UNIT – V CCETchettinadtech.ac.in/storage/11-07-19/11-07-19-11-23-27...CCET 5 P.MOHANRAJ, Assistant...

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P.MOHANRAJ, Assistant Professor, Dept. of MBA, Chettinad College of Engineering & Technology, Karur, Tamilnadu.

UNIT – V

THE MINIMUM WAGES ACT – 1948

It is to secure the welfare of the workers in a competitive market by fixing the minimum rates of wages in certain employments.

Applicable to scheduled employees in Part 1 & 2 ( Ref. book – Elements of Mercantile law by N.D.Kapoor).

Minimum rate of wages:

- A basic rate of wages + cost of living allowance - A basic rate of wages with or without cost of living allowance - Inclusive of cash value of any concessions

Procedure for fixing and revising minimum wages:

There 2 methods followed by State Govt., such as:

a) Appointment of Committees ( including sub committees) b) Publication of proposal in the official gazette.

- Consultation with advisory board - Govt. not bound to accept the recommendation of the committee appointed.

Advisory board and Central Advisory board

a) Advisory board: Organized as per the Govt. order and no prescribed procedure - Members are nominated by the Govt. - Both the employers and employees of scheduled list will be the member (equal

strength) - Independent person appointed by Chairman (1/3 of its total strength)

b) Central Advisory board: - Central Govt. appoints this board and members - Advising to State & Central Govt. in fixing and revision of minimum

rate of wages

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THE MINIMUM WAGES ACT, 1948 OBJECT: For fixing minimum rates of wages in certain employments.

The Minimum Wage Act, 1948 provides for fixation and enforcement of minimum wages in respect of schedule employments to prevent sweating or exploitation of labour through payment of low wages. The objective of the Act is to ensure a minimum subsistence wage for workers. The Act requires the appropriate government to fix minimum rates of wages in respect of employment specified in the schedule and review and revise the minimum rates of wages at intervals not exceeding five years.

With effect from November 2009 the National Floor Level Minimum Wage has been increased to Rs 100 from Rs 80 (in September 2007). The National Minimum Floor Level Wage was Rs 66 in 2004, Rs. 45 in 1999, Rs. 40 in 1998 and Rs. 35 in 1996.

APPLICABILITY: It extends to the whole of India and applies to scheduled employments in respect of which minimum rates of wages have been fixed under this act. SCHEDULED EMPLOYMENTS: An employment specified in the schedule, or any process or branch of work forming part of such employment (Section-2g) FIXING OF MINIMUM RATES OF WAGES: i. The appropriate government shall fix the minimum rates pf wages payable to employees employed in a scheduled employment. ii. Review at such intervals not exceeding five years, the minimum rates of wages so fixed and revise the minimum rates if necessary. The minimum rates of wages may be fixed as a minimum time rate or a minimum piece rate or as a guaranteed time rate (Section-3). PAYMENT OF MINIMUM RATES OF WAGES: The employer shall pay to every employee in a scheduled employment under him wages at the rate not less than the minimum rates of wages fixed under the Act. (Section-12) HOURS OF WORK, OVERTIME ETC.,: The Act also provides for regulation or working hours, overtime, weekly holidays and overtime wages. Period and payment of wages, and deductions from wages are also regulated. (Section—13 to 17)

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PENTALITY: Any employer who contravenes any of the provisions of this Act other than those relating to Section 12 and 13 of any rule or any order made thereunder shall be punishable with fine, which may extend to Rs.500. Any employer who contravenes the provision relating to the payment of minimum rates of wages fixed (Section- 12) hours of work stipulated for constituting a normal working day as per section 13 shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to Rs. 500/- or with both.

LIST OF EMPLOYMENTS a. EMPLOYMENTS ORIGINALLY INCLUDED IN THE SCHEDULE 1. Employment in any Woolen Carpet making or shawl Weaving Establishment (not fixed). 2. Employment in any Rice mill, Flour millr and Dhall mill. 3. Employment in any Tobacco (including beedi making ) Manufactory. 4. Employment in any Plantation, that is to say, any estate which is maintained for the purpose of growing cinchona, rubber, tea, coffee (or cardamom) 5. Employment in any Oil Mill. 6. Employment under any local authority. 7. Employment on the construction or maintenance of roads or in building operations. 8. Employment in stone breaking or stone crushing. 9. Employment in any talc manufacturing (not fixed) 10. Employment in any Mica works (not fixed) 11. Employment in Public Motor Transport. 12. Employment in Tanneries and leather manufactory. b. EMPLOYMENTS ADDED TO THE SCHEDULE BY THE STATE GOVERNMENT 13. Employment in the manufacture of Coir. 14. Employment in Salt Pan (not fixed) 15. Employment in Water Boat Transport, other motor boat Transport (not fixed) 16. Employment in Water Boat Transport, other motor boat Transport (not fixed). 17. Employment in Printing Presses 18. Employment in the Tile manufacturing Industry 19. Employment in Toddy tapping Industry 20. Employment in Match Industry. 21. Employment in Shops and Establishments (including Hotels and Restaurants) 22. Employment in Timber Industry. 23. Employment in bricks manufactories. 24. Employment in Banks (not fixed).

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25. Employment in Handloom Industry. 26. Employment in Plywood Industry. 27. Employment in Minor Ports. 28. Employment in Works in Forests. 29. Employment in Rubber Products. 30. Employment in Minor Engineering Industry. 31. Employment in the Construction industry. 32. Employment in Fish Peeling, Fish Canning, Freezing and exporting of Sea foods and Frog Legs. 33. Employment in the Hill Product Industry. 34. Employment in the manufacturing of Ayurvedic and Allopathic Medicines. 35. Employment in the Power loom Industry (excluding the worker employed in the Power loom section or the Cotton Textile Mils). 36. Employment in Drying of Coconuts for making them Copra. 37. Employment in Handling and care of Elephants. 38. Employment in Hosiery Manufactory. 39. Employment in Ice factories 40. Employment in the Units engaged in the manufacture and sale of Umbrella. 41. Employment in Hostels. 42. Employment in Rubber Mills. 43. Employment in Liquor Trading and Liquor Vending Industry. 44. Employment in Cinema Theaters. 45. Employment in Crumb Rubber Factories 46. Employment in Collection of river sand and its loading and unloading 47. Employment in Manufacture of Aluminium. 48. Employment in Light Motor Vehicles. 49. Employment in Oil Palm Plantations. 50. Employment in Marble and Granite Industry. 51. Employment in Food processing industry-Toffee, Bakery coming under the Factories Act, Ice cream, soft drinks etc. 52.Employment in agriculture, that is to say, in any form of farming including cultivation and tillage of the soil dairy, farming the production, cultivation, growing and harvesting of any agricultural or horticultural commodity, the raising of live stock, bees or poultry and any practice performed by a framer or on a farm as incidental to or in conjunction with farm operations (including any forestry or timbering operations and the preparations for market and delivery to storage or to market or a carriage for transporting to market of farm produce).

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THE PAYMENT OF WAGES ACT – 1936

It was passed to regulate the payment & unauthorized deductions of wages to certain classes of persons employed in a factory or industry.

Time of payment of wages (Rules):

1. Wages to be paid before 7th or 10th day of every month

- Less than 1000 persons 7th day - More than 1000 persons 10th day

2. Wages in case of termination of employment

- To be paid before the expiry of the 2nd working day from the date of termination

3. Wages to be paid on a working day only

Deductions from wages

1. Deductions for fines:

No fine – before showing cause and completed age of 15 years

2. Deductions for absence from duty

3. Deductions for damages or loss

4. Deductions for services provided by the employer

5. Deductions for recovery of advances

6. Deductions for recovery of loans

7. Deductions for payment to co-operative societies and insurance schemes

8. Other deductions:

- Deductions of income tax - Deductions by order of court - Deductions for payment to co-op societies advances - Deductions for provident fund - Deductions for insurance premium - Deductions made with written authorization of the employee to donations

Note: The total deduction shall not exceed 75% of such wages

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Maintenance of Registers & Records

The employer shall maintain the following registers and records

1. The work performed by them 2. The wages paid to them 3. Deductions made from their wages 4. The receipts given by them

Penalty for offences under the Act (To employer)

1. Penalty for delaying payment of wages within prescribed period 2. Penalty for not paying wages on a working day or in current coins or currency 3. Penalty for failure to maintain / furnish/ return records 4. Penalty for obstructing inspectors/ officials

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THE PAYMENT OF BONUS ACT – 1965

Bonus – Something to the good This act is to provide for the payment of bonus to persons employed in certain establishments for their contribution in profit.

- To impose statutory liability upon an employer - To define principles of payment of bonus - To provide minimum & maximum bonus - To provide machinery for enforcement of the liability for payment of bonus

A minimum bonus of 8.33% of the wage or salary is payable, whether the establishment has made profit or loss.

Liability for bonus is a statutory liability * Application of the Act

- Every factory coming under Factories act 1948 - Every other establishment, there employees strength more than 20 persons

Act not applicable to the following categories of employees:

- Employees of LIC -Seamen - University & other educational institutions

- Employed through contractors

- Employed by NABARD, UTI, SIDBI

- Any other financial institutions (other than banking company)

-Employees of redcorss society & its branches

- RBI employees

* Power of exemption for giving bonus

The appropriate Govt. alone empowered to give exemption to the establishment for giving bonus, based on its financial position and other relevant circumstances by notification in the official Gazette.

The order of exemption can be refused by affected parties and apposed through Quasi-Judicial with proper reasons.

* Eligibility & Distribution for Bonus:

Eligibility (U/S.8): Every employee shall be entitled to receive bonus, if he works not less then 30 working days in a financial year.

If he worked less than 30 days, the bonus could be reduced proportionately

* Disqualification (U/S: 9):

The employee shall be disqualified from receiving bonus, if he is dismissed from service for: Fraud, Violent behaviour, Theft and Sabotage of any property of factory.

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DETERMINATION OF BONUS

- Bonus can not be claimed by workers as a matter of right The following is the procedure for determining bonus for two different establishments,

namely Banking Company and others.

1. Determination of Gross Profit(GP) – For Banks and Others 2. Determination of available surplus 3. Allocable surplus 4. Proportionate reduction in bonus in certain cases 5. Adjustment of interim bonus paid 6. Time limit for payment of bonus 7. Recovery of bonus

1. Determination of Gross Profit (GP): At first we have to Determine GP from given Net Profit, GP can be calculated as follows:

- A) For a Banking Company – First schedule - Computation of GP from NP Particulars Amt. Amount (in Rs.)

Net Profit (from P&L account) xxxx ADD: Items to be added back to NP-(A)

- Provision for bonus - Provision for depreciation - Any reserves - Any gratuity paid/given - Donations in excess of admissible for IT - Capital expenditure and Capital losses - Losses from business situated out side india

LESS: Items to be deducted from NP – (B)

- Capital receipts - Profit of any business situated outside India - Refund of any excess direct tax paid - Cash subsidy given by Govt.

Gross Profit for Bonus

xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

xxxx xxxx

xxxx

xxxx

A) For Other Companies – First schedule - Computation of GP form NP

Particulars Amt. Amount (in Rs.) Net Profit (from P&L account) xxxx ADD: Items to be added back to NP-(A)

- Provision for bonus - Provision for depreciation/ Direct taxes - Any reserves - Any gratuity paid/given

xxxx xxxx xxxx xxxx

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- Donations in excess of admissible for IT - Capital expenditure and Capital losses - Losses from business situated out side india

LESS: Items to be deducted from NP – (B)

- Capital receipts - Profit of any business situated outside India - Refund of any excess direct tax paid - Cash subsidy given by Govt.

Gross Profit for Bonus

xxxx xxxx xxxx xxxx xxxx xxxx xxxx

xxxx xxxx

xxxx

xxxx

2. Determination of available surplus:

After determining the GP, the establishment should determine the available surplus as under.

Particulars Amt. Amount (in Rs.) Gross Profit (Calculated as above) xxxx Less: Items to be deducted

- Any depreciation admissible - Any amount spent for development - Any direct taxes paid - Amount specified in 3rd Shedule*

Allocable surplus

xxxx xxxx xxxx xxxx xxxx

xxxx

xxxx * The items specified in 3rd Schedule: - Dividend payable to preference share holders - 8.5/ 7.5% of its paid up equity share capital for commencement of Business - 6% of it reserves - Remuneration payable to the partners of the firm - Rs. 48,000 or remuneration paid to employees which ever is less.

3. Allocable surplus: After determining the available surplus, the employee’s share is called allocable surplus. The allocable surplus is the workers’ share in the available surplus.

a. The amount of bonus: - Mini.. bonus: 8.33% of the salary earned during the accounting year (U/s.10) or

Rs.100 p.m.(Rs.60 in case of below 15 years)w.e.is Higher.

- Maximum Bonus: (U/s. 11): It is possible only the allocable surplus exceeds the minimum bonus – i.e 20% of salary.

b. ‘Set on’ & ‘Set off’ of allocable surplus (u/s.15): The rule set-on and set-off is applicable on the allocable surplus.

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(i) ‘Set on’ : Where the allocable surplus for any accounting year exceeds the maximum bonus amount, the excess shall be carried forward to next/succeeding years. It should be utilized only for payment of bonus (the year in which there is no allocable surplus)

(ii) ‘Set- off’: In an accounting year, if the allocable surplus is not available to pay minimum bonus, the unpaid amount is set-off to next year.

Ex. The 4th schedule.

Minimum bonus: Rs.1,04,167 Maximum bonus: Rs.2,50,000

Year Allocable surplus Bonus Set-off / Set-on Total C/f 1 1,04,167 1,04,167 Nil Nil 2 6,35,000 2,50,000 2,50,000 (maxi) 3 2,20,000 2,50,000 (30000

from 2nd year) - 2,20,000

4 Nil 1,04,167 1,15,833 Nil 4. Proportionate reduction in bonus in certain cases: If any employee has not worked for all the working days in an accounting year, the minimum bonus will be reduced proportionately. 5. Adjustment of interim bonus paid If any interim bonus paid during that accounting year, that shall be reduced from actual bonus. 6. Time limit for payment of bonus - With in a month from the date on which the settlement comes into operation. - Or with in a period of 8 months, from the close of the accounting year. 7. Recovery of bonus In case of any due in payment of bonus, the affected person can recover them through Government.

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THE CONTRACT LABOUR (Regulation and Abolition) ACT, 1970 It is applicable where 20 or more workmen are working Contract Labour: A workman is considered to be employed as “Contract Labour” in or in connection with the work of an establishment when he is hired for this work by or through a contractor with or without the knowledge of the principal employer. Contractor: A person, who undertakes to produce a given result for an establishment through contract labour, or who supply contract labour for any work of the establishment (includes sub-contractors). The act does not regard persons as contractors who only supply goods or articles to manufacturers.

Prohibition of employment of contract labour

The employment of contract labour may not be permitted for any process, operation and other work, if it is:

a. Incidental to or necessary for the industry/ business that is carried on in the establishment

b. Of perennial or perpetual (continuous) nature or of a sufficient duration

c. Done ordinarily through regular workmen in that establishment or an establishment similar there to;

d. Capable of employing considerable number of whole time workmen Contract Labour employed on the following

1. Loading and unloading 2. Stacking and unstacking 3. Construction and maintenance of buildings and roads 4. Seasonal works.

Licensing of contractors Every contractor has to obtain a license for employing contract labour from the licensing officer appointed by the Government for this purpose.

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Welfare and Health of Contract Labour The contractors are required to provide and maintain:

a. A sufficient supply of wholesome drinking water at convenient places b. A sufficient number of latrines and urinals of the prescribed type

conveniently situated and accessible c. Washing facilities d. A first-aid box equipped with prescribed contents at every place where

contract labour is employed e. Canteen facilities- if work is to continue for more than 6 months and 100 or

more workers are employed. Obligations of Principal employer or Contractors:

1. Get his establishment registered with registering officer 2. Obtain a license from licensing authority for employing contract labour 3. Not to employ contract labour without obtaining a registration certificate

and license 4. Provide welfare and health facilities 5. Pay wages to workers before the expiry of the wage period 6. Co-operate with the inspectors during inspection of premises, documents,

etc., 7. Maintain the registers and records about contract labours, such as nature

of work performed, rates of wages and other information 8. Exhibit in the information of hours of work, rates of wages, wage period,

nature of duties, etc. 9. Send a half-yearly return to the licensing officer and yearly return to

registration officer. Rights of Contract Labour 1. Claim such working conditions, facilities and other benefits as are provided

under this act 2. They can be represented by their representatives on the Central and State

Advisory Boards.

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THE PAYMENT OF GRATUITY ACT, 1972 Gratuity: It is a benefit or amount earned by the employee as a reward for faithful service over a long period and meritorious service. It is earned by an employee as a reward for long, meritorious and continuous service. Calculation: 15 days’ salary for every completed year of service, subject to a maximum of Rs.3,50,000. Retirement: It means termination of the service of an employee on superannuation (attainment of age as is fixed in the contract or conditions of service) Continuous service: An employee shall be said to be in continuous service for a period if he has for that period, been in uninterrupted service, (Interrupted due to sickness, accident and leave will not be considered). Payment of Gratuity

1. Gratuity payable on termination of employment - Shall be payable on termination of his employment after rendered

continuous service for not less than 5 years. a. On his superannuation or b. On his retirement c. On resignation d. On his death/ disablement due to accident/ disease.

- The completion of continuous service of 5 yrs shall not be necessary where termination due to death/ disablement (On death – gratuity to nominee).

2. Rate of Gratuity: 15 days’ salary for every completed years of service (26 days per month). 15 days wages (Averages of 03 months total wages earned him at the time of termination – overtime wages will not be considered).

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3. Maximum gratuity: Rs.3,50,000 (from 1998)

4. Forfeiture of gratuity: Payment of gratuity may be forfeited – due to termination on willful omission, negligence causing any damage/loss, destruction of any property and theft. The gratuity shall be forfeited to the extent of the damage or loss he made and it may be wholly or partially forfeited.

5. Nomination

a. Nomination within 90/ 30 days: After completion of 1 year of service. b. More than one nominee is possible c. Nomination in favour of family members: A person who is not a

member of his family shall not be a nominee. d. Modification of nomination: It is possible at any time by employee by

giving notice to his employer. e. Death of nominee- pre-diseased the employee – Need a fresh

nominee

6. Determination/ application of gratuity - Employee may apply before 30days of the date of retirement - Nominee can apply within 30 days from date of retirement - Payment will be within 30 days of application, if not interest will be

collected.

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THE EMPLOYEES’ STATE INSURANCE ACT, 1984 It is an act established/ amended to protect the employee from social evils, such as sickness, maternity and other disabilities. Who is an insurable workman? Every employee of a factory to which the act applies is an insurable person. Except the following:

- Workers in mines - Workers in Railways running sheds - Members of the Indian Naval, Military, Air. - Workers whose wage exceeds Rs.3000pm.

Employee State Insurance Corporation A statutory body known as the ESI corporation has been created to administer and execute the scheme of ESI. Constitution of ESI Corporation

1. A Chairman, a Vice-chairman (not more than 5 persons to be appointed by the Central Govt.,)

2. 1 person from each state (Appointed by such state) 3. 1 person from each union territory. 4. 10 persons from employers 5. 10 persons from employees 6. 2 MPs from Lok Sabha 7. 1 MP from Rajya Sabha 8. 02 persons representing the medical profession 9. The Director General of the ESI Corporation

# Chairman, Vice-chairman and Director General of the ESI Corporation – Will hold the office upto any new appointment made the Govt.

# For all other 04 years.

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Powers of the ESI Corporation

1. It may employ the necessary staff for the efficient transaction of its business

2. In addition to the available schemes, it can promote measures for the improvement of the health and welfare of insured persons and for the rehabilitation and re-employment of insured persons who have been disabled and injured.

3. It can acquire, hold, sell and transfer any movable and immovable property.

4. It can invest money 5. It can raise loans and take measures for discharging such loans 6. It may constitute for the benefit of its staff PF 7. It may appoint inspectors 8. It can determine the amount of contribution payable in respect of

employees (Where proper records not available). Duties of the ESI Corporation

1. Each year to frame a budget 2. It shall maintain correct accounts 3. It shall submit annual report to the Central Govt. 4. Valuation of its assets in every 5 years. 5. The annual report, audited accounts reports of ESI Corporation, budget to

be finally presented to Parliament and published in Official Gazette. Standing Committee Standing Committee to General superintendence and Control of ESI corporation and acts as a executive body. Members of Standing Committee

1. A Chairman 2. 3 Members of ESI Corporation (appointed by Central Govt.) 3. 3 Members from ESI Corp. of 03 states 4. 8 Members from ESI corporation (3 Employer members from ESIC, 3

Employee members from ESIC, 1 ESIC’s Medical practitioner and 1 ESI member elected by Parliament.

5. The Director General of ESI Corp.

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Contribution

1. Employer’s Contribution: 5% on total wages (per month) of all employees, rounded to nearest 5 paise.

2. Employees’ Contribution: 2.5% of one month wage.

Exemption: Employee who earns, less than Rs.15 as his daily wages is exempted from contribution.

Example:

Employee Monthly wages Employees’ Contribution (2.5% on Monthly wages)

A 1,570 35.32 33.35 B 1,430 32.18 32.20 C 1,216 27.36 27.40 D 981 22.09 22.10 E 350* - - F 150* - - 5697 117.05

*Monthly wages less than Rs.15 per day (26 days/month), so exempted from employees’ contribution.

Employer’s contribution is 5% on Rs.5697, i.e., 284.85.

Standard rate of benefit

# Daily rate of benefit in respect of group of employees specified in the first column (SBR –Standard Benefit Rate).

S.No. Group of employees whose average daily wages

Corresponding Daily SBR in Rs.

1 Below Rs.6 2.50 2 Rs.6 and above but below Rs.8 3.50 3 Rs.8 and above but below Rs.12 5.00

4 Rs.12 and above but below Rs.16 7.00




8 Rs.48 and above 28.00

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Benefits under ESI act 1. Sickness benefit 2. Maternity benefit 3. Disablement benefit 4. Dependants’ benefit 5. Medical benefit 6. Funeral benefit # All benefits, except medical benefit are monetary benefits. 1. Sickness benefit

The daily rate of sickness benefit shall be the standard benefit rate (SBR) corresponding to the average daily wages. An insured person shall be entitled to this benefit only if his sickness is certified by a duly appointed medical practitioner. Example: Earns between Rs.6-Rs.24 daily, SBR is Rs.10/day. Maximum period of 56 days, first two days not allowed.

2. Maternity benefit

It is for confinement, miscarriage and sickness due to pregnancy. The daily rate of maternity benefit shall be equal to twice the SBR. Example: Daily wage rate is Rs.6 – Rs.8 (Rs.3.5 x 2 times), therefore Rs.7 is the daily rate. # During that 12 weeks, not exceeding for 6 weeks.

3. Disablement benefit

Payable to insured employee suffering from disablement as a result of an employment injury. Employment injury includes,

- Accidents happening while travelling in employer’s transport, - Accidents happening while meeting emergency - Occupational disease

Full rate: ie.40% extra on normal SBR. Example: Daily wage rate is Rs.8 – Rs.12, SBR is Rs. 5. So, Rs.5 and 40% on Rs.5 extra. (5+2 = Rs.7).

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4. Dependant’s benefit If an insured person dies as a result of an employment injury, his dependents who are entitled to compensation under this act. It shall be entitled to periodical payments. Rate of Benefit

a. To Widow – An amount equivalent to 3/5th of the full rate (Full rate – 40% more than the SBR. If more than one widow, the amount will be shared.

b. To each legitimate/ adopted son- 2/5th of full rate until he attains 18 years of age.

c. To each legitimate/ adopted unmarried daughter – 2/5th of the full rate until she attain 18 years of age or until marriage whichever is earlier.

d. If no widow/ legitimate/ adopted child means i. To the parent/ grandparent for life – 3/10th of full rate ii. Any other person/ male or female dependent

5. Medical benefits

This benefit to an insured person and/ or a member of his family whose condition requires medical treatment. Who are eligible for sickness benefit and maternity benefit can avail medical benefit. Receipt of such benefit does not disentitle him to receive medical benefit. An insured person may cease to be in insurable employment on account of permanent disablement, can receive medical benefit till the death.

Scale of Medical benefit - An insured person and his family shall be entitled to receive MB - State Government is in-charge for that - They shall have no right to claim any medical treatment except such

as is provided by the dispensary, Hospital, Clinic, etc. - Shall not be entitled to claim reimbursement from the ESI corporation.

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6. Funeral expenses In case the insured person dies, the expenditure on his funeral, call as funeral expenses.

- Shall be payable to eldest surviving member of the family - Claim must be made within 3 months from the date of death - Rs.1000 is prescribed as Funeral expenses.

General provisions regarding benefits

1. Benefit not assignable or attachable

2. Bar of similar benefit

3. Cash benefit not commutable

4. Benefit not received in certain cases

5. Benefits not to be combined

6. Repayment of benefit improperly received

7. Benefit payable up to day of death

8. Employer not to reduce wages

9. Employer not to dismiss employee during sickness

10. Enhancement of benefit.

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THE WORKMEN’S COMPENSATION ACT, 1923 It is to provide for the payment of compensation by certain classes of employers to their workmen for injury by accident. Defenses available to employees before passing of the act – to avoid his liability to pay.

1. Doctrine of assumed risks – “ volenti non fit-injuria” : That is a person voluntarily agreed to take risk of injury, no remedy in law.

2. Doctrine of common employment 3. Doctrine of contributory negligence 4. End of personal action with death.

Disablement Loss of capacity to work or to move, it reduces his earning capacity. Disablement may be, Partial (Permanent or temporary) and Total. Rules regarding workmen’s compensation

1. Personal injury caused to him by accident Employer is liable for personal injury is caused to him by accident – due to his employment. Accident; An occurrence is unexpected and without any design on the part of the workman. - Arising out of and in the course of employment or

2. Occupational diseases: Occupations are exposed to certain diseases, which are inherent in those occupations.

Amount of Compensation: It depends on a) The nature of injury b) The monthly wages of the workmen concerned c) The relevant factor for working our lump-sum Compensation for: a) Death, b)Permanent total disablement c) Permanent partial disablement and d) Temporary disablement, whether total or partial.

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SCHEDULE –IV (SEC.4) Factors for working out lump-sum equivalent of compensation amount in case of permanent disablement and death.

Completed years of age on the last birthday of the workman immediately preceding the date on which the compensation fell due

Age Factor Age Factor Not more than 16

228.54 Not more than 41

181.37

17 227.49 42 178.49 18 226.38 43 175.54 19 225.22 44 172.52 20 224.00 45 169.44 21 222.71 46 166.29 22 221.37 47 163.07 23 219.95 48 159.80 24 218.47 49 156.47 25 216.91 50 153.09 26 215.28 51 149.67 27 213.57 52 146.20 28 211.79 53 142.68 29 209.92 54 139.13 30 207.98 55 135.56 31 205.95 56 131.95 32 203.85 57 128.33 33 201.66 58 124.70 34 199.40 59 121.05 35 197.06 60 117.41 36 194.64 61 113.77 37 192.14 62 110.14 38 189.56 63 106.52 39 186.90 64 102.93 40 184.17 65 or more 99.37

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1. Compensation for Death Amount of compensation = 50% of monthly wages x Relevant factor

Or Rs.50,000 w.e. is more Eg. 50 x monthly wages x Relevant factor OR Rs.50,000 w.e. is more

100

2. Compensation for permanent total disablement

Eg. 60 x monthly wages x Relevant factor OR Rs.60,000 w.e. is more 100

3. Compensation for permanent partial disablement

Eg. 60 x 500 x Relevant factor OR Rs.60,000 w.e. is more 100

4. Compensation for temporary disablement – total or partial

25% of monthly wages of the workman shall be payable every half-month

Compensation not to be assigned, attached or charged.

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MATERNITY BENEFIT ACT, 1961

The act was passed to regulate the employment of women in certain establishments for certain period before and after child- birth and to provide for maternity benefit and certain other benefits.

Definitions

1. Child: A Still born child 2. Delivery – the birth of a child 3. Miscarriage – expulsion of the pregnant uterus at any period prior to or

during 26th week of pregnancy. Prohibition of employment

1. An employer is prohibited from knowingly employing any women in any establishment during the 06 weeks immediately following the day of her delivery or her miscarriage.

2. Employer shall not give any work for the following nature as per her request

- Any work is in arduous (difficult) nature - Work involves long hours of standing - Any work interfere with her pregnancy/ normal development of fetus - Period of one month immediately preceding the expected ate of

delivery. Maternity benefit Right to payment of maternity benefit: Average daily wages or 03 months average of salary Conditions:

- Minimum 80 days she has worked - Maximum period of maternity benefit 12 weeks - Death: If the women dies during this period of 12 weeks – benefit shall

be payable only for the days up to her death. - If death during delivery – benefit for entire period.

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# Notice of claim for maternity benefit and payment there of

- Any women employed in an establishment - May give notice to her employer - Shall be in writing in a prescribed form - Under taking that she will not work in any establishment during the

period - In the notice, shall state the date from which she will be absent/ leave - Failure to give notice shall not disentitle her to maternity benefit - Mode of payment – shall be paid in advance – production of proof -

within 48 hours from production of proof.

# Payment of maternity benefit in case of death of a women - Will be given to nominee or - To any legal representative

# Forfeiture of maternity benefit

- She shall forfeit her claim to the maternity benefit for such period # Dismissal during absence of pregnancy:

- Unlawful for her employer to discharge or dismiss her during such absence.

- The employer cannot discharge the/ stop the maternity benefits, but incase, such dismissal is due to misconduct, she may be refused.

Reasons: - Willful destruction of employer’s goods or property - Assaulting any superior’s place of work - Criminal offence - Theft, fraud, etc.,

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THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS

PROVISIONS ACT, 1952

Provident fund is a social security measure; induce employees to save a portion

from their present earnings for the future benefits and welfare.

Factories and establishments employing 20 or more persons are covered

under this act. Initially this act applied to industries engaged in the manufacturing

of cement, cigarettes, electrical, mechanical or engineering products, steel, paper

and textiles. The act now extended to over 150 industries and classes of

establishments.

EPF Schemes

- It is applies to all factories and other establishments to which the act

applies

- Both employer and employees contribute up to 12% on basic wages

or 8.33% -10%.

- Employer’s contribution 8.33% on basic wages, DA and other

allowances (retaining)

- Employees also contribute the same

(Retaining allowances – Allowance paid during any period in which

the establishment is not working for retaining his service)

Employees’ pension scheme

For the purpose of providing pension and life assurance benefits to the

employees of any establishment or class of establishments.

Schemes:

- Superannuation pension

- Retiring pension

- Permanent total disablement pension

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- Widow or widower’s pension

- Children pension

- Orphan pension

Pension fund: Contributed by employee maximum of 8.33% on BP +DA+RA

Employees’ Deposit – linked insurance scheme and fund

- Amended for the purpose of providing life insurance benefits to the

employees.

- The employer shall pay into the insurance fund from time to time – 1%

on aggregated BP+DA+RA.

Date post:	13-Mar-2018
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