What are the salient features of Shop and Establishment Act?

The Act is designed to regulate the payment of wages, hours of work, leave, holidays, terms of
service and other work conditions of people employed in the shop and commercial
establishments. In this article, we look at the salient features of the Shop and Establishment Act.

https://www.srcc.edu/sites/default/files/B.Com%20(H)_Sem6_BCH%206.4%20(d)_Industrial
%20Relations%20and%20Labour%20Laws_W2_CG_UNIT%205_0.pdf

https://www.ilo.org/dyn/natlex/docs/WEBTEXT/32063/64873/E87IND01.htm

6. MANUFACTURING PROCESS
https://www.academia.edu/8511337/The_Factories_Act_1948

Factory' means any premises where 10 or more workers are working and a
manufacturing process is carried out with aid of power (20 if manufacture is without
aid of power). [section 2(m)]. ‘Manufacturing process’ means process of altering,
repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up,
demolishing or otherwise treating or adopting any article or substance. It also
includes * pumping oil, water, sewage or any other substance * Generating,
transforming or transmitting power * Composing, typing, printing * Constructing,
repairing, breaking of ships or vessels * Preserving articles in cold storage. [section
2(k)]. - - Worker means a person employed in any manufacturing process or cleaning
or any work incidental to manufacturing process. It includes persons employed
through contractor. [section 2(l)].
9. MATERNITY FORFEITED

Forfeiture of maternity benefit —If a woman works in any establishment after she has
been permitted by her employer to absent herself under the provisions of section 6
for any period during such authorised absence, she shall forfeit her claim to the
maternity benefit for such period.

http://ncwapps.nic.in/acts/TheMaternityBenefitAct1961.pdf
10.MATERNITY - ALL BENEFITS TO FEMALE EMPLOYE
THE MATERNITY BENEFIT ACT, 1961 
The object of the Maternity Benefit Act, 1961 is to protect the dignity of motherhood by
providing for the full and healthy maintenance of woman and her child when she is not
working. Therefore, this Act was passed aiming at a uniform maternity benefit all over
the country providing Maternity Leave to all eligible female employees
 
APPLICABILITY
The Maternity Benefit Act, 19 applies to:
·         Factory, Mines, Plantation, Government Establishment, Exhibition of equestrian,
Acrobatics & other performances
·         Shops and establishments with 10 or more person employed
·         By Notification to other establishments, Industrial, commercial, agricultural or
otherwise after giving not less than months’ notice
 
ELIGIBILITY
Every women shall be eligible for maternity benefit when she is expecting a child and
has worked for her employer for at least 80 days in the 12 months immediately
preceding the date of her expected delivery (Section 5)
 
CONDITIONS FOR CLAIMING BENEFIT
 Ten weeks before the date of her expected delivery, she may ask the employer to
give her light work for a month.  At that time she should produce a certificate
that she is pregnant
 She should give written notice to the employer about seven weeks before the
date of her delivery that she will be absent for six weeks before and after her
delivery. She should also name the person to whom payment will be made in
case she cannot take it herself
 She should take the payment for the first six weeks before she goes on leave
 She will get payment for the six weeks after child-birth within 48 hours of giving
proof that she has had a child
 She will be entitled to two nursing breaks of fifteen minutes each in the course of
her daily work till her child is fifteen months old
 Her employer cannot discharge her or change her conditions of service while she
is on maternity leave (Section 5)
 
PERIOD OF MATERNITY BENEFIT
 It shall be twenty - six weeks of which not more than eight weeks shall precede
the date of her expected delivery and the remaining eighteen weeks can be
availed after delivery [Section 5(3)]
 The Section does not, however make it compulsory that the women employee
shall necessarily avail eight weeks leave preceding the delivery. It only forbids
her not to take more than eight weeks maternity leave if she intends to proceed
on leave prior to delivery. It is open to her to avail leave for less number of days
also. However the total period of leave admissible to her under the Act is twenty-
six weeks
 
CASH BENEFIT
·         Leave with average pay for six weeks before the delivery
·         Leave with average pay for six weeks after the delivery
·         A medical bonus of Rs. 3500.00 if the employer does not provide free medical
care to the woman
·         An additional leave with up to one month if woman shows proof of illness due
to pregnancy, delivery, miscarriage or premature birth
·         In case of miscarriage, six weeks leave with average pay from the date of
miscarriage
 
NON CASH BENEFIT
·         Light work for ten weeks (six weeks plus one month) before the date of her
expected delivery, if she asks for it
·         Two nursing breaks in course of her daily work until the child is 15 months old
·         No discharge or dismissal while she is on maternity leave
·         No change to her disadvantage in any of the conditions of her employment
while no maternity leave
·         Pregnant woman discharged or dismissed may still claim maternity benefit
from the employer
·         EXCEPTION: Woman dismissed for gross misconduct lose their right under this
Act
 
LEAVE FOR MISCARRIAGE AND TUBECTOMY OPERATION
·         Leave with wages at the rate of maternity benefit, for a period of six weeks
immediately following the day of her miscarriage of her medical termination of
pregnancy
·         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 9 &
13)
 
LEAVE FOR ILLNESS ARISIMG OUT OF PREGNANCY ETC
·         A woman suffering from illness arising out of pregnancy, delivery, premature
birth of child (miscarriage, medical termination of pregnancy or tubectomy
operation) be entitled, in addition to the period of absence allowed to her leave
with wages at the rate of maternity benefit for a maximum period of one month
(Section 12)
 
FORFEITURE OF MATERNITY BENEFIT
·         If permitted by her employer to absent herself under the provision of Section 6
for any period during such authorized absence, she shall forfeit her claim to the
maternity benefit for such period
·         For discharging or dismissing such a woman during or on account of her
absence from work, employer shall be punishable with imprisonment which
shall not be less than 3 months but will extend to one year and with fine, not
exceeding Rs 5000 (Section 18)
THE MAHARASHTRA SHOPS AND ESTABLISHMENTS ACT, 1948
 
The Maharashtra Shops and Establishments Act, 1948 regulates the condition of work
and employment in shops, commercial establishment, residential hotels, restaurants,
eating houses, theatres, other places of public amusement or entertainment and other
establishments. S&E Act mandatorily requires every establishments covered under this
Act to obtain Registration Certificate.  
 
APPLICABILITY
 
The Act is applicable to local areas, specified in Schedule I in the State of Maharashtra.
However the State Government can extend the application of the Act by notification to
other local areas having population of twenty five thousand and more or even less than
twenty five thousand [Section 1(2)(3) (4) & (5)]
 
COVERAGE
 
The Act, through various provisions makes it clear that it is applicable to Shops and
Commercial establishments, residential hotels restaurants eating hotels , theatres or
other places of public amusement and entertainment located in such local areas as may
be notified
 
REGISTRATION
 
·         Every establishment shall send to the Inspector of the local area concerned a
statement, in a prescribed Form A, together with such fees, within 30 days from
the date of commencement of work as may be prescribed, containing-
(a)   the name of the employer and the manager, if any;
(b)   the postal address of the establishment;
(c)   the name, if any, of the establishment;
(d)   the category of the establishment, i.e., whether it is a shop, commercial
establishment, residential hotel, restaurant, eating house, theatre or other
place of public amusement or entertainment; and
(e)   such other particulars as may be prescribed (Section 7, Rule 5, Form A)
·         The information is required to be transmitted electronically with requisite
fees (Rule 22 & 23)

LEAVE PROVISION
 
PROVISION ELIGIBILITY & CALCULATION
Subject to the provisions of clause (b), every employee who has
been employed for not less than three months in any year, shall for
every 60 days on which he has worked during the year be allowed
Section 35(1)(a)
leave, consecutive or otherwise, for a period of not  more than five
days;
 
Section 35 (1)(b) every employee who has worked for not less than two hundred and
forty days during  year irrespective of the date of commencement
of his service, shall be allowed leave, consecutive or otherwise, for
 a period of not less than twenty-one days;
 
Provided that such leave may be accumulated up to a maximum
period of forty-two days
 
Explanation: The leave allowed to an employee under clauses (a)
and (b) shall be inclusive of the day or days during the period of
such leave, on which a shop, or commercial establishment remains
closed under sub-section (1) of section 18, or on which he is
entitled to a holiday under sub-section (1) of section 24 or section
31
 
Pay during leave.-Every employee shall be paid for the period of his
leave at a rate equivalent to the daily average of his wages for the
days on which he actually worked during the preceding three
Section 36
months, exclusive of any earnings in respect of overtime.

 REGISTERS

PROVISIONS NAME OF REGISTERS FORMS

Section 62, Rule 20
Section 62, Rule 20
Section 62, Rule 20
Section 62, Rule 20
Section 62, Rule 20
Section 62, Rule 20
Section 62, Rule 20
Section 8, Rule 8
Register of Employment H or J
Notice of Holiday L
Register of Leave M
Leave Book N
Muster Roll - Cum- Wage Registers  Form II
Display Abstract of the Act and Rules  
on the establishments statutory notice
board in the language understood by
the majority of employees
Visit Book as per specification under  
Rule 20
Notice of Change E
THE PAYMENT OF GRATUITY ACT, 1972

The Payment of Gratuity Act, 1972 deals with provisions for gratuity and imposes
duty upon every establishment covered under this Act to provide benefits under
this Act to all the eligible employees
 
APPLICABILITY
·       This Act applies to every shops or establishments within the meaning of any law
for the time being in force in a State, in which 10 or more persons are employed
or were employed on any day of the preceding 12 months
·       A shop or establishment to which this Act has become applicable shall continue
to be government under this Act notwithstanding the number of persons
employed therein at any time after it has become applicable
 
8. GRATITUITY ELIGIBILITY CRITERIA
·      Every employee shall be eligible for the gratuity if he/she has completed 5 years
of continuous
      service
·      If the person has worked for 5 years and 6 months, then he is deemed to have
worked for 6 years but
      less than 6 months not to be considered
·       The gratuity shall be payable to an employee on termination of his employment
after he has rendered continuous service for not less than 5 years or,
o   On his superannuation, or
o   On his retirement, or where his death or total disablement the condition of
5 years complete service will not be applicable
o   For every completed year of service or part thereof in excess of six months
the employer shall pay gratuity to an employee at the rate of fifteen days’
wages based on the rate of wages last drawn by the employee concerned
 
NOMINATION
1.     The employee who intends to nominate shall have completed one year or service
2.     He shall make such nomination within thirty days of completion of one year
service in Form F in duplicate and either personally deliver it to the employer or
send it by registered post with acknowledgement due
3.     The employer after verifying the employee’s details in nomination form shall
record the nomination after acknowledging receipt thereof to the employee
4.     An employee who has no family at the time of nomination can make nomination
in favor of any person or persons but if he acquires a family thereafter, he has to
make a fresh nomination in Form G within ninety days in duplicate in favor of
one or more members of family of one or more members of his family
5.     An employee who intends to modify his nomination, can do so, after giving
written notice to the employer in Form  H
6.     A nomination or fresh nomination or modification of nomination shall be duly
signed by the employee or shall bear his thumb impression (if illiterate) in the
presence of two witnesses (Section 6 r/w Rule 6)
 
PROCEDURE FOR PAYMENT OF GRATUITY
1.     The employee shall make an application in Form I to the employer within 30
days from the date on which it becomes payable either by personal service on
the employer or by the registered post with acknowledgement due (Section 7
r/w Rule 7)
 
His nominee shall make an application in Form J within 30 days of ot becoming
payable. In case employee’s death, his legal heir can apply in Form K within one
year to then employer (Section 7 r/w Rule 7)
 
2.     The employer shall calculate the gratuity in the manner stated as prescribed
under the Act, as soon as the gratuity becomes payable whether or not an
application is made (Section 7)
3.      The employer thereafter shall give the notice in Form L within 15 days of receipt
of the application to the employee, or his nominee or his Legal heir under a copy
the controlling authority. Such notice be served either by personal service
against receipt or by registered post with acknowledgment due (Section 7 r/w
Rule 8)
4.     If the gratuity is not payable, the employer shall give the notice in Form M, to the
employee or his nominee or his legal heir with the reason for the same under a
copy to the controlling Authority
5.     If the amount is payable, the employer shall arrange to pay the gratuity within 30
days from the date it becomes payable
6.     In case of nominee or legal heir, the employer shall obtain the witness to
establish the identity of them
 
MODE OF PAYMENT OF GRATUITY
1.     Gratuity amount shall be paid in cash or
2.     Be sent by demand draft or by bank cheque to the employee, nominee or legal
heir as the case may be  or
3.     Be sent by money order, if gratuity amount is less than Rupees 1000 or
4.     In case of minor, the controlling authority shall invest the gratuity amount in SBI
or its subsidiaries or nationalized bank  (Rule 9)
 
RESPONSIBILITIES OF EMPLOYER
1.     Employer shall submit details regarding its opening in Form A to the controlling
authority, within 30 days of the Act becoming applicable to the establishment
(Rule 3)
2.     Employer shall submit details to the Controlling Authority in Form C, within 60
days before the intended closure of the establishment (Rule 3)
3.     Employer shall intimate change in name, address, employer or nature of business
to the Controlling Authority in Form B (Rule 3)
4.     Employer has to register his establishment with the Controlling authority.
(Section 4-A)
5.     If the employer has their own gratuity fund then her shall have to obtain the
insurance cover as laid down under Section 4-A of the Act
6.     The amount of the gratuity shall be determined in terms of Section 7 of the Act
 7.     Employer shall issue the notice of the payment to employee within the stipulated
period and pay the gratuity within the prescribed time as per Section 8 read with
Rule 7
8.     In case of the default by the employer, he is required to pay simple interest at the
prescribed rate [Section7(3A)]
9.     He is required to furnish such information or such records and registers as are
called for by the Inspector for inspection
10. Employer shall display an abstract of the Act and Rules in Form U in English or
such other language which can be understood by the employees (Rule 20)
11.  No deduction shall be made in the gratuity which is not permissible under the
Act [Section 4(6)]
 
CONTRAVENTION-PENALTY
CONTRAVENTION PENALTY
For not obtaining insurance for the Fine upto Rupees 10000 and Rupees 2000 for
employer’s liability for Gratuity each day of default for continuing the offence
For making false statement or false Six months imprisonment or with fine upto
representation to avoid payment of Rupees 10000 or both
gratuity
For violating or non-compliance of Imprisonment minimum-3 months –
any provision of the Act maximum one year or fine – minimum
Rupees 10000 or – maximum Rupees 20000
For non-payment of gratuity Sentence minimum – 6 months maximum –
two years
THE PAYMENT OF BONUS ACT, 1965
 
The Payment of Bonus Act, 1965 is enacted to provide for the payment of
statutory bonus to persons employed in certain establishments on the basis of profits or
on the basis of production or productivity and for matters connected therewith. The Act
also provides for minimum bonus and maximum bonus payable to the eligible
employees
 
APPLICABILITY
The Act is applicable to:
·         Every factory where in 10 or more persons are employed with the aid of power;
or
·         Establishment in which 20 or more persons are employed without the aid of
power on any day during 
        an accounting year (Section 1)
 
ESTABLISHMENT
Establishments includes Departments, undertakings and branches etc
 
ELIGIBILITY
·      Employees drawing wages up to ( before amendment - Rs 10000) after
amendment Rs 21000 per month
·       Minimum Bonus is 8.33% of the Salary
·       Maximum Bonus id 20% of the Salary
·       CAP for calculating bonus (before amendment - Rs 3500 per month) after
amendment Rs 7000 per month or the rate of minimum wages, whichever is
higher
·       An employee will be entitled to get bonus only when he has worked for not less
than 30 working days in the relevant accounting year
 
TIME LIMIT FOR PAYMENT OF BONUS
·         Within 8 months from the closing of the accounting year
·         If disputed then within 1 month from the date on which award becomes
enforceable
 
DISQUALIFICATION & DEDUCTION OF BONUS
 On dismissal of an employee for;
 Fraud; or
 riotous or violent behavior while in the premises of the establishment; or
 theft, misappropriation or sabotage of any property of the establishment or
·         Misconduct of causing financial loss to the Employer to the extent that bonus
can be deducted for that year (Section 9 & 18)
 
COMPUTATION OF GROSS PROFIT
·         For banking company, as per First Schedule
·         Others, as per Second Schedule (Section 4)
 
SET-OFF AND SET-ON
As per Schedule IV (Section 15)
 
COMPONENTS OF BONUS
 Salary or wages includes dearness allowance but no other allowances e.g. overtime,
house rent, incentive or commission. [(Section 2 (21)]
 
 
EMPLOYER'S DUTIES
·       Every employer shall pay either minimum bonus or maximum bonus in lieu
thereof to every eligible employee
·       In the State of Maharashtra the employer shall pay the bonus in A/c payee
cheque or by the way of crediting the same to the bank A/c of the employee
(Section 11A)
·       He shall pay bonus within 8 months from the close of the accounting year unless
such period is extended by the appropriate Government (Section 19)
·        Every employer shall maintain the following records/registers (Section 26):
o    A register showing allocable surplus in Form A
o    A register showing the set on and set off of the allocable surplus under
Section 15 in Form B
o    A register showing the details of the bonus disbursed with the deductions
under Section 17 & 18, in Form C
·       Every employer shall send a Return in Form D to the Inspector within 30 days of
the time limit specified under Section 19
·       Ever employer shall maje available all information or records/ registers sought
by the Inspectors in connection with compliance of the Act (Section 27)
 
 
PENALTY
For the contravention of any provision is the Act or the Rule: Imprisonment up to 6
months or with fine upto Rs 1000 or both (Section 28)
 
THE PAYMENT OF WAGES ACT, 1936
 https://www.slideshare.net/shalusaraf/payment-of-gratuity-act-1972-ppt
https://www.slideshare.net/kushnabhchhabra/payment-of-gratuity-act-1972-52410814
https://www.slideshare.net/anilkumar/payment-of-gratuity-act-1972-14069467
https://www.slideshare.net/Manisha_D_Vaghela13/payment-of-wages-act
https://www.slideshare.net/piyushsanghi/the-payment-of-gratuity-act-1972

Payment of Wages Act regulates and governs payment of wages. The Act provides for
responsibility of payment of wages, disbursement of wages, period of wages, fixation of
wage period, time and mode of payment of wages, wage cycle etc. 
 
APPLICABILITY
The Act applies:
1.      To every establishment covered by the Maharashtra Shops and Establishments
Act, 1948
2.      To Factories, Railways etc.
3.      Industrial establishment mentioned in Section 2(ii)(a) to (g)
4.      By notification under Section 2(ii)(h)
 
The Act does not apply to employees drawing wages more than Rs 18000 per month
[Section 1(6)]
 
COVERAGE OF EMPLOYEES
 Employees drawing wages up to Rs 6500 per month are covered under the Act as
amended with effect from 6th September 2005
 
TIME OF PAYMENT OF WAGES
1.      An employer shall not delay unduly the payment of wages to his employees.
2.      In case of an establishment, employing less one thousand persons, the wages are
to paid before the expiry of seventh day
3.      In any other case, before the expiry of tenth day after the last day of the wage
period (Section 5)
 
PAYMENT OF WAGES TO AN EMPLOYEE WHOSE SERVICES WERE TERNMINATED
Where the services of an employee are terminated by the employer, his wages become
payable before the expiry of the second working day from the day on which the
employment is terminated
 
MANNER OF PAYMENT OF WAGES
1.      The Act stipulates that all wages are to be paid in current coins or coin or
currency notes or in both but not by way of cheque or by crediting to the account
of the employee (Section 6)
2.      Further, all payments of wages are to be made on a working day [Section 5(4)]
 
EMPLOYER'S LIABILITY
1.      Every employer shall fix wage period
2.      Every employer shall ensure that wages are paid within the periods prescribed
under the Act
3.      He shall ensure that wages are paid in current coin or current notes
4.      He shall pay wages on working days
 5.      He shall extend all co-operation necessary to the Inspectors for conducting
enquiry and afford all facilities to him for making entry, inspection, supervision,
examination or enquiry under this Act
6.      He shall display a notice containing an abstract of the Act and the rules in
English and in the language of majority of employees
7.      Every employer shall maintain records and registers in the prescribed form
containing particulars of persons employed, work performed, wages paid
deductions effected and receipts given by them
8.      He shall preserve the records fot s period of three years  
 
 
PENALTIES
Fine not less than Rs. 1000, which may
extend to Rs. 5000.  On subsequent
On contravention of Section 5 (except conviction fine not less than Rs. 5000, may
Subsection .4), Section 7, Section 8 (except extend to Rs. 10000. On contravention
Subsection 8), Section 9, Section 10 (except Section 4, 5(4), 6, 8 (8), 10(2) or Section 25
Subsection 2) and Section 11 to Section 13 fine not less than Rs. 1000. - may extend to
Rs. 5000. On subsequent on conviction fine
not less.
 For failing to maintain registers or
records; or
 Willfully refusing or without lawful 
 Fine which shall not be less than Rs.
excuse neglecting to furnish
1000 but may extend to Rs. 5000 –
information or return; or
On record conviction fine not less
 Willfully furnishing or causing to be
than Rs. 5000, may extend to Rs.
furnished any information or return
10000.
which he knows to be false or
 For second or subsequent
 Refusing to answer or willfully
conviction, fine not less than Rs.
giving a false answer to any
5000 but may extend to Rs. 10000.
question necessary for obtaining
any information required to be
furnished under this Act.
  Willfully obstructing an Inspector
in the discharge of his duties under
this Act; or
 Refusing or willfully neglecting to
afford an Inspector any reasonable Fine not less than Rs.1000 extendable upto
facility for making any entry, Rs.5000 – On subsequent conviction fine
inspection etc. not less than Rs.5000 – may extent to
 Willfully refusing to produce on the Rs.10,000
demand of an inspector any register
or other document kept in
pursuance of this Act; or preventing
any person for appearance etc.
 On conviction for any offence and  Imprisonment not less than one
 month extendable upto six months
again guilty of Contravention of
and fine not less than Rs.2000
same provision.
extendable upto Rs.15000.
 Failing or neglecting to pay wages
 Additional fine upto Rs. 100 for
to any employee
each day
CHAPTER II MINIMUM WAGES

Payment of minimum rate of wages.

. No employer shall pay to any employee wages less than the minimum rate of wages notified by the
appropriate Government.

Fixation of minimum wages.

. (1) Subject to the provisions of section 9, the appropriate Government shall fix the minimum rate of
wages payable to employees in accordance with the provisions of section 8. (2) For the purposes of
sub-section (1), the appropriate Government shall fix a minimum rate of wages–– (a) for time work;
or (b) for piece work. (3) Where employees are employed on piece work, for the purpose of sub-
section (1), the appropriate Government shall fix a minimum rate of wages for securing such
employees a minimum rate of wages on a time work basis. (4) The minimum rate of wages on time
work basis may be fixed in accordance with any one or more of the following wage periods,
namely:–– (i) by the hour; or (ii) by the day; or (iii) by the month. (5) Where the rates of wages are
fixed by the hour or by the day or by the month, the manner of calculating the wages shall be such,
as may be prescribed. (6) For the purpose of fixation of minimum rate of wages under this section,
the appropriate Government,— (a) shall primarily take into account the skill of workers required for
working under the categories of unskilled, skilled, semi-skilled and highly-skilled or geographical area
or both; and (b) may, in addition to such minimum rate of wages for certain category of workers,
take into account their arduousness of work like temperature or humidity normally difficult to bear,
hazardous occupations or processes or underground work as may be prescribed by that
Government; and (c) the norms of such fixation of minimum rate of wages shall be such as may be
prescribed. (7) The number of minimum rates of wages referred to in sub-section (6) may, as far as
possible, be kept at minimum by the appropriate Government.

Components of minimum wages

(1) Any minimum rate of wages fixed or revised by the appropriate Government under
section 8 may consist of–– (a) a basic rate of wages and an 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 (hereinafter referred to as "cost of living
allowance"); or (b) a basic rate of wages with or without the cost of living allowance,
and the cash value of the concessions in respect of supplies of essential commodities
 at concession rates, where so authorised; or (c) an all-inclusive rate allowing for the
basic rate, the cost of living allowance and the cash value of the concessions, if any.
(2) The cost of living allowance and the cash value of the concessions in respect of
supplies of essential commodities at concession rate shall be computed by such
authority, as the appropriate Government may by notification, appoint, at such
intervals and in accordance with such directions as may be specified or given by the
appropriate Government from time to time.
 Procedure for fixing and revising minimum wages.

 8. (1) In fixing minimum rates of wages for the first time or in revising minimum rates of
wages under this Code, the appropriate Government shall either— (a) appoint as many
committees as it considers necessary to hold enquiries and recommend in respect of such
fixation or revision, as the case may be; or (b) by notification 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 on which the proposals shall be taken into
consideration. (2) Every committee appointed by the appropriate Government under clause
(a) of sub-section (1) shall consist of persons–– (a) representing employers; (b) representing
employees which shall be equal in number of the members specified in clause (a); and (c)
independent persons, not exceeding one-third of the total members of the committee. (3)
After considering the recommendation of the committee appointed under clause (a) of sub-
section (1) or, as the case may be, all representations received by it before the date specified
in the notification under clause (b) of that sub-section, the appropriate Government shall by
notification fix, or as the case may be, revise the minimum rates of wages and unless such
notification otherwise provides, it shall come into force on the expiry of three months from
the date of its issue: Provided that where the appropriate Government proposes to revise
the minimum rates of wages in the manner specified in clause (b) of sub-section (1), it shall
also consult concerned Advisory Board constituted under section 42. (4) The appropriate
Government shall review or revise minimum rates of wages ordinarily at an interval not
exceeding five years.
 Power of Central Government to fix floor wage.

 9. (1) The Central Government shall fix floor wage taking into account minimum living
standards of a worker in such manner as may be prescribed: Provided that different floor
wage may be fixed for different geographical areas. (2) The minimum rates of wages fixed by
the appropriate Government under section 6 shall not be less than the floor wage and if the
minimum rates of wages fixed by the appropriate Government earlier is more than the floor
 wage, then, the appropriate Government shall not reduce such minimum rates of wages
fixed by it earlier. (3) The Central Government may, before fixing the floor wage under sub-
section (1), obtain the advice of the Central Advisory Board constituted under sub-section (1)
of section 42 and consult State Governments in such manner as may be prescribed.
 Wages of employee who works for less than normal working day.

 If an employee whose minimum rate of wages has been fixed under this Code by the day
works on any day on which he was employed for a period of less than the requisite number
of hours constituting a normal working day, he shall, save as otherwise hereinafter provided,
be entitled to receive wages in respect of work done on that day, as if he had worked for a
full normal working day: Provided that he shall not be entitled to receive wages for a full
normal working day,— (i) in any case where his failure to work is caused by his unwillingness
to work and not by the omission of the employer to provide him with work; and (ii) in such
other cases and circumstances, as may be prescribed.
 Wages for two or more classes of work.

 Where an employee does two or more classes of work to each of which a different minimum
rate of wages is applicable, the employer shall pay to such employee in respect of the time
respectively occupied in each such class of work, wages at not less than the minimum rate in
force in respect of each such class.
 Minimum time rate wages for piece work

 Where a person is employed on piece work for which minimum time rate and not a
minimum piece rate has been fixed under this Code, the employer shall pay to such person
wages at not less than the minimum time rate.
 Fixing hours of work for normal working day

 (1) Where the minimum rates of wages have been fixed under this Code, 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 a 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 days of rest; (c) provide
for payment for work on a day of rest at a rate not less than the overtime rate. (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, namely:— (a)
employees engaged in any emergency which could not have been foreseen or prevented; (b)
employees engaged in work of the nature of preparatory or complementary work which
must necessarily be carried on outside the limits laid down for the general 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; and (e) employees engaged in a work which could not be carried on except at
times dependent on the irregular action of natural forces. (3) For the purposes of clause (c)
of sub-section (2), employment of an employee is essentially intermittent when it is declared
to be so by the appropriate Government on the ground that the daily hours of duty of the
employee, or if there be no daily hours of duty as such for the employee, the hours of duty
normally include periods of inaction during which the employee may be on duty but is not
called upon to display either physical activity or sustained attention.
 Wages for overtime work

 Where an employee whose minimum rate of wages has been fixed under this Code by the
hour, by the day or by such a longer wage-period as may be prescribed, works on any day in
excess of the number of hours constituting a normal working day, the employer shall pay
him for every hour or for part of an hour so worked in excess, at the overtime rate which
shall not be less than twice the normal rate of wages.
 PAYMENT OF WAGES
Mode of payment of wages
All wages shall be paid in current coin or currency notes or by cheque or by crediting the
wages in the bank account of the employee or by the electronic mode: Fixing hours of work
for normal working day. Wages for overtime work. Mode of payment of wages. Wages for
two or more classes of work. Minimum time rate wages for piece work.
Provided that the appropriate Government may, by notification, specify the industrial or
other establishment, the employer of which shall pay to every person employed in such
industrial or other establishment, the wages only by cheque or by crediting the wages in his
bank account
Fixation of wage period.
The employer shall fix the wage period for employees either as daily or weekly or fortnightly
or monthly subject to the condition that no wage period in respect of any employee shall be
more than a month
Time limit for payment of wages.
Provided that different wage periods may be fixed for different establishments. 17. (1) The
employer shall pay or cause to be paid wages to the employees, engaged on— (i) daily basis,
at the end of the shift; (ii) weekly basis, on the last working day of the week, that is to say,
before the weekly holiday; (iii) fortnightly basis, before the end of the second day after the
end of the fortnight; (iv) monthly basis, before the expiry of the seventh day of the
succeeding month. (2) Where an employee has been— (i) removed or dismissed from
service; or (ii) retrenched or has resigned from service, or became unemployed due to
closure of the establishment, the wages payable to him shall be paid within two working
days of his removal, dismissal, retrenchment or, as the case may be, his resignation. (3)
Notwithstanding anything contained in sub-section (1) or sub-section (2), the appropriate
Government may, provide any other time limit for payment of wages where it considers
reasonable having regard to the circumstances under which the wages are to be paid. (4)
Nothing contained in sub-section (1) or sub-section (2) shall affect any time limit for
payment of wages provided in any other law for the time being in force.

Deductions which may be made from wages

(1) Notwithstanding anything contained in any other law for the time being in force,
there shall be no deductions from the wages of the employee, except those as are
authorised under this Code. Explanation.––For the purposes of this sub-section,—
(a) any payment made by an employee to the employer or his agent shall be
 deemed to be a deduction from his wages; (b) any loss of wages to an employee, for
a good and sufficient cause, resulting from— (i) the withholding of increment or
promotion, including the stoppage of an increment; or (ii) the reduction to a lower
post or time-scale; or (iii) the suspension, shall not be deemed to be a deduction
from wages in a case where the provisions made by the employer for such purposes
are satisfying the requirements specified in the notification issued by the
appropriate Government in this behalf.
(2) (2) Deductions from the wages of an employee shall be made in accordance with the
provisions of this Code, and may be made only for the following purposes, namely:
— (a) fines imposed on him; (b) deductions for his absence from duty; (c) deductions
for damage to or loss of goods expressly entrusted to the employee for custody; or
for loss of money for which he is required to account, where such damage or loss is
directly attributable to his neglect or default; (d) deductions for house-
accommodation supplied by the employer or by appropriate Government or any
housing board set up under any law for the time being in force, whether the
Government or such board is the employer or not, or any other authority engaged in
the business of subsidising house-accommodation which may be specified in this
behalf by the appropriate Government by notification; (e) deductions for such
amenities and services supplied by the employer as the appropriate Government or
any officer specified by it in this behalf may, by general or special order, authorise
and such deduction shall not exceed an amount equivalent to the value of such
amenities and services. Explanation.––For the purposes of this clause, the
expression "services" does not include the supply of tools and raw materials
required for the purposes of employment; (f) deductions for recovery of— (i)
advances of whatever nature (including advances for travelling allowance or
conveyance allowance), and the interest due in respect thereof, or for adjustment of
overpayment of wages; (ii) loans made from any fund constituted for the welfare of
labour, as may be prescribed by the appropriate Government, and the interest due
in respect thereof; (g) deductions for recovery of loans granted for house-building or
other purposes approved by the appropriate Government and the interest due in
respect thereof; (h) deductions of income-tax or any other statutory levy levied by
the Central Government or State Government and payable by the employee or
deductions required to be made by order of a court or other authority competent to
make such order; (i) deductions for subscription to, and for repayment of advances
 from any social security fund or scheme constituted by law including provident fund
or pension fund or health insurance scheme or fund known by any other name; (j)
deductions for payment of co-operative society subject to such conditions as the
appropriate Government may impose; (k) deductions made, with the written
authorisation of the employee, for payment of the fees and contribution payable by
him for the membership of any Trade Union registered under the Trade Unions Act,
1926; (l) deductions for recovery of losses sustained by the railway administration
on account of acceptance by the employee of counterfeit or base coins or mutilated
or forged currency notes; (m) deductions for recovery of losses sustained by the
railway administration on account of the failure of the employee to invoice, to bill,
to collect or to account for the appropriate charges due to the railway
administration whether in respect of fares, freight, demurrage, wharfage and
cranage or in respect of sale of food in catering establishments or in respect of
commodities in grain shops or otherwise;
(3) (n) deductions for recovery of losses sustained by the railway administration on
account of any rebates or refunds incorrectly granted by the employee where such
loss is directly attributable to his neglect or default; (o) deductions, made with the
written authorisation of the employee, for contribution to the Prime Minister’s
National Relief Fund or to such other fund as the Central Government may, by
notification, specify. (3) Notwithstanding anything contained in this Code and
subject to the provisions of any other law for the time being in force, the total
amount of deductions which may be made under sub-section (2) in any wage period
from the wages of an employee shall not exceed fifty per cent. of such wages. (4)
Where the total deductions authorised under sub-section (2) exceed fifty per cent.
of the wages, the excess may be recovered in such manner, as may be prescribed.
(5) Where any deduction is made by the employer from the wages of an employee
under this section but not deposited in the account of the trust or Government fund
or any other account, as required under the provisions of the law for the time being
in force, such employee shall not be held responsible for such default of the
employer.

(4) DEDUCTIOJ OF WAGES RELATED TO Fines.

. (1) No fine shall be imposed on any employee save in respect of those acts and
omissions on his part as the employer, with the previous approval of the appropriate
Government or of such authority as may be prescribed, may have specified by notice
 under sub-section (2). (2) A notice specifying such acts and omissions shall be
exhibited in such manner as may be prescribed, on the premises in which the
employment is carried on. (3) No fine shall be imposed on any employee until such
employee has been given an opportunity of showing cause against the fine or
otherwise than in accordance with such procedure as may be prescribed for the
imposition of fines. (4) The total amount of fine which may be imposed in any one
wage-period on any employee shall not exceed an amount equal to three per cent.
of the wages payable to him in respect of that wage-period. (5) No fine shall be
imposed on any employee who is under the age of fifteen years. (6) No fine imposed
on any employee shall be recovered from him by instalments or after the expiry of
ninety days from the day on which it was imposed. (7) Every fine shall be deemed to
have been imposed on the day of the act or omission in respect of which it was
imposed. (8) All fines and all realisations thereof shall be recorded in a register to be
kept in such manner and form as may be prescribed; and all such realisations shall
be applied only to such purposes beneficial to the persons employed in the
establishment as are approved by the prescribed authority.

Deductions for absence from duty

(1) Deductions may be made under clause (b) of sub-section (2) of section 18 only on
account of the absence of an employee from the place or places where by the terms
of his employment, he is required to work, such absence being for the whole or any
part of the period during which he is so required to work. (2) The amount of such
deduction shall in no case bear to the wages payable to the employed person in
respect of the wage-period for which the deduction is made in a larger proportion
than the period for which he was absent bears to the total period within such wage-
period during which by the terms of his employment he was required to work:
Provided that, subject to any rules made in this behalf by the appropriate
Government, if ten or more employed persons acting in concert absent themselves
without due notice (that is to say without giving the notice which is required under
the terms of their contracts of employment) and without reasonable cause, such
deduction from any such person may include such amount not exceeding his wages
for eight days as may by any such terms be due to the employer in lieu of due
notice. Explanation.––For the purposes of this section, an employee shall be deemed
to be absent from the place where he is required to work if, although present in
 such place, he refuses, in pursuance of a stay-in strike or for any other cause which
is not reasonable in the circumstances, to carry out his work
 Deductions for damage or loss

 21. (1) A deduction under clause (c) or clause (n) of sub-section (2) of section 18 for damage
or loss shall not exceed the amount of the damage or loss caused to the employer by
negligence or default of the employee. (2) A deduction shall not be made under sub-section
(1) until the employee has been given an opportunity of showing cause against the
deduction or otherwise than in accordance with such procedure as may be prescribed for
the making of such deductions. (3) All such deductions and all realisations thereof shall be
recorded in a register to be kept in such form as may be prescribed.
 Deductions for services rendered.

 22. A deduction under clause (d) or clause (e) of sub-section (2) of section 18 shall not be
made from the wages of an employee, unless the house-accommodation amenity or service
has been accepted by him as a term of employment or otherwise and such deduction shall
not exceed an amount equivalent to the value of the house-accommodation amenity or
service supplied and shall be subject to such conditions as the appropriate Government may
impose
 Deductions for recovery of advances.

 23. Deductions under clause (f) of sub-section (2) of section 18 for recovery of advances
given to an employee shall be subject to the following conditions, namely:–– (a) recovery of
advance of money given to an employee before the employment began shall be made from
the first payment of wages to him in respect of a complete wage-period but no recovery
shall be made of such advances given for travelling expenses; (b) recovery of advance of
money given to an employee after the employment began shall be subject to such
conditions as may be prescribed; (c) recovery of advances of wages to an employee not
already earned shall be subject to such conditions as may be prescribed.
 Deductions for recovery of loans.

 24. Deductions under clause (g) of sub-section (2) of section 18 for recovery of loans granted
to an employee, regulating the extent to which such loans may be granted and the rate of
interest payable thereon, shall be such as may be prescribed.
 Chapter not to apply to Government establishments.

 The provisions of this Chapter shall not apply to the Government establishments unless the
appropriate Government, by notification, applies such provisions to the Government
establishments specified in the said notification.
https://clc.gov.in/clc/acts-rules/payment-wages-0
 https://egazette.nic.in/WriteReadData/2019/210356.pdf
 BONUS ACT
10 Steps to Follow in the Disciplinary
Action Process
Updated on: November 1, 2020 Leave a Comment

It’s necessary to foster high morale that makes for self-discipline in every employee
and group. and to gain willing acceptance of the rules, regulations, standards, and
procedures.

emplo
yee misconduct and disciplinary procedure

There is no rigid or specific procedure for taking disciplinary action.

What are the Steps to Follow in Procedure

for Taking Disciplinary Action?
The disciplinary procedure followed in industries usually consists of the following
steps:

1. Preliminary Investigation
A preliminary investigation is held just to find out whether a prima facie case or misconduct
exists or not.
Only when a prima facie case of misconduct exists, the management should proceed further
for taking disciplinary action.

Otherwise, the case can be dropped.

18 Innovative Ways To Keep Your Employees Motivated And Ultimately More
Productive.

2. Put the Problem in Perspective

There is a wide range of problems that might require disciplinary action.

Analysis of decision problem can be done on the basis of the following factors:

1. How severe is the problem?

2. Duration of the problem?
3. Frequency and nature of the problem.
4. Employees’ work history.
5. Extenuating factors related to the problem.
6. History of the organization discipline practices.
7. Implications for other employees.
8. Management baking.

3. Issuing a Charge Sheet

The management should issue a charge sheet to the worker if it is a cause of
misconduct.

Charges of misconduct or the case of indiscipline should clearly and precisely stated
in the charge sheet.

There should be a separate charge for each allegation. Charges must not relate to
any matter which has already been decided upon.

The charge sheet should also for an explanation for the said act of indiscipline.

The employee should be given sufficient time for answering this.

4. Considerations of Explanation
On getting the answer for the letter of charge served, the explanation furnished be
considered and if it is satisfactory, no disciplinary action needs to be taken.

On the contrary, when the management is not satisfied with the employee’s
explanation there is a need for serving a show-cause notice.

Different Types of Disciplinary Actions Applied by Companies.

5. Show Cause Notice

Show cause notice is given to the employee when there is sufficient evidence of
employees’ misconduct or serious indiscipline.

This gives the employees another chance to account for his misconduct and rebut
the charges made against him.

6. Notice of Enquiry
In a reply to a charge, the worker may admit the charge. In such a case, the
employer may award punishment without further inquiry.

But if the worker denies the charge, the employer must hold the inquiry by first
serving him a notice of inquiry indicating clearly the name of the enquiring officer,
time, date, and place of inquiry, etc.

7. Conduct the Enquiry

On a predecided date and time, a full-fledged inquiry must be held.

According to the principle of natural justice, the employee concerned must be given
an opportunity of being heard.

The inquiry officer is a judge. hence, he must be impartial and qualified to act in that
capacity. Employees charges should be explained with both side witnesses.

8. Recording of Findings
When the process of inquiry is over, the findings of the same are recorded.

9. Making a Final Decision and Awarding Punishment

At the conclusion of the inquiry proceedings, the inquiry officer should decide as to
whether the charges made are valid or not along with reasons for his findings.

steps to follow in the disciplinary action process

Disciplinary actions are taken when the misconduct of the employee is proved.

While awarding punishment, the employee’s previous record, precedents, effects of

disciplinary action another employee, etc, have to be considered.

Top Need & Importance of Discipline in an Organization.

When the employee feels that the inquiry conducted was not proper and the action

taken is unjustified, the employee mu st be

given a chance to hear an appeal.

The letter of the ward should contain a reference to the charge sheet and findings of
the inquiry. It should also contain the date for which the punishment is to be
effective.

Depending on the gravity of the misconduct, management may initiate the

following punitive actions against the employee who is found guilty:

 Dismissal.
 Discharge.
 Discharge simpliciter.
 Suspension.
 Demotion to an ower grade.
 Withholding of increments.
 Fine or.
 Warning or censure.

Of these, suspension, suspension, discharge, or dismissal are major punishment.

The suspension means prohibiting an employee from attending work, preventing him
from discharging the duties assigned to him, and withholding the wages payable to
him.

The suspension does not imply terminations of services of an employee, it only

means denial f work to him. When the act of misconduct of an employee is
considered serious, he is suspended (called procedural suspension) and an inquiry
is ordered to find out whether he is really guilty or not.

10. Follow Up
After taking the disciplinary action, a proper follow-up action has to be taken and the
consequences of the implementation of disciplinary action should be noted and
taken care of.

 https://policy.usq.edu.au/documents/13300PL
