K.S.

School of Engineering & Management

Solution and Scheme
Part Solution
&
Q.No
1.a Define Bonus.
Bonus is really a reward for good work or share of profit of the unit where the employee is
working
1.b Explain briefly the Employees’ Provident Fund.
The Employees' Provident Funds & Miscellaneous Provisions Act, 1952 applies to all states
in India except Jammu and Kashmir. The purpose of a provident fund is to provide financial
security and stability to elderly people on retirement or termination of job. The employer is
also expected to contribute to its employee’s retirement fund.
The EPF is a scheme intended to help employees from both private and non-pensionable
public sectors save a fraction of their salary every month in a saving scheme, to be used in
an event that the employee is temporarily or no longer fit to work or at retirement. Since
this scheme is mandatory for all employers, most employees benefit out of this scheme.

Employee Contribution
Provident fund contribution is recovered @ 12% of wages from employees who earn up to a
maximum wage of Rs.6,500/- p.m. However, employees can contribute more than this
statutory maximum which will be considered as Voluntary Contribution.

Applicability of the Act

1. It extends to the whole of India except the State of Jammu and Kashmir.
2. To every establishment which is a factory engaged in any industry specified in which
[twenty] or more persons are employed.

Employer's Contributions: Equal to 12% of the Pay of employee.

 Member is entitled to withdraw full amount: -
 On retirement from service.
 On retirement on account of permanent and total incapacity for work due to bodily or
mental infirmity.
  Immediately before migration from India for permanent settlement abroad or for taking
employment abroad
 On termination of service in the case of mass or individual retrenchment
 On termination of service under a voluntary scheme of retirement
 After two months of resignation. In case of no employment

Objective:
1. The scheme of provident funds, as a social security measure, is meant to induce
employees to save a portion from their present earnings for a rainy day.
2. Provision for their benefit after they retire from service and for their family members
after their death.
3. To provide for the institution of provident funds and family pension and deposit-linked
insurance schemes for employees in factories and other establishments

Withdrawal of Provident Fund and Pension Fund

 A member is eligible to apply for withdrawing his provident fund and pension fund only
after 2 months from the date of resignation, provided that he / she is not employed during
the said 2 months.

 The member should submit Form 19 to withdraw his provident fund dues on leaving
service/retirement/termination.
 To claim pension, the member is required to submit Form 10 C.
 The member needs to fill in Forms 19 and 10c and get it signed from the previous
employer and submit it to the provident fund office (in many cases, the employer will
themselves help by submitting the forms).
 Normally, it takes about 40 days to have the monies credited to the bank account of the
member after submission of the relevant forms.
1.c Explain briefly the concept of Maternity Benefits Act, 1961.
Objective
An Act to regulate the employment of women in certain establishments for certain period
before and after child-birth and to provide for maternity benefit and certain other benefits
1. Maternity Leave and benefit To protect the dignity of Motherhood by providing
complete & healthy care to women and her child when she is unable to perform her duty
 due to health condition.
2. Maternity Act 1961: Gives her the assurance that her rights will be looked after while
she is at home to care for her child.

Applicability
1. The Act extends to whole to India.
2. Every factory, mine or plantation (including those belonging to Government) and to
every shop or establishment wherein 10 or more persons are employed on any day
preceding 12 months.

Period of Benefit
 As ‘Maternity benefit’ is a right of a woman and a duty of her employer wherein the
woman is entitled for the payment of maternity benefit at the rate of the average daily
wage for a specific period before and after the delivery of the child.

 As per Section 5 of the Act, the maximum period for which the benefit under this Act can
be availed is a period of twelve weeks. This twelve week can be divided into two six
weeks of which one can be availed prior and up to the date of delivery and the other can
be availed after the date of the delivery.

 In case, the mother dies before the delivery then the benefit will be payable up to the date
of her death. In case the mother dies during the delivery or after delivering the child, but
within six weeks, the employer will be liable to pay the benefit for the whole six weeks.
But, if the child also dies along with the mother within the aforementioned period then
the benefit will be payable till the death of the child.

Who is Entitled to Maternity Benefit

 Every woman employee, whether employed directly or through a contractor, who has
actually worked in the establishment for a period of at least 80 days during the 12 months
immediately preceding the date of her expected delivery, is entitled to receive maternity
benefit.
 The qualifying period of 80 days shall not apply to a woman who has immigrated into the
State of Assam and was pregnant at the time of immigration.
 For calculating the number of days on which a woman has actually worked during the
preceding 12 months, the days on which she has been laid off or was on holidays with
wages shall also be counted.
 There is neither a wage ceiling for coverage under the Act nor there is any restriction as
regards the type of work a woman is engaged in.

Duties of Employers
Important obligations of employers under the Act are:
 To pay maternity benefit and/or medical bonus and allow maternity leave and nursing
breaks to the woman employees, in accordance with the provisions of the Act.
 Not to engage pregnant women in contravention of section 4 and not to dismiss or
discharge a pregnant woman employee during the period of maternity leave.

Right of Employees
Important rights of an employee are:
 To make a complaint to the Inspector and claim the amount of maternity benefit
improperly with held by the employer.
 To appeal against an order of the employer depriving her of the maternity benefit or
medical bonus or dismissing or discharging her from service, to the competent authority,
within 60 days of the service of such order.

Penalties For Contravention of Act by Employer

 For failure to pay maternity benefit as as provided for under the Act, the penalty is
imprisonment upto one year and fine upto Rs. 5000. The minimum being 3 months and
Rs. 2000 respectively.
 For dismissal or discharge of a woman as provided for under the Act, the penalty is
imprisonment upto one year and fine upto Rs. 5000. The minimum being 3 months and
Rs.2000 respectively.

Other provisions
 Leave for miscarriage
 Leave for illness due to pregnancy, delivery and others
 Nursing breaks
  Dismissal during absence of pregnancy
 Deduction of wages is not allowed for nursing breaks
 Inspectors
 Notice display
 Cognizance of offence and others
2.a Define Gratuity.
Gratuity is a monetary benefit given by the employer to his employee at the time of
retirement. ... In 1972, the government of India enacted the Payment of Gratuity Act which
made it mandatory for employers to pay their employees gratuity at the time of quitting,
provided certain conditions were met.
2.b Explain the concept of Employees compensation Act.
The Employees Compensation Act, 1923 requires legal liability upon an employer to
discharge his moral responsibility towards employees when they suffer from any physical
disabilities or diseases, during the course of employment in hazardous working
Conditions.
Objective of compensation act
The Act, aims to provide workmen and/or their dependents some relief or compensation in
case of accidents arising out of and in the course of employment and causing either death or
disablement (partial or total) of workmen.

Applicability/Scope and Coverage

1. The Act extends to the whole of India.
2. It applies to workmen employed in factories, mines, plantations, transport
establishments, construction work, railways, ships, circuses, & other hazardous
occupations & employments specified in Schedule II to the Act.
3. The coverage of this act is also to cooks employed in hotels and restaurants.
4. The Act does not apply to members of Armed Forces of the Union & workmen who are
covered by the ESI Act, 1948.

Amount of compensation
1. Where death of a workman results from the injury:-An amount equal to 50% of the
monthly wages of the deceased workman multiplied by the relevant factor or an amount
of, Rs. 1,20,000 whichever is more.
2. Where permanent total disablement results from the injury:-- An amount equal to 60% of
the monthly wages of the injured workman multiplied by the relevant factor or an amount
of Rs. 1,40,000, whichever is more.

Dependant means any of the following relatives of a deceased workman, namely:

1. a widow, a minor legitimate or adopted son and unmarried legitimate or adopted
daughter, or a widowed mother.
2. if wholly dependant on the earnings of the workman at the time of his death, a son or a
daughter who has attained the age of 18 years and who is infirm.
3. And any of the following were wholly or partly dependent on the workman at the time
of his death—
4. a widower, a parent other than a widowed mother, a minor illegitimate son, a
unmarried illegitimate daughter or a daughter legitimate or illegitimate or adopted if
married & a minor or if widowed & minor, a minor brother or an unmarried sister or a
widowed sister if a minor, a widowed daughter-in-law, a minor child of pre-deceased
son & daughter where no parent of the child is alive & a paternal grandparent if not the
parent of the workman is alive.

Employer’s Liabilities For Compensation

An employer is liable to pay compensation
to workman for-
1. Personal injury by accident- An employer is liable to pay compensation to workman if
personal injury is caused to him by accident arising out of & in the course of his
employment.
2. Occupational diseases- workers employed in certain occupations are exposed to certain
diseases which are inherent in those occupation.
Employer is not Liable For Compensation
1. In respect of any injury which does not result in the total or partial disablement of the
workman for a period exceeding three days;

2. In respect of any injury, not resulting in death or permanent total disablement, caused by
an accident which is directly attributable to –
- The workman having been at the time thereof under the influence of drink or drugs, or
 - The willful disobedience of the workman to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of workmen, or
- The willful removal or disregard by the workman of any safety guard or other device
which he knew to have been provided for the purpose of securing the safety of workmen
2.c Explain the Payment of Bonus Act, 1965.
The Payment of Bonus Act, 1965 is the principal act for the payment of bonus to the
employees which was formed with an objective for rewarding employees for their good
work for the organization. It is a step forward to share the prosperity of the establishment
reflected by the profits earned by the contributions made by capital, management and labour
with the employees.
Objective
 To improve legal liability to pay bonus [reward for good work] in case of profits or
losses.
 To prescribe formula for calculating bonus
 To prescribe Minimum & Maximum percentage bonus
 To provide of set off/set on mechanism
 To provide redressal mechanism

The Payment of Bonus Act, 1965 provides for the payment of bonus to persons employed in
certain establishments, employing 20 or more persons, on the basis of profits or on the basis
of production or productivity and matters connected there with.
The minimum bonus of 8.33% is payable by every industry and establishment under section
10 of the Act. The maximum bonus including productivity linked bonus that can be paid in
any accounting year shall not exceed 20% of the salary/wage of an employee under the
section 31 A of the Act.

Applicability/Eligibility For Bonus

 Its applicable for all over India factories and Establishment.
 Every employee receiving salary or wages upto RS. 3,500 p.m. and engaged in any kind
of work whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for
every accounting year if he has worked for at least 30 working days in that year.
 However employees of L.I.C., Universities and Educational institutions, Hospitals,
Chamber of Commerce, R.B.I., IFCI, U.T.I. Social Welfare institutions are not entitled to
 bonus under this Act.

Disqualification for bonus

Notwithstanding anything contained in the act, an employee shall be disqualified from
receiving bonus, if he is dismissed from service for fraud or riotous or violent behavior
while in the premises of the establishment or theft, misappropriation or sabotage of any
property of the establishment.

Minimum/Maximum Bonus Payable

Minimum bonus
The minimum bonus which an employer is required to pay even if he suffers losses during
the accounting year or there is no allocable surplus is 8.33 % of the salary or wages during
the accounting year, or Rs. 100 in case of employees above 15 years and Rs 60 in case of
employees below 15 years, at the beginning of the accounting year, whichever is higher

Maximum bonus
If in an accounting year, the allocable surplus, calculated after taking into account the
amount ‘set on’ or the amount ‘set of’ exceeds the minimum bonus, the employer should
pay bonus in proportion to the salary or wages earned by the employee in that accounting
year subject to a maximum of 20% of such salary or wages.

Time limit for payment

The bonus should be paid in cash within 8 months from the close of the accounting year or
within one month from the date of enforcement of the award or coming into operation of a
settlement following an industrial dispute regarding payment of bonus.

Rights of Employer and Employee

Rights of Employees
 Right to claim bonus payable under the Act and to make an application to the
Government, for the recovery of bonus due and unpaid, within one year of its becoming
due.
 Right to refer any dispute to the Labour Court/Tribunal Employees, to whom the
Payment of Bonus Act does not apply, cannot raise a dispute regarding bonus under the
 Industrial Disputes Act.
 Right to seek clarification and obtain information, on any item in the accounts of the
establishment.

An employer has the following rights:

 Right to forfeit bonus of an employee, who has been dismissed from service for fraud,
riotous or violent behaviour, or theft, misappropriation or sabotage of any property of
the establishment.
 Right to make permissible deductions from the bonus payable to an employee, such as,
festival/interim bonus paid and financial loss caused by misconduct of the employee.
 Right to refer any disputes relating to application or interpretation of any provision of
the Act, to the Labour Court or Labour Tribunal.

Offences and Penalties

 For contravention of the provisions of the Act or rules the penalty is imprisonment upto
6 months, or fine up to Rs.1000, or both.
 For failure to comply with the directions or requisitions made the penalty is
imprisonment upto 6 months, or fine up to Rs.1000, or both.
 In case of offences by companies, firms, body corporate or association of individuals, its
director, partner or a principal officer responsible for the conduct of its business, as the
case may be, shall be deemed to be guilty of that offence and punished accordingly,
unless the person concerned proves that the offence was committed without his
knowledge or that he exercised all due diligence
3.a Explain the concept of shop & Establishment Act.
Objectives of Shop & Establishment Act
 To provide statutory obligation and rights to employees and employers in the
unorganized sector of employment, i.e., shops and establishments.
 To regulate the conditions of work and employment in shops, commercial
establishments, residential hotels, restaurants, eating houses, theatres and other places of
public entertainment.

Scope and Coverage

 A state legislation; each state has framed its own rules for the Act.
  Applicable to all persons employed in an establishment with or without wages, except the
members of the employer's family.
 State government can exempt, either permanently or for a specified period, any
establishments from all or any provisions of this Act.

The Act provides for compulsory registration of shop/ establishment within thirty days of
commencement of work and all communications of closure of an establishment within 15
days from its closing.
It also lays down the hours of work per day and week as well as the guidelines for spread-
over, rest interval, opening and closing hours, closed days, national and religious holidays,
overtime work, etc.

Main Provisions
 Compulsory registration of shop/establishment within thirty days of commencement of
work.
 Communications of closure of the establishment within 15 days from the closing of the
establishment.
 Lays down the hours of work per day and week.
 Lays down guidelines for spread-over, rest interval, opening and closing hours, closed
days, national and religious holidays, and overtime work.
 Rules for employment of children, young persons and women
 Rules for annual leave, maternity leave, sickness and casual leave, etc.
 Rules for employment and termination of service.
 Maintenance of registers and records and display of notices.
 Obligations of employers.
 Obligations of employees.
3.b Explain briefly the Child Labor Act, 1986.
Child labour is the practice of having children engages in economic activity, on part or full-
time basis. The practice deprives children of their childhood, and is harmful to their
physical and mental development. Poverty, lack of good schools and growth of informal
economy are considered as the important causes of child labour in India
Objective of Child Labor Act
 To prohibit the engagement of children in certain employment’s
 To regulate the conditions of work of children in certain other employment’s.

Hours and period of work for children

 No child shall be required or permitted to work in excess hours.
 The period of work on each day so fixed that no period shall exceed three hours and that
no child shall work for more than three hours before he has had an interval for rest for at
least one hour.
 The period of work of a child shall not be spread over more than six hours, including
interval time & the time spent in waiting for work.
 No child shall be permitted to work between 7 p.m. and 8 a.m.
 No child shall be permitted or required to work overtime.
 No child shall be permitted to work in any establishment on any day on which he has
already been working in another establishment.

Penalties
(1) Whoever employs any child or permits any child to work in contravention of the
provisions of Sec. 3 shall be punishable with imprisonment for a term which shall not be
less than three months but which may extend to one year or with fine which shall not be less
than ten thousand rupees but which may extend to twenty thousand rupees or with both.

(2) Whoever, having been convicted of an offence under Sec.3, commits a like offence
afterwards, he shall be punishable with imprisonment for a term which shall not be less than
six months but which may extend to two years.

(3) Whoever – any person:-

(a) fails to give notice as required by Sec. 9, or
(b) fails to maintain a register as required by Sec.11 or false entry or
(c) fails to display a notice or
(d) fails to comply with or contravenes any other provisions of this Act shall be punishable
with simple imprisonment which may extend to one month or with fine which may extend
to ten thousand rupees or with both
3.c Explain briefly the concept of Gratuity Act, 1972.
Gratuity is a lump sum payment to employee when he retires or leaves service. It is
basically a retirement benefit to an employee so that he can live life comfortably after
retirement. However, under Gratuity Act, gratuity is payable even to an employee who
resigns after completing at least 5 years of service.
Payment of Gratuity Act, 1972, this act can be applied to -
1. Every factory, mine, oil-field, plantation, port and railway company in India.
2. Every shop or establishment within the meaning of any law for the time being in force in
relation to shops and establishments in a state in which ten or more persons are
employed, or were employed, on any day of the proceeding twelve months.
3. Such other establishment, or class of establishment in which ten or more employees are
employed, or were employed on any day of the proceeding twelve months, as the
Central Government may, by notification specify in this behalf.

Of course, this Act cannot be applied to

1. Apprentices and
2. As per Section 2 (e), persons who hold civil posts under central Government or a State
Government and are governed by any other Act or rules providing for the payment of
gratuity.

The objectives of the Payment of Gratuity Act, 1972 are mentioned below-
1. To provide for a Scheme for the payment of Gratuity to employees.
2. To provide for matters connected with or incidental to the Scheme for payment of
Gratuity.
3. To provide retiring benefits to employees who have rendered continuous services to his
employer and thereby contributed to his prosperity.
4. To define the principles of payment of gratuity according to the prescribed formula.
5. To provide machinery for the employment of liability for payment of gratuity.

Some important provisions of the Act.

Provisions relating to the payment of gratuity: -
1. The gratuity shall be payable to an employee on the termination of his employment after
he has rendered continuous service for not less than 5 years.
 2. The gratuity is payable to an employee on his termination in the following cases
 On his superannuation, or
 On his retirement or resignation
 On his death or disablement due to accident or disease.

3. The amount of gratuity payable to an employee shall not exceed three lakh and fifty
thousand rupees.
4. If the amount of gratuity is not paid by the employer within the prescribed time, the
person has then right to apply to the controlling authority for the recovery the gratuity.
5. The gratuity of an employee, whose services have been terminated for any act, willful
omission or negligence causing any damage or loss to, or destruction of, property
belonging to the employer, shall be forfeited to the extent of the damage or loss so
caused. The gratuity payable to an employee may be wholly or partially forfeited:- (i) if
the services of such employee have been terminated for his riotous or disorderly conduct
or any other act of violence on his part; or (ii) if the services of such employee have
been terminated for any act which constitutes an offence involving moral turpitude,
provided that such offence is committed by him in the course of his employment.
6. Provisions regarding Nomination: - According to Section 6, each employee who has
completed one year of service shall make nomination for the purpose of payment of
gratuity in case of his death.
7. Whoever, for the purpose of avoiding any payment to be made by himself under this Act
or of enabling any other person to avoid such payment, knowingly makes or causes to be
made any false statement or false representation, shall be punishable with imprisonment
or with fine or with both. Also, if an employer contravenes or makes default in
complying with any of the provisions of this Act or any rule or order made there under,
shall be punishable with imprisonment or with fine or with both.

4.a List the personal injury according to Compensation Act, 1923.

An employer is liable to pay compensation to workman for-
1. Personal injury by accident- An employer is liable to pay compensation to workman if
personal injury is caused to him by accident arising out of & in the course of his
employment.
2. Occupational diseases- workers employed in certain occupations are exposed to certain
diseases which are inherent in those occupation.
 Employer is not Liable For Compensation
 In respect of any injury which does not result in the total or partial disablement of
the workman for a period exceeding three days;
 In respect of any injury, not resulting in death or permanent
total disablement, caused by an accident which is directly
attributable to –
(i) The workman having been at the time thereof under the influence of drink or
drugs, or
 The willful disobedience of the workman to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of workmen, or
 The willful removal or disregard by the workman of any safety guard or other
device which he knew to have been provided for the purpose of securing the safety
of workmen
4.b Explain the concept of Minimum wages Act, 1948.
Wages means all remuneration capable of being expressed in terms of money, if the terms
of employment were fulfilled, be payable to a person employed in respect of his
employment which includes house rent allowance
Minimum wages is not defined in the act, as it is literally impossible to pay uniform wages
for all industries throughout the country, on account of different conditions and locations of
industries
The aim of any legislation is to protect workers. Indian labor is by and large is illiterate and
not organized to protect them.
In our Developing country, exploitation of workers is common
Hence, there was a need for the act to protect workers from exploitation.
Objective and scope
 To secure the welfare of the workers in a competitive market by providing for a
minimum limit of wages in certain employments
 To prevent the exploitation of workers
 To fix minimum wages which the employer must pay to workers
 To empower the government to take steps for fixing minimum wages and to revising it
in a timely manner
 To apply this law on most of the sections in organized sector (scheduled employment)
 Wages does not include
 Any house accommodation, supply of light, water
 Provident fund
 Traveling allowance
 Special expenses regarding the work
 Gratuity

Major components of Minimum Wages Act

 Consists of Fixed and Variable components
 Fixed component has to be fixed within 5 years, but generally updated within 2-3 years.
 Fixing variable components is not very regular.
 Several criteria while fixing these components–food consumption, rent, cloth
requirement, fuel, lighting, children education, medical costs, recreation, festivals, etc.
 Different level of rates are fixed for different type of employments (as specified in
schedules), areas, different classes (skilled, unskilled, semi-skilled), & even different
rates for adolescents (above 14 but below 18), adults, apprentices, etc.

Fixation of minimum wages

Minimum rate for time work ‗minimum time wage‘
Minimum rate for piece work ‗minimum piece rate‘
Minimum rate for ‗time-piece work‘
Overtime wages
4.c Explain briefly the ESI Act, 1948.
The ESI Act has been passed to provide for certain benefits to employees in case of
sickness, maternity and employment injury and to make provisions for related matters. As
the name suggests, it is basically an ‘insurance’ scheme i.e. employee gets benefits if he is
sick or disabled. The benefits extended under this Act are applicable to all employees
whether working inside the factory or establishment or else where they are directly
employed by the principal employee or through an intermediate agency, if the employment
is incidental or in connection with the factory or establishment. The Act applies to non-
seasonal, power using factories or manufacturing units employing ten or more persons and
non-power using establishments employing twenty or more persons.
Objective of the act:
To provide for certain benefits to employees in case of sickness, maternity and injury during
employment and to make provision for certain other matters in relation thereto.

Applicability of Act
 Applicability of the Act:
 All factories
 Shops employing 20 or more persons.
 Such other Govt. specified establishments

Act does not apply to: Seasonal factories. The factories exempted as seasonal from the
provisions of the act
 Mines
 Railway running sheds
 Govt. factories or establishments and Indian naval, military, or air force
 Other Govt. notified exempted establishments

Benefits available to insured employee:

The purpose of the Employee State Insurance Act is to provide benefits as detailed in the
Act particularly in section 46, to the insured persons or their dependants.
The following benefits are provided under section 46.
1. Sickness benefit
2. Maternity benefit
3. Disablement benefit
4. Dependents benefit
5. Medical benefit
6. Funeral expenses

The comprehensive and well-designed social security programme is administered by an

apex corporate body called the Employee State Insurance Corporation. It comprises
members representing vital interest groups that include, employee, employers, the central
and state government, besides, representatives of parliament and medical profession.
The insured employees and their dependants are entitled to the following benefits:
Medical benefit
Full medical facilities for self and dependants are admissible from day one of joining
insurable employment. Whereas, the primary, out patient, in patient and specialist services
are provided through a network of panel clinics, ESI dispensaries and hospitals, super
specialty services are provided through a large number of advanced empanelled medical
institutions on referral basis.

Sickness benefit [cash]

Sickness benefit is payable to an insured person in cash, in the event of sickness resulting in
absence from work and duly certified by an authorized insurable medical officer/
practitioner.

Extended sickness benefit [cash]

Extended sickness benefit is payable to insured persons for the period of certified sickness
in case of the 34 long-term diseases specified in the Act which need prolonged treatment
and absence from work on medical advice.

Enhanced sickness benefit [cash]

This cash benefit is payable to insured persons in the productive age group for under going
sterilization operation, viz., vasectomy/ tubectomy.

Maternity benefit [cash]

Maternity benefit is payable to insured women in case of confinement or miscarriage or
sickness related thereto.

Disablement benefit [cash]

Disablement benefit is payable to insured employees suffering from physical disablement
due to employment injury or occupation disease.

Dependents benefits [cash]

Dependents benefit [family pension] is payable to dependents of a deceased insured person
where death occurs due to employment or occupational disease.
 Other benefits
Funeral expenses - On the death of an insured person subject to a maximum of a Rs.2,500
payable at the local office.
5 Explain the concept of Factories Act, 1948.
Factory Act
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.
Objectives
 To ensure adequate safety measures and to promote the health and welfare of the
workers employed in factories.
 To prevent haphazard growth of factories through the provisions related to the
approval of plans before the creation of a factory
Applicability of the Act
 Applicable to the whole of India including Jammu & Kashmir.
 Covers all manufacturing processes and establishments falling within the definition
of ‘factory’.
 Applicable to all factories using power and employing 10 or more workers, and if
not using power, employing 20 or more workers on any day of the preceding 12
months.

Factories act includes:

 Health
 Safety
 Welfare
 Working Hours Of Adults
 Annual Leave With wages
Important provisions the Act:
Facilities and Conveniences - The factory should be kept clean. There should be
arrangement to dispose of wastes and effluents. Ventilation should be adequate. Reasonable
temperature for comfort of employees should be maintained. Dust and fumes should be
controlled below permissible limits. Artificial humidification should be at prescribed
standard level. . Overcrowding should be avoided. Adequate lighting, drinking water,
latrines, urinals and spittoons should be provided. Adequate spittoons should be provided.

Welfare - Adequate facilities for washing, sitting, storing cloths when not worn during
working hours. If a worker has to work in standing position, sitting arrangement to take
short rests should be provided.. Adequate First aid boxes shall be provided and maintained.

Overtime Wages - If a worker works beyond 9 hours a day or 48 hours a week, overtime
wages are double the rate of wages are payable. Total working hours including overtime
should not exceed 60 in a week and total overtime hours in a quarter should not exceed 50.
Register of overtime should be maintained.

Safety –
• All machinery should be properly fenced to protect workers when machinery is in
motion.
• Hoists and lifts should be in good condition and tested periodically.
• Pressure plants should be checked as per rules.
• Floor, stairs and means of access should be of sound construction and free form
obstructions.
• Safety appliances for eyes, dangerous dusts, gas, fumes should be provided.
• Safety Officer should be appointed if numbers of workers in factory are 1,000 or
more.

Working Hours - A worker cannot be employed for more than 48 hours in a week. Weekly
holiday is compulsory. If he is asked to work on weekly holiday, He cannot be employed
for more than 9 hours in a day. At least half an hour rest should be provided after 5 hours.
Total period of work inclusive of rest interval cannot be more than 10.5 hours. A worker
should be given a weekly holiday. Overlapping of shifts is not permitted. Notice of period
of work should be displayed.

Record of Workmen - A register (muster roll) of all workers should be maintained. No

worker should be permitted to work unless his name is in the register. Record of overtime is
also required to be maintained.

Leave - A worker is entitled in every calendar year annual leave with wages at the rate of
one day for every 20 days of work performed in the previous calendar year, provided that he
had worked for 240 days or more in the previous calendar year.

Child Employment - Child below age of 14 cannot be employed. [Section 67]. Child above
14 but below 15 years of age can be employed only for 4.5 hours per day or during the
night. [Section 71]. He should be certified fit by a certifying surgeon