Labour Laws in India

Indian Labour Legislation
By: Rashi Shukla.
M.S.W.
Department of Social Work.
Institute of Social Sciences, Agra.
Dr. B.R. Ambedkar University, India.
Guided By: Prof. Dr. R.K. Bharti.

Content
1. The Factories Act, 1948.
2. The Minimum Wages Act, 1948.
3. The Payment Of Wages Act, 1936.
4. The Maternity Benefit Act, 1961.
5. The Payment Of Gratuity Act, 1972.
6. The Payment Of Bonus Act, 1965.
7. The Industrial Employment (Standing Orders) Act, 1946.
8. The Employees’ Compensation Act, 1923.
9. The Employees’ Provident Fund Act, 1952.
10. The Employees’ State Insurance Act, 1948.
11. The Contract Labour ( Regulation & Abolition ) Act, 1970.

Labour Legislation in India
The term ‘Labour Legislation’
is used to cover all the laws
which have been enacted to
deal with employment and
non-employment, wages,
working conditions, industrial
relations, social security and
welfare of persons employed
in industries. Labour
Legislation refers to all laws of
the government to provide
social and economic security
to the workers. They maintain
the dignity of employees in
their organization.
Laws are Dynamic, Not Static.

The Factories Act, 1948
Objective
An act to consolidate & amend the law regulating labour in factories.
Introduction
Title: The Factories Act, 1948.
Extent: It extends to whole of India.
11 Chapters.
120 sections.
3 schedules.
It is a protective labour legislation.
References to the time of day
References to Indian Standard time (IST) being five & half hours ahead of
Greenwich Meridian time (GMT)

Continued…
Definitions
1. Child: Person who has not completed his fifteenth year of age.
2. Adolescent: Person who has completed his fifteenth year but has not completed
his eighteenth year of age.
3. Adult: Person who has completed his eighteenth year of age.
4. Factory: Premises including the precincts thereof-
(i) Where 10 or more workers are working or were working on any day of the
preceding 12 months & in any part of which a manufacturing process is being
carried on with the aid of power.
(ii) Where 20 or more workers are working or were working on any day of the
preceding 12 months & in any part of which a manufacturing process is being
carried on without the aid of power.
5. Hazardous Process: Any process or activity that causes material impairment to
the health of the workers & result in pollution of general environment.
6. Young person: Person who is either a child or an adolescent.
7. Occupier: Person who has ultimate control over the affairs of the factory.

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General duties of the Occupier
To ensure: Health, Safety & welfare of all the workers.
Health
• Cleanliness.
• Disposal of wastes & effluents, due to manufacturing process.
• Ventilation & temperature.
• Prevent inhalation of dust & fumes.
• Artificial humidification by prescribing standards of humidification.
• Proper lighting & clean drinking water.
• Latrines & Urinals (separate enclosed accommodation for men & women)
• Facility of spittoons ( whoever spits in contravention of this, shall be punishable with
fine not exceeding five rupees)
Safety
 Proper fencing of machinery.
 Casing of new machinery.
 Work on or near machinery in motion shall be made or carried out only by a specially
trained adult male worker wearing tight fitting clothes.

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 No woman or young person shall be allowed to clean, lubricate any part of a
moving machinery.
 No young person shall be required or allowed to work at any machine unless he
has been fully instructed about the dangers arising out & the precautions to be
taken.
 Prohibition of employment of women & children near cotton openers.
 Hoists & lifts should be of good mechanical construction.
 The maximum safe working load shall be plainly marked on every hoist or lift & no
load greater than such load shall be carried.
 Protection of eyes, against dangerous fumes, gases & in case of fire.
 Safety officers: where 1000 or more workers are employed.
Welfare
• Washing Facilities: (a) For the use of workers.
(b) Separate & screened facilities for use of male & female workers.
• Facility for: Storing & drying clothes.
• First- aid appliances: To be provided & maintained, shall not be less than one for
every 150 workers.

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• Facilities for: Sitting, Rest-rooms, Lunch rooms, Shelters.
• Crèches: Where more than 30 women workers are working, crèches shall be provided
for the use of Children under the age of 6 years
• Canteens: Where 250 or more workers employed.
• Welfare Officers: Where 500 or more workers are employed.
Working Hours of Adults
 Weekly hours: Not more than 48 hours.
 Daily hours: Not more than 9 hours.
 Weekly holidays: First day of the week.
 Compensatory holidays: No. of holidays so lost.
 Spread over: Not more than 10.5 hours in any day. Chief inspector in writing can
increase spread over up to 12 hours.
 Overtime: Any worker works for more than 9 hours in any day or for more than 48
hours in a week, shall be entitled to wages at the rate of
twice his ordinary rate of wages.
 Restriction on double employment.

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Employment of Young Persons
 Prohibition of young children.
 If certifying surgeon certifies, adolescents can work as adults & come under all the
provisions of adults.
 Working Hours for Children: Not more than 4.5 hours in any day.
 No female child required or allowed to work in any factory between 7:00 PM &
8:00 AM.
Offence & Penalties
 Contravention of any of the provisions of this act: The occupier &
manager shall be punishable with imprisonment for term which may
extend to 2 years or with fine which may extend to 1 Lakh or with both.
 If the Contravention is continued after conviction: Fine may extend to
1000/- for each day, on which contravention is continued.

The Minimum Wages Act, 1948
Objective
 To provide the minimum rate of wages to the workers.
 To stop exploitation of workers.
Introduction
• This Act may ne called The Minimum Wages Act, 1948.
• It extends to whole of the India.
• No. of Sections: 31 sections.
• It is a Protective Labour Legislation.
Definitions
 Child: Person who has not completed his fourteenth year of age.
 Adolescent: Person who has completed his fourteenth year but has not
completed his eighteenth year of age.
 Adult: Person who has completed his eighteenth year of age.

Continued…
 Appropriate Government: India has a federal form of Government at the Central &
State level & Minimum Wages Act provide separate areas of jurisdiction for both
Central & State Government.
 Wages: All the remunerations, that are capable of being expressed in terms of money.
Minimum Rates of Wages
1. Basic + Special Allowance (which varies with the cost of living index)
2. Basic + Cash value of Concessional Supply of food grains & other articles.
3. Basic + Cost of living allowance + Cash value of concessional supply of articles.
Fixation & Revision of Minimum Wages
• The minimum rates of wages will be revised for every 5 years by the Appropriate
Government.
• Appropriate Government can add any employment to the Schedule, wherein 1000 or
more workers are working.
• Different M.R.W. will be fixed for different Scheduled employments, different class of
workers, different localities.

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Payment of Minimum Rates of Wages
a) Payment of M.R.W. has to be paid without any deductions,
other than Statutory Deductions.
b) Payment less than M.R.W. on the account of less performance is illegal.
Wages of worker who works for less than Normal Working Day
Worker is entitled to receive wages in respect of work done by him on that day, as if
he had worked for a full normal working day, Unless his failure to work is caused
by his unwillingness to work.
Record Management
 Particulars of employed persons.
 Work performed by them
 Wages paid to them
 The receipts given by them.

Offence & Penalties
Offence(s)
• Payment of less than
Minimum rates of wages to
the employees.
Penalties
• Imprisonment which may
extend upto 6 months or
with fine which may extend
upto Rs. 500/- or both.

The Payment Of Wages Act, 1936
“A worker ought to be paid wages,
before his/her sweat evaporates.”
- Karl Marx.
Objective
An act to regulate the payment of wages of certain classes of persons employed in
Industries, whereas it is expedient to regulate the payment of wages to certain
classes of persons employed in Industries.
Introduction
 The Payment of Wages Act, 1936.
 It extends to Whole of The India.
 Most successfully implemented labour law.
 It deals with “when the wages are to be paid.”

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Applicability
Persons employed In: Any factory, Tramway service or motor transport service, Air
transport service, Dock, Wharf or Jetty, Mine, quarry or oil-field plantation,
Workshop or any other establishment.
Legal obligations under this Act
 Act last revised on 11th September, 2017.
 Regular, Periodical payment of wages restricting illegal deductions.
 Covers Wages upto: Rs. 18000/-
 All wages shall be paid in current coins or currency notes or in both.
 After obtaining the authorization, either by Cheque or by crediting the wages in
employee’s bank Account.
 Compensation should be given for illegal deductions.
 This act ensure timely payment of wages without any illegal deductions.

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Time of payment of wages
The wages of every person employed is paid. When less than 1000
persons are employed, wages shall be paid before the expiry of the 7th day
of the following month. When more than 1000 workers employed, wages shall be
paid before the expiry of the 10th day of the following month.
Deduction(s) made from Wages
 Deductions such as: fine, deduction for amenities and services supplied by the
employer, advances paid, over payment of wages, loan, granted for house-building
or other purposes, income tax payable, in pursuance of the order of the Court,
Provident Fund contributions, cooperative societies, premium for Life Insurance,
contribution to any fund constituted by employer or a trade union, recovery of
losses, Employees’ State Insurance contribution.
 Deduction for absence from duties for unauthorized absence.
 Deduction for damage or loss.
 Deductions for recovery of advance(s).
 Deduction for recovery of loans.
 Deductions for payment to co-operative societies and insurance schemes.

Continued…
Penalty for Offences under this Act
 Whoever being responsible for the payment of wages to an employed person
contravenes any of the provisions of this act, shall be punishable with fine which
shall not be less than one thousand five hundred rupees, but may extend to seven
thousand five hundred rupees.
Protection of action taken in Good faith
No suit, prosecution or other legal proceeding shall lie against the Government or any
other officer of the Government for anything which is in good faith done or
intended to be done under this act.

The Maternity Benefit Act, 1961
Introduction
• Title: The maternity benefit act, 1961.
• Extends to: Whole of the India (Including J&K from 1970)
• No. of Sections: 30 Sections.
• This act is enacted on the basis of Article 39(e) & (f) of the Constitution:
“ State shall, in particular, direct its policy towards securing the health & strength of
workers, men & women.’’
Objective
This act Regulates the employment of women in certain establishments for a certain
period, before & after child birth.
Further, It provides for maternity & other benefits.
‘‘Maternity benefits are aimed to provide for the maintenance of woman & her child,
when she is not working.’’

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Applicability of the act
• Where 10 or more workers are employed.
• Every establishment being a factory, mine or plantation.
• Every establishment where persons are employed for the exhibition of equestrian,
acrobatic & other performances.
Eligibility for Maternity Benefit
 Must have worked in the establishment for 80 days in 12 months
before her date of Delivery.
 Woman earning less than 15,000 may be offered ESI scheme by her employer and
will not be eligible for maternity benefit but will receive the maternity benefit
under ESI scheme.
Definitions
• Child: Includes a still-born child.
• Delivery: Birth of a child.

Continued…
• Appropriate Government includes:
 Establishment being a mine or establishment for the exhibition of equestrian,
acrobatic & other performances; THE CENTRAL GOVERNMENT.
 Any other establishment; THE STATE GOVERNMENT.
• Miscarriage: Expulsion of the contents of a pregnant uterus at any period prior to
or during the twenty-sixth week of pregnancy.
 Does not include any miscarriage which is punishable under Indian Penal Code.
• Commissioning Mother: Biological mother who uses her eggs(ovum) to create an
embryo, implanted in any other woman.
• Wages: All remunerations paid or payable in cash, includes: Cash Allowances
(dearness allowance, house rent allowance), Incentive bonus, Money value of the
concessional supply of food grains & other articles.

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Cash Benefits
• Leave with wages upto 26 weeks (8 weeks before expected date of delivery & 18
weeks after delivery)
• In case of Miscarriage: Paid leave of 8 weeks.
• Tubectomy Operation: Paid leave of 2 weeks.
• Mother who is having 2 surviving children will get 12 weeks maternity leave.
• Adopting mother: Paid leave of 12 weeks.
• Medical bonus: Rs. 3500/- (Minimum amount)
• An additional leave with pay up to one month. [Proof of illness]
Non-Cash Benefits
• No discharge or dismissal while on maternity leave.
• Light work for 10 weeks (6 weeks plus 1 month) before delivery.
• 2 Nursing breaks of 15 Minutes until the child is 15 months old.
• Pregnant women discharged or dismissed ( in the case of gross misconduct ) may
still claim maternity benefit from employer.
• Every establishment having 50 or more employees shall have the facility of crèche.
• Employer shall allow 4 visits a day to the crèche by the woman, which shall also
include the interval for rest allowed to her.

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Legal Obligations Under This Act
• Ten weeks before the expected delivery date, she may ask employer to give her light
work after producing certificate of pregnancy.
• She should inform the employer seven weeks prior to the date of delivery, about the
leave period.
• Name the person to whom the payment will be made in case she cannot take herself.
• Any woman who has not given the notice when she was pregnant may give such notice
as soon as possible after the delivery.
• No employer shall knowingly employ a woman in establishment during 6 weeks,
following date of her delivery or miscarriage.
• No woman shall work in any establishment during the 6 weeks immediately following
her date of delivery or miscarriage.
• It shall be unlawful to dismiss her on account of such absence.
• In case of gross misconduct, the employer in writing can communicate about depriving
such benefits.
• Within 60 days from date of deprivation of maternity benefit, any woman can appeal to
the authority prescribed by law.

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Payment of Maternity Benefit
Maternity benefit at the rate of average daily wages for the period of her actual
absence immediately preceding & including the day of her delivery & for the 6
weeks immediately following that day.
Record Management
• Every employer shall prepare and maintain registers, records,
muster-rolls.
Penalty for Contravention of Act
• Imprisonment with minimum period of 3 months to maximum period 01 year.
• Fine from Rupees Two Thousand to Rupees Five Thousand.

The Payment of Gratuity Act, 1972
Objective
To provide retiring benefits to the workers for long & unblemished services.
Introduction
 This act my be called the payment of gratuity act, 1972.
 Extends to whole of the India (except plantations & ports of J&K)
Meaning of Gratuity
• Gratuity means a lump sum payment made by employer to an employee as a
reward for his past services when his employment is terminated.
• Gratuity includes: Monetary Reward, Retirement Award, Retirement Benefit.
• Maximum Gratuity Limit: 20 Lakh Rupees.

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Applicability
• In an establishment, where 10 or more workers are working or were working on
any day of the preceding 12 months.
• This act does not cover apprentices.
Eligibility
• Employee must have worked for 5 or more years: only will be paid gratuity.
• Continuous year of service: Uninterrupted services.
• Gratuity is paid at the age of Super- Annuation, Retirement, Death or Disablement.
• In Perennial/Non-Seasonal Establishment: Worker must have worked 240 days in a
calendar year.
• In Seasonal Establishment: 75% of actual working days.
• In mines: 190 days for underground workers.
• 6 or more months: Full Gratuity of year.
• Less than 6 months: No Gratuity.

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Payment of Gratuity
For a complete year: Worker will get 15 days wages as Gratuity.
Calculation of Gratuity
1. Monthly wages ÷ 26 Days = 1 Day Wages
2. 1 Day Wages x 15 Days = Wages of 15 Days
3. 15 Days Wages x Total Working Years = Gratuity Amount.
Example
 Rs. 50000 ÷ 26 Days = Rs. 1923.07 /-
 Rs. 1923.07 x 15 Days = Rs. 28846.05 /-
 Rs. 28846.05 x 9 Years = Rs. 259614.45 /-
Gratuity Amount Calculated : Rs. 2,59,614.45 /-

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Legal obligations under this act
 Dismissal for Gross Misconduct, leads to termination: No Gratuity.
 Gratuity is tax free.
 Gratuity Fund: Every employer obtain an insurance for his liability of payment of
Gratuity from LIC or any other insurer.
 Every employer employing 500 or more workers will establish an approved
Gratuity fund.
Offence and Penalties
For avoiding any payment or for any false representation : Employer shall be
punishable with imprisonment upto 6 months & fine which may extend upto 10
thousand rupees or both.

The Payment Of Bonus Act, 1965
Objective
Act to provide for the payment of bonus to persons employed in certain
establishments on the basis of profits or on the basis of production or
productivity and for matters connected therewith.
Scope & Applicability
 It extends to the whole of India
 Every establishment in which twenty or more persons are employed any day
during an accounting year.
Note : For some establishments, Payment of Bonus Act will apply even If the
number of employees are below 20, under two conditions:
(i) Minimum of 10 employees.
(ii) Notified in gazette.

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Eligibility
 Apprentices are not included under this act.
 Salary or wages should not exceed twenty one thousand.
 An employee must have worked 30 or more days in an accounting year.
Bonus limit
 Bonus is paid for good performance, above the salary.
 This bonus is other than festive bonus, interim bonus. This is Statutory
Bonus.
 Minimum bonus: 8.33% of worker’s wages or Rs.100/- or Rs.60/- who is
below 15 years of age, whichever is higher.
 Maximum Bonus limit: 20%

Continued…
Payment of Bonus
 Gross Profit : Aggregate cumulative profit without legal deductions.
 Net Profit : Gross Profit – Legal Deductions.
 Net profit becomes available surplus.
 Out of Available Surplus:
1. 67 % Allocable Surplus in the case of Foreign Companies.
2. 60% Allocable Surplus in the case of Indian Companies.
 Out of Allocable Surplus, Bonus is Paid.
 20% of the bonus out of allocable surplus is paid in the same year, and if it is more
than 20%, then only 10% can be set-on to the next year, & this shall be added upto
4 years.
Legal obligations under this act
• Minimum bonus have to be given, whether there is profit or not.
• If there is one balance sheet & company has many branches, the company will be
treated as one.
• After the closure of accounting year, within 8 months bonus is paid.
• Minimum wages should be Rs. 7000 /- to get bonus.

Offence(s)
Contravention of any of the provision of this act.
Default in complying with the Act.
Penalty
Imprisonment upto 6 months or Fine of Rs. 10,000 or both.
1) Payment of Bonus shall be denied to an employee on the condition that on
the day of declaration of Bonus he was not engaged in employment ?
 NO! It violates the provisions of Section 8 of the Act.
2) Whether a Probationer is eligible for Bonus ?
A probationer will be eligible for bonus as there is no exclusion in the
definition of ‘employee’ under the Act.

The Industrial Employment (Standing Orders) Act, 1946
Introduction
• There was no uniformity in the conditions of service of workers until this act was
brought.
• The frequent causes of friction b/w management & workers in industrial
undertakings in India were mainly, due to absence of clear cut employment
conditions known to the workers.
• This is why – The Labour investigation committee 1944-46 observed: “ An
Industrial worker has the right to know the Terms & conditions which he is
expected to follow”
Objective
- To minimize Industrial conflict.
- To foster harmonious relationship between employer & employees.
- To require employers to define the conditions of work.

Continued…
Scope & Applicability
- This Act apply to whole of The India.
- It applies to every Industrial establishment wherein 100 or more workmen are
employed or were employed on any day of the preceding 12 months.
Act not applied to certain industrial establishments
To which the provisions of Chapter 7 of The Bombay Industrial Relation Act or
Madhya Pradesh Industrial Employment ( Standing Orders) 1961 are applicable.

Procedure, certification , Modification , Appeal
Within 6 months from the date on which this Act is applicable
to an Industrial establishment :
 The employer of an industrial establishment is required to submit to the
certifying officer , five copies of the draft standing orders proposed to be adopted
by him in his industrial establishment, together with the prescribed particulars
(Form 1) of workmen employed and name of trade union if any to which they
belong.
 On receipt of the draft, the certifying officer shall forward a (Form 2) copy thereof
to the trade union, if any, of the workmen or to the workmen requiring objections
if any, which the workmen may desire to make to the draft standing orders to be
submitted by him within 15 days from the receipt of the notice.
 Then the certifying officer shall decide whether or not any modification or
addition to the draft is necessary to render it certifiable under the Act and shall
make an order in writing.
 The Certifying Officer shall thereupon certify the draft standing orders and shall
send within 7 days, copies of the certified standing orders to the employer and to
the trade union or representative of the workmen.

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Appeal
• Any employer, workman, trade union aggrieved by the order of the certifying
officer, may within 30 days appeal to the appellate authority, whose decision shall
be final. (Section 6)
• The appellate authority shall within 7 days of its order send copies to the certifying
officer, to the employer and to the trade union copies of the standing orders as
certified by him and authenticated in the prescribed manner. (Section 6)
• The appellate authority has no power to set aside the order of the Certifying
Officer. It can confirm or amend the Standing Orders.
Date of Operation of Standing Orders
Standing orders will unless an appeal is preferred, come into operation on the expiry
of 30 days from the date on which the authenticated copies of the same are sent
or where appeal is preferred, on the expiry of 7 days from the date on which
copies of order of the appellate authority are sent.

Register of S.O.
• A copy of all standing orders as finally certified under this Act shall be filed by the
Certifying Officer in a register in the prescribed form.
• He shall furnish a copy of it to any person on payment of the prescribed fees.
Pasting of S.O.
The text of the standing orders finally certified shall be prominently pasted by the
employer in English and in language understood by the majority of the workmen on
special board to be maintained for that purpose at or near the entrance through
which the majority of workmen enter the industrial establishment.
When the Standing Orders be Modified
Standing orders finally certified under this Act shall not be modified until the expiry of
six months from the date on which the standing order or the last modifications
thereof come into operation, unless the agreement provide otherwise.

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Model Standing Orders (Matters to be covered in S.O.)
 Classification of workers.
 Publication of work time, holidays, pay days, wage rates.
 Working shift.
 Attendance & late coming.
 Payment of wages.
 Termination of employment.
 Disciplinary action for misconduct.
 Suspension.
 Dismissal.
 Complaints.
Penalties & Procedures
An employer who fails to submit draft standing orders
shall be punishable with fine which may extend to 5000 rupees and in case of a
continuing offence with a further fine which may extend to 200 rupees for every
day after the first, during which the offence continues.

The Employees’ Compensation Act, 1923
Introduction
• This act extends to whole of India.
• It came into force on first day of July, 1924.
• This act imposes statutory liability upon an employer to discharge his moral
obligations towards employees, when they suffer from any physical disabilities,
diseases, etcetera.
Objective
 To provide quick & cheaper disposal of disputes relating to the compensation
which is not possible in case of proceedings of civil law.
 This act also helps the dependents to get relieved from the hardship, rising from
accident.

When compensation is to be Given ?

Factors Considered
1. Nature of Injury.
2. Monthly wages of the Employee.
3. Relevant factor.
Other conditions to be fulfilled

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Temporary Disablement Benefit
• Personal injury that lasts for than three days & less than 5 years, may be an
accident.
• 25% monthly wages are given half monthly ( 2 installments )
• Compensation commissioner keeps the record.
Permanent-partial disablement
• In the second schedule of this act, compensation rate has been given according to
the level of disability.
• We consider total disablement as 100% on comparing to, how much disablement
has been caused, the compensation is given according to it.
• Example: 80% partial disablement has been caused, then 80% of the wages shall
be given as compensation.
• Permanent Disablement: (a) Total ( Lump sum amount is given)
(b) Partial (Amount not given in Lump sum)

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Permanent-Total Disablement
• 60% of the wages (monthly) x Relevant Factor.
• Compensation can never be less than 1 Lakh 40 Thousand.
• The compensation is given considering Rs. 8000 /- as wages of the employee & not
the actual wages.
• Compensation becomes due on the respective day of accident & can not be
delayed for more than 3 months by the compensation commissioner.
Compensation in case of Death
In case of Death: 50% of monthly wages x Relevant Factor.
Medical Expenses
• 100% reimbursement of the actual medical expenses.

Continued…
Funeral Expenses
• Not less than Rs. 5000/- will be paid in compensation as funeral expenses, it is
given to the dependent who has actually done these expenses.
• Paid by the employer.
Relevant Factor
It is a mathematical figure, calculated with reference to the age of the employee.
Penalty
Where an employer is default in paying the compensation, within one month from the
date it fell due, the commissioner shall, Direct that the employer in addition to the
amount of arrears, pay simple interest at the rate of 12% per annum or on such
higher rates.

The Employees’ Provident Fund Act,1952
Introduction
The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 is a Central
Act and is being administered by the Government of India, through EPF
Organization which has offices all over The India.
Objectives
1) The Employees’ Provident Fund Scheme 1952 provides for contributory Provident
Fund.
2) The Employees’ Pension Scheme 1995 provides for Monthly Member Pension,
Widow Pension, Orphan Pension and Nominee Pension.
3) The Employees’ Deposit-Linked Insurance Scheme 1976 provides for insurance
cover to all PF members in the event of their unfortunate death while in service.

Continued…
Under this Act the following three Schemes have been framed:
• The Employees’ Provident Funds Scheme 1952.
• The Employees’ Deposit-Linked Insurance Scheme 1976.
• The Employees’ Pension Scheme 1995. (Earlier called The Family Pension
Scheme 1971)
THE EMPLOYEES' PROVIDENT FUND SCHEME, 1952
The statutory rate of contribution to the provident fund by the employees
and the employers, as prescribed in the Act, is 10% of the pay of the
employees. The term "wages" includes basic wage, dearness allowance,
including cash value of food concession and retaining allowance, if any.

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EPF Interest Rate
The employees' provident fund scheme, the central government,
on the recommendation of the central board of trustees,
declares the rate of interest to be credited annually to the
accounts of provident fund subscribers.
Withdrawals
Under the scheme, a member may withdraw the full amount standing to
his credit in the fund in the event of :
i) Retirement from service after attaining the age of 55;
ii) Retirement on account of permanent and total incapacity;
iii) Migration from India for permanent settlement abroad; and
iv) Termination of service in the course of mass retrenchment (involving 3 or
more persons).

Continued…
The Scheme provides for non-refundable partial withdrawals/ advances to
meet certain contingencies :
1) Financing of life insurance policies;
2) House-building;
3) Purchasing shares of consumers co-operative credit housing societies;
4) During temporary closure of establishments;
5) Illness of member, family members;
6) Member's own marriage or for the marriage of his/her sister, brother or
daughter/ son and post-matriculation education of children;
7) Damages to movable and immovable property of members due to a
calamity of exceptional nature;
8) Unemployment relief to individual retrenched members;
9) Cut in supply of electricity to the factory/establishment.
10) Grant of advance to members who are physically handicapped for the
purchase of equipment.

Continued…
The Employees' Pension Scheme, 1995
• Employees' Pension Scheme 1995 has been made applicable on
16.11.1995 retrospectively with effect from 1.4.1993. This new Scheme
replaces the erstwhile Family Pension Scheme, 1971.
Contribution
• Employee is not required to contribute separately under the Employees'
Pension Scheme 1995. Employer share of provident fund contribution at
the rate of 8.33 % is diverted to pension fund every month
Service for Pension
• Actual service rendered after 16.11.1995 together with the service for
which the contribution has been made under the eased Family Pension
Scheme 1971, if any will be treated as service for pension.
• A person is entitled for pension after, completing the age of 58 years with
minimum service of 10 years.
• Six months or more shall be treated as one year and the service less than
six months shall be ignored.

Continued…
The Employees' Deposit-linked Insurance Scheme, 1976
• The scheme came into force from August 1, 1976. It is applicable to all factories/
establishments to which the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952 applies. All the provident fund member-employees, both in
the exempted and Non-exempted establishments, are covered under this scheme.
• While the employees are not required to contribute to the Insurance Fund, the
employers are required to pay contributions to it at the rate of 0.5% of the pay of
the employers who are provident fund subscribers.
• The Central Government also contributes to the' insurance fund at the rate of
0.25% of the pay in respect of the covered employee.
Applicability
Employees’ Provident Funds & Miscellaneous Provisions Act 1952 is an important
Social Security Legislation and is applicable to certain kind of industries/classes
of establishments, as notified in the Gazette by the Government of India,
Ministry of Labour from time to time.

Continued…
Penalty & Procedures
An employer who contravenes any of the provisions of his act, shall be punishable
with imprisonment for a term which may extend to one year or with fine of Five
thousand rupees or with both.

The Employees’ State Insurance Act, 1948
Objective
To provide certain benefits to employees in case of sickness, maternity &
employment injuries & to make provisions for related matters.
Introduction
The ESI Scheme is an integrated measure of Social Insurance. It is designed to
complete the task of protecting “Employees” against the hazards of
sickness, maternity, disablement or death due to employment injuries &
to provide full medical care to insured persons & their families.
Applicability
• Factories employing 10 or more workers.
• Shops, hotels, Restaurants, cinemas employing 20 or more workers.
• Private medical institutions & Educational Institutions employing 20 or more
workers.

Continued…
Contribution & Benefit Period
• Employers covered under this act are required to pay the contribution on a
monthly basis.
• There are two contribution periods, each of Six months & two corresponding
benefit periods also of Six months.
Example:
Contribution Benefit period
1st April to 30th September 1st January to 30th June
1st October to 31st March 1st July to 31st December

Continued…
Social Security Benefits
1. Sickness & Extended Sickness Benefit
• Represents periodical payments made to an insured person for the period of
certified sickness after completing 9 months in insurable employment.
• To qualify, contribution should be for minimum 78 days in the relevant period.
• Maximum duration for benefit is 91 days.
• Rates of Payment: Average of 50% of Daily Wages.
2. Maternity Benefit
• Implies cash payment to an insured woman in case of confinement or miscarriage
or sickness arising out of pregnancy or premature birth.
• Woman should have contributed for minimum 70 days in the preceding two
consecutive contribution periods.
• Rates of Payment: Double the Standard sickness benefit rate, i.e. Full Wages.

Continued…
3. Disablement Benefit
• Temporary Disablement: Benefit is admissible for the entire period for which the
insured person does not work.
• Permanent Disablement: Partial or Total loss of earning capacity, periodical
payments to be made for life. One time Lump-Sum payment is permissible in
certain cases.
4. Dependent’s Benefit
• Periodical pension paid to dependent(s) of deceased, where death occurs out of
employment injury or disease.
• Total amount distributed not to exceed ceiling of disablement benefit.
5. Medical Benefit
• Treatment continues even if person goes out of coverage, till sickness ends.
• Package covers all aspects of health, such as: Out-Patient Treatment, Domiciliary
treatment, Specialist consultation, Diagnostic Facilities, X-ray & Lab investigations,
Ambulance Services, etcetera.

Continued…
6. Funeral Expenses
• An amount of Rs. 10,000/- is payable to the dependents.
Note: All Payments under The ESI Scheme are paid in Cash except MEDICAL
BENEFIT, which is given in Kind.
Offence & Penalties

The Contract Labour ( Regulation & Abolition ) Act, 1970
Objective
 To prevent exploitation of Contract labour.
 To introduce better conditions of work .
Introduction
• This Act may be called The Contract Labour Act, 1970.
• It extends to whole of The India.
Applicability
 To every establishment in which twenty or more workmen are employed or
were employed on any day of the preceding twelve months as contract labour.
 To every contractor who employees or who employed on any day of the
preceding twelve months twenty or more workmen.

Continued…
Registration of Certain Employments
1. Every principal employer of an establishment to which this Act applies shall,
make an application to the Registering Officer in the prescribed manner for
registration of the establishment
2. If the application for registration is complete in all respects, the registering officer
shall register the establishment and issue to the Principal employer of the
establishment a Certificate of Registration containing such particulars as may be
prescribed.
Revocation of Registration in Certain Cases
If the Registering Officer is satisfied that, the registration of any establishment has
been obtained by misrepresentation or suppression of any material fact, or that
for any other reason the registration has become useless or ineffective.

Registration & Licensing
Registration
• Issued on payment of fees.
• Taken by the Principal Employer.
• Not renewable on year to year
basis.
• Certificate of Registration need
not to be displayed at the
establishment by Principal
Employer.
• Only Bank Draft Required.
License
• Issued on payment of fees &
Security money.
• Taken by Contractor.
• Valid only for one year/ should be
renewed before due date.
• License shall be displayed
prominently at the premises
where the contract work is being
carried on.
• Bank Draft + Certificate of
Principal Employer is required.

Continued…
Liabilities of Principal Employer
 To pay wages, incase the contactor fails to do so.
 To nominate a representative to be present at the time of distribution of
wages by the contractor.
 To provide welfare & health facilities.
 Maintain Register, Records.
 Display notice at a prominent place in English & Local language containing
information, like: Rate of wages, Hours of work, Wage period, etcetera.
 Submission of yearly return to Licensing Officer.
Liabilities of Contractor
• Maintaining Register, Muster Rolls, etcetera.
• Issue an employment card to each worker & to issue a service certificate on
termination of employment.
• Submission of half yearly return to Licensing officer.

Continued…
Welfare & Health of workers
 Canteens.
 Rest Rooms.
 First aid facilities,
 Responsibility for payment of Wages.
Penalty & Procedures
 Whenever any provision of this Act is contravened (extending to provisions
relating to license), it is implied that such an action has been acted against the
regulation of contract labor. Hence, the person concerned shall be punishable
with an imprisonment for a term that may extend to a maximum of three months
or may be penalized with a fine up to One thousand rupees or both.
 In the case of continuing contravention, an additional fine of Rs. 100/- for each
day may be imposed during which such contravention continues.

Conclusion
• In a dynamic context, Laws need to be reviewed from time to
time. Hence, review/updating labour laws is a continuous
process in order to bring them in tune with the emerging
needs of the economy including attaining higher levels of
productivity and competitiveness, increasing employment
opportunities, attracting more investment for growth,
etcetera.
• Strikes, lockouts, protests or other organized actions are
tightly restricted in order to preserve “Harmony”
• Violating these rules is a criminal offence. Labour laws should
be consolidated in a few cognate groups to reduce multiplicity
of laws for better enforcement and more effective
compliance.

Thank You!
Feedback & Suggestions are Invited.
E-mail: rashishukla776@gmail.com

Labour Laws in India

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