A HANDBOOK

ON

EMPLOYEE LEGISLATION

Presented by
Students of Accord Business School, Tirupati
(Batch – 2010 -2012)
 A HANDBOOK
ON
EMPLOYEE LEGISLATION

Presented by
Students of Accord Business School
(Batch – 2010 -2012)
(Under the supervision of Mrs.Anupama,MHRM,Ph.D​)
 Preface

Employee Legislation/labour legislation is an integral part of social and economic

transformations targeted at the creation of an efficient economic system that will provide for the
social justice. Employee legislation protects the economy not from the market driven forces but
protects the market driven environment with in. The primary objective of the labour laws is to
enhance maximum use of market oriented mechanisms, mobilization of the individual initiative of
citizens, and mechanisms of their collective self-organization. The present book is developed as a
part of curriculum of MBA (Sri Venkateswara University), for updating the students on the latest
developments that are taking place in the field of organizational management with regarding the
legal aspects. The book is combined efforts and contributions of students, industry personalities and
faculty towards the respective subject i.e., the Employee Legislation.

The material contained in this book has been organized in accordance with the syllabus of
Employee Legislation paper - Human Resource specialization of Department of Business
Management, Sri Venkateswara University, Tirupati. The main syllabus of the University is
divided into five units categorized into industrial relations laws, laws relating to misconduct,
discharge, domestic enquiry, disciplinary action, social surity laws, wages and bonus laws and laws
relating to working conditions. The syllabus of three units are incoporated in Part- I of the book and
the topics of fourth and fifth units are incorporated in Part – II of the book.

Additional material on case laws, famous Supreme Court Judgements, a case study on the
implementation of Employee Legislations at Allsec Technologies is also attached to Part – I of the
book.
Part – II book has the material contributed by Mr.V.Chandra Sekhar, Manager (HR), Amara Raja
Batteries Limited on the latest trends of Human Resource Management and implementation of
Employee legislation at work place. A special focus is made on the Factories Act,1948 by him. A
part of contents related to legal terminology is also put at the end of the Part – II copy.

We the students of Accord Business School Batch: 2010-2011 express our deep gratitude to the
management for giving such an opportunity and encouragement drafting and presenting this book to
the library of our college. We hope that this book will certainly help the coming juniors (next
batches) for reference and for new insights drafting new editions like this on employee legislation.

Students of Batch: 2010 - 2012

Accord Business School, Tirupati.
 List of Contents
Page No.
Preface i
List of Contents ii
Acknowledgments iii
List of Contributors iv
Introduction to Employee Legislation 5
The Industrial Disputes Act,1947 12
(Latest Amendments)
The Trade Unions Act,1926 29
(Latest Amendments)
The Employment Standing Orders Act,1948 40
(Latest Amendments)
Laws relating to Discharge, Dismissal, Domestic enquiry, 46
Disciplinary action
The Workmen’s Compensation Act,1923 60
(Amendments)
The Employees State Insurance Act,1948 73
(Amendments)
The Employee Provident Fund Act, 1952 81
The Maternity Benefit Act,1961 96
(Amendments)
The Payment of Gratuity Act,1972 103
(Amendments)
Case Laws 110
Famous Supreme Court Judgements 115
Case Study on implementation of Employee Legislations at 117
Allsec Technologies – A BPO Company
Legal Terminology. 118
 ACKNOWLEDGEMENTS

We express our earnest thanks to ​Mr.V Chandra Sekhar, Manager (HR), Amara Raja Batteries
Limited, Karkambadi ​for his enlightening examples from corporate world and for his support in
organizing this book.

We extend our sincere thanks to the ​Chairman, Accord Business School, Tirupati​ for
encouraging us to give our best participation for various activities and events organized at Accord.
We express our deep gratitude to​ Mr.Chandra Sekhar​ for supporting us in organizing this book -
“A Handbook on Employee Legislation”.

We acknowledge our sincere thanks to ​Mr.Prashanth, General Secretary, Accord Business

School,​ for being an inspiration to do the things in an exceptional way by us.

We express our sincere thanks to ​Principal, Mr.Naga Raju, Accord Business School​ for his
encouragement and blessings showered on us approving our activities and making them more
meaningful.

We acknowledge our gratefulness to the​ Dean, Mr.Uday Gowry Shanker, Accord Business
School​ who has been the chief motivator and who always been a back-up in all our endeavours.

We aknowledge our sincere thanks to​ Mr. Naga Prabhakar, Associate Professor, Accord
Business School ​for his guidance and encouragement towards the orgainizing this book.

We extend our sincere thanks to ​Mr.Swathantra Babu​, ​Head of the Department​, ​Accord
Business School ​for being a part of all our successes in all the activities of our curriculum.

We express our deep regards to ​Ms.Anupama, Assistant Professor, Accord Business School​ for
acting as a Chief Editor and supporting us in framing this book.

We acknowledge our appreciation and thanks to all the ​members of the Faculty​ for giving their
support and wishes for making this book a grand success.
Last but not the least we extend our heartfelt thanks to all the students​ who contributed​ to this
magnificent book on Employee Legislation.

Students of Batch: 2010 - 2012

Accord Business School, Tirupati.

Part-I
List of Contributors

Ser. Contributor Concept

No:
1 M.Balakonda Reddy Importance of Employee Legislation to
Management students
2 J.Mounica & M.Rajeswari The Industrial Disputes Act, 1947.

3 N.Praneetha & M.Sobha Rani The Trade Unions Act,1926

4 K.Rajesh & M.Chiranjeevi The Industrial Employment (Standing Orders

)Act,1946

5 B.Jagadeesh Reddy & Latest Amendments of The Industrial Disputes Act,

G.K.Jyothi 1947.The Trade Unions Act,1926The Industrial
Employment (Standing Orders )Act,1946

6 K.Tulasi & D.Kiranakumari The Workmen’s Compensation Act,1923 &

The Employees State Insurance Act,1948

7 M.Kalyan Chakravarthi & Latest Amendments of the Workmen’s

K.M.Karthikeya Jetty Compensation Act,1923 &
The Employees State Insurance Act,1948

8 M.Chandra Kala & The Employee Provident Fund Act,1972

K.Sandhya Rani

9 K.Suma & A.Mounika The Maternity Benefit Act,1961 & The Payment
Priyadharsini of Gratuity Act,1972
10 E.Ashok Kumar,B.Hima Latest Amendments of The Employee Provident
Bindu Fund, 1952 - The Maternity Benefit Act,
1961-The Payment of Gratuity Act,1972.
11 P. Sarada & V.Siva Kumar Supreme Court Judgements & Case Laws
 12 K.Sandhya Rani A Case Study on Allsec Technologies, Chennai

13 G.Anupama Legal Terminology

Employee Legislation

Employment legislation is the fastest changing area of HR today. This will help you understand
what statutory instruments exist today, how they will affect the business and what areas one need to
look out for. Over time a body of law or legislation has developed governing employer/employee
relations and the rights of employees and employers in the workplace.

"Law is not an abstract thing, it is a living organism

since it is applied on living human beings".

Industrialisation has brought with it, huge employment opportunities, mass production, distribution
of goods and commodities but at the same time carried with it certain disadvantages to workmen as
loss of freedom, unhygienic working conditions, no freedom of contract, the dynamics of market
and self interest. Peter Drucker calls it "The age of discontinuity, turbulent environment and
technocratic age". Technology has ushered in the following, (i) elimination of physical labour, (ii)
mass production at low cost (iii) too much of control mechanisms, (iv) reduction in workers ability
(v) heavy monitoring , maintaining, repairing, adjusting (vi) sense of alienation among workmen
(vii) inter dependence and (viii) strict discipline. Industry demands interaction of people. Industrial
relations involve inaction and violent action, conflict and co-operation. Labour management is
based on labour policy, laws, rules, regulations, agreements, awards, social sciences, behaviour
pattern, sociology, psychology and human approach. Industrial relation is the process by which
working people and their organisation interact at the place of work to establish terms and
conditions of work. Professor Lester "when people sell their services and spend their lives in the
premises of the purchaser of the services, a varying amount of dissatisfaction, discontent, industrial
unrest likely to occur. Hence there is a need for employee legislations. The State has enacted many
employee legislations to control the industries as to safeguard the interest of employees as well to
cater to their welfare and security needs. The Employee Legislation, The Labour Legislation or The
Industrial Legislation or The Human Resources Legislation, whatever name it may be called refers
to the one and the same concept that covers a number of legislations passed by the Parliament to
procure for the employees, higher wages, healthy working condition, opportunity to advance,
satisfaction at work, avenues for raising industrial dispute and protection against loss of wages, over
work and arbitrary treatment. This concept could easily be comprehended when we undertake the
study of all the characters who play the roles in an industrial organisation. The main characters are
Employer, Employee, the Trade Union and the Government.

Emergence of labour laws:

Labour is an important segment of general community. Being a 'human factor', labour is

manifestly different from other factors of production. As an important and vocal section of the
community, labour has been drawing greater interest of the state agencies, social welfare
organizations, planners, employers and all other concerned with it, in the study of labour and its
problems. There was lot of exploitation of labour in the beginning of the industrialization. Labour is
considered as a commodity rather than as an important means of production. Investment on labour
is considered as an unavoidable expense which should be cut short by all ways and means. There
were no such supporters and unions for employees who could raise the voice against the
exploitation of the labour during that period. The government followed a ​“Laissez-faire” policy
which mean the non-intervention of the government in the economic and trade activities of the
economy. This tendency of the government led to many unfair practices by the employers in
making huge profits for themselves.

Employee Legislation/labour legislation is an integral part of social and economic

transformations targeted at the creation of an efficient economic system that will provide for the
social justice. Employee legislation protects the economy not from the market driven forces but
protects the market driven environment with in.. The primary objective of the labour laws is to
enhance maximum use of market oriented mechanisms, mobilization of the individual initiative of
citizens, and mechanisms of their collective self-organization.
In the ​government of India (Amendment) Act, 1919, the Central legislature was given the power
to legislate in respect of practically all labour subjects. The Provincial government were empowered
to legislate only in respect of those labour matters which were classified as provincial, but require
sanction of Governor General. All the Labour Legislations were enacted by the Central legislature
during this period.
The Whitley Commission reported in 1931 about the bulk of labour problems within the
jurisdiction of government of India. The Labour Ministers’ Conference and Indian Labour
Conference, Standing Labour Committees are the products of forties. With the impact of World
War II, the machinery for labour administration at the centre expanded​. Rege Committee reported
on the eve of independence that workers could represent their grievances in the Institution of
labour officers under the Commissioner of labour.
Employee legislation strengthens the relationship between labour and management and encourages
uninterrupted production in the industries. Smooth and uninterrupted production achieves not only
industrial peace but also provides economic stability to any nation. Employee legislation broadens
the sphere of registered employment. It also reduces the long-term, stagnant unemployment. It also
looks into gradual extrusion of informal labour relations. Employee legislation helps in bringing
higher flexibility in labour relations and their adaptability to changes in economic conditions.
Protects the interests of weaker sections either employees or employers as the situation demands for
fair justice to whoever it is concerned. Guides the employer in running his/her business
uninterrupted and in fair manner taking into consideration all the provisions laid down by the
government in the legislations.

Objectives of Labour legislation:

Social justice: Through equal distribution of profits and other industrial benefits between owners
and workers, providing protection to workers against harmful affects to health, safety and morality.
Social equity: Labour must be dynamic; government must modify the laws in line with the
changing environment. Hence considering social equity these processes are to be carried forward.

International uniformity: While formulating and restructuring the labour laws, the government
looks into maintenance of international uniformity towards employees. Issues like compensation
packages, working conditions, vacations, incentives etc., are taken into account.

National economy: The elements of national economy such as the per capita income, GDP,
inflation trends, population demographics, cultural and political aspects are considered for the
formulation and execution of the labour laws.

The Socio – Economic environment:

The labour laws and their implementation is given lot of importance by the government because of
many socio-economic reasons and changes that have taken place since the ancient Indian society
has formed.

Labour in the ancient society​:

History begins when men actually produce their means of subsistence. “At the minimum, this
involves the production of food and shelter.” Production is a social enterprise since it requires
co-operation. Men work together to produce the goods and services necessary for life. The forces of
production of production and the product of labour were communally owned. With the emergence
of private property, and in particular, private ownership of production, the fundamental
contradictions of human society were created. A minority is able to control command and enjoy the
fruits of production which led to conflict of interests between the minority group and majority
group. In early, small scale, non-literate societies, the family and kinship relationship in general
were the basic organizing principles of social life.

Labour in middle ages:

Thus labourer in the ancient, agrarian society was therefore in a better position. However,
during the middle ages, due to the emergence of feudal system, the condition of labour deteriorated.
Most of the agricultural land was owned by feudal lords. Landless labourers, known as serfs, were
forced to work for the land owning nobility in order to gain a livelihood. Ownership of the forces of
production in the hands of feudal lords provided the basis for ruling class dominance and control of
labour.
A feudal structure of society seemed to have prevailed in various countries including India in the
medieval period. The economies of these countries were based on feudal ownership, which was
characterised by a specific form of the exploitation of the peasants, artisans.

Exploitation of workers in the beginning of industrialization:

The exploitation of employee during this period may be summarized under the following heads:

1. Growth of factory system and loss of freedom to work independently:

A great historic event that took place in ​Great Britain in the 18​th century was the advent
of ​“Industrial Revolution”. It soon spread to the neighbouring states. This led to mass production
of goods in short-period of time and providing mankind with material comforts, brought within its
wake a number of problems for the workers also.
(a)Independency of workers was lost.
(b)Hands were replaced by machinery.
(c)The worker is tied to the machine and to the owner of the machine.

2. Concentration of economic power and Indifferent attitude of the employers:

The owner is concerned more about the profits rather than labour welfare. Traditional
employee worked under the direct and immediate control of the traditional employer where as new
employee seldom sees his owner. Managers and supervisors manage the work done by the
employees. These managers and supervisors acted as wall of management exploiting the employees
to a larger extent.

3. Unfair contract of employment:

To ensure maximum profits, the management made the workers work for unduly long hours
without any interval for rest, for extremely low wages, in unhygienic working conditions. Workers
were considered as lifeless machines. The Laissez-faire policy of the government in economic
affairs of the state made the employers free to draft contracts of employment at their whims and
fancies without any check by the state.

4. Inhuman conditions at the work:

On ignoring the human factor in the production of goods​, Robert Owen​, a factory
owner himself who improved the conditions of his own factory pleaded to the other employers to
take care of their “living machines”. Accidents without insurance coverage or compensation to the
worker added to the misery of the workers. Proof was required by the employee that the accident
was not the cause of negligence. Long-working hours had impact on individual, family, and
children and thereby on the society. Workers dignity and character was hampered through these
unfair acts by the employers. Children were the most worst affected part of the labour force in the
early phase of industrialization. The unfair labour practices are manifested in many forms as
follows: Labour were regarded very cheap and paid low, all the age groups are taken into work
processes, employees are engaged in the work for more than 12-14 hours a day with only one hour
for dinner, workers are made to work in overcrowded rooms with lot of heat produced from it,
workers are engaged in work with bare foot, in rain and mud and with oily dress.
5. Migration of workers:
Due to the concentration of industries in selected regions there was huge migration of rural artisans
and farmers to those places in search of employment. This migration led to the problems of over
population in the cities causing so many social and economic evils.
6. Workers un-education:
As many of the people migrated from the rural areas, most of them are illiterates and this lack of
un-education and lack of awareness has been advantageous to the employer to exploit them further.
They were unaware of their legal rights and obligations which created confusions and problems for
them.
7. Lesser employment opportunities:
The phase of industrialization left India with many problems such as high growth rate of population,
low standard of living, social and cultural constraints, un-education, etc. These led to lesser
employment opportunities.
8. Evils of industrialization:
There were many evils prevailed in the country due to industrialization. Exploitation of workers,
exploitation of women and children, poor working conditions, poverty due to payment of low
wages, non-intervention of government in the matters of economic activities of the country, world
wars, etc deteriorated the life of the workers.

British policy towards labour in India:

 Indian industries were owned by foreigners. Workers/labourers were paid meagre wages
which were insufficient even for the sustenance of their lives. There were no fixed working hours,
working conditions were unhygienic and British employers were extremely supported by the
government. ​In 1929 the Royal Commission was appointed in India by the British government
to ​enquire into the working conditions of labour in India​. In the cause of its inquiries, the
commission held in all 128 public sittings for the examination of witnesses.
During the time of World War II-1939, there was a creation of adequate labour force to
maximize production. Therefore the Central government assumed wide powers to control and
regulate the industrial labour welfare.
A Chief Adviser of Factories was appointed. A new department of works, Mines, and power was
created and certain subjects which were related to labour matters are transferred to this department.

Empowerment of labour legislation in India:

Article 39 – of our Constitution empowers the labour legislation in India. ​Articles 36 to 51, Part
IV of the Indian Constitution make provisions regarding the Directive Principles of State
Policy​. The principle goal of our sovereign democratic republic and a welfare state and also
fundamental rights are taken into consideration.
According to ​Article 39​ – State shall, direct its policy towards securing that the -
(i) Citizens – men and women equally, have right to an adequate means of livelihood;
(ii) Ownership and control of material resources of the community – so distributed as best to
subservice the common good.
(iii) Equal pay for equal work - both men and women.
(iv) Health and safety of workers, men and women and the tender age children are not abused.
(v) The citizens are not forced by economic necessity to enter avocations unsuited to their age
or (strength) safety.

Labour administration in India:

Labour administration is concerned with labour affairs and administration of social policy.
Geneva, October, 1973 – Labour administration was held to administer substantive programmes of
labour. Specialized units were formed for each of the following:
a) Labour protection (formulation of standards relative to working conditions and terms of
employment, including wages)
b) Labour inspection
c) Labour relations
d) Employment of manpower, including training, and possibly,
e) Social security.

Various officers/machinery appointed by the government of India:

● Chief Labour Commissioner
● Number of Regional Labour Commissioners
● Conciliation officers
● Labour Welfare Advisers
● Labour bureau – for collection, compilation and publication of statistical and other
information regarding employment, wages, earnings, industrial relations, working conditions
and so on.
● A network of National Employment service and training institutes were set-up.
● The five-year programme for labour (1946) had many elements to strengthen the
administration and intensifying its operations.
Tripartite Labour Machinery: ​Tripartite Labour Machinery consists of Indian Labour
Conference, The Standing Labour Committee, The Industrial Committee, The committee on
Conventions, Steering committee on wages, Central Implementation and Evaluation Machinery,
Central Boards of Workers' Education, National Productivity Council.
There are also a Bipartite Joint Consultative Committee of the Ministry of Labour and Employment.
In addition there are Committees and Boards such as Committee on ILO (International Labour
Organization) Conventions Central committee on Labour Research.

Sequence of Events:

1877 : Emperor Mills Nagpur Stoppage

19th Century : Industrial Capitalism in Bombay and Surat.

18th and 19th Century : Industrialisation in Europe

1914 - 1918 : First World War – boon for employers because of

raising prices - huge profits - Economic distress for workmen.

1917 : Trade Dispute Act enacted.

1921 : First Trade Union started at Madras by B.P. Wadia

1921 : Mahatma Gandhi advocated Collective Bargaining and re opened

the Ahmedabad Textile Mills.

1923 : Workmen's Compensation Act was enacted.

1926 : Trade Union Act was born

1945 : Second World War

1946 : Huge profits to capitalists - Indian Employment Standing

Order enacted.

1946 - 1947 : Disturbed year

1947 : INTUC was born

1947 : Industrial Disputes Act

1948 : Minimum Wages Act,

Employees State Insurance Act & Factories Act

People involved in the labour administration:

Many agencies and government departments such as ​Chambers of Commerce, factory

and mines inspectorate, social insurance directorate, and Department of HRD and education
are involved in it.
Some organizations of employees and employers are also involved in the administration of labour
matters.
Responsibilities: The department of labour has the responsibility to lie down, develop and apply
sound labour policies, co-ordinate various recommendations received from various departments
which have a bearing on labour affairs. The labour department looks into research and field
investigations, labour policy proposals of Ministry of Labour, initiates preparatory process.

In some cases, Labour courts, arbitration bodies and different ad-hoc commissions can be
regarded as forming part of the labour administration, machinery, though they are usually outside
the department of labour. These bodies are either ​tripartite or bipartite​ in character.

Labour administrator gives effect to laws governing employment and conditions of work. Labour
legislation is a necessary instrument for a governments' administration of labour affairs. Standards
established may be further developed, complimented or applied through administrative action.
A system of law is a guarantee for people's personal safety, liberties and rights. To maintain
respect for the law in general, the laws that are adopted must be strictly applied, without fear or
favour. It the fundamental duty to uphold the rule of law at all times. Law sometimes is unwritten,
customary and sometimes situational which is driven out of practice.

Constraints of labour laws in India:

India has a very enormous and widely described labour legislation frame work to guide the
employers, employees and concern government administration and machinery. There are more than
45 pieces of legislations enacted by the central government of India towards payment of wages,
industrial disputes, and social security aspects. There are certain constraints of labour legislations
such as;
● More restrictive to employers compared to other countries
● 15 percent of the country's GDP is from manufacturing units.
● 92 percent of the economic activity is carried in unorganized sector leaving detrimental
effects on the employment.
● India has lost a huge number of man-days due to ineffective dispute resolution laws.
● Contract labour hired in 1990's increased tremendously in all the sectors where as it is
restricted to only few occupations or activities.

The thrust of Labour legislation is to create a climate of healthy industrial relations and
promoting an industrial culture conducive to improvement in efficiency, productive and real wages.
Though there are constraints in the implementation of the labour legislation in India, it has
enhanced the status of the workers in industry. Intervention of state in the economic affairs of the
country is possible only through the labour laws. Labour laws are very important to ensure fair
wage standards and provision of social security. Certain modifications are to be made to the labour
legislation according to the changes that are taking place in the national and international business
environments catering the needs and requirements of our economy.
 Industrial Disputes Act, 1947

The Industrial Disputes Act,1947 is enacted in accordance with the welfare concept of the
Constitution of India, and more particularly with the spirit of the Directive Principles of State
Policy. The primary objective of the Act is “to make provision for the investigation and settlement
of industrial disputes, and for certain other purposes”. This Act is for regulating the relation of
employers and workmen – past, present and future. It is based on the necessity of achieving
collective amity between labour and capital by means of conciliation, mediation, arbitration, and
adjudication.

Objective of the Act:

​The main objective of the Industrial Dispute Act, 1947 is to investigate and settle the
industrial disputes. For the purpose of investigation and settlement of the industrial disputes, the Act
provides for the machinery and procedure for ensuring a speedy resolution of industrial disputes.
Speedy resolution of disputes achieves twin objectives, first smoothness in the relationship between
labour and management and second uninterrupted production in the industries. Smooth and
uninterrupted production achieves not only industrial peace but also provides economic stability to
any nation.

Importance of the Act:

● This Act also aims to achieve collective bargaining and industrial peace.
● It enables the workers to participate in the management of the industries as per the wishes of
the Article 43-A.
● It reduces the tensions between the employer and employees.
 ● It provides the necessary machinery to prevent illegal strikes, lock-outs, lay-offs,
retrenchments, etc.
● It renders social justice to both the employees and employers.
● It enhances the dignity of the workmen and integrity of the industry.

The idea of Industrial disputes was practically unknown to India till the end of the World War I
(1914-18).

There was no special legislation as such on the issue of disputes in Industries as such and so at that
time ordinary principles of master and servant were used to govern the relations between the
employers and employees in the industries.

At that point of time, majority of the industries were under the control of the British industrialists -
administration and the War provided them with an opportunity to increase their production and
henceforth their profits as well.

England emerged successful in World War I which gave rise to establishment of a large number of
factories and so huge investment of money.

In spite of huge investment there was no improvement in the condition of labour. The year of 1919
marks the outbreak of an industrial strike on scale previously unknown to the world. The formation
of the International Labour Organization provoked the labour class and instilled the spirit among
labour community to struggle for their rights. The first session of the International Labour
Conference took place in Washington in 1919 and India also participated in the Conference.

The provinces of Bombay and Bengal were the first one to take initiative and they appointed
committees to investigate the matter to consider and report or create machinery for prevention or
settlement of disputes. The Bengal committee recommended the formation of joint workers
committee and it was not in favour of any sort of government interference or any type of special
legislation to decide labour disputes, but however they did recommended the formation and setting
up of Industrial Courts. The Bombay Government at that adhering to the recommendations of the
committee about setting up of the Industrial Courts, introduced a Bill in the Legislative Council of
the State, but due to the interference of the Central Government the bill was dropped and not
introduced before the Legislative Council of the State.

The Central Government however enacted the Workmen’s Compensation Act, 1923, the Mines Act,
1923 and also the all important Trade Unions Act of 1926. As an experimental measure, the Indian
Trade Disputes Act was passed in the year 1929 on the lines of the British Trade Disputes Act of
1927. It was to remain if force for five years. The Act was made permanent in April, 1934. There
were intensive agitations around the country in 1929 by various labour leaders demanding reforms
and expansion of labour laws, resulting in appointment of a Royal Commission on Indian Labour by
the King Emperor. The object of the of the commission was to enquire into and report on existing
conditions of labour in industrial undertakings in British India ; on Health, efficiency and standard
of living of the workers ; and on the relation between the employer and the employed; and to make
recommendations thereon.

Under the Government of India Act, 1935, provincial autonomy was given to all provinces. The
governments of many states appointed committees to inquire and to examine the present levels of
wages, conditions of work and make necessary recommendations henceforth. One of the first and
the most important measure so adopted was the enactment of the Bombay Industrial Disputes Act of
1938. When the Second World War started it once again changed the complexion of the Labour
Struggle. The Central Government being controlled by the Britishers was always in a more
advantageous position in terms of the powers when compared to the Provincial Governments.

They had exclusive powers of control of any trade or industry which were given to them by the
Defence of India Act, 1939. It also gave powers to regulate and control of any trade or industry, for
the purpose of maintaining of essential services for the life of the community. In January, 1942 Rule
81 was added to the said rules by the legislative authorities to restrain Lock – Outs and Strikes, this
rule made strike and lock outs prohibitive until under very restricted conditions. The government
was given exclusive power to refer industrial disputes to adjudication and enforce the awards. These
provisions including the Trade Disputes Act form the basic structure and backbone of the Industrial
Disputes Act.

The Rule 81- A empowered the Central Government to make provisions for prohibiting, subject to
provisions of an order; a strike or a lock- out in connection with any trade dispute and it also makes
it an offence to contravene any order made under it and prescribes punishment for the same.
The lapse of Defence of India Act, 1939 and its Rules, the government made the provision for the
settlement and investigations of industrial disputes and for other purposes enacted the Industrial
Disputes Act, 1947.

Object of the Act

The Act was basically enacted to make provisions investigations and settlement of industrial
disputes and for certain other purposes.

The object of the Act is not only to make provision for investigation and settlements of industrial
disputes, but also to secure industrial peace so that it may result in more production and improve
national economy and to ensure fair settlements to the workmen and to prevent disputes between
the employers and employees so that production may not be adversely affected and the larger
interests of the public may not suffer​.

The Principle objects of the Act are:

1) The promotion of measures for securing and preserving amity and good relations between the
employer and workmen.

2)​An investigation and settlement of industrial disputes between employers and employers,
employers and workmen or workmen and workmen as a result of representation by a registered
trade union or federation of trade unions or association of employers or federation of associations of
employers.

3)​ Prevention of illegal strikes and lock-outs.

4)​ Relief to workmen in the matter of lay – off and retrenchment

5)​ Collective Bargaining.

In the landmark case of ​Crown Aluminium Works v. Workmen AIR 1958 SC 30 ​it was held by
the Apex Court that though the social and economic justice is the ultimate ideal of industrial
adjudication, its immediate objective in an industrial dispute as to the wage structure is to settle the
dispute by constituting such a wage structure as would do justice to the interests of both labour and
capital , would establish harmony between them lead to their genuine and wholehearted cooperation
in the task of production .
 INDUSTRY RETRENCHMENT
INDUSTRIAL DISPUTE STRIKE
EMPLOYER LOCK OUT
AWARD ADJUDICATION, CONCILIATION BOARDS,
LAYOFF WORKS COMMITTEE

Main features of the Industrial Disputes Act:

1.Application of the Act:

The Industrial Disputes Act, 1947 applies to all the establishments which fall within the definition
of 'industry' as defined under the Industrial Disputes Act,1947. All the employees of the 'industry'
which fall within the definition of “workman” as defined under the Industrial Dispute Act, 1947, are
entitled to take the benefit of the Industrial Disputes Act, 1947.
2. Constitution of comprehensive machinery for investigation and settlement of Industrial
disputes.
The ID Act,1947 is a self-contained Act which provides for comprehensive machinery for the
investigation and settlement of disputes which fall within the definition of “industrial disputes”
under the Act. This machinery for the settlement of “industrial disputes” consists of conciliation
authorities, adjudicatory authorities, arbitrator and court of Inquiry which settle the industrial
disputes by way of conciliation, arbitration or by adjudication.
3. Compulsory settlement of “industrial disputes” by way of adjudication:
To settle the industrial disputes compulsorily by way of adjudication, the Industrial Disputes Act
provides for the constitution of Labour Courts, Industrial Tribunals and National Tribunals.
4. Speedy disposal of industrial disputes:
The ID Act, 1947 aims at speedy disposal of industrial disputes. The Act specifies the time period
within which the Conciliation Officer and Board of Conciliation is to send the report of their efforts
to bring about the conciliation between the parties to the industrial disputes. Similarly, the
appropriate government specifies the time period within which the Labour Court, Industrial
Tribunal or National Tribunal, as the case may be, is to send their award after the adjudication of
industrial disputes.
5. Prohibition of Strike and Lock-out under certain conditions:
The workmen can exercise their right to strike and employer can exercise his right to lock-out only
in accordance with the provisions of the ID act,1947.The ID Act also declares a strike or lock-out
illegal if it is declared in the public utility service without prior notice in accordance with the
provisions of the Act.
6. Regulation of lay-off, retrenchment of the workmen and transfer and closure of industrial
establishment:
The ID Act, 1947, lays down the provisions according to which employers may lay-off or retrench
his workmen or transfer or close down his industrial establishment. The Act lays down special
provisions of lay-off, retrenchment, transfer and closure of industrial establishment for the industrial
establishments which are not seasonal in their character and in which not less than one hundred
workmen were employed on an average per working day for the preceding twelve months.
7. Compensation to workmen in case of lay-off, retrenchment, transfer or closure of industrial
establishment:
The ID Act, 1947, provides for the right for the right of the workmen to claim compensation for
lay-off, retrenchment, transfer or closure of industrial establishment. A workman may claim
compensation for lay-off, retrenchment, transfer or closure if he has completed one year of
continuous service under his employer. The provisions of the compensation to workmen under the
Act enable the workmen to overcome the economic hardship arising due to non-employment due to
his lay-off, retrenchment or due to transfer or closure of the industrial establishment where he was
employed.

Important provisions of the Act:

1.Short title, Extent and Commencement

1) This Act may be called the Industrial Disputes Act, 1947.
(2) It extends to the whole of India].
(3) It shall come into force on the first day of April, 1947.
2.Definitions
“Appropriate Government”​:(i) In relation to any industrial dispute concerning any industry
carried on by or under the authority of the Central Government, or by a railway company or
concerning any such controlled industry as may be specified in this behalf by the Central
Government or in relation to an industrial dispute concerning a Dock Labour Board established
under section 5A of the Dock Workers (Regulation of employment) Act;
"(ii) in relation to any other industrial dispute, including the State public sector undertaking,
subsidiary companies set up by the principal undertaking and autonomous bodies owned or
controlled by the State Government, the State Government
“Arbitrator”​ includes an umpire;
“Average pay”​ means the average of the wages payable to a workman-
‘Award’ means an interim or a 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 section 10A;
“Closure’​ means the permanent closing down of a place of employ or part thereof;
​“Conciliation officer”​ means a conciliation officer appointed under this Act;
​“Conciliation proceeding” means any proceeding held by a conciliation officer or Board
under this Act;
“Conciliation officer”​ means a conciliation officer appointed under this Act;
“Conciliation proceeding” means any proceeding held by a conciliation officer or Board
under this Act;
“Industry” means any business, trade, undertaking, manufacture or calling of employers and
includes any calling, service, employment, handicraft, or industrial occupation or avocation of
workmen;
(k) ​“Industrial dispute” means any dispute or difference between employers and employers,
or between employers and workmen, or between workmen and workmen, which is connected
with the employment or non-employment or the terms of employment or with the conditions of
labour, of any persons;
‘Industrial establishment or undertaking’ means an establishment or undertaking in which
any industry is carried on:
Provided that where several activities are carried on in an establishment or undertaking and
only one or some of such activities is or are an industry or industries.
(kkk) ​“Lay-off” (with its grammatical variations and cognate expressions) means the failure,
refusal or inability of an employer on account of shortage of coal, power or raw materials or
the accumulation of stocks or the breakdown of machinery [or natural calamity or for any other
connected reason] to give employment to a workman whose name is borne on the muster rolls
of his industrial establishment and who has not been retrenched.
(l) “Lock-out” means the[temporary closing of a place of employment], or the suspension of
work, or the refusal by an employer to continue to employ any number of persons employed by
him;
[(oo) ​“Retrenchment” means the termination by the employer of the service of a workman for
any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action
but does not include-
(q) ​“Strike” means a cessation of work by a body of persons employed in any industry acting
in combination, or a concerted refusal, or a refusal, under a common understanding of any
number of persons who are or have been so employed to continue to work or to accept
employment;
2A.Dismissal, Etc., of an Individual workmen to be deemed to be an Industrial Dispute
3.Works Committee
(1) In the case of any industrial establishment in which one hundred or more workmen are
employed or have been employed on any day in the preceding twelve months, the appropriate
Government may by general or special order require the employer to constitute in the
prescribed manner a Works Committee consisting of representatives of employers and
workmen engaged in the establishment so however that the number of representatives of
workmen on the Committee shall not be less than the number of representatives of the
employer.
4.Conciliation officers
The appropriate Government may, by notification in the Official Gazette, appoint such number
of persons as it think--, fit, to be conciliation officers, charged with the duty of mediating in
and promoting the settlement of industrial disputes.
5.Boards of Conciliation
The Board of Conciliation is constituted by the appropriate government by notification in the
official gazette for promoting the settlement of an industrial dispute whenever the occasion
arises. The Board consists of a Chairman and two or four other members as the appropriate
government thinks fit. The Chairman is an independent person and the other persons appointed
in equal numbers to represent the parties to the dispute.
6.Courts of Inquiry
The appropriate government constitutes Court of inquiry when the occasion arises for
inquiring into any matter appearing to be connected with or relevant to an industrial dispute. It
has to give the report within 6 months of inquiry.
7.Labour Courts
Labour Courts. (1) The appropriate Government may, by notification in the Official Gazette,
constitute one or more Labour Courts for the adjudication of industrial disputes relating to any
matter specified in the Second Schedule and for performing such other functions as may be
assigned to then-, under this Act.
(2)A Labour Court shall consist of one person only to be appointed by the appropriate
Government.
(3)A person shall not be qualified for appointment as the presiding officer of a Labour Court,
unless.
(a)He is, or has been, a Judge of a High Court; or
(b)He has, for a period of not less than three years, been a District judge or an Additional
District Judge; or
(d) He has held any judicial office in India for not less than seven years; or
(e) He has been the presiding officer of a Labour Court constituted under any provincial Act or
State Act for not less than five years.
7A.Tribunals
(1) The appropriate Government may, by notification in the Official Gazette, constitute one or
more Industrial Tribunals for the adjudication of industrial disputes relating to any matter,
whether specified in the Second Schedule or the Third Schedule [and for performing such
other functions as may be assigned to them under this Act].
(2) A Tribunal shall consist of one person only to be appointed by the appropriate Government.
(3) A person shall not be qualified for appointment as the presiding officer of a Tribunal
unless-
(a) He is, or has been, a Judge of a High Court; or
(aa) He has, for a period of not less than three-years, been a District Judge or an Additional
District Judge;
"(b) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner
of the State Labour Department, having a degree in law and at least seven years' experience in
the labour department including three years of experience as Conciliation Officer:
Provided that no such Deputy Chief Labour Commissioner or Joint Labour Commissioner
shall be appointed unless he resigns from the service of the Central Government or State
Government, as the case may be, before being appointed as the presiding officer; or
(c) he is an officer of Indian Legal Service in Grade III with three years' experience in the
grade."
(4) The appropriate Government may, if it so thinks fit, appoint two persons as assessors to
advise the Tribunal in the proceeding before it.
7B.National Tribunals
(​1) The Central Government may, by notification in the Official Gazette, constitute one or
more National Industrial Tribunals for the adjudication of industrial disputes which, in the
opinion of the Central Government, involve 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.
(2) A National Tribunal shall consist of one person only to be appointed by the Central
Government.
(3) A person shall not be qualified for appointment as the presiding officer of a National
Tribunal unless he is, or has been, a Judge of a High Court.
(4) The Central Government may, if it so thinks fit, appoint two persons as assessors to advise
the National Tribunal in the proceeding before it.
7C.Disqualifications for the presiding officers to labour courts, tribunals and national
tribunals
No person shall be appointed to, or continue in, the office of the presiding officer of a Labour
Court, Tribunal or National Tribunal, if-
(a) He is not an independent person; or
(b) He has attained the age of sixty-five years.]
8.Filling of Vacancies
If, for any reason, a vacancy (other than a temporary absence) occurs in the office of the
presiding officer or any member of a Labour Court, Tribunal or National Tribunal, then in the
case, the apprpriate government, shall appoint another person in accordance with the
provisions of the Act, to fill the vacancy.
9.Finality of orders constituting boards, etc.
9A.Notice of change
No, employer, who proposes to effect any change in the conditions of service applicable to any
workman in respect of any matter specified in the Fourth Schedule, shall effect such change, -
(a) Without giving to the workmen likely to be affected by such change a notice in the
prescribed manner of the nature of the change proposed to be effected; or
(b) Within twenty-one days of giving such notice
Provided that no notice shall be required for effecting any such change.
(a) Where the change is effected in pursuance of any 1​ ​[settlement or award]; or
(b) Where the workmen likely to be affected by the change are persons to whom the
Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal)
Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service
Regulations, Civilians in Defence Services (Classification, Control and Appeal) Rules or the
Indian Railway Establishment Code or any other rules or regulations that may be notified in
this behalf by the appropriate Government in the Official Gazette, apply
9B.Power of Government to exempt
The appropriate government has the power to exempt any industry or establishment from the
provisions of the Act.
10.Reference of disputes to Boards, Courts or tribunals
10A.Voluntary reference of disputes to arbitration

11.Procedure and Powers of conciliation Officers, Boards, Courts and Tribunals and
National Tribunal
● To enter in to the premises occupied by any establishment to which the dispute relates.
● To examine any person and to inspect any document.
● To hold conciliation proceedings.
● To investigate the dispute.
● To send the report to the appropriate government, report in cases of no settlement.
● Time period for the submission of the report – 14 days.
11A.Powers of Labour Courts, Tribunals and National Tribunals to give appropriate
relief in case of discharge or dismissal of workmen
12.Duties of Conciliation Officers
13.Duties of Board – ​The Board shall submit its report to the appropriate government within 2
months or as specified by the appropriate government.
14.Duties of Courts
A Court shall inquire into the matters referred to it and report thereon to the appropriate
Government ordinarily within a period of six months from the commencement of its inquiry.
15.Duties of Labour Courts, Tribunals and National Tribunals
16.Form of report or award
(​1) The report of a Board or Court shall be in writing and shall be signed by all the members of
the Board or Court, as the case may be:
Provided that nothing in this section shall be deemed to prevent any member of the Board or
Court from recording any minute of dissent from a report or from any recommendation made
therein.
(2) The award of a Labour Court or Tribunal or National Tribunal shall be in writing and shall
be signed by its presiding officer.

17.Publication of reports and awards – ​within 30 days.

17A.Commencement of the Award – ​On the expiry of 30 days.
17B.Payment of full wages to workmen pending proceedings in Higher Courts –
Employer is liable to pay the wages as prescribed​.
18.Persons on whom settlements and Awards are Binding
19.Period of Operation of settlements and awards
20.Commencement and Conclusion of Proceedings
21.Certain matters to be kept confidential
22.Prohibition of Strikes and Lock-Outs
1) No person employed in a public utility service shall go on strike, in breach of contract-
(a) Without giving to the employer notice of strike, as hereinafter provided, within six weeks
before striking; or
(b) Within fourteen days of giving such notice; or
(c) Before the expiry of the date of strike specified in any such notice as aforesaid; or
(d) During the pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings.
(2) No employer carrying on any public utility service shall lock-out any of his workman-
(a) Without giving them notice of lock-out as hereinafter provided, within six weeks before
locking-out ; or
(b) Within fourteen days of giving such notice; or
(c) Before the expiry of the date of lock-out specified in any such notice as aforesaid ; or
(d) During the pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings.
(3) The notice of lock-out or strike under this section shall not be necessary where there is
already in existence a strike or, as the case may be, lock-out in the public utility service, but the
employer shall send intimation of such lockout or strike on the day on which it is declared, to
such authority as may be specified by the appropriate Government either generally or for a
particular area or for a particular class of public utility services.
(4) The notice of strike referred to in sub-section (1) shall be given by such number of persons
to such person or persons and in such manner as may be prescribed.
(5) The notice of lock-out referred to in sub-section (2) shall be given in such manner as may
be prescribed.
(6) If on any day an employer receives from any person employed by him any such notices as
are referred to in sub-section (1) or gives to any persons employed by him any such notices as
are referred to in sub-section (2), he shall within five days, thereof report to the appropriate
Government or to such authority as that Government may prescribe the number of such notices
received or given on that day.
23.General prohibition of Strickes and Lockouts
24.Illegal Strickes and Lock-Outs
For illegal strike a fine of Rs.50 per day for employee and for illegal lock-out a fine of Rs.1000
for employer is charged as per the Act.
25.Prohibition of Financial aid to illegal strickes and lock-outs
No person of any political party or that of any organization are supposed to provide any
financial aid to illegal strikes and lock-outs.
25A.Application of Sections 25C to 25E
25B.Defenition ​o​f Continuous service​ - 240 days in the preceding 12 months of the year.
25C.Right of Workmen Laid off for Compensation- ​A factory employing 50 or more and
less than 100 can lay-off with 50% of salary(Basic plus Dearness Allowance) being paid as
compensation to the laid-off employees.
25D.Duty of an Employer to maintain muster rolls of workmen
25E.Workmen not entitled to Compensation in certain cases
No compensation shall be paid to a workman who has been laid-off-(i) If he refuses to accept
any alternative employment in the same establishment from which he has been laid-off, or in
any other establishment belonging to the same employer situate in the same town or village or
situate within a radius of five miles from the establishment to which he belongs, if, in the
opinion of the employer, such alternative employment does not call for any special skill or
previous experience and can be done by the workman, provided that the wages which would
normally have been paid to the workman are offered for the alternative employment also ;
(ii) If he does not present himself for work at the establishment at the appointed time during
normal working hours at least once a day;
(iii) If such laying-off is due to a strike or slowing-down of production on the part of workmen
in another part of the establishment.

25F.Conditions precedent to retrenchment of workmen

No workman employed in any industry who has been in continuous service for not less than
one year under an employer shall be retrenched by that employer until-
(a) The workman has been given one month’s notice in writing indicating the reasons for
retrenchment and the period of notice has expired, or the workman has been paid in lieu of
such notice, wages for the period of the notice;
(b) The workman has been paid, at the time of retrenchment, compensation which shall be
equivalent to fifteen days’ average pay [ for every completed year of continuous service] or
any part thereof in excess of six months; and
(c) Notice in the prescribed manner is served on the appropriate Government [for such
authority as may be specified by the appropriate Government by notification in the Official
Gazette].

25FF.Compensation to Workmen in case of transfer of undertakings

25FFA.Sixty Day's notice to be given of intention to close down any undertaking
25FFF.Compensation to workmen in case of closing down of undertakings
25G.Procedure for Retrenchment
25H.Re-Employment of Retrenched Workmen
25-I.Recovery of moneys due from employers under this chapter
25-J.Effect of Laws inconsistent with this chapter
25K.Application of Chapter V-B
25L.Definitions
25M.Prohibition of Lay-Off
25N.Conditions precedent to retrenchment of workmen
25-O. Procedure for closing down an undertaking. (1) An employer who intends to close
down an undertaking of an industrial establishment to which this Chapter applies shall, in the
prescribed manner, apply, for prior permission at least ninety days before the date on which the
intended closure is to become effective, to the appropriate Government, stating clearly the
reasons for the intended closure of the undertaking and a copy of such application shall also be
served simultaneously on the representatives of the workmen in the prescribed manner:
Provided that nothing in this sub-section shall apply to an undertaking set up for the
construction of buildings, bridges, roads, canals, and dams or for other construction work.
(2) Where an application for permission has been made under sub-section (1) the appropriate
Government, after making such enquiry as it thinks fit and after giving a reasonable
opportunity of being heard to the employer, the workmen and the persons interested in such
closure may, having regard to the genuineness and adequacy of the reasons stated by the
employer, the interests of the general public and all other relevant factors, by order and for
reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such
order shall be communicated to the employer and the workmen.
(3) Where an application has been made under sub-section (1) and the appropriate Government
does not communicate the order granting or refusing to grant permission to the employer
within a period of sixty days from the date on which such application is made, the permission
applied for shall be deemed to have been granted on the expiration of the said period of sixty
days.
(4) An order of the appropriate Government granting or refusing to grant permission shall,
subject to the provisions of sub-section (5), be final and binding on all the parties and shall
remain in force for one year from the date of such order.
(5) The appropriate Government may, either on its own motion or on the application made by
the employer or any workman, review its order granting or refusing to grant permission under
sub-section (2) or refer the matter to a tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub-section, it shall
pass an award within a period of thirty days from the date of such reference.
(6) Where no application for permission under sub-section (1) is made within the period
specified therein, or where the permission for closure has been refused, the closure of the
undertaking shall be deemed to be illegal from the date of closure and the workmen shall be
entitled to all the benefits under any law for the time being in force as if the undertaking had
not been closed down.
(7) Notwithstanding anything contained in the foregoing provisions of this section, the
appropriate Government may, if it is satisfied that owing to such exceptional circumstances as
accident in the undertaking or death of the employer or the like, it is necessary so to do, by
order, direct that the provisions of sub-section (1) shall not apply in relation to such
undertaking for such period as may be specified in the order. (8) Where an undertaking is
permitted to be closed down under sub-section (2) or where permission for closure is deemed
to be granted under subsection (3), every workman who is employed in that undertaking
immediately before the date of application for permission under this section, shall be entitled to
receive compensation which shall be equivalent to fifteen days’ average pay for every
completed year of continuous service or any part thereof in excess of six months.]
25P.Special provision as to restarting of undertakings closed down before
commencement of The Industrial Disputes (Amendment) Act, 1976
25Q.Penalty for Lay-Off and retrenchment without previous permission
25RPenalty for Closure – ​6 months of imprisonment and fine of Rs.5000/- or with both.
25S.Certain Provisions of Chapter V-A to apply to an Industrial establishment to which
this Chapter Applies
25T.Prohibition of Unfair Labour Practice
25U.Penalty for Committing unfair labour Practices
26.Penalty for Illegal strickes and Lock-Outs -​1 month of imprisonment and Rs.1000/- fine
or with both.
27.Penalty for Instigation, Etc.
28.Penalty for giving Financial Aid to Illegal Strikes and Lock-Outs – ​6 months of
imprisonment and Rs.1000/- fine or with both.
29.Penalty for Breach of settlement or award
30.Penalty for Disclosing Confidential Information
30A.Penalty for Closure without notice
31.Penalty for other offences
32.Offence by Companies, Etc.
33.Conditions of Service, Etc., to remain unchanged under certain circumstances during
pendency of proceedings
33A.Special provision for adjudication as to whether conditions of service, Etc., Changed
during pendency of proceedings
33B.Power to Transfer certain proceedings
33C.Recovery of money due from an employer ​- If the appropriate Government is satisfied
that any money is so due, it shall issue certificate for that amount to the Collector who shall
proceed to recover the same in the same manner prescribed by the concern authority.
34.Cognizance of Offences
35.Protection of Persons
36.Representation of Parties
36A.Power to remove difficulties
36B.Power to exempt
37.Protection of Action taken under the Act
38.Power to make rules
39.Delegation of Powers
40.Power to amend Schedules
SCHEDULES:

Schedule – 1 : Industries which may be declared to be public utility services under

sub-clause (VI) of clause (N) of Section 2
Industries which may be declared to be Public Utility Services under sub-clause (vi) of clause
(n) of section 2
1 . Transport (other than railways) for the carriage of passengers or good S, ​2​[by land or
water];
2. Banking;
3. Cement;
4. Coal;
5. Cotton textiles;
6. Food stuffs;
7. Iron and Steel;
8. Defence establishments;
9. Service in hospitals and dispensaries;
10. Fire Brigade Service;
[11. India Government Mints;
12. India Security Press;]
13. Copper Mining;
14. Lead Mining;
15. Zinc Mining;]
[16. Iron Ore Mining;]
[17. Service in any oilfield;]
[19. Service in the Uranium Industry;]
[20 Pyrites Mining;]
21. Security Paper Mill, Hoshangabad;
[22. Services in the Bank Note Press, Dewas;]
[23. Phosphorite Mining;]
[24. Magnesite Mining;]
[ 25. Currency Note Press;]
[26. Manufacture or production of mineral oil (crude oil), motor and aviation spirit, diesel oil,
kerosene oil, fuel oil, diverse hydrocarbon oils and their blends including synthetic fuels,
lubricating oils and the like;]
[27. Service in the International Airports Authority of India.]
Schedule – 2 :Matters within the Jurisdiction of Labour Courts
1. The propriety or legality of an order passed by an employer under the standing orders;
2. The application and interpretation of standing order;
3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to,
workmen wrongfully dismissed;
4. Withdrawal of any customary concession or privilege;
5. Illegality or otherwise of a strike or lock-out; and
6. All matters other than those specified in the Third Schedule.
Schedule – 3 : Matters within the Jurisdiction of Industrial Tribunals
1. Wages, including the period and mode of payment;
2. Compensatory and other allowances;
3. Hours of work and rest intervals;
4. Leave with wages and holidays;
5. Bonus, profit sharing, provident fund and gratuity;
6. Shift working otherwise than in accordance with standing orders;
7. Classification by grades;
8. Rules of discipline;
9. Rationalisation;
10. Retrenchment of workmen and closure of establishment; and
 11. Any other matter that may be prescribed.
Schedule – 4 : Conditions of Service for change of which notice is to be given
1. Wages, including the period and mode of payment;
2. Contribution paid, or payable, by the employer to any provident fund or pension fund or for
the benefit of the workmen under any law for the time being in force;
3. Compensatory and other allowances;
4. Hours of work and rest intervals;
5. Leave with wages and holidays;
6. Starting alteration or discontinuance of shift working otherwise than in accordance with
standing orders;
7. Classification by grades;
8. Withdrawal of any customary concession or privilege or change in usage;
9. Introduction of new rules of discipline, or alteration of existing rules, except in so far as they
are provided in standing orders;
10. Rationalisation, standardisation or improvement of plant or technique which is likely to
lead to retrenchment of workmen;
11. Any increases or reduction (other than casual) in the number of persons employed or to be
employed in any occupation or process or department or shift, [not occasioned by
circumstances over which the employer has no control].]
Schedule -5 : Unfair Labour Practices
I. On the part of employers and trade unions of employers
1. To interfere with, restrain from, or coerce, workmen in the exercise of their right to organise,
form, join or assist a trade union or to engage in concerted activities for the purposes of collective
bargaining or other mutual aid or protection, that is to say :-
(a) Threatening workmen with discharge or dismissal, if they join a trade union;
(b) Threatening a lock-out or closure, if a trade union is organised;
(c) Granting wage increase to workmen at crucial periods of trade union Organisations, with a view
to undermining the efforts of the trade union Organisations.
2. To dominate, interfere with or contribute support, financial or otherwise, to any trade union, that
is to say :-
(a) An employer taking an active interest in organising a trade union of his workmen; and
(b) An employer showing partiality or granting favour to one of several trade unions attempting to
organise his workmen or to its members, where such a trade union is not a recognised trade union.
3. To establish employer sponsored trade unions of workmen.
4. To encourage or discourage membership in any trade union by discriminating against any
workman, that is to say :-
(a) Discharging or punishing a workman, because he urged other workmen to join or organise a
trade union;
(b) Discharging or dismissing a workman for taking part in any strike (not being a strike which is
deemed to be an illegal strike under this Act);
(c) Changing seniority rating of workmen because of trade union activities;
(d) Refusing to promote workmen to higher posts on account of their trade union activities;
(e) Giving unmerited promotions to certain workmen with a view to creating discord amongst other
workmen, or to undermine the strength of their trade union;
(f) Discharging office-bearers or active members of the trade union on account of their trade union
activities.
5. To discharge or dismiss workmen-
(a) By way of victimisation;
(b) Not in good faith, but in the colourable exercise of the employer’s rights;
(c) By falsely implicating a workman in a criminal case on false evidence or on concocted evidence;
(d) For patently false reasons;
(e) On untrue or trumped up allegations of absence without leave;
(f) In utter disregard of the principles of natural justice in the conduct of domestic enquiry or with
undue haste;
(g) For misconduct of a minor or technical character, without having any regard to the nature of the
particular misconduct or the past record or service of the workman, thereby leading to a
disproportionate punishment.
6. To abolish the work of a regular nature being done by workmen, and to give such work to
contractors as a measure of breaking a strike.
7. To transfer a workman mala fide from one place to another, under the guise of following
management policy.
8. To insist upon individual workmen, who are on a legal strike to sign a good conduct bond, as a
pre-condition to allowing them to resume work.
9. To show favouritism or partiality to one set of workers regardless of merit.
10. To employ workmen as ‘badlis”, casuals or temporaries and to continue them as such for years,
with the object of depriving them of the status and privileges of permanent workmen.
11. To discharge or discriminate against any workman for filing charges or testifying against an
employer in any enquiry or proceeding relating to any industrial dispute.
12. To recruit workmen during a strike which is not an illegal strike.
13. Failure to implement award, settlement or agreement.
14. To indulge in act of force or violence.
15. To refuse to bargain collectively, in good faith with the recognised trade unions.
16. Proposing or continuing a lock-out deemed to be illegal under this Act.
II.-On the part of workmen and trade unions of workmen
1. To advise or actively support or instigate any strike deemed to be illegal under this Act.
2. To coerce workmen in the exercise of their right to self-organisations or to join a trade union or
refrain from joining any trade union, that is to say :-
(a) For a trade union or its members to picketing in such a manner that non-striking workmen are
physically debarred from entering the work places;
(b) To indulge in acts of force or violence or to hold out threats of intimidation in connection with a
strike against non-striking workmen or against managerial staff.
3. For a recognised union to refuse to bargain collectively in good faith with the employer.
4. To indulge in coercive activities against certification of a bar-gaining representative.
5. To stage, encourage or instigate such forms of coercive actions as wilful go slow”, squatting on
the work premises after working hours or ‘gherao’ of any of the members of the managerial or other
staff.
6. To stage demonstrations at the residences of the employers or the managerial staff members.
7. To incite or indulge in wilful damage to employer’s property connected with the industry.
8. To indulge in acts of force or violence or to hold out threats of intimidation against any workman
with a view to prevent him from attending work.

The Industrial Disputes (AMENDMENT) Bill, 2010 passed by the Rajya Sabha

The Industrial Disputes Act 1947 provides a framework for investigation and settlement of
industrial disputes. The Industrial Disputes (Amendment) Bill, 2010 was finalized after detailed
consultations with stake holders and the Government had formulated the amendment proposals
mainly on the issues on which consensus were arrived at. The Industrial Dispute (Amendment) Bill,
2009 was introduced in the Rajya Sabha on 26.2.2009. The Bill was referred to the Parliamentary
Standing Committee on Labour. The Committee examined the Bill and made certain
recommendations for further modifications to the amendments proposed in the Bill. The
Government accepted some of its recommendations.
The amendment proposals in the Industrial Disputes (Amendment) Bill, 2010 inter-alia, seek
to amplify the definition of ‘appropriate Government’, enhance the wage ceiling prescribed for
supervisors, provide direct access for workman to Labour courts or Tribunal in case of individual
disputes, expand the scope of qualifications of Presiding Officers of Labour Courts or Tribunal,
setting up of Grievance Settlement Machinery and empowerment of Industrial
Tribunal-cum-Labour Courts to enforce decree.
The Industrial Disputes (Amendment) Bill, 2010 as amended was considered and passed by
the Rajya Sabha on 3.8.2010.
In his introductory remarks the Minister of Labour and Employment ​Shri Mallikarjun
Kharge said that the Industrial Disputes Act 1947 is a significant piece of legislation which
provides a framework for investigation and settlement of industrial disputes. The Act also seeks to
regulate illegal strikes and lockouts, and provides protection to the workmen in case of lay-off,
retrenchment and closure of establishments. Ministry of Labour & Employment has held tripartite
consultations with stake holders and formulated proposals for amendment in the Industrial Disputes
Act, 1947 on the issues on which consensus was arrived at.
The Industrial Disputes (Amendment) Bill, 2010 seeks the following:
Section 2(a): Amplification of definition of Appropriate Government
The Bill proposes to amplify the definition of ‘appropriate Government’ under 2(a) of the Act. The
Central Government is the appropriate Government in respect of categories listed in Section 2(a)(i)
of the I.D. Act, 1947​. ​In addition to this, it is further clarified that Central Government would be
appropriate Government for any company in which not less than fifty-one per cent of the paid-up
share capital is held by the Central Government, or any corporation, (not being a corporation
referred to in this clause) established by or under any law made by Parliament, or the Central Public
Sector Undertaking, subsidiary companies set up by the principal undertaking and autonomous
bodies owned or controlled by the Central Government.
State Government will be the appropriate Government in relation to any other industrial dispute,
including the State Public Sector Undertaking, subsidiary companies set up by the principal
undertaking and autonomous bodies owned or controlled by the State Government.
To amplify the definition of term ‘appropriate Government’ the Standing Committee has suggested
that the industrial disputes between a contractor and contract labour employed in any industrial
establishment needs to be brought under the purview of ‘appropriate Government’. The
Government has accepted this recommendation of the Committee. This amplification of the
definition will eliminate all ambiguities in the interpretation of the definition of ‘appropriate
Government’.
Section 2(s): Amendment of Section 2(s) (iv​) - ​Enhancing the wage ceiling of Rs.1600 per
month prescribed for supervisors in the definition of workmen under Section 2(s) to Rs.10,
000 per month.
The Bill is for enhancement of wage ceiling of the workers working in a supervisory capacity from
one thousand six hundred rupees per month to ten thousand rupees per month. The wage ceiling has
been enhanced to be in consonance with the increase in wages of industrial workers and also to
bring about parity with other labour laws like Employees State Insurance Act, 1948, Payment of
Bonus Act, 1965 and Payment of Wages Act, 1936.
Section 2A: Direct reference of disputes connected with Termination/ Dismissal/
Retrenchment/ Discharge to Industrial Tribunals.
To provide direct access for the workman to the Labour Court or Tribunal in case of disputes
arising out of Section 2A pertaining to retrenchment, discharge, dismissal or termination of services
etc. At present, such a dispute could be adjudicated by CGIT-cum LC only after a reference is made
by the ‘appropriate Government’. As a consequence of this proposed amendment, the workman can
directly approach the CGIT-cum-LC after filing his grievance before the conciliation machinery to
resolve the issue within 45 days. There will be no need for him to approach the ‘appropriate
Government’ for making a reference. This amendment would enable the aggrieved workman to
choose the alternative of adjudication for resolution of his dispute faster.
Substitution of new Chapter for Chapter IIB-Setting of Grievance Redressal Machinery:
The Bill seeks to establish a Grievance Redressal Machinery (GRM) within industrial establishment
having 20 or more workmen with one stage appeal at the head of the establishment for resolution of
disputes arising out of individual grievances. With this amendment, the workman will get one more
alternative grievance redressal mechanism for the resolution of his dispute within the organization
itself with minimum necessity for adjudication. It may be noted that setting up of GRM in no way
will affect the right of the workman to raise dispute on the same issue under the provision of
Industrial Disputes Act, 1947.
Section 7: Relaxation of Qualifications of Presiding Officers.
It is also proposed to expand the scope of qualification of Presiding Officers of CGIT-cum-LC by
making officers of Central Labour Service of the rank of Deputy Chief Labour Commissioner and
State Labour Department of the rank of Joint Labour Commissioner and officers of the Indian Legal
Service Gr.III eligible for the post of Presiding Officer in CGIT-cum-LC. This will enable the
Government to appoint the Presiding Officers from wide range of eligible officers from the relevant
field.
Section 11: - Power to enforce Decree by CGIT.
The Bill also proposes to empower the Labour Court or Tribunal to execute their awards, orders of
settlements arrived at as a decree of a w:st="on"Civil Court. This amendment will ensure better
enforcement of the awards given by CGITs-cum-LC.
Section 38(2) © - Salaries and allowances and other terms and conditions of service of
Presiding Officer of Central Government Industrial Tribunals-cum-Labour Courts (CGIT)
and National Tribunals.
The Bill proposes to make a specific provision in the Act by amending the Section 38(2) © of the
Act that Government may make rules to decide and review the salaries and allowances and other
terms and conditions for appointment of Presiding Officers. Details will be worked out while
framing the rules. To Summarise, the main amendment proposals in the I.D. Act are:
(i) Amplification of the definition of ‘Appropriate Government’.
(ii) To enhance the wage limit from Rs.1600/- per month to Rs. 10,000/- per month to make the
provision meaningful and in tune with the definition of workman in other labour laws
such as Payment of Bonus Act, 1965, Payment of Wages Act, 1936 and Employees’
State Insurance Act, 1948.
(iii )To provide a grievance ventilation and redressal machinery within an establishment having
20 or more workmen with one stage appeal at the level of the Head of the Industrial
 Establishment in order to promote better industrial relations at the industrial
establishment level.
(iv) To provide individual workman direct access to Labour Courts/ Tribunals in cases of
retrenchment, discharge, dismissal or termination of services.
(vi) To make officers of the Central Labour Service/State Labour Service/Indian Legal Service
eligible for the post of Presiding Officers in the Central Government Industrial
Tribunals–cum-Labour Courts for addressing the problem of availability of Presiding
Officers.
(vi) To empower Government to make rules to decide and review the salaries and allowances
and other terms and conditions for appointment of Presiding Officers.
(vii)To empower Central Government Industrial Tribunals, Labour Courts and National
Tribunals to execute their awards/orders/settlements as a decree of the civil court.

The Trade Unions Act, 1926

Chapter – I : Preliminary
1. Short title, extent and commencement.
(1) This Act may be called the Trade Unions Act, 1926.
(2) It extends to the whole of India
(3) It shall come into force on such date​4 as the Central Government may, by notification in the
Official Gazette, appoint
2. Definitions.
In this Act 1​​ [​“the appropriate Government” means, in relation to Trade Unions whose
objects are not confined to one State, the Central Government, and in relation to other Trade
Unions, the State Government, and], unless there is anything repugnant in the subject or
context,—
(a) ​“executive’’ means the body, by whatever name called, to which the management of the
affairs of a Trade Union is entrusted;
State Amendment
“(a) ​‘approved list’ means the list of approved unions maintained by the Registrar under
section 28A;
(a1) ​‘Approved union​’ means a registered Trade Union on the approved list.”
(e) ​“registered Trade Union”​ means a Trade Union registered under this Act;
3​
[(f) ​“Registrar” ​means—
(vii) a Registrar of Trade Unions appointed by the appropriate Government under section 3,
and includes any Additional or Deputy Registrar of Trade Unions, and
(viii)
(ii) in relation to any Trade Union, the Registrar appointed for the State in which the head or
registered office, as the case may be, of the Trade Union is situated;]

(g) “trade dispute” means any dispute between employers and workmen or between workmen
and workmen, or between employers and employers which is connected with the employment
or non-employment, or the terms of employment or the conditions of labour, of any person,
and “workmen” means all persons employed in trade or industry whether or not in the
employment of the employer with whom the trade dispute arises; and

(h) ​“Trade Union” means any combination, whether temporary or permanent, formed
primarily for the purpose of regulating the relations between workmen and employers or
between workmen and workmen, or between employers and employers, or for imposing
restrictive conditions on the conduct of any trade or business, and includes any federation of
two or more Trade Unions:

Chapter – II : Registration of Trade Unions

3. Appointment of Registrars.
1​
[(1)] 2​​ [The appropriate Government] shall appoint a person to be the Registrar of Trade
Unions for 3​​ [each State].

4​
[(2) The appropriate Government may appoint as many Additional and Deputy Registrars of
Trade Unions as it thinks fit for the purpose of exercising and discharging, under the
superintendence and direction of the Registrar, such powers and functions of the Registrar
under this Act as it may, by order, specify and define the local limits within which any such
Additional or Deputy Registrar shall exercise and discharge the powers and functions so
specified.
Powers of Registrar
The Registrar has power to enquire about the legality of the new election of the office-bearers
of a Trade Union; Mohan Lal v. Registrar of Trade Unions, 1983 Lab IC 1883.
4. Mode of Registration.
1​
[(1)] Any seven or more members of a Trade Union may, by subscribing their names to the
rules of the Trade Union and by otherwise complying with the provisions of this Act with
respect to registration, apply for registration of the Trade Union under this Act:

Provided that no Trade Union of workmen shall be registered unless at least ten per cent. or
one hundred of the workmen, whichever is less, engaged or employed in the establishment or
industry with which it is connected are the members of such Trade Union on the date of
making of application for registration.
5. Application for registration.
(1) Every application for registration of a Trade Union shall be made to the Registrar and shall
be accompanied by a copy of the rules of the Trade Union and a statement of the following
particulars, namely:—
(a) the names, occupations and address of the members making application;
(aa) in the case of a Trade Union of workmen, the names, occupations and addresses of the
place of work of the members of the Trade Union making the application;
(b) the name of the Trade Union and the address of its head office; and
(c) the titles, names, ages, addresses and occupations of the 2​​ [office-bearers] of the Trade
Union.
6. Provisions to be contained in the rule of a Trade Union.
A Trade Union shall not be entitled to registration under this Act, unless the executive thereof
is constituted in accordance with the provisions of this Act, and the rules thereof provide for
the following matters, namely:—
(a) the name of the Trade Union;
(b) the whole of the objects for which the Trade Union has been established;
(c) the whole of the purposes for which the general funds of the Trade Union shall be
applicable, all of which purposes shall be purposes to which such funds are lawfully applicable
under this Act;
(d) the maintenance of a list of the members of the Trade Union and adequate facilities for the
inspection thereof by the 1​​ [office-bearers] and members of Trade Union;
(e) the admission of ordinary members who shall be persons actually engaged or employed in
an industry with which the Trade Union is connected, and also the admission of the number of
honorary or temporary members as 1​​ [office-bearers] required under section 22 to form the
executive of the Trade Union;
(ee) the payment of a minimum subscription by members of the Trade Union which shall not
be less than—
(i) one rupee per annum for rural workers;
(ii) three rupees per annum for workers in other unorganised sectors; and
(iii) twelve rupees per annum for workers in any other case;
(f) the conditions under which any member shall be entitled to any benefit assured by the rules
and under which any fine or forfeiture may be imposed on the members;
(g) the manner in which the rules shall be amended, varied or rescinded;
(h) the manner in which the members of the executive and the other 1​​ [office-bearers] of the
Trade Union shall be 3​​ [elected] and removed;
(hh) the duration of period being not more than three years, for which the members of the
executive and other office-bearers of the Trade Union shall be elected;
(i) the safe custody of the funds of the Trade Union, an annual audit, in such manner as may be
prescribed, of the accounts thereof, and adequate facilities for the inspection of the account
books by the 1[office-bearers] and members of the Trade Union; and
(j) the manner in which the Trade Union may be dissolved.

7. Power to call for further particulars and to require alteration of name.

1) The Registrar may call for further information for the purpose of satisfying himself that any
application complies with the provisions of section 5, or that the Trade Union is entitled to
registration under section 6, and may refuse to register the Trade Union until such information
is supplied.

(2) If the name under which a Trade Union is proposed to be registered is identical with that by
which any other existing Trade Union has been registered or, in the opinion of the Registrar, so
nearly resembles such name as to be likely to deceive the public or the members of either
Trade Union, the Registrar shall require the persons applying for registration to alter the name
of the Trade Union stated in the application, and shall refuse to register the Union until such
alteration has been made.
8. Registration.
The Registrar, on being satisfied that the Trade Union has complied with all the requirements
of this Act in regard to registration, shall register the Trade Union by entering in a register, to
be maintained in such form as may be prescribed, the particulars relating to the Trade Union
contained in the statement accompanying the application for registration.

9. Certificate of registration.

10. Cancellation of registration​.

A certificate of registration of a Trade Union may be withdrawn or cancelled by the Registrar
(a) on the application of the Trade Union to be verified in such manner as may be prescribed;
(b) if the Registrar is satisfied that the certificate has been obtained by fraud or mistake or that
the Trade Union has ceased to exist or has wilfully and after notice from the Registrar
contravened any provision of this Act or allowed any rule to continue in force which is
inconsistent with any such provision or has rescinded any rule providing for any matter
provision for which is required by section 6;
1​
[(c) if the Registrar is satisfied that a registered Trade Union of workmen ceases to have the
requisite number of members:]
Provided that not less than two months’ previous notice in writing specifying the ground on
which it is proposed to withdraw or cancel the certificate shall be given by the Registrar to the
Trade Union before the certificate is withdrawn or cancelled otherwise than on the application
of the Trade Union.

11. Appeal.

12. Registered office.

All communications and notices to a registered Trade Union may be addressed to its registered
office. Notice of any change in the address of the head office shall be given within fourteen
days of such change to the Registrar in writing, and the changed address shall be recorded in
the register referred to in section 8.

13. Incorporation of registered Trade Unions.

Every registered Trade Union shall be a body corporate by the name under which it is
registered, and shall have perpetual succession and a common seal with power to acquire and
hold both movable and immovable property and to contract, and shall by the said name sue and
be sued.
14. Certain Acts not to apply to registered Trade Unions.

The following Acts, namely:—

(a) The Societies Registration Act, 1860 (21 of 1860);
(b) The Co-operative Societies Act, 1912 (2 of 1912);
1​
[(c) The Companies Act, 1956 (1 of 1956)],]
shall not apply to any registered Trade Union, and the registration of any such Trade Union
under any such Act shall be void.

Chapter-III :Rights and liabilities of registered trade unions

15. Objects on which general funds may be spent.
1
5The general funds of a registered Trade Union shall not be spent on any other objects than the
following, namely:—
(a) the payment of salaries, allowances and expenses to 1​​ [office-bearers] of the Trade Union;

(b) the payment of expenses for the administration of the Trade Union, including audit of the
accounts of the general funds of the Trade Union;

(c) the prosecution or defence of any legal proceeding to which the Trade Union or any
member thereof is a party, when such prosecution or defence is undertaken for the purpose of
securing or protecting any rights of the Trade Union as such or any rights arising out of the
relations of any member with his employer or with a person whom the member employs;

(d) the conduct of trade disputes on behalf of the Trade Union or any member thereof;

(e) the compensation of members for loss arising out of trade disputes;

(f) allowances to members or their dependants on account of death, old age, sickness, accidents
or unemployment of such members;

(g) the issue of, or the undertaking of liability under, policies of assurance on the lives of
members, or (under) policies insuring members against sickness, accident or unemployment;

(h) the provision of education, social or religious benefits for members (including the payment
of the expenses of funeral or religious ceremonies for deceased members) or for the
dependants of members;

(i) the upkeep of a periodical published mainly for the purpose of discussing questions
affecting employers or workmen as such;

(j) the payment, in furtherance of any of the objects on which the general funds of the Trade
Union may be spent, of contributions to any cause intended to benefit workmen in general,
provided that the expenditure in respect of such contributions in any financial year shall not at
any time during that year be in excess of one-fourth of the combined total of the gross income
which has up to that time accrued to the general funds of the Trade Union during that year and
of the balance at the credit of those funds at the commencement of that year; and

(k) subject to any conditions contained in the notification, any other object notified by the
2[appropriate Government] in the Official Gazette.
State Amendment

16. Constitution of a separate fund of political purposes.

17. Criminal conspiracy in the trade disputes.

No 1​​ [office-bearer] or member of a Registered Trade Union shall be liable to punishment under
sub-section (2) of section 120B of the Indian Penal Code 1860 (45 of 1860) in respect of any
agreement made between the members for the purpose of furthering any such object of the
Trade Union as is specified in section 15, unless the agreement is an agreement to commit an
offence.
18. Immunity from civil suit in certain cases.
(1) No suit or other legal proceeding shall be maintainable in any Civil Court against any
registered Trade Union or any 1​​ [office-bearer] or member thereof in respect of any act done in
contemplation or furtherance of a trade dispute to which a member of the Trade Union is a
party on the ground only that such act induces some other person to break a contract of
employment, or that it is in interference with the trade, business or employment of some other
person or with the right of some other person to dispose of his capital or of his labour as he
wills.

(2) A registered Trade Union shall not be liable in any suit or other legal proceeding in any
Civil Court in respect of any tortuous act done in contemplation or furtherance of a trade
dispute by an agent of the Trade Union if it is proved that such person acted without the
knowledge of, or contrary to express instructions given by, the executive of the Trade Union.

19. Enforceability of agreements.

Notwithstanding anything contained in any other law for the time being in force, an agreement
between the members of a registered Trade Union shall not be void or voidable merely by
reason of the fact that any of the objects of the agreement are in restraint of trade:

Provided that nothing in this section shall enable any Civil Court to entertain any legal
proceeding instituted for the express purpose of enforcing or recovering damages for the
breach of any agreement concerning the conditions on which any members of a Trade Union
shall or shall not sell their goods, transact business, work, employ or be employed

20. Right to inspect books of Trade Unions.

21. Rights to minors to membership of Trade Unions.
Any person who has attained the age of fifteen years may be a member of a registered Trade
Union subject to any rules of the Trade Union to the contrary, and may, subject as aforesaid,
enjoy all the rights of a member and execute all instruments and give all acquaintances
necessary to be executed or given under the rules:
1​
[***]

21A. Disqualification of office bearers of Trade Union

[21A. Disqualifications of office-bearers of Trade Unions.—(1) A person shall be disqualified
for being chosen as, and for being member of the executive or any other office-bearer of a
registered Trade Union if—

(i) he has not attained the age of eighteen years;

(ii) he has been convicted by a Court in India of any offence involving moral turpitude and
sentenced to imprisonment, unless a period of five years has elapsed since his release.

(2) Any member of the executive or other office-bearer of a registered Trade Union who,
before the commencement of the Indian Trade Unions (Amendment) Act, 1964, has been
convicted of any offence involving moral turpitude and sentenced to imprisonment, shall on
the date of such commencement cease to be such member or office-bearer unless a period of
five years has elapsed since his release before that date.]

2​
[(3) In its application to the State of Jammu and Kashmir, reference in sub-section (2) to the
commencement of the Indian Trade Unions (Amendment) Act, 1964, shall be construed as
reference to the commencement of this Act in the said State.]

22. Proportion of office-bearers to be connected with the industry.

1​
[22. Proportion of office-bearers to be connected with the industry.—(1) Not less than
one-half of the total number of the office-bearers of every registered Trade Union in an
unrecognised sector shall be persons actually engaged or employed in an industry with which
the Trade Union is connected:

Provided that the appropriate Government may, by special or general order, declare that the
provisions of this section shall not apply to any Trade Union or class of Trade Unions specified
in the order.

Explanation.—For the purposes of this section, “unorganised sector” means any sector which
the appropriate Government may, by notification in the Official Gazette, specify.

(2) Save as otherwise provided in sub-section (1), all office-bearers of a registered Trade
Union, except not more than one-third of the total number of the office-bearers or five,
whichever is less, shall be persons actually engaged or employed in the establishment or
industry with which the Trade Union is connected.

Explanation.—For the purposes of this sub-section, an employee who has retired or has been
retrenched shall not be construed as outsider for the purpose of holding an office in a Trade
Union.

(3) No member of the Council of Ministers or a person holding an office of profit (not being an
engagement or employment in an establishment or industry with which the Trade Union is
connected), in the Union or a State, shall be a member of the executive or other office-bearer
of a registered Trade Union.]

23. Change of name.

Any registered Trade Union may, with the consent of not less than two thirds of the total
number of its members and subject to the provisions of section 25, change its name.

24. Amalgamation of Trade Union.

Any two or more registered Trade Unions may become amalgamated together as one Trade
Union with or without dissolution or division of the funds of such Trade Unions or either or
any of them, provided that the votes of at least one-half of the members of each or every such
Trade Union entitled to vote are recorded, and that at least sixty per cent. of the votes recorded
are in favour of the proposal.

25. Notice of change of name on amalgamation.

(1) Notice in writing of every change of name and of every amalgamation signed, in the case
of a change of name, by the Secretary and by seven members of the Trade Union changing its
name, and in the case of an amalgamation, by the Secretary and by seven members of each and
every Trade Union which is a party thereto, shall be sent to the Registrar and where the head
office of the amalgamated Trade Union is situated in a different State, to the Registrar of such
State.
(2) If the proposed name is identical with that by which any other existing Trade Union has
been registered or, in the opinion of the Registrar, so nearly resembles such name as to be
likely to deceive the public or the members of either Trade Union, the Registrar shall refuse to
register the change of name.

(3) Save as provided in sub-section (2), the Registrar shall, if he is satisfied that the provisions
of this Act in respect of change of name have been complied with, register the change of name
in the register referred to in section 8, and the change of name shall have effect from the date
of such registration.

(4) The Registrar of the State in which the head office of the amalgamated Trade Union is
situated shall, if he is satisfied that the provisions of this Act in respect of amalgamation have
been complied with and that the Trade Union formed thereby is entitled to registration under
section 6, register the Trade Union in the manner provided in section 8, and the amalgamation
shall have effect from the date of such registration.

26. Effects of change of name, and of amalgamation.

1) The change in the name of a registered Trade Union shall not affect any rights or obligations
of the Trade Union or render defective any legal proceeding by or against the Trade Union, and
any legal proceeding which might have been continued or commenced by or against it by its
former name may be continued or commenced by or against it by its new name.

(2) An amalgamation of two or more registered Trade Unions shall not prejudice any right of
any of such Trade Unions or any right of a creditor of any of them.

27. Dissolution.
(1) When a registered Trade Union is dissolved, notice of the dissolution signed by seven
members and by the Secretary of the Trade Union shall, within fourteen days of the dissolution
be sent to the Registrar, and shall be registered by him if he is satisfied that the dissolution has
been effected in accordance with the rules of the Trade Union, and the dissolution shall have
effect from the date of such registration.

(2) Where the dissolution of a registered Trade Union has been registered and the rules of the
Trade Union do not provide for the distribution of funds of the Trade Union on dissolution, the
Registrar shall divide the funds amongst the members in such manner as may be prescribed

28. Returns
1) There shall be sent annually to the Registrar, on or before such date as may be prescribed, a
general statement, audited in the prescribed manner, of all receipts and expenditure of every
registered Trade Union during the year ending on the 31st day of 1​​ [December] next preceding
such prescribed date, and of the assets and liabilities of the Trade Union existing on such 31st
day of 1​​ [December]. The statement shall be prepared in such form and shall comprise such
particulars as may be prescribed.

(2) Together with the general statement there shall be sent to the Registrar a statement showing
changes of 2​​ [office-bearers] made by the Trade Union during the year to which the general
statement refers together also with a copy of the rules of the Trade Union corrected up to the
date of the despatch thereof to the Registrar.

(3) A copy of every alteration made in the rules of a registered Trade Union shall be sent to the
Registrar within fifteen days of the making of the alteration.
3​
[(4) For the purpose of examining the documents referred to in sub-sections (1), (2) and (3),
the Registrar, or any officer authorised by him by general or special order, may at all
reasonable times inspect the certificate of registration, account books, registers, and other
documents, relating to a Trade Union, at its registered office or may require their production at
such place as he may specify in this behalf, but no such place shall be at a distance of more
than ten miles from the registered office of a Trade Union.]

Chapter – IV :Regulations
29. Power to make regulations.
(1) 1​​ [***] The 2​​ [appropriate Government] may make regulations for the purpose of carrying
into effect the provisions of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such
regulations may provide for all or any of the following matters namely:—

(a) the manner in which Trade Unions and the rules of Trade Unions shall be registered and the
fees payable on registration;

(b) the transfer of registration in the case of any registered Trade Union which has changed its
head office from one State to another;

(c) the manner in which, and the qualifications by whom, the accounts of registered Trade
Unions or of any class of such Unions shall be audited;

(d) the conditions subject to which inspection of documents kept by Registrars shall be allowed
and the fees which shall be chargeable in respect of such inspections; and

(e) any matter which is to be or may be prescribed.

3​
[(3) Every notification made by the Central Government under sub-section (1) of section 22,
and every regulation made by it under sub-section (1) shall be laid, as soon as may be after it is
made, before each House of Parliament, while it is in session, for a total period of thirty days
which may be comprised in one session or in two or more successive sessions, and if, before
the expiry of the session immediately following the session or the successive sessions
aforesaid, both Houses agree in making any modification in the notification or regulation, or
both Houses agree that the notification or regulation should not be made, the notification or
regulation shall thereafter have effect only in such modified form or be of no effect, as the case
may be; so, however, that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that notification or regulation.

(4) Every notification made by the State Government under sub-section (1) of section 22 and
every regulation made by it under sub-section (1) shall be laid, as soon as may be after it is
made, before the State Legislature.]

30. Publication of regulations.

(1) The power to make regulations conferred by section 29 is subject to the condition of the
regulations being made after previous publication.
(2) The date to be specified in accordance with clause (3) of section 23 of the General Clauses
Act, 1897 (10 of 1897), as that after which a draft of regulations proposed to be made will be
taken into consideration shall not be less than three months from the date on which the draft of
the proposed regulations was published for general information.

(3) Regulations as made shall be published in the Official Gazette, and on such publication
shall have effect as if enacted in this Act.

Chapter – V : Penalties and procedure

31. Failure to submit returns.
(1) If default is made on the part of any registered Trade Union in giving any notice or sending
any statement or other document as required by or under any provision of this Act, every
1​
[office-bearer] or other person bound by the rules of the Trade Union to give or send the same,
or, if there is no such 1[office-bearer] or person, every member of the executive of the Trade
Union, shall be punishable with fine which may extend to five rupees and, in the case of a
continuing default, with an additional fine which may extend to five rupees for each week after
the first during which the default continues:

Provided that the aggregate fine shall not exceed fifty rupees.

(2) Any person who wilfully makes, or causes to be made, any false entry in, or any omission
from, the general statement required by section 28 or in or from any copy of rules or of
alterations of rules sent to the Registrar under that section, shall be punishable with fine which
may extend to five hundred rupees.

32.Supplying false information regarding Trade Unions.

Any person who, with intent to deceive, gives to any member of a registered Trade Union or
to any person intending or applying to become a member of such Trade Union any document
purporting to be a copy of the rules of the Trade Union or of any alterations to the same which
he knows, or has reason to believe, is not a correct copy of such rules or alterations as are for
the time being in force, or any person who, with the like intent, gives a copy of any rules of an
unregistered Trade Union to any person on the pretence that such rules are the rules of a
registered Trade Union, shall be punishable with fine which may extend to two hundred
rupees.

33. Cognizance of offences.

(1) No Court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try
any offence under this Act.

● No Court shall take cognizance of any offence under this Act, unless complaint thereof has
been made by, or with the previous sanction of, the Registrar or, in the case of an offence
under section 32, by the person to whom the copy was given, within six months of the date
on which the offence is alleged to have been committed.
 Latest Amendements to Trade Unions Act,1926 in the year 2001.

Important amendments are made to section 22 of the Trade Unions Act, 1926. A very important
amendment by Act 31 of 2001 took effect from 9.1.02 in sec 22 of the Trade Unions Act, 1926.

This section deals with the proportion of office bearers to be connected with the industry. Before
amendment, section 22 provided that not less than one half of the office bearers of a TU, shall have
to be persons actually engaged or employed in the industry with which the TU is connected. For
example if there are 20 office bearers in a TU, at least 10 [could be more] have to be from the
industry and 10 could be from outside.

This provision has been retained for the unorganized sector unions as per amended sec 22(1). The
appropriate government will have to specify which will be unorganized sectors.

A new Sub section 2 of section 22, which has been introduced after the amendment, stipulates that
in other than unorganized sector unions, all office bearers except not more than one third or five
whichever is less, should be from the industry i.e. outsiders can be office bearers only up to one
third of total office bearers or five whichever is less. For instance, if the TU has 21 office bearers
posts, not more than 7 can be outsiders. Since 7 is more than 5, only up to 5 [whichever is less]
office bearers can be outsiders and rest 16 will have to be from the industry itself.
Note: We must remember that the no. for outsiders is maximum and it could be less than that also.

A new Sub section 3 has been introduced to section 22 and this is as under:
“ No member of the council of ministers or a person holding an office of profit [ not being an
engagement or employment in an establishment or industry with which the TU is connected] in the
union or a state, shall be a member of the executive or other office bearer of the union.

A new section 9A has also been introduced by the act 31 of 2001 w.e.f 9.1.02 and it reads as under:

“ A registered TU of workmen shall at all times continue to have not less than 10 percent or 100 of
the workmen whichever is less, subject to minimum of 7, engaged or employed in an establishment
or industry with which it is connected, as its members.”

e.g. Suppose in an industry there are 2000 workmen. A TU can be registered in this industry if it has
at least 100 members as 10% is more i.e. 200.
In another industry, there are 60 workmen.10% will be 6. But minimum no. of members has to be 7.

--------------
 The Industrial Employment (Standing Orders) Act, 1946

The objective of the Industrial Employment (Standing Orders) Act,1946 is to require the employers
to define with sufficient precision the conditions of employment under them and the said conditions
known to the workmen employed by them.
Prior to the enactment of the Industrial Employment (Standing Orders) Act, 1946, the
conditions of employment in the industrial establishments were governed by contracts between
employer and his workmen without the interference of the state. Non-interference by the State
caused the employers to lay down the conditions of the employment of their choice. The conditions
laid down by the employer promoted the interests of the employer but ignored the interests of the
workmen.
In many cases the conditions of employment were not reduced to writing, and were governed
by oral agreements. Thus, the conditions of employment in many cases were not well defined prior
to the enactment of the Industrial Employment (Standing Orders) Act, 1946.

Main features of the Act:

Following are the main features of the Industrial Employment (Standing Orders) Act,1946
1. Employers to draft Standing orders:
Standing orders are the terms and conditions of employment on which the workmen are employed
by the employer. The Act requires the employers to draft standing orders for their industrial
establishments. Drafting of standing orders is compulsory for the employers who employ or have
employed one hundred or more workmen on any day of the preceding twelve months.

2. Certifying officer to certify the draft standing orders.

The Act makes provision for the certifying officer. Certifying officer is appointed by the
appropriate government. The certifying officer adjudicates upon the fairness and reasonableness of
the draft Standing Orders. The Certifying officer may refuse to certify the standing orders if the
conditions of employment in the draft Standing Orders do not include any of the matters specified
in the Schedule of the Industrial Employment (Standing Orders) Act,1946.

3.​ Certified standing orders are binding in nature:

​ The draft standing orders certified by the certifying officer are binding both upon the
employer and his workmen. The Certified Standing Orders have a statutory force and override the
individual contract between the employer and his workmen.

4. Duration and modification of certified standing orders:

​The certified standing orders are ordinarily not subject to modification within six months of
their certification.
5. Model standing orders:
The appropriate government ​may draft model standing orders for the purpose of the
Industrial Employment (Standing Orders) Act,1946. The model standing orders are applied to those
industrial establishments to which the Act becomes applicable but their standing orders are still to
be certified. The model standing orders apply temporarily for the prescribed time taken by the
employer to draft the standing orders and get them certified from the certifying officer.

1. Short title, extent and application

1) This act may be called the Industrial Employment (Standing Orders) Act, 1946. It extends to the
whole of India. It applies to every industrial establishment wherein one hundred or more workmen
are employed, or were employed on any day of the preceding twelve months.
Provided that the appropriate Government may, after giving not less than two month’s notice of its
intention so to do, by notification in the official Gazette, apply the provision of this Act to any
industrial establishment employing such number of persons less than one hundred as may be
specified in the notification.
2. Interpretation
b)​ “Appropriate Government”​ means in respect of industrial establishments under the control of
the Central Government or a [Railway Administration] or in a major port, mine or oilfield, the
Central Government, and in all other cases, the State Government:
[(c) ​“Certifying Officer” means a Labour Commissioner or a Regional. Labour Commissioner, and
includes any other officer appointed by the appropriate Government, by notification in the official
Gazette, to perform all or any of the functions of a certifying officer under this Act;]
(d) ​“Employer” means the owner of an industrial establishment to which this Act for the time
being applies, and includes-
(f) ​“Prescribed”​ means prescribed by rules made by the appropriate Government under this Act;
(g) ​“Standing orders” ​means rules relating to matters set out in the Schedule;
(h) ​“Trade union” ​means a trade union for the time being registered under the Indian Trade Unions
Act, 1926 (16 of 1926);
[(i) ​“Wages” and “workman” have the meanings, respectively assigned to them in Cls. (rr) and (s)
of Sec. 2 of the Industrial Disputes Act, 1947 (14 of 1947).

2A .Application of model standing orders to every industrial establishment:

According to Sec. 1 (2), the Act extends to the whole of India except the State of Jammu and
Kashmir. The Act applies to every industrial establishment wherein hundred or more workmen are
employed or were employed on any day of the preceding twelve months and to any industrial
establishment employing less than one hundred workmen if the appropriate government issues
notification to this effect.

3. Submission of Draft Standing orders:

​The procedure for the certification of the standing orders as prescribed by the Act is as follows:
The employer has to submit draft standing orders to the certifying officer. The standing orders to
fulfil certain conditions and certifying officer to adjudicate upon the fairness or reasonableness of
the drafting standing orders. An employer must submit draft standing orders to the certifying officer
within six months from the date on which the Act becomes applicable to his industrial
establishment. The employer must submit five copies of draft standing orders to the certifying
officer.
4. Conditions for certification of Standing Orders:
For certification of the Standing orders, they must fulfil the following conditions:
In the Standing Orders provision must be made for every matter set out in the Schedule to the Act.
The Standing orders must be in conformity with the provisions of the Act.
The draft standing orders must be accompanied by a statement. This statement gives prescribed
particulars of the workmen employed in the industrial establishments.
The statement must give the name of the trade union, if any, to which its workmen belong.
5. Certification of Standing Orders
(​1) On receipt of the draft under Sec. 3, Certifying Officer shall forward a copy thereof to the trade
union, if any, of the workmen, or where is no such trade union, to the workmen in such manner as
may be prescribed, together with a notice in the prescribed form requiring objections, if any, which
the workmen may desire to make to the draft standing orders to be submitted to him within fifteen
days from the receipt of the notice
(2) After giving the employer and the trade union or such other representatives of the workmen as
may be prescribed an opportunity of being heard, the Certifying officer shall decide whether or not
any modification of or addition to the draft submitted by the employer is necessary orders
certifiable under this Act, and shall make an order in writing accordingly.
(3) The Certifying officer shall thereupon certify the draft standing orders, after making any
modifications therein which his order under sub-section (2) of the certified may require, and shall
within seven days thereafter send copies of the certified standing orders authenticated in the
prescribed manner and of his order under sub-section (2) to the employer and to the trade union or
other prescribed representatives of the workmen.
6. Appeals
1)Any employer, workman, trade union or other prescribed representatives of any workman]
aggrieved by the order of the Certifying Officer under sub-section (2) of Sec. 5 may, within thirty
days from the date on which copies are sent under sub-section (3) of that section, appeal to the
appellate authority, and the appellate authority, whose decision shall be final, shall by order in
writing confirm the standing orders either in the form certified by the Certifying Officer or after
amending the said standing orders by making such modifications thereof or additions thereto as it
thinks necessary to render the standing orders certifiable under this Act.

(2) The appellate authority shall, within seven days of its order under sub-section (1), send copies
thereof to the Certifying Officer, to the employer and to the trade union or other prescribed
representatives of the workmen, accompanied, unless it has confirmed without amendment the
standing orders as certified by the Certifying Officer, by copies of the standing orders as certified
by it and authenticated in the prescribed manner.
7. Date of operation of Standing Orders
Standing orders shall, unless an appeal is preferred under Sec. 6, come into operation on the expiry
of thirty days from the date on which authenticated copies thereof are sent under sub-section (3) of
Sec. 5, or where an appeal as aforesaid is preferred, on the expiry of seven days from the date on
which copies of the order of the appellate authority are sent under sub-section (2) of Sec. 6.
8. Register of Standing Orders
A copy of all standing orders as finally certified under this Act shall be filed by the Certifying
Officer in a register in the prescribed form maintained for the purpose, and the Certifying Officer
shall furnish a copy thereof to any person applying there for on payment of the prescribed fee​.
9. Posting of Standing Orders
​The text of the standing orders as finally certified under this Act shall be prominently posted by the
employer in English and in the language understood by the majority of his workmen on special
boards to be maintained for the purpose at or near the entrance through which the majority of the
workmen enter the industrial establishment and in all departments thereof where the workmen are
employed.
10 Duration and modification of Standing Orders
A modification of a Certified Standing Orders within six months of its coming into operation is
permissible only on an agreement between the employer and his workmen. Likewise a modification
of certified standing orders within six months of its last modification is permissible only on an
agreement between employer and his workmen.
Certified Standing orders is subject to modification ordinarily only after the expiry of six months
from the date on which the Standing orders or the last modification thereof came into operation.
After the expiry of six months, an employer or workmen or a trade union or other representative
body of the workmen may apply for the modification of the certified standing orders. An
application for modification of the Standing orders must be accompanied by five copies of the
modification proposed to be made.
10A Payment of subsistence allowance
Where any workman is suspended by the employer pending investigation or inquiry into complaints
or charges of misconduct against him, the employer shall pay to such workman subsistence
allowance.
(a) At the rate of fifty percent of the wages which the workman was entitled to immediately
preceding the date of such suspension, for the first ninety days of suspension; and
(b) At the rate of seventy-five per cent. of such wages for the remaining period of suspension if the
delay in the completion of disciplinary proceedings against such workman is not directly
attributable to the conduct of such workman.
(2) If any dispute arises regarding the subsistence allowance payable to a workman under
subsection (1), the workman or the employer concerned may refer the dispute to the Labour Court
constituted under the Industrial Disputes Act, 1947 (14 of 1947) within the local limits of whose
jurisdiction the industrial establishment wherein such workman is employed is situate and the
Labour Court to which the dispute is so referred shall, after giving the parties an opportunity of
being heard, decide the dispute and such decision shall be final and binding on the parties.
(3) Notwithstanding anything contained in the foregoing provisions of this section, where
provisions relating to payment of subsistence allowance under any other law for the time being in
force in any State are more beneficial than the provisions of this section, the provisions of such
other law shall be applicable to the payment of subsistence allowance in that State.

11 Certifying officer and appellate to have powers of Civil Court:

The Act provides for the certifying officers to have powers of Civil Courts:
Every certifying officer has all the powers of a Civil Court for the purpose of-
(a) receiving evidence,
(b) administering oaths,
(c) enforcing the attendance of witnesses, and
(d)compelling the discovery and production of documents.
The Act provides for the Appellate authority to have powers of Civil Courts:
Every appellate authority has all the powers of a Civil Court for the purpose of-
(a) receiving evidence,
(b) administering oaths,
(c) enforcing the attendance of witnesses, and
(d)compelling the discovery and production of documents.
Correction of mistakes , such as clerical or arithmetical mistake or an error may arise due to
accidental slip or omission in an order passed by the appellate authority or certifying officer . Such
mistake or error may be corrected by the authorities or by their Successors in its office as per the
case may be.
12 Oral evidence In contradiction of Standing Orders not admissible
No oral evidence having the effect of adding to or otherwise varying or contradicting standing
orders as finally certified under this Act shall be admitted in any Court.
12A Temporary application of Model Standing Orders:
(1) Notwithstanding anything contained in Sees. 3 to 12, for the period commencing on the date on
which this Act becomes applicable to an industrial establishment and ending with the date on which
the 9’t5nding orders as finally certified under this Act come into operation under Sec. 7 in that
establishment, the prescribed model standing orders shall be deemed to be adopted in that
establishment, and the provisions of See. 9, sub- section (2) of Sec. 13 and Sec. 13-A shall apply to
such model standing orders as they apply to the standing orders so certified.
(2) Nothing contained in sub-section (1) shall apply to an industrial establishment in respect of
which the appropriate Government is the Government of the State of Gujarat or ‘the Government of
the State of Maharashtra.
13. Penalties and procedure:
If an employer who fails to submit draft standing orders as required by the Act is punishable with
fine. The fine may extend to five thousand rupees. In the case of a continuing offence with a further
fine which may extend to two hundred rupees for everyday after the first during which the offence
continues.
13A Interpretation, etc. of Standing Orders:
If any question arises as to the application or interpretation of a standing order certified under this
Act, any employer or workmen ​2​[or a trade union or other representative body of the workmen]
may refer the question to any one of the labour Courts constituted under the Industrial Disputes Act,
1947 (14 of 1947), and specified for the disposal of such proceedings by the appropriate
Government by notification in the official Gazette, and the Labour Court to which the question is so
referred shall, after giving the parties an opportunity of being heard, decide the question and such
Decision shall be final and binding on the parties.
13B Act not to apply to certain Industrial establishments:
Nothing in this Act shall apply to an industrial establishment in so far as the workmen employed
therein are persons to whom the Fundamental and Supplementary Rules, Civil Services
(Classification, Control and Appeal) Rules, Civil “Services (Temporary Service) Rules, Revised
Leave Rules, Civil Service Regulations, Civilians in Defence Service (Classification, Control and
Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may
be notified in this behalf by the appropriate Government in the official Gazette, apply.
14 Power to exempt:
The appropriate Government may, by notification in the official Gazette, exempt conditionally or
unconditionally, any industrial establishment or class of industrial establishment from all or any of
the provisions of this Act.

14A Delegation of powers:

The appropriate Government may, by notification in the official Gazette, direct that any power
exercisable by it under this Act or any rules made thereunder shall, in relation to such matters and
subject to such conditions, if any, as may be specified in the direction, be exercisable also-
(a) Where the appropriate Government is the Central Government, by such officer or authority
subordinate to the Central Government or by the State Government or by such officer or authority
subordinate to the State Government, as may be specified in the notification ;
(b) Where the appropriate Government is a State Government, by such officer or authority
subordinate to the State Government as may be specified in the notification.
15 Power to make rules:
The appropriate Government may, after previous publication, by notification, in the official Gazette,
make rules to carry out the purposes of this Act.

THE SCHEDULE

MATTERS TO BE PROVIDED IN STANDING ORDER UNDER THIS ACT:

1. Classification of workmen, e.g. whether permanent, temporary, apprentices, probationers, or
badlis.
2. Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates.
3. Shift working.
4. Attendance and late coming.
5. Conditions of procedure in applying for, and the authority which may grant, leave and holidays.
6. Requirement to enter premises by certain gates, and liability to search.
7. Closing and re-opening of sections of the industrial establishment, and temporary stoppages of
work and the rights and liabilities of the employer and workmen arising there from.
8. Termination of employment, and the notice thereof to be given by employer and workmen.
9. Suspension or dismissal for misconduct, and acts or omissions, which constitute misconduct.
10. Means of redress for workmen against unfair treatment or wrongful exactions by the employer
or his agents or servants.
11. Any other matter, which may be prescribed.
 Laws relating to – Discharge, Misconduct, Domestic
enquiry and Disciplinary action
EMPLOYEE DISCHARGE
I. PRELIMINARY INQUIRY
1. Has the employer followed its disciplinary procedures?
2. Is the employee's improper conduct or failure to respond to corrective suggestions documented?
3. Have any representations, either oral or written, been made to the employee about continued
employment?
4. Was the employee participating in or urging concerted activity?
5. Is the employee a member of a "protected group"?
II. GENERAL CONSIDERATION
6. Is the termination supported by facts? Is the decision: fair; accurate; consistent with policies and
treatment of others; timely; and supported by documentation and investigation?
7. What is the effect of the termination upon morale in the department, division, company?
8. Is it the type of termination which might induce employees to seek union representation?
9. What is the effect of the termination on business-related matters?
10. Is the supervisor or appropriate personnel manager aware that:
A) The disciplinary interview should be private and remain confidential?
B) The disciplinary interview should be calm?
C) They should avoid name-calling and unsubstantiated charges of lying, dishonesty, or
criminal or immoral behaviour?

Sources of Regulations:
The main statutes which regulate termination of employment are the Industrial Employment
(Standing Orders) Act (IESA), 1946, and the Industrial Disputes Act (IDA), 1947, as amended.
Some States have also passed legislation dealing with dismissal.
Regulations concerning termination of employment are also found in standing orders made pursuant
to the IESA. Standing orders are written documents dealing with terms and conditions of
employment. Drafted by employers in all establishments, standing orders are documents on which
trade unions or workers are given an opportunity to object. They are certified by the government
Certifying Officer who adjudicates upon the fairness and reasonableness of the provisions of any
standing order and upon its conformity to the model standing order (MSO).
Another source of regulation is the case law of the courts. Any questions arising from the
application or the interpretation of a standing order can be raised before the Labour Court and its
decision will be final and binding (sec. 17(2), IDA).

Scope of legislation
The IESA applies to all industrial establishments employing 100 workers or more (​sec. 1(3)​). The
IESA (​sec. 2(i)​) and IDA (​sec. 2(s)​) both exclude managerial and administrative employees, those
in supervisory positions earning more than a specified statutory amount, as well as members of the
Air Force, Army and Police services who are covered by specific legislation.

Contracts of employment
Workers are classified as permanent, probationers, ​badlis ​(a “badli” means a worker appointed in
the post of a permanent worker or probationer who is temporarily absent), temporary, casual and
apprentices (​sec. 2​, MSO).

Termination of employment
The contract of employment can terminate, not at the initiative of the employer, in certain
circumstances, including by:
● Mutual agreement;
● Resignation by the employee;
● Employee’s retirement; and
● The expiry of a fixed-term contract.

Dismissal
The law relating to termination of employment in India distinguishes broadly between three
different situations: dismissal for misconduct, discharge and retrenchment. Indian law starts from
the common law premise that an employer has a right to terminate the services of an employee
without giving a reason.​ ​However, this position has been affected by legislative intervention and by
the development by the courts of natural justice requirements.
As regards termination of employment for disciplinary reasons, some instances of misconduct
which may justify dismissal without notice and any compensation in lieu of notice are listed in the
MSO(Model Standing Orders) and include (​secs. 14(2)-(3)​, MSO):
14. wilful insubordination or disobedience;
15. theft, fraud or dishonesty;
16. wilful damage or loss of employer’s property;
17. bribery;
18. habitual lateness or absence; and
19. striking unlawfully.
The IDA (Industrial Disputes Act,1947) sets out detailed procedural requirements for retrenchment
which is defined as the termination by the employer of employment of a worker for any reason,
other than disciplinary, with certain exceptions (​sec. 2 (oo),​ IDA) “Retrenchment” corresponds
broadly to terminations based on economic grounds or related to the employee’s capacity (except
retirements, dismissals for ill health and the expiry of fixed-term contracts).
Thus, the concept of discharge at will can be said to apply only to employees not covered by the
IDA, and not dismissed for misconduct.
Termination of employment is unlawful if it is for reasons related to trade union membership or
activity; filing complaints concerning the employer; race, colour, sex, marital status, pregnancy,
religion, political opinion or social origin. In addition, termination of employment in violation of
fair labour practices as defined by legislation or case law will not be valid. The IDA (​Fifth
Schedule)​ lists some practices which will be considered to be “Unfair Labour Practices”. These
include dismissal on account of trade union activity or membership; dismissal by way of
victimization; dismissal not in good faith but in “the colourable exercise of the employer’s rights”;
dismissal by falsely implicating a worker in a criminal case or on false or trumped-up allegations of
absence without leave, dismissal without due regard to natural justice or for minor misconduct
leading to disproportionate punishment. The list is not exhaustive.
The Maternity Benefit Act, 1961, provides that absence from work during maternity leave, as
allowed under the statute, should not be considered as a valid reason for termination of service.
Similarly, employees may not be dismissed or discharged while they are in receipt of a sickness
benefit or disablement benefit for temporary disablement or are receiving medical treatment for
sickness or are absent from work as a result of certified illness arising out of pregnancy (​sec. 73,​
Employees’ State Insurance Act).
Notice and prior procedural safeguards
Under the Industrial Employment Standing Orders Act,1946 employers are required to give in
writing one month’s notice or payment in lieu of such notice in order to lawfully terminate the
employment of permanent monthly-paid workers. The two weeks’ notice is required for workers
paid on other basis. Notice is not required either for probationers, ​badlis ​or temporary workers (​sec.
13,​ MSO).
Notice is not required for workers found guilty of serious misconduct such as would constitute
summary dismissal. In case of dismissal on disciplinary grounds, the worker must be given an
opportunity of explaining the charges of misconduct alleged against him/her (sec. 13(2), MSO).
Furthermore, despite the fact that an employer is entitled to dismiss an employee for serious
misconduct or inadequate performance of work, the rules of natural justice have now influenced
labour law jurisprudence in India to the extent that the employer will be required to give the
employee a “hearing” to answer the charges before the dismissal is effected. This may take the form
of a written complaint to initiate departmental proceedings with a view to disciplinary proceedings,
and the hearing may be a mere explanation from the employee or may be a full departmental
inquiry into the matter with the necessary documentary evidence. Questions into the legality of
dismissal due to misconduct often hinge on the nature of this internal inquiry and the Indian courts,
in the interest of good industrial relations, have consistently affirmed the need for the usual rules of
natural justice to apply. Central to these rules are the requirements that the employee has a fair
hearing, including the right to adduce evidence on his or her behalf and to cross-examine witnesses,
and that the hearing be free from bias. An employee who faces a charge of misconduct may also
generally expect only a warning if it is a first offence or is not habitual conduct. Where a matter
relating to termination is pending before a conciliatory or adjudicatory body, the conditions
applicable to the worker may not be altered (​sec. 33​, IDA).
Under ​sec. 25F o​ f the IDA, an employer proposing to retrench workers, who have been
continuously employed for more than one year, must give one month’s notice or pay in lieu of such
notice to the worker, and must also notify the relevant governmental authority, giving the reasons
for the proposed retrenchment.
Special provisions under the IDA are applicable in relation to industrial establishments employing
100 workers or more. In this case, workers may not be retrenched unless three months’ written
notice, stating reasons for the retrenchment, or pay in lieu of notice, is given to the worker. In
addition, the employer must seek prior authorization from the relevant governmental authority
before the retrenchment can be carried out (sec. 25N, IDA).
The concept of “prior authorization” in this context perhaps needs some elaboration here. The
Supreme Court of India has recognized the right of management to run its own business as it
pleases without any interference by the courts. The decision to retrench is thus left solely up to the
discretion of management. The court will inquire only into the closure to verify that it is bona fide
and for economic reasons and will not question the motive behind it. The concept of a bona fide
redundancy does not, for example, include a situation where retrenchment is carried out in
accordance with unfair labour practices or to victimize workers. Consequently, the proper
governmental authority is required to examine the reasons given in the notice for the proposed
retrenchment to ascertain whether they are in accordance with good labour practice and are for bona
fide reasons of redundancy. If this is not found to be so, the governmental authority may refuse
permission for the retrenchment, giving its reasons in writing.
In the absence of any agreement between the employer and the workers retrenched as regards the
procedure for retrenchment, the employer retrenches the worker who was the last person to be
employed in the category, unless for reasons to be recorded the employer retrenches any other
worker (sec. 25G, IDA).

Severance pay
In case of retrenchments, employees with more than one year’s service, and other than temporary or
casual employees, are entitled to compensation equivalent to 15 days’ pay for each completed year
of service (​sec. 25F(b),​ IDA).
However, a distinction is made for cessation of business for reasons beyond the control of the
employer. This might include ​force majeure​, frustration of contract, etc., but does not include
financial difficulties or loss of stock. In such circumstances, the employee is still entitled to a
redundancy payment, but the amount is less than that given for termination of employment due to
other reasons, being a sum equivalent to no more than the average of three months’ pay (​sec.
25FFF,​ IDA).
Under the Payment of Gratuity Act, 1972, a worker continuously employed for five years or more is
entitled to a gratuity payment upon termination of service, except where such termination has been
as a result of his or her wilful omission or negligence resulting in damage or loss of the employer’s
property, in which case the gratuity is forfeited to the extent of the damage caused. Where the
employee has been dismissed on account of his or her riotous, violent or disorderly conduct or for
an offence involving moral turpitude committed in the course of employment, the gratuity shall be
wholly or partly forfeited. The sum is calculated at 15 days’ average pay for every completed year
of service.
Avenues for redress
Since the 1965 amendments to the IDA (​sec. 2A​), the dismissal or retrenchment of an individual is
deemed to be an industrial dispute, hence the ability of a worker to take his or her claim to the
Labour Courts. Under ​sec. 2(a) o​ f the IESA, a worker dissatisfied with his or her termination of
employment is entitled, in the first instance, to raise the matter as a labour dispute with an officer
from the conciliation department of the Ministry of Labour. The officer will attempt to conciliate
the matter and must submit a report to the Government if conciliation fails, pending a decision from
the governmental authority on whether the matter merits adjudication before the Labour Court or
Tribunal.
Challenges to dismissal can be made to the Labour Court under ​sec. 11A o​ f the Industrial Relations
(Amendment) Disputes Act, 1971. The Labour Court may review a termination of employment and
set aside a dismissal if it decides that the dismissal was not justified.
No time limit is prescribed within which an aggrieved worker may raise a labour dispute. However,
excessive delay may prejudice a worker’s case. The burden of proving that dismissal was for a valid
reason rests with the employer.
The Labour Court, Industrial Tribunal and National Tribunal have wide discretion to review
disputes relating to termination of employment, including the examination of the evidence, and to
award relief as they see fit including compensation in the form of damages and reinstatement (sec.
11A, IDA). Before reinstating an employee, the judicial body will inquire into the feasibility of
reinstatement; for example, whether the employee has lost confidence in the employer and whether
industrial peace and harmony will be threatened.

EMPLOYEE MISCONDUCT

Termination of Employee For Misconduct:

For the purpose of clarity a hypothetical situation is taken where the services of an employee
say one Mr. Shyam Nagpal have been terminated by an IT company with immediate effect for
misconduct and the Company now wants to understand the legal consequences of such
termination.
Mr. Nagpal was engaged in software development and was officiating as a "Group Leader". As a
Group Leader, Mr. Nagpal was responsible for monitoring and regulating the work of two to three
associates in his team in addition to provision of software development services. Mr. Nagpal's
performance for the first one year of service was above average but his performance deteriorated
thereafter and he often reported late for work. Considering Mr. Nagpal's lack-luster performance
and due to company's decision to downsize its work force, Mr. Nagpal's services were terminated
with immediate effect with one month salary in lieu thereof. The Company soon realized that it has
failed to undertake proper steps to dispense of Mr. Nagpal's services and is assessing its implication
and exposure under law.
Assessment
The validity of Mr. Nagpal's termination and consequences thereof under Indian laws would be
largely determined by the crucial question whether Mr. Nagpal was a 'workman' within the
definition of IDA.
An employee is termed as a workman if he is employed to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or reward. A person who is employed
mainly in a managerial or administrative capacity, or who being employed in a supervisory capacity
draws wages exceeding Rs. 1600/- per month or exercises functions mainly of a managerial nature
is excluded from the definition of a workmen. Supervisor means an individual having authority, in
the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign,
reward or discipline other employees or responsibility to direct them or to adjust their grievances or
effectively to recommend such action and in exercising such authority he uses of independent
judgment. In nutshell, a supervisor is one having authority over others, to superintend and direct.
Indian Labour Tribunals and Civil Courts have considered the actual and predominant duties
discharged by an employee and remuneration received by such an employee as the basis to
determine classification under "workman" or "non-workman" category and held that mere
managerial or administrative designations are not conclusive of the status of any employee as
"non-workman".
The Supreme Court of India has repeatedly held that it is the principal duties being performed by an
employee which are to be considered for the purposes of determining the real status of the employee
namely, whether such an employee has been discharging administrative, managerial or supervisory
work. An employee may at times be required to perform managerial, supervisory or administrative
work, but such occasional performance by itself does not determine the real status of the employee
and it is the principal or major duty performed by the employee that determines the employee's real
status and whether or not the concerned employee is a workman under the IDA.
Consequently, whether Mr. Nagpal, who presumably was not exercising managerial or
administrative function, was employed in a supervisory capacity as a Group Leader or for
technical/software development work would depend on whether the main and principal duties
carried out by him were:
(a) those of a supervisory character i.e., he had powers to give directions to the others as to the
actual manner in which they were to perform and carry out their duties and scrutinize the work done
by others in order to ensure that it was being done properly, or
(b) of a nature carried out by a software developer.
If Mr. Nagpal was mainly doing supervisory work, but incidentally or for a fraction of the time, also
did some software development work, then he was employed in supervisory capacity and would not
be a workman under the IDA. Conversely, if the main work done was of software development, the
mere fact that some supervisory duties were also carried out incidentally or as a small fraction of
the work done by Mr. Nagpal will not convert his employment as a skilled workman into one in
supervisory capacity.
Considering the nature of work performed by Mr. Nagpal was primarily of a software development
and not supervisory, Mr. Nagpal would be classified as "workman" in terms of IDA.
In terms of IDA, an employee in workman category who has been in continuous service for at least
one year cannot be terminated at will of the employer unless the employee is dismissed by way of
disciplinary action or as a result of non-renewal of contract of employment, or terminated on ground
of continued ill health, etc. Termination for any other reason whatsoever including termination of
service on ground of reduction in volume of business amounts to retrenchment and the IDA
prescribes detailed procedure for retrenchment of a workman including compliance with last to
come first to go rule, notice, payment of prescribed compensation, i.e., 15 days average pay for
every completed year of continuous service, filings/prior approvals from the government, if
required, etc.
For termination of services on disciplinary grounds, the procedure for dismissal of an employee
(who is classified as "workman" under IDA) on account of misconduct and/or indiscipline (which
should be normally incorporated into the Employee Handbook of a company) would need to be in
terms of broad principles of natural justice, the IDA and guidelines evolved from various court
decisions as follows:
(i) issue a charge sheet;
(ii) hold a domestic enquiry;
(iii) peruse the report of the enquiry officer;
(iv) issue show cause notice to the employee; and
(v) issue order of punishment.
In view of the foregoing, termination of Mr. Nagpal's services for misconduct without following the
principles of natural justice viz. sending notice, enquiry, providing opportunity of defense to the
employee may be open to challenge. Contravention of the provisions of the IDA renders the
company's directors, manager, secretary, agent or other officer concerned with management liable
for the prosecution and penalties if it is proved that the offence(s) was committed with knowledge
or consent and would entitle the terminated employee to raise dispute before the labour court and
seek reinstatement of services with back wages.
Remedies
To minimize the exposure arising from termination of Mr. Nagpal's services for misconduct without
following the procedure prescribed under IDA, it is advisable for the company to undertake the
following:
(i) The Company should immediately clear and pay all pending dues of Mr. Nagpal including
gratuity as per the Payment of Gratuity Act, 1972, if applicable, at the earliest.
(ii) The Company should maintain adequate supporting evidence to show Mr. Nagpal's poor
performance at work. The Company's notices/reminders to Mr. Nagpal to improve his work and
productivity should also be part of this paperwork.
To minimize employee related disputes and grievance, it is advisable to be guided by the rules and
guidelines stated in the Employee Hand Book and exercising due precaution and adherence to the
termination related procedure prior to discharge of employees for misconduct.

DOMESTIC ENQUIRY
Objective:​ To highlight the procedure for a fair and proper domestic enquiry as per requirements of
law.
Why we go for domestic enquiry?
In today’s context no employer can discharge or dismiss a delinquent workman even for a serious
misconduct without following an elaborate procedure for taking disciplinary action.
It is only when the workmen is found guilty of the charge in an enquiry conducted as per the
principal of natural justice, that the employer after following the procedure can punish him as per
the company’s standing orders.
Principal of natural justice:
No man shall be the judge in his own cause
Both sides shall be heard.
Rules of natural justice:
The employee proceeded against had been informed clearly of the charges levelled against him.
The witnesses are examined ordinarily in the presence of the employee in respect of the charges
The employee is given fair opportunity to cross-examine the witnesses
The employee has been given reasonable opportunity to defend.
Suppose the employer has dismissed/ discharged a workman after following the procedure,
conducting a fair and proper enquiry.
Now the question is whether his decision can be challenged?
The answer is yes. Decision can be challenged by the workmen under section 2-A of the ID Act,
1947 by raising an industrial dispute and for this he need not have support of any trade union or
other workmen. However, if an employee is not a workman he cannot raise industrial dispute under
the ID Act.
The question of bonafides (genuine) may be raised and it will be open to the court to consider
whether the employer had acted bona fide or was actuated by the desire to victimize the workman.
Now again you have to prove the genuineness of the decision. In case tribunal finds that
management was motivated or has acted with unnecessary harassment, or there was victimization or
unfair labour practice than what?
The tribunal or LC may interfere into quantum of punishment (11-A-I.D.Act), may order
reinstatement of the worker with back wages.
Basic error of fact
If the findings at the enquiry is based on extraneous (irrelevant) matter or if the workman is found
guilty and punished on a charge not disclosed in the charge sheet
The management will be guilty of committing basic error of the fact.
Procedure of holding a domestic enquiry-

*A workman against whom an enquiry is to be held is to be given a charge-sheet clearly stating the
charges levelled against him and asking him to submit his explanation.

* Management has to appoint Enquiry Officer (EO) & Management Representative (MR) for the
enquiry as per the charge sheet.
(Copy of the same is to be marked / given to the Delinquent Employee)

* Enquiry Officer(EO) will inform about the date on which the enquiry has to be start in
writing from his side.

*Management reserves the right to suspend the workman pending enquiry depending upon the
gravity of the charges.

* Workman is permitted to defend himself by other workman or by an office bearer of Trade Union
of which he is a member-defence Representative (DR).

*In Domestic enquiry - starts with the recording of the statements & letters as per the charge sheet.
The workman is allowed to produce witnesses in his defence and cross examine the witness of the
Management. EO shall record the concise summary of the evidences & questions & answers asked
by the both the parties.

* The proceedings of the inquiry shall be conducted in English, hindi or in the language of the state
where the Industrial establishment is located, or the language which is understood by the delinquent
employee.

* After it is over, sometimes it takes a year or more- EO should submit his findings giving brief
reasons.

* EO - appointment - The management can appoint

a. An officer employed in his Industrial establishment
b. An officer from outside
c. An advocate

In normal it is better to have an advocate to give credibility to the proceedings.

* On the receipt of the finding report from EO , the Management should give a letter to workman
along with the finding report of EO for his explanation.

* On the receipt of the same, Management can accord punishments to the workman found guilty of
misconduct. Here they are four types of punishments viz.,
1. Dismissal without any notice
2. Suspension for a period of not more than 4 days.
3. Fine
4. Warning or Censure.

* Points to remember while according the punishment

1. Gravity of the misconduct
2. Previous records if any
3. aggravating circumstances that may exist.

* The doctrine of proof beyond doubt as applicable in criminal trial is not applicable here. This is as
per the judgement held in High Court Judicature of Bombay v/s Udaysingh Ganpatrao,1997/CLR
1122 S.C.

1. A show cause letter is a letter provided to the employee to explain the alleged misconduct. The
warning letter is a statement of punishment to the employee when the employer is not satisfied with
the explanation given by the employee to the show cause letter.
2. No implications. However, if the employer is unhappy over the reasons you cite in the response
to the show cause letter, then they can take action against you. (Warning letter, Termination). The
degree of punishment depends on the severity of the misconduct. Past misconduct can also be taken
into consideration do decide on the punishment for future misconduct.
3. No. Your employer need not respond to your show cause letter if he is satisfied with your
explanation. The employer has a choice of whether he wants to issue a show cause letter or to
conduct a DI.
4. No you should not worry about the DI. Considering that you have not been provided with a
warning letter for your previous offense, it is obvious that your explanation has been accepted and
you have been given a chance to prove yourself. Put the incident behind you and move on.
5. If you continue coming late for work, your employer can issue you with a warning letter. If the
employer is not able to tolerate your repeated late coming, then he may terminate you.
6. A DI is not mandatory although it is recommended. You can also be dismissed on the strength of
a show cause letter, without a DI.
7.
Show cause --> Warning (if dissatisfied with explanation) or
show cause --> DI --> Punishment (Depending on severity) or
warning letter --> punishment (repeat offenders)
The employer will conduct a DI just to provide a warning letter as a punishment. The severity of the
case is definitely taken into consideration before the conduct of a DI, which is cumbersome and
expensive. For example, if the misconduct is of a minor nature that may equate to a warning letter
as a punishment, then it won’t require a DI. For more extreme cases that may end in termination,
then it is best to resort to the DI to justify the need for termination.
 DISCIPLINARY ACTION
Why indiscipline?
● Ignorance of rules,
● Physical/ mental incapability
● Absence of proper training
● Discontented workmen
● Misguidance by Trade Union leaders
● Absence of standard policies of handling discipline
● Uncongenial working conditions
Indiscipline requiring action
● Absenteeism
● Habitual Late coming
● Overstaying leave
● Disobeying rules/ standing orders
● Insubordination
● Misappropriation of funds or valuables
● Misconduct
Procedures
1. Standing Orders framed under the Industrial Employment (Standing Orders) Act, 1946 to be
followed.
2. Ensure principle of natural justice.
3. Serving Charge sheet
4. Holding of Domestic Enquiry
5. Serving Shaw Cause Notice
6. Order of punishment
7. Charge Sheet
8. Memorandum of charges
9. Statement of allegations of misconduct/ omission/ negligence
No particular format prescribed for charge sheet in any Labour enactment
The object is to give the employee exact idea of the misconduct committed by him so that he may
get reasonable opportunity to defend.
Requisites of Charge sheet
1. It should contain complete picture of misconduct
2. It should state that the act of commission or omission resulting in misconduct is violation of
a particular clause of standing order
3. Language to be as per Standing Orders or as required by the delinquent
4. Enclose a list of witnesses in support of charges
Be specific
 ● Charges levelled should be specifically stated- avoid ‘etc...Etc’/ ‘other’/ ‘any’/ ‘some
people’ like expressions.
● The amount misappropriated should be specific sum and not ‘ around’
● Person manhandled should be Mr./Ms. X and not ‘ someone’
● Time of misconduct should be exact- avoid ‘around’ time.
● Charge sheet for using offending language should contain the exact word used.

Service of Charge sheet

As stated in the Standing Orders
Serve the charge sheet personally against signature on the duplicate copy/ delivery book
If absent/ on leave/ under suspension, paste it on the wall of the residence of the delinquent
By Registered Post
Displaying in the Notice Board of the company
Publishing in the regional newspaper

Domestic Enquiry
● Follow rules laid down in Standing Orders
● Purpose of domestic enquiry -
● Provide delinquent an opportunity to defend the charges
● Provide employer an opportunity to evaluate the situation and decide the penalty to be
imposed
Notice of Enquiry to be served
1. Notice to show the Date and Time of enquiry
2. Venue of holding enquiry
3. Name of the Enquiry Officer
4. Notice to be served in the same manner as followed to serve charge sheet
5. Workman shall have right to appoint a Defence Helper
6. When legally trained person represents management in enquiry, workman shall also be
allowed to be represented by lawyer (Hindustan​ Teleprinters Ltd Vs Mr. Rajan Isaac.)
Recording the Evidences
Not mandatory that procedure laid down in the Code of Criminal Procedure, 1973 or the Evidence
Act, 1872 to be followed. (Mahindra and Mahindra Ltd. Vs Sunil Yeshwant Pandit and another )
● Question- Answer pattern may be followed
● Statement of Management to be taken first
● Cross examination by employee/ helper
● Take signature of the concerned on record
● Examine and cross examine witnesses
● Object/ Disallow irrelevant questions
Show Cause Notice
Before punishment is initiated a Show Cause Notice highlighting the charges, findings of the
enquiry and possible penalty imposed on the delinquent shall also be served calling on him to show
cause ‘why action including discharge or (even dismissal) shall not be taken against’ the delinquent.
Though serving of such notice will not make the process of enquiry invalid (as decided in S.
Shenbagaraj Vs Additional Commissioner of Industries and Commerce, Chepauk and others.), it is
advisable to give the employee a final opportunity before punishment is inflicted.
Enquiry report to be furnished to the employee
Order of Punishment
Principles of natural justice to be followed
Punishment should not violate section 73 of the ESI Act - notice of dismissal or discharge given to
an employee during the period the employee is in receipt of sickness, maternity or other benefit
shall be invalid.
Order issued without holding a domestic enquiry or after holding a defective enquiry will not stand
since Labour Court/ Tribunal can interfere with such order as provided u/s 11A of the Industrial
Disputes Act, 1947

Charge sheet- absenting without intimation

Date:
-------------
Sub: Absenting without intimation-
You have been absent since_____ (date)/ overstaying leave granted since_____ (date)
Absenting without leave/ overstaying of leave is an offence as per rule ___ of our Standing Orders
and as such your act of absenting without intimation is a misconduct which attracts such
punishment including termination of service.
Accordingly you are hereby called upon to explain in writing within 48 hours as to why appropriate
action should not be taken against you.
Sd/-
Appropriate Authority/ Authorised Signatory

Charge sheet- misbehavior

-------
It is reported that on ____(date) at _____(time) you misbehaved with Mr./Ms._____ (name), ____
(designation) in the presence of ______ (as witnesses)
Disobeying orders and misbehaving are serious misconduct as per rule____ of our Standing Orders
which attract punishment including dismissal from service.
Accordingly you are hereby called upon to explain in writing within 48 hours as to why appropriate
action should not be taken against you.
Sd/-
Appropriate Authority/ Authorised Signatory

Notice of enquiry
To Date:
--------
Sub: Enquiry u/r ___ of Standing Orders
Ref: Charge sheet No.____ dated______
Your explanation dated____
Since the explanation given by you as cited above is found unsatisfactory, a domestic enquiry u/r
____ of the Standing Orders has been initiated to decide on the charges.
The enquiry will commence at 9.30 am on ___ (date) at _____ (venue)
You are hereby required to present in person with or without a helper to give any clarification to
defend the charges against you.
Mr./Ms. ____ will be the Enquiry Officer.
Sd/-
Authorised Signatory

Enquiry Proceedings
Enquiry proceedings in to the charge sheet No____ dated ___ issued to Mr.___

(Time, date and place of enquiry)

Present
1. Charge sheeted employee
2. Defense helper
3. Management representative
The charges leveled against the employee were read over and explained to the employee.
(Examination of management witness- statement in support of charges)
Name and details of witness
Statement/ questions and answers
Signature of witness
Signature of charge sheeted employee with a declaration that the statement has been recorded in his
presence
Signature of Enquiry Officer
(Cross Examination by Employee/ defense helper)
-Same process as above-
(Examination of witness against charges)
-Same process as above-
(Cross Examination by management representative)
-Same process as above-
If any one does not want to cross examine, the same may be recorded as “ opportunity given for
cross examination but declined to cross examine” with signatures
Show Cause Notice
To Date
---------
Sub: Show Cause Notice
WHEREAS you were charge sheeted for an offence as stated.
AND WHEREAS you were granted an opportunity to defend the charges by way of Domestic
enquiry which commenced on ____ and ended on ___ (dates)
AND WHEREAS you have failed to prove your innocence before the Enquiry Officer.
NOW THEREFORE, the management is constrained to take disciplinary action against you.
Without prejudice and following the Enquiry Officer’s report your act of omission/ commission has
been proved to be a serious misconduct which attracts punishment which may extend to dismissal
from service.
THEREFORE, you are hereby called upon to show cause why disciplinary action including
dismissal should not be taken against you/ why you should not be removed from service. A copy of
the findings of the Enquiry Officer is enclosed herewith for your perusal.
Your written reply should reach the undersigned within____ days.
Sd/-
Authorised Signatory

Termination Order
To Date
--------
Sub: Order of Termination of Service
Ref: Charge sheet No____ dated____

Pursuant to the charge sheet above referred and findings of enquiry report dated____, the
management has come to the conclusion that the charges leveled against you have been proved
categorically.
As you have been found guilty of serious misconduct, the management has decided to dismiss you
from service. However, on compassionate grounds, we have decided to take a lenient step by
imposing a lesser punishment by discharging you from service with effect from/ with immediate
effect.
You are, therefore, directed to settle your dues including salary dues and handover the charges to
Mr________ during office hours on_________
 Sd/-
Authorised Signatory
 THE WORKMEN'S COMPENSATION ACT,1923

The object of the Workmen's Compensation Act, 1923 is to provide for compensation payable by
the employer to the workman who suffers an injury from an accident arising out of and in the course
of employment. The growing complexity of industry in this country, with the increasing use of
machinery and consequent danger to workmen, along with the comparative poverty of the workmen
themselves, renders it advisable that they should be protected as far as possible, from hardship
arising from accident.

Before the Constitution came into force, the Workmen's Compensation Act, 1923 was enacted
during the British reign by the recommendation of Royal Commission on Labour. Before enacting
this Act, the workmen were compelled to file the petitions for compensation before the Civil
Courts. The Civil Courts are fixed with rigid procedural laws, such as Civil Procedure Code, 1908,
The Limitation Act, 1963, The Indian Evidence Act, 1872, etc. Long time was usually taken for
granting the compensation to the injured workman or the poor dependants of the deceased workman
by the Civil Courts due to their rigid formalities and technicalities.

The Workmen's Compensation Act, 1923 radically changed the law relating to compensation
payable by the employer to his workman for employment injury. Prior to the enactment of the
Workmen's Compensation Act, 1923 the employer was liable to pay compensation for employment
injury. Prior to the enactment of the Workmen's Compensation Act, 1923, the employer was liable
to pay compensation for employment injury resulting in the death or disablement of the workman if
it was attributed to the negligence of the employer. Even in cases of proved negligence of employer
the workman was denied compensation if the workman was found to be guilty of contributing
negligence. Whereas under the Workmen's compensation Act,1923, the employer is liable to pay
compensation for the personal injury if it results in the death or disablement of the workman
irrespective of the negligence on the part of employer or contributory negligence on the part of the
workman.
Important objectives of the Act:
1.It gives cheap and quick remedy to the injured workman or the dependants of the deceased
workman.
2.Civil Courts are excluded.
3.The Commissioner is empowered to grant immediate relief.
4.The Commissioner is not bound to follow the technicalities and formalities of the Court. He is
Quasi-judicial authority.
5.The Act clearly defines 'injury', 'workman', 'accident arising out of and in the course of
employment', methods for calculating the compensation, etc.
6.The definition of 'workman' given in this Act is very wider than any other labour legislation.
7.Fee prescribed on application is only nominal and lowest.
8.It is the first labour legislation in India.
9.Though the Act was enacted in1923, the spirit of the Constitution of India, 1950 is seen in it.
Important Sections of the Act:
​ ​ CHAPTER I : PRELIMINARY

1. Short title extent and commencement ​(1) This Act may be called the Workmen's
Compensation Act 1923.
(ix) It extends to the whole of India.
(3) It shall come into force on the first day of July 1924.
● Definitions ​In this Act unless there is anything repugnant in the subject or context -
(b) ​"Commissioner" means a Commissioner for Workmen's Compensation appointed under
section 20;
(c) "compensation" means compensation as provided for by this Act;
(d) ​"dependent" ​means any of the following relatives of a deceased workman namely:-
(i) a widow a minor legitimate or adopted son an unmarried legitimate or adopted
daughter or a widowed mother; and
(ii) if wholly dependent on the earnings of the workman at the time of his death a
son or a daughter who has attained the age of 18 years and who is infirm;
(iii) if wholly or in part dependant on the earnings of the workman at the time of his death-
(a) a widower
(b) a parent other than a widowed mother
(c) a minor illegitimate son an unmarried illegitimate daughter or a daughter
legitimate or illegitimate or adopted if married and a minor or if widowed and minor
(d) a minor brother or an unmarried sister or a widowed sister if a minor (e) a widowed
daughter-in-law
(f) a minor child of a pre-deceased son
(g) a minor child of a pre-deceased daughter where no parent of the child is alive or
(h) a paternal grandparent if no parent of the workman is alive;
(e) "employer" ​includes any body of persons whether incorporated or not and any managing agent
of an employer and the legal representative of a deceased employer and when the services of a
workman are temporarily lent or let on hire to another person by the person with whom the
workman has entered into a contract of service or apprenticeship means such other person while the
workman is working for him;
(f) ​"managing agent" means any person appointed or acting as the representative of another
person for the purpose of carrying on such other person's trade or business but does not include an
individual manager subordinate to an employer;
(ff) "minor" means a person who has not attained the age of 18 years;
(g) ​"partial disablement" means where the disablement is of a temporary nature such disablement
as reduces the earning capacity of a workman in any employment in which he was engaged at the
time of the accident resulting in the disablement and where the disablement is of a permanent nature
such disablement as reduces his earning capacity in every employment which he was capable of
undertaking at that time:
Provided that every injury specified in Part II of Schedule shall be deemed to result in permanent
partial disablement;
(h)​ "prescribed"​ means prescribed by rules made under this Act;
(i) "qualified medical practitioner" means any person registered under any Central Act or an Act of
the Legislature of a State providing for the maintenance of a register of medical practitioners or in
any area where no such last-mentioned Act is in force any person declared by the State Government
by notification in the Official Gazette to be a qualified medical practitioner for the purpose of this
Act;
(k) "seaman" means any person forming part of the crew of any ship but does not include the
master of the ship;
(l) ​"total disablement" ​means such disablement whether of a temporary or permanent nature as
incapacitates a workman for all work which he was capable of performing at the time of the
accident resulting in such disablement : Provided that permanent total disablement shall be deemed
to result from every injury specified in Part I of Schedule I or from any combination of injuries
specified in Part II thereof where the aggregate percentage of the loss of earning capacity as
specified in the said Part II against those injuries amount to one hundred per cent or more;

(m) ​"wages" includes any privilege or benefit which is capable of being estimated in money other
than a travelling allowance or the value of any travelling concession or a contribution paid by the
employer of a workman towards any pension or provident fund or a sum paid to a workman to
cover any special expenses entailed on him by the nature of his employment;
(n) ​"workman" ​means any person (other than a person whose employment is of a casual nature
and who is employed otherwise than for the purposes of the employer's trade or business) who is -

​ CHAPTER II. WORKMEN'S COMPENSATION

3. Employer's liability for compensation:

(1)If personal injury is caused to a workman by accident arising out of and in the course of his
employment his employer shall be liable to pay compensation in accordance with the provisions of
this Chapter :
Provided that the employer shall not be so liable -
(a) in respect of any injury which does not result in the total or partial disablement of the workman
for a period exceeding three days;
(b) in respect of any injury not resulting in death or permanent total disablement caused by an
accident which is directly attributable to the workman having been at the time thereof under the
influence of drink or drugs or the wilful disobedience of the workman to an order expressly given
or to a rule expressly framed for the purpose of securing the safety of workmen or the wilful
removal or disregard by the workman of any safety guard or other device he knew to have been
provided for the purpose of securing the safety of workman.

4. Amount of compensation
(1) Subject to the provisions of this Act the amount of compensation shall be as follows namely :-
where death results from the injury an amount equal to fifty per cent of the monthly wages of the
deceased workman multiplied by the relevant factor; or an amount of fifty thousand rupees
whichever is more; where permanent total disablement results from the injury an amount equal to
sixty per cent of the monthly wages of the injured workman multiplied by the relevant factor; or an
amount of sixty thousand rupees whichever is more.

5. Method of calculating wages:

In this Act and for the purpose thereof the expression "monthly wages" means the amount of wages
deemed to be payable for a months' service (whether the wages are payable by the month or by
whatever other period or at piece rates) and calculated as follows namely :-
where the workman has during a continuous period of not less than twelve months immediately
preceding the accident been in the service of the employer who is liable to pay compensation the
monthly wages of the workman shall be one-twelth of the total wages which have fallen due for
payment to him by the employer in the last twelve months of that period. A period of service shall
for the purposes of this section be deemed to be continuous which has not been interrupted by a
period of absence from work exceeding fourteen days.

6. Review:
Any half-monthly payment payable under this Act either under an agreement between the parties or
under the order of a Commissioner may be reviewed by the Commissioner on the application either
of the employer or of the workman accompanied by the certificate of a qualified medical
practitioner that there has been a change in the condition of the workman or subject to rules made
under this Act on application made without such certificate.
7. Commutation of half-monthly payments:
Any right to receive half-monthly payments may by agreement between the parties or if the parties
cannot agree and the payments have been continued for not less than six months on the application
of either party to the Commissioner be redeemed by the payment of a lump sum of such amount as
may be agreed to by the parties or determined by the Commissioner as the case may be.
8. Distribution of compensation:
(1) No payment of compensation in respect of a workman whose injury has resulted in death and
no payment of a lump sum as compensation to a woman or a person under a legal disability shall be
made otherwise than by deposit with the Commissioner and no such payment directly by an
employer shall be deemed to be a payment of compensation.

9. Compensation not to be assigned attached or charged:

Save as provided by this Act no lump sum or half-monthly payment payable under this Act shall in
any way be capable of being assigned or charged or be liable to attachment or pass to any person
other than the workman by operation of law nor shall any claim be set off against the same.

10. Notice and claim:

No claim for compensation shall be entertained by a Commissioner unless notice of the accident has
been given in the manner hereinafter provided as soon as practicable after the happening thereof
and unless the claim is preferred before him within two years of the occurrence of the accident or in
case of death within two years from the date of death.

10A. Power to require from employers statements regarding fatal accident:

Where a Commissioner receives information from any source that a workman has died as a result of
an accident arising out of and in the course of his employment he may send by registered post a
notice to the workman's employer requiring him to submit within thirty days of the service of the
notice a statement in the prescribed form giving the circumstances attending the death of the
workman and indicating whether in the opinion of the employer he is or is not liable to deposit
compensation on account of the death.

10B. Reports of fatal accidents and serious bodily injuries:

Where by any law for the time being in force notice is required to be given to any authority by or on
behalf of an employer of any accident occurring on his premises which results in death or serious
bodily injury the person required to give the notice shall within seven days of the death or serious
bodily injury send a report to the Commissioner giving the circumstances attending the death or
serious bodily injury : Provided that where the State Government has so prescribed the person
required to give the notice may instead of sending such report to the Commissioner send it to the
authority to whom he is required to give the notice.

11. Medical examination:

Where a workman has given notice of an accident he shall if the employer before the expiry of
three days from the time at which service of the notice has been effected offers to have him
examined free of charge by a qualified medical practitioner submit himself for such examination
and any workman who is in receipt of a half-monthly payment under this Act shall if so required
submit himself for such examination from time to time : Provided that a workman shall not be
required to submit himself for examination by a medical practitioner otherwise than in accordance
with rules made under this Act or at more frequent intervals than may be prescribed.

12. Contracting:
Where any person (hereinafter in this section referred to as the principal) in the course of or for the
purposes of his trade or business contract with any other person (hereinafter in this section referred
to as the contractor for the execution by or under the contractor of the whole or any part of any
work which is ordinarily part of the trade or business of the principal the principal shall be liable to
pay to any workman employed in the execution of the work any compensation which he would have
been liable to pay if that workman had been immediately employed by him.
13. Remedies of employer against stranger: ​Where a workman has recovered compensation in
respect of any injury caused under circumstances creating a legal liability of some person other than
the person by whom the compensation was paid to pay damages in respect thereof the person by
whom the compensation was paid and any person who has been called on to pay an indemnity
under section 12 shall be entitled to be indemnified by the person so liable to pay damages of
aforesaid.

14. Insolvency of employer: ​Where any employer has entered into a contract with any insurers in
respect of any liability under this Act to any workman then in the event of the employer becoming
insolvent or making a compensation or scheme of arrangement with his creditors or if the employer
is a company in the event of the company having commenced to be wound up the rights of the
employer against the insurers as respects that liability shall notwithstanding anything in any law for
the time being in force relating to insolvency or the winding up of companies be transferred to and
vest in the workman and upon any such transfer the insurers shall have the same rights and
remedies and be subject to the same liabilities as if they were the employer so however that the
insurers shall not be under any greater liability to the workman than they would have been under the
employer.

15. Special provisions relating to master and seamen:

This Act shall apply in the case of workmen who are masters of ships or seamen subject to the
following modifications namely :-
The notice of the accident and the claim for compensation may except where the person injured is
the master of the ship be served on the master of the ship as if he were the employer but where the
accident happened and the disablement commenced on board the ship it shall not be necessary for
any seaman to give any notice of the accident. In the case of the death of a master or seaman the
claim for compensation shall be made within one year after the news of the death has been received
by the claimant or where the ship has been or is deemed to have been lost with all hands within
eighteen months of the date on which the ship was or is deemed to have been so lost.

16. Returns as to compensation:

​The State Government may by notification in the Official Gazette direct that every person
employing workmen or that any specified class of such persons shall send at such time and in such
form and to such authority as may be specified in the notification a correct return specifying the
number of injuries in respect of which compensation has been paid by the employer during the
pervious year and the amount of such compensation together with such other particulars as to the
compensation as the State Government may direct.

17. Contracting out:

Any contract or agreement whether made before or after the commencement of this Act whereby a
workman relinquishes any right of compensation from the employer for personal injury arising out
of or in the course of the employment shall be null and void in so far as it purports to remove or
reduce the liability of any person to pay compensation under this Act.

18. Proof of age:​ [Repealed by the Workmen's Compensation (Amendment) Act 1959,
(8 of 1959)]

18A. Penalties (1) Whoever – (a) fails to maintain a notice-book which he is required to maintain
under sub-section (3) of section 10 or
(b) fails to send to the Commissioner a statement which he is required to send under sub-section (1)
of section 10A or
(c) fails to send a report which he is required to send under section 10B or

(d) fails to make a return which he is required to make under section 16 shall be punishable with
fine which may extend to five thousand rupees.
(2) No prosecution under this section shall be instituted except by or with the previous sanction of a
Commissioner and no Court shall take cognizance of any offence under this section unless
complaint thereof is made within six months of the date on which the alleged commission of the
offence came to the knowledge of the Commissioner.

​ CHAPTER III : COMMISSIONERS

19. Reference of Commissioners:

If any question arises in any proceedings under this Act as to the liability of any person to pay
compensation (including any question as to whether a person injured is or is not a workman) or as
to the amount of duration of compensation (including any question as to the nature or extent of
disablement) the question shall in default of agreement be settled by a Commissioner. No Civil
Court shall have jurisdiction to settle decided or deal with any question which is by or under this
Act required to be settled decided or dealt with by a Commissioner or to enforce any liability
incurred under this Act.

20. Appointment of Commissioners:

The State Government may by notification in the Official Gazette appoint any person to be a
Commissioner for Workmen's Compensation for such area as may be specified in the notification.

21. Venue of proceedings and transfer: Where any matter under this Act is to be done by or
before a Commissioner the same shall subject to the provisions of this Act and to any rules made
hereunder be done by or before the Commissioner for the area in which -
(a) the accident took place which resulted in the injury; or
(b) the workman or in case of his death the dependant claiming the compensation
ordinarily resides; or
(c) the employer has his registered office

22. Form of application:

Where an accident occurs in respect of which liability to pay compensation under this Act arises a
claim for such compensation may subject to the provisions of this Act be made before the
Commissioner, (1A) Subject to the provisions of sub-section (1) no application for the settlement of
any matter of Commissioner other than an application by a dependant or dependants
for compensation shall be made unless and until some question has arisen between
the parties in connection therewith which they have been unable to settle by
agreement.

22A. Power of Commissioner to require further deposit in cases of fatal accident:

Where any sum has been deposited by an employer as compensation payable in respect of a
workman whose injury has resulted in death and in the opinion of the Commissioner such sum is
insufficient the Commissioner may by notice in writing stating his reasons call upon the employer
to show cause why he should not make a further deposit within such time as may be stated in the
notice. (2) If the employer fails to show cause to the satisfaction of the Commissioner the
Commissioner may make an award determining the total amount payable and requiring the
employer to deposit the deficiency
23. Powers and procedure of Commissioner:
The Commissioner shall have all the powers of a Civil Court under the Code of Civil Procedure
1908 (5 of 1908) for the purpose of taking evidence on oath (which such Commissioner is hereby
empowered to impose) and of enforcing the attendance of witnesses and compelling the production
of documents and material objects and the Commissioner shall be deemed to be a Civil Court for all
the purposes of section 195 and of Chapter XXVI of the Code of Criminal Procedure 1973 (2 of
1974).

24. Appearance of parties:

Any appearance application or act required to be made or done by any person before or to a
Commissioner (other than an appearance of a party which is required for the purpose of his
examination as a witness) may be made or done on behalf of such person by a legal practitioner or
by an official of an Insurance company or a registered Trade Union or by an Inspector appointed
under sub-section (1) of section 8 of the Factories Act 1948 (63 of 1948) or under sub-section (1) of
section 5 of the Mines Act 1952 (35 of 1952) or by any other officer specified by the State
Government in this behalf authorised in writing by such person or with the permission of the
Commissioner by any other person so authorised.

25. Method of recording evidence:

The Commissioner shall make a brief memorandum of the substance of the evidence of every
witness as the examination of the witness proceeds and such memorandum shall be written and
signed by the Commissioner with his own hand and shall form part of the record.

26. Costs:
​All costs incidental to any proceedings before a Commissioner shall subject to rules made under
this Act are in the discretion of the Commissioner.
27. Power of submit cases:
A Commissioner may if he thinks fit submit any question of law for the decision of the High Court
and if he does so shall decide the question in conformity with such decision.

​28. Registration of agreements:

Where the amount of any lump sum payable as compensation has been settled by agreement
whether by way of redemption of a half-monthly payment or otherwise or where any compensation
has been so settled as being payable to a woman or a person under a legal disability a memorandum
thereof shall be sent by the employer to the Commissioner who shall on being satisfied as to its
genuineness record the memorandum in a register in the prescribed manner : Provided that -
(a) no such memorandum shall be recorded before seven days after communication
by the Commissioner of notice to the parties concerned;
(c) the Commissioner may at any time rectify the register;
(d) where it appears to the Commissioner that an agreement as to the payment of a lump sum
whether by way of redemption of a half-monthly payment or otherwise or an agreement as to the
amount of compensation payable to a woman or a person under a legal disability ought not to be
registered by reason of the inadequacy of the sum or amount or by reason of the agreement having
been obtained by fraud or undue influence or other improper means he may refuse to record the
memorandum of the agreement and may make such order including an order as to any sum already
paid under the agreement as he thinks just in the circumstances.
An agreement for the payment of compensation which has been registered under sub-section (1)
shall be enforceable under this Act notwithstanding anything contained in the Indian Contract Act
1872 (9 of 1872) or in any other law for the time being in force.
29. Effect of failure to register agreement:
Where a memorandum of any agreement the registration of which is required by section 28 is not
sent to the Commissioner as required by that section the employer shall be liable to pay the full
amount of compensation which he is liable to pay under the provisions of this Act and
notwithstanding anything contained in the proviso to sub-section (1) of section 4 shall not unless
the Commissioner otherwise directs be entitled to deduct more than half of any amount paid to the
workman by way of compensation whether under the agreement or otherwise.
30. Appeals:
(1) An appeal shall lie to the High Court from the following orders of a Commissioner namely :-
(a) an order as awarding as compensation a lump sum whether by way of redemption of a
half-monthly payment or otherwise or disallowing a claim in full or in part for a lump sum;
(a) an order awarding interest or penalty under section 4A;
(b) an order refusing to allow redemption of a half-monthly payment;
(c) an order providing for the distribution of compensation among the dependants of a deceased
workman or disallowing any claim of a person alleging himself to be such dependant;
(d) an order allowing or disallowing any claim for the amount of an indemnity under the provisions
of sub-section (2) of section 12; or
(e) an order refusing to register a memorandum of agreement or registering the same or providing
for the registration of the same subject to conditions :
Provided that no appeal shall lie against any order unless a substantial question of law is involved in
the appeal and in the case of an order other than an order such as is referred to in clause (b) unless
the amount in dispute in the appeal is not less than three hundred rupees : Provided further that no
appeal shall lie in any case in which the parties have agreed to abide by the decision of the
Commissioner or in which the order of the Commissioner gives effect to an agreement come to by
the parties :Provided further that no appeal by an employer under clause (a) shall lie unless the
Memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the
appellant has deposited with him the amount payable under the order appealed against. The period
of limitation for an appeal under this section shall be sixty days The provisions of section 5 of the
Limitation Act 1963 (36 of 1963) shall be applicable to appeals under this section.

30A. Withholding of certain payments pending decision of appeal:

​Where an employer makes an appeal under clause (a) of sub-section (1) of section 30 the
Commissioner may and if so directed by the High Court shall pending the decision of the appeal
withhold payment of any sum in deposit with him.

31. Recovery:
The Commissioner may recover as an arrear of land revenue any amount payable by any person
under this Act whether under an agreement for the payment of compensation or otherwise and the
Commissioner shall be deemed to be a public officer within the meaning of section 5 of the
Revenue Recovery Act 1890 (1 of 1890).

​ CHAPTER IV: RULES

32. Power of the State Government to make rules: ​The State Government may make rules to
carry out the purpose of this Act.

33. Power of Local Government to make rule:​[Repealed by the A.O. 1937]

34. Publication of rule:

The power to make rules conferred by section 32 shall be subject to the condition of the rules
being made after previous publication. The date to be specified in accordance with clause (3) of
section 23 of the General Clauses Act 1897 (10 of 1897) as that after which a draft of rules
proposed to be made under section 32 will be taken into consideration shall not be less than three
 months from the date on which the draft of proposed rules was published for general information.
Rules so made shall be published in the Official Gazette and on such publication shall have effect as
if enacted in this Act.
35. Rules to give effect to arrangements with other countries for the transfer of money paid
as compensation:
The Central Government may by notification in the Official Gazette make rules for the transfer to
any foreign country of money deposited with a Commissioner under this Act which has been
awarded to or may be due to any person residing or about to reside in such foreign country and for
the receipt distribution and administration in any State of any money deposited under the law
relating to workmen's compensation in any foreign country which has been awarded to or may be
due to any person residing or about to reside in any State.

SCHEDULE I [Sections 2(1) and (4)]

PART I
List Of Injuries Deemed To Result In Permanent Total Disablement
S.No. Description of injury Percentage of loss of earning capacity
1. Loss of both hands or amputation at higher sites 100
2. Loss of a hand and a foot 100
3. Double amputation through leg or thigh, or amputation through leg or thigh on one side and loss
of other foot 100
4. Loss of sight to such an extent as to render the claimant unable to perform any work for which
eye-sight is essential 100
5. Very severe facial disfigurement 100
6. Absolute deafness 100
PART II
List Of Injuries Deemed To Result In Permanent Partial Disablement Amputation
cases-upper limbs (either arm)
1 Amputation through shoulder joint 90
2 Amputation below shoulder with stump less than 20.32 cms from tip of acromion 80
3. Amputation from 20.32 cms from tip of acromion to less than 11.43 cms below tip of olecranon
70.
4. Loss of a hand or of the thumb and four fingers of one hand or amputation from 11.43 cms below
tip of olecranon 60
5 Loss of thumb 30
6 Loss of thumb and its metacarpal bone 40
7 Loss of four fingers of one hand 50
8 Loss of three fingers of one hand 30
9 Loss of two fingers of one hand 20
10 Loss of terminal phalanx of thumb 20
Amputation cases-lower limbs
11 Amputation of both feet resulting in end bearing stumps 90
12 Amputation through both feet proximal to the metatarsophalangeal joint 80
13 Loss of all toes of both feet through the metatarso-phalngeal joint 40
14 Loss of all toes of both feet proximal inter-phalangeal joint 30
15 Loss of all toes of both feet distal to the proximal inter-phalangeal joint 20
16 Amputation at hip 90
17 Amputation below hip with stump not exceeding 12.70 cms in length measured from tip of great
trochanter 80
18 Amputation below hip with stump exceeding 12.70 cms in length measured from tip of great
trochanter but not beyond middle thigh 70
19 Amputation below middle thigh to 8.89 cms below knee 60
20 Amputation below knee with stump exceeding 8.89 cms but not exceeding 12.70 cms 50
21 Amputation below knee with stump exceeding 12.70 cms 50
22 Amputation of one foot resulting in end bearing stump 50
23 Amputation through one foot proximal to the metatarso-phalangeal joint 50
24 Loss of all toes one foot through the metatarso-phalangeal joint 20
OTHER INJURIES
25 Loss of one eye, without complication, the other being normal 40
26 Loss of vision of one eye, without complications or disfigurement of eye-ball, the other being
normal 30
26A Loss of partial vision of one eye 10 Loss of
A. Fingers of right or left hand
INDEX FINGER
27 Whole 14
28 Two phalanges 11
29 One phalanx 9
30 Guillotine amputation of tip without loss of bone 5
MIDDLE FINGER
31 Whole 12
32 Two phalanges 9
33 One phalanx 7
34 Guillotine amputation of tip without loss of bone 4
RING OR LITTLE FINGER
35 Whole 7
36 Two phalanges 6
37 One phalanx 5
38 Gulliotine amputation of tip without loss of bone 2
B. Toes of right or left foot
GREAT TOE
39 Through metatarso-phalanges joint 14
40 Part ,with some loss of bone 3
ANY OTHER TOE
41 Through metatarso-phalangeal joint 3
42 Part ,with some loss of bone 1
TWO TOES OF ONE FOOT, EXCLUDING GREAT TOE
43 Through metatarso-phalangeal joint 5
44 Part ,with some loss of bone 1
THREE TOES OF ONE FOOT, EXCLUDING GREAT TOE
45 Through metatarso-phalangeal joint 6
46 Part, with some loss of bone 3
FOUR TOES OF ONE FOOT, EXCLUDING GREAT TOE
47 Through metatarso-phalangeal joint 9
48 Part with some loss of bone 3
Note : Complete and permanent loss of the use of any limb or member referred to in the Schedule
shall be deemed to be the equivalent of the loss of that limb or member.

SCHEDULE II [Section 2(1)(n)]

LIST OF PERSONS WHO SUBJECT TO THE PROVISIONS OF SECTION 2(1)(n) ARE
INCLUDED IN THE DEFINITION OF WORKMEN
The following persons are workmen within the meaning of Section 2(1)(n) and
subject to the provisions of that section that is to say any person who is -
1.employed otherwise than in a clerical capacity or on a railway in connection
 with the operation repair or maintenance of a lift or a vehicle propelled by steam
or
other mechanical power or by electricity or in connection with the loading or unloading of any such
vehicle or
2. employed otherwise than in clerical capacity in any premises wherein or within
the precincts whereof a manufacturing process as defined in clause (k) of section 2
of the Factories Act 1948 (63 of 1948) is being carried on or in any kind of work
whatsoever incident to or connected with any such manufacturing process or with
the article made whether or not employment in any such work is within such
premises or precincts and steam water or other mechanical power or electrical power is used; or
3.employed for the purpose of making altering repairing ornamenting finishing or otherwise
adapting for use transport or sale any article or part of an article in any premises wherein or within
the percents whereof twenty or more person are so employed,

4. employed in the manufacture or handling of explosives in connection with the employer's trade
or business; or
5. employed in any mine as defined in clause (j) of section 2 of the Mines Act 1952 (35 of 1952) in
any mining operation or in any kind of work other than clerical work incidental to or connected
with any mining operation or with the mineral obtained or in any kind or work whatsoever below
ground; or
6.employed as the master or as a seaman of -
(a) any ship which is propelled wholly or in part by steam or other mechanical power of by
electricity or which is towed or intended to be towed by a ship so propelled; or (b) any ship not
included in sub-clause (a) of twenty-five tonnes net tonnage or over; or
(c) any sea-going ship not included in sub-clause (a) or sub-clause (b) provided with sufficient area
for navigation under sails alone; or
7 employed for the purpose of -
(a) loading unloading fuelling constructing repairing demolishing cleaning or painting any ship of
which he is not the master or a member of the crew or handling or transport within the limits of any
post subject to the Indian Ports Act 1908 (15 of 1908) or the Major Port Trusts Act 1963 (18 of
1963) of goods which have been discharged from or are to be loaded into any vessel; or
(b) warping a ship through the lock; or
(c) mooring and unmooring ships at harbour wall berths or in pier; or
(d) removing or replacing dry dock caissons when vessels are entering or leaving dry docks; or
(e) the docking or undocking of any vessel during an emergency; or
(f) preparing splicing chir springs and check wires painting depth marks on locksides removing or
replacing fenders whenever necessary landing of gangways maintaining lifebuoys up to standard or
any other maintenance work of a like nature; or
(g) any work on jolly boats for bringing a ship's line to the wharf; or
8 employed in the construction maintenance repair or demolition of -
(a) any building which is designed to be or is or has been more than one storey in height above the
ground or twelve feet or more from the ground level to the apex of the roof or
(b) any dam or embankment which is twelve feet or more in height from its lowest to its highest
point; or
(c) any road bridge tunnel or canal; or
(d) any wharf quay sea wall or other marine work including any moorings of ships; or
9 employed in setting up maintaining repairing or taking down any telegraph or telephone line or
post or any overhead electric line or cable or standard or fittings and fixtures for the same; or
10 employed otherwise than in a clerical capacity in the construction working repair or demolition
of any aerial ropeway canal pipeline or sewer; or
11 employed in the service of any fire brigade; or
12 employed upon a railway as defined in clause (31) of section 2 and sub-section (1) of section 197
of the Indian Railway Act 1989 (24 of 1989) either directly or through a sub-contractor by a person
fulfilling a contract with the railway administration; or
13 employed as an inspector mail guard sorter or van peon in the Railway Mail Service or as a
telegraphist or as a postal or railway signaller or employed in any occupation ordinarily involving
outdoor work in the Indian Posts and Telegraphs
Department; or
14 employed otherwise than in a clerical capacity in connection with operations for
winning natural petroleum or natural gas; or
15 employed in any occupation involving blasting operations; or
16 employed in the making of any excavation in which on any one day of the preceding twelve
months more than twenty-five persons have been employed or explosives have been used or whose
depth from its highest to its lowest point exceeds twelve feet; or
17 employed in the operation of any ferry boat capable of carrying more than ten person; or
18 employed otherwise than in a clerical capacity on any estate which is maintained for the purpose
of growing cardamom cinchona coffee rubber or tea and on which on any one day in the preceding
twelve months twenty-five or more persons have been so employed; or
19 employed otherwise than in a clerical capacity in the generating transforming transmitting or
distribution of electrical energy or in generation or supply of gas; or
20 employed in a lighthouse as defined in clause (d) of section 2 of the Indian Lighthouse Act 1927
(17 of 1927); or
21 employed in producing cinematograph pictures intended for public exhibition or in exhibiting
such pictures; or
22 employed in the training keeping or working of elephants or wild animals; or
23 employed in the tapping of palm trees or the felling or logging of trees or the transport of timber
by inland waters or the control or extinguishing or forests fires; or
24 employed in operations for the catching or hunting of elephants or other wild animals; or
25 employed as a diver; or
26 employed in the handling or transport of goods in or within the precincts of -
(a) any warehouse or other place in which goods are stored and in which on any one day of the
preceding twelve months ten or more persons have been so employed or (b) any market in which on
any one day of the preceding twelve months fifty or more persons have been so employed; or
27 employed in any occupation involving the handling and manipulation of radium or X-ray
apparatus or contract with radioactive substances; or
28 employed in or in connection with the construction erection dismantling operation or
maintenance of an aircraft as defined in section 2 of the Indian Aircraft Act 1934 (22 of 1934); or
29 employed in horticultural operations forestry bee keeping or framing by tractors or other
contrivances driven by steam or other mechanical power or by electricity; or
30 employed otherwise than in a clerical capacity in the construction working repair or maintenance
of a tube-well; or
31 employed in the maintenance repair or renewal of electric fittings in any building; or
32 employed in a circus.
33 employed as watchman in any factory or establishment; or
34 employed in any operation in the sea for catching fish;
35 employed in any employment which requires handling of snakes for the purpose of extraction of
venom or for the purpose of looking after snakes or handling any other poisonous animal or insects;
or
36 employed in handling animals like horses mules and bulls;
37 employed for the purpose of loading or unloading any mechanically propelled vehicle or in the
handling or transport of goods which have been loaded in such vehicles;
38 employed in cleaning of sewer lines or septic tanks within the limits of a local authority;
39 employed on surveys and investigation exploration or garage or discharge observation of rivers
including drilling operations hydrological observations and floodforecasting activities groundwater
surveys and exploration;
40 employed in cleaning of jungles or reclaiming land or ponds in which on any one day of the
preceding twelve months more than twenty-five persons have been employed;
41 employed in cultivation of land or rearing and maintenance of live-stock or forest operations or
fishing in which on any one day of the preceding twelve months more than twenty-five persons
have been employed;
42 employed in installation maintenance or repair of pumping equipment used for lifting of water
from wells tube wells ponds lakes streams and the like;
43 employed in the construction boring or deepening of an open well bore well bore-cum-dug well
filter point and the like;
44 employed in spraying and dusting of insecticides or pesticides in agricultural operations or
plantations; or
45 employed in mechanized harvesting and threshing operations;
46 employed in working or repair or maintenance of bulldozers tractors power tillers and the like;
47 employed as artists for drawing pictures on advertisement boards at a height of 3.66 metres or
more from the ground level;
48 employed in any newspaper establishment as defined in the Working Journalists and Other
Newspaper Employees (Conditions of Services) and Miscellaneous Provisions Act 1955 (45 of
1955) and engaged in outdoor work. Explanation : In this Schedule the preceding twelve months
relates in any particular case to the twelve months ending with the day on which the accident in
such case occurred.
SCHEDULE III [Section 3]
LIST OF OCCUPATIONAL DISEASES
1. Infectious and parasitic diseases contracted in an occupation where there is a particular risk of
contamination
(a)All work involving exposure to health or laboratory work;
(b) All work involving exposure to veterinary work
(c) Work relating to handling animals, animal carcasses or merchandise which may have been
contaminated by animals or animal carcasses;
(d) Other work carrying a particular risk of contamination.
2. Disease caused by work in compressed air All work involving exposure to the risk concerned
3.Diseases caused by lead or its toxic compounds All work involving exposure to the risk concerned
4. Poisoning by nitrous fumes All work involving exposure to the risk concerned
5. Poisoning by organo phosphorus compounds All work involving exposure to the risk concerned
PART B
1. Diseases caused by phosphorus or its toxic compounds All work involving exposure to the risk
concerned
2. Diseases caused by mercury or its toxic compounds All work involving exposure to the risk
concerned
3. Diseases caused by benzene or its toxic homologues All work involving exposure to the risk
concerned
4. Diseases caused by nitro and amino toxic derivatives of benzene or its homologous All work
involving exposure to the risk concerned.
 Amendments to Workers Compensation Act,1923
Recent amendments to the Workers Compensation Act 1987 (the 1987 Act) and the Workplace
Injury Management and Workers Compensation Act 1998 (the 1998 Act) came into force on 1
February 2011 and have significant implications for all stakeholders. Some of the particularly
significant amendments are outlined below.

Section 40 Weekly Benefits

Notations have been added to section 40 of the 1987 Act to provide that the section 35
'cap' applies only to the amount of weekly benefits that can be paid to a worker. Section 35
and 40 had previously been interpreted such that a worker's earnings and weekly benefits
could not exceed the section 35 cap and if a worker's earnings were above the cap, then
no weekly benefits would be payable. The amendments now provide that it is only the
weekly benefits amount that cannot exceed the section 35 cap.
For example, the current section 35 cap is $1,739.30 p.w. and previously if a worker
had a pre-injury wage of $2,000 p/w and current earnings of $1,600 p.w. the maximum
weekly benefits he/she could receive were $139.30 p.w. so that the combined amount
of earnings and weekly benefits did not exceed the section 35 cap. Similarly, if the
worker's current earnings were $1,800 p.w. he/she could not receive any weekly
benefits as his/her current earnings already exceeded the section 35 cap.
The amendment provides that that same worker with current earnings of $1,600 p.w.
could now receive weekly benefits of $400 p.w. being the difference between his/her
pre-injury wage and current earnings. Similarly, if the worker's current earnings were
$1,800, he/she could now receive weekly benefits of $200 p.w.
The impact of this amendment is that higher income workers are not disadvantaged by the
fact that they earn above the section 35 cap. The amendment applies only to
compensation payable pursuant to a claim for compensation made after 1 February 2011,
even if the injury concerned was received before that date.

Section 60 Expenses
Section 60 has been amended to provide that the Workers Compensation Commission
(​WCC​) has jurisdiction to deal with claims for proposed treatment or services when it had
previously been determined that the jurisdiction was limited to treatment or service costs
already incurred. A dispute in the WCC regarding proposed treatment or services must be
referred for Approved Medical Specialist assessment.
Accordingly, if an insurer or employer has declined liability for, or failed to determine
liability for, proposed treatment or services, a worker can now bring WCC proceedings and
obtain an award for compensation in respect of such treatment or services. Therefore,
workers will not have to incur the cost of treatment or services in order to have their
entitlement to compensation for such determined by the WCC and thereby be at risk of an
adverse decision leaving them 'out of pocket'. This amendment places even greater
importance on insurers/employers making decisions within the legislative timeframe of 21
days, for claims for proposed treatment or services as failure to do so could result in the
worker bringing WCC proceedings which would likely increase legal costs on the claim.
 Permanent Impairment Medical Reports
The cost of medical reports obtained by workers to claim permanent impairment
compensation is a section 60 expense and are payable accordingly. However section 73
of the 1987 Act now provides that the costs of such medical reports are not payable until
the permanent impairment claim has concluded. This applies to medical reports obtained
prior to the commencement of the amendment.
The practical implication of this is that insurers/employers can wait until a worker's lump
sum compensation claim has been determined or settled before considering payment of
the worker's permanent impairment medical report.

Appeals
There have been significant amendments which change the nature of appeals and the
types of decisions that can be appealed.
Section 352 of the 1998 Act (appeals against Arbitrator decisions) has been amended
such that appeals are now limited to determination of whether the Arbitrator's decision was
affected by error of fact, law or discretion and then the correction of any such error.
Appeals against Arbitrator decisions are no longer by way of a review or a new hearing.
Arbitrator decisions that are interlocutory decisions can now be appealed due to a further
amendment to section 352. Accordingly, it is now possible for parties to appeal decisions
by Arbitrators on matters such as admission of evidence, whether a party can raise an
issue in dispute that was not previously notified or allowing or refusing an application to
issue a Direction for Production. Appeals against interlocutory decisions require leave from
the Commission and the Commission can only allow such appeals if it is of the opinion that
doing so is necessary or desirable for the proper and effective determination of the
dispute.
The ability to appeal interlocutory decisions is particularly significant in the context of
applications for an Interim Payment Direction as it is now possible to appeal an Arbitrators
decision to grant or refuse an Interim Payment Direction. Prior to the amendment it was
not possible to appeal such a decision by an Arbitrator and this meant that
insurers/employers could be directed to pay compensation in respect of an injury for which
liability had been properly declined and workers could be refused compensation and in
both situations an appeal was expressly precluded. However, the recent amendments
provide for a formal appeal recourse for parties in these matters.
The amendments relating to appeals against Arbitrator decisions only apply to decisions
made after the commencement of the amendment.
Appeals against AMS decisions continue to be by way of review, however section 328 of
the 1998 Act has been amended limiting the scope of the review to the grounds on which
the appeal is made. It is no longer open to a Medical Appeal Panel to review an AMS
decision in its entirety and is restricted to reviewing the grounds of appeal relied on by the
appellant. This amendment applies to AMS decisions made prior to the commencement of
the amendment.

Work Injury Damages

Amendment to section 151IA of the 1987 Act has removed the specification of age 65
years as the retirement age for the purposes of work injury damages and the section now
refers to the 'pension age' under the Social Security Act 1991 (the Social Security Act).
This brings the retirement age for the purposes of work injury damages in line with the
retirement age for the purposes of weekly benefits compensation. This amendment will
change the work injury damages retirement age from 2017 when the Social Security Act
provides for the staged increase in retirement age from 65 to 67 years.
Section 280B has been inserted into the 1998 Act to provide that workers cannot receive
work injury damages unless and until they receive their lump sum compensation
entitlement. This is to protect workers from missing out on their lump sum compensation
entitlement if this is not received before receiving work injury damages, because the
receipt of work injury damages brings an end to the worker's statutory compensation
entitlements.

Indexation of IPD Section 60 Limit

Section 297 of the 1998 Act (providing for Interim Payment Directions) has been amended
to allow for adjustment of the medical expenses amount for which an Interim Payment
Direction can be issued. At present an Interim Payment Direction cannot be issued for
payment of medical expenses exceeding $7,500, however this amount can be adjusted so
the amount can be kept relative to changes in the cost of medical expenses. The first
adjustment is to occur from 1 April 2011 and has not yet been released.
Amendments were also made with respect to rates for occupational rehabilitation services;
appointment of Senior Approved Medical Specialists in the WCC; and insurance,
premiums and licensing arrangements.
The Employee State Insurance Act,1948

The Employees State Insurance Act,1948 is one of the important legislations

enacted by the government of India. ESI Act is a beneficial piece of Social Security Legislation.
The objective of the ESI Act, 1948 is to provide for certain benefit to the employees in case of
sickness, maternity and employment injury.
The Supreme Court has explained the object of the ESI as follows:
“It is the law designed to confer benefits on the weaker segment in situations of distress as is
apparent from preamble”. The ESI Act is a beneficial piece of Legislation mainly meant for the
benefit of the employees to provide an insurance coverage when in distress during sickness,
maternity, employment injury, etc. The ESI Act has 100 Sections and 3 Schedules where the list of
injuries and occupational diseases are enlisted in the Schedules.(Schedule one if omitted).

Applicability
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.
Note:​ As soon as the above conditions are fulfilled the employer should furnish the details in
Form-01 to ESI office for registration under the ESI Act, 1948 & Obtaining of the employer’s Code
No.

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.
Penal Provisions
1)For employees’ contribution : Imprisonment for minimum 2 yrs. to maximum 5 yrs. and/or fine of
Rs. 25,000/- .
2)​ For employer’s contribution: Imprisonment for minimum 6 months to maximum 3 yrs. and/or
fine of Rs. 10,000/- .

Employees’ State Insurance Act, 1948

� provides for health care and cash benefits in cases of sickness, maternity and
employment injury
� health and medical care facilities are provided to the workers through a network
of 140 hospitals, 43 annexes and 1443 dispensaries located throughout the country
� Jointly administered by the Central Government and the State Governments
� while the Central Govt formulates the Scheme, recovers the contribution from
employers of covered establishments with the help of its Recovery Officers, builds
the infrastructure (hospitals, dispensaries etc.), provides 7/8th of the total expenses,
the State Government contributes 1/8th, posts Medical Officers, specialists and
paramedical staff, procures and installs equipments, dispenses medicines and has the
overall responsibility for the management of the hospitals/dispensaries
� Director General (DG), ESIC is the Chief Executive Officer of the Corporation
and functions under the overall Supervision and control of the Board and
Committees/Councils formed there under

BENEFITS AT A GLANCE

Benefits Contributory Duration Rate To Whom

Conditions Payable
1}​ a) Sickness I.P. Should work 91 days in any two As per S.B.R. Only to the insured
Benefit. for wages for 78 consecutive B.P. person
days in the
corresponding
C.P.(wef
19-9-98).
 b) Extended Continuous 124 days which 25% Above Only to the insured
sickness benefit employment for may be extended S.B.R. person
for long term the period of two up to 309 days in
diseases like TB, years. specified chronic
leprosy, etc. cases during a
period of three
yrs.
c) Enhanced Same as for 7 days for Twice the S.B.R Only to the insured
sickness benefit Benefit (a)above vasectomy & 14 person
(for under-going days for
sterilization tubectomy
operation for extended in cases
family planning) of post-coperative
complications etc.
2} ​Disablement No Conditons In case of a) For temp. Only to disablement the
Benefits temporary injured 40% above person S.B.R
(employment disablement: as
injury) long as incapacity
lasts & in case of
permenant
dis-ablement: for
life time.
EXPLANATION: Where more injuries than one are caused by the same accident, the rate of
benefit payable under clauses (c) & (d) shall be aggregated but not so in any case as to exceed the
FULL RATE and in cases of disablement not covered by clauses (a), (b), (c) & (d) at such rate, not
exceeding the FULL RATE, as may be provided in the regulations.
3}​Dependent’s No condition To the WIDOW/S 3/5 of the FULL RATE, if there are 2
Benefit during life time or more widows, the amt. payable to
(employment until remarriage. the widows shall be divided equally
injury) To the legitimate between the widows.
or adopted SON/S 2/5 of the FULL RATE, if there are 2
until he attains the or more sons, the amt. payable to the
age of 18yrs. sons shall be divided equally between
the sons. Subject to a min of Rs. 14/-

Benefits Contributory Duration Rate To Whom Payable

Conditions
To the legitimate or -----do-----
adopted unmarried
Daughter/s until she
attains the age of 18
yrs. or until marriage,
whichever is earlier,
In case the deceased
person does not leave a
widow or legitimate or
adopted child. D.B.
 shall be payable to...
a)​ Parent or grand 3/10th of the
parent, for life FULL RATE
b)​ Any other male 2/10th of the
dependent, until FULL RATE
he attains the age of 18
yrs.
c)​ Any other female -----do-----
dependent, until she
attains the age of 18
yrs. Or until marriage
whichever is earlier.
N.B. An insured person whose ​PERMANENT DISABLEMENT has been assessed as final and
who has been awarded permanent disablement benefit at a rate not exceeding Rs. 1.50 per day may
apply for a lump sum payment and such amount shall be determined by multiplying the daily rate of
permanent disablement benefit by the figure indicated in Co. 2 of the Schedule III of the
Regulations.
Benefits Contributory Duration Rate To Whom
Conditions Payable
4}​Maternity Payment of 12 weeks of which Twice S.B.R. Only to the insured
Benefits contribution for not more than 6 Subject t o min person.
70 days in one or weeks can precede of Rs.20/- p.d.
two consecutive the expected date
periods. of confinement.
6 weeks for Medical bonus
miscarriage or for of Rs.250/-
medical where ESI
termination of facility is not
pregnancy available.
Additional
payment for one
month for
Complications
(pre or post)
arising out of
Pregnancy
5}​Medical No Condition From the date of Full Medical Person as
Insured entry of an care including well as his/
Benefit employee into an hospitalisation her Family
insurable Members as
employment so defined u/s 2(11)
long as he remains of the Act.
in insurable
employment and
three after for
certain additional
period
6}​Funeral No condition (i.e. One time lump Not more than To the eldest
Expenses merely by virtue sum payment Rs. 1,500/- surviving
of being an member of the
insured person) family of the
deceased I.P.
Or to the
person who
actually incurs
the
expenditure
on the funeral
of an I.P.
7}​Rehabilitation No condition For each day of Same as at Only to the
Allowance which I.P. remains 1(a) Up to Rs. 15 I.P.
admitted in L
Artificial Limb for
Center for Rehabilitation.
fixation,
repair or
replacement of
artificial limb.
8}​Medical No condition but Till the date on Medical Benefit IP and spouse.
Benefit to insured an. I.P. has to pay which an I.P.
persons who Rs. 10/- pm in would have
ceases insurable lump sum for one attained the age of
employment on year in advance superannuation
account of every year.
permanent
disablement.

9}​Medical 1) Insurable Till the time ----- Insured

Benefit to retired employment yearly person and
Insured Period for a period of 5 contribution is his spouse
years paid to the
and Concerned
2) Payment of Office of the
Office of the Corporation.
Contribution @
Rs. 15/-
PM in lump sum
for one year in
advance, each
year.

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 callipers, crutches, wheel chairs and cardiac pace makers,
dialysis/dialysis with kidney transplant etc. as part of medical care under the ESI Scheme.

Benefits Contributory Duration Rate To Whom

Conditions Payable
4}​Maternity Payment of 12 weeks of which Twice S.B.R. Only to the insured
Benefits contribution for not more than 6 Subject t o min person.
70 days in one or weeks can precede of Rs.20/- p.d.
two consecutive the expected date
periods. of confinement.
6 weeks for Medical bonus
miscarriage or for of Rs.250/-
medical where ESI
termination of facility is not
pregnancy available.
Additional
payment for one
month for
Complications
(pre or post)
arising out of
Pregnancy
5}​Medical No Condition From the date of Full Medical Person as
Insured entry of an care including well as his/
Benefit employee into an hospitalisation her Family
insurable Members as
employment so defined u/s 2(11)
long as he remains of the Act.
in insurable
employment and
three after for
certain additional
period
6}​Funeral No condition One time lump Not more than To the eldest
Expenses (i.e.merely by sum payment Rs. 1,500/- surviving
virtue of being an member of the
insured person) family of the
deceased I.P.
Or to the
person who
actually incurs
the
expenditure
on the funeral
of an I.P.
7}​Rehabilitation No condition For each day of Same as at Only to the
Allowance which I.P. remains 1(a) Up to Rs. 15 I.P.
admitted in L
Artificial Limb for
 Center for Rehabilitation.
fixation,
repair or
replacement of
artificial limb.
8}​Medical No condition but Till the date on Medical Benefit IP and spouse.
Benefit to insured an. I.P. has to pay which an I.P.
persons who Rs. 10/- pm in would have
ceases insurable lump sum for one attained the age of
employment on year in advance superannuation
account of every year.
permanent
disablement.

9}​Medical 1) Insurable Till the time ----- Insured

Benefit to retired employment yearly person and
Insured Period for a period of 5 contribution is his spouse
years paid to the
and Concerned
2) Payment of Office of the
Office of the Corporation.
Contribution @
Rs. 15/-
PM in lump sum
for one year in
advance, each
year.

Benefits Contributory Duration Rate To Whom

Conditions Payable
4}​Maternity Payment of 12 weeks of which Twice S.B.R. Only to the insured
Benefits contribution for not more than 6 Subject t o min person.
70 days in one or weeks can precede of Rs.20/- p.d.
two consecutive the expected date
periods. of confinement.
6 weeks for Medical bonus
miscarriage or for of Rs.250/-
medical where ESI
termination of facility is not
pregnancy available.
Additional
 payment for one
month for
Complications
(pre or post)
arising out of
Pregnancy
5}​Medical No Condition From the date of Full Medical Person as
Insured entry of an care including well as his/
Benefit employee into an hospitalisation her Family
insurable Members as
employment so defined u/s 2(11)
long as he remains of the Act.
in insurable
employment and
three after for
certain additional
period
6}​Funeral No condition One time lump Not more than To the eldest
Expenses (i.e.merely by sum payment Rs. 1,500/- surviving
virtue of being an member of the
insured person) family of the
deceased I.P.
Or to the
person who
actually incurs
the
expenditure
on the funeral
of an I.P.
7}​Rehabilitation No condition For each day of Same as at Only to the
Allowance which I.P. remains 1(a) Up to Rs. 15 I.P.
admitted in L
Artificial Limb for
Center for Rehabilitation.
fixation,
repair or
replacement of
artificial limb.
8}​Medical No condition but Till the date on Medical Benefit IP and spouse.
Benefit to insured an. I.P. has to pay which an I.P.
persons who Rs. 10/- pm in would have
ceases insurable lump sum for one attained the age of
employment on year in advance superannuation
account of every year.
permanent
disablement.

9}​Medical 1) Insurable Till the time ----- Insured

Benefit to retired employment yearly person and
Insured Period for a period of 5 contribution is his spouse
years paid to the
and Concerned
2) Payment of Office of the
Office of the Corporation.
Contribution @
Rs. 15/-
PM in lump sum
for one year in
advance, each
year.

RECORDS TO BE KEPT READY FOR ESI INSPECTION

1. Attendance Register/Muster Roll.
2. Salary/Wage Register/Payroll.
3. EC (Employee’s & Employer’s Contribution) Statement.
4. Employees’ Register U/R 32 (Form 7).
5. Accident Register U/R 66.
6. Return of Contribution (RC-Form 6).
7. Return of Declaration Forms (RDF - Form 3).
8. Receipted Copies of Challans.
9. Books of Account viz Cash/Bank, Expense Register, Sales/Purchase Register, Petty Cash Book,
Ledger, Supporting Bills asnd Vouchers, a/w Delivery Challans (if any).

Amendments to The Employee State Insurance Act,1948

Ministry of Labour and Emplyment has increased the scope of Employee state insurance act , 1948
vide notification dated 20.04.2010.Now employee taking salary up to Rs 15000/- (increased from
10000)are covered under ESI ACT ,1948.Notification is given below.This Notification is applicable
from 01.05.2010.
To be published in the Gazette of India. Part Il, Section 3, Sub-Section (i)]
GOVERNMENT OF INDIA
MINISTRY OF LABOUR AND EMPLOYMENT
New Delhi, th~~ril, 2010
​NOTIFICA TION
G.S.R. (E)- The following draft rules further to amend the Employees' State
Insurance (Central) Rules, 1950 were published as required under sub-section(l) of section
95 of the Employees' State Insurance Act, 1948 (34 of 1948) in the notification of the
Government of Indian in the Ministry of Labour & Employment vide No. G.S.R.164(E),
dated the 26th February, 2010, in the Gazette of India, Part Il, Section 3, Sub-section (i),
dated 27th February, 2010 for inviting objections and suggestions from all persons likely to
be affected thereby till the expiry of the period of thirty days from the date on which the
copies of the Gazette of India in which the said notification was published, were made
available to the public;
And whereas the copies of the said Gazette were made available to the public on
27th February, 2010;

And whereas, objections and suggestions received from persons likely to be

affected thereby have been considered by the Government;
Now, therefore, in exercise of powers conferred by section 95 of the Employees'
State Insurance Act, 1948, the Central Government, after consultation with Employees'
State Insurance Corporation, hereby makes the following rules further to amend the
Employees' State Insurance (Central) Rules, 1950, namely:-

1. These Rules may be called the Employees' State Insurance (Central) Amendment
Rules, 2010.
2. These shall come into force from the l " day of May, 2010.
3. In the Employees' State Insurance (Central) Rules, 1950, in Rule 50, for the words
"ten thousand", wherever they occur, the words "fifteen thousand" shall be substituted.

Employees’ Provident Fund and Miscellaneous Provisions Act, 1952

The Employees' Provident Fund Act, 1952 is an important piece of Labour Welfare
legislation enacted by the Parliament to provide social security benefits to the workers. At present,
the Act and the Schemes framed there under provides for three types of benefits -Contributory
Provident Fund , Pensioner benefits to the employees/ family members and the insurance cover to
the members of the Provident Fund.

The object of the Act in 1952 was the institution of the compulsory contributory Provident Fund to
the employees to which both the employee and the employer would contribute. The Employees'
Provident Fund Scheme was accordingly framed under the Act and it came into effect from
1-11-1952. Initially the title of the Act was, "The Provident Fund Act 1952".

The provisions of the Employees' Provident Fund & MP Act, 1952 extends to whole of India except
the State of Jammu & Kashmir and also the State of Sikkim where it has not been notified so far
after its annexation with the Union of India .The Act initially applied to factories/establishments
falling within six specified industries which had completed three years of existence and employed
50 or more persons. With effect from 31-12-1960, the establishments employing 20 or more persons
were also brought under the purview of the Act .
With effect from 1-8-1988, the Act is applicable to the establishment employing twenty or more
persons on expiry of a period of three years from the date of set up . From 22-9-1997 this infancy of
three years has been dispensed with and all the establishments employing 20 or more persons are
brought under the purview of the Act from the very date of set up subject to fulfilment of other
conditions. The provisions of the Act apply on its own force independently.

The Central Government has residual powers to apply this act to any establishment employing less
than twenty employees. By virtue of these provisions, the Employees' Provident Fund Scheme has
been extended to Cinema theatres employing five or more persons, w.e.f. 1-10-1984. Also there is a
provision for voluntary application of the Act to any establishment upon joint request from the
employer and majority of its employees, to whom it does not apply otherwise. An establishment to
which this Act applies shall continue to be governed by this Act notwithstanding that the number of
persons employed therein at any time falls below twenty.

The Employees' Provident Fund organisation came into being following enactment of
the Employees’ Provident Fund Act in the year 1952. The funds established under the Act vests in
and administered by Central Board of Trustees constituted by Central Government which functions
subject to overall regulatory control of the Central Government.

MEMBERSHIP:

At the inception of the scheme an employee who was in receipt of pay up to Rs.300/- p.m. , and
who worked for one year was eligible for membership of the fund. As a result of amendments made
from time to time, the conditions of eligibility for membership of the fund have been liberalised in
favour of employee. Presently an employee at the time of joining the employment and getting
wages upto Rs.6500/- is required to become a member. Now an employee is eligible for
membership of fund from the very first date of joining a covered establishment.

�Benefits available to the workers include the provident fund, employees deposit linked insurance
and the pension to the workers and their families
� applicable to 180 industries/classes of establishments employing 20 or more workers
� wage ceiling for coverage is Rs. 6,500 per month
� 24.53 million workers are covered under the Act
� these are administered by the Employees Provident Fund Organisation under the overall
supervision and direction of the Central Board of Trustees and Committees
� Central Provident Fund Commissioner (CPFC) is the Chief Executive Officer of the Organisation

The Act provides for:

1. Grant of exemption from the operation of the scheme/s framed under the Act to an establishment,
to a class of employees and to an individual employee, on certain conditions.
2. Penalties to employers/trustees of exempted Provident Fund who contravenes the provision of the
Act and the Scheme.
3. Appointment of inspector to secure compliance under the Act and the Schemes framed there
under.
4. Mode of recovery of moneys due from employers.
(Act No. 19 of 1952)4th March, 1952 - ​An Act to provide for the institution of provident funds,
pension fund and deposit-linked insurance fund for employees in factories and other
establishments.

1. Short title, extent and application ​- (1) This Act may be called the Employees’ Provident
Funds and Miscellaneous Provisions Act, 1952.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) Subject to the provisions contained in section 16, it applies -
(a)to every establishment which is a factory engaged in any industry specified in Schedule I and in
which twenty or more persons are employed and
(b) to any other establishment employing twenty or more persons or class of such establishments
which the Central Government may, by notification in the Official Gazette, specify, in this behalf:

Provided that the Central Government may, after giving not less than two months’ notice of its
intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any
establishment employing such number of persons less than twenty as may be specified in the
notification.

2.​Definitions​. - In this Act, unless the context otherwise requires, -

(a) ​“Appropriate Government”​ means -
(i)in relation to an establishment belonging to, or under the control of, the Central Government or
in relation to, an establishment connected with a railway company, a major port, a mine or an
oil-field or a controlled industry or in relation to an establishment having departments or branches
in more than one State, the Central Government: and(ii)in relation to any other establishment, the
State Government:
(aa)​ “authorised officer”​ means the Central Provident Fund Commissioner, Additional Central
Provident Fund Commissioner, Deputy Provident Fund Commissioner, Regional Provident Fund
Commissioner or such other officer as may be authorised by the Central Government, by
notification in the Official Gazette;
(b)​ “basic wages”​ means all emoluments which are earned by an employee while on duty or on
leave or on holidays with wages in either case in accordance with the terms of the contract of
employment and which are paid or payable in cash to him, but does not include-
(i) the cash value of any food concession;
(ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an
employee on account of a rise in the cost of living, house-rent allowance, overtime allowance,
bonus, commission or any other similar allowance payable to the employee in respect of his
employment or of work done in such employment;
(iii) any presents made by the employer;
(c) ​“Contribution”​ means a contribution payable in respect of a member under a scheme or the
contribution payable in respect of an employee to whom the Insurance Scheme applies;
(d) ​“controlled industry”​ means any industry the control of which by the Union has been declared
by a Central Act to be expedient in the public interest;
(e) ​“employer”​ means-
(i) in relation to an establishment which is a factory, the owner or occupier of the factory, including
the agent of such owner or occupier, the legal representative of a deceased owner or occupier and,
where a person has been named as a manager of the factory under clause f of sub-section 1 of
section 7 of the Factories Act, 1948 (63 of 1948), the person so named; and
(ii) in relation to any other establishment, the person who, or the authority which, has the ultimate
control over the affairs of the establishment, and where the said affairs are entrusted to a manager,
managing director or managing agent, such manager, managing director or managing agent;
(f)​ “employee”​ means any person who is employed for wages in any kind of work, manual or
otherwise, in or in connection with the work of an establishment and who gets his wages directly
or indirectly from the employer, and includes any person,-
(i) employed by or through a contractor in or in connection with the work of the establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52
of 1961) or under the standing orders of the establishment;
(ff) ​“exempted employee”​ means an employee to whom a Scheme or the Insurance Scheme, as
the case may be, would, but for the exemption granted under section 17, have applied;
(fff) ​“exempted establishment”​ means an establishment in respect of which an exemption has
been granted under section 17 from the operation of all or any of the provisions of any Scheme or
the Insurance Scheme, as the case may be, whether such exemption has been granted to the
establishment as such or to any person or class of persons employed therein;
(g) ​“factory”​ means any premises, including the precincts thereof, in any part of which a
manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of
power or without the aid of power;
(h) ​“Fund”​ means the Provident Fund established under a Scheme;
(ia)​ “Insurance Fund”​ means the Deposit-linked Insurance Scheme framed under sub-section 2 of
section 6C;
(ib) ​“Insurance Scheme”​ means the Employees’ Deposit-linked Insurance Scheme framed under
sub-section 1 of section 6C;
(ic) ​“manufacture” or “manufacturing process”​ means any process for making, altering,
repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or
otherwise treating or adapting any article or substance with a view to its use, sale, transport,
delivery or disposal;
(j)​“member”​ means a member of the Fund;
(k)“occupier of a factory” means the person, who has ultimate control over the affairs of the
factory, and, where the said affairs are entrusted to a managing agent, such agent shall be deemed
to be the occupier of the factory;
(kA)​ “Pension Fund” ​means the Employees’ Pension Fund established under
sub-section 2 of section 6A;
(kB) ​“Pension Scheme”​ means the Employees’ Pension Scheme framed
under sub-section 1 of section 6A;
(ka) ​“prescribed”​ means prescribed by rules made under this Act;
(kb) ​“Recovery Officer”​ means any officer of the Central Government, State
Government or the Board of Trustees constituted under section 5A, who may be authorised by
the Central Government, by notification in the Official Gazette, to exercise the powers of a
Recovery Officer under this Act;
(l) ​“Scheme”​ means the Employees’ Provident Funds scheme framed under section 5;
(l1) ​“Superannuation”​, in relation to an employee, who is the member of the Pension Scheme,
means the attainment, by the said employee, of the age of fifty-eight years.
(m) ​“Tribunal”​ means the Employees’ Provident Funds Appellate Tribunal constituted under
section 7D.
2A.Establishments to include all departments and branches​. - For the removal of doubts, it is
hereby declared that where an establishment consists of different departments or has branches,
whether situate in the same place or in different places, all such departments or branches shall be
treated as parts of the same establishment.

3​. Power to apply Act to an establishment which has a common provident fund with another
establishment​. - Where immediately before this Act becomes applicable to an establishment there
is in existence a provident fund which is common to the employees employed in that establishment
and employees in any other establishment, the Central Government may, by notification in the
Official Gazette direct that the provisions of this Act shall also apply to such other establishment.

4. Power to add to Schedule I​. – (1) The Central Government may, by notification in the Official
Gazette, add to Schedule I any other industry in respect of the employees whereof it is of opinion
that a Provident Fund Scheme should be framed under this Act, and thereupon the industry so
added shall be deemed to be an industry specified in Schedule I for the purpose of this Act.

(2) All notifications under sub-section 1 shall be laid before Parliament, as soon as may be, after
they are issued.

5. Employees’ Provident Funds Scheme. – ​(1) The Central Government may, by notification in
the Official Gazette, frame a scheme to be called the Employees’ Provident Fund Scheme for the
establishment of provident funds under this Act for employees or for any class of employees and
specify the establishments or class of establishments to which the said Scheme shall apply and
there shall be established, as soon as may be after the framing of the Scheme, a Fund in accordance
with the provisions of this Act and the Scheme.

5A.Central Board​. - (1) The Central Government may, by notification in the Official Gazette,
constitute, with effect from such date as may be specified therein, a Board of Trustees for the
territories to which this Act extends hereinafter in this Act referred to as the Central Board
consisting of the following persons as members, namely:- (a)a Chairman and a Vice-Chairman to
be appointed by the Central Government;

(aa) the Central Provident Fund Commissioner, Ex officio;

(b)not more than five persons appointed by the Central Government from amongst its officials;

(c)not more than fifteen persons representing Governments of such States as the Central
Government may specify in this behalf, appointed by the Central Government;

(d)ten persons representing employers of the establishments to which the Scheme applies,
appointed by the Central Government after consultation with such organisations of employers as
may be recognised by the Central Government in this behalf; and

(e) ten persons representing employees in the establishments to which the Scheme applies,
appointed by the Central Government after consultation with such organisations of employees as
may be recognised by the Central Government in this behalf.

(2)The terms and conditions subject to which a member of the Central Board may be appointed
and the time, place and procedure of the meetings of the Central Board shall be such as may be
provided for in the Scheme.

(3)The Central Board shall subject to the provisions of section 6 and section 6C administer the
Fund vested in it in such manner as may be specified in the Scheme.

(4)The Central Board shall perform such other functions as it may be required to perform by or
under any provisions of the Scheme, the Pension Scheme and the Insurance scheme.

(5)The Central Board shall maintain proper accounts of its income and expenditure in such form
and in such manner as the Central Government may, after consultation with the Comptroller and
Auditor-General of India, specify in the Scheme.

(6)The accounts of the Central Board shall be audited annually by the comptroller and
Auditor-General of India and any expenditure incurred by him in connection with such audit shall
be payable by the Central Board to the Comptroller and Auditor-General of India.

(7)The Comptroller and Auditor-General of India and any person appointed by him in connection
with the audit of the accounts of the Central Board shall have the same rights and privileges and
authority in connection with such audit as the Comptroller and Auditor-General has, in connection
with the audit of Government accounts and, in particular, shall have the right to demand the
production of books, accounts, connected vouchers, documents and papers and inspect any of the
offices of the Central Board.

(8)The accounts of the Central Board as certified by the Comptroller and Auditor-General of India
or any other person appointed by him in this behalf together with the audit report thereon shall be
forwarded to the Central Board which shall forward the same to the Central Government along
with its comments on the report of the Comptroller and Auditor-General.

(9)It shall be the duty of the Central Board to submit also to the Central Government an annual
report of its work and activities and the Central Government shall cause a copy of the annual
report, the audited accounts together with the report of the Comptroller and Auditor-General of
India and the comments of the Central Board thereon to be laid before each House of Parliament.

5AA. Executive Committee​. – (1) The Central Government may, by notification in the Official
Gazette, constitute, with effect from such date as may be specified therein, an Executive
Committee to assist the Central Board in the performance of its functions.

(2) The Executive Committee shall consist of the following persons as members, namely:-
(a)a Chairman appointed by the Central Government from amongst the members of the Central
Board:
(b)two persons appointed by the Central Government from amongst the persons referred to in
clause b of sub-section 1 of section 5A;
(c)three persons appointed by the Central Government from amongst the persons referred to in
clause c of sub-section 1 of section 5A;
(d)three persons representing the employers elected by the Central Board from amongst the
persons referred to in clause d of sub-section 1 of section 5A;
(e)three persons representing the employees elected by the Central Board from amongst the
persons referred to in clause e of sub-section 1 of section 5A;
(f)the Central Provident Fund Commissioner, ex-officio.
(3)The terms and conditions subject to which a member of the Central Board may be appointed or
elected to the Executive Committee and the time, place and procedure of the meetings of the
Executive Committee shall be such as may be provided for in the Scheme.
5B. State Board​.- (1)The Central Government may, after consultation with the Government of any
State, by notification in the Official Gazette, constitute for that State a Board of Trustees
hereinafter in this Act referred to as the State Board in such manner as may be provided for in the
Scheme.

(2) A State Board shall exercise such powers and perform such duties as the
Central Government may assign to it from time to time.
(3)The terms and conditions subject to which a member of a State Board
may be appointed and the time, place and procedure of the meetings of a State Board shall be such
as may be provided for in the Scheme.
5C. Board of Trustees to be body corporate​.- Every Board of Trustees constituted under section
5A or section 5B shall be a body corporate under the name specified in the notification constituting
it, having perpetual succession and a common seal and shall by the said name sue and be sued.

5D.Appointment of officers​. – (1) The Central Government shall appoint may appoint the
required officers as per the Act.

5DD.Acts and proceedings of the Central Board or its Executive Committee or the State
Board not to be invalidated on certain grounds. – ​No act done or proceeding taken by the
Central Board or the Executive Committee constituted under section 5AA or the State Board shall
be questioned on the ground merely of the existence of any vacancy in, or any defect in the
constitution of, the Central Board or the Executive Committee or the State Board, as the case may
be.

5E. ​Delegation​. - The Central Board may delegate to the Executive Committee or to the Chairman
of the Board or to any of its officers and a State Board may delegate to its Chairman or to any of its
officers, subject to such conditions and limitations, if any, as it may specify, such of its powers and
functions under this Act as it may deem necessary for the efficient administration of the Scheme,
the Pension Scheme and the Insurance Scheme.

6​. Contributions and matters which may be provided for in Schemes. – The contribution which
shall be paid by the employer to the Fund shall be ten percent. Of the basic wages, dearness
allowance and retaining allowance, if any, for the time being payable to each of the employees
whether employed by him directly or by or through a contractor, and the employee’s contribution
shall be equal to the contribution payable by the employer in respect of him and may, if any
employee so desires, be an amount exceeding ten percent of his basic wages, dearness allowance
and retaining allowance if any, subject to the condition that the employer shall not be under an
obligation to pay any contribution over and above his contribution payable under this section:

6A.Employees’ Pension Scheme. – (1) The Central Government may, by notification in the
Official Gazette, frame a scheme to be called the Employees’ Pension Scheme for the purpose of
providing for –

(a)superannuation pension, retiring pension or permanent total disablement pension to the

employees of any establishment or class of establishments to which this Act applies; and

(b) Widow or widower’s pension, children pension or orphan pension payable to the beneficiaries
of such employees.

6C. Employees’ Deposit-linked Insurance Scheme​. - The Central Government may, by

notification in the Official Gazette, frame a scheme to be called the Employees’ Deposit-linked
Insurance Scheme for the purpose of providing life insurance benefits to the employees of any
establishment or class of establishments to which this Act applies.

6D. Laying of Schemes before Parliament. - ​ Every scheme framed under section 5, section 6A
and section 6C shall be laid, as soon as may be after it is framed, before each House of Parliament,
while it is in session, for a total period of thirty days which may be comprised in one session or in
two or more successive sessions, and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid, both Houses agree in making any modification in the
scheme, or both Houses agree that the scheme should not be framed, the scheme shall thereafter
have effect only in such modified form or be of no effect, as the case may be; so however, that any
such modification or annulment shall be without prejudice to the validity of anything previously
done under that scheme.

7. Modification of Scheme – (1) The Central Government may, by notification in the Official
Gazette add to, amend or vary either prospectively or retrospectively, the Scheme, the Pension
Scheme or the Insurance Scheme, as the case may be.

7A. Determination of moneys due from employers​. – (1)The Central Provident Fund
Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund
Commissioner, any Regional Provident Fund Commissioner or any Assistant Provident Fund
Commissioner may, by order,

(a)in a case where a dispute arises regarding the applicability of this Act to an establishment,
decide such dispute; and
(b) determine the amount due from any employer under any provision of this Act, the Scheme or
the Pension Scheme or the Insurance Scheme, as the case may be,
and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary.
(2) The officer conducting the inquiry under sub-section 1 shall, for the purposes of such inquiry
have the same powers as are vested in a court under the code of Civil Procedure, 1908 (5 of 1908),
for trying a suit in respect of the following matters, namely:-
(a)enforcing the attendance of any person or examining him on oath:
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavit;
(d) issuing commissions for the examination of witnesses.
7B. Review of orders passed under Section 7A. - ​(1) Any person aggrieved by an order made
under sub-section 1 of section 7A, but from which no appeal has been preferred under this Act, and
who, from the discovery of new and important matter or evidence which, after the exercise of due
diligence was not within his knowledge or could not be produced by him at the time when the
order was made, or on account of some mistake or error apparent on the face of the record or for
any other sufficient reason, desires to obtain a review of such order may apply for a review of that
order to the officer who passed the order:

7C.Determination of escaped amount. - ​Where an order determining the amount due from an
employer under section 7A or section 7B has been passed and if the officer who passed the orders
–

(a) has reason to believe that by reason of the omission or failure on the part of the employer to
make any document or report available, or to disclose, fully and truly, all material facts necessary
for determining the correct amount due from the employer, any amount so due from such employer
for any period has escaped his notice;

he may, within a period of five years from the date of communication of the order passed under
section 7A or section 7B, re-open the case and pass appropriate orders re-determining the amount
due from the employer in accordance with the provisions of this Act:

7D Employees’ Provident Funds Appellate Tribunal. –​(1) The Central Government may, by
notification in the Official Gazette, constitute one or more Appellate Tribunals to be known as the
Employees’ Provident Funds Appellate Tribunal to exercise the powers and discharge the
functions conferred on such Tribunal by this Act and every such Tribunal shall have jurisdiction in
respect of establishments situated in such area as may be specified in the notification constituting
the Tribunal.

(2) A Tribunal shall consist of one person only to be appointed by the Central Government.
(3) A person shall not be qualified for appointment as a Presiding Officer of a Tribunal hereinafter
referred to as the Presiding Officer, unless he is, or has been, or is qualified to be, -
(i)a Judge of a High Court; or
(ii) a District Judge.
7E. Term of office. - ​ The Presiding Officer of a Tribunal shall hold office for a term of five years
from the date on which he enters upon his office or until he attains the age of sixty-two years,
whichever is earlier.

7F.Resignation. –​(1)The Presiding Officer may, by notice in writing under his hand addressed to
the Central Government, resign his office;

7G. Salary and allowances and other terms and conditions of service of Presiding Officer. -
The salary and allowances payable to, and the other terms and conditions of service including
pension, gratuity and other retirement benefits of, the Presiding Officer shall be such as may be
prescribed:

Provided that neither the salary and allowances nor the other terms and conditions of service of the
Presiding Officer shall be varied to his disadvantage after his appointment.

7H. Staff of the Tribunal. - (1)The Central Government shall determine the nature and categories
of the officers and other employees required to assist a Tribunal in the discharge of its functions
and provide the Tribunal with such officers and other employees as it may think fit.

(2) The officers and other employees of a Tribunal shall discharge their functions under the general
superintendence of the Presiding Officer.

(3) The salaries and all allowances and other conditions of service of the officers and other
employees of a Tribunal shall be such as may be prescribed.

7 – I. Appeals to the Tribunal. –​(1) Any person aggrieved by a notification issued by the Central
Government, or an order passed by the Central Government, or any authority, under the proviso to
sub-section 3, or sub-section4, of section I, or section3, or sub-section 1 of section 7A, or section
7B except an order rejecting an application for review referred to in sub-section 5 thereof, or
section 7C, or section 14B may prefer an appeal to a Tribunal against such order.

(2) Every appeal under sub-section 1 shall be filed in such form and manner, within such time and
be accompanied by such fees, as may be prescribed.

7 – J. Procedure of Tribunals. – ​(1)A Tribunal shall have power to regulate its own procedure in
all matters arising out of the exercise of its powers or of the discharge of its functions including the
places at which the Tribunal shall have its sittings.

(2) A Tribunal shall, for the purpose of discharging its functions, have all the powers which are
vested in the officers referred to in section 7A and any proceeding before the Tribunal shall be
deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the
purpose of section 196, of the Indian Penal Code (45 of 1860) and the Tribunal shall be deemed to
be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal
Procedure, 1973 (2 of 1974).

7K.Right of appellant to take assistance of legal practitioner and of Government, etc., to

appoint presenting officers. – ​(1) A person preferring an appeal to a Tribunal under this Act may
either appear in person or take the assistance of a legal practitioner of his choice to present his case
before the Tribunal.

(2)The Central Government or a State Government or any other authority under this Act may
authorise one or more legal practitioners or any of its officers to act as presenting officers and
every person so authorised may present the case with respect to any appeal before a Tribunal.

7L.Orders of Tribunal​. – (1) A Tribunal may, after giving the parties to the appeal, an
opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or
annulling the order appealed against or may refer the case back to the authority which passed such
order with such directions as the tribunal may think fit, for a fresh adjudication or order, as the case
may be, after taking additional evidence, if necessary.

7N.Finality of orders constituting a Tribunal​. – No order of the Central Government appointing

any person as the Presiding Officer shall be called in question in any manner, and no act or
proceeding before a Tribunal shall be called in question in any manner on the ground merely of
any defect in the constitution of such Tribunal.

7–O. Deposit of amount due, on filing appeal​. – No appeal by the employer shall be entertained
by a Tribunal unless he has deposited with it seventy-five per cent of the amount due from him as
determined by an officer referred to in section 7A:

Provided that the Tribunal may, for reasons to be recorded in writing, waive or reduce the amount
to be deposited under this section.

7P. Transfer of certain applications to Tribunals​. – All applications which are pending before
the Central Government under section 19A, shall stand transferred to a Tribunal exercising
jurisdiction in respect of establishments in relation to which such applications had been made as if
such applications were appeals preferred to the Tribunal.

7Q. The employer shall be liable to pay simple interest at the rate of twelve per cent per annum or
at such higher rate as may be specified in the Scheme on any amount due from him under this Act
from the date on which the amount has become so due till the date of its actual payment:

Provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of
interest charged by any scheduled bank.

8. Mode of recovery of moneys due from employers​– any amount due -

(a) from the employer in relation to an establishment to which any Scheme or the Insurance
Scheme applies in respect of any contribution payable to the Fund or, as the case may be, the
Insurance Fund, damages recoverable under section 14B, accumulations required to be transferred
under sub-section 2 of section 15 or under sub-section 5 of section 17 or any charges payable by
him under any other provision of this Act or of any provision of the Scheme or the Insurance
Scheme; or

(b) from the employer in relation to an exempted establishment in respect of any damages
recoverable under section 14B or any charges payable by him the appropriate Government under
any provision of this Act or under any of the conditions specified under section 17 or in respect of
the contribution payable by him towards the Pension Scheme under the said section 17, may, if the
amount is in arrear, be recovered in the manner specified in section 8B to 8G.

8A. Recovery of moneys by employers and contractors​.

(1) The amount of contribution that is to say, the employer’s contribution as well as the employee’s
contribution in pursuance of any Scheme and the employer’s contribution in pursuance of the
Insurance Scheme and any charges for meeting the cost of administering the Fund paid or payable
by an employer in respect of an employee employed by or through a contractor may be recovered
by such employer from the contractor, either by deduction from any amount payable to the
contractor under any contract or as a debt payable by the contractor.

8B. Issue of certificate to the Recovery Officer​.

(1) Where any amount is in arrear under section8, the authorised officer may issue, to the Recovery
Officer, a certificate under his signature specifying the amount of arrears and the Recovery Officer,
on receipt of such certificate, shall proceed to recover the amount specified therein from the
establishment or, as the case may be, the employer by one or more of the modes mentioned below:-

(a) attachment and sale of the movable or immovable property of the establishment or, as the case
may be, the employer;

(b) arrest of the employer and his detention in prison;

(c) appointing a receiver for the management of the movable or immovable properties of the
establishment or, as the case may be, the employer:

Provided that the attachment and sale of any property under this section shall first be effected
against the properties of the establishment and where such attachment and sale is insufficient for
recovery the whole of the amount of arrears specified in the certificate, the Recovery Officer may
take such proceedings against the property of the employer for recovery of the whole or any part of
such arrears.

(2) The authorised officer may issue a certificate under sub-section 1, notwithstanding that
proceedings for recovery of the arrears by any other mode have been taken.

8C. Recovery officer to whom certificate is to be forwarded​.

(1)The authorised officer may forward the certificate referred to in section 8B to the Recovery
Officer within whose jurisdiction the employer –

(a) carries on his business or profession or within whose jurisdiction the principal place of his
establishment is situated; or

(b) resides or any movable or immovable property of the establishment or the employer is situated.
(2)Where an establishment or the employer has property within the jurisdiction of more than one
Recovery Officers and the Recovery Officer to whom a certificate is sent by the authorised officer
-

8D. Validity of certificate, and amendment thereof.

(1) When the authorised officer issues a certificate to a Recovery Officer under section 8B, it shall
not be open to the employer to dispute before the Recovery Officer the correctness of the amount,
and no objection to the certificate on any other ground shall also be entertained by the Recovery
Officer.

8E. Stay of proceedings under certificate and amendment or withdrawal thereof.

(1) Notwithstanding that a certificate has been issued to the Recovery Officer for the recovery of
any amount, the authorised officer may grant time for the payment of the amount, and thereupon
the Recovery Officer shall stay the proceedings until the expiry of the time so granted.

8F. Other modes of recovery.

(1) Notwithstanding the issue of a certificate to the Recovery Officer under section 8B, the Central
Provident Fund Commissioner or any other officer authorised by the Central Board may recover
the amount by any one or more of the modes provided in this section.

8G. Application of certain provisions of Income-tax Act.

The provisions of the Second and Third Schedules to the Income-tax Act, 1961 (43 of 1961) and
the Income-tax Certificate Proceedings rules, 1962, as in force from time to time, shall apply with
necessary modifications as if the said provisions and the rules referred to the arrears of the amount
mentioned in section 8 of this Act instead of to the income-tax:

Provided that any reference in the said provisions and the rules to the “assessee” shall be construed
as a reference to an employer as defined in this Act.

9.Fund to be recognised under Act 11 of 1922​.

For the purpose of the Indian Income-tax Act, 1922 (11 of 1922), the Fund shall be deemed to be a
recognised provident fund within the meaning of Chapter IXA of that Act:

Provided that nothing contained in the said Chapter shall operate to render ineffective any
provision of the Scheme under which the Fund is established, which is repugnant to any of the
provisions of that Chapter or of the rules made there under.

10. Protection against attachment​.

(1) amount standing to the credit of any member in Fund or of any exempted employee in a
provident fund shall not in any way be capable of being assigned or charged and shall not be liable
to attachment under any decree or order of any court in respect of any debt or liability incurred by
the member or the exempted employee, and neither the official assignee appointed under the
Presidency Towns Insolvency Act, 1909 (3 of 1909) nor any receiver appointed under the
Provincial Insolvency Act, 1920 (5 of 1920), shall be entitled to have any claim on, any such
amount.

(2) Any amount standing to the credit of a member in the fund or of an exempted employee in a
provident fund at the time of his death and payable to his nominee under the Scheme or the rules of
the provident fund shall, subject to any deduction authorised by the said Scheme or rules, vest in
the nominee and shall be free from any debt or other liability incurred by the deceased or the
nominee before the death of the member or of exempted employee and shall also not be liable to
attachment under any decree or order of any court.

(3) The provisions of sub-section 1 and sub-section 2 shall, so far as may be, apply in relation to
the pension or any other amount, payable under the Pension Scheme and also in relation to any
amount payable under the Insurance Scheme as they apply in relation to any amount payable out of
the Fund.

11. Priority of payment of contributions over other debts​.

(1) Where any employer is adjudicated insolvent or, being a company, an order for winding up is
made, the amount due -

(a) from the employer in relation to an establishment to which any Scheme or the Insurance
Scheme applies in respect of any contribution payable to the Fund or, as the case may be, the
Insurance Fund damages recoverable under section 14B, accumulations required to be transferred
under sub-section 2 of section 15 or any charges payable by him under any other provision of this
Act or of any provision of the Scheme or the Insurance Scheme; or

(b) from the employer in relation to an exempted establishment in respect of any contribution to
the provident fund or any insurance fund in so far as it relates to exempted employees, under the
rules of the provident fund or any insurance fund, any contribution payable by him towards the
Pension Fund under sub-section 6 of section 17, damages recoverable under section 14B or any
charges payable by him to the appropriate Government under any provision of this Act, or under
any of the conditions specified under section 17,

12. Employer not to reduce wages, etc.

No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies
shall, by reason only of his liability for the payment of any contribution to the Fund or the
Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce
whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance
Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity,
provident fund or life insurance to which the employee is entitled under the terms of his
employment, express or implied.

13. Inspectors.

(1) The appropriate Government may, by notification in the Official Gazette, appoint such persons
as it thinks fit to be Inspectors for the purposes of this Act, the Scheme, the Pension Scheme or the
Insurance Scheme and may define their jurisdiction.

14.​ ​Penalties.

(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act, the
Scheme, the Pension Scheme or the Insurance Scheme or of enabling any other person to avoid
such payment, knowingly makes or causes to be made any false statement or false representation
shall be punishable with imprisonment for a term which may extend to one year, or with fine of
five thousand rupees, or with both.

14A.​ ​Offences by companies

(1)If the person committing an offence under this Act, the Scheme or the Pension Scheme or the
Insurance Scheme is a company, every person who at the time the offence was committed was in
charge of, and was responsible to, the company for the conduct of the business of the company, as
well as the company, shall be deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly:

14AA.Enhanced punishment in certain cases after previous conviction - Whoever, having been
convicted by a court of an offence punishable under this Act, the Scheme or the Pension Scheme or
the Insurance Scheme, commits the same offence shall be subject for every such subsequent
offence to imprisonment for a term which may extend to five years, but which shall not be less
than two years, and shall also be liable to a fine of twenty five thousand rupees.

14AB. Certain offences to be cognizable - Notwithstanding anything contained in the Code of

Criminal Procedure, 1898 (5 of 1898) an offence relating to default in payment of contribution by
the employer punishable under this Act shall be cognizable.

14AC.Cognizance and trial of offences ​– (1) No Court shall take cognizance of any offence
punishable under this Act, the Scheme or the Pension Scheme or the Insurance Scheme except on a
report in writing of the facts constituting such offence made with the previous sanction of the
Central Provident Fund Commissioner or such other officer as may be authorised by the Central
Government, by notification in the Official Gazette, in this behalf, by an Inspector appointed under
Section 13.

14B. Power to recover damages - Where an employer makes default in the payment of any
contribution to the Fund the Pension Fund or the Insurance Fund or in the transfer of
accumulations required to be transferred by him under sub-section 2 of section 15 or sub-section 5
of section 17 or in the payment of any charges payable under any other provision of this Act or of
any Scheme or Insurance Scheme or under any of the conditions specified under section 17, the
Central Provident Fund Commissioner or such other officer as may be authorised by the Central
Government, by notification in the Official Gazette, in this behalf may recover from the employer
by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the
Scheme.

14C. Power of court to make orders - Where an employer is convicted of an offence of making
default in the payment of any contribution to the Fund, the Pension Fund or the Insurance Fund or
in the transfer of accumulations required to be transferred by him under sub-section (2) of section
15 or sub-section (5) of section 17, the court may, in addition to awarding any punishment, by
order in writing require him within a period specified in the order which the court may, if it thinks
fit and on application in that behalf from time to time, extend, to pay the amount of contribution or
transfer the accumulations, as the case may be, in respect of which the offence was committed.

15.Special provisions relating to existing provident funds - Subject to the provisions of section
17, every employee who is a subscriber to any provident fund or an establishment to which this
Act applies shall, pending the application of a Scheme to the establishment in which he is
employed, continue to be entitled to the benefits accruing to him under the provident fund, and the
provident fund shall continue to be maintained in the same manner and subject to the same
conditions as it would have been if this Act had not been passed.

16.Act not to apply to certain establishments​ - This Act shall not apply –

(a) to any establishment registered under the Co-operative Societies Act, 1912 (2 of 1912), or
under any other law for the time being in force in any State relating to co-operative societies
employing less than fifty persons and working without the aid of power; or

(b)to any other establishment belonging to or under the control of the Central Government or a
State Government and whose employees are entitled to the benefit of contributory provident fund
or old age pension in accordance with any Scheme or rule framed by the Central Government or
the State Government governing such benefits; or

(c) to any other establishment set up under any Central, Provincial or State Act and whose
employees are entitled to the benefits of contributory provident fund or old age pension in
accordance with any scheme or rule framed under that Act governing such benefits;

(2)If the Central Government is of opinion that having regard to the financial position of any class
of establishments or other circumstances of the case, it is necessary or expedient to do so, it may,
by notification in the Official Gazette, and subject to such conditions, as may be specified in the
notification, exempt whether prospectively or retrospectively that class of establishments from the
operation of this Act for such period as may be specified in the notification.

16A.Authorising certain employers to maintain provident fund accounts -​The Central

Government may, on an application made to it in this behalf by the employer and the majority of
employees in relation to an establishment employing one hundred or more persons, authorise the
employer by an order in writing, to maintain a provident fund account in relation to the
establishment, subject to such terms and conditions as may be specified in the Scheme.

17.Power to exempt ​-The appropriate Government may, by notification in the Official Gazette,
and subject to such conditions as may be specified in the notification exempt, whether
prospectively or retrospectively, from the operation of all or any of the provisions of any Scheme -

17A. Transfer of accounts – Where an employee employed in an establishment to which this Act
applies leaves his employment and obtains re-employment in another establishment to which this
Act does not apply, the amount of accumulations to the credit of such employee in the fund, or as
the case may be, in the provident fund of the establishment left by him shall be transferred, within
such time as may be specified by the Central Government in this behalf, to the credit of his account
in the provident fund of the establishment in which he is re-employed, if the employee so desires
and the rules in relation to that provident fund permit such transfer.

18. Protection of Action taken in good faith ​- No suit, prosecution or other legal proceeding shall
lie against the Central Government, a State Government, the Presiding Officer of a tribunal, any
authority referred to in section 7A, an Inspector or any other person for anything which is in good
faith done or intended to be done in pursuance of this Act, the Scheme, the Pension Scheme or the
Insurance Scheme.

18A.Presiding Officer and other officers to be public servants - The Presiding Officer of a
Tribunal, its officers and other employees, the authorities referred to in section 7A and every
Inspector shall be deemed to be public servants within the meaning of section 21 of the Indian
Penal Code (45 of 1860).

19.​Delegation of powers - The appropriate Government may direct that any power or authority or
jurisdiction exercisable by it under this Act, the Scheme, the Pension Scheme or the Insurance
Scheme shall, in relation to such matters and subject to such conditions, if any, as may be specified
in the direction.

20.Power of Central Government to give directions ​- The Central Government may, from time
to time, give such directions to the Central Board as it may think fit for the efficient administration
of this Act and when any such direction is given, the Central Board shall comply with such
direction.

21.Power to make rules – The Central Government may, by notification in the Official Gazette,
make rules to carry out the provisions of this Act.

22.Power to remove difficulties – If any difficulty arises in giving effect to the provisions of this
Act, as amended by the Employees’ Provident Funds and Miscellaneous Provisions (Amendment)
Act, 1988, the Central Government may, by order published in the Official Gazette, make such
provisions, not inconsistent with the provisions of this Act, as appear to it to be necessary or
expedient for the removal of the difficulty.

Amendment to the Employees' Provident Fund Act,1952

Gazette of India, Extraordinary, Part II- Section 3, Sub- Section (i)

Notification No. 17
New Delhi, the 15th January 2011/Pause 25,1932

G.S.R. 25(E)- In exercise of the powers conferred by Section 5, read with sub-section(1)
of Section 7 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952
(19 of 1952), the Central Government hereby makes the following Scheme, further to
amend the Employees' Provident Funds Scheme, 1952, namely:-

1. (1) This Scheme may be called the Employees' Provident Funds (Amendment)
Scheme, 2011.
(2) It shall come into force from the 1st day of April 2011.

2. In the Employees Provident Funds Scheme, 1952, (hereinafter referred to as the said
Scheme), in paragraph 60, after sub-paragraph (5), the following sub- paragraph shall be
substituted, namely:-

"(6) Interest shall not be credited to the account of a member from the date on which it
has become Inoperative Account, under the provisions of sub-paragraph(6) of paragraph
72".

3. In the said Scheme, in paragraph 72, in sub-paragraph (6):-

(a) for the words "but no claim has been preferred " the word" but no application for
withdrawal under paragraphs 69 or 70 or transfer, as the case may be has been
preferred" shall be substituted.

(b) for the words "three years", at both the places where they occur, the words "thirty six
months shall be substituted.
 The Maternity Benefits Act,1961

The main objective of enacting the Maternity benefit Act, 1961 is to safeguard the
interests of the pregnant women employees working in the organizations of India. Taking into
consideration the hardships that are taken up by the women employees during the period of
pregnancy which deteriorate their health physically and psychologically, the government of India
has made special provisions through the enactment of the Maternity Benefits Act, 1961. The present
Act prescribes a number of guidelines and instructions to the employers who engage the women
employees in the industry. The Act provides for prohibiting the women employees from doing work
during the period of pregnancy and also for paying the pregnant employee a reasonable
compensation for fulfilling all her necessary medical requirements.
The Act also made provisions for not engaging the pregnant women in any such work
which is of an arduous nature or which involves long standing hours and which would affect the
growth and development of the foetus of the pregnant women employee. The important provisions
of the Act are as follows.
Important provisions of the Act:
1. Short title, extent and commencement.-​ (1) This Act may be called the Maternity Benefit Act,
1961.(2) It extends to the whole of India 2***.
(3) It shall come into force on such date3* as may be notified in this behalf in the Official Gazette,–
4*[(a) in relation to mines and to any other establishment wherein persons are employed for the
exhibition of equestrian, acrobatic and other performances, by the Central Government; and]
(b) in relation to other establishments in a State, by the
State Government.
2. Application of Act.​- 5*[(1) It applies, in the first instance,--
(a) to every establishment being a factory, mine or plantation including any such establishment
belonging to Government and to every establishment wherein persons are employed for the
exhibition of equestrian, acrobatic and other performances;
(b) to every shop or establishment within the meaning of any law for the time being in force in
relation to shops and establishments in a State, in which ten or more persons are employed, or were
employed, on any day of the preceding twelve months:]

3.​ Definitions​.- In this Act, unless the context otherwise requires,–

(a) ​“appropriate Government” ​means, in relation to an establishment being a mine, 1*[or an
establishment wherein persons are employed for the exhibition of equestrian, acrobatic and other
performances,] the
Central Government and in relation to any other establishment, the State Government;
(b) ​“child” ​includes a still-born child;
(c) “​delivery” ​means the birth of a child;
(d) ​“employer”​ means–
(i) in relation to an establishment which is under the control of the Government, a person or
authority appointed by the Government for the supervision and control of employees or where no
person or authority is so appointed, the head of the department;
(ii) in relation to an establishment under any local authority, the person appointed by such authority
for the supervision and control of employees or where no person is so appointed, the chief executive
officer of the local authority;
(iii) in any other case, the person who, or the authority which, has the ultimate control over the
affairs of the establishment and where the said affairs are entrusted to any other person whether
called a manager, managing director, managing agent, or by any other name, such person;
2*[(e​) "establishment"​ means--
(i) a factory;
(ii) a mine;
(iii) a plantation;
(iv) an establishment wherein persons are employed for the exhibition of equestrian, acrobatic and
other performances; 3*xxx
4*[(iva) a shop or establishment; or]
(v) an establishment to which the provisions of this Act have been declared under sub-section
(1) of section 2 to be applicable;]
(f)​ “factory” ​means a factory as defined in clause (m) of section 2 of the Factories Act, 1948 (63 of
1948)
(g) ​“Inspector”​ means an Inspector appointed under section
(h) “maternity benefit” means the payment referred to in sub-section (1) of section 5;
(i)​ “mine”​ means a mine as defined in clause (j) of section
2 of the Mines Act, 1952 (35 of 1952)
(j) ​“miscarriage”​ means expulsion of the contents of a pregnant uterus at any period prior to or
during the twenty-sixth week of pregnancy but does not include any miscarriage, the causing of
which is punishable under the Indian Penal Code (45 of 1860)
(k) ​“plantation”​ means a plantation as defined in clause (f)
of section 2 of the Plantations Labour Act, 1951 (69.of 1951;)
389.(l) ​“prescribed”​ means prescribed by rules made under this
Act;
(m) “State Government”, in relation to a Union territory, means the Administrator thereof;
(n)​ “wages”​ means all remuneration paid or payable in cash to a woman, if the terms of the contract
of employment, express or implied, were fulfilled and includes–
(1) such cash allowances (including dearness allowance and house rent allowance) as a woman is
for the time being entitled to;
(2) incentive bonus; and
(3) the money value of the concessional supply of food grains and other articles,
but does not include–
(i) any bonus other than incentive bonus;
(ii) over-time earnings and any deduction or payment made on account of fines;
(iii) any contribution paid or payable by the employer to any pension fund or provident fund or for
the benefit of the woman under any law for the time being in force; and
(iv) any gratuity payable on the termination of service;
(o) ​“woman”​ means a woman employed, whether directly or through any agency, for wages in any
establishment.
4. Employment of, or work by, women prohibited during certain period.
4. Employment of, or work by, women prohibited during certain period.​ (1) No employer shall
knowingly employ a woman in any establishment during the six weeks immediately following the
day of her delivery or her miscarriage.
(2) No woman shall work in any establishment during the six weeks immediately following the day
of her delivery or her miscarriage.
(4) The period referred to in sub-section (3) shall be–
(a) the period of one month immediately preceding the period of six weeks, before the date of her
expected delivery;
(b) any period during the said period of six weeks for which the pregnant woman does not avail of
leave of absence under section 6.5.Right to payment of maternity benefit.
5. Right to payment of maternity benefit.​- 1*[(1) Subject to the provisions of this Act, every
woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at
the rate of the average daily wage for the period of her actual absence, that is to say, the period
immediately preceding the day of her delivery, the actual day of her delivery and any period
immediately following that day.]
(2) No woman shall be entitled to maternity benefit unless she has actually worked in an
establishment of the employer from whom she claims maternity benefit, for a period of not less than
1*[eighty days] in the twelve months immediately preceding the date of her expected delivery:
6. Notice of claim for maternity benefit and payment thereof.​- (1)Any woman employed in an
establishment and entitled to maternity benefit under the provisions of this Act may give notice in
writing in such form as may be prescribed, to her employer, stating that her maternity benefit and
any other amount to which she may be entitled under this Act may be paid to her or to such person
as she may nominate in the notice and that she will not work in any establishment during the period
for which she receives maternity benefit.
(2) In the case of a woman who is pregnant, such notice shall state the date from which she will be
absent from work, not being a date earlier than six weeks from the date of her expected delivery.
(3) Any woman who has not given the notice when she was pregnant may give such notice as soon
as possible after the delivery.
3*[(4) On receipt of the notice, the employer shall permit such woman to absent herself from the
establishment during the period for which she receives the maternity benefit.]
(5) The amount of maternity benefit for the period preceding the date of her expected delivery shall
be paid in advance by the employer to the woman on production of such proof as may be prescribed
that the woman is pregnant, and the amount due for the subsequent period shall be paid by the
employer to the woman within forty-eight hours of production of such proof as may be prescribed
that the woman has been delivered of a child.
7. Payment of maternity benefit in case of death of a woman.​-If a woman entitled to maternity
benefit or any other amount under this
Act, dies before receiving such maternity benefit or amount, or where the employer is liable for
maternity benefit under the second proviso to sub-section (3) of section 5, the employer shall pay
such benefit or amount to the person nominated by the woman in the notice given under section 6
and in case there is no such nominee, to her legal representative.
8. Payment of medical bonus​.- Every woman entitled to maternity benefit under this Act shall also
be entitled to receive from her employer a medical bonus of 1*[two hundred and fifty rupees], if no
pre-natal confinement and post-natal care is provided for by the employer free of charge.
9. Leave for miscarriage.​- In case of miscarriage, a woman shall, on production of such proof as
may be prescribed, be entitled to leave with wages at the rate of maternity benefit, for a period of
six weeks immediately following the day of her miscarriage.
10. Leave for illness arising out of pregnancy, delivery, premature birth of child, or
miscarriage.- ​A woman suffering from illness arising out of pregnancy, delivery, premature birth
of child or miscarriage shall, on production of such proof as may be prescribed, be entitled, in
addition to the period of absence allowed to her under section 6, or, as the case may be, under
section 9, to leave with wages at the rate of maternity benefit for a maximum period of one month.
11. Nursing breaks.​- Every woman delivered of a child who returns to duty after such delivery
shall, in addition to the interval for rest allowed to her, be allowed in the course of her daily work
two breaks of the prescribed duration for nursing the child until the child attains the age of fifteen
months.
12. Dismissal during absence of pregnancy,​.- (1) When a woman absents herself from work in
accordance with the provisions of this
Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such
absence or to give notice of discharge or dismissal on such a day that the notice will expire during
such absence, or to vary to her disadvantage any of the conditions of her service.
(2) (a) The discharge or dismissal of a woman at any time during her pregnancy, if the woman but
for such discharge or dismissal would have been entitled to maternity benefit or medical bonus
referred to in section 8, shall not have the effect of depriving her of the maternity benefit or medical
bonus:
Provided that where the dismissal is for any prescribed gross misconduct, the employer may, by
order in writing communicated to the woman, deprive her of the maternity benefit or medical bonus
or both.
13. No deduction of wages in certain cases.​-No deduction from the normal and usual daily wages
of a woman entitled to maternity benefit under the provisions of this Act shall be made by reason
only of–
(a) the nature of work assigned to her by virtue of the provisions contained in sub-section (3) of
section 4;
or
(b) breaks for nursing the child allowed to her under the provisions of section
14. Appointment of Inspectors​.- The appropriate Government may, by notification in the Official
Gazette, appoint such officers as it thinks fit to be Inspectors for the purposes of this Act and may
define the local limits of the jurisdiction within which they shall exercise their functions under this
Act.
15. Powers and duties of Inspectors​.-An Inspector may, subject to such restrictions or conditions
as may be prescribed, exercise all or any of the following powers, namely:–
(a) enter at all reasonable times with such assistants, if any, being persons in the service of the
Government or any local or other public authority, as he thinks fit, any premises or place where
women are employed or work is given to them in an establishment, for the purposes of examining
any registers, records and notices required to be kept or exhibited by or under this Act and require
their production for inspection;
(b) examine any person whom he finds in any premises or place and who, he has reasonable cause
to believe, is employed in the establishment:
Provided that no person shall be compelled under this section to answer any question or give any
evidence tending to incriminate himself;
(c) require the employer to give information regarding the names and addresses of women
employed, payments made to them, and applications or notices received from them under this Act;
and
16. Inspectors to be public servants.-​ Every Inspector appointed under this Act shall be deemed to
be a public servant within the meaning of section 21 of the Indian Penal Code. (45 of 1860.)
17. Power of Inspector to direct payments to be made.​- 1*[(1) Any woman claiming that--
(a) maternity benefit or any other amount to which she is entitled under this Act and any person
claiming that payment due under section 7 has been improperly withheld;
(b) her employer has discharged or dismissed her during or on account of her absence from work in
accordance with the provisions of this Act,
may make a complaint to the Inspector.
(2) The Inspector may, of his own motion or on receipt of a complaint referred to in sub-section (1),
make an inquiry or cause an inquiry to be made and if satisfied that--
(a) payment has been wrongfully withheld, may direct the payment to be made in accordance with
his orders;
(b) she has been discharged or dismissed during or on account of her absence from work in
accordance with the provisions of this Act, may pass such orders as are just and proper according to
the circumstances of the case.]
(3) Any person aggrieved by the decision of the Inspector under sub-section (2) may, within thirty
days from the date on which such decision is communicated to such person, appeal to the prescribed
authority.
(4) The decision of the prescribed authority where an appeal has been preferred to it under
sub-section (3) or of the Inspector where no such appeal has been preferred shall be final.
18. Forfeiture of maternity benefit.- If a woman works in any establishment after she has been
permitted by her employer to absent herself under the provisions of section 6 for any period during
such authorised absence, she shall forfeit her claim to the maternity benefit for such period.
19. Abstract of Act and rules there under to be exhibited​.- An abstract of the provisions of this
Act and the rules made there under in the language or languages of the locality shall be exhibited in
a conspicuous place by the employer in every part of the establishment in which women are
employed.
20. Registers, etc.​ Every employer shall prepare and maintain such registers, records and
muster-rolls and in such manner as may be prescribed.
2*[21. Penalty for contravention of Act by employer.- (1) If any employer fails to pay any amount
of maternity benefit to a woman entitled under this Act or discharges or dismisses such woman
during or on account of her absence from work in accordance with the provisions of this Act, he
shall be punishable with imprisonment which shall not be less than three months but which may
extend to one year and with fine which shall not be less than two thousand rupees but which may
extend to five thousand rupees:
Provided that the court may, for sufficient reasons to be recorded in writing, impose a sentence of
imprisonment for a lesser term or fine only in lieu of imprisonment.
(2) If any employer contravenes the provisions of this Act or the rules made there under, he shall, if
no other penalty is elsewhere provided by or under this Act for such contravention, be punishable
with imprisonment which may extend to one year, or with fine which may extend to five thousand
rupees, or with both:
23. Cognizance of offences.
2*[23. Cognizance of offences.​- (1) Any aggrieved woman, an office-bearer of a trade union
registered under the Trade Unions Act,1926 (16 of 1926) of which such woman is a member or a
voluntary organisation registered under the Societies Registration Act, 1860 (21.of 1860) or an
Inspector, may file a complaint regarding the commission of an offence under this Act in any court
of competent jurisdiction and no such complaint shall be filed after the expiry of one year from the
date on which the offence is alleged to have been committed.
(2) No court inferior to that of a Metropolitan Magistrate or a Magistrate of the first class shall try
any offence under this Act.].
24. Protection of action taken in good faith.​- No suit, prosecution or other legal proceeding shall
lie against any person for anything which is in good faith done or intended to be done in pursuance
of this Act or of any rule or order made thereunder
25. Power of Central Government to give directions​.- The Central
Government may give such directions as it may deem necessary to a
State Government regarding the carrying into execution of the provisions of this Act and the State
Government shall comply with such directions.
26. Power to exempt establishments.-If the appropriate Government is satisfied that having regard
to an establishment or a class of establishments providing for the grant of benefits which are not
less favourable than those provided in this Act, it is necessary so to do, it may, by notification in the
Official Gazette, exempt, subject to such conditions and restrictions, if any, as may be specified in
the notification, the establishment or

27. Effect of laws and agreements inconsistent with this Act.​- (1)The provisions of this Act shall
have effect notwithstanding anything inconsistent therewith contained in any other law or in the
terms of any award, agreement or contract of service, whether made before or after the coming into
force of this Act:
Provided that where under any such award, agreement, contract of service or otherwise, a woman is
entitled to benefits in respect of any matter which are more favourable to her than those to which
she would be entitled under this Act, the woman shall continue to be entitled to the more favourable
benefits in respect of that matter, notwithstanding that she is entitled to receive benefits in respect of
other matters under this Act.
(2) Nothing contained in this Act shall be construed to preclude a woman from entering into an
agreement with her employer for granting her rights or privileges in respect of any matter which are
more favourable to her than those to which she would be entitled under this
Act.
28. Power to make rules​.- (1) The appropriate Government may, subject to the condition of
previous publication and by notification in the Official Gazette, make rules for carrying out the
purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may
provide for–
(a) the preparation and maintenance of registers, records and muster-rolls;
(b) the exercise of powers (including the inspection of establishments) and the performance of
duties by Inspectors for the purposes of this Act;
(c) the method of payment of maternity benefit and other benefits under this Act in so far as
provision has not been made therefor in this Act;
(d) the form of notices under section 6;
(e) the nature of proof required under the provisions of this Act;
(f) the duration of nursing breaks referred to in section11;
(g) acts which may constitute gross misconduct for purposes of section 12;
(h) the authority to which an appeal under clause (b) of sub-section (2) of section 12 shall lie; the
form and manner
(i) the authority to which an appeal shall lie against the decision of the Inspector under section 17;
the form and manner in which such appeal may be made and the procedure to be followed in
disposal thereof;
(j) the form and manner in which complaints may be made to
Inspectors under sub-section (1) of section 17 and the procedure to be followed by them when
making inquiries or causing inquiries to be made under sub-section (2)
of that section;
(k) any other matter which is to be, or may be, prescribed.
(3) Every rule made by the Central Government under this section shall be laid as soon as may be
after it is made, before each House of
Parliament while it is in session for a total period of thirty days which may be comprised in one
session 1*[or in two or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid,] both
Houses agree in making any modification in the rule or both Houses agree that the rule should not
be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the
case may be; so however that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule.
29. Amendment of Act 69 of 1951​.-In section 32 of the Plantations
Labour Act, 1951,–
(a) in sub-section (1), the letter and brackets “(a)” before the words “in the case of sickness”, the
word “and”
after the words “sickness allowance” and clause (b)
shall be omitted;
(b) in sub-section (2), the words “or maternity” shall be omitted.
30. Repeal.​- On the application of this Act–
(i) to mines, the Mines Maternity Benefit Act, 1941 (19 of
1941) and
(ii) to factories situate in the Union territory of Delhi, the Bombay Maternity Benefit Act, 1929
(Bom. Act VII
of 1929) as in force in that territory, shall stand repealed.
An Act to provide for a scheme for the payment of gratuity to employees engaged in factories,
mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters
connected therewith or incidental thereto. BE it enacted by Parliament in the Twenty-third Year of
Republic of India as follows :

THE MATERNITY BENEFIT (AMENDMENT) ACT, 2008

NO. 15 OF 2008

[1st April, 2008.]

An Act further to amend the Maternity Benefit Act, 1961.

BE it enacted by Parliament in the Fifty-ninth Year of the Republic of India as follows:-

1. Short title and commencement. - (1) This Act may be called the Maternity Benefit
(Amendment) Act, 2008. (2) It shall come into force on such date as the Central
Government may, by notification in the Official Gazette, appoint.

2. Substitution of new section for section 8. - In the Maternity Benefit Act, 1961, for
section 8, the following section shall be substituted, namely:- "8. Payment of medical
bonus. (1) Every woman entitled to maternity benefit under this Act shall also be entitled
to receive from her employer a medical bonus of one thousand rupees, if no pre-natal
confinement and post-natal care is provided for by the employer free of charge. (2) The
Central Government may before every three years, by notification in the Official Gazette,
increase the amount of medical bonus subject to the maximum of twenty thousand
rupees.".
 The Payment of Gratuity Act,1972

The payment of Gratuity Act, 1972 is a small Act having 15 sections without
schedules. Out of all the sections, ​section-4 ​is the most important section which explains about the
payment of gratuity. The Central government enacted the Payment of Gratuity (Central)Rules,1972.
In the similar lines, the State government also enacted the Rules applicable in their states
respectively. For example, the Government of Andhra Pradesh enacted the Andhra Pradesh
Payment of Gratuity Rules,1972.

Article 43 of the Constitution of India provides that the State shall endeavour to secure, by
suitable legislation or economic organization or in any other way, to all workers,
agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a
decent standard of life and full enjoyment of leisure and social and cultural opportunities. In
fact, in India the wages paid to workers are not living wages. Either they are minimum
wages or they are fair wages.
Further the value of the rupee is decreasing day-by-day. It is called 'inflation'. The workers spend
entire life in working from adolescence to old age in the factories. At the time of retirement, he may
get pension or provident fund. But this amount is not sufficient, when compared with the prices in
the market at the age of his retirement. Particularly at this age, the worker has to perform marriages
of his sons and daughters. At least, he has to construct a small house to spend his remaining life.
Therefore, it is necessary to provide certain facilities to the workers at their retirement age.
Therefore, Parliament enacted “the Payment of Gratuity Act, 1972” with an intention to help the
workers at their old age, retrenchment, disablement, etc.

Objective of the Act:

The Preamble of the Act says the object: “An Act to provide for a scheme for the payment of
gratuity to employees engaged in factories, mines, oil-fields, plantations, ports, railway companies,
shops or other establishments and for matters connected therewith or incidental thereto.” The
following are the important provisions of the Act.

Section: 1-Short title, extent, application and commencement.

(1) This Act may be called the Payment of Gratuity Act, 1972.

(2) It extends to the whole of India:

Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu
and Kashmir.

(3) It shall apply to--

(a) every factory, mine, oilfield, plantation, port and railway company;

(b) every shop or establishment within the meaning of any law for the time being in force in relation
to shops and establishments in a State, in which ten or more persons are employed, or were
employed, on any day of the preceding twelve months;

20. such other establishments or class of establishments, in which ten or more employees are
employed, or were employed, or, any day of the preceding twelve months, as the Central
Government may, by notification, specify in this behalf.

21. (3A) A shop or establishment to which this Act has become applicable shall continue to be
governed by this Act notwithstanding that the number of persons employed therein at any
time after it has become so applicable falls below ten.]

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

Section: 2 - Definitions.
In this Act, unless the context otherwise requires, -

(a) "appropriate Government"' means, -

(i) in relation to an establishment

(a) belonging to, or under the control of, the Central Government,

(b) having branches in more than one State,

(c) of a factory belonging to, or under the control of, the Central Government,

(d) of a major port, mine, oilfield or railway company, the Central Government,

(ii) in any other case, the State Government;

(b) "completed year of service" means continuous service for one year;
[2] [(c) "continuous service" means continuous service as defined in section 2A;]

(d) "controlling authority" means an authority appointed by the appropriate Government under
section 3 ;

(e) "employee" means any person (other than an apprentice) employed on wages, [3] [***] in any
establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled,
semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of
such employment are express or implied, [4] [and whether or not such person is employed in a
managerial or administrative capacity, but does not include any such person who holds a post under
the Central Government or a State Government and is governed by any other Act or by any rules
providing for payment of gratuity].

(f) "employer" means, in relation to any establishment, factory, mine,

Section: 2A
Continuous service.

For the purposes of this Act, -

(1) an employee shall be said to be in continuous service for a period if he has, for that period, been
in uninterrupted service, including service which may be interrupted on account of sickness,
accident, leave, absence from duty without leave (not being absence in respect of which an order
[***] treating the absence as break in service has been passed in accordance with the standing
order, rules or regulations governing the employees of the establishment), lay off, strike or a
lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or
interrupted service was rendered before or after the commencement of this Act.
(2) where an employee (not being an employee employed in a seasonal establishment) is not in
continuous service within the meaning of clause (1), for any period of one year or six months, he
shall be deemed to be in continuous service under the employer -

(a) for the said period of one year, if the employee during the period of twelve calendar months
preceding the date with reference to which calculation is to be made, has actually worked under the
employer for not less than -

(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine
or in an establishment which works for less than six days in a week; and

(ii) two hundred and forty days, in any other case;

(b) for the said period of six months, if the employee during the period of six calendar months
preceding the date with reference to which the calculation is to be made, has actually worked under
the employer for not less than -

(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an
establishment which works for less than six days in a week; and

(ii) one hundred and twenty days, in any other case;

The appropriate Government may, by notification, appoint any officer to be a controlling authority,
who shall be responsible for the administration of this Act and different controlling authorities may
be appointed for different areas.

Section: 4
Payment of gratuity.
(1) Gratuity shall be payable to an employee on the termination of his employment after he has
rendered continuous service for not less than five years, -

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be necessary where the
termination of the employment of any employee is due to death or disablement:
Provided further that in the case of death of the employee, gratuity payable to him shall be paid to
his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs
is a minor, the share of such minor, shall be deposited with the controlling authority who shall
invest the same for the benefit of such minor in such bank or other financial institution, as may be
prescribed, until such minor attains majority.]
Explanation. : For the purposes of this section, disablement means such disablement as
incapacitates an employee for the work which he, was capable of performing before the accident or
disease resulting in such disablement.
(2) For every completed year of service or part thereof in excess of six months, the employer shall
pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn
by the employee concerned:
Provided that in the case of a piece-rate
Section: 4A
Compulsory insurance
(1) With effect from such date as may be notified by the appropriate Government in this behalf,
every employer, other than an employer or an establishment belonging to, or under the control of,
the Central Government or a State Government, shall, subject to the provisions of sub-section (2),
obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity
under this Act, from the Life Insurance Corporation of India established under the Life Insurance
Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:
Provided that different dates may be appointed for different establishments or class of
establishments or for different areas.
(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt
every employer who had already established an approved gratuity fund in respect of his employees
and who desires to continue such arrangement and every employer employing five hundred or more
persons who establishes an approved gratuity fund in the manner prescribed from the provisions of
sub-section (1).
(3) For the purpose of effectively implementing the provisions of this section, every employer shall
within such time as may be prescribed get his establishment registered with the controlling authority
in the prescribed manner and no employer shall be registered under the provisions of this section
unless he has taken an insurance referred to in sub-section (1) or has established an approved
gratuity fund referred to in sub-section (2).
(4) The appropriate Government may, by notification, make rules to give effect to the provisions of
this section and such rules may provide for the composition of the Board of Trustees of the
approved gratuity fund and for the recovery by the controlling authority of the amount of the
gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer
with whom an insurance has been taken under sub-section (1), or as the case may be, the Board of
Trustees of the approved gratuity fund.
(5) Where an employer fails to make any payment by way of premium to the insurance referred to
in sub-section (1) or by way of 'contribution to all approved gratuity fund referred to in sub-section
(2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for
delayed payments) forthwith to the controlling authority.
(6) Whoever contravenes the provisions of sub-section (5)Section: 6
Nomination.
(1) Each employee, who has completed one year of service, shall make, within such time, in such
form and in such manner, as may be prescribed, nomination for the Purpose of' the second proviso
to sub-section (1) of section 4.
(2) An employee may, in his nomination, distribute the amount of gratuity payable to him under this
Act amongst more than one nominee.
(3) If an employee has a family at the time of' making a nomination, the nomination shall be made
in favour of one or more members of his family, and any nomination made by such employee in
favour of a person who is not a member of his family, shall be void.
(4) If at the time of making a nomination the employee has no family, the nomination may be made
in favour of any person or persons but if the employee subsequently acquires a family, such
nomination shall forthwith become invalid and the employee shall make, within such time as may
be prescribed, afresh nomination in favour of one or more members of his family.
(5) A nomination may, subject to the provisions of sub-sections (3) and (4), be modified by an
employee at any time, after giving to his employer a written notice in such form and in such manner
as may be prescribed, of his intention to do so.
(6) If a nominee predeceases the employee, the interest of the nominee shall revert to the employee
who shall make a fresh nomination, in the prescribed form, in respect of such interest.
(7) Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be
sent by the employee to his employer, who shall keep the same in his safe custody.

Section: 7
Determination of the amount of gratuity.
(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in
writing, to act on his behalf shall send a written application to the employer, within such time and in
such form, as may be prescribed, for payment of such gratuity.
(2) As soon as gratuity becomes payable, the Section: 7A
Inspectors
(1) The appropriate Government may, by notification, appoint as many Inspectors, as it deems fit,
for the purposes of this Act.
(2) The appropriate Government may, by general or special order, define the area to which the
authority of an Inspector so appointed shall extend and where two or more Inspectors are appointed
for the same area, also provide, by such order, for the distribution or allocation of work to be
performed by them under this Act.
(3) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the
Indian Penal Code, 1860 (45 of 1860).

Section: 7B
Powers of Inspectors.
(1) Subject to any rules made by the appropriate Government in this behalf, an Inspector may, for
the purpose of ascertaining whether any of the provisions of this Act or the conditions, if any, of
any exemption granted there under, have been complied with, exercise all or any of the following
powers, namely:

(a) require an employer to furnish such information as he may consider necessary

(b) enter and inspect, at all reasonable hours, with such assistants (if any), being persons in the
service of the Government or local or any public authority, as he thinks fit, any premises of or place
in any factory, mine, oilfield, plantation, port, railway company, shop or other establishment to
which this Act applies, for the purpose of examining any register, record or notice or other
document required to be kept or exhibited under this Act or the rules made there under, or otherwise
kept or exhibited in relation to the employment of any person or the payment of gratuity to the
employees, and require the production thereof for inspection;

(c) examine with respect to any matter relevant to any of the purposes aforesaid, the employer or
any person whom he finds in such premises or place and who, he has reasonable cause to believe, is
an employee employed therein;

(d) make copies of, or take extracts from, Section: 9

Penalties.

(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of
enabling any other person to avoid such payment, knowingly makes or causes to be made any false
statement or false representation shall be punishable with imprisonment for a term which may
extend to six months, or with fine which may extend to ten thousand rupees or with both.
(2) An employer who contravenes, or makes default in complying with, any of the provisions of this
Act or any rule or order made there under shall be punishable with imprisonment for a term which
shall not be less than three months but which may extend to one year, or with fine which shall not
be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both:
Provided that where the offence relates to non-payment of any gratuity payable under this Act, the
employer shall be punishable with imprisonment for a term which shall not be less than [36] [Six
months but which may extend to two years] unless the court trying the offence, for reasons to be
recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition 01; a
fine would meet the ends of justice.

Section: 9
Penalties.
(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of
enabling any other person to avoid such payment, knowingly makes or causes to be made any false
statement or false representation shall be punishable with imprisonment for a term which may
extend to six months, or with fine which may extend to ten thousand rupees or with both.
(2) An employer who contravenes, or makes default in complying with, any of the provisions of this
Act or any rule or order made there under shall be punishable with imprisonment for a term which
shall not be less than three months but which may extend to one year, or with fine which shall not
be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both:
Provided​ that where the offence relates to non-payment of any gratuity payable under this Act, the
employer shall be punishable with imprisonment for a term which shall not be less than [36] [Six
months but which may extend to two years] unless the court trying the offence, for reasons to be
recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition 01; a
fine would meet the ends of justice.

Section: 10
 Exemption of employer from liability in certain cases.
Where an employer is charged with an offence punishable under this Act, he shall be entitled, upon
complaint duly made by him and on giving to the complainant not less than three clear days notice
in writing of his intention to do so, to have any other person whom he charges as the actual offender
brought before the court at the time appointed for hearing the charge; and if, after the commission
of the offence has been proved, the employer proves to the satisfaction of the court -

(a) that he has used due diligence to enforce the execution of this Act, and

(b) that the said other person committed the offence in question without his knowledge, consent or
connivance, that other person shall be convicted of the offence and shall be liable to the like
punishment as if he were the employer and the employer shall be discharged from any liability
under this Act in respect of such offence:

Provided that in seeking to prove as aforesaid, the employer may be Section: 12

Protection of action taken in good faith.
No suitor other legal proceeding shall lie against the controlling authority or any other person in
respect of anything which is in good faith done or intended to be done under this Act or any rule or
order made there under.

Section: 13
Protection of gratuity.
No gratuity payable under this Act and no gratuity payable to an employee employed in any
establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under
section shall be liable to attachment in execution of any decree or order of any civil, revenue or
criminal court.

Section: 14
Act to override other enactments, etc.
The provisions of this Act or any rule made there under shall have effect notwithstanding anything
inconsistent therewith contained in any enactment other than this Act or in any instrument or
contract having effect by virtue of any enactment other than this Act.

Section: 15
Power to make rules.
(1) The appropriate Government may, by notification make rules for the purpose of carrying out the
provisions of this Act.

Every rule made by the Central Government under this Act shall be laid, as soon as may be after
it is made, before each House of Parliament while it is in session, for a total period of thirty days
which may be comprised in one session or in two or more successive sessions, and if, before the
expiry of the session ii-immediately following the session or the successive sessions aforesaid,
both Houses agree in making any modification in the rule or both Houses agree that the rule
should not be made, the rule shall, thereafter, have effect only in such modified form or be of no
effect as the case may be; so, however, that any such modification or annulment shall be without
prejudice to the validity of anything previously done under that rule.
In India, the Payment of Gratuity Act, 1972 (Act) requires entities with ten or more employees to
pay gratuity benefit to their employees at the time of termination of employment. The act also
provides that if an entity is covered under the act because its number of employees exceeded ten on
a particular day, it will continue to be covered under the act even if its number of employees fall
below ten subsequently. However, no gratuity is payable to an employee, which terminates its
services to the entity before completing five years of service, if such termination is not due to death
or disablement. Further, the act does not apply to arrangements, which do not constitute an
employer-employee relationship or to employees of the central/state governments governed by
separate rules framed by the government.
According to the act, gratuity payable to an employee is calculated by using the formula
given below:
Last monthly salary x 15 days x completed years of service
_______​plus part thereof exceeding six months_______
26 days
If gratuity computed as per the formula above exceeded Rs. 350,000, the entity had an
option to limit maximum gratuity payable to each employee to Rs. 350,000. In practice,
many entities have capped gratuity payable to their employees at the amount fixed under
the act.
Recent developments
The Government has notified the Payment of Gratuity (Amendment) Act 2010 in May
2010. This bill to this amendment was approved by the Cabinet before 31 March 2010.
The amendment raises the ceiling on gratuity payable to employees from the existing Rs.
350,000 to Rs. 1,000,000.
Financial reporting impact
The enactment of this amendment will require entities, which have fixed their maximum
gratuity liability at the ceiling laid down in the act, to pay higher gratuity to their employees.
We believe that the proposed amendment will give rise to the timing issue as to in which
period the provision is required. Given below is our perspective on this issue.
Should the proposed change in the limit be considered in determining gratuity
liability as at 31 March 2010?
Gratuity liability is covered under scope of AS 15 Employee Benefits and is treated as a
defined benefit plan. According to AS 15, the provision for a defined benefit plan is
calculated using the projected unit credit method (PUCM) of actuarial valuation. The
application of PUCM requires an entity to make various financial assumptions such as
future salary increases and changes in benefit levels. Consequently, the proposed change
in the gratuity limit should also be considered for determining defined benefit liability as at
31 March 2010. It does not matter if the bill was an act at the reporting period date, as long
as there is reasonable certainty that the law would be passed.
Appropriate disclosures should be made with regards to the above in the notes to the
financial statements.
 Case Laws

Case – 1​: ​Can the University be termed as industry?

Solution:​ ​Osmania University Vs. Industrial Tribunal (1960)LLJ A.P
The Supreme Court while disposing this case opined that a University would not come within the
scope of the Section2 (1) and a University would not be an industry. The Supreme Court expressed
“ We think that the correct test for ascertaining whether the Act would be applicable is to ascertain
whether the particular dispute is between capital and labour, whether they be engaged in
co-operation, or whether the dispute has risen in activities connected directly with, or attendant
upon, the production or distribution of wealth. As the dispute between the university and its
employees was not of the aforesaid kind, it is not an industrial dispute and therefore the reference to
the tribunal was not covered by the Act.”

Case - 2: ​A settlement was arrived by agreement between the employer and some workmen
otherwise than in the course of conciliation proceedings. Workmen who were not the parties to the
settlement urged the appropriate government to refer their dispute covered under the above
settlement to Industrial Tribunal. Can the appropriate government make the reference?
Solution: Section 18 of the Industrial Disputes Act, 1947 explains the provisions about “persons on
whom the settlements and awards are binding”. According to Section 18(1), a settlement arrived at
by agreement between the employer and workmen otherwise than in the course of conciliation
proceeding shall be binding on the parties to the agreement. According to Section (2), subject to the
provisions of sub-section (3), an arbitration award which has become enforceable shall be binding
on the parties to the agreement who referred the dispute to arbitration.
In the above problem, a group of employees referred the matter for settlement, and settled the
dispute with the employer, and thereupon obtained the settlement award. The basic principle of the
settlement resembles the principles of the 'Law of Contract' and 'Consent'. The other group of
employees had not given their consent nor participated in the settlement proceedings. Hence they
are bound to settlement as per Section 18. The appropriate government can refer the dispute to the
court of industrial tribunal.

Case – 3:
Brief Facts: ​On 1-11-1948, 859 night shift operators of the carding and spinning department of the
Carnatic Mills, a public utility industry, stopped work, some at 4 p.m., some at 4-30 p.m., and some
at 5p.m. The stoppage ended at 8 p.m. in both the departments. By 10 p.m., the strike ended
completely. The apparent cause for the strike was that the management of the Mills had expressed
its inability to comply with the request of the workers to declare the forenoon of 1​st November 1948
as a ​holiday ​for ​solar eclipse.
The dispute was referred to the Industrial Tribunal. The Tribunal found on the evidence and
circumstances of the case that there was concert and combination of the workers in sopping and
refusing to resume work on the night of 1​st November. The Tribunal observed that a very large
number of leave applications was put in for various reasons pointed to the concerted action and that
the application given by the workers and their representatives also indicated that they were acting in
combination both in striking and refusing to go back to work on the ground that they were entitled
to leave for the night shift whenever half a day's leave was granted to the day- shift workers. The
Tribunal declared that it was illegal strike.
The worker appealed to the High Court. The High Court reversed the decision of the Tribunal. The
aggrieved company appealed to the Supreme Court.
JUDGMENT:​ The Supreme Court upheld the decision of the Industrial Tribunal, and gave
judgment in favour of the company and allowed the appeal.
PRINCIPLES​: (i) The Supreme Court held that the action of the workers on the night in question
amounted to a strike​ ​within the definition of the term in Section 2 (q), and as no notice of the same
had been given to the management it was an illegal strike.
(ii) The workers, on strike, therefore, lost the benefit of the holidays that they would have otherwise
got under the leave rules of the Mill;
(iii) Where the decision of the matter in appeal by special leave before the Supreme Court depended
on the construction of the leave rules of the Carnatic Mills which were in accordance with and
similar in terms of the provisions of Charter -IV-A of the Factories Act, 1934 (now Chapter VI of
the Factories Act, 1948).

Case – 4: Caltex (India) Ltd., Vs. E.Fernandes(1957)

Brief Facts:​ The Supreme Court in this case observed that the immunity from criminal conspiracy
should be confined to trade dispute only. In this case, Fernandes, a Union Secretary of the trade
union absented for his duty for several months without application to leave, or without intimating
the management. The management gave the notice and had given an opportunity to be heard, and
lastly removed him. The Industrial Tribunal ordered for reinstatement under the immunity from
criminal conspiracy.

Judgement:​ The Supreme Court reversed the order of the Industrial Tribunal and opined that the
wilful and negligent absenteeism from duty could not be treated as immunity from criminal
conspiracy, and it could not be treated as a right of the worker.

While disposing Indian​ Bank Vs. Federation of Indian Bank Employees' Union and another
(1982), ​the Madras High Court held in this case that where any act is done by the employee, who is
a trade union member also, which resulted in unlawful activities and which would constitute
cognizable offence under Indian Penal Code or any other special legislation which treat such acts as
cognizable offences, the immunity from criminal conspiracy, would not be available to that
employee.
Case – 5:
Brief Facts: ​The Maharastra State Road Transport Corporation is owned by that State
Government . There are several unions. Only two unions were recognized under the Maharastra
Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. A complaint
was filed by a trade union, which was not recognized, before the Labour Court. The Union did not
produce any documents showing its recognition. The Labour Court dismissed the complaint. The
Trade union appealed.

Judgement:​ The Supreme Court upheld the decision of the Labour Court.

Principle: i) ​Their Lordships opined that as per the mandatory instructions of the Act enacted in
Maharastra, the complaint should be filed by the aggrieved worker or by the recognized trade union.
In this case, the complaint was filed by the unrecognized trade union. Hence the complaint was
dismissed.
22. The rule laid down in this case is applicable only in Maharastra, as that State has enacted the
Maharastra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act,
1971 and made necessary provisions for the 'recognition' and issue of 'Certificate of
Recognition' to trade unions in that state.

Case Law – 6: State Bank of India Staff Association and another Vs. State Bank
of India and Others (1996) 4 SSC 378.

Brief Facts: ​Some of the office-bearers in the trade union were in the trade union were appointed
on temporary basis and were terminated. Even after their termination, they were continuing in the
trade union. An arbitration and conciliation took place between the trade union and the
management, in which the terminated workers participated. The management objected it.

Judgement: ​The Supreme Court gave judgement in favour of the management holding that
ordinary or temporary members ceasing to be in the employment of the relevant industry, although
eligible to be an office-bearers of the trade union, were not entitled to negotiate with the
management nor is the management under an obligation to negotiate with them.

Point for reference to the above case law: According to the latest Amendment – 2001: ​A new
Sub section 2 of section 22, which has been introduced after the amendment, stipulates that in other
than unorganized sector unions, all office bearers except not more than one third or five whichever
is less, should be from the industry i.e. outsiders can be office bearers only up to one third of total
office bearers or five whichever is less. For instance, if the Trade Union has 21 office bearers’
posts, not more than 7 can be outsiders. Since 7 is more than 5, only upto 5 [ whichever is less]
office bearers can be outsiders and rest 16 will have to be from the industry itself.

Case Law – 7: ​GAIL'S Employees Association, Gas Authority of India Ltd., Vs. Chief
Labour Commissioner (Central)
In GAIL'S Employees Association, Gas Authority of India Ltd., Vs. Chief Labour
Commissioner (Central), the Standing orders certified under Sec.5 empowered the management to
detain or ask any number of workmen to come on duty on any national or festival holiday or on any
day. The Delhi High Court held such standing orders are valid. Because the Court held that the
employer in this case was engaged in providing essential services and this power is given to the
management in interest of safety and in interest of continuous operation of the undertaking.

Case Law – 8: (​Modification to be applied to be fair and reasonable)

Indian Oil Corporation Ltd. Vs. Joint Labour Commissioner and Appellate Authority:​ In the
above case the workmen wanted the modification of the certified standing orders. They demanded
the raise in the age of retirement from 58 to 60 years. The Delhi High Court allowed the
modification of certified standing orders. Because the raise of retirement age from 58 to 60 years
was held to be fair and reasonable modification.

Case Law – 9: ​(Dismissal for misconduct)

State Government Commissioner, Haryana, Chandigarh Vs. Sukhbir Singh: ​In the above case
the services of the workman, a bus conductor, were terminated as he was found guilty of
embezzling money by way of non-issue of the tickets to the passengers. Upholding the
management’s decision to terminate the services of the bus conductor the High Court of Punjab and
Haryana in this case, held as follows:-
“The workman embezzled money belonging to the public. He was working in a public
utility undertaking. The management had entirely lost confidence in the workman. In such
circumstances the Labour Court ought not to have exercised the jurisdiction of the Industrial
Disputes Act, 1947. We are of the opinion that dishonest and unscrupulous workmen should have
no place in public employment. If a dishonest employee is permitted to continue in service, it has a
demoralizing effect on all the employees who have been working honestly. Individuals, who have
acted dishonestly during the course of public service, cannot be shown any leniency.”

Famous Supreme Court Judgements

Devinder Singh vs Municipal Council, Sanaur

[​ SUPREME COURT OF INDIA, 11 Apr 2011]
(A) Labour & Industrial Law - Industrial Dispute Act, 1947 - Appellant was engaged by the
respondent for doing the work of clerical nature - He was paid consolidated salary of Rs.1,000 per
month - After two years, his service was discontinued without giving him notice and compensation
as per the requirement of s. 25-F of the Act - Appellant raised industrial dispute, which was referred
by the State Government to the Labour Court - Labour Court passed an award for reinstatement of
the appellant without back wages - Labour Court held that the appellant had worked for more than
240 days in a calendar year preceding the termination of his service and that his service was
terminated without complying with the mandatory provisions contained in s. 25F of the Act - Writ
petition filed there against was allowed by HC - HC held appointment of appellant was contrary to
the recruitment rules and arts. 14 and 16 of the Constitution - Hence, instant appeal - Whether HC
was justified in upsetting the award of reinstatement? - Held, HC neither found any jurisdictional
infirmity in the award of the Labour Court nor it came to the conclusion that the same was vitiated
by an error of law apparent on the face of the record - Approach adopted by the HC in dealing with
the award of the Labour Court was ex facie erroneous and contrary to the law laid down by SC -
Impugned order was set aside and the award passed by the Labour Court for reinstatement of the
appellant was restored - Appeal allowed.

(B) Labour & Industrial Law - Industrial Dispute Act, 1947 - Definition of workman - Held,
whenever an employer challenges maintainability of industrial dispute on the ground that the
employee was not a workman within the meaning of s. 2(s) of the Act, what the Labour
Court/Industrial Tribunal was required to consider was whether the person was employed in an
industry for hire or reward for doing manual, unskilled, skilled, operational, technical or clerical
work in an industry - Once the test of employment for hire or reward for doing the specified type of
work was satisfied, the employee would fall within the definition of 'workman' - Further, source of
employment, the method of recruitment, the terms and conditions of employment/contract of
service, the quantum of wages/pay and the mode of payment were not at relevant for deciding
whether or not a person was a workman within the meaning of s. 2(s) of the Act - Definition of
workman also did not make any distinction between full time and part time employee or a person
appointed on contract basis - There was nothing in the plain language of s. 2(s) from which it could
be inferred that only a person employed on regular basis or a person employed for doing whole time
job was a workman and the one employed on temporary, part time or contract basis on fixed wages
or as a casual employee or for doing duty for fixed hours was not a workman - Appeal allowed.

S. B. I. vs Hemant Kumar
[​ SUPREME COURT OF INDIA, 06 Apr 2011]
Labour & Industrial Law - Domestic enquiry - Violation of principles of natural justice -
Respondent Cashier-cum-Clerk allegedly misappropriated cash from appellant bank - Respondent
was charge-sheeted and enquiry proceedings were initiated - Since respondent was absent on
various dates of hearing, enquiry officer passed ex parte order holding that respondent was guilty of
charges - Respondent's departmental appeal was dismissed - Respondent raised an industrial dispute
- Industrial Tribunal directed reinstatement of respondent holding that departmental enquiry
suffered from violation of principles of natural justice - HC upheld Tribunal order in appellant's writ
petition - Whether there was any violation of principles of natural justice in instant case - Held,
principles of natural justice should not be stretched to a point where they would render in-house
proceedings unworkable - Respondent had not appeared for enquiry on two earlier dates and he was
absent on third appointment day also - Respondent adopted dilatory tactics and in-house
proceedings should be conducted expeditiously and without any undue loss of time - Tribunal's
observation that three barren dates in an in-house proceeding did not amount to delay, was
unfortunate - Further, respondent had already tendered two admissions of guilt in writing and one
orally before management witness and there was hardly anything that could be said on his behalf to
repel charges - Tribunal's findings, therefore, were wholly unreasonable and perverse and HC,
unfortunately, did not consider matter properly - Hence, impugned Tribunal and HC orders were set
aside - Appeal allowed.

Kuldeep Singh vs G. M., Instrument Design Development and Facilities Centre

and another
[​ SUPREME COURT OF INDIA, 03 Dec 2010]
Labour & Industrial Law - Industrial Disputes Act, 1947, ss. 25F to 25H - Period of limitation
for reference of dispute to Labour Court/Industrial Tribunal - Appellant was terminated from
service - Industrial dispute raised - On reference, Labour Court held that the appellant completed
240 days in 12 preceding months and the respondent-Management terminated his services without
complying with the provisions of s. 25(f) of the Act and that the order of termination was illegal,
null and void and deserves to be set aside - However, rejected appellant claim in its entirety on the
ground that the reference was bad and incompetent being raised so belatedly - Writ petition filed
thereagainst was dismissed - Hence, present appeal - Whether the Labour Court and the HC
justified in rejecting the claim of the workman merely on the ground of delay when the Labour
Court concluded that the termination of the services of the appellant by the respondent-Management
without complying with the provisions of s. 25F of the Act was illegal, null and void and deserves
to be set aside? - Held, there is no prescribed time limit for the appropriate Government to exercise
its powers u/s. 10 of the Act - Hence, the reference sought for by the workman cannot be said to be
delayed or suffering from a lapse when law does not prescribe any period of limitation for raising a
dispute u/s. 10 of the Act - However, disputes should be referred as soon as possible after they have
arisen and after conciliation proceedings have failed, particularly, when disputes relate to discharge
of workman - If sufficient materials are not put forth for the enormous delay, it would certainly be
fatal - In the present case, in view of the details furnished and the explanation offered, the appellant
cannot be blamed for the delay - Award of the Labour Court insofar as holding that the reference by
the State Government was bad and incompetent being raised so belatedly and dismissing the claim
statement on this ground set aside - Reinstatement of the appellant ordered - Appeal allowed.
Buckingham and Carnatic Co. Ltd. (Appellant) Vs. Workers of the Buckingham
and Carnatic Co. Ltd. (Respaondents) – ​(AIR 1953 SC 47 = 1953 ILLJ 181 SC)

Brief facts: on 1-11-1948, 859 night shift operators of the carding and spinning
department of the carnatic mills, a public utility industry, stopped work, some at
4p.m.,some at 4.30p.m.,and some at 5p.m. The stoppage ended at 8p.m. in the both the
departments. By 10p.m., the strike ended completely. The apparent cause for the strike
was that the management of the mills had expressed its inability to comply with the
request of the workers to declare the forenoon of 1st November 1948 as a holiday for solar
eclipse.
The dispute was referred to the industrial tribunal. The tribunal found on the evidence and
circumstances of the case that there was a concert and combination of the workers
stopping and refusing to resume work on the night of 1st November. The tribunal observed
that a very large number of leave applications was put in for various reasons pointed to the
concerted action and that the application given by the workers and their representatives
also indicated that they were acting in combination both in striking and refusing to go back
to work on the ground that they were entitled to leave for the night shift whenever half a
day’s leave was granted to the day shift workers. The tribunal declared that it was illegal
strike.
The worker appealed to the high court. The high court reversed the decision of the
tribunal. The aggrieved company appealed to the Supreme Court.
Judgment: the Supreme Court upheld the decision of the industrial tribunal, and gave
judgment in favour of the company and allowed the appeal.
Principles:
i). The supreme court held that the action of the workers on the night in question amounted
to a strike within the definition of the term in section 2 (Q), and as no notice of the same
had been given to the management it was an illegal strike.
ii). The workers, on strike, therefore, last the benefit of the holidays that they would have
otherwise got under the leave rules of the mill.
iii). Where the decision of the matter in appeal by special leave before the supreme court
depended on the construction of the leave rules of the carnatic mills which were in
accordance with and similar in terms of the provisions of chapter IV –A of the factories act
1934.
State bank of India staff association and another Vs. state bank of India
and others(1996)4SSC378.
Brief facts​: some of the office bearers in the trade union were in the trade union were
appointed on temporary basis and were terminated. Even after their termination, they were
continuing in the trade union. An arbitration and conciliation took place between the trade
union and the management, in which the terminated workers participated. the
management objected it.
Judgment: The supreme court gave judgment in favour of the management holding that
ordinary or temporary members ceasing to be in the employment of the relavent industry,
although eligible to be an office bearers of the trade union, were not entitled to negotiate
with the management nor is the management under an obligation to negotiate with them.
Point for reference to the above case law: According to the latest amendment -2001: A new sub
section 2 of section 22, which has been introduced after the amendments, stipulates that in other
than unorganized sector unions, all office bearers except not more than one third or five whichever
is less, should be from the industry i.e. outsiders can be office bearers only up to one third of total
office bearers or five whichever is less. For instance if the TU has 21 office bearers posts, not more
than 7 can be outsiders. Since 7 is more than 5, only up to 5 office bearers can be outsiders and rest
16 will have to be from the industry itself.

Rajasthan State Road Transport Corporation Vs. Smt. Anand Kanwar (1993)
III LLJ Raj
Brief facts: ​The deceased bus driver was the husband of Smt.A nand Kanwar. The Driver died in
an accident. She claimed compensation after the limitation. She convinced the Commissioner that
due to her ill-health, grievance and bereaved, she did not file application within te limitation, and
prayed for condonation. On humanitarian grounds, the Commissioner condoned the delay, and
accepted the claim competition, and after enquiry, he awarded the compensation. The employer
R.S.R.T.C appealed to the High Court raising the objection that the Commissioner had no power to
condone the delay.
Judgement: ​The Rajasthan High Court gave judgement upholding the decision of the
Commissioner and held that the Commissioner has discretionary power in condoning delay. The
Court further held that if the Commissioner satisfies with the circumstances explained in the
condonation petition, he is empowered to condone the delay.

Jwala Prasad and the State of U.P (1954)

Brief facts: ​Jwala Prasad, an employee submitted his resignation on 02-02-1953 with a condition
that he should be relieved from the services on 03-03-1953. The employer accepted his resignation
on 10-02-1953. Jwala Prasad submitted another application on 20-02-1953 requesting the employer
not to accept his resignation.
Judgement: ​The Court held that resignation cannot be revoked.
Principles:​ Resignation and its acceptance should follow the principles of Law of Employment, and
to the Standing Orders.

-------------

Case Study on implementation of Employee Legislations at Allsec Technologies.

The present study concentrates on the observations and recordings made through a
survey on Allsec Technologies. The study is intended to focus on the implementation of
employee legislations at Allsec Technologies. Allsec Technologies is a BPO (Business
Process Outsourcing). A Business process outsourcing (BPO) is a subset of outsourcing
that involves the contracting of the operations and responsibilities of specific business
functions (or processes) to a third-party service provider. Originally, this was associated
with manufacturing firms, such as Coca Cola that outsourced large segments of its supply
chain. In the contemporary context, it is primarily used to refer to the outsourcing of
business processing services to an outside firm, replacing in-house services with labor
from an outside firm. Employee legislation is applicable in all the organizations irrespective
of their nature of work processes. Whether the company belongs to public or private
sector, it has to consider the legislations formulated by the government concerned.

Choice of law in outsourcing contract

One of the most important considerations in a contract of outsourcing is the

dispute resolution mechanism. Choices of the tribunal which shall have jurisdiction and the
governing law in these cases have to be decided. This issue acquires greater significance
in the context of outsourcing as the agreement by its very essence involves a number of
different countries, which have different applicable laws. No one wants to be involved in a
lawsuit over a service contract; but if the suit is unavoidable, at least make sure it takes
place on your home turf. Choice of law provisions limit conflicts of laws and all international
outsourcing agreements designate the applicable law.
Choice of law and choice of forum remain important measures in international outsourcing
agreements as they can reduce the foreign-law-risk element on the many issues that are
governed by contract law, including warranties, indemnifications, and other such issues,
and provide for dispute resolution in a forum that may be more in tune with the party’s
perspective. India, for example, generally recognizes party autonomy to choose the
governing law, and US outsourcing customers will want to specify that the law of a US
state controls. They may also choose US court resolution or arbitration for disputes; Indian
law generally makes foreign court orders and foreign arbitration awards enforceable in
substantially the same manner as Indian court orders and Indian arbitration awards.
However the scope of the law of choice in a court of law is limited by numerous rules
attached to citizenship, place of formation of the contract, location of the goods, place of
performance and other statutes.
Choices of law clauses are nearly always enforced in technology and other arms’-length
commercial contracts. The rare cases where they are not enforced are where they have no
“reasonable relation” to the transaction. If you do not choose the applicable law at all, the
court, depending on the jurisdiction will typically use the “place of contracting” unless there
is another forum that, based on the facts of the case, has a “dominant relationship with the
parties and issues.”
Often, a supplier from a developing country will be content to deal in English law as a legal
system well known in international commerce. There is a real issue to agreeing to the law
of an overseas jurisdiction. If you agree to foreign law, you may end up involved in court
proceedings in a foreign country. That would involve extra legal costs, logistical problems
in fighting the case and major losses of management time. It is far better then to find a
neutral approach, in the sense of choosing international arbitration as a remedy, and best
if it is also under English law. The way to ensure the use of arbitration is to insist the
relevant arbitration clause in the contract. Well known organisations such as the ICC have
template clauses which can be used.
In general choice of law clauses should be very explicit. It is very important to choose a
governing law so as to provide certainty to the interpretation of the agreement. Also the
use of the clause: “excluding that body of law known as conflicts of law”, following the
choice of law as otherwise at least in theory, a New Jersey court may apply the law of the
State of New Jersey to the question of which state’s law applies. Thus the litigation may
end up being in a forum not chosen by the parties based on New Jersey’s own criteria for
choosing which state’s substantive law applies.
Also the choice of law clause should clearly specify that the chosen jurisdiction as “the
sole and exclusive” jurisdiction as a number of countries retain their jurisdiction unless the
contract specifies the sole and exclusive jurisdiction is elsewhere. A forum selection clause
that does not expressly specify a mandatory or “exclusive” forum for the resolution of
disputes can be construed as merely permitting, but not requiring litigation to be filed in the
designated forum. (​Blanco ​v. ​Banco Indus. de Venez.​ , S.A., 997 F.2d 974, 979 (2d
Cir.1993).
Another consideration for choosing the jurisdiction is that term of the contract should be
enforceable in that jurisdiction. For example, under English law, penalty payments, which
do not amount to a genuine pre-estimate of the customer’s loss, will be struck down. The
general view is that service incentives (a feature which European deals now take
increasingly from their US counterparts) are regarded as enforceable. Many of these
provisions are not enforceable in a number of European jurisdictions because of the
so-called “reasonableness test” which is applied in deciding whether liability has been
unreasonably excluded between parties.
Additionally the form of a contract is of consideration and Civil law contracts tend to be far
shorter, as many obligations are implied by commercial codes and less is recorded in
writing. Thus a US entrant into the market is likely to feel more comfortable in an English
law contract than in a civil law contract governed a civil law jurisdiction such as France or
Germany.
Women Employee and BPO:
 BPO is defined as the delegation of non-core operations or jobs from
internal production to an external entity that specialize in that operation. Business
segments outsourced from India includes IT, HR, Real Estates, etc. The clients are based
in US, UK, Australia and other major countries; therefore big time differences exist
between India and these countries. This makes nightshifts by Indian service providers
compulsory for their work to remain in business. Thousands of young women in India are
gainfully working in BPOs, earning the kind of money they could have only dreamt earlier.
The women working nightshifts in BPOs constitute 40% of the total workforce in BPOs in
India. Our survey observed that it is the BPO sector, which is the most promising sector
for women to work in night shift. They adopt very stringent security rules and provide an
efficient and friendly environment for women working in night shift. Many families who
would otherwise not permit their daughters to do night shifts have accepted their working
in BPO companies.

The reason could be that the insecurity is found least in BPOs (only 8%). Women’s level
of satisfaction for the duration of night shift is observed 84%. They face less commuting
problems (4%), are satisfied with their employers (95%) and mental harassment is felt the
least (3%). However the attraction to work in the nightshift due to better pay package is
only 8 %. Only 13.2% women employees working in the night shifts in BPOs face social
problems. As an attractive and most dynamic sector, it is suggested that more benefits
should be provided to nightshift working women to equalize social life and minimize other
problems.

Perview of Labour Law and BPO:

If the BPO sector is covered by the labour laws, it follows that disputes which arise in
the sector should be settled under the relevant industrial disputes legislation. As with employees in
other industrial sectors, BPO employees too have an inalienable right to collective bargaining with
managements. Ranabir Ray Choudhury throws light on the nature and structure of employment in
the BPO industry, call centres, in particular.
A recent study seeks to lay bare the nature and structure of employment in BPO call centres. It
seeks to emphasise that the work conditions in call-centres are different from conventional
industrial moulds. ​There is no question that the workforce employed in business process
outsourcing (BPO) units should be left out of the purview of the labour laws for the simple
reason that, as of now, there is no legislation which seeks to keep BPO employees out of
the mainstream of the Indian workforce. This apart, if the BPO sector is considered to be a
legitimate contributor to the economy's income-flow — its contribution being included (with
much fanfare) in the foreign exchange earnings of the economy — there is no rational
reason why the basic input behind the contribution should not be included in the accepted,
conventional input-base of the national economy at large.
If the BPO sector is covered by the nation's labour laws, it follows that disputes which arise
in the sector between employees and employers should be settled under the relevant
industrial disputes legislation. If, in fact, the entire issue is so transparent and simple, why,
one may ask, has it become such an important topic of discussion today, the subject
matter of controversy being whether the information technology sector should be
exempted from labour action in the shape of strikes. The immediate provocation for this
controversy is, of course, the CITU action in preventing staff of the info-tech hub in Kolkata
from attending work on September 29, specially when the Left Front Government in West
Bengal had given the strong impression that work at the hub would not be affected, as on
earlier occasions.
As with employees in other industrial sectors in the country, BPO employees too have the
inalienable right to indulge in collective bargaining with managements on any issue directly
or indirectly connected to their workplace. The all-important question is: Why, till now, have
they not had recourse to this procedure for remedial action? Is it because BPOs have
`comfortable' working conditions which negate any struggle or confrontation with
managements, or is it because, there is no effective leadership on the shopfloor as it were,
which can give appropriate shape to the protest?
Since the second query is dependent on the first, the effort here should be to try to
ascertain what exactly are the working conditions like in BPO units. Since the sector is
relatively new in India, there is as yet not much literature to fall back on to throw any
proper light on the subject. Even so, in recent months some rather perceptive attempts
have been made, one of which — associated with the V. V. Giri National Labour Institute in
Noida — seeks to lay bare the nature and structure of employment in BPO call centres in
particular as objectively as possible. Among other things, perhaps the most important point
which this study seeks to emphasise is that the work conditions to be found in call-centres
(which account for 65-70 per cent of the Indian BPO sector) are different from conventional
industrial moulds.
According to a survey that in the service sector, "customers in particular are considered
integral to the work organisation, either due to simultaneous production and use of many
personal services or due to a strong client-led definition and even co-production of the
actual services. This customer-oriented nature of work often challenges the traditional
conceptions of control and coordination, especially those of manager-worker control
relations. Further to this, `informatisation' of work also creates possibilities for novel modes
of conceptualising and organising work, leading to discernible changes in work cultures."
There are widely divergent views on what the nature of call-centre work is really like, but
attention is drawn to a "wider consensus that the work in call centres characterises some
deep-seated contradictions — contradictions of pleasures and pains in the experience of
work, and conflicts arising out of the competing logics of customer orientation and
rationalisation". There is little doubt that work at Indian call centres is "unskilled, repetitive
and monotonous". As the NLI paper says, "the workers are subjected to a work regime,
which is based on a high degree of computer-telephony integration. The use of such
technology, along with use of standard scripts allow the firms to keep the `free time'
between calls to the bare minimum". The system also allows managements "to examine
the performance of the employee quantitatively — average call time, number of calls and
so on, besides allowing the supervisors to listen remotely to the agents' call, with or
without the knowledge of the employee, to ascertain whether the work is being done within
the stipulated norms and standards".
Importantly, the survey draws attention to the surveillance system employed by call-centre
managements which assess "the entire gamut of activities of the agent within the firm,
ranging from their entry to the workplace to an interim break for lunch".
Dwelling on this aspect of work in some detail, it says the "entry of the employees is strictly
restricted to their work area and the common spaces earmarked for recreation and
refreshment. For each entry to and exit from the work bay, the agents have to punch their
electronic identity cards... During the working hours, the agents are directed to observe
punctuality in taking the admissible breaks, which are also tracked continuously, through
computers. The agents are supposed to be logged in and attending calls for a certain
number of hours per day, which prevents them from too many toilet and coffee breaks. For
each break, agents are required to log off, while leaving the work-bay and log in again at
the time of resuming work. Those who are away from the work bay for longer durations or
unable to attend calls for more than certain stipulated minutes are instantaneously warned
through intranet messages".
Basing itself on this premise, the paper has referred to comparisons made by some
commentators with "the situations of nineteenth century prisons or Roman Slave ships",
which has raised the hackles of a whole range of Indian IT personalities. To critics, such
management practices have evoked scenes of call-centres being nothing more than
"`modern sweatshops' or `bright satanic offices', where the exploitation of labour is
ensured through increased rationalisation and Taylorisation of work". The paper also refers
to what it calls the `emotion burden' on call-centre employees which results mainly from
the requirement of employees being expected "to display customer oriented attitudes and
feelings to facilitate a smooth interaction with the distantly placed consumers". As the
paper says, employees "are required to `manufacture' relationships... Quite often, aspects
such as moods of the agents (employees), facial expressions and words are subject to
monitoring. The agents are even found forced to either express some feelings, which they
do not feel or suppress certain feelings, which they genuinely want to share. In both the
cases, the employees find the job depressing and leading to emotional dissonance".
The conclusion is: "Emotional exhaustion adds to the physical and mental strain of the
workers, leading to higher levels of stress and burnout under the electronically monitored
work and tightly bureaucratised work regime".
To temper these adverse effects, call-centre managements (according to the paper)
arrange for "structured socialisation" of the employees such as organising consultative
forums, arranging get-togethers, etc, the main objective of all this however being the
"(striking of) the `right' balance between work and fun, thereby creating a `productively
docile' workforce". There is also the weapon of "illusory empowerment" through the
projection of the image of "superior work, vibrant ambience of workplace, attractive
designations, impressive salary structure", etc, which is meant to enable employees "to
cope with the pressures and pains of emotional labour".
The obvious question to ask is: Why has this happened if working conditions in the Indian
BPO sector have a lot of scope for improvement? Does the prevailing demand-supply
situation have any role to play in the answer? As one outsourcing employee is reported to
have said: "A union would make sense if there was no job security. Here jobs are more,
people are less — companies are trying all means possible to keep employees happy so
that they won't leave". The entire controversy over BPO working conditions, at this
particular point of time when the country is taking rapid strides towards expansion of the
sector, could not have come at a more inopportune moment for the BPO establishment, as
represented by Nasscom.

Company Profile:

Allsec Technologies Ltd, a BPO established in 1998 is a leading provider of

outsourced solutions in customer engagement, sales & retention and quality assurance for
businesses across BFSI, Insurance, Telecommunication, Retail, Healthcare, Energy &
Utilities and Technology. The Our solutions offered by the company are reflective of its
outlook and focus. Building Lasting Relationships - at Allsec, it’s a culture that percolates
into everything it do. With 10+ years of experience servicing multitude of clients, handling
millions of transactions and observing a million of them, Allsec has the experience,
expertise and customizable solutions that focus on customer delight. The company's
accreditations stand testimony to the fact that Allsec is a worthy partner. The Founder &
President of Allsec is Mr.Adi Saravanan who has been helpful for
business development and strategic finance solutions . The Vice president ​of the
company is Mr.​C.Mahadevan & Mr.Bapaiah is the Manager (HR) of BPO. The locations
of the company are situated at Chennai, Banglore, Tirchy, Manali, Bedford\TX. Allsec
designs process efficiency Tools to equip faster and easier communication and increase
productivity. Allsec’s home-grown enterprise integration modules promise safety, security
& integrity of client data.

Allsec is committed to enchancing skills and competencies of employees to provide

powerful career development opportunities and creating a supporting environment.It
occupies second position in 2009 and it occupies top position in BPO companies. The
Payroll services are ​ ​Oracle based soft ware which is flexible and scalable.

HR deparments globally look at innovative ways to attract, retain, nurture a

large, growing insatiable workforce. The compensation benefits are formulated in such
way that the employees of different categories are able to have ​Tax saving benefits with
reward campaigns. ​Employee can easilt manage claim, track & view. The company's policies are
designed in such away that they ​nurture growth, innovation and progress, with a team of
vibrant and passionate employees, who delight in driving customer and client satisfaction.
The service delivery objectives are focused on Clients’ Return on Investment while
enhancing the “customer experience” quotient.

Data Collection:

The data regarding the company is collected from the Human Resource Executives of the
company through well organized questionnaire intended to draw the information regarding
the implementation of various employee legislations followed at Allsec Technologies.
The data is also collected from the websites and journals of the company.

Analysis and Interpretation:

The implementations of the Employee Legislations at Allsec are according to the laws
formulated and followed in India. The Company has about 500 employees as its workforce
for various categories. The men and women employees of the company are in equal
proportion. The various legislations followed at Allsec are enlisted below:

The Employees State Insurance Act, 1948.

The Employees Provident Fund Act,1952.
The Payment of Gratuity Act, 1972.
The Maternity Benefit Act,1961.
The Payment of Bonus Act,1965.

The Factories Act.1948, The employment Standing Orders Act,1946 are not observed at
Allsec as it cannot be defined as an Industry according to Indian law.

Labour Laws Applicable in BPOS

Several of below mentioned legislations have salary limits, only below which, they apply
and even starting level employees of BPOs generally get excluded because they exceed
these limits. The support staff which may be employed by BPOs, from cleaners to
watchmen, have not been considered for the purpose of this compilation.

Trade Unions Act, 1926

Field work has indicated that there are no unions in the industry yet though associations
are coming up. Any unions formed in the future would enjoy the benefits of this Act on
registration thereunder.

Equal Remuneration Act, 1976

This Act provides for payment of equal remuneration to men and women workers for the
same work or work of a similar nature and for prevention of discrimination, on the ground
of sex, against women in the matter of employment and applies to BPOs. Employers are
prohibited from showing any discrimination against women in respect of recruitment or
promotion, training or transfer.

Maternity Benefit Act, 1961

Call centers are covered by the Maternity Benefits Act and the female employees working
in these places have a right to all the benefits offered by the act including paid leave at the
time of pregnancy.

Industrial Disputes Act, 1947

This act provides for conciliation, adjudication and settlements, and regulates the rights of
the parties and the enforcement of awards and settlements.Thus, for a BPO company’s
employees to be workman benefiting under this Act, their nature of work has to fall within
one of the categories specified in the act and it falls within the “operational” nature of
work. A team leader or other supervisor will not be covered by this Act.

Trade Unions Act, 1926

Field work has indicated that there are no unions in the industry yet though associations
are coming up. Any unions formed in the future would enjoy the benefits of this Act on
registration thereunder.

Equal Remuneration Act, 1976

This Act provides for payment of equal remuneration to men and women workers for the
same work or work of a similar nature and for prevention of discrimination, on the ground
of sex, against women in the matter of employment and applies to BPOs. Employers are
prohibited from showing any discrimination against women in respect of recruitment or
promotion, training or transfer.
 The Payment of Gratuity Act, 1922
All kinds of employees in the call centre will be able to benefit from it irrespective of the
nature of their job. The legislation provides for gratuity considering it as a retirement
benefit for long service and as provision for the employee in old age.

The Employees State Insurance Act, 1948

The Employees Provident Fund Miscellaneous Provisions Act, 1952

The provisions of these do not apply to employees drawing wages in excess of Six
Thousand Five Hundred (Rs. 6500) per month excluding most starting level BPO
employees.

Allsec Smart Leave:

Instant Information Retrieval and Updating, provides online leave applications and
approvals for employees at Allsec.Multi Level Leave Approval allows up to 3 levels of
configuration.
E-Mail Notification ensures leave application and approval transactions are automatically
emailed to the respective authority.
Allsec BPO Benefits Administration allows clients to configure and deploy complex ideas
into powerful employee delightful compensation packages, allowing tax saving benefits
and cash flow, on its powerful planning tool. Employees can manage, claim, track, view
and reconcile their yearly eligibilities in all transparency.
The above characterisation of work in BPO outfits does not paint a rosy picture of the working
conditions, which leads one to the second question, namely, whether employee-unionisation has not
taken place as yet because of the absence of effective leadership. This may, in fact, be the case but it
is also true that, if reports are to be believed, an attempt to unionise the 350,000 employees in the
sector (80,000 more jobs are to be added this year) by the Union Network International (a global
alliance of 900 unions) has till now not met with any success.
Tactically, it has done the right thing by rejecting outright the allegation. On a strategic
plane, the emphasis on minimum standards has been most sensible as also the gradual
framing and adoption of a self-regulatory agency "for laying guidelines on a range of
issues, including data protection and work conditions of employees". It can be no one's
case that the BPO sector is uniformly employee-friendly in the country. On the contrary, it
should be the universal appeal that the sector should be strengthened further if the nation
is to make the most of its IT potential.
 Legal Terminology for reference

1.Affiliation: ​Affiliation means that the unions pay an affiliation fee to the Labour Party; in
return, they and their members receive the privileges of affiliated membership.

2.Mixed economy:​Mixed economy is an economic system in which both the state and private
sector direct the economy, reflecting characteristics of both market economies and planned
economies. Most mixed economies can be described as market economies with strong regulatory
oversight, in addition to having a variety of government-sponsored aspects. India is mixed
economy.

3.Statutory provisions: ​Statutory means pertaining to or of the statute. Statute is the various
laws and Acts formulated by the Govt. and in force at any given time. Statutory provision is the
provisions under any Act or Rules framed thereunder, in force..For example, the rule that a juvenile
cannot be employed in any industry is a statutory provision under a specific law..

4.Laissez-faire: ​The practice or doctrine of non-interference in the affairs of others, especially

with reference to individual conduct or freedom of action by the governement. This policy was
adopted by the then British government during its regime.
5.Economic justice: ​Economic justice, which touches the individual person as well as the social
order, encompasses the moral principles which guide us in designing our economic institutions.
These institutions determine how each person earns a living, enters into contracts, exchanges goods
and services with others and otherwise produces an independent material foundation for his or her
economic sustenance. The ultimate purpose of economic justice is to free each person to engage
creatively in the unlimited work beyond economics, that of the mind and the spirit.

6.Collective bargaining: ​Collective bargaining by which dispute as to conditions of

employment is resolved amicably by agreement rather than coersion – especially between employer
and employees.

7.Arbitration:​Arbitration, a form of alternative dispute resolution (ADR), is a legal technique

for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more
persons (the "arbitrators", "arbiters" or "arbitral tribunal"), by whose decision (the "award") they
agree to be bound.

8.Adjudication:​Adjudication is the legal process by which an arbiter or judge reviews evidence

and argumentation including legal reasoning set forth by opposing parties or litigants to come to a
decision which determines rights and obligations between the parties involved.

9.Conciliation: ​Conciliation is a process in the industries to bring employees and employer

together by pacifying means.
10.Works committee:​In the case of any industrial establishment in which one hundred or more
workmen are employed or have been employed on any day in the preceding twelve months the
appropriate Government may by general or special order require the employer to constitute in the
prescribed manner a Works Committee consisting of representatives of employers and workmen
engaged in the establishment so however that the number of representatives of workmen on the
Committee shall not be less than the number of representatives of the employer.

11.Trade union: ​Trade union means any combination whether temporary and permanent,
formed primarily for the purpose of regulating the relations between workmen and employers, or
between workmen and workmen, or between employers and employers, or for imposing restrictive
conditions on the conduct of any trade or business, and includes any federation of two or more trade
unions.

12.Workmen:​"workman" means any person (other than a person whose employment is of a

casual nature and who is employed otherwise than for the purposes of the employer's trade or
business) who is - (i) a railway servant as defined in clause (34) of section 2 of the Railways Act,
1989 (24 of 1989), not permanently employed in any administrative, district or sub-divisional office
of a railway and not employed in any such capacity as is specified in Schedule II, or (ia) (a) a
master, seaman or other member of the crew of a ship,

13.Employee: ​(f) "employee" means any person who is employed for wages in any kind of work
manual or otherwise in or in connection with the work of an establishment and who gets his wages
directly or indirectly from the employer and includes any person(i) employed by or through a
contractor in or in connection with the work of the establishment; (ii) engaged as an apprentice not
being an apprentice engaged under the Apprentices Act 1961 or under the standing orders of the
establishment.

14.Employer:​"employer" means (i) in relation to an establishment which is a factory the owner

or occupier of the factory including the agent of such owner or occupier the legal representative of a
deceased owner or occupier and where a person has been named as a manager of the factory under
clause (f) of sub-section (1) of section 7 of the Factories Act 1948 the person so named; and (ii) in
relation to any other establishment the person who or the authority which has the ultimate control
over the affairs of the establishment and where the said affairs are entrusted to a manager managing
director or managing agent such manager managing director or managing agent.

15.Perpetual succession: ​Perpetual succession means continuous existence. Members come

and go, but the trade unions stands forever. It dies only when its registration is withdrawn or
cancelled by the competent authority only by legal procedure.

16.Common seal: ​The registered trade union enjoys a common seal of its own. Its name and
seal cannot be used by others. The common seal and name are its properties.

17.Principles of natural justice:​a. No man shall be Judge in his own cause

b. Both sides shall be heard, or audi alteram partem
. The other principles which have been stated to constitute elements of Natural Justice
are (i). The parties to a proceedings must have due notice of when the Court / Tribunal will
proceed
(ii). The Court / Tribunal must act honestly and impartially and not under the dictation of
other persons to whom authority is not given by Law

18.Immunity from criminal conspiracy: ​No office-bearer or member of a Registered

Trade Union shall be liable to punishment under sub-section (2) of section 120B of the
Indian Penal Code 1860 (45 of 1860) in respect of any agreement made between the
members for the purpose of furthering any such object of the Trade Union as is specified
in section 15, unless the agreement is an agreement to commit an offence.

19.Amalgamation of trade unions: ​Any two or more registered Trade Unions may
become amalgamated together as one Trade Union with or without dissolution or division
of the funds of such Trade Unions or either or any of them, provided that the votes of at
least one-half of the members of each or every such Trade Union entitled to vote are
recorded, and that at least sixty per cent. of the votes recorded are in favour of the
proposal.

20.Dissolution of trade unions:​(1) When a registered Trade Union is dissolved, notice

of the dissolution signed by seven members and by the Secretary of the Trade Union shall,
within fourteen days of the dissolution be sent to the Registrar, and shall be registered by
him if he is satisfied that the dissolution has been effected in accordance with the rules of
the Trade Union, and the dissolution shall have effect from the date of such registration.
(2) Where the dissolution of a registered Trade Union has been registered and the rules of
the Trade Union do not provide for the distribution of funds of the Trade Union on
dissolution, the Registrar shall divide the funds amongst the members in such manner as
may be prescribed.
21.Lay-off:​“Lay-off” (with its grammatical variations and cognate expressions) means the
failure, refusal or inability of an employer on account of shortage of coal, power or raw
materials or the accumulation of stocks or the breakdown of machinery [or natural calamity
or for any other connected reason] to give employment to a workman whose name is
borne on the muster rolls of his industrial establishment and who has not been retrenche

22.Retrenchment:​“Retrenchment” means the termination by the employer of the service

of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way
of disciplinary action but does not include-(a) Voluntary retirement of the workman; or (b)
Retirement of the workman on reaching the age of Superannuation if the contract of
employment between the employer and the workman concerned contains a stipulation in
that behalf.

23.Strike:​“Strike” means a cessation of work by a body of persons employed in any

industry acting in combination, or a concerted refusal, or a refusal, under a common
understanding of any number of persons who are or have been so employed to continue to
work or to accept employment;

24.Lock-out:​“Lock-out” means the temporary closing of a place of employment], or the

suspension of work, or the refusal by an employer to continue to employ any number of
persons employed by him;

25.Appropriate government: ​In relation to any industry carried by or under the authority of
the Central government, the Central government will be the appropriate government and in relation
to any industry carried by or under the authority of the State government, the State government will
be the appropriate government.

26.Award:​‘Award’ means an interim or a 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 section 10A;]

27.Industrial dispute:​“Industrial dispute” means any dispute or difference between

employers and employers, or between employers and workmen, or between workmen and
workmen, which is connected with the employment or non-employment or the terms of
employment or with the conditions of labour, of any persons;

28.Closure:​“Closure’ means the permanent closing down of a place of employ or part

thereof;]

29.Continuous service:​a workman shall be said to be in continuous service for a period if he is,
for that period, in uninterrupted service, including service which may be interrupted on account of
sickness or authorized leave or an accident or a strike which is not illegal, or a lock-out or a
cessation of work which is not due to any fault on the part of the workman;
(2) where a workman is not in continuous service within the meaning of clause (1) for a period of
one year or six months, he shall be deemed to be in continuous service under an employer-
(a) for a period of one year, if the workman, during a period of twelve calendar months
preceding the date with reference to which calculation is to be made, has actually worked
under the employer for not less than-(i) one hundred and ninety days in the case of a
workman employed below ground in a mine; and (ii) two hundred and forty days, in any
other case.
30.Industry:​“Industry” means any business, trade, undertaking, manufacture or calling of
employers and includes any calling, service, employment, handicraft, or industrial
occupation or avocation of workmen;