LABOUR LAW

CHECKLIST

CONTRACT LABOUR(REGULARATION &

ABOLITION) ACT,1970 & THE RULES

Applicability

Registration
Registration of
of

Every establishment in which 20 or

Establishment
Establishment
Object of the Act
more workmen are employed or
Principal
Principal
employer
employer
To regulate the
were employed on any day of the
employing
employing 20
20 or
or more
more
employment of
preceding 12 months as contract
workers
workers
through
through
the
the
contract labour in
labour.
contractor
contractor
or
or
the
the
certain establishments
Every contractor who employs or who
contractor(s)
contractor(s) on
on deposit
deposit of
of
and to provide for its
employed on any day of the
required
required fee
fee in
in Form
Form 1
1
abolition in certain
preceding twelve months 20 or
circumstances and for
more workmen.
Sec.
Sec. 7
7
matters connected
Sec. 1
therewith.
Revocation of
Licensing of Contractor
Registration
Engaging 20 or more than
Prohibition of Employment of
When obtained by
20 workers and on
Contract Labour
Misrepresentation
or
deposit of required fee
Only by the appropriate Government
suppression
in Form IV.
through issue of notification after
Of
material
facts
etc.
after
Valid
for
specified
consultation with the Board (and not
opportunity
to
the
period.Sec.12, Rule 21
Courts) can order the prohibition of
principal
employment of contract labour.
employer
Sec. 10
Sec. 9
Welfare measures to be taken by the Contractor
Revocation or Suspension &
Contract labour either one hundred or more employed by a
Amendment of Licences
contractor for one or more canteens shall be provided and
When obtained by misrepresentation or
maintained.
suppression of material facts.
First Aid facilities.
Failure of the contractor to comply with
Number of rest-rooms as required under the Act.
the conditions or contravention of Act
Drinking water, latrines and washing facilities. Sec. 16 & 17
or the Rules.
Sec.
14
Liability of Principal Employer
Laws, Agreement or standing
To ensure provision for canteen, restrooms, sufficient supply of
orders inconsistent with the
drinking water, latrines and urinals, washing facilities.
Act-Not Permissible
Principal employer entitled to recover from the contractor for
Unless the privileges in the contract
providing such amenities or to make deductions from amount
between the parties or more
payable. Sec. 20
favourable than the prescribed in the
Muster Roll, Wages Register, Deduction Register and Overtime Register
Act, such contract will be invalid and
by Contractor
the workers will continue to get more
Every contractor shall
favourable benefits.
Sec. 20

Registers of Contractors
Principal employer
To maintain a register of contractor in
respect of every establishment in
Form XII.
Contractor
Rule 74
To maintain register of workers for
each registered establishment in Form
XIII.
To issue an employment card to each
worker in Form XIV.
To issue service certificate to every
workman on his termination in Form
XV.
Rules 75, 76 and 77
PENALTIES
Sec.
Sec. 22

Offence
Obstructions

Sec.23
Violation
imprisonment of 3
Applicability of the Act
Any premises whereon 10 or
more persons with the aid of
power or 20 or more workers
are/were without aid of
power working on any dayd
preceding
12
months,
wherein
Manufactur-ing
process is being carried on.
Sec.2(ii)

Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII
respectively when combined.
Register or wage-cum-Muster Roll in Form XVII where the wage period is a
fortnight or less.
Maintain a Register of Deductions for damage or loss, Register or Fines and
Register of Avances in Form XX, from XXI and Form XXII respectively.
Maintain a Register of Overtime in Form XXIII.
To issue wage slips in Form XIX, to the workmen at least a day prior to the
disbursement of wages.
Obtain the signature or thumb impression of the worker concerned against the
entries relating to him on the Register of wages or Muster Roll-Cum-Wages
Register.
When covered by Payment of Wages Act, register and records to be maintained
under the rules
Muster Roll, Register of wages, Register of Deductions, Register of Overtime,
Register of Fines, Register of Advances, Wage slip.
Rule 79
To display an abstract of the act and Rules in English and Hindi and in the
language spoken by the Majority of workers in such forms as may be approved
by
appropriate
authority
Rule 80
To display notices showing rates of wages, hours of work, wage period, dates of
payment,
names and addresses of the inspector and to send copy to the
Punishment
inspector
and anythe
change
forwithwith
For
obstructing
inspector
or failing to produce registers etc.
Rule 81

- 3 months imprisonment or fine upto Rs.500, or both.

For violation of the provisions of Act or the Rules,

Months or fine upto Rs.1000. On continuing contravention,

Employer to ensure health of
Registration &
additional fine upto Rs.100 per day
workers pertaining to
Renewal of
Factories
Cleanliness Disposal of wastes
and effluents
To be granted by Chief
Ventilation and temperature
Inspector of Factories
dust and fume
on submission of
Overcrowding
Artificial
prescribed form, fee
humidification Lighting
and plan.
Drinking water Spittons.
Secs. 6
Secs. 11 to 20

FACTORIES ACT, 1948

 Self-acting machines.
Casing of new machinery.
Facing of machinery
Prohibition of employment of
Work on near machinery in motion.
women and children near
cotton-openers.
Employment
prohibition
of
young
Hoists and lifts.
persons on dangerous machines.
Striking gear and devices for cutting of
power.
Safety Measures

Working Hours, Spread Over & Overtime of Adults

Weekly hours not more than 48.
Daily hours, not more than 9 hours.
Intervals for rest at least hour on working for 5 hours.
Spreadover not more than 10 hours.
Overlapping shifts prohibited.
Extra wages for overtime double than normal rate of wages.
Restrictions on employment of women before 6AM and beyond 7
PM.
Secs. 51, 54 to 56, 59 & 60

Welfare Measures
Washing facilities
Facilities for storing and drying
clothing
Facilities for sitting
First-aid appliances one first
aid box not less than one for
every 150 workers.
Canteens when there are 250
or more workers.
Shelters, rest rooms and lunch
rooms when there are 150 or
more workers.
Creches when there are 30 or
more women workers.
Welfare office when there are
500 or more workers.

Employment of Young Persons

Annual Leave with Wages

Prohibition of employment of young children e.g. 14 years.

Non-adult workers to carry tokens e.g. certificate of fitnekss.
Working hours for children not more than 4 hrs. and not
permitted to work during night shift.
Secs. 51, 54 to 56, 59 & 60

A worker having worked for 240

days @ one day for every 20 days
and for a child one day for working
of 15 days.
Accumulation of leave for 30 days.
Secs. 79

OFFENCE
For contravention of the Provisions of the Act or
Rules
On Continuation of contravention
On contravention of Chapter IV pertaining to safety
or dangerous operations.
Subsequent contravention of some provisions
Obstructing Inspectors
Wrongful disclosing result pertaining to results of
analysis.
For contravention of the provisions of Sec.41B, 41C
and 41H pertaining to compulsory disclosure of
information by occupier, specific responsibility of
occupier or right of workers to work imminent
danger.

PENALTIES
Sec.92 to
Imprisonment upto 2 years or fine upto Rs.1,00,000 or
both
Rs.1000 per day
Not less than Rs.25000 in case of death.
Not less than Rs.5000 in case of serious injuries.
Imprisonment upto 3 years or fine not less than
Rs.10,000 which may extend to Rs.2,00,000.
Imprisonment upto 6 months or fine upto Rs.10,000
or both.
Imprisonment upto 6 months or fine upto Rs.10,000
or both.
Imprisonment upto 7 years with fine upto
Rs.2,00,000 and on continuation fine @ Rs.5,000
per day.
Imprisonment of 10 years when contravention
continues for one year.

INDUSTRIAL DISPUTES ACT, 1947

Object
Object of
of the
the Act
Act

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

Important Clarifications
Industry has attained wider meaning than defined
except for domestic employment, covers
from barber shops to big steel companies.
Sec.2(I)
Works CommitteeJoint Committee with equal
number
of
employers
and
employees
representatives for discussion of certain common
problems.
Sec.3
Conciliationis an attempt by a third party in
helping to settle the disputes
Sec.4
Adjudication Labour Court, Industrial Tribunal or
National Tribunal to hear and decide the dispute.
Secs.7,7A & 7B
Lay off & Payment of Compensation
Conditions for Laying off
Failure, refusal or inability of an employer to
provide work due to
Shortage of coal, power or raw material.
Accumulation of stocks.
Breakdown of machinery.
Natural calamity. Sec.25-C
Lay off Compensation
Payment of wages except for
intervening
weekly holiday
compensation 50% of total or
basic wages and DA for a
period
of
lay
of
upto
maximum 45 days in a year.
Sec.25-C

Prior Permission by the

Government for
Retrenchment
When there are more than 100
(in UP 300 or more) workmen
during preceding 12 months.
Three months notice or wages
thereto.
Form QA
Compensation
@
15
days
wages.
Sec. 25-N
Prohibition of unfair labour
practice either by
employer or workman
or a trade union as
stipulated in fifth
schedule
Both the employer and the Union

Closure of an Undertaking
60 days notice to the labour
authorities for intended closure in Form
QA. Sec.25FFA
Prior permission atleast 90 days before
in Form O by the Government when
there are 100 ore more workmen
during preceding 12 months (in UP 300
or more workmen) Sec.25-O

Power of Labour Court to give

Appropriate Relief
Labour Court/Industrial Tribunal can
Modify the punishment of dismissal or
discharge of workmen and give
appropriate relief including
reinstatement. Sec.11A

Persons Bound by
Settlement
When in the course of conciliation
proceedings etc., all persons
working or joining subsequently.
Otherwise than in course of
settlement upon the parties to the
settlement.
Sec.18

Notice of Change
21 days by an employer to workmen
about changing the conditions of
service as provided in Ivth Schedule.
Sec.9A

Right of a Workman during

Pendency of Proceedings
in High Court

Employer to pay last drawn wages

to reinstated workman when
proceedings challenging the award
of his reinstatement are pending
in
the
higher
Courts.
Period of Operation of
Settlements and
Awards
A settlement for a period as
agreed by the parties, or
Period of six months on
signing of settlement.
An award for one year after
its enforcement.
Sec.19

Prior Permission for Lay off

When there are more than 100
workmen during proceeding 12
months. Sec.25-M

Prohibition of Strikes & Lock Outs

Without giving to the employer notice of strike, as
During the pendency of proceedings before a Labour
hereinafter provided, within six weeks before striking. Court, Tribunal or National
Within fourteen days of giving such notice.
Tribunal and two months, after the conclusion of such
Before the expiry of the date of strike specified in any proceedings.
During the pendency of arbitration proceedings before an
such notice as aforesaid.
During the pendency of any conciliation proceedings arbitrator and two months after the conclusion of such
before a conciliation officer and seven days after the proceedings, where a notification has been issued under
Sub-Section(3A) of section 10A
conclusion of such proceedings.
During the pendency of conciliation proceedings
During any period in which a settlement or award is in
before a Board and seven days after the conclusion of operation, in respect of any of the matters covered by the
such proceedings.
settlement or award.
Secs.22&23

Conditions of service etc. to remain unchanged under certain circumstances during pendency of
proceedings
Not to alter to the prejudice of workmen concerned the condition of service.
To seek Express permission of the concerned authority by paying one months wages on

dismissal, discharge or punish a protected workman connected with the dispute.

To seek approval of the authority by paying one months wages before altering condition of

service, dismissing or discharging or punishing a workman. Sec.33

Retrenchment of Workmen Compensation & Conditions
Workman must have worked for 240 days.
Retrenchment compensation @ 15 days wages for every completed year to be calculated at last
drawn wages
One months notice or wages in lieu thereof.
Reasons for retrenchment
Complying with principle of last come first go.
Conditions of service etc. to remain unchanged under certain circumstances during pendency of
proceedings
Not to alter to the prejudice of workmen concerned the condition of service.

To seek Express permission of the concerned authority by paying one months wages on dismissal, discharge
or punish a protected workman connected with the dispute.
To seek approval of the authority by paying one months wages before altering condition of service, dismissing
or discharging or punishing a workman. Sec.33

Applicability of
the Act
<Punishment
PENALTIES
Every industrial
Sec.25-U
Imprisonment of upto 6 months or with fine upto Rs.3,000.
Offence
establishment
26
Imprisonment upto one month or with fine upto Rs.50(Rs.1000 for lockCommitting unfair labour practices
27
out) or with both.
wherein 100 or
Illegal strike and lock-ourts
28
Imprisonment upto 6 months or with fine upto Rs.1,000
more (in many
Instigation etc. for illegal strike or lock-outs.
29
Imprisonment for 6 months or with fine upto Rs.1,000
StatesGiving
it is 50
or
financial aid to illegal strikes and lock-outs.
30
Imprisonment upto 6 months or with fine.On continuity of ofence fine
Breach of settlement or award
more).
31A
uptoRs.200
per day
Disclosing
confidential
information
pertaining
to
Sec.21
INDUSTRIAL
EMPLOYMENT
Any industry
Imprisonment
upto 6 months or with fine upto Rs.1,000
Closure without 60 days notice under Sec.25 FFA
covered by
Imprisonment upto 6 months or with fine upto Rs.5,000
Contravention
of
Sec.33
pertaining
to
change
of
conditions
of
Bombay Industrial
31
Imprisonment upto 6 months or fine upto Rs.1,000. Fine upto Rs.100
Service during pendency of dispute etc.
Relations Act,
When no penally is provided for contravention
1946.
Industrial
establishment
covered by M.P.
Industrial
Employment
(Standing Orders)
Act, 1961.

(STANDING ORDERS) ACT, 1946 & THE

RULES

Matters to be provided in Standing orders

Classification of workmen, e.g., whether permanent, temporary, apprentices,

probationers, or badlis.
Manner of intimating to workmen periods and hours of work, holidays, paydays and wage rates.
Shift working.
Attendance and late coming.
Conditions of, procedure in applying for, and the authority which may grant,
leave and holidays.
Requirement to enter premises by certain gates, and liability to search.
Closing and re-opening of sections of the industrial establishments, and
temporary stoppages of work and the right and liabilities of the employer and
workmen arising therefrom.
Termination of employment, and the notice thereof to be given by employer
and workmen.
Suspension or dismissal for misconduct, and acts or omissions which
constitute misconduct.
Means of redressal for workmen against unfair treatment or wrongful
exactions by the employer or his agents or servants.

Additional Matters
Conditions for
Certification of
Standing Orders
Every matter to be
set out as per
Schedule and Rule
2A.
The standing orders
to
be
in
conformity
with
the provisions of
the Act.
Submissions of
Draft Standing
Orders
Within six months
from the date when
the Act becomes
applicable
to
an
industrial
establishment. Five
copies of the draft
Standing Orders are
to be submitted to
the
Certifying
Officer under the
Act.
Sec.3

Service Record Matters relating to service card, token tickets, certification of

service, change of residential address of workers and record of age
Confirmation Age of retirement Transfer Medical aid in case of Accident
Medical Examination Secrecy Exclusive service.
Secs.2(g), 3(2) and Rule 2A

Procedure for
Certification of
Standing Orders
Certifying
Officer
to
forward a copy of draft
standing orders to the
trade union or in the
absence of union, to the
workmen of the industry.
The trade union or the
other representatives, as
the case may be, are to
be heard.
Sec.5
Temporary
application of Model
Standing Orders
Temporary application
of mod standing orders
shall be deemed to be
adopted till the
standing orders as
submitted are certified.
Sec.12-A

Date of
Operation of
Standing
Orders
On the date of
expiry of 30 days
from certification
or on the expiry
of 7 days from
authentication of
Standing Orders.
Sec. 7

Posting of Standing
Orders
The
text
of
the
standing
orders
as
finally certified shall
prominently be posted
in English or in the
language
understood
by majority of workmen
on special board at or
near the entrance for
majority of workers.
Sec. 9

Payment of Subsistence Allowance to the

Suspended Workers
At the rate of fifty per cent, of the wages which the
workman was entitled to immediately proceeding the
date of such suspension, for the first ninety days of
suspension.
At the rate of seventy-five percent of such wages for
the remaining period of suspension if the delay in the
completion of disciplinary proceedings against such
workman is not directly attributable to the conduct
such workman. Sec.10-A

PENALTIES
Failure of employer to submit draft Standing Orders fine of Rs.5000 and Rs.200 for every day on
continuation of ofence.
Fine of Rs.100 on contravention and on continuation of ofence Rs.25 for every day.

MINIMUM WAGES ACT, 1948

CHECK LIST

Object of the Act

To provide for fixing
minimum rates of
wages in certain
employments
Minimum Rates of
Wages
Such as Basic rates of
wages etc. Variable DA
and Value of other
concessions etc. Sec. 4
Fixing Hours for
Normal Working

Fixation of Minimum Rates of Wages

The appropriate government to fix minimum rates of wages.
The
employees employed in para 1 or B of Schedule either at 2 or either part of
notification u/s 27.
To make review at such intervals not exceeding five years the minimum
rates or so fixed and revised the minimum rates.
Government can also fix Minimum Wages for
Time work Piece work at piece rate Piece work for the purpose of
securing to such employees on a time work basis Overtime work done by
employees
for
piece
work
or
time
rate
workers.
Procedure for fixing
Composition of
Payment of
and revising Minimum
Committee
Minimum
Rates of Wages
Representation
of
Rates of
Appointing Committee
employer
and
Wages
Employer to pay to
issue of Notification etc.
employee in schedule
every
employee
Sec. 5
employer in equal
engated in schedule
number
and
employment at a rate
Overtime
independent persons
not less than minimum
To be fixed by the hour, by
rd
not exceeding 1/3 or
rates of wages as fixed
the day or by such a longer
its total number one
by Notification by not
wage-period works on any
such person to be
making
deduction
day in excess of the number
appointed
by
the
other than prescribed.
of hours constituting normal
Sec.12
Chairman.
working day.
Wages
of
workers
who
works
for
less
than
Payment for every hour or for
normal
working
days
part of an hour so worked in
Save as otherwise hereinafter provided, be entitled
excess at the overtime rate
to receive wages in respect of work done by him
double of the ordinary rate of
on that day as if he had worked for a full normal
(1 times or for agriculture
working day.
labour)
Sec.
Sec.15
5

Shall constitute a
normal working day
inclusive of one or
more
specified
intervals.
To provide for a day
of rest in every
period of seven days
with remuneration.
To
provide
for
payment for work on
a day of rest at a rate
not less than the
overtime rate.. Sec.
13
Wages for two class of work
Where an employee does two or more
classes of work to each of which a
diferent minimum rate of wages is
applicable, wages at not less than the
minimum rate in respect of each such
class.
Sec. 16

Maintenance of registers and records

Register of Fines Form I Rule 21(4)
Annual Returns Form III Rule 21 (4-A)
Register for Overtime Form IV Rule 25
Register of WagesForm X, Wages slipForm XI, Muster RollForm V
Rule 26
Representation of register for three year Rule 26-A

Minimum time rate wages for piece

work
Not less than minimum rates wages
as
fixed
.

PENALITIES

Sec. 20

Claims by employees
To be filed by before authority constituted under the Act within 6
months.
Compensation upto 10 times on under or non-payment of wages

Offence

Punishment

For paying less than minimum

rates of wages

Imprisonment upto 6 months

or with fine upto Rs.500/-

For contravention of any provisions

pertaining to fixing hours for
normal working day etc.

Imprisonment upto 6 months

or with fine upto Rs.500/-

TRADE UNIONS ACT, 1926

Object of the Act

Object of the Act

To provide for the registration of Trade Union and in certain respects

To provide
for thethe
registration
of Trade
Union and
in certain
to define
law relating
to registered
Trade
Unionsrespects
to define the law relating to registered Trade Unions
Registration
Registrationof
oftrade
tradeUnion
Union

Registration
Registrationof
oftrade
tradeUnion
Union

Any
Any 77 or
or more
more members
members of
of aa trade
trade union
union may,
may, by
by
subscribing
their
names
to
the
rules
of
the
trade
subscribing their names to the rules of the tradeunion
union
and
andits
itscompliance.
compliance.

Prescribed
Prescribedform
formwith
withfollowing
followingdetails.
details.
Names,
occupations
and
address
Names, occupations and address of
of the
the
members
membersplace
placeof
ofwork.
work.

There
Thereshould
shouldbe
beat
atleast
least10%,
10%,oror100
100ofofthe
thework-men,
work-men,
whichever
is
less,
engaged
or
employed
whichever is less, engaged or employed inin the
the
establishment
establishmentor
orindustry
industrywith
withwhich
whichititisisconnected.
connected.
ItIthas
hason
onthe
thedate
dateof
ofmaking
making application
applicationnot
notless
lessthan
than 77
persons
as
its
members,
who
are
workmen
engaged
persons as its members, who are workmen engaged or
or
employed
employedininthe
theestablishment
establishmentor
orindustry
industrywith
withwhich
whichitit
isisconnected.
connected.
Minimum
Minimumrequirements
requirementsfor
for
membership
membershipof
oftrade
trade
union
union
Not
Notless
lessthan
than10%
10%, ,oror100
100
of
the
workmen,
of the workmen,whichever
whicheverisis
less,
less,
subject
subjectto
toaaminimum
minimumof
of77, ,
engaged
engagedor
oremployed
employedininan
an
establishments
establishmentsetc.
etc.
Sec.
Sec.9A
9A

Sec.
Sec.55

Criminal
Criminalconspiracy
conspiracyin
intrade
trade
disputes
disputes

Cancellation
Cancellationof
of
registration
registration
IfIfthe
thecertificate
certificatehas
hasbeen
been
obtained
by
fraud
obtained by fraudor
or
mistake
mistakeor
oritithas
hasceased
ceasedto
to
exist
or
has
wilfully
exist or has wilfully
contravened
contravenedany
anyprovision
provision
of
ofthis
thisAct.
Act.
IfIfititceases
ceasesto
tohave
havethe
the
requisite
requisitenumber
numberof
of
members.
members.
Sec.
Sec.10
10

Disqualification
Disqualificationof
ofoffice
officebearers
bearers
of
Trade
Union
of Trade Union
IfIfone
onehas
hasnot
notattained
attainedthe
theage
ageof
of18
18years.
years.
Conviction
for
an
ofence
involving
Conviction for an ofence involvingmoral
moral
turpitude.
turpitude.
Not
Notapplicable
applicablewhen
when55years
yearshave
haveelapsed.
elapsed.
Sec.
Sec.21-A
21-A

Penalties

No
No office
office bearer
bearer or
or member
member of
of aa
registered
registeredtrade
tradeunion
unionshall
shallbe
beliable
liableto
to
punishment
punishment under
under sub
sub section
section (2)
(2) of
of
conspiracy
conspiracyu/s
u/s120B
120Bof
ofIPC
IPCininrespect
respectof
of
any
any agreement
agreement made
made between
between the
the
members
for
the
purpose
members for the purposeof
offurthering
furthering
any
anysuch
suchobject
objectof
ofthe
theTrade
TradeUnion.
Union.
Sec.
Sec.17
17

Returns
Returns
Annually
Annuallyto
tothe
theRegistrar,
Registrar,on
onor
orbefore
beforesuch
suchdate
dateas
asmay
may
be
prescribed,
a
general
statement,
audited
in
be prescribed, a general statement, audited in the
the
prescribed
prescribed manner,
manner, of
of all
all receipts
receipts and
and expenditure
expenditure of
of
every
Trade
Union
during
the
year
ending
on
everyregistered
registered
Trade
Union
during
the
year
ending
on
st
the
the31
31stDecember.
December.
Sec.
Sec.28
28

Offence

Punishment

For making false entry in or

any omission in general
statement required for
sending returns.

Fine upto Rs.500. On

continuing default, additional
fault, Rs.5 for each week (not
exceeding Rs.50).

For making false entry in the

form.

Fine upto Rs.500.

Supplying false information

regarding Trade Union

Fine upto Rs.200.

U/s 31

U/s 32

Address
Addressof
ofits
itshead
headoffice;
office;and
and
Names,
ages,
addresses
and
Names, ages, addresses and occupations
occupations of
of
its
itsoffice
officebearers.
bearers.

PAYMENT OF BONUS ACT, 1965 & THE

RULES
Applicability of Act
Every factory where in 10 or more persons are
employed with the aid of power or
An establishment in which 20 or more persons are
employed without the aid of power on any day during
an accounting year

Establishment
Establishment includes
Departments,
undertakings and
branches, etc.

Separate establishment
Computation of available surplus
Income tax and direct taxes as
payable.
Depreciation as per section 32 of
Income Tax Act.
Development rebate, investment or
development allowance.
Sec.5

Components of
Bonus
Salary or wages
includes dearness
allowance but no other
allowances e.g. overtime, house rent,
incentive or

Disqualification & Deduction of Bonus

On dismissal of an employee for
Fraud; or
riotous or violent behaviour while on the premises of the
establishment; or
theft, misappropriation or sabotage of any property of the
establishment or
Misconduct of causing financial loss to the Employer to the
extent that bonus can be deducted for that year.
Secs. 9 & 18.

Eligibility of Bonus

Payment of Minimum Bonus

An employee will be entitled

only when he has worked
for 30 working days in that
year.
Sec. 8
Time Limit for
Payment of Bonus
Within 8 months from the
close of accounting y ear.
Sec. 19

8.33% of the salary or

Rs.100 (on completion of 5
years after 1st Accounting year
even if there is no profit)
Sec.10
Sec. 8
Set-off and
Set-on
As per Schedule IV.
Sec. 15

Maintenance of Registers and Records etc.

If profit and loss accounts

are
prepared
and
maintained in respect of
any such department or
undertaking or branch,
then such department or
undertaking or branch is
treated as a separate
establishment.
Sec.3
Computation of gross
profit
For banking company, as
per First Schedule.
Others, as per
Second Schedule
Sec.4
Eligible Employees
Employees drawing wages
upto Rs.3500 per month or
less.
For
calculation
purposes Rs.2500
per
month
maximum will be
taken even if an
employee
is
drawing
upto
Rs.3500 per month.
Sec.12
Note: The proposal to
enhance the existing
ceiling of Rs.3500 is under
active consideration by

A register showing the computation of the allocable surplus referred to in clause (4) of section 2, in
form A.
A register showing the set-on and set-off of the allocable surplus, under section 15, in form B
A register showing the details of the amount of bonus due to each of the employees, the
deductions under section 17 and 18 and the amount actually disbursed, in form C.
Sec.26, Rule 4
Act not applicable to certain employees of LIC, General Insurance, Dock Yards, Red Cross, Universities
& Educational Institutions, Chambers of Commerce, Social Welfare Institutions, Building Contractors,
etc. etc. Sec.32.
PENALTY

For contravention of any provision of the Act or the

Rule

Upto 6 months or with fine upto Rs.1000.

Sec.28

PAYMENT OF WAGES ACT, 1936

Applicability of Act
Factory industrial
Establishment
Tramway service or motor
transport service engaged in
carrying passengers or good
or both by road for hire or
reward. Air transport
service Dock, Wharf or Jetty
Inland vessel, mechanically
propelled
Mine, quarry or oil-field
Plantation

of
Object
ofthe
the
Act
Time Object
of
payment
ofAct
wages
To
regulate
the
payment
of
To
regulate
the
payment
ofwages
wagesof
of
The wages of every person
employed
certain
classesof
ofemployed
employedpersons
persons
becertain
paid. classes
When less than 1000 persons are
employed shall be paid before the
expiry of the 7th day of the following
month.
When more than 1000 workers, before
the expiry of the 10th day of the
following
month.

Wages to be paid in
current coins
or currency
notes
All wages shall be paid
in current coins or
currency notes or in
both.
After obtaining the
authorization, either by
cheque or by crediting
the wages in employees

Coverage of Employees
Drawing average wage upto
Rs.6500 pm as amended w.e.f.
6.9.05.
Fines as prescribed by
Not to imposed unless the
employer is given an
opportunity to show cause
To record in the register
Sec.8

Deductions for service

rendered
When accommodation amenity
or service has been accepted
by the employee.
Sec.11

Deduction made from wages

Deductions such as, fine, deduction for
amenities and services supplied by the
employer,
advances
paid,
over
payment of wages, loan, granted for
house-building or other purposes,
income tax payable, in pursuance of
the
order
of
the
Court,
PF
contributions, cooperative societies,
premium
for
Life
Insurance,
contribution to any fund constituted by
employer or a trade union, recovery of
losses, ESI contributions
etc.etc.
Deduction for damage or loss
For default or negligence of an
employee resulting into loss. Show
cause notice has to be given to the

On contravention of S.5 (except sub-sec.4), S.7, S.8

(except Ss.8), S.9, S.10 (except Ss.2) and Secs.11 to
13.

For failing to maintain registers or records; or

Wilfully refusing or without lawful excuse
neglecting to furnish information or return; or
Wilfully furnishing or causing to be furnished any
information or return which he knows to be false or
Refusing to answer or wilfully giving a false answer
to any question necessary for obtaining any
information required to be furnished under this
Act.
Wilfully obstructing an Inspector in the discharge
of his duties under this Act; or
Refusing or wilfully neglecting to aford an
Inspector any reasonable facility for making any
entry, inspection etc.
Wilfully refusing to produce on the demand of an
inspector any register or other document kept in
pursuance of this Act; or preventing any person for
appearance etc.
On conviction for any ofence and again guilty of
Contravention of same provision.

Deduction for
absence from
duties for
unauthorised
absence
Absence for whole or
any part of the day
If ten or more persons
absent without
reasonable cause,
deduction of wages upto
8 days.
Sec. 9

Fine not less than Rs.1000 which may extend to

Rs.5000. On subsequent conviction fine not less
than Rs.5000, may extend to Rs.10,000. On
contravention S.4, S.5(4), S6, S.8(8), S.10(2) or S.25
fine not less than Rs.1000. may extend to
Rs.5000. On subsequent On conviction fine not
less.
Fine which shall not be less than Rs.1000 but may
extend to Rs.5000 On record conviction fine not
less than Rs.5000, may extend to Rs.10,000.
For second or subsequent conviction, fine not less
than Rs.5000 but may extend to Rs.10,000

Fine not less than Rs.1000 extendable

Upto Rs.5000 On subsequent conviction fine
not less than Rs.5000 may extent to Rs.10,000

Imprisonment not less than one month extendable

upto six months and fine not less than Rs.2000

WORKMENS COMPENSATION
ACT, 1923
Applicabilit
y
All over India
Sec.1

Coverage of Workmen
All workers irrespective of their
status or salaries either directly or
through contractor or a person
recruited to work abroad. Sec.1(3)

Employers liability to pay

compensation to a workman
On death or personal injury resulting
into total or partial disablement or
occupational disease caused to a
workman arising out of and during
the course of employment.
Sec.3

Amount of compensation
Where death of a workman results from the injury

An amount equal to fifty per cent of the monthly

wages of the deceased workman multiplied by the
relevant factor on an amount of eighty thousand rupees,
whichever is more.
Where permanent total disablement results from the injury.

An amount equal to sixty per cent of the monthly

wages of the injured workman multiplied by the relevant
factor or an amount of ninety thousand rupees,
whichever is more
Procedure for calculation
Higher the age Lower the compensation
Relevant factor specified in second column of Schedule IV
giving slabs depending upon the age of the concerned
workman.
Example : In case of death.

Wages Rs.3000 PM Age 23 years

Factor as schedule IV Rs.19.95

Wages

Notice
Accident

When the monthly wages

are more than Rs.4000 per
month it will be deemed
Rs.4000.
Sec.4 Exh.b

As soon as
Practicable
Sec. 10

Report of accident
Rule 11 Form EE

When an employee is not liable

for compensation
In respect of any injury which does
result in the total or partial
disablement of the workman for a
period exceeding three days.
In respect of any injury, not
resulting in death or permanent
total disablement caused by an
accident
which
is
directly
attributable to The workman having been at the
time thereof under the influence of
drink or drugs, or
Willful
disobedience
of
the
workman to an order expressly
given, or to a rule expressly
framed, for the purpose of
securing the safety of workmen, or
Willful removal or disregard by the
workman of any safety guard or
other device which he knew to
have been provided for the
purpose of securing the safety of
Bar upon contracting out

Report of fatal Accident and Serious Injury within 7 days to

the Commissioner (not application when ESI Act applies).
Sec.10B

Any workman relinquishing his right

for personal injury not permissible.
Sec.14

PENALTY

In case of default by employer

Deposit of Compensation

50% of the compensation amount + interest to be paid to the

workman or his dependents as the case may be.
Within one month with the Compensation Commissioner
Sec.4A

EMPLOYEE PROVIDENT FUND AND MISC.

PROVISIONS ACT, 1956 & SCHEMES

Applicability
Applicability

Every
Every establishment
establishment which
which isis
factory
engaged
in
any
factory engaged in any industry
industry
specified
specified in
in Schedule
Schedule 11 and
and in
in
which
which 20
20 or
or more
more persons
persons are
are
employed.
employed.
Any
other
establishment
Any
other
establishment
employing
employing 20
20 or
or more
more persons
persons
which
which Central
Central Government
Government may,
may,
by
by notification,
notification, specify
specify in
in this
this
behalf.
behalf.
Any
Any establishment
establishment employing
employing
even
even less
less than
than 20
20 persons
persons can
can
be
be covered
covered voluntarily
voluntarily u/s
u/s 1(4)
1(4)
of
ofthe
theAct.
Act.

Benefits
Benefits

Employees
Employees covered
covered enjoy
enjoy aa benefit
benefit of
of
Social
Social Security
Security in
in the
the form
form of
of an
an
unattachable
unattachable and
and unwithdrawable
unwithdrawable
Eligibility
(except
in
severely
restricted
Eligibility
(except
in
severely
restricted
Any
circumstances
Any person
person who
who is
is
circumstances like
like buying
buying house,
house,
employed
marriage/education,
employed for
for work
work of
of an
an
marriage/education, etc.)
etc.) financial
financial
establishment
nest
establishment or
or employed
employed
nest egg
egg to
to which
which employees
employees and
and
through
contractor
employers
contribute
equally
through contractor in
in or
or in
in
employers
contribute
equally
connection
throughout
connection with
with the
the work
work of
of
throughout the
the covered
covered persons
persons
an
employment.
an establishment.
establishment.
employment.
This
This sum
sum isis payable
payable normally
normally on
on
retirement
retirement or
or death.
death. Other
Other Benefits
Benefits
include
include Employees
Employees Pension
Pension Scheme
Scheme
and
and Employees
Employees Deposit
Deposit Linked
Linked
RatesInsurance
of Contribution
Scheme.
Insurance
Scheme.

Rates of Contribution

Payment
Payment of
of Contribution
Contribution

The
The employer
employer shall
shall pay
pay the
the contribution
contribution
payable
payable to
to the
the EPF,
EPF, DLI
DLI and
and Employees
Employees
Pension
Pension Fund
Fund inin respect
respect of
of the
the member
member of
of
the
theEmployees
EmployeesPension
PensionFund
Fundemployed
employedby
by
him
himdirectly
directlyby
byor
orthrough
throughaacontractor.
contractor.
ItIt shall
shall be
be the
the responsibility
responsibility of
of the
the principal
principal
employer
employerto
topay
paythe
thecontributions
contributionspayable
payable
to
to the
the EPF,
EPF, DLI
DLI and
and Employees
Employees Pension
Pension
Fund
Fund by
by himself
himself inin respect
respect of
of the
the
employees
employees directly
directly employed
employed by
by him
him and
and
also
also inin respect
respect of
of the
the employees
employees directly
directly
employed
employed by
by him
him and
and also
also inin respect
respect of
of
the
the employees
employees employed
employed by
by or
or through
through aa
contractor.
contractor.

SCHEMEEMPLOYEESEMPLOYERSCENTRAL
GOVTSProvident
SCHEMEEMPLOYEESEMPLOYERSCENTRAL
GOVTSProvident Fund
Fund
Scheme12%Amount
Scheme12%Amount>>8.33%
8.33%(in
(incase
casewhere
wherecontribution
contributionisis12%
12%of
of10%)
10%)
10%
10%(in
(incase
caseof
ofcertain
certainEstablishments
Establishmentsas
asper
perdetails
detailsgiven
given
earlier)NILInsurance
earlier)NILInsuranceSchemeNIL0.5NILPension
SchemeNIL0.5NILPensionSchemeNIL8.33%
SchemeNIL8.33%(Diverted
(Diverted
out
outof
ofProvident
ProvidentFund1.16%
Fund1.16%

Clarification
Clarification about
about
Contribution
Contribution

After
After revision
revision inin wage
wage ceiling
ceiling from
from Rs.5000
Rs.5000 to
to
Rs.6500
Rs.6500 w.e.f.
w.e.f. 1.6.2001
1.6.2001 per
per month,
month, the
the
government
government will
will continue
continue to
to contribute
contribute 1.16%
1.16%
up
up to
to the
the actual
actual wage
wage of
of maximum
maximum Rs.6500
Rs.6500
per
per month
month towards
towards Employees
Employees Pension
Pension
Scheme.
Scheme. The
The employers
employersshare
share ininthe
thePension
Pension
Scheme
Schemewill
willbe
beRs.541
Rs.541w.e.f.
w.e.f.1.6.2001.
1.6.2001.
Under
Employees
Deposit-Linked
Under Employees Deposit-Linked Insurance
Insurance
Scheme
Scheme the
the contribution
contribution @
@ 0.50%
0.50% isis required
required
to
tobe
bepaid
paidup
upto
toaamaximum
maximumlimit
limitof
ofRs.6500.
Rs.6500.
The
The employer
employer also
also will
will pay
pay administrative
administrative
charges
charges @
@ 0.01%
0.01% on
on maximum
maximum limit
limit of
of
Rs.6500
Rs.6500 whereas
whereas an
an exempted
exempted establishment
establishment
will
will pay
pay inspection
inspection charges
charges @
@ 0.005%
0.005% on
on the
the
total
totalwages
wagespaid.
paid.
Notes:
Notes:
The
The above
above clarification
clarification isis given
given by
by taking
taking
wages
wages up
up to
to aa maximum
maximum of
of Rs.6500
Rs.6500 towards
towards
wage
wage(basic+DA).
(basic+DA).
Since
Since an
an excluded
excluded employee
employee i.e.
i.e. drawing
drawing
wages
wages more
more than
than Rs.6500
Rs.6500 can
can also
also become
become
member
memberof
ofthe
theFund
Fundand
andthe
theSchemes
Schemeson
onjoint
joint
request
requestand
andif,
if,for
forinstance,
instance,such
suchan
anemployee
employee
isis getting
getting Rs.10,000
Rs.10,000 per
per month,
month, his
his share
share
towards
towards provident
provident fund
fund contribution
contribution will
will be
be
Rs.1200
Rs.1200 e.g.
e.g. 12%
12% and
and employers
employers share
share
towards
towards provident
provident fund
fund contributions
contributions will
will be
be
Rs.659
Rs.659 and
and Rs.541
Rs.541 towards
towards Employees
Employees
Pension
PensionFund.
Fund.

Damages
Damages
Damages
Damages
Less
.@
Less than
than 22 months
months
.@ 17%
17% per
per
Less
.@
Less than
than 22 months
months
.@ 17%
17% per
per
annum
annum
annum
annum
Two
Two months
months and
and above
above but
but less
less than
than up
up to
to four
four months
months .@22%
.@22%
Two
Two months
months and
and above
above but
but less
less than
than up
up to
to four
four months
months .@22%
.@22%
per
per annum
annum
per
per annum
annum
Four
.@
Four months
months and
and above
above but
but less
less than
than upto
upto six
six months
months
.@ 27%
27%
Four
.@
Four months
months and
and above
above but
but less
less than
than upto
upto six
six months
months
.@ 27%
27%
Penal
per
Provision
Penal
per annum
annum
Provision
per
per annum
annum
Six
above
Liable
to
arrested
without
Six months
months
and
above
Liable
to be
beand
arrested
without warrant
warrant being
being aa cognizable
cognizable ofence.
ofence.
Six
Six months
months and
and above
above
Defaults
Defaults by
by employer
employer in
in paying
paying contributions
contributions or
or
inspection/administrative
inspection/administrative charges
charges attract
attract imprisonment
imprisonment up
up to
to 33 years
years
and
and fines
fines up
up to
to Rs.10,000
Rs.10,000 (S.14).
(S.14). For
For any
any retrospective
retrospective application,
application, all
all
dues
dues have
have to
to be
be paid
paid by
by employer
employer with
with damages
damages up
up to
to 100%
100% of
of

PAYMENT OF
GRATUITY ACT, 1972
arrears.
arrears.
& THE RULES

Applicability
Applicability

Wages
Wages for
for Calculation
Calculation

Every
Everyfactory,
factory,mine,
mine,oil
oilfield,
field,
plantation,
port,
railways,
plantation, port, railways,company,
company,
shop,
shop,establishment
establishmentor
oreducational
educational
institutions
institutionsemploying
employing10
10or
ormore
more
employees
employees

@
@ 15
15 days
days wages
wages for
for every
every
completed
year
as
if
completed year as if the
the month
month
comprises
comprises of
of 26
26 days
days at
at the
the last
last
drawn
drawn wages.
wages.

Calculati
Calculati
on
on PiecePiecerated
rated
employee
employee

Calculatio
Calculatio
nn
Seasonal
Seasonal
employee
employee

@
@15
15days
days
wages
wagesfor
for
every
every
completed
completed
year
yearon
onan
an
average
averageof
of33
months
months
wages
wages

@
@77days
days
wages
wagesfor
for
every
every
completed
completed
year
yearof
of
service.
service.

Nomination
Nomination
To
Tobe
beobtained
obtainedby
by
employer
employerafter
afterexpiry
expiry
of
ofone
oneyears
yearsservice,
service,
in
inForm
FormF
F

Recovery
Recovery of
of
Gratuity
Gratuity
To
Toapply
applywithin
within30
30
days
daysin
inForm
FormI Iwhen
when
not
notpaid
paidwithin
within30
30
days
days

Employee
Employee
All
Allemployees
employees
irrespective
irrespectiveof
of
status
statusor
or
salary
salary
Entitlement
Entitlement
On
Oncompletion
completion
of
offive
fiveyears
years
service
serviceexcept
except
in
incase
caseof
of
death
deathor
or
disablement
disablement

Maximum
Maximum
Ceiling
Ceiling
Rs.3,50,000
Rs.3,50,000

Qualifying
Qualifying
period
period
On
Onrendering
renderingof
of
55years
yearsservice,
service,
either
either
termination,
termination,
resignation
resignationor
or
retirement.
retirement.

Formula
Formula
for
for gratuity
gratuity
calculation
calculation
BASIC
BASIC++DA
DA
(Last
(LastPay
Paydrawn)
drawn)
XX15
15/26
/26XXNo.
No.
OF
OFYEARS
YEARS
WORKS
WORKS

%
% of
of
Gratuity
Gratuity
4.81percentag
4.81percentag
eeof
ofthe
the
monthly
monthlybasis
basis
salary
salaryof
ofthe
the
employee
employee

Mode
Mode of
of payment
payment

Display
Display of
of Notice
Notice

Cash
Cashor,
or,ififso
sodesired,
desired,by
by
Bank
BankDraft
Draftor
orCheque
Cheque

On
On conspicuous
conspicuous place
place
at
at the
the main
main entrance
entrance in
in
English
English language
language or
or
the
the language
language
understood
understood by
by majority
majority
of
employees
of employees of
of the
the
factory,
factory, etc.
etc.

Forfeiture
Forfeiture of
of Gratuity
Gratuity
On
On termination
termination of
of an
an employee
employee for
for moral
moral turpitude
turpitude or
or
riotous
riotousor
ordisorderly
disorderlybehavior.
behavior.
Wholly
Wholly or
or partially
partially for
for willfully
willfully causing
causing loss,
loss, destruction
destruction
of
ofproperty
propertyetc.
etc.

Protection
Protection
of
of Gratuity
Gratuity
Cant
Cantbe
be
attached
attachedin
in
execution
executionof
ofany
any
decree
decree

Penalties
Penalties
Imprisonment
Imprisonment for
for 66 months
months or
or fine
fine up
up to
to Rs.10,000
Rs.10,000 for
for avoiding
avoiding to
to make
make payment
payment by
by making
making false
false statement
statement
or
or representation.
representation.
Imprisonment
Imprisonment not
not less
less than
than 33 months
months and
and up
up to
to one
one year
year with
with fine
fine on
on default
default in
in comply-ing
comply-ing with
with the
the
provisions
of
Act
or
Rules.
provisions of Act or Rules.

EMPLOYEES STATE INSURANCE ACT, 1948

& THE SCHEMES

Applicability of
the Act &
Scheme

Is extended in area-wise
to factories using power
and employing 10 or
more persons and to
non-power
using
manufacturing units and
establishments
employing 20 or more
person up to Rs.7500/per
month
w.e.f.
1.4.2004.
It has also
been extend-ed upon
shops,
hotels,
restaurants, roads motor
transport undertakings,
equip-ment maintenance
staf in the hospitals.

Coverage
of employees
Drawing wages

Up to
Rs.10000/- per
month
engaged either
directly or thru
contractor

Rate of
Contribution
of the wages

Benefits
To the employees under
the Act

Employers

Medical,
sickness,
extended
sickness for certain diseases,
enhanced sickness, dependents
maternity,
besides
funeral
expenses,
rehabilitation
allowance, medical benefit to
insured person and his or her
spouse.

4.75%

Employees

1.75%

Manner and Time Limit

for making Payment of contribution
The total amount of contribution (employees share and employers share) is to
be deposited with the authorized bank through a challan in the prescribed form in
quadruplicate on ore before 21st of month following the calendar month in which
the wages fall due.

WAGES FOR ESI CONTRIBUTIONS

Registers/files to be maintained by the
employers
To be deemed as wages
Basic pay
Dearness allowance
House rent allowance
City
compensatory
allowance
Overtime wages (but not
to be taken into account
for
determining
the
coverage
of
an
employee)
Payment for day of rest
Production incentive
Bonus
other
than
statutory bonus
Night shift allowance
Heat,
Gas
&
Dust
allowance
Payment for unsubstituted
holidays
Meal/food allowance
Suspension allowance
Lay of compensation
Children
education
allowance (not being
reimbursement
for
actual tuition fee)

NOT to be deemed as
wages
Contribution paid by the
employer
to
any
pension/provident
fund or under ESI Act.
Sum paid to defray
special
expenses
entailed by the nature
of employment Daily
allowance paid for the
period spent on tour.
Gratuity
payable
on
discharge.
Pay in lieu of notice of
retrenchment
compensation
Benefits paid under the
ESI Scheme.
Encashment of leave
Payment of Inam which
does not form part of
the
terms
of
employment.
Washing allowance for
livery
Conveyance
Amount
towards
reimbursement
for
duty related journey

Contribution
period
1st
April
September.
1st October
March

to

to

30th

31st

Contribution
period
If the person joined
insurance employment
for the first time, say on
5th January, his first
contribution period will
be from 5th January to
31st March and his
corresponding
first
benefit will be from 5th
October
to
31st
December.

Penalties
Diferent punishment have been prescribed for
diferent types of ofences in terms of Section 85: (I)
(six months imprisonment and fine Rs.5000), (ii)
(one year imprisonment and fine), and 85-A: (five
years imprisonment and not less to 2 years) and 85C(2) of the ESI Act, which are self explanatory.
Besides these provisions, action also can be taken
under section 406 of the IPC in cases where an
employer deducts contributions from the wages of
his employees but does not pay the same to the
corporation which amounts to criminal breach of
trust.