THE GRATUITY ACT 1972

The Act provides for the payment of gratuity to workers employed in every factory, shop & establishments or educational institution employing 10 or more persons on any day of the preceding 12 months. A shop or establishment to which the Act has become applicable shall continue to be governed by the Act even if the number of persons employed falls bellows 10 at any subsequent stage. All the employees irrespective of status or salary are entitled to the payment of gratuity on completion of 5 years of service. In case of death or disablement there is no minimum eligibility period. The amount of gratuity payable shall be at the rate of 17 days wages based on the rate of wages last drawn, for every completed year of service. The maximum amount of gratuity payable is Rs. 3, 50,000/-. 

RESPONSIBILITY OF THE EMPLOYEERS

It is the duty of the employer to determine the amount of gratuity as soon as it becomes payable and to give notice of the same to the person to whom gratuity is payable and also to the Controlling Authority. The employer shall also provide to pay the amount of gratuity to the person to whom it is payable. Failure to do so shall render him liable to pay the interest at the prevailing rate from time taken. In case the employee is not paid the due amount of gratuity he should apply, ordinarily within thirty days, in Form-I to the employer. Is an employer fails to pay due gratuity even after the receipt of notice in Form-1, the claimant employee or his nominee or legal heir, may within ninety days of the occurrence of the case for the application, should apply in Form-IV, to the Controlling Authority for issuing direction to the employer. After conducting the enquiry as prescribed, the Controlling Authority will determine the amount payable and direct the employer to make the payment. If the employer fails to comply with the direction the Controlling Authority can direct the Collector to recover the amount due and pay to the applicant. 

PENALTY The Act provides that whoever makes false statement for the purpose of avoiding any payment shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to ten thousand rupees or with both. An employer who contravenes any provisions of the Act shall be liable for imprisonment for a term of not less than three months but which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees or with both. Where the offence relates to non-payment of gratuity the employer can be punished with imprisonment for a term which is not less than six months.

NominationEach employee is required to nominate one or more member of his family, as defined in the Act, who will receive the gratuity in the event of the death of the employee. 

GRATUITY PAYABLE:-

According to section 4 gratuity is paid after termination of employees after rendering continuous service not less than 5 years.

On his superannuation On his retirement or resignation On his death or disablement due to accident or disease. Provided that the completion of

continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement: Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority. 

RECOVERY OF GRATUITY:-

The employer is under the obligation to pay the gratuity amount within 30 days from the date it becomes payable. If the gratuity is not paid by the employer within prescribed time, the controlling authority shall have to issue a certificate for that amount along with compound interest to the collector.

APPLICABILITY:-

Depends on two factors:

Firstly he should be employed in an establishment to which the act applies according to section 1.-every factory mine, oilfield, plantation, port and railway company;-every or establishment within the meaning of law, in relation to shops and establishment in a state, in which 10 or more people are employed, were employed or employed on any day of that preceding 12 months;-as per the notification of central government.

Secondly he should be an employee under section 2Employee means any person (other than apprentice) employed on wages in an establishment to do any skilled, semiskilled, unskilled, manual, or supervisory technical or clerical work.With removal of ceiling on wages every employee will become eligible for gratuity, irrespective of wages level.

NOT APPLICABLE:-

The act does not apply to Apprentices and Persons who hold civil posts under central government or sate government and are governed by any other act or by any rules providing for payment of gratuity.

EXAMPLE:-

An employee has been taken for employment as retainer with effect from 01.09.2005 to 30.11.2005 which was renewed again 01.12.2005 to 28.02.2006.

His terms of employment were again renewed on 01.03.2006 to 31.08.2006. Now the company gave him an appointment on contract for three years from the period 05.09.5006 to 04.09.2009 which was renewed again on 05.09.2009 for another period of three years of employment.The employee was getting PF and ESI as per act from the day one of his employment. He left the organization on September 2010 at the completion of five years of employment. He is then entitled to a gratuity.

THE FACTORIES ACT, 1948

[Act No. 63 of 1948] As amended by the Factories (Amendment) Act, 1987

An Act to consolidate and amend the law regulating labor in factories. In India, the First Factories Act was passed in 1881. This Act was basically designed to protect children and to provide few measures for health and safety to the workers.This law was applicable to only those factories which employed 100 or more workers.

In 1981, another Factories Act was passed which extended to the factories employing 50 or more workers.

The Factories Act, is a social legislation which has been enacted for occupational safety, health and welfare of workers at work places. This legislation is being enforced by technical officers i.e. Inspectors of Factories, Dy. Chief Inspectors of Factories who work under the control of the Chief Inspector of Factories and overall control of the Labour Commissioner, Government of National Capital Territory of Delhi

A factory under the Act is defined as a place using power, employs 10 or more workers, or 20 or more workers without power or were working any day of the preceding 12 months. However, under section 85, the state governments are empowered to extend the provisions of the Act to factories employing fewer workers also. This section has been used to extend the coverage of the Act to workplaces like power looms, rice mills, flour mills, oil mills, saw mills, pesticide formulating units and other chemical units where hazards to health are considered to put workers at risk.

The act extended to the whole of India including Jammu and Kashmir and covers all manufacturing processes and establishments falling within the definitions of ‘Factory’ as defined under section 2(m) of the act. Unless otherwise specifies it is also applicable to factories belonging to the Central/State government.

The Act does not permit the employment of women and young in a dangerous process or operation. Children are defined, "who have not attained an age of 15 years", are not permitted to be hired (Sec. 2, 67) and need to have medical fitness certificates if he/she is has to work and age is not confirmed (Sec 69).

Penalties

Penalty for the contravention of provision relating to hazardous process Penalty for obstructing inspector Penalty for wrongfully disclosing results of analysis Penalty relating to casing of new machinery Penalty for offense by medical practitioner Penalty for employing child labor

Salient Features Approval of Factory Building Plans before construction/extension, under the Delhi

Factories Rules, 1950 . Grant of Licenses under the Delhi Factories Rules, 1950, and to take action against

factories running without obtaining License. Renewal of Licenses granted under the Delhi Factories Rules, 1950, by the Dy. Chief

Inspectors of Factories. Inspections of factories by District Inspectors of Factories, for investigation of

complaints, serious/fatal accidents as well as suo moto inspections to check compliance of provisions of this Act relating to :-

1. Health2. Safety3. Welfare Facilities4. Working Hours5. Employment of young persons6. Annual Leave with Wages etc.

APPLICABILITYIt applies to factories covered under the Factories Act, 1948. The industries in which ten (10) or more than ten workers are employed on any day of the preceding twelve months and are engaged in manufacturing process being carried out with the aid of power or twenty or more than twenty workers are employed in manufacturing process being carried out without the aid of power, are covered under the provisions of this Act. 

Act empowers state government to declare all or any of the provisions of the act to apply to any place with an objective to secure safety, health and welfare.

NOT APPLICABLE

When an electronic data processing unit or computer unit is installed in any premises or part thereof is not applicable to the factories act as no manufacturing process is carried out on the premises.

OBJECTIVES

Regarded as one of the noble and comprehensive labor legislation which is in force in our country. Covers all the aspects relating to workers employed in factories

Secures- safety and health Regulates- decent working hours Ensures annual leave with wages Provides additional protection from hazardous processes Additional protection to women workmen prohibition of employment of children. It ensures basic minimum requirements for ensuring the safety, health and wealth of

factory workers.

EXAMPLE:-

In a factory premises one of the contractors' labor met with an accident. People present there as principal employer have done the first aid and sent him to ESI hospital by our company's ambulance. The contractor had his own ESI code and that labor had ESI registration. Since the contractor has his own ESI registration, the employee who met with the accident will be under that registration number only. He will not be available in the Principal Employer's employee list when he logs in for submitting the accident report. Therefore, the contractor only can send the accident report. Therefore one has to furnish the details to the contractor like exact place of accident, what the employee was doing at the time of accident, nature of injury etc.If there is any loss of earning capacity, you can direct the Contractor to pay Compensation as per rule. If he fails, you can pay the due sum and the amount may be deducted from Contractor's bill when put-up after the disbursement by your Company or provisional "Keep Back" may be deducted to avoid any complication. After all, being principal employer it is the Company's responsibility to ensure payment besides post accidental care/treatment.That is because the contract worker is a worker in the factory and the occupier of the factory is responsible for ensuring safety and proper working environment.

THE MINIMUM WAGES ACT, 1948

An Act to provide for fixing minimum rates of wages in certain employments. ILO Convention no. 26 in 1928 recommended Machinery for fixation of minimum wages.

The Standing Labour Committee of Tripartite organization (ILC) discussed in 1943. On 13.04.1946 Dr. Ambedkar introduced minimum wages bill. On 15.03.1948 the Minimum Wages Act, 1948 passed.

Legislative protection for workers to receive a minimum wage can be considered as the hall mark of any progressive nation. It is one of the fundamental premises of decent work. In India, the Minimum Wages Act, 1948 provides for fixation and enforcement of minimum wages in respect of scheduled employments. The Act also requires the appropriate government (both at Centre and States) to fix minimum rates of wages in respect of employments specified in the schedule and also review and revise the same at intervals not exceeding five years. The Minimum Wages Act, 1948 is an Indian legislation enacted by the Parliament of India for statutory fixing of minimum wages to be paid to skilled and unskilled labours. The Indian Constitution has defined a 'living wage' that is the level of income for a worker which will ensure a basic standard of living including good health, dignity, comfort, education and provide for any contingency.

The objectives of the Act are:

To prevent the exploitation of Workers by the Employers (By fixing the statutory obligation on the employer to pay the minimum wages).

To bring the social justice. To enable the working class to have a minimum standard of life. To fix/revise the minimum rate of wages for the scheduled employments. To add any new employment to the schedule.

National Floor Level Minimum Wage

In order to have a uniform wage structure and to reduce the disparity in minimum wages across the country, a concept of National Floor Level Minimum Wage was mooted on the basis of the recommendations of the National Commission on Rural Labour (NCRL) in 1991. Keeping in view the recommendation of NCRL and subsequent rises in price indices, the National Floor Level Minimum Wage was fixed at Rs.35/- per day in 1996. Keeping in view the rise in Consumer Price Index the Central Government raised the National Floor Level Minimum wage to Rs.40/- per day in 1998. Further to Rs.45/- w.e.f. 01.12.1999 and Rs. 50/- per day w.e.f. 01.09.2002.

Based on the norms suggested by the Working Group and its acceptance by the Central Advisory Board subsequently in its meeting held on 19.12.2003, the National Floor Level Minimum Wage was revised upwards to Rs.66/- per day with effect from 1.02.2004. On the basis of increase in the Consumer Price Index, the Central Government further revised the National Floor Level Minimum Wages from Rs.66/- to Rs.80/- per day with effect from 01.09.2007.

It is, however, clarified that the National Floor Level Minimum Wage, is a non-statutory measure to ensure upward revision of minimum wages in different in States/UT’s. Thus, the State Governments are persuaded to fix minimum wages such that in none of the scheduled

employments, the minimum wage is less than National Floor Level Minimum Wage. This method has helped in reducing disparity among different rates of minimum wages to some extent.

To sum up, effective implementation of the Minimum Wages Act, 1948, including that of the revision of minimum wages at national floor level minimum wage or higher; which primarily falls in the State sphere, is assiduously pursued by us through discussion, writing letters, personal interaction and visits to States, including the North-Eastern States. The State Governments are regularly asked to fix and revise minimum wages in scheduled employments to be at least at par with National Floor Level Minimum Wage of Rs.80/- per day as at present. What they actually do is in keeping with their respective paying capacity.

Norms for fixation/revision of minimum wages

The norms include those which were recommended by the Indian Labour Conference in its session held in 1957.

(a) 3 consumption units for one earner.

(b) Minimum food requirements of 2700 calories per average Indian adult.

(c) Clothing requirements of 72 yards per annum per family.

(d) Rent corresponding to the minimum area provided for under Government's Industrial Housing Scheme.

(e) Fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the total Minimum Wages.

OBJECT:

For fixing minimum rates of wages in certain employments. The justification for statutory fixation of minimum wage is obvious. Such provisions which exist in more advanced countries are even necessary in India, where workers’ organizations are yet poorly developed and the workers’ bargaining power is consequently poor.

To bring the social justice. To enable the working class to have a minimum standard of life. To fix/revise the minimum rate of wages for the scheduled employments. To add any new employment to the schedule.

APPLICABILITY: It extends to the whole of India and applies to scheduled employments in respect of which minimum rates of wages have been fixed under this act.

The Act is expected to fix the minimum wages in respect of employees whether they are casual, daily rated, temporary or permanent. The Act is applicable to daily rates employees also.

The Act applies only to workers working in employments mentioned in a list (“Schedule”) attached to the Act (referred to as “Scheduled Employments”). It is in the government’s discretion whether or not to include a particular employment in the Schedule. The work of garbage collection done by the BMP Contract labour is not a notified employment. If the Scheduled Employment has 1000 or more workers then the Government is bound under law to fix a Minimum wage via notification. The Government may if it thinks fit fix a minimum wage for a Scheduled Employment where there are less than 1000 workers employed.

NOT APPLICABLE

The Minimum Wages Act 1948 providing that minimum wage may not be paid to a workman employed in any famine relief work cannot be sustained in the face of Article 23. Article 23 mandates that no person shall be required or permitted to provide labour or service to another on payment of anything less than the minimum wage. Whenever any labour or service is taken by the State from any person, whether he be affected by drought and scarcity conditions or not, the State must pay, at the least, minimum wage to such person on pain of violation of Article 23.

PENTALITY: Any employer who contravenes any of the provisions of this Act other than those relating to Section 12 and 13 of any rule or any order made there under shall be punishable with fine, which may extend to Rs.500. Any employer who contravenes the provision relating to the payment of minimum rates of wages fixed (Section- 12) hours of work stipulated for constituting a normal working day as per section 13 shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to Rs. 500/- or with both.

EXAMPLE:-

“Employment of Sweeping and Cleaning” in the Central sphere at Rs.120/-, Rs. 150/- and Rs.180/- per day and for “Employment of Watch and Ward” (a) without arms at Rs.120/-, Rs.150/- and Rs.180/- per day and (b) with arms at Rs.140/-, Rs.170/- and Rs.200/- per day for Area ‘C’, ‘B’ and ‘A’ respectively and the Final Notifications in respect of revision of minimum rates of wages for workers engaged in the scheduled employments of “Construction and “Loading and Unloading” in the Central sphere at Rs.120/-, Rs.150/- and Rs.180/- per day for unskilled workers to Rs.200/-, Rs.220/- and Rs.240/- per day for highly skilled workers in Area ‘C’,’B’ and ‘A’ respectively and for workers engaged in “Non-Coal Mines” in the Central sphere at Rs.120/- per day for unskilled Workers (Above Ground) to Rs.240/- per day for highly skilled workers (Below Ground).

EMPLOYEES’ STATE INSURANCE ACT 1948

An Act to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto. The promulgation of Employees' State Insurance Act, 1948 envisaged an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, and death due to employment injury resulting in loss of wages or earning capacity. The Act also guarantees reasonably good medical care to workers and their immediate dependants.

 Employees' State Insurance is a self-financing social security and health insurance scheme for Indian workers. For all employees earning  15000 (US$240) or less per month as wages, the employer contributes 4.75 percentage and employee contributes 1.75 percentage, total share 6.5 percentage. This fund is managed by the ESI Corporation (ESIC) according to rules and regulations stipulated therein the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family through its large network of branch offices, dispensaries and hospitals throughout India.

Salient features of ESI scheme

Act of Parliament: - The ESI scheme, introduced by an Act of Parliament in 1948, is a unique piece of Social Legislation in India. It aims at bringing about social justice to the poor Labor class of the land. The Act in the first place applies to all factories including the factories belonging to Government and other seasonal factories. The appropriate Govt. (i.e. State Govt.) is empowered by the Act to extend the provisions of the Act or any one of them to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise, in consultation with the Corporation.

A factory or an establishment to which the ESI Act applies shall continue to be governed by the Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under the Act or the manufacturing process therein ceases to be carried on with the aid of power.

The ESI ACT provides for medical help and unemployment insurance to industrial workers during their illness.

The basic objective is to offer social insurance to workers in respect of three contingencies:

Sickness Employment injury Child birth

APPLICABILITY

The ESI Act 1948 applies to 

Employees of the Factories and Establishments in receipt of wages not exceeding Rs.7500 /per month are covered under this Act.

1) All factories excluding seasonal factories employing 10 or more persons and working with electric power.

2) All factories excluding seasonal factories employing 20 or more persons and working without electric power.

3) Any establishment which the Government may specifically notify as being covered.

4) Shop employing 20 or more persons.

The act had been extended to the following class of establishments:

Shops Hotels & restaurants Clubs, cinemas, including preview teaters Road motor transport undertakings Newspaper establishments

NOT APPLICABLE

Factories where ESIC is unable to provide medical facilities, ESI Act may not be made applicable to the area.

This provision of the ESI Act, however are not applicable to factories or establishments run by the State Govt. / Central Govt. whose employees are otherwise in receipt of social security benefits substantially similar or superior to the benefits provided under the ESI Act. The case of each such Public Sector Undertaking is decided on merit by comparing the quality and quantity of benefits being provided to the employees by the concerned managements with those admissible under the ESI Act.

Eligibility

1) Any person employed for wages (up to Rs. 6,500) in or in connection with the work of a factory or establishment end.2) Any person who is directly employed by the employer in a factory or through his agent on work which is ordinarily part of the work of the factory or incidental to purpose of the factory.

Benefits

1) Free medical treatment is offered to covered employees at hospital and dispensaries run by the ESI Corporation.

2)  About 7/12th of employees normal wage will be payable to him by ESI during sickness.3)  Maternity benefit for 12 weeks of which not more than 6 weeks should be preceding

confinement.4)  Injury during/in course of employment resulting in temporary/permanent disablement

entitles the covered employee to a regular payment to substitute his lost wages.5)  Death during course of employment entitles specified dependents to a regular payment.6) Onetime payment of Rs. 1,500 to help meet funeral expenses.

OTHER BENEFITS

Supply of special aids : Insured persons and members of their families are provided artificial limbs, hearing aids, artificial dentures, spectacles (for insured person only) & artificial appliances like spinal supports, cervical collars, walking calipers, crutches, wheel chairs and cardiac pace makers, dialysis/dialysis with kidney transplant etc. as part of medical care under the ESI Scheme.

EXAMPLE:-

1. Maniben is the widow of deceased-GovindbhaiKanabhaiMakwana, whowas an insured person under the Employees' State Insurance Act, 1948. She has a son as well. The petitioners filed an ESI Application No. 7 in 1985 before the Employees' Insurance Court at Ahmedabad and claimed for dependent benefits for her and also for her then minor son (as the death was caused due to reasons that fit with ESI Act) who on application was allowed by the ESI Court vide its judgment and order dated 7-1-1992.

2. If an employee was injured while working in the mines, despite the fact that all safety precautions were taken, he will not receive compensation as a part of ESI.

3. If an employee faces death and has worked in a tea plantation unit for 2 months, 3 months and then 2 months again with breaks in between, it shall be counted in as 7 months and is eligible for insurance via the ESI Act.

PAYMENT OF WAGES ACT, 1936

With the growth of industries in India, problems relating to payment of wages to persons employed in industry took an ugly turn. The industrial units were riot making payment of wages

to their workers at regular intervals and wages were not uniform. The industrial workers were forced to raise their heads against their exploitation. The Payment of Wages Act, 1936 was enacted to regulate payment of wages to workers employed in Industries and to ensure a speedy and effective remedy to them against illegal deductions and/or unjustified delay caused in paying wages to them. The existing wage ceiling under Payment of Wages Act, 1936, was fixed at Rs. 1600/- pm in 1982. With a view to enhance the wage ceiling to Rs. 6500/- p.m. for applicability of the Act, to empower the Central Government to further increase the ceiling in future by way of notification and to enhance the penal provisions etc., the Payment of Wages (Amendment) Act, 2005, which was passed by both Houses of Parliament, has been notified on 6.9.2005 as an Act 41 of 2005 by the Ministry of Law & Justice. The Payment of Wages Bill, 1935 having been passed by the Legislative

Assembly received its assent on 23rd April, 1936. It came on the Statute Book as THE PAYMENT OF WAGES ACT, 1936 (4 of 1936).

The Central Government is responsible for enforcement of the Act in railways, mines, oilfields and air transport services, while the State Governments are responsible for it in factories and other industrial establishments.

The basic provisions of the Act are as follows:-

The person responsible for payment of wages shall fix the wage period up to which wage payment is to be made. No wage-period shall exceed one month.

All wages shall be paid in current legal tender, that is, in current coin or currency notes or both. However, the employer may, after obtaining written authorization of workers, pay wages either by cheque or by crediting the wages in their bank accounts.

All payment of wages shall be made on a working day. In railways, factories or industrial establishments employing less than 1000 persons, wages must be paid before the expiry of the seventh day after the last date of the wage period. In all other cases, wages must be paid before the expiry of the tenth day after the last day of the wage period. However, the wages of a worker whose services have been terminated shall be paid on the next day after such termination. 

Hence, the main object of the Act is to eliminate all malpractices by laying down the time and mode of payment of wages as well as securing that the workers are paid their wages at regular intervals, without any unauthorized deductions. The Act was amended by the Payment of Wages (Amendment) Act, 2005 in order to enlarge its scope and provide for more effective enforcement. The main amended provision is the enhancement of wage ceiling from Rs. 1600/-per month to Rs. 6500/-per month for the applicability of the Act as well as empowering the Government to enhance the ceiling by notification in future.

OBJECTIVES:

1. It regulates the payment of wages in time i.e., not later than 7th day from the last day of the wage period for factories employing less than 1000 employees and 10th day for factories exceeding 1000 employees. 2. Wages shall be paid in cash in current currency within the working hours. 3. Only authorized deductions can be caused from the earned wages; 4. Workers shall be issued wage slips giving all the details of their earned wages along with the wages paid; 5. Fines can be imposed as per the rules specified;

APPLICABLE:This Act applies to wages payable to an employed person in respect of a wage period if such wages for that wage period do not exceed six thousand five hundred rupees per month or such other higher sum which, on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organization, the Central Government may, after every five years. Persons employed in any factory, a saw mill, ginning factory, go downs, yards etc as defined in factories act, 1948Tramway service or motor transport service engaged in carrying passengers or good or both by road for hire or reward. Air transport service dock, mine, quarry or oil field plantation. Workshop or other establishment etc.

EXAMPLE: Under certain rules as per the Preventive Detention Act, an employee, working for the Railway Authorities, was compelled to go on leave from 16-1-1950 to 11.6.1950, on full pay, from 12.6.1950, to 7-10-1950, on half pay, and from 8-10-1950 without any pay at all. But although the employee was kept on leave till 24/8/1951, no pay was given to him. He had not been charged with anything that was contrary to the rules of service, and no form of departmental enquiry had been held. If a departmental enquiry had indeed been held, he wasn’t informed of the same. The employee went before the Authority under the Payment of Wages Act claiming that he was entitled to his full wages throughout the period as he was in the service of the railway authorities despite the compulsory leave.