Major amendments in labour laws 2010:Gratuity,Employee compensation, ESI legal

updates

Employees definition under Gratuity Act amended to included all types of works
irrespective of salary limits

The Payment of Gratuity Act, 1972 definition of the term “employee” under Section 2
got widened. It is no more the old definition of persons employed in administrative or
managerial capacity.

The new definition is as follows,

The Payment of Gratuity Act, 1972 definition of the term “employee” under Section 2
got widened. It is no more the old definition of persons employed in administrative or
managerial capacity.

The new definition is as follows,

Employees means any persons [NOT being an Apprentice] employed for wages in any
kind of work (manual or otherwise) or in connection with work of factory, mine,
plantation, oilfield, railway company, port or other establishment.

So, even teachers are eligible for gratuity now overriding the famous Ahmedabad
Private Primary Teachers Association case.

Employees means any persons [NOT being an Apprentice] employed for wages in any
kind of work (manual or otherwise) or in connection with work of factory, mine,
plantation, oilfield, railway company, port or other establishment.

Details in Employees definition under Gratuity Act amended to included all types of
works irrespective of salary limits ~ See Yes -> Yes, ACS

Gratuity Amendment Act 2010 is notified in Official Gazette with Rs.10 lakhs as limit
replacing Rs.3,50,000
The Payment of Gratuity (Amendment) Act, 2010 is notified in Official Gazette on 18th
May 2010, amending the Payment of Gratuity Act, 1972 with revision in maximum
ceiling from Rs. 3.5 lac to Rs. 10 lakhs. Whereas the date of effect of the revised ceiling
may be decided by the Central Government through Official Gazette as per Gratuity
Amendment Act 2010 is notified in Official Gazette with Rs.10 lakhs as limit replacing
Rs.3,50,000 ~ See Yes -> Yes, ACS
he Payment of Gratuity (Amendment) Act, 2010 is notified in Official Gazette on 18th
May 2010, amending the Payment of Gratuity Act, 1972 with revision in maximum
ceiling from Rs. 3.5 lac to Rs. 10 lakhs. Whereas the date of effect of the revised ceiling
may be decided by the Central Government through Official Gazette as per THE
PAYMENT OF GRATUITY (AMENDMENT) ACT 2010

Notification in Effective Date for Revision of Gratuity Amendment Act to Rs. 10 lakhs:
Notification in Official Gazette as on 24th May 2010

Workmen's Compensation Act, 1923 becomes Employees with enhanced compensation

limits, full medical expenses reimbursement, case disposal within 3 months, etc..& also
applicable to casual & clericals
Workmen’s Compensation Act is now Employees Compensation Act, 1923 and the
definition of employee includes clerical employees & casual employees also. Further,

the minimum compensation limits on no-fault basis are increased to Rs.1,20,000 &
1,40,000 (erstwhile limits being Rs. 80,000 & 90,000).
under the maximum compensation limit, the monthly wage limit of Rs.4,000/ is removed.
hence, the maximum compensation can go UPTO 50% of Total Monthly Wages now,
irrespective of limits.
Funeral expenses limit extended to Rs.5000 (from Rs.2,500)
The employee shall be reimbursed the actual (full) medical expenditure incurred by him
for treatment of injuries caused during the course of employment.
Time limit for disposal of cases relating to compensation introduced- The Commissioner
shall dispose of the matter relating to compensation within 3 months of reference.

Details in Workmen's Compensation Act, 1923 becomes Employees with enhanced

compensation limits, full medical expenses reimbursement, case disposal within 3
months, etc..& also applicable to casual & clericals ~ See Yes -> Yes, ACS

Workmen’s Compensation Act is now Employees Compensation Act, 1923 and the
definition of employee includes clerical employees & casual employees also. Further,

• the minimum compensation limits on no-fault basis are increased to Rs.1,20,000

& 1,40,000 (erstwhile limits being Rs. 80,000 & 90,000).
• under the maximum compensation limit, the monthly wage limit of Rs.4,000/ is
removed. hence, the maximum compensation can go UPTO 50% of Total
Monthly Wages now, irrespective of limits [now a new ceiling of Rs.8000/- is
introduced].
• Funeral expenses limit extended to Rs.5000 (from Rs.2,500)
• The employee shall be reimbursed the actual (full) medical expenditure incurred
by him for treatment of injuries caused during the course of employment.
• Time limit for disposal of cases relating to compensation introduced- The
 Commissioner shall dispose of the matter relating to compensation within 3
months of reference.

Old definition: "workman" means any person (other than a person whose employment is
of a casual nature and who is employed otherwise than for the purposes of the employer's
trade or business) who is….

New definition: Section 2

“(dd) “employee” means a person, who is—

(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24
of 1989), not permanently employed in any administrative district or sub-divisional office
of a railway and not employed in any such capacity as is specified in Schedule II; or

(ii) (a) a master, seaman or other members of the crew of a ship,

(b) a captain or other member of the crew of an aircraft,

(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in
connection with a motor vehicle.

(d) a person recruited for work abroad by a company,

and who is employed outside India in any such capacity as is specified in Schedule II and
the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India;
or

(iii) employed in any such capacity as is specified in Schedule II, whether the contract of
employment was made before or after the passing of this Act and whether such contract
is expressed or implied, oral or in writing; but does not include any person working in the
capacity of a member of the Armed Forces of the Union; and any reference to any
employee who has been” injured shall, where the employee is dead, include a reference to
his dependants or any of them;’;

Revised ESI limit Rs.15000 (not Rs.10000) for employees/workers w.e.f 1st May 2010 -
as amended by the Act [extended]

Ministry of Labour & Employment vide G.S.R. 394(E), dated 20th April, 2010 has made
Employees State Insurance Act, 1948 read with ESI (Central) (Amendment) Rules, 2010
applicable to employees whose wages does not exceed Rs. 15,000/- (Fifteen Thousand
Only). Details in Revised ESI limit Rs.15000 (not Rs.10000) for employees/workers
w.e.f 1st May 2010 - as amended by the Act [extended] ~ See Yes -> Yes, ACS
Labour laws amendment bill to exempt unit upto 40 workers
Monday, September 20th, 2010| The Union Cabinet today approved
withdrawal of Labour Laws (Exemption from Furnishing Returns and
Maintaining Registers by Certain Establishments) Amendment and
Miscellaneous Provisions Bill, 2005 from Rajya Sabha, and introduction
a new Bill, namely, Labour Laws (Exemption from Furnishing Returns
and Maintaining Registers by Certain Establishments) Amendment Bill,
2010 (Appendix-III) in the Rajya Sabha in the ensuing Session of
Parliament after making of changes of drafting as consequential
nature, if any, in consultation with the Legislative Department.
The Labour Laws (Exemption from Furnishing Returns and Maintaining
Registers by Certain Establishments) Act, 1988 presently provides for
exemption by way of allowing 'very small' establishment (employing
up to 9 workers) to maintain only one register and submit one return
and 'small establishments' (employing 10 to 19 workers) to maintain
three registers and submit one return.
The passage of the Amendment Bill will benefit establishments
employing up to 40 workers in maintaining registers and submitting
returns electronically under 16 Labour Laws.
The main features of the amendments are:
,,X The coverage in terms of number of Acts will be increased from 9 in
the Principal Act to 16.
,,X The existing method of defining establishments as 'very small' and
'small' in the Principal Act would continue. The dispensation enjoyed by
the 'very small' establishments by way of maintaining only one register
and submitting one return will also continue. However, the 'small'
establishments would cover those establishments employing between
I0 to 40 workers as against 19 in the Principal Act. They would be
required to maintain only two registers as against three at present and
submit one return. ,,X Registers/records can be maintained in
computer, floppy, diskette or on other electronic media and return
submitted through e-mail.
The Labour Laws (Exemption from Furnishing Returns and Maintaining
Registers by Certain Establishments) Amendment and Miscellaneous
Provisions Bill, 2005 was introduced in the Rajya Sabha to expand the
coverage of the Act. The Parliamentary Standing Committee on Labour
advised that the provisions of the bill be discussed with the employers'
and employees' organizations and amendments redrafted on the basis
of consensus reached.
As the amendments proposed in the Labour Laws (Exemption from
Furnishing Returns and Maintaining Registers by Certain
Establishments) Amendment and Miscellaneous Provisions Bill, 2005
have the effect to substantially delete a number of clauses and would
require negative voting as per laid down procedure , it is now proposed
to withdraw this Bill and introduce a new simple Bill relating only to
changes which are required.

Recent Amendments in Labour Laws:

Promoting Equity and Welfare

The Payment of Wages Act, 1936 amended to enhance the wage ceiling for its
applicability. It is presently fixed at Rs. 10,000/- per month.

The Payment of Bonus Act, 1965 amended to enhance the eligibility limit from Rs.
3,500/- per month to Rs. 10,000/- and calculation ceiling from Rs. 2,500 to Rs. 3,500/-
per month while making employees employed through contractors on building operations
eligible for payment of bonus under the Act.

The Apprentices Act, 1961 amended, inter alia, to provide for reservation for other
Backward Classes.

The Maternity Benefit Act, 1961 amended to enhance the medical bonus from Rs. 250/-
to Rs. 2,500/-and also empowering the Central Government to increase it from time to
time before every three years, by way of notification in the Official Gazette, subject to a
maximum of Rs. 20,000/-.

The Employees State Insurance Act, 1948 amended to improve the quality of delivery of
benefits under the scheme and also to enable ESI infrastructure to be used to provide
health care to workers of the unorganised sector.

The Payment of Gratuity Act, 1972 amended for raising the ceiling of Gratuity for
employees in the private sector to Rs. 10 lakh from Rs. 3.5 lakh.

The Plantations Labour Act, 1951 amended to provide safety and occupational health
care to plantations workers.