2. Acts and Rules
Blend of Acts and Rules
Centered on the responsibility of a Factory Manager,
Personnel/ HR Manager or self employed Entrepreneur.
Attention has not been made wherever the employer has
nothing to do with the provisions but has only to follow the
directions of the appropriate govt.
4. Act extends to the whole of India.
Applies to every factory wherein 10 or
more workers are or were employed, if run
with power and 20 or more workers are or
were employed, if run without power.
Application to factories with fewer workers
u/s 85
6. Factories Act now allows
women to work night shifts
PROVIDED
adequate safeguards in the factory as
regards occupational safety and health,
equal opportunity for women workers,
adequate protection of their dignity,
honor and safety and their transportation
from the factory premises to the nearest
point of their residence" are made.
8. The occupier (Employer) to
maintain a register – LEAVE WITH
WAGES REGISTER- in FORM 15
Provide each employee a Leave Book- thick
bound sheet- in FORM 16 (with similar
entries as in Form 15)
Provide each worker an Attendance Card in
form 28 showing the particulars of
employment
* shall be substituted by Electronic cards
9. EMPLOYER TTOO KKEEEEPP TTHHEE FFAACCTTOORRYY
PPRREEMMIISSEESS CCLLEEAANN • white washing at least once in every 14 months
• repainting or revarnishing every 5 years
• ensure proper disposal of wastes and effluents
• Record the dates on which white washing, painting or
varnishing done in a register in FORM 7.
• Ensure provision of sufficient number of Latrines and urinals –
separate for gents and ladies
• Ensure spittoons are provided at adequate places.
• Ensure workplace has adequate ventilation
• Avoid overcrowding – ensure 500 cubic feet of space for every
worker without reference to any space which is more than 14
feet above the level of the floor of the room.
• Ensure proper lighting- artificial or natural or both.
• Ensure supply of uninterrupted supply of Drinking Water.
• Where the no. of workers is more than 250, provision for
cold water in every lunch room, rest room and canteen shall be
ensured.
13. RETURNS TO BE SENT TO
APPROPRIATE AUTHORITIES
Notice of accidents and dangerous occurrences resulting
in death or bodily injury in form 18 (similar to the one to
be sent ESI Local Office under the ESI Act)
Half yearly returns in form 22
Annual returns in form 21
Notice of change of Manager in form 23
Details of closure in form 32
Report of examination of Pressure Vessel or Plant in
form 8
Report of examination of Water sealed Gas holder in
form 38
Report of Examination of Hoist or Lift in form 41
Certificate of Fitness for Dangerous Operations in form
39
15. SIGNIFICANCE
Terms of appointment order issued to
an employee cannot circumvent the
provisions of certified standing order.
Therefore, it is always desirable to get
standing orders drafted and certified as
it regulates the relationship between
the employer and the employee.
16. Standing Order drafted shall provide
for
Date on which the standing orders
shall come in to force and shall
remain in force
Definitions
Classification of workmen as
Permanent, Probationer, Badlis,
Casual and Trainees
17. contd
Obligations –
not to carryon any other business for gain or
to take admission in educational institution
without permission
to observe strict secrecy of company matters
not to take photographs, drawing or
documents of the process of manufacture of
the company
not to carry any lethal weapon, explosive or
article dangerous to life or property
to follow safety rules in force
to inform any change in the address
etc
23. Employer to ensure……
• No woman works during the six
weeks immediately following the
day of her delivery or her
miscarriage
• No woman does any arduous work
during the period of ten weeks
from the expected date of
delivery
• Not to discharge or dismiss a
woman during her pregnancy
24. Eligibility
Work of 80 days in the 12 months
immediately preceding the date of
delivery.
Leave days & lay offs taken as
worked.
25. Benefit
12 weeks leave of which not more than 6
weeks shall precede the date of her expected
delivery
The benefit to be paid @ average rate of
wages for the three months preceding her
maternity leave
In case of miscarriage, 6 weeks leave with
pay at the same rate as applicable to
maternity benefit.
27. Responsibility of the Employer
to follow the directions and fix wages of the
workers at the rate not less than the one fixed
to maintain Register of Wages in form XI showing
rate of wages payable,
actual amount paid,
attendance & overtime,
deductions for EPF, ESI and other,
net amount paid,
date of payment and
signature of respective employee.
Wages slip in form XIII showing the above details
to be given to every employee.
30. Time of Payment of wages
7th day of wage month where less than
1000 are working
10th day where more than 1000 are
working
No payment in KIND
31. Permissible deduction from Wages
• fines
• for absence from duty
• for damage caused to the property of the
employer
• for the amenities provided, like house
accommodation
• for recovery of advance or adjusting over
payment of wages
• towards EPF, ESI, Labour Welfare Fund and
similar deductions permitted under any Act or
the Standing Orders of the establishment
• for Life Insurance/ general insurance policies
and Housing loan.
35. Not eligible for Subsistence
Allowance
An employee placed under suspension
not entitled for subsistence allowance if
he accepts employment during the
period of suspension
37. Eligibility to Bonus
employee whose salary/ wages does not
exceed Rs 10000 per month
who has worked in the establishment for
not less than 30 days
Not disqualified to claim bonus due to
fraud, theft or any other misconduct
Bonus of very person drawing salary
between Rs 3500/- and Rs 10000/- per
month shall be calculated as if his salary
were Rs 3500 pm
39. Rate of Bonus
Minimum :8.33% of salary/wages
Maximum 20% of salary/wages
Computation of bonus as per Schedule I to IV
of the Act.
Adjust any interim bonus paid while making
payment of the final bonus.
40. Disputes on Bonus
The Bonus Act does not provide for
any machinery to resolve disputes
relating to bonus. For this, the
Industrial Dispute Act shall be
referred to.
44. Gratuity is payable to an
employee on termination of his
employment after he has
rendered continuous service for
not less than five years
on his superannuation
on his resignation
on his death or disablement due to employment
injury or disease
45. News paper employees
• The Working Journalists and Other
Newspaper Employees (Conditions of
service) and Miscellaneous Provisions
Act, 1955, provides for payment of
gratuity.
• As such, three years of continuous
service is required for eligibility for
Gratuity.
46. The payment of gratuity shall be
forfeited
to the extent of the damage or
loss caused by the employee to
the property of the employer
where the service of the
employee is terminated due to
misconduct
47. Rate of gratuity
15 days wages for every completed
year of service
Rates applicable to Working
Journalists depends upon the service
of the employee as provided in the
Working Journalists and Other
Newspaper Employees (Conditions of
service) and Miscellaneous Provisions
Act, 1955
50. Salary ceiling
The Amendment Act of
1994 removed the salary
ceiling of an employee,
but the maximum
gratuity payable shall be
Rs 3.5 lakh.
51. In order to be eligible for gratuity,
employee should have at least five
continuous years of service with the
employer
• An employee is in service in a calendar
year provided he has worked for
– 190 days in case employee is employed
below the ground and
– 240 days in any other case.
52. Continuous service (contd.)
The days he/she has been
laid off under an agreement or under the ID Act or as
permitted by the Standing Orders
on leave with pay
absent due to temporary disablement due to
employment injury
on maternity leave
shall be taken as worked for the
calculation of 190/240 days.
55. Extends to the whole of India.
Applies to every establishment wherein five or
more interstate migrant workmen (whether or
not in addition to other workmen) are
employed and every contractor who employs
(whether or not in addition to other workmen)
5 or more interstate migrant worker.
56. Interstate migrant worker
• An interstate migrant worker means
any person who is recruited by or
through a contractor in the state under
an agreement or arrangement for
employment in an establishment in
another state, whether with or without
the knowledge of the principal
employer.
57. Provides for
Registration of establishments
employing interstate migrant
workmen, licensing of contractors,
appointment of licensing officers,
prohibition of employment of
migrant workmen without
registration and duties and
obligations of contractors provided
under the Act.
62. Contract of apprenticeship
A contract of apprenticeship training is
entered in to between the employer and the
apprentice or, if he is a minor, guardian of the
apprentice.
The contract of apprenticeship training is to
be sent to the Apprenticeship Adviser of the
respective area.
63. Termination of training
• on the expiry of the period of apprenticeship
training specified in the contract.
• Premature termination by employer -
the employer shall pay to the apprentice such
compensation as may be prescribed
• Premature termination by the apprentice
apprentice or his guardian shall refund to the
employer as cost of training such amount as
may be determined by the Apprenticeship
Adviser
65. Duties of the employer
Make suitable arrangements for imparting
practical training
Provide for basic training.
Where an employer employs 500 or more
workers, the basic training shall be imparted in
separate part of the workshop building or in a
separate building set up by the employer.
* the employer may get easy loan from the
Govt. for construction of building for conducting
training classes
67. RI Centre
Apprentice to be given Related
Instruction course.
Time spent by a trade apprentice in
attending classes on RIC shall be treated
as part of his paid period of work.
69. Employer to ensure (contd.)
HEALTH, SAFETY AND WELFARE
OF APPRENTICES
Not to require or allow overtime
except with the approval of the
Apprenticeship Adviser.
In case of employment injury pay
compensation in accordance with
the provisions of the Workmen's
Compensation Act, 1923
70. disputes
• Any disagreement or dispute
between an employer and an
apprentice arising out of the
contract of apprenticeship shall be
referred to the Apprenticeship
Adviser for decision.
71. Obligation for employment
It shall not be obligatory on the part of
the employer to offer any employment
to any apprentice who has completed
the period of his apprenticeship
training in his establishment,
nor shall it be obligatory on the part
of the apprentice to accept an
employment under the employer.
73. The amount of compensation
• for accidents resulting in death, an amount
equal to fifty per cent of the monthly
wages of the deceased workman
multiplied by the relevant factor; or an
amount of eighty thousand rupees,
whichever is more
• * for permanent total disablement, an
amount equal to sixty per cent of the
monthly wages of the injured workman
multiplied by the relevant factor, or an
amount of ninety thousand rupees,
whichever is more.
74. The maximum compensation as per
W.C. Amendment Act 2000
Fatal Injury - Rs.4,57,080
Permanent Total Disablement -
Rs.5,48,496
Permanent Partial Disablement -
According to incapacity caused
Temporary Disablement - Rs. 2000 per
month upto a period of 5 years
75. ESI Corporation and Workmen
compensation
The liability of payment of
compensation shifted from the
employer to the Employees State
Insurance Corporation
77. ESI Act
* Applies to factories and
establishments functioning in the
notified area and consisting of 10 or
more employees.
* Provides for health care and cash
benefits in cases of sickness, maternity
and employment injury.
* The Act absolved the employers of
their obligations under the Maternity
Benefit Act, 1961 and Workmen’s
Compensation Act 1923.
80. Contribution Period and Benefit
Period
There are two contribution periods
each of six months duration and two
corresponding benefit periods also of
six months duration as under
Contribution period Corresponding
Benefit period
1st April to 30th Sept. 1st January of the following year
to 30th June
1st Oct. to 31st March 1st July to 31st December of
the year following
81. ESI Benefits
Medical Benefits
Available both to IP and family.
Also available to
disabled/retired IP
Super specialist treatment
Sickness Benefit Maternity Benefit
Disablement Benefit
Dependant benefit
Funeral Expenses Old age medi care
Rehabilitation
82. Employer to maintain and file
the following books and returns.
• 1. Form 7 (Register of Employees showing the
details of Gross wages, ESI contribution
deducted, Contribution by the Employer and total
for the contribution period (six months)
• 2. Accident book in form 15
• 3. ESI Declaration in form 1,
• 4. Return of declaration in form 3
• 5. Return of Contribution in form 6 for the
contribution period (with similar entries as in
register of employees Form 7)
• 6. Accident report in form 16. (similar to Form 18 to
be furnished to the Inspector of Factories and
Boilers)
85. Schemes under the Act
Three beneficial schemes-
1.Employees Provident Fund Scheme
1952
2.Employees Pension Scheme 1995
3.Employees Deposit Linked Insurance
1976
86. membership
An employee at the time of joining the
employment and getting wages up to
Rs.6500/- is required to become a member.
an employee is eligible for membership of
fund from the very first date of joining a
covered establishment.
89. Duties of employer
Employer to furnish information about:
(a) Ownership and names of responsible
persons of the establishment.
(b) Declaration and nomination.
(c) Joining and leaving of service by the
members in form 5 and form 10 respectively
(d) Form 12A with monthly challans of deposit.
(e) Form 9 for details of employees.
(f) Form 3A/6A at the end of the financial year.
(g) Any other information as may be required
under Para 76 of the scheme
91. Provident Fund Benefits
– Employer also contributes to Members’ PF @
3.67% (1.67% in case of sick industry - eg: beedi)
– EPFO guarantees the Employer contribution and
Govt. gives a decent interest to PF accumulations
– Member can withdraw from this accumulations to
cater financial exigencies in life - No need to
refund unless misused
• On resignation, the member can settle the account.
i.e., the member gets his PF contribution, Employer
Contribution and Interest
97. Duties of the Employer
• Provision of:
• Drinking Water
• Separate Toilets for Men and Women
• Medical facilities to the workmen and their family
• Canteen where 150 or more workers are employed
• Crèches where 50 or more women workers are
employed or where the number of children of women
workers is 20 or more
• Recreational facilities
• Educational Facilities where children between the
ages of six and twelve of workers employed in any
plantation exceed twenty five.
• Housing facility
• Welfare Officer where three hundred or more workers
are employed.
102. Works Committee
Where?: Establishments with 100
or more workers
Members: Equal number of
representatives of the Employer
and Employees
Objective: promotion of good
relationship between employer
and employee(s)
103. CCoonncciilliiaattiioonn ooffffiicceerrss
• Appointed by the appropriate
Government
• Duty: Settlement of industrial
disputes.
• Nature : Appointed for a specified
area or for specified industries in a
specified area or for one or more
specified industries and either
permanently or for a limited period.
104. Boards of Conciliation
• Appointed by the appropriate
Government as occasion arises for
settlement of disputes.
• Board shall consist of an independent
Chairman and two or four other
members in equal numbers to
represent the parties to the dispute
105. Courts of Inquiry
Constituted by the appropriate Government
as occasion arises for inquiring into any
matter appearing to be connected with or
relevant to an industrial dispute
106. Labour Courts
• Labour Courts are constituted by the
appropriate Govt. for the adjudication of
industrial disputes relating to any matter
specified in the Second Schedule and for
performing such other functions as may
be assigned to them under this Act.
107. Tribunals
Tribunals are constituted by the
appropriate Govt. for the adjudication of
industrial disputes relating to any matter
specified in the Second Schedule or the
Third Schedule and for performing such
other functions as may be assigned to
them under this Act.
108. National Tribunals
National Tribunals are constituted by the
Central Government for the adjudication of
industrial disputes which, in the opinion of
the Central Government, involve questions
of national importance or are of such a
nature that industrial establishments
situated in more than one State are likely
to be interested in, or affected by such
disputes.
111. III schedule (contd.)
7.Classification by grades;
8.Rules of discipline;
9.Rationalisation;
10.Retrenchment of workmen and
closure of establishment; and
11.Any other matter that may be
prescribed.
112. Prohibition of strikes and
lock outs
• Not to strike without giving six weeks
notice of strike and during the pendency of
any conciliation proceedings
• Not to declare lock-out without giving to
the employees six weeks notice of lock out
and during the pendency of any
conciliation proceedings
• A strike or lock-out shall be illegal if it is
commenced or declared in contravention
of the above.
• Not to support of any illegal strike or lock-out
114. Lay off compensation
a workman (other than a badli
workman or a casual workman) who
has completed one year of
continuous service under an
employer shall be paid Lay off
compensation
Lay off compensation shall be equal
to fifty per cent of the wages (Basic
+ DA)
Lay off compensation need not be
paid for the weekly holidays which
may intervene
115. Continuous Service
An employee is in continuous service in a calendar
year provided he has worked for
190 days in case employee is employed
below the ground and
240 days in any other case.
The days he/she has been
laid off under an agreement or under the ID Act or
as permitted by the Standing Orders
on leave with pay
absent due to temporary disablement due to
employment injury
on maternity leave
shall be taken as worked for the calculation of
190/240 days.
117. Retrenchment of workmen
No workman who has been in continuous
service for not less than one year shall be
retrenched without giving one month’s
notice (three months notice wherein not less
than 100 workers are employed) in writing
indicating the reasons for retrenchment or
if no notice is given, wages in lieu of such
notice.
Retrenchment of workmen employed in an
establishment wherein not less than 100
workers are employed requires permission
from the appropriate Govt.
119. Compensation to workmen in case of
transfer of undertakings
every workman shall be entitled to notice and
compensation as if the workman had been
retrenched.
120. No compensation on transfer
provided
1 . the service of the workman has not
been interrupted by such transfer;
2 . the terms and conditions of service
applicable to the workman after such
transfer are not in any way less favourable
to the workman
3 . the new employer takes in to
account the continuous service of the
workman.
122. Compensation to workmen in case of
closing down of undertakings
Compensation be paid as if workmen are
retrenched
However no compensation is payable if the
establishment is closed down on account of
unavoidable circumstances beyond the
control of the employer
124. Procedure for retrenchment and
re employment
Retrench the last worker to be
appointed under a particular category
first
For re-employment, retrenched
worker shall have preference over
other persons
132. Unfair-employer (contd.)
To recruit workmen during a strike which is
not an illegal strike.
Failure to implement award, settlement or
agreement.
To indulge in acts of force or violence.
To refuse to bargain collectively, in good
faith with the recognised trade unions.
Proposing or continuing a lock-out deemed
to be illegal under this Act
135. Unfair- employee (contd.)
To motivate or indulge in willful
damage to employer's property.
To indulge in acts of force or violence
or to hold out threats of intimidation
against any workman with a view to
preventing him from attending work.
137. Registration
The minimum number of workers to form a
registered Trade Union is 10% or 100
whichever is less, subject to a minimum of 7
workers.
Ensure that the number of members does
not fall down the above requirement.
139. APPLICATION OF CERTAIN ACTS
Provides for APPLICATION OF
CERTAIN ACTS, such as
Workmen's Compensation Act,
1923, Industrial Disputes Act, 1947,
Minimum Wages Act, 1948,
Maternity Benefit Act, 1961,
Payment of Bonus Act, 1965 and
Payment of Gratuity Act, 1972 TO
SALES PROMOTION EMPLOYEES
