BBA 602 Labour Laws notes

Question Answer Bank

BBA 602- Labour Laws

Q1. Define Industrial Relations. Also discuss its concept, nature, scope and importance?

Ans. Concept of Industrial Relations

Basically, IR sprouts out of employment relation. Hence, it is broader in meaning and wider in scope. IR is dynamic and developing socio-economic process. As such, there are as many as definitions of IR as the authors on the subject. Some important definitions of IR are produced here.

According to Dale Yoder’, IR is a designation of a whole field of relationship that exists because of the necessary collaboration of men and women in the employment processes of Industry”.

Armstrong has defined IR as “IR is concerned with the systems and procedures used by unions and employers to determine the reward for effort and other conditions of employment, to protect the interests of the employed and their employers and to regulate the ways in which employers treat their employees”

In the opinion of V. B. Singh “Industrial relations are an integral aspect of social relations arising out of employer-employee interaction in modern industries which are regulated by the State in varying degrees, in conjunction with organised social forces and influenced by the existing institutions. This involves a study of the State, the legal system, and the workers’ and employers’ organizations at the institutional level; and of the patterns of industrial organisation (including management), capital structure (including technology), compensation of the labour force, and a study of market forces all at the economic level”.

Encyclopedia Britannica defined IR more elaborately as “The concept of industrial relations has been extended to denote the relations of the state with employers, workers, and other organisations. The subject, therefore, includes individual relations and joint consultation between employers and workers at their places of work, collective relations between employers and trade unions; and the part played by the State in regulating these relations”.

Thus, IR can now safely be defined as a coin having two faces: co- operation and conflict. This relationship undergoes change from thesis to antithesis and then to synthesis. Thus, the relationship starting with co-operation soon changes into conflict and after its resolution again changes into co­operation. This changing process becomes a continuous feature in industrial system and makes IR concept as dynamic and evolving one.

Scope of IR

Based on above definitions of IR, the scope of IR can easily been delineated as follows:

1. Labour relations, i.e., relations between labour union and management.

2. Employer-employee relations i.e. relations between management and employees.

3. The role of various parties’ viz., employers, employees, and state in maintaining industrial relations.

4. The mechanism of handling conflicts between employers and employees, in case conflicts arise.

The main aspects of industrial relations can be identified as follows:

1. Promotion and development of healthy labour — management relations.

2. Maintenance of industrial peace and avoidance of industrial strife.

3. Development and growth of industrial democracy.

Objectives of IR

The primary objective of industrial relations is to maintain and develop good and healthy relations between employees and employers or operatives and management. The same is sub- divided into other objectives.

Thus, the objectives of IR are designed to:

1. Establish and foster sound relationship between workers and management by safeguarding their interests.

2. Avoid industrial conflicts and strikes by developing mutuality among the interests of concerned parties.

3. Keep, as far as possible, strikes, lockouts and gheraos at bay by enhancing the economic status of workers.

4. Provide an opportunity to the workers to participate in management and decision making process.

5. Raise productivity in the organisation to curb the employee turnover and absenteeism.

6. Avoid unnecessary interference of the government, as far as possible and practicable, in the matters of relationship between workers and management.

7. Establish and nurse industrial democracy based on labour partnership in the sharing of profits and of managerial decisions.

8. Socialise industrial activity by involving the government participation as an employer.

According to Krikaldy, industrial relations in a country are influenced, to a large extent, by the form of the political government it has. Therefore, the objectives of industrial relations are likely to change with change in the political government across the countries.

Accordingly, Kirkaldy has identified four objectives of industrial relations as listed below:

1. Improvement of economic conditions of workers.

2. State control over industrial undertakings with a view to regulating production and promoting harmonious industrial relations.

3. Socialisation and rationalisation of industries by making the state itself a major employer.

4. Vesting of a proprietary interest of the workers in the industries in which they are employed.

Importance of Industrial Relations

The healthy industrial relations are key to the progress and success. Their significance may be discussed as under –

v  Uninterrupted Production – The most important benefit of industrial relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is uninterrupted flow of income for all. Smooth running of an industry is of vital importance for several other industries; to other industries if the products are intermediaries or inputs; to exporters if these are export goods; to consumers and workers, if these are goods of mass consumption.

v  Reduction In Industrial Disputes – Good industrial relations reduce the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gheraos and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing production.

v  High Morale – Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. The employer in his turn must realize that the gains of industry are not for him along but they should be shared equally and generously with his workers. In other words, complete unity of thought and action is the main achievement of industrial peace. It increases the place of workers in the society and their ego is satisfied. It naturally affects production because mighty co-operative efforts alone can produce great results.

v  Mental Revolution – The main object of industrial relation is a complete mental revolution of workers and employees. The industrial peace lies ultimately in a transformed outlook on the part of both. It is the business of leadership in the ranks of workers, employees and Government to work out a new relationship in consonance with a spirit of true democracy. Both should think themselves as partners of the industry and the role of workers in such a partnership should be recognized. On the other hand, workers must recognize employer’s authority. It will naturally have impact on production because they recognize the interest of each other.

v  Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and recognition of each other. It will help increase production. Wastages of man, material and machines are reduced to the minimum and thus national interest is protected.

Thus, it is evident that good industrial relations is the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor.

Q2. Discuss the various approaches of industrial relations.

Ans. Approaches/Perspectives of IR

The IR can be viewed from the various angles which may range from the economic and social, political to the legal, psychological and managerial.

An economist tries to interpret the problem of IR in terms of interpersonal forces of the laws of demand and supply.  To a politician, the dynamics of IR, conflict revolves round the problem of class war, for a psychologist, IR can be best studied in terms of work behavior and attitude of labour and management and the like. A few approaches to IR are discussed.

a. Psychological Approach to IR:  The psychologists are of the view that the problem of IR are deeply rooted in the perception and the attitude of focal participants.   For ex. A photograph of an ordinary middle aged person served as input, which both groups were expected to rate.  It is interesting to note that both the groups rated the photograph in different manner, i.e., the Union leaders referred the person in the photograph as “ Manager” where the group of Executives saw Union leaders referred the person in the photograph as “Manager” where the group of Executives” saw “Union leader” in the photograph. 

This variance in perception of parties is largely because of their individual perception.  The conflict between labor and management occurs because every group negatively views/perceives the behavior of other i.e. even the honest intention of a party is looked with suspicion.

b. Sociological Approach to IR: The industry is a social world made up of groups with differing personalities, educational background, family breeding, emotions, likes and dislikes and host of other personal factors such as attitudes and behaviour. Since ages, the problems of IR have been looked upon as one basically concerned with wages, employment, conditions and labour welfare.  But in fact sociological aspects of the problem are more important than others.  This largely includes various sociological factors like value system, customs, norms, symbols and attitude and perception of both labour and management that affect the IR in varied ways.

c.Human relations Approach to IR

Management of people at work is an exclusive prerogative of HR specialists; the various HR policies including those relating to leadership and motivation have profound influence on their work behaviour.  For instance, a manager, using an autocratic style, designs, a close supervision system and feels that display of authority would drives people to work.  But this style leads to dissatisfaction and hatred among people whereas in a democratic style, it is held that a desired organisational behaviour can be cultivated if employees needs and wants are properly satisfied.  The manager working with such a style positively motivates people.  Infact, no style is good or bad is every situation demands specific leadership behaviour on the part of HR specialist.

4. Gandhian Approach to IR

Gandhiji advocated that for resolving disputes the following rules to be observed.

a. The workers should seek redressal of reasonable demands only through collective action.

b. If they have to organise a strike, trade unions should seek by ballot authority from all workers to do so, remain peaceful and use non-violent methods.

c.The workers should avoid strikes as far as possible in industries of essential services;

d.The workers should avoid formation of unions in philanthropic organisation.

e. The strikes should be resorted to only as a last resort after all other legitimate measures have failed.

Approaches to IR

UNITARY APPROACH

•          Industrial relations is grounded in mutual cooperation, individual treatment, teamwork and the sharing of common objectives.

•          The underlying assumption is that it is to the benefit of all to focus on common interests and promote harmony. 

•          Conflict is regarded as destructive.

Assumptions about workplace relations

•           - management and employees share common interest

•           - one source of legitimate authority (management)

 Assumptions about workplace conflict

•           - inevitable, aberration, destructive, to be avoided

•           - caused by poor management, dissidents, agitators or poor communication

Assumptions about trade unions

•           - a competing and illegitimate source of authority

•           - an unwarranted intrusion in the workplace

•           - create conflict where none would otherwise exist

 Assumptions about collective bargaining

•           - creates and institutionalizes unnecessary divisions of interest

•           - serves to generate workplace conflict rather than resolve it

PLURALIST APPROACH

           Regards conflict as inevitable because employers and employees have conflicting interests.

•          Trade unions are seen as legitimate representatives of employee interests.

•          Sees stability in industrial relations as the product of concessions and compromises between management and unions.

Assumptions about workplace relations

•           - managers and employees have different objectives

•           - multiple sources of legitimate authority

Assumptions about workplace conflict

•           - inevitable, caused by different opinions and values, benefit to an organization

•           - avoid by accepting trade unions, include in decision-making

Assumptions about the workplace role of trade unions

•           - not the cause of conflict

•           - are expression of diverse workplace interests that always exist

•           - a legitimate part of workplace relations

Assumptions about the role of collective bargaining

•           - deals with problems on a collective basis

•           - most efficient means for institutionalising employment rules

•           - fairer outcomes by balancing employee and management power

RADICALOR MARXIST APPROACH

•          Marxists, like the pluralists, regard conflict between management and employees as inevitable.

•          Sees industrial conflict as an aspect of class conflict.

•          The solution to worker alienation and exploitation is the overthrow of the capitalist system.

Assumptions about workplace relations

•           - reflects a wider class conflict between capital and labour

•           - reflects coercion of working class into dominant capitalist values

 Assumptions about workplace conflict

•           - inevitable: capital seeks to reduce costs, workers seek fairer price for labour

•           - will only cease by revolutionary change in distribution of property and wealth

Assumptions about trade unions

•           - should raise revolutionary consciousness of workers

•           - should not limit action to improving material lot of workers

•           - union leaders who accommodate management betray the workers

 Assumptions about collective bargaining

•           - merely offers temporary accommodations 

•           - leaves important managerial powers in tact

Q3. Define the term Trade Union and its features. Describe the various types of the trade unions.

Ans. TRADE UNION

Meaning and Concept

It is a well known fact that in every industrial community there are two distinct classes the employees and the Employers, without whom production at a large scale is not possible. Both these parties usually have contradictory motives, which creates many problems. Over the ages, the teeming millions which constituted a sizeable chunk of industrial society have struggled hard to achieve a greater measure of protection against inhuman treatment meted out to them by employers. They have learned to make themselves secure against ills over which they believed to have little control. In fact individually the labourers can do little to bring about the kind of reforms they believe desirable. They are effective only if they act in united ways. The very idea of joint action, laid down the foundation of the instrument of struggle for security and advancement–“Trade Union”. The Trade Union came into existence as an agent of workers and working class at large. It performed and still performs two functions: one to work for the redistribution of some of the nation’s wealth by raising wages and earning of its members. This enable worker at their own to improve their living standard and in the process become better equipment to deal with unfavourable economic conditions. The second objective of union is more directly related to their security role in esprit of here and now. Through various types of union welfare funds and later through pressure for employer welfare programme and the governmental social security measures, the union aim to obtain greater benefits for its members. In liberalized economic environment the union is looked upon as a facilitator of change.

Definition of trade unions

 1. “A trade Union is the continuous association of wage earners for the purpose of maintaining or improving the conditions of their working lives.” (Webb)

 2. According to Section 2(h) of Indian Trade Union Act, ”Trade union is an combination whether temporary or permanent formed primarily for the purpose of regulating the relation between workmen & employers workers & workers or between employers & employers or for imposing restrictive conditions or conduct of any trade or business and include any federation of two or more trade unions.”

The Characteristics of trade unions

1. Trade unions have a statement specifying that organization is a trade union.

2. Trade unions have a statement of its principle objectives.

3. Registration with Registrar of Trade Union.

4. Independence from employer, which may be evident from the certificate issued by the Registrar of Trade Union.

5. Affiliation with central trade union organization. All the trade union does not necessarily show these characteristics, yet many of the large trade unions do. General features of trade unions

Coming out of a vast definition of the concept, let us put a light on some features of trade union which are as follows:

1. The trade union is voluntary association: Trade union is not a compulsory association but voluntary association of workers, who may be in one or more industries and occupations.

 2. Common interest: There is certain common interest of the member workers. The leader of the trade union is supposed to pursue and protect the economic and other interest of the members which leads to their welfare.

3. Collective action: After thorough discussions in the meeting of trade union the leader of the union takes collective steps to press their demand before the management.

4. Permanent & continuous association: A trade union is a permanent and continuous organization. They persistently pursue their purpose conceive of their purpose as one, which is not merely immediate but continuous and long term as well. They do not expect to attain their purpose in a day because they anticipate and contemplate a continuing stream of additional objectives to be adopted from time to time.

 5.Association engaged in securing economic benefits: Trade unions attempts is to secure control of supply of labour in one or more markets and to maintain that control as a mean of fixing the price of labour as well as the conditions under which they works.

6.The origin and growth of trade union have been influenced by a number of ideologies: The socio economic and even political movement have influenced trade union in one or other way

7.Other benefits: Trade union is not only confined to economic benefits, but other benefits such as cultural, political, social and psychological are also within their broader preview.

Types and structure of the trade union.

Ever since the dawn of industrialization there has emerged a wide variety of unions across the globe these unions can be classed under two heads

 The purpose for which unions are formed

  The variation in the composition of their membership

(A)  Union classification according to the purpose

Under this head normally two type of union have been kept. 1) Reformist 2) Revolutionary

Reformist unions: Such unions don’t believe in the destruction of economic, social and management structure of the state or concern but want only to modify them and to have favourable response for their members through negotiation and other peaceful manners. The reformist union is subdivided in two parts:

 (a) Business unionism: Business unions are those unions that are maintained primarily to represent the workers in collective bargaining with the employers. They are distinct from other reformist which try to bring economic advantage to their members.

(b) Friendly or Uplift unionism: Idealistic in nature and aspires to elevate the moral, intellectual and social life of the workers and advocate idealistic plans for social regeneration. They emphasise such other consideration as education, health, insurance etc.

Revolutionary Unions: Such unions aim at destroying the present structure and replacing it with the new and different institution according to the ideals that are regarded as preferable. The revolutionary unionism generally seeks to destroy capitalist industry to abolish the wage system and substitute it with some other system generally socialist and communist. These unions are further classified in two classes:

a) Anarchist unions: The unions which try to destroy the existing economic system by revolutionary means called anarchist Unions. Such unions exists no more in presently scenario.

b) Political unions: The unions which gain power through political action called political unions. The main function of such unions is to eliminate the power of capital and capitalists, redistributing wealth and giving effective power to workers.

(B) Union classification on the basis of membership structure

The union can also be classified according to variations in the composition of the members. On this basis unions have been classified in four categories:

a)      Craft union: It is an organisation of workers employed in a particular craft and trade or in a single or few occupations. Such organizations link together those workers who have similar skills, craft training and specialization, aiming to safeguard their interest.

b)      Industrial union: It is an organisation of workers which links all craftsmen and skilled workers in any industry. It is organized upon the industry wise basis rather than the craft wise basis.

c)      Staff union: The term staff union is popularly used to both craft and industrial union. It is organized the workers on the basis of craft working in same industry.

d)      General union: It is an organisation which covers various industries and labourers having different skills. They have numerical superiority (large membership), for they are open to all classes of workers and this is the source of their strength.

Q4. What functions a Trade Union performs for their employees?

Or

 Describe the role of the Trade Unions.

Ans. Some important reason as to why workers organize themselves to form trade union are as follows:

 1) To safeguard their interests: Workers often join trade union in order to have a stronger voice to resist those actions of the management which are against their interest. When employers cut wages or pay low wages; when working conditions are unsafe or too unpleasant; when management. Interfere in worker’s personal lives, workers resist by forming unions. Through the unions they petition management for change and if don’t succeed; they may resort to a concerted works stoppage “a strike”.

2) To participate in union activities: Workers may join unions to obtain certain health or insurance benefits or to participate in educational program or to learn about their own business and occupation. They may also join to engage in social and community activities.

3) To exercise leadership: Some workers join union as an outlet for their own ambitions. They have leadership traits and to explore the power of the trade union to be a leader they joins the trade unions.

4)To get hike in wage rate: One of the important objective behind workers joining a union has been their belief that they would get wages increased and have stronger impact through collective action.

5) To maintain good relation: Another reason of employees joining trade unions may be broader realization on their part that trade unions maintain the employer – employee or labour management relation.

6) To maintain adequate working conditions: Employee may join trade union because of their belief that unions are effective way to secure adequate protection from various hazards and financial security during situation like accident injury, illness, unemployment etc.

7) To get a media of communication: The employees may join the unions because of their feeling that this would enable them to communicate their views, ideas, feeling and frustrations to the management and exercise an effective voice to the management decision on the matter concerning their welfare.

 8)To do fair dealing: The employees may join trade union to ensure a just and fair dealing by management and well planned actions. Through collective strength restrain the management from taking any such action which may be irrational or contrary to their interest.

 9) To get employment: Sometimes workers join trade union because it is a precondition to their getting employment. This is known as the ‘closed shop’ system and was prevalent in America till 1947.

10) To get strengthen: Since the employee alone as an individual feel specially weak in a world of mass production and mass movement, he prefers to join an organization that may offer him an opportunity to join other for the achievement of those objectives that he consider as socially desirable. “Objectives of Trade Union-same as above discussed points”.

Function of Trade Unions

 For the attainment of above objectives trade union performs two types of functions

 Militant functions

 Ministrant or Federal functions

Militant function: One of the main aim of the unions is to secure better conditions of work and employment and more recently, the trade union have an aim to secure some share of productivity gains and participation in the management or even control over industry. When the union fails to accomplish these objectives by the method of negotiations they adopt aggressive methods and put a fight with the management in the form of strike, boycott etc.

Federal function: A trade union is also a federal association or a mutual benefit organization supporting the member out of their own funds during the period of work stoppage due to strike or lockout. It also provides financial assistance to the member during the period when they are unfit for their work because of illness or employment injury or when they are temporary unemployed.

Some another function of the trade unions may be summarized as under:

1) Infra-mural activities:-Such functions of unions lead to the betterment of employment condition of employees such as adequate salary, sanitary etc. by collective bargaining, negotiation etc.

2) Extra-mural activities: -Such activities help the employee to maintain and improve their efficiency such as promote friendly relation, education and culture among members.

3) Political activities: - That may be related to the function of a political labour party or those reflecting an attempt to seek influence on public policy relating to matter connected with the interest of members.

 Role of the trade unions

Trade union performs various roles regarding the various classes of the society as follows:

 •Role towards the members of union

• Role towards the organization

 • Role towards the union

 • Role towards the society

1.      Role towards the trade union member

 The trade union performs following duties regarding their member employees:

 a) To safeguard the workers against all sort of exploitation by the employers, by union and by political parties.

 b) To protect workers from the unfair labour practices of the management.

c) To ensure healthy, safe and conducive work conditions.

d) To exert pressure for the enhancement of reward associated with the work only after making a realistic assessment of its practical implication.

e) To ensure a desirable standard of living by providing various type of services such as health, housing, education, recreational, cooperative etc.

 f) To guarantee a fair deal and social justice to workers.

g) To remove the dissatisfaction and redress the day-to-day grievances and complaints of workers.

 h) To encourage the worker’s participation in the management of organization.

 i) To make the workers aware about their rights and duties.

 j) To settle the disputes through negotiation, joint consultation and voluntary arbitration and through adjudication.

2.  Role toward the Industrial organization

Trade unions perform following functions for the industrial organization in which they are working:

a) To highlight the organization as a joint enterprise between workers and management and to promote identity of interest.

 b) To increase production quantitatively as well as qualitatively, by laying down the norms of production and ensuring their adequate observance.

c) To help in maintenance of discipline.

d) To help in removal of dissatisfaction and redressal of day-to-day complaints and grievances and ensure workers loyalty.

e) To create opportunity for worker’s participation in management and strengthen the co-operation.

f) To promote harmonic relationship between workers and management by setting disputes through negotiation, joint consultation and avoiding litigation.

g) To create favourable opinion of the management towards trade union and improve their status in industrial organization.

h) To exert pressure on the employers to enforce legislative provision beneficial to workers, to share the profit equitably and keep away from various type of unfair labour practice.

 i) To facilitate communication with management.

j) To impress upon the management the need to adopt reformative and not punitive approach towards worker’s fault.

 3.  Role toward the trade union organization

 a) To improve financial position of the concern by fixing higher subscription, by realizing the union dues and by organizing special fund raising campaigns.

b) To preserve and strengthen trade union democracy.

 c) To train members to assume leadership position.

d) To improve workers network of communication between union and its members.

e) To promote harmonic relationship between different unions to create a unified trade union movement.

 f) To resolve the problem of factionalism and promote unity within the union.

g) To prepare and maintain the necessary records.

h) To manage the trade union organization on scientific lines.

 i) To publicise the trade union objectives and functions, to know people’s reaction toward them and make necessary modification.

4.  Role toward society

 a) To render all sort of constructive co-operation in the formulation and implementation of plans and policies relating to national development.

b) To actively participate in the development of the programs of national development such as family planning, forestation, national integration etc.

c) To launch special campaigns against the social evils of corruption, casteism etc.

d) To enable unorganized sector to organize itself.

 e) To create public opinion favourable to government’s policies and plans and to mobilise people’s participation for their effective implementation.

f) To create public opinion favourable to trade unions thereby raising their social and public image.

g) To exert pressure, after realistically ascertaining its practical implication on the government to enact legislation conducive to the development of trade unions and their members.

Q5. What is meant by discipline? Discuss the Approaches, Principles and Procedure for discipline.

OR

“Too often discipline is thought of only in the negative sense. In reality, positive discipline is more effective and plays a larger role in business.” Discuss the statement and point out the approaches principles to be borne in mind while taking the disciplinary action.

Ans. Discipline is very essential for a healthy industrial atmosphere and the achievement of organizational goals. An acceptable performance from subordinates in an organization depends upon their willingness to carry out instructions and the orders of their superiors, to abide by the rules of conduct and maintain satisfactory standards of work.

The term ‘discipline’ can be interpreted. It connotes a state of order in an organization. It also means compliance with the proper appreciation of the hierarchical superior subordinate relationship. The concept of discipline emerges in a work situation from the interaction of manager and workers in an organization. Formal and informal rules and regulations govern the relationship between a manager and workers, the formal rules and regulations are codified in the company’s manual or standing order. Informal rules, on the other hand, are evolved from convention and culture in the organization.

Webster’s dictionary has defined discipline as “first, it is the training that corrects, mould, strengthen or perfect individual behaviour. Second, it is control gained by enforcing obedience, and third it is punishment or chastisement.”

According to Bremblett, “discipline does not mean a strict and technical observance of rigid rules and regulations. It simply means working, co-operating and behaving in a normal and orderly way, as any responsible person would expect an employee to do.”

In other words, it may be noted that discipline is employee self control which prompts him to willing cooperate with the organizational standards, rules, objectives, etc. It is essentially an attitude of the mind, a product of culture and environment and requires, along with legislative sanction, persuasion on a moral plane.

There are two basic concept of discipline; one of them being negative while the other is a positive aspect of discipline. The negative approach to discipline is traditional concept and is identified with ensuring that subordinates adhere strictly to the rules, and punishment is meted out in the event of indiscipline. In other word, for the violation of rules strict penalties are levied and the fear of punishment works as a deterrent in the mind of the employee.

 Approaches, Principles and Procedure for Disciplinary Action

Approaches

Basically, there are five approaches regarding to manage indiscipline or misconduct. All these approaches briefly explain here.

1.       Judicial Approach: It is commonly followed in India. The present day manager has to handle a variety of disciplinary issues. His right to hire and dismiss is curbed to a great extent, especially where unionized employees are concerned. The complexity is increasing in this arbitrary managerial function due to intervention by the government, by providing legislation for governing terms of employment. In order to secure security of jobs, the govt. has tried to ensure protection to industrial labour from likely misuse of managerial power to hire and fire.

2.       The Human Relation Approach: It calls for treating an employee as a human being and considers the totality of his personality and behaviour while correcting faults that contribute to indiscipline. His total personality is considered, as is his interaction with his colleagues, his family background, etc. and then appropriate punishment for misconduct is awarded.

3.       The Human Resources Approach: The approach calls for treating every employee as a resource and an asset to the organization before punishing the workers, the cause for indiscipline has to be ascertained. An analysis of the cause is made, to find out whether indiscipline is due to the failure of his training and motivating system or the individual’s own failure to meet the requirements, and accordingly corrections are made.

4.       The Group Discipline Approach: The management in this approach sets and conveys well established norms and tries to involve the groups of employees. The group as a whole control Indiscipline and awards appropriate punishments. The trade union may also act as a disciplinary agency.

5.       The leadership Approach: In this case, every supervisor or manager has to guide, control, train, develop, lead a group and administer the rules for discipline.

Principles for Disciplinary Action

Despite, best efforts, acts of indiscipline occur and it becomes necessary to take a disciplinary action. While taking disciplinary action the following principles must be considered.

1.      Principles of natural justice: This principle must guide all enquires and actions. This means that no person should be appointed to conducting an enquiry who himself is interested in the outcome –either as an aggrieved party or because he is hostile to the person proceeded against, or for any other reason.

2.      Principles of impartiality or consistency: There should be no marked difference in the action taken under identical situations where all the factors associated to situations are alike.

3.      Principle of impersonality: The disciplinary authority should not encourage a person who is failing to fulfill his duty. He should be impartial to everyone.

4.      Principle of reasonable opportunity to the offender to defend himself. Article 311 of the constitution of India says: No “person employed by the union or a state govt. shall be dismissed or remove until he has been given a reasonable opportunity showing cause against the action proposed to be taken in regard to him.”

Procedure for Disciplinary Action

The procedure for taking disciplinary action involves the following steps:

1.      Preliminary Investigation: First of all a preliminary enquiry should be held to find out the misconduct behaviour or situation.

2.       Issue of a charge sheet: Once a misconduct or indiscipline is identified, the authority should proceed to issue of charge sheet to the employee. Charge sheet is merely a notice of the charge and provides the employee an opportunity to explain his conduct. Therefore, charge sheet generally called as show cause notice. In the charge sheet each charge should be clearly defined and specified.

3.      Suspension Pending Enquiry: In case the charge is grave a suspension order may be given to the employee along with the charge sheet. According to the industrial employment (Standing orders) Act, 1946, the suspended worker is to be paid a subsistence allowance equal to one-half of the wages for the first 90 days of suspensions and three fourths of the wages for the remaining period of suspension if the delay in the completion of disciplinary proceedings are not due to the workers conduct.

4.       Notice of Enquiry: In case the worker admits the charge, in his reply to the charge sheet, without any qualification, the employer can go ahead in awarding the punishment without further enquiry. But if the worker does not admit the charge and the charge merits major penalty, the employer must hold enquiry to investigate into the charge. Proper and sufficient advance notice should be given to the worker of the enquiry.

5.      Conduct of Inquiry: The inquiry should be conducted by an impartial and responsible officer. He should proceed in a proper manner and examine witnesses. Fair opportunity should be given to the worker to cross-examine the management witnesses.

6.      Recording the findings: The enquiry officer must record all the conclusion and findings. As far as possible he should refrain from recommending punishment and leave it to the decision of the appropriate authority.

7.       Awarding Punishment: The management should decide the punishment on the basis of finding of an enquiry, past record of worker and gravity of the misconduct.

8.      Communicating Punishment: The punishment awarded to the worker should be communicated to him quickly. The letter of communication should contain reference to the charge sheet, the enquiry and the findings. The date from which the punishment is to be effective should also be mentioned.

Q6. Write a short note on :

(a)    Code of Discipline    (b) Causes of Indiscipline and Misconduct

Ans. a) Code of Discipline

Code of discipline forms the Gandhian approach to industrial relations to bind employees and trade unions to a moral agreement for promoting peace and harmony. It was an outcome of the efforts of Guljari Lal Nanda, the then Union Labour Minister in 1957 to 1958. G.L. Nanda was the true Gandhian. It was at his instance that code was formulated. It was formally adopted at the 16th session of the Indian labour conference (1958). National representatives of both employers and trade unions were parties to it. This code was a unique formulation to voluntarily regulate labour management relations.

The main features of this code are:

 1. Both employer and employees should recognise the rights and responsibilities of each other and should willingly discharge their respective obligations.

2. There should be no strike or lockout without proper notice and efforts should be made to settle all disputes through existing machinery.

3. A mutual agreed grievance procedure will be setup and both the parties will abide by it without taking arbitrary

4. Both employers and trade unions will educate their member regarding their mutual obligations.

5. Management will not increase workloads without prior agreement or settlement with the workers.

6. Employer will take prompt for the settlement of grievances and for the implementation of all awards and agreements.

7. Management will take immediate action against all officers found guilty of provoking indiscipline among workers

 8. Union will avoid demonstrations, rowdyism all form of physical duress and workers will not indulge in union activity during working hours.

9. Union will discourage negligence of duty, damage to property, careless operation, insubordination and other unfair labour practices on the part of workers.

Thus, the ‘code of discipline’ consists of three sets of principles, namely (a) obligation to be observed by management, (b) obligations to be observed by trade unions, and (c) principles binding on both the parties.

(b)   Causes of Indiscipline

Basically, indiscipline may arise due to poor management, errors of judgment by employees about their union leaders or a lack of understanding of management policy. This problem could also develop when an individual behaves in indisciplinary manner or as an outcome of the management’s ignorance to his grievance. It can occur due to lack of commitment towards the work, by an employee in an organization. Various other factors are also responsible for indiscipline such as: unfair labour practices, victimization by management, wage differentials, wrong work assignment, and defective grievance procedure, payment of very low wages (giving rise to poverty, frustration and indebtedness), poor communication, ineffective leadership, and result in indiscipline. Thus, various socio-economic and cultural factors play a role in creating indiscipline in an organization.

Sign and Symptoms of Misconduct

Every act of indiscipline is called misconduct. The main acts of misconduct are given as:

1. Disobedience or willful insubordination.

2. Theft, fraud or dishonesty in connection with the employers business or property.

3. Wilful damage or loss of employer’s goods or property.

4. Taking or giving bribe or any illegal gratification.

5. Habitual absence without leave or absence without leave for more than ten days.

6. Habitual late attendances.

7. Frequent repetition of any act or omission for which fine may be imposed.

 8. Habitual negligence or neglect of work.

9. Habitual breach of any law applicable to the establishments.

10. Disorderly behaviour during working hours at the establishment.

11. Striking of work or inciting others to strike in contravention of the provisions of any law.

These are not exhaustive but illustrative examples of misconduct under the model standing orders, framed as a part of the rules made under this Industrial Employment (Standing Orders) Act, 1946.

Q7. Write an introductory note on the History and the need of studying Labour Laws in India?

Ans. Labour law also known as employment law is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations. As such, it mediates many aspects of the relationship between trade unions, employers and employees. In other words, Labour law defines the rights and obligations as workers, union members and employers in the workplace. 

Generally, labour law covers:

·         Industrial relations – certification of unions, labour-management relations, collective bargaining and unfair labour practices;

·         Workplace health and safety;

·         Employment standards, including general holidays, annual leave, working hours, unfair dismissals, minimum wage, layoff procedures and severance pay.

There are two broad categories of labour law. First, collective labour law relates to the tripartite relationship between employee, employer and union. Second, individual labour law concerns employees' rights at work and through the contract for work.

The labour movement has been instrumental in the enacting of laws protecting labour rights in the 19th and 20th centuries. Labour rights have been integral to the social and economic development since the industrial revolution.

History of Labour laws

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

International Labour Organisation (ILO) was one of the first organisations to deal with labour issues. The ILO was established as an agency of the League of Nations following the Treaty of Versailles, which ended World War I. Post-war reconstruction and the protection of labour unions occupied the attention of many nations during and immediately after World War I. In Great Britain, the Whitley Commission, a subcommittee of the Reconstruction Commission, recommended in its July 1918 Final Report that "industrial councils" be established throughout the world. The British Labour Party had issued its own reconstruction programme in the document titled Labour and the New Social Order.  In February 1918, the third Inter-Allied Labour and Socialist Conference (representing delegates from Great Britain, France, Belgium and Italy) issued its report, advocating an international labour rights body, an end to secret diplomacy, and other goals. And in December 1918, the American Federation of Labor (AFL) issued its own distinctively apolitical report, which called for the achievement of numerous incremental improvements via the collective bargaining process.

As the war drew to a close, two competing visions for the post-war world emerged. The first was offered by the International Federation of Trade Unions (IFTU), which called for a meeting in Berne in July 1919. The Berne meeting would consider both the future of the IFTU and the various proposals which had been made in the previous few years. The IFTU also proposed including delegates from the Central Powers as equals. Samuel Gompers, president of the AFL, boycotted the meeting, wanting the Central Powers delegates in a subservient role as an admission of guilt for their countries' role in the bringing about war. Instead, Gompers favored a meeting in Paris which would only consider President Woodrow Wilson's Fourteen Points as a platform. Despite the American boycott, the Berne meeting went ahead as scheduled. In its final report, the Berne Conference demanded an end to wage labour and the establishment of socialism. If these ends could not be immediately achieved, then an international body attached to the League of Nations should enact and enforce legislation to protect workers and trade unions.

The British proposed establishing an international parliament to enact labour laws which each member of the League would be required to implement. Each nation would have two delegates to the parliament, one each from labour and management. An international labour office would collect statistics on labour issues and enforce the new international laws. Philosophically opposed to the concept of an international parliament and convinced that international standards would lower the few protections achieved in the United States, Gompers proposed that the international labour body be authorized only to make recommendations, and that enforcement be left up to the League of Nations. Despite vigorous opposition from the British, the American proposal was adopted.

The Americans made 10 proposals. Three were adopted without change: That labour should not be treated as a commodity; that all workers had the right to a wage sufficient to live on; and that women should receive equal pay for equal work. A proposal protecting the freedom of speech, press, assembly, and association was amended to include only freedom of association. A proposed ban on the international shipment of goods made by children under the age of 16 was amended to ban goods made by children under the age of 14. A proposal to require an eight-hour work day was amended to require the eight-hour work day or the 40-hour work week (an exception was made for countries where productivity was low). Four other American proposals were rejected. Meanwhile, international delegates proposed three additional clauses, which were adopted: One or more days for weekly rest; equality of laws for foreign workers; and regular and frequent inspection of factory conditions.

The Commission issued its final report on 4 March 1919, and the Peace Conference adopted it without amendment on 11 April. The report became Part XIII of the Treaty of Versailles. (The Treaty of Versailles was one of the peace treaties at the end of World War I. It ended the state of war between Germany and the Allied Powers. It was signed on 28 June 1919.)

The first annual conference (referred to as the International Labour Conference, or ILC) began on 29th  October 1919 in Washington DC and adopted the first six International Labour Conventions, which dealt with hours of work in industry, unemployment, maternity protection, night work for women, minimum age and night work for young persons in industry. The prominent French socialist Albert Thomas became its first Director General. The ILO became a member of the United Nations system after the demise of the League in 1946.

 Purpose/ Need of labour legislation

Labour legislation that is adapted to the economic and social challenges of the modern world of work fulfils three crucial roles:

·         it establishes a legal system that facilitates productive individual and collective employment relationships, and therefore a productive economy;

·         by providing a framework within which employers, workers and their representatives can interact with regard to work-related issues, it serves as an important vehicle for achieving harmonious industrial relations based on workplace democracy;

·          it provides a clear and constant reminder and guarantee of fundamental principles and rights at work which have received broad social acceptance and establishes the processes through which these principles and rights can be implemented and enforced. 

But experience shows that labour legislation can only fulfills these functions effectively if it is responsive to the conditions on the labour market and the needs of the parties involved. The most efficient way of ensuring that these conditions and needs are taken fully into account is if those concerned are closely involved in the formulation of the legislation through processes of social dialogue. The involvement of stakeholders in this way is of great importance in developing a broad basis of support for labour legislation and in facilitating its application within and beyond the formal structured sectors of the economy.

Q8: Define Industrial Dispute. Explain the different types/forms of industrial disputes in Indian organisations.

Ans. Definition of Industrial Dispute:

The Industrial Disputes Act, 1947 defines an industrial dispute as, “any dispute or difference between employers and employers, or between employers and employees, or between employers and employees, which is connected with the employment, or non employment, or the terms of employment or with the conditions of work of any person.”

Industrial dispute can take place at any time. It is the cause of employee dissatisfaction. It is the sign of industrial unrest. When the relations between management and employees are not smooth there is bound to be a confrontation leading to industrial dispute.

It may take any form, organized or unorganized. Organized from of industrial dispute may lead to strike, gherao, demonstrations, boycott etc. but unorganized form of dispute leads to low productivity, low morale, frustration etc. Any kind of dispute leads to hampering industrial growth. It becomes necessary to resolve industrial disputes as early as possible.

Forms of Disputes:

Industrial dispute may take any form like strike, lock outs, gherao, bandh etc. It may be violent at times leading to loss of life and property. It disturbs the public life also. There are losses of man-hours and production which enterprise has to suffer.

The forms of disputes are discussed as below:

1. Strike:

Non acceptance of employees’ demand leads them to stop the work and proceed on strike. Strike is the last and important weapon with the employee which is used when all hopes of fulfillment of their demand are shattered and there is no way left to them but to resort to strike. Strike is initiated and supported by the employee union. It is stopping of work by the employees or a group of employees undertaken to pressurize the management to accept their demands. It can continue for any number of days. It is a complete cessation of work by the employees. Strikes can be of following types.

(a) Economic Strike:

Economic strike is one which is undertaken by the members of the trade union for fulfillment of their economic demands such as rise in wages, bonus, and other facilities such as health, education, food at concessional rates etc. and other conditions of work.

(b) General Strike:

General strike is one which is undertaken by all the employees belonging to all unions and in regions in the entire industry. General strike is resorted to by the employees for fulfillment of common demands. It can be an extension of sympathetic strike.

(c) Sympathetic Strike:

It is the strike undertaken by the members of one union to support the demands of striking employees of the other union. This is undertaken to express sympathy with the striking employees and their demands. If this sympathy strike is extended further it can take the form of general strike. This is also known as token strike.

(d) Sit Down Strike:

It is the strike when employees stop working but do not leave the place of work. They sit at the place of work. This form of strike is also known as pen down or tools down strike. They do not interfere in the work but they themselves do not work at all.

(e) Go slow Strike:

The strike where employees do not stop work but do not work with enthusiasm. The speed of their work is very slow which results in low output. They are doing this in an organized way. This puts employers under pressure which is the object of strike.

2. Gherao:

Gherao means to surround. The members of the union surround the Chief executive and do not allow him to leave the place where he is surrounded or gheraoed. Usually this place is his office. They create a human chain around him restricting him to move. Gheraos are very common means of protest. Any group can do this any time if they are dissatisfied. It should take the violent turn.

3. Lock Out:

Lock out is resorted to by the employers to put pressure on their employees. Lock out is undertaken by the employers to force the employees to resume work on the terms and conditions of employers. Lock out is an extreme step taken by the employers to curb the militant activities of the unions. At times it becomes a trial of strength between the employers and employees.

4. Picketing:

Picketing is a method resorted to by the employees to attract attention of common men to the fact that there exists a dispute between the management and employees. Picketing is dissuading the employees from reporting to work by some men at the gate of the place of work. Picketing is legal activity to exhibit protest. It is not violent activity.

5. Boycott:

The workers may boycott use of company’s product. They may request the general public also to do so. This adversely affects the sale of company’s product. To get rid of the ill effects it may think of accepting the demands of the employees.

All the forms of disputes strike, bandhs, lock out etc. adversely affect the industrial growth and enterprises have to suffer a lot. Employees and management should settle the disputes amicably without resorting to any of the above forms. As far as-possible a care should be taken that the things should not so worsen that employees to proceed on strikes etc. Good industrial relations is the key to success and growth where both the parties gain, no one is to lose anything.

The numbers of industrial disputes are on increase since independence resulting into a tremendous loss of man-hours and production. The need of the hour is to strengthen the industrial relations and eliminate industrial disputes for better industrial growth and prosperity.

Q9. What are the various preventive machineries that are set up for handling of Industrial disputes in India?

Ans. 6 Preventive Machineries used for Handling Industrial Disputes in India

Some of the major preventive machinery for handling industrial disputes in India are as follows: 1. Worker’s Participation in Management 2. Collective Bargaining 3. Grievance Procedure 4. Tripartite Bodies 5. Code of Discipline 6. Standing Orders.

Lasting industrial peace requires that the causes of industrial disputes should be eliminated. In other words, preventive steps should be taken so that industrial disputes do not occur.But if preventive machinery fails, then the industrial dispute settlement machinery should be activated by the Government because non-settlement of disputes will prove to be very costly to the workers, management and the society as a whole.

The preventive machinery has been set up with a view to creating harmonious relations between labour and management so that disputes do not arise.

It comprises of the following measures:

1. Worker’s participation in management

2. Collective bargaining

3. Grievance procedure

4. Tripartite bodies

5. Code of discipline

6. Standing orders

1. Worker’s Participation in Management:

It is a method whereby the workers are allowed to be consulted and to have a say in the management of the unit. The important schemes of workers’ participation are: Works committee, joint management council (JMC), shop council and joint council. These have been discussed later in this book.

2. Collective Bargaining:

According to Dale Yoder, “Collective bargaining is the term used to describe a situation in which essential conditions of employment are determined by a bargaining process undertaken by representatives of a group of workers on the one hand and of one or more employers on the other.”

Collective bargaining not only includes negotiation, administration and enforcement of the written contracts between the employees and the employers, but also includes the process of resolving labour-management conflicts.

The role of collective bargaining for solving the issues arising between the management and the workers at the plant or industry level has been widely recognised. Labour legislation and the machinery for its implementation prepare a framework according to which industrial establishments should operate.

But whatever labour laws may lay down, it is the approach of employers and trade union leaders which matters. Unless both are enlightened, industrial harmony is not possible. Therefore, the solution to common problems can be found directly through negotiation between both parties and in this context, the scope of collective bargaining is very wide.

3. Grievance Procedure:

Grievances are symptoms of conflicts in the enterprise. So, they should be handled very promptly and efficiently. Coping with grievances forms an important part of a manager’s job. The manner in which he deals with grievances determines his efficiency in dealing with the subordinates. A manager is successful if he is able to build a team of satisfied workers by removing their grievances. This would help in the prevention of industrial disputes in the organisation.

4. Tripartite Bodies:

Industrial relations in India have been shaped largely by principles and policies evolved through tripartite consultative machinery at industry and national levels. The aim of the consultative machinery is to bring the parties together for mutual settlement of differences in a spirit of cooperation and goodwill.

Indian Labour Conference (ILC) and Standing Labour Committee (SLC) have been constituted to suggest way and means to prevent disputes. The representatives of the workers and employers are nominated to these bodies by the Central Government in consultation with the All-India organisations of workers and employers.

The agenda of ILC/SLC meetings is settled by the Labour Ministry after taking into consideration the suggestions set to it by member organisations. These two bodies work with minimum procedural rules to facilitate free and fuller discussions among the members. The ILC meets once a year, whereas the SLC meets as and when necessary.

The functions of ILC are:

(a) to promote uniformity in labour legislation;

(b) to lay down procedure for the settlement of industrial disputes; and

(c) to discuss matters of all-India importance as between employers and employees.

The ILC advises the Government on any matter referred to it for advice, taking into account suggestions made by the state governments and representatives of the organisations of workers and employers. The Standing Labour Committee’s main function is to consider and determine such questions as may be referred to it by the Plenary Conference or the Central Government and to render advice, taking into account the suggestions made by various state governments, and the organisations of workers and employers.

5. Code of Discipline:

Code of Discipline is a set of self-imposed mutually agreed voluntary principles of discipline and good relations between the management and the workers in industry. In India, Code of Discipline was approved by the 16th Indian Labour Conference held in 1958.

It contains three sets of codes which have already been discussed later in this book. According to National Commission on Labour, the Code in reality has been of limited use. When it was started, very favourable hopes were thought of it; but soon it started acquiring rust.

Main reasons for the lapses on the part of the employers and employees to secure harmonious relations through the Code may be listed as below:

(i) There was absence of self-imposed voluntary restraint on the part of the parties.

(ii) The worsening of economic situation led to the erosion of real wages of the workers.

(iii) The rivalry among labour representatives.

(iv) Conflicts between the Code and the law.

(v) The state of indiscipline is the body politic, that is, the whole set up is charged with indiscipline and the Code could not work.

(vi) The employers could not implement the Code in many respects for reasons beyond their control.

6. Standing Orders:

The terms and conditions of employment have been a bone of contention between labour and management since the advent of factory system. To prevent the emergence of industrial strife over the conditions of employment, one important measure is the Standing Orders. Under the Industrial Employment Standing Orders Act, 1946, it was made obligatory that Standing Orders would govern the conditions of employment.

The Standing Orders regulate the conditions of employment from the stage of entry in the organisation of the stage of exits from the organisation. Thus, they constitute the regulatory pattern for industrial relations. Since the Standing Orders provide Do’s and Don’ts, they also act as a code of conduct for the employees during their working life within the organisation.

The Standing Orders define with sufficient precision the conditions of employment under the employers and hold them liable to make the said conditions known to workmen employed by them. These orders regulate the conditions of employment, discharge, grievances, misconduct, disciplinary action, etc. of the workmen employed in industrial undertakings.

These issues are potential problems in industrial relations. Unresolved grievances can become industrial disputes; and disciplinary action in the wake of disciplinary proceedings against misconduct may also lead to industrial dispute.

Q10. Explain the methods used for the settlement of Industrial disputes?

Ans. 3 Methods for Settlement of Industrial Disputes

The three methods for settlement of industrial disputes are as follows: 1. Conciliation 2. Arbitration  3. Adjudication.

Failure of the employees and the employers to sort out their differences bilaterally leads to the emergence of industrial disputes. The Industrial Disputes Act, 1947 provides legalistic machinery for settlement of such disputes by involving the interference of a third party.

The settlement machinery as provided by the Act consists of the three methods:

1. Conciliation

2. Arbitration

3. Adjudication

These are discussed one by one.

1. Conciliation:

In simple sense, conciliation means reconciliation of differences between persons. Conciliation refers to the process by which representatives of workers and employers are brought together before a third party with a view to persuading them to arrive at an agreement by mutual discussion between them. The alternative name which is used for conciliation is mediation. The third party may be one individual or a group of people.

In view of its objective to settle disputes as quickly as possible, conciliation is characterised by the following features:

(i) The conciliator or mediator tries to remove the difference between the parties.

(ii) He/she persuades the parties to think over the matter with a problem-solving approach, i.e., with a give and take approach.

(iii) He/she only persuades the disputants to reach a solution and never imposes his/her own viewpoint.

(iv) The conciliator may change his approach from case to case as he/she finds fit depending on other factors.

According to the Industrial Disputes Act 1947, the conciliation machinery in India consists of the following:

1. Conciliation Officer

2. Board of Conciliation

3. Court of Enquiry

A brief description of each of these follows:

Conciliation Officer:

The Industrial Disputes Act, 1947, under its Section 4, provides for the appropriate government to appoint such number of persons as it thinks fit to be conciliation officers. Here, the appropriate government means one in whose jurisdiction the disputes fall.

While the Com­missioner /additional commissioner/deputy commissioner is appointed as conciliation officer for undertakings employing 20 or more persons, at the State level, officers from central Labour Commis­sion office are appointed as conciliation officers, in the case of Central government. The conciliation officer enjoys the powers of a civil court. He is expected to give judgment within 14 days of the commencement of the conciliation proceedings. The judgement given by him is binding on the parties to the dispute.

Board of Conciliation:

In case the conciliation officer fails to resolve the dispute between the disputants, under Section 5 of the Industrial Disputes Act, 1947, the appropriate government can appoint a Board of Conciliation. Thus, the Board of Conciliation is not a permanent institution like conciliation officer. It is an adhoc body consisting of a chairman and two or four other members nominated in equal numbers by the parties to the dispute.

The Board enjoys the powers of civil court. The Board admits disputes only referred to it by the government. It follows the same conciliation proceedings as is followed by the conciliation officer. The Board is expected to give its judgment within two months of the date on which the dispute was referred to it.

In India, appointment of the Board of Conciliation is rare for the settlement of disputes. In practice, settling disputes through a conciliation officer is more common and flexible.

2. Arbitration:

Arbitration is a process in which the conflicting parties agree to refer their dispute to a neutral third party known as ‘Arbitrator’. Arbitration differs from conciliation in the sense that in arbitration the arbitrator gives his judgment on a dispute while in conciliation, the conciliator disputing parties to reach at a decision.

The arbitrator does not enjoy any judicial powers. The arbitrator listens to the view points of the conflicting parties and then gives his decision which is binding on all the parties. The judgment on the dispute is sent to the government. The government publishes the judgment within 30 days of its submission and the same becomes enforceable after 30 days of its publication. In India, there are two types of arbitration: Voluntary and Compulsory.

Voluntary Arbitration:

In voluntary arbitration both the conflicting parties appoint a neutral third party as arbitrator. The arbitrator acts only when the dispute is referred to him/her. With a view to promote voluntary arbitration, the Government of India has constituted a tripartite National Arbitration Promotion Board in July 1987, consisting of representatives of employees (trade employers and the Government. However, the voluntary arbitration could not be successful because the judgments given by it are not binding on the disputants. Yes, moral binding is exception to it.

Compulsory Arbitration:

In compulsory arbitration, the government can force the disputing parties to go for compulsory arbitration. In other form, both the disputing parties can request the government to refer their dispute for arbitration. The judgment given by the arbitrator is binding on the parties of dispute.

3. Adjudication:

The ultimate legal remedy for the settlement of an unresolved dispute is its reference to adjudica­tion by the government. The government can refer the dispute to adjudication with or without the consent of the disputing parties. When the dispute is referred to adjudication with the consent of the disputing parties, it is called ‘voluntary adjudication.’ When the government herself refers the dis­pute to adjudication without consulting the concerned parties, it is known as ‘compulsory adjudication.

The Industrial Disputes Act, 1947 provides three-tier machinery for the adjudication of indus­trial disputes:

1. Labour Court

2. Industrial Tribunal

3. National Tribunal

A brief description on these follows:

Labour Court:

Under Section 7 of the Industrial Disputes Act, 1947, the appropriate Government by notifying in the official Gazette, may constitute Labour Court for adjudication of the industrial disputes The labour court consists of one independent person who is the presiding officer or has been a judge of a High Court, or has been a district judge or additional district judge for not less than 3 years, or has been a presiding officer of a labour court for not less than 5 years. The labour court deals with the matters specified in the second schedule of the Industrial Disputes Act, 1947.

These relate to:

1. The property or legality of an employer to pass an order under the standing orders.

2. The application and interpretation of standing orders.

3. Discharge or dismissal of workers including reinstatement or grant of relief to workmen wrongfully dismissed.

4. Withdrawal of any statutory concession or privilege.

5. Illegality or otherwise of a strike or lockout.

6. All matters other than those reserved for industrial tribunals.

Industrial Tribunal:

Under Section 7A of the Act, the appropriate Government may constitute one or more Industrial tribunals for the adjudication of industrial disputes. Compared to labour court, industrial tribunals have a wider jurisdiction. An industrial tribunal is also constituted for a limited period for a particular dispute on an adhoc basis.

The matters that come within the jurisdiction of an industrial tribunal include the following:

1. Wages, including the period and mode of payment.

2. Compensatory and other allowances.

3. Hours of work and rest periods.

4. Leave with wages and holidays.

5. Bonus, profit sharing, provident fund, and gratuity.

6. Classification by grades.

7. Rules of discipline.

8. Rationalisation.

9. Retrenchment of employees and closure of an establishment or undertaking.

10. Any other matter that can be prescribed.

National Tribunal:

This is the third one man adjudicatory body appointed by the Central Govern­ment by notification in the Official Gazette for the adjudication of industrial disputes of national importance. The central Government may, if it thinks fit, appoint two persons as assessors to advise the National Tribunal. When a national tribunal has been referred to, no labour court or industrial tribunal shall have any jurisdiction to adjudicate upon such matter.

Q11. What are the main provisions of Factories Act, 1948?

Ans. FACTORIES  ACT

The object of the Factories Act is to regulate the conditions of work in manufacturing establishments coming within the definition of the term "factory" as used in the Act.

The first Act, in India, relating to the subject was passed in 1881. This was followed by new Acts in 1891, 1911, 1922, 1934 and 1948. The Act of 1948 is more comprehensive than the previous Acts. It contains detailed provisions regarding the health, safety and welfare

of workers inside factories, the hours of work, the minimum age 6f, ­workers, leave with pay etc. The Act has been amended several times.

The Act is based on the .provisions of the Factories Act of Great

Britain passed in 1937.

In 1976 the Act was amended extensively. The provisions of the Amendment have been quoted and summarised at the appropriate .places in this chapter.

APPLICATION OF THE ACT

The Factories Act of 1948 came into force on 1st April 1949; It applies to factories, as defined in. the Act, all over India, including the State of Jammu and Kashmir.

Unless 'otherwise provided, the Factories Act applies to factories belonging to the Central or any State Government.--Sec. 116.

DEFINITIONS UNDER THE FACTORIES ACT

Factory. The term Factory is defined in Section 2 (m) of the Act as follows: "Factory means any premises including the precincts thereof- .

(i). whereon ten or more workers are working, or were work­ing on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or

(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,___­

but does not include a mine subject to the operation of the Indian Mines Act, 1952 (Act XXXV of 1952), or a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place.

PROVISIONS REGARDING THE HEALTH OF WORKERS

Sections 11 to 20 of the Act contain certain provisions intended to ensure that the conditions under .which work is carried on in fac­tories do not affect the health of the workers injuriously. The  summary of the provi­sions are explained below :

Summary of the provisions of the Factories Act. relating -to the health of workers are stated below.

1. Cleanliness. Every factory shall be kept clean and free from dirt, and the outflow of drains etc. The floors must be cleaned. Drainage shall be provided. Inside walls, partitions and ceilings must be repainted at least once in five years. When washable water paint is used they must be painted once every three years and washed at least every period of six months.-Sec. 11,' as amended in 1976.

2. Disposal of wastes and effluents. The waste materials pro­duced from the manufacturing process must be effectively disposed off-Sec. 12.

3. Ventilation 'and Temperature. There must be provision for adequate ventilation by the circulation of fresh air: The temperature must be kept at a comfortable level. Hot parts of machines must be'separated and insulated.-Sec. 13.

4. Dust and Fume. If the .manufacturing process used. gives off injurious or offensive dust and fume steps must be taken so that they are not inhaled or accumulated. The exhaust fumes of internal combustion engines must be conducted outside the factory.--Sec. 14.

5. Artificial humidification. The water used for this purpose must be pure. It must be taken from some source of drinking water supply. The State Government can frame rules .regarding the process of humidification etc.-8ec. 15.            .

6. OverCrowding. There must be no overcrowding in a fac­tory. In factories existing before the commencement of the Act there must be at least 350 c.ft. (~r 55 cubic metres) of space per worker. For factories built afterwards, there must be at least 500 c.ft. (or 75 cubic metres) of space. In calculating the space, an account is to be taken of space above 14 ft. (or 5 metres) from the floor.-Sec. 16.

7. Lighting. Factories must be well lighted. Effective measures must be adopted to prevent glare or formation of shadows which might cause eyestrain.-sec. 17.

8. Drinking water. Arrangements must be made to provide a sufficient supply of wholesome drinking water. All supply' points of such water must be marked "drinking water". No such points shall be within 20 ft. (or 7.5 metres) of any latrine, washing place etc. Factories employing more than 250 workers must cool the water during the hot weather.-Sec. 18.

9. Latrines and Urinals. Every factory must provide' sufficient number of latrines and urinals. There must be separate provision for male and female workers. Latrine and urinals must be kept in a clean and sanitary condition. In factories. employing more than 250 workers, they shall be of prescribed sanitary types.--sec. 19.

PROVISIONS REGARDING THE SAFETY OF WORKERS

Sections 21 to 40A, 40B and 41 of the Act lay down rules for the purpose of securing the safety of workers. Summary of the provisions of the Factories Act regarding the safety of the workers are stated below: (Sections 2l to 41) .

1. Fencing ot machinery. All dangerous machinery must be securely fenced e.g., moving .parts- of prime movers and flywheels connected to every prime mover. electric generators. etc.-Sec. 2l.

2. Work on or near machinery in motion. Work on or near machinery in motion must be carried out only by specially trained adult male workers wearing tightly fitting c1othes.-Sec. 22.

3. Employment of young persons on dangerous machines. No young person shall work at any danger()us machine' unless he has been specially instructed as to the dangers and the precautions to be observed. has received sufficient training about th~ work. and is under the supervision of some person having thorough knowledge and experience of the machine.-Sec. 23.

4. Striking gear and devices for cutting off power. In every factory suitable devices for cutting off power in emergencies from running machinery shall be provided and maintained in every work­room.~. 24.

5. Self-acting machines. Moving parts of a self-acting machine must not be allowed to come within 45 cms. of any fixed structure which is not part of the machine.-Sec. 25.

6. Casing of new machinery. In all machinery installed after the commencement of the Act. certain parts must be sunk, encased or otherwise effectively guarded e.g.. set screw. bolt. toothed gearing etc. -sec. 26.

7. Women and children near cotton Openers. Women and children must not be allowed to work near cot/On openers, except In certain  cases.-Sec. 27

8. Hoists, lifts, chains etc, Every hoist and lift  must be so constructed as to be safe. There are detailed rules as to how such safety is to be secured. There are similar provisions regarding lifting machines. chains, ropes and lifting tackle .Sec. 28. 29.

9.Revolving machinery. Where grinding is . carried on the maximum safe working speed of every revolving  machinery connected therewith must be notified. Steps must be taken to see that the safe speed is not exceeded.-Sec. 30.

10. Pressure plant. Where any operation is carried on at a pressure higher than the atmospheric pressure, steps must be taken to ensure that the safe working pressure is not exceed~cL-.sec. 31.

11. Floors, stairs and means of access. All floors,  steps, stairs, passage and gangways shall be of sound construction and properly maintained. Handrails shall be provided where necessary. Safe means of access shall be provided to the place where the worker will carry on any work.-Sec. 32.

12. Pits, sumps. openings in floors etc. Pits. sumps. openings in floors etc. must be securely covered or fenced.-Sec. 33.

13. Excessive weights. No worker shall be made to carry a load so heavy as to cause him injury.-8ec. 34.

14. Protection of eyes. Effective screen or suitable goggles shall be provided to protect the eyes of the worker from fragments thrown off in course of any manufacturing process and from excessive light if any.-Sec. 35.

15. Precautions against dangerous fumes. No person shall be allowed to enter any chamber. tank etc. where dangerous fumes are likely to ,be present. unless it is equipped with a manhole or other means of going out. In such space no portable electric light of more than 24 ,volts shall be used. Only a lamp or light of flame proof construction can be used in such space. For people entering such space suitable breathing apparatus, reviving apparatus etc. shall be provided. Such places shall be cooled by ventilation before any person is allowed to enter.-8ecs. 36 and 36A.

16. Explosive or inflammable gas etc. where a manufacturing process produces inflammable gas. dust. fume. etc. steps must be taken to enclose the machine concerned, prevent the accumulation of substances and exclude all possible sources of ignition. Extra precautionary measures are to be taken where such substances are worked at greater than the atmospheric. pressure.-Sec. 37.

17. Precaution in case of fire. Fire escapes shall be provided. Windows and doors shall be constructed to open outwards. The means of exit in case of the fire shall be clearly marked in red letters. Arrangements must be made to give warning in case or fire -sec. 38

18. Specifications of defectives etc. and safety of buildings and machinery. If any building or machine is in a defective or dangerous condition, the inspector of factories can ask fer the holding of tests to determine how they can be made safe. He can also direct the adoption of the measure necessary to make them safe. In case of immediate danger, the use of the building or machine can be prohibited.-Secs. 39. 40.

19. Maintenance of Buildings. If the Inspector of Factories thinks that any building in a factory, or any. part of it. is in such a state of disrepair that it is likely to affect the health and welfare of the workers. he may serve on the occupier or manager or both in writing specifying the measures to be done before the specified date.­ Sec. 4OA.

20. Safety Officers. The State Government may notify to the occupier to employ a number of Safety Officers in a factory (i) wherein one thousand or more workers are ordinarily employed. or (ii) wherein any manufacturing process or operation which involves the risk of bodily injury, poisoning. disease or any other hazard to health of the persons employed in the factory .-Sec. 40B.

PROVISIONS REGARDING THE WELFARE OF WORKERS

Summary of the provisions of the Factories Act regarding the welfare of workers are stated below :

1.Washing. In every factory adequate and suitable facilities for washing  shall be provided and maintained. They shatI be con­veniently accessible and shall be kept clean. There must be separate provisions for male and female workers.-Sec. 42.

2. Storing and drying. The State Government may make rules requiring the provision of suitable facilities for storing and drying clothing.-Sec. 43.

 3. Sitting. Sitting facilities must be provided for workers who have to work in a standing position. so that they may take rest when possible. When work can be done in a sitting position efficiently the Chief Inspector may direct the provision of sitting arrangements.­ Sec. 44.

4. First aid. Every factory must provide first aid boxes or cupboard. They must contain the prescribed materials and they must be in charge of persons trained in first aid treatment. Factories em­ploying more than 500 persons must maintain an ambulance roam con­taining the prescribed equipment and in charge of the prescribed medical and nursing staff-Sec. 45.

5. Canteens. Where more than 250 workers are employed. the state Government may require the opening of canteen or canteens for workers. Rules may be framed regarding the food served. its manage­ment etc.,..-Sec. 46.

6. Shelters. In every factory where more than 150 workers are employed there must be provided adequate and suitable shelters or rest. rooms and a lunch room (with drinking water supply) where workers may eat meals brought by them. Such rooms must be suffi­ciently lighted and ventilated and must be maintained in a cool and clean condition~. The standards may be fixed by the State Government. -Sec. 47,

 7. Creches. In every factory where more than 30 women a employed, a room shall be provided for the use of the children (below 6 years) of such women. The room shall be adequate size. well lighted and ventilated, maintained in a clean and sanitary condition and shall be in charge of a woman trained in the care of children and infants. The standards shall be laid down by the State Government.­Sec. 48.

 8. Welfare officers. Welfare officers must be appointed in every factory where 500 or more workers are employed. The State Govern­ment may prescribe the duties, qualifications etc. of such officers.­ Sec. 49.

9. Rules. The State Government may make rules regarding the welfare of workers.-Sec. 50.

THE WORKING HOURS OF ADULTS

Weekly Hours. No adult worker shall .be required or allowed . to-work in a factory for more than forty-eight hours in any week.­ Sec. 51.

Daily Hours. No adult worker shall be required or allowed to work in a factory for more than nine hours in any working day. The daily maximum may be exceeded with the previous approval of the Chief Inspector, to facilitate change of shifts.-Sec. 54.

Intervals for Rest. The periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed five hours arid that no worker shall work for more than five hours before he has had an interval for rest of at least half an hour. The State Government or the Chief Inspector may, by order in writing, and for reasons stated therein, increase the work period to six.-Sec. 55.

Spreadover. The periods of work of an adult worker in a factory shall be arranged that inclusive of his intervals for rest under section 55, they shall not spread-over more than ten and half hours in any day. The Chief Inspector may for specified reasons increase the spreadover up to twelve hours.-Sec. 56.

RULES REGARDING EMPLOYMENT OF ADULTS

 Night Shifts. Where a worker in a factory works on a. shift which extends beyond midnight, (a) his weekly holiday and compen­satory holiday means a period of holiday for 24 consecutive hours beginning when his shift ends, and (b) the following day for him shall be deemed to be the period. of 24 hours beginning when such shift ends and the hours he has worked after midnight shall be counted in he previous day.-sec. 57

Overlapping Shifts. Work shall not be carried on in any factory by means of a system of shifts so arranged. that more than one relay of workers is engaged in work of the same kind at the same time. The State Government or the Chief Inspector may grant exemption from this rule.-See. 58.

Double Employment. No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save In such circumstances as may be prescribed.-Sec. 60.

 Notice of Periods of Work. There must be displayed in every factory a notice showing periods of work of adults, classification of workers in groups according to nature of their work, shifts and relays  etc. Change made in the system of work must be notified to the Inspector before change. The manager of every factory must maintain a Register of Adult Workers showing the name of each worker, the nature of his work, the group in which he is included, the relay in which he is allotted etc. The hours of work of an adult worker- must correspond with the notice referred to above and the Register.- Sections 61, 62, 63.

No adult worker shall be required or allowed to work in any factory unless his name and other particulars have been entered' in the register of adult workers.-Sec. 62 (1A) added by the Factories (Amendment) Act, 1976.

RESTRICTIONS ON THE EMPLOYMENT OF WOMEN

By section 66 the following restrictions have been imposed to women workers :

(a) Maximum daily work is 9 hours: No exemption from the provisions of Section 54 (which lays down that the maximum daily hours of work shall be nine hours) can be granted in respect of any women.

 (b) prohibition of night work: No women shall be required or­ allowed to work in any factory except between the hours of 6 a.m. and 7 p.m. The State Government may by notification in the official Gazette vary the limits for any factory or group or class or descrip­tion of factories. But such variation must not authorise the employ­ -ment of women between the hours 10 p.m. and 5 a.m.                                                                                    .

(c)Change of shift only after holiday:There shall be no change of shifts for women except after a weekly holiday or any other holiday.

Exception: There is an exceptional case. The State Government may make rules providing for the exemption from the afore~aid restrictions (wholly or partially or conditionally) of women working in fish-curing or fish-canning factories. In factories, mentioned above, the employment of women beyond the hours specified is necessary to prevent damage to or deterioration in any raw material. But such rules shall remain in force for not more than three years at a time.

Other restrictions: There are other restrictions on the employ­ ment of women workers :

1. Work on or near machinery in motion. No woman or young person shall be allowed to clean, lubricate or adjust any part of the machinery while the prime mover or transmission machinery is in motion or to work between moving parts, or between fixed and moving parts of any machinery which is in motion.-Sec. 22(2}.

2. Cotton openers. No woman or child shall be employed in any part of a factory for pressing cotton in which a cotton opener is at work. If the feed-end of a cotton opener is in a room separated from the delivery-end by a partition extending to the roof or to such height as the Inspector may in a particular case specify in writing , women and children may be employed on the side of the partition where the feed-end is situated.-Sec. 27.

3. Excessive weights. The State Government may make rules prescribing the maximum weights .which may be lifted, carried. or moved by adult men, adult women, adolescents and children employed in factories or in any class or description of factories or in carrying on any specified process.-Sec. 34.

4. Creches. In every factory wherein more than thirty women workers are ordinarily employed there shall be provided and main­ tained a suitable room or rooms for the use of children under the age of six years of such women.-Sec. 48.

5. Dangerous operations. The State Government is empowered to make special rules for the purpose of controlling and regulating factories which carry on operations exposing women, young persons and other workers to a serious risk of bodily injury, poisoning or disease.-Sec. 87 (b).

EMPLOYMENT OF YOUNG PERSONS

Employment of ChiIdren . No child who has not completed his fourteenth year shall be required or allowed to work in any factory.--sec. 67.

Certificate of Fitness and Token. A child who has completed his fourteenth year or an adolescent shall not be required or allowed to work in any factory unless (a) he has been granted a certificate of fitness. which is. in the custody of  the manager, and (b) such child or adolescent carries a token giving a reference to such certificate-­Sec. 68.

The Certificate of Fitness is a certificate granted to a child or adolescent by a Certifying Surgeon after. examination: The certificate is. given to a child if the surgeon is satisfied that he has completed his fourteenth year and has attained the prescribed physical standards. The certificate is granted to an adolescent if the surgeon is satisfied that he has completed his fifteenth year and is fit for a full day's we in a factory. The certifying surgeon must have personal knowledge of the intended place of work and of the manufacturing process involved. The certificate is valid only for a period of 12 months. It may be granted  subject to conditions (e.g., that of periodical re-examination). The

certificate may be renewed and, if necessary, revoked. Any fee pa: able for the certificate must be paid by the occupier of the factory all must not be recovered from the young person or his parents c guardian.-Sec. 69.

Working hours for Children. The law regarding working hours for children are stated below.-Sec. 71 :

1. No child shall be employed or. permitted to work in any factory- '

              (a)  for more than four and a half hours in any day;

              (b) during the night, .

Explanation: For the purpose of this sub-section "night" shall mean a period of at least twelve consecutive hours which shall include the interval between 10 p.m. and 6 a.m.

2. The period of work of all children employed in a factory shall be limited to two shifts which shall not overlap or spread-over more than five hours each, and each child shall be. employed in only one of the relays which shall not, except with the previous permission in writing of the Chief Inspector, be changed more frequently than once  in a period of thirty days.

3. The provisions of section 52 shaIl apply also to child workers, and in respect of any child. (Sec. 52 relates to weekly holidays. See next ' Section).

4. No child shall be required or allowed to work in any factory on any day on which he has already been working in another factory.

Medical Examination. Where an Inspector is of opinion that a person working as an adult is a young person, or that a young person is not fit to work, he may direct the manager of the factory to. have the person medically examined by a certifying surgeon.--Sec. 75.

CHILD-LABOUR

Rules regarding child-Iabour are contained in the Factories Act, Mines Act etc. There are also. two. general Acts an the subject. The Children (Pledging of Labour) Act (Act 11 of 1933) prohibits the making of  agreements to. pledge the labour of children and the employ­ment of  children whose labour has been pledged.  The Children Act of 1938, 1960 and 1978 prohibit the employment of a child who. has not completed  his fifteenth year of age in any occupation connected with the transport of passengers, goods or mails by railway or con­ -nected with a part authority Within the limits of any part. The Act also prohibits the employment of a child, who. has not completed his fourteenth year of age, in the processes set forth in the schedule to the Act. Children between 15 and 17 can be employed subject to certain restrictions as regards their periods of rest etc

HOLIDAYS AND LEAVE

The Factories Act provides for the following holidays, viz.,Weekly holidays, Compensatory holidays and Annual leave with wages according to certain rules. The provisions are explained below.

Weekly Holidays. Section 52 provides that an adult workers shall have a holiday on the first day of the week. But the manager of the factory may fix the holiday on any other day which is with three days before or after the first day of the week in case of such substitution, notice must be given to the Inspector of Factories an displayed in the factory. No substitution can be made which will result in any worker working for more than ten days consecutively without a holiday for a whole day. The State Government may make rules providing for exemption from the above section in certain cases, e.g., for urgent repairs.

The Weekly Holidays Act (Act XVIII of 1942) provides for the grant of weekly holidays to persons employed in shops, restaurants and theatres. The Act ,can be applied to a State by notification of the State Government.

Compensatory Holidays. Where as a result of the exemption of  factory from the operation of the role regarding weekly holidays, a worker is deprived from any weekly holiday he shall be allowed within the month in which the holidays were due, or within two months immediately following that month, compensatory holidays of equal number to the holidays lost.--Sec. 53.

Annual Leave with Wages. Sections 78 to 84 provide for the grant of a certain period of leave with wages to workmen.

Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subse­quent calendar year, leave with wages for a number of days calculated at the rate of

   (i) if an adult, one day for every twenty days of work per­formed by him during the previous calendar year;

    (ii) if a child, one day for every fifteen days of work performed  by him during the previous calendar year.

EXTRA WAGES FOR OVERTIME

( 1 ) Where a worker works in a factory for more than nine hours in  any day or for more than 48 hours in any week, he shall in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.-Sec 59(1)

 (2) For the purpose of sub-section (1), "ordinary rate of wages means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.-Sec. 59(2).

(3) Where any workers in factory are paid on a piece rate basis, the time rate of their work will include the following rules:

(i) if the workers bad been paid on the same or identical job during a month immediately preceding a month during which overtime work was done, the time rate shall be deemed to be equivalent to the daily average of their full­time earnings for the days of the overtime work. Also such time rates shall be deemed to be the ordinary rates of wages of those workers.

(ii) In the case of a worker who had not worked in the imme­diately preceding calendar month on the same or identi­cal job, the time rate shall be deemed to be equivalent to the daily average of the earning of the worker for the days on which he actually worked in the week in which the overtime work was done.

Q12. Explain the major provisions of Workmen Compensation Act , 1923?

Ans. Workmen Compensation Act

The Workmen’s Compensation Act, aims to provide workmen and/or their dependents some relief in case of accidents arising out of and in the course of employment and causing either death or disablement of workmen.

It provides for payment by certain classes of employers to their workmen compensation for injury by accident.

EMPLOYEES ENTITLED TO COMPENSATION

Every employee (including those employed through a contractor but excluding casual employees), who is engaged for the purposes of employer’s business and who suffers an injury in any accident arising out of and in the course of his employment, shall be entitled for compensation under the Act.

EMPLOYER’S LIABILITY FOR COMPENSATION (ACCIDENTS)

The employer of any establishment covered under this Act, is required to compensate an employee:
a. Who has suffered an accident arising out of and in the course of his employment, resulting into (i) death,

(ii) permanent total disablement,

(iii) permanent partial disablement, or

(iv) temporary disablement whether total or partial, or
b. Who has contracted an occupational disease.

HOWEVER THE EMPLOYER SHALL NOT BE LIABLE

a. In respect of any injury which does not result in the total or partial disablement of the workmen for a period exceeding three days;
b. In respect of any injury not resulting in death, caused by an accident which is directly attributable to-
i. the workmen having been at the time thereof under the influence or drugs, or
ii. the willful 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
iii. The willful removal or disregard by the workmen of any safeguard or other device which he knew to have been provided for the purpose of securing the safety of workmen.
The burden of proving intentional disobedience on the part of the employee shall lie upon the employer.
iv. when the employee has contacted a disease which is not directly attributable to a specific injury caused by the accident or to the occupation; or
v. When the employee has filed a suit for damages against the employer or any other person, in a Civil Court.

WHAT IS DISABLEMENT

Disablement is the loss of the earning capacity resulting from injury caused to a workman by an accident.
Disablement’s can be classified as (a) Total, and (b) Partial. It can further be classified into (i) Permanent, and (ii) Temporary, Disablement, whether permanent or temporary is said to be total when it incapacitates a worker for all work he was capable of doing at the time of the accident resulting in such disablement.

ACCIDENT ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT

An accident arising out of employment implies a casual connection between the injury and the accident and the work done in the course of employment. Employment should be the distinctive and the proximate cause of the injury. The three tests for determining whether an accident arose out of employment are:
1. At the time of injury workman must have been engaged in the business of the employer and must not be doing something for his personal benefit;
2. That accident occurred at the place where he as performing his duties; and
3. Injury must have resulted from some risk incidental to the duties of the service, or inherent in the nature condition of employment.

The general principles that are evolved are:

· There must be a casual connection between the injury and the accident and the work done in the course of employment;
· It is not necessary that the workman must be actually working at the time of his death or that death must occur while he was working or had just ceased to work;

COMPENSATION IN CASE OF OCCUPATIONAL DISEASES

Workers employed in certain types of occupations are exposed to the risk of contracting certain diseases, which are peculiar and inherent to those occupations. A worker contracting an occupational disease is deemed to have suffered an accident out of and in the course of employment and the employer is liable to pay compensation for the same.
Occupational diseases have been categorized in Parts A, B and C of Schedule III. The employer is liable to pay compensation:
a. When a workman contracts any disease specified in Part B, while in service for a continuous period of 6 months under one employer.

b. When a workman contracts any disease specified in Part C, while he has been in continuous service for a specified period, whether under one or more employers.

CALCULATION OF COMPENSATION

The amount of compensation payable by the employer shall be calculated as follows:
(a) In case of death. - 50% of the monthly wages X Relevant Factor or Rs. 50,000, whichever is more and Rs.1000 for funeral expenses.
(b) In case of total permanent disablement Specified under -60% of the monthly wages X Relevant Factor or Rs. 60,000, whichever is more.

(c) In case of partial permanent disablement .-Such percentage of the compensation payable in case (b) above, as is proportionate to the loss of earning Capacity (as assessed by a qualified medical practitioner).
(d) In case of temporary disablement (whether total or partial). - A half-monthly installment equal to 25% of the monthly wages, for the period of disablement or 5 years, whichever is shorter

WHEN COMPENSATION TO BE DEPOSITED WITH COMMISSIONER ?

The amount of compensation is not payable to the workman directly. It is generally deposited along with the prescribed statement, with the Commissioner who will then pay it to the workman. Any payment made to the workman or his dependents, directly, in the following cases will not be deemed to be a payment of compensation:
i. in case of death of the employee;
ii. in case of lump sum compensation payable to a or a minor or a person of unsound mind or whose entitlement to the compensation is in dispute or a person under a legal disability.
The receipt of deposit with the Commissioner shall be a sufficient proof of discharge of the employer’s liability.

AMOUNTS PERMISSIBLE TO BE PAID TO THE WORKMAN/ DEPENDENTS DIRECTLY

Following amounts may be paid directly to the workman or his dependents:
a. In case of death of the workman, any advance on account of compensation up to [an amount equal to three months’ wages of such workman] may be paid to any dependent.
b. In case of lump sum compensation payable to an adult male worker not suffering from any legal disability.
In case of half-monthly payments payable to any workman.

REGISTRATION OF AGREEMENTS OF COMPENSATION

1. Where the amount payable as compensation has been settled by agreement a memorandum thereof shall be sent by the employer to the Commissioner, who shall, on being satisfied about its genuineness, record the memorandum in a registered manner.
2. However where it appears to the Commissioner that the agreement ought not to be registered by reason of the inadequacy of the sum or amount, or by reason that the agreement has been obtained by fraud or undue influence or other improper means he may refuse to record 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.

3. An agreement for payment of compensation which has been registered shall be enforceable under this act notwithstanding anything contained in the Indian Contract Act, or any other law for the time being in force.

EFFECT OF FAILURE TO REGISTER AGREEMENT
When a memorandum of any agreement is not sent to the Commissioner for registration, the employer shall be liable to pay the full amount of compensation, which he is liable to pay under the provisions of this Act.

FILING OF CLAIMS

—  A claim for the compensation shall be made before the Commissioner.
No claim for compensation shall be entertained by the Commissioner unless the notice of accident has been given by the workman in the prescribed manner, except in the following circumstances:
a. in case of death of workman resulting from an accident which occurred on the premises of the employer, or at any place where the workman at the time of the accident was working died on such premises or such place or in the vicinity of such premises or place;
b. in case the employer has knowledge of the accident from any other source, at or about the time of its occurrence;

c. in case the failure to give notice or prefer the claim, was due to sufficient cause.

LIMITATION
Workman, to the Commissioner, may file the claim for accident compensation in the prescribed form, within 2 years from the occurrence of the accident or from the date of death. The claim must be preceded by (i)a notice of accident, and
(ii) the claimant-employee must present himself for medical examination if so required by the employer.

DUTIES OF EMPLOYERS / EMPLOYEES

· To pay compensation for an accident suffered by an employee, in accordance with the Act.
· To submit a statement to the Commissioner (within 30 days of receiving the notice) in the prescribed form, giving the circumstances attending the death of a workman as result of an accident and indicating whether he is liable to deposit any compensation for the same.
· To submit accident report to the Commissioner in the prescribed form within 7 days of the accident, which results in death of a workman or a serious bodily injury to a workman.
· To maintain a notice book in the prescribed from at a place where it is readily accessible to the workman.
· To submit an annual return of accidents specifying the number of injuries for which compensation has been paid during the year, the amount of such compensation and other prescribed particulars.

DUTIES OF EMPLOYEES

·         To send a notice of the accident in the prescribed form, to the Commissioner and the employer, within such time as soon as it is practicable for him. The notice is precondition for the admission of the claim for compensation.

·         To present himself for medical examination, if required by the employer.

Q13. Explain the major provisions of the Employee State Insurance Act 1948.

Ans. THE EMPLOYEE’S   STATE INSURANCE ACT 1948                    

ESI Scheme for India is an integrated social security scheme tailored to provide Social Production to workers and their dependents, in the organised sector, in contingencies, such as Sickness, Maternity and Death or Disablement due to an employment injury or Occupational hazard  

  1. Employees’ Contribution – 1.75% of the Wages

   2. Employers’ Contribution – 4.75% of the Wages   

               TOTAL                    - 6.5 % of the Wages

Benefits to Employees

ESI Scheme Major Social Security Benefits in Cash and Kind include:

  1. Medical Benefit    –  for self & Family

  2. Sickness Benefit  –  for self   

  3. Maternity Benefit  -  for self

  4. Disablement Benefit

      a). Temporary Disablement Benefit – for self

       b). Permanent Disablement Benefit – for self

  5. Dependents’ Benefit – for dependents in case of death due to employment injury    

•          Benefits to Employees …

•          In addition, the Scheme also provides some other need based benefits to insured workers. These are:

   i). Funeral Expenses – to a person who

                        performs the last rites of IP

   ii). Rehabilitation allowances – for self

   iii). Vocational Rehabilitation  -  for self

   iv). Old age Medicare – for self and spouse

   v). Medical Bonus – for insured women and   IP’s wife

Medical Benefit

Medical Benefit means Medical care of IPs and their families, wherever covered for medical benefit.

·         The Standard medical care consists of out-door treatment, in-patient treatment, all necessary drugs and dressing, pathological and radiological specialist consultation and care, ante-natal and post natal care, emergency treatment etc.,

·         Out-door medical care is provided at the state Insurance Dispensaries or Mobile Dispensaries manned by full-time doctors (service’ system)  or at the private clinics of Insurance Medical Practitioners (Panel System) 

·         Insured worker and members of his family are eligible for medical care from the very first day of the worker coming under ESI Scheme.

·         A worker who is covered under the scheme for first time is eligible for medical care for the period of three months. If he/she contributes at least for 78 days in a contribution period the eligibility is there up to the end of the corresponding benefit period.

·         A worker is also eligible for extended sickness benefit when he/she is suffering from any one of the long term 34 diseases listed in the Act. This is admissible after the worker has been under ESI these conditions are satisfied medical benefit is admissible for a maximum period of 730 days for the IP and his/ her family. 

Sickness Benefit

·         Sickness signifies a state of health necessitating Medical treatment and attendance and abstention from work on Medical grounds. Financial support  extended by the corporation is such a contingency is called sickness Benefit

·         Sickness Benefit represents periodical payments made to an Insured Person for the period of certified sickness after completing 9 Months in insurable employment.

Benefits to Employees

•          To qualify for this benefit, contributions should have been payable for atleast 78 days in the relevant contribution period.

•          The Maximum duration for availing sickness Benefit is 91 days in two consecutive benefit periods

•          Standard benefit rate – this rate corresponds to the average daily wage of an Insured person during the corresponding contribution period and is roughly half of the daily wage rate.

Extended Sickness Benefits

•          Extended Sickness Benefit is a  Cash Benefit paid for prolonged illness (Tuberculosis / Leprosy, Mental and Malignant diseases) due to any of the 34 Specified diseases

•          The IP should have been in continuous employment for a period of 2 years and should have contributed for atleast 156 days in 4 preceding contribution periods 

•          The daily rate of Extended Sickness Benefit is 40% more than the standard Sickness Benefit  rate admissible

•           After exhausting sickness Benefit Payable for 91 days the Extended Sickness Benefit is payable upto further period of 124 / 309 days that can be extended upto 2 years in special circumstances 

•          Is Cash Benefit for IP undergoing sterilisation operation of vasectomy / tuberctomy for family planning.

•          The contributory conditions are the dame as for claiming sickness benefits

•          The daily rate of this benefit is double the standard benefit rate. Say, not less than the daily wage.

•          The benefit rate of this benefit is double the standard benefit rate. Say, not less than the daily wage.

•          The benefit is available upto 7 days for vasectomy and upto 14 days for tubectomy operations. 

Maternity Benefit

•          Maternity Benefit is cash payable to an Insured women for the specified period of abstention from work for confinement or mis-carriage or for sickness arising out of pregnancy, “confinement” “premature birth of child or miscarriage” “confinement” connotes labour after 26 weeks of pregnancy whether the result issue is alive or dead,

•          “Miscarriage” means expulsion of the contents of a pregnant uterus at any period prior to or during 26^th week of pregnancy.

•          Criminal abortion or miscarriage does not, however, entitle to benefit.

•          The contribution condition is the same as for Sickness Benefit.

•          The daily benefit rate is double the sickness Benefit rate and is thus roughly equivalent to the full wages. Benefits is paid for Sundays also. 

•          The Benefit is paid as follows (Duration)

 a). For Confinement 

   For a total period 12 Weeks beginning not more than 6 weeks before the expected date of child birth, if the insured women dies during confinement or with in 6 weeks thereafter, leaving behind the living child, the benefit continues to be payable for the whole of the period. But the child also die during that period, the benefit will be paid upto and including the day of the death of the child.

b). For Miscarriage For the period of 6 weeks following the date of miscarriage 

c). For sickness arising out of pregnancy, confinement, Premature birth of child or  miscarriage : For an additional period or upto four weeks. In all the cases, the benefit is paid only if the   insured women does not work for remuneration during the period for which benefit is claimed. There is no waiting period.

Medical Bonus

   Medical Bonus is lump sum payment made to an Insured woman or the wife of an insures person in case she does not avail medical facility from an ESI hospital at the time of delivery of a child. This bonus of Rs. 250/- has been increased to Rs. 1000/- from 1^st April 2003

Disablement Benefit

a). Temporary disablement benefit :

•          In case of temporary disability arising out of an employment injury or occupational disease.,

•          Disablement benefit is  admissible to insured person for the entire period so certified by an Insurance Medical officer / Practitioner for which IP does not work for wages.

•          The benefit is not subject to any contributory condition and is payable at a rate which is not less than 70% of daily average wages.

•          However, not payable if the incapacity lasts for less than 3 days excluding the date of accident.

b)Permanent disablement benefit

·         In case an employment injury or occupational disease results in permanent, partial or total loss of earning capacity,

·         Periodical payments are made to the IP for life at a rate depending on the actual loss of earning capacity as may be determined and certified by a duly-constituted Medical Board.

·         The rates of Disablement Benefits are determined in accordance with the provisions of Rule 57 of ESI (Central) Rules, 1991.

·         In order to product erosion in real value of the periodical payments  of Permanent Disablement benefits, against rise in the cost of living index, periodical increases are granted, based on actuarial calculation 

·         Commutation of periodical payments into lump sum (one time payment) is permissible where the permanent disablement stands assessed as final.

·         Commutation of Permanent  Disablement Benefit into lump sum payment is also allowed in case the total commuted value does not exceed Rs.10000/- (The ceiling is now being raised to Rs.30000/-).

Dependants’ Benefit

Dependents Benefit is a monthly pension payable to the eligible dependents of an insured person who dies as a result of an Employment Injury or occupational disease

Beneficiaries and Duration of benefit

    a). Widow / widows during life or until remarriage

    b). Legitimate or adopted son until age 18 or if legitimate son is infirm, till infirmity lasts.

    c). Legitimate or adopted unmarried daughter until age 18 or until marriage, whichever is earlier, or if infirm, till infirmity lasts and she continues to be unmarried.

    In the absence of any widow or legitimate child, the benefit is payable to a parent or grandparent for life, to any other male dependent until age 18 or to an unmarried or widowed female dependent until age 18.

How much

•          The total divisible benefit is equivalent to the temporary disablement benefit rate (roughly 70% of the wage rate). The widow / widows share 3/5^th of the benefit and the legitimate or adopted son and daughter 2/5^th each of the benefit. If the total benefit so divided exceeds the full rate, there is a proportionate reduction in the respective shares of the beneficiaries.

•          The amount of pension paid to the dependents of a deceased insured person is reviewed vis-à-vis the cost of living index and increases are granted from time to time to compensate for erosion in its real value.

Q14. Give an introductory note on Social Security in India?

Ans. Social security

• any of the measures established by legislation to maintain individual or family income or to provide income when some or all sources of income are disrupted or terminated or when exceptionally heavy expenditures have to be incurred (e.g., in bringing up children or paying for health care)
• social security may provide cash benefits to persons faced with sickness and disability, unemployment, crop failure, loss of the marital partner, maternity, responsibility for the care of young children, or retirement from work
• Social security benefits may be provided in cash or kind for medical need, rehabilitation, domestic help during illness at home, legal aid, or funeral expenses
• It acts as a facilitator – it helps people to plan their own future through insurance and assistance.

Social Security in India

• India has always had a Joint Family system that took care of the social security needs.
• However with rise of migration, urbanization, nuclear families and demographic changes, Joint family system has declined. Hence we need a formal system of social security.

Social Security: Constitutional Provisions

SOCIAL SECURITY LAWS in India

EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952 & THE SCHEMES

Object of the Act

To provide wider terminal benefits to the Workers on completion of their employment.

Applicability

Every specified factory OR establishment in which 20 or more persons are employed. Any factory or Establishment can also voluntarily cover under the Act, even if the number of employees are less than 20.

Eligibility

•          Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment and drawing salary upto Rs.6,500/- p.m. (Basic + DA).

•                                              Any disabled employee appointed after 1.4.2008 drawing salary upto Rs.25,000/-

•          Any international worker (irrespective of salary limit)

Payment of Contribution

•                                              The employer shall pay the contribution payable to the EPF, DLI and Employees’ Pension Fund in respect of the member of the Employees’ Pension Fund employed by him directly by or through a contractor.

•          It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, DLI and Employees’ Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.

Rates of Contribution

•                                              Employer  -  12%

•                                              Employee  - 12%

•          Govt.-  1.16%

SCHEME	EMPLOYEE’S	EMPLOYER’S	CENTRAL
			GOVT’S
		Amount > 8.33% (in case where
Provident		contribution is 12% of 10%)
	12%	10% (in case of certain	NIL
Fund Scheme		Establishments as per details given
		earlier)
Insurance	NIL	0.5	NIL
Scheme
Pension		8.33% (Diverted out of Provident	1.16%
	NIL	Fund (12)
Scheme

•          The employer also will pay administrative charges @ 1.11% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.

Benefits

•                                              Withdrawal of accumulated amount with interest on exit from employment.

•                                              Advances in severely restricted circumstances like buying house, marriage/education, etc.

•                                              Pension to the employees under Employees’ Pension Scheme a

•          Insurance under Employees’ Deposit Linked Insurance Scheme.

Damages on Delayed Payment
• Less than 2 months		….@ 5% per annum
• Two months and above but less than upto four months		…. @10% per annum
• Four months and above but less than upto six months		…. @ 15% per annum
• Six months and above		….@ 25% per annum

•    Simple Interest @12% p.a. on delayed payment of contribution.

Penal Provision

•                            For contraventions of Provisions of the Act, imprisonment upto 3 years and fine upto Rs.10,000/-.

•    For repeated contraventions of the Act, imprisonment upto 5 years and fine upto Rs.25,000/-.

EMPLOYEES’ STATE INSURANCE ACT, 1948 & SCHEME

Object of the Act

To provide social insurance for the employees.

Applicability of the Act & Scheme

Is extended in area-wise to factories employing 10 or more persons and establish-ments employing 20 or more person.

Coverage of employees

Employees drawing gross wages upto Rs.15000/- per month, engaged either directly or thrugh contractor

Rate of Contribution of the wages

Employers’ 4.75%

Employees’ 1.75%

Manner and Time Limit for making Payment of contribution

The total amount of contribution (employee’s share and employer’s share) is to be deposited with the authorised bank through a challan in the prescribed form in quadruplicate on or before 21^st of month following the calendar month in which the wages fall due.

Benefits to the employees under the Act

Medical, sickness, extended sickness for certain diseases, enhanced sickness, dependents maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person and his or her spouse.

WAGES FOR ESI CONTRIBUTIONS

To be deemed as wages

•                      Basic pay

•                      Dearness allowance

•                      House rent allowance

•                      City compensatory allowance

•                      Overtime wages (but not to be taken into account for determining the coverage of an employee)

•                      Payment for day of rest

•                      Production incentive

•                      Bonus other than statutory bonus

•                      Night shift allowance

•                      Heat, Gas & Dust allowance

•                      Payment for unsubstituted holidays

•                      Meal/food allowance

•                      Suspension allowance

•                      Lay off compensation

•                      Children education allowance (not being reimbursement for actual tuition fee)

NOT to be deemed as wages

•                      Contribution paid by kthe employer to any pension/provident fund or under ESI Act.

•                      Sum paid to defray special expenses entailed by the nature of employment – Daily allowance paid for the period spent on tour.

•                      Gratuity payable on discharge.

•                      Pay in lieu of notice of retrenchment compensation

•                      Benefits paid under the ESI Scheme.

•                      Encashment of leave

•                      Payment of Inam which does not form part of the terms of employment.

•                      Washing allowance

•                      Conveyance Amount towards reimbursement for duty related journey

Contribution period

1^st April to 30^th September.

1^st October to 31^st March

Contribution period

If the person joined insurance employment for the first time, say on 5^th January, his first contribution period will be from 5^th January to 31^st March and his corresponding first benefit will be from 5^th October to 31^st December.

Penal Provision

•                      For contraventions of Provisions of the Act, imprisonment upto 2 years and fine upto Rs.5,000/-.

•                      For repeated contraventions of the Act, imprisonment upto 5 years and fine upto Rs.25,000/-.

FACTORIES ACT, 1948

Applicability of the Act

To any premises where manufacturing activities are carried out with the aid of power and where 10 or more workers are/were working OR where manufacturing activities are carried out without the aid of power and where 20 or more workers are/were working.

Employer to ensure health of workers pertaining to

•                      Cleanliness Disposal of wastes and effluents

•                      Ventilation and temperature dust and fume

•                      Overcrowding Artificial humidification Lighting

•                      Drinking water Spittoons.

Safety Measures

•                      Facing of machinery

•                      Work on near machinery in motion.

•                      Employment prohibition of young persons on dangerous machines.

•                      Striking gear and devices for cutting off power.

•                      Self-acting machines.

•                      Casing of new machinery.

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

•                      Hoists and lifts.

Working Hours, Spread Over & Overtime of Adults

•                      Weekly hours not more than 48 hours.

•                      Daily hours, not more than 9 hours.

•                      Intervals for rest at least ½ hour on working for 5 hours.

•                      Spreadover not more than 10½ hours.

•                      Overlapping shifts prohibited.

•                      Extra wages for overtime double than normal rate of wages.

•                      Restrictions on employment of women before 6AM and beyond 7 PM.

Welfare Measures

•                      Washing facilities

•                      Facilities for storing and drying clothing

•                      Facilities for sitting

•                      First-aid appliances – one first aid box not less than one for every 150 workers.

•                      Canteens when there are 250 or more workers.

•                      Shelters, rest rooms and lunch rooms when there are 150 or more workers.

•                      Creches when there are 30 or more women workers.

•                      Welfare office when there are 500 or more workers.

Employment of Young Persons

•                      Prohibition of employment of young children i.e. below 14 years.

•                      Adolescent workers (15 to 18 years of age) are permitted with less working hours and special conditions.

Annual Leave with Wages

A worker having worked for 240 days @ one day for every 20 days of working.

Penal Provision

•                      For contraventions of Provisions of the Act, imprisonment upto 7 years or fine upto Rs.2,00,000/-

•                      For continuous contraventions of the Act, imprisonment upto 10 year and/or fine upto Rs.5,000/- per day

INDUSTRIAL DISPUTES ACT, 1947

Object of the Act

Provisions for investigation and settlement of industrial disputes and for certain other purposes.

Important Definition

Industry – has attained wider meaning than defined except for domestic employment, covers from shops with nominal employees to big industrial units.

Workman – Includes almost all category of employees, except person doing Managerial and Administrative work, and also Supervisors earning wages more than Rs.10,000/- p.m.

Machinery to deal with Disputes

Works Committee–Joint Committee with equal number of employers and employees’ representatives for discussion of certain common problems.

Conciliation–is an attempt by Govt. Official in helping to settle the disputes. Adjudication – Labour Court, Industrial Tribunal or National Tribunal to hear and decide the dispute.

Persons Bound by Settlement

•                      When in the course of conciliation proceedings etc., all persons working or joining subsequently.

•                      Otherwise than in course of conciliation, upon the parties to the settlement.

Period of Operation of Settlements and Awards

•                      A settlement for a period as agreed by the parties, or

•                      Period of six months on signing of settlement.

•                      An award for one year after its enforcement.

Conditions for Laying off

Failure, refusal or inability of an employer to provide work due to

•                      Shortage of coal, power or raw material.

•                      Accumulation of stocks.

•                      Breakdown of machinery.

•                      Natural calamity.

Lay off Compensation

Payment of wages except for intervening weekly holiday compensation 50% of total or basic wages and DA for a period of lay off upto maximum 45 days in a year.

Notice of Change

21 days notice to be given by an employer to workmen about changing the conditions of service as provided in IVth Schedule.

Prohibition of strikes & lock out

•                      Without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking.

•                      Within fourteen days of giving such notice.

•                      Before the expiry of the date of strike specified in any such notice as aforesaid.

•                      During the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

•                      During the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings.

•                      During the pendency of proceedings before a Labour Court, Tribunal or National

•                      Tribunal and two months, after the conclusion of such proceedings.

•                      During the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings, where a notification has been issued under Sub-Section(3A) of section 10A

•                      During any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award.

Prior Permission from the Govt.

When there are more than 100 workmen (in UP 300 or more) during proceeding 12 months, prior permission to be obtained by the Employer for Lay Off, Retrenchment or Closure.

Retrenchment of Workmen Compensation & Conditions

No employees who has worked for 240 days in a year shall not be retrenched unless paid/given:

•                      Retrenchment compensation @ 15 days’ wages for every completed year of service.

•                      Given One month’s notice or wages in lieu thereof.

•                      Reasons for retrenchment

•                      Complying with principle of ‘last come first go’.

Notice for Closure of an Undertaking

•                      60 days’ notice to the authorities for intended closure in prescribed form, when there are minimum 50 workers and less than 100 workers.

•                      To apply for Prior permission from Govt. atleast 90 days before the intended closure, when there are 100 or more workmen during preceding 12 months (in UP 300 or more workmen)

Penal Provision

•                      For breach of provisions of the Act, the employer shall be punishable with imprisonment upto 6 months and/or fine not exceeding Rs.5,000/-.

•                      On continuity of offence fine upto Rs.200/- per day.

 PAYMENT OF BONUS ACT, 1965

Object of the Act

To provide certain statutory right to the employees to share the profit of the employer.

Applicability of Act

Every factory where in 10 or more persons are employed and Other establishments in which 20 or more persons are employed on any day during an accounting year.

Certain States like Maharashtra has made this Act applicable to all the Establishments employing minimum 10 employees.

Exemption for newly set up Establishments

Newly set up establishment is exempted from paying bonus for the initial 5 years, provided no profit is made during these years. If the employer derives profit in any of the first five years, he has to pay bonus for that year.

Eligibility for Bonus

•                      Employees (other than Apprentice) drawing salary (basic + DA) upto Rs.10,000/- p.m.

•                      An employee will be entitled only when he has worked for 30 working days in that financial year.

Benefits

•                      Minimum Bonus is 8.33% of total salary earnings (basic + DA) for the financial year. (Calculation to be done as if the maximum salary were Rs.3,500/- p.m.)

•                      Maximum bonus is 20%

Disqualification & Deduction of Bonus

On dismissal of an employee for

•                      Fraud; or

•                      riotous or violent behaviour while on the premises of the establishment; or

•                      theft, misappropriation or sabotage of any property of the establishment or

•                      Misconduct of causing financial loss to the Employer to the extent that bonus can be deducted for that year.

Time Limit for Payment of Bonus

Within 8 months from the close of accounting year.

Set-off and Set-on

As per Schedule IV. Sec. 15

Maintenance of Registers and Records

•                      A register showing the computation of the allocable surplus , in Form ‘A’.

•                      A register showing the set-on and set-off of the allocable surplus, in form ‘B’

•                      A register showing the details of the amount of bonus paid, in Form ‘C’

Filing of Return.

Annual Return to be filed in form ‘D’ to the concerned Authority.

Penal Provision

For breach of provisions of the Act, the employer shall be punishable with imprisonment upto 6 months and/or fine not exceeding Rs.1,000.

PAYMENT OF GRATUITY ACT, 1972

Object of the Act

To provide certain reward to the employees for a long meritorious service, at the end of their services.

Applicability

Every factory, mine, oil field, plantation, port, railways, shop or establishment employing 10 or more employees

Once Act applies, it continues to apply even if employment strength falls below 10.

Eligibility

•                      Any person employed on wages/salary (irrespective of designation) and completed 5 years of continuous service (except in case of death), shall be eligible for gratuity at the end of their services.

Benefits

•                      15 days wages (basic + DA) for every completed year of service.

•                      Maximum gratuity payable is Rs.10,00,000/-

Calculation Method

Gratuity =

Monthly salary

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

26

X

15 days

X

No. of year of service

Forfeiture of Gratuity

Gratuity can be forefeited on termination of an employee

•                      for moral turpitude or riotous or disorderly behaviour.

•                      Wholly or partially for wilfully causing loss, destruction of property etc.

Display of Notice

Certain notices & abstract of Act are to be displayed at conspicuous place at the main entrance in English language or the language understood by majority of employees of the factory/establishment.

Nomination

To be obtained by employer after expiry of one year’s service, in Form ‘F’

Penal Provision

•                      Imprisonment upto 2 years or fine upto Rs.20,000 for avoiding to make payment by making false statement or representation.

•                      For other contraventions of the Act, imprisonment upto one year and/or fine upto Rs.10,000/-

PAYMENT OF WAGES ACT, 1936

Object of the Act

The main object of the Act is to regulate the payment of wages of certain classes of employed persons, avoid unnecessary delay in the payment of wages and to prevent unauthorised deductions from the wages.

Applicability of Act
• Factories,	industrial		Establishments,  Tramway  service  or  motor  transport
service, Air	transport		service,  Dock, Wharf or Jetty, Inland vessel, Mine,

quarry or oil-field Plantation, Workshop, construction activities or other establishment etc.

•                      In the state of Maharashtra the Act is extended to Shops & commercial establishments.

Coverage of Employees

The employees drawing average wage upto Rs.10,000/- p.m.

Time of payment of wages

The wages of every person employed be paid:

•                      When less than 1000 persons are employed shall be paid before the expiry of the 7^th day of the following month.

•                      When more than 1000 workers, before the expiry of the 10^th day of the following month.

Mode of Payment of Wages

•                      All wages shall be paid in current coins or currency notes or in both.

•                      After obtaining the authorization, either by cheque or by crediting the wages in employee’s bank Account

•                      Wages exceeding Rs.3000/- to be paid by cheque/through bank (Applicable in Maharashtra only)

Fines as prescribed by

•Not to imposed unless the employer is given an opportunity to show cause To record in the register (Sec.8)

Deduction from wages

Deductions such as, fine, deduction for amenities and services supplied by the employer, advances paid, over payment of wages, loan, granted for house-building or other purposes, income tax payable, in pursuance of the order of the Court, PF contributions, cooperative societies, premium for Life Insurance, contribution to any fund constituted by employer or a trade union, recovery of losses, ESI contributions etc. can be made from the wages, in accordance with Section 7.

Maximum Deductions

•                      The maximum permissible deductions is 50% of the wages

•                      In the event of deduction include payment to co-operative societies, the maximum permissible deduction is 75% of the wages.

Penal Provision

•                      Penalties for breach of provisions are from Rs.200/- to Rs.1000/-.

•                      Repeat offences attract 1 month to 6 months imprisonment and fine from Rs.500/- to Rs.3000/-

•                      Delayed wage payments attract penalty f Rs.100/- per day

MATERNITY BENEFIT ACT, 1961

Object of the Act

To protect the dignity of motherhood and to provide certain benefits to women employees at the time of child-birth.

Coverage of the Act

Upon all women employees either employed directly or through contractor employed in mines, factories, plantations and also in other establishments if the State Government so decides. Also applicable to every shop or establishment in which ten or more persons are employed.

Conditions for eligibility of benefits

Women indulging temporary of unmarried are eligible for maternity benefit when she is expecting a child and has worked for her employer for at least 80 days in the 12 months immediately proceeding the date of her expected delivery.

This Act shall not be applicable when and where ESI Act is applicable.

Benefits

•                      Leave with average pay for six weeks before the delivery.

•                      Leave with average pay for six weeks after the delivery.

•                      A medical bonus of Rs.3500/- if the employer does not provide free medical care to the woman.

•                      An additional leave with pay up to one month if the woman shows proof of illness due to the pregnancy, delivery, miscarriage, or premature birth.

•                      In case of miscarriage, six weeks leave with average pay from the date of miscarriage.

Non Cash Benefits/Privilege

•                      Light work for ten weeks (six weeks plus one month) before the date of her expected delivery, if she asks for it.

•                      Two nursing breaks in the course of her daily work until the child is 15 months old.

•                      No discharge or dismissal while she is on maternity leave.

•                      No change to her disadvantage in any of the conditions of her employment while on maternity leave.

•                      Pregnant women discharged or dismissed may still claim maternity benefit from the employer.

Exception : Women dismissed for gross misconduct lose their right under the Act for Maternity Benefit

Maintenance of Registers and Records

Every employer shall prepare and maintain such registers, records and muster-rolls and in such manner as may be prescribed by Rules.

Penal Provision

For breach of provisions of the Act, the employer shall be punishable with imprisonment upto one year and/or fine not exceeding Rs.5,000.

MINIMUM WAGES ACT, 1948

Object of the Act

To fix minimum rates of wages in certain category of employments & industries.

Applicability of Act

•                      The Act will applicable to certain schedule of employment in respect of which Minimum rates of wages have been fixed by the Act.

•                      It applicable to employees directly employed or employed through contractors, in such schedule of Industry.

Fixation of Minimum Rates of Wages

•                      The appropriate government to fix minimum rates of wages from time to time for various industries/schedule of employments.

Procedure for fixing and revising Minimum Rates of Wages Appointing Committee issue of Notification etc. Composition of Committee

Representation of employer and employee in schedule employer in equal number and independent persons not exceeding 1/3^rd or its total number one such person to be appointed by the Chairman.

Payment of Minimum Rates of Wages

Employer to pay to every employee engaged in schedule employment at a rate not less than minimum rates of wages as fixed by Notification by not making deduction other than prescribed.

Minimum time rate wages for piece work Not less than minimum rates wages as fixed. Overtime

For Over time work, the wages to be paid at double the normal rate. (1½ times or for agriculture labour)

Maintenance of registers and records

•                      Annual Returns

•                      Register for Overtime

•                      Register of Wages

•                      Wages slip

•                      Muster Roll

Penal Provision

For breach of provisions of the Act, the employer shall be punishable with imprisonment upto 6 months and/or fine upto Rs.500/-.

EMPLOYEE’S COMPENSATION ACT, 1923

Object of the Act

This Act earlier known as “Workmen’s Compensation Act is introduced as a kind of Social Security Scheme for the workmen who suffer employment injury, occupational decease etc.

Applicability

To those employers employing persons listed in Schedule II of the Act and to whom ESI Act, not applicable.

Coverage of Workmen

All workers irrespective of their status or salaries either directly or through contractor or a person recruited to work abroad.

Eligibility

•                      Any workman who is injured by accident arising out of and in the course of his employment OR contracts occupational disease peculiar to his occupation.

Benefits

•                      In case of death results from injury, 50% of monthly wages X relevant factor OR Rs.1,20,000/- whichever is more.

•                      In case of Permanent total disablement resulted from the injury, 60% of

monthly wages X         relevant factor OR Rs.1,40,000/- whichever is more

•                      Where permanent , partial disablement or termporary disablement results from injurty, as per prescribed schedule.

•                      In case of death funeral expenses of Rs.5,000/-

•                      Relevant factor is based on the age of workman

•                      For the purpose of calculation of compensation, the monthly salary ceiling is Rs.8000/-, as per Central Govt. Notification dated 31.05.2010.

•                      In the event of death or in the event of any dispute, the compensation to be deposited with the Commissioner within one month.

When an employee is not liable for compensation

•                      In respect of any injury which does result in the total or partial disablement of the workman for a period exceeding three days.

•                      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

•                      Willful 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

•                      Willful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workman.

Report of accident

Report of fatal Accident and Serious Injury within 7 days to the Commissioner (not application when ESI Act applies).

Bar upon contracting out

•                      Any workman relinquishing his right for personal injury not permissible.

•                      Bar of benefit under other enactments :- When a person is entitled to any of the benefits provided by this Act, he shall not be entitled to receive any similar benefit admissible under the provisions of any other enactment.

Penal Provision
In case of default by employer   -		50%  of  the  compensation  amount  +
interest to be

paid to the workman or his dependents as

the case may be.

Other offences attract fine upto Rs.5000/-

CONTRACT LABOUR(REGULARATION & ABOLITION) ACT,1970

Object of the Act

To regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.

Applicability

•                      Every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour.

•                      Every contractor who employs or who employed on any day of the preceding twelve months 20 or more workmen.

Registration of Establishment

Every Principal employer employing 20 or more workers through the contractor has to register with the Authority by paying prescribed fees.

Licensing of Contractor

•                      Every Contractor engaging 20 or more workers should obtain License from the Authority by required fees and keeping specified Security Deposit.

•                      The License is issued for specified period.

Prohibition of Employment of Contract Labour

Only by the appropriate Government through issue of notification after consultation with the Board (and not Courts) can order the prohibition of employment of contract labour.

Welfare measures to be taken by the Contractor

•                      Canteen facility (if workers are 100 or more)

•                      First Aid facilities.

•                      Rest Rooms

•                      Drinking water, latrines and washing facilities.

Liability of Principal Employer

•                      To ensure provision for canteen, restrooms, sufficient supply of drinking water, latrines and urinals, washing facilities.

•                      Principal employer entitled to recover from the contractor for providing such amenities or to make deductions from amount payable

Registers of Contractors

By Principal employer

•                      To maintain a register of contractor in respect of every establishment in prescribed form.

By Contractor

•                      Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively when combined.

•                      Register or wage-cum-Muster Roll in prescribed Form

•                      Register of Deductions for damage or loss.

•                      Register or Fines

•                      Register of Advances

•                      Register of Overtime

•                      To issue wage slips to the workmen at least a day prior to the disbursement of wages.

•                      Obtain the signature or thumb impression of the worker concerned against the entries relating to him on the Register of wages or Muster Roll-Cum-Wages Register.

•                      When covered by Payment of Wages Act, register and records to be maintained under the rules

•                      To display an abstract of the act and Rules in English and Hindi and in the language spoken by the Majority of workers in such forms as may be approved by appropriate authority.

•                      To display notices showing rates of wages, hours of work, wage period, dates of payment, names and addresses of the inspector and to send copy to the inspector and any change forthwith

•                      To issue an employment card to each worker in prescribed form.

•                      To issue service certificate to every workman on his termination in prescribed form.

Penal Provision

•                      For contraventions of Provisions of the Act, imprisonment upto 3 months or fine upto Rs.1,000/-.

•                      For continuous contraventions of the Act, fine of Rs.100/- per day

INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1961

Object of the Act

To standardize the service conditions of the workmen employed in any industrial establishment. The Act lay down uniformity in the service conditions of the employees in Industrial Establishments, so that the employer and the employees know in clear manner their rights and obligations.

Applicability of the Act

•                      Every industrial establishment wherein 100 or more employees are employed. In many States like Maharashtra, the Act is made applicable if the number of employees is 50 or more.

•                      There are some establishments where this Act is not Applicable such as any establishment/industry covered by Bombay Industrial Relations Act, 1946, M.P. Industrial Employment (Standing Orders) Act, 1961 & Industrial Establishments employing persons covered by Civil Service Rules.

Matters to be provided in Standing orders

•                      Classification of workmen, e.g., whether permanent, temporary, apprentices, probationers, or badlis. Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates.

•                      Shift working.

•                      Attendance and late coming.

•                      Conditions of, procedure in applying for, and the authority which may grant, leave and holidays.

•                      Requirement to enter premises by certain gates, and liability to search.

•                      Closing and re-opening of sections of the industrial establishments, and temporary stoppages of work and the right and liabilities of the employer and workmen arising therefrom.

•                      Termination of employment, and the notice thereof to be given by employer and workmen.

•                      Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.

Additional Matters

•                      Service Record

•                      Token tickets,

•                      Record of age,

•                      Fixing Age of retirement

•                      Medical Examination

•                      Secrecy

•                      Exclusive Service

Submissions of Draft Standing Orders

The employer has to submit draft Standing orders for certification within six months from the date when the Act becomes applicable to an industrial establishment.

Temporary Application of Model Standing Orders

Till the certification is done by the Certifying Officer, the Model Standing orders provided by the Rules shall be applicable to the Establishment.

Procedure for Certification of Standing Orders

•                      The Draft Standing Order to be submitted to the Certifying Officer.

•                      The Certifying Officer has to forward a copy of draft standing orders to the trade union or in the absence of union, to the workmen of the industry.

•                      The trade union or the other representatives, as the case may be, are to be heard. (Sec.5)

•                      After hearing both the parties and after making necessary changes and amendment, the Certifying Officer shall certify the Standing order.

Date of commencement of Operation of Standing Orders

On the date of expiry of 30 days from certification or on the expiry of 7 days from the Appellate order if any passed

Display of Standing Orders

The certified Standing Orders should be displayed in English language or in the language understood by majority of workmen on a notice board at or near the entrance of the Establishment.

Penal Provisions

•                      For contraventions of provisions of the Act, a fine upto Rs. 5000/- can be imposed.

•                      For repeated or continuous contravention of the Act, further fine of Rs. 200/- per day can be imposed