Industrial relations & labor laws hr 03

Industrial Relations &
Labor Laws HR-03
Dr. Zubair Ahmad Management Deptt.
Jahangirabad Institute of Technology, Barabanki

Industrial Relations
 Industrial relations is the relations between worker to union, union to
management the relations between management and workers in industry.
 "lifetime employment tends to contribute to better industrial relations"

Meaning and Concept
 The term ‘Industrial Relations’ comprises of two terms:
‘Industry’ and ‘Relations’
 “Industry” refers to “any productive activity in which an individual (or a
group of individuals) is (are) engaged”.
 By “relations” we mean “the relationships that exist within the industry
between the employer and his workmen.”

Meaning and concept
 The term industrial relations explains the relationship between employees and
management which stem directly or indirectly from union-employer relationship.
 Industrial relations are the relationships between employees and employers within the
organizational settings.
 The relationships which arise at and out of the workplace generally include the
relationships between individual workers, the relationships between workers and their
employer, the relationships between employers, the relationships employers and
workers have with the organizations formed to promote their respective interests, and
the relations between those organizations, at all levels
 The term industrial relations has a broad as well as a narrow outlook. Originally,
industrial relations was broadly defined to include the relationships and interactions
between employers and employees

Definitions
The Industrial Relation relations also called as labor - management,
employee employers relations.
1) “Employer-employee relationships that are covered specifically
under collective bargaining and industrial relation laws”.
2) “Concerned with the systems, rules and procedures used by unions &
employers to determine the reward for effort & other conditions of
employment.”

Parties to IR
Industrial Relations
Employees
Employers
Government Courts &
Tribunals
Employer
Associations
Trade Union

objectives
1. To safeguard the interest of labor and management by securing the
highest level of mutual understanding and good-will among all those
sections in the industry which participate in the process of production.
2. To avoid industrial conflict or strife and develop harmonious relations,.
3. To raise productivity to a higher level in an aera of full employment by
lessening the tendency to high turnover and frequency absenteeism.
4. To improve the economic conditions of workers in the existing state of
industrial managements and political government
5. To Protect management and labor interests by securing mutual relations
between the two groups.

Significance
 Uninterrupted production
 Reduction in Industrial Disputes
 High morale
 Mental Revolution
 Reduced Wastage
 Foster Industrial Peace
 Promote Industrial Democracy

Three Actors to I.R.
 EMPLOYEES
 STATE
 EMPLOYER

Role of three actors to I.R.
Role of Employee:
 To redress the bargaining advantage on one-on-on basis
 To secure better terms and conditions for their members
 To obtain improved status for the worker in his/her work
 To increase implementation of democratic way of decision making at
various levels

Role of employers
 Creating and sustaining employee motivation
 Ensuring commitment from employees
 Negotiating terms and conditions of employment with TU leaders
 Sharing decision making with employees

Role of State
 Labor policies
 Labor laws
 Industrial tribunals
 Wage boards
 Industrial relations policy

Trade Unionism
 Trade Union Defined
 “The organisation of workers and employers on an occupational basis is one of the
most significant features of modern industrial society”. - International Labour
Organisation (ILO).
 A trade union has been defined differently by various authors. Webbs (Sidney
James, 1858-1947 and his wife Beatrice 1858-1943), English Economists and
Sociologists have defined Trade Union as “a continuous association of wage earners
for the purpose of maintaining or improving the conditions of their working lives”.
 The Indian Trade Union Act of 1926 defines a trade union as “ any combination
whether temporary or permanent formed primarily for the purpose of regulating
the relations between workmen and employers or between workmen and
workmen, between employers and employers or for imposing restrictive conditions
on the conduct of any trade or business and include any federation of two or more
trade unions”.

Principles of trade unionism
 Trade unions function on the basis of three cardinal principles. If any one of
them is threatened or is in jeopardy, they would fight back. These principles
are :
i. Unity is strength
ii. Equal pay for equal work or for the same job
iii. Security of service

Why do workers join Trade Union
 Workers join trade unions because they are constrained by circumstances to do so
and because they want:
i. To get economic security; that is, they want steady employment with an
adequate income;
ii. To communicate their views, aims, ideas, feelings and frustrations to the
management; that is, they want to have an effective voice in discussions which
affect their welfare;
iii. To secure protection from economic hazards beyond their control; for example,
illness, accident, death, disability, unemployment and old age;
iv. To get along with their fellow workers in better way and to gain respect in the
eyes of their peers;
v. To get a job through the good offices of a trade union.

Trade Unions - Their Significance,
objectives and functions
 Significance
 If there has been any single factor with a stabilising influence in the industrial
world today, it is a well organised and well directed Trade-Union organisation. But
for the existence of organised labour, industrial activity anywhere in the world
would not have been so bright as we find in the present times.
 Trade Union - A ‘Must’ Democratic Institution in the Industrial set-up
 A trade union as voluntary organisation is an essential social and democratic
institution in an industrial organisation. Industrial democracy can only survive if all
concerned - the workers, the employers, the Government and the community at
large realise its importance and utility in the building up of the national life. Such
an institution should be free from politics.

Trade Unions– Their Objectives
 The underlying objectives of trade unions are to look after the well-being of their
members to protect and further their interests.
 The trade unions as today are concerned not only with the solutions of economic
problems of their members relating to the conditions of employment - hours of
work, wages, etc., but their social and cultural development too, so that they
come up as good citizens enjoying a dignified position in the society.
 How are Trade Union Objectives achieved?
 The objectives of a trade union are achieved by pursuit of traditional methods.
These are:
i. The organisation of a trade union on the basis of the craft of industry.
ii. Recognition of trade union as the only bargaining agent.
iii. Political pressure exercised through legislators who are capable of bringing
about changes in labour laws.
iv. Mutual insurance through common contributions to meet the financial needs
of workers when there are stoppages of work.

Trade Unions– Their functions
 Primarily, trade unions serve as a means of achieving working class desires and
goals. Thus, their major functions in most of the industrialised countries of the
world are:
 To promote, defend and protect the interest of their members.
 To maintain and improve the living standards of their members.
 To negotiate with employers over wages and other terms of employment,
through the process of collective bargaining.
 Providing security of their jobs, a grievance procedure for its members.
 Organising and guiding workers.
Ancillary Functions of Trade Unions
Besides their main function, which basically consists of organising workers and
improving their terms and conditions of employment, many trade unions provide a
variety of services to their members and sometimes to the community of which
they are a part. These ancillary functions can be categorised into four groups:
(i) communication; (ii) welfare activities; (iii) educational activities; and (iv)
research.

Trade Unionism
 At present, there are nine Central Trade Unions and a large number of registered
federations of unions in various industries and occupations.
 Nine Central Unions
 1. I.N.T.U.C (Ruling Congress) 2. N.L.O. (Old Congress)
 3. A.I.T.U.C.(C.P.I.) 4. C.I.T.U. (C.P.M.)
 5. U.T.U.C. 6. U.T.U.C. (at Central Avenue
 (at Lenin Sarini) Calcutta )(Radical party)
 (Radical Party)
 7. H.M.S (Praja Socialist) 8. H.M.P. (Samyukta Socialist Party)
 9. Bharatiya Mazdoor Sangh
 (Jan Sangh)
 Federations of Trade Unions
1. All-India Bank Employees Association
2. National federation of Indian Railwaymen
3. All-Indian Post and Dock Workers Federation
4. National Federation of Post and Telegraph Workers
5. All-India Mine Workers’ Federation
6. Indian Federation of Working Journalists

Principal Trade Unions
 All India Trade Union Congress (AITUC)
 This National Federation was established in 1921. Ideologically it is linked
with the communist philosophy and therefore espouses a more radical
approach, as compared to some of the other federations, in attaining the
workers’ interests and goals.
 Indian National Trade Union Congress (INTUC)
 This union was organised in 1947 with active support and encouragement from
Congress leaders. It wanted to bring about a peaceful and non-violent solution
to industrial disputes.

Principal Trade Unions
 Hind Mazdoor Sabha (HMS)
 This national federation came into being in 1948. This federation espouses the
socialist philosophy and has linkages with socialist parties. However, there has
been a division within the socialist ranks with the emergence of the Hind Mazdoor
Panchayat, another federation with socialist leanings.
 Centre of Indian Trade Unions (CITU)
 This is a national federation which was established in 1971 as a result of the split
in the AITUC which was a sequel to the split in the CPI, a new centre, the Centre
of Indian Trade Unions (CITU) emerged owing to its allegiance to the CPI(M).

Problems of Union
 Multiplicity of Unions
 This plethora of unions has led to problems at the plant level. In India, many of
the unions are general unions. In this environment a combination of factors seems
to operate.
1. The first being the democratic principle of any seven members being able to
form and register a union.
2. In multi-union situations at the plant level, the problem of inter-union rivalry
frequently poses a managerial problem.
3. One of the effects of industrialisation, which has meant the stepping up of the
rate of capital formation, has been a strain on the living standards of workers.
4. Another factor was the political linkage with unionisation. Unions through their
collective action are organisations concerned with the interest of a particular
class.
5. Another phenomenon has been the role of the outside leaders in the union.

Participative management
 Meaning of Workers’ Participation in Management
 Various terms have come to be used to denote different forms and degrees of
participation. For example, joint consultation, labour-management cooperation,
co-determination, joint decision making, workers’ participation in industry and
workers’ participation in management.
 Different Interpretations of Employee Participation
 In a recent work Michael Salamon has referred to three distinctly different
interpretations of the term “employee participation”. First, a socio-political
concept or philosophy of industrial organisation, it is synonymous with “workers
control” or “industrial democracy”.
 Second, as a generic term it encompasses all processes and institutions of
employee influence with the organisation.
 In the third sense, it is considered as “a discreet term to denote a nebulous but
distinct evolutionary development of the traditional joint regulatory processes
which seek to promote greater employee influence within the existing
organisational system.”

Collective Bargaining and Participative
Management: Difference
 Before proceeding further, it is necessary to distinguish between “collective
bargaining” and “participative management”. Traditionally, collective bargaining
refers to an institutional arrangement where the representatives of the workmen
negotiate with the management on various “interest related” issues relating to
better wages, bonus, hours of work and other service conditions with right to
agree or disagree.
 Participation is conceived as any process whereby workers have a share in reaching
of managerial decision in enterprises. This process of share may be achieved
through such different methods and levels of participation as collective
bargaining, the appointment of worker directors, consultation, autonomous work
groups and particular styles of management.
 The two main approaches to participation are “power-centred” and “task-
centred”.

Forms of Participation
 A review of the existing literature confirms the extent of interest on participative
management in various countries under different socio-economic systems.
However, the research findings on various facets of participation are not
consistent. These are the objectives, scope, processes, extent of involvement, as
well as the outcomes in terms of change in attitude and behaviour, motivation,
commitment, job satisfaction, efficiency productivity, turnover and profitability.
 In the West, formal representative participation has taken the following forms:
1. Joint Consultation
2. Joint Decision Making
3. Workers Control

Evolution of Workers participation in
India
i. Although Joint Consultation as a management style was first introduced in the
Indian Textile Industry around 1910, the Tata Iron and Steel Co. Ltd at
Jamshedpur was the first to set up a “works committee” in 1919 consisting
of the representatives of management and the workers for handling various
kinds of complaints and grievances.
ii. The Royal Commission on Labour (1931) also attained great importance to joint
committees in the field of industrial relations.
iii. The Industrial Disputes Act, 1947 prescribed for setting up of a “works
committee” in an industrial establishment employing 100 or more workmen
with equal representation from the employer and the workmen.
iv. The Industrial Policy Resolution of 1956 enunciated that in a “socialist
democracy”, labour is a partner in the common task of development and should
participate in it with enthusiasm. The Planning Commission also emphasised the
need for increased association of labour with management.

Objectives of Workers Participation in
Management
 The background paper prepared by the All India Organisation of Employers in
a seminar on Workers’ Participation in Management held at New Delhi in
October, 1987 has identified four basic and essential objectives of workers’
participation. These are : (i) to improve the quality of working life and job
satisfaction ; (ii) to improve the efficiency and productivity of the enterprise
(iii) to improve industrial relations and thereby promote industrial peace and
harmony and; (iv) to secure full recognition of the importance of human
factor in industry. On the basis of an analysis of schemes in operation in
different countries the same paper has considered the following objectives
running common to these schemes:
i. Promotion of workers, interest in work and enterprise through reducing or
removing alienations.
ii. Humanisation and democratisation of work process as well as management
of the enterprise.
iii. Utilisation of resources, economy and quality.
iv. Motivation of workers and promotion of works committees.

Workers Participation in Management in
India
 The major course followed in the field are:
 Works Committees
 Works committee is the first government measure in the country in the area of
participative management. The system of works committees was introduced in the
country with the enactment of the Industrial Disputes Act, 1947. Section 3 of the
Act empowers the Central and State governments in their respective jurisdictions
to make general or special orders requiring the employer to constitute a works
committee in any industrial establishment employing 100 or more workmen.
 Joint Councils of Management
 The Industrial Truce Resolution, 1947, had recommended the formation of unit
production committees in industrial establishments for promoting the efficiency of
workers and improving production. The Industrial Policy Resolution of 1948 also
suggested the setting up of bipartite production committees. A model constitution
for a unit production committee was prepared by the Central government in 1948
and steps were suggested to enable the existing works committees to function as
production committees.

Collective Bargaining
 Negotiation of wages and other conditions of employment by an organized
body of employees.
MEANING;-
Collective bargaining is a process between employers and employees to reach an
agreement regarding the rights and duties of people at work.
Collective bargaining aims to reach a collective agreement which usually sets
out issues such as employees pay, working hours, training, health and safety, and rights
to participate in workplace or company affairs.
DEFINITION:-
Collective bargaining is an agreement between a single employer or an association
of employers on the one hand and a labour union on the other, which regulates the
terms and conditions of employment. (Tudwig Teller)

Objectives of Collective bargaining
 Collective bargaining has benefits not only for the present, but also for the future.
The objectives of collective bargaining are:
 1. To provide an opportunity to the workers, to voice their problems on issues related to
employment.
 2. To facilitate reaching a solution that is acceptable to all the parties involves.
 3. To resolve all conflicts and disputes in a mutually agreeable manner.
 4. To prevent any conflict/disputes in the future through mutually signed contracts.
 5. To develop a conductive atmosphere to foster good organizations relations.
 6. To provide stable and peaceful organization (hospital) relations.
 7. To enhance the productivity of the organization by preventing strikes lock – out ect.

Characteristics of Collective Bargaining
 It is a group process, wherein one group, representing the employers, and the other,
representing the employees, sit together to negotiate terms of employment.
 2. Negotiations form an important aspect of the process of collective bargaining i.e.,
there is considerable scope for discussion, compromise or mutual give and take in
collective bargaining.
 3. Collective bargaining is a formalized process by which employers and independent
trade unions negotiate terms and conditions of employment and the ways in which
certain employment-related issues are to be regulated at national, organizational and
workplace levels

Principles of collective bargaining
 For union and management:-
-CB should be an education as well as a bargaining processes.
-There must be mutual confidence and good faith and a desire to make collective bargaining
effective in practices.
-There should be an honest and responsible leadership for only this kind of leadership will make
collective bargaining effective and meaningful
For the management :
 Management must develop and consistently follow a realistic labour policy which should be
accepted and carried out by its representatives.
 Management must grant recognition to the trade union without any reservations and accept it
as a constructive force in the organization
 Management should not wait for the trade union to bring employee grievance to its notice
but should rather create the condition employee can approach
 Management should deal only with one trade union in the organization

For trade union
 Trade union leaders should be appreciate the economic implication of collective
bargaining for their demands are generally met from the income and resources of the
organisation
 - Trade union should resort to strikes only when all the other methods of the settlement
of a dispute have failed
 -trade union leaders should not imagine that their only function is to secure higher
wages ,shorter hours of work and better working conditions for their members

Legal framework for collective
bargaining
Employee have the right to :-
 Form to join or to assist a labour organisation of their choice ,
 Bargain collectively through that labour organisation
 Engage in concerted activities an mutual aid refrain (avoid doing) from any of the
activities .
Protects employees by defining and prohibiting unfair labour organisation
 Discriminating against employees for engaging in or refraining from union activities.
 Refusing to bargain with the union that is the lawful representative of its employees.

Misconduct
 unacceptable or improper behavior, especially by an employee or professional
person.
 Misconduct outside work. Misconduct outside work could lead to disciplinary
action or dismissal if: the conduct damaged the relationship of trust and
confidence between the employee and employer, or. the conduct brought the
employer into disrepute.

Disciplinary Action
 Employees are uncomfortable with disciplinary action such as an employee
reprimand. They are sad and uncomfortable when their manager tells them
that their performance warrants a verbal warning, the final step before
written disciplinary action begins.
 Disciplinary action. The term 'discipline' is used to cover any action by an
employer in relation to an employee which is designed to correct the
employee's behavior – in response to a perceived misdemeanour or
wrongdoing or refusal of duty by the employee.

Grievance
 A Complaint which is left unattended by a superior at work place take the
form of a Grievance in long term. So there should be a good relation between
subordinate and superior to avoid any grievances.
 Grievance Settlement Procedure: Grievance Procedures. Grievance
procedures are a means of dispute resolution that can be used by a company
to address complaints by employees, suppliers, customers, and/or
competitors. A grievance procedure provides a hierarchical structure for
presenting and settling workplace disputes.

Factories Act 1948
 (m) "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

Factories Act 1948
 In India, the First factories Act was passed in 1881.
 This Act was basically designed to protect children and to provide few measures for
health and safety of the workers.
 This law was applicable to only those factories, which employed 100 or more workers.
 In 1891 another Factories Act was passed which extended to the factories employee 50
or more workers.

Factories Act Includes
 Health
 Safety
 Welfare
 Working Hours Of Adults
 Annual Leave With wages

Definitions
 “Factory” is defined in section 2(m) of the Act. It means any premises including
the precincts thereof-
a) Whereon 10 or more workers are working, or were working on any day of the
preceding 12 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
b) Whereon 20 or more workers are working, or were working on any day of the
preceding 12 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 Mines Act, 1952 or a
mobile unit belonging to the Armed forces of the Union, a railway running shed
or a hotel, restaurant or eating place.

Objectives
 The main objective of Factories Act, 1948 is to ensure adequate safety measures and to
promote the health and safety and welfare of the workers employed in factories. The act
also makes provisions regarding employment of women and young persons (including
children & adolescents), annual leave with wages etc.
 The Act extended to whole of India including Jammu & Kashmir and covers all
manufacturing processes and establishments falling within the definitions of “factory”
as defined u/s 2(m) of the act. Unless otherwise provided it is also applicable to factories
belonging to Central/State Government (section 116)

Provisions regarding Health
1) Cleanliness
2) Disposal of Wastes & Effluents
3) Ventilations & Temperature
4) Dust & Fumes
5) Artificial Humidification
6) Overcrowding
7) Lighting
8) Drinking Water
9) Latrines & Urinals
10) Spittoons

Provisions regarding Safety
1) Fencing of Machinery
2) Work on or near Machinery in motion
3) Employment of Young Persons on Dangerous Machines
4) Striking Gear and Devices for cutting off power
5) Self Acting Machines
6) Casing of New Machinery
7) Prohibition of Employment of Women & Children near Cotton openers
8) Hoists, lifts, Lifting Machines and others
9) Revolving Machinery
10) Pressure Plant

Provisions regarding Welfare of Workers
1) Washing Facilities
2) Facilities for Storing & Drying clothing
3) Facilities for Sitting
4) First Aid facilities
5) Canteens, Shelters, Rest Rooms & Lunch Rooms
6) Creches
7) Welfare Officers

Working Hours of Adults
• Weekly Hours: < 48 hours
• Weekly Holidays : at least 1 holiday in a week , substitute holidays
• Compensatory Holidays
• Daily Hours : < 9 hours
• Intervals for rest : at least half an hour
• Spread Over
• Night Shifts

Weekly hours of Adults
• Prohibition of Overlapping Shifts : not more than 2 continuous shift
• Extra wages for overtime : wages at the rate of twice at his ordinary rate of
wages for overtime
• Notice of period of work

Offences
A court can take cognizance of the offence only when the complaint is made within 3
months of the date on which the alleged commission of the offence came to the knowledge of
the inspector, but where the offence consist of disobeying a written order made by an
Inspector, complaint may be made within 6 months of the commission of the offence

Penalties
 General penalties for offence
 Penalty for the contravention of Provisions Relating to Hazardous process
 Penalty for obstructing Inspector
 Penalty for wrongfully Disclosing Results of Analysis
 Penalty relating to casing of new machinery
 Penalties for Offences by workers & Parents
 Penalty for offence by a medical practitioner
 Penalty for employing child labour

The Industrial Dispute Act 1947
The industrial dispute means any dispute or difference between:-
(i) Employers and employers
(ii)Employers and Workmen or
(iii)Workmen and workmen, which is connected with
 Industrial disputes may be said to be disagreement or
controversy between management and labor with respect to
wages, working conditions, other employment matters or
union recognition.

Industry
As per section 2 (J) of industrial disputes act 1947, Industry mean any systematic activity
carried on by cooperation between an employ and his work man for the production supply
or distribution of goods and services with a view of satisfy human wants or needs.

Objectives
 Promotion of measures of securing, preserving Industrial harmony
 Settlement of disputes between:
 Employer – Workman
 Employer - Employer
 Workman - Workman
 Prevention of illegal- Strike; Lockout
 Promotion of collective bargaining

Types of Industrial Disputes
Grievance disputes: may
pertain to discipline,
wages, working time,
promotion, rights of
supervisors etc. also some
times called interpretation
disputes
Unfair labor practices:
those arising out of right to
organize, acts of violence,
failure to implement an
award, discriminatory
treatment, illegal strikes and
lockouts
Recognition disputes: over
the rights of a TU to
represent class or category
of workers

Prohibition of strikes and lock-outs
According to SEC 22 (1) No person employed with a public utility service shall go on
strike in breach of contract – Without giving the employer notice of strike, within six weeks
before the strike. Before the expiry of date of strike specified in such notice. According to
SEC 23; No employee of any industrial establishment shall go on strike during the period
when proceedings in any disputes case is going on or when final judgment is awaited .

INDUSTRIAL DISPUTE RESOLUTION
MECHANISM
Industrial
Undertaking Works Committee
Conciliation officer
CG/State Govt.
Labour court
TribunalBoard

Settlement Without State Intervention
 There are two ways in which the basic parties to an industrial
dispute- the employer and the employees- can settle their
disputes.
 Collective bargaining
 Voluntary arbitration

Settlement Under the Influence of the State
 Compulsory establishment of bipartite committees.
 Establishment of compulsory collective bargaining.
 Conciliation and mediation (voluntary and compulsory).
 Compulsory investigation.
 Compulsory arbitration or adjudication.

Voluntary Arbitration
 It is commonly viewed as less expensive and faster than resolving a dispute in court.
 An arbitrator may be a single person or a panel.
 Sometimes, however, the parties may agree to submit the dispute to an arbitrator but at
the same time, reserve their right to accept or reject the award when it comes.

Adjudication in India
Labor Court Tribunal

Cont...
 Labor Courts and the Tribunal can be established both by the central and state
governments, but the National Tribunal is setup only by the central government.
 National Tribunal is set up to adjudicate such disputes which involve any question
of national importance or are of such a nature that industrial establishments situated in
more than one state are likely to be interested in or affected by them.

Introduction
 The Labor Court adjudicates disputes relating to the propriety or legality of an order
passed by the employer under this standing orders, discharge or dismissal of workmen,
legality or otherwise of a strike or lock-out.
 The Tribunal and National Tribunal generally deal with such subject matters as wages,
bonus, profit-sharing, rationalization, allowances, hours of work, provident fund,
gratuity etc.
 Strikes and lock-outs are prohibited during the pendency of the proceedings before any
of the adjudication authorities, and two months after the conclusion of such proceedings
and during any period in which the award is in operation, in respect of any matter
covered by the award.

Other Tripartite Bodies at the State Level
 Amongst the important tri partite committees functioning in the states are:
 Implementation and Evaluation Committees
 Committees for particular industries
 Labor Welfare Boards or Committees
 Some of these are permanent, while others are constituted as and when required.

Payment of Wages Act 1936
 An Act to regulate the payment of wages to certain classes of
[employed persons] [23rd April, 1936]
 Cap for applicability of Payment of Wages Act 1936 increased to Rs.18,000
p.m. w.e.f 11th Sep 2012 ( Earlier it was 10000)
 This Act may be called the Payment of Wages Act, 1936.
 It extends to the whole of India
 The Central Government is responsible for enforcement of the Act in railways,
mines, oilfields and air transport services, while the State Governments are
responsible for it all other establishments ( factories and other establishments)—
amendment 2005.

 It applies in the first instance to the payment of wages to persons employed in
any [factory to persons] employed (otherwise than in a factory) upon any
railway by a railway administration or either directly or through a sub-contractor,
 by a person fulfilling a contract with a railway administration [and to persons
 employed in an industrial or other establishment specified in sub-clauses (a) to
 (g) of clause (ii) of section 2.].

 The State Government may extend the provisions of this Act or any of them to the
payment of wages to any class of persons employed in [any establishment or class
of establishments specified by the Central Government or a State Government.
 "employed person" includes the legal representative of a deceased employed
person;
 "employer" includes the legal representative of a deceased employer
 any sum to which the person employed is entitled under any scheme framed under
any law for the time being in force ;
but does not include- a) bonus (profit sharing); b) value of house rent
accommodation or supply of light, water medical attendance or other amenities
(excluded from computation of wages ; c) employer’s contribution to pension, PF,
and interest thereon; d)Leave travel facility; e) special expenses on account of
nature of employment and f) gratuity

Every employer shall be responsible for the payment to persons employed by him
of all wages required to be paid under this Act :
 (a) In factories, if a person has been named as the manager of the factory
under clause(f) of sub-section(1) of section(7) of the Factories Act, 1948 (63
of 1948) ;
 b) in industrial or other establishments, if there is a person responsible to the
employer for the supervision and control of the industrial or other
establishment
 the railway administration has nominated a person in this behalf for the local
area concerned, the person so named, the person so responsible to the
employer or the person so nominated as the case may be, shall also be
responsible, for such payment.

Wage Period:
 (1) Every person responsible for the payment of wages under section 3 shall fix periods (in
this Act referred to a wage period) in respect of which such wages shall be payable.
 (2) No wage-period shall exceed one month.
Time for payment of wages
 (1) The wages of every person employed upon or in-
 (a) any railway, factory or [industrial or other establishment] upon or in which less than one
thousand persons are employed, shall be paid before the expiry of the seventh day.
 (b) any other railway, factory or [industrial or other establishment] shall be paid before the
expiry of the tenth day,
after the last day of the wage-period in respect of which the wages are payable :

 (2) Where the employment of any person is terminated by or on behalf of the employer, the
wages earned by him shall be paid before the expiry of the second working day from the day
on which his employment is terminated;
 The State Government may provide exemptions for employers to pay wages to certain
categories eg. Daily wagers in PWD of Central or State Government,
 Payment: Payment of Wages shall be on a working day and in currency and coins and/or
both
 On obtaining employee’s mandate the employer can issue cheques or credit the bank
accounts directly or any other mode (ECS etc)
 Deductions permissible: The following are the permissible deductions from wages: a) Any
loss of wages resulting from the imposition, for good and sufficient cause, upon a person
employed, of any of the following penalties, namely :-(i) the withholding of increment or
promotion (including the shoppage of increment at an efficiency bar) ;
(ii) the reduction to a lower post or time-scale or to a lower stage in a time-scale ; b) Fines
with the sanction of the appropriate authorities

Fines:
 Notice to the employee about the acts and omission
 Give a reasonable opportunity to the employee
 Total fines shall not exceed 3 per cent of wages pertaining to that wage period.
 No fine for workers below the age of 15 years
 No recovery of fines after 60 days or by instalments
 Separate register to be maintained

 Deductions for absence from duties for the purpose of this section, an employed
person shall be deemed to be absent from the place where he is required to work
if, although present in such place, he refuse, in pursuance of a stay in-strike or for
any other cause which is not reasonable in the circumstance, to carry out his
work.
 Deductions of damage or loss - (1) A deduction shall not exceed the amount of
the damage or loss cause to the employer by the neglect or default of the
employed person.—Reasonable opportunity to the employee, maintenance of a
separate register are other requirements.
 Deductions for services rendered like House Rent or a concessional rent once
it is accepted by the employee
 Deduction for recovery of advances: Advance salary, Festival advance or other
types of advance payments in anticipation of salary
 A Deductions for recovery of loans

 Deductions towards subscriptions to and for repayment of advances from
any provident fund;
 Deductions towards income tax
 Deductions for payment to co-operative societies and insurance schemes
approved by the State Government ( postal insurance)
 deductions made with the written authorisation of the employee for
payment of any premium on his life insurance policy or purchase of
securities.

 Inspectors - (1) An Inspector of Factories appointed under sub- section(1) of
section 8 of the Factories Act, 1948 (63 of 1948) shall be an Inspector for the
purpose of this Act in respect of all factories within the local limits assigned to
him.

 (2) The State Government may appoint Inspectors for the purposes of this Act in
respect of all persons employed upon a railway (otherwise than in a factory) to
whom this Act applies.

 (3) The State Government may, by notification in the official Gazette, appoint
such other persons as it thinks fit to be Inspectors for the purpose of this Act, and
may define the local limits within which and the class of factories and industrial or
other establishments in respect of which they shall exercise their functions.

 Contracting out - Any contract or agreement, whether made before or after
the commencement of this Act, whereby an employed person relinquished any
right entered by this Act shall be null and void in so far as it purports to
deprive him of such right.
 Application of Act to railways, air transport services mines and oil-fields -
The powers by this Act conferred upon the State Government shall in relation
to railways, air transport services, mines and oilfields, be powers of the
Central Government.
 Display by notice of abstracts of the Act - The person responsible for the
payment of wages to person shall cause to be displayed in such factory or
industrial or other establishment a notice containing such abstracts of this Act
and of the rules made there under in English and in the language of the
majority of the persons employed.

 Payment of undisbursed wages, in cases of death of employed person- IN
case of death of an employee or his whereabouts not known the wages
payable should be paid to a) the nominee; or b) deposited with the
prescribed authority. IN these cases, the employer is discharged from his
obligations
 State Government has regulatory powers to lay down the procedure to be
adopted by the authorities and the courts. Such regulations may relate to
a)maintenance of records, registers returns and notices and the
particulars to be entered thereon; b) Display of rates of wages for
different categories and c)regular inspection of weights and measures re:
wages

 Hence, the main object of the Act is to eliminate all malpractices by laying
down the time and mode of payment of wages as well as securing that the
workers are paid their wages at regular intervals, without any unauthorised
deductions
 Amendment in 2005 or Payment of Wages Act enhanced the ceiling from 1600
to 6500 per month

Authorised Officers:
The appropriate Government may, by notification in the Official Gazette, appoint-
(a) any Commissioner for Workmen's Compensation; or
(b) any officer of the Central Government exercising functions as,- (i) Regional Labour
Commissioner; or (ii) Assistant Labour Commissioner with at least two years' experience; or
(c) any officer of the State Government not below the rank of Assistant Labour Commissioner
with at least two years' experience; or
(d) a presiding officer of any Labour Court or Industrial Tribunal, constituted under the
Industrial Disputes Act, 1947 (14 of 1947) or under any corresponding law relating to the
investigation and settlement of industrial disputes in force in the State; or
(e) any other officer with experience as a Judge of a Civil Court or a Judicial Magistrate,
as the authority to hear and decide for any specified area all claims arising out of deductions
from the wages, or delay in payment of the wages, of persons employed or paid in that
area, including all matters incidental to such claims:

 Where the appropriate Government considers it necessary so to do, it may appoint
more than one authority for any specified area and may, by general or special
order, provide for the distribution or allocation of work to be performed by them
under this Act.";
 The authority shall hear the applicant and the employer or other person
responsible for the payment of wages or give them an opportunity of being heard,
and, after such further enquiry, if any, as may be necessary, may, without
prejudice to any other penalty to which such employer or other person is liable
under this Act, direct the refund to the employed person of the amount deducted,
or the payment of the delayed wages, together with the payment of such
compensation as the authority may think fit (subject to maximum limits
prescribed by the Act from time to time.

 A claim under this Act shall be disposed of as far as practicable within a
period of three months from the date of registration of the claim by the
authority:
 Extension of time permitted if both parties to the dispute agree for any bona
fide reason to be recorded by the authority that the said period of three
months may be extended to such period as may be necessary to dispose of the
application in a just manner:
 No direction for the payment of compensation shall be made in the case of
delayed wages if the authority is satisfied that the delay was due to- (a) a
bona fide error or bona fide dispute as to the amount payable to the
employed person;

Trade Union Act 1926
"Trade Union" means any combination, whether temporary or permanent, formed
primarily for the purpose of regulating the relations between workmen and employers
or between workmen and workmen, or between employers and employers, or for
imposing restrictive conditions on the conduct of any trade or business
Trade unions are formed to protect and promote the interests of their members. Their
primary function is to protect the interests of workers against discrimination and unfair
labor practices.

Definition and Scope of Trade Union
 A trade union is such an organisation which is created voluntarily on the basis of
collective strength to secure the interests of the workers.
 This Act provides for the registration of trade unions
and in certain respects in define the law relating to registered Trade Unions.
 The act applies to registered Trade Unions.

COVERAGE OF THE ACT
 This act specifies the mode of their registration:.
 The act was passed to regulate :
a) Conditions governing the registration of a trade union.
b) Obligation imposed upon a registered trade unions and
c) Rights and Liabilities of Registered Trade unions.

Registration of Trade Union
Mode of
registration
Application
for
registration
Appointment
of Registrars.
Provisions to
be contained
in the rules of
a Trade Union
Power to call
for further
particulars
and to
require
alterations of
names
Registration
Certificate of
registration

 Objects on which general funds may be spent
 Constitution of a separate fund for political purposes
 Criminal conspiracy in trade disputes
 Immunity from civil suit in certain cases
 Enforceability of agreements
 Right to inspect books of Trade Union
 Rights of minors to membership of Trade Unions

Trade Unions Finance and Funds
Rate of subscription of Union Members:- Section(6) (e) of the trade union act 1926,
provides that the payment of minimum subscription by member shall not be less
than;
I. One rupee per annum for rural workers;
II. Three rupee per annum for workers in other un recognized sectors; and
III. Twelve rupees per annum for workers in other cases.

B. General Fund
Section 15 of the trade union act, 1926 lays down
the purpose for which general fund of a
registered Trade union can be utilized namely
1. The payment of salary allowances and expenses to office bears of trade union;
2. The payment of expenses for the administration of the trade union including Audit
of the accounts of general funds of the trade union
3. The conduct of trade disputes on behalf of then trade union or any member
thereof;

c. Political Funds
 Trade unions compelled to get into political spheres. Trade Unions which are registered
are permitted as per Section 16 of the Act, to raise separate Political Fund for is
members.
 The political Fund can be use for the following expenses.
1. For holding the meeting.
2. For distribution of any document.
3. For holding Political meeting.
4. For registration of electors.

Amalgamation of Trade Union (Sec. 24 &
25)
 Any Registered trade union may amalgamate with any other union provided that at
least 50% of the members of each such union record their votes and at least 60% of
votes so recorded are in favor of amalgamation. A notice of amalgamation signed by
the secretary and at least seven members of each amalgamating union should be sent
to the registrar and the amalgamation shall be in operation after the registrar registers
the notice.

Dissolution of Trade Union
 A Registered trade union can be dissolved in accordance with the rule of the union. A
notice of dissolution signed by any seven members and the secretary of the union
should be sent to register within 14 days of the dissolution. On being satisfied The
registrar shall register the notice and the union shall stand dissolved from that date.

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