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Frequently asked questions

the obligation of employer once the Certified Standing Order is obtained?(Test)

Testing UAT11.

EPF, or Employee's Provident Fund, is a government-backed retirement savings scheme in India where both the employee and the employer contribute a fixed percentage of the employee's basic salary to the EPF account. These contributions accumulate with interest over the employee's working life, forming a substantial corpus that provides financial security after retirement and can be withdrawn under certain conditions. The Employees' Provident Fund Organisation (EPFO) administers this mandatory savings scheme for organized sector employees in India, offering tax benefits and a secure way to build wealth. ..

No.Its not permissible. Any such deduction is a criminal offence.

 The employer shall prepare Draft Standing Orders as far practicable in conformity with Model Standing Orders as prescribed under the Act.

Five copies of the Draft Standing Orders shall be submitted.

Draft Standing Order shall be submitted accompanied by a statement giving particulars of workmen, including the name of the trade Union in which they belong.

 Within 6 months from the date on which this Act becomes applicable to an industrial establishment.

This Act shall not apply to -
(i) any industry to which the provisions of Chapter VII of the Bombay Industrial Relations Act, 1946 (11 of 1947), apply; or
(ii) any industrial establishment to which the provisions of the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961 (26 of 1961) apply:
 
Nothing in this Act shall apply to an industrial establishment in so far as the workmen employed therein are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Services) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Service (Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette, apply.]
 
 The Act applies to industrial Establishments when there are 100 or more workmen are employed.
However the Appropriate Govt. has Powers to the reduce the number from 100 for applicability.
 Act to require employers in industrial establishments formally to define conditions of employment under them.

 “Adolescent” means a person who has completed his fifteen year of age but has not completed his eighteenth year.
 
 An adolescent shall not be required or allowed to work in any factory unless—
(a) a certificate of fitness granted is in the custody of the manager of the factory; and
(b) Such adolescent carries while he is at work a token giving a reference to such certificate.
 The child is not allowed to work in any factory.

  
Welfare officer: In every factory wherein 500 or more workers are ordinarily employed the occupier shall employ Welfare officer(s).
Safety officer: In every factory wherein 1000 or more workers are ordinarily employed the occupier shall employ Safety officer(s).
  

Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of—

(i) if an adult, one day for every twenty days of work performed by him during the previous calendar year;

(ii) if a child, one day for every fifteen days of work performed by him during the previous calendar year.

 

 At least for Half an hour.

 Yes, If the exemption is available/obtained under Sec. 64 or under Sec.65 of the Act.

Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.

 Daily Hours: Not more than 9 hours
Weekly Hours: Not more than 48 hours
 A) A license can be cancelled in following cases

1.

When a Factory is totally closed

2.

When the machineries installed are shifted and manufacturing activity ceases.

3.

If the number of workers reduces & it no longer remains amenable under the factories Act (Sec. 2(m) (i), Sec 2 (m) (ii) or Sec 85 whatever the case may be)

 No Worker in the Factory-
·         shall willfully interfere with or misuse any appliance, convenience or other thing provided in a factory for the purposes of securing the health, safety or welfare of the workers therein
·         shall willfully and without reasonable cause do anything likely to endanger himself or others; and
·         shall willfully neglect to make use of any appliance or other thing provided in the factory for the purposes of securing the health or safety of the workers therein.
 To comply with all the provision of the Act and the rules made there under. It is responsibility of the occupier and in certain cases of the manager of the factories

General duties of the occupier in Section 7A is specifically mentioned as under.

7-A. General duties of the occupier.-
1.
Every occupier shall ensure, so far as is reasonably practicable, the health, safety and welfare of all workers while they are at work in the factory.
2.
Without prejudice to the generality of the provisions of sub-s (1), the matters to which such duty extends, shall include --
a.
the provision and maintenance of plant and systems of work in the factory that are safe and without risks to health;
b.
the arrangements in the factory for ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances;
c.
the provision of such information, instruction, training and supervision as are necessary to ensure the health and safety of all workers at work;
d.
the maintenance of all places of work in the factory in a condition that is safe and without risks to health and the provision and maintenance of such means of access to, and egress from, such places as are safe and without such risks;
e.
the provision, maintenance or monitoring of such working environment in the factory for the workers that is safe, without risks to health and adequate as regards facilities and arrangements for their welfare at work.
3.
Except in such cases as may be prescribed, every occupier shall prepare, and, as often as may be appropriate, revise, a written statement of his general policy with respect to the health and safety of the workers at work and the organisation and arrangements for the time being in force for carrying out that policy, and to bring the statement and any revision thereof to the notice of all the workers in such manner as may be prescribed.
 Factories which are falling under any of the following categories are to take license under the Act,
 
1.
Where Ten or more workers are working or were working on any day of the preceding twelve months and in any part of which a manufacturing process is being carried on with the aid of power or is so ordinarily so carried on.
2.
Where twenty or more workers are working or were working on any day of the preceding twelve months and in any part of which manufacturing process is being carried on without aid of power or is ordinarily so carried on
3.
All the premises declared as a "Factory" by the State Govt. by notification under section 85 of the Factories Act. 1948 in the Official Gazette
 Yes, It is compulsory. The approval, license and registration of a factory is compulsory before starting the manufacturing process. The occupier of the factory should submit the plan to the Chief Inspector of the State for approval. After the approval, the licensee will be granted by the CIF and the factory will be registered.
 For computing the number of workers, all the workers in different groups and relays in a day shall be taken into account.

 “factory” means any premises including the precincts thereof—
(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or
(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,
If any person-
(a)   fails to maintain a notice-book under section 10(3), or
(b)   fails to send a statement under section 10A(1), or
(c)   fails to send report under section 10B, or
(d)   fails to send return under section 16,
           shall be punishable with fine up to Rs.5,000.
State Government may, by notification, direct every person employing workmen, to submit a return specifying the number of injuries in respect of which compensation has been paid by the employer during the previous year and the amount of such compensation, together with such other particulars as to the compensation.
If any accident occurs on the premises of any employer which results in death of an employee or serious bodily injury to an employee,
the employer must, within 7 days of the death or serious bodily injury, send in the prescribed form a report to the Commissioner for Employees'
 Compensation giving the circumstances attending the death or serious bodily injury   
Compensation payable under the Act, whether in the form of a lump sum or in the form of a half-monthly payment, cannot be assigned, charged, attached or set-off against any claim.
Payment of compensation in respect of employee whose injury has resulted in death is not to be made directly to the dependents of the employee.  
In such case the employers is required to deposit the amount of compensation with the Commissioner for Employees' Compensation.
The Commissioner will then apportion the amount among the dependents of the employee.
It is open to the employer and the employee to agree or to either of them to apply to the Commissioner for Employees' Compensation and get half-monthly payments (in the case of temporary disablement) converted into a payment of a lump sum.

The employer shall pay compensation as soon as it fall due due. If there is default in payment beyond one month from the date
it fell due, the commissioner shall direct that employer to pay simple interest (@12%/annum) in addition to the amount of arrears
or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank on the amount of compensation plus
penalty up to 50 per cent of the amount of compensation.                                                                                                          
  When the injury of an employee results in his permanent total disablement, the amount of compensation he is entitled to receive is an
  amount equal to 60% of the monthly wages of the   injured   employee   multiplied by   the relevant factor or an amount of Rs. 1,40,000 
  whichever is higher.                                                                         
 When the injury to an employee results in his death, the amount of compensation payable to his dependents is an amount equal to 50% of the
monthly wages of the deceased employee multiplied by the relevant factor or an amount of Rs.1,20,000,whichever is more.        

The employer is not liable to pay compensation for injury to an employee in the following circumstances:
            (1) If the injury does not result in total or partial disablement of the employee for a period exceeding three days;
            (2) If the injury does not result in death of the employee and is caused by an accident which is directly attributable to:-
  (i)  the employee having been at the time thereof under the influence of drink or drugs, or
  (ii) the disobedience of the employee to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of employee, or
            (iii) the wilful removal or disregard by the employee of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of employee.
(i) Death results from injury,
(ii) permanent total disablement results from the injury,
(iii) permanent partial disablement results from the injury, and
(iv) temporary disablement whether total or partial results from the injury.
To provide for the payment of compensation by certain employers to their workmen for injury caused to them by accident.
For first conviction: Fine which may extend to Rs. 5,000
 
For  Second and subsequent conviction:  Imprisonment for not less than1 month but which may extend to 6 months or with fine which shall
not be less than ` 10,000 but may extend toRs. 25,000 or with both.      


It shall not be necessary for an employer of small and very small establishments to maintain registers and to furnish returns under
the Schedule Acts subject to the following
 
Employer shall continue:
-          To issue wages slip under the minimum wages Act
-          To submit notice of accident/dangerous occurrences under the Factories Act on such occurrences
-          To submit notice of accidents and maintain register of accidents under the Plantations Act.
An establishment in which not more than 9 persons are employed or were employed on any day of the preceding twelve months. 
An establishment in which not less than 10 and not more than 19 persons are employed or were employed on any day of the preceding twelve months. 
Employer of small establishment
-          shall maintain Form B, Form C and Form D registers
-          shall submit a core return in Form A within 15th February every year
 
Employer of very small establishment
-          shall maintain Form E register
-          shall submit a core return in Form A within 15th February every year
            

            1. The Payment of Wages Act, 1936
            2. The Weekly Holidays Act, 1942
            3. The Minimum Wages Act, 1948
            4. The Factories Act, 1948
            5. The Plantations Labour Act, 1951
  6. The Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955
            7. The Contract Labour (Regulation and Abolition) Act, 1970
            8. The Sales Promotion Employees (Conditions of Service) Act, 1976
            9. The Equal Remuneration Act, 1976
To provide for the exemption of employers in relation to establishments employing a small number of persons from furnishing returns and maintaining registers under certain labour laws (Scheduled Acts).
Punishable with simple imprisonment which may extends 1 month or with fine or Rs.10, 000/- or both.
Punishable with imprisonment for a term which shall not be less than 3 months but which may extend to one year or fine which shall not be Rs.10,000/- but which may extend to Rs.20,000/- or both.

                  I) Such no. of hours as may be prescribed for such establishments or class of establishments.
           II) For each 3 hours of work one hour interval /rest shall be provided and spread over shall not be more than 6 hours in a day.
           III) No child labour is permitted to work between 7.00 P.M and 8.00 A.M.
           IV) The child labour is not permitted to work over time.
           V) No child shall be required to work in any establishment or any day on which he was already working in another establishment
  VI) Every child labour shall be given a weekly holiday that shall be specified by the occupier in notice permanently exhibited.
The regulation of the conditions of the work is applicable other than the occupations or process referred to in section 3 in part A & B of the schedules notified under prohibition of the employing the children.
Any of the occupations set forth in part A of the schedule or in any work shop wherein any of the processes set forth in part B of the schedule.
The working person who has not completed his/her 14th year of age.

1.  An annual return in Form 01 -A by 31 * January of every year to the Regional Office, showing the changes if any during the preceding year.

2.     Return of Contributions in quadruplicate for each contribution period to be submitted to the branch office duly enclosing all the paid challans for the six
    months within 42 days of expiry of each contribution period, i.e. by 11th November for contribution period ended 30* Sept., and 12* May for the contribution period ended


   31st March.



3.   Reports: Accident report in Form 12 in case any accident takes place, to the notice of the Accident.

4.   Declaration Forms: in Form 1 for all the employees at the time of coverage of the unit, and thereafter as and when a new employee joins the insurable employment


    along with a return in Form 3 in duplicate within 10 days.
 


In addition to the Muster roll, wage record and books of Account maintained under other laws, the employer is required to maintain the following registers for ESI:-

1.             Employees Register in new Form 6

2.             Accident Register in new Form-11 and

3.             An inspection book.

The immediate employer is also required to maintain the Employee's Register for the employees deployed to the principal employer.


The financial year from April to March has been divided in to two six monthly contribution periods i.e. 1" April to 30th September and


1 * October to 31 * March of next year. The benefit period for each contribution period commences three months after the end of the relevant


contribution period i.e. Jan to June and July to December (The calendar year from January to December has been divided in to two six monthly benefits periods)


1.             The employer is liable for prosecution under Section 85(a) of the Act.

2.             The Corporation may levy and recover damages at the following rates, not exceeding the amount of contribution payable for default or delay in

        payment of the contribution.
 
Period of delay
Rate of damages in % p.a
I)     Less than 2 months
5%
ii)    2 to 4 months:
10%
iii)   4 to 6 months:
15%
iv)   6 months and above:
25%

An employer who fails to pay the contribution within the limit prescribed under Regulation 31, shall be liable to pay simple interest at the

rate of 12% per annum in respect of each day of default or delay in payment of contribution (Regulation 31 -A).



An   insured   person who leaves the insurable employment on attainment of  the age of superannuation or retires I under a voluntary

Retirement Scheme or , takes premature retirement, after being an insured person for not less than 5 years, shall be eligible to receive medical
 
benefit for himself and his spouse subject to production of proof thereof, and payment of a nominal contribution of rupees one hundred and twenty
 
for one year. In case the insured person expires, his spouse is entitled to the medical benefit for the remaining period for which the contribution was made,
 
and she can continue to receive the medical benefit on payment of the contribution @ 120/- p.a. forfurther period.
This medical benefit is also admissible to an insured person who ceases to be in employment on account of permanent disablement caused due to
 
employment injury for himself and his spouse on payment of similar contribution till the date on which he would have vacated the employment on attaining the age of
 
superannuation, had not sustained such permanent disablement.


Family members are also entitled to full medical care as and when needed. The family members are also entitled to artificial limbs,

artifical appliances etc. as apart of medical treatment.


The medical benefit is also admissible to the family during the period the insured person is in receipt of unemployment allowance. In case he dies
 
during the period, his family continues to receive the medical benefit till the end of those twelve months.
    
Reimbursement of expenditure incurred on the funeral of the deceased employee.

In case of the death of the insured employee due to employment injury, the spouse, widowed mother and children are entitled to Dependants' benefit.


       Any benefit due to the insured employee at the time of death is paid to the nominee.


A lump sum payment not exceeding Rs. 5000/- towards expenditure on the funeral of a deceased insured person, is paid either to the eldest surviving
 
member of the family or if he has no family or not residing with his family at the time of death, to the person who actually performs the funeral of the deceased insured person


Medical Bonus is lump sum payment made to an insured woman or an insured person in repect of his wife for each confinement to meet the

confinement expenses, if the confinement occurs at a place where necessary facilities under the ESI Scheme are not available. At present the confinement
 
expenses paid is Rs. 2500/- per confinement.

If the insured woman needs medical treatment and attendance and abstention from work due to sickness arising out of pregnancy,
 
miscarriage, premature child birth or confinement, duly certified by an authorized Medical Officer, Maternity Benefit at double the standard


benefit rate is payable for a period one month.



'Miscarriage' means the expulsion of the contents of a pregnant uterus at any time prior to or during the 26th week of pregnancy, but does not include a


miscarriage, the cause of which is punishable under the Indian penal code. Maternity benefit is payable for miscarriage for a period of 6 weeks
 
(42 days) from the date following the date of miscarriage at double the standard benefit rate subject to fulfilment of the contributory condition prescribed.


Confinement means labour resulting in the issue of a living child or labour after 26 weeks of pregnancy resulting in the issue of a

child whether alive or dead. Maternity benefit at double the standard benefit rate (full wages) is payable for 84 days, subject to payment of contribution
 
for not less than 70 days in the immediately preceding two contribution period. The benefit can be claimed at anytime prior to six weeks before the expected


date of confinement or from the date of confinement as per the condition and requirement of the insured woman.


Maternity benefit is periodical payments to an insured person for specified period of abstention from work, due to confinement,


miscarriage or sickness out of pregnancy, pre-mature birth of child or miscarriage or confinement.


No qualifying conditions or contributory conditions are attached for payment of temporary disablement benefit, permanent

disablement benefit or Dependants benefit. Even if he meets with an employment injury on the very first day of his joining the insurable employment,


the benefit is admissible.


The rate of dependants' benefit is the full rate of disablement benefit, which is 75% of the wages of the deceased insured person. It is distributed
 
among the dependants as follows: 1) Widow: Till death or remarriage at 3/5th of the full rate. 2) Widowed mother till death @2/5* of the full rate

3) Sons @2/5lh of the full rate each till he attains the age of twenty-five years. 4) Unmarried daughters @ 2/5th of  the  full rate till they get married.
 

5) If the son or daughter is infirm and wholly dependant on the earnings of the insured person at the time of his death, they continue to receive the
 
benefit even after attaining the age of 25 years/ marriage as the case may be. If the total dependants' benefit for all the dependants worked out as

above exceeds at any time, the full rate, the share of each of the dependants shall be proportionately reduced, so that the total amount payable to

them does not exceed the amount at full rate.


Dependants' benefit is a monthly pension payable to the eligible dependants of an insured person who dies as a result of an employment
 
injury or occupational disease. The benefit can be drawn in cash at the Branch Office or by Money order at the cost of the Corporation or it can be credited
 
every month to the bank account of the beneficiary.


If there is any residual disability of permanent nature due to employment injury, the insured person is examined by a Medical Board to access


the loss of earning capacity if any and its percentage. The insured person is paid monthly periodical payments of permanent disablement for life from the
 
date following the date of termination of temporary disablement at that percentage out of full daily rate of disablement benefit. Periodical increase in the benefit
 
is also admissible due to erosion in the cost of living. The benefit can be drawn in cash at the Branch Office, by Money Order at the cost of the Corporation, or credited


to the Bank Account of the insured person every month. The insured person can also opt for the payment in lump sum if his daily rate of PDB does not exceed rupees
 
five or even if it exceeds five per day, but the commuted value does not exceed Rs 30,000.


It is a periodical payment to an insured person suffering from Disablement as a result of 'Employment injury' for the period of abstention from work

duly certified by an authorized Medical Officer. This is paid till the temporary disability lasts and the employee is able to resume his normal

duties, @150% of the standard benefit rate which is 75% of his wages.


Contracting any disease, while in employment for a specified period in any of the industries listed in Part A, B, or C of Schedule III to the Act
 
is called Occupational disease. Occupational health hazards can be of two main types. Short term and high dose with acute on set, synonymous with acute


poisoning, included by large dose of a toxic substance in an industrial environment, and the other one is chronic on set, which is the result of repeated


or continuous exposure of small doses of substances.


It is a personal injury to an employee caused by an accident or occupational disease arising out of and in the course of his

insurable employment within or outside territorial limits of India.


Disablement is a condition resulting from employment injury, which may render the insured person temporarily incapable of

doing his work and necessitating medical treatment (temporary disablement). It may reduce his earning capacity (permanent partial disability)
 
or it may totally deprive the insured person from the capacity of doing any work (permanent total disability).


To promote the norms of small family, this cash benefit is paid to the insured person for undergoing vasectomy/ tubectomy operation.

This is paid at double the standard benefit rate i.e. full wages, for a period of 7 days for vasectomy operation and for 14 days for tubectomy

operation. This period can be extended in case of any post operative complications.


This is an additional sickness benefit provided by the Corporation in exercise of its powers under Section 99 of the Act. An insured person
 
who has completed two years of insurable employment and contributed for not less than 156 days during this period is entitled to extended

sickness benefit for a period of 309 days for the 34 specified long term diseases. This period can be extended up to 730 days or till the insured

person attains the age of 60 years which ever is earlier. The benefit is payable @ 140% of the standard benefit rate which works out to 70% of

his wages. The insured person and his family are also entitled to Medical Benefit during this extended period.


If an insured person requires medical treatment and attendance and needs abstention from work on medical grounds, Sickness

benefit is paid for the period of abstention duly certified by the Authorised Medical Officer, for a period not exceeding 91 days in two

consecutive benefit periods (say one year) @ 60% of his wages, subject to payment of contribution for not less than 78 days in the

corresponding contribution periods.


While leaving the station, the insured person may obtain a certificate of employment from his employer in ESIC-105, and carry

the same with him along with his identity card.  Based on this, the insured person can avail the medical benefit in any ESI Dispensary/

Hospital across the country. After the introduction of IT rollout, 'Pehchan Card' for self and family is being issued. With this, the insured

person and his family can avail the 'medical benefit' in any ESI Dispensary/ Hospital throughout the country.


If the family is residing in any other place either in the same State or different State, based on the declaration of the insured person

and certified by the employer, the family is provided with a family identity card' for receiving medical benefit from ESI Dispensary in the
 
area in which it is residing. After IT rollout, the 'Family' is issued a separate 'smart card'. By producing this smart card, the family can avail the


medical benefit from any ESI Dispensary/ Hospital either at their place of residence or in any other part of the country.

If he leaves the employment before his registration process is completed, the employer may provide him with a 'certificate of employment'

consisting of his date of employment, date of leaving, family particulars etc. in form ESIC-86. Based on this certificate that person and his

family can avail' medical benefit1 for a period of 3 months.


The insured person and his family are entitled to the Medical Benefit from the very first day of his/her joining the insurable employment.

A person who Is covered under the scheme forthe first time is eligible for medical care for self and family forthree months. If he/she continues
 
in insurable employment for three months or more, the benefit is admissible till the beginning of the corresponding benefit period. If contributions
 
were paid/ payable for not less than 78 days in the said contribution period, medical benefit is admissible till the end of the corresponding benefit
 
period. If the insured person is in ESI coverage for at least 2 years, and contributed for not les than 156 days, and is suffering from any of the 34

specified long term diseases, the medical benefit is admissible till the incapacity lasts orfor a period of 3 years for self and family.


Full   range of Medical,   surgical   & obstetric treatment consisting of out-door treatment, in-patient treatment, supply of all drugs

and dressings, pathological and radiological investigations, prenatal and post-natal care, super specialty consultation & treatment,
 
ambulance services, provision of artificial appliances etc.


Medical benefit means the medical attendance and treatment to the insured persons covered under the Act and their families

as and when needed. This Is the only benefit provided in kind through the State Governments (except in Delhi), and uniform to all as
 
perthelr requirement without linking ittothelrwages and contributions.

Immediate Employercan be any or all of the following :-

(i)   One who executes any work inside the premises of the principal employer of a factory or an establishment;
 
(ii)  One who executes the work of a factory or establishment outside the premises underthe supervision of its principal employer or his agent;
 
(iii) One who lets on hire the services of his employees to the principal employer of a factory or establishment; and (iv) A Contractor (Sec. 2(13)).

(A) In the case of afactory, any of the following:-

      (I) Owner;

     (ii) Occupier;

   (iii) Managing Agent of the owner or occupier;

     (iv) Legal representative of a deceased owner or occupier;

     (v) Manager of thefactory underthe Factories Act, 1948.
(B) In the case of Establishments belonging to or under the control of Government of India:

     (i) The Specified Authority
    
     (ii) The Head of the Department (In the absence of specified Authority).
(C) In the case of other establishments:

      Any person responsible for the supervision and control of the establishment.

Yes. If the employees in a factory or establishment are other-wise in receipt of benefits substantially similar or superior to those provided

under the ESI Act, the appropriate Government may grant exemption to such factory or establishment for a period of one year at a time prospectively

in consultation with ESIC. Application for renewal is to be made three months before the date of expiry of exemption period (Section 87).


Once a factory or an Establishment is covered under the Act, it continues to be covered notwithstanding the fact that the
 
number of persons/ coverable employees employed therein at any time falls below the required limit or the manufacturing

process therein ceases to be carried on (Section 1 (6) of the Act).


The words 'premises' and 'precincts' used in the definition of factory' have not been used in the notifications issued by the

State Governments, while extending the provisions of the Act to the establishments under Sec. 1(5) of the Act. So long as

the establishment employs a minimum prescribed number of 20 coverable employees for wages, it will stand covered under the
 
Act whether these employees are employed at one place or at places away from each other, as they are engaged in the organised

activity of the same establishment. Thus, all the coverable employees including those working in branches, regd. office, sales office etc.

whether situated in implemented area or not.

According to the notification issued by the State Government concerned under Section 1 (5)of the Act, the following establishments

employing 20 or more persons for wages attracts ESI coverage.

1.        Shops

2.        Hotels or restaurants not having any manufacturing activity, but only engaged in 'sales'.

3.        Cinemas including previewtheatres;

4.        Road Motor Transport Establishments;

5.        News paper establishments, (that is not covered as factory under Sec.2(12));


6.        Private Educational Institutions (those run by individuals, trustees, societies or other organisations) and

7.  Medical Institutions (including Corporate, Joint Sector, trust, charitable, and private ownership hospitals, nursing homes,

     diagnostic centres, pathological labs).



Manufacturing process shall have the meaning assigned to it in the Factories Act, as per Section 2(14-AA) of the Act.

It is defined in section 2(k) of the Factories Act as" any process for

1)   Making, altering repairing, ornamenting, finishing, packing, Oiling, washing,cleaning, breaking up, demolishing, or otherwise treating
 
or adopting any article or substance with a view to its use, sale, transport, delivery, or disposal; or

2)  Pumping of oil water, or sewages, or any other; or

3)  Generating, transforming, or transmitting power; or

4)  Composing types for printing, by letter press, lithography, photogravure or other similar processes, or book binding; or

5)  Constructing, reconstruction, repairing, refitting, finishing, or breaking up ships or vessel; or

6)  Preserving or storing an article in cold storage; and

7)  Tapping, collecting, cross matching and keeping in bottles, the blood, or whole human blood.



The term 'Premises' and 'Precincts' have not been defined in the Act. According to the definition assigned to the 'premises' under

Section 2(m) of the Factories Act, 1948, it is a generic building, or shed. In view of the word 'precincts', thereof 'separate buildings'

located apart or a distance when used for one continuous manufacturing process shall also constitute the 'Premises'.

The following persons are not to be counted

a)           A proprietor or a partner whether drawing salary or not;

b)           A contractor lending the services of his employee;

c)            An apprentice engaged for the first time under the Apprentice Act, 1961;

d)           Persons employed on contract for service, e.g. legal technical, tax consultants;

e)           Persons employed in branch/sales offices etc. away from the factory premises are not to be counted for the purpose of covered

as employee under Section 2 (9), if their wages does not exceed the ceiling limit prescribed.


Yes. All persons employed in the premises including the precincts thereof irrespective of their wages including casual, trainees,

contract employees are counted for the purpose of coverage of the factory/ establishment. Even the Directors employed are to be counted.

Factory is defined under section 2(12) as "any premises including the precincts thereof whereon ten or more persons are

employed or were employed on any day of the preceding twelve months, and in any part of which, a manufacturing process

is being carried on or is ordinarily so carried on, but does not include a mine subject to the operation of Mines Act 1952, or a railway running shed."


This is also an identification number allotted by the Regional Office to a sub-unit, branch office, sales office or Registered Office

of a covered factory or establishment located in the same State or different State, on receipt of the details in prescribed proforma from the employer.


It is a 17 digit identification number allotted to factory/establishment by the Regional Officer on receipt of Form-01 or Survey

report from the Social Security Officer.

Documents relating to the constitution of the Factory/ Firm/ Establishment, evidence in support of the date of commencement

of production/business, list of partners/ Directors with their addresses, address proof like pan card /passport/voter identity card,

month wise employment position etc. are the essential documents.

The Factory or Establishment to which the Act applies is to be registered by submitting an Employer's Registration Form (Form-01)
 
to the concerned Regional Office and obtain an identification number called the Code number (Section 2(A) read with Regulation 10-B)

On registration under the scheme, the employee is termed as insured person. He is provided with a 'temporary identification certificate',

which is valid for a period of 3 months, but may be extended if necessary till a permanent family photo identity card with family particulars
 
is issued. The identity card serves as a means of identification both for availing medical benefit at the dispensary/ hospital and availing cash benefits at the


ESI branch Office. The identity card should be signed/ thumb impression affixed by the insured person. Any changes in his residence/dispensary/employment

are carried out by the Branch Office Manager in the identity card. Now the smart cards(Pehchan) are being issued to the insured person for drawing cash


benefits from any ESI Branch Office of his choice and convenience.


At the time of joining the insurable employment, an employee is required to fill in a Declaration Form (Form-I) and submit afamily


photo in duplicate to the employer, which is to be submitted to the ESI Branch Office by his employer. The employee is then allotted an


insurance numberforthe purpose of his identification under the scheme and issued a temporary identity card for availing medical benefit for

self and family for a period of three months. Thereafter, he is provided with a permanent photo identity card. A person once registered need not register


again in case of change of employment. The same registration can be transferred from one place to the other. Now the ESIC is going 'online'. Smart card name


"Pehchan Card" separately for self and family with biometric details are issued, which is valid in any ESI Hospital/dispensary throughout the country for availing
 
the medical benefits. The employee can also draw his cash benefits from any of the ESI Branch Office throughout the country.

The benefits provided under the Act are related to the contribution paid by the employer on behalf of the insured person. Therefore, to identify
 
each insured person, both for proper recording of the contributions received as also for honouring his claims for benefits, registration of an insured


person is necessary.

Registration is the process of obtaining and recording information about the entry of an employee into 'insurable employment', for the purpose
 
of his identification under the Act.


Yes, it is the statutory responsibility of the employer under Section 2 -A of the Act read with Regulation 10-B, to register their Factory/

Establishment under the ESI Act within 15 days from the date of its applicability to them.

Registration is the process, by which every factory/ establishment, to which the Act applies, is identified for the purpose of the

ESI Scheme, and their individual records are set up for them.

The scheme provides full medical care to the employee registered under the scheme during the period of his incapacity for restoration of his health and


working capacity. It provides financial assistance to compensate the loss of his/ her wages during the period of his abstention from work due to


sickness, maternity and employment injury. The scheme provides medical care to his/her family members also.

It is a compressive Social Security Scheme designed to accomplish the task of socially protecting the 'employees' in the organized

sector against the events of sickness, maternity, disablement and death due to employment injury and to provide medical care to the insured employees and their families.

Any sum deducted by the Principal employer from wages under the ESI Act shall be deemed to have been entrusted to him by the


employee for the purpose of paying the contribution in respect of which it was deducted (Sec. 40(4). Non-payment or delayed payment of the Employee's

contribution deducted from the wages of the employee amounts to' Breach of trust1 and is punishable under IPC 406.

The total amount of contribution (both the shares) in respect of all the employees for each month is to be deposited with the authorized bank


branches in cash or by cheque through a challan or demand draft in the prescribed form in quadruplicate. Challan prescribed for this purpose

shall be supplied free of cost by the Concerned Branch Office on placing the indent. The payment can be made online after generating online challan


by giving necessary details in online register of employees in Form 5.

Contribution shall be paid in respect of an employee in to a bank duly authorized by the Corporation within 21 days of the last day of the calendar month in

which the contribution falls due for any wage period (Reg. 29 & 31).

With effect from 1-4-2008, the wage ceiling limit for coverage of employees with disability has been raised to rupees twenty five thousand a month.


To encourage the employers for employing more employees with disability, the employer is exempted from payment of Employer's share of contribution


on the wages paid to the employees with disability for a maximum period of three years from the date of commencement of the contribution period in which such employee


with disability is employed. The Central Government shall reimburse this Employer's contribution to the ESI Corporation.

a)            Employer's contribution: A sum equal to 4.75% of the   wages payable to an employee, rounded off to the next higher rupee;

b)            Employee's contribution: A sum equal to 1.75% of the wages payable to an employee, rounded to the next higher rupee;

Contribution is the sum of money payable to the Corporation by the Principal employer in respect of an employee and includes any
amount payable by or on behalf of the employer in accordance with the provisions of the Act (Section2(4)).




If the wages of an employee (excluding remuneration for overtime work) exceeds the wage limit prescribed by the Central Government after start of
contribution period, he continues to be an employee till the end of that contribution period and contribution is to be deducted and paid on the total wages earned by him.


The following items are taken into account for computation of wages for payment of contribution.

a)            Basic Pay, Wages, Salary;
b)            D.A./HRA/CCA/Overtime/officiating   allowance/Night shift allowance /efficiency allowance/ Heat, Gas, Dust allowance/
Education allowance/ Food & Tea allowance/ conveyance allowance;

c)            Wages/ salary/ payfor weekly off and public holidays;
d)            Commission paid to sales staff;
e)            Subsistence allowance paid to an employee during the period of suspension;
f)                Attendance Bonus or incentive or exgratia in lieu of Attendance Bonus or production incentive;
g)            Regular Honorarium or salary or remuneration paid to a Director;
h)  Collection Batta paid to running staff,
i) Actual payments made towards leave salary, layoff compensation, or wages for strike period.
j) Any other remuneration paid or payable in cash to an employee if the terms of contract of employment, expressed or implied were fulfilled.

It is Rs. 15,000 per month from 1st  May, 2010.

The wage ceiling for coverage of an employee with 'disablility' is Rs. 25,000/- per month from 1-4-2010.


  Any person employed for wages in or in connection with the work of a covered factory or establishment, and:

      1) Directly employed by the Principal employer, on any work of the Factory or establishment within the premises or elsewhere, 

    or in any part, department or branch dealing with administration, purchase of raw materials, sale, or distribution of the products 

    of the factory or establishment. Employees of the Immediate employer:

2) Employed in the premises on any work of the factory or establishment;

3) Employed outside the premises on any work of the factory or establishment under the supervision of the Principal employer or his agent;

4) Employees lent or let on hire to the principal employer on any work of the factory, or Paid Directors of acompany.


Exclusions: 

       1. An Apprentice engaged for the first time under the Apprentice Act 1961 and

       2. An employee drawing wages above the wage ceiling prescribed bythe Central Government.

[Sec33] Every complaint for the aforesaid offences must be made in writing to the Apprenticeship Adviser within 6 months from the date on which the offence is alleged to have been committed, otherwise the offence will not be cognizable.

[Sec 32] In relation to offences by companies, firms, associations of persons or body corporate, the director, partner or the principal officer, as the case may be, who was incharge of responsible for the business at the time the offence was committed, shall be deemed to be guilty of that offence and punished accordingly.

[Sec 30] Any employer who

  • engages any unqualified person as apprentice ;
  • refuses to furnish any information or return ;
  • obstructs any inspection, examination or inquiry under the Act ;
  • requires an apprentice to work overtime or to do any work not connected with his training ;
  • fails to fulfill his obligations under the contract ;
  • does not engage the required number of apprentices ;
  • makes payment to the apprentice on basis of piece-work or under any output bonus or incentive scheme,

shall be punishable with imprisonment upto 6 months or with fine of with both.

[Sec 31] If any employer or other person contravenes any other provision of the Act, he shall be punishable with fine upto Rs. 500

The rights of the employers and the apprentices are common:

·         Both have the right to refer any dispute arising out of the contract of apprenticeship to the Apprenticeship Adviser [Sec 20(1)].

·         Both have the right to terminate the contract of apprenticeship before the completion of training with the approval of the Apprenticeship Adviser [Sec 7].

·         Both can appeal against the decision of the Apprenticeship Adviser within 30 days from the date on which the order is communicated [Sec 20(2)].

As per Sec 19 of the Act, every employer must maintain a record of the training progress in the prescribed form. He must also furnish information & returns in the prescribed form & manner.

The employer is not liable to employ the apprentice after completion of his training period unless there is an agreement between them to the contrary & such agreement shall bound both the employer & the apprentice [Sec 22].

After completion of training period, the apprentice shall be granted a certificate provided he clears the test conducted by the National Council [Sec 21].

If personal injury is caused to an apprentice, by accident arising out of and in the course of his training as an apprentice, his employer shall be liable to pay compensation which shall be determined and paid, so far as may be, in accordance with the provisions of the Workmen's Compensation Act, 1923, subject to the modifications specified in the Schedule [Sec 16]. 

In every designated trade, training places shall be reserved by the employer for the Scheduled Castes and the Scheduled Tribes and where there is more than one designated trade in an establishment, such training places shall be reserved also on the basis of the total number of apprentices in all the designated trades in such establishment [Sec 3A(1)].

The number of training places to be reserved for the Scheduled Castes and the Scheduled Tribes under sub-section (1) shall be such as may be prescribed, having regard to the population of the Scheduled Castes and the Scheduled Tribes in the State concerned [Sec 3A(2)].

As per Sec 5 of the Act, if an employer with whom the apprentice is employed is unable to fulfill his obligation under the contract of apprenticeship, then the apprentice shall with the approval of the Apprenticeship Advisor be engaged as an apprentice under another employer for the unexpired period of apprenticeship training.

As per Sec 22 of the Act, the employer is not liable to employ the apprentice after completion of his training period unless there is an agreement between them to the contrary & such agreement shall bound both the employer & the apprentice. Further even after successful completion of training he is not entitled to any such appointment straightaway without competing with others.

·         The employer & the apprentice must enter into a contract of apprenticeship containing terms & conditions consistent with the Act & as are agreed to by them.

·         The contract of apprenticeship must be submitted to the Apprenticeship Adviser for registration within 3 months [Sec 4]. The period of training as prescribed by the Government must be specified in the contract. The training is deemed to commence from the date of the contract [Sec 6].

·         If the employer is unable to fulfil his obligation under the contract due to any reason, the apprentice can be engaged under another employer for the unexpired period of training. A fresh contract of apprenticeship must be entered into for this purpose and must be registered with the Apprenticeship Adviser. The old contract of apprenticeship lapses automatically from the date of the new contract [Sec 5].

·         If due to strike, lock-out or lay-off in the establishment the apprentice is unable to complete his training, then his period of training will be extended for a period equal to the period of such strike, lock-out or lay-off.

·         Further, the apprentice will also be entitled to receive stipend for the period of such strike, lock-out or lay-off or for a maximum period of 6 months, whichever is less. But, if the strike, lock-out or lay-off continues for a longer period, then the employer must proceed for novation of contract with another employer.

 

As per Sec 13 of the Act, an apprentice shall be entitled to receive stipend at the prescribed rates. He shall not be paid on the basis of piece work or be required to take part in any bonus or incentive scheme. The stipend must be paid by the tenth day of the following month. No deduction shall be made from the stipend for the period during which an apprentice remain on casual leave or medical leave. However, the continuance of payment of stipend to the apprentice is subject to the work and conduct of the apprentice being satisfactory.

As per Explanation to Sec 8 of the Act, an apprentice is not a management trainee. Management Trainee is a person who is engaged by an employer for undergoing a course of training (not being apprenticeship training) subject to the condition that on successful completion of such training, he shall be employed by the employer on a regular basis.

As per [Sec 18] an apprentice is neither a worker nor an employee but a trainee only. He is not a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947. He cannot claim monetary benefits under the said Act. No dispute relating to an apprentice can be referred to Labour Court. Further, an apprentice is also not an employee under Section 2(9) of the Employees State Insurance Act, 1948. The stipend received by him during his period of apprentice is not wages. He is not entitled to wages like regular employees.

"Technician (vocational) apprentice" means an apprentice who holds or is undergoing training in order that he may hold a certificate in vocational course involving two years of study after the completion of the secondary stage of school education recognized by the All-India Council and undergoes apprenticeship training in any vocational course as may be prescribed [Sec 2(pp)].

"Graduate or technician apprentice" means an apprentice who holds, or is undergoing training in order that he may hold a degree or diploma in engineering or technology or equivalent qualification granted by any institution recognised by the government and undergoes apprenticeship training in any such subject field in engineering or technology as may be prescribed [Sec 2(j)].

"Apprenticeship training" means a course of training in any industry or establishment undergone in pursuance of a contract of apprenticeship and under prescribed terms and conditions which may be different for different categories of apprentices [Sec 2(aaa)].

As per Sec 2(aa), apprentice means a person who is undergoing apprenticeship training in pursuance of a contract of apprenticeship. A person can be engaged as an apprentice provided he is not less than 14 years of age & satisfies the prescribed standards of education & physical fitness [Sec 3].

Yes, the employer needs to submit quarterly and biennial returns in the prescribed forms to the local Employment Exchange.

An employer has to announce the results of the selection within 15 days of his date of selection.

 
The time limit for notifying the vacancies in the Central Employment Exchange is 60 days prior to the date of dispatch of the particulars of interview/ written test.
Yes, In case the employer thinks that the choices would be better if he notifies the vacancies on a state level then he can do so at the Central Employment Exchange or else he can notify at the local Employment Exchange.

15 days before the applicant is required to come for an interview/ written test.

Notification of vacancies should be in a prescribed form as specified in the Act.

This Act compels the employer to notify vacancies occurring in his establishment to  the specified Employment Exchanges.
 No, the employer is not obliged to select or employ a person from the well.

It provides an opportunity to the person to claim employment.

This Act compels the employer to notify vacancies occurring in his establishment to  the specified Employment Exchanges.

Yes, a retrenched employee is also entitled to gratuity.

Maximum Gratuity payable to an employee is Rs. 10 lacs.

In case the employee expires before completing 5 years and gratuity shall be paid to the nominee of the deceased employee provided the employee has completed a year of service.

No, but where an employee has completed 4 years & 240 days of continuous service in the 5th year he is eligible for the Gratuity.

Employee has to complete continuous service of 5 years, but after the ruling of Madras High Court if there are 240 working days in the 5th year even then an employee is eligible for the gratuity.

Yes. He/she can do that, but sooner or later he/she acquires a family than the employee has to communicate the same to the HR department to make the necessary changes in Nomination.

If employee is married than he/she can nominate spouse, if not then dependant parents.

 Form F has to be filled for Nomination of Gratuity.

Gratuity is applicable to employee who completes 5 years of continuous service with the organization.

The provisions of the Act shall have an overriding effect on all laws, agreements, contract of service or any standing order applicable to establishment if they are inconsistent with the provisions of the Act. But this provision does not preclude the employee from securing more favorable benefits, if he receives under any such agreements or contract of service (S. 30).

 Every contractor shall in respect of each work on which he engages contact labour

 i) maintain a muster roll and register of wages  
ii) maintain a register of deduction for damages or loss, fines and advances
iii) maintain register of overtime recording the number of hours of and wages, paid for overtime work, if any 
iv) Where the wage period is one week or more issue wage slips  at least one day prior to disbursement of wage

v)  shall obtain the signature or thumb impression of worker concerned in the register of wages and muster-roll which shall be authenticated by the initials of contract or his representative (Rule 78)
vi) shall submit half yearly return in the prescribed form within the prescribed time.

 

The principal employer to maintain records containing particulars like details of contractors employed, that the nature of work performed, etc. They shall also exhibit premises where contract labour is employed, notices in prescribed form containing particulars about the hours of work, nature of duty, rate of wages, wage period, date of payment of wages, name and addresses of the inspectors having jurisdiction and date of payment of unpaid wages. These notices shall be display in English, Hindi and in local language understood by majority of workmen at all conspicuous places at the establishment and work site of principal employer and inter action (Sec. 29, Rule 80 & 81).

The Principal Employer has to submit annual return in the prescribed form within the specified time.

On receiving a compliant made by the inspector, within 3 months from the date of commissioning of an offense, Courts equal to or superior to that of a Presidency Magistrate or a Magistrate of the First Class shall take cognizance of an offence under the Act [S.26].

A person contravening any provision or rule of the Act or any condition of license is punishable with imprisonment extending up to three months or fine amounting to Rs, 1,000/ or both and in case of continuing contravention additional fine of Rs. 100/- for everyday during which contravention continues [S.23]. The offence is continued and not time –barred till license is renewed.

 

If the offence under this Act is done by a company, the company as well as every person in charge of, and responsible for conduct of business at the time of commission of offence shall also be liable for punishment. But if the person in charge of company could prove that offense was committed without his knowledge and he had taken due diligence to prevent such offence, he will be exempted from liability. If the offence is proved to be committed with the consent and connivance of or due negligence on part of director, manager, managing agent or any such officer, that person will also be made liable for the offence [S. 25].

The contractor has to pay wages to contract workers on or before 7th of the following month. The wages shall be paid in the presence of representatives of the employer. In case contractor makes default, the principal employer has to pay wages and recover the same from the contractor either by deduction from amount payable to him or as a debt payable by the contractor [S. 21 Rules (66-72].

Any person who is aggrieved by an order u/s. 7,8,12 or 14 may prefer an appeal to an appellate officer within 30 days from the date on which order is communicated to him, Provision for condonation of delay is also available on adducing sufficient cause [S. 15].


If the licensing officer is satisfied that a license is granted under
 
 i) misrepresentation or
 ii) suppression of material facts or
 iii) contractor failed to comply with the conditions of license or
 iv) has contravened any of the provisions of the Act or rules

 

Licensing officer after giving an opportunity to be heard can revoke, or suspend the license granted to contractor [S.12 (1)].


Following matters are taken into account before granting or refusing a license by the licensing officer namely-
 
a) Whether the applicant
     i)  is a minor
      ii)  is of unsound mind as declared by a competent court
     iii) is an undercharged insolvent
    iv)   has been convicted for an offence involving moral turpitude

b) Whether there is an order or an award or settlement for prohibition of employment of contract labour in that particular type of work
c) Whether an order for revoking or suspending of license u/s. 14 was made in respect of applicant and 3 years has elapsed from the date of such order

d) Whether the fee U/R. 26 and security U/R. 24 has been deposited by applicant (Rule 22)

An application for license shall be made by the contractor in Form IV to concerned licensing officer. Application shall contain the particulars of location of the establishment, the nature of process, operation or work for which contract labour is to be employed
An application for license shall be made by the contractor in Form IV to the concerned licensing officer. Application shall contain the particulars of location of the establishment, the nature of process, operation of work for which contract labour is to be employed


Before issuing notification u/s. 10(1) of the Act appropriate government shall have regard to the condition of work and benefits provided to the contract labour and other relevant factor such as-

 (i) Whether the process, operations or other work is incidental to or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment. 
(ii)  Whether work is of a perennial nature, i.e., it is of a sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment.

(iii) Whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto.

(iv) Whether it is sufficient to employ considerable number of whole-time workmen [S.10 (2)].

The appropriate Government only, and not by any court, can after consulting with the Central Board or State Board, prohibit by notification in the official gazette, employment of contract labour in any process operation or work of the establishment [S. 10(1)].

If the registration of particular establishment is obtained by

 

a)      Misrepresentation or

b)      Suppression of any material fact or

c)      Registration became useless or ineffective due to expiry of contract or removal of contractor etc. then registrar after giving an opportunity to the principal employer to be heard and with the previous approval of the appropriate Government may revoke the registration [S. 8].

 

Following persons can be called principal employer:

 

(i)   The head of the office or department or such other officer as the Government or local authority, may specify in this behalf.
(ii)  in a factory, the owner or occupier of the factory

(iii) in a mine, the owner or agent of the mine

(iv) in any other establishment, any person responsible for the supervision and control of the establishment [S.2(1)(g)].

 

Establishment means any office or department of the Government or a local authority or any place where any industry, trade, business, manufacture, or occupation is carried on [S.2 (1) (c)]

A person who supplies goods or articles of manufacture to establishment through contract labour is not contractor.

Contractor is a person who undertakes to produce a given result for the establishment or who supplies contract labour for any work of the establishment and includes a sub-contractor [S.2(1)(c)]

A workmen is called contract labour if he is hired in through contractor in connection with the work of establishment [S.2 (1) (b)]


Appropriate Government means –

 
(i)  in relation to an establishment in respect of which the appropriate Government under Industrial Disputes Act, 1947 is the Central Government, the Central Government
(ii) in relation to any other establishment, the Government of the State in which the establishment is situated. [S.2(1)(a)]

 

Appropriate Government can apply provisions of the Act to any establishment irrespective of number of labourers employed after giving 2 months notice in official gazette.

i)           To every establishment, where 20 or more workmen are employed on any day of the proceeding 12 months.

ii)                   To every contractor, who employed on any day of the preceding 12 months 20 or more workmen.

 

The Act will not apply to an establishment where work of a casual or intermittent nature is performed. The work will not be intermittent or casual (i) if performed for more than 120 days in the preceding 12 months (ii) if seasonal character and is performed for more than 60 days in a year. [S.1(4)]

The Payment of Wages Act and the Industrial Disputes Act operate in different fields and the provisions of section 26 of the Industrial Disputes Act providing for penalty for illegal strikes do not affect the right of the management to effect a cut in wages to the extent permitted by Section 9(2) of the Payment of Wages Act.
  1. An advance of wages shall not exceed four months wages.
  2. The advance may be recovered in installments by deduction from wages spread over not more than 18 months.
  3. No installment shall exceed one-third of the wages for the month.
  4. The rate of interest charged for advances shall not exceed 6 1/4% per annum. {Rule 18}
If such deduction and payment is made with the consent of the employees and / or with the approval of a competent Court, it is not invalid under Section 7 of the Act.
An employer shall stand discharged of his liability to pay such wages if he pays them to the nominee of the deceased person, and in case he is not able to do so, if he deposits them with the prescribed authority. {Section 25A}

Every employer must display in his factory or establishment a notice containing the abstracts of the Act and the rules made thereunder in English and also in the language understood by the majority or the persons employed in the factory or establishment. {Section 25}

 

Form No. VI and Rule 24 regarding the display of the abstract of this Act has been deleted by Government of Maharashtra vide notification date 30-Mar-2001 MGG Pt. I-L. Ext. date 30-Mar-2001 P. 213
Such agreement being beneficial and advantageous to the employees is not null and void under Section 23 of the Act.
An employed person is prohibited from contracting out of the Act, i.e. from giving up any right conferred upon him by the Act, and any contract or agreement made by him relinquishing such rights is null and void. {Section 23}
No such suit can be filed because according to section 22(d) of the Act no Court can entertain any suit for the recovery of any deduction from wages insofar as the sum so claimed can be recovered by an application under section 15 of the Act.
The Authority or the Appellate Court can attach the property of an employer pending the disposal of such claim if it is satisfied that the employer is likely to evade payment of any amount that may be ordered to be paid by it. {Section 17A}
The Authority under the Payment of Wages Act is a Court of summary jurisdiction having powers to deal with the simple matter of delay in payment of wages or deduction from wages. It is not within the competence of the Authority to decide the question of the status of an employed person, i.e., whether he is a Mistry or Veldar. The matter is a complicated question of law as also of fact.
If an order of suspension has been passed by an officer competent to pass it, the authority under the Act cannot examine its validity to see as to whether it was justified in law or not.
The subsistence allowance payable to an employee placed under suspension pending Departmental Enquiry is covered within the definition of wages given under Section 2(6) of the Act and, therefore, the Authority is competent to entertain and decide an application for payment of subsistence allowance.
The writ petition is not maintainable if by filing it the employer has deliberately chosen to circumvent the provisions of law.
The Act makes no provision for condonation of the delay in filing the appeal.
The amount required to be deposited under Section 17(1A) must be paid at the time of filing of the appeal. The appeal filed un-accompanied by the certificate of deposit is not maintainable.
Section 17(1A) of the Act provides that no such appeal shall lie unless the amount payable under the order has been deposited by the employer with the Authority.
If the employer is aggrieved by the order of the Authority, he also can, within 30 days of the date of order, prefer an appeal to the Appellate Court if the amount ordered to be paid by him is more than Rs. 300.00 or the order imposes on him a financial liability of more than Rs. 1000.00
In the State of Maharashtra and in some other States the employed person is exempted from paying any Court-fees, other than fees for service of process, for making such application; but at the same time the Government is empowered to recover the amount of such court-fees from the employer of the employed person if the employed person succeeds in the application. {Section 15A}
This can be done if they are working in the same establishment and if deductions have been made from their wages for the same cause and during the same wages period or if their wages have remained unpaid for the same wage period. {Section 16}
Compensation awarded under section 15(3) is not penal but is in the nature of a payment by way of recompensation for loss or privation by reason of deduction from the wages paid.
The compensation awarded under section 15(3) may not be in multiples of the wages deducted. The Authority is free to fix such compensation at the proportionate rate which it may think to be fair and just subject to the maximum of ten times the amount deducted.
Under the second proviso to Section 15(2) of the Act the Authority is given power to condone the delay in making the application within the said period if sufficient cause is shown by the applicant for not making the application within the said period.

The Authority may refuse to entertain an application presented to it, if after giving the applicant an opportunity of being heard the Authority is satisfied, for reason to be recorded in writing that -

a.       the applicant is not entitled to present an application;

b.      the application is barred by limitation, or

c.       the applicant shows no sufficient cause for making a direction under Section 15.

The Authority may refuses to entertain an application presented to it if the application is insufficiently stamped or otherwise incomplete. When the Authority refuses to entertain an application for the said reason, he shall return it with an indication of the defects. The application so refused may be presented again after the defects have been made good. {Rule 7 or Central Rules}

a.       If contrary to the provisions of the Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed, he has to make an application for claiming the same to the Authority appointed under the Act.

b.      Such application can be made by the employed person himself or a legal practitioner or an official of a registered trade union.

c.       Such application has to be made within a period of 12 months from the date on which the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made.

d.      When any application under Subsection (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under Section 3, or give them an opportunity of being heard, and, after such further enquiry, if any, as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employed person of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and not exceeding three thousand rupees but not less than one thousand five hundred rupees in the latter, and even if the amount deducted or delayed wages are paid before the disposal of the application, direct the payment of such compensation, as the authority may think fit, not exceeding two thousand rupees.

e.      The amount directed to be paid by the Authority ca be recovered as if it were a fine.

      f.   If the employed person is not satisfied with the order of the Authority, he himself or a legal practitioner or an official of a registered trade union, if the amount claimed by him is more than Rs. 25.00, can, within 30 days
           from the date of the order prefer an appeal to the Appellate court. {Subsection 15 & 17}
In the Maharashtra Payment of Wages Rules, 1963, the word paymaster is used to denote an employer or other person responsible under section 3 of the Act for the payment of wages required to be paid under the Act. {Rule 2(q)}

a.       In factories, if any person has been named as the manager of the factory, then the person so named is also responsible for such payment.

b.      In industrial establishments, if there is a person responsible to the employer for the supervision and control of the industrial establishment, then the person so responsible is also responsible for such payment.

      c.    Upon railways, if the employer is the railway administration and the railway administration has nominated a person in this behalf, then the person so nominated is also responsible for such payment. {Section 3}
Any person desiring to impose a fine on an employed person or to make a deduction for damage or loss shall explain personally or in writing to the said person the act or omission, or damage or loss in respect of which the fine or deduction is proposed to be imposed, and the amount of fine or deduction, which it is proposed to impose, and shall hear his explanation in the presence of at least one other person, or obtain it in writing. {Subsection 8(3), 10(1-A) & Rule 15}
Fines can be imposed in respect of only those acts or omissions of the employed persons which are approved by the authority prescribed under section 8(1) of the Act. {Rules 10 to 12}
  1. The employer must exhibit on his premises a list of acts or omissions for which fines can be imposed.
  2. Before imposing a fine on an employed person he must be given an opportunity of showing cause against the fine.
  3. The amount of fine must not exceed 3 percent of the wages.
  4. A fine cannot be imposed on an employed person who is under the age of 15 years.
  5. A fine cannot be recovered by installments or after 90 days from the day of the act or omission for which it is imposed.
  6. The moneys realized from fines must be applied to purposes beneficial to employed persons. {Section 8}
The Act prohibits all kinds of deductions except those which are authorized by or under the Act. {Section 7}
Wages must be paid in current coin or currency notes or in both and not in kind. It is, however, permissible for an employer to pay wages by cheque of by crediting them in the bank account if so authorized in writing by an employed person. {Section 6}

The following are the requirements of the Act in respect of time of payment of wages:

a.       Wages must be paid on a working day and not on a holiday.

b.      Establishments employing less than 1000 persons must pay wages before the expiry of the 7th day of every month and other establishments must pay wages before the expiry of the 10th day of every month.

When the employment of any person is terminated, the wages earned by him must be paid before the expiry of the second working day from the day of termination. {Section 5}
The period to be fixed for paying wages to an employed person must not exceed one month. That means, an employer can choose to pay wages to a person employed by him for a period of every week or every fortnight, but not for a period of every two months or every three months, {Section 4}
Wages means contractual wages and not overtime wages. They are not to be taken into account for deciding the applicability of the Act in the context of section 1(6) of the Act.
Wages averaging less than Rs. 10000.00 per month only are covered or protected by the Act.

The Act is applicable to the payment of wages to persons employed:

a.       in factories;

b.      upon railways;

c.       in other establishments specified in sub-clauses (a) to (g) of section 2(ii) of the Act.

The Act empowers the State Government to extend its provisions to the persons employed in any establishments over and above the aforesaid establishments. {Section 1}
The main object of the Act is to avoid unnecessary delay in the payment of wages and to prevent unauthorized deductions from the wages.

Every employer is required to maintain, in the prescribed form, the following three registers:

a.     a register showing the computation of the allocable surplus;

b.     a register showing the set-on and set-off of the allocable surplus;

c.     a register showing the details of the amount of bonus payable to each of employees, the amount of deductions if any, and the amount actually paid.

The employer is also required to send, in the prescribed form, an annual return to the Inspector appointed under the Act. The time limit for sending the annual return is thirty days from the expiry of the time limit specified in section 19 for payment of bonus. {Section 26 & Rule 4 and 5}
If an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, unless a separate balance-sheet and profit and loss account are prepared and maintained in respect of them, all such departments of undertakings or branches should be treated as parts of the same establishment for the purpose of computation of bonus, and once they are treated as parts of the same establishment, they should be continued to be treated as such. {Section 3}
An employee must be taken to have not worked during the period of his suspension. During the period of his suspension he is paid subsistence allowance which is not salary or wages for work done and which is not an amount paid by way of remuneration. He is therefore entitled to be paid bonus for the period.
According to section 14 of the Act an employee shall be deemed to have worked on the days on which he has bee laid off. During the period of lay-off he is paid lay-off compensation which is not excluded from the purview of the definition of wages under the Act. He is therefore entitled to be paid bonus for the period.

If the employee is entitled to bonus for the accounting year 1981-82, the employer cannot say that the payment will not be made because the employee is dismissed on some future date.

Section 8 of the Act speaks of an employee working in the establishment for not less than thirty working days in an year to make him eligible for bonus for that year. But, when an employee, for no fault of his and involuntary, is prevented from working in the establishment for the prescribed number of days, it does not axiomatically follow that he is ineligible for bonus.
If an employee is dismissed from services for (a) fraud; (b) riotous or violent behaviour while on the premises of the establishment; (c) theft, misappropriation, or sabotage of  any property of the establishment; he is disqualified form receiving bonus. {Section 9}
When the ownership of an establishment is transferred from one person to another, the establishment remains the same and it cannot be said to be a new establishment in the hands of the transferee.
The newly set up establishment is exempted from paying bonus to its employees in the first five years following the year in which the employer sells the goods produced or manufactured by him. If, however, the employer derives profit in any of the first five year, he has to pay bonus for that year. The provisions of set on and set off are not applicable in such cases. {Section 16}
An exemption under Section 36 of Act from all or any of the provisions of the Act may be sought by an establishment to which the Act is applicable and whose employees are otherwise entitled to bonus. In the case of establishment employing employees to whom the Act is not applicable because of Section 32, the question of seeking any specific exemption under Section 36 of the Act does not arise.
The Government has no power to entertain the second application for the same period.
The Act permits the Government to exempt any establishment from all or some of the provisions of the Act for a specified period and subject to specified conditions if, having regard to the financial position and other relevant circumstances of the establishment, it is of opinion that it will be in public interest to do so. {Section 36}
Both sections 10 and 36 are contemporaneous provisions in the Act. It is patent from the phraseology of section 36 that the Government has the competence to exempt any establishment even from section 10 notwithstanding that section 10 is mandatory.
As attendance bonus which was being paid by the establishment was outside the purview of the Payment of Bonus Act, 1965,  workmen of the establishment can claim the bonus payable under the Act over and above the attendance bonus.
Employees can enter into an agreement or a settlement with their employer for granting them bonus under a formula different from that under the Act, i.e. bonus linked with production or productivity; but subject to the provisions of the Act in respect of payment of minimum and maximum bonus. {Subsection 31A & 34}
The employees of Life Insurance Corporation of India, Reserve Bank of India, Unit Trust of India, Central Government and State Government industrial establishments and Universities and other educational institutions are some of the excluded categories. {Section 32}
If is open to any employer to pay bonus linked with production or productivity instead of bonus based on profits, if there is an agreement to that effect between him and his employees, but subject to the provisions of the Act in respect of payment of minimum and maximum basis. {Section 31A}
If any person contravenes any provision of the Act or any rule made thereunder; or fails to comply with any direction given to him; he would be punished with imprisonment upto 6 months, or with fine upto Rs. 1000.00 or with both. {Section 28}
A dispute about bonus payable under the Act will have to be raised by the employees concerned in accordance with the provisions of the Industrial Disputes Act, 1947, or any corresponding State law, as is applicable to them, as such a dispute is deemed to be an industrial dispute within the meaning of such laws. {Subsection 22 & 39}
If any bonus is due to an employee under a settlement, award or agreement, he can make an application for its recovery to the Government and the Government may issue a certificate to the Collector to recover the same as an arrear of land revenue. Such application should be made within one year from the date on which bonus became due to the employee from the employer. {Section 21}
If there is no dispute about payment of bonus, bonus must be paid within a period of 8 month from the close of the accounting year. If there is a dispute about the payment of bonus pending before any authority, bonus must be paid within one month from the date on which the award in respect of such dispute becomes enforceable or the settlement in respect of such dispute comes into operation. In all cases bonus must be paid in cash. {Section 19}
Customary bonus is bonus which is being paid by way of tradition or custom at a uniform rate over a number of years and which has no link with profit.
(1) If in any year the employer has paid any amount to an employee as customary bonus, then he can deduct such amount from payable to the employee for that year. (2) If an employee is found guilty of misconduct causing financial loss to the employer, then the employer can deduct the amount of loss from the amount of bonus payable to the employee for the year in which he was found guilty of misconduct. {Subsection 17 & 18}

The principle of set on and set off of allocable surplus is as follows:

 

Where for any year the allocable surplus exceeds the amount of maximum bonus payable to the employees, then, the excess shall, subject to a limit of twenty percent of the total salary or wages of the employees, be carried forward for being set on in the succeeding year and so on to be utilized for the purpose of payment of bonus.

 

Where for any year there is no available surplus, or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees, and there is no amount or sufficient amount carried forward and set on which could be utilized for the purpose of payment of the minimum bonus, then, such minimum amount or the deficiency, as the case may be, shall be carried forward for being set off in the succeeding year and so on. {Section 15}
The principle behind fixing a minimum and maximum limit for payment of bonus is that the rate of bonus should not fluctuate widely from year to year.
Bonus payable under the Act is linked with profits. The employer has to calculate "gross profits" of his establishment in the manner specified in section 4. Then from "gross profits" so calculated he has to deduct the sums referred to in section 6 as prior charges. The balance is called "available surplus". A percentage of the available surplus calculated in accordance with the provisions of sub-section (4) of section 2 is called "allocable surplus". Where, in respect of any year the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer must pay to every employee in respect of that year bonus in proportion to the salary or wage earned by the employee during the year subject to a maximum of twenty percent of such salary or wage. {Subsection 2(4), 4 , 5, 6 & 11}
When in any year the allocable surplus exceeds the amount of minimum bonus payable to the employees, the maximum bonus payable by the employer to his employees in that year is 20% of the salary or wage. {Section 11}
The employer is bound to pay to his employees every year a minimum bonus of 8.33% of the salary or wage or Rs. 100.00, whichever is higher, whether be has any allocable surplus or not. {Section 10}
If an employee is drawing a salary or wage not exceeding Rs. 3500.00 per month, he is entitled to get bonus on his entire salary or wage. If an employee is getting a salary or wage exceeding Rs. 3500.00 per month, but not exceeding  10000.00 per month, the bonus payable to him is to be calculated as if his salary or wage were Rs. 3500.00 per month. An employee getting a salary or wage exceeding Rs. 10000.00 per month is not entitled to get bonus. {Section 12}
For the purpose of calculation of bonus a salary or wage includes a basic salary or wage and dearness allowance but does not include other allowances, overtime salary or wage, house rent allowance, traveling concessions, bonus, employer's contribution to provident fund, retrenchment compensation, gratuity or commission. {Section 2(21)}
Section 8 relates to the eligibility for bonus. The only requirement of that section is that the employee should have worked in an establishment for not less than thirty working days in an accounting year. Therefore, if a seasonal worker has worked in an establishment for more that thirty working days, he shall be entitled to get bonus.
An employee, irrespective of whether he is managerial or not, so long as he came within the definition of employee by virtue of drawing salary falling within the maximum prescribed under Section 2(13) of the Act, he would be eligible for payment of bonus under the Act.
The provision imposing the ceiling is constitutionally valid.
Every employee who is drawing a salary or wage upto Rs. 10000.00 per month and who has worked for minimum period of 30 days in a year is entitled to be paid bonus. {Section 2(13) & 8}
According to sub-section (2) of Section 20, save as otherwise provided in sub-section (1), nothing in the Act shall apply to the employees employed by any establishment in public sector. By the said sub-section (1) the provisions of the Act are made applicable in relation to an establishment in public sector which sells any goods produced or manufactured by it or renders any services in competition with an establishment in private sector and earns income from such sale or services or both an quantified in the said sub-section.

The Act is applicable to:

a.     (a) every factory

b.     (b) every other establishment employing 20 or more persons.

The Government can, however, apply the Act to any establishment employing less that 20 but not less than 10 persons. An establishment to which the Act applies shall continue to be governed by the Act irrespective of any fall in the number of person employed therein. {Section 1}
The object of the Act is to maintain peace and harmony between labour and capital by allowing the employees to share the prosperity of the establishment reflected by the profits earned by the contributions made by capital, management and labour.
An employee is prohibited from contracting out of the Act, i.e. from giving up any of his rights under the Act and any contract or agreement made by him relinquishing or reducing his right to a minimum rate of wages or any privilege or concession accruing to him under the Act is null and void. {Section 25}
The Act prohibits Civil Courts from entertaining any suit for recovery of minimum wages payable under the Act. {Section 24}

If any employer -

a.     pays to any employee less than the minimum rates of wages fixed for that employees' class of work; or

b.     contravenes any rule or order made by the appropriate Government under Section 13 regarding hours of work;

he would be punished with imprisonment upto five years or with fine upto Rs. 10000.00 or with both. The offences under Section 22 of this Act shall be cognizable and non-bailable. {Section 22, 22B}
Every employer must maintain a muster-roll-cum-wage register and also a bound inspection book. {Rule 27 & 28}
A single application can be made on behalf or in respect of any number of employees.
In the State of Maharashtra an employee is exempted from paying any court-fee, other than the fee for service of process, for making such application; but at the same time the Government is empowered to recover the amount of such court-fee from the employer if the employee succeeds in the application. {Section 21A}
The limit of "ten times the amount of such excess" mentioned in section 20(3)(i) of the Act is the maximum limit. When the Authority awards heavy compensation under the said section, it must give reasons for doing so.
The intension of the Legislature was to include employment on hotels and restaurants under purview of the Minimum Wages Act. When the Legislature specifically omitted the term "Students' Hotels" in the Schedule, it thereby excludes it from the purview of the Minimum Wages Act.

The procedure for making a claim is as follows:

a.     An employee having any claim under the Act has to make an application to the Authority appointed under the Act.

b.     Such application can be made by the employee himself, or any legal practitioner or any official of a registered trade union.

c.     Such application has to be made within six months from the date on which the claim amount became payable.

d.     In appropriate case the Authority can, over and above directing the payment of the difference between minimum wages payable and wages actually paid, award compensation upto ten times the amount of the difference.

e.     The amount directed to be paid by the Authority can be recovered as if it were a fine imposed by a Magistrate.

       f.   Every direction of the Authority will be final. {Section 20}
The employer is bound pay minimum wages fixed under the Act and it is irrelevant whether he has the capacity to pay them or not.
An Industrial Tribunal adjudicating a dispute relating to wages is not bound by the minimum rates of wages fixed under the Minimum Wages Act and it is open to it to fix wages at rates higher than the rates of minimum wages fixed under the Act.
Section 24 of the Act does not bar the jurisdiction of an Industrial Tribunal to adjudicate upon a dispute relating to the fixation of wages of employees covered under the Act.
Where an employee gets wages higher than the minimum wages fixed under the Act he cannot claim any benefit under the Act.
If an employee covered by the Act works for more than 9 hours on any day or 48 hours in any week, he is in respect of overtime work entitled to wages at double the ordinary rate of wages. {Section 14 & Mah. Rule 26}
A normal working day prescribed for the employees covered by the Act is of 9 hours. {Section 13 & Mah. Rule 24}
The minimum rate of wages fixed under the Act is remuneration payable to the worker as one package of fixed amount, Neither the scheme of the Act nor any provision of the Act provides that the rate of minimum wages is to be split into basic wages and cost of living allowance and therefore where an employer is paying total sum which is higher than the minimum rate of wages fixed under the Act including cost of living allowance, the employer is not committing any illegality.
Where minimum wages are fixed and enforced under section 5 of the act in respect of any employment covered by the Act, the employer is bound to pay to every employee engaged in that employment wages at a rate not less than the minimum rate to fixed and enforced. {Section 12}
Such supply cannot form part of the minimum wage unless it is authorized by the appropriate Government by a notification in the Official Gazette under section 11(3) of the Act.
Attendance bonus is in the nature of an incentive. It is an additional payment made to the workmen as a means of increasing production. It cannot be treated as part of the minimum wage fixed under the Act.
As a rule minimum wages payable under the Act must be paid in cash. The employer, however, can pay them in kind with the permission of the appropriate Government. {Section 11}
The task of the Government is not over once it fixes minimum rates of wages payable to employees employed in a scheduled employment. The minimum rates of wages of fixed are required to be reviewed and, if necessary, revised by the Government at intervals not exceeding five years. {Section 3(1)(b)}

a.     by appointing one or more committees and sub-committees consisting of representatives of employers and employees and also of independent persons to hold necessary enquiries and by taking into consideration the advice tendered by the committee or committees; or

      b.    by formulating and publishing its proposals and taking into consideration the representations received in response to the proposals. {Section 5}

The Act is expected to fix the minimum wages in respect of employees whether they are casual, daily rated, temporary or permanent. The Act is applicable to daily rates employees also.
A teacher would not come within the definition of "employee" given  under Section 2(i) of the Act. It is beyond the competence of a Government to bring the teachers of an educational institution under the purview of the Act.
The list is not an exhaustive one. The appropriate Government can add any employment to either part of the Schedule. {Section 27}
The Government is required to fix minimum rates of wages payable to employees employed in the employments specified in Part I or Part II of the Schedule appended to the Act. {Section 3}
The object of the Act is to provide for fixing and revising minimum wages in certain employments in order to stop sweated labour and prevent the exploitation of unorganized labour.
The Payment of Wages Act and the Industrial Disputes Act operate in different fields and the provisions of section 26 of the Industrial Disputes Act providing for penalty for illegal strikes do not affect the right of the management to effect a cut in wages to the extent permitted by Section 9(2) of the Payment of Wages Act.
  1. An advance of wages shall not exceed four months wages.
  2. The advance may be recovered in installments by deduction from wages spread over not more than 18 months.
  3. No installment shall exceed one-third of the wages for the month.
  4. The rate of interest charged for advances shall not exceed 6 1/4% per annum. {Rule 18}
If such deduction and payment is made with the consent of the employees and / or with the approval of a competent Court, it is not invalid under Section 7 of the Act.
An employer shall stand discharged of his liability to pay such wages if he pays them to the nominee of the deceased person, and in case he is not able to do so, if he deposits them with the prescribed authority. {Section 25A}

Every employer must display in his factory or establishment a notice containing the abstracts of the Act and the rules made thereunder in English and also in the language understood by the majority or the persons employed in the factory or establishment. {Section 25}

 

Form No. VI and Rule 24 regarding the display of the abstract of this Act has been deleted by Government of Maharashtra vide notification date 30-Mar-2001 MGG Pt. I-L. Ext. date 30-Mar-2001 P. 213

Such agreement being beneficial and advantageous to the employees is not null and void under Section 23 of the Act.
An employed person is prohibited from contracting out of the Act, i.e. from giving up any right conferred upon him by the Act, and any contract or agreement made by him relinquishing such rights is null and void. {Section 23}
No such suit can be filed because according to section 22(d) of the Act no Court can entertain any suit for the recovery of any deduction from wages insofar as the sum so claimed can be recovered by an application under section 15 of the Act.
The Authority or the Appellate Court can attach the property of an employer pending the disposal of such claim if it is satisfied that the employer is likely to evade payment of any amount that may be ordered to be paid by it. {Section 17A}
The Authority under the Payment of Wages Act is a Court of summary jurisdiction having powers to deal with the simple matter of delay in payment of wages or deduction from wages. It is not within the competence of the Authority to decide the question of the status of an employed person, i.e., whether he is a Mistry or Veldar. The matter is a complicated question of law as also of fact.
If an order of suspension has been passed by an officer competent to pass it, the authority under the Act cannot examine its validity to see as to whether it was justified in law or not.
The subsistence allowance payable to an employee placed under suspension pending Departmental Enquiry is covered within the definition of wages given under Section 2(6) of the Act and, therefore, the Authority is competent to entertain and decide an application for payment of subsistence allowance.
The writ petition is not maintainable if by filing it the employer has deliberately chosen to circumvent the provisions of law.
The Act makes no provision for condonation of the delay in filing the appeal.
The amount required to be deposited under Section 17(1A) must be paid at the time of filing of the appeal. The appeal filed un-accompanied by the certificate of deposit is not maintainable.
Section 17(1A) of the Act provides that no such appeal shall lie unless the amount payable under the order has been deposited by the employer with the Authority.

If the employer is aggrieved by the order of the Authority, he also can, within 30 days of the date of order, prefer an appeal to the Appellate Court if the amount ordered to be paid by him is more than Rs. 300.00 or the order imposes on him a financial liability of more than Rs. 1000.00

In the State of Maharashtra and in some other States the employed person is exempted from paying any Court-fees, other than fees for service of process, for making such application; but at the same time the Government is empowered to recover the amount of such court-fees from the employer of the employed person if the employed person succeeds in the application. {Section 15A}
This can be done if they are working in the same establishment and if deductions have been made from their wages for the same cause and during the same wages period or if their wages have remained unpaid for the same wage period. {Section 16}
Compensation awarded under section 15(3) is not penal but is in the nature of a payment by way of recompensation for loss or privation by reason of deduction from the wages paid.
The compensation awarded under section 15(3) may not be in multiples of the wages deducted. The Authority is free to fix such compensation at the proportionate rate which it may think to be fair and just subject to the maximum of ten times the amount deducted.
Under the second proviso to Section 15(2) of the Act the Authority is given power to condone the delay in making the application within the said period if sufficient cause is shown by the applicant for not making the application within the said period.

The Authority may refuse to entertain an application presented to it, if after giving the applicant an opportunity of being heard the Authority is satisfied, for reason to be recorded in writing that -

a.       the applicant is not entitled to present an application;

b.      the application is barred by limitation, or

c.       the applicant shows no sufficient cause for making a direction under Section 15.

The Authority may refuses to entertain an application presented to it if the application is insufficiently stamped or otherwise incomplete. When the Authority refuses to entertain an application for the said reason, he shall return it with an indication of the defects. The application so refused may be presented again after the defects have been made good. {Rule 7 or Central Rules}

a.       If contrary to the provisions of the Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed, he has to make an application for claiming the same to the Authority appointed under the Act.

b.      Such application can be made by the employed person himself or a legal practitioner or an official of a registered trade union.

c.       Such application has to be made within a period of 12 months from the date on which the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made.

d.      When any application under Subsection (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under Section 3, or give them an opportunity of being heard, and, after such further enquiry, if any, as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employed person of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and not exceeding three thousand rupees but not less than one thousand five hundred rupees in the latter, and even if the amount deducted or delayed wages are paid before the disposal of the application, direct the payment of such compensation, as the authority may think fit, not exceeding two thousand rupees.

e.      The amount directed to be paid by the Authority ca be recovered as if it were a fine.

f.    If the employed person is not satisfied with the order of the Authority, he himself or a legal practitioner or an official of a registered trade union, if the amount claimed by him is more than Rs. 25.00, can, within 30 days from the date of the order prefer an appeal to the Appellate court. {Subsection 15 & 17}
In the Maharashtra Payment of Wages Rules, 1963, the word paymaster is used to denote an employer or other person responsible under section 3 of the Act for the payment of wages required to be paid under the Act. {Rule 2(q)}

a.       In  factories, if any person has been named as the manager of the factory, then the person so named is also responsible for such payment.

b.      In industrial establishments, if there is a person responsible to the employer for the supervision and control of the industrial establishment, then the person so responsible is also responsible for such payment.

c.   Upon railways, if the employer is the railway administration and the railway administration has nominated a person in this behalf, then the person so nominated is also responsible for such payment. {Section 3}
Any person desiring to impose a fine on an employed person or to make a deduction for damage or loss shall explain personally or in writing to the said person the act or omission, or damage or loss in respect of which the fine or deduction is proposed to be imposed, and the amount of fine or deduction, which it is proposed to impose, and shall hear his explanation in the presence of at least one other person, or obtain it in writing. {Subsection 8(3), 10(1-A) & Rule 15}
 Fines can be imposed in respect of only those acts or omissions of the employed persons which are approved by the authority prescribed under section 8(1) of the Act. {Rules 10 to 12}
  1. The employer must exhibit on his premises a list of acts or omissions for which fines can be imposed.
  2. Before imposing a fine on an employed person he must be given an opportunity of showing cause against the fine.
  3. The amount of fine must not exceed 3 percent of the wages.
  4. A fine cannot be imposed on an employed person who is under the age of 15 years.
  5. A fine cannot be recovered by installments or after 90 days from the day of the act or omission for which it is imposed.
  6. The moneys realized from fines must be applied to purposes beneficial to employed persons. {Section 8}
The Act prohibits all kinds of deductions except those which are authorized by or under the Act. {Section 7}
Wages must be paid in current coin or currency notes or in both and not in kind. It is, however, permissible for an employer to pay wages by cheque of by crediting them in the bank account if so authorized in writing by an employed person. {Section 6}

The following are the requirements of the Act in respect of time of payment of wages:

a.       Wages must be paid on a working day and not on a holiday.

b.      Establishments employing less than 1000 persons must pay wages before the expiry of the 7th day of every month and other establishments must pay wages before the expiry of the 10th day of every month.

When the employment of any person is terminated, the wages earned by him must be paid before the expiry of the second working day from the day of termination. {Section 5}
The period to be fixed for paying wages to an employed person must not exceed one month. That means, an employer can choose to pay wages to a person employed by him for a period of every week or every fortnight, but not for a period of every two months or every three months, {Section 4}
Wages means contractual wages and not overtime wages. They are not to be taken into account for deciding the applicability of the Act in the context of section 1(6) of the Act.
Wages averaging less than Rs. 10000.00 per month only are covered or protected by the Act.

The Act is applicable to the payment of wages to persons employed:

a.       in factories;

b.      upon railways;

c.       in other establishments specified in sub-clauses (a) to (g) of section 2(ii) of the Act.

The Act empowers the State Government to extend its provisions to the persons employed in any establishments over and above the aforesaid establishments. {Section 1}
The main object of the Act is to avoid unnecessary delay in the payment of wages and to prevent unauthorized deductions from the wages.
(1) If any employer fails to pay any amount of maternity benefit to a woman entitled under the Act or discharges or dismisses such woman during or on account of her absence from work in accordance with the provisions of the Act, he shall be punishable with imprisonment which shall not be less than three months but which may extend to one year and with fine which shall not be less than two thousand rupees but which may extend to five thousand rupees. The Court may, however, for sufficient reasons to be recorded in writing, impose a sentence of imprisonment for a lesser term or fine only in lieu of imprisonment. (2) If any employer contravenes the provisions of the Act or the rules made thereunder, he shall, if no other penalty is elsewhere provided by or under the Act for such contravention, be punishable with imprisonment which may extend to one year, or with fine which may extend to five thousand rupees, or with both. Where the contravention is of any provision regarding maternity benefit or regarding payment of any other amount and such maternity benefit or amount has not already been recovered, the Court shall, in addition, recover such maternity benefit or amount as if it were a fine and pay the same to the person entitled hereto. {Section 21}
Under the Act the employer is required: (a) to exhibit the abstract of the provisions of the Act and the rules made thereunder in a conspicuous place in every part of the establishment in which women are employed {Section 19 & Rule 5}; (b) to maintain a muster roll in the prescribed form {Rule 3}; (c) to submit annual returns in the four prescribed forms. {Rule 16}
Such condition has to be satisfied for claiming Maternity Benefit under Section 5 of the Act. There is no condition of any sort to be satisfied for claiming leave wages for miscarriage under Section 9 of the Act.
In case of miscarriage, a woman shall be entitled to leave with wages at the rage of maternity benefit, for a period of 6 weeks immediately following the day of her miscarriage. {Section 9}
A woman suffering from illness arising out of pregnancy delivery, premature birth of child or miscarriage shall be entitled, in addition to the period of absence allowed to her under the provisions of the Act, to leave with wages at the rate of maternity benefit for a maximum period of one month. {Section 10}
The appropriate Government can exempt any establishment from the operation of all or any of the provisions of the Act or of any rule made under the Act if the benefits provided by the establishment are not less favourable that those provided in the Act. {Section 26}
If a woman works in any establishment after she has been permitted by her employer to absent herself under the provisions of the Act for any period during such authorized absence, she shall forfeit her claim to the maternity benefit for such period. {Section 18}

A woman entitled to maternity benefit under the Act shall also be entitled to receive from her employer a medical bonus of 2500 rupees, if no pre-natal confinement and postnatal care is provided for by the employer free of charge. The medical bonus shall be paid along with the second installment of the maternity benefit. {Section 8 & Rule 5}

(i) The maximum period for which any woman shall be entitled to maternity benefit shall be 12 weeks of which not more than 6 weeks shall precede the date of her expected delivery. If a woman dies during this period, the maternity benefit shall be payable only for the days up to and including the day of her death. If a woman, having been delivered of a child, dies during her delivery or during the period immediately following the date of her delivery for which she is entitled for the maternity benefit, leaving behind in either case the child, the employer shall be liable to the maternity benefit for the entire period but if the child also dies during the said period, then, for the days up to and including the date of the death of the child.

 

(ii) But no woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit, for a period of not less than 80 days in the 12 months immediately proceeding the date of her expected delivery.

 

For the purpose of calculating the days on which a woman has actually worked in the establishment, the days for which she has been laid off or was on holidays declared under any law to be holidays with wages during the period of 12 months immediately preceding the day of her delivery, the actual day of her delivery and any period immediately following that day. For the purpose of this provision, 'the average daily wage' means the average of the woman's wages payable to her for the days on which she has worked during the period of 3 calendar months immediately preceding the date from which she absents herself on account of maternity, or the minimum rate of wage fixed or revised or under the Minimum Wages Act, 1948 or 10 rupees, whichever is the highest. {Section 5}
The amount of maternity benefit for the period preceding the date of her expected delivery shall be paid in advance to the woman on production of proof that the woman is pregnant and the amount due for the subsequent period shall be paid to the woman within 48 hours of production of proof that the woman has been delivered of a child. {Section 6}
When a woman absents herself from work in accordance with the provisions of the Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such absence. {Section 12}
If a woman entitled to maternity benefit dies before receiving such benefit, the employer shall pay such benefit to the person nominated by the woman and in case there is no such nominee, to her legal representative. {Section 7}

The restrictions placed by the Act on the employment of women are as follows:

  1. The employer is prohibited from knowingly employing a woman in any establishment during the six weeks immediately following the day of her delivery or her miscarriage;
  2. A woman also, on her part, is required to abstain from working in any establishment during the said period;
A pregnant woman can also request her employer not to give her any work which is of an arduous nature or which involves long hours of standing, etc. during the period of one month immediately preceding the period of six weeks, before the date of her expected delivery or any period during the said period of six weeks for which the pregnant woman does not avail of leave of absence, under the Act. On such a request being made by her, the employer shall not give her such work during such period. {Section 4}
The Supreme Court, in Municipal Corporation of Delhi v. Female workers (Muster Roll) & Anr. (2000 I C.I.R. 879) has said; "We have scanned the different provisions of the Act, but we do not find anything contained in the Act which entitles only regular woman employees to the benefit of maternity leave and not those who are engaged on casual basis or on muster roll on daily wage basis."

The Act applies to (1) every establishment being a factory, mine, plantation or circus; (2) every shop in which 10 or more persons are employed; (3) any other establishment to which the Act is applied by the State Government under the proviso to Section 2(1)

 

Note: (1) The Act applies to a factory, mine or plantation belonging to Government. (2) The Act does not apply to any factory or other establishment to which the provisions of the Employees' State Insurance Act apply. {Section 2}
The Object of the Act is (1) to provide for maternity benefit to women workers in certain establishments; (2) to regulate the employment of women workers in such establishments for certain period before and after child birth.
The equality of work is not based on the designation or the nature of work alone. There are several other factors, which are equally relevant. They are qualifications, responsibilities, reliabilities, experience, confidentiality, functional need and requirements commensurate with the position in the hierarchy.
Every employer shall maintain in the prescribed form (Form D) a register in relation to the workers employed by him. {Section 8 & Rule 6}

If any employer:-
 
(a) makes any recruitment in contravention of the provisions of the Act, or
 
(b) makes any payment of remuneration at unequal rates to men and women workers, for the same work or work of a similar nature, or

(c) makes any discrimination between men and women workers in contravention of the provisions of the Act, he would be punished with fine upto Rs. 10000.00 {Section 10}


a) Complaints with regard to the contravention of any provision of the Act and claims arising out of non-payment of wages at equal rates to men and    women workers for the same work or work of similar nature shall be heard and decided by an authority appointed by the appropriate Government. An appeal shall lie against any order of the authority to an appellate authority appointed by the appropriate Government (Section 7)



b) Monies due from an employer arising of the decision of the authority or the appellate authority can be recovered by making an application under Section 33-C(1) of the Industrial Disputes Act, 1947. (Section 7(8))
The provisions of the Act shall be inapplicable when special treatment is given to women under any law or when special treatment is accorded to women in connection with the birth of a child. {Section 15}
No employer shall make any discrimination against women while making recruitment for the same work or work of a similar nature. {Section 5}
No employer shall pay to any worker employed by him remuneration at rates less favourable than those at which remuneration is paid by him to the workers of the opposite sex for performing the same work or work of similar nature. {Section 4(1)}
The Central Government is empowered to authorize any employer of an establishment employing one hundred or more persons to maintain a Provident Fund account in relation to the establishment so as to ensure prompt service to the members of the Fund. {Section 16(A)}
The provisions of sections 6, 7-A, 8 and 14-B shall, so far as may be, apply to the employer of the exempted establishment and where such employer contravenes, or makes default in complying with any of the said provisions or any other provision of the Act, he shall be punishable under section 14 as if the said establishment had not been exempted. {Section 17(1A)}
The Act permits the Central Government or the State Government, subject to specified conditions, to exempt any establishment from the operation of all or any of the provisions of any Scheme if the Government thinks it fit to do so having regard to the adequacy of the benefits similar to those of the Schemes available to the employees of such establishment. {Section 17(1)}
The offence relating to default in payment of any contribution especially the employee's share deduct from the wages of the employees by the employer is cognizable. That means a person committing such offence can be arrested by the police without warrant. {Section 14(AB)}
The employer is liable to pay the employer's contribution as  well as the employee's contribution irrespective of the fact that wages have been paid to the employees or not.
If the remittance of contribution to Provident Fund is delayed on account of the delay  in a Bank or post office, the employer cannot be penalized for it under section 14-B.

If any employer makes default-

         i.            in the payment of any contribution to any Fund;

       ii.            in the transfer of accumulations as required under Section 15(2) or Section 17(5);

in the payment of any charges payable under the Act or Schemes the Central/Regional Provident Fund Commissioner can levy and recover from the employer by way of penalty such damages not exceeding the amount of arrears, as may be specified in the scheme. The Central Board may reduce or waive the damages levied by the Commissioner in certain case. {Section 14(B)}
In 1991, the Central Government, by inserting Para 32-A in the Employees' Provident Funds Scheme, has laid down different rates of damages depending upon the period of default. Courts have held that it is not just and fair to levy damages at a flat rate for different periods of default.
No period of limitation is prescribed in the Act for exercising the power of levying damages under section 14-B of the Act.

a.       If any person, for the purpose of avoiding any payment to be made under the Act or the Schemes, knowingly makes any false statement or false representation, he would be punished with imprisonment upto one year, or with fine upto Rs. 5000.00 or with both.

b.       If any employer makes default in payment of the employer's contribution or the employee's contribution payable under the Employees' Provident Funds Scheme or paragraph 38 of the said scheme relating to the payment of administrative charges, or under section 17(3)(a) of the Act relating to the payment of inspection charges, he would be punished with imprisonment upto three years but it shall not be less than one year and a fine of Rs. 10000.00 in case of default in payment of the employee's contribution which has been deducted by the employer from the employees' wages and six months and a fine of a Rs. 5000.00 in any other case.

c.       If any employer makes default in payment of the employer's contribution or the administrative charges payable under the Deposit Linked Insurance Scheme under section 6-C or contravenes the provisions of section 17(3)(a) relating to the payment of inspection charges, he would be punished with imprisonment upto 1 year, but which shall not be less than 6 months, plus fine upto Rs. 5000.00

d.       If any person contravenes or makes default in complying with any other provision of the Act or any condition for exemption from any scheme, he would be punished with imprisonment upto six months but which shall not be less than 1 month and with fine upto Rs. 5000.00 or with both.

If any person convicted of an offence under the Act or the Schemes commits it again, he would be punished with imprisonment upto five years but which shall not be less than two years, plus fine upto Rs. 25000.00 {Section 14 & 14(AA)}
On the application of the statutory Provident Fund Scheme to an establishment, the accumulations in the private provident fund in that establishment standing to the credit of the employees who become members of the statutory Provident Fund must be transferred to the statutory Provident Fund. The accumulations will be credited to the accounts of the employees entitled thereto in the statutory Provident Fund. {Section 15}
Where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. {Section 2(A)}

An Inspector appointed under the Act has power-

1.       to require any employer or contractor to furnish any information required by him;

2.       to enter and search any establishment or premises and require any one found in charge thereof to produce any accounts, books, registers and other documents relating to employment or wages for his examination;

3.       examine any employer or his agent, servant or employee found in such establishment or premises;

make copies of any book, register or other document or seize such books, register or other document. {Section 13}
The nominee cannot claim an absolute right to the amount excluding the right of the heirs. An heir of the deceased employee can always initiate legal proceedings against the nominee for claiming his share in accordance with the law of succession.
Vesting of the amount in the nominee is for limited purpose of receiving the amount from the employer and handing over the same to the heirs entitled thereto. The nominee is merely authorized to receive the amount for the benefit of heirs of the deceased.
The amount standing to the credit of a member in the Fund cannot be assigned, charged or attached under any decree or order of any Court. Similarly, the amount standing to the credit of a member in the Fund at the time of his death is free from any debt or other liability incurred by the member before his death and cannot be attached under any decree or order of any Court. {Section 10}
The position of a Recovery Officer in exactly that of an executing court. He can recover only the amount specified in the certificate. If the certificate does not include any interest, it is beyond the competence of the Recovery Officer to demand such amount.

The Central Regional Provident Fund Commissioner can recover such arrears-

1.       by issuing a certificate to the Recovery Officer to recover the arrears from the employer by one or more of the modes mentioned in section 8-B;

2.       by requiring any person from whom any money is due to the employer to deduct the amount of arrears from such money and pay the same to him, i.e., the Central Regional Provident Fund Commissioner;

3.       by issuing a notice to any person from whom any money is due to the employer, requiring to pay the amount of arrears to him, i.e., the Central Regional Provident Fund Commissioner;

4.       by applying to the Court, in whose custody there is any money belonging to the employer, for payment of the amount of arrears from such money to him, i.e., the Central Regional Provident Fund Commissioner;

by distraint and sale of the moveable property of the employer in the manner laid down in the Third Schedule to the Income Tax Act, 1961. {Subsection 8(B) to 8(G)}
If the employer pays any contribution or administrative charges for or on behalf of a contractor, he can recover the same from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor. The contractor can, then recover the employee's contribution from the wages of the employee. {Section 8(A)}
If any dispute arises regarding the applicability of the Act to an establishment or as to the amount of moneys due from any employer under the Act or any Scheme, the Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner, or any Assistant Provident Fund Commissioner may decide the same by holding an enquiry. {Section 7(A)}
Under Section 7-I of the Act an appeal against such order lies to E.P.F. Appellate Tribunal and as such a Writ Petition against such order is not maintainable.

An appeal lies to the Provident Funds Appellate Tribunal-

1.       against any order passed under the proviso to subsection (3) of section 1, applying the provisions of the Act to any establishment employing less than twenty persons;

2.       against any orders passed under subsection (4) or section 1, applying the provisions of the Act to any establishment on the application of the employer and employees;

3.       against any notification of the Central Government under section 3, applying the provisions of the Act to any establishment having a common provident fund with another fund with another establishment to which the Act is applicable;

4.       against any order passed under subsection (1) of section 7A, deciding any dispute regarding the applicability of the Act to any establishment and determining the amount due from any employer under the Act or any Scheme framed under the Act;

5.       against any order passed under section 7B reviewing his own order;

6.       against any order passed under section 7C, re-opening any case and redetermining the amount due from any employer;

7.       against any order under section 14B, levying for de-fault any damages upon any employer by way of penalty.

The Act is not applicable -

a.       to any factory or other establishment registered under any Central or State law relating to co-operative societies, employing less than 50 persons and working without the aid of power;

b.       to any establishment belonging to the Central Government or a State Government and having a scheme of contributory provident fund or old age pension;

to any establishment set up under any Central or State Act and having a scheme of contributory provident fund or old age pension; {Section 16(1) and (c)}
The Act permits the Central Government, subject to specified conditions, to exempt any class of establishments from the operation of the Act, if having regard to their financial position or other circumstances of the case, it is necessary or expedient to do so. {Section 16(2)}

The Central Government has been given wide powers to extend the application of the Act. It can apply the provisions of the Act-

a.       to any factory or establishment even if such factory or establishment is employing less than 20 persons; {Section 1(3)(b) Proviso}

b.       to any factory or establishment whatsoever if the employer and the majority of the employees of such factory or establishment have agreed that the provision of the Act should be made applicable to it on and from the date of such agreement or from any subsequent date specified in such agreement; {Section 1(4)}

c.       to any factory employing 20 or more persons but not engaged in any industry specified in Schedule I to the Act. {Section 4}

where, immediately before the Act becomes applicable to any establishment there is a provident fund which is common to the employees in that establishment and employees in any other establishment, to such other establishment. {Section 3}
A poly clinic is covered by the entry in respect of "establishments of hospital" as well as the entry in respect of "establishment of Medical Practitioners and Specialists" and therefore the Act applies to a poly clinic. The object (of the two entries) is to bring all medical establishments employing 20 or more persons under the purview of the Act.
For the purpose of the Employees Provident Funds Act a partner of a partnership firm cannot be said to be an employee of the firm having regard to the provisions of the Indian Partnership Act. A person cannot be both an employer and employee.
The provisions of Section 2(f)(ii) of the Act and Para 2(f)(iv) of the Scheme framed under the Act are to be kept in mind while considering if a trainee is an employee or not. These provisions show that a trainee who is an apprentice engaged under the Apprentices Act, 1961 or who is an apprentice according to the certified standing orders applicable to the establishment is excluded from the definition of an employee under the Act.
The workers employed at their homes in the manufacture of beedis are also entitled to the benefit of the Act and the Schemes framed thereunder.
The plea that an establishment is a charitable institution is not relevant to the determination of the question of the applicability of the Act
Where a factory is closed down for good and only four security men are retained for keeping a watch over the assets and properties of the establishment, the Act would not continue to be applicable to the factory
Where there is neither an establishment nor an employer nor an employee, there is no point in saying that the Act would continue to apply. In such circumstances any continued application of the Act would be in vacuum.

The Act is applicable to:

a.       every factory engaged in any industry specified in Schedule I to the Act and employing 20 or more persons;

b.       every other establishment employing 20 or more persons specified by the Central Government in this behalf.

Any establishment to which the Act applies shall continue to be governed by the Act even if the number of persons employed therein at any time falls below 20. {Section 1(3) & (5)}

The provisions of the two Acts are neither inconsistent nor repugnant and, therefore, there is not question of either automatic or implied repeal of the Bombay Shops and Establishments Act on coming into operation of the Motor Transport Workers Act.
There is a large number of offences under the Act and the majority of them are punishable with fine which would be not less than fifty rupees and which may extend to five hundred rupees. {Subsection 52 to 61}
A Nationalized Bank is not an establishment of the Central Government nor is there any specific exemption from the provisions of the Act for Nationalized Banks as in the case of the Reserve Bank of India and the State Bank of India. A Nationalized Bank cannot, therefore, claim exemption from the provisions of the Act.

Exemptions are of two kinds, temporary exemption from the "operation" of the provisions of the Act and permanent exemption from the "application" of the provisions of the Act are as follows:

a.       The Government, by issuing a general notification, can temporarily exempt all establishments from all or some of the provisions of the Act by suspending the operation of such provisions on account of any holidays or festive occasions.

The Government, by issuing a special notification, can permanently exempt any establishment from all or some of the provisions of the Act by making such provisions inapplicable to that establishment on account of the special requirement of that establishment. {Subsection 4 & 6}
The professional activity of a legal practitioner could not be included in the definition of "commercial establishment".
If any shop or commercial establishment situate within the precincts of a factory is not connected with the manufacturing process of the factory, it will be governed by the Shops and Establishments Act. But the State Government can apply all or any of the provisions of the Factories Act to such shop or commercial establishment. {Section 70}
An employee who is given a holiday or who is on leave in accordance with the provisions of the Act is prohibited from working in any establishment on  such holiday or during such leave. {Section 65}
Every employer or manager of a shop or commercial establishment has to maintain various registers like register of employment, a register of leave, a visit book, etc, as detailed in Rules made under the Act. He has also to maintain certain records and display certain notices as per the Rules. {Section 62 & Rule 20}
If the rights or privileges conferred on an employee under any other law, contract, custom, usage, award, settlement or agreement are more favourable than those conferred under the Shops and Establishments Act, then, the former will prevail over the latter. {Section 69}
When an employer terminates the services of any employee (by way of discharge or dismissal) for misconduct, the employer need not give any notice to the employee. {Section 66 Proviso}
If the services on an employee are terminated without giving such person any notice or wages in lieu of notice, as per Section 66 of the Act, his termination is bad in law and he is entitled to reinstatement with continuity of service and full back wages.

(1) If an employer wants to terminate the services of any employee who has been in his continuous service employment for one year or more, the employer can terminate his services by giving him 30 days' notice in writing or wages in lieu of such notice.

(2) If an employer wants to terminate the services of any employee who has been in his continuous service employment for less than one year but more than three months, the employer can terminate his services by giving him 14 days' notice in writing or wages in lieu of such notice. {Section 66}
When any employee is required to work overtime, i.e. in excess of the limit of hours of work, he must be paid for a such work at double the rate of his ordinary wages. The limit of hours of work for the purpose of calculating overtime is 9 hours in any day and 48 hours in any week {Section 63}

An Inspector appointed under the Act has power:

a.       to enter any place which is an establishment;

b.       to make examination of the premises, registers, records and notices;

c.       to take evidence of any person;

if he suspects that an employer has committed an offence under Section 52 or 55, to seize the necessary registers, records or other documents and retain them for a reasonable period for examination thereof or for prosecution of the employer. {Section 63}

Every establishment must take appropriate measures as

a.       per the provisions of the Act and the Rules:

b.       to keep the premises clean;

c.       to keep the premises ventilated;

d.       to keep the premises sufficiently lighted during working hours;

e.       to protect the premises against fire; and

if a manufacturing process is carried on in the premises to provide and maintain a first-aid box.
Section 38-C of the Bombay Shops and Establishments Act as well as the proviso to sub-section (1) of Section 2 of the Maternity Benefit Act give power to the State Government to extend the application of the Maternity Benefit Act to women employees in any establishment or class of establishments. Accordingly the State Government has extended the application of the Maternity Benefit Act to all shops, commercial establishments, residential hotels, restaurants and eating houses to which the Bombay Shops and Establishments Act applies but the Employees' State Insurance Act does not apply.
According to Section 38-B of the Bombay Shops and Establishments Act the provisions of the Industrial Employment (Standing Orders) Act, in its application to the State of Maharashtra, are applicable to all establishments wherein fifty or more employees are employed and to which the Bombay Shops and Establishments Act applies.
An employee working in a clerical capacity in an establishment to which the Bombay Shops and Establishments Act applies is entitled to claim compensation under the Workmen's Compensation Act. By virtue of Section 38-A of the Bombay Shops and Establishments Act he is deemed to be a workman within the meaning of the Workmen's Compensation Act and, therefore, it is not necessary for him to prove that he is a workman under the said Act.
According to Section 38-A of the Bombay Shops and Establishments Act, the provisions of the Workmen's Compensation Act are application to employees of establishments to which the Bombay Shops and Establishments Act applies.
Section 38 of the Bombay Shops and Establishments Act gives power to the State Government to extend the application of the Payment of Wages Act to any class of establishments or any glass of employees to which the Bombay Shops and Establishments Act applies. Accordingly the State Government has extended the application of the Payment of Wages Act to establishments situated in Greater Bombay, Thane, Poona, Sholapur, Kolhapur and Nagpur.
In addition to annual leave with pay an employee of a shop or re-establishment is entitled to a paid holiday on 26th January, 1st May, 15th August and 2nd October every year. {Section 35(4)}

The main provisions of the Act about the grant of annual leave with wages are as follows:

a.       An employee is entitled to annual leave with pay for 21 days for 240 days of work.

b.       An employee who has not worked for one year is entitled to leave with pay for 5 days for every 60 days of work.

c.       An employee is entitled to be paid before his leave begins half the amount of his leave pay.

d.       Leave with pay can be accumulated upto 42 days.

A discharged employee is entitled to leave pay for the balance of leave to his credit. { Subsection 35 to 37}

Anybody who is between the age of 15 years and 17 years is considered to be a young person. No young person can be required or allowed to work, whether as an employee or otherwise, in any establishment:

a.       after 7.00 p.m.;

b.       for more than 6 hours in any day; and

if the work involves danger to life, health or morals. {Section 33, 34 & 34A}
Restrictions are placed on the closing hours for women as well as on giving then dangerous work. Thus no woman can be required or allowed to work, whether as an employee or otherwise, in any establishment after 9.30 p.m. In other words, women cannot be required or allowed to attend work late in the evening. Similarly no woman working in any establishment, whether as an employee or otherwise, can be required or allowed to perform work involving danger to her life, health or morals. {Subsection 33 & 34A}
The employment of children is totally prohibited. Anybody who is below the age of 15 years is considered to be a child. No child can be required or allowed to work whether as an employee or otherwise in any establishment. {Section 32}

The main restrictive provisions of the Act about the working hours of employees in theatres and other places of public amusement or entertainment are as follows:

a.       A theatre or other place of public amusement or establishment must be closed at the latest by 00.30 a.m. {Section 26}

b.       An employee in a theatre or other place of public amusement or entertainment cannot be required or allowed to work for more than 9 hours in a day or 48 hours in a week {Section 28}

c.       He must be allowed an interval of rest of at least one hour after five hours of continuous work. {Section 29}

d.       His spread-over cannot exceed 11 hours in a day. {Section 30}

e.       He must be given at least one day in a week as a holiday. No deduction can be made from his wages on account of such holiday. {Section 31}

Note: The above restrictions can be relaxed in certain circumstances.

The main restrictive provisions of the Act about the working hours of employees in residential hotels, restaurants and eating houses are as follows:

a.       A restaurant or eating house cannot be opened earlier than 5 a.m. and closed later than 12 midnight for service. {Section 19}

b.       An employee in a restaurant or eating house may be required to commence work from 4.30 a.m. onwards. He cannot be required to work after 00.30 a.m. {Section 19}

c.       An employee in a residential hotel, restaurant or eating house cannot be required or allowed to work for more than 9 hours in a day and 48 hours in a week. {Section 21}

d.       He must be allowed an interval of rest of at least one hour after five hours of continuous work. {Section 22}

e.       His spread-over cannot exceed 12 hours in a day. {Section 23}

f.        He must be given at least one day in a week as a holiday. No deduction can be made from his wages on account of such holiday. {Section 24}

Note: The above restrictions can be relaxed in certain circumstances.

The main restrictive provisions of the Act about the working hours of employees in shops and commercial establishments are as follows:

a.       The general rule about the opening hours of shops is that they are not allowed to be opened earlier than 7 a.m. But shops selling goods like milk, vegetable, fish etc., are allowed to be opened from 5 a.m. onward. {Section 10}

b.       This general rule about the closing hours of shops is that they must be closed at the latest by 8.30 p.m. But shops selling goods like pan, bidi, etc., are allowed to be kept open upto 11 p.m. {Section 11}

c.       Commercial establishment are not allowed to be opened earlier than 8.30 a.m. and closed later than 8.30 p.m. in a day {Section 13}

d.       An employee in a shop or commercial establishment cannot be required or allowed to work for more than 9 hours in a day and 48 hours in a week. {Section 14}

e.       He must be allowed an interval of rest of at least one hour after five hours of continuous work {Section 15}

f.        His spread-over cannot exceed 11 hours in a day. {Subsection 16 & 17}

g.       Every shop and commercial establishment must remain closed on one day of the week. No deduction can be made from the wages of any employee in a shop or commercial establishment on account of any day on which it has so remained closed. {Section 18}

Note: The above restrictions can be relaxed in certain circumstances.
A registration certificate will be valid upto the end of the year for which it is granted. It should be renewed every year. The application for renewal should be made not less than fifteen days before the date of expiry of the registration certificate. A registration certificate may be renewed, at the option of the employer, for a period of three years. {Section 7(2A) & (2AA)}
If a registration certificate is lost, destroyed or defaced the employer should obtain a duplicate copy of the certificate by making a necessary application and paying the prescribed fees to the Inspector who had issued the certificate. {Rule 7}
An employer is required to notify to the Inspector the closing of his establishment within 10 days of his doing so. The Inspector will then cancel the registration of the establishment. {Section 9}
As the establishment of the employer is already registered, he has only to notify to the Inspector under section 8 of the Act the change that he has started a new business in addition to the original business on the same premises.

(a) The employer of an establishment has to apply to the Inspector of the local area concerned in the prescribed form (Form A) along with the prescribed fees for getting the establishment registered under the Act.

 

(b) On receipt of the application and the fees the Inspector, on being satisfied about the correctness of the particulars contained in the application, will register the establishment and will issue a registration certificate.

 

(c) If there is any change in the said particulars, the employer has to notify the same to the Inspector by applying in the prescribed form (Form E) accompanied by prescribed fees and get the registration certificate suitable amended.

 

(d) The employer has to get the registration certificate renewed every year by applying to the Inspectors in the prescribed form (Form B) accompanied by prescribed fees. {Section 7 & 8 Rule 5 & 8}
A church is neither a shop nor a commercial establishment. It will be stranger than fiction to hold that the devotee who goes to the church is a "customer" and the church is a commercial establishment or shop where "services are rendered".
Such an association, which is only for the benefit of its members and which is neither carrying on any trade or business nor rendering any services to outsiders, will not come within the definition of the term "shop" or "commercial establishment".
A place where services are sold on retail basis is also a shop. Therefore, an establishment engaged in arranging for musical performance on occasions such as marriages etc., is a shop.
According to the definition of a shop, an establishment where goods are sold or an establishment where services are rendered to customers is a shop. {Section 2(27)}
If such a shop or commercial establishment is not connected with the manufacturing process of the factory the provisions of the Act will apply to it. Otherwise the provisions of the Factories Act will apply to it. {Section 70
The establishment of the Central Government and the State Government are exempted from all provisions of the Act {Section 4 & Schedule II Entries 1 & 2}
Broadly speaking the premises governed by the Act are shops, commercial establishments, residential hotels, clubs, restaurants, eating houses, theatres and other places of public amusement or entertainment. {Preamble}
In the first instance the operation of the Act is confined to the municipal areas specified in Schedule I to the Act. But the State Government is required to extend the operation of the Act to other areas having population of 25,000 and more. {Section 1}
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