calculation of income tax for an individual

8/11/2019 calculation of income tax for an individual

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Chapter 1

COMPANY PROFILE

1.1 INTRODUCTION

Surya Child Care, Mumbai has set a benchmark in Neonatal Intensive Care andPediatric Health Care and is one of Indias fastest growing tertiary care

hospitals.

With the overriding principle of Beginning with care we are glad to have

played a major role in saving thousands of critically ill children. One of the veryfew centres in India which aims at providing quality health care facilities for

children up to 18 years, we bring unique and high-level care in pediatricservices including Inpatient, Outpatient, Intensive Care and Sub Specialities.

We seek to provide pediatric patients and their families easy access to the mostadvanced and affordable clinical care. As an extension of our commitment toquality healthcare, our experts have built several pediatric healthcare programsthat set national and international standards for quality and take initiatives totrain the next generation of healthcare leaders through our academic andteaching programs.

1.2 OUR VALUES

SuperiorCare

Excellence in patient care with continuing commitment and compassion

Young Generation

Teaching and educating the next generation

Recovery

Distinctly personalized healthcare for a faster recovery in healthy familyenvironment.

United Efforte

Greater clinical outcomes through teamwork and continuous improvement

Affordable

Patient-centric affordable care for all sections of society

1.3 OUR VISION


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Wellness of a child is our priority and that is at the core of Surya. We take this

responsibility very seriously and continue to provide consistent and finest care

for the child across ages.

1.4 HOPSPITAL EXPERIENCE

A visit to a hospital can be challenging situation for a child and her parent.From doctors to operative procedures, there is a lot you want to know about.Here are some tips to help prepare you and your child for a better health careexperience.

Choose a quiet time to talk and use a calm and relaxed tone of voice. Tell yourchild that he or she will be going to the hospital for an operation, test or

procedure, and let your child know that you feel this is the right thing to do.Children can usually sense how a parent feels about a hospitalization or a

procedure.

Ask what your child knows or thinks about the hospital. Listen to your child'sfeelings, and help her talk about them. Start with what seems the most importantin your child's mind. Its helpful to talk about what the hospital is with your

child. For example, you might say "The hospital is a place where people of allages go when their bodies need some help to work. The doctors and nursesknow a lot about how our bones and muscles and insides work. They try to help

us get well, feel better and stay healthy."

Encourage your child to ask you and the doctors and nurses a lot of questions. Ifyour child is uneasy about asking questions, you can ask for her.

Let your child know in advance if you know a test or procedure is about tohappen, even if it is something uncomfortable like a needle. This will give yourchild a feeling of trust. Use honest and simple explanations that fit your child'sage and level of understanding, and ask your child questions to make sure he or

she understands what you have said.

Try to choose words that are neutral when describing procedures and tests toyour child. For example, you might say, "The nurse will 'slide' the needle intoyour arm," rather than "The nurse will 'stick' or 'poke' a needle into your arm."

Tell your child how she might feel, before, during and after the operation,procedure or test. For example, you may want to explain she will not hear, seeor feeling anything during the operation. The doctor will give a special sleep

medicine called anesthesia before the operation. Try not to make promises you


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can't keep. For example, don't tell your child that nothing will hurt or that therewon't be any blood tests.

Build your child's confidence by involving her in organizing and packing a few

things to help them during their visit. Encourage your child to bring her favoritetoys to the hospital, such as a stuffed animal, pillow and videos.Let your child know that it is okay to feel many different ways about going tothe hospital, for example, curious, worried, angry or frustrated.

If your child seems unusually worried and frightened about her surgery or stayin the hospital, you may want your child to see a counselor. At the Children'sMedical Coping Clinic, our psychologists and psychiatrists can provideevaluations, treatment and support for you and your family.

1.5 SOCIAL RESPONSIBILITY

At Surya, our purpose is to improve the quality of life of the communities we

serve. We do this through leadership in areas of significance, where we make a

difference through our unique set of capabilities. To reach out to larger sectors

of population, we have created the Surya Hospital and Bio-Medical Research

Centre - A Mother and Child Care Hospital. A specialised hospital to serve the

needs of the less privileged and down trodden strata with equal care andsensitivity.


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Chapter 2

INTRODUCTION TO INDUSTRIAL RELATIONS

2.1 CONCEPT OF INDUSTRIAL RELATIONS:

The term Industrial Relations comprises of two terms: Industry and

Relations. Industry refers to any productive activity in which an individual

(or a group of individuals) is (are) engaged. By relations we mean therelationships that exist within the industry between the employer and hisworkmen. The term industrial relations explains the relationship between

employees and management which stem directly or indirectly from union-employer relationship.

Industrial relations are the relationships between employees and employerswithin the organizational settings. The field of industrial relations looks at therelationship between management and workers, particularly groups of workersrepresented by a union. Industrial relations are basically the interactions

between employers, employees and the government, and the institutions andassociations through which such interactions are mediated.

The term industrial relations has a broad as well as a narrow outlook.Originally, industrial relations were broadly defined to include the relationships

and interactions between employers and employees. From this perspective,industrial relations covers all aspects of the employment relationship, includinghuman resource management, employee relations, and union-management (orlabor) relations. Now its meaning has become more specific and restricted.Accordingly, industrial relations pertains to the study and practice of collective

bargaining, trade unionism, and labor-management relations, while humanresource management is a separate, largely distinct field that deals withnonunion employment relationships and the personnel practices and policies ofemployers.

The relationships which arise at and out of the workplace generally include the

relationships between individual workers, the relationships between workers

and their employer, the relationships between employers, the relationships

employers and workers have with the organizations formed to promote their

respective interests, and the relations between those organizations, at all

levels.Industrial relations also includes the processes through which these

relationships are expressed (such as, collective bargaining, workers

participation in decision-making, and grievance and dispute settlement), and the
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management of conflict between employers, workers and trade unions, when it

arises.

2.2 HISTORY AND EVOLUTION OF IR IN INDIA

The evolution of industrial relations in India began a long time ago. The castesystem greatly influenced the ancient industries and their development. Due tosuccessive foreign invasions in India, the living conditions of slave and artesiancouldn't be differentiated. Furthermore, under the autocratic regime of Muslimrulers, the conditions of employees worsened. Wages were not guaranteed, theliving conditions of workers were harsh, and there was no proper management.The coming of the British didn't improve the working conditions. After sometime, however, most Indian industries were modeled after the British system of

business, and this led to growth in various sectors.

Industrial Relations under British Rule:During British rule, India was expected to be a colonial market for British goodsup until a cotton mill was established in Mumbai in 1853 and a jute mill wasestablished in Kolkatta in 1955. The working conditions of workers, however,were still very harsh with low pay, and this gave rise to various disputesinvolving the management and employees. On the other hand, Tata Iron andSteel industry was also established in Jamshedpur in 1911. While there wasgreat demand of iron and steel before and during the First World War, the

working conditions of workers hadn't improved. Hence, the Factories Act of1881 was established, and it granted workers certain rights.

2.3 INDUSTRIAL RELATIONS IN FIRST WORLD WAR:

The First World War was an opportunity in disguise for local factories in India.Prices of virtually all products went up and profits soared, however, wages oflower employees were still the same. There were various strikes and disputes

between management and employees. During this time, the Workmen's

Compensation Act (1923), theTrade Union Act (1926), and the TradeDisputes Act (1917) were established. While the wages of employees remainedthe same, they were given a certain share of profits made by their hiringindustry. Strikes, however, were sometimes prohibited under the EmergencyRules. The years following World War II involved the most workers' upheaval,and saw the establishment of Industrial Employment Act (1946) and IndustrialDisputes Act (1947).Post-Independence Industrial Relations:The post-independence era saw a developing relation between industry and

labor. A conference called the Industrial Truce Resolution took place in 1947,and foresaw the establishment of the Minimum Wages Act, Factories Act, and
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Employees State Insurance Act in 1948. This ensured peace between labor and

industry. While industrial relations in India have evolved a long way, some

features of the early system still exist today. Modern industrial relations are

dynamic, and may integrate industrial policies of American and British

businesses.

2.4 HISTORY OF TRADE UNIONS IN INDIA

The evolution of trade unions is based on the objectives and interests of

communal groups as a result of modern industrialization (Zeiltin 1987), this

interest are context dependent. It is hard to have regulations to ensure that this

trade unions and collective bargaining institutions remain focused to their roles.So where do India trade history begin.

The First Phase Occurred From 1957-1966

The historical development of trade unions in India is described as occurred in

four phases, which was related with the changes in the economy. We shall

examine all the four phases. The first occurred before independence from 1957-

1966. This period is termed as a period of national capitalism. Which wascharacterised by a state sponsored industrialization policy that was based on

importation of substitutes that lead to large unemployment. The unemployment

rate increased to 2% annual from1961-1966 (Venkata 1987). Due to this public

employment lead to formation of sector unionism bringing the number of

registered unions from 4623 in 1951 to 11,614 in 1962 (Venkata, 1987). The

most dominant trade union was the communist one known as all India Trade

Union Congress (AITUC) it was dominant in textile and engineering. The huge

public sector lead to entry of large scale unions, this saw the emergency of newinroads by the trade union controlled by the congress party ; the Indian National

Trade Union Congress (INTUC). As opposed to the AITUC the INTUC had a

proper chain of command coming from the party to the union the party was

headed by the prime minister during that period.

Venkata (1987) observers that, the INTUC leadership was first loyal to the

congress party, and then to the current congress government and lastly to the

workers who are union members. When the INTUC is faced with solving a

dispute between the government and the workers, the INTUC also supported thegovernment side. This was because all the official dealing with the union was


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congress government appointees. The officials were always requested by the

government to support it in order to overpower rival unions (Datta 1994). This

relationship among the government and unions in the first phase of trade unions

seemed to result in the formation of labour laws. As seen when industrial

dispute act was formed, this is an important labour law between the employer

and the employee. Yet, it did not have provisions for processes to //represent the

employee as a collective bargaining body. In summary, this first phase was

characterized by state led industrialization that required government guidance in

labour unions. The laws formed were biased and the concept was that the

government knew better than the workers.

Second Phase of Labour Union from 1967-1974

This was from1967-1974; this corresponded with the high inflation period when

the inflation went beyond 10% mark. During this period industrial stagnation

occurred (Datta 1994) industries production went down to 3.6%. The structural

changes that occurred in India during this period also affected the

labourmarkets and its relationships. The period saw an increased number of

labour disputes resulting in strikes and lockouts (Morley 2006). Workers

become disillusioned with INTUC management and small trade unions were

formed which were supported by different political parties. This phase reflected

a period of crisis between the states controlled labour union and the workers.

This period saw increase in labour unions which were not effective as by 1979

the number of registered unions went up to 10,021 where as the size of this

labour unions increased so little. This meant that the power of this unions were

limited. It can be argued that this was an attempt by the unions and the state to

reach at new governance and improve the bargaining power of the union. As

time went by it became clear that they was trouble in the union monopoly,

specifically in the public sector. This was due to the factor that the public sector

unions who had their official appointed by the government were paid well by

the government. In contrast the private sector unions had to bargain a lot to

receive such benefits in a private sector that was competitive. This period saw

this unions looking for a common voice in an increased disputes environment.

Phase Three Occurred From 1980- 1991

This phase was witnessed between 1980-91 this period was during the five year
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economic plan of 1985-90 that saw the economy grow by 5.7 percent. This

phase was characterized by emergence of independent unions in India. These

unions arouse basically as a result of lack of strong bargaining power by the

traditional unions (Datta 1994). Due to increased demand for labour unions

which were more organized, better employers, two types of unions emerged,

those that were altruistic and those that were selfish (Zeitlin 1987). The

altruistic unions bargained for more wage increment for the workers, while the

selfish ones were more interested in cooperating in the macro level. This made

it hard to have a fair and efficient polices in the labour movement. Once more,

this phase did not yield serious changes in the industrial relations regulations

and laws.

Phase Four Occurred From 1992-2000

This stage saw the government adopt the World Bank -IMF structural

adjustment plans this saw a lot of liberalization in the economy sector. This

meant that barging power was decentralised; this meant that the government

influence on labour unions reduced so much. Themarket experienced less

disputes in the labour markets and a stop to union divisions. The positive aspect

of this was that more employment was created and the labour unions increased

it voice both on macro and micro level. India has experienced a lot ofdifferences in the trade unions, the political parties and the state; these

differences have hindered the enactment of industrial relations reforms. The

worrying effect of luck of reaching a national agreement on labour unions

reform is the lack of the labour unions to have a national effect and lack of

power to bring industrial relations.

2.5 COLLECTIVE BARGAINING POWER

The collective bargaining power of the labour unions was experienced more in

the third and fourth phase. This lead to redesigning of agreements to cover

stopping of recruitment of employees, halting of job transfers from bargain able

group to non-bargain able. The bargains also touched on voluntary retirements,

transfer of stable permanent jobs to temporary one (Morley 2006). Though, the

management had an upper hand, the unions also made some gains such as

awarding of allowances for instance, house rent allowance, allowing pregnant

mothers not to do computer work, allowing voluntary retired workers to takecontract jobs, and much more. The government has continued to resist passing
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laws to increase minimum wages level. The trade unions have united to force

the government to accept to increase the wages in a period of 5 years instead of

the government proposed 10 years plan. Pressure from workers and employers

in both public and private by sector to decentralize the bargaining power is

going on.

2.6 CHALLENGES FACED BY THE INDIAN LABOUR UNIONS

The challenges facing the labour unions in India are how to tackle the

implications of implementation global policies (Morley 2006). Today India

labour markets are faced with an increase in international capital movement

which is causing restructuring of many industries, and satellite production units

are replacing big production factories. This situation is causing the management

to lie off, retrench, or lock out workers, in worst cases the management even

resort to closure. In new plants being put up workers are being exploited by

working long hours, being paid poorly and being exposed to other exploitative

ways.

Much industrial management in India are implementing these new measures

which are decreasing the bargaining power of labour unions. The Indian

government, the labour systems and also the judiciary are working withindustries to undermine the labour unions by refusing to intercede in the labour

disputes or by misinterpreting the laws in a way that it supports the global

capital process, which are offensive to workers' welfare.

Even though, this is going on still the pro market supporters and the industrial

managers feel that they are not given enough support. To them, the workers

wages should be reduced to lower level because of market competition. Thus,

labour unions are faced with a bigger challenge to ensure that they fight against

the industries' managers to reduce or stop employees from being exploited.India labour markets is facing pressure from the international capital

organisations such as World Bank to change the current labour laws which if

changed will reduce legal protection of labour unions and consequently lead to

reduced bargaining power of the unions. It is within this context that, labour

unions are faced with challenging issues pertaining how to improve the working

conditions of the employees and also at the same time maintain good industrial

relations.


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2.7 MODEL OF INDIAN LABOUR UNIONS COMPARED TO OTHERS:

The labour unions in India differ with other models in the world because; in

India labour unions are based on political parties. In that, most of the unions are

sponsored or backed by political parties (International Journal of HRM 2006).

The government also has been the major player in the labour market by

assuming different roles sometimes conflicting roles in labour unions. In India,

there is no central labour union as in other countries. It seems that, the

centralised labour unions that were there mainly at some stage in the phase one

of labour industry lost momentum in the second phase and disappeared in the

third phase (Jacoby 1994). The fragmented unions have tried to bargain for

better agreements but in most cases have not succeeded because of employer's

resistance. Some observers suggest that the unions have gone on defensive side

since the start of reforms on the labour markets (Zeitlin 1987). In other

countries labour unions are central organisations which have strong bargaining

powers, in some instance, this organisation at times have immense political

powers.

The industry brings together the employer or management and the worker,

while the interest of the management is ensure that the gap between product

price of the labour cost is wide the employees' interest to get more for the

services rendered. As seen before the relationship among the employer and the

employee is referred as industrial relations (IR). The main aim of industrial

relations is to minimize industrial disagreement. In India, statistics show that

most of the disputes occur due to wages and allowances disagreements, workers'

indiscipline, that lead to violence; and retrenchment of workers (Venkata1987).

The industrial disputes Act of 1947 outlines the procedures of investigating and

settling of the disagreements to ensure peace in the industries.

2.8 OBJECTIVES OF THE INDUSTRIAL RELATIONS

The main objectives ofindustrial relations system are:-

To safeguard the interest of labor and management by securing thehighest level of mutual understanding and good-will among all thosesections in the industry which participate in the process of production.
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Chapter 3

LABOUR LAWS

It is necessary to be aware of the salient provisions of such labour laws, toavoid litigation, prosecution and for proper implementation of the same. In

view of this, the salient provisions of the following Acts have been

incorporated in this report, which was studied during the summer internship

project:

Labour law applies in the Hospital sector which is given hereunder. Please

note that no such factory act is not at all applicable.

1.

Payment of Wages Act2. Minimum Wage Act3. Provident Fund Act4. ESI act (who are drawing salary less than Rs.10,000/-)5. Payment of Bonus Act6. Payment of Gratuity Act7. Workman Compensation act.8. Industrial Disputes Act.9. Employment Exchange Act and Rules.10.Contract Labour (R&A) act (if any contractor is engaged any part of

your hospital for any manual/full time job.

THE PAYMENT OF WAGES ACT, 1936

Objectives

The Payment of Wages Act, 1936 was enacted with the object of

(i) Regulating payment of wages, imposition of fines and deductionsfrom wages, and

(ii) Eliminating all malpractices by laying down wage periods and timeand mode of payment of wages. The Act, therefore, ensures

payment of wages in a particular form at regular intervals withoutunauthorized deductions.

Scope and Coverage

The Payment of Wages Act extends to the whole of India. It applies to any

factory, any railway establishment and any industrial or other establishment or


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any other establishment notified by the Central or State Government.

Employees Entitled

The Act is applicable to the employees receiving wages below Rs. 1,600 p.m.

Persons employed in a railway establishment, either directly or through a

contractor, are also covered under the Act.

Administrative Authority

The Act is administered by the State Governments in their respective States.

However, in case of railways, mines, oil fields and Central air transport service,

it is administered by the Central Government. The Central and State

Governments are empowered to appoint the inspectors and payment of wagesauthority and make rules for enforcement of the provisions of the Act.

(Sections. 24 & 26)

Central Advisory Board

The Central Government has appointed a Central Advisory Board for advising

the Central and State Governments in the matters of the fixation and revision of

minimum rates of wages and other matters, and for coordinating the work of the

Advisory Boards.

Wages- Definition and Meaning

As per section 2(vi), 'wages' means - all remuneration (whether by way of

salary, allowances or otherwise) expressed in terms of money or capable of

being so expressed which would, if the terms of employment, express or

implied, were fulfilled, be payable to a person employed in respect of his

employment or of work done in such employment and includes -

a) Any remuneration payable under any award or settlement between the parties

or order of a court

b) Any remuneration to which the person employed is entitled in respect of

overtime work or holidays or any leave period

c) Any additional remuneration payable under the terms of employment

(whether called as bonus or by any other name)

d) Any sum which by reason of termination of employment of the person


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employed is payable under any law, contract or instrument which provides for

the payment of such sum, whether with or without deductions, but does not

provide for the time within which the payment is to be made

e) Any sum to which the person employed is entitled under any scheme framedunder any law for the time being in force

Obligations of Employers

1. Responsibility for payment of wages

Every employer is primarily responsible for payment of wages to his

employees. Besides the manager of a factory, or the person responsible for

supervision and control of an industrial or other establishment or the person

nominated by the employer is also responsible for payment of wages to the

employees of the factory or establishment.

2. Fixation of Wage-Periods

Every employer or the person responsible for payment of wages should fix the

wage-period, which may be per day, per week or per month, etc. But in no case

it should exceed one month. (Sec. 4)

3. Time of Payment

Every employer / manager should make timely payment of wages. If the

number of persons employed in an establishment is less than 1000, then wages

must be paid within 7 days of the expiry of the wage period and in other cases

within 10 days of the expiry of the wage period. (Sec. 5)

Rights of Employers

1. Right to make permissible deductions from the wages of an employee.(Sec7).

2. Right to appeal against an order directing the employer to refund deductions

wrongfully made or to pay the delayed wages or compensation to the employee

under section 15(3) or an order-imposing penalty under Section 15(4).

Rights of Employees

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1. Right to claim unpaid or delayed wages, unauthorized deductions from wages

and fines imposed, along with some compensation. The application for such

claims may be presented within 12 months, by the employee himself or through

a legal practitioner or an official of a registered trade union, authorized in this

behalf.

2. Right to appeal against an order of the payment of wages authority if the

amount of wages claimed to have been withheld exceeds Rs. 20/- or against an

order-imposing penalty under Section 15(4) for making a malicious or vexatious

claim against an employer. (Sec. 17)

THE MINIMUM WAGES ACT, 1948

Object of the Act

Since exaction of labour and services against payment of less then the minimum

wages amounts to forced labour and violates article-23 of the Constitution, the

Minimum Wages Act has been enacted to ensure that the employer pays

minimum wages to the employees as fixed or revised by the appropriate Govt.in certain employments in accordance with the procedure as laid down under the

Act. Keeping in view the directive principles of State Policy embodied in

Article-43 of the constitution, the Act ensures physical subsistence,

maintenance of health and decency.

Main Provisions Under The Act

Fixing of minimum rates of wages

The appropriate Government may fix a minimum rate of wages for timeand for piece rate. However different wage rates may be fixed fordifferent scheduled employments, different classes of work in the samescheduled employment, for adults, adolescents, children and apprenticesand for different localities and for any one or more of the wage periods,

viz., by the hour or by the day or by the month or by such larger period.


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Minimum rate of wages

Any minimum rate of wages fixed or revised may consist of

A basic rate of wages and a special allowance. A basic wage rate with or without cost of living allowances and the cash

value of concessions in respect of supplies of essential commodities atconcessional rates.

An all-inclusive rate allowing for the basic rate, the cost of living

allowance and the cash value of concessions.

Procedure for fixing and revising minimum wages

The appropriate Government may appoint an advisory Board for advising it,

generally in the matter of fixing and revising minimum rates of wages.

The Central Government may appoint a Central Advisory Board for the purpose

of advising the Central and State Governments in the matters of the fixation and

revision of minimum rates of wages.

The Central Advisory Board may consist of persons to be nominated by the

Central Government representing employers and employees in the scheduled

employments, in equal number and independent persons not exceeding one third

of its total number of members. One of such independent persons would be

appointed chairman of the Board by the Central Government.

Wages in kind

Minimum wages payable under this Act is to be paid in cash. The payment of

minimum wages can be made wholly or partly in kind by notification in the

official Gazette if it is customary to pay wages wholly or partly in kind.

Payment of minimum rate of wages

The employer is required to pay to every employee engaged in a scheduled

employment under him wages at a rate not less than the minimum rate of wages

fixed by the competent authority.

Fixing hours for normal working day

In regard to any scheduled employment minimum rates of wages in respect of

which have been fixed under this Act, the appropriate Government may


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Fix the number of hours of work, which shall constitute a normalworking day inclusive of one or more specified intervals.

Provide for a day of rest in every period of seven days, whichshall be allowed to all employees or to any specified class of

employees, and for the payment of remuneration in respect ofsuch days of rest.

Provide for payment for work on a day of rest at a rate not less

than the overtime rate.

Overtime

If any employee whose minimum rate of wages is fixed under the Act works on

any day in excess of the number of hours constituting normal working day, the

employer is required to pay him at the overtime rate fixed under this Act or

under any law of the appropriate Government for the time being in force

whichever is higher.

Wages for two or more classes of work

If an employee does two or more classes of work to each of which a different

rate of wages is applicable, the employer is required to pay to such employee in

respect of the time respectively occupied in each such class of work, wages at

not less than the minimum time rate in respect of each class.

Maintenance of registers and records

Every employer is required to maintain such registers and records giving

particulars of employees, the work performed by them, the wages paid to them,

the receipts given by them and any other required particulars.

Inspections

The appropriate Government may, by notification in the official Gazette,

appoint inspectors for the purpose of this Act and define the local limits of their

functions.

Claims

The appropriate Government may appoint Labour commissioner or any other

officer with experience as a judge of a civil court or as a stipendiary Magistrate

to hear and decide for any specified areas, all claims arising out of the payment

of less than the minimum rates of wages as well as payment for days of rest or

for work done.


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Penalties for Offences

Any employer who contravenes any provision of this Act shall be punishable

with imprisonment for a term, which may extend to six months or with fine,

which may extend to five hundred rupees or with both.

Employees' Provident Fund and Miscellaneous Provisions Act,

1952

The umbrella legislation relating to provident fund isthe Employees'Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act) .The Act was enacted with the main objective of making some provisions for thefuture of industrial workers after their retirement and for their dependents incase of death. It provides insurance to workers and their dependents againstrisks of old age, retirement, discharge, retrenchment or death of the workers. Itisapplicableto every establishment which is engaged in any one or more of theindustries specified in Schedule I of the Act or any activity notified by CentralGovernment in the Official Gazette and employing 20 or more persons.

However, the Act shall not apply to any establishment:-

Registered under the Co-operative Societies Act 1912 or under any otherlaw for the time being in force in any State relating to co-operativesocieties employing less than fifty persons and working without the aid of

power; or

Belonging to or under the control of the Central Government or a State

Government and whose employees are entitled to the benefits ofcontributory provident fund or old age person in accordance with anyscheme or rule framed by the Central Government or the StateGovernment governing such benefits; or

Set up under any Central Provincial or State Act and whose employeesare entitled to the benefits of contributory provident fund or old age

person in accordance with any scheme or rule framed under that Actgoverning such benefits; or
http://business.gov.in/outerwin.php?id=http://indiacode.nic.in/rspaging.asp?tfnm=195219http://business.gov.in/outerwin.php?id=http://indiacode.nic.in/rspaging.asp?tfnm=195219http://business.gov.in/outerwin.php?id=http://indiacode.nic.in/rspaging.asp?tfnm=195219http://business.gov.in/outerwin.php?id=http://indiacode.nic.in/rspaging.asp?tfnm=195219http://business.gov.in/outerwin.php?id=http://epfindia.nic.in/Applicability.htmhttp://business.gov.in/outerwin.php?id=http://epfindia.nic.in/Applicability.htmhttp://business.gov.in/outerwin.php?id=http://epfindia.nic.in/Applicability.htmhttp://business.gov.in/outerwin.php?id=http://epfindia.nic.in/Applicability.htmhttp://business.gov.in/outerwin.php?id=http://indiacode.nic.in/rspaging.asp?tfnm=195219http://business.gov.in/outerwin.php?id=http://indiacode.nic.in/rspaging.asp?tfnm=195219


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Newly set up until the expiry of a period of three years from the date on

which such establishment has been set up.

The Act is administered by the Government of India through theEmployees'Provident Fund Organisation (EPFO).EPFO is one of the largest providentfund institutions in the world in terms of members and volume of financialtransactions that it has been carrying on. It is an autonomous tripartite bodyunder the control ofMinistry of Labourwith its head office in New Delhi. Itaims to extend the reach and quality of publicly managed old-age incomesecurity programs through its consistent efforts and ever-improving standards ofcompliance and benefit delivery system to its members. This way it seeks tocontribute to the economic and social well-being of the country.

EPFO functions under the overall superintendence of the policies framed by

theCentral Board of Trustees, headed by Union Minister for Labour asChairman. The main functions of the Board are:-

Administering the funds created and vested in the Board and performingother works incidental thereto.

Maintaining accounts of income and expenditure in prescribed form and

manner.

Delegation of powers for administration of the schemes.

Submitting audited accounts with comments and annual report on

performance of the Organisation to Government.

The main provisions of the Act are:-

The Act aims to provide for institution of provident funds, family pensionfunds and deposit linked insurance funds for the employees in thefactories and other establishments. Accordingly, three schemes are inoperation under the Act. These schemes taken together provide to the

employees an old age and survivorship benefits, a long term protectionand security to the employee and after his death to his family members,and timely advances including advances during sickness and for the

purchase/ construction of a dwelling house during the period ofmembership. These three schemes are as follows:-

Employees' Provident Fund Scheme, 1952

Employees' Deposit Linked Insurance Scheme, 1976
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Employees' Pension Scheme, 1995 (replacing the Employees'

Family Pension Scheme, 1971)

The Central Government may by notification in the Official Gazette

constitute a Central Board of Trustees for the territories to which this Actextends. Also, the Government may constitute an Executive Committeeto assist the Board in the performance of its functions.

Thecontributionwhich shall be paid by the employer to the fund shallbe eight and one-third per cent of the basic wages, dearness allowancesand retaining allowance (if any) for the time being payable to each of theemployees. While, the employees' contribution shall be equal to the

contribution payable by the employer in respect of him and may if anyemployee so desires and if the Scheme makes provision therefore be anamount not exceeding eight and one-third per cent of his basic wages,dearness allowances and retaining allowance (if any), subject to thecondition that the employer shall not be under an obligation to pay anycontribution over and above his contribution payable under the Act.

The Central Government may by notification in the Official Gazette

constitute one or more Employees' Provident Funds Appellate Tribunal toexercise the powers and discharge the functions conferred on such

Tribunal by this Act and every such Tribunal shall have jurisdiction inrespect of establishments situated in such area as may be specified in thenotification constituting the Tribunal.

No employer in relation to an establishment to which any scheme applies,shall by reason only of his liability for the payment of any contribution tothe fund, or any charges under this Act or the scheme, reduce whetherdirectly or indirectly, the wages of any employee to whom the schemeapplies or the total quantum of benefits in the nature of old age pension

gratuity provident fund or life insurance to which the employee isentitled.

Whoever for the purpose of avoiding any payment to be made by himself

under this Act or of enabling any other person to avoid such payment,knowingly makes or causes to be made any false statement or falserepresentation, shall be punishable with imprisonment or with fine orwith both.
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EMPLOYEES' STATE INSURANCE

Employees' State Insuranceis a self-financing social security andhealth

insurance scheme for Indian workers. For all employees earning

15000 (US$250) or less per month as wages, the employer contributes 4.75percentage and employee contributes 1.75 percentage, total share 6.5

percentage. This fund is managed by the ESI Corporation (ESIC) according to

rules and regulations stipulated there in the ESI Act 1948, which overseen as the

provision of medical and cash benefits to the employees and their family

through its large network of branch offices, dispensaries and hospitals

throughout India. ESIC is an autonomous corporation by a statutory creation

under Ministry of Labour and Employment, Government of India. As it is a

legal entity, the corporation can raise loan and take measures for dischargingsuch loans with previous sanction of Central Government. And also it can

acquire both movable and immovable property and all incomes from the

property shall vest with the corporations. The corporation can setup hospital

either independently or in collaboration with state government or other private

entities. But most of the dispensaries and hospitals are run by concerned state

governments.

BenefitsIn ESI scheme, a worker in insurable employment is called insured person (IP).

Insured persons and their family are entitled to different types of benefits. The

benefits are broadly classified into two: (1) Medical benefits and (2) cash

benefits.

The employees registered under the scheme are entitled to medical treatment for

themselves and their dependents,unemployment cash benefit in certain

contingencies, and maternity in case of women employees. In case of

employment-relateddisablement or death there is provision for adisablementbenefit and a family pension, respectively. Funeral Benefit to dependents of

Insured Persons/Insured Women. Super Specialty Treatment through Private

Tie Up Network as well as through its own Super Specialty Hospitals situated

throughout India. Also ESI is constructing Medical and PG Medical, Dental

Colleges in which it has set aside certain percentage of seats for children of

Insured Persons. Recently ESI taken a decision to make the 'dependent benefit'

up to a ceiling of 1200 (US$20) for all eligible dependents of a deceased

person. Through this approximately 86000 dependents got benefit. From time to

time ESI relaxes conditions for disbursement of Sickness Benefit and SuperSpecialty Treatment.
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Outpatient medical facilities are available in 1398 ESI dispensaries, and through

1,678 empanelled private medical practitioners. Inpatient care is available in

145 ESI Hospitals and 42 Hospital annexes; a total of 19387 beds. In addition,

several state government hospitals also have beds for exclusive use of ESI

Beneficiaries. Cash benefits can be availed in any of 783 ESI centers lughoutIndia.

Recent years have seen an increasing role of information technology in ESI,

with the introduction of Pehchan smart cards in 'Project Panchdeep', India's

largest e-governance project. In addition to insured workers, poor families

eligible under theRashtriya Swasthya Bima Yojana can also avail facilities in

ESI hospitals and dispensaries. There are plans to open medical, nursing and

paramedical schools in ESI hospitals.

Hospitals

ESI has set up numerous hospitals all over the country. Currently more than 20

new hospitals are under construction, some of the hospitals include ESI

Gulbarga, ESI Joka, ESI Chennai etc. ESI has recently inaugurated their

Medical College inKollam,Kerala.ESI has a budget of 250

million (US$4.2 million) to 300 million (US$5.0 million) per hospital for

services and amenities such as modular operation theatres, and medical gas

pipeline systems.

PAYMENT OF BONUS ACT

ThePayment of Bonus Act, 1965was enacted to provide for the payment obonus to persons employed in certain establishments on the basis of profits or

productivity and for the matters connected therewith. The Act applies to:- (i) everyfactory as defined under theFactories Act, 1948; and (ii) every otherestablishment in which twenty or more persons are employed on any day during anaccounting year. However, the Government may, after giving two months'notification in the Official Gazette, make the Act applicable to any factory orestablishment employing less than twenty but not less than ten persons.

The Act is enforced through theCentral Industrial Relations Machinery(CIRM).CIRM is an attached office of theMinistry of Labourand is also knownas theChief Labour Commissioner (Central) [CLC(C)] Organisation. It is
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headed by the Chief Labour Commissioner (Central).

The key provisions of the Act are:-

According to the Act, the term 'employee' means "any person employed on a

salary or wage not exceeding three thousand and five hundred rupees permensem in any industry to do any skilled or unskilled manual, supervisory,managerial, administrative, technical or clerical work for hire or reward,whether the terms of employment be express or implied".

An employee is entitled to be paid by his employer a bonus in an accountingyear subjected to the condition that he/she has worked for not less than 30working days of that year.

An employer shall pay minimum bonus at the rate of 8.33% of the salary or

wages earned by an employee in an year or one hundred rupees,whichever ishigher. Here it is not required that the employer has any allocable surplus inthe accounting year. However, where an employee has not completed fifteenyears of age at the beginning of the accounting year, the minimum bonus

payable is 8.33% or sixty rupees, whichever is higher.

In any accounting year, if the allocable surplus exceeds the amount o

minimum bonus payable to the employees, the employer shall in lieu of suchminimum bonus, be bound to pay bonus (maximum bonus) equivalent to the

amount which shall not exceed 20% of the salary or wages earned byemployees.

In computing the allocable surplus, the amount set on or the amount set of

shall be taken into account. In other words:- (i) If, in any accounting year,the allocable surplus exceeds the amount of maximum bonus payable to theemployees in the establishment, then the excess surplus is carried forwardfor being set on in the succeeding accounting year and so on up to andinclusive of the fourth accounting year for the purpose of payment of bonus;or (ii) If there is no or less allocable surplus in respect of that year, then sucha shortfall is carried forward for being set off in the succeeding accountingyear and so on up to and inclusive of the fourth accounting year.

Where in any accounting year, any amount has been carried forward and set

on or set off, then in calculating bonus for the succeeding accounting year,the amount of set on or set off carried forward from the earliest accountingyear shall first be taken into account.

All amounts payable to an employee by way of bonus under this Act shall be

paid in cash by his employer within a month from the date on which theaward become enforceable or the settlement comes into operation, in respect


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of any dispute regarding payment of bonus. But, in any other case, it shall bepaid within a period of eight months from the close of the accounting year.

However, the Government may order, upon receiving application made to itby the employer and for sufficient reasons, to extend the said period of eightmonths to such further period or periods as it thinks fit, such that that thetotal period so extended shall not, in any case, exceed two years.

An employee shall be disqualified from receiving bonus if he/ she is

dismissed from service for:- (i) fraud; or (ii) riotous or violent behaviourwhile on the premises of the establishment; or (iii) theft, misappropriation orsabotage of any property of the establishment.

THE PAYMENT OF GRATUITY ACT, 1972

Objective

An Act to provide for a scheme for the payment of gratuity to employees

engaged in factories, mines, oilfields, plantations, ports, railway companies,

shops or other establishments and for matters connected therewith or incidental

thereto.

Scope and Coverage

1) This Act may be called the Payment of Gratuity Act, 1972.

2) It extends to the whole of India: Provided that in so far as it relates to

plantations or ports, it shall not extend to the State of Jammu and Kashmir.

3) It shall apply to -

a)

Every factory, mine, oilfield, plantation, port and railway company;b) Every shop or establishment within the meaning of any law for the time

being in force in relation to shops and establishments in a State, in which

ten or more persons are employed, or were employed, on any day of the

preceding twelve months;

c) Such other establishments or class of establishments, in which ten or

more employees are employed, or were employed, on any day of the

preceding twelve months, as the Central Government may, by

notification, specify in this behalf.


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4) (3A) A shop or establishment to which this Act has become applicable shall

continue to be governed by this Act notwithstanding that the number of

persons employed therein at any time after it has become so applicable falls

below ten.

5)

It shall come into force on such date as the Central Government may, by

notification, appoint.

Continuous Service

For the purposes of this Act,(1) an employee shall be said to be in continuous

service for a period if he has, for that period, been in uninterrupted service,

including service which may be interrupted on account of sickness, accident,leave, absence from duty without leave (not being absence in respect of which

an order treating the absence as break in service has been passed in accordance

with the standing order, rules or regulations governing the employees of the

establishment), lay off, strike or a lock-out or cessation of work not due to any

fault of the employee, whether such uninterrupted or interrupted service was

rendered before or after the commencement of this Act.

(2) Where an employee (not being an employee employed in a seasonal

establishment) is not in continuous service within the meaning of clause (1), for

any period of one year or six months, he shall be deemed to be in continuous

service under the employer -

(a) For the said period of one year, if the employee during the period of twelve

calendar months preceding the date with reference to which calculation is to be

made, has actually worked under the employer for not less than (i) one

hundred and ninety days, in the case of an employee employed below the

ground in a mine or in an establishment which works for less than six days in aweek; and (ii) two hundred and forty days, in any other case;

(b) For the said period of six months, if the employee during the period of six

calendar months preceding the date with reference to which the calculation is to

be made, has actually worked under the employer for not less than -

Ninety-five days, in the case of an employee employed below the ground in a

mine or in an establishment which works for less than six days in a week; and

One hundred and twenty days, in any other case;


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PAYMENT OF GRATUITY

(1) Gratuity shall be payable to an employee on the termination of his

employment after he has rendered continuous service for not less than five

years,

(a) On his superannuation, or

(b) On his retirement or resignation, or

(c) On his death or disablement due to accident or disease: Provided that the

completion of continuous service of five years shall not be necessary where the

termination of the employment of any employee is due to death or disablement:

Provided further that in the case of death of the employee, gratuity payable tohim shall be paid to his nominee or, if no nomination has been made, to his

heirs, and where any such nominees or heirs is a minor, the share of such minor,

shall be deposited with the controlling authority who shall invest the same for

the benefit of such minor in such bank or other financial institution, as may be

prescribed, until such minor attains majority.

Explanation: For the purposes of this section, disablement means such

disablement as incapacitates an employee for the work which he was capable of

performing before the accident or disease resulting in such disablement.

(2) For every completed year of service or part thereof in excess of six months,

the employer shall pay gratuity to an employee at the rate of fifteen days wages

based on the rate of wages last drawn by the employee concerned: Provided that

in the case of a piece-rated employee, daily wages shall be computed on the

average of the total wages received by him for a period of three months

immediately preceding the termination of his employment, and, for this

purpose, the wages paid for any overtime work shall not be taken into account :

Provided further that in the case of an employee who is employed in a seasonal

establishment and who is not so employed throughout the year, the employer

shall pay the gratuity at the rate of seven days wages for each season.

Explanation: In the case of a monthly rated employee, the fifteen days wages

shall be calculated by dividing the monthly rate of wages last drawn by him by

twenty-six and multiplying the quotient by fifteen.


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(3) The amount of gratuity payable to an employee shall not exceed three lakhs

and fifty thousand rupees.

(4) For the purpose of computing the gratuity payable to an employee who is

employed, after his disablement, on reduced wages, his wages for the periodpreceding his disablement shall be taken to be the wages received by him during

that period, and his wages for the period subsequent to his disablement shall be

taken to be the wages as so reduced.

(5) Nothing in this section shall affect the right of an employee to receive better

terms of gratuity under any award or agreement or contract with the employer.

(6) Notwithstanding anything contained in sub-section (1), -

(a) The gratuity of an employee, whose services have been terminated for any

act, willful omission or negligence causing any damage or loss to, or destruction

of, property belonging to the employer, shall be forfeited to the extent of the

damage or loss so caused.

(b) The gratuity payable to an employee may be wholly or partially forfeited -

i.If the services of such employee have been terminated for his riotous or

disorderly conduct or any other act of violence on his part, orii.If the services of such employee have been terminated for any act, which

constitutes an offence involving moral turpitude, provided that he commits

such offence in the course of his employment.

Power To Exempt. -

The appropriate government is empowered to exempt, by notification, any

establishment, factory, mine, oilfield, plantation, port, railway company or shop

to which this Act applies from the operation of Act, if the not less favorable

than the benefits conferred under this Act. The appropriate government may

also exempt any employee or class of employees, similarly.

Nomination

Each employee, who has completed one year of service, shall make, within

such time, in such form and in such manner, as may be prescribed,


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nomination for the purpose of the second proviso to sub-section (1) of section

4.

An employee can distribute the nomination between more than one people.

If an employee has a family at the time of making a nomination, the

nomination shall be made in favor of one or more members of his family, and

any nomination made by such employee in favor of a person who is not a

member of his family, shall be void.

If at the time of making a nomination the employee has no family, the

nomination may be made in favor of any person or persons but if the

employee subsequently acquires a family, such nomination shall forthwith

become invalid and the employee shall make, within such time as may be

prescribed, a fresh nomination in favor of one or more members of his family.

A nomination may, subject to the provisions of sub-sections (3) and (4), bemodified by an employee at any time, after giving to his employer a written

notice in such form and in such manner as may be prescribed, of his intention

to do so.

If a nominee predeceases the employee, the interest of the nominee shall

revert to the employee who shall make a fresh nomination, in the prescribed

form, in respect of such interest.

Forfeiture of Gratuity

The gratuity may be wholly or partly forfeited if the termination of services is

due to employees riotous or disorderly conduct or any other act of violence or

any offence including moral turpitude committed in the course of his

employment. Thus, a workman who was dismissed for assaulting another

workman is the factory, was not entitled to payment of any amount of gratuity.

WORKMEN'S COMPENSATION ACT, 1923

The Workmens Compensation Act, 1923 provides for payment of

compensation to workmen and their dependents in case of injury and accident(including certain occupational disease) arising out of and in the course ofemployment and resulting in disablement or death. The Act applies to railwayservants and persons employed in any such capacity as is specified in Schedule

II of the Act. The schedule II includes persons employed in factories, mines,


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plantations, mechanically propelled vehicles, construction works and certainother hazardous occupations.

The amount of compensation to be paid depends on the nature of the injury andthe average monthly wages and age of workmen. The minimum and maximumrates of compensation payable for death (in such cases it is paid to thedependents of workmen) and for disability have been fixed and is subject torevision from time to time.

ASocial Security Division has been set up under the Ministry of Labour andEmployment , which deals with framing of social security policy for theworkers and implementation of the various social security schemes. It is alsoresponsible for enforcing this Act. The Act is administered by the StateGovernments through Commissioners for Workmen's Compensation.

The main provisions of the Act are:-

An employer is liable to pay compensation:- (i) if personal injury iscaused to a workman by accident arising out of and in the course of hisemployment; (ii) if a workman employed in any employment contractsany disease, specified in the Act as an occupational disease peculiar tothat employment.

However, the employer is not liable to pay compensation in the following

cases:-

If the injury does not result in the total or partial disablement of the

workman for a period exceeding three days.

If the injury, not resulting in death or permanent total disablement, iscaused by an accident which is directly attributable to:- (i) the workmanhaving been at the time of the accident under the influence of drink ordrugs; or (ii) the willful disobedience of the workman to an orderexpressly given, or to a rule expressly framed, for the purpose of securingthe safety of workmen; or (iii) the willful removal or disregard by theworkman of any safety guard or other device which has been provided forthe purpose of securing safety of workmen.

The State Government may, by notification in the Official Gazette,

appoint any person to be a Commissioner for Workmen's Compensationfor such area as may be specified in the notification. Any Commissioner

may, for the purpose of deciding any matter referred to him for decisionunder this Act, choose one or more persons possessing special knowledge
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of any matter relevant to the matter under inquiry to assist him in holdingthe inquiry.

Compensation shall be paid as soon as it falls due. In cases where the

employer does not accept the liability for compensation to the extentclaimed, he shall be bound to make provisional payment based on theextent of liability which he accepts, and, such payment shall be depositedwith the Commissioner or made to the workman, as the case may be.

If any question arises in any proceedings under this Act as to the liabilityof any person to pay compensation (including any question as to whethera person injured is or is not a workman) or as to the amount or duration ofcompensation (including any question as to the nature or extent ofdisablement), the question shall, in default of agreement, be settled by a

Commissioner. No Civil Court shall have jurisdiction to settle, decide ordeal with any question which is by or under this Act required to besettled, decided or dealt with by a Commissioner or to enforce anyliability incurred under this Act.

The State Government may, by notification in the Official Gazette, direct

that every person employing workmen, or that any specified class of suchpersons, shall send at such time and in such form and to such authority, asmay be specified in the notification, a correct return specifying thenumber of injuries in respect of which compensation has been paid by theemployer during the previous year and the amount of such compensationtogether with such other particulars as to the compensation as the StateGovernment may direct.

Whoever, fails to maintain a notice-book which he is required tomaintain; or fails to send to the Commissioner a statement which he isrequired to send; or fails to send a report which he is required to send; orfails to make a return which he is required to make, shall be punishablewith fine.

INDUSTRIAL DISPUTES ACT

Industrial disputes are the disputes which arise due to any disagreement in anindustrial relation. The term 'industrial relation' involves various aspects ofinteractions between the employer and the employees; among the employees as

well as between the employers. In such relations whenever there is a clash of


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interest, it may result in dissatisfaction for either of the parties involved andhence lead to industrial disputes or conflicts. These disputes may take variousforms such as protests, strikes, demonstrations, lock-outs, retrenchment,dismissal of workers, etc.

Some of the important causes of an industrial dispute are:-

Demand for higher wages and allowances.

Demand for payment of bonus and determination of its rate thereof.

Demand for higher social security benefits.

Demand for good and safer working conditions, including length of a

working day, the interval and frequency of leisure and physical work

environment.

Demand for improved labour welfare and other benefits. For example,

adequate canteen, rest, recreation and accommodation facility,arrangements for travel to and from distant places,etc.

Besides, poor personnel management; conflicting legislative measure or

government policies; and psychological factors such as denial ofopportunity to the worker for satisfying his/ her basic urge for self-expression, personal achievement and betterment may also result inlabour problems.

In India,the Industrial Disputes Act, 1947is the main legislation forinvestigation and settlement of all industrial disputes. The Act enumerates thecontingencies when a strike or lock-out can be lawfully resorted to, when theycan be declared illegal or unlawful, conditions for laying off, retrenching,discharging or dismissing a workman, circumstances under which an industrialunit can be closed down and several other matters related to industrialemployees and employers.

The Act is administered by theMinistry of Labourthrough itsIndustrialRelations Division.The Division is concerned with improving the institutionalframework for dispute settlement and amending labour laws relating toindustrial relations. It works in close co-ordination with theCentral IndustrialRelations Machinery (CIRM)in an effort to ensure that the country gets astable, dignified and efficient workforce, free from exploitation and capable ofgenerating higher levels of output. The CIRM, which is an attached office of theMinistry of Labour, is also known as theChief Labour Commissioner

(Central) [CLC(C)] Organisation.The CIRM is headed by the Chief Labour

Commissioner (Central). It has been entrusted with the task of maintaining
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industrial relations, enforcement of labour laws and verification of trade unionmembership in central sphere. It ensures harmonious industrial relationsthrough:-

Monitoring of industrial relations in Central Sphere;

Intervention, mediation and conciliation in industrial disputes in order to

bring about settlement of disputes;

Intervention in situations of threatened strikes and lockouts with a view to

avert the strikes and lockouts;

Implementation of settlements and awards.

According to the Act, the term 'industrial dispute' means "any dispute or

difference between employers and employers, or between employers andworkmen, or between workmen and workmen, which is connected with theemployment or non-employment, or the terms of employment or with theconditions of labour, of any person". The basic objectives of the Act are:-

To provide a suitable machinery for the just, equitable and peaceful

settlement of industrial disputes.

To promote measures for securing and preserving amity and good

relations between employers and employees.

To prevent illegal strikes and lockouts.

To provide relief to workers against layoffs, retrenchment, wrongful

dismissal and victimisation.

To promote collective bargaining.

To ameliorate the conditions of workers.

To avoid unfair labour practices.

Under the Act, a statutory machinery has been constituted for conciliation andadjudication of industrial disputes. It includes:-

The Act provides for appointment of 'Conciliation Officers', byappropriate Government, charged with the duty of mediating in and

promoting the settlement of industrial disputes. He/ she may be appointedfor a specified area, or for specified industries in a specified area, or forone or more specified industries, either permanently or for a limited

period. It is the duty of these officers to bring both the employees and


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employers together and help them to resolve their differences. If thedispute is settled, he/ she shall send a report, to that effect, to theappropriate Government.

The appropriate Government may, as occasion arises, constitute a 'Boardof Conciliation', which shall consist of a chairman and two or four othermembers, as the appropriate Government thinks fit. The Chairman shall

be an independent person and the other members shall be personsappointed in equal numbers to represent the parties to the dispute. Wherea dispute has been referred to a Board, it shall, without delay, investigatethe dispute and do all such things as it thinks fit for the purpose ofinducing the parties to come to a fair and amicable settlement of thedispute.

The appropriate Government may, as occasion arises, also constitute a

'Court of Inquiry' to inquire into any matter appearing to be connectedwith or relevant to an industrial dispute. It shall, thereafter, report about itto the Government ordinarily within a period of six months from thecommencement of its inquiry. Such a court may consist of oneindependent person or of such number of independent persons as theappropriate Government may think fit and where it consists of two ormore members, one of them shall be appointed as the chairman.

The appropriate Government may constitute one or more 'Labour Courts'

to adjudicate industrial disputes relating to any matter specified in thesecond schedule like issues related to standing orders, discharge ordismissal of workers, illegality or otherwise of strikes and lockouts,withdrawal of any customary benefit, etc. and to perform such otherfunctions as may be assigned to them under the Act. A labour court shallconsist of one person only to be appointed by the appropriateGovernment.

The appropriate Government may constitute one or more 'Industrial

Tribunals' to adjudicate industrial disputes relating to any matter, whetherspecified in the second schedule or third schedule, and to perform suchother functions as may be assigned to them under the Act. A tribunal shallconsist of one person only to be appointed by the appropriateGovernment. The third schedule covers the matters such as wages, bonus,allowances and certain other benefits, certain working conditions,discipline, rationalisation, retrenchment and closure of establishment.

The Central Government may, by notification in the Official Gazette,

constitute one or more 'National Industrial Tribunals' to adjudicate anindustrial dispute which, in the opinion of the Central Government,


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involve questions of national importance or are of such a nature thatindustrial establishments situated in more than one State are likely to beinterested in, or affected by, such disputes. Such a tribunal shall consist ofone person only to be appointed by the Central Government.

The Act also makes it obligatory for an employer to set up a 'Grievance

Settlement Authority (GSA)' in an industrial establishment in which fiftyor more workers have been employed in the preceding twelve months.This authority shall have the responsibility to settle industrial disputesconcerning an individual worker employed in that establishment.

No reference can be made under the Act to Conciliation Boards, Labour Courtsor Industrial Tribunals, unless the dispute has first been the subject of a decisionof a Grievance Settlement Authority.

Underthe Industrial Disputes Act, 1947, the Central Government is theappropriate Government for investigation and settlement of industrial disputesin regard to the departmental undertakings of the Central Government, major

ports, mines, oil fields, cantonment boards, banking and Insurance Companies,Life Insurance Corporation of India (LIC), Industrial Finance Corporation ofIndia Limited, the Oil and Natural Gas Corporation Limited, the Indian Airlines,Air India, the Airport Authority of India and all air transport services. While inrelation to other industrial establishments, the State Government is theappropriate Government.

Accordingly,Central Government Industrial Tribunals (CGITs) -cum-Labour Courtshave been set up in different parts of the country. There are at

present17 CGITsto whom industrial disputes could be referred foradjudication. These CGITs-cum-Labour Courts are at New Delhi , Mumbai (2CGITs ), Bangalore, Kolkata, Asansol, Dhanbad (2 CGITs ), Jabalpur,Chandigarh, Kanpur, Jaipur, Lucknow, Nagpur, Hyderabad, Chennai andBhubaneshwar. Out of these CGITs, 2 CGITs namely Mumbai-I and Kolkatahave been declared as National Industrial Tribunals.

Besides, theOrganization of the Chief Labour Commissioner( Central)actsas the primary conciliatory agency in the Central Government for industrialdisputes. There are theRegional Labour Commissioners(Central)andAssistant Labour Commissioners (Central)who on behalf ofthe Chief Labour Commissioner (Central) act as Conciliatory Officers indifferent parts of the country.
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EMPLOYMENT EXCHANGES (COMPULSORY

NOTIFICATION OF VACANCIES) ACT, 1959

TheEmployment Exchanges (Compulsory Notification of Vacancies) Act,1959provides for compulsory notification of vacancies and submission ofemployment returns(ER-I andER-II)by the employers to the employmentexchanges. According to the Act, the term 'employment exchange' means "anyoffice or place established and maintained by the Government for the collectionand furnishing of information, either by keeping of registers or otherwise,respecting:- (i) persons who seek to engage employees; (ii) persons who seekemployment; and (iii) vacancies to which persons seeking employment may beappointed". Thus, the main activities of the employment exchanges areregistration, placement of job seekers, career counselling, and vocationalguidance and collection of employment market information.

The Act applies to all establishments in the public sector and suchestablishments in the private sector as are engaged in non-agricultural activitiesand employing 25 or more workers. The employer in every establishment in

public sector in any State or area shall furnish such information or return as maybe prescribed in relation to vacancies that have occurred or are about to occur inthat establishment, to such employment exchanges as may be prescribed. But, it

shall not apply in relation to the vacancies in any employment:-

In agriculture (including horticulture) in any establishment in private

sector other than employment as agricultural or farm machineryoperatives;

In domestic service;

The total duration of which is less than three months;

To do unskilled office work;

Connected with the staff of Parliament.

Unless the Central Government otherwise directs by notification in the OfficialGazette in this behalf, this Act shall not also apply in relation to:- (i) vacancieswhich are proposed to be filled through promotion or by absorption of surplusstaff of any branch or department of the same establishment or on the result ofany examination conducted or interview held by, or on the recommendation of,any independent agency, such as the Union or a State Public Service

Commission and the like; and (ii) vacancies in an employment which carries a
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