Q. DISCUSS THE CONCEPT OF NATIONAL WAGE POLICY.

ANS:

Wage Policy in India:

Wage policy in India is a critical component of the country's economic and labor framework.
It plays a pivotal role in ensuring fair compensation to workers, maintaining industrial peace,
and promoting socio-economic development. Here are some key points about wage policy in
India:

1. **Minimum Wage:** The Minimum Wages Act, 1948, is a cornerstone of wage policy in
India. Under this act, both the central and state governments fix and revise minimum wages
for various categories of employment. These minimum wage rates are periodically reviewed
and updated to account for inflation and living costs.

2. **Fair Wage:** The concept of a "fair wage" is an important aspect of wage policy. It
ensures that wages are not only minimum but also fair, considering factors like the skill of
the worker, the nature of the job, and the cost of living.

3. **Equal Remuneration:** India has laws in place that promote equal remuneration for men
and women for the same work or work of a similar nature. This is aimed at reducing gender
wage gaps and promoting gender equality in the workforce.

4. **Living Wage:** While minimum wages are essential, there is also a growing emphasis
on ensuring that wages provide a decent standard of living. The concept of a "living wage" is
gaining traction, which takes into account the basic needs of a worker and their family.

5. **Regular Revision:** Wage policy in India involves periodic revision of wage rates.
Central and state advisory boards, consisting of representatives from employers, employees,
and government officials, often play a role in wage revision decisions.

6. **Industrial Relations:** Wage policies are closely linked to industrial relations.

Negotiations between labor unions and employers often revolve around wage revisions, and
the government may mediate in cases of disputes.

7. **Skilled Labor:** India's wage policy also recognizes the need to reward skilled labor and
promote skill development. Higher wages are often associated with greater skill and
expertise.

8. **Compliance and Enforcement:** Ensuring compliance with wage laws is a challenge in

India. Effective enforcement mechanisms are crucial to prevent exploitation of labor and
ensure that workers receive their due wages.
9. **Globalization Impact:** With globalization and economic reforms, India has seen shifts in
wage patterns, especially in sectors like IT and manufacturing. Wage policies must adapt to
these changes and balance the interests of employers and employees.

In summary, wage policy in India is a multifaceted framework aimed at ensuring fair

compensation for workers, reducing income inequality, and maintaining industrial harmony. It
evolves with changing economic conditions and social needs while striving to strike a
balance between the interests of workers and employers.

Q. DISCUSS THE THEORIES OF WAGES.

ANS:

The main theories of wages are:-

Wages Fund Theory:  This theory was developed by Adam Smith (1723-1790). His theory was based
on the basic assumption that workers are paid wages out of a pre-determined fund of wealth.  This
fund, he called, wages fund created as a result of savings. According to Adam Smith, the demand for
labor and rate of wages depend on the size of the wages fund.  According to this theory, therefore,
trade unions cannot raise wages for the labor class as a whole.  The efforts of trade unions to raise
wages are futile. If they succeeded in raising wages in one trade, it can only be at the expense of
another, since the wage fund is fixed and the trade unions have no control over population

Wages Fund Theory:  This theory was developed by Adam Smith (1723-1790). His theory was based
on the basic assumption that workers are paid wages out of a pre-determined fund of wealth.  This
fund, he called, wages fund created as a result of savings. According to Adam Smith, the demand for
labor and rate of wages depend on the size of the wages fund.  According to this theory, therefore,
trade unions cannot raise wages for the labor class as a whole.  The efforts of trade unions to raise
wages are futile. If they succeeded in raising wages in one trade, it can only be at the expense of
another, since the wage fund is fixed and the trade unions have no control over population

The Surplus Value Theory of Wages  This theory was developed by Karl Marx (1849-1883). This
theory is based on the basic assump-tion that like other article, labor is also an article which could be
purchased on payment of its price i.e. wages.  This payment, according to Karl Marx, is at
subsistence level which is less than in propor-tion to time labor takes to produce items. The surplus,
according to him, goes to the owner. Karl Marx is well known for his avocation in the favor of labor. 
According to Marx, labor is an article or commodity which can be purchased on payment of a price.
The price of any product is determined by the time and effort needed to produce it.  The laborer is
not paid in proportion to the time spent and the surplus goes to the management to meet other
expenses.

RESIDUAL CLAIMANT THEORY

This theory owes its development to Francis A. Walker (1840- 1897). According to Walker, there are
four factors of production or business activity, viz., land, labor, capital, and entrepreneurship.  He
views that once all other three factors are rewarded what remains left is paid as wages to workers.
Thus, according to this theory, worker is the residual claimant.  This theory admits the possibility of
increase in wages through greater efficiency of employees. In this sense, it is an optimistic theory;
the subsistence theory and wages fund theory were pessimistic theories.  According to Walker,
wages are the residue left over, after the other factors of production have been paid.

Marginal Productivity Theory PRAGYA SINGH  This theory was propounded by Phillips Henry Wick-
steed (England) and John Bates Clark of U.S.A. According to this theory, wages is determined based
on the production contributed by the last worker, i.e. marginal worker. His/her production is called
„marginal production‟.  This theory state that, under the condition of perfect competition, every
worker of same skill and efficiency in a given category will receive a wage equal to the value of the
marginal product of that type of labor.  The value of marginal net product of labor may be defined
as being the value of the amount by which output would be increased by employing one more
worker with the appropriate addition of other factors of production.

The Bargaining Theory of Wages  John Davidson was the propounder of this theory. According to
this theory, the fixation of wages depends on the bargaining power of workers/trade unions and of
employers.  If workers are stronger in bargaining process, then wages tends to be high.  In case,
employer plays a stronger role, then wages tends to be low.  According to this theory, there is an
upper limit and a lower limit of wage rates and the actual rates between these limits are determined
by the bargaining power of the employers and the workers.  John Davidson, the earliest exponent
of the bargaining theory of wages, argued that the wages and hours of work were ultimately
determined by the relative bargaining strength of the employers and the workers .

Behavioral Theories of Wages  Based on research studies and action programmes conducted, some
behavioural scientists have also developed theories of wages.  Their theories are based on
elements like employee‟s acceptance to a wage level, the prevalent internal wage structure,
employee‟s consideration on money or‟ wages and salaries as motivators.  Many behavioral
scientists — notably industrial psychologists and sociologists — like Marsh and Simon, Robert Dubin,
Eliot Jacques have presented their views of wages and salaries, on the basis of research studies and
action programmes conducted by them.

Q. DISCUSS THE ESSENTIAL FEATURES OF MINIMUM WAGES ACT 1948.

ANS:-

Features of Minimum Wages Act, 1948

1500 words • 20 min • 2nd Feb, 2023
Introduction: Need for Minimum Wages Act, 1948
The Minimum Wages Act, 1948 was enacted by the Indian Legislature to deal with matters
relating to providing the minimum wage to the workers so that they can afford their basic
needs and maintain a decent standard of livelihood. The Act further ensures a secure and
adequate living wage for all labourers and it also guarantees that an employee earns enough
to provide for his family. The Act authorises both Central and state governments in fixing the
rate of minimum wage. The Minimum Wages Act, 1948 has also laid down a provision for
revision of minimum wages in order to cope with the changing prices of basic commodities.

The Act seeks to provide better protection of the rights of the employees by establishing
advisory boards to resolve any dispute between the employer and employee regarding the
payment of minimum wage to the employees. The Act further appoints a Commissioner for
Workmen’s Compensation or any other officer of the Central Government exercising functions
as a Labour Commissioner for any region, with an experience as a judge in order to hear and
decide cases concerning non-payment or payment of less than the minimum wages to the
employees. The Act also states provisions for penalising any employer who fails to provide the
minimum wage to the employer and contravenes any rule or order made under the Act.

Objectives of Minimum Wages Act

The significance of the Minimum Wages Act, 1948 is mentioned below:

1. To fix the minimum rates of wages that are to be provided to the employees and revise
such rates of wages every five years.
2. To secure an adequate living wage for all the labourers in the interest of the public.
3. To fix the daily working hours of the employees.
4. To prevent exploitation of the workers by the employers.
5. To ensure that the labourers can maintain a decent standard of living.
6. To provide basic physical needs, good health and a level of comfort to the employees.
7. To penalise the employers when they fail to provide minimum wages to the workers.
8. To establish advisory boards to regulate and administer the provisions of the Act.
9. To lay down the powers and duties of the inspectors for the purposes of this Act.
10. To prevent any employer from wrongfully infringing the right of any employees.
11. To establish appropriate authorities where the employees can seek redressal when the
employer has failed to pay the daily wage.
12. To authorise the Central and state governments to make rules and regulations for the
purposes of this Act.

Application of Minimum Wages Act

The Minimum Wages Act, 1948 is applicable to the whole of India as laid down in Section 1 of
the Act. It applies to any employment if it employs 1000 employees in the respective state.
However, it does not apply to any employees in any undertaking owned by the Central
Government or of the federal railway, except with the consent of the Central Government.

Essential provisions under Minimum Wages Act-

The significant provisions of the Minimum Wages Act, 1948 are mentioned below.

Minimum rates of wages-

Under Section 3 of the Act, the minimum wages payable to the employees are to be fixed by
the appropriate government. However, this Section also mentions that the rate of wages shall
be revised every five years. The appropriate government may fix:

13. The minimum rate of wages for time work,

14. the minimum rate of wage for piece work,
15. a minimum rate of remuneration to apply in the case of employees employed on piece
work for the purpose of securing to such employees a minimum rate of wages on a
time work basis,
16. a minimum rate of wage to substitute the for the minimum rate which would otherwise
be applicable, in respect of overtime work done by employees.

In fixing or revising minimum wages under Section 3 of the Act:

17. Different minimum rates of wages may be fixed for; different classes of work, different
scheduled employment, different localities, different age groups, etc.
18. Minimum wages may be fixed by the wage period such as; by the hour, by the day,
etc.

Section 4 of the Minimum Wages Act, 1948 states that the minimum wages fixed by the
appropriate government must consist of: A basic rate of wages and a special allowance must
be adjusted at necessary intervals by the appropriate government to match the cost of living of
the employees.

Section 5 states that in order to fix or revise the minimum wage of the employees the
appropriate government may establish as many committees and subcommittees necessary to
hold enquiries in matters regarding fixing and revision of minimum wage.

Advisory board
Under Section 7 the appropriate government must appoint advisory boards for coordinating
the work of the committees and subcommittees mentioned in Section 5 and also for advising
the appropriate government generally in the matter of fixing and revising minimum rates of
wages.

Committees
Section 9 of the Act states that the members of committees, sub-committees, and Advisory
Boards shall be appointed by the appropriate government. Individuals who are appointed to
these committees shall be representatives of employers and employees in scheduled
employments and shall be equal in number. The appropriate government shall appoint such
an independent person to be the Chairman of the committee.

Fixing hours for a normal working day

Section 13 specifies that the appropriate government may:
 19. Fix the working hours of a normal day including one or more specified intervals.
20. Provide a day of rest in every period of seven days to all the employees or a class of
employees, and adequate remuneration must be provided to the employees during the
day of rest.
21. Provide payment to the employees on the day rest which shall not be less than the
overtime rate. When an employee works more than the specified number of hours
constituting a normal working day, the employer shall be liable to pay him for every
hour or part of the hour at the overtime rate fixed under this Act or under any law of the
appropriate government for the time being in force.

Inspectors
In this Act, the appropriate government by notification to the official gazette shall appoint
inspectors in a manner prescribed under the Act. The inspectors shall be liable to exercise
their functions within the local limits of their jurisdiction.

22. The inspectors shall enter the premises or places within the local limits of their
jurisdiction where the employees are employed to work in respect of which minimum
rates of wages have been fixed under this Act, for the purpose of examining the
register, record of wages, etc.
23. To examine any person on the premises or places who is an employee.
24. Seize or take copies of registers, records of wages, or other required documents under
this act which he may consider relevant in case of commission of any offence.
25. The inspector will be required to exercise any other power as may be prescribed under
the Act.

Penalties for offences

Section 22 of the Minimum Wages Act, 1948 an employer who fails to provide minimum rates
of wages to the employees or contravenes any rule or order made under Section 13 of the Act
shall be punished with imprisonment for a term which may extend to six months or fine not
less than five hundred rupees or both.

Exemptions of the employers in certain cases

When an employer is accused under this Act and brought before the court he will be exempted
from such offence under the following circumstances:

26. The employer has used due diligence in the execution of all the provisions of the Act.
27. The other person has committed the offence without his knowledge, connivance or
consent. Then in that case the other will be held liable as if he were the employer and
the employer will be discharged.

Q. DISCUSS THE MACHINERY FOR FIXATION OF MINIMUM WAGES.

ANS:
Fixation and Revision of Minimum Wages
By Sanskar01 | Views 23277

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The fixation and revision of minimum wages is an important aspect of labour and
employment regulations in many countries. Minimum wage laws are designed to
establish a baseline level of compensation that employers must pay to workers for their
labour. The purpose of these laws is to protect workers from exploitation, ensure fair
compensation, and provide a decent standard of living.

The process of fixing and revising minimum wages typically involves a combination of
legislative action, government agencies, and consultation with stakeholders such as
trade unions, employers' associations, and worker representatives. The specific
procedures and institutions involved can vary from country to country. The concept of
minimum wages in India was brought in the year 1920 by Mr. K.G.R Chaudhary, who
proposed the bill to formulate the policy of minimum wages at the International Labour
Conference.

The bill was brought in 1946, and by 1948, the bill of Minimum Wages Act was enforced
to save the rights of the workers. The provisions of the Act are intended to achieve the
objective of doing social justice to workers employed in the scheduled employment by
prescribing the minimum rate of wages for them. In other words, the Act aims to
provide a statutory fixation of minimum wages with a view to preventing the
exploitation of labor.

It's important to note that the specific processes and mechanisms for fixing and revising
minimum wages can vary significantly across different countries and jurisdictions. The
above overview provides a general framework, but the actual procedures and practices
may differ depending on the legal, economic, and political context of each country.

Objectives Of The Act

1. Ensuring Fair Remuneration:

One of the primary objectives of the Minimum Wages Act is to ensure that
workers receive fair remuneration for their labour. It aims to establish a
minimum wage level that provides workers with a decent standard of living,
taking into account factors such as the cost of living, inflation, and economic
conditions.

2. Preventing Exploitation:
The Act seeks to protect vulnerable workers from exploitation by setting a floor
on wages. It aims to prevent the payment of unreasonably low wages that can
 lead to unfair labour practices, including forced labour, sweatshop conditions,
and abusive employment relationships.

3. Reducing Income Inequality:

Minimum wage laws are often seen as a tool to address income inequality by
providing a basic level of income for workers. By establishing a minimum wage,
the Act aims to reduce wage disparities and ensure that workers at the lower
end of the income scale receive a fair share of the economic gains.

4. Promoting Social Justice:

The Minimum Wages Act is rooted in principles of social justice and aims to
create a more equitable society. It recognizes that workers deserve a living wage
that enables them to meet their basic needs, support their families, and
participate in society.

5. Stimulating Consumer Demand:

Another objective of the Act is to stimulate consumer demand and support
economic growth. By ensuring that workers have sufficient income to meet their
basic needs, it can contribute to increased consumer spending, which in turn can
drive economic activity and boost businesses.

6. Providing Social Protection:

The Act serves as a social protection mechanism by establishing a minimum
wage floor. It helps safeguard workers from extreme poverty and provides a
safety net for those in low-paid jobs. By ensuring a minimum level of income, it
can contribute to poverty reduction and social welfare.

7. Promoting Labour Standards:

Minimum wage laws often go hand in hand with other labour standards, such as
regulations related to working hours, overtime pay, and workplace safety. The
Act aims to promote and enforce these labour standards, ensuring that workers
are protected and their rights are upheld.

It's important to note that the objectives of the Minimum Wages Act may be influenced
by the specific social, economic, and political context of each country or jurisdiction. The
Act's effectiveness in achieving these objectives can depend on factors such as
enforcement mechanisms, compliance rates, and the level of cooperation among
various stakeholders, including employers, workers, and government authorities.

Minimum Rate Of Wages Under The Act

Under section 3 of the Minimum Wages Act, the minimum rate of wages fixed by the
Appropriate Government in respect of the scheduled employment consists of the
following:
The basic wages and house rent allowance may vary with the cost of living index.

The basic rate of wages with or without house rent allowance based on the cost of living
index number of the employee
All-inclusive rates for the basic rate of wages with the cost of living allowances and cash
value of concessional supply of materials
The term minimum wages has not been defined under the provision of the Minimum
Wages Act, 1948 presumably because it would not be possible to lay down a uniform
minimum wage for all industries throughout the country on account of different and
varying conditions prevailing from one industry to another.

Procedure For Fixation And Revision Of Minimum Wages

In India, the fixation of minimum wages is governed by the Minimum Wages Act, of
1948. The Act provides for the fixation and enforcement of minimum wages for various
scheduled employments across different industries and sectors.

Scheduled Employments:
The Act categorizes specific employments into schedules based on the nature of work,
industry, and geographic region. Each schedule includes different occupations or
industries for which minimum wages need to be fixed. The number and nature of
scheduled employment may vary from state to state.

As far as section 5 of the Minimum Wages Act is concerned, there are two modes of
procedures for fixing and revising the minimum wages. One common thing among both
of the procedures is to empower the Government in reaching a favorable result
regarding the fixation of minimum wage.

The two modes of fixing and revising minimum wages can be categorized as
follows:

1. Committee Method [Section 5(1)]

2. Notification Method [Section 5(2)]

Committee Method
Under the Minimum Wages Act, of 1948 in India, the committee method is a mechanism
used for the fixation and revision of minimum wages for certain scheduled
employments. The committee method involves the establishment of committees that
play a crucial role in conducting inquiries, examining relevant factors, and making
recommendations for the fixation and revision of minimum wages.

Here's an overview of the committee method under the Minimum Wages Act:

1. Minimum Wages Fixation Committee:

For certain scheduled employments, the appropriate government may constitute
a Minimum Wages Fixation Committee. This committee is tasked with conducting
inquiries and recommending the minimum wages to be fixed for the particular
employment.

2. Composition of the Committee:

The Minimum Wages Fixation Committee typically consists of representatives
from employers, employees, independent experts, and government officials. The
committee may include individuals with expertise in relevant fields such as
labour economics, industrial relations, or specific industries covered by the
scheduled employment.

3. Inquiries and Data Collection:

The committee conducts detailed inquiries and collects relevant data to inform
the process of fixing minimum wages. This may include studying factors such as
the cost of living, standard working hours, prevailing wage rates in similar
employments, skill requirements, and the capacity of employers to pay.

4. Examination of Factors:
The committee examines various factors that influence wage determination,
considering both economic and social aspects. These factors may include living
conditions, social needs, productivity levels, regional variations, and the impact
of proposed wage rates on workers and employers.

5. Stakeholder Consultation:
The committee may engage in consultations with stakeholders such as
employers' associations, trade unions, worker representatives, and other
interested parties. These consultations provide an opportunity for stakeholders
to present their views, concerns, and suggestions regarding the fixation and
revision of minimum wages.

6. Recommendations and Reports:

Based on the inquiries, data analysis, and stakeholder consultations, the
committee prepares a report containing its recommendations for the fixation or
revision of minimum wages. The report may outline the proposed wage rates,
the rationale behind the recommendations, and any additional provisions or
considerations relevant to the scheduled employment.

7. Government Decision:
The government reviews the recommendations made by the Minimum Wages
 Fixation Committee and takes a decision on the fixation or revision of minimum
wages. The government considers the committee's report along with other
relevant factors, such as economic conditions, legal requirements, and
administrative feasibility.

8. Notification and Implementation:

Once the government approves the minimum wages based on the committee's
recommendations, it issues a notification specifying the minimum rates of wages
applicable to the scheduled employment. This notification provides the legal
basis for employers to comply with the prescribed minimum wages, and it
includes details such as the effective date and any other relevant provisions.

The committee method ensures a consultative and evidence-based approach to the

fixation and revision of minimum wages, incorporating the perspectives of various
stakeholders and considering factors specific to the scheduled employment. It helps in
establishing fair and reasonable minimum wages that balance the interests of workers
and employers while promoting social justice and economic well-being.

Notification Method
Under the Minimum Wages Act, of 1948 in India, the notification method is used for the
fixation and implementation of minimum wages for various scheduled employments.
The notification method involves the issuance of an official notification by the
appropriate government specifying the minimum rates of wages applicable to the
scheduled employment.

Here's an overview of the notification method under the Minimum Wages Act:

1. Identification of Scheduled Employments:

The Act categorizes specific employments into schedules based on the nature of
work, industry, and geographic region. Each schedule includes different
occupations or industries for which minimum wages need to be fixed. The
number and nature of scheduled employment may vary from state to state.

2. Consultation and Advisory Boards:

Before fixing the minimum wages, the appropriate government may consult with
advisory boards or committees established under the Act. These boards consist
of representatives from employers, employees, independent experts, and
government officials. Their input may be considered in determining the
minimum wages for the scheduled employments.

3. Determination of Minimum Wages:

The appropriate government, either the central or state government, examines
relevant factors such as the cost of living, prevailing wage rates, standard
 working hours, skill requirements, and the capacity of employers to pay. Based
on these considerations, the government determines the minimum rates of
wages for each scheduled employment.

4. Preparation of Notification:
Once the minimum wages are determined, the government prepares an official
notification. The notification specifies the minimum rates of wages applicable to
each scheduled employment. It includes details such as the effective date, the
period of applicability, wage components (basic wages, dearness allowance, etc.),
and any other relevant provisions.

5. Publication and Legal Effect:

The notification containing the minimum wages is published in the official
gazette or other appropriate publications as required by law. Once published,
the notification carries the force of law, and employers in the scheduled
employments are legally obligated to pay their workers at least the prescribed
minimum wages.

6. Compliance and Enforcement:

The government designates labour inspectors or enforcement officers who are
responsible for ensuring compliance with the minimum wages specified in the
notification. These officials conduct inspections, receive complaints, and take
appropriate action against employers who fail to pay the mandated minimum
wages. Non-compliance may result in penalties or other legal consequences for
employers.

7. Periodic Revision and Amendments:

The government periodically reviews the minimum wages and may make
necessary revisions or amendments based on changing economic conditions,
cost of living, and other relevant factors. The revised minimum wages are
communicated through subsequent notifications, which supersede the previous
ones.

The notification method provides a legally binding mechanism for the fixation and
implementation of minimum wages. It ensures that employers are aware of their
obligations and workers are entitled to receive the prescribed minimum wages for their
labour. The method allows for transparency and uniformity in wage determination
across scheduled employment while facilitating compliance and enforcement.

Penalties
As per section 22 of the Minimum Wages Act, the penalties may be charged in the
case if:

• The employees pay less than the minimum wages prescribed by the Act
 • The employer does not comply with the provisions given in section 13 of the Act

If there is an act of omission of acts by the employer, then a notice specifying the same
can be exhibited in a prescribed manner on the premises in which the employment is
carried on.

• Fine: extending upto 500 rupees

• Imprisonment: 6 months

Q. DISCUSS THE CONCEPT OF BUNUS IN INDIAN LABOUR LAW.

ANS:

Payment Of Bonus Act, 1965

By Kavan@3600 | Views 130370

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The Payment of Bonus Act of 1965 imposes a contractual obligation on employers to

pay bonuses to employees in proportion to the resources available for the
establishment's smooth functioning. The Act's purpose was to give workers a say in the
company's profits and to enable them to earn slightly more than the minimum wage
based on their performance.

History Of Payment Of Bonus Act, 1965

The tradition of paying bonuses in India seems to have started during World War I,
when some textile mills gave their employees a 10% wage increase as a war bonus in
1917. In certain cases of labour disputes, the claim for bonus payment was also
included. The Full Bench of the Labour Appellate Tribunal established a bonus
calculation formula in 1950. In 1959, a demand was made to change the formula.

It was decided at the second and third meetings of the eighteenth Session of the
Standing Labour Committee (G.O.I) in New Delhi in March/April 1960 to appoint a
Commission to look into the issue of bonuses and develop appropriate norms. The
Government of India established a Tripartite Commission to examine the issue of bonus
payments based on earnings to employees working in establishments in a detailed
manner and make recommendations to the Government.

The Commission's recommendations were adopted by the Indian government with

some modifications. The Payment of Bonus Act of 1965 was enacted to carry out these
recommendations, and it went into effect on September 25, 1965.

Scope And Coverage Of The Payment Of Bonus Act, 1965

The Bonus Payment Act covers the entire India. It covers any establishment with twenty
or more employees on any given day during the accounting year, as well as any factory
as specified by the factories act of 1948. �Employee� is defined in Section 2 (13) of
the Act as any person (other than an apprentice) employed on a salary or wage of not
more than twenty one thousand rupees per mensem in any industry to perform any
skilled or unskilled manual, supervisory, managerial, administrative, scientific, or clerical
work for hire or compensation, regardless of whether the terms of employment are
express or implied.

The Act does not apply to the following classes of employees:

i. Employees employed in:

a. Life Insurance Corporation of India

b. Industry carried on or under the authority of any department of Central
Government or a State Government or a Local Authority.
c. Indian Red Cross Society or any other institution of like nature including
its branches;
d. Universities and other educational institutions;
e. Hospital, Chambers of Commerce and Social Welfare Institutions
established not for purposes of profits;
f. employed through contractors on building operations;
g. Reserve Bank of India;
h. Industrial Finance Corporation of India, Deposit Insurance Corporation
and other financial corporations being set up financially assisted by the
Government, and Unit Trust of India, Agricultural Refinance Corporation,
and Industrial Bank of India,
i. Seamen as defined in Sec. 3(42) of the Merchant Shipping Act, 1958;
j. Inland Water Transport establishment. (Section 32).

Objective Behind The Act

The objective of the Payment of Bonus Act, 1965 is to provide for the payment of bonus
to the persons employed in certain establishments on the basis of profits or production.
The object of the Payment of Bonus Act was very clearly described in Jalan Trading v
Mill Mazdoor Sabha 1, the Supreme Court observed that the purpose of the Bonus Act
was to maintain peace and harmony between labour and capital by allowing workers to
share the prosperity of the establishment and prescribing the maximum and minimum
rates of bonus, as well as the scheme of "set-off" and set - on to not only secure the
labour's right in the share of profits but also to ensure a reasonable degree of
uniformity.

Constitutionality Of The Act

The constitutional validity of the act was challenged in the Supreme Court in the case of
Jalan Trading Company Ltd. v. Mill Mazdoor Sabha2, on the grounds of violation of
Articles 14 and 19 of the Constitution. The Supreme Court ruled that the main provision
of the Act which required the payment of a minimum bonus was constitutional. The
payment of a bonus is fair since it complies with Articles 39 and 43 of the Constitution.

�Bonus� As Under The Act

The word "bonus" is not specified anywhere in the bonus payment act. A bonus is a
monetary reward that is above and beyond the standard payment. According to the
Cambridge dictionary, a bonus is an additional sum of money offered to you as a gift or
incentive for good performance. The primary goal of providing bonuses is to distribute
the company's profits to its workers and employees.

The bonus commission in its report suggested "It is difficult to define in rigid terms the
concept of bonus, but it is possible to urge that once the profits exceed a certain base,
labour should legitimately have a share in them. In other words, we think it to construe
the concept of bonus as sharing by the workers in the prosperity of the concern in
which they are employed.

This has also the advantage that in the case of low paid workers sharing in prosperity
augments their earnings to bridge the gap between the actual wage and the need-
based wage. If it is not feasible to better the standard of living of all the industrial and
agricultural workers as aimed at in Article 43 of the Constitution it is nothing wrong in
endeavoring to do so in respect of those workers whose efforts have contributed to the
profits of the concern in which they have worked.

The validity of such a conception of bonus is not affected by the difficulty of determining
or qualifying precisely the living wage or even the �need-based:� wage at any given
time and place. It appears tows that a properly conceived bonus system that is linked to
profit also imparts a measure of desirable flexibility to wage structure. The workers are
enabled to share in the prosperity of the concern without disturbing the underlying-
basic wage structure.�
Eligibility For Bonus Under The Act
The payment of bonus is a statutory right under the act and According to the Section 8
of the act, any employer who has worked for a minimum of 30 days in an accounting
year, shall be eligible for a bonus.

In East Asiatic Co. Ltd. Vs Industrial Tribunal 3, it was held that a retrenched
employee is eligible for bonus if they worked for a min of 30 days and have a salary of
10,000 pm in a year.

In the case of J. K. Ginning & Pressing Factory v. Second Labour Court, Akola &
Others 4, a factory employed ten seasonal employees, and the issue of their bonus
eligibility arose. The Bombay High Court ruled that the Act does not exclude such
seasonal workers from employment; the only criterion for eligibility is that they meet
the Section 8 requirements. As a result, even seasonal employees were deemed to be
entitled to bonus payments under the Act.

Disqualification From Bonus Under The Act

According to the sec 9 of the act an employee shall be disqualified from receiving bonus
under the Payment of Bonus Act, 1965, if he is dismissed from service for:

• Fraud, or
• Riotous or violent behavior while on the premises of the establishment, or
• Theft, misappropriation or sabotage of any property of the establishment

This provision is based on the recommendation of Bonus Commission, which stated

that:
After all, bonus can only be shared by those workers who promote the stability and
well-being of the industry, not by those who positively exhibit disruptive tendencies.
Bonuses, without a doubt, impose a duty of good behaviour.

The appellant, a bus conductor working for a government of Tamil Nadu undertaking,
was dismissed from service in Pandian Roadways Corporation Ltd. vs. Presiding
Officer 5. Following that, the petitioner and management reached an agreement, and
the petitioner as appointed as a new entrant. Following that, the petitioner claimed an
bonus of rs 1,842 for the duration after his re-appointment. the court ruled in the case
that " If an employee is dismissed from service, he is disqualified from receiving any
bonus under the said Act, not just the bonus for the accounting year," the court ruled.

In Gammon India Ltd Vs Niranjan Das 6, the court held that an employee who is
dismissed from service for fraud, riotous or aggressive behaviour on the premises of
the company, or who is guilty of theft, misappropriation, or sabotage of any
establishment's property is disqualified from receiving bonus for the accounting year
under section 9 of the Payment of Bonus Act, 1965. A dismissed employee who has
been reinstated with back pay has evidently not committed the above crimes and has
not been fired. As a result, he is entitled to a bonus.

Rights Of Employer And Employee

The Said act defines the rights available to the employees as defined below:

1. Right to claim bonus due under the Act, which allows them to make a request to
the government for payment and recovery of bonus amounts that are not paid
to them within one year of their due date
2. The right to take any dispute to a Labour Court or Tribunal; however, it is
necessary to remember that employees who are not entitled to bonuses are
unable to take their case to a Labour Court or Tribunal.
3. Right to seek clarity to obtain details about whatever products are in the name of
the business so that they can determine whether or not they are being fairly
compensated for their services.

The rights available to the Employer against any exploitation or the protection of
their business are given as below:

1. Rights to bring any dispute to the Labour Court or the Tribunal over a request for
an interpretation of any clause of the Act.
2. Right to deduct a fair amount from an employee's bonus on account of a bonus
already paid as a festival bonus or in the event of a monetary loss caused by the
employee's misbehaviour.
3. Right to deduct the value of a bonus paid to an employee who has been fired for
misbehaviour, offensive behaviour, or obstructing the establishment's land.

Payment Of Minimum Bonus

Section 10 of the Act states that, regardless of whether the employer has some allocable
surplus in the accounting year, each employer must pay each employee a minimum
bonus equivalent to 8.33 percent of the employee's salary or wage earned during the
accounting year, or one hundred rupees, whichever is greater. However, if an employee
is under the age of fifteen at the start of the accounting year, the terms of this Section
refer to that employee as if the words "one hundred rupees" were replaced with "sixty
rupees." Section 10 of the Act does not contradict Articles 19 and 301 of the
Constitution. Even if the employer loses money during the fiscal year, he must pay the
minimum bonus as according to section 10 of the act.
In J.K. Chemicals Ltd. vs. Govt. of Maharashtra7 the court held that the company
would not be relieved from its liability to pay minimum bonus, if the bonus liability is
negligible in comparison to the loss incurred. If the employer's damages were not
caused by employee wrongdoing, the employer must pay the statutory minimum
bonus.

Payment Of Maximum Bonus

If the allocable surplus for any accounting year referred to in Section 10 exceeds the
amount of the minimum bonus available to workers under that Section, the employer is
allowed to pay a bonus equal to each employee's salary or wage received during that
accounting year. In determining the allocable surplus under this Section, the amount set
on or set off under the provisions of Section 15 must be taken into account in
accordance with those provisions.

Provisions Related To Bonus Under The Code On Wages, 2019

The chapter relating to bonus payments under the code on wages applies only to
establishments employing at least 20 workers on any day during the accounting year,
similar to the provisions of the Payment of Bonus Act, 1965.

An annual bonus would be paid to all workers whose salaries do not exceed a certain
monthly sum (to be determined by the federal or state governments). Bonuses are paid
on the higher of the minimum wage or the wage limit set by the relevant government.
Along the lines of the Payment of Bonus Act, the Code on wages lists disqualifications
for receiving bonuses. It should be noted, however, that the Code also states that
removal from service due to a conviction for sexual assault would be provided a ground
for disqualification of bonus under the Code.

Conclusion
The Payment of Bonus Act of 1965 aims to legalise the practise of various
establishments paying bonuses. It provides a mechanism for calculating bonus based
on profit and performance. It allows workers to make more money than the minimum
wage or salary. This Act establishes various procedures for different types of
businesses, such as banks and government agencies, as well as businesses that are not
corporations or firms. This Act also establishes a rigorous redress process in addition to
the procedure.

Q. DISCUSS THE BASIC FEATURES AND MACHINERY OF EMPLOYEE COMPENSATION ACT

ANS:

Basics of Employee's Compensation Act, 1923

By Eshika Singla (Amity Law School, Noida) | Views 92106

10 3 14 Blogger5 pocket7 Digg6

The main objective behind implementation of the Employee's Compensation Act, 1923
was to provide payment by employers to employees in the form of compensation for
any loss or injuries suffered by employees in an accident. At the time of enactment this
act was referred to as Workmen Compensation Act but later on it was renamed
as Employee�s Compensation Act, 1923 on 18th January,2010[1] the reason behind
this is that now employees in clerical capacity are also entitled for compensation.

For any organization or company employees are considered to be the most asset and a
valuable resource. They play an integral role in success of a company. Their major or
key function is to achieve the desired goals in a company. In return they do expect
certain kind of security from the employers in the form of security of their jobs and
compensation for any sort of expenses incurred by them for the success of the
organization. An employee ensures the success for an organization by meeting
deadlines for work on time and ensuring customer satisfaction.

Now when it comes to employer it is very important to understand it's meaning well for that lets refer to section
2(e) of the Employee's Compensation Act 1923:

a. Anybody of person whether incorporated or not.

b. Managing agent of employer.
c. Legal representative of a deceased employer.

All these factors contribute for compensation to be paid to employees. But as every side
has two aspects similarly there are certain conditions where employers are not liable to
pay any sort of compensation to employee. The entire concept of employers non
liability is very well illustrated in Employee's Compensation Act, 1923.

Definitions:
Dependent According to section 2(d) of the Employee's Compensation Act 1923, the
word dependent includes the following relatives of a deceased person, such as:

1. a widow[2] of the deceased person, minor legitimate[3] child, unmarried

legitimate daughter or a widowed mother;
2. a son or daughter who has attained the age of 18 years and is infirm[4] or a
person who is completely dependent on the earnings of the employee at the
time of his death;
 3. a person who is partially or completely dependent on the earnings of deceased
employee, this may include:

a. a widower
b. a parent apart from widower mother
c. in case no parent of the workman is alive a paternal grandparent
d. a widowed daughter in law.

Dependant also includes some other relations in respect to person partially dependent.
But for an insight we can say that dependent is someone whose source of livelihood
was earning of that deceased workman.

Workman
The term workman includes any person (except those whose employment is of casual
nature or a person who is employed for the sake of employer's business or trade) who
is:

1. One who is not permanently employed in administrative, district or sub-

divisional office of a railway but is a railway servant as defined in section 3 of the
Indian Railway Act, 1890.
2. Employed as per specified in schedule II.

The Act is applicable to all such people who are employed as cook in hotel, liquified
petroleum gas, restaurants using power etc.

Partial disablement: According to section 2(1)(g) of Employee's Compensation Act,

1923 it can be classified into categories i.e.:
1. Temporary partial disablement:

It is a situation in which earning capacity of an employee decreases due to

temporary disablement to perform his duty in the course of employment.

2. Permanent partial disablement:

In such a situation the earning capacity of employee deemed to be reduce

permanently in every course of employment that he was capable of taking at
that point of time.

Total disablement According to section (2)(l) of Employee's Compensation Act, 1923 it

can be classified into two categories i.e.:
 1. Temporary total disablement

In this case the injury is such that it causes disablement of a nature which leads
to incapacity of performing any duty as he could at the time of accident.

2. Permanent total disablement- It includes any such injury as specified in part I of

Schedule I. Further total disablement includes those injuries as specified in part
II.

Employer's liability for compensation:

The whole purpose of the Act is to provide compensation to employees who suffer any
injury due to accident cause in course of employment. As per section 3(1) of the Act an
employer is liable to pay compensation to an employee under the following
circumstances:

1. In case any sort of mental, physical or bodily injury is injury caused to employees
i.e., personal injury takes place.
2. The accident that occurred out of or in the course o9f employment.
3. The injury caused is such that it leads to death, permanent or temporary
disablement or say partial or total disablement of employees.
4. The injury is cause out of employee- employer relationship.

Scope of arising out of employment:

The term arising out of employment includes conditions, nature, incident and obligation
of employment as well. If during work a worker gets injured due to any of the above
listed factors than it would be termed as injury arising out of employment.

Case law:
In Oriental Fire and General Insurance CO. Limited vs. Sunderbai Ramji[5] case, the
scope of term arising out of employment was determined by Gujarat High Court. In this
case the labourer was performing hard labour which involved physical exertion. One
day labourer after performing his duty for 3 hours felt a pain in chest and fainted on
spot. Later on, when taken to hospital he was declared dead.

Then on observing the case keenly the commissioner found out that it was his duty
which caused him physical discomfort and pain due to which he died and hence he
declared that labourer died due to nature of his job.
Furthermore. The High Court of Gujarat upheld the decision of commissioner that the
injury was caused under the subhead of arising out of employment as specified in
section 3(1) of the Act. It is a personal injury that led to his death and has direct nexus
with employment.

Scope of arising in course of employment:

The term arising in course of employment implies accident that took place in course of
employment. It involves injury arising out of the risk incident to employment. A very
important factor to make employer liable is that the work performed by employee was
at the time and place which is similar with employment.

Case law:
In National Iron and Steel Company Ltd. vs. Manorama[6] case, the deceased was a
boy working at a tea stall outside the factory, his duty was to serve tea to the employees
of the factory. One day after serving tea while he was on his way back from the factory,
he crossed a violent mob of workers, police in order to protect themselves shot at the
mob accidently bullet hit the boy and he was killed. The court held that since accident
took place during the working hours and at place of employment hence deceased boy
will be paid compensation.

Doctrine of Notional Extension:

The Doctrine of Notional Existence comes into force when there is any sort of link
between the time and place of work and accident, in such a compensation is payable by
employer to employee according to the provisions of Act. This doctrine was laid down in
following cases-

Case law
In Moondra and Co. vs. Mst. Bhawani[7] case, a truck driver after taking due
permission of the employer went inside the tank of truck to check the source of petrol
leak, he lighted a matchstick inside the tank due to which accident took place and driver
sustained huge burn injuries and eventually died. The court held that since accident
took place at the time and place of work hence dependents of employee were entitled
to compensation.

Conditions under which employer is not liable for payment of compensation:

According to section 3(1) of Employee's Compensation Act 1923, an employer is not
liable for payment of compensation in following cases or circumstances-
 a. In case the injury caused is such that it does not cause the entire or partial
disablement of an employee for a period exceeding three days.
b. If the injury, not leading to the death or permanent total disablement of
employee, is caused by an accident which is directly attributable to:

o If the employee at the time when accident took place is under the
influence of any sort of drugs or drinks due to which he is not in senses or
say right frame of mind.
o If he or she willfully disagrees or disobeys an order mentioned to them or
framed for their safety purpose.
o The willful denial or non-usage of any kind of safety equipment duly
provided to them for the purpose of securing their safety while
working.[8]

Under all the above-mentioned circumstances an employer is not liable to pay any sort
of compensation to employee because he or she is themselves responsible for the
injuries sustained by them as is clear from the conditions mentioned in section 3(1) of
Employee's Compensation Act.

Next ground is that the workman died due to heart attack and, therefore, it is a natural
death and it is not due to an accident arising out of his employment. The term Accident
has no clear meaning in the Workmen's Compensation Act, 1923.

It is a natural death and not accident.

Doctrine of Added Peril.

According to this doctrine whenever an employee outperforms his duty that is, he does
something which is not the part of his duty as well as it involves some sort of extra
danger, the employer cannot be held responsible to pay compensation for the injury
arising out of any such act of employee. This further disentitles the employee from
claiming any sort of compensation on the basis that such danger was taken by
employee at his own risk and same was not required by the employer in course of
employment.

Hence assuming that such injury caused is not arising out of employment employee will
not be entitled to any profit or compensation.

Case Laws:
In case of Devidayal Ralyaram vs. Secretary of State[9], a person appointed at a job
of fitter went under the operating machine to collect scrap in order to make out some
nuts and studs out of it. The machine when set in motion caused permanent injury to
the employ. On analysing the case it was drawn that fitter was prohibited from doing so
and it was not part of his duty to go under the machine and search for scrap. Hence all
the damage or injuries caused to fitter were due to his voluntary actions and there was
no duty imposed on him to do so. Further court held that employer can use doctrine of
added peril as defence for pleading non- liability in case of compensation.

In case of Lancashire and Yorkshire Railway Co. v. Highley[10], an employee

appointed a railway company while going to the messroom took the path through metal
lines being well aware of the goods train standing by side. Suddenly the train started
and employee was killed. On observing through clearly it was held that the accident that
took place arose out of the employee's negligence and risk taken by him it was not out
of the employment of employee. As a result of this observance court laid down the
doctrine of added peril as an imperative of injury arising out of employment.

Self-inflicted Injury
If an injury caused to employee is self-inflicted that is, they are themselves responsible
for the cause of the injury whether it may be intentional or accidental in such a case
employer may not be held responsible for payment of compensation. Jobs like Law
enforcement, medical employees, farmers, teachers, salesperson involves a very high
risk of self- inflicted injuries.

Self- inflicted injuries and suicides cannot be termed as accident in course of

employment.

Contributory Negligence
It is held that employees also have duty towards employers to perform their task with
utmost care and attention so as to avoid any sort of injury or accident. Although
employers are deemed to be vicariously liable for their employee's negligence but are
entitled to claim a contribution or indemnity from their negligent employee in
appropriate circumstances. However, in case there is negligence on the part of both
employer and employee then the employer is only liable to pay compensation to the
extent of his own negligence but not the employee.

Therefore, the only benefit is that the compensation amount may reduce because the
employer will not be liable to for any sort of negligence committed on the part of
employer.

Employer's liability when contractor is engaged:

Sometimes an employer instead of directly employing an employee for the sake of
doing work or trade may hire the same but through contractor. Now in such a case
what if an injury is caused to employee due to some accident whom is to be held
responsible? Section 12 of the Act defines the employer's liability in case contractor is
involved.

Section 12(1) of the Act defines employer's liability when contractor is engaged in certain circumstances:

1. When the contractor is involved in any sort of work which is part of the
employer's (principal) work.
2. The employees are involved in the course of employment of work.
3. The accident has occurred at the place where the principal i.e., employer has
undertaken to manage and execute the concerned work.

Amount of Compensation:
Section- 4 of the Employee's Compensation Act, 1923 defines amount of compensation
when Death results from injury- If the employee dies due to any such reason then
amount payable is equal to rupees eighty thousand or fifty percent of the monthly
wages multiplied by a factor as per mentioned in the Schedule 4 of the Act whichever is
more.

When permanent total disablement is caused by injury- If by any chance the employee
faces permanent total disablement due to injury then the amount payable is ninety
thousand rupees or sixty percent provided whichever is more.

When permanent partial disablement is caused by injury- In such a case the amount
payable is ninety thousand rupees or sixty percent of the disablement.

Liability of Insurer
Always remember that liability of insurer is determined on the basis of wages paid to
employees. The insurance policy covers the wages of employees and the insurer is
liable to pay only that part of amount as covered under wages. It is on the part of the
insurer to prove that injury caused is due to occupational disease.

Distribution of Compensation:
Section-8 of the Act talks about rights of heirs of dependents in terms of distribution of compensation

1. The amount of compensation will be deposited to the commissioner because no

direct payment of compensation can be made by employer to employee who is
injured and is dead. Also, in in case of legal disability no lumpsum payment can
be made.
2. Dependent receives the payment of compensation from employer in case the
employee is already dead. The amount of compensation shall be equal to three
months wage of the employee. In case the amount payable to dependent
exceeds it shall be deducted by commissioner and returned to employer.
3. In case of amount not less than 10 rupees shall be paid by commissioner on
behalf of that person.
4. In case when the amount of compensation is payable to a woman or any other
person who is legally not entitled then such amount deposited with
commissioner shall be paid by him to the person who is entitled to get it.
5. In case of lumpsum amount deposited with commissioner which is payable to a
woman or other person who is legally disable, then such an amount can be used
for the benefit of any other disable person.

Procedure in the proceedings before commissioner:

Section - 20 of the Act talks about this. A commissioner shall be appointed by the state
of central government. A specific may regulate the business in case state government
appoints more than one commissioner for a particular area. A commissioner can
choose any person to assist him in inquiry provided he possess a special knowledge.

Appeals:
Section-30 of the Act talks about appeals. An appeal can be made in front of High court
by orders of commissioner.

1. A lumpsum amount is awarded as compensation by way of an order,

redemption of half of the monthly payment is away.
2. Gain of a half monthly compensation shall be reduced by an order.
3. Compensation shall be distributed to the family of deceased by an order,
similarly a claim can be disallowed by an order.

Q. DISCUSS THE HEALTH AND SAFETY MEASURES AS MANDATED BY FACTORIES ACT 1948.

ANS:

Q. DISCUSS THE PROVISIONS OF EMPLOYEE WELFARE UNDER THE FACTORIES ACT.

ANS:

Welfare measures under the factories act: A Critical Appraisal

Apoorva Neral

Hidayatullah National Law University, Raipur (C.G)

ABSTRACT:
Welfare measures means such services, facilities and amenities as may be established in or in the
vicinity of undertakings to enable the persons employed in them to perform their work in healthy,
congenial surroundings and to provide them with amenities conducive to good health and high morale.
After the independence, the Government of India makes strict rules and regulations to safeguard the
interest of the workers in the factories. The present article pertains to the welfare measures provided to
the workers as per the provisions laid down in Chapter 5 (Section 42 to 50) of The Factories Act, 1948
for the benefit of employees of the factories. This article also tries to analyze the effectiveness of these
welfare provisions. It is analytical and descriptive in nature and doctrinal in approach.

KEY WORDS: Factories Act, Welfare Measures, Health, Security, Workers.

INTRODUCTION:
The term ‘Labour Welfare’ refers to the facilities provided to workers in and outside the factory
premises such as canteens, rest and recreation facilities, housing and all other services that contribute
to the wellbeing of workers. Welfare measures are concerned with general wellbeing and efficiency of
workers. In the early stages of industrialization, welfare activities for factory workers did not receive
adequate attention.

Employers were not inclined to accept the financial burden of welfare activities. Wherever employers
provided for such amenities, it was more with a paternalistic approach to labour rather than recognition
of workers’ needs. Hence the state had to intervene, in discharge of its welfare responsibility, by using
its persuasive powers and/or by enforcing legislation, where persuasion failed. Compulsory provisions
are thus incorporated in the Factories Act, 1948 with respect to the health, safety and welfare of workers
engaged in the manufacturing process.

Working conditions of factory workers in India has been historically very pathetic. Due to poverty and
exploitation by factory owners, workers had practically no option. Due to an increase in industrial
activity in the latter half of the 19th century, attempts were made to improve the condition of the workers
many times by the reports of the Royal Commission through various acts. The act of 1948 builds upon
the act of 1934 after understanding the defects and weaknesses of the earlier act. An important change
was the widening the definition of a 'Factory' to include any industrial establishment employing 10 or
more people that uses power, or any industrial establishment that employs more than 20 people that
does not use any power. Other important changes were:

• The distinction between seasonal and non-seasonal factories was removed.

• Increasing the minimum age of children eligible to work from 12 to 14.
• Reducing the hours of work for children from 5 to 4 and a half.
• Prohibiting children from working after 7 PM and before 6 AM.
• Explicit and special focus on health, safety, and welfare of all sorts of workers.
Quality of Work Life might have different connotations to different persons but in academics it means
the degree to which the members of work organization are able to satisfy important personal needs
through their experiences in the organization. It refers to fair remuneration, safe and healthy
environment, opportunities for growth and the like. Better quality of work life leads to motivation and
satisfaction. The welfare aspect of the quality of work life plays a very significant role in increasing the
productivity of manpower in the organization.

WELFARE MEASURES
The welfare measures involve three major aspects which are - occupational health care, suitable working
time and appropriate salary. It refers to the physical, mental, moral, and emotional well-being of an
individual. The safe work environment provides the basis for the person to enjoy working. The work
should not pose a health hazard for the person. The welfare measures aim at integrating the socio-
psychological needs of employees, the unique requirements of a particular technology, the structure and
processes of the organization and the existing socio-cultural environment. It creates a culture of work
commitment in organizations and society which ensure higher productivity and greater job satisfaction
to the employees. The welfare measures are defined in the same way as defined by the I.L.O. at its
Asian Regional Conference, "A term which is understood to include such services, facilities and
amenities as may be established in or in the vicinity of undertakings to enable the persons employed in
them to perform their work in healthy, congenial surroundings and to provide them with amenities
conducive to good health and high morale."

Due to the welfare measures, the employees feel that the management is interested in taking care of the
employees that result in the sincerity, commitment and loyalty of the employees towards the
organization. The employees work with full enthusiasm and energetic behavior which results in the
increase in production and ultimately the increased profit.

The measures of welfare give result after a long period of time. It is a long process, so the management
has to keep patience while providing the welfare facilities for the employees. While deciding the welfare
facility for the employees, the management has to do discussions with the persons who are now going
to avail the facilities. The communication increases the cohesiveness between the management and the
employees and thus industrial relations improve.

Welfare measures in factories:

After the independence, the Government of India makes strict rules and regulations to safeguard the
interest of the workers in the factories. The welfare facilities are provided to the workers as per the
provisions laid down in Chapter 5 (Section 42 to 50) of 'The Factories Act, 1948' for the benefit of
employees of the factories. Analyzing the benefits of the welfare provisions, the management bears the
huge cost spend on the welfare activities. The experts have a firm opinion that by providing the welfare
facilities to the employees the productivity of the employees increases and ultimately profit increases.
According to Section 49 of 'The Factories Act, 1948' – "In every factory wherein five hundred or more
workers are ordinarily employed the occupier shall employ in the factory such number of welfare
officers as may be prescribed". The major role of welfare officer is to facilitate and observe the welfare
measures for the employees in the organization.

Workers’ Participation in Management:

Workers’ Participation in Management (W.P.M.) is the tool of employee welfare and this encourages
the employees to work hard for more productivity which ultimately increases the turnover of the
organization. In WPM method, the management takes the decision with the consultancy and consensus
of the workers. The workers are given the proper role and participation in the decision making process.

It has been found that the workers, the executives and the management people are all responsible for
the proper implementation of the welfare measures in the organization.1

WELFARE PROVISIONS UNDER THE FACTORIES ACT, 1948

The Factories Act, 1948 is one of the major central legislation designed to regulate the working
conditions in the factories. It lays down all essential provisions relating to cleanliness, ventilation,
lighting, sanitary arrangements, health, safety & welfare of the workers in the factories. This Act is
applicable to the factories where in ten or more workers are working, or were working on any day of
the preceding twelve months and in which a manufacturing process is being carried on with the aid of
power or twenty or more workers without the aid of power.2

Provisions Regarding Health of the Factory Workers

To take care of the health of workers in factories, the Factories Act, 1948 has provided for certain
measures which are stated below:

(i) Cleanliness of the factory premises -

Every factory shall be kept clean and free from effluvia arising from any drain, privy or other nuisance.
It is specifically provided that in a factory -
— Accumulations of dirt and refuse shall be removed daily, by sweeping or any other method, from the
floors and benches of work rooms and from stair cases and passages, and disposed off in a suitable
manner;
— The floor of every room shall be cleaned. This shall be done at least once every week by washing,
using disinfectant or by some other effective method;
— Where a floor is liable to become wet in the course of any manufacturing process to such an extent
as is capable of being drained, effective means of drainage shall be provided.
— All inside wall and partitions, all ceilings or tops of rooms and all walls, sides and tops of passages
and staircases shall

a) Be painted or varnished, and repainted and revarnished at least once in a period of five years;
where they are painted or varnished, be cleaned at least once in a period of 14 months by such methods
as may be prescribed by the Government.
b) Where painting or varnishing is not required, be kept white washed or colour washed, and the
white washing or colour washing shall be carried out at least once in every period of 14 months.3

(ii) Disposal of Wastes and Effluents –

Effective arrangement shall be made for the disposal of wastes and effluents arising out of
manufacturing process in the factories.4

(iii) Ventilation and Temperature –

Provision to be made for ventilation and regulation of temperature in the factories. Effective and
suitable measures shall be adopted for securing and maintaining in every room -
— Adequate ventilation by the circulation of fresh air, and
— Such a temperature as will secure to workers reasonable conditions of comfort, and prevent injury
to health, and in particular the walls and roofs shall be of such material and so designed that such
temperature shall not exceed but kept within reasonable limits.
The state government shall prescribe the standards of adequate ventilation and reasonable temperature
for any factory or part thereof.5

(iv) Dust and Fume –

In every factory, where due to manufacturing process, dust or fume or other impurity arise which is
likely to be injurious to the health of workers employed, effective measures shall be taken to prevent its
inhalation, and accumulation in any workroom. If it is necessary to install exhaust appliances, it would
be installed near the point of origin of the dust, fumes, or other impurity. Measures shall be taken to
enclose such points.6

(v) Artificial humidification –

Artificial creation of humidity is employed in India in cotton textile mills and in cigarette making
factories. In respect of factories, where humidity of the air is artificially increased, it is provided to
make rules—
— Prescribing standard of humidification;
— Regulating the methods used for artificially increasing the humidity of the air;
— Directing prescribed tests for determining the humidity of the air to be correctly carried out and
recorded, and
— Prescribing methods to be adopted for securing adequate ventilation and cooling of the air and the
work rooms.7

(vi) Overcrowding –
No room in any factory shall be overcrowded to such an extent which becomes injurious to the health
of the workers employed therein. The Chief Inspector of factories by order in writing shall fix the
maximum member of workers to be employed in each room in the factory.8

(vii) Lighting –
The Factories Act provides for sufficient and suitable lighting, natural or artificial where workers are
working or passing through. Provision of cleaning of inner and outer surface is provided for all glazed
windows and skylights used for the lighting of the workrooms. In every factory, effective provision
shall be made for the prevention of
a) glare, either directly from a source of light or by reflection from a smooth or polished surface;
b) the formation of shadows to such an extent as to cause eyestrain or the risk of accident to any
worker.9

(viii) Drinking Water –

In every factory, effective arrangement shall be made at suitable places for sufficient supply of
wholesome drinking water. Such places shall be legibly marked ‘Drinking Water’ in a language
understood by a majority of the workers employed in the factory. In case of factories employing more
than 250 workers, provisions shall be made for cooling drinking water during hot weather by effective
means, and for its distribution.10

(ix) Latrines and Urinals –

The Factories Act requires that provision should be made for –
a) Sufficient latrine and urinal accommodation conveniently situated and accessible to workers while
they are in the factory;
b) Separate enclosed accommodation for male and female workers;
c) Such accommodation being adequately lighted and ventilated;
d) All such accommodation being maintained in a clean and sanitary condition;
e) Sweepers being employed to clean latrines, urinals and washing places.
Where the number of workers in a factory is more than 250 –
i) Latrines and urinals shall be of prescribed sanitary types;
ii) The floor and internal walls of the latrines and urinals shall be laid with glazed tiles;
iii) Floors and walls and the sanitary pans of latrines and urinals shall be thoroughly washed and
cleaned at least once in every seven days with suitable detergents or disinfectants or with both. 11

(x) Spittoons –
Sufficient number of spittoons must be provided in every factory and maintained in clean and hygienic
condition. No person shall spit within the premises of a factory except in the spittoons. A notice
containing this provision and the penalty for its violation shall be prominently displayed at suitable
places in the factory premises.12

Safety Provisions in the Factories Act

The Factories Act provides for the following safety measures:—

(i) Fencing of Machinery -

In every factory, measures should be taken for secured fencing of machinery. Safeguards of substantial
construction must be raised and constantly maintained and kept in position while the parts of machinery
(they are fencing) are in motion or in use.
Fencing is necessary in respect of:
— Every moving part of a prime mover;
— Headrace and tailrace of every water-wheel and water turbine;
— Every part of an electric generator, a motor or a rotary convertor;
— Every part of transmission machinery; and
— Every dangerous part of any other machinery.13
It was held in Caroll v. Andrew Barely and Sons Ltd.14 that the duties under Sec 21 is not only confined
to shutting off the employee from danger, but includes shutting in the machinery so that it cannot fly
out and strike the workmen if it breaks.

(ii) Work on or near Machinery in Motion –

Where in any factory, it becomes necessary to examine any part of machinery, while the machinery is
in motion, such examination shall be carried out only by specially trained adult male workers. Such
workers shall wear tight fitting clothing and their names shall be recorded in the register prescribed in
this connection. The machinery in motion with which such workers would otherwise be liable to come
in contact during the course of its examination, shall be securely fenced to prevent such contact. No
woman or young person shall be allowed to clean, lubricate or adjust any part of a prime mover or
transmission machinery, while the machinery is in motion.15

(iii) Employment of Young Persons on Dangerous Machines –

The Factories Act prohibits employment of young persons on certain types of machines as specified
under Sec.23 of the Act.

They can work only after they have been fully instructed as to the dangers arising in connection with
the machines and the precautions to be observed. They should have received sufficient training in work
at such machines. They should be under adequate supervision by a person who has a thorough
knowledge and experience of the machines.16

(iv) Striking Gear and Devices for cutting off Power –

In every factory —
i) Suitable striking gear or other efficient mechanical appliances shall be provided and maintained,
and used to move driving belts to and from fast and loose pulleys which form part of transmission
machinery. Such gear or appliances shall be so constructed, placed and maintained as to prevent the
belt from creeping back on to the fast pulley.

ii) Driving belts when not in use, shall not be allowed to rest or ride upon shaft in motion.

In every factory, suitable devices for cutting off power in emergencies from running machinery shall
be provided and maintained in every workroom.17

(v) Self-acting Machine –

No traversing part of a self-acting machine in any factory, and no material carried thereon shall, if the
space over which it runs, is a space cover which any person is liable to pass, whether in the course of
his employment or otherwise, be allowed to run on its outward or inward traverse within a distance of
eighteen inches from any fixed structure which is not a part of the machine. This is to safeguard the
workers from being injured by self acting machines.18

(vi) Casing of New Machinery –

Every set screw, bolt or key on any revolving shaft, spindle, wheel, or pinion shall be so sunk, encased
or otherwise effectively guarded as to prevent danger in all machinery driven by power and installed in
the factory.

The State government is authorized to make rules specifying further safeguards to be provided in respect
of any dangerous part of any particular machine or class or description of machines in this connection.19
(vii) Prohibition of Employment of Women and Children near Cotton openers –
No women or child shall be employed in any part of a factory where pressing a cotton–opener is at
work.20

(viii) Hoists and Lifts –

In every factory—
i) Hoists and lifts shall be of good mechanical construction, sound material and of adequate strength;
ii) They shall be properly maintained, and shall be thoroughly examined by a competent person at
least once in every period of six months. A register shall be kept containing the prescribed particulars
of each such examination;
iii) Every hoistway and liftway shall be sufficiently protected by an enclosure fitted with gates, and
the hoist or lift and every such enclosure shall be so constructed as to prevent any person or thing from
being trapped between any part of the hoist or lift and any fixed structure or moving part.
iv) The maximum safe working load shall be plainly marked on every hoist or lift, and no load greater
than such load shall be carried thereon.
v) The cage of every hoist or lift used for carrying persons shall be fitted with a gate on each side
from which access is afforded to a landing.
vi) Every gate shall be fitted with interlocking or other efficient device to secure that the gate cannot
be opened except when the cage is at the landing and that the cage cannot be moved unless the gate is
closed.

Where in the hoists and lifts used for carrying persons, the cage is supported by rope or chain, there
shall be at least two ropes or chains separately connected with the cage and balance weight, and each
rope or chain with its attachments shall be capable of carrying the whole weight of the cage together
with its maximum load.

Efficient devices shall be provided and maintained capable of supporting the cage together with its
maximum load in the event of breakage of the rope, chain or attachments. An efficient automatic device
shall be provided and maintained to prevent the cage from overrunning.21

(ix) Lifting Machines, Chains, Ropes and Lifting Tackles –

‘Lifting machine’ means any crane, crab, winch, teagle, pulley block, gin wheel, and runway. ‘Lifting
tackle’ means chain slings, rope slings, hooks, shackles and swivels.

In every factory, following safety measures shall be adopted in respect of every lifting machine (other
than a hoist and lift) and every chain, rope and lifting tackle for the purpose of raising or lowering
persons, goods or materials—
a) All parts including the working gear of every lifting machine and every chain, rope or lifting
tackle shall be -
a. of good construction, sound material and adequate strength, and free from defect;
b. properly maintained ; and
c. thoroughly examined by a competent person at least once in every period of twelve months.
b) No lifting machine and no chain, rope, or lifting tackle shall be loaded beyond the safe working
load which shall be plainly marked on it.
c) While any person is employed or working on or near the wheel track of a travelling crane in any
place where he would be liable to be struck by the crane, effective measures shall be taken to ensure
that the crane does not approach within twenty feet of that place.
A lifting machine or a chain, rope or lifting tackle shall be thoroughly examined in order to arrive at a
reliable conclusion as to its safety.22

(x) Revolving Machinery –

Effective measures shall be taken in every factory to ensure that the safe working peripheral speed of
every revolving vessel, cage, basket, flywheel, pulley disc or similar appliance driven by power is not
exceeded. A notice indicating the maximum safe working peripheral speed of every revolving
machinery shall be put up in every room in a factory in which the process of grinding is carried on.23

(xi) Pressure Plant –

If in any factory, any part of the plant or machinery used in a manufacturing process is operated at a
pressure above atmospheric pressure, effective measures shall be taken to ensure that the safe working
pressure of such part is not exceeded.24

(xii) Floors, Stairs, and Means of Access –

In every factory—
a) all floors, steps, stairs and passages shall be of sound construction and properly maintained, and
where it is necessary to ensure safety, steps, stairs, and passages shall be provided with substantial hand
rails;
b) there shall, so far as is reasonably practicable, be provided, and maintained safe means of access
to every place at which any person is at any time required to work.25

It was held in Davies v. Havill and Aircraft Co. Ltd.26 that no breach of statutory duty imposed under
this section is occasioned if an injury is caused by accumulation of rain water in little depression in the
concrete of the passage. In Cole v. Blackstone Co. Ltd.27 it was held that the obligation imposed by this
section is not discharged by saying that the occupier has taken all practical steps to ascertain the
goodness and efficiency.

(xiii) Pits, Sumps, openings in floor etc. –

In every factory, every fixed vessel, sump, tank etc. which may be a source of danger, shall be either
securely covered or securely fenced. Securely fencing a pit means covering or fencing it in such a way
that it ceases to be a source of danger.28

(xiv) Excessive Weights –

No person shall be employed in any factory to lift, carry or move any load so heavy as to be likely to
cause him an injury.29

(xv) Protection of Eyes –

If the manufacturing process carried on in any factory is such that it involves (a) risk of injury to the
eyes from particles thrown off in the course of the process or (b) risk to the eyes by reason of exposure
to excessive lights, effective screens or suitable goggles shall be provided for the protection of persons
employed on, or in the immediate nearness of, the process.30

In Finch v. Telegraph Construction and Maintenance Co. Ltd.,31 it was held that hanging of goggles in
the office room is not enough, but the workers must be informed of their whereabouts, only then the
requirements of Sec 35 can be said to have been complied with.

(xvi) Precautions against Dangerous Fumes and use of Portable Light -

i) No person shall enter any chamber, tank, vat, pit, pipe or other confined space in a factory in
which dangerous fumes are likely to be present to such an extent as to cause risk of persons being
overcome thereby;
ii) No portable electric light of voltage exceeding twenty four volts shall be permitted in any factory
for use inside any confined space. Where the fumes present are likely to be inflammable no lamp or
light, other than of flame–proof nature, shall be allowed to be used.
iii) No person in any factory shall be allowed to enter any confined space, until all practicable
measures have been taken to reverse any fumes which may be present and to prevent any ingress of
fumes.
iv) Suitable breathing apparatus, reviving apparatus and belts and ropes shall be kept in every factory
for instant use. All such apparatus shall be periodically examined and certified by a competent person
to be fit for use.
v) No person shall be permitted to enter in any factory, any boiler, furnace, chamber, tank, pipe, or
other confined space for the purpose of working or making any examination until it has been sufficiently
cooled by ventilation or otherwise to be safe for persons to enter.32

(xvii) Explosive or Inflammable Dust, Gas etc. –

If any manufacturing process in the factory produces dust, gas, fume, or vapour of such a nature as is
likely to explode on ignition, measures shall be taken to prevent any such explosion by:
— Effective enclosure of the plant or machinery used in the process;
— Removal or prevention of the accumulation of such dust, gas, fume or vapour;
— Exclusion or effective enclosure of all possible source of ignition.
Measures shall also be adopted to restrict the spread and effects of the explosion by providing in the
plant or machinery of chokes, baffles, vents, or other effective appliances.33

(xviii) Precautions in case of fire -

i) Every factory shall be provided with such means of escape in case of fire as may be prescribed;
ii) In every factory, the doors affording exit from any room shall not be locked so that they cannot
be easily and immediately opened from the inside while any person is within the room, and all such
doors, unless they are of sliding type, shall be constructed to open outwards.
iii) Every door, window or other exit affording a means to escape in case of fire shall be distinctively
marked in a language understood by the majority of the workers. Such marking should be in red letters
of adequate size or by some other effective and clearly understood sign.
iv) An effective and clearly audible means of giving warning, in case of fire, to every person shall be
provided in the factory.
v) A free passage–way giving access to each means of escape in case of fire shall be maintained for
the use of all workers in the factory.
vi) Effective measures shall be taken to ensure that in every factory all workers are familiar with the
means of escape in case of fire and have been adequately trained in the routine to be followed in such a
case.34

(xix) Safety of Building and Machinery –

In case it appears that any building, machinery or plant in a factory is in such a condition that it is
dangerous to human life or safety, the manager of the factory may be served an order specifying
measures to be adopted as prescribed. Further, in case it appears that the use of any building, machinery
or plant in a factory involves imminent danger to human life or safety, an order may be served
prohibiting the use of such building or machinery, until it has been repaired or altered.35

Welfare Provisions in the Factories Act

(i) Washing facilities -
The Factories Act provides for -
a) adequate and suitable facilities for washing for the use of workers in the factories. The workers
who live in crowded areas have inadequate facilities for washing at their homes, and bathing facilities
add to their comfort, health and efficiency.
b) Separate and adequately screened washing facilities for the use of male and female workers.
c) Such facilities being conveniently accessible, and being kept clean.36

(ii) Facilities for storing and drying clothes –

A suitable place for keeping clothes not worn during working hours shall be provided in every factory.
Facilities shall also be provided for the drying of wet clothes.37

(iii) Facilities for sitting –

For workers who are to work in a standing position, suitable arrangement for sitting shall be provided
in the factories. This is to enable workers to take advantage of any opportunity for rest which may occur
in the course of their work.38

(iv) First-aid appliances –

First-aid boxes or cupboards equipped with the required contents should be provided for workers in
every factory. This should be readily accessible to them during all working hours. The number of such
first aid boxes shall not be less than one for every 150 workers employed in the factory.
Such first-aid box shall be kept in the charge of a responsible person who is trained in first-aid treatment
and who shall be available during the working hours of the factory.

In factories employing more than 500 workers, there shall be an ambulance room. It should contain the
prescribed equipments, and be in the charge of such medical and nursing staff as may be prescribed. 39

(v) Canteens –
In factories employing more than 250 workers, there shall be a canteen for the use of workers. The
government may prescribe the rules in respect of the —
— Food stuff to be served in the canteen;
— Charges to be made;
— Constitution of a managing committee for the canteen; and
— Representation of the workers in the management of the canteen.40

It is true that so far as employer is concerned where the staff canteen has to be provided in pursuance
of this section it must be run on a no profit basis as prescribed by sub-rule (2) of Rule 85. But a
contractor who conducts the canteen not out of any philanthropic considerations but for profit carries
on a trade of keeping a catering establishment, for which he must obtain a licence, if provided under
the relevant statute.41

It was held by the Madras High Court in Elangovan M. and Others v. Madras Refineries Ltd. 42, that the
employees of a canteen run in compliance to statutory duty are workmen of the establishment running
the canteen for the purposes of Factories Act, 1948 only and not for all purposes.

In Haldia Refinery Canteen Employees Union and Another v. Indian Oil Corporation Ltd. and Others 43,
the respondent corporation was running a statutory canteen through a contractor. The workmen
employed by the contractor in the canteen claimed regularization in service of the corporation. The
Supreme Court held their claim as not sustainable because the control that the respondent corporation
exercised over the contractor was only to ensure that the canteen was run in efficient manner. Further
the corporation was not reimbursing to the contractor the wages of the workmen. Secondly two
settlements had been made between the contractor and the canteen workmen and the respondent was
not a party to either of them. Therefore, it was held that the workmen in canteen became workers of the
respondent corporation only for the purposes of the Factories Act, 1948 and not for any other purpose.

(vi) Shelters, restrooms and lunch rooms –

Adequate and suitable shelters, rest rooms, and lunch rooms with drinking water facility shall be made
in factories employing 150 workers or more. Workers can eat meals brought by them in such rooms.
Rest and lunch rooms shall be sufficiently lighted and ventilated. It shall be maintained in cool and
clean conditions.44

(vii) Creches –
In every factory, where more than 50 women workers are employed, provision shall be made for suitable
and adequate room for the use of children under the age of six years of such women. Such a room shall
be adequately lighted and ventilated.

It shall be maintained in clean and sanitary conditions under the charge of a woman trained in the care
of children and infants.45

(viii) Welfare Officer –

The factories Act also provides for employment of welfare officers with prescribed qualification to look
into the implementation of various facilities provided for. Such a provision exists in every factory
employing more than 500 workers.46
It was held in Employees’ Association of Northern India v. Secretary of Labour47, that the provision of
this section shall apply to those sugar factories also wherein five hundred or more workers are employed
for a few months in a year.

Under what circumstances and subject to what conditions, an employee’s services can be terminated
can well be the subject matter of a contract of employment, because conditions of service would take
in the termination of service and incidentally, the conditions subject to which such termination could
be brought about. That being so a rule imposing on the management obligation to secure the concurrence
of the Labour Commissioner before inflicting the punishment, cannot be said to fall outside Section
49(2) of the Factories Act.48

In Arun Kumar Bali v. Government of N.C.T. of Delhi and Others49, the petitioner was employed as a
Welfare Officer. As per his letter of appointment his services could be terminated by the employer either
by giving two months’ prior notice or by paying two months’ salary in lieu of notice. The service of
petitioner were terminated in terms of his letter of appointment. Feeling aggrieved by his termination
he moved a writ petition. Dismissing the petition the High Court held that the termination of Welfare
Officer’s service in terms of contract of employment could not be challenged as it was a termination
simpliciter in terms of stipulation contained in his letter of appointment.

Welfare facilities outside factory premises

In addition to providing welfare facilities in the factory premises, workers are also provided certain
benefits and facilities outside the factory. These include:
— maternity benefits;
— gratuity, pension and provident fund benefits;
— medical benefits;
— educational facilities;
— housing facilities;
— recreational facilities including sports and cultural activities;
— library and reading rooms;
— holiday home and leave travel facilities;
— consumers’ cooperative stores and fair price shops;
— vocational training; and
— transportation facility to and from the place of work.

Q. DISCUSS THE DIFFERENT TYPES OF WAGES.

ANS:

What are wages?

Professionals receive monetary compensation for their work hours, referred to as

wages. The amount and distribution method of wages depends on the
employer's payroll policies and other factors, such as legal restrictions. Wages are
generally paid bi-weekly or monthly, depending on the employer and employee's
agreement.
Wages come in different forms and are crucial to understanding the compensation
structures for various jobs. Here are the different types of wages and examples of jobs
that usually offer them:

1) Salary

A salary refers to a predetermined amount of money an employer pays to an employee

annually. The payments are usually spread throughout the year, according to
the employment contract. Jobs typically offer salaries include IT specialists, HR
generalists, marketing managers, accountants, business development coordinators,
physicians, registered nurses, and retail store buyers.

2) Hourly Wage

Hourly wages are a type of wage where employers pay employees for each hour
worked. This type of wage is common for part-time employment and sometimes full-
time employment. Jobs that offer hourly wages include retail, healthcare assistance,
sales, and construction.

3) Commissions

Commissions are typically offered to sales professionals by their employers in addition

to hourly pay or salaries. Employees earn a percentage of money from each sale they
make. Examples of jobs typically offering commissions include sales representatives,
retail store associates, talent acquisition specialists, and wholesale agents.

4) Fair Wage

A fair wage is a wage that employers offer their employees. It considers factors like the
cost of living in a particular area and typical wages for a job position. Fair wages usually
act as a midway point between minimum wage and a living wage. Jobs typically receive
fair wages, including housekeepers, virtual assistants, retail sales managers, home
health aides, and tech support specialists.

5) Overtime

Overtime wages are paid to employees for any work they complete that exceeds 40
hours per week. Typically, overtime pay includes double an employee's average
earnings during a 40-hour work week. Examples of jobs that usually offer overtime
include registered nurses, truck drivers, construction workers, tradespeople, EMTs, and
IT specialists.

Useful Read: Time Off in Lieu (TOIL): Balancing Employee Rewards and Work-Life
Harmony

6) Severance Pay
Severance pay refers to the type of wage employers pay to employees they have to let
go. The severance pay an employee receives usually coincides with the years they've
worked at the company. For instance, an employee who worked for a company for
three years would likely get three weeks of severance pay to help their transition.

Useful Read: What is Statutory Redundancy Pay? A Guide for UK Employers

7) Prevailing Wage

A prevailing wage is typically used in government contracting between agencies and

outside businesses. The U.S. Department of Labor provides various data to help
determine recommended payments for contractual workers. Prevailing wage may differ
depending on the state where a professional works contractually with the government.
Jobs that may receive prevailing wages include civil engineers, urban planners,
mechanics, construction workers, and construction supervisors.

8) Living Wage

Living wage refers to the minimum amount of money an employer can offer an
employee. Living wage is different from minimum wage because employers don't have
to follow legal guidelines like they would if they offered minimum wage to employees.
Examples of jobs that may receive living wages include receptionists, mail carriers, hair
stylists, nannies, and waiters.

9) Minimum Wage

The minimum wage refers to the set hourly rate the U.S. Department of Labor decides
upon. This figure varies depending on the state the individual works in. Jobs that offer
minimum wage include cashiers, grocery store clerks, dishwashers, and daycare
assistants.

10) Bonuses

Bonuses are cash compensation that employers provide to employees for producing
good work. Bonuses don't factor into salaried or hourly earnings and aren't guaranteed
to employees. This type of wage usually acts as an incentive for employees to reach a
certain level of productivity. Jobs that may offer bonuses include salespersons,
marketing specialists, recruitment specialists, and general managers.

11) Vacation Pay

Vacation pay is the money employers compensate employees for when they take time
off from work. This type of wage may vary depending on the employee's job position.
For example, a nurse might receive more vacation pay than someone in retail.
Employees eligible to receive vacation pay typically get two weeks of paid leave each
year.
12) Paid time off

Paid time off refers to the money employers pay employees for taking days off from
work when needed. This type of wage is usually provided as an additional benefit to
employees and is paid out in addition to their regular salary or hourly wage. Jobs that
may offer paid time off include nurses, customer service representatives, legal
assistants, teachers, and librarians.

Q. DISCUSS THE ADJUDICATION AUTHORITIES UNDER INDUSTRIAL DISPUTES ACT.

ANS:

MEANING OF INDUSTRIAL DISPUTE ACT

 An Act to make provision for the investigation and settlement of industrial

disputes, and for certain other purposes.

 It defined as 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 condition of labour of any person.

OBJECTIVES of the act

 To support measures for securing and preserving good relations between

employers and employees.

 To provide suitable machinery for the equitable and peaceful settlement of

industrial disputes.

 To prevent illegal strikes and lockouts.

 To afford relief to workers against layoffs, retrenchment, wrongful dismissal and

victimisation.

 To promote collective bargaining.

 To improve the conditions of workers.

 To avoid unfair labour practices.

Features of the Act

 The act applies to entire India also includes the state of Jammu and Kashmir.
 It favours arbitration over the disputes between employers and workers.

 It affords for setting up of works committees as machinery for mutual

discussion between employers and workers to promote friendly relation.

 The act paved the way for creating permanent conciliation machinery at various
stages having definite time limits for conciliation and arbitration.

 This act emphasis on compulsory adjudication apart from the conciliation and
voluntary arbitration of Industrial Disputes.

 The Act empowers the Government to refer the dispute to an appropriate

authority, i.e., Labour Court, Industrial tribunal and National tribunal
depending upon the nature of the dispute either on its own or on the request of
the parties.

Authorities under the Act

 Works Committee.

 Conciliation Officers.

 Board of Conciliation.

 Court of Inquiry.

 Labour Court.

 Industrial Tribunal.

 National Tribunal.

Works Committee

 The works committee is considered to be a powerful social institution only to

secure cooperation between workers and employers, but to make the will of the
employees effective on the management. According to section 3 of the Industrial
Disputes Act, in case of an industrial establishment which contains 100 or more
workmen are employed or have been employed on any day in the preceding
twelve months, the appropriate Government by ordinary or particular order,
acquire the employer to build a works committee containing of representatives
of employers and workmen engaged in the establishment. The number of
representatives of workers on Works Committee should not be less than the
number of representatives of the employers.

 Responsibilities of Work Committee

 To promote measures for securing and preserving good relations between the
employer and the workmen.
 To communicate upon subjects of their common interest or concern.

Conciliation Officers

 The appropriate government will appoint conciliation officers charged with the
duty of mediating in and promoting the settlement of the industrial disputes.
Those conciliation officers are appointed for a specified area or a specified
industry in a specified area, and his appointment may be permanent or
temporary.

 Responsibilities of Conciliation Officers

 In case of any industrial disputes exist, the conciliation officer should maintain
conciliation proceedings in a prescribed manner without delay to have the right
settlement.

 Whether the settlement is reached or not, the conciliation officer has to submit
the report within 14 days of the commencement of the conciliation proceedings
or within the date fixed by the appropriate government.

 If the report proposed in satisfied to the respective Government, it may refer or

not refer the dispute to any concerned authority under the Act. If the
Government is not performing any endorsement, it should record and
communicate the reason to the relevant parties.

Board of Conciliation

 Similarly, a board of conciliation also be constituted to promote the settlement

of industrial disputes. A board should consist of a chairperson and two or four
other members, as the appropriate government thinks fit. The chairman should
be an independent person, and the other member should be a person appointed
in equal numbers to represent the parties to the dispute on the recommendation
of the parties concerned. If any party refuses to make a recommendation within
the prescribed time, then the appropriate government can appoint such persons
eligible to represent the party.
 Responsibilities of Board of Conciliation
 When a dispute has been proposed to a Board, the board will investigate the
matter affecting the merits and right settlement of the dispute without delay.
 Whether settlement reached or not, the Board must submit the report within
two months of the date on which the dispute was proposed to it.

 If no settlement has arrived, the Government may refer the dispute to the labour
court, Industrial Tribunal or National Tribunal.
 The time for submission of the report will be extended by the period as agreed
by all the parties to the disputes
 The report of the Board should be in the written notice and has to be signed by
all the members of the Board.
 The appropriate Government should publish the report submitted within
30days from the receipt

 A Board of Conciliation only has the power to bring about a settlement. It has
no authority to impose a settlement on the parties to the dispute.

Courts of Inquiry

 The appropriate government will constitute a court of inquiry consisting

thirteen of one or more independent persons to inquire into any subject
connected with or relevant to an industrial dispute where a court consists of
two or more members any one of them will be appointed as chairman.

 Responsibilities of Courts of Inquiry

 A Court will inquire into the request raised to it and report to the appropriate
government within six months from the commencement of the inquiry.

 The report of the court will be in the form of a written statement and signed by
all the members of the court.

 Members are free to record their dissent. The report submitted will be published
within 30 days of its receipt by the Government.

Labour Courts

 he appropriate government will constitute one or more labour courts to

adjudicate industrial disputes relating to any of the following entities.

 The propriety or legality of an order passed by an employer under the standing

orders.

 The application and interpretation of standing orders.

 Discharge or dismissal of workers, including the retirement, grant of relief to

workers wrongfully dismissed.

 Withdrawal of any customary concession or privilege.

 The appropriate government will appoint a labour court which consists of one
person with the necessary judicial qualifications and will be appointed by the
appropriate government.

 Responsibilities of Labour Courts

 Adjudicate upon the industrial disputes regarding any subject specified in the
Second Schedule.

 When an industrial dispute has been proposed to a Labour Court for

adjudication, within the specified period, it should submit award to the
appropriate Government.

 The appropriate Government will publish it within 30 days from the date of its
receipt.
Industrial Tribunals

 The appropriate Government by notification in the legal Gazette will constitute

one or more industrial tribunals for the adjudication of industrial disputes
relating to any matters specified above as in the case of Labour Court, or the
following matters, namely

 Wages include the period and mode of payment

 Compensatory and other allowances; Hours of work and rest intervals.

 Leave with wages and holidays.

 Bonus, profit sharing, provident fund and gratuity.

 Shift working otherwise than by standing orders.

 Rules of discipline

 Rationalisation

 Retrenchment of workers and closure of establishment and Any other

subject which is prescribed.

National Tribunal

 A National Tribunal will consist of one person to be appointed by the Central

Government. To be qualified as a Presiding Officer of a National Tribunal, a
person must be or must have been a Judge of a High Court, or must have held
the office of the Chairman or any other member of the Labour Appellate Tribunal
for at least two years. The Central Government may appoint two assessors to
advise the National Tribunal, in proceedings before it.

 Responsibilities of National Tribunals

 When an industrial dispute is requested to the National Tribunal for

adjudication, it should submit its request to the appropriate government.

 The request should be in written format and also be signed by the presiding
officer of the National Tribunal.

 It should publish the request made within a period of 30days from the date of
its receipt by Central Government.

 _________________________________________________________________________

Q. DISCUSS THE JUDICIAL REVIEW OF INDUSTRIAL DISPUTES AWARD.

ANS:
Judicial Review of Industrial Awards
By Chandnigautam01 | Views 46907

15 3 4 Blogger3 pocket1 Digg3

Meaning and Definition of Award

Sec. 2(b) of the Industrial Dispute Act defines the term as follows award means an
interim or final determination of any industrial dispute or of any question relating
thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and
includes an arbitration award made under Sec. 10-A.
Where as in layman’s language an Award is the decision given by the adjudicator of
Labour Court, Industrial Tribunal or the National Tribunal and the arbitrator.

(i) Interim or final determination

The expression determination of any dispute means an adjudication of the dispute on
merits.
The word interim means when a particular issue is decided out of other issues and
report is submitted on that particular issue , it is known as interim determination.

Form of an Award:
Sec.16(2) of the Act simply states that the award of a Labour Court, Tribunal or National,
Tribunal shall be in writing and shall be signed by the presiding officer.

Publication of awards:
The adjudicator shall submit the award to the appropriate Government under section
15 of the I.D Act. The appropriate Government shall then within a period of thirty days
from the date of its receipt publish the award in such manner as the Government thinks
fit. . It is mandatory for the appropriate Government to publish the award, unless it is
prevented from doing so by an order of a Court of competent jurisdiction. The
appropriate Government is duty bound to publish the award, because unless the award
is published it cannot become enforceable under the scheme of the Act. But in public
undertaking government can defer with the period of 30 days for this government. has
to bring a notification into official gazette before the expiry of the 30thday or before
enforceability later after the notification government remains silent , award will
automatically become enforceable after the 90thday from the date of ion of the award.

If the Govt. want to temper with the award and presented the copy of award in the front
of parliament or state legislature , it will become enforceable after 15days of presenting
the copy.
Commencement or Enforceability of an award:
The award which has been published shall become enforceable on the expiry of thirty
days from the date of its publication.
Unless the award becomes enforceable, no rights and liabilities can arise under the
award. In other words, the obligations imposed by the award on the parties shall come
into effect immediately after the expiry of thirty days statutory period from the date of
its publication.

Coming into operation of an award:

Sec.l7-A(4) lays down that the award shall come into operation from such date which is
specified therein, but where no date is specified, it shall come into operation on the
date when the award becomes enforceable. The Act distinguishes between the
enforceability and coming into operation of an award. Coming into operation envisages
the date from which the benefits provided in the award shall be available to the parties.
The adjudicator, according to this Section, has discretion to bring the award into
operation from any date that may be specified in the award.

Persons on whom the awards are binding:

According to Sec.l8(3) of the Act, an award of a Labour Court, Tribunal
or National Tribunal, as the case may be, which has become enforceable shall be
binding on-
a) all the parties to the industrial dispute;
b) all other parties summoned to appear in the proceeding as parties to the dispute.

Period of operation of awards:

Sec.18(3) lays down that an award shall remain in operation for a period of one year
from the date on which the award becomes enforceable under Sec.l7-A. This one year
period of operation can be reduced or increased by the government under the
provisions of Sec.19 but government can’t exceed this period beyond 3 years.

# Awards which are operative are binding.

# After the expiry of the period of operation, award will be statutorily binding till this
award is terminated by giving a notice of 2 months by the party to other party or parties
. This notice can be given before the expiry of the operative period or thereafter. Unless
the award is terminated it continues to be binding after the expiry of the period.
# Still after the termination award will be bindings upon the parties till it is replaced by a
new award. The rationale behind this concept is that courts have observed there is
implied consent of both the parties.
Penalty for breach of award:
If any person commits breach of any term of award , he is liable for the punishment.
The punishment provided for is imprisonment which may extend upto 6 months or fine
or both.

Finality and Judicial Review of awards:

Sec.17(2) of the I.D. Act declares, Subject to the provisions of Section
17-A, the award published under sub-sec(l) shall be final and shall not be called in
question by any court in any manner whatsoever. This provision, first, seeks to oust the
jurisdiction of the civil courts against the awards of adjudicators under the Act.
Secondly, it implies that there is no appeal or revision against the awards.

Special Leave Petition

Under Article 136, the Constitution of India gives power to the Supreme Court to grant
special permission or leave to an aggrieved party to appeal against an order passed in
any of the lower courts or tribunals in India.

Meaning of Special Leave Petition

Special leave petition (SLP) means that an individual takes special permission to be
heard in appeal against any high court/tribunal verdict. Thus it is not an appeal but a
petition filed for an appeal. So after an SLP is filed, the Supreme Court may hear the
matter and if it deems fit, it may grant the ‘leave’ and convert that petition into an
‘appeal’. SLP shall then become an Appeal and the Court will hear the matter and pass a
judgment.

SLP Can Be Presented Under Following Circumstance

·It can be filed against any judgment or decree or order of any high court /tribunal in the
territory of India, or
·It can be filed in case a high court refuses to grant the certificate of fitness for appeal to
Supreme Court of India.
Who Can File SLP
Any aggrieved party can file an SLP against the judgment or order of refusal of grant of
certificate.

Grounds of SLP:
# When there is miscarriage of justice
# When there is flagrant violation of law
# When there is violation of principle of natural justice.

Scenario Under Labour Law:

If the industrial award is not satisfactory , award of any tribunal or court can be
challenged when there is miscarriage of justice , flagrant violation of law , or violation of
principle of natural justice.

JUSTICE KRISHNAN has asserted that the jurisdiction of Supreme Court regarding SLP is
limitless . This power of Supreme Court is residuary and it is known as the extra
ordinary power of the Supreme Court. Supreme Court of other countries doesn’t have
such power except the Supreme Court of India i.e. power to challenged the decision of
any court be it a tribunal or a court.

Under Article 136 a party can appeal only when the decision is given by a court or by a
tribunal. If the decision given by a body is not a court or a tribunal, party can’t appeal
under article 136.

So now the question arises whether the definition of industrial tribunal and court
comes under the definition of court and tribunal of article 136.

Leading case law:

Cooper v/s Wilson
In this case certain guidelines were issued regarding bodies who perform judicial
function:
# presentation of case before the court
# it involves ascertainment of facts
# if case involves legal question , let there be legal argument.
# there should be a decision of the case.

In order to determine the meaning of court and tribunal we have to see HALSBURY LAW
OF ENGLAND ,according to this:
# court is a body created by the state i.e. king or sovereign.

# the body created by state must enjoy entire judicial power of the state
# body must decide the dispute in a judicial manner i.e. procudre which is laid down in
Cooper vs Wilson must be followed.

In order to determine the meaning of tribunal and tribunal we have to see HALSBURY
LAW OF ENGLAND, according to this:
# tribunal is a body created by the state i.e. king or sovereign.
# the tribunal created by state doesn’t enjoy entire judicial power of the state, they have
got trapping of the courts i.e. limited power
# body must decide the dispute in a judicial manner i.e. procudre which is laid down in
Cooper vs Wilson must be followed.
Ultimately, labour courts and tribunal are tribunal within the meaning of article 136 i.e.
they have got limited judicial power within the meanng of article 136.

Q. ENUMERATE THE DEDUCTIONS PERMISSIBLE UNDER PAYMENT WAGES ACT 1948.

ANS:

Deductions from Wages

Notwithstanding the provisions of the Railways Act, 1989 (24 of 1989), an employer must pay the wages
of an employed person without deductions of any kind except those specified under the Payment of
Wages Act, 1936. A deduction can be made only in the following manner.

1. Fines (explained in Section 8)

2. Absence from duty (explained in Section 9)

3. Damage to or loss of goods expressly entrusted in the employed person (explained in

Section 10)

4. House-accommodation or other amenities or services that the employer provides

(explained in Section 11).

It is important to note that the term ‘services‘ does not imply the supply of tools and also the
raw materials required for fulfilling the job.

5. Recovery of Advances (explained in Section 12)

 a. The recovery of loans made from any fund constituted for labor welfare

b. Also, the recovery of loans granted for house-building or other purposes

Additionally,

• The income tax that the employed person is liable to pay

• Any deduction under the order of the court or any other competent authority

• Provident fund – subscription and also the repayment of advances

• Payments that the employee makes to cooperative societies

• Payment of premium of the life insurance policy to the Life Insurance Corporation of
India, of the employed person. Further, this requires written authorization from the
person employed.

• Payment of the contribution of the employed person towards any fund that the
employer or the trade union constitutes. This also requires written authorization from
the person employed.

• Payment of the fees for the membership of any trade union registered under the Trade
Union Act, 1926. Also, this requires written authorization from the person employed as
well.

• The payment of insurance premium on Fidelity Guarantee Bonds

• Recovery of losses which the railway administration sustains on account of the employed
person accepting counterfeit coins or mutilated or forged currency notes.

• If the railway administration sustains losses due to the employed person failing to invoice
or bill or collect or account for the appropriate charges, then the losses are recovered as
deductions.

• Recovery of losses which the railway administration sustains on account of the employed
person incorrectly granting any rebates or refunds

• A contribution that the employed person makes to the Prime Minister’s National Relief
Fund or any similar Fund which is notified in the Official Gazette. Further, this needs
written authorization from the person employed.

• A contribution to an insurance scheme that the Central Government may make for its
employees

Limit on Deductions

As per Section 7(3) of the Payment of Wages Act, 1936, the total amount of deductions cannot exceed:

1. 75 percent of the wages when the deductions are wholly or partly for payments to
cooperative societies.

2. 50 percent of the wages in every other case

Q. NARRATE THE PROCEDURE FOR DOMESTIC INQUIRY AND DISCIPLINARY ACTION AS PER
INDUSTRIAL DISPUTES ACT.

ANS:

The practice of Domestic Enquiry in organizations is increasing day by day. Domestic

Enquiry is identical to a trial in a court of law. Domestic Enquiry is initiated against the
offences committed in the establishment for misconduct, punishable under standing
orders/conduct and discipline rules and regulations of organizations. Domestic Enquiry
needs to be tackled according to the Principles of Natural Justice. In such enquiries, the
matter is decided by the disciplinary authority or administrative officers and not by the
courts of law. It is an investigation that is to be conducted by the management or employer
to examine the facts of the case and take appropriate disciplinary action, if necessary. It
allows employees to present their evidence and arguments and ensures that disciplinary
action shall depend on a thorough investigation of the facts.

Keywords:

Principle of Natural Justice, Nemo in propria causa judex, esse debet, Audi alteram partem,
internal investigation, the opportunity of being heard, appropriate disciplinary action.

Governed By:

Domestic enquiry is not considered as a legal requirement under the Industrial Disputes
Act, or other substantive laws such as the Factories act, Mines Act, etc. but has been
provided under the standing orders to be framed in the Industrial Employment (Standing
Order Act) 1946. As a result, it is now well-established that such standing orders have the
force of law and constitute statutory terms of employment

INTRODUCTION

• Domestic Enquiry

Domestic Enquiry is generally applicable for an enquiry into alleged indiscipline and
misconduct. Domestic Enquiry is a universally accepted concept that extends to all court
and enquiry jobs. It is common for disciplinary authorities in a department or industry to
appoint a competent person as an officer or officers to inquire into the allegations against an
employee. They are commonly referred to as “investigations” and are also known as
domestic enquiries.

Dismissing an employee without a fair and just domestic investigation amounts to a

violation of the laws of natural justice and is mortification to the Labour Courts/Industrial
Tribunals. As a result, adverse decisions or actions will be taken against the contractor.
In addition, the investigating officer cannot punish the employee when he verifies the facts,
evidence, and the Guilty Rules. Only the Supervisor or Approving entity, known as the
notified regulatory authority, can impose the penalty and take appropriate action.

• Principles Of Natural Justice

• Nemo in propria causa judex, esse debet

“No one should be made a judge in his own case, or the rules against bias”

• Audi alteram partem

“Hear the other party, or the rule of fair hearing, or the rule that no one should be
condemned unheard.

• Disciplinary Action

In common parlance, where domestic enquiry ends, disciplinary action begins.

Disciplinary action refers to the measures an employer initiates to address and resolve
employee misconduct or performance problems. Steps may be verbal or written warnings,
performance improvement plans, holding wages or salary for a short period, delay in
promotions, suspension, demotion, or termination of employment.

Disciplinary action is a tool in the hands of management to ensure compliance with the rules
and regulations of the organization. It is the source of enforcing the guidelines, rules,
regulations, and code of conduct of employees and dealing with the consequences and penal
provisions for non-compliance.

As per The International Labour Organization (ILO)

Disciplinary action is the process of dealing with an employee’s breach of organizational

policies or standards of behaviour. It involves communicating the problem to the employee,
investigating the situation, deciding on a course of action, and implementing the chosen
disciplinary measure.

PROCEDURE FOR DOMESTIC ENQUIRY

• Charge-sheet:

If there is enough evidence to support a case and the offence is serious, a charge sheet may
be issued based on the allegations made. The charge sheet must be in writing and include all
imputations of misconduct. It should also specify the time limit within which the charged
employee must submit their explanation.

• Suspension

When it is necessary for disciplinary reasons, a charged worker may be suspended and
entitled to wages during the suspension according to the standing orders.
 • Service of charge-sheet

If the workman is present, a charge sheet should be handed over to him in the presence of a
witness after explaining the contents of it in a language known to him.

If the delinquent workman is absent or refuses to accept the charge sheet, it should be sent to
his last address under registered post with acknowledgement due. If he refuses to accept it
or if it comes back undelivered otherwise, the charge- sheet should published in a local
newspaper with wide circulation.

• Explanation

The explanation given by the worker within the given time is considered valid.

• Notice of Enquiry

If the explanation is found unsatisfactory, a notice is served to the worker, the time, place,
and date of the enquiry, along with the name of the enquiry officer.

The enquiry officer must not be the one who has issued the charge sheet because it is a
principle of natural justice that a person should disqualified to act as a judge if he is a party
to the dispute.

• Enquiry

At the appointed time, on the stipulated date and place of the enquiry, it commenced by the
enquiry officer in the presence of a charge-sheeted workman.

At the commencement of the enquiry, the enquiry officer should explain the charge sheet to
the worker. If the charge-sheeted workman pleads innocence, the investigation is necessary
to conduct. If he accepts guilty in writing, the enquiry is not required.

• Fact-findings

On the completion of the enquiry, the enquiry officer should submit his findings to the
authority authorized to take disciplinary action. He should state in his report the charges
accompanied by the explanations. The enquiry officer should not recommend any
punishment in his findings.

• Decision

The higher management, such as the works manager or director, should consider the
investigation findings before taking disciplinary action. If the manager determines an
employee is guilty, they can impose appropriate punishment by standing orders.

• Service of the order

The charge-sheeted worker should be served with an order of punishment, if any, in this
way, completes the procedure for domestic enquiry.

MODES OF DISCIPLINARY ACTION

The disciplinary actions should be a corrective measure restraining further misconduct or

poor performance.

• Warning or Alerts:

This is the mildest form of disciplinary action that generally applies to minor offences.
Warnings may be given verbally or in written form. Verbal warnings are used for minor
misconduct, and if they do not produce the desired result, the organization may resort to
written alerts for more severe action.

• Written Notice:

When a warning does not work and if employees continue with the same misconduct, it
becomes necessary to issue a written notice implying a provision for certain punishment.

• Disciplinary Layoffs:

When an employee is subjected to disciplinary action, they may be temporarily prohibited

from performing their assigned tasks for a certain period. These temporary layoffs should
not be confused with layoffs caused by a lack of work. Typically, they last for several days or
weeks. Once the period of punishment is completed, the employee may resume their job.

• Lowering the status or Demotion:

It is initiated in circumstances when an employee does not meet his present job
requirements or standards. When he is lacking in his performance at a workplace, he will
continue at a lower rank than at his present in the organization.

• Fines:

It is the type of punishment in which the fine will deducted from the remuneration or wages
for his misconduct. A penalty is imposed on the employee if he breaks any rule repeatedly.

• Reduction in wages:

When an employee causes any loss or damage to the property in the organization, absent
without permission, taking undue advantages, etc. he is not paid with his entire
remuneration, and the amount of loss or damage will be deducted from his pay. This
approach usually has a demoralizing effect on the employee.

• Withholding increments:
It falls under a little harsh punishment. When an employee faces disciplinary action just
before an annual increment, his annual increment is on hold for a certain period.

• Loss of Privileges:

When an employee commits an offence, such as being late or leaving work without
permission, various privileges can be taken away as a punishment. These privileges may
include good job assignments, the right to choose machines or tools to work with, and the
freedom to move around the workplace or company.

• Punitive Suspension:

The difference between punitive and pending suspensions is that the former is a
punishment for misconduct.

• Termination of services:

When an employee is dismissed, it is usually the result of severe punishment, which is the
final step in disciplinary action.

Q.

Industrial Employment (Standing Orders) Act, 1946

• LABOUR

• CENTRAL

• ACT

A | A

•
 •

What are Standing Orders?

Standing Orders means the rules related to Classification of workmen, working

hours, Attendance, Conditions and Procedure for obtaining Leave and the
authority who may grant leave, Requirement to enter premises by certain gates,
Rights and liabilities of the employer and workmen arising from Closing and
temporary stoppages of work, Termination and Suspension or dismissal of the
workmen, Means of redress for workmen against unfair treatment or wrongful
exactions by the employer and Any other matter relating to industrial
establishments in coal mines as specified in the Schedule of the Act.

What are the Objectives of the Standing Orders?

1. To bring uniformity in terms and conditions of the employments.

2. To foster harmonious relations between employers and employees.
3. To make the conditions of service known to the workmen
4. To regulate the conditions of recruitment, discharge, disciplinary action,
leave, holidays, etc. of the workers employed in industrial establishments.

To Whom the Industrial Employment (Standing Orders) Act is applicable?

The Act is extends to the whole of India. Further, every industrial establishment
wherein one hundred or more workmen are employed, or were employed on any
day of the preceding twelve months will come under Industrial Employment
(Standing Orders) Act.

To whom the Industrial Employment (Standing Orders) Act is not applicable?

This Act is not applicable to those industrial establishments in which workmen

comes under or to whom the below mention Rules or Regulations applies:

1. Fundamental and Supplementary Rules;

2. Civil Services (Classification, Control and Appeal) Rules;
3. Civil Services (Temporary Service) Rules;
4. Revised Leave Rules;
5. Civil Service Regulations;
6. Civilians in Defense Service (Classification, Control and Appeal) Rules;
 7. Indian Railway Establishment Code or any other rules;
8. Regulations that may be notified in this behalf by the appropriate
Government in the Official Gazette.

What is the procedure for submission of draft Standing Orders?

1. Within six months from the date on which this Act becomes applicable to
an industrial establishment, employer shall submit to the Certifying Officer
five copies of the draft standing orders proposed by him for adoption in
Form I. It has to be accompanied by a statement giving prescribed
particulars of the workmen employed including the name of the trade
union, if any.
2. The Draft Standing Order shave to cover every matter set out in the Schedule
to the Act and more or less confirm to the Model Standing orders as
prescribed by the Government.

Certification of Standing Orders.

On receipt of the draft Standing Orders, the Certifying Officer shall:

1. Forward a copy to the workers’ trade union and if there is no such trade
union, to the representative of the workmen along with the notice in Form
II requiring their comments and objections, if any, which the workmen may
desire to make to the draft standing orders to be submitted to him within
fifteen days from the receipt of the notice.
2. The Certifying Officer shall certify the draft standing orders, after making
any modifications, and shall within seven days thereafter send copies of the
certified standing orders authenticated along with his to the employer and
to the trade union or other representatives of the workmen.
3. Standing orders shall come into operation on the expiry of thirty days (30
days) from the date on which authenticated copies are sent.

Duration and modification of Standing Orders:

1. Certified Standing Orders shall not be modified until the expiry of six
months from the date on which the standing orders came into operation.
2. An employer or workman or a trade union or other representative body of
the workmen may apply to the Certifying Officer to have the standing orders
modified along with the application accompanied by the five copies of the
modified standing orders and a copy of the agreement between employer
and workmen.

Duties of the Employer:

Payment of Subsistence Allowance:

1. It is mandatory for the employer to pay subsistence allowance to the

workmen who is suspended at the investigation or inquiry at the following
rates:
 1. For the First ninety days (90 days): at the rate of 50% (percentage
fifty) of the wages which the workman was entitled to immediately
preceding the date of such suspension and;
2. For Remaining Period: at the rate of seventy-five per cent of such
wages for the remaining period of suspension if the delay in the
completion of disciplinary proceedings against such workman is not
directly attributable to the conduct of such workman.
2. Employer of an industrial establishment is required to maintain Register of
standing orders and files the same with Certifying Officer in Form III.
3. Employer of an industrial establishment is required to post the text of the
standing orders in English and in the language understood by the majority
of his workmen on special boards at or near the entrance through which
workmen enter and in all departments.

Penalties:

1. Employer fails to submit draft orders or modifies certified orders without

following the procedures: Fine up to Rs. 5000/- plus up to Rs. 200/- per day
for continuing offense.
2. Employer act in contravention of the orders: Fine up to Rs. 100 plus up to Rs.
25 per day for continuing offense.
3. Prior approval of the appropriate Government is required for prosecution for
an offense under this Act and no court below Metropolitan or judicial
Magistrate of second class shall try any offense.

Frequently Asked Questions :

1. Who is employer?

Ans: owner of an industrial establishment to which this Act for the time being
applies, and includes:

1. Any person as manger in the factory;

2. Authority appointed in any industrial establishment under the control of any
department of any Government in India or where no authority is so
appointed, the head of the department;
3. in any other industrial establishment, any person responsible to the owner
for the supervision and control of the industrial establishment;

2. Who is certifying officer?

Ans: Labour Commissioner or a Regional Labour Commissioner, and includes any

other officer appointed by the appropriate Government, by notification in the
Official Gazette, to perform all or any of the functions of a Certifying Officer.

3. What are the conditions for certification of standing orders?

Ans: Standing orders will be certifiable if:

1. provision is made for every matter set out in the Schedule of the Act and
2. Standing orders are in conformity with the provisions of this Act.
Q. DISCUSS THE REMEDIES AVAILABLE TO WORKMENT UNDER PAYMENT OF WAGES ACT.

ANS:

Claims arising out of deductions from wages or delay in Payment of wages and Penalty
for Malicious or Vexatious Claims (2005 amendments)

A person named below will be chosen by the competent government to hear and decide all claims
arising from deductions from wages or delays in payment of wages of persons hired or paid,
including all things ancillary to such claims.

(a) any Commissioner for Workmen's Compensation; or

(b) any officer of the Central Government with at least two years' experience performing the
functions of – I Regional Labor Commissioner; or (ii) Assistant Labor Commissioner; or

(c) any officer of the State Government with at least two years' experience performing the functions
of – I Regional Labor Commissioner; or (ii) Assistant Labor Commissioner; or

(d) a presiding officer of any Labor Court or Industrial Tribunal established under the Industrial
Disputes Act, 1947 (14 of 1947) or any corresponding law in force in the State relating to the
investigation and settlement of industrial disputes; or

(e) any other officer with experience as a Civil Court Judge or a Judicial Magistrate, as the authority
to hear and decide for any specified area all claims arising out of deductions from wages, or delays
in payment;

If the appropriate government deems it necessary, it may appoint more than one authority for any
given area and provide for the distribution or allotment of work to be undertaken by them under
this Act by general or special order.

Any lawyer, any Inspector under this Act, or an official of a registered trade union authorized to
write an application to the authority appointed by the government for direction of payment of
wages according to this act if any employer does anything contrary to the provisions of this act,
any unreasonable deduction from an employed person's wages has been made, or any payment of
wages has been delayed, in such case any lawyer, any Inspector under this Act, or any official of a
registered trade union authorized to write an application to the authority appointed by
government for direction of payment of wages according to this act.

Any such claim must be submitted within 12 months of the date on which the deduction from
wages was made or the date on which the wages were due to be paid. If there is a good reason,
the time it takes to submit an application can be extended.
Following receipt of the application, the authority will hold a hearing with the applicant and the
employer or other person responsible for wage payment, and if required, will undertake an
investigation.

If an error with the employer is discovered, the authority may compel the employer to pay the
wage or return to the employee the amount deducted unfairly or pay the delayed wages, as well as
pay any other compensation the authority deems appropriate. If there is a fair and genuine basis
for the delay in the payment of wages, the employer will not be liable for any compensation.

Single Application respect of Claims from Unpaid Group

If there are numerous employees whose wages have not been paid, there is no need for a large
number of applications. As a result, all employees can submit a single application to the authority
for wage payment under this legislation.

Appeal

Parties who are displeased with the outcome might take their case to the district court.

• If the application is denied by the above-mentioned agencies,

• The authorities ordered a compensation of more than 300/- rupees on the employer.
• If the amount withheld by the employer exceeds 25/- rupees for a single unpaid employee.
50/- in the case of a large number of underpaid employees.

Penalty for offences under the Act (2005 amendments)

Reasons for penalty

• Delay in payment of wages

• Unreasonable deductions
• Excess deduction for house-accommodation amenity or service
• Failure to maintain record for collected fines from employee.
• Improper usage of fine collected from employees.
• Excess deduction for absence of duty
• Excess deduction for damage or loss to employer
• Failure of employee to display notice containing such abstracts of this Act and of the rules
made.

Punishable with fine which shall not be less than 1000/- rupees but which may extend to
7500/- rupees. If Wage period exceed one month.

• Failure in payments of wages on a working day.

• Wages not paid in form of current coin or currency notes or in both.

Punishable with fine which may extend 3000/- rupees

• Whoever obstructs an Inspector in the discharge of his duties under this Act
 • Whoever refuses or willfully neglects to afford an Inspector any reasonable facility for
making any entry, inspection, examination, supervision, or inquiry authorized by or under
this Act
• Whoever willfully refuses to produce on the demand of an Inspector any register or other
document.

Fines of not less than 1000/- rupees, but not more than 7500/- rupees, may be imposed.

Whoever does the same offence more than once.

Imprisonment for a period of not less than one month, but not more than six months, and a fine of
not less than 3750 rupees, but not more than 20500 rupees.

Procedure in the trial of offences

• No Court will consider an objection against an individual for an offence under subsection
(1) of section 20 unless an application in regard to the realities establishing the offence has
been displayed under section 15 and has been allowed entirely or partially, and the
authority engaged under the last section of the investigative Court has authorized the
creation of the grievance.
• Before authorizing the creation of a protest against any individual for an offence under
subsection(1) of section 20, the power granted under section 15 or the Appellate Court, all
things considered, will give such individual a chance to show cause why such approval
should not be granted, and the assent will not be granted if such individual fulfills the
position or Court that his default was expected to—
• a bona fide error or bona fide dispute about the amount payable to the employed
individual, or the occurrence of a crisis, or the presence of exceptional circumstances, such
that the individual responsible for wage payment was unable, despite exercising
reasonable persistence, to make prompt payment, or the failure of the employed individual
to apply for or acknowledge payment.

Apart from an objection filed by or with the assent of an Inspector under this Act, no Court lobby
takes notice of a repudiation of section 4 or section 6, or of a negation of any standard established
under section 26.

The Court will consider the amount of any payments already granted against the defendant in any
procedures conducted under section 15 when imposing any fine for an offence under paragraph
(1) of section 20.

Bar of suits

No Court will entertain any suit for the recovery of wages or any deduction from compensation to
the extent that the entirety so guaranteed-

• has shaped the subject of a course under section 15 for the offended party; or
• structures the subject of an application under section 15 which has been displayed by the
offended party and which is pending before the power selected under that section or of
intrigue under section 17; or
 • has been decreed, in any proceeding unrelated to the offended party
• could have been recovered by an application under section 15.

Q. DISCUSS THE CONCEPT OF DEARNESS ALLOWANCE.

ANS:

Dearness Allowance

Dearness allowance is a cost of living adjustment that the Government pays to public sector
employees and pensioners.

It is calculated as a percentage of the basic salary to curb the effect of inflation. As per the
provisions of the Income Tax Act 1961, it is compulsory to declare the tax liability concerning
DA when filing an ITR. This salary component is offered to employees in both India and
Bangladesh.

What is Dearness Allowance and Current DA Rate

Dearness Allowance is paid by the Indian government to its employees and pensioners to
neutralise the inflation impact.

Since DA is based on the cost of living, this salary component is not fixed. It varies from one
public sector employee to another based on his/her location. Hence, DA allowance is different
for employees in the rural, urban, and semi-urban sectors.

DA rates are subject to change twice every year. This allowance is increased by the Government
every six months. Usually, the change is introduced on January 1st for the timeframe between
January to the month of June and on July 1st for the period ranging from July to the month of
December.

Different Types of Dearness Allowance

Now that we understand what is DA in salary, check the different types of dearness allowances
that are offered by the Indian Government:
 • Variable Dearness Allowance (VAD)

VAD is a type of DA that is paid to Central Government employees. It undergoes revision every
six months based on the changes in the Consumer Price Index (CPI) to mitigate inflation.

VAD mainly comprises 3 elements-

• Variable DA that remains fixed

• Base index

• CPI

The first component of VAD stays fixed until the government increases or decreases the basic
minimum wages. Likewise, the base index also remains fixed for a specific timeframe. However,
the CPI changes every month and thus has an effect on the value of VAD.

• Industrial Dearness Allowance (IDA)

This is the allowance that is offered to public sector employees by the Government. IDA is
revised every quarter based on the changes in CPI.

Calculation of DA

Previously referred to as “Dear Food Allowance”, dearness allowance was introduced after the
Second World War. However, after 2006, changes were made in its calculation. It is presently
calculated as a particular percentage of the basic salary.

DA is added to the basic salary along with other components such as House Rent Allowance
(HRA), Conveyance Allowance, and more to form the total salary.

This is how DA in salary is calculated for public sector employees and pensioners:

• Central Government Employees

 DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 12 months – 115.76)/115.76] x 100

• Public Sector Employees

DA% = [(Average of AICPI (Base Year 2001 = 100) for the last 3 months – 126.33)/126.33] x 100

Here, AICPI means All-India Consumer Price Index.

• Pensioners

Whenever a pay commission introduces a new salary structure, the pension for retired public-
sector employees is revised. When DA increases, the corresponding surge is reflected in the
retired public sector employees’ pensions. This applies to both family and regular pensions.

When pensioners are re-employed, they cannot get DA if it is granted on a fixed pay or time
scale. However, in some other cases, re-employed pensioners may get DA which is limited to
their last drawn pay.

DA is not paid to pensioners if they are residing in a foreign country during re-employment.
Nevertheless, pensioners who reside abroad without being re-employed are eligible for DA on
their pension.

How is DA Treated Under Income Tax?

As per the provisions of the Income Tax Act 1961, there is a full incidence of tax on salaried
employees. Suppose a salaried employee gets rent-free accommodation from his or her
employer where all the previously mentioned conditions are met. In that case, DA becomes a
part of the salary, up to which it becomes a retirement benefit salary component.

The Income Tax Act has made it compulsory for individuals to declare their tax
liabilities concerning DA while filing their tax returns.
Q. DISCUSS THE PAYMENT OF BONUS ACT AMENDMEND 2015.

ANS:

The Payment of Bonus (Amendment) Bill, 2015 notified:Increase in the

Eligibility Limit under clause (13) of Section 2 and Calculation Ceiling under
Section 12 of the Payment of Bonus Act, 2015

The Payment of Bonus (Amendment) Bill, 2015 was passed by the Parliament in the
just concluded Winter Session of the Parliament. The Payment of Bonus (Amendment)
Act, 2015 has been published in the Gazette of India, Extraordinary on 1st January,
2016 as Act No. 6 of 2016. The provisions of the Payment of Bonus (Amendment) Act,
2015 shall be deemed to have come into force on the 1st day of April, 2014.

The Payment of Bonus (Amendment) Act, 2015 envisages enhancement of eligibility

limit under section 2(13) from Rs.10,000/- per month to Rs.21,000/- per month and
Calculation Ceiling under section 12 from Rs. 3500 to Rs.7000 or the minimum wage
for the scheduled employment, as fixed by the appropriate Government, whichever is
higher. The Payment of Bonus (Amendment) Act, 2015 also mandates previous
publication of draft subordinate legislations, framed under the enabling provisions
under the said Act, in the Official Gazette for inviting objections and suggestions before
their final notification.

The Government has been receiving representations from trade unions for removal of
all ceilings under the Payment of Bonus Act, 1965. It is also one of the demands made
by them during the country-wide General Strike held in February, 2013 and September,
2015. As the last revision in these two ceilings were made in the year 2007 and was
made effective from the 1st April, 2006, it was decided by the Government to make
appropriate amendments to the Payment of Bonus Act, 1965.

These changes in the Payment of Bonus Act, 1965 will benefit thousands of work force.

Q. STATE THE DEFENSES AVAILABLE TO EMPLOYERS AGAINST EMPLOYEE CLAIMS UNDER EC ACT.

ANS: 1. Self-Inflicted Injuries

In rare circumstances, employers may claim that their injured employees
intended to become injured so they could pad their pockets with the
compensation money. You may see this kind of defense with claims
where the employee has a somewhat low income-but it can occur with
any kind of workers’ compensation claim. The employer wants to pin
fault on you to void the case.
2. Negligence or Failure to Follow Rules
More commonly, an employer will say that an employee’s injuries
occurred because of failure to pay attention. The employee did not
adhere to safety rules, or simply operated heavy equipment while
distracted. As a result, the employer did not cause the problem and
should not have liability for it. You will have to prove that you did not
behave in a negligent way before sustaining injuries.
3. Horseplay
“Horseplay” refers to another way your employer may try to dodge your
claim. Essentially, if you acted rowdy or clowned around before the
injury occurred, your company may point the finger at you instead of
giving you the compensation you require. Therefore, you will either have
to attest that you kept your actions professional, or you will have to
verify that you should have been safe no matter how you acted.
4. Intentional Misconduct
Intentional misconduct goes beyond horseplay and indicates that you
purposefully violated safety rules in the name of fun or rebellion. You
didn’t intend to sustain injuries, but you did intend to do something
unsafe. You will need your lawyer’s help to refute this claim as well so no
obstacles stand between you and your compensation.
5. Intoxication
When a person becomes intoxicated or uses illegal drugs, his or her
inhibitions suffer, so he or she may try to do unsafe things. Alcohol and
drugs also undermine one’s motor skills and depth perception.
Employers sometimes try to say that you became injured because you
worked under the influence. Luckily, your lawyer can arrange blood tests
and other proofs that help you get around this defense.
6. Medical Causation
As mentioned above, you have to prove medical causation when you file
a workers’ compensation claim. If you have a preexisting condition, or if
your physiology has any characteristics that could have caused the
injury instead, the company you work for could attempt to use that
condition to void your claim.
Depending on your circumstances, you and your lawyer may have the
ability to prove that you should not have sustained the injury despite any
preexisting conditions.
7. Failure to Notify Employer
When you become injured on the job, you have the responsibility to tell
your employer about the incident no more than 120 days afterward. If
you wait longer than that, the court may deny your claim. However, if a
coma or other severe debilitation kept you from reporting the accident,
you can prove that you lacked the ability to tell your employer on time.
8. Failure to Follow the Statute of Limitations
Depending on the state you live in, you may have to deal with a statute
of limitations on your workplace injury. The statute of limitations may
give you up to three years to file your claim. It may give you more, or it
may give you fewer. In any case, make sure you file your claim as soon as
possible so your employer cannot use this defense against you.
9. No Connection to Employment
Perhaps you became injured at a company party. Or perhaps you
sustained injuries as you carried your heavy briefcase across the ice in
the morning. With either of these situations, you will have to prove that
your injury occurred because of something your employer did.
Otherwise, he or she may posit that your injury happened due to outside
factors, not something work related.
Workers’ compensation claims may seem complicated and intimidating,
especially if you try to navigate them on your own. Study our posts on
the subject to become more informed, and do not forget to hire a lawyer.
Your lawyer can see which of the above defenses your company may
gravitate to, and he or she can help you prepare for and then overturn
that defense.

Q.
ypes of Disablement in the Workmen Compensation Act can be classified into –

A) Total disablement

B) Partial disablement

Which can be further categorized as a) Temporary disablement

b) Permanent disablement

NOTE : Whether a type of disablement in Workmen Compensation Act is total or partial

depends on the efficiency or the working capacity of the employee which he/she was
able to do before the respective accident or the injury. Also, the difference between
temporary and permanent types of disablement in the workmen compensation act is
defined by the duration for which the employee is injured.

For example, A lifetime problem in the working capacity of a person is considered as

permanent disablement under types of disablement in the workmen compensation act.

A) TOTAL DISABLEMENT

I) Total Disablement ( Permanent ) :

As the name suggests, total permanent in types of disablement in workmen

compensation act states a condition when the employee faces a lifetime injury or the
life pending in his company due to the accident along with a reduction in his major
efficiency to work.

For example: If Mr X works in a marketing department and comes across an accident

leading to paralysis in his leg. Therefore, in such a case he cannot continue his
fieldwork.
II) Total Disablement (Temporary) :

Now, total temporary in types of disablement in workmen compensation act refers to

a situation when the employee suffers a major reduction in his work which he did
before the injury but for a temporary basis.

For example: In the above-mentioned example if Mr X meets an accident resulting in a

fracture in his leg, in that case, he cannot continue his fieldwork but for a temporary
basis.
B) PARTIAL DISABLEMENT(Types Of Disablement In Workmen
Compensation Act)

I) Partial Disablement (Permanent):

Partial permanent in types of disablement in workmen compensation act occurs

when an employee’s capacity to work compromises or decreases as compared to the
work done by him before the injury but for a lifetime.

For example: If Rahul is a data entry operator and loses his left hand in an accident.
Being a right-handed person, he will be able to perform his task but with a reduction in
his efficiency for his whole life which is termed as partial permanent disablement.
Chart Explanation For Types Of Disablement In Workmen Compensation Act

Furthermore, there is a permanent partial disability chart time for which the
employees are entitled to the number of weeks for permanent partial disability. As a
result, to get the partial loss of use, multiply the percentage of loss by the total
number of weeks assigned for a total loss to determine the number of weeks of
permanent partial disability to which the employee is entitled.

Amount of compensation.Previous Next

2
[4. Amount of compensation.--(1) Subject to the provisions of this Act, the amount of
compensation shall be as follows, namely:--

(a) where death results from the injury an amount equal to 3[fifty per cent.]
of the monthly wages of the deceased 1[employee] multiplied by the
relevant factor; or an amount of 4[one lakh and twenty thousand rupees],
whichever is more;

(b) where permanent total disablement results from the injury an amount
equal to 5[sixty per cent.] of the monthly wages of the injured 1[employee]
multiplied by the relevant factor; or an amount of 6[one lakh and forty
thousand rupees],whichever is more:

[Provided that the Central Government may, by notification in the Official

7

Gazette, from time to time, enhance the amount of compensation

mentioned in clauses (a) and (b);]
Explanation I.--For the purposes of clause (a) and clause (b), "relevant
factor", in relation to a 1[employee] means the factor specified in the second
column of Schedule IV against the entry in the first column of that Schedule
specifying the number of years which are the same as the completed years
of the age of the 1 [employee] on his last birthday immediately preceding
the date on which the compensation fell due.

*****
8

(c) where permanent partial disablement results from the injury. (i) in the
case of an injury specified in Part II of Schedule I, such percentage of the
compensation which would have been payable in the case of permanent
total disablement as is specified therein as being the percentage of the
loss of earning capacity caused by that injury, and (ii) in the case of an
injury not specified in Schedule I, such percentage of the compensation
payable in the case of permanent total disablement as is proportionate to
the loss of earning capacity (as assessed by the qualified medical
practitioner) permanently caused by the injury.

Explanation I.--Where more injuries than one are caused by the same
accident, the amount of compensation payable under this head shall be
aggregated but not so in any case as to exceed the amount which would
have been payable if permanent total disablement had resulted from the
injuries.

Explanation II.--In assessing the loss of earning capacity for the purposes of
sub-clause (ii), the qualified medical practitioner shall have due regard to
the percentages of loss of earning capacity in relation to different injuries
specified in Schedule I;
(d) where temporary disablement, whether total or partial results from the
injury a half-monthly payment of the sum equivalent to twenty-five per cent.
of monthly wages of the 9[employee], to be paid in accordance with the
provisions of sub-section (2).

[(1A) Notwithstanding anything contained in sub-section (1), while fixing

10

the amount of compensation payable to a 9[employee] in respect of an

accident occurred outside India, the Commissioner shall take into account
the amount of compensation, if any, awarded to such 9[employee] in
accordance with the law of the country in which the accident occurred and
shall reduce the amount fixed by him by the amount of compensation
awarded to the 9[employee] in accordance with the law of that country.]

[(1B) The Central Government may, by notification in the Official Gazette,

11

specify, for the purposes of sub-section (I), such monthly wages in relation
to an employee as it may consider necessary;]

(2) The half-monthly payment referred to in clause (d) of sub-

section (1) shall be payable on the sixteenth day--

(i) from the date of disablement where such disablement lasts for a period
of twenty-eight days or more, or

(ii) after the expiry of a waiting period of three days from the date of
disablement where such disablement lasts for a period of less than twenty-
eight days; and thereafter half-monthly during the disablement or during a
period of five years, whichever period is shorter:

Provided that--

(a) there shall deducted from any lump sum or half-monthly payments to
which the 9[employee] is entitled the amount of any payment or allowance
which the 9[employee] has received from the employer by way of
compensation during the period of disablement prior to the receipt of such
lump sum or of the first half-monthly payment, as the case may be; and

(b) no half-monthly payment shall in any case exceed the amount, if any, by
which half the amount of the monthly wages of the 9[employee] before the
accident exceeds half the amount of such wages which he is earning after
the accident.

Explanation.--Any payment or allowance which the 9[employee] has received

from the employer towards his medical treatment shall not be deemed to
be a payment or allowance received by him by way of compensation within
the meaning of clause (a) of the proviso.

[(2A) The employee shall be reimbursed the actual medical expenditure

11

incurred by him for treatment of injuries caused during the course of

employment.]

(3) On the ceasing of the disablement before the date on which any half-
monthly payment falls due there shall be payable in respect of that half-
month a sum proportionate to the duration of the disablement in that half-
month.]

[(4) If the injury of the 13[employee] results his death, the employer shall, in
12

addition to the compensation under sub-section (1), deposit with the

Commissioner a sum of 14[two thousand and five hundred rupees] for
payment of the same to the eldest surviving dependant of the 13[employee]
towards the expenditure of the funeral of such 13[employee] or where
the 13[employee] did not have a dependant or was not living with his
dependant at the time of his death to the person who actually incurred such
expenditure.]
 [Provided that the Central Government may, by notification in the Official
15

Gazette, from time to time, enhance the amount specified in this sub-
section.]