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UNIT – I

INDUSTRIAL DISPUTE ACT, 1947

INTRODUCTION Industry plays a vital role in building the economic structure of a society. Therefore, the importance of labour and industrial laws in shaping the economy of a country can not be ignored. Industrial jurisprudence is of great importance to all developed or developing countries of the world because it is concerned with the study of problems relating to human relations arising out of a large scale development of factory system which has emerged in consequence of industrial revolution. Principles of Labour Legislation : Labour legislation in any country should be based on the principles of social justice, social equity, international uniformity and national economy. Social Justice : Social justice is a justice according to social interest. It is founded on the basic idea of socio-economic equality and its aim is to assist the removal of socio-economic disparities and inequalities.

Social Equity : Where it is felt that the law should be flexible and should be changed or modified as the circumstances and conditions change, the law empowers the government to make such changes. This is done by giving the government rule making power under the provisions of the Act. When power under the Act is given to the government the rules may be modified to suit the changed conditions. Such legislation is said to be based on social equity.

Social Security : The concept of social security is based on ideals of human dignity and social justice. The underlying idea behind social security measurers is that a citizen who has contributed or likely to contribute to his country's welfare should be given protection against certain hazards. Social security means a guarantee provided by the State through its appropriate agencies, against certain risks to which the members of the society may be exposed.

Industrial Adjudication : The essential function of industrial adjudication is to assist the state by helping a solution of industrial disputes. The objectives of industrial adjudication are industrial peace and economic justice. Following are some guiding principles of industrial adjudication– (i) Industrial adjudication must be in public interest.

(ii) Industrial harmony and good will in solving industrial issues must be taken into consideration.

(iii) The principle of equality should also be taken into consideration.

(iv) Whenever a tribunal has before it a matter which requires expert assistance us collecting and assessing the appropriate material as to technical matters, the tribunal should avail itself of such assistance.

(v) Socio-economic effects of the decisions must be taken into consideration.

(vi) The Tribunals must act in judicial manners.

Industrial Dispute Act, 1947 : The Industrial Dispute Act, 1947 extends to the whole of India. It came into operation on the first day of April, 1947. The object of the Act according to its preamble is to make provisions for the investigation and settlement of industrial disputes. MAIN FEATURES OF THE ACT

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1. Any industrial dispute may be referred to an industrial tribunal by an agreement of parties to the dispute or by the state.

2. An award shall be binding on both the parties to the dispute for the specified period not exceeding one year. It shall be normally enforced by the Government.

3. Strikes and lock-out are prohibited–

a. During the pendency of conciliation and adjudication proceedings; and

b. During the pendency of settlements reached in the course of conciliation proceedings; and

c. During the pendency of awards of Industrial Tribunal declared binding by the appropriate government.

4. In public interest or emergency the appropriate Government has power to declare the transport (other than railways), Coal, Cotton, textiles, food-stuff and iron and steel industries to be a public utility service for the purposes of this Act, for a maximum period of six month.

5. In case of lay off or retrenchment of workmen the employer is required to pay compensation to them.

6. Provision has also been made for payment of compensation to workmen in case of transfer or closure of an undertaking.

7. A number of authorities such as work committee, conciliation officers, Board of conciliation, courts of inquiry, labour courts, tribunal and National Tribunal are provided for settlement of industrial disputes. The nature of powers, functions and duties of these authorities differ from each other but each one of them plays an important role in ensuring industrial peace.

IMPORTANT DEFINITIONS Section 2(a). Appropriate Government : In relation to some industrial disputes the Central Government and in relations to some others the state Government Concerned are the appropriate government to deal with such dispute.

In India Naval Canteen Control v. Industrial Tribunals1 : Kerala High Court held that "the question as to whether an industry is carried on by or under the authority of the Central Government, is essentially a question of fact depending on the circumstances of each case."

In Goa sampling Employees' Association v. General Superintendence Co. of India Pvt. Ltd. and others2 : It was held that in case of a dispute arising in Union Territory reference may be made by the Central Government since Central Government is the appropriate Government in relation to a union territory.

Section 2 (j) 'Industry' : means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen. Some guidelines have been given by the Supreme Court in a number of decisions to determine the Character or industry.

Hospital Mazdoor Sabha Case3 : In this case Gajendragadker J. said that an activity systematically or habitually undertaken for the production or distribution of goods for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking. Such an activity generally

1 (1965) II LLJ, 336 2 (1987) II Lab LJ (7) 217 (SC) 3 State of Bombay v. Bombay Hospital Mazdoor Sabha, AIR, 1960 SC 610

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involves the co-operation of the employer and the employees; and its object is the satisfaction of material human needs, is called an industry.

Banglore Water Supply Case4 : In this case seven judges bench of Supreme Court reiterated the test laid down in Hospital Mazdoor Sabha Case:

Triple Test – Ac activity is industry if it is–

a. Systematic activity

b. Organized by co-operation between employer and employee.

c. for the production and distribution of goods and services calculated to satisfy human wants and wishes;

Dominated Nature Test : Where a complex of activities, some of which qualify for exemption, others not, involve employees on the total undertaking some of whom are not productive goods and services if isolated, even then the predominant nature of the services and the integrated nature of the departments will be true test, the whole undertaking will be 'industry'.

The Industrial Dispute (Amendment) Act, 1982 : enacts a new definition has not been enforced till now. The amended definition to a great extent incorporates the views of Supreme Court expressed in Benglore Water Supply v. A. Rajappa.

Section 2(k). Industrial Dispute : Following elements are essential to constitute an Industrial Dispute–

a. A dispute or difference (a) employers and employers (b) employers and workmen (c) workmen and workmen.

b. The dispute or difference should be connected with (a) employment or non-employment, or (b) terms of employment (c) conditions of labour of any person.

c. The dispute may be in relation to any workmen or any other person in whom they are interested as a body.

Section 2(kkk). Lay-off : "Lay – off" means putting aside workmen temporarily. The duration of lay off should not be for a period longer than the period of emergency. The relationship of employer and employee does not come to an end but is merely suspended during the period of emergency. Following are essentials of lay-off.

1. An employer, who is willing to employ fails or refuses or is unable to provide employment for reason beyond his control.

2. Any such refusal to employ a workmen may be on account of–

a. Storage of coal, power or raw material

b. Or, the accumulation of stock.

c. Or, the breakdown of machinery, or

d. Natural calamity, or

e. Any other connected reasons.

3. A workman who is so deprived of employment must be such whose name is borne on the muster rolls of his industrial establishment.

4. The workman must not have been retrenches.

Remedy : Section 25-C of Industrial Dispute Act, 1947 entitles a workman to get compensation from the employer for the period is laid- off. When the employer is

4 Banglore water supply v. A Rajappa, AIR 1978, SC 548

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enable to provide work to his workman for reason beyond his control, he woes a duty to pay lay-off, compensation to such workmen.

Section 2 (i). Lockout : 'Lockout' means the closing of a place of employment or the suspension of work or the refusal by an employer to continue to employ any number of persons employed by him. Following are essentials of lockout–

1.

a. temporary closing of a place of employment by the employer; or

b. suspension of work by the employer;

c. refusal by an employer to continue to employ any number of persons employed by him;

d. These acts of the employer should be motivated by coercion.

2. These acts of the employer should be motivated by coercion.

3. An industry as defined in the Act.

4. A dispute in such industry.

Difference between Lock out and retrenchment : (1) Lockout is temporary, retrenchment is permanent.

(2) In lockout the relationship of employer and employee is only suspended, in retrenchment such a relationship is severed at the instance of the employer.

(3) By lockout employer coerce the workman: retrenchment is to dispense with surplus labour.

(4) Lockout is due to industrial dispute; but there is no such dispute in a case of retrenchment.

Difference between Lockout and Closure : (1) Lockout is temporary but closure is permanent.

(2) Lockout is a weapon of coercion in the hands of employer; closure is generally for trade reasons.

(3) Lockout is during an industrial dispute but there is no need of such dispute in a case of closure.

Section 2(oo). Retrenchment : Defines the retrenchment as follows–

- The termination by the employer of service of a workman.

- The termination may be for any reason what so ever.

- But it should not be as a measure of punishment by way of disciplinary action.

Remedy : Section 25-F prescribes following conditions for a valid retrenchment. These conditions apply in case of retrenchment of an employee who has been in continuous service for not less than one year–

a. One month's notice in writing to the workmen, stating the reason of retrenchment. If no notice is given, the workmen must be paid in lieu of such notice wages for the period of notice.

b. The workman has been paid, at the time of retrenchment, compensation, equivalent to 15 days' average pay for every completed year of continuous service or any part there of in excess of six months.

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c. Notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the official Gazette.

Section 25(g). Procedure of retrenchment : The principle 'first come last go' and 'last come first go' has been incorporated in section 25-G of the I.D. Act.

# The principle of 'last come first go' applies only in case of retrenchment. If there has been a genuine closure the question of its application does not arise.

Difference between Retrenchment and closure : (1) Retrenchment affects some of the workmen, while closure affects all.

(2) In retrenchment the trade or business remains continue while in closure the business itself is discontinued.

Section 2 (q). Strike : defines strike as–

(1) Cessation of work by a body of persons employed in any industry acting in combination; or

(2) a concerted refusal of any number of persons who are or have been employed in any industry to continue to work or to accept employment; or

(3) a refusal under a common understanding of any number of persons who are or have been employed in industry to continue to work or to accept employment.

Kinds : There are three kinds of strikes–

1. General Strike : Where the workmen join together for common cause and stay away from work, depriving the employer of their labour needed to run his factory, is called general strike. Token strike is also a kind of general strike. Token strike is for a short duration but General Strike is for a longer period.

2. Stay–in–Strike – A 'Stay-in-Strike' is also known as 'tools-down–strike' or pens down–strike'. In this strike workmen report their duties, occupy the premises but do not work.

3. Go slow : In a "go-slow" strike, the workmen do not stay away from work, they do come to their work and work also, but with a slow speed in order to lower down the production and thereby cause loss to the employer.

Section 22(l). Prohibition of Strikes : Provides that no person employed in public utility service shall go on strike in breach of contract–

(a) without giving to the employer notice of strike within six weeks before striking;

(b) or, within 14 days of giving such notice;

(c) or, before the expiry of the date of strike specified in any such notice as aforesaid; or

(d) during the pendency of any conciliation proceeding before a conciliation officer and seven days after the conclusion of such proceedings–

Illegal Strikes : According to section 24 (l) a strike or lock out shall be illegal if it is–

(1) Commenced or declared in contravention of section 22 in a public utility service.

(2) Continued in contravention of an order made by the appropriate Government under section 10 (3) or sub-section (4-A) of section 10-A of the Act.

(3) Commenced in contravention of section 23 in any industrial establishment (including both public utility and non public utility service).

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Punishment for Illegal Strikes : To go on strike is a right of works but it is not a fundamental right. If a strike is illegal the party guilty of the illegality is liable to punishment under section 26 of the Act.

Strike by Government Servant : There are different rules which prohibit a Government Servant to go on strike. Central Government employees are governed by the Central Civil Service (Conduct) Rules, 1955 Rule 4-A which deals with the demonstrations and strike by the Central Government employees enacts that no Government servant shall participate in any demonstration or resort to any strike in connection with any matter pertaining to his conditions of service. The Supreme Court in Kameshwar Prasad v. State of Bihar held that a person did not lose his fundamental rights by joining Government service. These conclusions were supported by Article 33 of the Constitution whereby fundamental rights of the members of the Armed Forces, etc. can be abridged or abrogated by law, thus implying that fundamental rights of other Government servants cannot be abridged. Rule 4-A of the Bihar Government Servant Conduct Rules, 1956 was held to be valid so far as it referred to strikers, and void in so far as it referred to demonstration because it violated the fundamental right of speech and expression. This decision was followed by the Supreme Court in O.K. Ghosh v. E.R. Joseph. Thus the provisions of this Act shall apply to Government servants going on strike. Of course they shall further be subject to the conduct rules as framed by the Government concerned. The conduct rules framed by the Government, in order to be valid must not be in contravention of the fundamental rights guaranteed by the Constitution. Section 25 of the I.D. Act prohibits financial aid to illegal strikes and lock-outs. It says that no person shall knowingly spend or apply any money in direct furtherance or support of an illegal strike or lock-out.

Section 2(rr). Wages : According to this section 'wages' means all remuneration capable of being expressed in terms of money which would, if the terms of employment, expressed or implied were fulfilled, be payable to a workman in respect of his employment or of work done in such employment. Wages also includes– (i) Such allowance as the workman is for the time being entitled to;

(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles.

(iii) any travelling concession.

(iv) any commission payable on the promotion of sales or both.

Section 2(s). Workmen : workman is any person including an apprentice employed in any industry to do any manual, unskilled, skilled technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act, in relation to an industrial dispute includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute. 'Workman' does not include any such person–

(i) Who is subject to the Air Force Act, 1950, or the Army Act. 1950, or the Navy Act 1957, or

(ii) Who is employed in the police service or as an officer or other employee of a prison; or

(iii) Who is employed mainly in a managerial or administrative capacity; or

(iv) Who being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per men sum or exercises, either by the nature of duties

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attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

AUTHORITIES The main purpose of codification of this Act was investigation and settlement of industrial disputes the machinery for adjudication has been made available. The Act prescribes following authorities for investigation and settlement of industrial disputes.

1. Work Committee

2. Conciliation Officers

3. Boards of Conciliation

4. Courts of Enquiry

5. Labour Court

6. Industrial Tribunal

7. National Tribunal

8. Arbitration

Section 3 Works Committee : The Works Committee is an authority under this Act. The following are the duties of the Works Committee– 1. to promote measures for securing and preserving amity and good relations between

the employers and workmen;

2. to achieve the above object, it is their duty to comment upon matters of common interest or concern of employers and workmen;

3. to endeavor to compose any material difference of opinion in respect of matters of common interest or concern between employers and workmen.

The main purpose of creating the Works Committee is to develop a sense of a partnership between the employer and his workmen. It is a body which aims to promote good-will and measures of common interest. This section is applicable, only to such industrial establishment in which one hundred or more workmen are employed, or to an establishment in which a minimum of one hundred workmen have been employed on any day in the preceding twelve months. The word 'workmen' in this section is used in the same sense in which it appears in Section 2(s) of the Act. It means there must be one hundred workmen and not one hundred employees working in the establishment for many categories of employees are excluded from the definition of workmen. The Appropriate Government under Section 3(1) is authorised by general or special order, to require the employer to constitute in the prescribed manner a Works Committee.

The Committee consists of representatives of employers and workmen engaged in the establishment. The number of representatives of workmen on the Works Committee shall not be less than the number of representatives of the employer. The representatives of workmen shall be chosen in the prescribed manner from among the workmen engaged in the establishment and in consultation with their Trade Union, if any, registered under the Indian Trade Union's Act, 1926.

Works Committee has been provided in the rules framed under the Industrial Disputes Act in order to look after the welfare and interest of the workmen. They are normally concerned with the problems arising in the day-to-day working of the concern and, function of the Works Committee is to ascertain the grievances of the employees and to arrive at some agreement when the occasion so arise. It is for that reason said that the Works Committee airs the grievances of workmen and endeavors to seek amicable settlement.

Section 4 Conciliation Officer : The Appropriate Government may by notification in the

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Official Gazette, appoint conciliation officers. These officers are charged with the duty of mediating in and promoting the settlement of industrial disputes. The Appropriate Government may appoint one or more conciliation officers, as it thinks fit. A conciliation officer may be appointed for a specified area or for specified industries in a specified area, or for one .or more specified industries. The appointment may be made either permanently or for a limited period. The jurisdiction, powers and other matters in respect of the conciliation officer shall be published in the Official Gazette. Section 5 Boards of Conciliation : The provision for appointment of Boards of Conciliation is made under the Act to bring the two parties to a dispute to sit together and thrash out their differences and to find out ways and means to settle them. Section 5 of the Act provides that the Appropriate Government may, by notification in the Official Gazette, constitute a Board of Conciliation. The object of appointing the Board is promotion of settlement of an industrial dispute. A Board consists of a Chairman and two or four other members, as the Appropriate Government thinks fit.

Section 6 Courts of Inquiry : Section 6 points out that if "occasion arises" the Appropriate Government may constitute a Court of Inquiry. If any matter is referred to a Court by the Appropriate Government, it shall inquire and make a report ordinarily within a period of six months from the commencement of inquiry. The purpose of constitution of Court of Inquiry is to inquire into any matter appearing to be connected with or relevant to an industrial dispute. The constitution of the Court has to be notified in the Official Gazette.

Section 7 Labour Court : The Appropriate Government may constitute one or more Labour Courts. The constitution of the Labour Court together with names of persons constituting the Labour Court should be notified in the Official Gazette.

Section 7(a) Tribunals : In our country the Industrial Tribunals were for the first time created by the Industrial Disputes Act, 1947. Commenting upon the status of these tribunals the Supreme Court has observed that the tribunals under the Act are invested with many trappings of a Court but do not have the same status as Courts. These Tribunals need not follow the strict technicalities of law in adjudication of industrial dispute.

The power to constitute Industrial Tribunal is conferred upon the Appropriate Government. The appointment of an Industrial Tribunal together with !he names of persons constituting the Tribunal shall be notified in the Official Gazette further, one or more than one tribunals may in the discretion of Appropriate Government, be constituted. It is the duty of the Tribunal to adjudicate upon any industrial dispute relating to any matter, whether specified in the Second Schedule or the Third Schedule. These tribunals shall perform such other functions as may be assigned to them under this Act.

The Tribunal shall consist of one person only, who shall be appointed by the State Government. Any person having one of the following qualifications may be appointed as the presiding officer of the Industrial Tribunal, namely–

(a) if he is, or has been, a judge of a High Court; or

(aa) if he has for a period of not less than three years, been a District Judge or an Additional District Judge.

It is provided by. Section 7-A(4) that the appropriate Government, if it thinks fit, may appoint two persons as assessors to advise the Tribunal in the proceedings before it.

These Tribunals are important for many practical reasons. First, only experienced persons of high integrity can be appointed as presiding officer of the Tribunal as stated above secondly, almost any important matter can be submitted for adjudication to the Tribunal including questions relating to wages, bonus, provident fund, gratuity and dismissal etc. Thirdly, the Tribunals enjoy unlimited powers so long as they act within the scope of their authority.

Powers : The Tribunal is a judicial body or at any rate a quasi-judicial body. Therefore, a

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Tribunal must serve notice upon the parties of the reference by name and any award made without serving such notices is fundamentally wrong. It could make a suitable award for bringing about harmonious relations between the employers and workmen and can direct reinstatement of a workman if it is necessary in the interest of industrial peace. The Tribunal while arriving at a finding in a matter may rely on data available to it otherwise than from evidence adduced on behalf of the parties.

While an application was made for quashing an award of the Industrial Tribunal, the Supreme Court held that no writ can be issued against a Tribunal which has ceased to exist. It is clear from the Act itself that Tribunals are constituted when an industrial dispute arises and normally function as long as such a dispute is not disposed of. The Tribunals can be appointed for a limited period or for deciding a specified number of disputes. When a new Tribunal is appointed it may start hearing of the Case from the beginning, particularly when any prejudice is likely to be caused to any part. It is open to either party to point out and convince the Tribunal that prejudice will be caused if a de novo trial is not held.

Jurisdiction : The question whether an objection to jurisdiction of a Tribunal could be raised before the Tribunal itself or it is necessary to apply to the High Court to quash the proceedings before the Tribunal, has been considered on a number of occasion by the Courts. There can be no difficulty where the question of jurisdiction is clear from the admitted facts. The difficulty of jurisdiction actually arises where the question of jurisdiction is a mixed question of law and fact. In such cases the question should be raised before the Tribunal itself which shall determine the question after going into the facts. The proceeding before the Tribunal comes to an end if it finds that it has no jurisdiction. If in its opinion the Tribunal thinks that it has jurisdiction it may proceed on to decide the industrial dispute itself. Where a preliminary finding is given by the Tribunal or the question of jurisdiction along with the dispute is decided by the Tribunal the High Court in appropriate proceedings may decide whether the Tribunal has acted with or without jurisdiction. Ordinarily the finding of fact with regard to the jurisdiction will not be interfered with by the High Court or the Supreme Court. The finding of the Tribunal may be set aside by these Courts, if it is found that the Tribunal while interpreting the facts has misapplied any principle of law. Where the objection as regards the jurisdiction was not raised before the Tribunal, it cannot be, for the first time, raised before the Court unless it is a pure question of law.

Section 7(b). National Tribunals : The National Tribunals can only be constituted by the Central Government. The power is to be exercised by issuing of notification in the Official Gazette. The name of the person constituting the National Tribunal shall also be notified in the Official Gazette. The Central Government may constitute one or more Tribunals. National Industrial Tribunals are constituted for the adjudication of industrial dispute, which in the opinion of the Central Government (i) involves question of national importance or (ii) are of such a nature that the industrial establishments situated in more than one State are likely to be interested in or affected by such dispute. It is sole discretion of the Central Government to decide that the industrial dispute involves a question of national importance or industrial establishments situated in more than one State are interested in or affected by the dispute.

A National Tribunal shall consist of one person to be appointed by the Central Government.

A person shall not be qualified for appointment as the presiding officer of National Tribunal unless he is or has been a Judge of a High Court.

The Central Government may, if it thinks fit, appoint two persons as assessors to advise the National Tribunal in the proceeding before it.

Section 7(c). Disqualifications for the presiding officers of Labour Courts, Tribunals an National Tribunals : No person shall be appointed to, or continue in the office of the presiding officer of a Labour Court, Tribunal or National Tribunal, if(a) he is not an independent person; or (b) he has attained the age of sixty-five years.

According to the latter part of Section 8 proceedings, after filling in the vacancy, may be

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started from the stage at which the vacancy is filled. But where a tribunal constituted under Section 7-A of the Act, could not dispose of some references, and a new Tribunal was constituted by the Government the proceeding must be commenced again and not started as provided for by Section 8 of the Act.

Section 9 of the Industrial Disputes Act provides that any order of the appointment made under Sections 5 to 7 of the Act, from being called in question. Therefore, no question can be raised whether an appointment was legally and properly made or not. Section 9(1) of the Act provides that no order of the Appropriate Government, or of the Central Government appointing any person as the Chairman or any other member of a Board or Court or as the Presiding Officer of a Labour Court, Tribunal or National Tribunal shall be called in question in any manner on the ground merely of the existence of any vacancy in, or defect in the constitution of such Board or Court. Section 9(2) of the Act aims to protect any settlement from being declared invalid simply on the ground that the conciliation proceeding had been continued beyond a period of fourteen days or less as fixed by the Government under Section 12(6) or that the proceedings before a Board are continued beyond a period of two months or less as fixed by the Government under Section 13(5) of the Act.

Section 9(3) of the Act provides that where the report of any settlement arrived at in the course of conciliation proceedings before a Board is signed by the Chairman and all other members of the Board, no such settlement shall be invalid by reason only of the casual or unforeseen absence of any of the members including the Chairman of the Board during any stage of the proceedings. This sub-section applies only to conciliation proceedings before a Board of Conciliation.

Section 10. Reference of Disputes to Boards, Courts or Tribunals : Section 10 (1) of the Act is in the nature of operative provision providing for reference of any matter relating to an industrial dispute or the dispute itself to various authorities created by the Act. A precondition for making any reference by the Appropriate Government under this section is in existence or apprehension of an industrial dispute. The reference should be by an order in writing. This sub-section provides that where the Appropriate Government is of the opinion that any industrial dispute exists or is apprehended, it may at any time– (a) refer the dispute to a Board for promoting a settlement thereof; or

(b) refer any matter appearing to be connected with or relevant to, the dispute to a court for inquiry ; or

(c) refer the dispute or any matter appearing to be connected with, or relevant to the dispute to a Labour Court for adjudication provided the dispute relates to any matter specified in the second schedule; or

(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute (where it relates to any matter specified in the Second Schedule or Third Schedule), to a tribunal for adjudication:

Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen the Appropriate Government may, if it so thinks fit, make the reference to a Labour Court under clause (c) above:

Provided further that where the dispute relates to a public utility service and a notice of strike or lock-out under Section 22, has been given, the Appropriate Government shall make a reference under this sub-section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced. No such reference shall be made if the notice has been frivolously or vexatiously given or· that it would be inexpedient to make the reference:

Provided also that where the dispute in relation to which the Central Government is the Appropriate Government, it shall be competent for that Government to refer the dispute to a Labour Court or an Industrial Tribunal, as the case may be, constituted by the State

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Government.

Under Section 10 (I-A) the Central Government may refer a dispute to a National Tribunal for adjudication if it is of the opinion that–

(i) any dispute exists or is apprehended; and

(ii) the dispute involves any question of national importance; or

(iii) the dispute is of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by such dispute; and

(iv) the dispute should be adjudicated by a National Tribunal.

It is further provided that the reference to National Tribunal shall be made by the Central Government only whether it is the Appropriate Government in relation to that dispute or not. The reference must be by an order in writing. The Central Government may refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, it has only referred in its order to findings of the Tribunal which has adjudicated he merits of the case.

Reference of industrial dispute : The act of making a reference of any dispute under sub-section (1) is an administrative act and neither judicial nor quasi-judicial. If the Appropriate Government decides that no reference is necessary, the Government cannot be compelled by issuing a writ to make a reference. The use of the word 'may' shows that the power is discretionary and not mandatory. If in any particular case, the Government acts arbitrarily or contrary to law in refusing to refer a dispute to the Tribunal or Labour Court, then such a refusal may be a right ground for petition under Article 226 of the Constitution.

Section 10. Scope of reference : Sections 10(1) and 10(4) of the Act lay down the scope of reference. Under the former clause matters appearing to be connected with or relevant to the dispute may be referred and under the latter clause the scope of reference shall be confined to specified points of dispute and matters incidental thereto. Unless a dispute was raised by the workmen with their employer it could not become an industrial dispute. The scope of reference under Section 10 has to be gathered from the circumstances preceding the Government order.

Sections 10 and 10-A are the alternative remedies to settle an industrial dispute.

Once the parties have chosen the remedy under Section 10-A, the Government cannot refer the same dispute for adjudication under Section 10. If any such reference is made, it is invalid.

Where a reference was made under Section 10 of the Tribunal regarding the question of abolition of contract labour it was pointed out that the Appropriate Government has power under Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 to prohibit employment of contract labour. If the work for which contract labour is employed is incidental to and closely connected with the main activity of the industry and is of a perennial and permanent nature, the abolition of contract labour could be justified. In such a case it would also be open to the Industrial Tribunal to have regard to the practice obtaining in their industries in or about the area.

Tribunal's Jurisdiction : In Calcutta Port Shramik Union v. The Calcutta River Transport Association and others, the Wage Board set up by the Central Government for' Port and Dock Workers in major ports did not make any recommendation in respect of bargemen. Hence an industrial dispute was raised by bargemen claiming the benefit of Wage Board recommendation and the dispute was referred to National Tribunal. The National Tribunal was of the view that bargemen were dock workers and were as such entitled to wages in accordance with Wage Board recommendations. The Calcutta High Court held that the award of the Tribunal was beyond the scope of reference. Hence, this appeal by special leave to the Supreme Court. It was held that the Courts exercising judicial review should attempt to sustain the awards made by the Tribunal as far as possible instead of picking holes in the

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award on trivial points, ultimately frustrating the entire adjudication process before the Tribunal by striking down awards on hyper-technical grounds. The Tribunal was justified in coming to the conclusion that bargemen were also dock workers and there is no justification in denying them the benefit of the recommendation of the Wage Board. Such award is within its jurisdiction.

Section 10. Constitutional validity : The validity of this section has been upheld by the Supreme Court holding Section 10 as intra-vires. Its validity in D.C. and G. Mills v. Shambhu Nath, was sought to be challenged on fresh grounds, namely, that Section 10 violated Article 14 of the Constitution. It was held that: "Where the Supreme Court has held that Section 10 is intra-vires and repelled the objection under Article 14 of the Constitution it would not be permissible to raise the question again by submitting that a new ground could be raised to sustain the objection. It is certainly easy to discover fresh ground of attack to sustain the same objection, but that cannot be permitted once the law has been laid down by the Supreme Court holding that Section 10 of the Act does not violate Article 14 of the Constitution."

Section 10(a). Voluntary reference of disputes to arbitration : Section 10-A of the Act differs from Section 10 of the Act mainly in one respect. Section 10 of the Act provides for reference of an industrial dispute by the Government either on its own or on an application having been made to it by the parties to the dispute. The arbitrator under Section 10 is appointed by the Government making such reference. But Section 10-A of the Act authorises the parties to a dispute themselves to choose their own arbitrator, including a Labour Court, Tribunal or National Tribunal.

Section 10-A (1) provides that where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the dispute to arbitration, they may refer the dispute to arbitration. Such reference by agreement may be made at any time before the dispute has been referred under Section 10 to a Labour Court, Tribunal or National Tribunal. The agreement, between the parties to an industrial dispute, to make a reference must be in writing.

Section 10-A (I-A) provides that where an arbitration agreement provides for reference of the dispute to an even number of arbitrators, the agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion. The award of the umpire shall prevail and shall be deemed to be an arbitration award for the purpose of this Act.

Section 10-A (2) provides that an arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties thereto in such manner as may be prescribed.

Under Section 10-A (3) a copy of the arbitration agreement shall be forwarded to the Appropriate Government and the conciliation officer, and the Appropriate Government shall within one month from the date of the receipt of such copy publish the same in the Official Gazette.

Section 11. Procedure; Powers and Duties of Authorities : Section-11 procedure and Powers of Conciliation Officers, Boards, Courts and tribunals. Section 11 of the Act as it stood at the time of its enactment in 1947 has been amended in 1956. Sub-section (1) of Section-11 gives very wide powers to the authorities in so far as the procedure to be followed by them is concerned. This sub-section is worded in general terms. Sub-sections (3), (4) and (7) of this section provide special procedures to be followed in certain cases and to that extent they can be said to curtail the general power with regard to the procedure conferred by sub-section (1).

Section 11(1) provides that "subject to any rules that may be made in this behalf, an arbitrator, Board, Court, Labour Court, Tribunal or National Tribunal shall follow such procedure as the arbitrator or other authority concerned may think fit. These provisions give very wide discretion to the authorities, and the discretion must be exercised with care and

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caution bearing in mind the principles of natural justice.

Under Section 11(2) a Conciliation Officer or a member of a Board or Court or the Presiding Officer of a Labour Court, Tribunal or National Tribunal may, for the purpose of inquiry into any existing or apprehended industrial dispute, enter the premises occupied by any establishment to which the dispute relates. But before entering the premises such authority must give reasonable notice of its intention to do so.

Sub-section (3) which is in the nature of a proviso to sub-section (1) enacts that every Board, Court, Labour Court, Tribunal and National Tribunal shall have the same powers as are vested in a Civil Court under the Civil Procedure Code, 1908, when trying a suit in respect of the following matters, namely–

(a) enforcing the attendance of any person and examining him on oath;

(b) compelling the production of documents and material objects;

(c) issuing commissions for the examination of witnesses;

(d) in respect of such other matters as may be prescribed.

Every inquiry or investigation by a Board, Labour Court, Tribunal and National Tribunal, shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code. Section 193 of the Indian Penal Code deals with giving or fabricating false evidence in a judicial proceeding. Section 228 of the I.P.C. deals with intentional insult or interruption to a public servant acting in any stage of a judicial proceeding. Provisions of sub-section (3) do not refer to a Conciliation Officer.

Sub-section (4) deals specially with the procedure to be followed by the Conciliation Officer. He may enforce the attendance of any person for the purpose of examination of such person or call for and inspect any document which he has ground for considering–

(i) to be relevant to the Industrial Dispute; or

(ii) to be necessary for the purpose of verifying the implementation of any award; or

(iii) carrying out any other duty imposed on him under this Act.

Award of Industrial Tribunal : Any award of the Industrial Tribunal must be supported with sufficient reasons. The giving of reasons in support of their conclusions by judicial and quasi-judicial authorities when exercising initial jurisdictions is essential for various reasons. First, it is calculated to prevent unconscious unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations. Secondly, it is a well-known principle that justice should not only be done but should also appear to be done. Unreasonable conclusion may be just but they may not appear to be just to those who read them. Reasoned conclusions, on the other hand, will have also the appearance of justice. Thirdly, it should be remembered that an appeal generally lies from the decisions of judicial or quasi-judicial authorities to this Court by special leave granted under Article 136. A judgment which does not disclose the reasons, will be of little, assistance to the court.

Unfair labour practices on the part of employers and trade unions of employers : 1. To interfere with, restrain from, or coerce, workmen in the exercise of their rights to

organise, from, join or assist a Trade Union or to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, that is to say–

(a) threatening workmen with discharge or dismissal, if they join a trade union;

(b) threatening a lock-out or closure, if a trade union is organised;

(c) granting wage increase to workmen at crucial periods of the union

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organisation, with a view to undermining the efforts of the trade union at organisation.

2. To dominate, interfere with or contribute support, financial, or otherwise, to any trade union, that is to say–

(a) an employer taking an active interest in organising a trade union of his workmen; and

(b) an employer showing partiality or granting favour to one of several trade unions attempting to organise his workmen or to its members where such a trade union is not a recognised trade union.

3. To establish employer sponsored trade unions of workmen.

4. To encourage or discourage membership in any trade union by discriminating against any workman, that is to say–

(a) discharging or punishing a workman, because he urged other workmen to join or organise a trade union;

(b) discharging or dismissing a workman for taking part in the strike (not being a strike which is deemed to be an illegal strike under this Act);

(c) changing seniority rating of workmen because of trade union activities;

(d) refusing to promote workmen to higher posts on account of their trade union activities;

(e) giving unmerited promotions to certain workmen with a view to creating discord amongst other workmen, or to undermine the strength of their trade union;

(f) discharging office-bearers or active members of the trade union on account of their trade union activities.

5. To discharge or dismissed workmen–

(a) by way of victimisation;

(b) not in good faith, but in the colourable exercise of the employer's right;

(c) by falsely implicating a workman in a criminal case on false evidence or on conducted evidence;

(d) for patently false reasons;

(e) on untrue or trumped up allegations of absence without leave;

(f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;

(g) for misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct or the past record or service of the workman, thereby leading to a disproportionate punishment.

6. To abolish the work of a regular nature being done by workmen, and to give such work to contractors as a measure of breaking a strike.

7. To transfer a workman mala fide from one place to another, under the guise of following management policy.

8. To insist upon individual workmen, who are on a legal strike to sign a good conduct bond, as a pre-condition to allowing them to resume work.

9. To show favouritism or partiality to one set of workers regardless of merit.

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10. To employ workmen as 'badlis', casuals or temporaries and to continue them as such for years with the object of depriving them of the status and privileges of permanent workmen.

11. To discharge or discriminate against any workmen for filing charges or testifying against an employer in any enquiry or proceeding relating to any industrial dispute.

12. To recruit workmen during a strike which is not an illegal strike.

13. Failure to implement award, settlement or agreement.

14. To indulge in acts of force or violence.

15. To refuse to bargain collectively, in good faith with the recognised trade unions.

16. Proposing or continuing a lock-out deemed to be illegal under this Act.

Unfair labour practices on the part of workmen and trade unions of workmen : 1. To advise or actively support or instigate any strike deemed to be illegal under this

Act.

2. To coerce workmen in the exercise of their right to self-organisation or to join a trade union or refrain from joining any trade union, that is to say–

(a) for a trade union or its members to picketing in such a manner that non-striking workmen are physically debarred from entering the work places;

(b) to indulge in acts of force or violence or to hold out threats of intimidation in connection with a strike against non-striking workmen or against managerial staff.

3. For a recognised union to refuse to bargain collectively in good faith with the employer.

4. To indulge in coercive activities against certification of a bargaining representative.

5. To stage, encourage or instigate such forms of coercive actions and willful 'go slow', squatting on the work premises after working hours or 'gherao' of any of the members of the managerial or other staff.

6. To stage demonstrations at the residences of the employers or the managerial staff members.

7. To incite or indulge in willful damage to employer's property connected with the industry.

8. To indulge in acts of force or violence or to hold out threats of intimidation against any workman with a view to prevent him from attending work.

It is difficult to define and lay down exhaustive test of unfair labour practice, but it may be said that any practice, which violates the directive principles of State policy contained in Article 43 of the Constitution and such other Articles as deal with the decent wages and living conditions for workmen amount to unfair practice.

Section 25. UNFAIR LABOUR PRACTICES Section 25- T. Prohibition of unfair labour practice : No employer or workman or a Trade Union, whether registered under the Trade Unions Act, 1926, or not. shall commit any unfair labour practice.

Section 25-U. Penalty for committing unfair labour practices : Any person who commits any unfair labour practice shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees or with both.

Victimization : Victimization means one of two things. One is when the workman concerned

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is innocent and yet he is punished because he has in some way displeased the employer. For example, by being an active member of a Union of workmen who were acting prejudicially to the interests of the employer. The second instance is where an employee has committed an offence but is given a punishment quite out of proportion to the gravity of the offence, simply because he has incurred the displeasure of the employer, or where the punishment is shockingly disproportion to the misconduct or is such as no reasonable employer would impose under the circumstances. If an employer punishes an employee for a wrong which someone else has committed, it would be right to infer that the employee is victimized by being made a scape-goat to him.

THE WORKMEN'S COMPENSATION ACT, 1923 INTRODUCTION The Workmen's Compensation Act, is one of the earliest measures adopted to benefit the labourers. It was passed in 1923 and enforced on 1st July, 1924. Since then a number of amendments have been made from time to time so as to suit the changing needs and conditions of the workmen.

The object of the Act was to make provision for the payment of compensation by certain class of employers to their workmen for injury by accident. The reasons that compelled the initiation of the Bill were attributed to the growing complexity of industry with the increasing use of machinery and consequent danger to workmen along with the comparative poverty of workmen themselves that rendered it advisable that they should be protected as far as possible from hardships arising from accidents.

It was as early as 1884, that the question of payment of compensation to workmen involved in serious or fatal accidents was raised when the Factory and Mining Inspectors drew the attention of the Government to this human problem which warranted immediate legislative protection of workmen, But its importance was realised by the Government of India only at the end of 1920, when public opinion was invited on connected issues. A committee consisting of members of the Legislative Assembly, employers, workers or representatives of workers, medical and insurance experts was constituted. It was on the basis of the recommendation of the committee that Workmen's Compensation Act was enacted in 1923 which provided for setting up of Tribunals on the American model to decide disputes, appointment of special Commissioners with wide powers and a limited right of appeal to the High Court.

Originally the Act was applicable to workers of certain specified industries, employed otherwise than in clerical capacity; and receiving monthly wages not exceeding Rs. 300, The workmen (as defined in the Act) were entitled to compensation from the employer in case of personal injury caused by accident arising out of and in the course of employment with certain reservations to the duration of, incapacity and negligence of workman himself. The payment of compensation was mainly dependent upon the incapacity or disablement of workmen. Any claim for compensation was to be determined in accordance with the provisions of the Act and rules made there under by Provincial Commissioners for workmen's compensation.

The Workmen's Compensation Act was framed with a view to provide for compensation to workmen incapacitated by an injury from accident arising out of and in the course of employment. It is a guarantee against hazards of employment to which a workman is exposed because of his employment. The main object of the Act was to make provision for payment of compensation to a workman only, i.e. the concerned employee himself in case of his surviving the injury in question and to his dependants in the case of his death in view of section 2 (1) (n) of the Act. But compensation is not the only benefit flowing from this Act; it has important effects in furthering work on the prevention of accidents, in giving workmen greater freedom from anxiety and in rendering industry more attractive.

This Act extends to the whole of India except the State of Jammu and Kashmir.

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This Act is not applicable to all workmen. It is applicable to workmen of certain industries. It affords protection to a workman from loss or injury caused by accident arising out of and in the course of his employment. It is not necessary that the accident should have been caused by some wrongful act of the employer. Compensation is payable only when the conditions provided by section 3 are fulfilled and the procedure prescribed by section 10 has been adopted in making a claim to compensation. Any claim for compensation must be made within two years of the occurrence of the accident or in case of death within two years from the date of death.

The rights and liabilities of the parties stand crystallized on the date of the accident under sections 3 and 4 of the Act. Where the Schedule is amended it must have a prospective operation unless the Schedule is made expressly retrospective. Therefore, compensation would be payable at rates applicable on the date of the accident.

MAIN FEATURES OF THE ACT 1. The Workmen's Compensation Act is modeled on the British pattern. Under the Act

payment of compensation has been made obligatory on all employers whose employees are entitled to claim benefit under the Act.

2. The workman or his dependants may claim compensation if the injury has been caused by accident arising out of and in the course of employment in case of injury not resulting in death if such accident cannot be attributed to the workman having been at the time of accident under the influence of drink or drugs or if it is not caused due to willful disobedience of rule or orders or disregard of safety devices.

3. The various classes of workmen have been specified in the definition of "Workman" in section 2 (1)(n) and in Schedule II. Persons employed in administrative or clerical capacity and earning more than Rs. 1,600/- per month (except railway servants) were excluded from the benefit of the Act. But now the condition of average monthly wage limit of Rs. 1,600/- has been abolished.

4. The amount of compensation payable depends in case of death on the average monthly wages of the deceased workman and in the case of an injured workman both on the average monthly wages and the nature of disablement.

5. The term "wages" for the purposes of this Act includes over-time pay, and the value of any concessions or benefit in the form of food, clothing, free quarters, etc. Whenever the compensation payable to any workman has to be worked out, first of all his monthly wages are determined and then the amount of compensation is decided by reference to section 4 and Schedule IV, where in the method for determining the amount of compensation for death, and permanent disablement is given.

6. In order to protect the interest of dependants in case of fatal accidents the following provisions are made–

(i) All cases of fatal accident are to be brought to the notice of the Commissioner;

(ii) If the employer admits his liability the amount of compensation payable is to be deposited with the Commissioner;

(iii) If the employer admits his liability and at the same time there are grounds for believing compensation to be payable, the dependants get the information necessary to enable them to judge if they should make a claim or not.

7. A sub-contractor may indemnify his contractor if he has had to pay compensation either to a principal or to a workman.

8. The Commissioner may deduct a sum of Rs. 50/- from the amount of compensation and pay the same to the person who has incurred funeral expenses of the deceased workman. The Act is administered by the Commissioner for Workman's

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Compensation appointed by the State Government.

Principles Governing Compensation : The purpose of the Workmen's Compensation Act is not to provide for solatium to the workman or his dependants but to make good the actual losses suffered by him. Compensation is in the nature of insurance of the workman against certain risk of accident. The rule, that in order to make the employer liable to pay compensation, death or injury must be the consequence of an accident arising out of and in the course of his employment, is dependent upon the following four conditions–

(1) A causal connection between the injury and the accident, and the accident and tire work done in the course of employment is essential.

(2) The onus lies upon the claimant to establish that the injury or its aggravation was the outcome of the work and resulting strain.

(3) It is not necessary that the workman must be actually working at the time of his death or that death must occur while he is working or has just ceased to work.

(4) If the evidence adduced shows greater probability which satisfies a reasonable man that the work contributed to the causing of personal injury, it would be sufficient ground for the workman to succeed in his claim.

Nature of Liability : The Workmen's Compensation Act creates a new type of liability. It is not strictly a liability arising out of tort, but is. a sort of liability arising out of the relationship of the employer and the employee. An employer under this Act is liable to pay compensation at a rate fixed in the Act itself to any workman incapacitated by an accident arising out of and in the course of his employment. The main principle governing the compensation is not dependent on the suffering caused to the workman or expenses incurred by him in his treatment but on the difference between his wage earning capacity before and after the accident. The liability for the payment of compensation is not dependent upon the neglect or wrongful act on the part of the employer.

Doctrine of added peril : The principle of added peril means that if a workman while doing his employer's work, trade or business engages himself in some other work which he is not ordinarily required to do under the contract of his employment and which act involves extra danger, he cannot hold his master liable for the risk arising there from. The doctrine of added peril, therefore, comes into play only when the workman is at the time of meeting the accident performing his duty.

Adjudication of Compensation : Compensation may be fixed either by settlement or by award. Once the compensation has been fixed, it cannot be revised on the ground of subsequent aggravation of a permanent disability. Compensation once fixed operates for ever except in cases covered by section 6 of the Act which provides for making subsequent change in the amount of compensation on the ground of change in circumstances. But the scope of section 6 is limited only to half monthly payments which are prescribed by the Act for only temporary disablement. No review on the ground of aggravation of disability is maintainable even under sections 17, 19 and 22 of this Act.

Self-inflicted Injury : An injury caused by accident which could have been anticipated or foreseen, or is brought about intentionally or negligently by the workman himself does not make the master liable, for it cannot be termed as an injury by accident within the terms of the Act. Accident means any unintended and unexpected occurrence, which produces hurt or loss. If the mishap was designed, intended or anticipated it is self-inflicted injury and not an injury caused by accident.

Contributory Negligence : Contributory negligence is not ground under the Act for reducing the amount of compensation if the accident has arisen in the course of employment. A workman, an employee in a saw mill, received injuries on his finger, was given treatment by the employer and re-employed. Later on the injury developed into tetanus and the workman died due to negligence. It was held that compensation payable to the widow cannot be

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reduced on the ground of contributory negligence.

DEFINITIONS Interpretation : Section 2(1) of the Workmen's Compensation Act begins with words "in this Act unless there is anything repugnant in the subject or context". Repugnant means something inconsistent with or contrary to any thing said before in the Act itself. If two provisions of the same statute are contrary to one another, the test of repugnancy is to see whether the two can co-exist. If both of such contradictory provisions can stand together they are not repugnant. If one of such provisions says "do" and another in relation to the same subject-matter says "do not" they are said to be repugnant with each other.

Dependant : Section 2(1)(d) of the Act defines dependant. Under this sub-section relations of a workman are divided into three classes. However, there is no preferential right amongst dependants to maintain claim application. The dependants are not classified in different categories in the sense that those specified in category I will exclude others. Dependants belonging to any category may claim simultaneously–

(i) The first category includes a window, a minor legitimate or adopted son, an unmarried legitimate or adopted daughter and a widowed mother. They are deemed in law as dependants of a workman whether they are in fact dependant on the earnings of the workman or not.

(ii) In the second category of dependants are included a son and a daughter, they have to fulfil the following conditions, namely–

(a) They must be wholly dependant on the earnings of the workman at the time of his death;

(b) They must be infirm; and

(c) They must have attained the age of 18 years.

(iii) The following are included in the third category of dependants provided they are wholly or in part dependant on the earnings of the workman at the time of his death–

(a) a widower,

(b) a parent other than a widowed mother,

(c) (i) a minor illegitimate son,

(ii) an unmarried illegitimate daughter,

(iii) a daughter whether legitimate or illegitimate or adopted if married and minor, or if widowed and a minor,

(d) a minor brother or an unmarried sister or a widowed sister if a minor,

(e) a widowed daughter-in-law,

(f) a minor child of a predeceased son,

(g) a minor child of a predeceased daughter where no parent of the child is alive, or

(h) a paternal grandparent if no parent of workman is alive.

Section 2(1)(g). Partial Disablement : This section defines partial disablement. Such disablement is of two kinds–

(1) Temporary partial disablement.

(2) Permanent partial disablement.

The test of such disablement is the reduction in the earning capacity of the workman.

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If the earning capacity of a workman is reduced in relation to the employment he had been at the time of the accident resulting in such disablement, it is temporary partial disablement.

If the injury caused by an accident results in the reduction, of the earning capacity in respect of employment which the workman was capable of undertaking at the time of accident it is permanent partial disablement.

Any injury specified in part II of Schedule I shall be deemed to result in permanent partial disablement. Compensation under the Act is payable only if the injury caused by an accident results in workman's disablement exceeding three days.

To determine whether the injury is permanent or temporary the courts have to see whether the injury has incapacitated the workman from every employment which he was capable of undertaking at the time of accident or merely from the particular employment in which he was at the time of the accident resulting in disablement. In the former case the disablement is partial but permanent in the latter case it is temporary:

The following propositions are helpful in deciding the nature of disablement–

(i) Earning is not the same as earning capacity. There is difference between earning of a person and his capacity to earn.

(ii) Rise in earning may be because of various factors and rise in wages is not decisive of no loss of earning capacity.

(iii) Loss of physical capacity is not co-extensive with loss of earning capacity.

(iv) Loss of physical capacity or physical incapacity may be relevant in assessing to what extent there is loss of earning capacity for every employment which the workman was capable of undertaking at that time or the employment in which he was engaged at the time of the accident as the case falls for consideration.

Section 2(1)(i). Total Disablement Total disablement is defined in section 2(1)(i) of the Act.

When a workman is incapacitated of doing any work which he was capable of performing at the time of accident resulting in such disablement, it is total disablement. Incapacity for all work is different from the incapacity for the work which a workman was doing at the time of accident. It is further provided in the Act that permanent total disablement shall be deemed to result from every injury specified in Part I of Schedule I. It may also result from any combination of injuries in Part II of Schedule I, where the aggregate percentage of the loss of earning capacity, as specified against those injuries amounts to one hundred per cent or more.

It was held in National Insurance Co. Ltd. v. Mohd. Saleem Khan and another that if the workman is incapacitated to do all the work which he was capable of performing at the time of accident it is a case of total disablement. It may be that in view of the injuries the workman is capable enough to render some other sort of work, but still when there is incapacity to do the work which he was capable of performing by the date of the accident it is a case of total disablement. The certificate of the doctor of physical impairment and loss of physical function is not material in deciding the question of total disablement.

Section 2(1)(m). Wages : The term "wages" as defined in section 2(l)(m) includes any privilege or benefit which is capable of being estimated in money. The definition is not exhaustive. The following are not wages–

(a) Travelling allowance or the value of any travelling concession;

(b) Contribution paid by the employer of a workman towards–

(i) any pension, or

(ii) any provident fund;

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(c) Any sum paid to a workman to cover any special expenses incurred on him by the nature of his employment.

(d) Leave carried forward to next year.

Annual leave with wages is certainly a privilege but this privilege only means that no wages due for that period shall be deducted from the wages. It does not mean that the workman can claim an equivalent amount in lieu of such leave. Thus, in calculating wages an addition to wages for the period of leave a workman was entitled to after working for one year is not justified, unless there is in the contract of service an express provision for such amount of wages in lieu of the leave earned for the year.

The term "wages" has different meanings under the Payment of Wages Act, the Factories Act and Industrial Disputes Act. Compensation to an injured employee under the Workmen's Compensation Act is determined on the basis of wages of the injured employee. The wages has to be determined according to the definition of "wages" provided in this Act.

COMPENSATION Section 3. Compensation Employer's liability for Compensation : The liability of an employer to pay compensation is limited and is subject to the provisions of this Act. Under sub-section (1) of section (3) the liability of the employer to pay compensation is dependent upon the following four conditions–

(1) Personal injury must have been caused to a workman;

(2) Such injury must have been caused by an accident;

(3) The accident must have arisen out of and in he course of employment; and

(4) The injury must have resulted either in death of the workman or in his total or partial disablement for a period exceeding three days.

The employer shall not be liable to pay compensation in the following cases–

(a) If the injury did not result in total or partial disablement of the workman for a period exceeding three days;

(b) In respect of any injury not resulting in death or permanent total disablement the employer can plead–

(i) that the workman was at the time of accident under the influence of drinks or drugs;

(ii) that the workman wilfully disobeyed an order expressly given or a rule expressly framed for the purpose of securing safety of workmen ; and

(iii) that the workman having known that certain safety-guards or safety devices are specifically provided for the purpose of securing the safety of workman, wilfully disregarded or removed the same.

Section 2(3). Employer's Liability in case of occupational diseases : Sub-section (2) of section 3, deals with the payment of compensation in case of an injury resulting from occupational diseases. The list of the occupational diseases is contained is Schedule III of the Act. Schedule III is divided into three parts, A, B and C. The disease contracted must be an occupational disease peculiar to the employment specified in Schedule III. In respect of every such disease mentioned as occupational disease in Schedule III, a list of a number of employments is given: To support any claim for compensation in case of occupational disease in Part A no specified period of employment is necessary; for diseases in Part B the workman must be in continuous employment of the same employer for a period of six months in the employment specified in that part; and for diseases in Part C the period of employment would be such as is specified by the Central Government for each such employment whether in the service of one or more employers. The contracting of any disease specified in

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Schedule III shall be deemed to be an injury by accident arising out of and in the course of employment unless the contrary is proved.

The employer shall be liable to pay compensation for an injury resulting from an occupational disease mentioned in Part A of Schedule III, if a workman employed in any employment specified in Part A of Schedule III contracts any disease specified therein as an occupational disease peculiar to that employment. The contracting of the disease shall be deemed to be an injury by accident and unless the contrary is proved the accident would be deemed to have arisen out of and in the course of employment.

If any such disease as is mentioned in Part A of Schedule III develops after a workman has left the employment, no compensation shall be payable to him.

In case of contracting of any disease mentioned in Part B of Schedule III the employer shall be liable if a workman while in the service of an employer in whose service he has been employed for a continuous period of not less than six months in any employment specified in Part B of Schedule III contracts any disease specified therein as an occupational disease peculiar to that employment. The contracting of the disease shall be deemed to be an injury by accident within the meaning of this section, and unless contrary is proved, the accident would be deemed to have arisen out of and in the course of the employment.

The employer shall be liable to pay compensation to a workman where a workman contracts any disease as aforesaid after he has left his employment in the following conditions–

• If a workman has served under any employer in any employment specified in Part B of Schedule III for a continuous period of six months.

• If a workman has after cessation of his service contracted any disease specified in Part B of Schedule, III as an occupational disease peculiar to that employment.

• If it is proved that such disease arose out of the employment.

• The contracting of the disease shall then be deemed to be an injury by accident within the meaning of this section.

Where a workman contracts any disease specified in Part C of Schedule III in the employer shall be liable–

• If a workman was in the service of one or more employers in any, employment specified in Part C of Schedule III for such continuous period as the Central Government may specify in respect of each such employment; and

• If he contracts any disease specified therein as an occupational disease peculiar to that employment.

Employment : The concept of employment implies three elements: an employer, an employee and a contract of employment between them. In other words, employment means a contract of service between the employer and employee wherein the employee agrees to serve the employer under his control and supervision. Employment under the present Act is not limited to actual work or place of work but extends to all things which the workman is entitled by the contract of employment expressly or impliedly to do. To justify any claim for compensation existence of a contract of employment express or implied between the employer and the injured workman is necessary.

Personal injury : Injury ordinarily refers to a physiological injury. Personal injury does not mean only physical or bodily injury but includes even a nervous shock, a mental injury or strain which causes a chill. It is a term wider than bodily injury. In· Indian News Chronicle v. Mrs. Lazarus, a workman, employed as an electrician had frequently to go to a heating room from a cooling plant, was attacked by pneumonia and died after a short illness of five days. The Court held that the injury caused by an accident is not confined to physical injury and the injury in the instant case was due to his working and going from a heating room to a cooling

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plant as it was his indispensable duty arising out of and in the course of employment.

Arising out of and in the course of employment : The expression "arising out of" suggests the cause of accident and the expression "in the course of" points out to the place and circumstances under which the accident takes place and the time when it occurred. A causal connection or association between the injury by accident and employment is necessary. The onus is on the claimant to prove that accident arose out of and in the course of employment. The employment should have given rise to the circumstances of injury by accident. But a direct connection between the injury caused by an accident and the employment of the workman is not always essential. Arising out of the employment does not mean that personal injury must have resulted from the mere nature of employment and is also not limited to cases where the personal injury is referable to the duties which the workman has to discharge. The words arising out of employment are understood to mean that "during the" course of the employment, injury has resulted from some risk incidental to the duties of the service which unless engaged in the duty owing to the master it is reasonable to believe the workman would not otherwise have suffered. There must be a causal relationship between the accident and employment. If the accident had occurred on account of a risk which is an incident of the employment; the claim for compensation must succeed unless of course the workman has exposed himself to do an added peril by his own imprudence. This expression applies to employment as such, to its nature, its conditions, its obligations and its incidents and if by reason of any of these, a workman is brought within the zone of special danger and so injured or killed, the Act would app]y. The employee must show that he was at the time of injury engaged in the employer's business or in furthering that business and was not doing something for his own benefit or accommodation. The question that should be considered is whether the workman was required or expected to do the thing which resulted in the accident though he might have imprudently or disobediently done the same. In other words, was the act which resulted in the injury so outside the scope of the duties with which the workman was entrusted by his employer as to say that the accident did not arise out of his employment.

COMMISSIONERS Section 19. Reference to Commissioner : Any Commissioner of an area concerned shall have the power to decide and settle all questions as to the liability of any person to pay compensation. In default of an agreement between the parties to arrive at a conclusion in respect of any claim to compensation, the Commissioner has jurisdiction to decide inter alia–

(i) The question as to whether a person injured is a workman.

(ii) The liability of any person to pay compensation.

(iii) The amount and duration of compensation.

(iv) The nature or extent of disablement.

Section 19 provides for settlement by the Commissioner of any question regarding liability of any person to pay compensation or the amount or duration of compensation, in default of any agreement, if such question arises in any proceeding under the Act. The question does not have the effect of suspending the liability of an employer to pay compensation under Section 3 till after the settlement contemplated under Section 19.

The Commissioner has jurisdiction to decide the loss of earning capacity of an injured workman. The medical evidence, being only opinion, would not be decisive of the question and that the Commissioner had independently to give a finding as to extent of the loss of the earning capacity. If with the consent of the parties, the Commissioner refers any matter for decision of the Medical Board or some other agency, it should be held that he acted extra cursum curiae and the parties would be bound by the opinion of the reference. None of the two parties would have a right to complain if the opinion goes against him. In such a case there would be no right to appeal. Apart from-the objection to the assessment of the loss of

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earning capacity by the Medical Board, there is no other objection to the assessment of compensation by the Commissioner. A Commissioner has no power to set aside a previous order for compensation made by him under a mistake. No addition or alteration shall be made to the judgment other than the correction of Clerical or arithmetical mistake arising from an accidental slip or omission.

Section 19 refers to a liability arising by virtue of this Act. The liability adjudicated upon by Claims Tribunal under the Motor Vehicles Act is a liability founded in tort and thus falls outside the scope of this section.

The Commissioner acting under the Workmen's Compensation Act is a tribunal and not a civil court. He constitutes an independent tribunal. His function is to judge and decide and not merely to enquire and advise and in judging and deciding the matters before him, he has to proceed judiciously and not arbitrarily.

Appeal : Section 30 of the Workmen's Compensation Act deals with the right of appeal. It provides a right of appeal to the High Court from the order of the Commissioner. Only restricted right of appeal has been granted by this section. No appeal shall lie against any order of the Commissioner unless the following conditions are fulfilled–

(1) A substantial question of law is involved in the appeal.

(2) Except an order refusing to allow redemption of a half-monthly payment, the amount in dispute in appeal is not less than Rupees three hundred.

(3) The parties have not agreed to abide by the decision of Commissioner.

(4) Order of the Commissioner does not give effect to an agreement arrived at between the parties.

(5) In case of an appeal against an order awarding compensation in lump sum, the memorandum of appeal must be accompanied with a certificate by the Commissioner to the effect that the appellant has deposited with, him the amount payable under the order appealed against. This provision is mandatory and not merely declaratory. The presentation of appeal without certificate is not competent.

(6) Appeal is filed within the limitation period of sixty days from the date of the order. Limitation would begin from the date the party is informed of the order.

It is also provided that an appeal shall lie from the following orders of the Commissioner–

(1) an order awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or disallowing a claim in full or in part for a sum;

(2) an order awarding interest or penalty under Section 4-A;

(3) an order refusing to allow redemption of a half-monthly payment;

(4) an order providing for the distribution of compensation among the dependants of a deceased workman, or disallowing any claim of a person alleging himself to be such dependant;

(5) an order allowing or disallowing any claim for the amount of an indemnity under the provisions of sub-section (2) of Section 12; or

(6) an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions.

The provisions of Section 5 of the Limitation Act, 1963 shall be applicable to appeals under this section.

THE EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 OBJECT AND SCOPE OF THE ACT

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The long title of this Act is the Employees Provident Funds, Family Pension Fund and Deposit Linked Insurance Fund Act, 1952. By an amendment of the year 1997 the words Family Pension Fund have been substituted by the words Pension Fund. Thus the word 'Family' has now been omitted. But the Act is known by short title The Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The object of the Employees' Provident Funds Act, is to provide for the institution of provident funds, pension fund and deposit linked insurance funds for employees in factories and-other establishments. The principal duty is laid upon the employer to put the Provident Fund Scheme into operation and to make contribution of both the employees' and employer's share to the fund then and there and deduct the employees' share from their wages. The Act extends to the whole of India except the State of Jammu and Kashmir. The Act and Scheme were enforced in the scheduled industries in November, 1952. There had been a persistent demand for extension of the E.P.F. Act to all categories of industrial workers and the Planning Commission and Tripat1ite Consultative Committees recommended for such extension. The Act was accordingly extended to many additional industries so as to cover millions of employees working in more than 4,000 factories by the end of March, 1957.

Employees' Provident Funds (Amendment) Act, 1956 empowered the Government to extend the Act to non-factory establishments. In view of the Amendment Act, 1976, this Act is now called Employees' Provident Funds and Miscellaneous Provisions Act, 1952. According to Section 1 (3)(a) this Act applies to every establishment which is a factory engaged in any industry specified in Schedule 1, and in which twenty or more persons are employed. According to Section 1 (3)(b) it shall also apply to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf. In exercise of this power conferred by the Act upon the Government the Act was extended on 30th April, 1957, to workers in plantations of tea, coffee, rubber, cardamom and pepper employing 50, or more workers. Proviso to sub-section (3) provides that the Central Government may after giving not less than two months' notice of its intention so to do, by notification in the Official Gazette apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification. The number of employees specified by the notification by the Central Government as stated above may be even less than twenty. However, the provisions of this sub-section are subject to the provisions of Section 16 of this Act.

DEFINITIONS Section 2(a). Appropriate Government : According to Section 2(a) the appropriate Government is the Central Government (I) in relation to an establishment belonging to or under the control of Central Government ; or (2) in relation to any establishment connected with (i) it railway company; (ii) a major port; (iii) a mine; (iv) an oilfield ; or (v) a controlled industry ; or (3) in relation to an establishment having departments or branches in more than one State.

In relation to any establishment other than those mentioned above, the appropriate Government means the State Government.

Section 2(aa). Authorised Officer : Authorised officer means the Central Provident Fund Commissioner, Additional Central Provident Fund Commissioner, Deputy Provident Fund Commissioner, Regional Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette.

Section 2(c). Contribution : 'Contribution' means a contribution, payable in respect of a member under a Scheme or the contribution payable in respect of an employee, to whom the Insurance Scheme applies.

Section 2(d) Controlled Industry- 'Controlled industry' means any industry whose control by the Union of India has been declared by an Act of Parliament to be expedient in the public

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interest. All the industries specified in the First Schedule of Industries (Development and Regulation) Act have been taken under the control of the Union in the public interest.

Section 2(e). Employer : 'Employer' in relation to an establishment which is a factory means–

(i) the owner or occupier of the factory;

(ii) the agent of such owner or occupier;

(iii) the legal representative of a deceased owner or occupier of the factory; or

(iv) any person named as a manager of the factory under Section 7(1)(f) of the Factories Act, 1948.

In relation to any other establishment, 'employer' means-

(i) the person who has the ultimate control over the affairs of the establishment ; or

(ii) the authority which has the ultimate control over the affairs of the establishment; or

(iii) where the affairs of an establishment are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent.

A receiver appointed under Order XL, Rule I, C.P.C. to take possession of all the properties of the partnership is an employer within the meaning of this sub-section, where the receiver so appointed had all the powers except that in certain things he was required to take permission from the Court.3 He had also power to employ additional staff with the permission of the Court. When such a receiver was prosecuted for breach of the provisions of the P.E Scheme he pleaded that he was not 'employer' within the meaning of Section 2(e) of the Act.

Section 2(f). Employee : Before a person can be said to be an 'employee' .there must be proof–

(1) that he is employed,

(2) that he is employed for wages,

(3) that he is employed in work, manual or otherwise,

(4) that the work is in connection with the work of a factory (establishment), and

(5) that he gets his wages directly or indirectly from the employer. Employee includes any person–

(i) employed by or through a contractor in or in connection with the work of the establishment;

(ii) engaged as an apprentice not being an apprentice engaged under the Apprentices Act, 1961, or under the standing order of the establishment.

Persons employed by or through a contractor in or in connection with the work of the establishment shall be included as employee provided that they have completed the period of working days laid down in the scheme for entitling an employee to the benefits of the fund.

For a person to be an employee it is not necessary that he should actually be employed in the establishment itself, it is sufficient if he is employed in connection with any work of the establishment. Further, it is also not necessary that a person should be employed for any manual work; the expression 'employee' includes a person employed for clerical or other work in or in connection with the work of the establishment.

In Mohammed Ali v. Union of India,4 it was argued that the Act was intended by Parliament to apply to employees who were mere wage earners and not to the salaried servants. The contention was rejected by the Supreme Court.

In Victoria Jubilee Technical Institute v. K.S. Naik, R.P. F. Commissioner, Maharashtra and

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others the Victoria Institute trained students in electrical, mechanical and general engineering in laboratories and workshops attached to the Institute. The question was whether workshops and laboratories attached to the Institute will make it a factory.

It was held that the petitioner Institute cannot be described as engaged in production of electrical, mechanical and general engineering goods. The Institute has several laboratories and workshops attached to its departments for the purpose of training students and to give practical experience in their field of study.

In laboratories and workshops students are given training under the guidance of the teaching staff. The product manufactured ,by the students are not sold, nor the Institute derives any monetary benefit out of such production. Therefore, the Institute is not engaged in the production of such goods. The expression "engaged" indicates the commercial production or production as a primary concerned and by no stretch of imagination can educational institution be treated as engaged in production of these goods and hence it is not a factory.

Section 2(h). Fund : 'Fund' means the provident fund established under the Employee's, Provident Fund Scheme framed under Section 5 of this Act providing for all or any matters specified in Schedule II.

In Som Prakash Rekhi v. Union of India the Supreme Court pointed out that the roots of gratuity and Provident fund are different from pension. Each one is a salutary benefaction statutorily guaranteed independent of the other. Pensions are paid out of regard for past meritorious service.

Section 2(i). Industry : 'Industry' means any industry specified in Schedule I which means any industry engaged in the production of cement, cigarette, electrical, mechanical or general engineering products, iron (or steel), paper or textile, made wholly or in part of cotton, wool, jute or silk, whether natural or artificial.

Section 3. Application of the Act : Ordinarily the Act applies to such establishment which is a factory engaged in any industry specified in Schedule I and wherein twenty or more persons are employed. But Section 3 of the Act empowers the Central Government to apply the provisions of the Act to any such other establishment, whose employees have a provident fund common with the employees of any other establishment, to which this Act applies. The Central Government may do so by a Gazette notification provided the provident fund is in existence in the establishment immediately before this Act applies to such establishment.

Section 4. Power to add to Schedule : Under Section 4 the Central Government may by a Gazette notification add any other industry in Schedule 1. After such addition the provisions of this Act shall apply to any establishment engaged in the industry so added by the Central Government.

EMPLOYEES' PROVIDENT FUND SCHEME AND AUTHORITIES Section 5. Employees' Provident Fund Scheme : Section 5 of the Act authorises the Central Government to frame Employees' Provident Fund Scheme for the establishment of Provident Fund under this Act. The Central Government shall have to issue a notification in the Official Gazette before framing any such scheme. The scheme shall apply to employees or any class of employees of an establishment or class of establishments as specified in it. The word 'specify' means that there should be no room for uncertainty in mentioning or naming the establishment to which the scheme is to be applied. I after the framing of the scheme as soon as possible, a Fund shall be established in accordance with the provisions of this Act and the scheme.

The fund shall vest in and be administered by the Central Board, constituted under Section 5-A. Subject to the provisions of this Act. A Provident Fund Scheme may provide for all or any of the matters specified in Schedule II. Any such scheme shall take effect either prospectively or retrospectively on such date as may be specified in the Schedule.

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The power of the Central Government to frame a scheme is neither unrestricted nor unguided. There are various provisions in the Act for the guidance of the Central Government. It is an idle contention that Section 5 gives wholly unrestricted and unguided direction to the Central Government to frame a scheme, and it appears on the other hand that the Act is full of carefully laid down principles to guide the Central Government.

Two distinct powers are conferred on the Central Government by Section 5(1) namely, (i) to frame a scheme, and (ii) to specify to which factories the scheme shall apply. Both these powers can be exercised through the medium of a single notification. Further the factories to which the scheme shall apply may be specified in the scheme itself.

Where a factory had ceased to work for some time, the workers thereof applied for refund because the amount was payable under para 72 of the scheme. But the application for withdrawal did not conform to the provisions of para 69(2) of the scheme. The workers joined the same factory, in which they had worked for more than a year, before any order for refund was made. It was held by High Court that para 69(4) of the scheme will not apply in this case. Their case was governed by para 26 and those workers cannot be said to be employed in the factory as new workers. It was wrong to say, that they would not be entitled to the provident fund benefit unless they again qualified themselves by one year's service.

In Bombay Printers Ltd. & others v. Union of India and others, seven employees of the petitioners retired on attaining the age of superannuation and had withdrawn their fun amount of accumulation of Provident Fund. They were re-employed by the petitioner on temporary basis as per their convenience and subject to their health conditions. Asstt. P.F. Commissioner, Maharashtra called upon the petitioner to remit provident fund dues in respect of these employees. It was held 'that the employer cannot be asked to pay contribution in respect of re-employed employees on temporary basis.

The delegation of power under Section 5 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 on the Central Government for framing the scheme cannot be said to be ultra-vires the Act or Article 14 of the Constitution of India.

Section 5(a). Central Board : The Central Government may by a Gazette notification constitute Board of Trustees caned Central Board for administering the Employees' Provident Fund in the territories to which this Act extends. The Central Board shall come into force from such date as may be specified in the notification, and shall consist of the following persons as members–

(a) a Chairman and a Vice-Chairman to be appointed by the Central Government;

(aa) the Central Provident Fund Commissioner, ex-officio;

(b) not more than five persons appointed by the Central Government from amongst its officials;

(c) not more than fifteen persons representing Government of such State as the Central Government may specify in this behalf, appointed by the Central Government;

(d) Ten persons representing employers, or the establishment to which the Scheme applies, appointed by the Central Government after consultation with such organisations of employers as may be recognised by the Central Government in this behalf; and

(e) Ten persons representing employers, in the establishment to which the Scheme applies, appointed by the Central Government after consultation with such organisations of employees as may be recognised by the Central Government in this behalf.

The terms and conditions subject to which a member of the Central Board may be appointed shall be such as may be provided for in the Scheme. The time, place and procedure of the meetings of the Central Board shall be such as may be provided for in the Scheme. The

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Central Board shall subject to the provisions of Section 6-A and Section 6-C administer the Fund, vested in it in such manner as may be specified in the scheme. The Central Board shall perform such other functions as it may be required to perform by or under any provisions of the Scheme, the Family Pension Scheme and the Insurance Scheme.

Section 6(a). Employees' Pension Scheme (1) The Central Government, may, by notification in the Official Gazette, frame a scheme

to be called the Employees' Pension Scheme for the purpose of providing for–

(a) superannuation pension, retiring pension or permanent total disablement pension to the employees of any establishment or class of establishments to which this Act applies; and

(b) widow or widower's pension, children pension or orphan pension payable to the beneficiaries of such employees.

(2) Notwithstanding anything contained in Section 6, there shall be established, as soon as may be after framing of the Pension Scheme, a Pension Fund into which there shall be paid from time to time, in respect of every employee who is a member of the Pension Scheme–

(a) such sums from the 'employer's contribution under section 6, not exceeding eight and one-third per cent of the basic wages, dearness allowance and retaining allowance, if any, of the concerned employees, as may be specified in the Pension Scheme;

(b) such sums, as are payable by the employer of exempted establishments under sub-section (6) of Section 17;

(c) the net assets of the Employees' Family Pension Fund as on the date ,of the establishment of the Pension Fund;

(d) such sums as the Central Government may, after due appropriation by Parliament by law in this behalf, specify.

(3) On the establishment of the Pension Fund, the Family Pension Scheme (hereinafter referred to as the ceased scheme) shall cease to operate and all assets of the ceased scheme shall vest in and shall stand transferred to, and all liabilities under the ceased scheme shall be enforceable against, the Pension Fund and the beneficiaries under the ceased scheme shall be entitled to draw the benefits, not less than the benefits they were entitled to under the ceased scheme, from the Pension Fund;

(4) The Pension Fund shall vest in and be administered by the Central Board in such manner as may be specified in the Pension Scheme.

(5) Subject to the provisions of this Act, the Pension Scheme may provide for all or any of the matters specified in Schedule III.

(6) The Pension Scheme may provide that all or any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in that behalf in that scheme.

(7) A Pension Scheme, framed under sub-section (1), shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the scheme or both Houses agree that the scheme should not be made, the scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that

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scheme.

IMPORTANT QUESTIONS 1. Define the 'Industrial Dispute' under the Industrial Dispute Act, 1947. When does an

individual dispute become industrial dispute? Explain.

2. Write the main condition for the claims of compensations by a workman under the Workmen Compensation Act.

3. When does a strike become unlawful? Explain the constitutional validity of the strike. Is these a need to impose total ban on strike in India.

4. Define and Distinguish between 'Lay-off' and 'Retrenchment.

5. "Section 11-A of the I.D. Act, 1947 gives discretionary power to the Labour Court, Industrial Tribunal and National Tribunal to give appropriate relief to the discharged or dismissed workmen? Comment.

6. Explain the scope and objects of Employees Provident Fund Act, 1952.

7. "Accident alone does not entitle a workman to claim compensation, accident must arise out of and in the course of employment". Comment

8. Discuss the applicability and objects of the Employees Provident Fund Act, 195.

RECOMMENDED READINGS 1. "Labour and Industrial Laws", Dr. V.G. Goswami.

2. "Labour and Industrial Laws", S.N. Misra.

3. "Social Security in India", Dr. P.C. Srivastava.

4. Reports of the National Labour Commissions.

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UNIT - II THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS)

ACT, 1946

Before passing of The Industrial Employment (Standing Orders) Act, 1946 the conditions of employment were governed by contracts either express or implied between the employers and their employees in different industrial undertakings. In many cases these conditions were not well defined and suffered from doubt and ambiguity. With the advent of Trade Unionism and collective bargaining new problems of maintaining industrial peace· and production for the society were created. It was then considered that the society had a vital interest in the settlement of terms of employment of industrial labour and thus the settlement of labour problems became tripartite and the State, representing the society entered on the scene.

The importance of making a law defining precisely the conditions of employment was emphasised during discussions in the Tripartite Labour Conferences. To give effect to the new ideology the Industrial Employment (Standing Orders) Act, 1946 was enacted by the Central Government. It is obligatory upon all the employers covered by this Act to define conditions of employment under them.

Section 1. APPLICATION OF THE ACT The object of the Standing Orders is to make it clearation both the parties on what terms and conditions the workmen are offering to work and the employer is offering to engage them. This Act requires the employers to define the conditions of service in their establishments and to reduce them to writing and to get them compulsorily certified with a view to avoid unnecessary industrial disputes.

The Act applies to every industrial establishment–

(1) Situated within the Indian Union, except the State of Jammu and Kashmir.

(2) employing 100 or more workmen on any day of the preceding 12 months.

The appropriate Government may by a Gazette notification apply the Act to any Industrial establishment employing such number of persons as specified in the notification. The number of employees fixed by the Government may be less than 100. But the Appropriate Government must give two months' prior notice of its intention to make any such extension of the Act.

The Act does not apply to the following establishments–

(1) Any industry to which the provisions of Chapter VII of the Bombay Industrial Relations Act, 1946 apply.

(2) Any industrial establishment to which the provisions of the M.P. Industrial Employment (S.O.) Act, 1961 apply.

Section 13-B. Act not to apply to certain industrial establishments : The Act does not apply to such workmen employed in any industrial establishment as are covered by the following rules and regulations– .

(1) The Fundamental and Supplementary Rules;

(2) The Civil Service (Classification, Control and Appeal) Rules;

(3) The Civil Services (Temporary Service) Rules;

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(4) The Revised Leave Rules;

(5) The Civil Services Regulations;

(6) The Civilians Defence (Classification, Control and Appeal) Service Rules;

(7) The Indian Railway Establishment Code; or

(8) Any other Rules or Regulations that may be notified in this behalf by the appropriate Government in the Official Gazette.

Section 14. Power to exempt : Section 14 of the Act authorises the appropriate Government to exempt conditionally or unconditionally any industrial establishment or class of industrial establishments from all or any of the provisions of this Act.

SPECIAL FEATURES OF THE ACT The following are some of the main features of the Industrial Employment (Standing Orders) Act, 1946–

(1) The employer of every industrial establishment to which the Act applies is required to frame draft Standing Orders and to submit them to the Certifying Officer, who is generally the Labour Commissioner, for certification;

(2) The definition of workmen under this Act includes a "supervisory Technical Personnel" under certain conditions;

(3) The certifying officer is empowered to modify or add to the draft Standing orders so as to render them certifiable under the Act;

(4) A group of employers of similar industrial establishments may submit joint Standing Orders for certification;

(5) The Government may by rules set out model Standing Orders for the purposes of this Act. The Draft Standing Order framed by an employer should as far as practicable be in conformity with the Model Standing Orders;

(6) This Act normally applies to every industrial establishment wherein one hundred or more workmen are employed;

(7) The certifying officers and appellate authorities shall have all the powers of a Civil Court in respect of certain matters provided in section 19 of the Act;

(8) The employer can be penalised for failure to submit draft Standing Order for certification or for contravention of any provision of the Standing Order finally certified;

(9) The appropriate Government may by a Gazette notification exempt any establishment or class of industrial establishments from any of the provisions of the Act;

(10) The appropriate Government may after previous publication by notification in the Official Gazette, make rules to carry out the purposes of this Act.

STANDING ORDERS Section 3. Submission of Draft Standing Orders : (1) Within six months from the date by which this Act becomes applicable to an industrial

establishment the employer of that establishment shall submit to the Certifying Officer five copies of the Draft Standing Orders proposed by him for adoption in his industrial establishment.

(2) The Draft Standing Orders must make provision for every matter, set out in the Schedule, which may be applicable to the industrial establishment. In those cases where Model Standing Orders have been prescribed the Draft Standing Orders shall 'be, so far as practicable, inconformity with such model.

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(3) The Draft Standing Orders submitted under this section shall be accompanied by a statement giving prescribed particulars of the workmen employed in the industrial establishment. The name of the Trade Union, if any to which workmen belong, should also be sent along with the Draft Standing Orders.

(4) A group of employers in similar industrial establishments may submit a joint draft of Standing Orders under this Section provided they satisfy the conditions, if any, prescribed in this respect.

Section 4. Conditions for Certification of Standing Orders : The Certifying Officer shall certify the Standing Orders under this Act if–

(1) provision is made in the Standing Order for every matter set out in the Schedule, which is applicable to the industrial establishment; and

(2) the Standing Orders are otherwise in conformity with the provisions of this Act.

The Certifying Officer or the appellate authority shall have the power to adjudicate upon the fairness or reasonableness of the provisions of the Standing Orders. While doing so the Certifying Officer is directed to consider and weigh the social interest in the claims of the employer and the demands of workmen. Modification of Standing Orders is permissible under section 10 but that can be achieved only by adhering to the prescribed manner. Modification of Standing Order requiring giving of reasons in cases of discharge of workman was held to be fair and reasonable. The question as to fairness and reasonableness of modification has been left by Legislature to the authorities empowered under the Act and the Supreme Court under Art. 136 of the Constitution would not be justified in interfering with conclusions of authorities unless an important principle of law requiring elucidation is involved. The Parliament has by amending sections 4 and 10 of the Act given dual remedy to the workmen. One is to raise an industrial dispute under the Industrial Disputes Act and the other by conferring the right to individual workman to contest the Draft Standing Orders submitted by the employer for certification on the ground that they are either not fair or reasonable, and more important is the right to apply for their modification

Section 6. Appeals : Any employer, workman, Trade Union or other prescribed representatives of the workmen aggrieved by the order of the Certifying Officer may, within' 30 days from the date on which copies of the Draft Standing Orders are sent, appeal to the Appellate Authority whose decision thereon shall be final. The Appellate authority shall by order in writing confirm the Standing Orders either in the form certified by the Certifying Officer or after amending Standing Orders by making such modifications as it thinks necessary to render the Standing Orders certifiable under this Act.

The Appellate Authority shall within seven days of its order send copies of the Draft Standing Order to the Certifying Officer, employer, Trade Union or other prescribed representatives of the workmen. In cases the Appellate Authority makes any modification in the Draft Standing Order, it shall send a copy of the amended Standing Order along with his order. But no such copy needs to be sent by him if no modification has been made by him in the Draft Standing Order.

THE EMPLOYEES' STATE INSURANCE ACT, 1948 INTRODUCTION Many important Social Security Schemes had been introduced in our country before independence. The urgency of such Schemes has been more badly felt after World War II. Social security to the workers of an industry can be provided by a self-balancing Scheme of Social Insurance or by public assistance or a combination of the two methods. Social security measures adopted in any country can be said to be dependent upon a number of factors viz., population, economic resources, standard of living, availability of technical experts and development of industry. The Workmen's Compensation Act, though designed to protect and safeguard the interest of the labour was in the nature of social assistance and not social

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insurance. The Employees' State Insurance Act was first of such measures adopted in India to provide for social insurance to the labourers. Many other fields of social insurance like health and unemployment are still left untouched.

The Employees' State Insurance Act is a legislation which aims at bringing about social and economic justice to the poor labour class of the land. It aims at the labour welfare. But labour welfare is an elastic term bearing somewhat different interpretation in one country from another according to different social customs, the degree of industrialisation and the educational development of the workers}. Investigation Committee of the Government of India has preferred to include under welfare activities anything done for the intellectual, physical, moral and economic betterment .of workers whether by employers, by Government or by other agencies, over and above, what is laid down by law or what is normally expected as part of contractual benefits for which workers have bargained. Labour Welfare is a very comprehensive term and includes everything undertaken by the State, employers and association of workers for the improvement of workers standard of living and promotion of their social and economic well-being.

These welfare activities need to be considerably extended so as to cover workers of every factory, industry, mines, plants and communication, etc. A definite minimum standard of welfare should be laid down, which has to be observed by all employers.

Section 1. APPLICATION AND SCOPE OF THE ACT The Employees' State Insurance Act, 1948, extends to the whole of India Section 1(3) of this Act empowers the Central Government to enforce different provisions of the Act in different States or part thereof on different dates. These dates of enforcement are to be made public by a Gazette notification issued by the Central Government. According to Section 1(4), the Act in the first instance applies to all factories including factories belonging to the, Government other than seasonal factories.

Section 2. DEFINITIONS (1) Appropriate Government : Appropriate Government means the Central Government

in respect of establishments under the control of the Central Government or a railway administration or a major port or a mine or oil-field and the State Government in all others cases.

(6-A) Dependant : There are three categories of dependants under the Act. In the first category are included–

(1) a widow;

(2) a minor legitimate or adopted son;

(3) an unmarried legitimate or adopted daughter;

(4) a widowed mother.

(8) Employment Injury : The following are the ingredients of an Employment Injury–

(1) The injury must be personal to an employee.

(2) The injury must be caused by an–

(i) accident; or

(ii) occupational disease.

(3) The accident must arise out of and in the course of employment.

(4) The employment must be insurable.

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(15-A) Permanent Partial disablement : The definition given in the Act has the following in ingredients–

(1) partial disablement must be of a permanent nature;

(2) the disablement must reduce the earning capacity of an employee;

(3) reduction of earning capacity must be in every employment which he was capable of undertaking at the time of the accident resulting in the disablement.

What is permanent partial disablement is a question of fact. But every injury specified in Part II of the Second Schedule shall be deemed to result in permanent partial disablement. The test to determine permanent partial disablement has been discussed in detail in the Workmen's Compensation Act.

(15-B) Permanent total disablement : The definition contains the following ingredients–

(1) the disablement resulting from injury must be permanent; and

(2) the disablement must be of such a nature as renders the workman incapable for all work which he was capable of performing at the time of accident resulting in such disablement; and

(3) every injury specified in Part I of Schedule II shall be deemed to result in permanent total disablement; and

(4) It shall also be deemed to result from any combination of injuries specified in Part II of Second schedule where the aggregate percentage of the loss of earning capacity, as specified against those injuries, amounts to one hundred percent or more.

(21) Temporary Disablement : Ingredients of this definition are as follows–

(1) It is a condition resulting from an employment injury; and

(2) The injury must be such as requires medical treatment; and

(3) The injury must render the employee temporarily incapable of doing the work; and

(4) The incapacity to work must be with regard to such work which the employee was doing either prior to injury or at the time of injury resulting in such disablement.

Corporation Section 3. Establishment of Employee's State Insurance Corporation : Section 3 of the Act provides that the Employees' State Insurance Corporation shall be established by the Central Government by notification in the Official Gazette. The Corporation shall be established with effect from such date as may be notified by the Government. The function of the Corporation is the administration of the Scheme of Employees' State Insurance in accordance with the provisions of this Act.

The following are main features of the Corporation–

(1) It shall be a body corporate by the name of Employees' State Insurance Corporation;

(2) The Corporation shall have perpetual succession;

(3) It shall also have a common seal;

(4) It can sue and be sued in its own name.

The effect of declaring the Corporation as a body corporate is that it becomes a legal entity like an individual and anyone who trust it, trusts that legal person and must look to its assets for any claim against it. A decree or award made against the corporate body (i.e., Corporation) is not enforceable against the individual members but only against the assets of the corporate body.

Section 4. Constitution of Corporation- The following office bearers and members shall

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constitution the Corporation–

(a) A Chairman to be appointed by the Central Government.

(b) A Vice-Chairman to be appointed by the Central Government.

(c) Not more than five persons to be appointed by the Central Government.

(d) One person each representing each of the States in which this Act is in force to be appointed by the State Government concerned.

(e) One person to be appointed by. the Central Government to represent the Union Territories.

(f) Ten persons representing employers to be appointed by the Central Government in consultation with such organisations of employers as may be recognised for the purpose, by the Central Government.

(g) Ten persons representing employers to be appointed by the Central Government in consultation with such organisations of employees as may be recognised for the purpose, by the Central Government.

(h) Two persons representing the medical profession to be appointed by the Central Government in consultation with such organisations of medical practitioners as may be recognised for the purpose by the Central Government.

(i) Two members of the House of the People (Lok Sabha) elected by the members of that House, and one member of the Council of State (Rajya Sabha) elected by the members of that house.

(j) The Director General of the Corporation shall be ex-officio member of the Corporation.

Section 8. Constitution of Standing Committee : The Standing Committee shall be constituted from amongst the members of the Corporation. It shall consist of the following office bearers–

(1) The following members and office-bearers shall be appointed by the Central Government–

(a) Chairman,

(b) Three members of the Corporation,

(2) Three members of the Corporation representing such three State Governments as the Central Government may, by notification in the official Gazette, specify from time to time.

(3) The Director-General of the Corporation shall be ex-officio member of the Standing Committee.

(4) The following eight members shall be elected by the Corporation–

(a) three members from among the members of the Corporation representing the employers;

(b) three members from among the members of the Corporation representing the employees ;

(c) one member from among the members of the Corporation representing the medical profession, and

(d) one member from among the members of the Corporation elected by the Parliament.

Section 9. Terms of office of members of Standing Committee : The Chairman, three

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members of the Corporation appointed by the Central Government and three members of the Corporation representing States shall hold office during the pleasure of the Central Government. All the eight members elected by the Corporation shall hold office for a period of two years from the date on which their election is notified.

Section 10. Medical Benefit Council : Section 10 of the Act provides for the constitution of a Medical Benefit Council by the Central Government. The Medical Benefit Council shall consist of the following members and office-bearers–

1. The Director General Health Services shall be ex-officio Chairman.

2. The Medical Commissioner of the Corporation shall be ex-officio member of the Council.

3. The following appointments shall be made by the Central Government to the Medical Benefit Council–

i. A Deputy Director-General, Health Services.

ii. Three members representing employers to be appointed in consultation with such organizations of employers as may be recognized for the purpose by the Central Government.

iii. Three members representing employees to be appointed in consultation with such organizations of employees as may be recognized for the purpose by the Central Government.

iv. Three members representing the medical profession to be appointed in consultation with such organizations of medical practitioners as may be recognized for the purpose, by the Central Government. No less than one of these members shall be a woman.

4. One representative from every State, other than the Union Territories, in which this Act is in force shall be appointed by the State Government concerned.

Tenure of the members of the Medical Benefit Council : According to Section 10(2) the representatives of employers, employees and medical profession in the Medical Benefit Council, shall hold office for a period of four years from the date on which their appointment is notified.

Section 16. Principal Officers : 1. The Central Government may, in consultation with the Corporation, appoint a Director

General and a Financial Commissioner.

2. The Director General shall be the Chief Executive Officer of the Corporation.

3. The Director General and the Financial Commissioner shall be whole time Officers of the Corporation and shall not undertake any work unconnected with their office without the sanction of the Central Government and the Corporation.

4. The Director General or the Financial Commissioner shall hold office for such period, not exceeding five years, as may be specified in the order appointing him.

5. Director General or Financial Commissioner shall receive such salary and allowances as may be prescribed by the Central Government.

6. A person shall be disqualified from being appointed as or for being Director General or the Financial Commissioner if he is subject to any of the disqualification specified in Section 13.

7. The Central Government may at any time, remove the Director General or the Financial Commissioner from office and shall do so if such removal is recommended by a resolution of the Corporation passed at a special meeting called for the purpose

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and supported by the votes of not less than two-thirds of the total strength of the Corporation.

Section 18. Powers of the Standing Committee : The Standing Committee is constituted to administer the affairs of the Corporation. It has to function in accordance with the regulations framed by the Corporation. Its work and activities are controlled and supervised by the Corporation. It has following powers–

1. Power of administration of the Corporation, subject to the general superintendence and control of the Corporation.

2. Subject to the general control of the Corporation it may exercise any of the powers and perform any of the function of the Corporation.

3. It shall submit for consideration and decision of the Corporation all such cases and matters as may in its discretion, submit any other case or matter for the decision of the Corporation.

Section 22. Duties of Medical Benefit Council : The Medical Benefit Council shall advise the Corporation and the Standing Committee on matters relating to the administration of medical benefit, the certification for purposes of the grant of benefits and other connected matters.

The Medical Benefit Council shall have such powers and perform such duties of investigation as may be prescribed in relation to complaints against medical practitioners in connection with medical treatment and attendance.

The Medical Benefit Council shall perform such other duties in connection with medical treatment and attendance as may be specified in regulations.

FINANCE AND AUDIT Section 26. Employees' State Insurance Fund : All contributions paid under the employees' State Insurance Act and all other moneys received on behalf of the Corporation shall be paid into the Employees' State Insurance Fund. The Employees' State Insurance Fund shall be held and administered by the Corporation for the purposes of this Act.

According to sub-section (2) the Corporation may accept grants, donations, and gifts from the Central or any State Government, local authority, or any individual or body whether incorporated or not, for all or any of the purposes of this Act.

All moneys accruing or payable to the Employees' State Insurance Fund shall be paid into the Reserve Bank of India or such other bank as may be approved by the Central Government.

CONTRIBUTIONS Section 38. All Employees to be insured : All employees in factories or establishments shall be insured in the manner provided by this Act. For an employee to be insured two conditions are provided: namely (i) he must be employed in a factory or an establishment and (ii) contributions must be either paid or payable to him under the Act.

Section 39. Contribution : The contribution payable under this Act in respect of an employee shall comprise the contribution partly paid by the employer and partly by the employee. The contribution payable by the employer is known as employer's contribution and that by the employee is known as the employee's contribution. The contributions shall be paid at such rates as may be prescribed by the Central Government Provided that the rates so prescribed shall not be more than the rates which were in force immediately before the commencement of the Employees' State Insurance (Amendment) Act, 1989.

Section 40. Principal employer to pay the contribution in first instance : Section 40 of the Act makes the employers responsible to pay the contribution in respect of all employees, whether employed by him directly or by or through an immediate employer. The contribution

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to be paid by the employer includes both the employer's as well as employee's contribution from the wages payable to the employee if–

(i) the employee is not an exempted employee; and

(ii) the employee is directly employed by him.

The employer's right to deduct the employee's contribution from his wages is subject to the. provisions of the Act and regulations and also subject to the following conditions–

(i) the deduction shall be made from wages for that period or part of the period in respect of which the contribution is payable; and

(ii) no deduction, in excess of the sum representing the employee's contribution for the period shall be made.

BENEFITS Section 46. Benefits : The purpose of the Employees' State Insurance Act is to provide benefits as detailed in the Act particularly in Section 46, to the insured persons or their dependants. The following benefits are provided under Section 46.

1. Sickness benefit : It is in the form of periodical payment to any insured person, provided his sickness is certified by a duly appointed medical practitioner, or any person having such qualifications and experience as may be specified by regulations of the Corporation. Where provision is made for sick leave by standing order, the employer cannot require the employee to seek sickness benefit provided under this sub-section

2. Maternity Benefit : This benefit in the form of periodical payment available to an insured woman. It is payable in case of–

(i) confinement; or

(ii) miscarriage; or

(iii) sickness arising out of pregnancy; or

(iv) premature birth of a child.

The grounds of eligibility of an insured woman to such payments must be certified by an Insurance Medical Officer as provided by the regulations .

3. Disablement benefit : Any insured person shall be entitled to periodical payments if–

(i) he suffers from disablement;

(ii) the disablement results from an employment injury; and

(iii) he sustained the employment injury as an employee under condition mentioned in the Act.

The disablement benefit is payable only when the· injury is duly certified by an Insurance Medical Officer.

4. Dependents benefit : This benefit is available to such dependents, of an insured person who dies as a result of an employment injury sustained as an employee, as are entitled to compensation under this Act.

5. Medical benefit : Medical benefit is available to an injured person or to a member of his family, were such benefit is extended to the members of his family. This benefit is in the following forms–

(i) out-patient treatment and attachment in the hospital or dispensary; or

(ii) by visits of the home of the insured; or

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(iii) as an in-patient in a hospital or other institution.

6. Funeral expenses : Funeral expenses are payable to the eldest surviving member of the family or to such person who actually incurs funeral expenses. The amount of such payment shall not exceed such amounts as may be prescribed by the Central Government. Any claim for the funeral expenses must be made within three months of the death of the insured person or within such extended period as the Corporation or any other competent official may allow.

Section 49. Sickness benefit : The qualification of a person to claim sickness benefit, the conditions subject to which such benefit may 'be given, the rates and period thereof shall be such as may be prescribed by the Central Government.

An award of seven days' sick leave on production of a medical certificate in addition to the benefits under the Employees' State Insurance Act was held justified by the Supreme Court. The sickness benefit shall be paid at the rates specified in the First Schedule.

Section 50. Maternity benefit : The qualification of an insured woman to claim maternity benefit, the conditions subject to which such benefit may be given, the rates and period thereof shall be such as may be prescribed by the Central Government.

Section 51. Disablement benefit : Subject to the provisions of this Act a person who sustains temporary disablement for not less than three days (excluding the day of accident) shall be entitled to periodical payment at such rates and for such period and subject to such conditions as may be prescribed by the Central Government.

Section 51(a). Presumption as to accident arising in course of employment : Section 51A provides that if it is shown that the accident arose in the course of employment of an insured person, it would be presumed also to have arisen out of employment. But the presumption is a rebut table one and applied to this Act only.

Section 51(b). Accident happening while acting in breach of regulations : Section 51B of the Act provides an explanation to the expression "out of and in the course of employment". An accident shall be deemed to arise out of and in the course of employment if the act is done for the purpose of and in connection with employer's trade or business unless–

(i) the insured person is at the time of accident acting in contravention of the provisions of any law applicable to him; or

(ii) the insured person is acting in contravention of any orders given by or on behalf of his employer; or

(iii) he is acting with instructions from his employer:

Section 51(c). Accident happening while travelling in employer's transport : Section 51-C of the Act incorporates the principle of notional extension of employer's premises. This section lays down the liability of the employer for the payment of benefit for accident arising while an employee is traveling in any transport provided by the employer while going to or coming from work. The conditions for holding the employer liable are the following–

(i) an insured person must be traveling by any vehicle with the express or implied permission of his employer;

(ii) he must be going to or coming from his place of work;

(iii) the vehicle must be operated by or on behalf of his employer or some other person in pursuance of an agreement made with the employer;

(iv) the vehicle is not being operated in the ordinary course of public transport service.

Section 52. Dependant's benefit : (l) If any insured person dies as a result of an employment injury sustained as an

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employee under this Act (whether or not he was in receipt of any periodical payment for temporary disablement in respect of the injury) dependant's benefit shall be payable at such rates and for such periods and subject to such conditions as may be prescribed by Central Government to his dependants specified in sub-clause (i), sub-clause (i-a) and sub-Clause (ii) of clause (6-A) of Section 2.

(2) In case the insured person dies without leaving behind him the dependants as aforesaid, the dependant's benefit shall be paid to the other dependants of the deceased at such rates and for such period and subject to such conditions as may be prescribed by the Central Government.

Section 52(a). Occupational Disease : The expression "occupational disease" has nowhere been defined in the Act, but a list of these diseases along with the employments peculiar to them is given in the third schedule of the Act. Any employee who contracts any such occupational disease while working in any of these employments shall be deemed to have extracted an employment injury. The third schedule is divided into three parts. For occupational disease mentioned in Part A no period of employment is necessary; but in case of any disease mentioned in Part B of Schedule III, the insured person must have served in the employment peculiar to that disease for a period of not less than 6 months. The provisions of section 51-A shall not apply to the case to which section 52-A applies.

ADJUDICATION OF DISPUTES AND CLAIMS Section 74. Constitution of Employees' Insurance Court : Section 74 of the Act authorizes the State Government to constitute an Employees' Insurance Court. The Insurance Court shall be constituted by issuing a notification in the Official Gazette.

The local area within which the Court shall, exercise its jurisdiction will be specified in the notification. The number of Judges, as shall constitute the Court, shall be determined by the State Government. A judicial officer or a legal practitioner of five years' standing is qualified for the appointment as a Judge of the Employees' Insurance Court. The State Government may appoint the same Court for two or more local areas, or two or more Courts for the same local area. Where there are more than one Court in the same local area, the distribution of work amongst them may be regulated by general or special order of the State Government.

Section 75. Matter to be decided by Employees' Insurance Court : Any question or dispute subject to the provisions of sub-section (2-A) relating to the following matters shall be decided by the Employee's Insurance Court–

(1) whether any person is an employee or is liable to pay the employee's contribution; or

(2) the rate of wages of average daily wages for the purpose of this Act; or

(3) the rate of contribution payable by the principal employer in respect of any employee; or

(4) the person who is or was the principal employer in respect of any employee; or

(5) the right of any person to any benefit and the amount arid duration or that benefit;

(6) the direction issued by the Corporation under Section 55-A on a review of any payment of dependant's benefits; or

(7) any other matter which is in dispute between–

(i) a principal employer and the Corporation; or

(ii) a principal employer and an immediate employer; or (iii) a person and the Corporation; or

(iv) an employee and a principal or immediate employer.

The dispute between the above parties may be in respect of–

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(i) any contribution, benefit or other dues payable or recoverable under this Act;

(ii) any other matter required to be or which may be decided by the Employees' Insurance Court under this Act.

The Employees' Insurance Court shall have the powers of a Civil Court for the following purposes–

(i) summoning and enforcing the attendance of a witness;

(ii) compelling the discovery and production of documents and material objects;

(iii) administering oath and recording evidence.

Section 78. Power of Employees' Insurance Court : The Employees' Insurance Court shall be deemed to be a Civil Court within the meaning of Section 195 of the Criminal Procedure Code. It shall follow the procedure prescribed by rules made by the State Government. That means, it is not necessary that the same set of rules should be followed by Employees' Insurance Court in different States. If there are no statutory rules prescribing the procedure the Court will follow the rule of natural justice.

All costs incidental to any proceeding before such Court shall, subject to the rules made by the State Government, be in the discretion of the Court. The Court has power to allow cost incidental to proceedings. Any order of the Employees' Insurance Court shall have the sanctity of a decree passed by a Civil Court. In other words, it shall be enforceable in the same manner is a decree passed in a suit by a Civil Court.

Section 79. Appearance by Legal Practitioner : The following parties can appear on behalf of any person before the Employees' Insurance Court–

(i) a legal practitioner;

(ii) an officer of registered Trade Union, authorised in writing by such person; or

(iii) any person authorised in writing with the permission of the Court.

But where a person is required to appear before such Court for the purpose of his examination as a witness, he shall appear personally, and in all other cases he may be represented by any of the parties as stated above.

Section 81. Reference to High Court : Section 81 of the Act authorises the Employees' Insurance Court to submit any question of law for the decision of the High Court. Whenever any such reference is made, the matter involving the determination of such question of law shall be kept pending before the Court. When the question of law is considered and decided by the High Court the decision shall be communicated to the Court making such reference, which shall decide that matter in conformity with the decision of ;the High Court.

Section 82 Appeal Clause (1) of Section 82, of the Act provides that there shall be no right of appeal from an order of an Employees' Insurance Court except where appeal is allowed under this section. The right of appeal is normally creature of a statute. There is no inherent right of appeal. Therefore an appeal lies only when a provision to that effect is expressly made in a statute. Under this section an appeal shall lie to the High Court from any decision of the Employees' Insurance Court if it involves a substantial question of law. No appeal can be entertained under Section 82(2) on a pure question of fact. The period of limitation for an appeal is sixty days. It is further provided that the provisions of Sections 5 and 12 of the Limitation Act, 1963 shall apply to appeals under Section 82 of the Act.

Appeal to Supreme Court : Article 136 of the Constitution empowers the Supreme Court to grant special' leave to appeal from any judgment decree, determination, sentence or order on any cause or matter passed or made by any Court or Tribunal in the territory of India. Decisions of Employees State Insurance .Court are in certain cases appealable to the High Court. But there is no provision for appeal from the decisions of special Tribunal constituted under Section 73-B of the Act. Similarly the appropriate Government may in suitable cases

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exempt a particular person or class of persons and a factory or establishment from the operation of this Act. The special Tribunal, constituted under Section 73-B and any Government doing an act in the exercise- of powers conferred by Sections 87 and 88 of the Act is a Tribunal. The Supreme Court can grant special leave to appeal from any such decision.

Section 83. Stay of payment pending appeal : The provision to withhold the payment of compensation under Section 83 pending an appeal is very limited. If the Corporation has appealed against an order of the Employees' Insurance Court that court has a discretion to withhold the payment of compensation directed to be paid by the order appealed against. But if the High Court before which any such appeal is pending directs the Employees' Insurance Court to withhold the payment of compensation that court shall have to comply with the order because no discretion is conferred in that case. Thus the High Court may pass any interim order that it thinks proper to meet the ends of justice, pending the decision of appeal.

IMPORTANT QUESTIONS 1. Discuss the medical benefits available to an employee under the Employees' State

Insurance Act, 1948.

2. Discuss the provisions of the Industrial Employment (Standing Orders) Act, 1946 relating to the certification of standing orders.

3. What is 'Model Standing Order'?

4. Discuss the medical benefits available to an employee under the employee's State Insurance Act, 1948.

5. What is the procedure for certification of standing orders?

6. Explain the objects of Industrial Employment (Standing Orders) Act, 1946.

7. When Industrial Employment (Standing Orders) Act, 1946 does not apply?

8. Explain 'Week' under the provisions of Employee's State Insurance Act, 1948.

RECOMMENDED READINGS 1. "Labour and Industrial Laws", Dr. V.G. Goswami.

2. "Labour and Industrial Laws", S.N. Misra.

3. The Social Security System in India, 1972.

4. Encyclopedia Americana, Vol. 25 p. 186.

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UNIT – III THE PAYMENT OF WAGES ACT, 1936

INTRODUCTION The need to protect the wages earned by the worker had been felt from the early years of the twentieth century, but it was as early as 1925 that a Private Bill called the "Weekly Payment Bill" was for the first time introduced in the Legislative Assembly. At that time different periods of payment of wages were prevalent. An attempt was made to remedy some of the evils viz., delay in payment of wages, non-payment of wages, deductions made from wages on account of fines imposed by the employer etc. The Bill was, however, withdrawn on an assurance of the Government that the matter was under consideration of the Government. Imposition of fines by employers on workers and deduction of even double the amount of wages for absence period by way of fine was very much customary in those days. The desirability of regulating the extent of fines and other deductions, through legislation was felt by the Government in 1926.

The Royal Commission on Labour in India made some valuable recommendations.

The present Act is mostly based on those recommendations. The Commission was of the opinion that legislation regarding deductions from wages and fines was essential.

The following recommendations are worth citing–

(i) If Children should be exempt from fine.

(ii) The minimum amount which could be deducted by way of fine should not exceed in any month half an anna in the rupee of the worker's earnings.

(iii) The sum realised as fine should be utilised for some purpose beneficial to the employees as a class and should be approved by some recognised authority.

(iv) A notice specifying the acts and omissions in respect of which fines may be imposed should be posted and any other fine should be deemed to be illegal

(v) Any deduction made for goods having been damaged should not exceed the wholesale price of the goods damaged.

(vi) Deductions may be made on account of provision for housing accommodation and of tools and raw materials.

(vii) Imposition of any fine and deduction made which is not permitted by law should be made penal.

A Bill of Payment of Wages Act, based on the recommendations of the Royal Commission on Labour was introduced in the Legislative Assembly in 1933 but could not take the shape of the Act because of the dissolution of the Assembly. The Payment of Wages Act was passed in 1936 and came into force on 21st March, 1937.

OBJECT The preamble of the Act states that the object of the Act is "to regulate the payment of wages to certain classes of employed persons." The regulation contemplated by the Act is twofold: first the date of payment of wages and secondly the deductions from wages whether as fine or otherwise. To ensure payment of wages to persons covered by the Act certain provisions have been made in this Act.

Any deduction from the wages or salaries of the workmen governed by the Payment of Wages Act, unless authorised by the Act shall be deemed to be illegal. Any deduction from the wages of the workmen, under a settlement between representative Union and employer

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can, however, permit a deduction as' it is the outcome of an understanding between the parties even though such deduction may. not be authorised or legally permissible under the Act.

Section 1. Application : The Payment of Wages Act, 1936 extends to the whole of India. It came into operation on 21st March, 1937.

According to sub-section (4) this Act applies in the first instance to the payment of wages to :

(i) persons employed in any factory;

(ii) persons employed (otherwise than in factory) upon any railway by a railway administration, or either directly or, through a sub-contractor, by a person fulfilling a contract with a railway administration; and

(iii) persons employed in an industrial or other establishment specified in sub-clauses (a) to (g) of clause (ii) of Section 2 of this Act.

Sub-section (5) empowers the State Government to extend the application of the whole or part of the Act to payment of wages to any class of persons employed in the establishment or class of establishments specified by the Central Government or a State Government under sub-clause (h) of clause (ii) of Section 2.

Section 2(vi). Wages : 'Wages' means all remuneration, whether by way of salaries, 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.

'Wages' 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 a bonus or by any other name.

AUTHORITIES UNDER THE ACT Section 14. Inspectors : Section 14 of the Act makes provision for three kinds of Inspectors which are as follows–

(1) An Inspector of factories appointed under Section 8(1) of the Factories Act shall be an Inspector for the purposes of this Act in respect of all factories within the local limits assigned to him.

(2) In respect of all persons employed upon a railway otherwise than in a factory, to whom this Act applies, the State Government is empowered to appoint Inspector for the purposes of this Act.

(3) The State Government is further empowered to appoint such other persons, as it thinks fit, as Inspectors for the purposes of this Act in respect of persons employed in case of factories and industrial or other establishment as specified by such Government by a Gazette notification. The State Government shall also define the local limits within which such inspectors shall exercise their functions.

Powers of the Inspectors : Section 14(4) lays down that an Inspector may–

(a) make such examination and inquiry as he thinks fit in order to ascertain whether the provisions of this Act or rules made there under are being observed;

(b) enter, inspect and search any premises of any railway, factory or industrial or other establishment at any reasonable time for the purposes of carrying out the objects of

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this Act. They have power to take any assistance which they think necessary for any of the above purposes;

(c) supervise the payment of wages to persons employed upon any railway or in any factory or industrial or other establishment;

(d) require by a written order the production at such place, as may be prescribed, of any register or record maintained in pursuance of this Act. He can also take on the spot or otherwise statement of any persons which he considers necessary for carrying out the purposes of this Act;

(e) seize or take copies of such registers or documents or portions thereof as he may consider relevant in respect ,of an offence under this Act which he has reason to believe has been committed by an employer; and

(f) exercise such other powers as may be prescribed.

But according to sub-section (4) of Section 14 no person shall be compelled to answer any question or make any statement tending to incriminate himself. The provisions of the Code of Criminal Procedure, 1973 shall, so far as may be, apply to any search or seizure under this sub-section. as they apply to any search or seizure made under the authority or a warrant issued under Section 94 of the said Code. Every' Inspector shall be deemed to be public servant within the meaning of the Indian Penal Code 1860.

The State Government is further empowered to appoint more than one authority for the same specified area, and where it so appoints it shall, by general or special order, provide for the distribution or allocation of work to be performed by them under this Act.

MEANING OF DEDUCTION In Union of India v. Kameshwar Dubey and others5, the point for consideration by the Court was the difference between "deducted wage" and "delayed wage". It was held that the difference depends upon the intention of the employer. If his intention is to deny the liability to pay the wages or to deny the right of the workmen to receive the same, it would be a case of "wages deducted". But if the employer concedes the liability to pay and does not dispute the workman's right to the same, it would be a case of "delayed payment". The word "deduction" in Section 15 of the Payment of Wages Act is used in a wider sense. It means "to take away" or denying the liability to pay wages. It includes withholding of wages by the employer whether partially or wholly.

Presentation of application : An application in respect of the following claim can1be" made to the Authority mentioned in Section 15(2)–

(i) where contrary to the provisions of this Act any deduction has been made from the wages of an employed person; or

(ii) where contrary to the provisions of this Act, any payment of wages has been delayed, an application may be made by anyone of the following–

(a) employed person himself; or

(b) any legal practitioner authorised in writing to act on his behalf; or

(c) any official of a Registered Trade Union authorised in writing to act on his behalf; or

(d) any Inspector under this Act; or

(e) any oth]er person acting with the permission of the authority appointed to hear such claims under Section 15(1).

5 (1988) II L.L.J. 302 (Delhi)

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Section 15(3).

PROCEDURE

Lays down the procedure to be followed by the Authority entertaining an application under Section 15(2). The Authority shall hear the applicant and the employer or other persons responsible for payment of wages under Section 3. Thus after giving them an opportunity of being heard and after such further inquiry as may be necessary, the Authority may direct the refund to the employed person, of the amount deducted or the payment of the delayed wages. The authority may also direct payment of such compensation as it thinks fit but not exceeding ten times the amount of wages deducted and in case of delay in payment of wages, not exceeding twenty-five rupees. In case where the amount deducted or the wages delayed are paid before the disposal of the application, the Authority can direct the payment of such compensation as it may think fit but not exceeding twenty-five rupees. Any other penalty to which the employer or the other person responsible for delay or deduction is liable under this Act may be also imposed. That is, the direction under sub-section (3) of Section 15 does not prejudice any other penalty to which the employer or other person is liable under this Act.

But no direction for the payment of compensation shall be made in the case of delayed wages if the Authority is satisfied that the delay was due to-

(a) bona fide error or bona fide dispute as to amount payable to the employed person; or

(b) the occurrence of an emergency, or the existence of exceptional circumstances such that the person responsible for the payment of wages was unable, though exercising reasonable diligence, to make prompt payment; or

(c) the failure of the employed person to apply for, or accept payment.

Section 15. SCOPE OF JURISDICTION The scope of jurisdiction which the Authority under Section 15 exercises in deciding claims is limited. Where complicated questions of fact or law are raised and a prolonged inquiry becomes necessary, the Payment of Wages Authority would have no jurisdiction to the claim before it.

THE TRADE UNIONS ACT, 1926 HISTORY OF TRADE UNIONISM IN INDIA The germs of trade unionism in India can be traced back to the year 1890, when for the first time an association of mill workers was formed in the name and style of 'Bombay Millhands Association'. This association was formed for the redressal of grievances of the Bombay mill workers. It is difficult to treat this association as Trade Union in the strict sense in which this expression is used now-a-days. Very little account is available about its mode of working. After the first world war was over the cost of living considerably increased. The political agitation against foreign rule was also gaining momentum throughout the country. The increase in cost of living and country-wide political upsurge found its way in economic discontent amongst masses, particularly in industries. The industrial unrest and economic discontent led to a number of strikes by workers, guided and controlled by their Action Committees consisting 'of representatives of workers themselves. On many occasions these strikes were successful in getting the demands of the workers fulfilled. The Trade Union movement in India got impetus by the success of strikes in India and the world-wide uprising of labour consciousness. The establishment of International Labour Organisation has also influenced the growth to the trade union movement in our country.

The progress of the trade union movement in India in pre-independence days has not been very satisfactory, but the post-independence has been a tremendous Trade Union activity in

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every sphere of industry.

DEVELOPMENT OF TRADE UNION LAW IN INDIA After independence democratic spirit is gradually developing among the Indian citizens and the workmen in industry are not an exception to it. It was in the year 1920 that the High Court of Madras in a suit filed against the officials of the Madras Textile Labour Union by Binny & Co. granted an injunction restraining the Union Officials to induce certain workers to break their contracts of employment by refusing to return to work. Obviously the leaders of the Trade Union found themselves liable to prosecution and imprisonment even for bona fide, trade union activities. It was then that they felt that some legislative protection of Trade Union was necessary. Mr. N.M. Joshi, the then General Secretary of All India Trade Union Congress, successfully moved a resolution in the Central Legislative Assembly seeking introduction of some measure by the Government for protection of Trade Unions. The employers were so much opposed to any such legislative measure being adopted that the passing of the Indian Trade Union Act could only be possible in 1926. But this Act was enforced only from 1st June, 1927. The contribution of the capital and labour in any industry is equally important.

Therefore, the prosperity of an industry depends upon the co-operation of its two components-the capital and the labour. As disputes between the capital and the labour are inevitable so the object of any industrial legislation is to ensure smooth relationship between the two and to strive for settlement of any dispute by resorting to negotiation and conciliation. The importance of the Trade. Unions lies in the fact that they encourage such collective bargaining as ensures better terms and conditions of employment to the labour, and at the same time endeavours for maintenance of good relations between employer and employees. In their endeavour to secure better working conditions, privileges and amenities to the labour, the Trade Unions adopt certain methods, namely, legislation, collective bargaining, mutual insurance, and strike. The method of mutual insurance is almost unknown to Trade Unions in India.

The original Act of 1926 was amended in 1929 so as to provide for the procedure of appeal against the decisions of the Registrar. When the Registrar refused to register a Trade Union or when the registration was withdrawn, an appeal could be preferred against any such decision of the Registrar.

The Royal Commission on Labour, after examining the working of the Act made the following recommendations–

(1) The Act was to be re-examined within 3 years. The limitations imposed upon the activities of the Trade Unions and their office-bearers were .to be reconsidered. It should be ensured that a bona fide Trade Union is not deprived of applying for registration.

(2) The accounts of the Trade Union should be audited free of charge by Government officers.

(3) At least two-third members of the executive of a Trade Union should be persons actually engaged or employed in industry to which the union relates.

(4) Trade Unions should not be deprived of carrying on co-operative societies.

The original Trade Unions Act of 1926 made provisions in respect of–

(i) Conditions governing the registered Trade Unions.

(ii) Obligations imposed upon a registered Trade Union.

(iii) Rights and privileges of a registered Trade Union.

Under the original Trade Unions Act of 1926, where the object of a Trade Union was not confined to one State the appropriate Government was the Central Government and the

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powers of the provincial Governments in respect of such Unions were by the Government of India (Adaptation of Indian Laws) Order, 1937 vested in the Central Government. But after the first Labour Ministers' Conference held in January 1940, the powers in respect of a Union whose object was not confined to one State were to be exercised by the Government of that province where the registered office of the Union was situated.

Indian Trade Union (Amendment) Act, 1947 : The Indian Trade Unions Act, 1926 made provision for registration of a Trade Union after fulfilling the requisite conditions but the employer was under no obligation either to recognise or to deal with a Trade Union even if it was a registered one. The Royal Commission on Labour pleaded for recognition of representative Trade Unions in spirit as well as in the letter. The matter was repeatedly discussed in various Labour Minister's Conferences and Standing Committees. Consequently, the Act was amended in the year 1947 providing for compulsory recognition by employers of representative Trade Unions.

Individual Dispute and Trade Dispute : As observed by the Supreme Court, an individual dispute cannot per se be a trade dispute unless the cause is sponsored by a Trade Union or by a substantial number of workmen. It is not necessary that it should be supported by all or majority of the workmen, but it should have the support of substantial section of workmen of the establishment. It is not the arithmetical majority of the workmen but the substantiality of their number taking up the cause, which is to be considered. It does not matter that the dispute is not raised by a majority of the workmen. An industrial dispute may be raised by a group of workmen who may not represent all or even the majority of workmen, and if the dispute is referred to the Industrial Tribunal for adjudication and an award is made, it binds not only the parties to the dispute, or other parties summoned to appear but all persons who were employed in the establishment, or who would be employed in future are also governed by the award.

Employment and non-employment : The use of the expression "employment or non-employment" in the Act makes it clear that the dispute may be connected with the workman in employment or out of employment. That means a dispute connected with a dismissed, discharged, removed or retrenched employee is a Trade Dispute. It has been observed by the Federal Court that reinstatement is connected with non-employment and is, therefore, within the words of the definition. So also, a claim for compensation for wrongful dismissal being connected with the question of non-employment is a Trade Dispute.

Workman : The latter part of section 2 (g) of this Act defines "workmen" as follows:

"Workmen" means all persons employed in trade or industry whether or not in the employment of the employer with whom the Trade Dispute arises. This definition has two ingredients–

(1) "Workmen" means all persons employed in trade or industry.

(2) It is immaterial that the persons employed in a trade or industry are not in the employment of the employer with whom the Trade Dispute arises.

TRADE UNION

Section 2, (h) defines "Trade Union" which can be analysed into the following ingredients:

(1) Any combination whether temporary or permanent;

(2) The combination should have been formed for the purposes of–

(a) regulating the relations between:

(i) workmen and employers; or

(ii) workmen and workmen; or

(iii) employers and employers.

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(b) imposing restrictive conditions on the conduct of any trade or business. But this Act shall not affect–

(i) any agreement between partners as to their business; or

(ii) any agreement between an employer and those employed by him as to such employment;

(iii) any agreement inconsideration of the sale of the goodwill of a business or instruction in any profession, trade or handicraft.

A Trade Union is a continuous association of wage earners for the purpose of maintaining the conditions of their lives. But the statutory definition given in the Trade Unions Act, 1926 uses the expression 'combination' instead of 'association' used in Sydney's definition. The word 'combination' carries a very wide meaning. Whatever may be the 'combination' if it is for one or the other of the statutory objects as provided in this Act) it is Trade Union. It is the primary object of an association which determines its nature. A society consisted of authors, publishers and other owners of copyright and was formed for the protection of copyright in music and songs. There were also certain rules which could be regarded as imposing certain restrictions on the trade of the individual music publishers who became members of the association. The society was held by the House of Lords to be not a Trade Union because the principal object of the society was the protection of the copyright. It was further held that, to come within the statutory definition, restrictive conditions imposed must be in respect of trade or business in general and imposition of such conditions on particular members of a trade or business will not suffice. Tamil Nadu N.G.O. Union included among its members Sub-Magistrates of the Judiciary, Tahsildars, officers incharge of Treasuries and Sub-Treasuries, officers of Civil Court establishment, and the Home-Department of Government. Their union could not be recognised as a Trade Union for these persons were civil servants engaged in the task of the sovereign and regal aspects of the Government which were its inalienable functions.

Section 9(a). Minimum requirement about membership of a Trade Union : A registered of Union and workmen shall at all times continue to have not less than ten per cent. or one hundred of the workmen, whichever is less, subject to a minimum of seven, engaged or employed in an establishment or industry with which it is connected, as its members.

Section 10. CANCELLATION OF REGISTRATION Power to withdraw or cancel registration of a Trade Union is given to the Registrar. The Registrar can exercise his power in the following cases–

(1) On the application of the Trade Union to be verified in the prescribed manner.

(2) If the Registrar is satisfied that the certificate of registration has been obtained by fraud or mistake.

(3) Where the Trade Union has ceased to exist.

(4) If the Union has willfully and after notice from the Registrar contravened any provisions of this Actor allowed any rule to continue in force which is inconsistent with the provisions of the Act.

(5) Where the Union has rescinded any rule providing for any matter provision for which is required to be made by section 6.

(6) According to clause (c) of Section 10 if the Registrar is satisfied that a registered Trade Union of workmen ceases to have the requisite number of members, the registration can be cancelled.

The Registrar on receiving an application from the Union for withdrawal or cancellation of registration must· before granting the prayer, satisfy himself that the withdrawal or

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cancellation of registration was approved by. a general meeting of the Trade Union or if it was not so approved it had the approval of the majority of the members of the Trade Union. For this purpose he may call for such further particulars as he thinks necessary and may also examine any officer of the Union.

COLLECTIVE BARGAINING AND TRADE DISPUTES An individual is free to bargain for himself and safeguard his own interest. If an individual workman seeks employment he stands in a weaker position before his master, who having command over wealth stands in better position to dictate his own terms and the individual has to accept the offer without any reserves for he has to earn something to feed his family. However the position becomes different if a bargain is made by a body or association of workmen. They can negotiate and settle their terms with the employer in a better way and secure better wages, better terms of employment .and greater security. The object of collective bargaining is to harmonise labour relations, promote industrial peace by creating equality of bargaining power between the labour and the capital. Collective bargaining can exist only in an atmosphere of political freedom. Any conditions of service like, wages, hours of work, leave, gratuity, bonus, allowances and other like privileges can all be settled by negotiation between the body of workmen and employer. Thus "collective bargaining" is that arrangement whereby the wages and conditions of employment of workmen are settled through a bargain between the employer and the workmen collectively whether represented through their Union or by some of them on behalf of all of them. The Encyclopedia of social sciences treats collective bargaining as a process of discussion and negotiation between two parties, one or both of whom is a group of persons acting in concert more specifically it is the procedure by which an employer or employers and a group of employees agree upon the conditions of work. Ludwig Teller defines collective bargaining as an agreement between a single employer or an association of employers on the one hand and a labour Union on the other, which regulates the terms and conditions of employment.

"The Encyclopedia Britannica", defines collective bargaining as "negotiation between an employer or group of employers and a group of work people to reach agreement on working conditions. If negotiations are between an employer and a group of his work people the dependence of the work people on the employer for their job weakens their bargaining power, and therefore collective, bargaining is more usually understood to be negotiation between one or more Trade Unions and an 'employer or group or association of employers. Trade Union organisation gives the work people greater strength to providing means for the expert presentation of demands by skilled officials not dependent on the employers for their jobs. Further a Union has funds and means of obtaining information outside any one undertaking and can secure for the work people at anyone firm the support of their fellows in other firms."

Now a day collective bargaining has become a general feature in all industry. Any agreement collectively arrived at is generally observed by both the employers and workmen who are not a party to it. Of course the Trade Union movement in India has not been able to reach that standard which its counterpart, in other developed countries could, yet it has done much.

Large concentration of economic power in the hands of the employer due to modern technological development has placed individual in a weaker position in so far as contractual bargaining relating to the terms and conditions of employment or settlement of disputes is concerned. It was to protect the interest of individual labour against the capitalist employer that the Trade Union movement gave birth to the principle of collective bargaining. The principle of collective bargaining presupposes the right of workmen to be represented collectively by a Trade Union. This right has received statutory recognition. A Trade Union can raise or sponsor a trade dispute and represent on behalf of its members in legal proceedings in consequence of an industrial dispute. But a Trade Union cannot represent a workman who is not its member. It does not mean that the workman himself cannot, where a Trade Union has right to represent his case, pursue or represent his own case in a legal proceeding. Provisions of section 36 of the Industrial Disputes Act, 1947 are only permissive.

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A workman can either himself represent his case or his case can be sponsored and represented by a Trade Union of which such workman is a member.

The rights of an unregistered Trade Union are different from a registered Trade Union. The employer can negotiate with an unregistered Trade Union. The management will be bound to recognize any Trade Union which has enrolled a majority of its employees as its member. A Union whether registered or unregistered commanding allegiance of a majority of the workmen has fl better claim to negotiate with the employer on behalf of its workmen in preference to a registered Trade Union representing a minority of the workmen. To accept a principle other than this would, in the opinion of the Madras High Court, give room for abuse and lead to inconvenient results.

But an unregistered Trade Union is not competent to represent its member's interest in proceedings initiated under the Industrial Disputes Act, 1947, because only an officer of a registered Trade Union is entitled to represent its member's interest in any proceeding under the Act. A worker who is a member of an unregistered Trade Union is entitled to be represented by an officer of a registered Trade Union connected with, or by any other workmanc employed in the industry in which such worker is employed, provided there is an authorisation to represent in prescribed manner.

The process of collective agreements normally takes one or the other of the forms, namely, negotiation, mediation and arbitration, voluntary or compulsory.

Negotiation is the process of settling the differences by face to face round table talks between the representatives of the employees and employers. In case of failure of the negotiating machinery to resolve the difference by mutual discussions and understanding, a third party intervention to secure settlement of labour disputes by way of mediation is often resorted to. The mediator functions not as a judge, but assists the parties in dispute to reach an agreement by persuading them to resume or continue their bargaining efforts. Arbitration is an act of settling labour disputes through the medium of a neutral third party. The parties to a dispute may either agree amongst themselves to submit for settlement by a third person and abide by his award or a dispute might be submitted to arbitrator under the provisions of a statute. In the former case it is voluntary arbitration, in the latter it would be compulsory arbitration. In case of voluntary arbitration the selection of arbitrator entirely rests with the parties to the dispute. The award is binding on the parties and is also enforceable in the courts.

IMPORTANT QUESTIONS 1. Under which provisions of Payment of Wages Act deductions are permissible?

2. Discuss the rights of Trade Union under Trade Unions Act.

3. Discuss the mode of registration of trade union. Can Registrar cancel the registration certificate?

4. What are permissible deductions under the payment of Wages Act, 1936?

5. Explain the 'General Fund' of a Trade Union.

6. What are the rights and immunities which are available to a trade union under the Trade Union Act, 1986?

7. When can registration of a trade union be withdrawn or cancelled? Can Registrar refuse to register a trade Union? What remedy is available when registration is refused or it is cancelled or withdrawn?

RECOMMENDED READINGS

1. "Labour and Industrial Laws", Dr. V.G. Goswami.

2. "Labour and Industrial Laws", S.N. Misra.

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3. "Industrial Labur in India", V.B. Singh.

4. Conventions and Recommendations, I.L.O. Veneva, 1949.

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UNIT – IV THE MINIMUM WAGES ACT, 1948

OBJECT OF THE ACT The Minimum Wages act was passed for the welfare of labourers. This Act has been enacted to secure the welfare of the workers in a competitive market by providing for a minimum limit of wages in certain employments.

"The justification for statutory fixation of minimum wages is obvious. Such provisions which exist in more advanced countries are even necessary in India, where workers' organizations are yet poorly developed and the worker's bargain-power is consequently poor."

The Act provides for fixation by the Central Government of minimum wages for employments detailed in the Schedule of the Act and carried on by or under the authority of the Central Government, by a railway administrative or in relation to a mine, oilfield or majorport, or any corporation established by a Central Act, and by the State Government for other employments covered by the Schedule of the Act.

SALIENT FEATURES OF THE ACT Some of the features are–

1. This Act provides for the fixation of– (a) minimum time rate of wages; (b) a minimum piece rate; (c) a guaranteed time rate; and (d) an overtime rate, for different occupations, localities or classes of work and for adults, adolescents, children and apprentices.

2. The minimum rate of wages under the Act may consist of: (a) a basic rate of wages and a cost of living allowance; or (b) basic rate of wages with or without and a cost of living allowance; or (b) basic rate of wages with or without the cost of living allowance and the cash value of the concessions in respect of essential commodities supplied at concessional rate; or (c) an all-inclusive rate.

3. The Act requires that wages shall be paid in cash, although it empowers the appropriate Government to authorize the payment of minimum wages, either wholly or partly in kind in particular cases.

4. It lays down that the cost of living allowance and the cash value of concessions in respect of supplies of essential commodities at concessional rates shall be compute by the competent authority at certain interval. In case of undertakings controlled by the Union Territories and the Central Government, the Director, Labour Bureau is the competent authority.

5. The Act empowers the appropriate Government to fix the number of hours of work per day, to provide for a weekly holiday and the payment of overtime wages in regard to any scheduled employment in respect of which minimum rates of wages have been fixed under the Act.

6. The establishments covered by this Act are required to maintain registers and records in the prescribed manner;

7. The Act also provides for appointment of Inspectors and authorities to hear and decide claims arising out of payment of wages at less than the minimum rates of wages or remuneration for days of rest or of work done on such days or of overtime wages.

8. The provision is also made in the Act for dealing with complaints made for violation of

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the provisions of the Act and for imposing penalties for offences committed under the Act.

Section 2. Interpretation (a) "Adolescent" means a person who has completed his fourteenth year of age but has

not completed his eighteenth year.

(aa) "Adult" means a person who has completed his eighteenth year of age.

(h) "Wages" 'Wages' means all remuneration, capable of being expressed in terms of money, which would if the terms of the contract of employment, express of implied, were fulfilled, be payable to person employed in respect of his employment or of work done in such employment and includes house rent allowance.

Wages do not include–

1. the value of–

a. any house accommodation, supply of light, water, medical attendance; or

b. any other amenity or any service excluded by general or special order of the appropriate Government;

2. any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance;

3. any traveling allowance or the value of any traveling concession;

Where a trip allowance was prescribed by a notification, the notification was held to be invalid because trip allowance is meant to compensate the extra cost which an employee is likely to incur when he moves out of his headquarter in connection with his employment; it clearly partakes of the character of traveling allowance and traveling allowance according to the definition of the expression "wages" cannot form a component of the wages;

4. any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment;

5. any gratuity payable on discharge.

Wage-Structure : Broadly speaking the wage structure can be divided into three categories- The basic 'minimum wage' which provides bare subsistence and is at poverty line-level, a little above is the 'fair wage' and finally the 'living wages' which comes at a comfort level. It is not possible to demarcate these levels of wage structure with any precision.

Minimum Wages : The expression "minimum wages" is not defined in the Act presumably because it would not be possible to lay down a uniform minimum wages for all industries throughout the country on account of different and varying conditions prevailing from industry to industry and from one part of the country to another.

Components of a minimum wage : A minimum wage must provide not merely for the bare subsistence of life but for some measure of education, medical requirements and amenities. The concept of minimum wage does not mean a wage that enables the worker to cover his bare physical need and keep himself just above starvation. The capacity of the employer to pay is irrelevant in fixing minimum wage. Therefore, no addition shall be made to the components of the minimum wage, which would take the minimum wage near the lower level of the fair wage. In Unichay v State of Kerala, it was held that "the Act contemplates that minimum wage rates should be fixed in the scheduled industries with the dual object of providing subsistence and maintenance of the worker and his family and preserving his efficiency as a worker."

The Tripartite Committee of the Indian Labour Conference (1957) accepted the following five norms for the fixing of 'minimum wage'–

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1. In calculating the minimum wage, the standard working class family should be taken to consist of 3 consumption units for one earner; the earnings of workmen, children and adolescents should be disregarded.

2. Minimum food requirement should be calculated on the basis of a net intake of calories, as recommended by Dr. Aykroyd for an average Indian adult of moderate activity.

3. Clothing requirements should be estimated at per capita consumption of 18 yards per annum which would give for the average workers family of four, a total of 72 yards.

4. In respect of housing, the rent corresponding to the minimum area provided for under Government Industrial Housing Scheme should be taken into consideration in fixing the minimum wage.

5. Fuel, lighting and other 'miscellaneous' items of expenditure should constitute 20% of the total minimum wage.

Fair wages : There is difference between minimum wages and fair wages. In case of fair wage, besides the principle of industry-cum-region, of company's capacity to bear the financial burden must receive due consideration. But mere hopeful observations made in the director's annual report cannot be basis for awarding increased observations made in the director's annual report cannot be basis for awarding increased wages because such observations are sometimes made to inspire hope and confidence in shareholders and they cannot be a substitute for actual audited figure.

Living Wage : The Fair Wage Committee in its report published by Government of India, Ministry of Labour in 1949 defined the 'living wage' as under:

"The living wage should enable the male earner to provide for himself and his family not merely the bare essentials of food, clothing and shelter but a measure of frugal comfort including education for children, protection against ill-health, requirements of essential social needs, and a measure of insurance against the more important misfortunes including old age."

Section 3. Fixation of minimum rates of wages : Section 3 lays down that the appropriate Government shall be empowered to fix the minimum rates of wages in the manner prescribed under this Act. It shall fix the minimum rates of wages payable to employees employed in an employment specified in Part I or Part II of the Schedule and in an employment added to either part by notification under Section 27.

The appropriate Government shall review the minimum rates of wages to fix and revise the minimum rates, if necessary, at such intervals as it may think fit. The intervals as aforesaid shall not exceed five years.

Sub-section (1-a) provides that the appropriate Government may refrain from fixing minimum rates of wages in respect of any scheduled employment in which there are in the whole State less than one thousand employees engaged in such employment.

Section 4. MINIMUM RATES OF WAGES Section 4 provides that any minimum rates of wages fixed or revised by the appropriate Government in respect of scheduled employment under Section 3 may consist of–

1. a basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (which is known as the cost of living allowance); or

2. a basic rate of wages with or without the cost of living allowance and the cash value of the concession in respect of supplies of essential commodities at concession rates,

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where so authorized; or

3. an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash of the concessions, if any.

Irrelevant considerations in fixation of minimum wages : The following considerations are not relevant in fixation of wages–

1. the fact that an employer may find it difficult to carry on his business on the basis of minimum wages;

2. the financial capacity of the employee i.e., his capacity to pay;

3. the fact of the employer-company having incurred losses during the previous year;

4. employer's difficulties in importing raw materials; and

5. the region-cum-industry principles.

Section 5. Procedure of fixing and revising minimum wages : Section 5 lays down that in fixing minimum rates of wages in respect of any scheduled employment for the first time under this Act or in revising minimum rates of wages so fixed, the appropriate Government shall either–

(a) appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision, as the case may be; or

(b) by notification in the Official Gazette, publish its proposals for the information of persons likely to be affected thereby and specify a date not less than two months from the date of the notification of which the proposals will be taken into consideration.

Section 7. ADVISORY BOARD The appropriate Government shall according to Section 7 appoint an Advisory Board for the purpose of:

(a) co-ordinating the work of committees and sub-committees, appointed under Section 5; and

(b) advising the appropriate Government in the matter of fixing and revising minimum rates of wages.

Besides the Advisory Board may devise the procedure to be adopted for discharging its functions under Section 5 of the Act.

Section 8. Central Advisory Board : Section 8 makes it obligatory upon the Central Government to appoint a Central Advisory Board for he following purposes–

(a) advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages and other matters under the Act; and

(b) for co-ordinating the work of the Advisory Boards.

Section 8(2) provides that the Central Advisory Board shall consist of–

(a) persons to be nominated by the Central Government representing employers and employees in the scheduled employment who shall be equal in number; and

(b) independent persons not exceeding one-third of its total number of members.

The Chairman of the Central Board shall be one of the independent persons and shall be appointed by the Central Government.

Section 9. Composition of committees etc. : Section 9 provides that such of the

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committee, sub-committees and the Advisory Board shall consist of persons to be nominated by the appropriate Government. Persons who can be appointed to these committees shall be representatives of the employers and employees in the scheduled employments and shall be equal in number. Independent persons not exceeding one-third of the total number of members in such bodies shall also be appointed. The appropriate Government shall appoint one of such independent persons to be the Chairman.

The expression 'independent person' in this section means a person other than those who are employer and employees in relation to the scheduled employment in respect of which minimum wages are sought to be fixed. The fact that the person nominated to function as independent member in the committee is a Government official, is no bar to such nomination. It does not mean that persons in the employment of Government were to be excluded. The presence of high Government officials who may have actual working knowledge about the problems of employers and employees can afford a good deal of guidance and assistance in formulating the advice which is to be tendered under Section 9 to the appropriate Government. The appointment of a Labour Commissioner as a Chairman who is conversant with the employment conditions and representing independent interest is valid.

Section 11. Wages in kind : The minimum wages payable under this Act shall be paid in cash. Where it has been the custom to pay wages wholly or partly in kinds, the appropriate Government being of the opinion that it is necessary in the circumstances of the case may, by notification in the official Gazette, authorize the payment of minimum wages either wholly or partly in kind.

If the appropriate Government is of the opinion that provisions should be made for the supply of essential commodities at concessional rates, it may by notification in the official Gazette, authorize the provision of such supplies at concessional rates. The cash value of wages in kind and of concessions in respect of supplies of essential commodities at concessional rates shall be estimated in the prescribed manner.

Section 12. Payment of minimum rates of wages : Section 12 lays down that where in respect of any scheduled employment a notification under Section 5 is in force, the employer shall 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 such notification for that class of employees in that employment without any deductions except as may be authorized within such time and subject to such conditions as may be prescribed. Provisions of Section 12 of this Act should not affect the provisions of the Payment of Wages Act, 1936.

Section 13. Fixing hours of normal working day, etc. : Section 13(1) provides that, in regard to any scheduled employment minimum rates of wages in respect of which have been fixed under this Act, the appropriate Government may:

(a) fix the number of hours of work which shall constitute a normal working day, inclusive of one or more specified intervals;

(b) provide for day of rest in every period of seven days which shall be allowed to all employees or to any specified class of employees and for the payment of remuneration in respect of such day of rest;

(c) provide for payment for work on a day of at a rest not less than the overtime rate.

According to Section 13(2) the provisions of sub-section (1) shall, in relation to the following classes of employees apply only to such extent and subject to such conditions as may be prescribed–

(a) employees engaged on urgent work, or in any emergency which could not have been foreseen or prevented;

(b) employees engaged in work in the nature of preparatory or complementary work which must necessarily be carried on outside the limits laid down for the general

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working in the employment concerned;

(c) employees whose employment is essentially intermittent;

(d) employees engaged in any work which for technical reasons has to be completed before the duty is over;

(e) employees engaged in a work which could not be carried on except at time dependent on the irregular action of natural forces.

Section 20. Claims : Section 20(1) empowers the appropriate Government to appoint, by notification in the official Gazette, in Authority to hear and decide for any specified area the following claims–

(a) any claims arising out of payment of less than the minimum rates of wages; or

(b) any claim in respect of the payment of remuneration for days of rest; or

(c) any claim in respect of payment of remuneration for work done on such days under clause (b) or (c) or Section 13(1); or

(d) any claim of wages at the overtime rate under Section 14, or employees employed or paid in that area.

Who can be appointed as authority : The following may be appointed as an Authority to decide any claims as aforesaid:

(a) any Commissioner for Workmen's Compensation; or

(b) any officer of Central Government exercising functions as a Labour Commissioner for any region; or

(c) any officer of the State Government not below the rank of a Labour Commissioner; or

(d) any other officer with experience as a Judge of a Civil Court or as Stipendiary Magistrate.

Who can apply : Sub-section (2) provides that where an employee has any claim as referred to in Section 20(1) the following may apply to the Authority for a direction:

(a) the employee himself; or

(b) any legal practitioner authorized in writing to act on his behalf; or

(c) any official of a registered Trade Union authorized in writing to act on behalf of the employee; or

(d) any Inspector; or

(e) any person acting with the permission of the Authority.

Application for claims : The application for any claim shall be presented within 6 months from the date on which the minimum wages or other amount become payable. But any application may be admitted after six months if the applicant satisfies the Authority that he had sufficient cause for not making the application within the prescribed period. The exercise of power for the condonation of delay is not controlled by the period of limitation prescribed by the Limitation Act for a suit and the Authority functioning under the Minimum Wages Act has, in its discretion, plenary power to condone the delay in presentation of a claim.

Procedure for deciding claims : Sub-section (3) provides that when any application for claim is entertained, the Authority shall hear the applicant and the employer or give them an opportunity of being heard, and after such further inquiry, if any, as it may consider necessary, may without prejudice to any other penalty to which the employee may be liable under this Act, direct:

(a) in the case of a claim arising out of payment of less than the minimum rates of wages,

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the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid together with the payment of such compensation as the Authority may think fit. In no case any payment so directed should exceed ten times the amount of such excess as stated above;

(b) in any other case, the payment of the amount due to the employee, together with payment of such compensation as the Authority may think fit, but not exceeding ten rupees; and

(c) payment of such compensation in cases where the excess of the amount due is paid by the employer to the employee before the disposal of the application.

Powers of the Authority : Section 20(4) lays down that if the Authority hearing any application under this section is satisfied that it was either malicious or vexatious, it may direct that a penalty not exceeding fifty rupees be paid to the employer by the person presenting the application.

Recovery of amount under order of Authority : According to Section 20(5) any amount directed to be paid by the Authority may be recovered:

(a) if the Authority is a Magistrate, by the Authority as if it were a fine imposed by the Authority as a Magistrate; or

(b) if the Authority is not a Magistrate, by any Magistrate to whom the Authority makes application in this behalf, as if it were a find imposed by such Magistrate.

Section 22. Penalties for certain offences : Section 22 lays down that an employer 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, if he:

(1) pays to any employee less than the minimum rates of wages fixed for that employee's class of work, or less than the amount due to him under the provisions of this Act; or

(2) contravenes any rule or order made under Section 13.

The Court, while imposing any fine for an offence under this section, shall take into consideration the amount of any compensation already awarded against the accused in any proceedings taken under Section 20.

THE EQUAL REMUNERATION ACT, 1976 INTRODUCTION The principle of equal pay for equal work is contained in Clause (d) of Article 39 of the Indian Constitution which envisages that the State shall, in particular, direct its policy towards securing that there is equal pay for equal work for both men and women. This principle implies that where all things are equal, that is, where all relevant considerations are the same, persons holding identical posts may not be treated differently in the matter of their pay merely because they belong to different departments. Of course, if officers of the same rank perform dissimilar functions and the powers, duties and responsibilities of the posts held by them vary, such officers may not be heard to complain of dissimilar pay merely because the posts are of the same rank and the nomenclature is the same. In Randhir Singh v. Union of India the Supreme Court held that the principle of equal pay for equal work though not a fundamental right is certainly a constitutional goal and therefore capable of enforcement through constitutional remedies under Article 32 of the Constitution. The doctrine of wagers are entitled to the same wages as other permanent employees in the department employed to do the identical work.

Equal pay for equal work finds its place in the Directive Principles of State Policy and it is an accompaniment of equality clause enshrined in Articles 14 and 16 of the cannot be read in Article 14. Reasonable classification based on intelligible criteria, having nexus to the object sought to be achieved, is permissible.

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Section 5. No discrimination to be made while recruiting men and women workers : On and from the commencement of this Act, no employer shall, while making recruitment for the same work or work of a similar nature, or in any condition of service subsequent to recruitment such as promotions, training or transfer, make any discrimination against women except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force:

Provided that the provisions of this section shall not effect any priority or reservation for Scheduled Castes or Scheduled Tribes, ex-servicemen, retrenched employees or any other class or category of persons in the matter of recruitment to the posts in an establishment or employment.

Section 6. ADVISORY COMMITTEE 1. For the purpose of providing increasing employment opportunities for women the

appropriate Government shall constitute one or more Advisory Committees to advise it with regard to the extent to which women may be employed in such establishments or employments as the Central Government may, by notifications, specify in this behalf.

2. Every Advisory Committee shall consists of not less than ten persons to be nominated by the appropriate Government, of which one-half shall be women.

3. In tendering its advice, the Advisory Committee shall have regard to the number, of women employed in the concerned establishment or employment, the nature of work, hours of work, suitability of women for employment, as the case may be, the need for providing increasing employment opportunities for women, including part-time employment, and such relevant factors as the Committee may think fit.

4. The Advisory Committee shall regulate its own procedure.

5. The appropriate Government may, after considering the advice tendered to it by the Advisory Committee and after giving to the persons concerned in the establishment or employment an opportunity to make representations, issue such directions in respect of employment of women workers, as the appropriate Government may think fit.

Section 7. Power of appropriate Government to appoint authorities for hearing and deciding claims and complaints: 1. The appropriate Government may, by notification, appoint such officers, not below the

rank of a Labour Officer, as it thinks fit to be the authorities for the purpose of hearing and deciding–

a. Complaints with regard to the contravention of any provision of this Act;

b. Claims arising out of non-payment of wages at equal rates to men and women workers for the same work or work of a similar nature.

and may, by the same or subsequent notification, define the local limits within which each such authority shall exercise its jurisdiction.

2. Every complaint or claim referred to in sub-section (1) shall be made in such manner as may be prescribed.

3. If any question arises as to whether two or more works are of the same nature or of a similar nature, it shall be decided by the authority appointed under sub-section (1).

4. Where a complaint or claim is made to the authority appointed under sub-section (1), it may, after giving the applicant and the employer an opportunity of being heard and after such inquiry as it may consider necessary, direct–

a. In the case of a claim arising out of non-payment of wages at equal rates to men

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and women workers for the same work or work of a similar nature, that payment be made to the worker of the amount my which the wages payable to him exceed the amount actually paid:

b. In the case of complaint, that adequate steps be taken by the employer so as to ensure that there is not contravention of any provision of this Act.

5. Every authority appointed under sub-section (1) shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), for the purpose of taking evidence and of enforcing the attendance of witnesses and compelling the production of documents, and every such authority shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

6. Any employer or worker aggrieved by any order made by an authority appointed under sub-section (1), on a complaint or claim may, within thirty days, from the date of the order, prefer an appeal to such authority as the appropriate Government may, by notification, specify in this behalf, and that authority may, after hearing the appeal, confirm, modify or reverse the order appealed against and no further appeal shall lie against the order made by such authority.

7. The authority referred to in sub-section (6) may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the period specified in sub-section (6), allow the appeal to be preferred within a further period of thirty days but not thereafter.

8. The provisions of sub-section (1) of section 33-C of the Industrial Disputes Act, 1947 (14 of 1947), shall apply for the recovery of monies due from an employer arising out of the decision of an authority appointed under this section.

Section 10. PENALTIES (1) If after the commencement of this Act, any employer, being required by or under the

Act, so to do:

a. Omits or fails to maintain any register or other document in relation to workers employed by him, or

b. Omits or fails to produce any register, muster-roll or other document relating to the employment of workers employed by him, or

c. Omits or refuses to give any evidence or prevents his agent, servant, or any other person in charge of the establishment, or any worker from giving evidence. or

d. Omits or refuses to give any information,

he shall be punishable with simple imprisonment for a term which may extend to one month or with fine which may extend to ten thousand rupees or with both.

(2) If, after the commencement of this Act, any employer:

a. Makes any recruitment in contravention of the provisions of this Act, or

b. Makes any payment of remuneration at unequal rates to men and women workers, for the same work or work of a similar nature, or

c. Makes any discrimination between men and women workers in contravention of the provisions of this Act, or

d. Omits or fails to carry out any direction made by the appropriate Government under sub-section (5) of section 6,

he shall be punishable with fine which shall not be less than ten thousand rupees but

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which may extend to twenty thousand rupees or with imprisonment for a term which shall not be less than three months but which may extend to one year or with both for the first offence, and with imprisonment which may extend to two years for the second and subsequent offences.

(3) If any person being required so to do, omits or refuses to produce to an Inspector any register or other document or to give any information, he shall be punishable with fine which may extend to five hundred rupees.

The CHILD LABOUR (PROHIBITION AND REGULATION) ACT, 1986 INTRODUCTION The need for providing protection and safeguards to children have first been stated in the Geneva Declaration of the Rights of he Child. 1924 and was recognised in the Universal Declaration of Human Rights, 1948 and in the Statutes of specialised agencies of U.N.O. Art, 25 of the Universal Declaration of Human Rights, 1948 provides that "motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection". Rights to free and compulsory elementary education to children is assured by Article 26.

The Declaration of the Rights of Child, 1959 : A concrete step has been taken through the Declaration of the Rights of the child in 1959 which aims that the child may have a happy childhood and enjoy for his own good and for the good of the society, the rights set forth in the Declaration. The Preamble of the Declaration expresses concern of the International Community for child welfare. The child by reason of his physical and mental immaturity, needs special welfare. The child by reason of his physical and mental immaturity, needs special safeguards and care. It also calls upon parents, upon men and women as individuals, and upon voluntary organisations, local authorities and national Governments to recognise children rights and strive for their observance by legislative and other measures. These rights which the General Assembly of the United Nations calls upon to be recognised and implemented by the National Governments are contained in the following Ten Principles of the Declaration.

International Convention on the Rights of Child, 1989 : A great headway had been made in the year 1989, which marked the 30th Anniversary of the 1959 Declaration of the Rights of the Child and the 10th Anniversary of the international year of the child, when on 20th November the General Assembly adopted an international convention on the rights of child, which was termed by the adopted an international convention on the rights of child, which was termed by the General Assembly President Joseph N. Garba as a binding piece of international legislation. The convention needs to be ratified by 20 countries before it comes into force. Prior to being placed before the assembly the draft of the Convention was approved by the Economic and Social Council and the commission on Human Rights during their sessions in 1989.

Section 1. OBJECT AND SCOPE There are a number of enactments which prohibit, the employment of children below 14 years and 15 years of age in certain specified employments. However, there is no procedure laid down in any law for deciding in which employments, occupations or processes the employment of children should be banned. There is also no law to regulate the working conditions of children in most of the employments where they are not prohibited from working and are working under exploitative conditions. Therefore the Child Labour (Prohibitions and Regulation) Act, 1986 has been enacted to prohibit the engagement of children in certain employments and to regulate the conditions of work of children in certain other employments. The Act seeks to achieve the following objects–

(1) To ban the employment of children, i.e., those who have not completed their

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fourteenth year, in specified occupations and processes;

(2) To lay down a procedure to decide modifications to the Schedule of banned occupations or processes;

(3) To regulate the conditions of work of children in employments where they are not prohibited from working;

(4) To lay down enhanced penalties for employment of children in violation of provisions of this Act, and other Acts which forbid the employment of children;

(5) To obtain uniformity in the definition of "child" in the related laws.

In view of sub-section (2) of Section 1 this Act extends to the whole of India. Section 1(3) provides that the provisions of this Act other than Part III, shall come into force at once, and Part III shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different States and for different classes of establishments.

Section 2. DEFINITION In this Act, unless the context otherwise requires–

(1) "child" means a person who has not completed his fourteenth year of age;

(2) "day" means a period of twenty-four hours beginning at midnight;

(3) "establishment" includes a shop, commercial establishment, workshop, farm, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment;

(4) "family", in relation to an occupier, means the individual, the wife or husband, as the case may be, of such individual, and their children, brother or sister of such individual;

(5) "occupier", in relation to an establishment or a workshop, means the person who has the ultimate control over the affairs of the establishment or workshop;

(6) "port authority" means any authority administering a port;

(7) "workshop" means any premises (including the precincts thereof) wherein any industrial process is carried on, but does not include any premises to which the provisions of Section 67 of the Factories Act, 1948 (63 of 1948), for the time being, apply.

Section 3. Prohibition of employment of children in certain occupations and processes : No child shall be employed or permitted to work in any of the occupations set forth in Part A of the Schedule or in any workshop wherein any of the processes set forth in Part B of the Schedule is carried on:

Provided that nothing in this section shall apply to any workshop wherein any process is carried on any the occupier with the aid of his family or to any school established by, or receiving assistance or recognition from, Government.

Section 5. Child Labour Technical Advisory Committee : 1. The Central Government may, by notification in the Official Gazette, constitute an

advisory committee to be called the Child Labour Technical Advisory Committee (hereafter in this section referred to as the Committee) to advise the Central Government for the purpose of addition of occupations and processes to the Schedule.

2. The Committee shall consist of a Chairman and such other members not exceeding ten, as may be appointed by the Central Government.

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3. The Committee shall meet as often as it may consider necessary and shall have power to regulate its own procedure.

4. The Committee may, if it deems it necessary so to do, constitute one or more sub-committees and may appoint to any such sub-committee, whether generally or for the consideration of any particular matter, any person who is not a member of the Committee.

5. The term of office of the manner of filing casual vacancies in the office of and the allowances if any payable to the Chairman and other members of committee and the conditions and restrictions subject to which the committee may appoint any person who is not a member of the committee as a member of the Committee as a member of any of its sub committees shall be such as may be prescribed.

Section 6. Application of Part : The provisions of this Part shall apply to an establishment or a class of establishments in which none of the occupations or processes referred to in Section 3 is carried on.

Section 7. HOURS AND PERIOD OF WORK 1. No child shall be required or permitted to work in any establishment or a class of

establishments.

2. The period of work on each day shall be so fixed that no period shall exceed three hours and that no child shall work for more than three hours before he has had an interval for rest for at least one hour.

3. The period of work of a child shall be so arranged that inclusive of his interval for rest, under sub-section (2), it shall not be spread over more than six hours, including for time spent in waiting for work on any day.

4. No child shall be permitted or required to work between 7 p.m. and 8 a.m.

5. No child shall be required or permitted to work in any establishment on any day on which he has already been working in another establishment.

6. No child shall be required or permitted to work in any establishment on any day on which he has already been working in another establishment.

Section 8. Weekly holidays : Every child employed in an establishment shall be allowed in each week, a holiday of one whole day, which day shall be specified by the occupier in a notice permanently exhibited in a conspicuous place in the establishment and the day so specified shall not be altered by the occupier more than once in three months.

Section 9. Notice to Inspector : 1. Every occupier in relation to an establishment in which a child was employed or

permitted to work immediately before the date of commencement of this Act in relation to such establishment shall, within a period of thirty days from such commencement, send to the Inspector within whose local limits the establishment is situated, a written notice containing the following particulars, namely:

a. The name and situation of the establishment;

b. The name of the person in actual management of the establishment;

c. The address to which communications relating to the establishment;

d. The nature of the occupation or process carried on in the establishment.

2. Every occupier, in relation to an establishment, who employs, or permits to work, any child after the date of commencement of this Act in relation to such establishment, shall, within a period of thirty days from the date of such employment, send to the

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Inspector within whose local limits the establishment is situated, a written notice containing the particulars as are mentioned in sub-section (1).

Section 11. Maintenance of register : There shall be maintained by every occupier in respect of children employed or permitted to work in any establishment, a register to be available for inspection by an Inspector at all times during working hours or when work is being carried on in any such establishment, showing:

(a) the name and the date of birth of every child so employed or permitted to work;

(b) hours and periods of work of any such child so employed or permitted to he is entitled;

(c) the nature of work of any such child; and

(d) such other particulars as may be prescribed.

Section 13. HEALTH AND SAFETY 1. The appropriate Government may, by notification in the Official Gazette, make rules

for the health and safety of the children employed or permitted to work in any establishment or class of establishments.

2. Without prejudice to the generality of the foregoing provision, the said rules may provide for all or any of the following matters, namely–

a. Cleanliness in the place of work and its freedom from nuisance;

b. Disposal of wastes and effluents.;

c. Ventilation and temperature;

d. Dust and fume;

e. Artificial humidification;

f. Lighting;

g. Drinking water;

h. Latrine and urinals;

i. Spittoons;

j. Fencing of machinery;

k. Work at or near machinery in motion;

l. Employment of children on dangerous machines;

m. Instructions, training and supervision in relation to employment of children on dangerous machines;

n. Device for cutting of powers;

o. Self-acting machines;

p. Device for cutting of powers;

q. Self-acting machines;

r. Floor, stairs and means of access;

s. Pits, sumps, openings in floors, etc.;

t. Excessive weights;

u. Protection of eyes;

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v. Explosive or inflammable dust, gas, etc.;

w. Precautions in case of fire;

x. Maintenance of buildings; and

y. Safely of buildings and machinery.

Section 14. Penalties : 1. Whoever employees any child or permits any child to work in contravention of the

provisions of Section 3 shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees or with both.

2. Whoever, having been convicted of an offence under Section 3, commits a like offence afterwards, he shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to two years.

3. Whoever–

a. Fails to give notice as required by Section 9, or

b. Fails to maintain a register as required by Section 11 or makes any false entry in any such register; or

c. Fails to display a notice containing an abstract of Section 3 and this section as required by Section 12; or

d. Fails to comply with or contravenes any other provisions of this Act or the rules made thereunder;

shall be punishable with simple imprisonment which may extend to one month or with fine which may extend to ten thousand rupees or with both.

Section 16. Procedure relating to offences : 1. Any person, police officer or Inspector may file a complaint of the commission of an

offence under this Act in any court of competent jurisdiction.

2. Every certificate as to the age of a child which has been granted by a prescribed medical authority shall, for the purposes of this Act, be conclusive evidence as to the age of the child to whom it relates.

3. No court inferior to that of a Metropolitan Magistrate or a Magistrate of the first class shall try any offence under this Act.

Meaning of Complaint : The word 'complaint' as used in this section has a wide meaning since it includes even an oral allegation. No particular from of complaint is prescribed. But a complaint must be an allegation prima facie disclosing the necessary facts that are necessary to constitute the offence alleged. It is on the basis of these facts that the Magistrate takes action.

IMPORTANT QUESTIONS 1. Discuss the procedure of fixing minimum wages under Minimum Wages Act, 1948.

2. What do you understand by minimum wages? Is the Government bound to take into account capacity of an industry to pay minimum wages?

3. Explain the concept of 'living wage' 'fair wage' and 'minimum wages'.

4. Explain the provisions regarding prohibitions of a child labour under the Child Labour Act, 1986.

5. Explain the main provisions of Equal Remuneration Act, 1976.

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6. What are the objects of passing Equal Remuneration Act, 1976?

7. Explain the term 'minimum wages'. Is the financial capacity of an employer to pay it a necessary consideration for the fixation of minimum wage?

8. Can discrimination be made by an employer in recruiting men and women workers?

RECOMMENDED READINGS 1. "Labour and Industrial Laws", Dr. V.G. Goswami.

2. "Labour and Industrial Laws", S.N. Mishra.

3. "Industrial Jurisprudence.

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UNIT - V PAYMENT OF BONUS ACT, 1965

INTRODUCTION

Bonus is a cash payment made to employees in addition to wages. It is not an ex-gratia payment. Bonus differs from wages in that it does not rest on contract, but still payments for bonus are made because legally due, but which parties do not contemplate indefinitely. In our country bonus was for the first time granted to the employees in textile industry in July, 1917 which is known as war bonus because an increase in wages was allowed owing to war conditions.

Mill Owners Association v. Rastriya Mill Mazdoor Sangh, a Full Bench of the Labour Appellate Tribunal observed that bonus could no longer be considered as an ex-gratia payment and laid down a formula known as "Full Bench Formula". Since both labour and capital contributed to the earnings of industrial concerns, it was only fair that labour should get some benefit if there was a surplus left after meeting prior and necessary charges. Broadly speaking the formula provided that the following prior charges should be deducted from the gross profits of an enterprise–

1. Return on paid up capital generally at the rate of six per cent;

2. Return on working capital varying from two to four per cent;

3. Depreciation worked out on a notional basis;

4. Rehabilitation; and

5. Income tax.

If after deduction of these prior charges, surplus was left over the workmen would he entitled to a share in the said surplus on an equitable basis. In the absence of any surplus, however, there would be no question of payment of bonus on genera] notions of social justice.

Labour unions did not feel satisfied with the Full Bench Formula. Their main grievance was against the rehabilitation charge which, in their view, generally wiped out what was left of the available surplus. Some employers were also not quite happy with this formula because it did not provide an easy method for computation of bonus and often led to disputes year after year.

The Supreme Court, while approving this principle Muir Mill Ltd. v. Suti Mill Mazdoor Union laid down two conditions which had to be satisfied before a demand for bonus could be justified–

1. the wages fell short of the living standard; and

2. the industry makes huge profits part of which are due to the contribution made by workmen in increasing production.

The demand for bonus would become an industrial claim when either or both of these conditions were satisfied. The Government of India had been under a constant pressure to revise the bonus formula.

The present Act is the outcome of the recommendations made by a Tripartite commission, which was setup by the Government of India in 1961. The Commission was asked to consider the question of payment of bonus based on profits to employees employed in establishments. The recommendation of the Commission was received by the Government on January 24, 1964. On September 2, 1964 the Government implemented the recommendations, subject to certain modifications. With a view to accept these recommendations, the Payment of Bonus Ordinance, 1965 as promulgated on 26th May,

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1965. The Ordinance later on was adopted by the Parliament and enacted as Payment of Bonus Act, 1965. Under the Act the payment of bonus has become a statutory obligation imposed upon the employers covered by the Act.

The object of the Act as contained in the preamble is to provide for payment of bonus to persons employed in certain establishments and for matters connected therewith.

The scheme of the Act is four dimensional–

(1) to impose statutory liability upon an employer of every establishment covered by the Act to pay bonus to employees in establishment;

(2) to define the principle of payment of bonus according to the prescribed formula;

(3) to provide for payment of minimum and maximum bonus and linking the payment of bonus with the scheme of "set-off and set-on"; and

(4) to provide machinery for enforcement of the liability for payment of bonus.

Section 1. SCOPE AND APPLICATION This Act extends to the whole of India.

Sub-section (3) of Section 1 provides that save as otherwise provided in this Act, it shall supply to (a) every factory; and (b) every other establishment in which twenty or more persons are employed on any day during an accounting year.

Section-2 DEFINITIONS In this Act, unless the context otherwise requires:

Accounting year- "Accounting year" means–

(i) in relation to a corporation, the year ending on the day on which the books and accounts of the corporation are to be closed and balanced;

(ii) in relation to a company, the period in respect of which any profit and loss account of the company laid before it in annual general meeting is made up. whether that period is a year or not;

(iii) in any other case–

(a) the year commencing on the 1st day of April; or

(b) if the accounts of an establishment maintained by the employer thereof are closed and balanced on any day other than the 31st day of March. then, at the option of the employer, the year ending on the day or. which its accounts are so closed and balanced;

Provided that an option once exercised by the employer under paragraph (b) a; this sub-clause shall not again be exercised except with the previous permission in writing of the prescribed authority and upon such conditions as that authority may think fit.

Computation of gross profits : The gross profits derived by an employer from an establishment in respect of the accounting year shall–

(a) in the case of banking company, be calculated in the manner specified in the First Schedule;

(b) in any other case, be calculated in the manner specified in the Second Schedule.

ELIGIBILITY FOR BONUS Every employee shall be entitled to be paid by his employer in an accounting year, bonus in

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accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.

It was held in Project Manager, Ahmedabad Project, D.N.G.C. Sabarmati v. Sham Kumar Sahegal (Died) by his Legal Representatives that when an employee is suspended. it cannot be said that such an employee did not work for the establishment. The word "worked" in Section 8 of the Act should mean "ready and willing to work". Therefore when an employee is prevented from working by an overt act on the part of the employer, which is ultimately set aside and the employer is reinstated in service then the reasonable inference is that the employees' statutory eligibility for bonus within the, meaning of Section 8 of the Act cannot be said to have been lost. Nor can the employer refuse to accede to the demand for such bonus if it is otherwise payable under the provision of the Act.

Disqualification for bonus : Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for-

(a) fraud; or

(b) riotous or violent behaviour while on the premises of the establishment; or

(c) theft, misappropriation or sabotage of any property of the establishment.

Payment of minimum bonus : Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 9.79 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year:

Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have, effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted.

The statutory bonus of eight and one third per cent shall be payable whether there are profits in the accounting year or not. After coming into force of this Act, bonus has become an implied term of employment not dependant upon the profits. Employees are entitled to festival bonus only if there is an implied agreement or it is paid as customary bonus.

The minimum bonus under the Act is a right vested in an employee under a statute. The right to minimum bonus is a statutory right which vests in the employee and no further adjudication of the right to the payment of minimum bonus is called for. It constitutes an existing statutory right. The denial of this right by the employer does not render it an industrial dispute calling for an adjudication by way of reference under Section 10 of the Industrial Disputes Act read with Section 22 of the Payment of Bonus Act. A claim for the payment of minimum bonus cannot constitute an industrial dispute within the meaning of Section 22 of the Payment of Bonus Act.

Payment of maximum bonus : (1) Where in respect of any accounting year referred to in section 10, the allocable

surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employer during the accounting year subject to a maximum of twenty per cent of such salary or wage.

(2) In computing the allocable surplus under this section, the amount set on or the amount set off under the provisions of section 15 shall be taken into account in accordance with the provisions of that section.

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Calculation of bonus with respect to certain employees : Where the salary or wages of an employee exceeds two thousand and five hundred rupees per mensem, the bonus payable to such employee under Section 10 or, as the case may be, under section 11 shall be calculated as if his salary or wages were two thousand and five hundred rupees per mensem.

Proportionate reduction in bonus in certain cases : Where an employee has not worked for all the working days in an accounting year, the minimum bonus of one hundred rupees or, as the case may be, of sixty rupees, if such bonus is higher than 8.33 per cent of his salary or wage for the days he has worked in that accounting year, shall proportionately reduced.

Computation of number of working days- For the purposes of Section 13, an employee shall be deemed to have worked in an establishment in any accounting year also on the days on which-

(a) he has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act, 1946, or under the Industrial Disputes Act, 1947 or under any other law applicable to the establishment;

(b) he has been on leave with salary or wage;

(c) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

(d) the employee has been on maternity leave with salary or wage, during the accounting year.

Set on and set off of allocable surplus : (1) Where for any accounting year the allocable surplus exceeds the amount of maximum

bonus payable to the employees in the establishment under Section 11, then, the excess shall, subject to a limit of twenty percent of the total salary or wage of the employees employed in the establishment in that accounting year, be carried forward for being set on in the succeeding accounting year and so on, upto and inclusive of the fourth accounting year to be utilised for the purpose of payment of bonus, in the manner illustrated in the Fourth Schedule.

(2) Where for any accounting year, there is no allocable surplus or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees in the establishment under Section 10, and there is no amount or sufficient amount carried forward and set on under sub-section (1) which could be utilised for the purpose of payment of minimum bonus, then, such minimum amount or the deficiency, as the case may be, shall be carried forward for being set off in the succeeding accounting year and so on upto and inclusive of the fourth accounting year in the manner illustrated in the Fourth Schedule.

(3) The principle of set on and set off as illustrated in the Fourth Schedule shall apply to all other cases not covered by sub-section (1) or sub-section (2) for the purpose of payment of bonus under this Act.

(4) Where in any accounting year any amount has been carried forward and set on or set off under this section, then, in calculating bonus for the succeeding accounting year, the amount of set on or set off carried forward from the earliest accounting year shall first be taken into account.

Sum deductible from gross profits : The following sums shall be deducted from the gross profits as prior charges, namely–

(a) any amount by way of depreciation admissible in accordance with the provisions of sub-section (I) of Section 32 of the Income Tax Act or in accordance with the provisions of the Agricultural Income-tax Law as the case may be–

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Provided that where an employer has been paying bonus to his employees under a settlement or an award or agreement made before the 29th May, 1965, and subsisting on that date after deducting from the gross profits notional normal depreciation, then, the amount of depreciation to be deducted under this clause shall, at the option of such employer (such option to be exercised once and within one year from that date) continue to be such notional normal depreciation;

(b) Any amount by way of employment rebate or investment allowance or development allowance which the employer is entitled to deduct from his income under the Income-tax Act;

(c) Subject to the provisions of Section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;

(d) Such further sums as are specified in respect of the employer in the Third Schedule.

Section-17. Adjustment of customary or interim bonus against bonus payable under the Act : Where in any accounting year–

(a) an employer has paid by puja bonus or other customary bonus to an employee;

(b) an employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payable;

then, the employer shall be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him to the employee under this Act in respect of that accounting year and the employee shall be entitled to receive only the balance.

Sec.-18. Deduction of certain amounts from bonus payable under the Act.-When in accounting year, an employee is found guilty of misconduct 'causing financial loss to the employer, then, it shall be lawful for the employer to deduct the amount of loss from the amount of bonus payable by him to the employee under this Act in respect of that accounting year only and the employee shall be entitled to receive the balance, if any.

Sec.-19. Time-limit for payment of bonus : All amounts payable to an employee by way of bonus under this Act shall be paid in cash by his employer–

(a) where there is dispute regarding payment of bonus pending before, any authority under Section 22, within a month from the date on which the award becomes enforceable or the settlement comes into operation, in respect of such dispute;

(b) in any other case, within a period of eight months from the close of the accounting year.

Provided that the appropriate Government of such authority as the appropriate Government may specify in this behalf may, upon an application made to it by the employer and for sufficient reasons, by order, extend the said period of eight months to such further period or periods as it thinks fit; so, however, that the total period so extended shall not in any case exceed two years.

Sec.-20. Application of Act to establishments in public sector in certain cases : (1) If in any accounting year an establishment in public sector sells any goods produced

or manufactured by it or renders any services, in competition with an establishment in private sector, and the income from such sale or services or both is not less than twenty per cent of the gross income of the establishment in public sector for that year, then the provisions of this Act shall apply in relation to such establishment in public sector as they apply in relation to a like establishment in private sector.

(2) Save as otherwise provided in sub-section (1), nothing in this Act shall apply to the employees employed by any establishment in public sector.

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Section-21. Recovery of bonus due from an employer : Where any money is due to an employee by way of bonus from his employer under a settlement or an award or agreement, the employee himself or any other person authorised by him in writing in this behalf, or in the case of the death of the employee, his assignee or heirs may, without prejudice to any other mode of recovery make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government or such authority as the appropriate Government may specify in this behalf, is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue.

Provided that every such application shall be made within one year from the date on which the money became due to the employee from the employer,

Provided further that any such application may be entertained after the expiry of the said period of one year, if the appropriate Government is satisfied that the applicant had sufficient cause for not making the application within the said period.

Explanation- In this section and in Sections 22, 23, 24 and 25, "employee" includes a person who is entitled to the payment of bonus under this Act but who is no longer in employment.

The mode of recovery prescribed under this section shall be available only if the bonus sought to be recovered is "under a settlement or an award or an agreement". It will not apply to recovery of bonus which is payable under the Act.

Section-22. Reference of disputes under the Act : Where any dispute arises between an employer and his employees with respect to the. bonus payable under this Act or with respect to the application is this Act to an establishment in public sector, then, such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act, 1947 or of any corresponding law relating to investigation and settlement of industrial disputes in force in a State and the provisions of that Act or, as the case may be, such law, shall save as otherwise expressly provided, apply accordingly.

Section-28. Penalty : If any person–

(a) contravenes any of the provisions of this Act or any rule made there under; or

(b) to whom a direction is given or requisition is made under this Act fails to comply with the direction or requisition;

he shall be punishable with imprisonment for a term which may extend to six months, or with fine-which may extend to one thousand rupees, or with both.

THE MATERNITY BENEFIT ACT, 1961 Section-l Extent and Commencement : The Maternity Benefit Act, 1961 was enacted to regulate the employment of women in certain establishments for certain periods before and after child birth and to provide for maternity benefit and certain other benefits. This Act extends to the whole of India except the State of Jammu and Kashmir. It shall come into force on such date as may be notified in this behalf in the Official Gazette, (a) in relation to mines and to any other establishment wherein persons are employed for the exhibition of, equestrian, acrobatic and other performance, by the Central Government and (b) in relation to other establishments in a state by the State Government.

The Maternity Benefit Act is intended to achieve the object of doing social justice to women workers. Therefore in interpreting the provisions of this Act beneficent rule of construction, which would enable the woman worker not only to subsist but also to make up her dissipated energy, nurse her child, preserve her efficiency as a worker and maintain the level of her previous efficiency and output, has to be adopted by the Court.

Section-2 APPLICATION

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It applies in the first instance–

(a) To every establishment which is a factory, mine or plantation, including any such establishment belonging to Government and to every establishment wherein persons are employed for the exhibition of equestrian, acrobatic and other performances,

(b) to 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.

Section-3. DEFINITIONS In this Act, unless the context otherwise requires–

(a) Appropriate Government : In relation to an employment being a mine, or an establishment wherein persons are employed for the exhibition of equestrian, acrobatic and other performances the appropriate Government means Central Government and in relation to any other establishment, the State Government.

(o) Woman : 'Woman' means a woman employed, whether directly or through any agency, for wages in any establishment.

Section-4. Employment of, or work by woman prohibited during certain period : Under Section 4 of the Act, the employer is prohibited from knowingly employing any woman in any establishment during the six weeks immediately following the day of her delivery, miscarriage or medical termination of pregnancy.

No woman shall work in any establishment during the six weeks immediately following the day of her delivery, miscarriage or medical termination of pregnancy.

Without prejudice to the provisions of Section 6 no pregnant woman shall, on a request being made by her, be required by her employer to do any work of the following nature during the period of one month immediately preceding the period of six weeks before the date of her expected delivery and during the said period of six weeks for which the pregnant woman does not avail of the leave of absence under Section 6–

(1) any work which is of arduous nature;

(2) any work which involves long hours of standing;

(3) any work which in any way is likely to interfere with her pregnancy or the normal development of foetus or likely to cause her miscarriage or otherwise adversely affect her health.

Section-5 RIGHT TO PAYMENT OF MATERNITY BENEFIT Provides that the maternity benefit to which every woman shall be entitled and her employer shall be liable for is a payment to a worker at the rate of average daily wages for the period of her actual absence immediately preceding and including the day of her delivery and for six weeks immediately following that day.

Section-5B. Payment of maternity benefit in certain cases : Every woman–

(a) who is employed in a factory or other establishment to which the provisions of the Employees' State Insurance Act, 1948, apply;

(b) whose wages (including remuneration for over-time work) for a month exceed the amount specified in sub-clause (b) of clause (9) of Section 2 of that Act ; and

(c) who fulfills the conditions specified in sub-section (2) of Section 5, shall be entitled to the payment of maternity benefit under this Act.

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Section 6. Notice of claim for maternity benefit and payment there of : Section 6 provides that any woman employed in an establishment and entitled to maternity benefit under the provisions of the Act may give notice in writing in such form as may be prescribed, to her employer, stating that her maternity benefit and any other amount to which she may be entitled under this Act may be paid to her or to such person as the may nominate in the notice and that she will not work in any establishment during the period for which she receives maternity benefit.

In the case of a woman who is pregnant such notice shall state the date from which she will be absent from work, not being a date earlier than six weeks from the date of her expected delivery. Any woman who has not given the notice when she was pregnant may give such notice as soon as possible after delivery. On receipt of the notice, the employer shall permit such woman to absent herself from the establishment until the expiry of six weeks after the day of her delivery.

The amount of maternity benefit for the period preceding the date of her expected delivery shall be paid in advance by the employer to the woman on production of such proof as may be prescribed that to woman is pregnant and the amount due for the subsequent period shall be paid by the employer to the woman within forty-eight hours of production of such proof as may be prescribed that the woman has been delivered of a child.

Section 7. Payment of maternity benefit in case of death of a woman : If a woman entitled to maternity benefit or any other amount, under this Act, dies before receiving such maternity benefit or amount, or where the employer is liable for maternity benefit under the, second proviso to Section 5(3), the employer shall pay such benefit or amount to the person nominated by the woman in the notice given under Section 6 and in case there is no such nominee to her legal representative.

Section 8. Payment of medical-bonus : Every woman entitled to maternity benefit under this Act shall also be entitled to receive from her employer a medical bonus of twenty-five rupees if no pre-natal confinement and post-natal care is provided for by the employer free of charge.

Section 9. Leave for miscarriage : In case of miscarriage or medical termination of pregnancy, a woman shall, on production of such proof as may be prescribed, be entitled to leave with wages at the rate of maternity benefit, for a period of six weeks immediately following the day of her miscarriage or, as the case may be, her medical termination of pregnancy.

Section 9-A. Leave with wages for tubectomy operation : In case of tubectomy operation, a woman shall, on production of such proof as may be prescribed, be entitled to leave with wages at the rate of maternity benefit for a period of two weeks immediately following the day of her tubectomy operation.

Section 10. Other leaves : A woman suffering from illness arising out of pregnancy, delivery, premature birth of a child, miscarriage, medical termination of pregnancy or tubectomy operation shall, on production of such' proof as may be prescribed, be entitled in addition to the period of absence allowed to her under Section 6, or as the case may be, under Section 9 to leave with wages at the rate of maternity benefit for a maximum period of one month.

Section 11. Nursing breaks : Every woman delivered of a child who returns to duty after such delivery shall, in addition to the interval for the rest allowed to her, be allowed in the course of the daily work, two breaks of the prescribed duration for nursing until the child attains the age of fifteen months–

1. Discuss the features of Indian Maternity Benefit Act, 1961.

2. State the circumstances under which a workman is eligible for 'bonus' under the Payment of Bonus Act, 1965. What is minimum and maximum limit of bonus as permissible under the Act?

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3. Explain "available surplus" under the payment of Bonus Act.

4. Explain the main objects of Maternity Benefit Act.

5. When can a female worker claim maternity benefit? Can maternity benefit be forfeited?

6. What are the disqualification for receiving bonus under the Payment of Bonus Act, 1965?

7. Does the Maternity Benefit Act, 1961 has territorial jurisdiction upon state of Jammu and Kashmir? Explain its applicability.

8. What are the rights and immunities which are available to a trade union under the Trade Union Act, 1986?

RECOMMENDED READINGS 1. "Labour and Industrial Laws", Dr. V.G. Goswami.

2. "Labour and Industrial Laws", S.N. Misra.

3. "Social Security in India", Dr. P.C. Srivastava.

4. "The Social Security System in India, 1972", N. Hasan.