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LABOUR LAW

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Q no 1: Define the term 'Settlement under the Industrial Disputes Act, 1947. Write
an exhaustive note on the nature, duration and termination of Settlements.

Introduction:

The Industrial Disputes Act, 1947 is a legislation in India that governs industrial
relations and provides a framework for the resolution of industrial disputes. The act was enacted on
April 1, 1947, and it applies to all industries except those specified in the Schedule of the Act. One of the
key mechanisms provided by the Act for resolving disputes is through settlements. Settlements are
agreements reached between the parties involved in an industrial dispute, which aim to bring about a
harmonious resolution and maintain industrial peace. The primary objective of the act is to maintain
peace and harmony in the industrial sector by providing a legal framework for the settlement of
disputes between employers and employees.

Meaning of Settlement:

According to Section 2 (p) of the Industrial Dispute Act, 1947 “Settlement” means a
settlement arrived at in the course of conciliation proceeding and includes a written agreement
between the employer and workmen arrived at otherwise than in the course of conciliation proceeding
where such agreement has been signed by the parties thereto in such manner as may be prescribed and
a copy thereof has been sent to an officer authorized in this behalf by the appropriate Government and
the conciliation officer.

Nature of Settlements:

The nature of the settlement can be discussed as below:

i. Voluntary Agreement: Settlements are voluntary agreements entered into by the parties
involved in an industrial dispute, usually with the assistance of a conciliation officer or through
direct negotiations. It is based on the principle of mutual consent, where both the employer and
employees willingly accept the terms and conditions of the settlement.
ii. Binding on the Parties: Once a settlement is arrived at, it becomes binding on both the
employer and employees, as well as on any other parties covered by the agreement, such as
trade unions. The terms and conditions of the settlement must be followed by all parties
involved.
iii. Legally Enforceable: Settlements have legal sanctity under the Industrial Disputes Act, 1947.
They can be enforced through legal proceedings, and any violation of the settlement can lead to
legal consequences, including penalties and compensation.

Duration of Settlements:

i. Fixed Term: Settlements can have a fixed duration specified within the agreement. The
duration may range from a few months to a few years, depending on the nature of the dispute
and the agreement reached between the parties. Once the specified term expires, the
settlement may be renegotiated or terminated.

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ii. Continuation until Modified: In certain cases, settlements continue until modified by mutual
agreement between the parties. This means that the settlement remains in force until the
parties decide to make changes to its terms and conditions.
iii. Permanent Settlements: Some settlements may be permanent in nature, particularly when
they relate to long-standing issues or provide for structural changes in the employment
relationship. Permanent settlements remain in force until they are terminated or superseded by
a subsequent agreement or legal action.

Termination of Settlements:

i. Mutual Agreement: Settlements can be terminated by mutual agreement between the parties
involved. If the employer and employees both consent to terminate the settlement, they can do
so through a written agreement.
ii. Breach of Settlement Terms: If any party violates the terms and conditions of the
settlement, the other party may seek termination of the settlement. The aggrieved party can
approach the appropriate authority, such as a labor court, to seek redress and termination of
the settlement.
iii. Legal Proceedings: Settlements can be terminated through legal proceedings initiated by
either party. This may occur if there are allegations of fraud, coercion, or misrepresentation
during the negotiation or execution of the settlement.
iv. Subsequent Agreements: Settlements can also be terminated if the parties enter into
subsequent agreements that supersede or modify the terms of the existing settlement. The new
agreement will prevail over the earlier settlement.

Conclusion:

Settlements under the Industrial Disputes Act, 1947 provide a mechanism for resolving
industrial disputes in India. They are voluntary agreements that are binding on the parties involved and
have legal enforceability. The duration of settlements can vary, and they can be terminated by mutual
agreement, breach of terms, legal proceedings, or through subsequent agreements. Settlements play a
crucial role in maintaining industrial peace and fostering harmonious relations between employers and
employees.

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Q no 2: Define the term 'Settlement under the Industrial Disputes Act, 1947. Write
an exhaustive note on the mechanism of Settlement disputes under the Industrial
Dispute Act, 1947

Introduction:

The Industrial Disputes Act, 1947 is a legislation in India that governs industrial
relations and provides a framework for the resolution of industrial disputes. The act was enacted on
April 1, 1947, and it applies to all industries except those specified in the Schedule of the Act. One of the
key mechanisms provided by the Act for resolving disputes is through settlements. Settlements are
agreements reached between the parties involved in an industrial dispute, which aim to bring about a
harmonious resolution and maintain industrial peace. The primary objective of the act is to maintain
peace and harmony in the industrial sector by providing a legal framework for the settlement of
disputes between employers and employees.

Meaning of Settlement:

According to Section 2 (p) of the Industrial Dispute Act, 1947 “Settlement” means a
settlement arrived at in the course of conciliation proceeding and includes a written agreement
between the employer and workmen arrived at otherwise than in the course of conciliation proceeding
where such agreement has been signed by the parties thereto in such manner as may be prescribed and
a copy thereof has been sent to an officer authorized in this behalf by the appropriate Government and
the conciliation officer.

Mechanism of Settlement disputes under the Industrial Dispute Act, 1947:

The various mechanism of Settlement of a disputes provided under the Industrial

Dispute Act, 1947 are as follows:-

i. Works Committee: A works committee, also known as a shop committee or joint labor-
management committee, is a formal group composed of representatives from both workers
and management within a workplace or organization. The competent Government may, by
general or special order, necessitate the employer to form in the prescribed manner a
Works Committee. The purpose of a works committee is to facilitate communication,
cooperation, and collaboration between employees and employers to address various work-
related issues.
ii. Conciliation officer: The competent Government may appoint as many conciliation
officers as it sees proper to promote and settle industrial disputes by notifying them in the
official Gazette. The major goal of selecting a conciliation officer is to establish a friendly
culture in the workplace and to resolve disagreements between workers and employers
iii. Board of Conciliation: If the appropriate government believes that there are any
industrial conflicts in a particular industry, it may refer the matter to the Board of
Conciliation for resolution. The Board of Conciliation is responsible for resolving the issue.
He must submit a report as well as a memorandum of settlement to the appropriate
government officials

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iv. Court of Inquiry: By notification in the official Gazette, the appropriate Government may
form a court of inquiry into any matter appearing to be associated with the settlement of
industrial disputes, consisting of an independent person or such independent persons as the
appropriate Government deems appropriate. The court must have at least two members,
one of whom must be chosen by the Chairman. The court is required to deliver a report to
the appropriate government within six months of the start of any investigation.
v. Voluntary Arbitration: Section 10A of the Industrial Dispute Act also allows for voluntary
arbitration. In voluntary arbitration, the arbitrator or arbitration panel acts as a neutral third
party and hears arguments from both sides of the dispute. They consider the evidence,
apply relevant laws or rules, and make a binding decision, known as an arbitral award. The
decision of the arbitrator is typically final and enforceable, similar to a court judgment.
vi. Adjudication: It is not that adjudication completely replaces conciliation; rather, if
conciliation fails to resolve a dispute between two parties, adjudication steps in to do the
job that the conciliation mechanism was supposed to finish. The industrial dispute can be
resolved using a three-tier method, which will include the following:

a. Labour Court: The labour court is made up of one person who is either an independent judge
or a High Court or District Court judge. The judge could alternatively be a previous labour court
judge with at least 5 years of experience. The second schedule of the Industrial Dispute Act of
1947 specifies the types of cases that the labour court can hear.
b. Industrial Tribunal: The government can establish one or more industrial tribunals as he sees
fit, with the courts having broader jurisdiction than the labour court. It is not to be considered a
permanent body, but rather one that has been put up for the sole purpose of hearing on an as-
needed basis.
c. National Tribunal: The Central Government establishes a national tribunal by an official
gazette for the adjudication of industrial disputes of national importance.

Landmark Judgments:

Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd

The court stated that for any industry to flourish and prosper in the long run, it is
necessary to foster harmonious construction of the wants of both the employer and the employee of
that business. In order to attain this goal, the court determined that mandatory adjudication for
resolving industrial disputes is required, as well as a forum where the parties can seek arbitration to
avoid any kind of conflict in the workplace.

Conclusion:

Settlement of disputes under the Industrial Dispute Act of 1947 is a good technique to get
rid of the confusion that comes with industry. As India gradually evolves with the introduction of various
sectors, it has become vital to ensure that the industries run properly in order to aid the country’s
economic development. The Industries Dispute Act of 1947 plays an important role in this regard, not
only by laying forth regulations for regulating the operation of an industry, but also by establishing
methods for resolving conflicts between employees and employers.

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Q no 3: Discuss the nature and scope of the power of the Appropriate Government
under section 10(1) of the Industrial Disputes Act, 1947. Are the reasons given by
the government in refusing a reference justiciable? Can a reference once made be
withdrawn?

Introduction:

The Industrial Disputes Act, 1947, was enacted to provide a legal framework for the
prevention and settlement of industrial disputes in India. It applies to both the public and private sectors
and aims to maintain industrial peace and promote harmonious relations between employers and
employees. Section 10(1) of the Act, deals with the power of the Appropriate Government in relation to
industrial disputes. Section 10(1) of the Act empowers the Appropriate Government to refer an
industrial dispute to a board, court, tribunal, or arbitrator for adjudication.

Nature of the Power:

The nature of the power vested in the Appropriate Government is primarily regulatory and
facilitative. The government acts as a neutral third party that oversees the resolution process and
ensures that it is conducted in a fair and impartial manner. It grants the government the authority to
intervene in industrial disputes, refer them to suitable resolution mechanisms, and ensure that the
resolution process is fair and impartial. This power serves the purpose of maintaining industrial peace,
promoting harmonious relations, and safeguarding the interests of both employers and employees. Also
the government may appoint conciliation officers, boards of conciliation, or courts of inquiry to assist in
resolving disputes.

The exercise of this power is discretionary, meaning that the Appropriate Government
has the freedom to decide when and how to intervene in an industrial dispute. It can choose the most
suitable method of resolution, such as conciliation, arbitration, or adjudication, based on the nature and
complexity of the dispute.

Scope of the Power:

The scope of the power of the Appropriate Government under section 10(1) of the
Industrial Disputes Act, 1947 can be discussed as below:-

i. Referral of Dispute: The Appropriate Government has the authority to refer an industrial
dispute or any matter connected with it to a Board, Court, or Tribunal. The dispute or matter
may pertain to issues mentioned in the Second Schedule (relating to matters of national
importance) or the Third Schedule (relating to matters of regional or local importance).
ii. Discretion to Determine Scope: The Appropriate Government has the discretion to decide
which dispute or matter is referred for arbitration, adjudication, or inquiry. It may consider
various factors, including the nature and gravity of the dispute, the interests of the parties
involved, and the overall impact on industrial relations.
iii. Broad Interpretation: The scope of the power under section 10(1) is broad and covers not
only the core issues directly related to the dispute but also matters that are connected with or

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relevant to the dispute. This ensures that the Appropriate Government can address all aspects
that may impact the resolution of the dispute.
iv. Binding Effect: Any order issued by the Appropriate Government under this section is legally
binding. The Board, Court, or Tribunal to which the dispute is referred must proceed with
arbitration, adjudication, or inquiry and provide a decision or award that carries legal
consequences.

Justiciability of Reasons for Refusing a Reference:

In general, the term "justiciability" refers to the ability of a matter to be resolved

through judicial process, where a court can review and adjudicate upon the issue. Section 10(1) of the
Industrial Disputes Act, 1947 does not explicitly address the justiciability of reasons given by the
government in refusing a reference.

However, the reasons given by the government in refusing a reference are generally
considered justiciable. If the government exercises its power arbitrarily or without reasonable cause, the
affected parties may challenge the decision before a court or tribunal. The court can review the reasons
provided by the government to determine if they are valid and in compliance with the principles of
natural justice.

However, it is important to note that the court's review is limited to examining the
legality and rationality of the government's decision, rather than substituting its own decision. As long as
the government's decision-making process is fair and based on reasonable grounds, the court is unlikely
to interfere.

Withdrawal of a Reference:

Once a reference has been made by the Appropriate Government, it generally cannot be
withdrawn unilaterally. The reference triggers the adjudicatory process, and the proceedings before the
Board, Court, or Tribunal are conducted independently. The reference is binding on the parties involved,
and they are entitled to have their dispute adjudicated.

However, in exceptional circumstances, such as a settlement reached between the

parties or the existence of an error in the reference, the government may seek to withdraw or modify
the reference. In such cases, the government may approach the relevant authority and make an
application for withdrawal or modification. The authority will then consider the circumstances and
decide whether to allow the withdrawal or modification based on the merits of the case.

Conclusion:

In conclusion we can say that section 10(1) of the Industrial Disputes Act, 1947 grants
the Appropriate Government discretionary power to intervene in industrial disputes. The nature of this
power is aimed at resolving disputes, promoting industrial harmony, and safeguarding the interests of
the parties involved. The scope of the power includes the authority to refer disputes or matters

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connected with them to appropriate bodies for arbitration, adjudication, or inquiry, with the
government having the discretion to determine the scope based on the circumstances.

Q no 4: What is adjudication? What are the adjudicatory authorities under

the Industrial Disputes Act, 1947? Discuss the jurisdiction of adjudicatory
authorities under the Act.

Introduction:

Disputes are always a drawback for any industry. A dispute arises for several reasons, the most
common being the relation between the labourers and their wages. The parties involved in an industrial
dispute are the employer and the employee. To settle these disputes arising in an industry the Industrial
Dispute Act, 1947 was enacted which provide the concept of the mechanism of settling disputes under
the Act. Some of the mechanisms that are commonly utilized are adjudication, conciliation, an inquiry by
the court of law etc. These mechanisms help in settling the disputes by investigating the matter and in
to successfully carry out the process, available mechanisms are utilized.

Meaning of Adjudication:

An adjudication is a legal ruling or judgment, usually final, but can also refer to the process of
settling a legal case or claim through the court or justice system, such as a decree in the bankruptcy
process between the defendant and the creditors.

Adjudicatory authorities under the Industrial Disputes Act:

There are various authorities under the Industrial Disputes Act, 1947. These are labour
court, industrial tribunal, national tribunal. We can discuss these as below-

i. Labor Court:

Section 7 of the act talks about the constitution of the labor court by the appropriate
government. It can create one or more labor court as it thinks fit for the adjudication of industrial
dispute as specified under schedule II. It consists of one person to be appointed by the appropriate
government. Powers of labour courts are:

a. Discharge or grant of relief to workmen who are wrongfully employed or dismissed.

b. To determine the illegality of a strike or deadlocks.
c. Customary concession or privileges are withdrawn by this court etc.

ii. Industrial Tribunal

Section 7A deals with the provision of constitution of the one or more tribunal for
the adjudication of dispute relating to the aspects as mentioned in schedule second or third. Tribunal

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consist of one person who shall be appointed by appropriate government. Matters relating to the
following are:

a. Retrenchment of labour.
b. Compensatory and other allowances and rules of the disciple in the workplace.
c. If the company is in profit, then matter related to bonus and profit sharing.
d. Work manual such as hours of working and interval for rest.
e. Wages and provident fund of workmen etc.

iii. National Tribunal:

Section 7B deals with the national tribunal which is appointed by the central government
constitute one or more national tribunal for the adjudication of industrial disputes which in the opinion
of the central government involves questions of national importance or are of such a nature that
industrial establishments situated in more than one state are likely to be interested in or affected by
such disputes.

The national tribunal shall be consisted of one person only to be appointed by the central
government. in order to be appointed as the presiding officer of a national tribunal he should be or has
been a judge of a high court. the central government can also appoint two persons as assessors to
advise the national tribunal in the proceeding before it.

Jurisdiction of Adjudicating Authorities:

Labor Court have jurisdiction in all matters other than those specified in the Third Schedule.

The Industrial Dispute Act, 1947 assigned Industrial Tribunal to adjudicate upon
industrial disputes provided in Second and Third Schedule of the Act or any matter appearing to be
associated or relevant to such disputes, referred to it under Section 10 (1) (d) of the Act.

Section 10 (1-A) provides that: where the Central Government is of opinion that any
industrial dispute exists or is apprehended and the dispute involves any question of national importance
or is of such a nature that industrial establishments situated in more than one State are likely to be
interested in, or affected by, such dispute and that the dispute should be adjudicated by a National
Tribunal."

Section 10 (2) provides that: when the parties to the industrial dispute apply to
government to refer dispute to the National Tribunal and if the government satisfies it shall make the
reference to the Industrial Tribunal."

Conclusion:
In my opinion the adjudicatory bodies play a vital role in the peaceful settlement of
industrial disputes, as it complies with the main objective of the Industrial Dispute Act,1947. In a
developing country like India where more industries is to be set up in future which will obviously raise
the Industrial disputes so to combat with that adjudication is the best method among all of the four
ways of settlement of disputes. For that there must be an Act or law to manage it all.

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Q no 5: What are adjudicatory authorities under the Industrial Disputes Act, 1947?
Briefly discuss their powers and functions. Point out the defects of industrial
adjudication in India.

Introduction:

Disputes are always a drawback for any industry. A dispute arises for several reasons, the most
common being the relation between the labourers and their wages. The parties involved in an industrial
dispute are the employer and the employee. To settle these disputes arising in an industry the Industrial
Dispute Act, 1947 was enacted which provide the concept of the mechanism of settling disputes under
the Act. Some of the mechanisms that are commonly utilized are adjudication, conciliation, an inquiry by
the court of law etc. These mechanisms help in settling the disputes by investigating the matter and in
to successfully carry out the process, available mechanisms are utilized.

Adjudicatory authorities under the Industrial Disputes Act:

There are various authorities under the Industrial Disputes Act, 1947. These are labour
court, industrial tribunal and National tribunal. We can discuss these as below-

iv. Labor Court: Section 7 of the act talks about the constitution of the labor court by the
appropriate government. It can create one or more labor court as it thinks fit for the
adjudication of industrial dispute as specified under schedule II. It consists of one person to
be appointed by the appropriate government.
v. Industrial Tribunal: Section 7A deals with the provision of constitution of the one or more
tribunal for the adjudication of dispute relating to the aspects as mentioned in schedule
second or third. Tribunal consist of one person who shall be appointed by appropriate
government.
vi. National Tribunal: Section 7B deals with the national tribunal which is appointed by the
central government constitute one or more national tribunal for the adjudication of
industrial disputes which in the opinion of the central government involves questions of
national importance or are of such a nature that industrial establishments situated in more
than one state are likely to be interested in or affected by such disputes. The national
tribunal shall be consisted of one person only to be appointed by the central government.

Powers and Functions of Adjudicatory Authorities:

The powers and functions of these Adjudicatory authorities can be discussed as below:

A. Power and Function of Labor Courts: Labor Courts are established under the Industrial
Disputes Act to adjudicate disputes relating to matters specified in the act, such as the legality of
strikes and lockouts, termination of employment, and employment conditions. The powers and
functions of Labor Courts include:
i. Settling disputes referred to them by the appropriate government.
ii. Examining the merits of the case, taking evidence from the parties involved, and passing an
award or judgment based on the facts and circumstances.

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iii. Determining the legality or illegality of strikes or lockouts and granting appropriate relief.
iv. Resolving other industrial disputes by making an award, which is binding on the parties
involved.

B. Power and Function of Industrial Tribunals: Industrial Tribunals are constituted for the
adjudication of industrial disputes that are of a more complex nature or have a significant
impact on the industry as a whole. The powers and functions of Industrial Tribunals include:
i. Resolving disputes referred to them by the appropriate government.
ii. Conducting proceedings in a manner similar to that of a civil court.
iii. Examining witnesses, hearing arguments, and evaluating evidence presented by the parties.
iv. Formulating an award or decision based on the facts and circumstances of the case.
v. Determining the terms and conditions of employment and settling other related issues.

C. Power and Function of National Tribunals: National Tribunals are established by the
central government to adjudicate industrial disputes of national importance or those affecting
multiple states. The powers and functions of National Tribunals include:
i. Adjudicating disputes referred to them by the central government.
ii. Resolving complex or significant disputes that have widespread implications.
iii. Conducting proceedings similar to a civil court, including summoning witnesses, examining
evidence, and hearing arguments.
iv. Passing an award or decision that is binding on the parties involved.
v. Deciding matters related to wages, working conditions, and other issues affecting workers on a
national scale.

Defects of Industrial Adjudication in India:

Industrial adjudication in India has faced several criticisms and has been associated with
various defects. Some of the major defects of industrial adjudication in India include:

i. Delays in proceedings: One of the primary defects is the significant delay in the resolution of
industrial disputes. The adjudication process often suffers from long waiting periods, backlog of
cases, and adjournments, leading to prolonged litigation and dissatisfaction among the parties
involved.
ii. Lack of expertise: Industrial adjudication bodies often lack specialized knowledge and
expertise in industrial relations, employment laws, and related fields. This can result in
judgments that are not well-informed, inconsistent, or inadequate in addressing the
complexities of labor issues.
iii. Limited enforcement mechanisms: The lack of effective mechanisms to ensure compliance
weakens the authority of these bodies and reduces the effectiveness of their decisions.
iv. Limited coverage: Industrial adjudication in India primarily covers organized sectors and
registered establishments, leaving a significant portion of the workforce. This exclusion hampers
the ability to address their grievances and protect their rights.

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v. Inadequate resources: Industrial adjudication bodies often face resource constraints,

including a shortage of skilled personnel, infrastructure, and funding. Insufficient resources can
hamper the efficiency and effectiveness of the adjudication process, contributing to delays and
suboptimal outcomes.

Conclusion:

From the above discussion we have seen that the adjudicatory bodies play a vital role
in the peaceful settlement of industrial disputes, as it complies with the main objective of the Industrial
Dispute Act, 1947. Also these adjudicatory bodies are vested with various powers and function to deal
with the disputes arises among the industries. Though there are several defects of adjudicatory bodies
in various matter related to the adjudication of a dispute but it serves an important role to resolve the
disputes of industries in India.

Q No 6: Discuss the principles of natural justice required to be followed in a

domestic enquiry. Support your answer with the help of decided cases.

Introduction:

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

Principles of Natural justice in a Domestic Enquiry:

The principles of natural justice, also known as procedural fairness, are

fundamental to any domestic enquiry or disciplinary proceedings. These principles ensure that
individuals are treated fairly and given a fair opportunity to present their case. There are two main
principles of natural justice: the principle of audi alteram partem (the right to be heard) and the
principle of nemo judex in causa sua (the rule against bias).

A. Principle of Audi Alteram Partem (Right to be Heard): 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. The literal meaning of this rule is that both parties
should be given a fair chance to present themselves with their relevant points and a fair trial
should be conducted. This principle guarantees that every individual has the right to be heard
and to present their case before a decision is made that may affect their rights, interests, or
privileges.

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It includes the following elements:

i. Notice: The person involved should be given adequate notice of the allegations or charges
brought against them. The notice should be clear, specific, and given in a timely manner to
enable them to prepare a defense.
ii. Opportunity to Present Case: The individual must be given a fair and reasonable opportunity
to present their case, evidence, witnesses, and arguments. They should be allowed to respond
to the allegations, cross-examine witnesses, and provide any relevant information to support
their defense.
iii. Impartial Decision-maker: The decision-maker should be impartial and unbiased. They
should not have any personal interest or bias in the outcome of the proceedings. The decision-
maker should be independent and free from any undue influence.

B. Principle of Nemo Judex in Causa Sua (Rule Against Bias): “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. This principle ensures that the decision-maker or
adjudicator is unbiased and impartial. It prevents any decision from being influenced by
personal or financial interests.

The key elements of this principle include:

i. Impartial Tribunal: The tribunal or decision-maker should be unbiased and impartial. They
should not have any personal or financial interest in the outcome of the case. The decision-
maker should approach the proceedings with an open mind and without any preconceived
notions.
ii. No Conflict of Interest: The decision-maker should not have any direct or indirect interest in
the case that may affect their impartiality. They should disclose any potential conflicts of
interest and recuse themselves if necessary.
iii. No Bias in Procedure: The procedures followed in the domestic enquiry should not be biased
or unfair. The rules and procedures should be clear, transparent, and applied consistently to all
parties involved.

Case laws:

Maneka Gandhi v. Union of India (AIR 1978): The Supreme Court of India held that
the principles of natural justice are part of the right to life and personal liberty guaranteed under Article
21 of the Indian Constitution. The court emphasized the need for fair procedures and the right to be
heard.

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A.K. Kraipak v. Union of India ( AIR 1970): The court ruled that the decision-
making authority must be free from bias and must act independently. The court emphasized that the
rule against bias is a fundamental principle of natural justice.

Cooper v. Wandsworth Board of Works (1863): This English case established the
importance of giving a fair opportunity to be heard and the right to present evidence. It held that the
decision-maker should give the accused a reasonable opportunity to present their defense.

Conclusion:

The principles of natural justice are very much important in a domestic inquiry as
because these principles ensure fairness, transparency, and the protection of individual rights
throughout the proceedings. 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. Thus the
principles of natural justice considered to have significant importance in a domestic inquiry.

Q no 7: Discuss the powers of the Industrial Tribunal to give appropriate relief in

case of discharges or dismissal of workmen under section 11-A of the Industrial
Disputes Act, 1947.

Introduction:

The Industrial Tribunal, also known as the Labor Court or Industrial Court, is a
judicial body that adjudicates and resolves industrial disputes between employers and workmen.
Section 11-A of the Industrial Disputes Act, 1947, empowers the Industrial Tribunal to grant appropriate
relief in cases of discharge or dismissal of workmen. This section was introduced to ensure that
workmen who are unfairly terminated from their employment are provided with adequate
compensation or reinstatement. Also under the same Section the Industrial Tribunal has the authority
to examine the legality, fairness, and justification of a workman's discharge or dismissal. It ensures that
the employer adheres to the principles of natural justice and follows proper procedures while taking
disciplinary actions against workmen.

Powers of the Industrial Tribunal under Section 11-A of ID Act:

Under Section 11-A, the Industrial Tribunal has the authority to consider the validity of
the discharge or dismissal and can take various actions to provide relief to the affected workman. The
powers of the Industrial Tribunal in such cases include:

i. Reinstatement: One of the powers of the Industrial Tribunal is the authority to order the
reinstatement of an employee who has been discharged or dismissed. Reinstatement means
that the employee is restored to their previous position as if the termination had not occurred.
This can include restoring the employee's job title, duties, and benefits.
ii. Re-employment: If reinstatement is not considered appropriate or feasible, the tribunal may
order re-employment of the worker in a similar or equivalent position within the same

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organization. Re-employment allows the employee to regain employment with the same
employer but in a different role.
iii. Compensation: In cases where reinstatement or re-employment is not feasible or preferred,
the Industrial Tribunal has the power to award monetary compensation to the affected worker.
The compensation amount can vary depending on factors such as the employee's length of
service, the nature of the dismissal, and any financial losses suffered as a result of the
termination.
iv. Back Wages: If the tribunal orders reinstatement or re-employment, it may also require the
employer to pay back wages to the employee for the period between their dismissal and the
date of the order. This ensures that the worker is compensated for the lost wages during the
period of unemployment.
v. Interim Relief: In certain cases, the Industrial Tribunal may have the power to grant interim
relief or provide immediate remedies while the case is being heard. This can include granting
temporary reinstatement, maintaining the employee's benefits, or preventing any adverse
action against the worker during the proceedings.
vi. Remedial Actions: Apart from the above, the Industrial Tribunal may have the authority to
direct the employer to take remedial actions, such as changing company policies or practices
that may have contributed to the unfair dismissal or discharge of the worker. These actions aim
to prevent future similar occurrences and promote better employment practices.

Conclusion:

From the above discussion we have seen that Section 11-A of the Industrial Disputes Act
empowers the Industrial Tribunal to provide appropriate relief, such as reinstatement, compensation, or
other remedies, in cases of unjust or improper discharge or dismissal of workmen, based on the specific
circumstances of each case. Thus this provision is considered as an important part of the Industrial
Disputes Act as well as an important provision for labour welfare.

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Q no 8: Narrate the procedure for domestic enquiry and disciplinary action against
Workmen.

Introduction:

The Industrial Employment (Standing Orders) Act, 1946 is a significant legislation in India
that aims to regulate the terms and conditions of employment for workmen in industrial establishments.
The Act also provides a framework for regulating employment conditions in industrial establishments. It
includes provisions for disciplinary action against workmen for misconduct or violation of company
policies when it becomes necessary. A disciplinary enquiry is carried out, based on the principles of
natural justice, whenever any employee commits any misconduct, in order to decide the fate of their
employment. Below is a comprehensive note on the procedure for conducting domestic enquiries and
disciplinary actions against workmen under the Industrial Employment (Standing Orders) Act, 1946.

Procedure for Domestic Enquiry and Disciplinary Action Against Workmen:

Under the Industrial Employment (Standing Orders) Act, 1946, a domestic

enquiry can be initiated against workmen in cases where there are allegations of misconduct or
disciplinary issues. A domestic enquiry is a formal process that allows the employer to investigate the
charges and give the workman an opportunity to present their defense. Here is a step-by-step
procedure for conducting a domestic enquiry:

i. Preliminary Investigation: First of all, a preliminary inquiry should be held to find out
whether a prima facie case of misconduct exists. Before initiating an enquiry, the management
or the concerned authority should conduct a preliminary investigation into the alleged
misconduct or wrongdoing by the workman. This investigation may involve gathering evidence,
interviewing relevant parties, and assessing the seriousness of the allegations.
ii. Issuance of Charge Sheet: When an employer identifies an alleged misconduct or violation of
company policies by a workman, a charge sheet or show-cause notice is prepared. This
document contains details of the misconduct, the specific rule violated, and the consequences it
may entail.
iii. Appointment of an Enquiry Officer: An Enquiry Officer should be appointed to conduct the
domestic enquiry. The officer should be impartial and unbiased, preferably someone who is not
directly involved in the issue at hand. The workman should be notified of the appointment of
the Enquiry Officer.
iv. Suspension Pending Inquiry: In certain cases, the employer may choose to suspend the
workman pending the inquiry to prevent any further disruption or influence during the
investigation. The suspension should follow the principles of natural justice and should not be
prolonged unnecessarily.
v. Notice of Inquiry: The workman is served a notice specifying the date, time, and place of the
inquiry. The notice should be given in writing and with sufficient time to allow the workman to
prepare his defense. It should also contain a list of witnesses, if any, who will be examined
during the inquiry.

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vi. Conducting the Inquiry: The inquiry committee conducts the proceedings in a fair and
impartial manner. The workman is given an opportunity to present his case, cross-examine
witnesses, and produce evidence in his defense. The committee may also call witnesses and
examine any relevant evidence.
vii. Recording the Findings: On the conclusion of the enquiry, the enquiry officer must record his
findings and the reasons thereof. As far as possible, he should refrain from recommending
punishment and leave it to the decision of the appropriate authority.
viii. Awarding Punishment: The management should decide the punishment purely on the basis
of findings of the enquiry, past record of the worker and gravity of the misconduct.
ix. Communicating Punishment: The punishment awarded to the worker should be
communicated to him in written and the earliest available opportunity. The letter of
communication should contain reference to the charge sheet, the enquiry and the findings. The
date from which the punishment is to be effective should also be mentioned.
x. Right to Appeal: In many cases, workmen have the right to appeal the decision of the
disciplinary action. The appeal process allows the workman to challenge the decision if they
believe there were procedural errors or unfair treatment during the enquiry. The organization
should have a clearly defined appeals procedure, which may involve a review by a higher
authority or an independent appeal committee.

Conclusion:

The procedure for conducting a domestic enquiry and subsequent disciplinary action
against workmen is a crucial aspect of maintaining discipline and fairness in the workplace. Following
the outlined steps helps ensure that employees are provided with a fair opportunity to present their
defense, and that appropriate action is taken based on a thorough investigation. It is essential for
employers to adhere to the principles of natural justice and comply with relevant employment laws and
regulations.

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Q no 9: What is an award under the Industrial Disputes Act, 1947? Write a

note on judicial review of industrial awards.

Definition of Award:

Sec. 2(b) of the Industrial Dispute Act defines the term as ‘ an award means an interim
or final determination of any industrial dispute or of any question relating thereto by any Labour Court,
Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made under Sec. 10-
A.’

Where as in layman’s language an Award is the decision given by the adjudicator of Labour
Court, Industrial Tribunal or the National Tribunal and the arbitrator.

Ingredients of Award –

To constitute Award under Section 2(b) of the Industrial Dispute Act, 1947 the following
ingredients are to be satisfied-

a. An Award is an interim or final determination of an industrial dispute.

b. It is an Interim or final determination of any question relating to such dispute.
c. Such interim or final determination is made by any Labour Court, Industrial Tribunal or National
Industrial Tribunal.
d. Award (Judgement) of Arbitrators under section 10A is an award.

Publication of awards:

The adjudicator shall submit the award to the appropriate Government under section 15 of
the I.D Act. The appropriate Government shall then within a period of thirty days from the date of its
receipt publish the award in such manner as the Government thinks fit. . It is mandatory for the
appropriate Government to publish the award, unless it is prevented from doing so by an order of a
Court of competent jurisdiction. The appropriate Government is duty bound to publish the award,
because unless the award is published it cannot become enforceable under the scheme of the Act.

But if the Govt. want to temper with the award and presented the copy of award in the front of
parliament or state legislature , it will become enforceable after 15days of presenting the copy.

Enforcement of an Award:

The award which has been published shall become enforceable on the expiry of thirty days
from the date of its publication. Unless the award becomes enforceable, no rights and liabilities can
arise under the award. In other words, the obligations imposed by the award on the parties shall come
into effect immediately after the expiry of thirty days statutory period from the date of its publication.

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Operation of an Award:

Sec.l7-A(4) lays down that the award shall come into operation from such date which is
specified therein, but where no date is specified, it shall come into operation on the date when the
award becomes enforceable.

Sec.18(3) lays down that an award shall remain in operation for a period of one year from the
date on which the award becomes enforceable under Sec.l7-A. This one year period of operation can be
reduced or increased by the government under the provisions of Sec.19 but government can’t exceed
this period beyond 3 years.

Finality and Judicial Review of awards:

Sec.17(2) of the I.D. Act declares, Subject to the provisions of Section

17-A, the award published under sub-sec(l) shall be final and shall not be called in question by any court
in any manner whatsoever. This provision, first, seeks to oust the jurisdiction of the civil courts against
the awards of adjudicators under the Act. Secondly, it implies that there is no appeal or revision against
the awards.

Special Leave Petition

Under Article 136, the Constitution of India gives power to the Supreme Court to grant special
permission or leave to an aggrieved party to appeal against an order passed in any of the lower courts or
tribunals in India.

Scenario Under Labour Law:

If the industrial award is not satisfactory, award of any tribunal or court can be challenged when
there is miscarriage of justice, flagrant violation of law , or violation of principle of natural justice.

JUSTICE KRISHNAN has asserted that the jurisdiction of Supreme Court regarding SLP is
limitless . This power of Supreme Court is residuary and it is known as the extra ordinary power of the
Supreme Court. Supreme Court of other countries doesn’t have such power except the Supreme Court
of India i.e. power to challenged the decision of any court be it a tribunal or a court.

Under Article 136 a party can appeal only when the decision is given by a court or by a
tribunal. If the decision given by a body is not a court or a tribunal, party can’t appeal under article 136.

So now the question arises whether the definition of industrial tribunal and court comes
under the definition of court and tribunal of article 136.

Conclusion:

From the above discussion we have seen that Judicial review of industrial awards
plays a vital role in ensuring fairness, legality, and adherence to the principles of natural justice in the
resolution of industrial disputes. It acts as a safeguard against arbitrary or erroneous decisions and
upholds the rule of law. By subjecting industrial awards to judicial scrutiny, the Industrial Disputes Act,

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1947 provides a mechanism for aggrieved parties to seek redress and maintain a balance between labor
and management interests.

Q no 10: Discuss the provisions relating to the constitution of Labour Court, its
functions and power. What are the matters that can be adjudicated in the Labour
Court? Does the Labour Court has original jurisdiction to try a dispute?

Introduction:

The Industrial Disputes Act, 1947 is an important legislation that governs the resolution
of industrial disputes between employers and workers. The Act provides for the establishment of
various authorities, including the Labour Court, to settle disputes and promote harmonious industrial
relations. The primary function of the Labour Court is to resolve disputes related to terms and conditions
of employment, work conditions, wages, benefits, disciplinary actions, layoffs, retrenchment, and other
matters affecting the industrial relationship. The court follows the principles of natural justice and
ensures a fair and impartial hearing for both the employer and the employees. Also it has the power to
adjudicate and decide upon industrial disputes referred to it by the appropriate government or by the
parties involved.

Constitution of Labour Court:

The constitution of a Labour Court is governed by Section 7 of the Industrial Disputes

Act, 1947. According to this section, the appropriate government, which can be either the central
government or the state government, has the power to constitute one or more Labour Courts.

The Labour Court is typically composed of a single presiding officer who is

appointed by the appropriate government. The presiding officer is usually a person with legal
qualifications and experience, such as a retired judge or a lawyer. The presiding officer is responsible for
conducting the proceedings of the Labour Court and making decisions on the matters brought before it.

Power and Functions of Labour Court:

The functions and powers of a labor court are as follows:

i. Dispute Resolution: The primary function of a labor court is to resolve disputes between
employers and employees or between different parties in the workplace. These disputes can
include matters related to wages, working conditions, unfair dismissals, discrimination,
harassment, and violation of labor laws.
ii. Interpretation and Application of Labor Laws: Labor courts play a vital role in interpreting
and applying labor laws and regulations. They provide legal clarity and guidance on the correct
interpretation of employment statutes, collective bargaining agreements, and other relevant
labor legislation.
iii. Enforcement of Workers' Rights: Labor courts are empowered to enforce and protect the
rights of workers. If violations are found, the court can issue orders to rectify the situation, such
as awarding compensation to affected employees or ordering reinstatement.

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iv. Collective Bargaining Disputes: Labor courts handle disputes arising from collective
bargaining agreements (CBAs) between employers and trade unions or employee
representatives. They mediate negotiations, facilitate discussions between parties, and resolve
conflicts related to the terms and conditions of employment, such as wages, benefits, working
hours, and job security.
v. Adjudication of Unfair Labor Practices: Labor courts have the authority to adjudicate cases
related to unfair labor practices, such as unlawful termination, discrimination, retaliation, or
interference with workers' rights to join unions or engage in collective bargaining.
vi. Appeals and Judicial Review: Labor courts may also handle appeals and requests for judicial
review of their decisions. Parties dissatisfied with the court's judgment can seek review in higher
courts to ensure a fair and just resolution. This allows for the correction of any legal errors or
interpretations and promotes consistency in the application of labor laws.

Matters that can be Adjudicated in the Labour Court:

The various matters that can be adjudicated in the Labour Court are as follows:-

i. The propriety or legality of an order passed by an employer under the standing orders;
ii. The application and interpretation of standing orders;
iii. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen
wrongfully dismissed;
iv. Withdrawal of any customary concession or privilege;
v. Illegality or otherwise of a strike or lock-out; etc.

Does the Labour Court has Original Jurisdiction:

Yes, the Labour Court has original jurisdiction to try disputes under the Industrial
Disputes Act, 1947. The Industrial Disputes Act is a legislation in India that provides a legal framework
for the resolution of industrial disputes between employers and employees. The Act establishes various
forums for the adjudication of such disputes, including the Labour Court.

The Labour Court is a specialized tribunal that has the authority to hear and decide
matters related to industrial disputes. It has the power to adjudicate disputes arising from the
interpretation or application of the Industrial Disputes Act, including disputes relating to wages, working
conditions, employment termination, and other industrial matters. The decisions of the Labour Court
can be legally binding on the parties involved.

Conclusion:

The labor court acts as a specialized legal forum that safeguards workers' rights,
resolves disputes between employers and employees, and ensures the fair and equitable application of
labor laws. Its functions and powers encompass dispute resolution, interpretation and application of
labor laws, enforcement of workers' rights, handling collective bargaining disputes, facilitating
arbitration and mediation, adjudicating unfair labor practices, and providing avenues for appeals and
judicial review.

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Q no 11: Discuss briefly the salient features of the Industrial Employment

(Standing Orders) Act, 1946.

Introduction:

To avoid friction amongst the employers and workmen employed in an industry is the
principal aim of Industrial Legislation in India. The Industrial Employment (Standing Orders) Act, 1946 is
one step further in the above direction. Before the enactment of the above Act the conditions of
employment of workmen were governed by the terms and conditions of contract entered into between
the employer and workmen which led to considerable function. Therefore, the steps, were taken by the
Central Government to enact Industrial Employment (Standing Orders) Act, 1946 with a view to afford
protection to the workmen with regard to conditions of employment.

Objective of the Act

The objective of the Industrial Employment (Standing Orders) Act, are as follows:

a. To provide regular standing orders for workers, factories, and working relationship.
b. To ensure that the employee recognizes the terms and conditions of the employees and thus to
minimize exploitation of the workers.
c. To promote industrial peace and harmony by supporting fair industrial practices.

Salient features of the Act:

The Industrial Employment (Standing Orders) Act, 1946 is a legislation in India that
outlines the terms and conditions of employment in industrial establishments. Here are its salient
features:

i. Applicability of the Act: The Act applies to industrial establishments employing 100 or more
workers, and the appropriate government can extend its provisions to establishments with a
lower number of workers. It covers both the public and private sectors.
ii. Standing Orders: The Act requires employers to define and implement standing orders that
regulate various aspects of employment, such as work shifts, working hours, holidays, leave,
disciplinary actions, termination, etc. Standing orders promote uniformity and clarity in
employment conditions.
iii. Certification of Standing Orders: The standing orders need to be certified by a certifying
officer appointed by the appropriate government. Once certified, they become legally binding
on both the employer and the employees.
iv. Contents of Standing Orders: The Act provides a list of essential provisions that must be
included in the standing orders, such as the designation of the authority responsible for issuing
orders, rules of conduct, conditions for leave, termination, and disciplinary action, among
others.
v. Modification and Display: Any modification to the standing orders must be approved by the
certifying officer. Employers are required to prominently display the certified standing orders at
the workplace for the information of the employees.

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vi. Protection for Workers: The Act safeguards the interests of workers by ensuring fair
employment practices, preventing unfair dismissals or layoffs, and providing a framework for
resolving disputes between employers and employees.
vii. Implications of Certified Standing Orders: Once the standing orders are certified, they
become legally binding on both the employer and the workers. Violation of the standing orders
can lead to disciplinary action.
viii. Provision for Appeals: If any employer, workmen, trade union or other prescribed
representatives of the workmen aggrieved by the order of the Certifying Officer under section
5(2) of the Act may within thirty days from the date on which copies are sent can also appeal to
the Industrial Tribunal for resolving disputes related to the standing orders.
ix. Obligations of Employers: Employers are obligated to provide a copy of the certified standing
orders to each worker employed in the establishment. They must also comply with the
provisions outlined in the standing orders.
x. Provision for Temporary and Probationary Workers: The Act extends protection to
temporary and probationary workers by defining their rights and entitlements in the standing
orders
xi. Grievance Redressal: The Act encourages the establishment of grievance redressal
mechanisms within the organization to address employee complaints and disputes. It promotes
peaceful resolution and avoids unnecessary litigation.
xii. Penalties: The Act prescribes for penalties under section 10 of the Act for non-compliance with
its provisions, including fines and imprisonment for certain offenses committed by employers.

Conclusion:

From the above discussion we have seen that the Industrial Employment (Standing Orders)
Act, 1946 aims to promote industrial peace, regulate employment conditions, and safeguard the
interests of both employers and workers by establishing clear guidelines for conduct and dispute
resolution in industrial establishments. Thus the Act is considered to be an important legislation in
history of Industrial legislation.

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Q no 12: What do you mean by "Standing Orders" under the Industrial

Employment (Standing Orders) Act, 1946? Discuss the process of
certification of Standing Orders under the said Act.

Introduction:

The term "Standing Orders" refers to a set of rules and regulations that govern the
conditions of employment in industrial establishments. These orders are established under the
Industrial Employment (Standing Orders) Act, 1946, which is an Indian labor law. The purpose of the
Industrial Employment (Standing Orders) Act is to promote industrial peace and harmonious relations
between employers and workers by clearly defining the rights and obligations of both parties. The act
requires employers in industrial establishments to define and publicly display the terms and conditions
of employment through standing orders.

Meaning of Standing Orders:

Standing Orders can be defined as a set of rules and regulations that govern the terms
and conditions of employment, disciplinary procedures, and other related matters within an industrial
establishment. These orders are legally binding and provide a framework for the rights and obligations
of both employers and employees.

Section 2(g) of the Industrial Employment (Standing Orders) Act, 1946, states that
“standing orders” are the rules relating to matters set out in the Schedule, i.e. with reference to:

 The classification of workmen;

 Manner of intimation to workers about work and wage-related details;
 Attendance, and conditions of granting leaves, etc.;
 Rights & liabilities of the employer/ workmen in certain circumstances;
 Conditions of ‘termination of’/‘suspension from’ employment; and
 Means of redressal for workmen, or any other matter.

Process of Certification of Standing Orders:

The procedure for certification of Standing Order is prescribed under Section 5 of the
Industrial Employment (Standing Orders) Act, 1946. The certification process of "Standing Orders"
involves several steps to ensure that the terms and conditions of employment are clearly defined and
legally binding for both the employer and the employees. Here is a step-by-step overview of the
certification process:

i. Applicability: The Industrial Employment (Standing Orders) Act, 1946 is applicable to industrial
establishments employing 100 or more workers (the appropriate government can prescribe a
lower threshold). The Act covers both the public and private sectors.
ii. Drafting of Standing Orders: The employer is responsible for drafting the standing orders
that define the conditions of employment in the establishment. The draft should cover various
aspects, such as working hours, leave policies, termination procedures, disciplinary actions, and

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other terms and conditions of employment. The draft is prepared in the local language and must
be precise, clear, and unambiguous.
iii. Submission to Certifying Officer: Once the draft is prepared, the employer must submit it to
the Certifying Officer appointed by the appropriate government. The Certifying Officer is
typically an officer of the labor department or a similar authority.
iv. Notice and Objections: The Certifying Officer examines the draft and publishes a notice in the
establishment, inviting objections or suggestions from the employees within a specified time.
The notice should be prominently displayed and communicated to all workers.
v. Settlement of Disputes: If any objections or suggestions are received, the Certifying Officer
may conduct an inquiry or hold a meeting to settle the disputes. The objective is to resolve any
conflicting issues and ensure that the standing orders are fair and reasonable to both the
employer and the employees.
vi. Certification: After considering the objections and suggestions, if any, and settling disputes,
the Certifying Officer issues a certificate of certification. The certificate validates the standing
orders and makes them legally binding on the employer and the employees.
vii. Revision and Display: The certified standing orders remain in force until they are revised. If
the employer wishes to revise the standing orders, they must follow a similar process, including
submitting the proposed changes to the Certifying Officer for approval. The certified standing
orders should be prominently displayed in the establishment in a language understood by the
majority of workers.

Case : S.K. Sheshadri v H.A.L and others, (1983)

In this case, the Hon’ble Karnataka High Court held that, as long as the Standing Orders fall
within the Schedule to the Act, irrespective of the fact that they contain additional provisions which are
not accounted for in the MSOs, the Standing Orders would not be deemed to be invalid or ultra vires of
the Act. The MSOs only serve as a model for framing the Standing Orders.

Conclusion:

From the above discussion we have seen that the Industrial Employment (Standing
Orders) Act, 1946 is a significant piece of labor legislation in India that seeks to provide a framework for
defining the terms and conditions of employment in industrial establishments. One of the key provisions
of this Act is "Standing Orders" which is a set of rules and regulations that govern the terms and
conditions of employment. The process of certification of Standing Order prescribed under Section 5 of
the Act involves several steps to ensure that the terms and conditions of employment that may vary
slightly from state to state in India because the Act is implemented by state governments.

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Q no 13: Discuss the need of Restraints on Prerogatives as laid down in sec. 33

and Managerial 33A of the Industrial Disputes Act, 1947.

Introduction:

The Industrial Disputes Act, 1947, is a significant legislation in India that aims to
regulate industrial relations and provide a framework for dispute resolution. Section 33 and Managerial
Section 33A of the Industrial Disputes Act, 1947, outline the need for restraints on prerogatives of
employers and management in order to maintain harmonious industrial relations and protect the
interests of workers. These provisions recognize the importance of balancing the power dynamics
between employers and employees, promoting fair labor practices, and preventing arbitrary actions that
may lead to industrial disputes.

Need of Restraints on Prerogatives:

The need of Restraints on Prerogatives as laid down in sec. 33 and Managerial 33A of
the Industrial Disputes Act, 1947 can be discussed as below:

i. Protection of Workers' Rights: Section 33 and Managerial 33A of the Industrial Disputes
Act, 1947, primarily serve to safeguard the rights of workers and prevent any arbitrary
actions by employers that may adversely affect them. These provisions require employers to
seek permission or provide prior notice before implementing certain measures that may
impact the terms and conditions of employment, such as transfers, layoffs, retrenchment, or
closure of establishments.
ii. Promoting Collective Bargaining: The restraints on prerogatives prescribed in the Act
play a crucial role in promoting collective bargaining between employers and employees or
their representatives. By mandating prior notice or permission, the Act provides an
opportunity for dialogue and negotiation, allowing both parties to discuss and potentially
resolve any conflicts or disputes arising from proposed managerial actions. This fosters a
cooperative environment and encourages peaceful resolution of differences.
iii. Preventing Unilateral Actions: Section 33 and Managerial 33A act as checks on unilateral
actions by employers, ensuring that decisions regarding transfers, layoffs, retrenchment, or
closure of establishments are not made in an arbitrary or unfair manner. These provisions
require employers to provide a legitimate reason for their actions and seek approval or give
notice to the appropriate authorities or labor representatives, providing an opportunity for
review and intervention if necessary.
iv. Ensuring Job Security: The inclusion of restraints on prerogatives in the Industrial
Disputes Act helps to protect the job security of employees. By mandating prior notice or
permission, the Act provides workers with an opportunity to prepare for potential changes
in their employment status or seek alternative arrangements. This reduces the uncertainty
and vulnerability that employees may face due to sudden and unexpected actions by
employers.
v. Maintaining Industrial Peace and Stability: Restraints on prerogatives contribute to
the maintenance of industrial peace and stability. By ensuring that employers exercise their

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managerial rights in a responsible and measured manner, these provisions help prevent
abrupt disruptions in the workplace and reduce the likelihood of industrial disputes. By
encouraging dialogue and negotiation, the Act promotes a balanced approach to industrial
relations, fostering an atmosphere of cooperation and understanding.
vi. Preventing victimization and unfair labor practices : Section 33 of the Industrial
Disputes Act acts as a safeguard against victimization or unfair labor practices by employers.
It prevents the employer from taking punitive actions against workers involved in legitimate
industrial disputes. This provision aims to protect workers from retaliation and ensures that
they can exercise their rights without fear of adverse consequences.
vii. Balancing management authority and worker interests : The restraints on
prerogatives laid down in Sections 33 and 33A strike a balance between the authority of
management and the interests of workers. While employers have the prerogative to
manage their enterprises, these provisions place reasonable limitations on their powers to
ensure that the rights and well-being of workers are respected.

Conclusion:

In conclusion, the restraints on prerogatives as laid down in Section 33 and

Managerial Section 33A of the Industrial Disputes Act, 1947, serve as important safeguards to ensure
fairness, balance, and social justice in industrial relations. They prevent employers from unilaterally
altering conditions of service during the pendency of dispute resolution proceedings, thereby promoting
stability, protecting workers' interests, and fostering a conducive environment for resolving industrial
disputes.

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Q no 14: What are the defenses that are available to an employer against the claim
of compensation by an injured person under the Employee's Compensation Act,
1923?

Introduction:

The Employee's Compensation Act, 1923, is a legislation in India that aims to provide
compensation to employees for work-related injuries and occupational diseases. It establishes a
framework for employers to provide financial support to employees or their dependents in case of
injury, disability, or death arising out of or during the course of employment. The Act applies to all
employees, including those engaged in hazardous occupations, and covers both temporary and
permanent employees. The Act also outlines the procedure for filing claims, including the time limits for
reporting injuries and the requirement of medical examination.

Employer Defenses Against Workers Compensation:

Under the Employee's Compensation Act, 1923, employers are provided with certain
defenses that they can use against a claim for compensation by an injured person. These defenses
include:

i. Notice of the accident: An employer can defend against a claim if the injured employee
fails to provide notice of the accident within the specified time period. The Act requires the
employee to notify the employer within 30 days of the occurrence of the accident causing
the injury.
ii. Self-Inflicted Injuries: The workers’ compensation program is in place to help those
injured by workplace injuries that are accidental. However, some employees go as far as to
hurt themselves intentionally and blame the injuries in a workplace accident in an attempt
to claim workers’ compensation benefits. This is fraudulent activity and will result in
benefits being denied altogether.

iii. Contributory Negligence: If the injury was caused in part due to the negligence or
misconduct of the employee, the employer may argue contributory negligence. In such
cases, the employer may contend that the compensation amount should be reduced or
denied altogether based on the degree of the employee's negligence.
iv. Willful Disobedience or Misconduct: If the injury was a result of the employee's willful
disobedience of orders, or if the employee willfully disregarded any safety rules or
regulations established by the employer, the employer may claim this as a defense against
the compensation claim.
v. Assumption of Risk: If the employee was fully aware of the risks associated with their job
and voluntarily accepted those risks, the employer may raise the defense of assumption of
risk. This defense suggests that the employee willingly assumed the potential hazards of
their occupation and thus should not be entitled to full compensation.
vi. Independent Contractor: If the injured person is classified as an independent contractor
rather than an employee, the employer may argue that they are not liable for compensation

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under the Employee's Compensation Act. The distinction between an employee and an
independent contractor is based on various factors, such as control, the nature of work, and
the relationship between the parties.
vii. Pre-existing Condition: If the employer can demonstrate that the injury or disability
claimed by the employee existed before the employment began or was not caused by the
work-related incident, they may use this defense to dispute the compensation claim.
viii. No Connection to Employment: The employer may dispute the causal connection
between the injury and the employment, arguing that the injury was not a result of the
work-related activities or conditions.
ix. Horseplay and Reckless Behavior: If the employee was engaged in misconduct or was
displaying reckless behavior at the time of the injury, then the claim can be denied. The
employer can review surveillance footage or get eyewitness accounts to confirm how the
injury occurred.
x. Intoxication from Drugs or Alcohol: This is a common workers’ compensation employer
defense. Employers do not have to pay benefits to those who are injured while under the
influence of drugs or alcohol. However, proving this can be difficult. It is best to get
sufficient evidence, such as medical tests, proving that the person had drugs or alcohol in his
or her system at the time of the injury.

Conclusion:

The Employee's Compensation Act, 1923, is a crucial legislation in India that

safeguards the interests of employees by ensuring fair compensation for work-related injuries and
occupational diseases. But the Act also provides certain specific defenses to the employers against the
claim of compensation by an injured person under the Employee's Compensation Act, 1923 which may
vary depending on the jurisdiction and the circumstances of the case to the employer so that no
employee can take benefit through illegal means.

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Q no 15: Explain in detail the concept of National Wage Policy. Also discuss the
different theories of wages with examples.

Introduction:

Wages are understood as monetary payment for any service or labour. Under Indian
law, wages are defined in The Minimum Wages Act, 1948. Section 2 (4) of the Act defines wages as ‘all
remuneration which is made by monetary mode for a work done under an employment’.The concept of
a National Wage Policy refers to a framework or set of guidelines established by a government to
regulate and govern wages across a nation or specific industries. The policy aims to strike a balance
between the interests of employees, employers, and the overall economy. It plays a crucial role in
shaping labor markets, ensuring fair compensation, promoting social justice, and fostering economic
stability.

Key Objectives of a National Wage Policy:

i. Promoting Fair Compensation: The primary objective of a National Wage Policy is to ensure
that workers receive fair and equitable remuneration for their labor.
ii. Enhancing Productivity: By setting reasonable wage levels, the policy encourages
productivity and efficiency in the workforce. Adequate compensation motivates employees,
leading to increased job satisfaction, reduced turnover rates, and improved overall productivity.
iii. Economic Stability: A National Wage Policy plays a vital role in maintaining economic stability.
By balancing wages with economic conditions, inflation, and productivity, it seeks to prevent
wage-driven inflationary pressures or deflationary spirals that could harm the overall economy.
iv. Social Welfare: The policy aims to promote social welfare by addressing issues such as
poverty, income disparities, and ensuring a decent standard of living for workers. It considers
factors like the cost of living, socioeconomic conditions, and prevailing wage trends.

Factors Influencing National Wage Policy:

i. Labor Market Conditions: The supply and demand dynamics of the labor market significantly
influence wage policies. Factors such as unemployment rates, labor force participation, skills
shortages, and the overall health of the economy play a crucial role in determining wage levels.
ii. Productivity: The level of productivity within an economy or industry is a critical factor in wage
policy. Higher productivity often justifies higher wages, as it reflects increased output and
economic growth.
iii. Cost of Living: The cost of living, including housing, healthcare, education, transportation, and
other essential goods and services, is a key consideration when formulating wage policies.
Adjustments are made to ensure that wages keep pace with the rising cost of living, preventing
workers from falling into poverty.
iv. Inflation and Price Stability: National wage policies must strike a balance between wage
growth and price stability. Excessive wage increases without corresponding gains in productivity
can fuel inflation, while inadequate wage growth may lead to social unrest and decreased
purchasing power.

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v. Social Dialogue: Effective wage policies involve consultation and collaboration between the
government, employers, trade unions, and other relevant stakeholders. Social dialogue
facilitates the negotiation and implementation of fair and balanced wage policies that consider
the interests of all parties.

Theories of Wages:

Theories of wages provide different perspectives on how wages are determined in the labor
market. Some prominent theories include:

i. Subsistence Theory: The Subsistence Theory of Wages also known as the Iron Law of
Wages or the Brazen law of Wages is an economic concept that was proposed during the late
18th and early 19th centuries by classical economists, including Thomas Malthus and David
Ricardo. According to the Subsistence Theory of Wages, wages are influenced by the supply and
demand dynamics in the labor market.
ii. Wage Fund Theory: In 1930, this theory was given by John Stuart Mill. The wage fund theory
was propounded with the assumption that the payment of workers is done out of a pre-
determined wealth fund. According to the Wage Fund Theory, the total amount of wages paid
to workers in an economy is determined by the size of the wage fund, which is a predetermined
pool of money set aside by employers to pay their workers.
iii. Marginal Productivity Theory: This theory was propounded by Phillips Henry Wick-steed
(England) and John Bates Clark of U.S.A. According to this theory, wages is determined based on
the production contributed by the last worker, i.e. marginal worker. His/her production is called
‘marginal production’.
iv. Bargaining Theory: John Davidson was the propounder of this theory. According to this
theory, the fixation of wages depends on the bargaining power of workers/trade unions and of
employers. If workers are stronger in bargaining process, then wages tends to be high.
v. Residual Claimant Theory: This theory owes its development to Francis A. Walker (1840-
1897). According to Walker, there are four factors of production or business activity, viz., land,
labour, capital, and entrepreneurship. He views that once all other three factors are rewarded
what remains left is paid as wages to workers. Thus, according to this theory, worker is the
residual claimant.
vi. The Surplus Value Theory of Wages: This theory was developed by Karl Marx (1849-1883).
This theory is based on the basic assumption that like other article, labour is also an article
which could be purchased on payment of its price i e wages. This payment, according to Karl
Marx, is at subsistence level which is less than in proportion to time labour takes to produce
items.
vii. Behavioural Theories of Wages: Based on research studies and action programmes
conducted, some behavioural scientists have also developed theories of wages. Their theories
are based on elements like employee’s acceptance to a wage level, the prevalent internal wage
structure, employee’s consideration on money or’ wages and salaries as motivators.

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Conclusion:

From the above discussion we have seen that a well-designed National Wage Policy is
crucial for promoting fair compensation, economic stability, and social justice. By considering factors
such as labor market conditions, productivity, cost of living, and social dialogue, governments can
establish effective wage regulations that benefit both workers and the economy as a whole. Also there
are various theories of wages that provide different perspectives on how wages are determined in the
labor market.

Q no 16: Who are entitled for compensation under the Workmen's Compensation
Act, 1923. Also discuss the concept of injury arising out of and in the course of
employment.

Introduction:

The Workmen's Compensation Act, 1923 (now referred to as the Employees'

Compensation Act, 1923 in India) is a social security legislation that provides compensation to
employees or their dependents in case of injuries, disabilities, or death arising out of and in the course
of employment. The Act aims to ensure financial support and protection for workers and their families in
the event of work-related accidents or occupational diseases.

Person entitled for compensation under the Workmen's Compensation Act

Under the Act, the following persons are entitled to receive compensation:

i. Employees: The primary beneficiaries of the Act are employees, including both manual and
non-manual workers, who suffer from an injury or disability, or in case of death, their
dependents. An employee refers to any person who works for wages or a salary under a
contract of employment, whether express or implied, and includes both permanent and
temporary workers.
ii. Dependents Family Members: In the unfortunate event of an employee's death due to a
work-related accident or occupational disease, certain dependents are entitled to receive
compensation. Dependents generally include the spouse, children, parents, and other family
members who were dependent on the employee's earnings at the time of death. The specific
definition of dependents may vary depending on the jurisdiction or country.
iii. Legal representatives: If an employee dies as a result of a work-related accident or
occupational disease, the legal representative of the deceased employee's estate may also claim
compensation on behalf of the deceased's dependents.

However, to claim compensation, the employee or their dependents need to

establish that the injury or death occurred due to an accident arising out of and in the course of
employment. The Act defines an accident as a sudden and unexpected event caused by external means.

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It is essential to report the accident to the employer as soon as possible and file a claim within the
prescribed time limits.

Concept of Injury Arising Out of and in the Course of Employment:

The concept of "injury arising out of and in the course of employment" is a

fundamental principle in workers' compensation law. It refers to the circumstances under which an
employee is eligible to receive benefits for a work-related injury or illness.

In general, for an injury to be considered as arising out of employment, it means that

there must be a causal connection between the conditions under which the work is performed and the
injury sustained. In other words, the injury must have resulted from a risk or hazard that is inherent to
the job or the workplace. For example, if an employee slips and falls while walking on a wet floor in their
workplace, the injury would be considered to arise out of employment.

Regarding the phrase "in the course of employment," it refers to the time and place in
which the injury occurred. For an injury to be considered as occurring in the course of employment, it
must happen while the employee is carrying out their job duties or engaging in activities reasonably
related to their employment. This includes injuries that happen during regular working hours, as well as
injuries that occur off-site but are still connected to the employee's work responsibilities. For example, if
an employee is injured while attending a work-related conference or running an errand for their
employer, the injury would generally be considered to occur in the course of employment.

The concept of "injury arising out of and in the course of employment" forms the
basis for determining workers' compensation eligibility. Workers' compensation is a form of insurance
that provides benefits to employees who are injured or become ill due to their work. By establishing the
connection between the injury and the employment, it ensures that employees are appropriately
compensated and their medical expenses and lost wages are covered, regardless of fault.

Conclusion:

From the above discussion we have seen that The Workmen's Compensation Act,
1923 (now referred to as the Employees' Compensation Act, 1923 in India) is an important legislation
India that provides various provision for the welfare of employees or workmen including compensation
to the employee or their dependents in case of injury or death. But such injury or death have to be
occurred due to an accident arising out of and in the course of employment.

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Q no 17: Discuss the concept of different kind of wage.

Introduction:

Wages play a crucial role in the socio-economic framework of any nation, including India.
According to Merriam-Webster, wage is “a payment usually of money for labour or services; usually
according to contract and on an hourly, daily, or piecework basis.”A wage is the payment made to the
workman for his services to the organization. Wages are generally paid hourly to blue-collar workers
such as production and maintenance workers while salary is a monthly payment made to an employee
for the services he has rendered to the organization. In India , the Minimum Wages Act, 1948 deals with
wages for workmen for their services.

Origin of Wage:

Wage is a reward for the services rendered or remuneration for the work done and it is as
old as the society itself. In the primitive days, wages were paid in kind, most common of them was
grains and the food. But with the advent of industrialization wages form a complex problem and in
almost all industrialized countries it became a sensitive area of public policy. Very soon the quantum of
wages assumed a common cause of friction between the employers and the wage-earners.

Frequent disputes between employer and wage-earners resulted in strikes over the
demand for wage-increase. The determination of adequate wages that should be justifiably payable to
die workmen by the employer, was not merely an economic problem but a multidimensional
phenomena, necessarily involving relevant factors like place of industry, prices of the product, living
standards, basic needs of die wage-earner and the governmental policy in a given society.

The natural instinct of the employer to keep the wage-bill to a minimum and workers struggle
to secure a wage-increase to meet both ends, created a chaotic situation which demanded an
immediate State’s intervention to protect the weaker section of the society, namely, workers, in view of
its low bargaining capacity.

Kinds of Wage:

There are three main types of wages in India viz. Living, Minimum and Fair wages. The
concept of living wages, fair wages and minimum wages was formulated by the Fair Wages Committee
when its report got published by the Government of India in 1949. These are explained below:

i. Living Wage:

The wages which sufficiently serve the need of certain basic facilities as well as other needs
of the employee and his family according to their social status are termed as Living wages. They are
usually sufficient for the betterment of the employee. The term ‘living wages’ is not defined in the
Minimum Wages Act, 1948.

Living wage enables a wage earner not only to afford the minimum requirements of life
like food, clothing, shelter, basic education and health needs, but also the need of luxuries which include

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higher and better health and ea facilities for family and children, fulfilling societal desires, ensuring safe
and insured future, and thus, procuring a comfort life at present.

ii. Minimum Wages:

The term Minimum Wage(s) has not been defined in the Minimum Wages Act, 1948. The
minimum wage is the lowest wage in the scale. Below the minimum wage, the efficiency of the worker is
at stake. It includes the simple physical necessities of the worker as well as some comfort such as the
conventional necessities as otherwise, any wage below it will necessarily need to depletion of the
efficiency of the worker.

According to Government Committee on Wages, 1948, "Minimum wage is a wage which

must provide not only for bare sustenance of life but for the preservation of efficiency of the worker".
Minimum wage should also provide for the requirements like education of children, medical facilities,
etc. It is fixed by an agreement between worker and the management but usually it is determined by the
legislation's related to wages.

iii. Fair Wage:

Fair wage means which is something more than the minimum wages. It is a mean between
the minimum wage and the living wage. It can be studied in two senses, wiz, narrow and broad sense. In
narrow sense, wage can be considered fair, if it is equal to present market rate in the same industry and
in the surrounding industries, performing same type of work. In a broad sense, fair wage is that wags
which is equal to the principal rate for same type of work throughout the country, when the labors a
organised systematically and they have power to bargain.

Conclusion:

From the above discussion we have seen that there are mainly three kinds of Wages viz
minimum wage, fair wage and living wage provided under the Minimum Wage Act, 1948. All these types
of wages is essential for both employers and employees to ensure fair and equitable compensation
practices in the Indian labor market. Thus these kinds of wages serves an important role for the labour
welfare in India.

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Q no 18: What are the salient features of the Payment of Wages Act, 1936?
Discuss the remedial measures provided in the Act against unauthorized
deductions in the payment of wages

Introduction:

The Payment of Wages Act, 1936 is an important legislation in India that aims to ensure the timely and
lawful payment of wages to employees. It provides a framework for the regulation of payment of wages
and sets certain standards that employers must adhere to. The Act also provides for the responsibility
for payment of wages, fixation of wage period, time and mode of payment of wages, permissible
deduction as also casts upon the employer a duty to seek the approval of the Government for the acts
and permission for which fines may be imposed. The Act does not apply to persons whose wage is Rs.
24,000/- or more per month.

Salient Features of the Payment of Wages Act, 1936:

The salient features of the Payment of Wages Act, 1936 are as follows-

i. Scope and Applicability: The Act applies to all employees in the organized sector whose
monthly wages do not exceed a specific threshold, currently set at Rs. 24,000. It covers various
industries and establishments, including factories, mines, railways, and other specified sectors.
ii. Modes of Payment: The Act allows wages to be paid in legal tender, such as currency notes or
coins, or through various electronic modes like direct bank transfer, cheque, or electronic
clearing system.
iii. Wage Periods: The Act specifies that the wage period should not exceed one month, and the
wages for a wage period should be paid within the specified time. It ensures that employees
receive regular and timely payment for their work.
iv. Prohibition of Certain Deductions: The Act prohibits certain deductions from wages, such as
fines, deductions for absence from work, deductions for damages or loss, and deductions for
services or amenities provided by the employer. It ensures that employees receive their full
wages without any unauthorized deductions.
v. Maintenance of Registers and Records : Employers are required to maintain registers and
records to track the payment of wages and deductions made. These records should be kept
readily available for inspection by labor inspectors.
vi. Enforcement: The Act empowers labor inspectors to ensure compliance with its provisions.
They have the authority to conduct inspections, examine records, and take necessary actions in
case of non-compliance. Employers found guilty of offenses under the Act may face penalties
and fines.
vii. Complaints and Claims: The Act provides a mechanism for employees to file complaints
regarding non-payment or underpayment of wages. It also allows employees to claim their
unpaid wages or seek redressal through the competent authority or labor court.
viii. Penalties and Remedies: The act typically prescribes penalties for employers who engage in
unauthorized deductions. These penalties may include fines, legal actions, or other sanctions.
Additionally, the act may provide remedies for affected employees, such as the right to recover

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deducted amounts, compensation for financial losses, or reinstatement of wrongfully

terminated employment.

Remedial measures Against Unauthorized Deductions:

Unauthorized deductions in the payment of wages can be a significant concern for employees,
as they can result in financial hardships and undermine their rights. To protect workers from such
deductions the Act provides certain remedial measures. These are -

i. Clear Definition of Wages: The act typically includes a clear definition of what constitutes
wages. This definition aims to prevent employers from making unauthorized deductions by
specifying the elements that should be included in an employee's wages, such as basic salary,
allowances, overtime pay, and bonuses.
ii. Prohibition of Unauthorized Deductions: The act explicitly prohibits employers from making
deductions from an employee's wages without proper authorization. It ensures that any
deduction made from the wages should be lawful, fair, and reasonable, and should not exceed
the limits specified by the act.
iii. Written Consent: In many cases, the act requires employers to obtain written consent from
employees before making any deductions from their wages. This consent serves as a safeguard
against unauthorized deductions and ensures that employees are aware of and agree to the
specific deductions.
iv. Limitations on Deductions: The act usually sets limitations on the types and amounts of
deductions that employers can make. As per Section 7(3) of the Act, the total amount of
deductions cannot exceed 75 percent of the wages when the deductions are wholly or partly for
payments to cooperative societies and50 percent of the wages in every other case
v. Notice and Disclosure Requirements: To ensure transparency, the act often requires
employers to provide clear and detailed information regarding any authorized deductions. This
includes notifying employees in advance about the nature, amount, and purpose of the
deduction.
vi. Grievance Redressal Mechanisms: The act may establish mechanisms for employees to
lodge complaints or grievances against unauthorized deductions. This can include avenues for
mediation, conciliation, or arbitration, allowing employees to seek resolution and appropriate
remedies for any deductions made in violation of the act.
vii. Penalties and Remedies: The act typically prescribes penalties for employers who engage in
unauthorized deductions. These penalties may include fines, legal actions, or other sanctions.
Additionally, the act may provide remedies for affected employees, such as the right to recover
deducted amounts, compensation for financial losses, or reinstatement of wrongfully
terminated employment.

Conclusion:

Overall, the Payment of Wages Act, 1936 establishes a legal framework to safeguard the
rights of employees in relation to timely and proper payment of wages. It sets standards for payment,
deductions, and maintenance of records, ensuring transparency and accountability in the payment of

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wages. It's also provides certain specific measures and remedies against unauthorized deductions can
vary depending on the country and the applicable labor laws.

Q no 19: Enumerate the deductions permissible under the Payment of

Wages Act, 1936.

Introduction:

The Payment of Wages Act 1936 is one of the most important labor welfare legislation which
helps to prevent exploitation of the labors. It ensures timely and lawful payment of wages and provides
certain safeguards to protect the rights of employees. The Act provides for the responsibility for
payment of wages, fixation of wage period, time and mode of payment of wages, permissible deduction
as also casts upon the employer a duty to seek the approval of the Government for the acts and
permission for which fines may be imposed by him and also sealing of the fines, and also for a
machinery to hear and decide complaints regarding the deduction. The Act also allows deductions which
can be made from the wages payable to a worker. The Act does not apply to persons whose wage is Rs.
24,000/- or more per month.

Objectives of the Act:

The Payment of Wages Act, 1936 is a legislation that aims to ensure the timely and full payment
of wages to workers in India. Its main objectives include:

i. Regulating wage payments: The act provides a framework for the regulation of wage
payments, setting guidelines for the time and manner in which wages should be paid to
employees.
ii. Ensuring timely payment: The act mandates that wages should be paid within a specified
period, typically not exceeding a month, to ensure that workers receive their wages promptly.
iii. Preventing unauthorized deductions: The act prohibits employers from making
unauthorized deductions from workers' wages, ensuring that employees receive their full
entitlement without any unjustified reductions.
iv. Securing minimum wages: The act establishes a mechanism to ensure that workers are paid
at least the minimum wage set by the appropriate authority, safeguarding their economic well-
being.

Deductions permissible under the Payment of Wages Act:

Section 7 of the Payment of Wages Act, 1936, outlines the deductions from wages permitted
under the Act. The following deductions are permissible:

i. Fines: Deductions can be made for fines imposed on employees for misconduct or any breach of
employment rules. Section 7(2) (a) of the Payment of Wages Act authorizes deduction by way of
fines. Section 8 Lays down the rules for the imposition of such fines.

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ii. Deductions for absence from duty: Section 7(2) (b) of the Act permits deductions for absence
from duty. This section provides that employers can deduct wages for the period when an
employee is absent from work without a valid reason.
iii. Deductions for damage or loss: Section 7(2) (c) of the Act permits deductions for damage or loss
of goods. This section provides that if an employee causes any damage or loss to the employer's
property or goods, deductions can be made to cover the cost of repair or replacement.
iv. Deductions for amenities and services: According to Section 7(2)(d) and 7(2) (e) of the Act the
employers can make deductions for amenities and services respectively provided to employees,
such as housing, medical facilities, or transportation, as long as the total deductions do not exceed
the prescribed limit (usually 25% of wages).
v. Deductions for recovery of advances: Section 7(2)(f) of the Act authorizes the employer to
make deductions for the advances made by him. If an employee has received any advances from the
employer, deductions can be made from the wages to recover the amount owed.
vi. Deductions for recovery of loan: Section 7(2)(ff) of the Act provides that employer may make
deduction for the recovery of loans together with interest made from any fund constituted for the
welfare of labor in accordance with the rules approved by the State Government in this regard.
vii. Income tax deductions: Section 7(2)(g) of the said Act permits an employer to make this
deduction subject to the provisions of the Income Tax Act. Employers are required to deduct income
tax at source as per the applicable tax laws.
viii. Deductions by the order of a court: Section 7(2)(h) of the Act permits an employer to effect
any deduction by the order of a Court. If an employer receive any order from the court to deduct
the wage then such employer can deduct the wage under the same section provided.
ix. Deductions for provident fund: Section 7(2)(i) of the Act provides that the employer should
deduct provident fund contributions from his employee's salary and shall also make contributions
from his share, which is mandatory.
x. Deductions for payments to co-operative societies: Section 7(2)(j) authorizes the deductions
for payments to Co-operative societies. Employer can make deduction for the payment to co-
operative societies.
xi. Deductions with the consent of the employed Person: Section 7(2)(k) of the Act provides that
deductions may be made with the written authorization of the person employed for payment of any
premium on his life insurance policy to the Life Insurance Corporation Act of India established under
the Life Insurance Corporation 1956 (31 of 1956) or for the purchase of securities of the
Government of India or of any State Government or for being deposited in any Post Office Saving
Bank in furtherance of any savings scheme of any such government.
xii. Deduction for the Welfare Fund: Section 7 (2) (kk) of the Act provides that deductions made
with the written authorization of the employed person for the payment of his contribution to any
fund constituted by the employer or a trade union registered under the Trade Union act 1926 (16 of
1926) for the welfare of the employed persons or the members of their families or both and
approved by the State Government or any officer specified by it in this behalf during the
continuance of such approval.

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xiii. Trade Union Membership Fees : Section 7(2) (kkk) of the Act provides that deductions made
with the written authorization of the employed person for payment of the fees payable by him for
the membership of any trade union registered under the Trade Union Act 1926.

Conclusion:

From the above discussion we have seen that the Payment of Wages Act 1936 has established
various rules and regulations for the betterment and effective operation of the industry. It also allows the
employers for the deductions which can be made from the wages payable to a worker. But the deduction
should be as per the prescribed law provided under Section 7 of the Act. Violation of the same section of the
Act is punishable as per law. Thus this part is also considered as an important provision under the Act.

Q no 19: “Concept of Bonus is a dynamic concept." -Explain.

Introduction:

The Payment of Bonus Act, 1965 is an important legislation in India that governs the
payment of bonus to employees in certain establishments. The act was enacted with the objective of
providing statutory provisions for the payment of bonus to employees and promoting employee
welfare. The act is applicable to the whole of India for all establishments which had twenty or more
persons employed on any day during the year. However, the Act was amended in 2015 which
introduced several changes to the Act. The amendments aimed to promote employee welfare and
improve the overall working conditions in establishments covered under the Act.

Meaning of Bonus:

Bonus is the extra payment or financial component which is received as a reward for doing
one’s job well. Bonus usually comes along with salary of the employee. It is the gesture of appreciation
from the organization towards their employees. Bonus is given globally in most of the organization
across different nations. It is not only given for the job well done but also to keep the employees
motivated and focused.

Bonus is a Dynamic Concept:

The concept of a bonus is indeed dynamic and has evolved over time.
Traditionally, a bonus was a monetary reward or an additional payment given to employees or
individuals as an incentive for exceptional performance, achieving targets, or as a share of profits.
However, the understanding and implementation of bonuses have become more nuanced and
multifaceted in recent years.

One aspect of the dynamic nature of bonuses is their purpose and scope. While
financial rewards remain a significant component, companies now use bonuses to achieve various

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objectives beyond motivating employees. Bonuses can be designed to promote specific behaviors, such
as teamwork, innovation, or customer satisfaction. They can also be used to attract and retain top talent
in competitive industries or as a tool to align employee interests with company goals.

Another dynamic element of bonuses is their structure. Traditionally, bonuses were

often given as a one-time, lump-sum payment. However, modern organizations are adopting more
flexible approaches. This includes performance-based bonuses tied to specific metrics or key
performance indicators (KPIs), where the amount is determined by individual or team achievements.
Variable bonuses that fluctuate based on business performance are also becoming more prevalent.
Furthermore, some companies offer non-monetary bonuses such as stock options, additional paid time
off, or career development opportunities.

The timing of bonuses has also evolved. While annual or year-end bonuses are still
common, organizations now employ more frequent bonus cycles. This can include quarterly or monthly
bonuses to provide more immediate recognition and reinforcement of desired behaviors or results.
Some companies even utilize real-time or instant bonuses, rewarding employees on the spot for
exceptional contributions or going above and beyond expectations.

Moreover, the concept of bonuses is not limited to the corporate world. In other
contexts, such as the financial sector, bonuses can take on a different meaning. In investment banking,
for example, bonuses are often a significant part of compensation and are tied to the performance of
the individual, team, or overall firm. This can lead to discussions and debates about fair compensation
and the potential risks associated with excessive or misaligned incentives.

Conclusion:

In conclusion, the concept of a bonus has evolved into a dynamic tool used by
organizations to motivate, recognize, and reward employees. With changing objectives, structures, and
timing, bonuses have become more adaptable to the needs and goals of modern workplaces.
Understanding this dynamism is crucial for both employers and employees to ensure that bonuses are
utilized effectively and contribute to overall organizational success.

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Q no 20: What are the changes that have been brought in by the Payment
of Bonus (Amendment) Act, 2015? Discuss

Introduction:

The Payment of Bonus Act, 1965 is an important legislation in India that governs the
payment of bonus to employees in certain establishments. The act was enacted with the objective of
providing statutory provisions for the payment of bonus to employees and promoting employee
welfare. The act is applicable to the whole of India for all establishments which had twenty or more
persons employed on any day during the year. However, the Act was amended in 2015 which
introduced several changes to the Act. These changes were aimed at providing more extensive coverage
and increased benefits to employees by raising the eligibility limit, calculation ceiling, and minimum
bonus payment while ensuring clarity and timely payment. The amendments aimed to promote
employee welfare and improve the overall working conditions in establishments covered under the Act.

Objectives of the Act:

The objectives of the Act are as follows:

a. To impose a legal responsibility upon the employer of every establishment covered by the Act to
pay the bonus to employees.
b. To designate the minimum and maximum percentage of bonus.
c. To prescribe the formula for calculating bonus.
d. To provide redressal mechanism.

Changes brought in by the Payment of Bonus (Amendment) Act, 2015:

There are several key changes brought in by the Payment of Bonus (Amendment) Act,
2015. These are as follows-

i. Introduction of new definitions: The amendment introduced new definitions for

"employee," "establishment," "salary," and "scheduled employment" to provide clarity and
ensure uniform application of the Act.
ii. Increase in Applicability: The amendment increased the coverage of the Act by raising the
threshold for applicability. Previously, the Act applied to establishments employing 20 or more
employees, but now it applies to establishments employing 10 or more employees. This change
expanded the scope of bonus entitlement to a larger number of employees.
iii. Increase in Bonus Calculation Limit: The maximum bonus calculation limit was increased
from Rs. 3,500 to Rs. 7,000 per month. It means that eligible employees are entitled to a bonus
based on the higher limit of Rs. 7,000 per month, or the actual minimum wage, whichever is
higher.
iv. Eligibility Criteria: By amending Section 2(13) of the Principal Act, the Amendment Act has
now widened the scope of employees eligible for payment of bonus from those drawing salary
of INR 10,000 per month, to INR 21,000 per month. Previously, employees earning a salary or

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wage of up to Rs. 10,000 per month were eligible for bonus payments. However, the
amendment increased this limit to Rs. 21,000 per month.
v. Calculation of Bonus: The amendment changed the method of calculating bonus payments.
Earlier, the bonus was calculated based on the minimum wages or a fixed amount, whichever
was higher. However, with the amendment, the calculation is based on the actual minimum
wages or the new limit of Rs. 7,000 per month, whichever is higher.
vi. Effective Date: The amendment Act came into effect retrospectively from April 1, 2014. It
means that the changes in the bonus calculation and eligibility criteria were applicable from
April 1, 2014, onwards.
vii. Provision for mandatory annual bonus payment: The amendment made it mandatory for
every employer to pay a minimum annual bonus of 8.33% of the employee's salary or ₹100,
whichever is higher, even if the establishment incurs losses.
viii. Disqualification criteria: The amended Act introduced certain disqualification criteria for
employees to be eligible for bonus payments. These criteria include dismissal for fraud, riotous
or violent behavior, theft, or damage to property.
ix. Time limit for bonus payment: The amendment reduced the time limit for the payment of
bonus from 8 months to within 30 days from the date of the annual financial statement of the
employer.

Conclusion:

From the above discussion we have seen that the changes in the Payment of Bonus
(Amendment) Act, 2015 aimed to expand the coverage of bonus payments and provide better benefits
to employees. By increasing the eligibility criteria, raising the calculation limit, and enhancing the
applicability of the Act, more employees became entitled to receive bonus payments, thereby
promoting better remuneration and improving the financial well-being of workers in India. Thus the Act
is considered as an important legislation in the history of employee’s welfare.

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Q no 21: Discuss the concept of Bonus. Who is eligible for statutory bonus in
India? What are the criteria for paying bonus? What is the minimum percentage of
bonus paid to an employee under the Payment of Bonus Act.

Introduction:

The Payment of Bonus Act, 1965 is an important legislation in India that governs the
payment of bonus to employees in certain establishments. The act was enacted with the objective of
providing statutory provisions for the payment of bonus to employees and promoting employee
welfare. The act is applicable to the whole of India for all establishments which had twenty or more
persons employed on any day during the year. However, the Act was amended in 2015 which
introduced several changes to the Act. The amendments aimed to promote employee welfare and
improve the overall working conditions in establishments covered under the Act.

Concept of Bonus:

In India, the concept of a bonus refers to an additional payment made by employers to

their employees, typically in addition to their regular wages or salary. Bonuses are generally provided as
a reward or incentive for good performance, productivity, loyalty, or as a share of profits.

The regulations and guidelines for bonuses in India are primarily governed by the Payment of
Bonus Act, 1965. According to this act, any establishment with 20 or more employees is required to pay
a bonus to its employees, subject to certain conditions. The act specifies that a bonus must be paid to
eligible employees if they have worked for a minimum of 30 working days in an accounting year and
have a salary or wage below a specific threshold (currently set at INR 21,000 per month).

The bonus amount is calculated based on the employee's salary or wage and the profits
of the establishment. The act mandates that the minimum bonus payable is 8.33% of the employee's
annual salary or wage, and the maximum bonus is capped at 20% of the annual salary or wage.
However, if the allocable surplus (available profits for distribution as bonus) exceeds the minimum
bonus payable, the employer can choose to pay a higher amount as a bonus, subject to a maximum of
20%.

Eligibility for statutory bonus in India:

The statutory bonus in India is governed by the Payment of Bonus Act, 1965, which outlines
the provisions for the payment of bonus to eligible employees. The eligibility for statutory bonus in India
is determined by the following criteria:

i. Minimum eligibility: The Payment of Bonus Act applies to establishments employing a

minimum of 20 employees on any given day during a financial year.
ii. Qualifying period: An employee should have worked for a minimum of 30 working days in that
financial year to be eligible for a bonus. These working days can include regular working days,
paid leave, holidays, and maternity leave.

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iii. Salary limit: The Act specifies a salary threshold for eligibility. Employees drawing a salary or
wage up to Rs. 21,000 per month are eligible for a bonus. This limit may be revised periodically
by the government.

Criteria for Paying Bonus:

The Payment of Bonus Act, 1965 is an Indian legislation that provides for the payment of bonus
to employees in certain establishments. The Act lays down specific criteria for paying bonuses to eligible
employees. Here are the key criteria outlined in the Act:

i. Applicability: The Act applies to establishments that employ 20 or more employees during the
accounting year.
ii. Eligibility: To be eligible for a bonus, an employee must have worked for at least 30 working
days in an accounting year. This includes both full-time and part-time employees.
iii. Calculation of bonus: The Act specifies that an employee is entitled to a minimum bonus of
8.33% of their annual salary or wage, subject to a maximum of 20% of the salary or wage. The
actual bonus amount may vary based on factors such as the company's profits and the
employee's performance.
iv. Computation of available surplus: The Act defines the "available surplus" as the gross profits
of the establishment after deducting certain permissible deductions like depreciation, statutory
gratuity, and any amount set aside for future expansion or development. The Act provides
detailed guidelines on how to calculate the available surplus.
v. Set-on and set-off of allocable surplus: If an establishment has incurred losses in any
accounting year, the Act allows the employer to set off the losses against the available surplus of
the subsequent accounting year(s). However, the set-off cannot exceed the available surplus of
that subsequent year. Any amount remaining after such set-off is called "set-on" and is carried
forward to subsequent years.
vi. Time limit for payment: The Act requires employers to pay bonuses within 8 months from the
close of the accounting year. In case of disputes, the Act provides for the establishment of a
machinery for conciliation and reference to the appropriate authorities.

Minimum Percentage of Bonus paid to an Employee under the Act:

Under the Payment of Bonus Act, 1965 in India, the minimum percentage of bonus paid
to an employee is 8.33% of the salary or wage earned by the employee during the accounting year.
However, if the allocable surplus (available for distribution as bonus) exceeds the amount required to
pay a minimum bonus of 8.33%, the employer is required to pay a higher bonus, which is subject to a
maximum of 20% of the salary or wage earned by the employee.

However, it's important to note that the actual percentage of bonus paid to an
employee may vary based on various factors such as company performance, profitability, and the bonus
policy of the organization. Some employers may choose to pay a higher percentage of bonus than the
statutory minimum to motivate and reward their employees, while others may stick to the minimum
requirements set by the Act.

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Conclusion:

From the above discussion we have seen that, the concept of bonuses in India serves as a
means to motivate employees, recognize their contributions, and share the financial success of the
company with its workforce. It is an important aspect of the employment landscape, providing an
additional incentive for employees to perform well and contribute to the growth and profitability of
their organizations.

Q no 22: Discuss the salient Features of Payment of Bonus Act 1965.

Introduction:

Bonus is one of the most important employee benefits in the form of an added
remuneration that employees receive in addition to their monthly wages. It is the employer's profit that
is shared among the employees as compensation for their services and loyalty to the company. The
Payment of Bonus Act, 1965 is a legislation in India that ensures the payment of bonus to employees in
certain establishments. The main object of the Payment of Bonus Act, 1965 is to maintain peace and
harmony between labour and capital by allowing the employees to share the prosperity of the
establishment, prescribing the minimum and maximum rates of Bonus together. The act applies to
establishments employing 20 or more persons and covers both private and public sector organizations.

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.

Salient features of the Payment of Bonus Act, 1965:

The Payment of Bonus Act, 1965 is a legislation in India that provides for the payment
of bonus to employees. Here are its salient features:

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i. Applicability: The Act applies to establishments employing a minimum of 20 people and to

those with higher employment levels as notified by the government.
ii. Eligibility: The Act also provides that all employees drawing a salary below a specified amount
(currently Rs. 21,000 per month) and who have worked for at least 30 working days in an
accounting year are eligible to receive a bonus.
iii. Calculation of Bonus: Bonus is calculated based on the employee's annual salary or wage and
the profits of the establishment. The Act specifies a minimum and maximum bonus limit, which
is currently set at 8.33% and 20% of the salary or wage, respectively.
iv. Payment of Bonus: Employers are required to pay the bonus within eight months from the
close of the financial year. It must be distributed amongst eligible employees in proportion to
their wages or salary.
v. Exemptions: Certain establishments, such as those in the banking and insurance sectors, are
exempted from the Act's provisions due to the presence of specific bonus schemes for their
employees.
vi. Set-off and Adjustments: Employers are allowed to set off certain statutory payments, such
as overtime wages, against the bonus payable. Adjustments for losses incurred by the
establishment can also be made in subsequent years.
vii. Disputes and Penalties: The Act provides for the settlement of disputes related to bonus
payments through conciliation or reference to authorities. Failure to comply with the Act's
provisions can result in penalties, including fines and imprisonment.
viii. Authorities: The Act establishes the role of various authorities, including the Central and State
governments, to enforce and administer the provisions of the act. These authorities are
responsible for handling complaints, conducting inquiries, and ensuring compliance with the act.

Conclusion:
The Payment of Bonus Act of 1965 aims to legalize 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.

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Q no 23: Under what circumstances and what rates are the compensation payable
under the Workmen’s Compensation Act, 1923, now renamed as the Employees
Compensation Act, 1923.

Introduction:

The Workmen's Compensation Act, 1923, which has been renamed as the Employees'
Compensation Act, 1923, is an Indian legislation that provides for compensation to employees for
occupational injuries and diseases arising out of and in the course of employment. The Act is applicable
for those workers who are working with an industry that is mentioned in the act. Under this act, the
protection of workmen from injuries and losses caused through an accident in course of and arising out
of the employment subject to specific expectations as mentioned in the act. The rates of compensation
payable under the Act are determined based on certain factors, including the nature and extent of the
injury or disability and the monthly wages of the employee.

Circumstances:

The Employee's Compensation Act, 1923, provides the following circumstances for
granting compensations payable to the workmen are follows:-

i. Permanent Total Disablement: This refers to a disability that incapacitates an employee

completely, rendering them unable to perform any kind of work. In other words an
employee suffers an injury that permanently prevents them from working in the capacity in
which they were trained is known as permanent total disablement.
ii. Permanent Partial Disablement: This type of disability signifies a permanent
impairment or loss of bodily function or capacity, which does not prevent the employee
from engaging in gainful employment, albeit with reduced efficiency. This means the worker
often can work in a different role but typically earns less than they would have made prior
to the injury.
iii. Temporary Total Disablement: It refers to a temporary disability that renders an
employee completely unable to work for a specific period due to an injury or illness.
iv. Temporary Partial Disablement: This type of disability indicates a temporary impairment
or loss of bodily function or capacity that hampers the employee's ability to perform specific
tasks or duties but does not prevent them from undertaking alternative employment.
v. Death: The Act also provides if death occurs while a person is at work or performing work
related tasks then compensation is payable to the dependents of an employee who dies due
to an employment injury.

Rates of Compensation:

Section 4 of the Employee's Compensation Act, 1923, provides for different rates of
compensation based on the nature and extent of the injury or disability. The rates are typically
calculated as a percentage of the monthly wages of the employee and are subject to certain maximum
limits. The exact rates may vary depending on the specific circumstances and the state in which the
employment is located. However, here are some general guidelines:

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i. Temporary Disablement: If the employee suffers a temporary total or partial disability due to
the employment injury, he or she is entitled to receive a weekly compensation equal to 25% to
50% of the weekly wages, depending on the severity of the disability.
ii. Permanent Disablement: In case of permanent total disability caused by an injury, the
compensation is 60 percent of the monthly wages multiplied by the relevant factor of the
employee or a sum of 1,20,000 whichever is higher. However in case of permanent partial
disability the compensation is determined based on a percentage of the wages and the degree
of disability as assessed by a medical professional.
iii. Death: In case of death resulting from an employment-related accident or occupational disease,
the Act provides for compensation payable to the dependents of the deceased worker. The
compensation amount is 50 percent of the monthly wage of the deceased employee. The
maximum ceiling limit of the monthly wage is eight thousand i.e., 8000 multiplied by a relevant
factor or a sum of rupees 1,40,000 whichever is higher.

Case Laws:

In the case of National insurance company Vs. Dheeraj Singh And Another on 7 August,
2020, the High court of Jammu and Kashmir held that an employee can claim compensation under
section 4(1) (b) of the Employee Compensation Act, 1923 even if the cause of the disablement incurred
is not in scheduled injury, but the injury resulted comes into the definition of total disablement.

Conclusion:

From the above discussion we have seen that the Workmen's Compensation Act, 1923, is
a social welfare legislation that provides compensation to workers or their dependents in case of
employment-related injuries, accidents, or occupational diseases. It outlines the circumstances and rates
at which compensations are payable. Thus the act is considered as an important legislation in the history
of welfare legislation in India.

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Q no 24: What are the different kinds of disabilities recognized under the Employee's
Compensation Act, 1923? Discuss the principles for determination of quantum of
compensation.

Introduction:

Every employee needs a secured job and wants to get compensation for the expenses he
has incurred. The Workmen's Compensation Act, 1923 is the first social security measure undertaken in
India. The Act aims to provide workmen and/or their dependants some relief in case of accidents arising
out of and in the course of employment and resulting in either death or disablement of workmen. The
general principle of this Act is that a worker who suffers an injury in the course of his employment,
which results in a disablement, should be entitled to compensation and in the case of fatal injury his
dependants should be compensated under the Act.

Kinds of Disabilities Recognized under the Employee's Compensation Act:

Under the Employee's Compensation Act, 1923, which is an Indian legislation, the
following kinds of disabilities are recognized:

i. Permanent Total Disablement:

This refers to a disability that incapacitates an employee completely, rendering them

unable to perform any kind of work. In other words an employee suffers an injury
that permanently prevents them from working in the capacity in which they were trained is known as
permanent total disablement.

ii. Permanent Partial Disablement:

This type of disability signifies a permanent impairment or loss of bodily function or

capacity, which does not prevent the employee from engaging in gainful employment, albeit with
reduced efficiency. This means the worker often can work in a different role but typically earns less than
they would have made prior to the injury.

iii. Temporary Total Disablement:

It refers to a temporary disability that renders an employee completely unable to work

for a specific period due to an injury or illness.

iv. Temporary Partial Disablement:

This type of disability indicates a temporary impairment or loss of bodily function or

capacity that hampers the employee's ability to perform specific tasks or duties but does not prevent
them from undertaking alternative employment.

Principles for Determination of Quantum of Compensation:

The principles for the determination of quantum of compensation, particularly in legal

contexts, can vary depending on the jurisdiction and the specific circumstances of the case. However, I

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can provide you with some general principles that are often considered when determining the amount
of compensation in legal cases. These are -

i. Principle of Restitution: The principle of restitution aims to restore the injured party to
the position they were in before the harm occurred. It seeks to compensate for the actual
loss suffered, which may include both economic and non-economic damages.
ii. Principle of Proportional Compensation: This principle suggests that the compensation
awarded should be proportionate to the harm suffered. The severity of the injury or loss is
considered when determining the quantum of compensation. For example, a more severe
injury may warrant higher compensation compared to a minor injury.
iii. Principle of Causation: Compensation is generally awarded when there is a direct causal
link between the negligent or wrongful act and the harm suffered by the injured party. The
compensation is intended to address the specific harm caused by the responsible party's
actions or omissions.
iv. Principle of Reasonableness: The principle of reasonableness takes into account what
would be considered a reasonable amount of compensation in the circumstances. It
considers factors such as the nature and extent of the harm, the impact on the injured
party's life, and prevailing standards or precedents for similar cases.
v. Principle of Mitigation: This principle emphasizes that the injured party has a duty to
mitigate their damages and take reasonable steps to minimize their losses. Failure to
mitigate damages can potentially reduce the amount of compensation awarded.
vi. Principle of Equitable Compensation: Equitable compensation focuses on fairness and
seeks to provide redress for any loss or harm suffered. It takes into account the individual
circumstances of the case and may consider factors such as the age, occupation, earning
capacity, and future needs of the injured party.

Case law:

In National Iron and Steel Company Ltd. vs. Manorama Dassi, AIR 1953 Cal 143
case, the deceased was a boy working at a tea stall outside the factory, his duty was to serve tea to the
employees of the factory. One day after serving tea while he was on his way back from the factory, he
crossed a violent mob of workers, police in order to protect themselves shot at the mob accidently
bullet hit the boy and he was killed. The court held that since accident took place during the working
hours and at place of employment hence deceased boy will be paid compensation.

Conclusion:

From the above discussion we have seen that the Employee's Compensation Act, 1923
recognizes some categories of disabilities to provide compensation and benefits to employees who
suffer from work-related injuries or illnesses. The Act also provides certain principles that can vary
across legal systems and jurisdictions. The specific laws, regulations, and case precedents of a particular
jurisdiction plays a significant role in determining the quantum of compensation. Thus the Act is
considered as an important legislation in India for the protection of workers welfare.

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Q no 25: Discuss the salient features of the Factories Act 1948.

Introduction:

The Factories Act, 1948 is an important legislation in the history of Labour and Industrial
Law. The Factories Act, 1948 provides safeguard for workers to protect health and safety at the
workplace when dealing with machinery, improves the physical conditions of the workplace, and
provides welfare amenities. The Act also restricts the hours of work, provides for overtime and spread of
working hours, and employment of young persons and women. The main objectives of the Indian
Factories Act, 1948 are to regulate the working conditions in factories, to regulate health, safety welfare,
and annual leave and enact special provision in respect of young persons, women and children who
work in the factories.

Salient Features of the Factories Act, 1948:

The Factories Act, 1948 is an important piece of legislation in India that governs the working conditions
in factories. It aims to ensure the health, safety, and welfare of workers employed in factories. Here are
the salient features of the Factories Act, 1948:

i. Applicability: The Act applies to factories engaged in manufacturing processes with the aid of
power and employing ten or more workers, or without the aid of power and employing twenty
or more workers. It covers a wide range of industries, including manufacturing, processing, and
service sectors.
ii. Factory registration: The Act requires every factory to register with the Chief Inspector of
Factories or the State Government. The registration process involves providing details about the
factory, its location, machinery, and the number of workers employed.
iii. Health and safety provisions: The Act lays down various provisions to ensure the health and
safety of workers. It covers aspects such as cleanliness, ventilation, temperature control,
lighting, and proper disposal of waste and effluents. It also mandates the provision of first aid
facilities, precautions against hazardous substances, and safety measures for machinery,
equipment, and workers.
iv. Employment of Young Persons: The Act prohibits the employment of young persons (below
the age of 18) in certain hazardous occupations and processes. It also prescribes regulations for
the working hours, overtime, and mandatory rest intervals for young workers.
v. Working hours: The Act regulates the working hours of adults (workers above a certain age)
and restricts the overtime work. It prescribes a maximum of 48 hours of work per week, with a
limit of 9 hours in a day. Any work beyond these limits qualifies as overtime, for which workers
must be compensated accordingly.
vi. Employment of women and young workers: The Act includes provisions to safeguard the
interests of women and young workers. It prohibits the employment of women during night
shifts (between 7 pm to 6 am) unless certain conditions are met. It also lays down rules
regarding the employment of young workers, such as minimum age requirements, maximum
working hours, and restrictions on dangerous or hazardous work.

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vii. Annual leave and holidays: The Act mandates the granting of annual leave with wages to
workers, which includes earned leave, sick leave, and casual leave. It also specifies the provision
of weekly holidays and public holidays, ensuring that workers have regular periods of rest.
viii. Welfare provisions: The Act emphasizes the welfare of workers by requiring the provision of
amenities such as drinking water, sanitary facilities, washing facilities, and adequate canteen
facilities. It also covers issues like proper ventilation, safety from hazardous processes, and
measures to prevent occupational diseases.
ix. Inspections and penalties: The Act provides for inspections by factory inspectors to ensure
compliance with its provisions. Inspectors have the authority to enter factories, examine
records, and take necessary actions for enforcement. Non-compliance with the Act can lead to
penalties, including fines and imprisonment, depending on the severity of the violation.
x. Special Provisions for Dangerous Operations: The Act contains specific provisions for
factories engaged in dangerous operations, such as explosive manufacturing, hazardous
chemicals, and certain types of machinery. These provisions impose additional safety and
security requirements.

Applicability of Factories Act, 1948:

The Act is applicable to any factory 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 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 this does not include a mine, or a mobile unit belonging to the armed forces of the union, a
railway running shed or a hotel, restaurant or eating place.

Conclusion:

From the above discussion we have seen that the Factories Act 1948 provides a various safety
and welfare for the workers of the Factory. It also provides some rule and regulations for the owner,
director, manager and worker of the factory for welfare of the worker as well as for the society. Thus the
Factories Act 1948 serves an important role in the present era of industrialisation. Though it has been
amended for several times but is considered as an important legislation in the history of workers
welfare.

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Q no 26: Discuss the provisions relating to health measures under the

Factories Act, 1948.

Introduction:

Health is an important part of everyone’s life. Being healthy does not only mean being
‘disease free’. It includes physical, social, and mental health too. Maintaining sound health is undoubtedly a
concern for everyone but it is more necessary for those who are constantly under threat of health hazards.
These are the factory workers. They are constantly under the danger of health risks. Hence, it becomes
necessary to concentrate on the health of the workers in the factories as well as people in society. In order
to standardize the health measures and safety provisions, the Factories Act, 1948 lays down certain ‘health
measures.’

Provisions related to Health:

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

i. Cleanliness (Section 11):

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

ii. Disposal of Wastes and effluents (Section 12):

Under this section it is necessary for the factories to arrange proper and effective waste
treatment and its disposal. The State Government may make rules prescribing the arrangements for the
disposal and treatment of waste and effluents.

iii. Ventilation and temperature (Section13):

Ventilation and Temperature is to be maintained in any work room through adequate

ventilation and circulation of air. The temperature in the work room should be secured to provide
comfort to workers and prevent injury to their health. The Chief Inspector of Factories may prescribe
proper measuring instruments and suitable measures for maintaining suitable temperature and
ventilation in the work room.

iv. Dust and Fume (Section 14):

This section states that if dust and fume release in the manufacturing process of a factory
then they should take effective measures to prevent its inhalation and accumulation in the workplace.
For this, they should use proper exhaust appliances in the workplace. In any factory, no stationary
internal combustion engine shall be operated unless the exhaust is conducted into the open air.

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v. Artificial Humidification (Section 15):

This section specifies regarding the artificial humidification in factories. In this the humidity
level of air in factories are artificially increased as per the provision prescribed by the Stat.

vi. Overcrowding (Section 16):

No workroom of the factory is overcrowded because it was injurious to the health of

workers. If a factory is established before the commencement of this Act then the distance between
workers is 9.9 cubic meters, but if a factory is established after the commencement of this Act then the
distance between two workers is 14.2 cubic meters. The floor of the room is high at 4.2 meters. If the
Chief Inspector by order in writing, may or may not post a notice specifying the maximum number of
workers who may be employed in the room.

vii. Lighting (Section 17):

Lighting should be provided in a suitable manner, by natural or artificial methods or by

both. All glazed windows and sky lights should be kept clean and there should not be any glare or
reflection from any smooth or polished surface. The lighting should not form shadows so as to cause
strain to eyes or cause accident.

viii. Drinking Water (Section 18):

Drinking Water should be made available at all convenient places and all such points shall be
legibly marked “drinking water” and no such drinking water should be situated within six meters of any
washing place, urinal, latrine, spittoon etc. The water should be wholesome, free from any
contamination and during hot weather cool drinking water should be provided to workers.

ix. Latrines and Urinals (Section 19):

All factories should have enough restrooms, and urinal accommodations of the required
types must be offered in a location that is convenient and always accessible to workers. Also male and
female employees must have separate enclosed rooms. These locations must be thoroughly cleaned,
kept in a hygienic state, and have sufficient lighting and ventilation and sweepers must be used to
maintain latrines, urinals, and washing facilities clean.

x. Spittoons (Section 20):

All factories must have spittoons in easily accessible locations, and they must be kept clean and
hygienic. The state government specifies the number of spittoons that must be given, their placement in
any factory, as well as their maintenance in a clean and hygienic manner. Also notice must be posted if
any violations occur, with a fine of five rupees.

Conclusion:

The safety health measure is a very important measure for the workers. In India, the number
of industries is increasing day today and it was necessary that we can take care of the health and safety
of the workers. But various factories and industries do not follow any rules and regulation which causes

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danger to the life of the worker. But we can say that the Factories Act, 1948 provides some important
provision to protect the health measures of workers.

Q no 27: Discuss the provisions relating to Safety of Workers under the

Factories Act, 1948.

Introduction:

The Factories Act, 1948 is an important legislation in the history of Labour and Industrial
Law. The Factories Act, 1948 provides safeguard for workers to protect health and safety at the
workplace when dealing with machinery, improves the physical conditions of the workplace, and
provides welfare amenities. The Act also restricts the hours of work, provides for overtime and spread of
working hours, and employment of young persons and women. The main objectives of the Indian
Factories Act, 1948 are to regulate the working conditions in factories, to regulate health, safety welfare,
and annual leave and enact special provision in respect of young persons, women and children who
work in the factories.

Provisions relating to Safety of Workers:

Section 21 to 41 of Chapter III of the Factories Act, 1948 contained the safety provisions of
Factories Act, 1948 of the workers. These provisions are made to provide the safe working environment
in the factories to the workers. The details of the provisions are as follows:

a. Fencing of machinery (Section 21):

In every factory where a motion or transmission machine is used in that condition, fencing is a
must. In other words every moving part of the machinery present in the factory is dangerous in kind
should be securely fenced with well maintained substantial construction.

b. Work on or Near Machinery in Motion (Section 22):

This provision requires that the machinery shall be lubricated or examined while in motion
only by the trained worker. The workers should be adult and his name should be mentioned in the
registers of the factory to do the same work. He can do so only after wearing proper tight clothes
supplied to him by the occupier of the factory.

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c. Employment of young person on Dangerous Machines (Section 23):

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

d. Striking gear and devices for cutting off power (Section 24):

This section provides provision of striking gear and devices for cutting off power in case of
emergency. Every factory should have special devices for cutting off of power in emergencies from
running machinery. Suitable striking gear appliances should be provided and maintained for moving
belts.

e. Prohibition of employment of women and children near cotton openers(Section 27):

This section prohibits working of women and children on specific machinery. As per this
section women and children should not be appointed for any part of factory working on cotton pressing.

f. Floors, stairs, and means of access (Section 32):

In this section it has been specified that all floors, stairs, passages and gangways should be
properly constructed and maintained, so that there are no chances of slips or fall.

g. Excessive weights and Protection of eyes (Section 34&35):

According to Section 34 no one should carries excessive weight so that it causes injury to the
person. The State government prescribed maximum weight lifting by any adult men, adult women,
adolescence and children employed must be followed by every factory. Also in a factory where the
manufacturing process creates the particles in the air and also some explosive light comes from the
manufacturing plant which the eyes of workers. So proper safety measures should be adopt by the
employer to protect the eyes of the worker.

h. Precaution against dangerous fumes, gases, etc.( Section 36):

As per this section it is provided that no worker shall be forced to enter any chamber, tank,
vat, pit, pipe, flue or other confined space in any factory in which any gas, fume, vapour or dust is likely
to be present to such an extent as to involve risk to persons being overcome thereby.

i. Precautions in case of fire (Section 38):

As per this section there should be proper precautionary measures built for fire. There
should be safe mean to escape in case of fire, and also necessary equipments and facilities to extinguish
fire.

j. Safety of buildings and machinery (Section 40):

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The inspector appointed under this act has to ensure that every factory has a repaired building
and machinery which is not detrimental to health or safety to the workers. He may serve a written
notice to the occupier of the factory to get the building of factory repaired before a specified date, if he
finds any discrepancy.

Case: Bayer (India) Limited and others v. the State of Maharastra, AIR 1995 Bom 290 (India)

In this case, the court held that those industries manufacture chemicals and hazardous
substances. It sometimes causes danger to the life of workers. The judge said that the main focus of this
Act is to protect the life and health of the worker. Anything which causes danger to the life of a worker
then the court has an inherent power to prohibit the activity of the factory.

Conclusion
The safety measure is a very important measure for the workers. In India, the number of
industries is increasing day today and it was necessary that we can take care of the safety of the
workers. Various factories and industries do not follow any rules and regulation which causes danger to
the life of the worker. But we can say that the Factories Act, 1948 provides some important provision to
protect the safety of workers.

Q no 29: In what way the Labour Court and Tribunals are different from the
ordinary courts of law? Would an appeal lie against the determination of Labour
court or Tribunals to the Supreme Court under Article 136 of the Constitution?
Elucidate your answer with the help of decided cases.

Introduction:

To settle the Industrial disputes, the Industrial Disputes Act,1947 provides three kinds of
Courts - Labour Court, Industrial Tribunal and National Tribunal or National Industrial Tribunal.
According to Section 7 of the Industrial Dispute Act, 1947 The appropriate Government has been
empowered to constitute Labour Court. The appropriate government, by notification, in the official
gazette, may constitute one or more labor Courts for adjudication of industrial dispute specified in the
second schedule.It consisted of one person, appointed by the government. The objective behind the
establishment of labour courts and tribunals is to solve the differences arising in the various industries.

How Labour Court and Tribunals are Different from the Ordinary Courts:

The Labour Court and Tribunals are different from the ordinary courts of law in several
ways. Here are some key distinctions:

i. Jurisdiction: The Labour Court and Tribunals have specific jurisdiction over labor and
employment-related matters. They handle disputes and cases that arise between employers and
employees or trade unions, such as unfair dismissals, wage disputes etc. Ordinary courts, on the
other hand, have a broader jurisdiction and handle a wide range of civil and criminal cases.

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ii. Expertise: The Labour Court and Tribunals are specialized bodies that have expertise in labor
laws and employment matters. Ordinary courts deal with a variety of legal matters but may not
have the same level of specialization or specific knowledge of labor laws.
iii. Informality: Labour Court proceedings and tribunal hearings tend to be less formal compared
to ordinary courts. The aim is to create a more accessible and user-friendly environment,
especially for workers and employers representing themselves. The procedures followed in
these specialized forums are often less rigid, allowing for more flexible and expedited resolution
of labor disputes.
iv. Speed: Due to their specialized nature and focus on resolving labor disputes efficiently, Labour
Courts and Tribunals often prioritize speedy resolution of cases. Ordinary courts may have more
congested dockets, leading to longer wait times for hearings and judgments.
v. Appeals: The process of appeal from decisions of Labour Courts and Tribunals may differ from
appeals in ordinary courts. Some jurisdictions have specific appellate bodies or higher courts
designated for labor-related matters. In ordinary courts, appeals typically follow the general
appellate process.

Would an appeal lie against the determination of Labour court or Tribunals to the
Supreme Court:

Yes, an appeal can be filed to the Supreme Court of India against the determination
of the Labour Court or Tribunals under Article 136 of the Constitution. Article 136 of the Indian
Constitution grants the Supreme Court the power to hear and decide appeals from any judgment,
decree, or order in any cause or matter, regardless of whether it is a civil, criminal, or other proceeding.
It is a discretionary power, and the Supreme Court may choose to grant special leave to appeal in cases
where it deems fit.

If a party to a case before the Labour Court or Tribunals is dissatisfied with the
determination, they can file a petition for special leave to appeal before the Supreme Court under
Article 136. However, it's important to note that the Supreme Court has the discretion to accept or
reject such petitions. The Court will consider factors such as the importance of the case, substantial
questions of law involved, and the interests of justice before deciding whether to grant special leave to
appeal.

Case Laws:

Workmen of Dimakuchi Tea Estate v. The Management of Dimakuchi Tea Estate (1958):

In this case, the Supreme Court held that an appeal would lie to the Supreme Court
under Article 136 against the determination of the Labour Appellate Tribunal, which was considered as a
tribunal for the purposes of Article 136.

Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha (1980):

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The Supreme Court observed that the power of the Supreme Court under Article 136 is
discretionary and should be exercised sparingly, particularly when the case involves determination of
facts by specialized tribunals like Labour Courts.

Conclusion:

From the above discussion we have seen that the Industrial Dispute Act 1947 provides the
establishment of Labour Courts and tribunals to resolve the differences arises among the industries .
However, the Labour Courts and Tribunals are quite different from the ordinary courts in various
manner such in case of jurisdiction, appeal, proceeding speed etc. Also the Supreme Court of India have
the power to adjudicate a case or appeal from Labour Court or Tribunal under Section 136 of the
Constitution Of India.

Q no 30: Distinguish between Minimum wage and Living wage. Describe

the procedure adopted by the adjudicatory authorities for fixing and
revising the wage structure in industry.

Introduction:

The Minimum Wage Act of 1948 is an important piece of legislation in India that aims to
ensure fair remuneration for workers by establishing minimum wages in various industries. The primary
objective of the Minimum Wage Act is to prevent the exploitation of workers and ensure that they
receive a minimum standard of living. The act empowers the appropriate government, which can be
either the central or state government, to fix minimum wages for different employments. The act was
enacted on 15th March 1948 and has since undergone several amendments to keep up with changing
economic and social conditions.

Difference Between Minimum Wage and Living Wage:

Minimum Wage: Minimum wage refers to the legal minimum amount that employers
must pay their employees for their work. It is typically set by the government or labor authorities and
may vary from one jurisdiction to another. The purpose of the minimum wage is to establish a baseline
level of compensation to ensure that workers receive a fair wage for their labor.

Living Wage: Living wage refers to an income level that is considered sufficient for an
individual or a family to meet their basic needs and maintain a decent standard of living in a specific
geographic area. It is often calculated based on the cost of essential expenses such as housing, food,
healthcare, transportation, and other necessities, taking into account the local cost of living.

Key differences between Minimum Wage and Living Wage:

i. Minimum wage is a legally enforced standard that all employers must comply with.

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Unlike minimum wage, a living wage is not enforced by law and is typically a voluntary
measure taken by employers or advocated for by activists or organizations.

ii. The amount of living wage varies based on marital status, no. of children, debt position,
location, etc.

But the minimum wage amount is the same across the country.

iii. The specific amount of minimum wage is typically set by government bodies or labor
authorities through legislation or regulations

But there is no established governing body for a living wage.

iv. Living Wage considers various cost-of-living considerations, which are already inflation-
adjusted.

But Minimum Wage is not adjusted to compensate for the rising inflation.

v. The minimum wage may not always be sufficient to cover all the basic living expenses of a
worker, especially in regions with a high cost of living.

In many cases, a living wage is higher than the legally mandated minimum wage because
it takes into consideration the actual costs of living in a particular area.

Procedure Adopted by Adjudicatory Authorities for Fixing and Revising the Wage
Structure:

Under Section 5 of the Minimum Wages Act, 1948, the procedure adopted by the
adjudicatory authorities for fixing and revising the wage structure involves the following steps:

i. Notification: The appropriate government issues a notification specifying the minimum rates of
wages for different categories of workers in a scheduled employment, either for the whole state
or specific regions within the state.
ii. Formation of Advisory Board: The appropriate government constitutes an Advisory Board for
the scheduled employment, consisting of representatives of employers, employees, and
independent persons. The Advisory Board assists the government in fixing and revising
minimum wages.
iii. Collection of Data: The Advisory Board collects relevant data and information necessary for
fixing or revising minimum wages. This data includes factors like the cost of living, standard
working hours, basic necessities, and other socio-economic factors.
iv. Inquiry: The Advisory Board conducts an inquiry and examines various aspects related to the
scheduled employment, including the nature of work, skill requirements, existing wage rates,
and any other relevant factors.
v. Recommendations: Based on the data collected and the inquiry conducted, the Advisory
Board formulates its recommendations regarding the fixation or revision of minimum wages.

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The recommendations take into account factors such as the skill level, geographic location, and
prevailing economic conditions.
vi. Consideration by the Appropriate Government: The recommendations of the Advisory
Board are submitted to the appropriate government for consideration. The government reviews
the recommendations and may consult with other relevant authorities or experts before making
a decision.
vii. Notification of Minimum Wages: After considering the recommendations and other relevant
factors, the appropriate government issues a notification specifying the minimum rates of wages
for the scheduled employment. This notification is published in the official gazette and comes
into effect from the date mentioned in the notification.
viii. Revision of Wages: The minimum wages fixed by the appropriate government are subject to
revision at regular intervals, usually not exceeding five years. The revision may take place
through a similar procedure, including the reconstitution of the Advisory Board, data collection,
inquiry, and recommendations.
ix. Adjudication: In case of any disputes or grievances related to the fixation or revision of
minimum wages, the matter can be referred to the concerned adjudicatory authorities. These
authorities, such as the Labor Court or Industrial Tribunal, have the power to adjudicate and
settle disputes related to minimum wages.

Conclusion:

Over the years, the Minimum Wage Act has played a crucial role in protecting the interests
of workers and ensuring a decent standard of living. The Act provides the procedure adopted by the
adjudicatory authorities for fixing and revising the wage structure of the welfare of workmen. It has also
contributed to the reduction of exploitation and provided a legal framework for fair wages. Thus the
Minimum Wage Act 1948 in India has been considered as the safeguard of the rights of workers by
establishing minimum wage standards.

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Short Notes

Q no 1: Dearness Allowance

Dearness Allowance (DA) is an allowance provided to employees in certain

countries to counter the impact of inflation on their salaries. It is an additional component of an
employee's salary and is usually calculated as a percentage of their basic pay. The purpose of the
Dearness Allowance is to ensure that employees can maintain their purchasing power and meet their
daily expenses, especially in times of rising prices and inflation.

The concept of Dearness Allowance originated in India but is also prevalent in

other countries such as Bangladesh, Pakistan, and Sri Lanka, where it is known by different names. In
India, the Dearness Allowance is calculated based on the Consumer Price Index (CPI) and reflects
changes in the cost of living.

The Dearness Allowance is revised periodically, typically on a quarterly or annual

basis, to keep up with the changing cost of living. The percentage increase or decrease in the Dearness
Allowance is determined by the government or relevant authorities, taking into account various
economic factors such as inflation rates and price indices.

The Dearness Allowance is usually applicable to government employees, both at the

central and state levels. It is also extended to employees in the public sector and some private sector
organizations. However, the applicability and calculation of the Dearness Allowance may vary depending
on the specific rules and regulations of each organization.

The Dearness Allowance serves as a crucial tool to protect the real income of
employees, ensuring that their purchasing power remains intact despite the impact of inflation. It helps
maintain a balance between the rising cost of living and the income earned by employees.

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Q no 2: Principles for fixation of Dearness Allowance

Dearness Allowance (DA) is an allowance provided to employees in certain countries

to counter the impact of inflation on their salaries. It is an additional component of an employee's salary
and is usually calculated as a percentage of their basic pay. The purpose of the Dearness Allowance is to
ensure that employees can maintain their purchasing power and meet their daily expenses, especially in
times of rising prices and inflation.

Principles for fixation of Dearness Allowance:

In India, the Dearness Allowance (DA) is an allowance granted to government employees,

public sector employees, and pensioners to mitigate the impact of inflation on their earnings and
pensions. The fixation of Dearness Allowance follows certain principles, which are as follows:

i. Cost of Living Index: The cost of living index is a key factor in calculating the DA. It represents
the average price level of essential goods and services in a particular area. The DA percentage is
often linked to changes in the cost of living index, reflecting the rise or fall in prices over time.
ii. Consumer Price Index: The Consumer Price Index (CPI) measures the changes in the prices of
a basket of goods and services consumed by households. The DA may be linked to specific
categories of CPI, such as CPI for industrial workers or urban consumers, to reflect the
inflationary trends affecting employees.
iii. Base Year: The DA calculation considers a specific base year against which the current CPI is
compared. The base year is revised periodically to reflect the changing consumption patterns
and price levels.
iv. Government Policies: In many cases, the government sets guidelines for the calculation of DA
for public sector employees. These guidelines may include specific formulas or parameters to
determine the DA percentage based on factors like CPI, inflation rates, and other economic
indicators.
v. Periodic Revisions: The fixation of DA is typically reviewed and revised periodically to ensure
that it remains aligned with changing economic conditions. The revision frequency can vary, but
it is often done annually or semi-annually.

It's important to note that the specific principles for fixation of Dearness
Allowance can vary across organizations and countries. But the Dearness Allowance serves as a crucial
tool to protect the real income of employees, ensuring that their purchasing power remains intact
despite the impact of inflation. It helps maintain a balance between the rising cost of living and the
income earned by employees.

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Q no 3: Subsistence Theory of Wages

Introduction:

The Subsistence Theory of Wages also known as the Iron Law of Wages or the Brazen
law of Wages is an economic concept that was proposed during the late 18th and early 19th centuries
by classical economists, including Thomas Malthus and David Ricardo. The father of Economics Adam
Smith has also mentioned such theory in his book ‘The Wealth of Nations’, where he states that wages
which are to be paid to workers should be enough so that they can live and support their family. It
seeks to explain the determination of wages in relation to the basic needs and living standards of
workers. The theory suggests that wages tend to gravitate towards the minimum level required for
workers to sustain their basic necessities, such as food, clothing, and shelter.

Explanation of the Theory:

According to the Subsistence Theory of Wages, wages are influenced by the supply and
demand dynamics in the labor market. It posits that when the supply of labor exceeds the demand for
labor, wages tend to decrease, while when the demand for labor surpasses the supply of labor, wages
tend to increase. However, regardless of these fluctuations, the theory argues that wages will ultimately
settle at the subsistence level.

The subsistence level refers to the minimum amount of income required by workers to
survive and reproduce. It includes the basic necessities needed for an individual or a family to maintain a
decent standard of living. The theory assumes that workers will not accept wages below this subsistence
level, as doing so would result in severe deprivation and an inability to sustain themselves and their
families.

Critics of the Subsistence Theory of Wages argue that it fails to account for factors beyond
basic survival needs, such as social and cultural factors, and the influence of institutions and government
policies on wage determination. They contend that wages can be influenced by various other factors,
including worker productivity, education and skills, labor market conditions, bargaining power, and the
overall level of economic development.

Moreover, critics argue that the theory does not adequately consider the potential for
technological advancements and improvements in productivity, which can lead to higher wages and
improved living standards over time. The theory assumes a static view of the economy, without
accounting for the potential for economic growth and changes in the distribution of wealth.

Conclusion:

The Subsistence Theory of Wages, proposed by classical economists, emphasized the

significance of workers' basic needs and argued that wages tend to settle at the subsistence level. While
this theory has faced criticisms and limitations, it contributed to the understanding of early labor market
dynamics. The contemporary analysis of wages incorporates a broader range of factors, reflecting the
complex interplay of economic, social, and institutional factors in determining wage levels.

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Q no 4: The Wage Fund Theory

Introduction:

The Wage Fund Theory of Wages is an economic concept that was popularized by the
classical economists, especially Adam Smith and David Ricardo, during the 18th and 19th centuries. In
1930, this theory was given by John Stuart Mill. The wage fund theory was propounded with the
assumption that the payment of workers is done out of a pre-determined wealth fund. This fund is made
from the savings of the previous year operations of the organization. This theory seeks to explain the
determination of wages in a capitalist economy based on the availability of a wage fund.

Explanation of the Theory:

According to the Wage Fund Theory, the total amount of wages paid to workers in an
economy is determined by the size of the wage fund, which is a predetermined pool of money set aside
by employers to pay their workers. This wage fund is assumed to be fixed in the short run and is
determined by the savings and capital accumulation decisions of employers. The wage fund is derived
from the profits of capitalists, who allocate a portion of their profits to pay wages to their employees.
The theory argues that the wage fund is limited and that it sets a ceiling on the total wages that can be
paid to workers.

According to the Wage Fund Theory, the wage rate is determined by dividing the total
amount of the wage fund by the number of workers seeking employment. In other words, wages are
determined by the ratio of the available funds to the number of workers in the labor market. Therefore,
if the number of workers increases without a corresponding increase in the wage fund, the theory
predicts that wages will decline due to the excess supply of labor.

Critics of the Wage Fund Theory argue that it oversimplifies the complexities of wage
determination in a capitalist economy. They contend that wages are influenced by various factors such
as labor market conditions, bargaining power of workers, labor productivity, and demand for goods and
services. Moreover, the theory assumes a fixed wage fund, disregarding the potential for changes in
capital investment and savings behavior.

Conclusion:

Despite its limitations, the Wage Fund Theory of Wages contributed to the understanding
of labor markets and the role of capital accumulation in determining wages. It highlighted the
relationship between capital investment and labor demand and underscored the significance of savings
and investment decisions in shaping economic outcomes. Also the Wage Fund Theory has been largely
superseded by modern theories of wages, such as neoclassical economics and labor market theories,
which provide a more comprehensive analysis of wage determination based on supply and demand
dynamics, human capital, and institutional factors.

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Q no 5: Machinery for Fixation of Statutory Minimum Wage

Introduction:

The fixation of a statutory minimum wage is crucial for ensuring fair remuneration and
promoting decent work conditions for employees. The minimum wages must be in compliance with the
cost of living index of the employees. Section 5 of the Minimum Wages Act gives the procedure for fixing
and revising the minimum wages. The appropriate government shall appoint committees and
subcommittees that may be able to advise on the fixation of minimum wages. However, to establish an
effective system, many countries have implemented specific machinery or mechanisms responsible for
determining and enforcing the statutory minimum wage.

Machinery for Fixation of Statutory Minimum Wage:

The Minimum Wages Act, 1948 doesn’t not provide any specific provision for the fixation of
statutory minimum wages. However there are certain machinery for fixation of statutory minimum
wages. These are as follows:-
i. Central Advisory Board: The Act establishes a Central Advisory Board consisting of
representatives from employers, employees, and independent persons appointed by the central
government. This board advises the government on the fixation and revision of minimum wages.
ii. Advisory Boards: The central or state governments may also set up Advisory Boards at the
regional or local level. These boards consist of representatives of employers and employees in
the respective industries or occupations. They assist the government in fixing minimum wages
for specific industries or regions.
iii. Tripartite Committees: The tripartite committees consisting of representatives from the
government, employers' organizations, and trade unions. These committees facilitate a
balanced and comprehensive discussion on wage-related matters, taking into account the
perspectives of all stakeholders.
iv. Wage Committees: In some cases, wage committees may be formed to study the wages
prevailing in a particular industry or occupation. These committees assess the needs of the
workers and make recommendations regarding minimum wage fixation.
v. Legal Framework and Legislation: An essential aspect of machinery for fixing the statutory
minimum wage is the establishment of a legal framework. This includes legislation outlining the
process, criteria, and factors to be considered in determining the minimum wage. The legislation
may also define the roles, responsibilities, and powers of the relevant authorities or committees
involved in the process.

Conclusion:

The machinery for the fixation of statutory minimum wage varies across countries,
reflecting diverse social, economic, and political contexts. However, the common objective is to
establish fair and equitable wages while considering factors such as cost of living, productivity, and
social justice. By engaging relevant stakeholders, conducting research, and maintaining transparency,
these mechanisms strive to strike a balance between protecting workers' rights and fostering
sustainable economic growth.

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Q no 6: Health and Safety Measures Provided Under the Mines Act, 1952

The Mines Act, 1952 is an important legislation in India that aims to ensure the
health, safety, and welfare of workers employed in mines. The act is designed to prevent accidents,
protect workers from occupational hazards, and promote a safe working environment in mines. The
main aim and objects of the Mines Act 1952 is to regulate the working conditions in mines by providing
for measures required to be taken for the welfare and security of workers employed in Mines And to
Make Provisions as to Health, Safety , Hours And Limitations of employment , leave with wages etc

Health and Safety Measures Provided Under the Mines Act, 1952:

Section 19-27 of the Mines Act , 1952 enumerates certain Provisions to ensure the Health
and Safety of workers employed in mines. Here some important Health and Safety measures provided
under the Act-

i. Drinking water (Section 19): The Mines Act 1952 prescribes effective arrangements of
drinking water in every Mines. Every Mines shall maintain sufficient supply of whole some
drinking water at suitable points for the workers employed therein.
ii. Conservancy (Section 20): Every Mines shall provide a sufficient number of latrines and
urinals separately for males and females . And Latrines and urinals of prescribed types so
situated in convenient and accessible to person's employed in the mine at all times .
iii. Medical Appliances (Section 21): Every mine shall provide and maintain such number of
First-aid boxes or cupboards equipped accessible during all working hours. Sufficient
number of Medic-Box shall be kept in the charge of a responsible and trained person.
iv. Appointment of Safety Officers: The Mines Act, 1952 mandates the appointment of
qualified and experienced Safety Officers by mine owners or operators. These officers are
responsible for overseeing the implementation of health and safety measures, conducting
inspections, providing necessary training, and advising the management on safety-related
issues.
v. Ventilation and Dust Control: The act requires mines to have effective ventilation
systems to maintain a constant supply of fresh air and remove hazardous gases, dust, and
fumes from the working areas. Adequate dust control measures, such as water sprays or
dust suppression systems, must be implemented to minimize respiratory problems among
workers.
vi. Lighting and Illumination: To ensure a safe working environment, the Mines Act, 1952
specifies standards for lighting and illumination in mines. Sufficient lighting is necessary to
prevent accidents, enable clear visibility, and reduce eye strain for workers.

Conclusion:

The Mines Act, 1952 plays a crucial role in safeguarding the health and safety of workers
employed in mines. Thus the Act provides several health and safety measure provisions. These
provisions collectively contribute to creating a safe and healthy working environment for mining
personnel, minimizing accidents, and promoting their overall well-being.

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Q no 7: Health and Safety measures under the Plantation Labour Act, 1951

The Plantation Labour Act, 1951 is an Indian legislation that aims to regulate the working
and living conditions of laborers employed in plantations. It applies to plantations engaged in the
production of tea, coffee, rubber, or any other specified plantation crops etc. It focuses primarily on
welfare and health-related issues. Any plantation to which this Act, wholly or in part, applies is referred
to as a plantation, and this term includes buildings used for offices, hospitals, dispensaries, schools, and
any other purposes associated with such a plantation.

Health and Safety measures under the Plantation Labour Act, 1951

Here are some of the key provisions under the Plantation Labour Act, 1951 concerning
health and safety:

i. Housing: The act mandates that suitable and adequate housing facilities be provided to
plantation workers. The housing should be in a good condition, well-ventilated, and properly
maintained.
ii. Drinking water: Employers are required to provide an adequate and accessible supply of
clean drinking water to the workers at all times.
iii. Latrines and urinals: Adequate and clean toilet facilities must be provided separately for
male and female workers. These facilities should be well-maintained and situated
conveniently within the plantation.
iv. Medical facilities: The act stipulates that necessary medical facilities should be provided to
the workers and their families. This includes establishing medical dispensaries, appointing
qualified medical personnel, and supplying essential medicines.
v. First aid: Employers are required to provide first aid boxes equipped with necessary
medical supplies at convenient locations within the plantation. Trained personnel should be
available to administer first aid to injured workers.
vi. Safety measures: The act emphasizes the implementation of safety measures to prevent
accidents and ensure the overall safety of the workers. This includes providing protective
equipment like helmets, goggles, gloves, etc., where required, and taking necessary
precautions to prevent accidents and occupational hazards.
vii. Welfare amenities: The act also addresses the provision of various welfare amenities for
the workers, including bathing facilities, creches for children, facilities for rest and meals,
and facilities for education and recreation.

Conclusion:

The Plantation Labour Act, 1951 plays a crucial role in safeguarding the health and safety of
workers employed in plantations growing cinchona, rubber, tea, and coffee etc. Thus the Act provides
several health and safety measure provisions. Thus the Act is considered as an important legislation for
the welfare of plantation workers.

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Q no 7: Doctrine of notional extension of time and place of work

The Doctrine of Notional Extension of Time and Place of Work is a legal principle that
allows for the inclusion of additional time and location as part of an employment contract or a
contractual relationship. It recognizes that certain activities related to employment may take place
outside the traditional boundaries of time and location specified in the contract. This doctrine provides
flexibility to accommodate the evolving nature of work and the advancements in technology that enable
remote work arrangements..

Under this doctrine, certain activities that are integral to the employment relationship
but occur outside the conventional workplace or working hours are deemed to be within the scope of
the employment contract. This means that the employee's obligations and the employer's
responsibilities extend beyond the confines of the physical workplace and regular working hours.

The doctrine recognizes that modern work arrangements may involve employees
working remotely from home, telecommuting, or traveling for work purposes. It acknowledges that
work-related tasks can be performed using various technologies, such as email, video conferencing, and
other communication tools. As a result, the doctrine allows for these activities to be considered part of
the working time and place, even if they occur outside the usual office setting or outside standard
working hours.

The Notional extension of time means that the time spent by an employee on work-related
activities outside regular working hours can be counted as part of their working time. Notional extension
of place refers to the recognition that work can be performed outside the physical workplace. This
includes situations where an employee works remotely from home, a co-working space, or any other
location that is not the employer's premises.

In conclusion, the Doctrine of Notional Extension of Time and Place of Work

recognizes the changing nature of work and the need for flexibility in employment relationships. It
allows for the inclusion of additional time and location as part of an employment contract,
accommodating activities that occur outside traditional boundaries. By acknowledging the potential for
remote work and non-traditional working hours, this doctrine provides a legal framework that reflects
the realities of modern work arrangements.

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Q no 8: Marginal Productivity Theory of Wages

The marginal productivity theory was first stated by Von-Thunen. The theory has been
developed by Wicksteed Walras J.B. Clark and many others. The Marginal Productivity Theory of Wages
is an economic theory that seeks to explain how wages are determined in a competitive labor market.
According to this theory, an individual's wage is determined by their marginal productivity, which refers
to the additional output or value that is generated by the last unit of labor they contribute to the
production process.

The theory suggests that in a perfectly competitive market, employers will hire workers up
to the point where their marginal productivity equals the wage rate. If a worker's productivity is higher
than their wage, the employer benefits from their contribution and is willing to pay them a higher wage.
Conversely, if a worker's productivity is lower than their wage, the employer may find it uneconomical
to employ them at that wage rate.

The Marginal Productivity Theory of Wages also highlights the role of labor demand
and supply in determining wages. When the demand for labor exceeds the supply, employers may be
willing to pay higher wages to attract workers. On the other hand, when the supply of labor exceeds the
demand, wages may be pushed down as employers have more options to choose from.

Critics of the Marginal Productivity Theory of Wages argue that it oversimplifies the
complex factors that determine wage levels. They argue that other factors such as bargaining power,
institutional factors, and discrimination can also influence wage levels and may not be adequately
captured by the theory.

Despite its limitations, the Marginal Productivity Theory of Wages remains a widely
discussed and influential theory in the field of labor economics. It provides a valuable framework for
understanding the relationship between productivity and wages in a competitive labor market and
offers insights into the factors that shape wage differentials among workers.

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Q no 9: Salient features of the Payment of Wages Act, 1936

The Payment of Wages Act, 1936 is an important legislation in India that governs the
payment of wages to workers employed in any industry, factory, or establishment. 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 withinside the charge of wages and
to save you unauthorized deductions from the wages. The Act also governs how wages are paid to
employees (direct and indirect). The statute is intended to protect employees from unlawful employer
deductions and/or unjustifiable salary delays.

i. Applicability: The Act applies to all establishments where any industry, trade, business, or
manufacturing process is carried out and where workers are employed. It covers both the
organized and unorganized sectors, with certain exceptions like members of the armed forces
and police forces.
ii. Mode of Payment: The Act specifies that wages should be paid in legal tender, such as
currency notes or coins, and not in kind except as permitted by the appropriate government.
iii. Time of Payment: Wages must be paid within a specified time period, which cannot exceed
one month. For establishments with less than 1,000 workers, wages must be paid within seven
days after the end of the wage period. In other cases, wages must be paid within ten days.
iv. Deductions: The Act limits the deductions that can be made from wages. Only specific
deductions, such as those required by law or authorized by the worker, can be made.
Deductions for fines, absent from duty, or damage to goods are generally prohibited unless
authorized by the appropriate government.
v. Prohibition of Unauthorized Deductions: The Act prohibits employers from making
unauthorized deductions from wages. This ensures that workers receive their full wages without
arbitrary deductions.
vi. Maintenance of Registers and Records : Employers are required to maintain registers and
records relating to the wages paid to workers. These records include wage registers, wage slips,
and other documents specified by the appropriate government.
vii. Inspecting and Enforcing Authorities: The Act empowers certain authorities, such as labor
inspectors and enforcement officers, to inspect establishments and ensure compliance with the
provisions of the Act. These authorities have the power to conduct inquiries, examine witnesses,
and take necessary actions for enforcing the Act.
viii. Penalties: The Act imposes penalties for contravention of its provisions. If an employer fails to
pay wages within the prescribed time or makes unauthorized deductions, they may be liable for
fines or imprisonment, or both.

It's important to note that while these are the salient features of the Payment of
Wages Act, 1936, there may be additional provisions, amendments, or interpretations made by
subsequent legislation or legal decisions that could impact its implementation.

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Q No 10: iscuss the restraints on Managerial Prerogative under sections 33 and

33A of the Industrial Disputes Act, 1947?

Sections 33 and 33A of the Industrial Disputes Act, 1947 in India impose certain
restraints on the managerial prerogative of employers. These sections aim to protect the rights and
interests of workers and ensure that their employment conditions are not unilaterally altered by the
management. Let's discuss the restraints imposed by these sections:

A. Section 33:

This section deals with the prohibition of certain actions by the employer during the
pendency of proceedings before a conciliation officer, a Board, or an arbitrator. It restricts the employer
from making any changes in the conditions of employment of the workers without prior permission
from the appropriate authority. The key restraints under Section 33 are:

i. Change in Conditions: The employer cannot alter the conditions of service, discharge or
punish a worker, or take any disciplinary action against them during the pendency of
proceedings.
ii. Prior Permission: If the employer intends to make any changes in the conditions of service or
take disciplinary action against a worker, they must obtain prior permission from the
appropriate authority.
iii. Exception: Section 33 provides an exception in cases where the change is made for reasons of
misconduct, provided that a worker is paid his wages for the period of suspension pending
inquiry.

B. Section 33A:

Section 33A was introduced in the Industrial Disputes Act, 1947 through an
amendment in 1976. It deals with the restraints on managerial prerogative during the pendency of an
application for permission to initiate disciplinary proceedings against a workman. This section applies to
workmen who are members of a registered trade union, and it aims to protect them from victimization
or unfair disciplinary action by their employers.

Under Section 33A, if an employer intends to take disciplinary action against a

workman, such as suspending, dismissing, or discharging the workman, during the pendency of an
application seeking permission for such action, the employer must obtain prior permission from the
appropriate government authority or the designated authority. This permission acts as a safeguard to
prevent arbitrary or unjust disciplinary actions against workmen and ensures that due process is
followed.

The section also provides certain guidelines for the granting or refusal of permission by
the government or designated authority. It states that the permission may be granted if there is a prima
facie case for disciplinary action against the workman, and it may be refused if sufficient grounds for the
proposed action are not found.

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In summary, Sections 33 and 33A of the Industrial Disputes Act, 1947 impose
restraints on managerial prerogative during the pendency of conciliation proceedings, arbitration
proceedings, labor court proceedings, or disciplinary proceedings against workmen. These sections aim
to maintain the status quo and prevent unilateral actions by employers that could harm the interests of
the employees or undermine the fairness of the dispute resolution process.

Q no 11: What do you mean by Managerial Prerogative? Discuss the principles of

Sec. 33(1) of the Industrial Disputes Act, 1947.

Meaning of Managerial Prerogative:

Managerial prerogative refers to the rights and powers that managers have within an
organization to make decisions and take actions that are considered necessary for the effective
management of the company. It encompasses a wide range of managerial responsibilities, including but
not limited to hiring and firing employees, setting work schedules, determining job assignments, setting
performance standards, and making decisions regarding promotions and salary increases.

Principles of Sec. 33(1) of the Industrial Disputes Act:

Section 33(1) of the Industrial Disputes Act, 1947, is an important provision that
deals with the conditions for the continued employment of workmen during the pendency of
proceedings in certain cases. This provision aims to strike a balance between protecting the rights of
workmen and allowing employers to take necessary actions during the pendency of disputes or legal
proceedings.

Here are the key principles of Section 33(1) of the Industrial Disputes Act, 1947:

i. Prohibition on the Employer: Under Section 33(1), during the pendency of any conciliation,
arbitration, or legal proceedings, an employer is generally prohibited from taking any action
against a workman, such as discharging, dismissing, or punishing the workman, except with the
express permission of the appropriate authority.
ii. Approval of Appropriate Authority: If the employer wishes to take any action against a
workman during the pendency of proceedings, they must seek prior approval from the
appropriate authority. The appropriate authority may be the government, labor court, tribunal,
or any other authority specified by the government.
iii. Grounds for Permission: The employer must provide sufficient grounds or reasons for
seeking permission to take action against a workman. The grounds could include misconduct,
indiscipline, inefficiency, or any other valid reasons related to the workman's conduct or
performance. The authority will consider these grounds and determine whether the proposed
action is justified.
iv. Notice to Workman: Before seeking permission, the employer must give a notice to the
workman, informing them of the proposed action and the grounds for it. This gives the workman
an opportunity to present their case and oppose the proposed action if they feel it is unjust.

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v. Factors Considered: The appropriate authority considers various factors while deciding
whether to grant permission or not. These factors include the prima facie merits of the case, the
likelihood of success in the proceedings, the nature of the alleged misconduct or inefficiency,
and any other relevant circumstances.
vi. Protection of Workman: The provision aims to protect the workman from arbitrary or unfair
actions by the employer during the pendency of proceedings. It ensures that workmen are not
victimized for participating in industrial disputes or exercising their rights.
vii. Exceptional Circumstances: In exceptional circumstances where the continuance of a
workman during the pendency of proceedings is prejudicial to the employer's interests or
involves a risk to the property, the employer may suspend the workman without prior
permission. However, the employer must report the suspension and the reasons for it to the
appropriate authority within 24 hours.

It is important to note that Section 33(1) provides safeguards to prevent employers

from taking retaliatory or unfair actions against workmen during the pendency of proceedings. It aims to
maintain industrial peace and ensure that disputes are resolved through a fair and impartial process.

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