Unit 3 lab

FACTORIES ACT, 1948
Dr.D.Joel Jebadurai
Assistant Professor
Department of MBA
St.Joseph’s College of Engineering

Sec.1
1) This Act may be called the Factories Act, 1948.
1[(2) It extends to the whole of India 2 ***.]
(3) It shall come into force on the 1st day of April 1949.

FACTORY Sec.2
• A factory is a premises whereon 10 or more persons are engaged if power
is used, or 20 or more persons are engaged if power is not used, in a
manufacturing process.
• but does not include a mine subject to the operation of 7[the Mines Act,
1952 (35 of 1952)], or 8[a mobile mobile unit belonging to the armed
forces of the Union, railway running shed or a hotel, restaurant or eating
place].

Interpretations/ Terms in Factories Act Sec.2
“Adult" means a person who has completed his eighteenth year of age;
(b) “Adolescent" means a person, who has completed his fifteenth year of age but has not
completed his eighteenth year;
(bb) “Calendar year" means the period of twelve months beginning with the first day of
January in any year;
(c) “Child" means a person who has not completed his fifteenth year of age;
(ca) “Competent person", in relation to any provision of this Act, means a person or an
institution recognised as such by the Chief Inspector for the purposes of carrying out tests,
examinations and inspections required to be done in a factory under the provisions of this Act
having regard to-
(i) the qualifications and experience of the person and facilities available at his disposal,
or
(ii) the qualifications and experience of the persons employed in such institution and
facilities available therein, with regard to the conduct of such tests, examinations and
inspections, and more than one person or institution can be recognised as a competent
person in relation to a factory;

Terms in Factories Act
Sec.2
"young person" means a person, who is either a child or an adolescent;
(e) "day" means a period of twenty-four hours beginning at midnight;
(f) "week" means a period of seven days beginning at midnight on Saturday night or
such other night as may be approved in writing for a particular area by the Chief
Inspector of Factories;
(g) "power" means electrical energy, or any other form of energy, which is
mechanically transmitted and is not generated, by human or animal agency;
(h) "prime-mover" means any engine, motor or other appliance, which generates or
otherwise provides power;
(i) "transmission machinery" means any shift, wheel, drum, pulley, system of pulleys,
coupling, clutch, driving belt or other appliance or device by which the motion of a
prime-mover is transmitted to or received by any machinery or appliance;

Manufacturing Process Sec.2
Manufacturing process" means any process for-
1. Making, altering, repairing, ornamenting, finishing, packing, oiling, washing,
cleaning, breaking up, demolishing or otherwise treating or adopting any article or
substance with a view to its use, sale, transport, delivery or disposal; or
2. Pumping oil, water, sewage, or any other substance; or
3. Generating, transforming or transmitting power; or
4. Composing types for printing, printing by letter press, lithography, photogravure or
other similar process or book-binding; or
5. Constructing, reconstructing,, repairing, refitting, finishing or breaking up ships or
vessels; or
6. Preserving or storing any article in cold storage ;

Occupier Sec.2
Occupier" of a factory means the person, who has ultimate control over the
affairs of the factory,
(i) in the case of a firm or other association of individuals, any one of the
individual partners or members thereof shall be deemed to be the occupier;
(ii) in the case of a company, any one of the directors, shall be deemed to be
the occupier:
(iii) in the case of a factory owned or controlled by the Central Government or
any State Government, or any local authority, the person or persons appointed
to manage the affairs of the factory by the Central Government, the State
Government or the local authority, as the case may be, shall be deemed to be
the occupier

Duties of occupier Sec.7A
(1) Every occupier shall ensure, so far as is reasonably practicable, the health, safety
and welfare of all workers while they are at work in the factory.
(2) Without prejudice to the generality of the provisions of sub-section (1), the
matters to which such duty extends, shall include-
(a) the provision and maintenance of plant and systems of work in the factory
(b) the arrangement in the factory
(c) Instruction, training and supervisions
(d) the maintenance of all places of work in the factory
(e) the provision, maintenance or monitoring of such working environment in the
factory for the workers that is safe, without risks to health
(3) Except in such cases as may be prescribed, every occupier shall prepare, and, as
often as may be appropriate, revise, a written statement of his general policy with
respect to the health and safety of the workers at work and the organisation

Powers of Inspectors Sec.9
a) enter with such assistants, being persons in the service of the Government, or any
local or other public authority or with an expert, as he thinks fit, any place which is
used, or which he has reason to believe, is used as a factory;
(b) make examination of the premises, plant, machinery, article or substance;
(c) inquire into any accident or dangerous occurrence, whether resulting in bodily
injury, disability or not,
(d) require the production of any prescribed register or any other document
relating to the factory;
(e) seize, or take copies of, any register, record or other document or any portion
thereof, as he may consider necessary in respect of any offence under this Act, which he
has reason to believe, has been committed;
(f) direct the occupier that any premises or any part thereof, or anything lying
therein, shall be left undisturbed (whether generally or in particular respects) for so long
as is necessary for the purpose of any examination under clause (b);
(g) take measurements and photographs and make such recordings as he considers
necessary for the purpose of any examination under clause (b), taking with him any
necessary instrument or equipment;
(h) in case of any article of substance found in any premises, being an article or
substance which appears to him as having caused or is likely to cause danger to the
health or safety of the workers, direct it to be dismantled or subject it to any process or
test ;
(i) exercise such other powers as may be prescribed.

PROVISIONS OF THE ACT
• Health
• Safety
• Welfare

HEALTH
1. Cleanliness (Sec.11)
2. Disposal of waste and effluents (Sec.12)
3. Ventilation and temperature (Sec.13)
4. Dust and fume (Sec.14)
5. Artificial humidification (Sec.15)
6. Overcrowding (Sec.16)
7. Lighting (Sec.17)
8. Drinking water (Sec.18)
9. Latrines and urinals (Sec.19)
10. Spittoons (Sec.20)

SAFETY
Fencing of machinery (Sec.21)
• Compulsory fencing
• Every dangerous part of any machinery shall be securely fenced
• Employer cannot evade his liability on commercial or mechanical
reason by SG
Workon machinery near motion (Sec.22)
• Examination, lubrication etc., of machinery should be carried out
only by a specifically trained male
• Wearing tight fitting clothes
• Name of such should be recorded in the register
• Workers shall handle a belt at a moving pulley only when,
a. Belt is not more than 15 cm in width
b. Pulley is normally for the purpose of drive, it should not be a
balanced wheel
c. Good condition
d. Secure foothold and secure handhold

Employment of young persons on dangerous machines (Sec.23)
• Unless, he has been fully instructed and the precautions to
be observed
•He has received sufficient training or is under adequate
supervision of expert
Striking Gear and devices to cut off power (Sec. 24)
•Suitable striking gears (to control the movement of belt) or
other efficient mechanical appliances shall be provided
•Driving belts when NOT IN USE shall not be allowed to
rest or ride upon shafting in motion
•In every factory suitable devices for cutting off power in
emergencies from running machinery shall be provided and
maintained in every work room
Self acting machines (sec.25)
•Make sure that no person should be walk in space within
45 cm from any fixed structure which is not a part of
machine

Casingof newmachinery(Sec.26)
•All machinery driven by power and installed in any factory
after 1st April 1949
•All parts of the machinery which are not requiring frequent
adjustments while in motion shall be completely encased
(close fitting surround)
•The offense may be punished with imprisonment upto 3
months and fine upto Rs.500 or both
Prohibition of employment of women and children near cotton openers (Sec 27)
•Shall not be employed in any part of the factory for
pressing cotton in which cotton opener is at work
Hoists and lifts (Sec.28)
Good mechanical construction
Sound material
Adequate strength
Properly maintained and throughly examined once in every
6 months

Lifting machines, chains,ropes (Sec.29)
Revolving machinery (Sec.30)
•Grinding is carried on
•Maximum safe working speed
Pressure plant (Sec.31)
Floors, stairs and means of access (Sec.32)
•Sound construction and properly maintained
•Free from obstruction and substances likely to cause a
person to slip
•Shall be provided with substantial handrails
Pits, sumps, openings (Sec.33)
•Shall be securely covered and fenced
•Omission of doing so, is an offence
•Distance between the pits and factory should be 400 feet
Excessive weights (Sec.34)
•Cause injury
•SG make rules prescribing the maximum weights

Protection of eyes (Sec.35)
• Effective screen or goggles
Precaution against dangerous fumes (Sec.36)
• No person shall be allowed
• Measures to take to remove any gas fumes or dust
Precaution against the use of portable light (Sec.36 A)
• 24 volts not allowed, unless adequate safety devices are
provided
Precaution against explosives (Sec.37)
• Prevent such explosion
• Effective enclosures
• Removal
Precaution in case of fire (Sec.38)
• Prevent out break of fire
• Escape mechanism for all persons
• Necessary equipment and facilities for extinguishing fire

Power to require tests of stability (Sec.39)
Safety of building and machinery (Sec.40)
Maintenance of building (Sec.40 A)
Safety officers (Sec.40 B)

WELFARE
• Washing facility (Sec.42)
• Facilities for storing and drying clothes (Sec.43)
• Facility for sitting (Sec.44)
• First aid appliances (Sec.45)
• Canteens (Sec.46)
• Shelters, rest rooms and lunch rooms (Sec.47)
• Crèches (Sec.48)
• Welfare officers (Sec.49)

Working Hours of Adults
Weekly hours of work (Section 51)
No adult worker shall be required or allowed to work in a
factory for more than forty-eight hours in any week.
Daily Hoursof work(Section54)
Restricts the daily hours of work to nine
But can be exceeded with a view to facilitating the
change of shifts
•By the previous approval of the chief inspector
•The management has the power to vary the working
hours with the prescribed limits
•The above provision cannot be changed by mutual
agreement between management and workers
Interval duringdailyhoursof work (Section55)
•No adult worker is required to work for a period
exceeding 5 hours
•Without an interval for rest

•Six hours work at a stretch (without break) without any
interval is allowed
•When the total number of hours to be worked on any
day in a shift does not exceed six
•However, the mere presence of the person in the factory
during rest period no offence
•An interval of rest, a period should be one in which,
•The worker is, neither, called upon to work nor
expected to work
Spread over Period (Section 56)
•The period of work including such intervals for rest
•Shall be so arranged that they shall not spread over
more than ten and a half hour in one day
•But the chief inspector may increase the spread over
•Upto twelve hours for reasons to be specified by him
in writing
Weekly holidays (Section 52)

•But if he is required to work on Sunday
•He must have another whole day as holidays
•Which should fall within three days before and after the first day
of the week
•A previous notice of this desire of manager to employ a worker
Sunday has to be communicated to the inspector
•Provided,
•Before the worker is made to work
•Such notice must also be displayed in the factory
Compensatory holiday(Section 53)
• Compensatory holiday is a holiday which is allowed to a worker
•In lieu of some due holiday on which the worker worked
•Where a worker is deprived of any of the weekly holidays
•He must be allowed compensatory holidays
•Of the equal number to the holidays so lost
•Within the month in which the holidays were due to him or within
two months immediately that month
•SG has been has been empowered to prescribe the manner

Night Shifts(Section 57)
• Where a worker work on a factory
• Which extend beyond mid night
• A holiday for him will mean a period of 24 hours
• Beginning when his shift ends
• And the hours he has worked after mid-night should be
counted in the previous day.
Prohibitionof overlapping shifts(Section58)
•Work shall not be carried on in any factory by means of 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 government or the chief inspector may grant any factory
exemption from this rule by written order
Extra wagesfor overtime (Section59)
•When a worker works in a factory
•For more than nine hours in a day
•Or for more than 48 hours in a week
•He is entitled to extra wages in respect of over time work
•The extra wages shall be paid at the rate of twice his ordinary rate of

Restriction of double employment (Section 60)
•No adult worker shall be required or allowed to work in any
factory
•On which he has already worked in any other factory
•Except in circumstances as may be laid down
Notice of periods (Length or portion of time) of work of adults (Section 61)
•There shall be displayed
•A notice of period of work for adults
•Showing clearly for every day the period during to which
adult worker would be required to work
•The notice shall be in English language or language
understood by majority of the workers

Register of adult workers (Section 62)
The name of each adult worker in the factory
•The nature of his work
•The group, if any, in which he is included
•Where his group works on shifts, the relay to which he is
allotted
•Such other particulars as may be prescribed
•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 for adult workers
•The register should be produced immediately on demand

Employment of Women
Work on near machinery in motion (Section 21)
•No women shall; be allowed to clean, lubricate or adjust
any part of the machinery
•While it is in motion
Prohibition of employment of women near cotton openers (Section 27)
•No women shall be employed in any part of the factory for
pressing cotton
•In which cotton opener is at work
•The prohibition is relaxed in certain cases
Creches (Section 48)
•Wherein more than 30 women workers are employed
•There shall be provided and maintained in a suitable room
•For the use of children under the age of six years of such
women
•Facilities shall be given for the mothers of such children to

 Restriction on employment of women (Section 66)
•No women worker shall be required or allowed to work in
any factory for more than 48 hours in any week
•Or nine hours on any day
•No women shall be required or allowed to work in any
factory except between the hours of 6 am and 7 pm.
•But the SG may be 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 employment of
any women between the hours of 10 pm to 5 am.
•The inspector has no right to issue a general prohibition
against the employment of women at the night.
Dangerous operations (Section 87)
Where the SG declares any manufacturing process or
operation in any factory as dangerous or injurious to the

Employment of young person
Prohibition of employment of young children (Section 67)
•A child who has not completed his fourteenth year is
prohibited from working in any factory
•Under any circumstance, whatsoever, no exemption even
in case of emergency can be allowed to overcome the
provision of this section
•This is an absolute prohibition
Non-adult workers to carry tokens (Section 68)
•A child who has completed his fourteenth year
•Or adolescent shall not be required or allowed
•To work in any factory unless he is given a certificate of
fitness by a competent certifying surgeon
•Such certificate shall be in the custody of manager of the
factory
•The young person shall carry while he is at work a token

Certificate of Fitness (Section 69)
•The certificate of fitness is granted by certifying surgeon
on the application of young person
•The application must be accompanied by a document
signed by the manager
•That the young person will be employed therein if
certified to be fit for a work in a factory
•The certifying surgeon shall examine the young person
and ascertain his fitness for a work in a factory
Certificateof fitnessto work in a factory as a child
•Provided he has completed his fourteenth year
•He has attained the prescribed physical standards and
fit for such work
Certificateof fitness to workin a factory as an adolescent
•He has completed his fifteenth year and is fit for a full day’s
work in a factory

Working hours for children (Section 71)
No child can be employed or permitted to work in
any factory
1. For more than four and half hours in any day
2. During the night i.e., a period of at least 12
consecutive hours
3. On any day on which he has already been working
in any other factory
• The period of work of all children employed in a
factory shall be limited to two shifts
• Such shift shall not overlap or spread over more than
five hours
• No female child shall be required or allowed to work in
any factory except between 8 am to 7 pm.
 Notice of periods of work for children (Section 72)
• Every factory must display and correctly maintain a

Register of child workers (Section 73)
a. The manager of every factory in which children are
employed shall maintain a register of child workers
showing:-
b. The group in which he is included
c. Where his group work on shifts, the relay to which he
is allotted and
d. The number of his certificate of fitness
•No child worker shall be required or allowed to work in
any factory unless his name and other particulars have
been entered in the register of child workers
•The register shall be made available to the inspector at
all times during the working hours
•The SG may prescribe the form of the register of child
workers, the manner in which it shall be maintained

Power to require medical examination (Section 75)
•An inspector has power to serve notice on the manager
•Asking him medical examination of the young person
•Who works in a factory wither without a certificate of
fitness or with a certificate of fitness but is no longer fit
such a young person, shall not, if the inspector so direct be
employed or permitted to work
•Until he has been granted a certificate of fitness or
fresh certificate of fitness as the case may be
Power to make rules (Section76)
This section authorizes the SG to make rules
•Forms of certificate of fitness to be granted
•Physical standards to be attained by children
•Procedure for certifying surgeon

Provision related to safety of young persons
The provisions relating to the safety of young persons are
scattered through the Act
1. No young person shall be allowed to clean, lubricate or
adjust any part of the machinery while it is in motion
(Sect 22)
2. No young person shall work at any dangerous machine
unless
•He has been fully instructed as to the danger arising in
connection with the machine and the precautions to be
observed
•He has received sufficient training in work at the
machine or under adequate supervision by a person who
has a through knowledge and experience of the machine
No child shall be employed in any part of a factory for
pressing cotton
In which cotton opener is at work

Annual Leave with wages
1. Number of working days
•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
•Annual leave with wages calculated as follows,
• In case of adult workers, one day for every 20 days
worked,
• In case of child worker, one day for every 15 days
worked
• While calculating the leave period,
•Fraction of leave of half a day or more shall be treated as
one full days leave
2. Computation of number of days
•While counting 240 days, the following days are
included in the days worked:

•He shall be entitled to leave with wages
•If he has worked for TWO-THIRD number of days in which
remaining days of that year
Where worker has wrongly suspended, his days of
suspension shall be counted towards computing 240
days.
3.Discharge, dismissal , termination of employment
• Where a worker is discharged or dismissed from
service or leaves his employment or retires or dies his
service
• He or heir shall be entitled to wages
• In lieu of annual leave to which he has entitled
• Even if he had not worked for the 240 days required to
make him eligible
• The payment shall be made
Before the expiry of second working day
1. Where the worker is discharged or dismissed or quits

4.Carry forwardof leaves
•Where a worker does not avail his whole of the annual
leave earned by him
•Can carry forward his un-availed leave to the following
year
•Which shall be added in the leave of the following year
subject to the following limits:
a. 30 days in case of adult workers
b. 40 days in case of child workers
But a worker can carry forward his leave without any limit
5. Procedure to avail Annual Leave
•When a worker want to avail his AL
•He should give an application in writing to the manager
•Not less than 15 days before the date of
commencement of leave
•In case of Public utility service (Which provided public
service)

6. Scheme for annual leave
•Due to continuity of work, the manager in agreement with
the representative of workers formulating the scheme for
regulating the grant of annual leave,
•In a planned manner to ensure the continuing work, a copy
of the scheme shall be displayed in NB and submit the
same to Chief Inspector. 12 months (Active)
7. Payment in lieu of leave
• If the employment of a worker, who is entitled to leave
• before he has taken the entire leave
• Or Worker quits his employment terminated by the
occupier before he has taken the leave
• The occupier of the factory shall pay him the amount
payable in respect of leave not taken
• Where terminated by the occupier, before the expiry
of the second working day
• Where a worker who quits his employment, such

Wages during the leave period
Payment in advance in certain cases
•A worker will be paid advance leave with wages
•Provided the leave allowed is not less than 4 days in case
of adult workers
•Not less than five days in case of child

Penalties' and procedures
General penalty for offences
•For violation of any provision of the act
•The occupier and manager
•Shall each be guilty of the offence
•And punishable with imprisonment for a maximum term
of two years
•Or fine with not exceeding one lakh rupees or with
both
•Where the offence continues even after conviction,
•Penalty for further fine Rs.1000
Enhanced penaltyfor after previous conviction
For repeated offences
Where a person has already been convicted
Further violation of the same provision of the act
3 years imprisonment

Penalty for obstructing Inspector
•6 months or fine Rs. 10000
•Penalty for contravention of the provision
•7 years and Rs. 2,00,000
•Continues
•Additional fine Rs.5000
•Penalty for using false certificate of fitness
•2 months or Rs.1000 or both
•Penalty for permitting double employment of child
•Rs. 1000 to the child parents, guardian, or other
person

INDUSTRY
• Industry means any systematic activity
carried on by co-operation between an
employer and his workmen.

Meaning of Industrial dispute
Industrial dispute means any dispute of difference
between employees and employers or between
employers and workmen or between workmen and
workmen, which is connected with the employment or
non-employment of the terms of employment or the
conditions of work of any person (The industrial Disputes
Act 1947, Section 2K).

Objectives of Industrial Disputes Act
1. To support measures for securing and preserving
good relations between employers and employees.
2. To provide suitable machinery for the equitable and
peaceful settlement of industrial disputes.
3. To prevent illegal strikes and lockouts.
4. To afford relief to workers against layoffs,
retrenchment, wrongful dismissal and victimization.
5. To promote collective bargaining.
6. To improve the conditions of workers.
7. To avoid unfair labour practices.

Strike
Industrial dispute act under 2 (q) defines strikes as “a cessation
of work by a body of persons employed in any industry acting
acting in combination, or a concerted refusal, or a refusal,
under a common understanding of any number of persons who
who are or have been so employed to continue to work or to
accept employment”.

Reason for a strike
•Dispute relating to minimum wages.
•Salary and incentive issues.
•Increment is not up to the performance.
•Dissatisfaction with the policies of the company.
•Hours of work and interval timings.
•Holidays and leaves with pay.
•Bonus, Provident Fund, and gratuity.
•Withdrawal of any facility or allowance.
•Wrongful dismissal of workmen.

https://theinvestorsbook.com/industrial-disputes.html

Types of Strike
Gherao: Gherao refers to physically encircling the managers
by the workmen to create a restricted area where no one can
move in or out. The targeted managers are humiliated
through; abuses also they are restricted move in or out.
•Picketing: Picketing is the process of putting up signboards,
play cards and banners by the workmen to display their
protest or dispute in front of the public. To involve maximum
workers in the strike, some union members are made to stand
at the factory gate to influence others too.
•Boycott: As the name suggests, boycott refers to interrupting
business operations. It requests the other labourers to
temporarily pull back their co-operation with the
management and contribute to the strike.

Types of strike
•Stay Away Strike: In a stay-away strike, the workmen
organize a protest in the form of demonstrations, marches,
rallies, apart from the workplace.
•Pen Down Strike: It is also known as the sit-down strike or
tools down strike. Though the workmen come to the
workplace daily and also avails the work facilities, they sit
idle and stop working.
•Token Strike: A token strike is a short form of protest
where the workmen stop their work for a definite period. It is
usually for as short as 24 hours, to hamper a day’s
production or so and get their demands fulfilled by the
management.
•Lightning Strike: The lightning strike is that form of strikes
where the workmen call off the work immediately without
giving any prior information or warning to the management.
It is also termed as a catcall strike.

Types of Strike
•Go Slow Strike: This is another harmful way of protesting
against the management where the workmen secretly plan
to decrease their work speed so that the production is
hampered. However, in front of the management, they
pretend to be highly committed towards their job.
•Work to Rule: In this type of strike, the employees strictly
follow their job rules or contract and stops performing any
additional task, other than what all is mentioned in their
agreement.
•Hunger Strike: One of the most common forms of a strike
is the hunger strike. The workmen go on fasting for an
indefinite period and sit nearby the workplace or the
employer’s house to project their demands.

Other Strikes
•General Strike: The strikes which are conducted on a mass
level, i.e., in the whole country or state or city instead of just a
single organization for fulfilment of a demand unanimously
like job permanency or an increase in pay, etc.
•Political Strike: Any law or act proposed by the government
for making changes to the working terms or conditions when
unaccepted by the workers is protested through political
strike on a massive level.
•Particular Strike: The protest against a specific issue or
person within a city, state or country and take up a colossal
form is termed as a particular strike.
•Bandhs: Bandh is adopted in countries like Nepal and India
where a specific community or a political party calls for a
general strike across the city or state or country. It is a form
of civil disobedience and sometimes become violent, even
involving stone attacks or arson attacks at times.

Legality of the strike
Under the following situation as given under section
22, on these grounds the strikes can be considered as
illegal:
1.Without giving to employer notice of strike within six
weeks before striking; or
2.Within fourteen days of giving such notice; or
3.Before the expiry of the date of strike specified in any
such notice as aforesaid; or
4.During the pendency of any conciliation proceedings
before a conciliation officer and seven days after the

1.During the pendency of conciliation proceedings
before a board and till the expiry of 7 days after the
conclusion of such proceedings;
2.During the pendency and 2 months after the
conclusion of proceedings before a Labour Court,
Tribunal or National Tribunal;
3.During the pendency and 2 months after the
conclusion of the arbitrator, when a notification has
been issued under subsection 3 (a) of section 10 A;
4.During any period in which a settlement or award is

Penalty
(1) a strike which is illegal under any workman who commences, continues or otherwise
acts in furtherance ofr this Act, shall be punishable with imprisonment for a term
term which may extend to one month, or with fine which may extend to fifty
rupees, or with both.
(2) Any person who instigates or incites others to take part in, or otherwise acts in
in furtherance of, a strike or lock-out which is illegal under this Act, shall be punishable
with imprisonment for a term which may extend to six months, or with fine which
may extend to one thousand rupees, or with both.
(3) Any person who knowingly expends or applies any money in direct furtherance or

Lock out
Section 2(1) of the Industrial Dispute Act,1947 defines
Lockout - “Lock-out” means the temporary closing of a
place of employment, or the suspension of work, or the
refusal by an employer to continue to employ any
number of persons employed by him

BASIS FOR
COMPARISON
STRIKE LOCK-OUT
Meaning Strike refers to the suspension
of work by the workers or
employees, so as to compel
the employer, to agree to their
demands.
Lock-out is when the
employer compels the
workers to accept his terms
and conditions, by shutting
down the factory.
What is it? Organized and collective
withdrawal of labor supply.
Withholding the demand for
labor.
Tool of Workers Management
Tactic Union power tactic Employer power tactic
Objective To gain redressal of the
grievance, or to cause change
through it.
To gain an advantage by
inflicting proprietary rights
over the workers.
Used to Initiate or resist change in their
working conditions.
Force employees to return
to work.

Layoff
Section 2 (kkk) of the Industrial Disputes Act, 1947
defines the term ‘Layoff’’ as the inability, failure, or
refusal of the employer to provide employment to a
a workman whose name is mentioned in the muster roll
of his industrial establishment and who is not
retrenched
due to the lack of power, coal, raw materials,
accumulation of stocks, breakdown of machinery or
natural calamity for any other relevant reason.

Rights of Layoff Compensation by workmen
1.Workman name should be borne on muster rolls of the establishment
and he/she is not a badli workman or a casual workman; and
2.The workman should have completed not less than one year
continuous service as defined under Section 25-B; and
3.The workman should have laid-off, continuously or intermittently;
4.Then the workman shall be entitled to lay-off compensation for all
days during which he was so laid-off;
5.However, the workman shall not be paid lay-off compensation for
such weekly holidays as may intervene the period of lay-off.
6.The lay-off compensation is equal to 50% of the total of the basic
wages and dearness allowance that would have been payable to him, if
he had not been so laid off.

Maximum days allowed to Layoff of employee by employer
1. According to section 25C of Industry and dispute Act 1947, maximum
days allowed to Layoff of employee by employer is 45 days, for those days,
employee who is laid-off is entitled for compensation equal to 50% of the
total of the basic wages and dearness allowance that would have been
payable to him, had he not been so laid off.
2. However, if this contingency is prolonging beyond a reasonable time, say
45 days, it would be matter of serious concern. both to the employer and
to the workmen because both of them are put to a loss of 50% wages i.e.
The employer is required to pay lay-off compensation without extracting
work from workmen and workmen too, would be losing 50% wages
which he would have earned had he not been so laid-off. Therefore the
parties can enter into an agreement not to continue lay-off after a period
of 45 days in a year.

Cases in which a Workman is not Entitled to Lay-Off
Compensation:
Refusal to Accept Alternative Employment:
Condition,
(a) In the same establishment from which he has been laid-off or
(b) In any other establishment belonging to the same employer situated
in the town or village within a radius of five miles from the
establishment to which he belongs,
(c) In the opinion of the employer the alternative employment does not
call for any special skill or previous experience and can be done by the
workman and
(d) It carries the same wages which would normally have been paid to
the workman in his original employment.
Absence from the establishment
Strike or go slow

BASIS FOR
COMPARISON
LAYOFF LOCK-OUT
Meaning Lay-off alludes to the involuntary
separation of the employees of a
department or unit, by the employer
due to his/her failure to provide
employment.
Lock-out, means the refusal of
employer to continue to employ the
workers, despite any intention to
close the unit.
Process It is a process in which the employer
refuses to give employment to the
employees for certain specified reasons.
It is a process in which the
employer voluntarily closes the
business, not because of any
specified reasons.
Declaration The employer declares lay-off under
specific circumstances.
The employer declares lock-out, as
a result of industrial dispute.
Applicability Only to group of workers, that may be
workers of a shift, department or unit,
depending on the circumstances.
To entire establishment and
sometimes industry.
Business Continues to operate Closed down for the period of lock
out.
Result of Trade-reasons. Weapon of collective bargaining.
Compensatio
n
Compensation is paid to the laid off
workers.
In lock out compensation is paid to
the worker as per the type of lock
out.

Retrenchment
Section 2(oo) of the Act states that "retrenchment means the
termination by the employer of the service of a workman for any
any reason whatsoever, otherwise than as a punishment inflicted by
inflicted by way of disciplinary action, but does not include –
(a) Voluntary Retirement of the workman (VRS) or
(b) retirement of the workmen on reaching the age of
superannuation if the contract of employment between the
employer and the workman concerned contains a stipulation in that
behalf; or
(bb) termination of the service of the workman as a result of the non-
renewal of the contract of employment between the employer and
employer and the workman concerned on its expiry or of such

Rules of RETRENCHMENT
a.An workman has been given one month's notice in writing indicating the reasons
for retrenchment and the period of notice has expired, or the workman has been paid
workman has been paid in lieu of such notice, wages for the period of the notice:
b.the workman has been paid, at the time of retrenchment, compensation which
shall be equivalent to fifteen days' average pay for every completed year of
completed year of continuous service or any part thereof in excess of six
excess of six months; and
c.notice in the prescribed manner is served on the appropriate Government or

Closure
The Act defines “Closure” as the permanent closing
down of a place of employment or part thereof.
employer is constrained to close the establishment
permanently.

PROCEDURE FOR SETTLEMENT OF
DISPUTES
• Works committee
• Conciliation officers
• Boards of conciliation
• Courts of inquiry
• Labour courts
• Industrial tribunals
• National tribunals

Works committee
As per the provisions of the Industrial Disputes Act, 1947, organizations
employing 100 or more persons have to set up works committees at
the unit level. These committees have an equal number of
representatives from the workers and the employers. Works
committees are purely consultative in nature and have been regarded
as the most effective agency for the prevention of industrial
disputes. This committee represents workers and employers
1. Remove the causes of friction in the day-to-day work situation.
2. Foster amity and harmonious relationship between the parties.
3. Create an atmosphere for the voluntary settlement of disputes
and frictions.
4. Issues relating to wages, benefits, bonus, terms and conditions
of employment, hours of work, welfare measures, training,
development, promotion, transfer, etc. fall under the purview of
works committees

Conciliation Officers
1. One of the authorities under the Act is the conciliation
officer.
2. The law provides for the appointment of a Conciliation
Officer by the Government to conciliate between the
parties to the industrial dispute.
3. These officers are appointed for a specific area or for
specified industries in a specified area or for one or more
specified industries, either permanently or for a limited
period.
4. The Conciliation Officer is given the powers of a civil
court, whereby he is authorized to call the witness the
parties on oath. It should be remembered; however,
whereas civil court cannot go beyond interpreting the
laws, the conciliation officer can go behind the facts and
make a judgment that will be binding upon the parties.
5. 14 days report submit to the appropriate govt.

Board of Conciliation
Under Section 10(1) (a) the appropriate government is
empowered to refer the existing or apprehended dispute to a
Board. The Board is constituted on an ad hoc basis. It shall
consist of an independent person as Chairman and one or two
nominees respectively of employers and workman. The chairman
must be an independent person. A quorum is also provided for
conducting the proceedings.
(a) To investigate the dispute and all matters affecting the
merits and do everything fit for the purpose of inducing
the parties to reach a fair and amicable settlement.
(b) (b) A report has to be sent to the government by the board
if a dispute has been settled or not within two months of
the date on which the disputes were referred to it

Court of Enquiry
1. The court of enquiry is required to submit its report within a
period of six months from the commencement of enquiry.
2. This report is subsequently published by the government
within 30 days of its receipt.
3. Unlike during the period of conciliation, workers’ right to
strike, employers’ right to lockout, and employers’ right to
dismiss workmen, etc. remain unaffected during the
proceedings in a court to enquiry.
4. Basic objective is to promote the settlement of an industrial
dispute.
5. Thus, a court of enquiry is primarily fact-finding machinery.
6. The government may appoint a Court of enquiry for
enquiring into any industrial dispute. A court may consist of
one person or more that one person and in that case one of
the persons will be the chairman.

Labour court
The appropriate Government may, by notification in the
official gazette constitute one or more labor courts for
adjudication of industrial disputes relating to any matters
specified in the second schedule of Industrial Disputes
Act.
They are:
1. Dismissal or discharge or grant of relief to workmen
wrongfully dismissed.
2. Illegality or otherwise of a strike or lockout.

Industrial Tribunal
The appropriate Government may, by notification in the official gazette,
constitute one or more Industrial Tribunals for the adjudication of
Industrial disputes relating to the following matters:
Wages
Compensatory and other allowances
Hours of work and rest intervals
Leave with wages and holidays
Bonus, profit-sharing, PF etc.
Rules of discipline
Retrenchment of workmen
Working shifts other than in accordance with standing orders
• It is the duty of the Industrial Tribunal to hold its proceedings
expeditiously and to submit its report to the appropriate
government within the specified time.
• A Tribunal is appointed by the government for the adjudication of
Industrial disputes.

National Tribunal
1. A National tribunals is constituted by the Central government
for Industrial Disputes involving question of national
importance.
2. The Central Government may appoint two assessors to assist
the national tribunal. The award of the tribunal is to be
submitted to the Central Government which has the power to
modify or reject it if it considers it necessary in public
interest.
3. It should be noted that every award of a Labour Court,
Industrial Tribunal or National Tribunal must be published by
the appropriate Government within 30 days from the date of
its receipt. Unless declared otherwise by the appropriate
government, every award shall come into force on the expiry
of 30 days from the date of its publication and shall remain
in operation for a period of one year thereafter.

Arbitration
The employer and employees may agree to settle the dispute
by appointing an independent and impartial person called
Arbitrator. Arbitration provides justice at minimum cost.
1. Voluntary Arbitration: In voluntary arbitration the
arbitrator is appointed by both the parties through mutual
consent and the arbitrator acts only when the dispute is
referred to him
2. Compulsory Arbitration: Implies that the parties are
required to refer the dispute to the arbitrator whether they
like him or not. Usually, when the parties fail to arrive at a
settlement voluntarily, or when there is some other strong
reason, the appropriate government can force the parties to
refer the dispute to an arbitrator

Joint Management Council
1. In India, the joint management council (JMC) came into existence
due to the provisions in this regard made by the Industrial Policy
Resolution, 1956.
2. These councils were set up to enable workers to participate in the
management and infuse a spirit of cooperation between the
workers and the management.
The salient features of the JMCs are as follows:
1. The scheme is a voluntary one.
2. The minimum and maximum number of its members are 6 and 12
respectively consisting of equal number of representatives of
workers and employers.
3. The JMCs deal with matters like information sharing, consultative,
and administrative.
4. The decisions taken by the JMC should be unanimous ones.
5. The JMCs can be set up in the units employing 500 or more
person and having strong trade unions

MEANING OF BONUS
• Extra dividend to the share holders of a
company
• Distribution
holders
of profits to insurance policy-
• Gratuity to workmen beyond their wages
• Desire of the employer to share with his
by common
workers the surplus generated
endeavor and enterprise

OBJECT AND SCHEME OF THE ACT
• Object is to provide for the payment of bonus to
persons employed in certain establishments
SCHEME :
• Toimpose statutory liability upon an employer to pay
bonus
• Todefine principle of payment of bonus according to
prescribed formula
• To provide for payment of minimum and maximum
bonus
• To provide machinery for enforcement of the liability
for payment of bonus

ELIGIBILITY FOR BONUS
• Worker must have worked in the
establishment for not less than 30 working
days in that year

DISQUALIFICATION FOR BONUS
Employee will not get bonus if he is
dismissed from service for :
• Fraud
• Violent behavior
• Theft, misappropriation or sabotage of any
property

DETERMINATION OF BONUS
BONUS FORMULA DEPENDS ON :
• Computation of gross profits

SCHEDULES IN THE ACT
FIRST SCHEDULE- Computation of gross profits of a
banking company
Items to be added :
• Provision for depreciation, donations, income tax,
capital expenditure, income, profits and gains.
Items to deduct :
• Capital receipts and profits
• Expenditure or losses
• Capital expenditure and losses
• Income of foreign banking companies

SECOND SCHEDULE- COMPUTATION
OF GROSS PROFITS IN OTHER CASES
Items to be added :
• Provision for depreciation, donations, income tax,
capital expenditure, income, profits and gains.
Items to deduct :
• Capital receipts and profits
• Expenditure or losses
• Capital expenditure and losses
• Income of foreign banking companies

THIRD SCHEDULE
• The third schedule tells about the amount of
cash that is left over after deductions are
made. This forms the available surplus out of
which bonus is given

SEGREGATION OF EMPLOYER
• Company other than a banking company
• Banking company
• Corporation
• Co-operative society
• Any other employer not falling under the
above mentioned category

FOURTH SCHEDULE
This part deals with :
• Method of calculation of available surplus
• Its distribution
• Set on or set off of the amount available out of it

SCOPE OF THE ACT
• To prevent the evils of withholding wages,
delays in payment of pages, unreasonable
deductions out of pages.
• To regulate the payment of wages to certain
classes of persons employed in industry.
• To ensure payment of wages in a particular
form and at regular intervals without
unauthorised deductions.

APPLICATION OF THE ACT
• Applies to persons employed in any factory.
• Topersons employed in railways.

RULES FOR THE PAYMENT OF WAGES
• Responsibility for payment of wages
• Fixation of wage period
• Time of payment of wages
• Medium of payment of wages

DEDUCTIONS FROM WAGES
• Deductions for fines
• Deductions for absence from duty
• Deductions for damage or loss
• Deductions for services
• Deductions for recovery of advances
• Deductions for recovery of loans
• Deductions for payments to co-operatives and
insurance schemes

MAINTENANCE OF REGISTERS
The register must contain :
• The work performed by them
• Wages paid to them
• Deductions made from their wages
• Receipts given by them

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