IMPORTANT LABOUR AND

FACTORY LEGISLATIONS IN
INDIA

MADHU.T.K

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

 THE FACTORIES ACT, 1948

Act which makes it obligatory on the

part of the employer to provide for
the health, safety and welfare of the
workers employed.

MADHU , INC KANNUR

 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

MADHU , INC KANNUR

 PROVIDES for
Hours of work (adult) not to exceed 48 hours in a week or
9 hours in a day.
Relaxation: Where an adult worker is engaged in
urgent repairs.
Payment of Overtime wages for overstay at workplace @
twice the ordinary rate of wages.
** Provision relating to hours of work not applicable to
supervisory staff.
Weekly Holiday: No work for more than 10 days without a
day of rest.
Intervals of rest: half an hour for 5 hours of work
No child (who has not attained the age of 15 years) be
permitted to work.
Prohibition of employment of Women: No woman shall be
employed in any factory for more than 9 hours in any day
or between 7 pm and 6 am.

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

 Leave with Wages
@ 1day for every 20 days provided -----
240 days of work during preceding
year.
Days of lay off, paid holidays or leave days
considered
Encashment of unavailed leave: Encashable
at the present rate of wages.

MADHU , INC KANNUR

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
MADHU , INC KANNUR
 EMPLOYER TO KEEP THE FACTORY
PREMISES CLEAN
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. MADHU , INC KANNUR
 EMPLOYER TO ENSURE SAFETY
OF WORKERS
Fencing of Machines and Moving parts of machines
spindles, gears, pulleys, belts etc
Protection of eyes using screens or goggles from
excessive light or infra-red or ultra violet radiations
Precaution in case of Fire.
No woman or young person shall, unaided by
another person, lift, carry or move by hand or head
any material or tool exceeding the maximum limit
prescribed.
* Adult male 75 Kgs
* Adult female 30 Kgs
* Adolescent male 30 Kgs
* Adolescent female 20 Kgs
Safety Officer: Appoint a Safety Officer wherein 1000
or more workers are employed.
MADHU , INC KANNUR
EMPLOYER TO LOOK AFTER THE
WELFARE OF EMPLOYEES
Washing facility separately for women and men
Separate rooms for men and women for drying of clothes
Separate rest rooms for men and women
First Aid boxes equipped with prescribed medicines
Ambulance room where 500 or more are employed
Canteen for use of workers where 250 or more are
employed (150 under Plantation Labour Act)
Lunch room where 150 or more are employed
Crches where 30 or more women are employed
Appoint WELFARE OFFICER (S) where 500 or more are
employed (300 under PLA)
The duties, qualification and conditions of service of such
welfare officers shall be in accordance with the rules of the
respective State Govt.
NOTICE OF DANGEROUSMADHU OPERATIONS
, INC KANNUR
REGISTERS TO BE MAINTAINED
Attendance Register/ Muster roll in form 25
Register of Adult Workers in form 12
Record of Lime washing, painting etc in form 7
Register of Compensatory Holidays in form 9
Overtime Muster roll for Exempted workers in form 10
Register of Leave with Wages in form 15
Health Register in form 17 (in respect of persons employed
in occupations declared to be dangerous operations u/s 87)
Register of Accidents and Dangerous Occurrences in form 26
Particulars of Rooms in the factory in form 35.

MADHU , INC KANNUR

 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 MADHU , INC KANNUR
THE INDUSTRIAL EMPLOYMENT
(STANDING ORDER) ACT, 1946
Defines the terms and conditions
of service between the employer
and his employees.
Applies to every industrial
establishment wherein 100 (in some
States 50)or more workers are
employed
The Act extends to the whole of India

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

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

MADHU , INC KANNUR

 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
MADHU , INC KANNUR
 contd
Medical examination and aid in case of accident
Identification of workmen and issue of Identity
cards
Working time for different categories of
workmen
Record of age, qualification and experience
Entry, exit and liability for security checking
Shift working and weekly off
Attendance and late coming
Methods of applying for different kinds of leave
and extension of leave
Action for unauthorised absence

MADHU , INC KANNUR

 contd
National and festival holidays
Transfer
Apprehension of danger to the safety
and security of factory and its
personnels
Date of payment of wages/ salary
Overtime wages
Increment and promotion
Stoppage, closing or lay off of
establishment and strike
Resignation notice or payment in lieu
of notice to be given
Termination of employment and notice
or payment in lieu of notice required to
be served or made MADHU , INC KANNUR
 contd
Deduction from wages for fine imposed or
absence from duty or loss caused to the
property and recovery of employees
contribution to schemes like EPF, ESI and
Labour Welfare fund
Age of superannuation
Grievance procedure
Disciplinary action for misconduct
Punishment for misconduct and procedure for
imposition of punishment

MADHU , INC KANNUR

 contd
Service of notice
Issue of service certificate
Amendment of Standing order
Exhibition of Notices as whether if put
in the Notice Board or not

MADHU , INC KANNUR

 THE MATERNITY BENEFIT ACT,
1961
The Act extends to the whole of
India
Applies to every factory, shop or
establishment
Woman entitled to maternity
benefit not withstanding the
application of the Employees
State Insurance Act, 1948

MADHU , INC KANNUR

 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
MADHU , INC KANNUR
Eligibility

Work of 80 days in the 12 months

immediately preceding the date of
delivery.
Leave days & lay offs taken as
worked.

MADHU , INC KANNUR

 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.
MADHU , INC KANNUR
THE MINIMUM WAGES ACT, 1948
AN ACT TO PREVENT SWEATED LABOUR AND
EXPLOITATION OF LABOUR

The Act extends to the whole of India

Requires the Central and State Govt. to fix minimum

rates of wages in certain scheduled employment.

Minimum wages fixed REVISED from time to time

MADHU , INC KANNUR

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.
MADHU , INC KANNUR
THE WORKING JOURNALISTS (FIXATION OF
RATES OF WAGES) ACT, 1958

Provides for the fixation of wages in respect of Working

Journalists and for matters connected therewith
MADHU , INC KANNUR
PAYMENT OF WAGES ACT, 1936
An Act to regulate the payment
of wages to certain classes of
persons
Extends to the whole of India
Responsibility of payment wages rests
with the employer
Employer to fix Wage Period
No wage period shall exceed one
month.
MADHU , INC KANNUR
 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

MADHU , INC KANNUR

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.
MADHU , INC KANNUR
 The Kerala Payment of
Subsistence Allowance Act, 1972

Act to provide for the payment of

subsistence allowance to the
employees during the period of
suspension
Extends to the whole of Kerala

MADHU , INC KANNUR

Suspension

Any interim decision of an employer

debarring an employee temporarily from
attending his office

MADHU , INC KANNUR

Payment of Subsistence
Allowance
50% of wages for the first ninety days of
suspension
75% of wages for the period beyond
ninety days
Full wages for the period beyond one
hundred and eighty days

MADHU , INC KANNUR

Not eligible for Subsistence
Allowance

An employee placed under suspension

not entitled for subsistence allowance if
he accepts employment during the
period of suspension

MADHU , INC KANNUR

 THE PAYMENT OF BONUS ACT,
1965
An Act to provide for the payment of Bonus to
persons in certain establishments on the
basis of profits, production or productivity.
Extends to the whole of India.
Applies to every establishment wherein 20 or
more are employed
The Appropriate Govt. shall apply the Act to
any other establishment, including a factory
to which the Factories Act, 1948 applies,
wherein less than 20 workers are employed
provided the number of persons employed is
not less than 10.
MADHU , INC KANNUR
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

MADHU , INC KANNUR

For calculating the
number of working days
the days for which the worker has been
laid off
the days he has been on leave with pay
the days he has been absent due to
temporary disablement caused by an
employment injury
the days a woman employee has been on
maternity leave
shall be taken in to account.
MADHU , INC KANNUR
 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.

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

THE PAYMENT OF GRATUITY
ACT, 1972
The Kerala Industrial Employees
Payment of Gratuity Act, 1970, followed
by the West Bengal Employees Payment
of Compulsory Gratuity Act, 1971 and
the intention of the other States to have
similar Acts in their respective states
necessitated the Central Act so as to
avoid different treatment to employees
of establishments having branches in
more than one states who are subject to
transfer from one state to another.

MADHU , INC KANNUR

The Payment of Gratuity Act, 1972
extends to the whole of India.

Applies to every factory, mine,

plantation and other establishment
wherein 10 or more workers are
employed.

MADHU , INC KANNUR

 Gratuity is in the nature of
a retirement benefit
payable
It is not paid to an
to an employee
employee for
gratuitously or
merely as a matter of boon. It is paid for the
a long
service and
rendered meritorious
by him to the employer
(Delhi Cloth and service
General. Mills Co; Ltd
Vs The Workmen)
Then why it should necessarily be
denied to him when an employee is
dismissed for misconduct at a latter
stage of service ???
MADHU , INC KANNUR
 Gratuity is payable to an
employee on termination of his
employment after he has
rendered continuous service for
on his not less than five years
superannuation
on his resignation
on his death or disablement due to employment
injury or disease

MADHU , INC KANNUR

 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.

MADHU , INC KANNUR

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

MADHU , INC KANNUR

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
MADHU , INC KANNUR
 The average pay of the
monthly rated employee shall
be taken by
dividing the monthly salary/
wages by 26 and not by 30
MADHU , INC KANNUR
Piece rate workers and
Seasonal
establishments
For piece rated workers, average of the
three months wages immediately
preceding the day of leaving shall be
taken as average rate of wage
An employee in a seasonal
establishment shall be paid @ seven
days wages for each season

MADHU , INC KANNUR

 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.

MADHU , INC KANNUR

 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.
MADHU , INC KANNUR
 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.

MADHU , INC KANNUR

 For seasonal employment 75%
attendance during a season
shall constitute service in a year

An employee who has worked for 4

years 11 months and 10 days not
eligible for gratuity as decided in P.
Raghavalu and Sons Vs Additional
Labour Court, Andhra Pradesh, as the
qualifying phrases part thereof in
excess of six months shall be taken
only for calculation of gratuity and not
for determining the eligibility of gratuity.
MADHU , INC KANNUR
 THE INTERSTATE MIGRANT
WORKMEN (REGULATION OF
EMPLOYMENT AND
CONDITIONS OF SERVICE) ACT
1979

Act to regulate the employment of

interstate migrant workers and to provide
for their conditions of service.

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

 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.

MADHU , INC KANNUR

 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.
MADHU , INC KANNUR
 Employer to ensure
Regular payment, equal pay for equal work
irrespective of sex, suitable conditions of
work, medical facilities, protective clothing
etc shall be ensured to such workmen.
The contractor to maintain register of
migrant employees, send report of
accidents, half yearly returns (From 23)
and annual returns (Form 24)
Employer contravening the provisions
liable for punishment of imprisonment or
fine or both
MADHU , INC KANNUR
 THE EQUAL REMUNERATION
ACT, 1976
Act provides for the payment of equal
remuneration to men and women
Extends to the whole of India
Act makes it obligatory on the part of
employer to pay equal remuneration to
men and women workers for same work
or work of a similar nature.
In order to make the wages equal,
prevailing wages shall not be reduced
but the higher rate shall be maintained.

MADHU , INC KANNUR

 No discrimination

No discrimination while making

recruitment for the same work or
work of a similar nature, except
where the employment of women
in such work is prohibited or
restricted by or under any law
for the time being in force.

No discrimination in any
condition of service subsequent
to recruitment such as
promotions, training or transfer.
MADHU , INC KANNUR
 THE APPRENTICES ACT, 1961
The Act extends to the whole of
India.
Applies to those apprentices who are
undergoing apprenticeship training in
designated trades.
From time to time, the Central Govt.
has specified the designated trades.

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

 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

MADHU , INC KANNUR

 NUMBER OF APPRENTICES
Depends on the ratio of trade
apprentices to workers other than
unskilled workers and the facilities
available and that may be made
available by the employer for training
the apprentices.

MADHU , INC KANNUR

 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

MADHU , INC KANNUR

 ITIs
if the number of apprentices to be trained is less
than twelve, then the employer may depute such
apprentices to any Basic Training Center or
Industrial Training Institute run by the
Government for basic training in any designated
trade.
Where an employer deputes any apprentice as
above, such employer shall pay to the
Government the expenses incurred by the
Government on such training, at such rate as
may be specified by the Central Government.

MADHU , INC KANNUR

 RI Centre

Apprentice to be given Related

Instruction course.
Timespent by a trade apprentice in
attending classes on RIC shall be treated
as part of his paid period of work.

MADHU , INC KANNUR

 EMPLOYERS to
ensure
Placement of Training Officer with
suitable qualification
Payment of stipend at a rate not less
than the prescribed minimum rate
Not to pay on the basis of piece work
Not to require to take part in any
output bonus or other incentive
scheme

MADHU , INC KANNUR

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
MADHU , INC KANNUR
 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.

MADHU , INC KANNUR

Obligation for employment
Itshall 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.

MADHU , INC KANNUR

 THE WORKMENS
COMPENSATION ACT, 1923
The Act provides for payment of
compensation to the worker
injured during the course of
employment or contracted by any
occupational disease peculiar to
that employment
Act extends to the whole of India.

MADHU , INC KANNUR

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. MADHU , INC KANNUR
The maximum compensation as per
W.C. Amendment Act 2000

FatalInjury - 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

MADHU , INC KANNUR

ESI Corporation and Workmen
compensation

Theliability of payment of
compensation shifted from the
employer to the Employees State
Insurance Corporation

MADHU , INC KANNUR

EMPLOYEES STATE INSURANCE
ACT, 1948
Act extends to the whole of India,
However
The ESI Scheme is being implemented
area-wise by stages.
The Scheme has already been
implemented in different areas in all
States/Union Territories except
Nagaland, Manipur, Tripura, Sikkim,
Arunachal Pradesh and Mizoram and UTs
of Delhi, Chandigarh and Pondicherry

MADHU , INC KANNUR

 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 Workmens
Compensation Act 1923.
MADHU , INC KANNUR
 Employees
covered
All employees drawing
salary of Rs 10,000 or less
are covered
(w.e.f 1-10-2006)

MADHU , INC KANNUR

Contribution
Employees contribution . 1.75% of wages
Employers contribution. 4.75 % of wages
Employees receiving a daily average wage upto
Rs.70/-(w.e.f 1-8-07) are exempted from payment
of contribution. Employers will however
contribute their own share in respect of these
employees.
pay contribution within 21 days.

MADHU , INC KANNUR

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
MADHU , INC KANNUR
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

MADHU , INC KANNUR

 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)

MADHU , INC KANNUR

EMPLOYEES PROVIDENT FUND
AND MISC. PROVISIONS ACT,
1952
An Act to provide for the institution of
provident funds, pension funds and
deposit linked insurance fund for the
employees in the factories and other
establishments
Extends to the whole of India except
the State of Jammu and Kashmir

MADHU , INC KANNUR

Applicability
Applies to all factories and
establishments in which 20 or more
are employed
Continuity of application
Exemption
Where employees get benefits
in the nature of provident fund or
old age pension fund from the
establishment which are not less
favourable than the benefits under
the Act.

MADHU , INC KANNUR

Schemes under the Act
Three beneficial schemes-

1.Employees Provident Fund Scheme

1952

2.Employees Pension Scheme 1995

3.Employees Deposit Linked Insurance 1976

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

 Contribution to EPF
Employees share : 12% of the Basic +
DA
Employers contribution : 12% to be
deposited as :

8.33% to be deposited in Pension Fund

A/C No 10 and
the balance, ie, 3.67% to be deposited
in Provident Fund A/C No 01 along with
Employees share of 12%
MADHU , INC KANNUR
 Contribution (contd.)
Administration charges -
@ 1.1% of the total wages/salary
disbursed by deposit to A/C No 02,
Employees Deposit Linked Insurance @
0.5% of the total wages/salary by
deposit to A/C No. 21 and
Administration of EDLI @ 0.01% of the
wages/ salary by deposit to A/C. No. 22.

MADHU , INC KANNUR

 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

MADHU , INC KANNUR

Benefits to employees

Provident Fund Benefits

Pension Benefits
Death Benefits

MADHU , INC KANNUR

 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

MADHU , INC KANNUR

 Pension Benefits
Pension to Member
Pension to Family (on death of member)
Scheme Certificate
This Certificate shows the service & family details of
a member
This is issued if the member has not attained the age
of 58 while leaving an establishment and he applies for
this certificate
Member can surrender this certificate while joining
another establishment and the service stated in the
certificate is added with the service he is gaining from
the new establishment.
After attaining the age of 50 or above, the member can
apply for Pension by surrendering this scheme
certificate (if total service is at least 10 years)
This is a better choice than Withdrawal Benefit, that if
a member dies holding a valid scheme certificate, his
family will get pension (Death when NOT in service)

MADHU , INC KANNUR

Pension benefit (contd.)
Withdrawal Benefit
if not eligible for pension, member may withdraw
the amount accumulated in his pension account
the calculation of this amount is based only on (i)
Last average salary and (ii) Service (Not based on
actual amount available in Pension Fund Account)
No amount is taken from Member to give Pension to the Member.
Employer and Govt. contribute to Pension fund @8.33% and
@1.16% respectively
EPFO guarantees pension to members, even if the Employer has
not contributed to Pension Fund.
Pension calculation is similar to that of Govt. Employee

MADHU , INC KANNUR

 Death Benefits
Provident Fund Amount to Family (or
to Nominee)
Pension to Family (or to Parent /
Nominee)
Capital Return of Pension
Insurance (EDLI) amount to Family
(or to Nominee)
No amount is taken from Member for this
facility. Employer contributes for this.
Nominee is basically determined as
per the information submitted by the
member at this office through FORM-2
MADHU , INC KANNUR
THE PLANTATION LABOUR ACT
1951
AN ACT TO PROVIDE FOR THE
WELFARE OF THE LABOUR, AND TO
REGULATE THE CONDITIONS OF
WORK, IN PLANTATIONS
It extends to the whole of India
except the State of Jammu and
Kashmir

MADHU , INC KANNUR

Applicability
Applies to any land used or intended to
be used for growing tea, coffee, rubber,
cinchona or cardamom or any other
plant which measures 5 hectares or
more and in which 15 or more workers
are employed on any day of the
preceding 12 months.
The State Government by notification
can apply this law to any other land
even if it measures less than 5 hectares
and employs less than 15 workers.

MADHU , INC KANNUR

 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
Crches 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.
MADHU , INC KANNUR
Hours of work and Limitations of
employment
Hours of work 48 hours per week which can be
extended to 54 hours with double the rate as
overtime wages
Weekly holiday
Daily intervals of rest
Prohibition of employing women workers
between 7 pm and 6 am
Annual Leave (with wages) @ 1 per 20 days work
Sickness and maternity benefits
Employer to furnish Notice of Accident
Employer to maintain a register of Accidents
MADHU , INC KANNUR
 THE INDUSTRIAL DISPUTES
ACT, 1947

An Act to make provision for the

investigation and settlement of
industrial disputes, and for
certain other purposes.

It extends to the whole of India

MADHU , INC KANNUR
 Industrial dispute
Any dispute or difference between
employers and employers, or
between employers and
workmen, or between workmen
and workmen, which is connected
with the employment or non-
employment or the terms of
employment or with the conditions of
labour, of any person.
MADHU , INC KANNUR
AUTHORITIES UNDER THIS
ACT
Works Committee
Conciliation officers
Boards of Conciliation
Courts of Inquiry
Labour Courts
Tribunals
National Tribunals
MADHU , INC KANNUR
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)
MADHU , INC KANNUR
 Conciliation officers
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.

MADHU , INC KANNUR

 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

MADHU , INC KANNUR

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

MADHU , INC KANNUR

 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.

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

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.
MADHU , INC KANNUR
Matters within the Jurisdiction of
Labour Courts (the II Schedule)

1.The propriety or legality of an order passed

by an employer under the standing orders;
2.The application and interpretation of
standing order;
3.Discharge or dismissal of workmen
including re-instatement of, or grant of relief
to, workmen wrongfully dismissed;
4.Withdrawal of any customary concession or
privilege;
5.Illegality or otherwise of a strike or lock-
out; and
6.All matters other than those specified in
the Third Schedule.

MADHU , INC KANNUR

 Matters within the Jurisdiction of
Industrial Tribunals (the III schedule)

1.Wages, including the period and mode of

payment;
2.Compensatory and other allowances;
3.Hours of work and rest intervals;
4.Leave with wages and holidays;
5.Bonus, profit sharing, provident fund and
gratuity;
6.Shift working otherwise than in accordance
with standing orders;
MADHU , INC KANNUR
 III schedule (contd.)
7.Classificationby grades;
8.Rules of discipline;
9.Rationalisation;
10.Retrenchment of workmen and
closure of establishment; and
11.Any other matter that may be
prescribed.

MADHU , INC KANNUR

 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
MADHU , INC KANNUR
 LAY-OFF AND
RETRENCHMENT
Noworkman (other than a badli
workman or a casual workman) whose
name is borne on the muster-rolls of
an industrial establishment wherein 50
or more workers are employed
shall be laid-off by his employer except
with the prior permission of the
appropriate Government.

MADHU , INC KANNUR

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

MADHU , INC KANNUR

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. MADHU , INC KANNUR
 Workmen not entitled to
compensation in certain cases
When a worker refuses to accept alternative
employment in the same establishment or
another establishment owned by the employer
and situated in the same village or town or
within 5 a radius of miles of the establishment.
When a worker does not present himself for
work at the establishment at the appointed
time during normal working hours at least
once a day
When such laying-off is due to a strike or
slowing-down of production on the part of
workmen in another part of the establishment

MADHU , INC KANNUR

Retrenchment of workmen
No workman who has been in continuous
service for not less than one year shall be
retrenched without giving one months
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.

MADHU , INC KANNUR

Retrenchment
Compensation
Fifteen days average pay for
every year (or part thereof in
excess of six months) of his
service

THIS IS APART FROM THE GRATUITY

PAYABLE UNDER THE PAYMENT OF
GRATUITY ACT

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

Notice to be given of intention to
close down any undertaking
An employer who intends to close down an
undertaking shall give at least sixty days notice
(Ninety days wherein not less than 100 workers
are employed) to the appropriate government
stating clearly the reasons for the intended
closure of the undertaking:
This section shall not apply to-
(a) an undertaking in which less than fifty
workmen are or were employed, or
(b) an undertaking set up for the
construction of buildings, bridges, roads,
canals, dams or for other construction work or
project.

MADHU , INC KANNUR

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

MADHU , INC KANNUR

 These shall not constitute
circumstances beyond the
control
financial difficulties (including financial
losses); or
accumulation of undisputed off stocks;
or
the expiry of the period of the lease or
license granted to it; or
in case where the undertaking is
engaged in mining operations,
exhaustion of the minerals in the area
in which operations are carried on
MADHU , INC KANNUR
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

MADHU , INC KANNUR

 RECOVERY OF MONEY DUE
FROM AN EMPLOYER
(section 33 C of ID Act)
Any sum due from the employer
under a settlement or an award is
recoverable in the same manner as
an arrear of land revenue
Application by the employee to be
received within ONE year.
Any sum capable of being computed
in terms of money shall be recovered
from the employer with the
intervention of Labour Court.
MADHU , INC KANNUR
UNFAIR LABOUR PRACTICES
On the part of employers
threatening workmen with discharge or
dismissal, if they join a trade union
threatening a lock-out or closure, if a trade union
is organised
granting wage increase to workmen at crucial
periods of trade union organisation, with a view
to undermining the efforts of the trade union at
organisation
an employer taking an active interest in
organising a trade, union of his workmen

MADHU , INC KANNUR

 Unfair-employer
(contd.)
To establish employer-sponsored trade
unions of workmen
discharging or punishing a workman,
because he urged other workmen to join
or organise a trade union
discharging or dismissing a workman for
taking part in any strike (not being a
strike which it deemed to be an illegal
strike under this Act)
changing seniority rating of workmen
because of trade union activities
MADHU , INC KANNUR
 Unfair-employer
(contd.)
refusing to promote workmen to

higher posts on account of their trade

union activities
giving unmerited promotions to
certain workmen with a view to
creating friction amongst other
workmen, or to undermine the
strength of their trade union
discharging office bearers or active
members of the trade union on
account of their trade union activities

MADHU , INC KANNUR

 Unfair-employer (contd.)
To discharge or dismiss workmen
by way of victimisation;
by falsely implicating a workman in a criminal
case on false or fabricated evidence;
on untrue allegations of absence without leave;
in utter disregard of the principles of natural
justice in the conduct of domestic enquiry or
with undue haste;
for misconduct of a minor or technical character,
without having any regard to the nature of the
particular misconduct or the past record of
service of the workman.

MADHU , INC KANNUR

 Unfair-employer
(contd.)
To abolish the work of a regular nature
being done by workmen, and to give
such work to contractors as a measure
of breaking a strike.
To transfer a workman mala fide from
one place to another, under the excuse
of following management policy.
To insist upon individual workmen, who
are on a legal strike to sign a good
conduct bond, as a precondition to
allowing them to resume work.

MADHU , INC KANNUR

 Unfair-employer
(contd.)
To show favoritism or partiality to one set
of workers regardless of merit.
To employ workmen as "badlis" casuals or
temporaries and to continue them as such
for years, with the object of depriving
them of the status and privileges of
permanent workmen.
To discharge or discriminate against any
workman for filing charges or testifying
against an employer in any enquiry or
proceeding relating to any industrial
dispute.
MADHU , INC KANNUR
 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

MADHU , INC KANNUR

 UNFAIR LABOUR PRACTICES
On the part of workmen
advise, support or instigate any strike deemed
to be illegal under this Act.
coerce workmen to join a trade union or refrain
from joining any trade union,
picket in such a manner that non-striking
workmen are physically debarred from entering
the work places
indulge in acts of force or violence or
intimidation in connection with a strike against
non-striking workmen or against managerial
staff

MADHU , INC KANNUR

 Unfair- employee
(contd.)
For a recognised union to refuse to
bargain collectively in good faith with the
bargain collectively in good faith with the
employer.
To indulge in coercive activities against
certification of bargaining representative.
To stage, encourage or instigate such
forms of coercive actions as willful "go
slow", squat on the work premises or
"gherao" of any of the members of the
managerial or other staff.
To stage demonstrations at the
residences of the employers or the
managerial staff members.

MADHU , INC KANNUR

 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.

MADHU , INC KANNUR

 The Trade Unions Act, 1926
An act to provide for the registration
of Trade Unions and in certain
respects to define the law relating to
registered Trade Unions.
It extends to the Whole of India

MADHU , INC KANNUR

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.

MADHU , INC KANNUR

 Sale Promotion Employees
(Conditions of Service) Act, 1976
An Act to regulate certain conditions
of service of sales promotion
employees in certain establishments,
in the first instance, engaged in
pharmaceutical industry
It extends to the whole of India

MADHU , INC KANNUR

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

MADHU , INC KANNUR

THANK YOU

MADHU , INC KANNUR