Labour laws in India

Labour Laws In India Presented by Yashaswee Sarkhel & Divyansha Leekha 1 st Year Symbiosis Law School, NOIDA



Transcript of Labour laws in India

Page 1: Labour laws in India

Labour Laws In India

Presented by

Yashaswee Sarkhel & Divyansha Leekha 1st Year Symbiosis Law School, NOIDA

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What is Labour Law?• A combined body of laws, administrative rulings,

precedents, enactments and precedents

• Addressing

a) The legal rights

b) And the duties of

working people and their organizations

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In other words…• It defines both rights and obligations of

a) Workers

b) Union Members

c) Employers

at a workplace.

• It is also called as ‘Employment Law’

• In India, law relating to labour and employment is primarily

known under the broad category of "Industrial Law"

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What does it cover?Generally Labour Laws cover

• Industrial relations

a) certification of unions,

b) labour-management relations,

c) collective bargaining

d) unfair labour practices

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Continued…• Workplace health and safety

• Employment standards

a) general holidays, b) annual leave, c) working hours, d) unfair dismissals, e) minimum wage, f) layoff proceduresg) severance pay.

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Continued…•How the need arose

During the post world war I era the need for definite labour laws were felt for the first time.

Previously, organizations all over the world made their labourers work with little or no power and with minimal pay. This kept the labour cost low and increased the profit margin.

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Continued…However, during this time period, the voices of the

workers, against such labor practices, started to rise.

On one hand there were workers demanding better work atmosphere, increased wage and right to organize

On the other there were organizations trying to restrict the power of workers and to keep labour costs low, and avoid the gaining of political power of the workers.

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Continued…This conflict between these two opposite

interests in the society highlighted the need for a set of regulations i.e. laws. That will maintain a balance between the rights and liabilities of both the employer and the employee.

In addition to that, which will also ensure the peaceful working of the organizations.

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Continued…•International Labour Organisation (ILO)

was one of the first organisations to deal with labour issues.

•The ILO was established as an agency of the League of Nations following the Treaty of Versailles, which ended World War I

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Continued…•Most of the labour legislations in India

are pre-constitutional.

•Until 1919, there were no important labour legislations in India.

•With the establishment of ILO coupled

with trade union pressure in the country, has greatly affected labour legislations

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Factors Influencing Evolution of Labour legislation

Several factors which influenced the evolution of labour legislation in India :-

• Early Industrialism

• Influence of colonial rules

• The rise of Trade Union

• The growth of Humanitarian ideas and the concept of Social justice

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Continued…•Indian constitution

•Establishment of ILO

•National movement

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Industrialization & British


Complex industrial relations

Inadequate civil


Protect & safeguard

labor rights

Labour policy

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Purpose of Labour lawsThere are three crucial purposes which labour

laws fulfill

1. Establishing a legal system that facilitates productive individual

and collective employment relationships, and therefore a

productive economy.

2. providing a framework within which employers, workers and their

representatives can interact with regard to work-related issues,

it serves as an important instrument for achieving harmonious

industrial relations based on workplace democracy.

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Continued…•providing a clear and constant reminder

and guarantee of fundamental principles and rights at work which have received broad social acceptance and establishes the processes through which these principles and rights can be implemented and enforced.

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Labour Policy In India…• Creative measures to attract public and private  investment. • Creating new jobs • New Social security schemes for workers in the  unorganized sector. • Social security cards for workers. • Unified and beneficial management of funds of  Welfare Boards. • Reprioritization of allocation of funds to benefit  vulnerable workers. • Model employee‐employer relationships.  

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Continued…•Long term settlements based on productivity.  •Vital industries and establishments declared as 

`public utilities`. •Special conciliation mechanism for projects wit

h investments of Rs.150 crores or more.  • Industrial Relations committees in more sectors

.•  Labour Law reforms in tune with the times. Em

powered body of experts to suggest required changes. 

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Continued…• Statutory amendments for expediting and  streamlining the mechanism of Labour Judiciary.  • Amendments to Industrial Disputes Act in tune with the

 times.  • Efficient functioning of Labour Department. • More labour sectors under Minimum Wages Act. • Child labour act to be aggressively enforced.  • Modern medical facilities for workers. • Rehabilitation packages for displaced workers.  • Restructuring 

in functioning of employment exchanges. Computerization and updating of data base.  

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•Revamping of curriculum and course content in  industrial training. 

•Joint  cell of  labour department and  industries department to study  changes  in  laws  and rules

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Category•Labour laws enacted by the Central Govern

ment, where the Central Government has the sole responsibility for enforcement. 

Few examples are:a) The Employees’ State Insurance Act, 1948 


b) The Employees’ Provident Fund and Miscellaneous Provisions Act,1952  

c) The Mines Act, 1952  

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Continued…•Labour  laws  enacted  by  Central 

Government  and  enforced  both  by  Central  and  State 

Governments Few examples are:a) The Minimum Wages Act, 1948  b) The Payment of Bonus Act, 1965  c) The Payment of Gratuity Act, 1972  d) The Payment of Wages Act, 1936

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Continued…•Labour laws enacted by Central Governme

nt and enforced by the State Governments Few examples are:a) The Employers’ Liability Act, 1938  b) The Factories Act, 1948  c) The Motor Transport Workers Act, 1961  d) The Personal Injuries (Compensation  Insurance) Act, 1963  

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Continued…•Laws enacted by state governments and

enacted by state governments in respective states.

Few examples are:a) Workmen’s  Compensation (Madhya 

Pradesh) Rules, 1962  b) Madhya  Pradesh Workmen’s 

Compensation (Occupational  Diseases) Rules, 1963 

c) Gujarat  Workmen's Compensation Rules, 1967

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Classification•Laws related to Industrial Relations•Laws related to Wages•Laws related to Working Hours,

Conditions of Service and Employment •Laws related to Equality and

Empowerment of Women•Laws related to Deprived and

Disadvantaged Sections of the Society•Laws related to Social Security

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Continued…•Laws related to Industrial Relations

a) Trade Unions Act, 1926 b) Industrial Employment Standing Order 

Act,  1946. c) Industrial Disputes Act, 1947.

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Continued…•Laws related to Wages

a) Payment of Wages Act, 1936 b) Minimum Wages Act, 1948 c) Payment of Bonus Act, 1965. d) Working Journalists (Fixation of Rates of

 Wages Act, 1958

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Continued…•Laws related to Working Hours,

Conditions of Service and Employment

a) The Apprentices Act, 1961 

b) The Contract Labour (Regulation and Abolition) Act, 1970

c) Mines and Mineral (Development and Regulation Act, 1957

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Continued…•Laws related to Equality and

Empowerment of Women

a) Maternity Benefit Act, 1961

b) Equal Remuneration Act, 1976

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Continued…•Laws related to Deprived and

Disadvantaged Sections of the Society

a) Bonded Labour System (Abolition) Act, 1976 

b) Child Labour (Prohibition & Regulation) Act, 1986 

c) Children (Pledging of Labour) Act, 1933 

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Continued…•Laws related to Social Security

a) Workmen’s Compensation Act, 1923. b) Employees’ State Insurance Act, 1948. c) Employees’ Provident Fund & Miscellan

eous Provisions Act, 1952. d) Payment of Gratuity Act, 1972. e) Employers’ Liability Act, 1938

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Continued...OBJECT OF THE ACT • “Promotion of New manpower at skills”. • Improvement/refinement of old skills through theoretical and

practical training in number of trades and occupation.

APPLICABILITY OF THE ACT• According to Sec.1 Areas and industries as notified by the Central


QUALIFICATION FOR BEING TRAINED AS AN APPRENTICE• Sec 3. A Person cannot be an apprentice in any designated trade

unless• He is not more than 14 years of age;• He satisfies such standard of education and physical fitness as may

be prescribed.

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Continued…PERIOD OF APPRENTICESHIP •Training to be determined by the National


CONTRACT OF APPRENTICESHIP•According to Sec.4 To contain such terms

and conditions as may be agreed to by the apprentice, or his guardian (in case he is a minor) and employers.

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• To learn his trade conscientiously, diligently. • To attend practical and instructional classes regularly. • To carry out all lawful orders. • To carry out his contractual obligations.


• As per Factories Act or Mines Act as the case may be when undergoing training.

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Continued…HOURS OF WORK 

• 42 to 48 in a week while on theoretical training.  • 42 in a week while on basic training. • 42 to 45 in a week in second year of training. • As per other workers (in the third year). • Not allowed to work between 10 PM to 04 AM unless approved by

Apprenticeship Advisor. 

LEAVE & HOLIDAYS • Casual Leave for the maximum period of 12 days in a year.• Medical Leave for the maximum period of 15 days and the

accumulated leave up to 40 days in a year.• Extraordinary leave upto a maximum period of 10 days in a year.

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Continued…PAYMENT OF APPRENTICE • The employer to pay such stipend at a rate of not

less than prescribed minimum rate as may be specified.

Sec.6 EMPLOYER’S LIABILITY TO PAY COMPENSATION FOR INJURY • As per provisions of Workmen's Compensation Act.


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Continued…OFFENCES & PUNISHMENT  • Imprisonment of a term upto 6 months or with

fine when employer• Engages as an apprentice a person who is not

qualified for being so engaged or• fails to carry out the terms and conditions of a

contract of apprenticeship, or• contravenes the provisions of the Act relating to

the number of apprentices which he is required to engage under those provisions.

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Industrial Disputes Act…•INDUSTRY - has attained wider meaning than defined except for domestic employment, covers from barber shops to big steel companies. Sec.2(I)

•WORKS COMMITTEE -Joint Committe with equal number of employers and employees representatives for discussion of certain common problems. Sec.3

•CONCILIATION - is an attempt by a third party in helping to settle the disputesSec.4

•ADJUDICATION - Labour Court, Industrial Tribunal or National Tribunal to hear and decide the dispute. Sec.7,7A & 7B

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y strikes











Token or




l. 2.Particu

lar 3.Politica

l. 4.Bandhs

Secondary strikes




tool/lie down

or stay-in

Picketing &


Lightening or

cat call strike





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Continued…LAY OFF & PAYMENT 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


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Payment of Wages except for intervening weekly holiday compensation 50% of total or basic wages and DA for a period of lay off upto maximum 45 days in a year. 

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• Without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking

  • Within fourteen days of giving such notice. 

• Before the expiry of the date of strike specified in any such notice as aforesaid. 

• During the Pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings. 

• During the pendency of conciliation proceedings before a Board and

seven days after the conclusion of such proceedings

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Continued…• During the pendency of conciliation proceedings before a Board and

seven days after the conclusion of such proceedings.  • During the pendency of proceeding before a Labour Court, Tribunal

or National 

• Tribunal and two months, after the conclusion of such proceedings.  • During the pendency of arbitration proceedings before an arbitrator

and two months after the conclusion of such proceedings, where a notification has been issued under Sub-Section (3A) of Section 10A 

• During any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award.Sec.22 & 23

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Continued…•COVERAGE OF WORKMENAccording to Sec. 1(3) "All workers irrespective of their status or salaries either directly or through contractor or a person recruited to work abroad.“


According to Sec. 3 "On death or personal injury resulting into

total or partial disablement or occupational disease caused to a

workmen arising out of and during the course of the employment."

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• 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.

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Payment of Wages Act 1936

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• Every person employed in any factory, upon any railway or through subcontractor in a railway and a person employed in an industrial or other establishment.

• The State Government may by notification extend the provisions to any class of person employed in any establishment or class of establishments. 


• Every person who is employed in any of the above mentioned establishments and who is drawing less than Rs. 1,600 per month


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Continued…BENEFITS : the Act prescribes for

• The regular and timely payment of wages (on or before 7th day or 10th day after last day of the wage period in respect of which the wages are payable)

• Preventing unauthorised deductions being made from wages and arbitrary fines. 


• Penalties are from Rs. 200-1000. Repeat offenses attract 1 to 6 months imprisonment and fine from Rs. 500-3000.

• Delay wage payments attract penalty of Rs. 100 per day of delay

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Minimum Wages Act 1948…APPLICABILITY

Any person who directly or through another person, whether for himself or for any other person employs one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed under this Act.   ELIGIBILITY

Any person who is employed for hire or reward to do any work in a scheduled employment and includes an outdoor worker to whom any articles or materials are given for either doing some work either at home or at any other premises.

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The Act prescribes the minimum rates of wages payable to employees for different scheduled employment for different class of work and for adults, adolescents, children and apprentices depending upon different localities.


Imprisonment up to 6 months and/or fine up to Rs. 500 is imposable for contravention.

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Contract Labour Act, 1970OBJECT OF THE ACT To regulate the employment of contract labour in certain establishment and to provide for its abolition in certain circumstances and for matters connected therewith.

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Continued…APPLICABILITYEvery establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour.•Every Contractor who employs or who

employed on any day of the preceding twelve months 20 or more workmen.

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Continued…REGISTRATION OF ESTABLISHMENT •Principal employer employing 20or more

workers through te contractor or the contractors on deposit of required fee in Form 1.Sec.7

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Continued…PRINCIPAL EMPLOYER • To Maintain a register of contractor in respect of every

establishment in Form XII.Rule 74

CONTRACTOR • 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.Rule 75,76 and 77

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Form XVI and Form XVII respectively when combined.

• Register of wage-cum Muster Roll in Form XVII where the wage period is a fortnight or less.

• Maintain a Register of Deductions for damages or loss, Register of Fines and Register for Advances in Form XX, Form XXI and Form XXII respectively.

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Continued…•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.

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Continued…When covered by Payment of Wages Act, register and records to be maintained under the rules of Overtime, Register of Fines, Register of Advances, Wage Slip.Muster Roll, Register of Wages, Register of Deductions, Register of Overtime, Register of Fines, Register of Advances, Wage Slip.

Rule 79

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Continued…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

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Continued…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 inspector and any change for with.

Rule 81

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Employees’ State Insurance Act, 1948• Introduction

The object of the Act is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishmens and dependents benefits to the dependents of such employees.

• Applicability of the ActTo all Factories & establishments employing 20 or more employees.Every employee drawing wages (Gross Salary) upto Rs.15,000/- Per month.

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Employers Provident Fund & Miscellaneous Provisions Act 1952

• ObjectiveThe Employee's provident funds and miscellaneous provisions act, 1952 is enacted to provide a kind of social security to the industrial workers. The Act mainly provides retirement or old age benefits, such as

a) Provident Fund,

b) Superannuation Pension,

c) Invalidation Pension,

d) Family Pension

e) Deposit Linked Insurance.

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Continued…• Applicability of the Act 

• To every factory employing 20 or more persons.

• An employee whose pay at the time he is otherwise entitled to become a member of the fund exceeds Rs.6500/- per month

• An Employee who having been a member of the fund, has withdrawn the full amount of his contribution in the fund

 (a) on retirement from service after attaining the age of 55 years or

(b) before migration from India for permanent settlement abroad; or for taking employment abroad.

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Continued…•PF interest Rate is 9.5% per annum

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Payment of Bonus Act, 1965

• Applicability

(a)  Every factory (as def. in Factories Act), &

(b) Every other establishment in which 20 or more persons (less than 20 but 10 or more if appropriate Govt. notifies) are employed on any day subject to certain exemptions.

Employees' drawing remuneration of Rs. 3,500/- or more and those who have worked for less than 30 days are not eligible to receive bonus under the Act.

Bonus to be paid within eight months from the expiry of the accounting year.

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Continued…•Eligibility  i)  Every person (other than an apprentice)

drawing salary up to RS 3,500 per month.

ii) Every person drawing salary between RS 2,501/- and RS 3,500/- per month. The bonus payable to him is to be calculated as if his salary were RS 2,500/- p.m.


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Continued…• Benefits

i)  Subject to other provisions :— Minimum bonus shall be 8.33% of salary/wages earned or RS 100 whichever is higher.

ii) If allocable surplus exceeds the amount of minimum bonus, then bonus shall be payable at higher rate subject to a maximum 20% of salary/wages.

iii) Computation of bonus is to be worked out as per Schedule I to IV of the Act.


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Continued…•Penal Provisions

Imprisonment up to 6 months and or fine up to RS 1000/-

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Continued…• Maintenance of registers • Every employer shall prepare and maintain the following

registers, namely:-

 a register showing the computation of the allocable surplus referred to in clause (4) of section 2, in form A

 a register hoving 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 sections 17 and 18 and the amount actually disbursed, in Form C.

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Maternity Benefit Act, 1961OBJECT: • to provide for maternity benefit to women

employees•to regulate the employment of women for

certain periods before and after childbirth.

The Act does not apply to any factory or establishment to which the ESI Act is applicable. ESI Act, 1948 provides for maternity benefits separately.

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Continued…Restriction on employment of women: Sec. 4: •Employer is prohibited from knowingly

employing a woman during six weeks immediately following the day of her delivery, miscarriage, or medical termination of pregnancy.

•A woman also on her part shall not work during the period of six weeks as above.

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Continued…•A pregnant woman can request the employer not to

give her any work which is of arduous nature or which involves long hours of standing, likely to interfere with the pregnancy or the normal development of the foetus or is likely to cause miscarriage or otherwise adversely affect her health, during the period of one month immediately preceding the period of six weeks, before the date of her expected delivery or during the six weeks period for which the pregnant woman though entitled, does not avail the leave of absence. On such a request, the employer shall not give her such work during the period as above.

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Continued…Period for which a woman is entitled to maternity benefit and the nature of benefit OR Right to payment of maternity benefit: Sec. 5 and 18:

• Maximum period a woman is entitled to maternity benefit shall be 12 weeks of which up to 6 weeks shall be before the date of her expected delivery.

• If the woman dies during this period, the maternity benefit shall be payable only for the days up to and including the day of her death.

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Continued…• If the woman, having delivered a child, dies during

the period for which she is entitled for the maternity benefit, leaving behind the child, the employer shall pay the maternity benefit for the entire period. If the child also dies during the said period, then the payment shall be made up to the date of the death of the child.

• A woman shall not be entitled to MB unless she has actually worked in the establishment for a period of not less than 80 days in the 12 months immediately preceding the date of her expected date of delivery.

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Continued…•When calculating the number of days a

woman has actually worked, the days of lay-off or leave with wages shall be included.

•A woman shall be entitled to the payment of MB at the rate of average daily wage for the period of her actual absence (maximum 12 weeks), or the rate fixed under the Minimum Wages Act or Rs. 10/- per day whichever is higher.

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Continued…•The average daily wage means average of

the last 3 calendar months immediately preceding the date from which she goes on leave on account of maternity.

•A woman, who goes on maternity leave, but she works in any other establishment during the period of such leave, shall forfeit her claim to MB for such period.

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Continued…•MEDICAL BONUS: Sec. 8 Rule 5: A

woman who is entitled to MB shall also be entitled to receive from the employer a medical bonus of Rs. 250/- if the employer provides for no pre-natal confinement and post-natal care free of charge. Medical bonus shall be paid along with the second installment of the MB.


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CHILDBIRTH: Sec. 10: A woman suffering from illness arising out of pregnancy, delivery, premature childbirth, miscarriage, medical termination of pregnancy or tubectomy operation shall be entitled to an additional leave with wages at the rate of MB for a maximum period of one month.


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Continued…• NURSING BREAKS: Sec. 11: A woman who

returns to duty after delivery shall be allowed two additional breaks for nursing the child until the child attains age of 15 months.


9-A: A woman who undergoes the operation shall, on production of the required proof, be entitled to leave with wages at the rate of MB for a period of two weeks following the day of her operation.

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Continued…PENALTY FOR CONTRAVENTION BY THE EMPLOYER: Sec. 21:Employer who fails to pay MB, or discharges or dismisses a woman during her maternity leave, he shall be punishable with imprisonment of minimum 3 months, maximum up to one year, and fine of not less than Rs. 2000/- but maximum up to Rs. 5000/-. If there are sufficient reasons, the court may impose a sentence of lesser term or fine only in lieu of imprisonment.

Any other contravention – imprisonment up to one year; fine up to Rs. 5000/- or both.

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Continued…COGNIZANCE OF AN OFFENCE: Sec. 23: An aggrieved woman, an office-bearer of a registered trade union of which the woman is a member or a registered voluntary organization or an Inspector may file a complaint regarding the commission of an offence under the Act.

No complaint shall be filed after the expiry of one year from the date of the alleged offence.

No court inferior to the court of Metropolitan Magistrate or a Magistrate of the First Class shall try an offence under this Act.

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Conclusion…The labour in India consists of about 487 million workers, the second largest


China. India has numerous labor laws such as those prohibiting

discrimination and

child labor, those that aim to guarantee fair and human conditions of work,

those that

provide social security, minimum wage, right to organize, form trade unions

and enforce

collective bargaining. India is considered to be a highly regulated and most

rigid labor

law countries in the world. They need to be flexible for their proper

implementation and

should be reviewed from time to time keeping in tune with the labour and



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Thank You..