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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.

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Act which makes it obligatory on the part

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

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Act extends to the whole of
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
Application to factories with fewer workers
u/s 85

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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.

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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.

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

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The occupier (Employer) to
maintain a register LEAVE WITH
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
* shall be substituted by Electronic cards
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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. Raghubar Jha
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
* 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.
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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.
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.

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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 Raghubar Jha
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

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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.

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Standing Order drafted shall provide for

Date on which the standing orders

shall come in to force and shall
remain in force
Classification of workmen as
Permanent, Probationer, Badlis,
Casual and Trainees

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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

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Medical examination and aid in case of
Identification of workmen and issue of Identity
Working time for different categories of
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

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National and festival holidays
Apprehension of danger to the safety
and security of factory and its
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
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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

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

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The Act extends to the whole of India
except Jammu & Kashmir
Applies to every factory, shop or
Woman entitled to maternity benefit
not withstanding the application of
the Employees State Insurance Act,

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Employer to ensure
No woman works during the six
weeks immediately following the
day of her delivery or her
No woman does any arduous work
during the period of ten weeks
from the expected date of
Not to discharge or dismiss a
woman during her pregnancy
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Work of 160 days in the 12 months

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

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12 weeks leave of which not more than 6

weeks shall precede the date of her expected
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.
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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

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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.

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Provides for the fixation of wages in respect of Working

Journalists and for matters connected therewith
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An Act to regulate the payment of

wages to certain classes of
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.

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Time of Payment of wages

7th day of wage month where less than

1000 are working
10th day where more than 1000 are
No payment in KIND

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Permissible deduction from Wages
for absence from duty
for damage caused to the property of the
for the amenities provided, like house
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.

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The Kerala Payment of
Subsistence Allowance Act, 1972

Act to provide for the payment of

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

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Any interim decision of an employer

debarring an employee temporarily from
attending his office

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

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Not eligible for Subsistence

An employee placed under suspension

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

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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.

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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

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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.
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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.

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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.

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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.

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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.

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Gratuity is in the nature of a
retirement benefit payable to an
employee for a long and meritorious
It is not paid to an employee gratuitously or
merely as a matter of boon. It is paid for the
service rendered by him to the employer (Delhi
Cloth and General Mills Co; Ltd Vs The
Then why it should necessarily be denied to
him when an employee is dismissed for
misconduct at a latter stage of service ???
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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

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The payment of gratuity shall be
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

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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
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The average pay of the monthly rated
employee shall be taken by
dividing the monthly salary/ wages by
26 and not by 30

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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

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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.

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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.
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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.

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

Anemployee 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
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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.

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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.
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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.

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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

The contract of apprenticeship training is to

be sent to the Apprenticeship Adviser of the
respective area.

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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

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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.

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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

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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
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.

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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.

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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
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Employer to ensure (contd.)
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
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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.

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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
nor shall it be obligatory on the part
of the apprentice to accept an
employment under the employer.

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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.

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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. Raghubar Jha
The maximum compensation as per
W.C. Amendment Act 2000

Fatal Injury - Rs.4,57,080

Permanent Total Disablement -
Permanent Partial Disablement -
According to incapacity caused
Temporary Disablement - Rs. 2000 per
month upto a period of 5 years

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ESI Corporation and Workmen

The liability of payment of

compensation shifted from the
employer to the Employees State
Insurance Corporation

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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

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* 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.
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Employees covered
All employees drawing salary of Rs
21,000 or less are covered

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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
pay contribution within 21 days.

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Contribution Period and Benefit
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
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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

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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

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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
Extends to the whole of India except the
State of Jammu and Kashmir

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Applies to all factories and
establishments in which 20 or
more are employed
Continuity of application
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.
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Schemes under the Act
Three beneficial schemes-

1.Employees Provident Fund Scheme


2.Employees Pension Scheme 1995

3.Employees Deposit Linked Insurance

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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.

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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%

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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.

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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

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Benefits to employees

Provident Fund Benefits

Pension Benefits
Death Benefits

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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

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Pension Benefits
Pension to Member
Pension to Family (on death of member)
Scheme Certificate
This Certificate shows the service & family details of a
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)

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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

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Death Benefits
Provident Fund Amount to Family
(or to Nominee)
Pension to Family (or to Parent /
Capital Return of Pension
Insurance (EDLI) amount to Family
(or to Nominee)
No amount is taken from Member for
this facility. Employer contributes for
Nominee is basically determined as
per the information submitted by
the member at this office through
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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

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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.

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Works Committee
Conciliation officers
Boards of Conciliation
Courts of Inquiry
Labour Courts
National Tribunals
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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)
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Conciliation officers
Appointed by the appropriate
Duty: Settlement of industrial
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.
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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

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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

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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.

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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.

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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
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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
5.Illegality or otherwise of a strike or lock-
out; and
6.All matters other than those specified in
the Third Schedule.
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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;
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III schedule (contd.)

7.Classification by grades;
8.Rules of discipline;
10.Retrenchment of workmen and
closure of establishment; and
11.Any other matter that may be

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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-
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No workman (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.

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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
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
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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
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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

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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 50 workers are employed) in writing
indicating the reasons for retrenchment or
if no notice is given, wages in lieu of such
Retrenchment of workmen employed in an
establishment wherein not less than 50
workers are employed requires permission
from the appropriate Govt.

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


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Compensation to workmen in case of
transfer of undertakings

every workman shall be entitled to notice and

compensation as if the workman had been

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No compensation on transfer

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

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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 50 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

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Compensation to workmen in case of
closing down of undertakings

Compensation be paid as if workmen are

However no compensation is payable if the
establishment is closed down on account of
unavoidable circumstances beyond the
control of the employer

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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
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Procedure for retrenchment and
re employment
Retrench the last worker to be
appointed under a particular category

For re-employment, retrenched

worker shall have preference over
other persons

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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.
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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
an employer taking an active interest in
organising a trade, union of his workmen

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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

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Unfair-employer (contd.)
refusing to promote workmen to higher
posts on account of their trade union
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

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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.

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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

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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.

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Unfair-employer (contd.)
To recruit workmen during a strike which is
not an illegal strike.
Failure to implement award, settlement or
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

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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

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Unfair- employee (contd.)
For a recognised union to refuse to 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
To stage demonstrations at the residences of
the employers or the managerial staff

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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.

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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
It extends to the Whole of India

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The minimum number of workers to form a

registered Trade Union is 10% or 100
whichever is less, subject to a minimum of 7
Ensure that the number of members does
not fall down the above requirement.

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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
It extends to the whole of India

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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

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