official Gazette, make such
provisions, not inconsistent with the provisions of this Act as appear to it to be necessary or
expedient for the removal of the difficulty:

Provided that no such order shall be made after the expiry of a period of three years from the
date on which the said amendment Act receives the assent of the President.
(2) Every order made under this section shall, as soon as may be after it is made, be laid
before each House of Parliament.

15.43 Summary
The Employees' Provident Fund came into existence with the promulgation of the
Employees' Provident Funds Ordinance on the 15th November, 1951. It was replaced by the
Employees' Provident Funds Act, 1952. The Employees' Provident Funds Bill was introduced
in the Parliament as Bill Number 15 of the year 1952 as a Bill to provide for the institution of
provident funds for employees in factories and other establishments. The Act is now referred
as the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 which extends to
the whole of India. The Act and Schemes framed there under are administered by a tri-partite
Board known as the Central Board of Trustees, Employees' Provident Fund, consisting of
representatives of Government (Both Central and State), Employers, and Employees.

15.44 Key words

Authorized officer” means the Central Provident Fund Commissioner, Additional Central
Provident Fund Commissioner, Deputy Provident Fund Commissioner, Regional Provident
Fund
Commissioner or such other officer as may be authorized by the Central Government, by
notification in the Official Gazette.

Basic Wages” means all emoluments which are earned by an employee while on duty or on
leave or on holidays with wages in either case] in accordance with the terms of the contract of
employment and which are paid or payable in cash to him, but does not include

Employer” means (i) in relation to an establishment which is a factory, the owner or occupier
of the factory, including the agent of such owner or occupier, the legal representative of a
deceased owner or occupier and, where a person has been named as a manager of the factory
under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948), the
person so named; and

Employee” means any person who is employed for wages in any kind of work, manual or
otherwise, in or in connection with the work of [an establishment], and who gets his wages
directly or indirectly from the employer, and includes any person—
Centre for Distance Education 15.22 Acharya Nagarjuna University

Employees’ Provident Fund Schemes The Central Government may, by notification in the
Official Gazette, frame a Scheme to be called the Employees’ Provident Fund Scheme for the
establishment of provident funds under this Act for employees or for any class of employees
and specify the establishments or class of establishments to which the said Scheme shall
apply and there shall be established, as soon as may be after the framing of the Scheme, a
Fund in accordance with the provisions of this Act and the Scheme

15.45 Self Assessment Questions

1. Briefly explain the Procedure of Employee Fund scheme
2. Outline the Central Board and Appointment of officer in EPF
3. Discuss the Appeals and Procedure of Tribunal in EPF
4. Describe the offences and Penalties of Employees Fund Scheme

15.46 Suggested Readings

1. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 as amended by
Along with Employees’ Provident Funds Scheme, 1952, July 2022
by Professional (Author), Professional book publishers.
2. Employees Provident Funds & Miscellaneous Provisions Act, 1952 alongwith with
allied Schemes, Rules, Notifications & Forms, January 2020,
by Professional (Author), Professional book publishers.
3. Commentary on Employees Provident Funds and Miscellaneous Provisions Act, 1952
- Latest 2023 Edition by Kharbanda & Kharbanda , February 2023
4. Malik, P.L : Industrial Law, Eastern Book Company, Lucknow , 1999.
5. Vaidyanathan, N : ILO Conventions and India , Menerva Associates, Calcutta , 1975.
6. Sinha, G.P. & Sinha,, P.R.N : Industrial Relations and Labour Legislations, Oxford and IBH
Publishing Co., New Delhi , 1980.
7. Sharma, A.M : Legal Framework on Industrial Relations, Himalaya Publishing House,
Mumbai, 2002.

Dr.M.Rama satyanarayana
 LESSON -16

PAYMENT OF GRATUITY ACT, 1972

Learning outcomes

✓ To study the Gratuity Payable to the employee on the termination of his employment
✓ To Know the Powers of Inspectors
✓ To evaluate the Penalties and recovery of Gratuity
✓ To identify the Cognizance offences, gratuity and protection of action in good faith

Structure
16.1Introduction
16.2 Section: 2 Definitions.
16.3 Section: 2A- Continuous service
16.4 Section: 3 Controlling authority
16.5 Section: 4 Gratuity payable to an employee on the termination of his employment
16.6 Section: 4A Compulsory insurance
16.7 Section: 5 Power to exemption
16.8 Section: 6 Nomination
16.9 Section: 7 Determination of the amount of gratuity
16.10 Section: 7A Inspectors
16.11Section: 7B Powers of Inspectors
16.12 Section: 8 Recovery of gratuity
16.13 Section: 9 Penalties
16.14 Section: 10 Exemption of employer from liability in certain cases
16.15 Section: 11 Cognizance of offences
16.16 Section: 12Protection of action taken in good faith
16.17Section: 13 Protection of gratuity
16.18 Section: 14 Act to override other enactments, etc
16.19 Section: 15 Power to make rules.
16.20 Summary
16.21 Key words
16.22 Self Assessment questions
16.23 Suggested Readings

16.1Introduction
An Act to provide for a scheme for the payment of gratuity to employees engaged in
factories, mines, oilfields, plantations, ports, railway companies, shops or other
establishments and for matters connected therewith or incidental thereto. BE it enacted by
Parliament in the Twenty-third Year of Republic of India as follows :
Section: 1Short title, extent, application and commencement.
(1) This Act may be called the Payment of Gratuity Act, 1972.
(2) It extends to the whole of India:
Provided that in so far as it relates to plantations or ports, it shall not extend to the State of
Jammu and Kashmir.
Centre for Distance Education 16.2 Acharya Nagarjuna University

(3) It shall apply to -

(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in
relation to shops and establishments in a State, in which ten or more persons are employed, or
were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are
employed, or were employed, or, any day of the preceding twelve months, as the Central
Government may, by notification, specify in this behalf.
(3A) A shop or establishment to which this Act has become applicable shall continue to be
governed by this Act notwithstanding that the number of persons employed therein at any
time after it has become so applicable falls below ten.]
(4) It shall come into force on such date as the Central Government may, by notification,
appoint.
16.2 Section: 2 Definitions.
In this Act, unless the context otherwise requires, -
(a) "appropriate Government"' means, -
(i) in relation to an establishment
(a) belonging to, or under the control of, the Central Government,
(b) having branches in more than one State,
(c) of a factory belonging to, or under the control of, the Central Government,
(d) of a major port, mine, oilfield or railway company, the Central Government,
(ii) in any other case, the State Government;
(b) "completed year of service" means continuous service for one year;
[(c) "continuous service" means continuous service as defined in section 2A;]
(d) "controlling authority" means an authority appointed by the appropriate

Government under section 3 ;

(e) "employee" means any person (other than an apprentice) employed on wages, [in any
establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any
skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether
the terms of such employment are express or implied, and whether or not such person is
employed in a managerial or administrative capacity, but does not include any such person
who holds a post under the Central Government or a State Government and is governed by
any other Act or by any rules providing for payment of gratuity

Explanation :
(f) "employer" means, in relation to any establishment, factory, mine, oilfield, plantation,
port, railway company or shop -
(i) belonging to, or under the control of, the Central Government or a State Government, a
person or authority appointed by the appropriate Government for the supervision and control
of employees, or where no person or authority has been so appointed, the head of the
Ministry or the Department concerned,
(ii) belonging to, or under the control of, any local authority, the person appointed by such
authority for the supervision and control of employees or where no person has been so
appointed, the chief executive office of the local authority,
(iii) in any other case, the person, who, or the authority which, has the ultimate control over
Payment of Gratuity Act 16.3 Labor Legislations and Law
the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or
shop, and where the said affairs are entrusted to any other person, whether called a manager,
managing director or by any other name, such person;
(g) "factory" has the meaning-assigned to it in clause (m) of section 2 of the Factories Act,
1948 (63 of 1948);
(h) "family", in relation to an employee, shall be deemed to consist of -
(i) in the case of a male employee, himself, his wife, his children, whether married or
unmarried ,his dependent parents and the dependent parents of his wife and the widow] and
children of his predeceased son, if any,
(ii) in the case of a female employee, herself, her husband, her children, whether married or
unmarried, her dependent parents and the dependent parents of her husband and the widow
and children of her predeceased son, if any:

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

(i) "major port" has the meaning assigned to it in clause (8) of section 3 of the Indian Ports
Act, 1908 (15 of 1908);
(j) "mine" has the meaning assigned to it in clause (J) of sub-section (1) of section 2 of the
Mines Act, 1952 (35 of 1952);
(k) "notification" means a notification published in the Official Gazette;
(l) "oilfield" has the meaning assigned to it in clause (e) of section 3 of the Oilfields
(Regulation and Development) Act, 1948 (53 of 1948);
(m) "plantation" has the meaning assigned to it in clause (f) of section 2 of the Plantations
Labour Act, 1951 (69 of 1951) ;
(n) "port" has the meaning assigned to it in clause (4) of section 3 of the Indian Ports Act,
1908 (15 of 1908);
(o) "prescribed" means prescribed by rules made under this Act;
(p) "railway company" has the meaning assigned to it in clause (5) of section 3 of the Indian
Railways Act,1890 (9 of 1890);
(q) "retirement" means termination of the service of an employee otherwise than on
superannuation;
[8] [(r) "superannuation", in relation to an employee, means the attainment by the employee
of such age as is fixed in the contract or conditions of service at the age on the attainment of
which the employee shall vacate the employment;
(s) "wages" means all emoluments which are earned by an employee while on duty or on
leave in accordance with the terms and conditions of his employment and which arc paid or
arc payable to him in cash and includes dearness allowance but does not include any bonus,
commission, house rent allowance, overtime wages and any other allowance.

16.3 Section: 2A- Continuous service

For the purposes of this Act, -
(1) an employee shall be said to be in continuous service for a period if he has, for that
period, been in uninterrupted service, including service which may be interrupted on account
of sickness, accident, leave, absence from duty without leave (not being absence in respect of
which an order treating the absence as break in service has been passed in accordance with
the standing order, rules or regulations governing the employees of the establishment), lay
Centre for Distance Education 16.4 Acharya Nagarjuna University

off, strike or a lock-out or cessation of work not due to any fault of the employee, whether
such uninterrupted or interrupted service was rendered before or after the commencement of
this Act.

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

(a) for the said period of one year, if the employee during the period of twelve calendar
months preceding the date with reference to which calculation is to be made, has actually
worked under the employer for not less than -
(i) one hundred and ninety days, in the case of an employee employed below the ground in a
mine or in an establishment which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case;
(b) for the said period of six months, if the employee during the period of six calendar months
preceding the date with reference to which the calculation is to be made, has actually worked
under the employer for not less than -
(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an
establishment which works for less than six days in a week; and
(ii) one hundred and twenty days, in any other case;
Explanation: For the purpose of clause (2), the number of days on which an employee has
actually worked under an employer shall include the days on which -
(i) he has been laid-off under an agreement or as permitted by standing orders made under the
Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial
Disputes Act, 1947 (14 of 1947), or under any other law applicab1c to the establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in
the course of his employment and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period
of such maternity leave does not exceed twelve weeks.

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

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

16.4 Section: 3 Controlling authority

The appropriate Government may, by notification, appoint any officer to be a controlling
authority, who shall be responsible for the administration of this Act and different controlling
authorities may be appointed for different areas.

16.5 Section: 4 Gratuity payable to an employee on the termination of his employment

(1) Gratuity shall be payable to an employee on the termination of his employment after he
has rendered continuous service for not less than five years, -
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where
the termination of the employment of any employee is due to death or disablement:
Payment of Gratuity Act 16.5 Labor Legislations and Law

Provided further that in the case of death of the employee, gratuity payable to him shall be
paid to his nominee or, if no nomination has been made, to his heirs, and where any such
nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling
authority who shall invest the same for the benefit of such minor in such bank or other
financial institution,
as may be prescribed, until such minor attains majority.

Explanation. : For the purposes of this section, disablement means such disablement as
incapacitates an employee for the work which he, was capable of performing before the
accident or disease resulting in such disablement.

(2) For every completed year of service or part thereof in excess of six months, the employer
shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages
last drawn by the employee concerned:

Provided that in the case of a piece-rated employee, daily wages shall be computed on the
average of the total wages received by him for a period of three months immediately
preceding the termination of his employment, and, for this purpose, the wages paid for any
overtime work shall not be taken into account.

Provided further that in the case of [an employee who is employed in a seasonal
establishment and who is riot so employed throughout the year], the employer shall pay the
gratuity at the rate of seven days wages for each season.

Explanation: In the case of a monthly rated employee, the fifteen days wages shall be
calculated by dividing the monthly rate of wages last drawn by him by twenty-six and
multiplying the quotient by fifteen.

(3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty
thousand] rupees.

(4) For the purpose of computing the gratuity payable to an employee who is employed, after
his disablement, on reduced wages, his wages for the period preceding his disablement shall
be taken to be the wages received by him during that period, and his wages for the period
subsequent to his disablement shall be taken to be the wages as so reduced.

(5) Nothing in this section shall affect the right of an employee to receive better terms of
gratuity under any award or agreement or contract with the employer.

(6) Notwithstanding anything contained in sub-section (1),

(a) the gratuity of an employee, whose services have been terminated for any act, wilful
omission or negligence causing any damage or loss to, or destruction of, property belonging
to the employer, shall be forfeited to the extent of the damage or loss so caused.

(b) the gratuity payable to an employee may be wholly or partially forfeited]

(i) if the services of such employee have been terminated for his riotous or disorderly conduct
or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an
Centre for Distance Education 16.6 Acharya Nagarjuna University

offence involving moral turpitude, provided that such offence is committed by him in the
course of his employment.

16.6 Section: 4A Compulsory insurance

(1) With effect from such date as may be notified by the appropriate Government in this
behalf, every employer, other than an employer or an establishment belonging to, or under
the control of, the Central Government or a State Government, shall, subject to the provisions
of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment
towards the gratuity under this Act, from the Life Insurance Corporation of India established
under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed
insurer:

Provided that different dates may be appointed for different establishments or class of
establishments or for different areas.

(2) The appropriate Government may, subject to such conditions as may be prescribed,
exempt every employer who had already established an approved gratuity fund in respect of
his employees and who desires to continue such arrangement and every employer employing
five hundred or more persons who establishes an approved gratuity fund in the manner
prescribed from the provisions of sub-section (1).

(3) For the purpose of effectively implementing the provisions of this section, every employer
shall within such time as may be prescribed get his establishment registered with the
controlling authority in the prescribed manner and no employer shall be registered under the
provisions of this section unless he has taken an insurance referred to in sub-section (1) or has
established an approved gratuity fund referred to in sub-section (2).
(4) The appropriate Government may, by notification, make rules to give effect to the
provisions of this section and such rules may provide for the composition of the Board of
Trustees of the approved gratuity fund and for the recovery by the controlling authority of the
amount of the gratuity payable to an employee from the Life Insurance Corporation of India
or any other insurer with whom an insurance has been taken under sub-section (1), or as the
case may be, the Board of Trustees of the approved gratuity fund.

(5) Where an employer fails to make any payment by way of premium to the insurance
referred to in sub-section (1) or by way of 'contribution to all approved gratuity fund referred
to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act
(including interest, if any, for delayed payments) forthwith to the controlling authority.

(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine
which may extend to ten thousand rupees and in the case of a continuing offence with a
further fine which may extend to one thousand rupees for each day during which the offence
continues.
Explanation : In this section "approved gratuity fund" shall have the same meaning as in
clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961)].

16.7 Section: 5 Power to exempt

(1) The appropriate Government may, by notification, and subject to such conditions as may
be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation,
port, railway company or shop to which this Act applies from the operation of the provisions
of this Act if, in the opinion of the appropriate Government, the employees in such
Payment of Gratuity Act 16.7 Labor Legislations and Law
establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt
of gratuity or pensionary benefits not less favourable than the benefits conferred under this
Act.

(2) The appropriate. Government may, by notification and subject to such conditions as may
be specified in the notification, exempt any employee or class of employees employed in any
establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this
Act applies from the operation of the provisions of this Act, if, in the opinion of the
appropriate
Government, such employee or class of employees are in receipt of gratuity or pensionary
benefits not less favorable than the benefits conferred under this Act.

(3) A notification issued under sub-section (1) or sub-section (2) may be issued
retrospectively a date not earlier than the date of commencement of this Act, but no such
notification shall be issued so as to prejudicially affect the interests of any person.

16.8 Section: 6 Nomination

(1) Each employee, who has completed one year of service, shall make, within such time, in
such form and in such manner, as may be prescribed, nomination for the Purpose of' the
second proviso to sub-section (1) of section 4.

(2) An employee may, in his nomination, distribute the amount of gratuity payable to him
under this Act amongst more than one nominee.

(3) If an employee has a family at the time of' making a nomination, the nomination shall be
made in favour of one or more members of his family, and any nomination made by such
employee in favour of a person who is not a member of his family, shall be void.

(4) If at the time of making a nomination the employee has no family, the nomination may be
made in favour of any person or persons but if the employee subsequently acquires a family,
such nomination shall forthwith become invalid and the employee shall make, within such
time as may be prescribed, afresh nomination in favour of one or more members of his
family.

(5) A nomination may, subject to the provisions of sub-sections (3) and (4), be modified by
an employee at any time, after giving to his employer a written notice in such form and in
such manner as may be prescribed, of his intention to do so.

(6) If a nominee predeceases the employee, the interest of the nominee shall revert to the
employee who shall make a fresh nomination, in the prescribed form, in respect of such
interest.

(7) Every nomination, fresh nomination or alteration of nomination, as the case may be, shall
be sent by the employee to his employer, who shall keep the same in his safe custody.

16.9 Section: 7 Determination of the amount of gratuity

(1) A person who is eligible for payment of gratuity under this Act or any person authorized,
in writing, to act on his behalf shall send a written application to the employer, within such
time and in such form, as may be prescribed, for payment of such gratuity.
Centre for Distance Education 16.8 Acharya Nagarjuna University

(2) As soon as gratuity becomes payable, the employer shall, whether an application referred
to in sub-section (1) has been made or not, determine the amount of gratuity and give notice
in writing to the person to whom the gratuity is payable and also to the controlling authority
specifying the amount gratuity so determined.

(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date
it becomes payable to the person to whom the gratuity is payable.

(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer
within the period specified in sub-section (3), the employer shall pay, from the date on which
the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not
exceeding the rate notified by the Central Government from time to time for repayment of
long-term deposits, as that Government may, by notification specify:
Provided that no such interest shall be payable if the delay in the payment is due to the fault
of the employee and the employer has obtained permission in writing from the controlling
authority for the delayed payment on this ground.

(4) (a) If there is any dispute as to the amount of gratuity payable to an employee under this
Act or as to the admissibility of any claim of, or in relation to, an employee for payment of
gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with
the controlling authority such amount as he admits to be payable by him as gratuity.
(b) Where there is a dispute with regard to any matter or matters specified in clause (a), the
employer or employee or any other person raising the dispute may make an application to the
controlling authority for deciding the dispute.

(c)] The controlling authority shall, after due inquiry and after giving the parties to the
dispute a reasonable opportunity of being heard, determine the matter or matters in dispute
and if, as a result of such inquiry any amount is found to be payable to the employee, the
controlling authority shall direct the employer to pay such amount or, as the case may be,
such amount as reduced by the amount already deposited by the employer.]

(d)The controlling authority shall pay the amount deposited, including the excess amount, if
any, deposited by the employer, to the person entitled thereto.

(e)As soon as may be after a deposit is made under clause (a), the controlling authority shall
pay the amount of the deposit -
(i) to the applicant where he is the employee; or
(ii) where the applicant is not the employee, to the nominee or, as the case may be, the
guardian of such nominee or] heir of the employee if the controlling authority is satisfied that
there is no dispute as to the right of the applicant to receive the amount of gratuity.

(5) For the purpose of conducting an inquiry under sub-section (4), the controlling authority
shall have the same powers as are vested in a court, while trying a suit, under the Code of
Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely :

(a) enforcing the attendance of any person or examining him on oath;

(b) requiring the discovery and production of documents,
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses.
(6) Any inquiry under this section shall be a judicial proceeding within the meaning of
Payment of Gratuity Act 16.9 Labor Legislations and Law
sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code, 1860 (45
of 1860).

(7) Any person aggrieved by an order under sub-section (4) may, within sixty days from the
date of the receipt of the order, prefer an appeal to the appropriate Government or such other
authority as may be specified by the appropriate Government in this behalf:

Provided that the appropriate Government or the appellate authority, as the case may be, may,
if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal
within the said period of sixty days, extend the said period by a further period of sixty days.

Provided further that no appeal by an employer shall be admitted unless at the time of
preferring the appeal, the appellant either produces a certificate of the controlling authority to
the effect that the appellant has deposited with him an amount equal to the amount of gratuity
required to be deposited under subsection (4), or deposits with the appellate authority such
amount.]

(8) The appropriate Government or the appellate authority, as the case may be, may, after
giving the parties to the appeal a reasonable opportunity of being heard, confirm, modify or
reverse the decision of the controlling authority.

16.10 Section: 7AInspectors

(1) The appropriate Government may, by notification, appoint as many Inspectors, as it
deems fit, for the purposes of this Act.
(2) The appropriate Government may, by general or special order, define the area to which
the authority of an Inspector so appointed shall extend and where two or more Inspectors are
appointed for the same area, also provide, by such order, for the distribution or allocation of
work to be performed by them under this Act.

(3) Every Inspector shall be deemed to be a public servant within the meaning of section 21
of the Indian Penal Code, 1860 (45 of 1860).

16.11Section: 7BPowers of Inspectors

(1) Subject to any rules made by the appropriate Government in this behalf, an Inspector
may, for the purpose of ascertaining whether any of the provisions of this Act or the
conditions, if any, of any exemption granted there under, have been complied with, exercise
all or any of the following powers, namely:
(a) require an employer to furnish such information as he may consider necessary
(b) enter and inspect, at all reasonable hours, with such assistants (if any), being persons in
the service of the Government or local or any public authority, as he thinks fit, any premises
of or place in any factory, mine, oilfield, plantation, port, railway company, shop or other
establishment to which this Act applies, for the purpose of examining any register, record or
notice or other document required to be kept or exhibited under this Act or the rules made
there under, or otherwise kept or exhibited in relation to the employment of any person or the
payment of gratuity to the employees, and require the production thereof for inspection;
(c) examine with respect to any matter relevant to any of the purposes aforesaid, the employer
or any person whom he finds in such premises or place and who, he has reasonable cause to
believe, is an employee employed therein;
(d) make copies of, or take extracts from, any register, record, notice or other document, as he
Centre for Distance Education 16.10 Acharya Nagarjuna University

may consider relevant, and where he has reason to believe that any offence under this Act has
been committed by an employer, search and seize with such assistance as he may think fit,
such register, record, notice or other document as he may consider relevant in respect of that
offence;
(e) exercise such other powers as may be prescribed.
(2) Any person required to produce any register, record, notice or other document or to give
any information by an Inspector under sub-section (1) shall be deemed to be legally bound to
do so within the meaning of sections 175 and 176 of the Indian Penal Code 1860 (45 of
1860).

(3) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall so far as may
be, apply to any search or seizure under this section as they apply to any search or seizure
made under the authority of a warrant issued under section 94 of that Code.]

16.12 Section: 8Recovery of gratuity

If the amount of gratuity payable under this Act is not paid by the employer, within the
prescribed time, to the person entitled thereto, the controlling authority shall, on an
application made to it in this behalf by the aggrieved person, issue a certificate for that
amount to the Collector, who shall recover the same, together with compound interest thereon
at such rate as the Central Government may, by notification, specify,] from the date of expiry
of the prescribed time, as arrears of land revenue and pay the same to the person entitled
thereto :

Provided that the controlling authority shall, before issuing a certificate under this section,
give the employer a reasonable opportunity of showing cause against the issue of such
certificate:

Provided further that the amount of interest payable under this section shall, in no case
exceed the amount of gratuity payable under this Act.

16.13 Section: 9Penalties

(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act
or of enabling any other person to avoid such payment, knowingly makes or causes to be
made any false statement or false representation shall be punishable with imprisonment for a
term which may extend to six months, or with fine which may extend to ten thousand rupees
or with both.

(2) An employer who contravenes, or makes default in complying with, any of the provisions
of this Act or any rule or order made there under shall be punishable with imprisonment for a
term which shall not be less than three months but 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:

Provided that where the offence relates to non-payment of any gratuity payable under this
Act, the employer shall be punishable with imprisonment for a term which shall not be less
than [36] [Six months but which may extend to two years] unless the court trying the offence,
for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or
the imposition 01; a fine would meet the ends of justice.
Payment of Gratuity Act 16.11 Labor Legislations and Law
16.14 Section: 10Exemption of employer from liability in certain cases
Where an employer is charged with an offence punishable under this Act, he shall be entitled,
upon complaint duly made by him and on giving to the complainant not less than three clear
days notice in writing of his intention to do so, to have any other person whom he charges as
the actual offender brought before the court at the time appointed for hearing the charge; and
if, after the commission of the offence has been proved, the employer proves to the
satisfaction of the court -

(a) that he has used due diligence to enforce the execution of this Act, and
(b) that the said other person committed the offence in question without his knowledge,
consent or connivance, that other person shall be convicted of the offence and shall be liable
to the like punishment as if he were the employer and the employer shall be discharged from
any liability under this Act in respect of such offence:

Provided that in seeking to prove as aforesaid, the employer may be examined on oath and
his evidence and that of any witness whom he calls in his support shall be subject to cross
examination on behalf of the person he charges as the actual offender and by the prosecutor:

Provided further that, if the person charged as the actual offender by the employer cannot be
brought before the court at the time appointed for hearing the charge, the court shall adjourn
the hearing from time to time for a period not exceeding three months and if by the end of the
said period the person charged as the actual offender cannot still be brought before the court,
the court shall proceed to hear the charge against the employer and shall, if the offence be
proved, convict the employer.

16.15 Section: 11Cognizance of offences

(1) No court shall take cognizance of any offence punishable under this Act save on a
complaint made by or under the authority of the appropriate Government:

Provided that where the amount of gratuity has not been paid, or recovered, within six
months from the expiry of the prescribed time, the appropriate Government shall authorise
the controlling authority to make a complaint against the employer, whereupon the
controlling authority shall, within fifteen days from the date of such authorisation, make such
complaint to a Magistrate having jurisdiction to try the offence.

(2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first
class shall try any offence punishable under this Act.

16.16 Section: 12Protection of action taken in good faith

No suitor other legal proceeding shall lie against the controlling authority or any other person
in respect of anything which is in good faith done or intended to be done under this Act or
any rule or order made there under.

16.17Section: 13Protection of gratuity

No gratuity payable under this Act and no gratuity payable to an employee employed in any
establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted
under section shall be liable to attachment in execution of any decree or order of any civil,
revenue or criminal court.
Centre for Distance Education 16.12 Acharya Nagarjuna University

16.18 Section: 14Act to override other enactments, etc

The provisions of this Act or any rule made there under shall have effect notwithstanding
anything inconsistent therewith contained in any enactment other than this Act or in any
instrument or contract having effect by virtue of any enactment other than this Act.

16.19 Section: 15Power to make rules.

(1) The appropriate Government may, by notification make rules for the purpose of carrying
out the provisions of this Act.

(2) Every rule made by the Central Government under this Act shall be laid, as soon as may
be after it is made, before each House of Parliament while it is in session, for a total period of
thirty days which may be comprised in one session or in two or more successive sessions, and
if, before the expiry of the session ii-immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the rule or both Houses
agree that the rule should not be made, the rule shall, thereafter, have effect only in such
modified form or be of no effect as the case may be; so, however, that any such modification
or annulment shall be without prejudice to the validity of anything previously done under that
rule.

16.20 Summary
Under Section 4, payment of gratuity is mandatory. Gratuity shall be payable to an
employee on termination of employment after he has rendered continuous service for not less
than five years in a single organisation. The termination can be due to: Superannuation,
Retirement or resignation, and Death or disablement due to accident or disease. As per
Section 4(1), the completion of continuous service of 5 years is not required where
termination of employment is due to death or disablement. In such case mandatory gratuity is
payable. The unpaid gratuity amount is seized by government which is further used in
holiday, vacations, parties and other fun related activities. Gratuity is paid at a rate of 15 days'
wages for every completed year of service or part thereof in excess of six months. The wages
here means wages last drawn by the employee. The "15 days' wages" will be calculated by
dividing the last drawn wages by and multiplying the result with But under Section 4(3), the
maximum gratuity that is payable is fixed at ₹20,00,000. Any gratuity amount paid in excess
of ₹20,00,000 is taxable in the employee's hands.

16.21 Key words

Employee- means any person (other than an apprentice) employed on wages, [in any
establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any
skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether
the terms of such employment are express or implied, and whether or not such person is
employed in a managerial or administrative capacity, but does not include any such person
who holds a post under the Central Government or a State Government and is governed by
any other Act or by any rules providing for payment of gratuity

Superannuation- in relation to an employee, means the attainment by the employee of such

age as is fixed in the contract or conditions of service at the age on the attainment of which
the employee shall vacate the employment

Wages- means all emoluments which are earned by an employee while on duty or on leave
in accordance with the terms and conditions of his employment and which arc paid or arc
payable to him in cash and includes dearness allowance but does not include any bonus,
Payment of Gratuity Act 16.13 Labor Legislations and Law
commission, house rent allowance, overtime wages and any other allowance

Controlling authority- The appropriate Government may, by notification, appoint any

officer to be a controlling authority, who shall be responsible for the administration of this
Act and different controlling authorities may be appointed for different areas.

16.22 Self Assessment Questions

1. Briefly Explain the Procedure of Payment of Gratuity Act 1952
2. Explain the Power of Inspectors
3. Discuss the Penalties and Recovery of Gratuity
4. Describe the Cognizance offences, gratuity and protection of action in good faith
16.23 Suggested Readings
1. Commentaries on Payment of GRATUITY ACT,1972, Tenth edition, January 2022,
by Kharbanda & Kharbanda (Author), Law publishing house.
2. The Payment of Gratuity Act, 1972 Paperback – 1 January 2019 by Asia Law
House (Author), Asia law house, Hyderabad.
3. The Payment of Gratuity Act,1972 January 2020 by sathpal puliani (Author, Editor)
karnataka law journal publication, Bangalore.
4. Labour Law Agency's Bare Act on The Payment Of Gratuity Act, 1972 | 2017
Edition, January 2022 by Labour Law Agency (Author), Mumbai.
5. Malik, P.L : Industrial Law, Eastern Book Company, Lucknow , 1999.
6. Sharma, A.M : Aspects of Labour Welfare and Social Security, Himalaya Publishing
House, Mumbai, 2002.
Dr.M.Rama satyanarayana
 LESSON-17

AP SHOPS AND ESTABLISHMENT ACT

Learning Objectives

✓ To study the Registration and Renewal of Establishment

✓ To Understand the employment of women, children and young persons in the shops
✓ To Know the Health and safety in the shops
✓ To learn the wages shops and establishment of the shops
✓ To know the penalties and offences of shops
✓ To outline the issues of Bar suits

Structure
17.1 Introduction
Short title, extent Commencement and application
17.2 Definitions
17.3 Registration of Establishments
17.4 Renewal of Registration Certificate
17.5. Revocation or Suspension of the Registration Certificate
17.6. Appeal against revocation or suspension of the Registration certificate
17.7. Opening and closing hours of shops –
17.8. Selling outside prohibited, before opening and after closing hours of shops
17.9. Daily and weekly hours of work in shops
17.10. Interval for rest
17.11. Spread over periods of work
17.12. Closing of shops and grant of holidays
17.13. Closing of shops in public interest during special occasions –
17.14 Establishment Other Than Shops
17.14.1 Application of this chapter to establishments to other than shops
17.14.2 Opening and closing hours
17.14.3 Daily and weekly hours of work
17.14.4 Interval for rest
17.14.5 Spread over of periods of work
17.14.6 Holidays
17.15 Employment Of Women, Children And Young Persons
17.15.1 Children not to work in establishment
17.15.2 Special provision for young persons
17.15.3 Daily and weekly hours of work for young persons
17.15.4 Special provision for women
17.15.5 Maternity leave
17.15.6 Maternity benefit
17.16 Health And Safety
17.16.1 Clean lines
17.16.2 Ventilation
17.16.3 Precautions for the safety of employees in establishments
17.16.4 Pay during leave and holidays
17.16.5 Power to increase the period of leave allowable under section 30
17.16.6 Compulsory enrolment of employees to Insurance-cum-Savings Scheme
17.17 Wages, Conditions For Termination Of Services, Appeals, Suspension And Terminal
Centre for Distance Education 17.2 Acharya Nagarjuna University

Benefits
17.17.1 Responsibility for payment of wages
17.17.2 Wages for over time work
17.17.3 Time of payment of wages
17.18 Deductions for absence from duty
17.18.1 Deductions for damage or less -
17.18.2 Deductions for services rendered
17.19 Penalties For Offences
17.19.1 Power to Compound offence
17.19.2 Penalty for obstructing Inspector, etc.,
17.19.3 Procedure in trial of offences
17.20 Bar of suits
17.20.1 Contracting Out
17.20.2 Offences to be tried by magistrate of second class or above
17.21 Key words
17.22 Self assessment Questions
17.23 Suggested Reading

17.1 Introduction
Short title, extent Commencement and application
(1) This Act may be called the Andhra Pradesh Shops and Establishments Act, 1988.
(2) It extends to the whole of the State of Andhra Pradesh.
(3) It shall come into force on such date as the Government may, by notification, appoint.
(4) It shall apply-
(i) in the first instance to all areas in which the Andhra Pradesh Shops and Establishments
Act, 1966 was in force immediately before the commencement of this Act;
(ii) to such other areas in the State on such date as the Government may, by notification,
specify.

17.2 Definitions
In this Act, unless the context otherwise requires,-
(1) ‘apprentice’ means a person who is employed whether on payment of wages or not, for
the purpose of being trained in any trade, craft or employment in any establishment;
(2) ‘Chief Inspector’ means the Chief Inspector appointed under section 57;
(3) ‘child’ means a person who has not completed fourteen years of age;
(4) ‘closed’ means not open for the service of any customer, or for any trade or business or
for any other purpose connected with the establishment except loading, unloading and annual
stock taking;
(5) ‘commercial establishment’ means an establishment which carries on any trade, business,
profession or any work in connection with or incidental or ancillary to any such trade,
business or profession or which is a clerical department of a factory or an industrial
undertaking or which is a commercial or trading or banking or insurance establishment and
includes an establishment under the management and control of a co-operative society, an
establishment of a factory or an industrial undertaking which falls outside the scope of the
Factories Act, 1948, (Central Act 63 of 1948) and such other establishment as the
Government may, by notification, declare to be a commercial establishment for the purposes
of this Act but does not include a shop;
(6) ‘day’ means the period of twenty-four hours beginning at mid-night: Provided that, in the
case of an employee, whose hours of work extend beyond mid-night, day means the period of
twenty-four hours beginning from the time when such employment commences.
AP Shops & Establishment Act 17.3 Labor Legislations and Law
(7) ‘dependent’ means, in relation to a deceased employee, his nominee or in the absence of
such nominee, the heir or legal representative;
(8) ‘employee’ means a person wholly or principally employed in, and in connection with,
any establishment and includes an apprentice and any clerical or other staff of a factory or
industrial establishment who fall outside the scope of the Factories Act, 1948 (Central Act 63
of 1948); but does not include the husband, wife, son, daughter, father, mother, brother or
sister of an employer or his partner, who is living with and depending upon such employer or
partner and is not in receipt of any wages;
(9) ‘employer’ means a person having charge of or owning or having ultimate control over
the affairs of an establishment and includes the manager, agent or other person acting in the
general management or control of an establishment;
(10) ‘establishment’ means a shop, restaurant, eating-house, residential hotel, lodging house,
theatre or any place of public amusement or entertainment and includes a commercial
establishment and such other establishment as the Government may, by notification, declare
to be an establishment for the purposes of this Act;

(11) ‘factory’ means factory within the meaning of the Factories Act, 1948;
(12) ‘Government’ means the State Government;
(13) ‘Inspector’ means an Inspector appointed under section 57;
(14) ‘notification’ means a notification published in the Andhra Pradesh Gazette and the
word "notified" shall be construed accordingly:
(15) ‘opened’ means opened for the service of any customer or for any trade or business
connected with the establishment;
(16) ‘periods of work’ means the time during which an employee is at the disposal of the
employer;
(17) ‘prescribed’ means prescribed by rules made by the Government under this Act;
(18) ‘register of establishment’ means a register maintained for the registration of
establishments under this Act;
(19) ‘registration certificate’ means a certificate issued under this Act;
(20) ‘service compensation’ means the service compensation payable under section 47;
(21) ‘shop’ means any premises where any trade or business is carried an or where services
are rendered to customers and includes a shop run by a cooperative society, an office, a store
room, go down, warehouse or work place, whether in the same premises or otherwise, used in
connection with such trade or business and such other establishments as the Government
may, by notification, declare to be a shop for the purposes of this Act, but does not include a
commercial establishment;
(22) ‘theatre’ includes any premises intended principally or wholly for the exhibition of
pictures or other optical effects by means of a cinematograph or other suitable apparatus or
for dramatic or circus performances or for any other public amusement or entertainment;
(23) ‘wages’ means every remuneration, whether by way of salary, allowance or otherwise
expressed in terms of money or capable of being so expressed which would, if the terms of
employment, express or implied were fulfilled, be payable to an employee in respect of his
employment or of work done in such employment, and includes-
(a) any remuneration payable under any settlement between the parties or order of a tribunal
or court;
(b) any remuneration to which the employee is entitled in respect of overtime work or
holidays or any leave period;
(c) any additional remuneration payable under the terms of employment, whether called a
bonus or by any other name;
(d) any sum which by reason of the termination of employment of the employee is payable
Centre for Distance Education 17.4 Acharya Nagarjuna University

under any law, contract or instrument which provides for the payment of such sum, whether
with or
without deductions, but does not provide for the time within which the payment is to be
made;
(e) any sum to which the employee is entitled under any scheme framed under any law for the
time being in force; but does not include,-
(i) any bonus, whether under a scheme of profit sharing or otherwise, which does not form
part of the remuneration payable under the terms of employment, or which is not payable
under any award or settlement between the parties or order of a court;
(ii) the value of any house accommodation, or of the supply of light, water, medical
attendance or other amenity or of any service excluded from the computation of wages by a
general or special order of the Government;
(iii) any contribution paid by the employer to any person or provident fund, and the interest
which may have accrued thereon;
(iv) any travelling allowance or the value of any travelling concession;
(v) any sum paid to the employee to defray special expenses entailed on him by the nature of
his employment;
(vi) any service compensation payable on the termination of employment in cases other than
those specified in subclause (d);
(vii) the subscription paid by the employee to life insurance and the contribution paid by the
employer to the life insurance of the employee under the provisions of this Act and the bonus
which may have accrued thereon; or
(viii) house rent allowance payable by the employer;
(24) ‘week’ means a period of seven days beginning at mid-night on Saturday;
(25) ‘young person’ means a person who is not a child and has not completed eighteen years
of age.

17.3 Registration of Establishments

(1) Every employer of an establishment shall –
(i) in the case of an establishment existing on the date of commencement of this Act, within
thirty days from that date; and
(ii) in the case of a new establishment, within thirty days from the date on which the
establishment commences its work, send to the Inspector concerned a statement containing
such particulars, together with such fees, as may be prescribed.

(2) On receipt of such statement, the Inspector shall register the establishment in the register
of establishments in such manner as may be prescribed and shall issue in the prescribed form
a registration certificate to the employer who shall display it at a prominent place of the
establishment.

(3) Every registration certificate issued under sub-section (2), shall be valid with effect from
the date on which it is issued upto the 31st day of December following.

(4) Every employer shall give intimation to the Inspector, in the prescribed form, any change
in any of the particulars in the statement made under sub-section (1) within fifteen days after
the change has taken place. The Inspector shall, on receipt of such intimation and the fees
prescribed therefor make the change in the register of establishments in accordance with such
intimation and shall amend the registration certificate or issue a fresh registration certificate,
if necessary.
AP Shops & Establishment Act 17.5 Labor Legislations and Law
(5) The employer shall, within fifteen days of the closure of the establishment, give
intimation thereof in writing to the Inspector, who shall, on receipt of such intimation,
remove the name of the establishment from the register of establishments and cancel the
registration certificate. Provided that, where the Inspector is satisfied otherwise than on
receipt of such intimation, that the establishment has been closed, he shall remove the name
of such establishment from the register and cancel the registration certificate.

17.4 Renewal of Registration Certificate

(1) The Inspector may, on an application made by the employer accompanied by the fees
prescribed therefor, renew the registration certificate for a period of one year or for
such number of years as may be prescribed, commencing from the date of its expiry.
(2) Every application for the renewal of the registration certificate shall be made in such form
and in such manner as may be prescribed so as to reach the Inspector not later than thirty days
before the date of its expiry:

Provided that, an application for the renewal of a registration certificate received not later
than thirty days after its expiry may be entertained by the Inspector on the applicant paying
such penalty as may be prescribed, by the Government from time to time.

(3) An applicant for the renewal of a registration certificate under subsection (2) shall, until
communication of orders on his application, be entitled to act as if the registration certificate
had been renewed.

17.5. Revocation or Suspension of the Registration Certificate

If the Inspector is satisfied, either on a reference made to him in this behalf or otherwise,
that-
(a) the Registration Certificate granted under section 3 or renewed under section 4 has been
obtained by mis-representation, fraud or suppression of any material fact; or
(b) the employer has willfully contravened any of the provisions of this Act or the Rules
made thereunder, the Inspector may, without prejudice to any other penalty to which the
employer may be liable under this Act, revoke or suspend the Registration Certificate, after
giving the employer an opportunity of showing cause

17.6. Appeal against revocation or suspension of the Registration certificate

(1) Any person aggrieved by an order made under section 5 may, within thirty days from the
date on which the order is communicated to him, prefer an appeal to such authority as may be
prescribed: Provided that the appellate authority may entertain the appeal after the expiry of
the said period of thirty days if he is satisfied that the appellant was prevented by sufficient
cause from filing the appeal in time.

(2) On receipt of an appeal under sub-section (1), the appellate authority shall, after giving
the appellant an opportunity of being heard, dispose of the appeal within two months.

17.7. Opening and closing hours of shops

(1) No shop shall on any day be opened earlier or closed later than such hour as may, after
previous publication, be fixed by the Government by a general or special order in that behalf:

Provided that, any customer who was being served or was waiting to be served in any shop at
the hour fixed for its closing may be served during the quarter of an hour immediately
Centre for Distance Education 17.6 Acharya Nagarjuna University

following such hour.

(2) The Government may, for the purposes of this section, fix different hours for different
classes of shops or for different areas or for different time of the year.

17.8. Selling outside prohibited, before opening and after closing hours of shops
No person shall carry on, in or adjacent to, a street or public place, the sale of any
goods, before the opening and after the closing hours fixed under section 7 for the shops
dealing in any kind of goods in the locality in which such street or public place is situated:
Provided that, nothing in this section shall apply to the sale of-
(i) News papers;
(ii) flowers;
(iii) pan;
(iv) vegetables and fruits; and
(v) such other goods as the Government may, by notification, specify from time to time.

17.9. Daily and weekly hours of work in shops

(1) Subject to other provisions of this Act, no employee in any shop shall be required or
allowed to work therein for more than eight hours in any day and forty-eight hours in any
week.

[(2) Any employee may be required or allowed to work in a shop for any period in excess of
the limit fixed under sub-section (1), on payment of overtime wages, subject to the following
limitations:
(i) The total number of hours of work, including overtime, in any day shall not exceed
twelve;
(ii) The spread over, inclusive of intervals of rest, shall not exceed thirteen hours in any one
day;
(iii) The total number of hours of work in any week, including overtime, shall not exceed
sixty two;
(iv) No employee shall be allowed to work overtime, for more than seven days at a stretch;
fifty.
Explanation: for the purpose of this sub-section ‘Month’ means Calendar month.]

17.10. Interval for rest

No employee in any shop shall be required or allowed to work therein for more than
five hours in any day unless he has had an interval for rest of at least one hour:

Provided that, an employee who was serving a customer at the commencement of the
interval may be required to serve him during the quarter of an hour immediately following
such commencement.

17.11. Spread over periods of work

The periods of work of an employee in a shop shall be so arranged that along with his
intervals for rest, they shall not spread over for more than twelve hours in any day: Provided
that, where an employee works on any day for the purpose of stock-taking and preparation of
accounts, the spread over shall not exceed fourteen hours in any such day on payment of
over-time wages.

17.12. Closing of shops and grant of holidays

AP Shops & Establishment Act 17.7 Labor Legislations and Law
(1) Every shop, whether with or without employees, shall remain closed on every Sunday
which shall be a holiday for every employee in the shop:
Provided that the Chief Inspector may, by notification, specify in respect of any shop or class
of shops or in respect of shops or class of shops in any area any day in the week instead of
Sunday on which day such shop or class of shops shall remain closed.

(2)(a) The Chief Inspector may, by notification, require in respect of any specified class of
shops that they shall in addition to the weekly holiday mentioned in sub-section (1), be closed
for one half day in a week, as may be fixed by the Government;

(b) Every employee in any shop to which a notification under clause (a) applies, shall be
allowed in each week an additional holiday of one half day fixed for the closing of the shop
under clause (a).

(3) The Chief Inspector may, for the purposes of sub-section (2), fix different hours for
different classes of shops or for different areas or for different times of the year.

(4) The weekly day on which a shop is closed in pursuance of a requirement under sub-
section (2) shall be specified by the employer in a notice prominently exhibited in a
conspicuous place in the shop.

(5) It shall not be lawful for the employer to call an employee at or for the employee to go to
his shop or any place for any work in connection with the business of his shop on any day or
part of the day on which it has remained closed.

(6) No deduction shall be made from the wages of any employee in a shop on account of any
day or part of a day on which it has remained closed; and if such employee is employed on
the basis that he would not ordinarily receive wages for such day or part of a day he shall
nonetheless be paid for such day or part of a day the wages he would have drawn had the
shop not remained closed, or had the holiday not been allowed, on that day or part of a day.

17.13. Closing of shops in public interest during special occasions

In addition to the holidays mentioned in section 12, the Chief Inspector may, by
notification and with the previous approval of the Government, require in . Omitted by the
Act No. 36 of 2018, S.2. respect of any specified class of shops that they shall be closed on
any specified day or days in the public interest

17.14 Establishment Other Than Shops

17.14.1 Application of this chapter to establishments to other than shops
The provisions of this Chapter shall apply only to establishments other than shops.
17.14.2 Opening and closing hours
(1) No establishment shall on any day be opened earlier, or closed later, than such hour as
may, after previous publication, be fixed by the Government by general or special order in
that behalf Provided that, in the case of a restaurant or eating-house, any customer who was
being served or was waiting to be served therein at the hour fixed for its closing may be
served during the quarter of an hour immediately following such hour.
(2) The Government may, for the purposes of this section, fix different hours for different
classes of establishments or for different areas or for different times of the year.
Centre for Distance Education 17.8 Acharya Nagarjuna University

17.14.3 Daily and weekly hours of work

(1) Subject to the provisions of this Act, no employee in any establishment shall be required
or allowed to work therein for more than eight hours in any day and fortyeight hours in
any week.

(2) Any employee may be required or allowed to work in an establishment for any period in
excess of the limit fixed under sub-section (1), on payment of over-time wages, subject
to the following limitations:

(i) The total number of hours of work (including overtime), in any day shall not exceed
twelve;
(ii) The spread over, inclusive of intervals of rest, shall not exceed thirteen hours in any one
day;
(iii) The total number of hours of work in any week, including overtime, shall not exceed
sixty two;
(iv) No employee shall be allowed to work overtime, for more than seven days at a stretch
and the total number of hours of overtime work in any month shall not exceed fifty
hours.

Explanation: for the purpose of this sub-section ‘Month’ means Calendar

17.14.4 Interval for rest

No employee in any establishment shall be required or allowed to work in such
establishment for more than five hours in any day unless he has had an interval for rest of at
least one hour: Provided that the Chief Inspector may, in the case of an establishment whose
daily hours of work are less than eight hours, reduce interval for rest to half-an-hour on an
application made by the employer, with the consent of the employees.

17.14.5 Spread over of periods of work

The periods of work of an employee in an establishment shall be so arranged that,
along with his interval for rest, they shall not spread over for more than twelve hours on any
day: Provided that, where an employee works on any day for the purpose of stock taking and
preparation of accounts the spread over shall not exceed fourteen hours on any such day on
payment of over-time wages

17.14.6 Holidays
(1) Every employee in any establishment shall be allowed in each week a holiday of one
whole day: Provided that, nothing in this sub-section shall apply to any employee whose total
period of employment in the week, including any days spent on authorised leave is less than
six days.

(2) The Government may, by notification, require in respect of any specified class of
establishments that every employee therein shall be allowed in each week an additional
holiday of one half-day commencing at such hour in the afternoon as may be fixed by the
Government.

(3) The Government may, for the purposes of sub-section (2), fix different hours for different
classes of establishments or for different areas or for different times of the year.

(4) No deduction shall be made from the wages of any employee in an establishment on
AP Shops & Establishment Act 17.9 Labor Legislations and Law
account of any day or part of a day on which a holiday has been allowed in accordance with
this section and if such employee is employed on the basis that he would not ordinarily
receive wages for such day or part of a day, he shall non the less be paid for such day or part
of a day the wages he would have drawn, had the holiday not been allowed on that day or part
of a day.

(5) It shall not be lawful for the employer to call an employee at or for the employee to go to,
his establishment or any other place for any work in connection with the business of his
establishment on any day or part of a day on which a holiday has been allowed in accordance
with this section.

17.15 Employment Of Women, Children And Young Persons

17.15.1 Children not to work in establishment
No Child shall be required or allowed to work in any establishment.

17.15.2 Special provision for young persons

No young person shall be required or allowed to work in any establishment before 6
a.m. and after 7 p.m.

17.15.3 Daily and weekly hours of work for young persons

Notwithstanding anything in this Act, no young person shall be required or allowed
to work in any establishment for more than 7 hours in any day and forty-two hours in any
week nor shall such person be allowed to work overtime.

17.15.4 Special provision for women

No Woman employee shall be required or allowed to work in any establishment
before 6-00 a.m. and after 8-30 p.m.: Provided that the women employees may be required or
allowed to work between 8.30 p.m. and 6.00 a.m. in any establishment in which adequate
safety security measures and other safeguards as my be prescribed by the State Government
are provided. The safety and security measures shall include provision of shelter, rest rooms,
lunch rooms, night crèches and ladies, toilets, adequate protection of their privacy, dignity,
honor and safety, protection from sexual harassment, employment of at least five (5) women
employees together and their transportation between factory premises and the doorstep of
their residence:

Provided further that the above relaxation shall not be allowed to a woman employee during a
period of sixteen (16) weeks before and after her childbirth, of which at least eight (8) weeks
shall be before the expected childbirth, and for such additional period, if any, as specified in
the medical
certificate stating that it is necessary for the health of the woman employee or her child].

17.15.5 Maternity leave

The periods of absence from duty in respect of which a women employee is entitled to
maternity benefit under section 25, shall be treated as authorised absence from duty, and the
women employee shall be entitled to maternity benefit, but not to any wages for any of those
periods.

17.15.6 Maternity benefit

Every woman who has been for a period of not less than six months preceding the
date of her delivery in continuous employment of the same employer whether in the same or
Centre for Distance Education 17.10 Acharya Nagarjuna University

different shops or commercial establishments, shall be entitled to receive from her

employer for the period of-

(a) six weeks immediately preceding the day of delivery; and

(b) six weeks following the day of delivery; such maternity benefit and in such manner as
may be prescribed:

Provided that, no woman employee shall be entitled to receive such benefit for any day
during any of the aforesaid periods, on which she attends work and receive wages thereof.

17.16 Health And Safety

17.16.1 Clean lines
The premises of every establishment shall be kept clean and free from effluvia arising
from any drain or privy or other nuisance and shall be cleaned at such times and by such
methods as may be prescribed.

17.16.2 Ventilation
The premises of every establishment shall be ventilated as provided for in the laws
relating to the municipalities, gram-panchayats or other local authorities for the time being in
force.

17.16.3 Precautions for the safety of employees in establishments

(1) In every establishment other than such establishment or class of establishments as the
Government, may, by notification, specify, such precautions against fire shall be taken as
may be prescribed.

(2) Nothing in sub-section (1) shall apply in respect of any establishment where the number
of holidays with wages allowed by the employer is more than the holidays notified by the
Government under that sub-section: Provided that, every such employer shall send a list of
holidays with wages allowed by him, which shall include the five holidays specified in
subsection (1), to the inspector and to the Chief Inspector and shall also display
the list at a prominent place of the establishment.

17.16.4 Pay during leave and holidays

Every employee shall, for the period of the leave allowed under sub-sections (1) and
(5) of section 30 or the holidays allowed under section 31, be paid at a rate equivalent to the
daily average of his wages for the days on which he actually worked during the preceding
month exclusive of any earning in respect of overtime.

17.16.5 Power to increase the period of leave allowable under section 30

Notwithstanding anything in section 30, the Government may, by notification,
increase the total number of days of leave allowable under subsection (1) of that section and
the maximum number of days upto which such leave may be accumulated in respect of any
establishment or class of establishments.

17.16.6 Compulsory enrolment of employees to Insurance-cum-Savings Scheme

(1) Every employee who has served in an establishment for a period of not less than
one year shall subscribe to the insurance scheme or Insurance-cum-Saving scheme as may be
notified by the Government to be applicable to the establishment in which the employee is
working, at the rates, stipulated by the Government in the notification either in lumpsum
AP Shops & Establishment Act 17.11 Labor Legislations and Law
every year or in monthly installments as may be prescribed by the Government in the
notification. For this purpose the employer shall make the payment to the authority notified
by the Government on behalf of the employee on or before the
stipulated date and recover the same from the wages payable to the employee.

(2) In addition to the subscription of the employee mentioned in subsection (1), every
employer of the establishment to which the scheme of insurance or Insurance-cum-Savings is
made applicable by the Government, shall also pay such percentage of annual wages of
employee as may be notified by the Government, from time to time to the authority notified
for the purpose as employer's contribution on or before the specified date every year.

17.17 Wages, Conditions For Termination Of Services, Appeals, Suspension And

Terminal Benefits
17.17.1 Responsibility for payment of wages
Every employer shall be responsible for the payment by him to employees of all
wages and sums, required to be paid under this Act.

Fixation of wage period-

(1) Every employer shall fix periods (hereinafter referred to as wage-periods) in respect of
which such wages shall be payable.

(2) No wage-period shall exceed one month.

17.17.2 Wages for over time work

Where any employee in any establishment is required to work over-time he shall be
entitled, in respect of such over-time work, to wages at twice the ordinary rate of wages:

Provided that, where the normal hours of work in an establishment are ordinarily less than
eight hours a day and 48 hours a week, he shall be entitled in respect of work in excess of
such normal hours upto eight hours a day and forty eight hours a week to wages at the
ordinary rate of wages and in respect of work in excess of eight hours a day and forty eight
hours a week at twice the
ordinary rate of wages, in addition to the wages for the normal hours of work. Explanation:-
For the purpose of this section, the expression ‘ordinary rates of wages’ shall mean such rate
of wages as may be calculated in the manner prescribed.

17.17.3 Time of payment of wages

(1) The wages of every employee shall be paid before the expiry of the fifth day after the last
day of the wage-period in respect of which the wages are payable.

(2) Where the service of any employee is terminated by or on behalf of the employer the
wages earned by such employee shall be paid before the expiration of the second working
day from, the day on which his employment is terminated.

(3) The Government may, by general or special order and for reasons stated therein exempt
an employer from the operation of this section in respect of the wages of any employee or
class of employees to such extent and subject to such conditions as may be specified in the
order.
Centre for Distance Education 17.12 Acharya Nagarjuna University

(4) All payments of wages shall be made on a working day.

Wages to be paid in current coin or currency notes

All wages shall be paid in current coin or currency notes or in both.

Deductions which may be made from wages

(1) The wages of an employee shall be paid to him without deduction of any kind except
those authorised by or under this Act.

Explanation:-Every payment made by an employee to the employer shall, for the purposes of
this Act, be deemed to be a deduction from wages (2) Deductions from the wages of an
employee shall be made only in accordance with the provisions of this Act and may be of the
following kinds
only, namely:-

(a) fines and other penalties lawfully imposed;

(b) deductions for absence from duty;
(c) deductions for damages to, or loss of goods expressly entrusted to the employee for
custody or for loss of money for which he is required to account, where such damage or loss
is directly
attributable to his neglect or default;
(d) deductions for house accommodation provided by the employer;
(e) deductions for such amenities and services supplied by the employer as the Government
may, by general or special order, authorise;
(f) deductions for recovery of advances or for adjustment of overpayments of wages;
(g) deductions of income-tax or profession-tax payable by the employee;
(h) deductions required to be made by order of a court or other authority competent to make
such order;
(i) deductions for subscriptions to and for repayment of advances from, any provident fund to
which the Provident Funds Act, 1925 (Central Act 19 of 1925) applies or any recognised
provident fund as defined in section 2(38) of the Income Tax Act, 1961, (Central Act 43 of
1961) or any provident fund approved in this behalf by the Government during the
continuance of such approval;

(j) deductions for payments to co-operative societies approved in this behalf by the
Government or any officer authorised by them in this behalf or to a scheme of insurance
maintained by the Indian Post Office or the Life Insurance Corporation of India established
under Life Insurance Corporation Act, 1956 (Central Act 31 of 1956):

(k) deductions made with the written authorisation of the employee in furtherance of any
savings scheme approved by the Government or the purchase of securities of the Central or
State Government.

Fines

(1) No fine shall be imposed on any employee save in respect of such acts and omissions on
his part as the employer, with previous approval of the Government or of the prescribed
authority may have specified by notice under sub-section (2).

(2) A notice specifying such acts and omissions shall be exhibited in the prescribed manner
AP Shops & Establishment Act 17.13 Labor Legislations and Law
on the premises in which the employment is carried on.

(3) No fine shall be imposed on any employee until he has been given all opportunity of
showing cause against the fine or otherwise than in accordance with such procedure as may
be prescribed for the imposition of fines.

(4) The total amount of fine which may be imposed in any one wage period on any employee
shall not exceed an amount equal to three paise in the rupee of the wages payable to him in
respect of that wage period.

(5) No fine shall be imposed on any employee who has not completed the age of fifteen
years.

(6) No fine imposed on any employee shall be recovered from him after the expiration of
sixty day from the day on which it was imposed.

(7) Every fine shall be deemed to have been imposed on the day of the act or omission in in
respect of which it was imposed.

(8) All fines and all realizations thereof shall be recorded in a register to be kept by the
employer in such form as may be prescribed; and all such realizations shall be applied only to
such purposes beneficial to the employees in the establishment as are approved by the
prescribed authority.

Explanation :- When the employees are only part of a staff employed under the same
management all such realizations may be credited to a common fund maintained for staff as a
whole, provided that the fund shall be applied only to such purposes as are approved by the
prescribed authority.

17.18 Deductions for absence from duty

(1) Deductions may be made under clause (b) of sub-section (2) of section 40 only on account
of the absence of an employee from the place or places where by the terms of his
employment, he is
required to work, such absence being for the whole or any part of the period during which he
is so required to work.

(2) The amount of such deduction shall in no case bear to the wages payable to the employee
in respect of the wage period for which the deduction is made, a larger proportion than the
period for which he was absent bears to the total period, within such wage-period during
which by the terms of his employment, he was required to work:

Provided that, subject to any rules made in this behalf by the Government, if ten or
more employees acting in concert absent themselves without due notice, that is to say,
without giving the notice which is required under the terms of their contract of employment
and without reasonable cause,
such deduction from any such employee may include such amount not exceeding his wages
for four days as may by any such terms be due to the employer in lieu of due notice.

Explanation:-For the purpose of this section, an employee shall be deemed to be absent from
the place where he is required to work, if, although present in such place he refuses, in
Centre for Distance Education 17.14 Acharya Nagarjuna University

pursuance of a stay in strike or for any other cause which is not reasonable in the
circumstances, to carry out his work.

17.18.1 Deductions for damage or less

A deduction under clause (c) of subsection (2) of section 40 shall not exceed in respect of the
damage of goods, one half of the amount of such damage and in respect of loss of goods or
money, the amount of such loss caused to the employer by negligence or default of the
employee and shall not be made until the employee has been given an opportunity of showing
cause against the deduction, or otherwise than in accordance with such procedure as may be
prescribed for the making of such deductions.

(2) All such deductions and all realisations thereof shall be recorded in a register to be kept
by the employer in such form as may be prescribed.

17.18.2 Deductions for services rendered

A deduction under clause (d) or clause (e) of sub-section (2) of section 40 shah not be
made from the wages of an employee unless the house accommodation, amenity or service
has been accepted by him as a term of employment or otherwise, and such deduction shall not
exceed an amount equivalent to the value of the house
accommodation, amenity or service supplied and in the case of a deduction under the said
clause (e), it shall be subject to such conditions, as the Government may impose.

Deductions for recovery of advances

Deductions under clause (f) of sub-section (2) of section 40 shall be subject to the following
conditions, namely:-

(a) recovery of an advance of money given before employment began shall be made from the
first payment of wages in respect of a complete wage-period but no recovery shall be made of
such
advance given for travelling, expenses;

(b) recovery of advances

17.19 Penalties For Offences

Penalties
(1) Any employer who makes any false or incorrect statement under section 3 shall be
punishable with fine which may extend to one hundred rupees.

(2) Any employer who contravenes any of the provisions of the sections 3, 4, 5, 7, 9 to 12,
13, 15 to 32, 34 to 47, 49, 68 and 69 shall be punishable for a first offence with fine which
may extend to rupees one hundred, for a second offence with fine which shall not be less than
rupees two hundred and fifty but which may extend to rupees five hundred and for the third
or subsequent offences with imprisonment for a term which may extend to three months and
with a fine which shall not be less than rupees five hundred but which may extend to rupees
one thousand :

Provided that where any employer fails to posses a valid certificate of registration in
contravention of the provisions of sections 3, 4 and 5 he shall, on conviction be punishable, in
the case of a continuing offence with a further fine which may extend to rupees two hundred
AP Shops & Establishment Act 17.15 Labor Legislations and Law
and fifty for each day during which the offence continues.

(3) Whoever contravenes the provisions of section 8 shall be punishable for a first
offence with fine which may extend to one hundred rupees, and for a second or subsequent
offence with fine which may extend to two hundred and fifty rupees.

(4) Whoever contravenes the provisions of sub-section (2) of section 48 shall on

conviction be punishable with fine which may extend to rupees fifty for each day during
which the offence continues.

(5) Whoever contravenes the provisions of sub-section (3) of section 48 shall on conviction
be punishable with a fine which may extend to rupees fifty for each day during which the
offence continues.

17.19.1 Power to Compound offence

The Chief Inspector may authorise by notification any officer to accept from any
person who is reasonably believed to have committed an offence under sections 3, 4, 7, 8, 10,
12, 15, 16, 17, 19, 20, 31 and 63 of this Act or the rules made thereunder a sum of money not
exceeding rupees one hundred in case of each violation by way of compounding such
offence. Any proceedings taken against such person in respect of such offence shall on
payment of such money be withdrawn and no further proceedings shall be taken in respect of
such offence.

17.19.2 Penalty for obstructing Inspector, etc.,

Any person who wilfully obstructs an Inspector in the exercise of any power
conferred on him by or under this Act or any person lawfully assisting such Inspector in the
exercise of such power, or who fails to comply with any lawful direction made by such
Inspector, shall be punishable with imprisonment for a term which may extend to three
months or with both.

17.19.3 Procedure in trial of offences

(1) No Court shall take cognizance of a complaint against an employer under sub-section (2)
of section 61 relating to deductions from the wages or delay in payment of wages or service
compensation payable under this Act to an employee, unless an application in respect of facts
constituting the offence has been presented under section 51 and has been granted wholly or
in part and the authority empowered under the latter section or the appellate authority
granting such applications has sanctioned the making of the complaint.

(2) Before sanctioning the making of a complaint against the employer for such an offence,
the authority empowered under section 50 or the Appellate Authority, as the case may be,
shall give such employer an opportunity of showing cause against the granting of such
sanction, and the sanction shall not be granted if such employer satisfies the authority or
Court that his default was due to-
(a) a bonafide error or bonafide dispute as to amount payable to the employee; or
(b) the existence of exceptional circumstances, such that the
employer was unable, though exercising diligence, to make prompt payment; or
(c) the failure of the employee to accept payment.

(3) No Court shall take cognizance of a complaint against any person for an offence under
section 61 other than the offence referred to in sub-section (1) or for a contravention of any
Centre for Distance Education 17.16 Acharya Nagarjuna University

rule made under section 71 except on a complaint made by or with the previous sanction in
writing of an Inspector under this Act within six months from the date on which the offence
or contravention is
alleged to have been committed.

(4) In imposing any fine for an offence referred to in sub-section (1), the Court shall take into
consideration the amount of any compensation already awarded against the accused in any
proceedings taken under section 51.

17.20 Bar of suits

No Court shall entertain any suit for the recovery of wages or service compensation or of any
deduction therefrom in so far as the sum so claimed-

(a) forms the subject of an application under section 51 which has been presented by the
plaintiff and which is pending before the authority appointed under section 50 or of an appeal
under section 53; or
(b) has formed the subject of a direction under section 51 in favour of the plaintiff; or
(c) has been adjudged, in any proceeding under section 51 not to be owned to the plaintiff; or
(d) could have been recorded by an application under section 51.

17.20.1 Contracting Out

Any contract or agreement, whether made before or after the commencement of this
Act, whereby an employee relinquishes any right conferred by this Act shall be null and void
in so far as it purports to deprive him of such right.

17.20.2 Offences to be tried by magistrate of second class or above

No Court, inferior to that of a Magistrate of the Second Class shall try any offence
punishable under this Act, or any rule or order made there under.

17.21 Key words

Renewal of Registration Certificate - The Inspector may, on an application made by the
employer accompanied by the fees prescribed there for, renew the registration certificate for a
period of one year or for such number of years as may be prescribed, commencing from the
date of its expiry.

Registration of Establishment- Every employer of an establishment shall in the case of an

establishment existing on the date of commencement of this Act, within thirty days from that
date;

Revocation or Suspension of the Registration Certificate - If the Inspector is satisfied,

either on a reference made to him in this behalf or otherwise, that- the Registration Certificate
granted under section 3 or renewed under section 4 has been obtained by mis-representation,
fraud or suppression of any material fact;

Appeal against revocation or suspension of the Registration certificate - Any person

aggrieved by an order made under section 5 may, within thirty days from the date on which
the order is communicated to him, prefer an appeal to such authority as may be prescribed:
Provided that the appellate authority may entertain the appeal after the expiry of the said
period of thirty days if he is satisfied that the appellant was prevented by sufficient cause
from filing the appeal in time.
AP Shops & Establishment Act 17.17 Labor Legislations and Law

17.22 Self Assessment questions

1. Briefly explain the Registration and Renewal of Establishment
2. Identify Health and Safety issues in the shops
3. Discuss the Penalities and offences of shops
4. Outline the Issues of Barsuits

17.23 Suggested Readings

1. Labor Laws (2011) I.A Saiyed Himalaya Publishing House
2.Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
3. Dr. O. P. Gupta, Dr. Vijay Gupta (2021)Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
4. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers
5. Commercial Labour Laws Edition 2022 Commercial Law Publishers House.
6.SrivastavaS.C(2022) Industrial Relations and Labour Laws
Sixth Edition Vikas Publishing House Pvt Ltd
7.Padhi P.K (2021) Labour and Industrial Laws Forth Edition PHI Learning
8.V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House
9.Commercial’s New Labour& Industrial Code along with Draft Rules 3rd Edition 2022
10. Hardbound, Justice M.R. Mallick (2021) Labour& Industrial Law Manual Professional
Book Publishers

Dr.V.Naga Nirmala
 LESSON -18

EMPLOYMENT EXCHANGE ACT 1959

Learning Objectives

✓ To Understand the Notifications of Vacancies in employment exchanges

✓ To learn the Cognizance of offences in Employment Exchange
✓ To study the Power to make rules of Employment exchange

Structure

18.1 Introduction
18.2 Definitions
18.3 Notification of vacancies in employment exchanges
18.4 Right of access to records or documents
18.5 Cognizance of offence
18.6 Power to make rules
18.6.1 Employers to furnish information and returns in prescribed form.
18.6.2 Right of access to records or documents
18.6.3 Penalties
18.7 Cognizance of Offences
18.8 Power to make rules.
18.7 Summary
18.8 key words
18.9 Self Assessment Questions
18.10 Suggested Readings

18.1 Introduction
Short title, extend and commencement:
a. The Act may be called the Employment Exchanges (Compulsory Notification of
Vacancies) Act, 1959.
b. It extends to the whole of India except the State of Jammu and Kashmir.
c. It shall come into force in a State on such a date as the Central Government may, by
notification in the Official Gazette, appoint in this behalf for such State and different dates
may be appointed for different States or for different areas of a State.

18.2 Definitions
2. In this Act, unless the context otherwise requires:
(a) “appropriate Government” means- (I) in relation to:
(a) any establishment of any railway, major port, mine or oil-field, or
(b) any establishment owned, controlled or managed by-
(i) the Central Government or a department of the Central Government,
(ii) a company in which not less than fifty-one per cent of the shares capital is held by the
Central Government or partly by the Central Government and partly by one or more State
Governments,
(iii) a corporation (including a co-operative society) established by or under a Central Act
which is owned, controlled or managed by the Central Government;
Centre for Distance Education 18.2 Acharya Nagarjuna University

(II) in relation to any other establishment, the Government of the State in which that other
establishment is situated;
(b) “employee” means any person who is employed in an establishment to do any work for
remuneration;
(c) “employer” means any person who employs one or more other persons to do any work in
an establishment for remuneration and includes any person entrusted with the supervision and
control of employees in such establishment;

(d) “employment exchange” means any office of place established and maintained by the
Government for the collection and furnishing of information, either by the keeping of
registers or otherwise, respecting
1. persons who seek to engage employees,
2. persons who seek employment, and
3. vacancies to which persons seeking employment may be appointed;

(e) “establishment” means

(a) any office, or
(b) any place where any industry, trade business or occupation is carried on;
(f) “establishment in public sector” means an establishment owned, controlled or managed
by-
(i) the Government or a Department of the Government;
(ii) a Government company as defined in Section 617 of the Companies Act , 1956,
(iii) a corporation (including a co-operative society) established by or under a Central
provincial or State Act, which is owned, controlled or managed by the Government,
(iv) a local authority;
(g) “establishment in private sector” an establishment winch is not an establishment in public
sector and where ordinarily twenty-five or more persons are employed to work for
remuneration; (h) “prescribed” means prescribed by rules made under this Act;
(i) “unskilled office work” means work done in an establishment by any of the following
categories of employees, namely
1. daftari,
2. jamadar, or orderly and peon,
3. dusting man or farash,
4. bundle or record lifter,
5. process server,
6. watchman,
7. sweeper,
8. any other employee doing any routine or unskilled work which the Central Government
may, by notification in the Official Gazette, declare to be unskilled office work. Act not to
apply in relation to certain vacancies:
.
I. This Act shall not apply in relation to vacancies a. in any employment in agriculture
(including horticulture) in any establishment in private sector other than employment as
agricultural or farm machinery operatives;
b. in any employment in domestic service;
c. in any employment the total duration of which is less than three months;
d. in any employment to do unskilled office work;
e. in any employment connected with the staff of Parliament.

Unless the Central Government otherwise directs by notification in the

Employment Exchange Act 1959 18.3 Labor Legislations and Law

Official Gazette in this behalf this Act shall not also apply relation to:
a. Vacancies which are proposed to filled through promotion or by absorption or surplus staff
of any branch or department of the same establishment or on the result of any examination
conducted or interview held by, or on the recommendation of, any independent agency, such
as the Union or a State Public Commission and the like;
b. Vacancies in an employment which carries a remuneration of less than sixty rupees in
month.
Act not to apply in relation to certain vacancies:

I. This Act shall not apply in relation to vacancies

a. in any employment in agriculture (including horticulture) in any establishment in private
sector other than employment as agricultural or farm machinery operatives;
b. in any employment in domestic service;
c. in any employment the total duration of which is less than three months;
d. in any employment to do unskilled office work;
e. in any employment connected with the staff of Parliament.

Unless the Central Government otherwise directs by notification in the

Official Gazette in this behalf this Act shall not also apply relation to:
a. Vacancies which are proposed to filled through promotion or by absorption or surplus staff
of any branch or department of the same establishment or on the result of any examination
conducted or interview held by, or on the recommendation of, any independent agency, such
as the Union or a State Public Commission and the like;
b. Vacancies in an employment which carries a remuneration of less than sixty rupees in
month.

18.3 Notification of vacancies in employment exchanges

I. After the commencement of this Act in any State or area thereof, the employer in every
establishment in public sector in that State or area shall, before filling up any vacancy in any
employment in that establishment notify that vacancy to such employment exchanges as may
be prescribed.

II. The appropriate Government, may, by notification in the Official Gazette, require that
from such date as may be specified in the notification, the employer in every establishment in
private sector or every establishment pertaining to any class or category of establishments in
private sector shall before filling up any vacancy in any employment in that establishment,
notify that vacancy to such employment may be prescribed, exchanges as and the employer
shall thereupon comply with such requisition.

III. The manner in which the vacancies referred to in sub-section (I) or sub-section (II) shall
be notified the employment exchanges and the particulars or employments in which such
vacancies have occurred about to occur shall be such as may be prescribed.

IV. Nothing in sub-section (I) and (II) shall be deemed to impose any obligation upon any
employer to recruit any person through the employment exchange to fill any vacancy merely
because that vacancy has been notified under any of those subsections. Employers to furnish
information and returns in prescribed form 5.

I. After the commencement of this Act any State or area thereof, the employer in every
Centre for Distance Education 18.4 Acharya Nagarjuna University

establishment in the public sector in that State or area shall furnish such information or return
as may be prescribed in relation to vacancies that have occurred or are about to occur in that
establishment, to such employment exchanges as may be prescribed.

II. The appropriate Government may, by notification in the Official Gazette, require that from
such date as may be specified in the notification, the employer in every establishment in
private sector or every establishment pertaining to any class or category or establishments in
private sector shall furnish such information or return as may be prescribed in relation to
vacancies that have occurred or are about to occur in than establishment to such employment
exchanges as may be
prescribed, and the employer shall thereupon comply with such requisition.

III. The form in which, and the intervals of time at which, such information or return shall be
furnished and the particulars which they shall contain shall be such as may be prescribed.

18.4 Right of access to records or documents

Such officer of Government as may be prescribed in this behalf, or any person
authorized by him in writing, shall have access to any relevant record or document in the
possession of any employer required to furnish any information or returns under section 5 and
may enter at any reasonable time any premises where he believes such record or document to
be and inspect or take copies of relevant records or documents or ask any question necessary
for obtaining any information required under this section. Penalties

I. If any employer fails to notify to the employment exchanges prescribed for the purpose any
vacancy in contravention of sub-section (I) or sub-section (II) of section 4, he shall be
punishable for the first offence with fine which may extend to five hundred rupees and for
every subsequent offence with fine which may extend to one thousand rupees.

II. If any persona. required to furnish any information or return-

(i) refuses or neglects to furnish such information or return , or

(ii) furnishes or causes to be furnished any information or return which he knows to be
false, or
(iii)refuses to answer, or gives a false answer to, any question necessary for obtaining any
information required to be furnished under section 5; or

b. impedes the right of access to relevant records or documents or the right of

entry conferred by section 6, he shall be punishable for the first offence with fine
which may extend to two hundred and fifty rupees and for every subsequent
offence with fine which may extend to five hundred rupees.

18.5 Cognizance of offence

No prosecution for an offence under this Act shall be instituted except by or with the
sanction of such officer of Government as may be prescribed in this behalf of or any person
authorized by that officer in writing.

No suit, prosecution, or other legal proceeding shall lie against any person for
anything which is in good faith done or intended to be done under this Act.
Employment Exchange Act 1959 18.5 Labor Legislations and Law
18.6 Power to make rules
I. The Central Government may, by notification in the Official Gazette and subject to the
condition of previous publication make rules for carrying out the purposes of this Act.

In particular and without prejudice to generality of the foregoing power, such rules
may provide for all or any of the following matters, namely:
a. the employment exchange or exchanges to which, the form and manner in which and the
time within which, vacancies shall be notified, and the particulars of employment in which
such vacancies have occurred or are about to occur;

b. the form and manner in which and the intervals at which information and returns required
under section 5 shall be furnished, and the particulars which they shall contain;

c. the officers by whom and the manner in which the right of access to documents and the
right of entry conferred by section 6 may be exercised;
d. any other matter which is to be, or may be prescribed under this Act.

All rules made under this Act shall be laid for not less than thirty days before each House of
Parliament as soon as may be after they are made, and shall be subject to such modifications
as Parliament may make during the session in which they are so laid or the session
immediately following.

18.6.1 Employers to furnish information and returns in prescribed form.

(1) After the commencement of this Act in any State or area thereof, the employer in every
establishment in public sector in that State or area shall furnish such information or return as
may be prescribed in relation to vacancies that have occurred or are about to occur in that
establishment, to such employment exchanges as may be prescribed.

(2) The appropriate Government may, by notification in the Official Gazette, require that
from such date as may be specified in the notification, the employer in every establishment in
private sector or every establishment pertaining to any class or category of establishments in
private sector shall furnish such information or return as may be prescribed in relation to
vacancies that have occurred or are about to occur in that establishment to such employment
exchanges as may be prescribed, and the employer shall thereupon comply with such
requisition.

(3) The form in which, and the intervals of time at which, such information or return shall be
furnished and the particulars which they shall contain shall be such as may be prescribed.

18.6.2 Right of access to records or documents

Such officer of Government as may be prescribed in this behalf, or any person
authorized by him in writing, shall have access to any relevant record or document in the
possession of any employer required to furnish any information or returns under section 5 and
may enter at any reasonable time any premises where he believes such record or document to
be and inspect or take copies of relevant records or documents or ask any question necessary
for obtaining any information required under that section.
Centre for Distance Education 18.6 Acharya Nagarjuna University

18.6.3 Penalties
(1) If any employer fails to notify to the employment exchanges prescribed for the purpose
any vacancy in contravention of sub-section (1) or sub-section (2) of section 4, he shall be
punishable for the first offence with fine which may extend to five hundred rupees and for
every subsequent offence with fine which may extend to one thousand rupees.

(2) If any person--

(a) required to furnish any information or return--

(i) refuses or neglects to furnish such information or return, or

(ii) furnishes or causes to be furnished any information or return which he knows to be false,
or

(iii) refuses to answer, or gives a false answer to, any question necessary for obtaining any
information required to be furnished under section 5; or

(b) impedes the right of access to relevant records or documents or the right of entry
conferred by section 6,

he shall be punishable for the first offence with fine which may extend to two hundred and
fifty rupees and for every subsequent offence with fine which may extend to five hundred
rupees.
18.7 Cognizance Of Offences
No prosecution for an offence under this Act shall be instituted except by, or with the sanction of,
such officer of Government as may be prescribed in this behalf or any person authorised by that
officer in writing.

Protection of action taken in good faith.

No suit, prosecution or other legal proceeding shall lie against any person for anything which
is in good faith done or intended to be done under this Act.

18.8 Power to make rules.

(1) The Central Government may, by notification in the Official Gazette and subject to the
condition of previous publication, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules
may provide for all or any of the following matters, namely:--
(a) the employment exchange or exchanges to which, the form and manner in which, and the
time within which vacancies shall be notified, and the particulars of employments in which
such vacancies have occurred or are about to occur;
(b) the form and manner in which, and the intervals at which, information and returns
required under section 5 shall be furnished, and the particulars which they shall contain;
(c) the officers by whom and the manner in which the right of access to documents and the
right of entry conferred by section 6 may be exercised;
(d) any other matter which is to be, or may be, prescribed under this Act.
Employment Exchange Act 1959 18.7 Labor Legislations and Law

18.9 Summary
Every rule made under this Act shall be laid, as soon as may be after it is made, before
each House of Parliament, while it is in session, for a total period of thirty days which may be
comprised in one session or in two or more successive sessions, and if, before the expiry of
the session immediately following the session or the successive sessions aforesaid, both
Houses agree in making any modification in the rule or both Houses agree that the rule
should not be made, the rule shall thereafter have effect only in such modified form or be of
no effect, as the case may be; so, however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.

18.10 Key words

“appropriate Government” means- (I) in relation to any establishment of any railway,
major port, mine or oil-field, or any establishment owned, controlled or managed by

employment exchange” means any office of place established and maintained by the
Government for the collection and furnishing of information, either by the keeping of
registers or otherwise, respecting

“unskilled office work” means work done in an establishment by any of the following
categories of employees, namely daftari,,jamadar, or orderly and peon,dusting man or
farash,,bundle or record lifter, process server,
watchman, sweeper,

18.11 Self Assessment questions

1. Briefly Discuss the Notification of vacancies in employment Exchanges
2. Describe the right to information about books regarding the employment Exchanges
3. Explain the procedure the Cognizance of offences in Employment exchange

18.12 Suggested Readings

1. Labor Laws (2011) I.A Saiyed Himalaya Publishing House
2. Taxmann(2020) Labour Laws with Code on Wages Book Taxman’s Publications
3. Dr. O. P. Gupta, Dr. Vijay Gupta (2021) Labour Legislation In India: Revised
Edition SBPD Publishing House, Agra.
4. S N Misra Edition (2022) Central’s Labour & Industrial Laws with Latest Amendment by
Central Law Publications
5. Commercial Labour Laws Edition 2022 Commercial Law Publishers House.
6.SrivastavaS.C(2022) Industrial Relations and Labour Laws
Sixth Edition Vikas Publishing House Pvt Ltd
7. Hardbound, Justice M.R. Mallick (2021) Labour & Industrial Law Manual Professional
Book Publishers
8. Padhi P.K(2021) Labour and Industrial Laws Forth Edition PHI Learning
9. V.K. Kharbanda (2022) LPH’s Labour Law Digest Edition Law Publishing House
10. Commercial’s New Labour & Industrial Code along with Draft Rules 3rd Edition 2022

Dr.V.Naga Nirmala
 303HM21
MODEL QUESTION PAPER
MA(HRM) DEGREE EXAMINATION
Second Year, Semester- III
Paper-III
LABOR LEGISLATION AND CASE LAW
Time : Three Hours Maximum: 70 marks
SECTION A- (5x4= 20 marks)
Answer any FIVE of the following
1(a) Labor Legislation
(b) Certifying Surgeon
( c)Duties of occupier
(d)Power of Inspectors
(e)Exemptions in Bonus Act
(f) Constituion
(g) Penalty
(h) Compensation
(i) Standing Committee
(j) Workmen
SECTION B- (2 x 10=20 marks)

Answer any TWO of the following

2) Discuss the Concept and Principles of Natural Justice ?

3) Describe the Classification and Principles of Labor Legislation ?
4) Discuss the Factories Act 1948?
5) Elaborate the Payment of Wages Act 1936?

SECTION B- (2 x 15=30 marks)

Answer any TWO of the following
6) Explain the Concept and Role of Labor legislation?
7) Describe the Employment Exchange Act 1959?
8) Discuss the Payment of Gratuity Act 1972?
9) Elaborate the Factories Act 1948?