SESSION ON LABOR &

INDUSTRIAL LAWS
 Provident Fund:
 PF Act 1952 :
Employees Provident Fund Scheme (EPFS) is a long-term retirement saving
scheme managed by Employees provident fund organization (EPFO) and it is
covered under the Employees' Provident Funds and Miscellaneous Provisions
Act, 1952. . EPF Scheme extends to the whole territory of India
 What is Employee Provident Fund(EPF):
If any organization is having more than 20 employees , that organization has
to pay EPF. Under EPF scheme, an employee has to pay a certain contribution
towards the scheme and an equal contribution is paid by the employer. The
employee gets a lump sum amount including self and employer's contribution
with interest on both, on retirement.
 EPS(Employee Pension Scheme):
 The Pension scheme pays a pension to the employees who are
members of EPFO and have contributed to the EPS account. On
the death of an employee, pension continues to be paid to the
nominee. Employee's don't contribute to the EPS account.
 Calculation of EPF & EPS:

Employer Employee PF Pension Total Amount

Contribution Contribution

12% of Basic 12% of Basic 3.67 % + 12% 8.33 % 24% +Admin

PF ACT 1958 Charges

CALCULATION OF MONTHLY PF CHALLAN

A/c No Contribution %

A/c 1 Employee & Employer PF Contribution 12% +3.67%

A/c 2 PF Admin Charges 0.5%

A/c 10 Employer Pension Contribution 8.33%

A/c 21 EDLI 0.5%

A/c 22 EDLI Admin Charges NIL

Total 25%
FORMS UNDER PF ACT

 Form 2 - Declaration and nomination form for EPF & EPS

 Form 5 - New employees registering for EPF and EPS
 Form 10C - For claiming withdrawal benefits/scheme certificate of EPS
 Form 10D - For claiming monthly pension
 Form 11- Auto transfer of EPF
 Form 13 - EPF Account Transfer
 Form 15G - To save TDS on the interest income on EPF
 Form 19 - Final Settlement of PF
 Form 20 - EPF Final settlement in case of death of the employee
 Form 5IF - Claim EDLI insurance benefits by Nominee
 Form 31 - Claim Advances from PF Balance
 UAN GENERATION AS EMPLOYER

 UAN(Universal Account No):

Universal Account Number or UAN is a 12-digit identification number, which
both you and your employer are assigned, under which each of you can
contribute to the EPF. This number is issued by the Ministry of Labour and
Employment and is generated and appointed by the Employees' Provident
Fund Organization (EPFO)
 Steps to follow for generating UAN:
 Visit Government of India EPFO Homepage.
 Sign in to Establishment using establishment ID and password
 Click on “Register Individual” tab in the “Member” section
 Enter the employee's details such as PAN, Aadhaar, bank details, etc
 Approve all details in the “Approval” section.
 UAN ACTIVATION AS EMPLOYEE

 Step’s to follow as Employee to activate UAN:

 Visit EPF Member Portal and click on “Activate UAN”
 Select from any one of the following – UAN, Member ID, Aadhaar or PAN
 Fill additional details such as Name, Date of Birth, Mobile Number and
Email ID and click on “Get Authorization PIN”
 An authorization PIN will be sent to the mobile number registered with
EPFO
 Enter this PIN and click on “Validate OTP and Activate UAN”
 Your UAN will be activated and the password will be sent to your mobile
number
 Now you can login to your EPF account using your UAN and password.
 Grievances related UAN
 Do not know his or her UAN Number:
 Do not know how to use UAN portal and how to active UAN
 What to do if two UAN generated wrongly by employer how to merge into one
UAN number.
 How to see passbook of their PF Balance
 How to merge or transfer all previous companies PF into one company
 Companies left and shut down not able to contact to employer in that situation
how to know their UAN number
 Have very old PF number how to generate UAN number for this
 Employee can not withdraw or transfer his PF account amount due to his data
mismatch as per records (do not match with the Aadhar details)
 How to correct wrong details in UAN like date of birth, his name, father name
etc.
 Keep update his or Aadhar details with correct data of him like proper full name,
date of birth etc
 His or her mobile number must be linked with Aadhar
 His or her Bank name should be match with the Aadhar details
 His or her PAN details should be match with the aadhar.
 Now if you know your UAN number (you can find it in your monthly pay slip or ask
to your HR)
 Why two UAN generated for an employee and how to merge it into one UAN:
 Mostly this type of errors was done in past few years before when Aadhar
seeded details are not mandatory. For example an employee given his details to
employee Pan etc. and his UAn generated after that he left the job and join
another company but did not given his past UAN number to the current
employer. Current employer also registers him into EPFO portal and generate an
new UAN number.
 Then activate this.
 If this type of error happened do one thing , must update your aadhar into both
UAN numbers.
 Once you update it then follow the process of one member one epf account
and transfer old pf account details into new one.
 If Employee cannot withdraw or transfer his PF account amount due to his data
mismatch as per records (do not match with the Aadhar details)
 And How to correct wrong details in UAN like date of birth, his name, father
name etc.
 Click on profile and check your details you will find a change button for all
entries at the right
 Click on that if details you want to change (make sure data should be correct in
Aadhar) and submit this, this will go to employer for dsc approval.
 VOLUNTARY PROVIDENT FUND

 What is Voluntary Provident Fund?

 Voluntary Provident Fund (VPF) aka Voluntary Retirement Fund is the
voluntary fund contribution from the employee towards his provident fund
account. This contribution is beyond the 12% of contribution by an employee
towards his EPF. The maximum contribution is up to 100% of his Basic Salary
and Dearness Allowance. Interest is earned at the same rate as the EPF.
 Employers are under no obligation to contribute to their employees’ VPF
portfolio. Likewise, an employee is also under no obligation to contribute to
the Plan. Once the contribution is chosen in VPF, the same cannot be
terminated or discontinued before the base tenure of 5 years completed.
The interest rate of Voluntary Retirement Plan is decided by the Government
of India at the start of each financial year.
 Who can invest in Voluntary Provident Fund:
 A VPF is an extension of the EPF. The VPF option is available only to salaried
individuals who receive their monthly payments through a specific salary
account.
 Benefits of Voluntary Provident Fund:
 The VPF falls under the EEE category ( EEE – exempt on contribution; exempt from
the principal; exempt on interest) making it an excellent tax saving option. It also
helps the employee amass a sizeable savings portfolio and help him during big
life milestones.
 Other benefits are:
 Safe Investment Option
The scheme is managed by the Govt of India with fixed interest accrual. Hence,
it is considered as a risk-free investment compared to the long-term investment
ones offered by other private players.
 Easy to Apply
To open a VPF account, an employee has to approach his HR/Finance team
and advise them to raise a request for an additional contribution in the VPF
through a registration form. The existing EPF account will serve as the additional
VPF account.
 High Returns:
Currently, the interest is accrued at 8.5% per annum under this scheme.
Contributions up to 1.5 lakhs PA and interest accrued is exempt from tax under
Section 80C, resulting in higher returns in a long-term perspective.
 Easy transfer:
The account can be transferred from one employer to another upon changing jobs.
 Withdrawal facilities:
 The fund allows partial withdrawals as loans with also the possibility of complete
withdrawals. If the withdrawal happens before the 5-year minimum tenure, then tax
will be applicable on the accumulated maturity amount. Once the employee
resigns or retires from the employment the final maturity amount is paid to him. At
the time of the untimely death of the account holder, the nominee can get the
possession of the accumulated fund in the VPF account.
 The VPF fund is mainly popular as the accumulated money can be withdrawn at
any given time. In case of an unforeseen financial emergency, one can always fall
back to his VPF account. The account can be broken for many reasons which
include :
 Payments of medical bills for the individual and his kin
 Cost-intensive events like higher education and marriage

 Payments for house construction or purchase of new land/house

The employees deposit linked insurance
scheme 1976
 Benefits:
 The benefit provided in case of death of an employee who was member of the
scheme at the time of the death.
 According to revised scheme payment of benefit amount to be 20 times of the
wages or based on the deposit in the Provident Fund, which ever is less. With the
increase in the wages ceiling from 6500/- to 15000/- from 01.09.2014, the maximum
benefit amount has become 3 lakh and an additional 20% of the benefit amount
calculated is also paid.
 Nomination:
 The nomination under the EPF Scheme will be applicable for the EDLI Scheme also.
 Claim Forms:
 For claiming Insurance Benefit by a nominee/ beneficiary in case of member’s
death while in service: Form 5IF
Benefits under pension scheme

 Eligibility Criteria:
 In order to be eligible for availing benefits under the Employees’ Pension Scheme
(EPS), an individual has to fulfil the following criteria:
 He should be a member of EPFO
 He should have completed 10 years of service
 He has reached the age of 58
 He can also withdraw his EPS at a reduced rate from the age of 50 years
 He can also defer his pension for two years (up to 60 years of age) after which
he will get a pension at an additional rate of 4% for each year
How to calculate your pension under
EPS

 The pension amount in PF depends on the pensionable salary of the member

and the pensionable service. The member’s monthly pension amount is
calculated as per the following formula:
 Member’s Monthly Salary = Pensionable salary X Pensionable service / 70
 Pensionable salary is the average monthly salary in the last 12 months before the
member exits the Employees’ Pension Scheme.
 If there are non-contributory periods in the last 12 months of the employment,
the non-contributory days in the month will not be considered and the benefit of
those days would be given to the employee. Let us assume that the person takes
up the job on 3rd of the month then his salary of 28 days will be divided as per
each day’s pay and then multiplied with 30 to calculate the total monthly wage
for the month.
 If the salary of the person is ₹ 15,000, the salary for the person would be ₹ 14,000
for 28 days ( ₹ 500 per day less for two days). However, the monthly salary
considered for EPS would be for 30 days, i.e. ₹ 15,000
 The maximum pensionable salary is limited to ₹ 15,000 every month.
 Since the employer contributes 8.33% of this salary in the employee’s EPS
account, the amount deposited in the EPS account of the employee every
month is
 ₹ 15000 x 8.33/100 = ₹ 1250
 Pensionable Service
 The actual service period of the member is considered as the pensionable
service. Service periods under different employers are added at the time of
calculating the pensionable service period. The employee has to get the EPS
Scheme Certificate issued and submit it to the new employer every time he
switches a job.
 It is worth mentioning that the employee gets a bonus of 2 years after
completing 20 years of service.
 If the member withdraws the EPS corpus before completing the service period of
10 years and joins another company, he will have to start afresh for contributing
to the EPS account and the service period will also be set as zero at the start.
 The pensionable service period is considered on a 6 months basis. The minimum
pensionable service period is 6 months. If the service period is 8 years 2 months,
the pensionable service period considered is 8 years. However, if the service
duration is 8 years and 10 months, the pensionable service period is taken as 9
years.
 Pension benefits
 Pension Benefits under Employees’ Pension Scheme (EPS):
 All eligible members of EPFO can avail pension benefits as per their age from
when they start withdrawing the pension. The pension amount is different in
different cases.
 Pension on Retirement at the Age of 58 years
 A member becomes eligible for pension benefits once he retires at the age of 58
years. However, it is mandatory for him to provide service for a period of at least
10 years when he turns 58 for availing pension benefits. An EPS Scheme
Certificate is generated which can be used to fill Form 10D for withdrawing the
monthly pension.
 Pension on leaving service before becoming eligible for Monthly Pension
 In case a member is not able to remain in service for 10 years before attaining
the age of 58 years, he can withdraw the complete sum at the age of 58 years
by filling Form 10C. It is worth mentioning here that he will not get the monthly
pension benefits after retirement.
 Pension on Total Disablement during the Service:
 A member of the EPFO, who becomes disabled totally and permanently, is
entitled to a monthly pension irrespective of the fact that he has not served the
pensionable service period. His employer has to deposit funds in his EPS account
for at least one month to be eligible for the pension.
 The member becomes eligible for the monthly pension from the date of
permanent disablement and is payable for his lifetime. However, the member
may have to undergo a medical examination to check whether he is unfit for
the job that he was doing before becoming disabled.
 Pension for the Family on the Death of the Member:
 A member’s family becomes eligible for the pension benefits in the following
cases:
 In case of death of the member while in service and the employer has deposited
funds in his EPS account for at least one month
 In case the member has completed 10 years of service and dies before attaining
58 years of age
 In case of death of the member after the commencement of the monthly
pension
 A member’s family becomes eligible for the pension benefits in the following
cases:
 In case of death of the member while in service and the employer has deposited
funds in his EPS account for at least one month
 In case the member has completed 10 years of service and dies before attaining
58 years of age
 In case of death of the member after the commencement of the monthly
pension
 Types of Pensions under Employees’ Pension Scheme:
 There are different types of pensions under EPS such as pensions for widows,
children and orphans. These pensions provide an income to the family member
of the EPF subscriber.
 Widow Pension:
 Widow pension or vridha pension is applicable to the widow of the member
eligible for a pension. The pension amount will be payable until the death of the
widow or her remarriage. In case of more than one widow, the pension amount
will be payable to the eldest widow.
 Child Pension:
 In case of death of the member, monthly children pension is applicable for the
surviving children in the family in addition to the monthly widow pension. The
monthly pension will be paid till the child attains the age of 25 years. The amount
payable is 25% of the widow pension and can be paid to a maximum of two
children.
 Orphan Pension:
 In case the member dies and has no surviving widow, his children will be entitled
to get the monthly orphan pension of 75% of the value of monthly widow
pension. The benefit will be applicable for two surviving children from oldest to
youngest.
 Reduced Pension:
 A member of the EPFO can withdraw an early pension if he has completed 10
years of service and has reached the age of 50 years but is less than 58 years. In
this case, the pension amount is slashed at a rate of 4% for every year the age is
less than 58 years.
 In case the member decides to withdraw the monthly reduced pension at the
age of 56 years, he will get the pension at a rate of 92% (100% – 2 x4) of the
original pension amount.
 Important Points to remember about EPF Pension:
 All contributions made in the Employees’ Pension Scheme (EPS) account are to
be done by the employer
 The employer makes a contribution of 8.33% of the employee’s pay for EPS
 The employee’s pay consists of basic wages with dearness allowance, retaining
allowance and admissible cash value of food concessions
 The employer has to make the contribution within 15 days of close of every
month
 All applicable contribution cost has to be borne by the employer
 The principal employer has to make the contributions for all employees working
for him directly or under a contractor
 The minimum service period is 10 years to be eligible for availing pension benefits
 If you have completed less than 10 years service. but more than 6 months’
service, you can withdraw the EPS amount on being unemployed for more than
two months.
 As per the scheme, the retirement age of the person is fixed at 58 years of age
 An employee ceases to be a member of the Pension Fund after reaching the
age of 58 or from the time he starts availing reduced pension (at the age 50).
 New EPF rules 2021 - the latest amendments

 Besides the amendments above, the central government has decided to implement the
important changes to the EPF act. Here are the new EPF rules that EPF members should be
aware of:
 As per EPFO directives, seeding KYC’s (Aadhaar) is mandatory for all employees. Otherwise,
the contribution of monthly benefits and subsequent interest will not take place.
 As per EPF guidelines, members (employees) who have an EPF account must update their
nominee(s) in the EPF portal.
 As per a 2019 ruling from the Apex court, employees whose salary remains below the threshold
limit of PF membership, i.e., INR 15,000/-, shall also include other allowances paid to the
employee(s) as regular income in calculating PF and contributing accordingly.
P. TAX
 P. TAX

 Professional tax or employment tax is a tax imposed by an Indian state. Each

state government of India levies a professional tax on its resident based on
his/her employment.
 It is a deduction that is made from the gross income before computing the
tax. Professional tax can be termed as a benevolent and beneficial tax as it
is not a part of the direct tax on your income.
 State Governments charge the professional tax based on certain criteria.
Professional tax is deducted from the salary account of the employee
 Calculation of P.Tax

 Calculation of P.Tax :
 Step 1: Consider if the professional tax is applicable in the state of residence
 Step 2: If yes, determine the tax amount based on monthly income
 Step 3: Look at the tax slab rates according to your salary
 This gives an idea of how much professional tax is deductible per month.
 How to pay P.Tax

 Steps to follow for payment of P.Tax:

 Step 1: Log in to the website. Firstly, you need to log in to the West Bengal
Government's official tax website.
 Step 2: Choose application options. Secondly, you need to choose what
you are paying for. ...
 Step 3: Fill details.
 Step 4: Make payment.
Payment of wages
act 1936
 Objectives of the Act

 To avoid unnecessary delay in payment of wages

To prevent un authorized deductions from wages

 Payment of wages

The Payment of Wages Act, 1936 regulates payment of wages to employees (direct
and indirect). The act is intended to be a remedy against unauthorized deductions
made by employer and/or unjustified delay in payment of wages.
 Regular Pay:
Payment should be made before the 7th day of a month where the number of
workers is less than 1000 and 10th day otherwise. The wage-period shall not exceed
1 month. The Act is applicable only to employees drawing wages not exceeding
Rs. 6500 a month.
 Mode of Payment:
Under the act, payment has to be made in currency notes or coins. Cheque
payment or crediting to bank account is allowed with consent in writing by the
employee. (Section 6)
 Payment of wages

 Deduction from Wages

 Employer is allowed to effect only authorized deductions, as specified in the
Act. This include fines (Section 8), absence from duty (Section 9), Damages
or loss (Section 10), deduction for services (amenities ) given to employer
(Section 11) recovery of advances and loans (Section 12, 13) and payment
to cooperative society and insurance (Section 13).
 Claims for excessive deduction and Non Payment
 Employers individually or through trade union can approach the authority
(Labour Office) for relief. (Section 15, 16, 17)
Employee State Insurance Act
1948
 EMPLOYEE STATE INSURANCE ACT
1948

 An Act to provide for certain benefits to employees in case of sickness, maternity and employment
injury and to make provision for certain other matters in relation thereto
 Objective of ESI Act:
 The Employees State Insurance Act of 1948 has been enacted with the objective of securing
financial relief in cases of sickness, maternity, disablement and for providing medical benefits to
employees of factories and establishments, and their dependents.
 Benefits of ESI:
 The Employees' State Insurance is a social security scheme that is aimed at delivering medical care
and other benefits available to the employees and workers employed in factories, organizations,
and other establishments. The ESI scheme works as a for a worker/employee and their family
members
 ESI Calculation Rate
Employer contribution – 3.25% on gross salary
Employee contribution – 0.75% on gross salary
Gross amount maximum 21000rs.

In total, the overall ESI percentage contribution is 4%, i.E. 800rs of the wages paid or payable
to the employee, which should get deducted from the wages paid by the employer. The
employer is responsible for making these ESI deductions.

These deductions should be deposited every month through ESI employer’s login portal via
SBI net banking by logging in through their particular user id and password.
The contribution period also plays a significant role in providing the employees with the
benefit of ESI. There are two contributions periods, six months each.

Employees with average wages up to rs 137/- are exempted from contribution payment, but employers
are liable to contribute their share of contribution in respect of these employees.
 ESI schemes
 The section 46 of the Act envisages following six social security benefits :-
Medical Benefit : Full medical care is provided to an Insured person and his family members from the day he enters
insurable employment. There is no ceiling on expenditure on the treatment of an Insured Person or his family member.
Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a
token annual premium of Rs.120/- .
 Benefits:
 Sickness Benefit
 Maternity Benefit
 Medical Benefit
 Disablement benefit
 Dependent benefit
 Funeral Benefit
 Vocational Rehabilitation
 Physical rehabilitation
 Applicability of ESI Act

 Section 4 extends the applicability of this act to all factories at the first
instance except seasonal factories.
 Section 2(12) of the act allows the ESI Act 1948 applicable to all non-
seasonal factories employing ten or more persons.
 According to Section 1(5), the State Govt. extended the application of the
Act to:
 Shops, Hotel, Restaurants, Cinema including preview theatres,
 Road-motor transport undertakings,
 Newspaper establishments,
 Private Medical Institutions, Educational Institutions and
 Contract and casual employees of Municipal Corporation/Municipal Bodies
employing ten or more persons in the certain States/UTs, where that State
Govt. is the appropriate Govt.
 Applicability:
 Under Section 2(1), the ESI Act is applicable to all non-seasonal factories employing 10
or more persons.
The State Govt. has extended the coverage under Section 1(5) of the Act to Shops,
Hotel, Restaurants, Cinema including preview theatres, Road-motor transport
undertakings, Newspaper establishments, Private Medical Institutions, Educational
Institutions and to contract and casual employees of Municipal
Corporation/Municipal Bodies employing 10 or more persons in the certain States/UTs,
where State Govt. is the appropriate Govt.
 The Central Govt. has extended the coverage under Section 1(5) to Shops, Hotels,
Restaurants, Road Motor Transport establishments, Cinema including preview theatres,
Newspaper establishments, establishment engaged in Insurance Business, Non-
Banking Financial Companies, Port Trust, Airport Authorities, Warehousing
establishments employing 20 or more Persons, where Central Govt. is the appropriate
Govt.
 The existing wage limit for coverage under the Act effective from 01.01.2017 is
Rs.21,000/- per month (Rs.25,000/- per month in the case of Persons with Disability).
 SCHEMES

 Sickness Benefit(SB) : Sickness Benefit in the form of cash compensation at the rate of 70 per
cent of wages is payable to insured workers during the periods of certified sickness for a
maximum of 91 days in a year. In order to qualify for sickness benefit the insured worker is
required to contribute for 78 days in a contribution period of 6 months.
 General Sickness:
 General Sickness represents periodical cash payment made to an IP during the period of
certified sickness.
 And when IP requires medical treatment and attendance with abstention from work on
medical grounds.
 Sickness benefit is roughly 60% of average daily wages and is payble for 91 days during 2
consecutive benefit period.
 Eligibility Conditions:
 In order to qualify for sickness benefit the insured worker is required to contribute for 78
days in a contribution period of 6 months.
 A person who has entered into insurable employment for the 1st time has to wait for nearly
9 months for becoming eligible to sickness benefits.
 Enhanced Sickness Benefit : Enhanced Sickness Benefit equal to full wage is payable
to insured persons undergoing sterilization for 7 days/14 days for male and female
workers respectively.
 Insured persons eligible to ordinary sickness benefits are paid enhanced sickness
benefit at double rate of sickness benefits, I,e – above full average daily wages.
 Maternity Benefit (MB) : Maternity Benefit for confinement/pregnancy is payable
for Twenty Six (26) weeks, which is extendable by further one month on medical advice
at the rate of full wage subject to contribution for 70 days in the preceding Two
Contribution Periods.
 Disablement Benefit
 Temporary disablement benefit (TDB) : From day one of entering insurable
employment & irrespective of having paid any contribution in case of
employment injury. Temporary Disablement Benefit at the rate of 90% of wage is
payable so long as disability continues.

 Permanent disablement benefit (PDB) : The benefit is paid at the rate of 90% of
wage in the form of monthly payment depending upon the extent of loss of
earning capacity as certified by a Medical Board
 Schemes
 Dependants Benefit(DB) : DB paid at the rate of 90% of wage in the form of monthly
payment to the dependants of a deceased Insured person in cases where death occurs
due to employment injury or occupational hazards.
 Other Benefits :
 Funeral Expenses : An amount of Rs.15,000/- is payable to the dependents or to the person
who performs last rites from day one of entering insurable employment.
 Confinement Expenses : An Insured Women or an I.P.in respect of his wife in case
confinement occurs at a place where necessary medical facilities under ESI Scheme are
not available.
 Vocational Rehabilitation :To permanently disabled Insured Person for undergoing VR
Training at VRS.
 Physical Rehabilitation : In case of physical disablement due to employment injury.
 Old Age Medical Care :For Insured Person retiring on attaining the age of superannuation or
under VRS/ERS and person having to leave service due to permanent disability insured
person & spouse on payment of 120 Rs per annum
 Schemes

Rajiv Gandhi Shramik Kalyan Yojana :

This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005. An Insured
Person who become unemployed after being insured three or more years, due to closure of
factory/establishment, retrenchment or permanent invalidity are entitled to :-
 Unemployment Allowance equal to 50% of wage for a maximum period of upto Two
Years.
 Medical care for self and family from ESI Hospitals/Dispensaries during the period IP
receives unemployment allowance.
 Vocational Training provided for upgrading skills - Expenditure on fee/travelling
allowance borne by ESIC.
 Benefits & Contributory Conditions :
 An interesting feature of the ESI Scheme is that the contributions are related to the
paying capacity as a fixed percentage of the workers wages, whereas, they are
provided social security benefits according to individual needs without distinction.
Cash Benefits are disbursed by the Corporation through its Branch Offices (BOs) / Pay
Offices (POs), subject to certain contributory conditions.
 Contribution Period and Benefit Period:
There are two contribution periods each of six months duration and two
corresponding benefit periods also of six months duration as under.
 Contribution period Corresponding Cash Benefit period
 1st April to 30th Sept.1st January of the following year to 30th June.
 1st Oct. to 31st March 1st July to 31st December of the year following
 ESI finance

 ESI scheme is a self-financing and contributory scheme that raises funds

from covered employers and employees and helps them in
contingencies.
 As per provisions of this Act, the State Governments contribute 1/8th of
the total expenditure of medical benefit within a per capita ceiling of Rs.
1500/- per Insured Person per annum.
 Any additional expenditure incurred by the State Governments, over
and above the limit, is borne by the State Governments concerned.
Forms Usage of Forms
Form-01 Employer’s registration form
Form-01(A) Form of Annual Information on Factory /
Establishment covered under ESI Act

Form - 1 Declaration Form

Form - 1(A) Family Declaration Form
Form - 1 (B) Changes in Family Declaration Form
Form-2 Addition / Deletion in Family Declaration Form
Form - 3 Return of Declaration Forms

Form - 5 Return of Contributions

Form-9 Claim for Sickness/Temporary Disablement

Benefit/Maternity Benefit

Form-11 Accident Book

Form - 12 Accident Report filled by Employer

Form - 14 Claim for Permanent Disablement Benefit

Form-15 Claim for Dependent Benefit

 Forms Usage of Forms

Form - 16 Claim for Periodical Payment of

Dependent Benefit

Form - 19 Claim for Maternity Benefit & Notice of

Work

Form - 20 Claim for Maternity Benefit after the death

of an Insured women leaving behind the
child

Form - 22 Funeral Expenses Claim

Form - 23 Life Certificate for Permanent Disablement

Benefit
Form - 24 Declaration and Certificate for
Dependents Benefit
Form - 32 Wage / Contribution record for
disablement Benefit
Form - 37 Certificate of Re-employment / continuous
Employment
Form - 53 Application for change in particulars of IP
regarding change of Branch
office/Dispensary
Form - 63 Declaration form regarding payment to the
legal heir/representative of the deceased
IP
 Forms Usage of Forms

Form - 71 Particulars of contribution in case Return of

Contribution in respect of IP not sent

Form - 72 Application for Duplicate Identity Card

Form - 86 Certificate of Employment

Form - 105 Certificate of Entitlement

Form - 126 Certificate of Continuous Employment for

Extended Medical / Sickness Benefit

Form - 142 Claim for conveyance allowance and/or

compensation for loss of wages for an IP
appeared before the medical board
 Forms Usage of Forms

Form - 71 Particulars of contribution in case Return of

Contribution in respect of IP not sent

Form - 72 Application for Duplicate Identity Card

Form - 86 Certificate of Employment

Form - 105 Certificate of Entitlement

Form - 126 Certificate of Continuous Employment for

Extended Medical / Sickness Benefit

Form - 142 Claim for conveyance allowance and/or

compensation for loss of wages for an IP
appeared before the medical board
 Wages for esi contributions
not to be deemed as wages

 Contribution paid by the employer to any pension/provident fund or under esi act

 Sum paid to defray special expenses entailed by the nature of employment-daily allowance
paid for the period spent on tour

 Gratuity payable on discharge

 Pay in lieu of notice of retrenchment compensation

 Benefits paid under the esi scheme

 Enhancement of leave

 Payment of inam which does not form part of the terms of employment

 Washing allowance for livery

 Conveyance amount towards reimbursement for duty related to journey.

 Penalties

 Different punishment have been prescribed for different types of offences in terms of
section 85 :

 Six months imprisonment and fine rs.5000

 One year imprisonment and fine

 And section 85 – a

 Five years imprisonment and not less to 2 years

 And section 85 – c (2) of the esi act which are self explantory. Beside these provisions,
action also can be taken under section 406 of the ipc in cases where an employer
deducts contributions from the wages of his employees but does not pay the same to
the corporation which amounts to criminal breach of trust.
 ESIC REGISTRATION – PROCESS,
BENEFITS, DOCUMENTS REQUIRED

 ESI stands for Employee State Insurance managed by the

Employee State Insurance Corporation (ESIC) which is an
autonomous body created by the law under the Ministry of
Labour and Employment, Government of India.
ESIC REGISTRATION PROCESS ONLINE

 Earlier, there was manual registration. Now, the ESIC

registration is completely online. Following are the steps
involved in ESIC Registration:
 STEP 1: LOG IN TO ESIC PORTAL

An employer needs to get himself registered on the ESIC portal.

An employer can register on the ESIC portal by clicking on the ‘Employer
Login’ option on the home screen.
On the next page, click on the ‘Sign Up’ button.
After clicking on the ‘Sign up’ button, the employers need to fill in the
details and submit the form.
 STEP 2: CONFIRMATION MAIL

After submitting the form for sign up to the portal, the employer will receive
a confirmation mail sent to the registered mail id and mobile number
entered at the time of sign up.
The email will contain the username and password details for registering as
an employer and employee under the ESIC scheme.
 STEP 3: EMPLOYER REGISTRATION FORM-1

Next, log in to the ESIC portal by clicking on the ‘Employer Login’ option on the
home screen and entering the username and password received in the email.
This will redirect to the page having the option of ‘New Employer Registration’.
Click on the ‘New Employer Registration’ option.
Next, select the ‘Type of Unit’ from the drop-down list and click on the ‘Submit’
button.
The ‘Employer Registration – Form 1’ will appear and the employer needs to fill
in the details.
On the Employer Registration Form-1 (ESI Registration Form), the employer
needs to enter the details pertaining to the unit of the employer, employer
details, factory/establishment details and employee details. Once, the
complete form is filled by the employer, he/she needs to click on the ‘Submit’
button.
 STEP 4: PAYMENT FOR REGISTRATION

After submission of the ESI Registration Form, i.e. Form-1, the ‘Payment of
Advance Contribution’ page will open where the employer needs to fill the
amount to be paid and select the payment mode.
The employer will need to pay the advance contribution for 6 months.
 STEP 5: REGISTRATION LETTER
On the successful payment of six months advance contribution, the system
generated Registration Letter (C-11) is sent to the employer which will
contain a 17 digit Registration Number by the ESIC department.
The Registration Letter (C-11) is a valid proof of registration of the employer.
The Registration Letter (C-11) is a valid proof of registration of the employer.
The sample of the Registration Letter (C-11) is provided below.
 BENEFITS OF ESIC REGISTRATION
The benefits of registering under this scheme are varied. Some of them are:

Sickness benefits at the rate of 70% (in the form of salary), in case of any
certified illness and which lasts for a maximum of 91 days in any year.
Medical benefits to an employee and his family members.
Maternity benefit to the women who are pregnant (paid leaves).
If the death of the employee happens while on work – 90% of the salary is
given to his dependents in the form of a monthly payment after the death
of the employee.
Same as above in case of disability of the employee.
Funeral expenses.
Old age medical care expenses.
 COMPLIANCES AFTER ESIC REGISTRATION

The establishment needs to comply with the following after registering

under the ESIC:
Maintaining the attendance register.
Maintaining a complete register of wages for workers.
Inspection book.
Monthly return and challan within 15th of the succeeding month.
Maintaining a register that records any accidents that happened on the
premis
 RETURNS TO BE FILED AFTER ESIC
REGISTRATION
After the registration under the ESIC, the employers have to file ESI Returns
half-yearly. The following documents are required for the filing of the
returns:

Register of attendance of the employees.

Form 6 – Register.
Register of wages.
Register of any accidents which have happened on the premises of the
business.
Monthly returns and challans.
Contract Labour
(regulation and
abolition)Act 1970
 Contract labour( regulation &
abolition)act 1970

 To whom it applies:
 It applies to every establishment in which 20 or more Workmen are employed
or were employed on any day of preceding 12 month as contract Labour.
 To every contractor who employ or who employed on any day of the
preceding 12 months 20 or more Workmen.
 Not applicable to

 an establishment in which work only of intermittent or casual nature is

performed.
 it shall not be deemed to be an intermittent nature:-
 if it was performed for more than one hundred and twenty days in the
preceding twelve months; or
 if it is of seasonal character and is performed for more than sixty days in year.
 Important definition

 Appropriate Govt - Central or State

 Controlled Industry - Control by Union for Public interest
 Contract labour - if hired for work of an Estb. through a contractor, with or without
the knowledge of the principal employer
 Advisory board

 Central & State Advisory Board

 Board comprising of Chairman appntd. by the Govt., C/A/J/D/ALC. &
Members (by Govt.) to represent the stakeholders ie. the govt., contractors,
workmen and any others
 The appropriate Govt. can constitute committees for specific purpose/s
 What is an establishment

 Any office or department of the government or a local Authority.

 Any place where any industry, trade, business, manufacture or occupation is
carried on.
Contract Labour Registration
As per the terms of this Contract Labour Act, each organisation using contract labour
must be legally registered and have a registering officer to preside over and administer
the various procedures associated with the Contract Labour Act.
The mechanism for Registration of Contract Labor Companies
Every company that hires contract labourers must get a registration certificate from the
proper authority. The following is the method for registering such businesses:
 The employer must visit the registration office with the registration application in Form
No. 1 and the documentation evidencing settlement of the specified fee.
 If the application gets approved in every way, the registration officer registers the
business and issues a copy of the registered certificate in Form-II.
 Specifications of the Registration Certificate
 The organisation’s name and address
 The total number of contract labourers that could get employed
 Form of business, as well as any other pertinent information
 Labour contract agreement

 The Principal Employer had no supervisory authority over the contractor’s

personnel, and the technique and approach whereby the operation would get
completed are to be monitored only by the contractor. As a result, no direct
employer-employee link would form between the Principal Employee and the
contractor’s workers.
 The contractor should be responsible for maintaining all sorts of records about the
individuals he employs, and the Principal Employer should not meddle in such
things.
 As employers, the Contractors will be expected to comply with the terms of these
Acts, i.e. the employer welfare laws, and you, as the Principal Employer, will not
have to bear the burden of compliance on their behalf.
 The principal employer’s obligations

 The Contract Labour Act imposes vicarious liability on an organisation’s

owners as an employer’s responsibility. The Contract Labour Act protects
contract labour against non-payment of wages by providing them with
access to the employer in the event of a default by the contractor.
 Wages

 Under the Contract Labour Act, the principal employer is vicariously responsible,
which means that the Contract Labour Act provides relief to contract labour in
non-payment of wages by enabling them access to the principal employer in the
event of a payment default.
 According to Section 21(2) of the Contract Labour Act, the representative must
be present when the contractor pays the contract labour.
 Section 21(4) states that if the contractor defaults to pay wages to the labour
hired, the primary employer might well be required to step in and make such
payment. As a result, the primary employer must look after the earnings.
 The principal employer can collect the equivalent amount paid by the contractor
either through the contractor’s debt or by deducting it from any payment
payable to the contractor, depending on the circumstances.
 Essential Amenities
 The Contract Labour Act requires the contractor to offer specific facilities to the
workers it employs.
 The contractor should provide the following services:
 Provisions for a canteen
 A restroom
 First-aid services
Contract labour regulation and abolition act 1970 amendments
amendment to contract labour rules (CENTRAL)

 Sub-Rule (1) of Rule 1 of Rule 17 of the Contract Labour (Regulation and Abolition) Central Rules,
1971, has been revised by the Central Government by replacing “Form 1” with “Form XIII”
appended to Rationalisation of Forms and Reports under Central Labour Law Rules, 2017.
 Sub-rule (1) of Rule 82, on the submission of Annual Returns, has been replaced by the
following:“(1) Every principal employer and contractor shall file a Unified Annual Return online in
Form XIV annexed to the Rationalization of Forms and Reports under Central Labour Laws Rules,
2017, in the Shram Suvidha Portal of the Central Government in the Ministry of Labour and
Employment on or before the 1st day of February following the end of the year to which it relates.”
 Rule 82 sub-rule (2), as well as Forms XXIV and XV, have been eliminated. Attached is a copy of
the Notification modifying the Contract Labour (Regulation and Abolition) Central Rules, 1971.
 The revision above to these Rules will apply to organisations wherein the Central Government is the
“Appropriate Government.”
 The Member Establishments, for whom the Central Government is the ‘Appropriate Government,’
are respectfully requested to take note of the modification and submit the Annual Returns as
specified above.
Who is principal employer &who is a
contractor

 The Head of the office or department in case of office, government department, local
authority or such other officer specified in this behalf.
 The owner or occupier of the factory or the person named as manager in Factory Act.
 Any person responsible for the supervision and control of the establishment.
 A person who undertakes to produce a given result for the establishment other than a
mere supply of goods or articles of manufacture to such establishment, through
contact labour or who supplies contract labour for any work of the establishment and
include a sub-contractor.
 Registration of establishment

 Every Principal Employer of an establishment to whom this Act applies shall make an
application to the Registering Officer in triplicate in the prescribed form-1 for
registration of establishment at least 2 months before the estimated date of
commencement of contract work.
 Every application shall be either personally delivered to the RO or sent to him by
registered post.
 Application

 To the “Labour Commissioner” and “Registering Officer Under Contract Labour

Act”.
 In Prescribed form “ Form – 1
 3 Copies to be send.
 To be signed and submitted by the Principal Employer.
 Documents required

 A certificate by the principal employer in form 5 along with two photos of

contractor (One photo should be attached be the principal employer).
 An Affidavit as required by state rules.
 Security deposit treasury challan in Original.
 License fee treasury challan in original.
 Other information

 Every License is valid for one year.

 It will remain in force up to 31st December of the year for which the License is
granted.
 Rs. 5 will be charged for duplicate registration Certificate in case it is lost,
accidentally destroyed or Defaced.
 For contractor
 The security shall be deposited in the treasury at the rate of Rs. 30/- for each of the workman
employed as contract labour.
 License Fee : To be deposited in the treasury as per the schedule
 Maximum number of workers to be employed on any day during the year.

0 - 20 21- 50 51-100 101-200 201-400 400 +

Rs. 5/- Rs. 12.5/- Rs.25/- Rs.50/- Rs. 100/- Rs. 125/-
 Licensing of contractors

 Licensing officers (Govt.)

 Contractor shall not undertake or execute any work thro. contract labour without
a license issued by D/ALC
 Application shall contain particulars like location, the nature of process,
operations or work etc. requiring contract labour
 Investigation, Specific period of License
 Revocation, suspension & amendment
Prohibition of employment of contract
labor

 the Govt. consulting with the Advisory Board can prohibit employment of
contract labour in any process, operation or other work in any estb. After
considering conditions of work and benefits provided for the contract labour
 Other consideration

 Nature (incidental) & necessity (for the industry) of work

 Ordinarily done through regular workmen
 Perennial nature of work
 When the work needs a whole time employee
 Salient features of registration & license

License
Registration

Issued on Payment of Fee

This is not renewable on This is taken by Contractor
This is taken by the & Security money .
Principal Employer. year to year basis

License shall be displayed

Certificate of Reg.. Need
not be displayed at the
establishment by P.E.
No condition as attached
in certificate
prominently at the
Issued on Payment Bank Draft + Certt. Of P.E. Is
premises where the
of fees. required (Form V)
contract work is being
carried on.
For only Bank Draft
Required. There is full Annx. This is valid for only one
Containing conditions for year / should renewed
fulfillment by contractor. before due date.
 Liabilities of the principal employer

 In case the contractor fails to make payment of wages, then it shall be the responsibility
of the principal employer to make such payment to the contract labour.
 The principal employer shall be required to nominate a representative to be present at
the time of disbursement of wages by the contractor who shall ensure that wages paid to
the contract labour in the prescribed manner.
 In case the facilities like drinking water, latrine & Urinals, washing facilities, first aid boxes,
rest room and canteen facilities are not provided by the Contractor then the Principle will
have to insure the same.
 He can recover the expenses involved from the Contractor.
Liabilities of the principal employer

 Maintain a register and records in form XII giving particulars like

 No of Contractors and contract labour employed.
 Nature of work.
 Rate of wages.
 Display Notice at a conspicuous place in English and Local Language containing
information like
 Rate of wages.
 Hour of work.
 Wage period.
 Date of payment of wages.
 Name and address of the Inspectors.
 Submission of yearly return to Licensing Officer in Form XXV.
 Liabilities of the contractor

 Maintain a register in form XIII containing information like

 Muster Roll
 Wages
 Deductions.
 Over time
 Fines
 Advance
 Wage slips
 Issue an employment card in form XIV to each worker and to issue a service certificate on
termination of employment in form XV
 Submission of half yearly return to Licensing Officer in Form XXIV.
Responsibility for payment of wages

 Contractor shall be responsible for payment of wages to his labour

 Authorised, nominated Rep. of Principal employer is to be present at the time of
wages disbursement by the contractor
 Representative is to certify the wage payment
 Contractor to ensure wage disbursement in presence of the authorized
representative of Principal Employer
 Acts applicable to contract labour

 Factories Act 1948.

 Employee’s Provident Funds and Miscellaneous Provision Act 1952.
 The Employees State Insurance Act 1948.
 The Payment of Wages Act 1936.
 The Minimum Wages Act 1948.
 The Industrial Disputes Act 1947.
 The Workman’s Compensation Act 1923.
 5 welfare measures to be taken by
the contractor
 Contract labour either one hundred or more employed by a contractor
 Canteens shall be provided and maintained.
 First Aid facilities.
 Number of rest-rooms as required under the Act.
 Drinking water, latrines and washing facilities.
 Sufficiently lighted and ventilated rest room. (sec. 16 & 17)

 Otherwise it is Liability of Principal Employer to provide above facilities.

 Principal employer entitled to recover from the contractor for providing such
amenities or to make deductions from amount payable. (sec. 20)
 Exemption, protection & power

 The appropriate Government (in special cases) may exempt

 The appropriate Government has power to make rules
 The Central Govt. may give directions to the State reg. the carrying of execution
 Penalties and procedure

 Obstruction to inspector, willful refusal to produce documents - punishable with

imprisonment for a term which may extend to 3 months, or with fine which may
extend to Rs. 500, or with both
 Contravention of provisions – Act, rules or condition of a licence granted
 3 Months or/& Rs. 1000. Continuation attracts addl. fine upto Rs. 100/day
 Offences by companies

 Co. as well as every person in charge/ responsible to the Co. for the conduct of
its Bsns. is treated as guilt & liable to be proceeded against and punished
 Director, Manager etc. is also liable if it is proved that the offence is committed
with the consent or connivance
 Exemption: If established that exercised without knowledge or diligently handled
Cognizance of offences & limitation

 1st class Magistrate Court on complaint or with pre-sanction of the inspector

 Complaint to be made within 3 months, But, if a written order of an inspector
disobeyed - 6 months
CHANGES IN CONTRACT LABOUR IN
LABOUR CODE
 Shops and
Establishment Act
 Objective

S&E act is designated to protect the rights of employees by defining uniform benefits to the
employees; irrespective of the industry and type of establishment he / she is employed with.

Designed to regulate the payment of wages, terms of service, holidays, leaves, work conditions,
hours of work, overtime work, maternity leave and benefits, rules for employment of children.
 Scope
S&E act is governed by the labour department and regulates premises wherein any trade, business or
profession is carried out.
Most businesses in india are regulated by the S&E act.
Every state & UT has its separate act and regulations.
It regulates the working of shops, commercial establishments, and even residential premises running for
business gain.
S&E act regulates the following areas:
Working hours, overtime, leave policy
Rest interval for employees
Opening and closing hours
Closed days, national and religious holidays
Annual, maternity, sickness, and casual leave
Time and conditions of payment of wages
Deductions from wages
Dismissal of employment
Cleanliness, lighting and ventilation
Precautions against fire
Accidents reporting and record keeping
Maintain various registers
Display of notices/certificate
Rules for the employment of children
Who can apply for the shop and
establishment license?

 Wholesalers or the retailer’s shops and establishments;

 Service Centers;
 Warehouses, Store-rooms, and Godowns;
 Hotels;
 Eating joints and restaurants;
 Entertainment houses, Amusement parks, Theaters;
 Additionally, any other working places.
Why do the businesses in india need to
have the shop and establishment license?

 The Shop and Establishment License safeguards the rights of the

employees working in these establishments such as hotels, restaurants,
theatres etc.
 Also, this Act aims to set better working conditions for these employees
by regulating their wages, holidays, incentives etc.
 What are the provisions covered under
the shop and establishment act?

 Different State Government has various provisions under the shop and
establishment Act which can be checked on their respective state government
website.
 Following are the provisions regulated under the Shop and Establishment Act[1]:
 Minimum and Maximum working hours of the employees or labours.
 The time duration for the beak and lunch timing.
 Issuance of laws to prohibit child labour in factories and other establishments.
 Employment of Women.
 Number of week holidays to be allotted
 Office timing of the establishments/shops.
 Extra wages for overtime.
 Accident Coverage employees
 Preventive measures against fire
 Proper ventilation and lighting for workers
 Clean and hygienic premises for the workers
 Conditions and timing for the payment
 Regulation of deductions on the payments
 Leave Policy
 Dismissal
 Employee’s proper record keeping.
 Key Definitions

Shop”:
Shop means any premises where goods are sold, either by retail, wholesale, or services are
rendered to customers. It includes an office, a store-room, godown, warehouse, or
workplace, whether on the same premises or otherwise, used in connection with such trade/
business. A shop however does not include a factory or a commercial establishment.

“Commercial establishment”:
Commercial establishment means a premise where any trade, business, profession or any
work is undertaken, which may include society, charitable or another trust, journalistic and
printing establishments, contractors and auditors establishments, educational institutes,
premises where the business of banking, insurance stocks, and shares, the brokerage is
undertaken, restaurants and eating houses, residential hotels, clubs, theatres and other
places of public amusement or entertainment.
Establishment as new labour code
 Leave under Shops & Establishment Act

 How much privilege leave is allowed to an employee working in a shop or an establishment under WB Shops &
Establishment Act?
14 days Privilege leave:
with full pay,
14 days sick leave:
with half pay,
10 days Casual leave:
with full pay and
Maternity leave as per rules:
When an entity employs people who may be casual workers, full time employees, contract based etc, to regulate
the work conditions and ensure the workers' rights are protected, it is mandatory to get registered under the Shops
and Establishments Act, informally called Shop Licence.
What business are covered under the terms Shop & Establishment?
Broadly, all shops, hotels, eating houses, restaurants, theatres, places of public amusement or establishment and
other commercial establishments, etc. are under the Shop and Establishment Act. They have to obtain registration
under the same.
Holidays under shops & establishment act

 In Each week:
 Every shops & Commercials shall remain entirely closed
 Every person employed in a shop or an establishment shall be allowed a holiday.
 No deduction on account of any holiday allowed
 Registration of Shop and Establishment

As each statein India has its own shop act and follows separate regulations. The process, fee structure,
documentation may be different depending on the state regulations.

On starting a shop or establishment, one needs to apply for shop act registration within the stipulated period
set by state regulations.

Application is to be submitted to the chief inspector in the prescribed form according to the state regulations,
containing following details:
Name of the employer
Name, address, and category of the establishment
The number of employees
Other relevant detail as required
The fee is calculated as per the number of employees.

The labour department of each state has the authority for the registration process. The many states have a
100% online process, while some states are still following the manual procedure for filing.
The registration certificate is required to be renewed periodically as mentioned in the state regulations.
Registration of shops & establishment
 Every shopkeeper & Employer shall:
 In the case of shops or establishment in existence on the date on which this act applying within
such date as the state government may by notification specify
 In the case of new shops or establishments, if this act applies within such period as may be
prescribed
Apply for registration under this act to the registering authority in such form together with such fee, as
may be prescribed, every such application shall contain
 The name of the shopkeeper or the employer
 The postal address of shop or establishment
 The name of the shop or establishment
 Declaration of weekly closing days in the case of a shop
 Such other particulars as may be prescribed
 The Registering authority shall maintain a register of shops and establishment in prescribed form
 Every shopkeeper or employer shall display the certificate of registration
 Amendment of Registration Certificate

In case of change in following scenarios, an application for amended of the registration has to be
submitted to the concerned officer within timeline prescribed as per state act:

Name and address of the establishment

Nature of business
Director, employer, partner
Number of employees
The fresh certificate is issued post cancellation of the existing certificate.
 Closure of Shop or Establishment

Due to any reason, if shop or establishment gets closed, the occupier must intimate the concerned
chief inspector in writing within 15 days of the closure; who shall cancel the registration and
remove it from the register.
 Benefits of Registration

Proof of legal entity: registration is a proof of legal entity and allows to conduct business within limits of the
particular state.
Business bank account: the proof as a legal entity helps in opening a business bank account.
Smooth inspections: it helps to smoothen the inspection process whenever the inspector visits the premises.
Benefit under various schemes of central & state governments
 Self certification scheme (ease of doing
business)

Many state governments have implemented a voluntary compliance / self - certification scheme to save employers from
difficulties due to a plethora of labour laws, registers, and returns.

The entrepreneur / employers are free to join the scheme anytime.

They are motivated to comply with labour laws with self-inspiration without compromising with labourers' health, safety and
social security.

If registered under the scheme, sets of labour laws will be automatically covered and benefits can be availed under such
laws including:

Minimum wages act, 1948 & respective state rules

Payment of wages act, 1936 & respective state rules
Contract labour (regulation & abolition) act, 1970 & state rules
Payment of bonus act, 1956 & respective state rules
Payment of gratuity act, 1972 & respective state rules
Maternity benefit act, 1961 & respective state rules
Equal remuneration act, 1976 & respective state rules
Child labour (prohibition & regulation) act, 1986 & state rules
few more; varied for states
those joining the scheme are exempted from surprise inspections under various labour laws and in place of multiple
registers, one consolidated register is required to be maintained and few annual returns will be filed instead of the number
of returns in various labour laws.
 Penalties

The penalties under the S&E act varied for states and are usually monetary or operational and in
few case imprisonment as well.
While the monetary values are high, but the risk of closure notice always hang under various non
compliance.
Forms under shops & establishment act

Form Purpose

Form B Application for Registration

Form C Notice of Change

Form E Notice of winding Up

Form G
H Weekly off
Holiday list
What are the eligibility criteria for
obtaining the shop and establishment
license in india?

 Following are the things which you should check before you apply for the Shop
and Establishment License:
 The first thing that you should look over is that the business or the establishment for
which you want to obtain the license is covered under the Shop and
Establishment Act or not. If it is so, then read the rules and regulations carefully
keeping in mind your concerned state government.
 Additionally, you need to fill the online application for it within 30 days of
establishing the business.
What are the benefits you can enjoy after
obtaining the shop and establishment
license?

 It provides a legal identification to your establishments.

 This license can act as Business proof when you apply for further registrations in India.
 After obtaining this license, you can provide this license in banks by which that can open an
account (Bank Account) in the name of the establishment or shop.
 Also, this license can help you in availing loans from the banks, which can help raise
investments for your proposed business establishment.
 What are the Documents required for obtaining the Shop and Establishment License?
 Following is the Checklist of Documents required for the Shop and Establishment License:
 Identity proof such as Aadhar card or PAN card or driving license of the employer.
 A Passport size photograph of the employer or the owner of the establishment.
 A photo of the shop or establishment along with the employer.
 A copy of the rent agreement (in case of a rented apartment).
 Any utility bill of the working premises
What are the benefits you can enjoy after
obtaining the shop and establishment
license?

 A list of number of trustees – In case of a trust

 ROC
 Memorandum of Association
 A file containing the number of members and chairman – for the co-operative societies
 Address Proof of the Establishment.
 Partnership deed with all the vital information such as company name, name, the signature
of the respective partner and share percentage of partners
 Copy of the RBI permission
 Incorporation Certificate as per the Companies Act.
 Transportation Permit from the RTO (Regional Transport Office).
 Food or FSSAI license
What is the procedure for obtaining the
shop and establishment license?

 Apply with respective State Government

 At first, download the registration application form from your respective state official website where
your shop or establishment is located.
 Fill the required details
 You need to fill in the following information in the form:
 Name of your establishment/shop
 Personal details of the employer
 Personal details of the employees working at that time
 Registered establishment address along with NOC or rent agreement (only for rented premises)
 Details of the PAN Card of the employer
 Submit the application
 Submit the application form to the Chief Inspector in charge of the Shop and Establishment Act with
the prescribed fees amount.
 Application Verification
 After you submit the application form, the concerned authorities will verify all the documents.
 Issuance of the License
 It usually takes 15-20 days for the document verification after which the Shop and Establishment
license will be issued. However, time duration for grant of license vary from state to state.
Procedure to cancel shops and
establishment license

 The prescribed form for the cancelling the application should be filled fully
and logically.
 The application should be applied within the time period of 10 days after real
closure of the establishment.
 It is mandatory to mention the registration number of the establishment on
the cancellation form and it shall mention the name, address of the business
and other significant information.
 It is very important to mention the reason for cancellation of the license in
the application form. The reason must be valid and reasonable.
 Finally, there must be an attachment of a copy of paid legal dues of
employee.
 The features and policies under shop and establishment licence have been
designed and programmed to benefit the employees and to ensure safe
working conditions for them.
 However, there are several advantages and benefits for business owners as
well, if they understand what the Shop and Establishment Act is, and if they
realise that the Act benefits both the employers and the employees.
 Here are 4 major benefits of getting shop establishment license, under
Shop Establishment Act:
 Legal Right Of Conducting Business: By availing Shop And Establishment
License, and by furnishing proof of business such as partnership or
proprietorship, the business owner gets the legal right of conducting
business, within the jurisdiction of the Act. He/she cannot be hassled and
troubled by law enforcement authorities.
 Banking Account For Business: As per the RBI rules, every business needs
to have a separate business account for handling the finances of the
business. And this business account can be opened only with an under
shop establishment act certificate. Hence, for following RBI rules related
to business, having a Shop And Establishment License is a must.
 Fair Inspections Without Any Hassles: Local municipality authorities and other
statutory bodies such FCCAI etc. have the right to conduct inspections and checks.
If you don’t have the shop and establishment act license, then such audits and
inspections can snowball into a massive issue, and your shop can be forced to close
down. The best way forward is to get a shop establishment license and conduct
your business with legal means.
 Avail Govt Benefits & Schemes: In order to promote and encourage small shops,
and commercial establishments, Govt of India regularly comes out with interesting
schemes and offers, which can only be availed if you have the shop and
establishment act license. Besides, there are attractive bank loans, financial plans
and schemes, with low-interest rates, applicable only for the businesses which are
registered under shop and establishment act.
Minimum Wages Act
 Minimum wages

 object of the Minimum Wages Act, 1948:

The object of this Act is to promote the welfare of workers by fixing minimum rates of
wages in certain industries where labour is not organized and sweated labour is most
prevalent.
 Purpose of minimum wages Act:
Keeping this in view, the Government of India enacted the Minimum Wages Act,
1948. The purpose of the Act is to provide that no employer shall pay to workers in
certain categories of employments wages at a rate less than the minimum wage
prescribed by notification under the Act.
 Types of wages

 Piece Wages:
 Piece wages are the wages paid according to the work done by the worker. To
calculate the piece wages, the number of units produced by the worker are taken into
consideration.
 Time Wages:
 If the labourer is paid for his services according to time, it is called as time wages. For
example, if the labour is paid Rs. 35 per day, it will be termed as time wage.
 Cash Wages:
 Cash wages refer to the wages paid to the labour in terms of money. The salary paid to
a worker is an instance of cash wages.
 Wages in Kind:
 When the labourer is paid in terms of goods rather than cash, is called the wage in
kind. These types of wages are popular in rural areas.
 Contract Wages:
 Under this type, the wages are fixed in the beginning for complete work. For instance, if
a contractor is told that he will be paid Rs. 25,000 for the construction of building, it will
be termed as contract wages.
 Interpretation / definitions

 Adult means a person who has completed his eighteenth year of age
 Adolescent means a person who has completed his fifteenth year of age but
has not completed his eighteenth year
 Child means a person who has not completed his fifteenth year of age
 Young person means a person who is either a child or an adolescent
 Appropriate Government
 Refers to Central governments/State Governments
 Interpretation / definitions

 Wages:
 Its means all remuneration capable of being expressed in term of employment
were fulfilled be a payable to workman to in respect of his employment or of work
done in such employment
 Employer:
 Means any person who employs one or more employees in any schedule of
employment
 Employee:
 Means any person employed for hired or reward and includes an out – Worker
 Minimum rate of wages

 Any minimum rate of wages fixed or revised by the appropriate Government in

respect of scheduled employments under section 3 may consist of-
 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 (hereinafter referred to as the "cost of living
allowance"); or
 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
concessional rates, where so authorized; or
 an all-inclusive rate allowing for the basic rate, the cost of living allowance and
the cash value of the concessions, if any.
 Minimum rate of wages

 The cost of living allowance and the cash value of the concessions in respect of
supplies of essential commodities at concessional rates shall be computed by the
competent authority at such intervals and in accordance with such directions as
may be specified or given by the appropriate Government.
 Wages in kind

 Minimum wages payable under this Act shall be paid in cash.

 Where it has been the custom to pay wages wholly or partly in kind, 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 provision should be made for
the supply of essential commodities at concession rates, the appropriate
Government may, by notification in the Official Gazette, - authorize the provision
of such supplies at concession rates.
Payment of minimum rates of wages

Where in respect of any scheduled employment a notification under section 5 [20]

[***] 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. (2) Nothing contained in this section shall affect
the provisions of the Payment of Wages Act 1936 (4 of 1936).
 Hours of Work:
Rules for adult workers:
 A worker can not be employed for more than 48 hours in a week
 He must be given a holiday for whole day in every week , or a compensatory
holiday lieu of weekly holiday
 A worker can not be employed for more than 9 hours a day & should get an
interval of rest of at least half an hour after maximum 5 hours of work
 Total period of work including rest period can not exceed 10.5 hours in a
day.
 Overtime:
For overtime work above nine hours a day or 48 hours a week, he shall be paid at twice
the normal rate of wages
 Wages of worker who works for less than normal working day:
If an employee whose minimum rate of wages has been fixed under this Act by the day
works on any day on which he was employed for a period 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 by him on that day as if
he had worked for a full normal working day:
Provided, however, 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,,-nay be prescribed.
 Maintenance of registers and records:
 Every employer shall maintain such registers and records giving such particulars of
employees employed by him, the work performed by them, the wages paid to them,
the receipts given by them and such other particulars and in such form as may be
prescribed.
 Every employer shall keep-exhibited, in such manner as may be prescribed, in the
factory, workshop or place where the employees in the scheduled employment may
be employed; or in the case of out-workers, in such factory, workshop or place as
may be used for giving out-work to them notices in the prescribed form containing
prescribed particulars.
 The appropriate Government may, by rules made under this Act, provide for the issue
of wage books or wage slips to employees employed in any scheduled employment
in respect of which minimum rates of wages have been fixed and prescribe the
manner in which entries shall be made and authenticated in such wage books or
wage slips by the employer or his agent.
Employees in wage code
Payment of wages in new wage code
SALARY STRUCTURE IN WAGE CODE
Bonus Act 1965
 Bonus Act

 Introduction :
An Act to provide for the payment of 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.
Short title, extent and application:
 It extends to the whole of India
 Every other establishment in which twenty or more persons are employed on any
day during an accounting year.
 Bonus - applicability

 Every factory (as def. in Factories Act), & (b) Every other establishment in which 20
or more persons (less than 20 but 10 or more if appropriate Govt. notifies) are
employed on any day subject to certain exemptions.

 Bonus to be paid within eight months from the expiry of the accounting year.
 Establishments to include departments, undertakings and branches
 Where an establishment consists of different departments or undertakings or has
branches, whether situated in the same place or in different places, all such
departments or undertakings or branches shall be treated as parts of the same
establishment for the purpose of computation of bonus
 Bonus – eligibility & disqualify

 Every employee shall be entitled to be paid by his employer in an accounting

year, bonus, in accordance with the provisions of this Act, provided he has
worked in the establishment for not less than thirty working days in that year.
An employee shall be disqualified from receiving bonus under this Act :-
 fraud; or
 riotous or violent behavior while on the premises of the establishment; or
 theft, misappropriation or sabotage of any property of the establishment
 Computation of number of working
days

 An employee shall be deemed to have worked in an establishment in any

accounting year also on the days on which,-
 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;
 he has been on leave with salary or wages;
 he has been absent due to temporary disablement caused by accident arising
out of and in the course of his employment, and
 the employee has been on maternity leave with salary or wages, during the
accounting year
 Key highlights

A minimum bonus of 8.33% and the maximum is 20% of wages is payable

Statutory bonus is payable within 8 months from the close of the accounting year
payable to all employees whose wages do not exceed rs. 21,000 per month

If employee’s wages equal to or more than rs. 7,000 or the minimum wages fixed by
the government then the bonus is paid as per employee’s wages
 Payment of minimum & maximum
bonus

Minimum Bonus- The Act contemplates that a minimum bonus of 8.33% of

the salary or the wage earned by the employee during the accounting
year or Rs. 100 whichever is higher should be paid to an employee.
Maximum Bonus- It is important to note that the Act stipulates an upper
limit of 20% of the salary or wage earned by the employee during an
accounting year for the payment of maximum bonus.
 Available surplus (deductions)

 Direct taxes payable for the accounting year (calculated as per Sec.7) – Sums
specified in the Third Schedule.
 Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately
preceding accounting year.
 Allocable Surplus = 60% of Available Surplus, 67% in case of foreign companies.
 Make adjustment for ‘Set-on’ and ‘Set-off’. For calculating the amount of bonus in
respect of an accounting year, allocable surplus is computed after considering the
amount of set on and set off from the previous years
 Set on & set off

 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.
 The allocable surplus so computed is distributed amongst the employees in proportion
to salary or wages received by them during the relevant accounting year
 BONUS PAYABLE

If Basic Salary + Dearness Allowance of an If Basic Salary + Dearness Allowance of an

employee is less than Rs. 21,000 employee is more than Rs. 21,000

In the above case, Bonus is Payable In the above case, Bonus is not Payable

If salary is equal to or less than rs. 7000/- then the bonus is calculated on the actual amount by using the
formula: bonus = salary x 8.33/100
if salary is more than rs. 7,000/- then the bonus is calculated on rs. 7,000/- by using the formula: bonus = 7,000 x
8.33/100
for example, if z’s salary is rs. 5,000/- than bonus payable shall be = 5,000 x 8.33/100 = 416.5 per month (rs. 4,998 per
year)
And, if y’s salary is rs. 12, 000 then bonus payable shall be = 7,000 x 8.33/100 = 583 per month (rs. 6997per year).
Please note that salary here means: basic salary + dearness allowance
 Ways in which Statutory Bonus can be paid

Advance payment through Advance payment as an

Advance payment in bulk Arrear payment in bulk
salary` adhoc head

While the employer can

To pay advance Statutory
Bonus through salary the
employer will have to
include this as head in the
salary structure. Once it is
included in the salary
structure it gets paid
automatically through
payroll
If the employer wishes to pay advance Statutory
If the employer has not
pay the employee in Bonus any number of times
added a Statutory Bonus
advance during the year and with varying
to an employee’s salary
but also based on a percentages, the arrear
structure, they can still
percentage of wages then payment can be done
make the payment
the employer can use this only once for an employee
through the Adhoc
option, i.e. advance and only after his March
payment process
payment in bulk payroll for the year has
been confirmed
Difference Between Bonus and Statutory
Bonus

Bonus Statutory Bonus

Bonus is a generic name to denote When the bonus is specifically

a bonus linked to performance or called Statutory Bonus, it indicates
productivity as an incentive or any the bonus paid under the Payment
customary bonus given on festivals of Bonus Act, 1965.
Time-limit for payment of bonus

 where there is a 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;
 in any other case, within a period of eight months from the close of the
accounting year:
Recovery of bonus due from an
employer(sec-22)

 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 authorized 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 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 particular employee.
 Rights of employees

 Right to claim bonus payable under the Act and to make an application to the
Government, for the recovery of bonus due and unpaid, within one year of its
becoming due.
 Right to refer any dispute to the Labour Court/Tribunal.
 Employees, to whom the Payment of Bonus Act does not apply, cannot raise a
dispute regarding bonus under the Industrial Disputes Act.
 Right to seek clarification and obtain information, on any item in the accounts of the
establishment
Reference of disputes under the
bonus 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 of this Act
to an establishment in public sector, then, such dispute shall be deemed to be an
industries dispute within the meaning of the Industrial Disputes Act, 1947 (14 of
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.
Maintenance of register, records &
inspectors

 Every employer shall prepare and maintain such registers, records and other
documents in such form and in such manner as may prescribed.
 The appropriate Government may, by notification on the Official Gazette,
appoint such person as it think fit to be Inspectors for the purposes of this Act
and may define the limits within which they shall exercise jurisdiction.
 Inspectors duties

 An Inspector appointed under sub-section (1) may, for the purpose of ascertaining
whether any of the provisions of this Act has been complied with --
 Require an employer to furnish such information as he may consider necessary;
 at any reasonable time and with such assistance, if any, as he thinks fit enter any
establishment or any premises connected therewith and require any one found in
charge thereof to produce before him for examination any accounts, books, registers
and other documents relating to the employment of persons or the payment of salary
or wage or bonus in the establishment.
Offences and penalties

 For contravention of the provisions of the Act or rules the penalty is imprisonment
upto 6 months, or fine up to Rs.1000, or both.
 For failure to comply with the directions or requisitions made the penalty is
imprisonment upto 6 months, or fine up to Rs.1000, or both.
 In case of offences by companies, firms, body corporate or association of
individuals, its director, partner or a principal officer responsible for the conduct of
its business, shall be deemed to be guilty of that offence, unless the person
concerned proves that the offence was committed without his knowledge or that
he exercised all due diligence
Special provisions pertaining to
startups/ new establishments

 Startups and New establishments have been given a respite from payment of
bonus for the first five years. In the first five (05) years following the accounting
year in which the operations of the new establishment/ startup commence,
employer can pay Statutory Bonus only in the years in which the employer derives
profits.
The payment of bonus act does not apply to the
following sections of employees

 The employees of Life Insurance company

 Seamen defined under clause 42 of the merchant shipping act 1958.
 Employees who registered or listed under the dock workers Act 1948 and employed by
the registered or listed employers.
 The employees of any industry controlled by Central or State Government.
 Employees from Indian red cross society or education institutions, institutions not for
profit.
 Employees employed by the contractor on building operations
 Reserve Bank Of India(RBI) employees
 Employees of any financial corporation under Section 3 or Section 3a of the State
Financial Corporation Act (SFC) 1951
 Employees of IFCI, Deposit Insurance Corporation, agriculture Refinance Corporation.
 Any financial institution is an establishment in public sector which Central Government
notifies.
 The employees of Inland Water Transport Establishment
Payment of Bonus in Wage code
 Revisions Related To Bonus Under The Code On Wages, 2019:

 The chapter relating to bonus payments under the code on wages applies only to
establishments employing at least 20 workers on any day during the accounting
year, similar to the provisions of the Payment of Bonus Act, 1965.

An annual bonus would be paid to all workers whose salaries do not exceed a
certain monthly sum (to be determined by the federal or state governments).
Bonuses are paid on the higher of the minimum wage or the wage limit set by the
relevant government. Along the lines of the Payment of Bonus Act, the Code on
wages lists disqualifications for receiving bonuses. It should be noted, however,
that the Code also states that removal from service due to a conviction for sexual
assault would be provided a ground for disqualification of bonus under the Code.

Conclusion:

The Payment of Bonus Act of 1965 aims to legalise the practise of various
establishments paying bonuses. It provides a mechanism for calculating bonus
based on profit and performance. It allows workers to make more money than
the minimum wage or salary. This Act establishes various procedures for different
types of businesses, such as banks and government agencies, as well as
businesses that are not corporations or firms. This Act also establishes a rigorous
redress process in addition to the procedure.
 Compliance requirement

 Maintenance of register
Name of the register Particulars
Form A Register showing the computation of the allocable surplus, as referred in clause (4) of
section 2.

 Form B Register showing the set-on and set off of the allocable surplus, as referred in section
15.
Form C Register showing the details of the amount of bonus due to each of the employees,
the deductions under sections 17 and 18 and the amount actually disbursed
 Annual return:
Name of the form - Form D

Periodicity - Annual
Timeline - Within 30 days after the expiry of the time limit specified in section 19 (within eight
months from the close of the accounting year) for payment of bonus.
Maternity Benefit Act
1961& Amendment
2017
 Maternity benefit act

Objective :
To Provide Healthy Maintenance Of Pregnant Women Employee and her child
Applicability:
 Every factory, mine or plantation (including those belonging to Government) and
 To every shop or establishment wherein 10 or more persons are employed
Main Highlights of the Amendment in Material Benefit:
 The time of maternity leave which a lady worker is qualified for has been expanded
from 12 weeks to 26 (twenty) weeks.
 The improved Maternity Benefit can be profited for the initial two kids
 If more than 2 kids, maternity benefits will be for 12 weeks
 Cash Benefits:
 26 weeks Leave with pay
 A medical bonus of Rs. 1,000/-(As Per latest Amendment)
 An additional leave with pay up to one month
 In case of miscarriage Six weeks leave with average pay.
 Non Cash Benefits:
Light work for 10 weeks (6 weeks plus 1 month) before delivery.
 2 Nursing breaks of 15 Minutes until the child 15 months old.
 No discharge or dismissal while on maternity leave.
 No charge to her disadvantage while on maternity leave.
Conditions for claiming benefits:
 Must actually work for 80 days in 12 months immediately preceding her date of
Delivery.
 Should intimate the employer Seven Weeks before her delivery date about the
leave period.
 Can take advance payment for 12 week leave before delivery
 Can take payment for 26 week leave after child birth within 48 hours after
submitting the proof.
 Leave for Miscarriage & Tubectomy Operation:
 Miscarriage/Termination of pregnancy: Leave with wages of maternity
benefit, for a period of 6 weeks
 Tubectomy operation : Leave with wages of maternity benefit for a period of
2 weeks.
 Dismissal During Absence of Pregnancy:
 Any discharge or dismissal of a woman during pregnancy for absence is
entitled to maternity benefit/medical bonus.
 In case of Gross misconduct the employer in written can communicate
about depriving such benefit.
 Within 60 days from date of deprivation of maternity benefit, any Women
can appeal to the authority prescribed by law.
 Penalty for Contravention of Act:
 Imprisonment with minimum period of 3 months to maximum 01 year
 Fine from Rupees Two Thousand to Rupees Five Thousand.

Situation and Duty of Employer:

 If a woman dies during the period of her maternity leave. 2The employer needs to pay
the maternity benefit only for the days up to and including the day of her death
 If a woman dies during or following her delivery but has given birth to her child. The
employer shall be liable to pay the maternity benefit for that entire period.
 If the child also dies during the said period. The employer is liable to pay the maternity
benefit until the date the child passes away, including the date of the death of the
child.
Creche facility introduced by maternity
benefit (amendment) act, 2017

 In terms of Section 11A of the Maternity Benefit Act, every establishment to which the Act
applies and have fifty or more employees must establish a Crèche facility within such distance
as may be prescribed through notification. The Creche must be established either separately or
along with common facilities.
 The employer must allow women at least four visits a day to the crèche and it shall also include
the interval for rest allowed to her
National guidelines for setting up and running
creches under the maternity benefit
(amendment) act, 2017

 Section 11A mandates the establishment of crèches within such distance as may be prescribed,
either separately or along with common facilities.
 Crèche For Whom:
 The use of a crèche facility is proposed to be extended to children of the age group of 6
months to 6 years of all employees including temporary, daily wage, consultant and
contractual personnel.
 Crèche Location:
 The center should be near/at the workplace site or in the beneficiaries’ neighborhood, within
500 meter
 Timings:
 The crèche preferably should open for 8 hours to 10 hours. In this case, the workers can follow a
shift system. In case the establishment has day and night shifts, then the crèche should also be
run in shifts.
 Facilities to be provided:
 Crèches should be concrete, with a min space of 10-12 sq.ft. per child, with
ventilation, drinking water and with no unsafe places such as open drains, pits,
garbage bins near the center. Further, other facilities to be provided include:
 A guard, who should have undergone police verification.
 Ramps and handrails.
 Every Creche should have one supervisor per crèche.
 The Creche should have a minimum of one trained worker for every 10 children who
are under three years of age.
 For every 20 children above the age of three, the creche should have one trained
worker along with a helper.
 No plumbers, drivers, and electricians and other outside persons should be allowed
inside the crèche when children are present.
 A Crèche monitoring committee should be formed having representations from
among crèche workers, parents, and administration.
 Forming a grievance redressal committee for inquiring into instances of sexual abuse.
Maternity benefit (mines and circus)
amendment rules 2019

 It is pertinent to note these rules do not apply to Crèches established in Mines and
Circus establishments. Crèches in Mines are regulated by the Maternity Benefit
(Mines and Circus) Amendment Rules 2019. Some of the key provisions include:
 Rule 2 (b) – The crèches are set up for children under 6 years of age.
 Rule 4- The crèches are divided into 4 Types (A, B, C, D) based on the number of
women employed.
 Rule 4- Basic Standard requirements to be provided.
 Rule 8- The crèches shall be open during the whole day and open at night if the
women employees are at the office.
 Rule 9- Restriction of access to outsiders.
 Rule 10- Guidelines for medical arrangements.
Gratuity Act 1972
 Gratuity act

 Applicability
 Section. 1
 Every factory, mine, oil field, plantation, port, railways, company,
 Shop, establishment or educational institutions employing 10 or more employees
 Wages for calculation
 Section. 2 (S)
 15 days wages for every completed year as if the month comprises of 26 days at the last drawn
wages
 Entitlement
 Section. 2 (e)
 On completion of five years service except in case of death or disablement
 Qualifying period
 Section. 2 (e)
 On rendering of 5 years service either termination, resignation or retirement
 Calculation price-rated employee:
 Section. 4
 @ 15 days wages for every completed year on an average of 3 months wages.

 Calculation seasonal employee:

 Section. 4
 @ 7 days wages for every completed year of service
 Display of notice

 On conspicuous place at the main entrance in english language

 Or the language understood by majority of employees of the
 Factory/establishment
 Rule 6
 Section. 6
 Nomination
 To be obtained by employer after expiry of one year service in form – F

 Section. 4 (3)
 MAXIMUM CELLING rs. 20 lacs

 Section. 4 (6)
 Forfeiture of gratuity
 On termination of an employee for moral turpitude or riotous or disorderly behavior
 Wholly or partially for wilfully causing loss. DESTRUCTION OF PROPERTY, etc

 Rule 8
 Section. 8
 Recovery of gratuity
 To apply with in 30 days in form I when not paid with in 30 days
 Rule 9
 Mode of payment
 Cash or, if so desired by bank draft or cheque
 Section. 9
 Penalties
 Imprisonment for 6 months or fine upto rs.10,000 for avoiding to make payment by
making false statement or representation

 Imprisonment not less than 3 months and upto one year with fine on default in
complying with the provisions of act or rules
 Section. 13
 Protection of gratuity
 Can’t be attached in execution of any decree.
 Payment of gratuity

Gratuity shall be payable to an employee on the termination of his employment after

he has rendered continuous service for not less than five years, -
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
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
 The amount of gratuity payable to an employee shall not exceed10 lacs rupees.
 For the purpose of computing the gratuity payable to an employee who is
employed, after his disablement, on reduced wages, his wages for the period
preceding his disablement shall be taken to be the wages received by him during
that period, and his wages for the period subsequent to his disablement shall be
taken to be the wages as so reduced.
 Nothing in this section shall affect the right of an employee to receive better
terms of gratuity under any award or agreement or contract with the employer.
 Notwithstanding anything contained in sub-section (1), - (a) the gratuity of an
employee, whose services have been terminated for any act, wilful omission or
negligence causing any damage or loss to, or destruction of, property belonging
to the employer, shall be forfeited to the extent of the damage or loss so caused.
(b) the gratuity payable to an employee may be wholly or partially forfeited]
Salient features of the payment of gratuity
act, 1972

 The Act is a self-contained and an exhaustive Act and the provisions of this Act and rules
made under it have an overriding effect on all other Acts or instruments or contracts so far as
they are inconsistent with this Act.
 The Act is fairly sweeping in coverage, as it applies to all factories, mines, oil fields, plantations,
ports and railways irrespective of the number of workmen employed by them. It also covers
shops and establishments employing 10 or more persons.
 The Act gives a statutory right of gratuity to all the employees, who have rendered five years’
continuous service and whose services stand terminated after coming into force of the Act
on account of superannuation, or retirement, or resignation, or death or disablement.
 The Act provides both executive and quasi-judicial machinery for matters pertaining to
nomination, determination and recovery of gratuity.
 The executive machinery pertains to maintenance of records regarding opening, change or
closure of establishments, display of notices and maintenance of records by the controlling
authority. The quasi-judicial functions have been divided between the employers and the
Controlling Authority in as much as for payment of gratuity, the first forum provided is an
application to the employer. When the employer has declined or avoided payment of
gratuity, then an application is required to be made to the Controlling Authority.
 The machinery provided for recovery rests with the Controlling Authority.
 The orders of the Controlling Authority for payment or determination of gratuity are
applicable before the appropriate government or the appellate authority.
Retirement and superannuation

 Retirement means termination of the service of an employee otherwise than on

superannuation; superannuation in relation to an employee, means the
attainment by the employee of such age as is fixed in the contract or conditions
of service as the age on the attainment of which the employee shall vacate the
employment. Wages are all emoluments which are earned by an employee while
on duty or on leave, in accordance with the terms and conditions of his
employment and which are paid or are payable to him in cash and includes
dearness allowance but does not include any bonus, commission, house rent
allowance, overtime wages and any other allowance[xx].
 Nomination
 Each employee, who has completed one year of service, shall make, within such time, in
such form and in such manner, as may be prescribed, nomination for the Purpose of' the
second provison to sub-section (1) of section 4.
 An employee may, in his nomination, distribute the amount of gratuity payable to him
under this Act amongst more than one nominee.
 If an employee has a family at the time of' making a nomination, the nomination shall be
made in favour of one or more members of his family, and any nomination made by such
employee in favour of a person who is not a member of his family, shall be void.
 If at the time of making a nomination the employee has no family, the nomination may be
made in favour of any person or persons but if the employee subsequently acquires a
family, such nomination shall forthwith become invalid and the employee shall make, within
such time as may be prescribed, afresh nomination in favour of one or more members of his
family.
 A nomination may, subject to the provisions of sub-sections (3) and (4), be modified by an
employee at any time, after giving to his employer a written notice in such form and in such
manner as may be prescribed, of his intention to do so.
 If a nominee predeceases the employee, the interest of the nominee shall revert to the
employee who shall make a fresh nomination, in the prescribed form, in respect of such
interest.
 Every nomination, fresh nomination or alteration of nomination, as the case may be, shall
be sent by the employee to his employer, who shall keep the same in his safe custody.
 Recovery of gratuity

 If the amount of gratuity payable under this Act is not paid by the employer,
within the prescribed time, to the person entitled thereto, the controlling authority
shall, on an application made to it in this behalf by the aggrieved person, issue a
certificate for that amount to the Collector, who shall recover the same, together
with compound interest thereon at such rate as the Central Government may, by
notification, specify,] from the date of expiry of the prescribed time, as arrears of
land revenue and pay the same to the person entitled thereto : Provided that the
controlling authority shall, before issuing a certificate under this section, give the
employer a reasonable opportunity of showing cause against the issue of such
certificate: Provided further that the amount of interest payable under this section
shall, in no case exceed the amount of gratuity payable under this Act.
 Compulsory insurance

 Payment of Gratuity Act, 1972 Section: 4A Compulsory insurance:

The Payment of Gratuity (Amendment) Act, 1987 has prescribed provisions for
compulsory insurance for employer’s liability for payment towards the gratuity under the
Act from the Life Insurance Corporation of India established under the Life Insurance
Corporation of India Act,1956 or any other prescribed Insurer. However, employer of an
establishment belonging to or under the control of the Central Government or the State
Government are exempted from operations of these provisions. (Section 4A)[xxiii]
 Protection of Gratuity:

 No gratuity payable under the Act shall be liable to attachment in execution of any
decree or order of any civil, revenue or criminal court. However if the employee had
agreed to a deduction from the amount due as gratuity then that amount can be
recovered[xxv]. (Sec. 13)
 Notice of Opening, change, closing of Establishment(Rule 3):

 Once the Payment of Gratuity Act becomes applicable to the establishment, a notice
in Form ‘A’ has to be given by the employer to the controlling authority within 30 days.
Notice in Form ‘B’ is to be given to the controlling authority within 30 days of any
change in name, address, employer or nature of business. Where an employer
proposes to close down the business he shall submit a notice in Form ‘C’ to the
Controlling Authority at least 60 days before the intended closure.
Exemption of employer from liability in
certain cases:

Where an employer is charged with an offence punishable under this Act, he shall be
entitled, upon complaint duly made by him and on giving to the complainant not less than
three clear days notice in writing of his intention to do so, to have any other person whom
he charges as the actual offender brought before the court at the time appointed for
hearing the charge; and if, after the commission of the offence has been proved, the
employer proves to the satisfaction of the court - (a) that he has used due diligence to
enforce the execution of this Act, and (b) that the said other person committed the
offence in question without his knowledge, consent or connivance, that other person shall
be convicted of the offence and shall be liable to the like punishment as if he were the
employer and the employer shall be discharged from any liability under this Act in respect
of such offence:
 Penalties
 Failure to comply with the Payment of Gratuity Act 1972 entails certain penalties (Sec.
9)[xxvi], which are the following:
 (i) For avoiding any payment knowingly makes any false statement or representation
shall be punishable with imprisonment upto 6 months or fine upto Rs. 10,000.00 or both.
 (ii) Failure to comply with any provision of the Act or Rules Shall be punishable with
imprisonment upto 1 year but will not be less than 3 months or with fine, which will not
be less than Rs. 10,000.00 but may extend upto Rs. 20,000.00 or with both.
 (iii)Any offense relating to non-payment of gratuity under the Act Employer shall be
punishable with imprisonment for a term which shall not be less than 6 months but may
extend to 2 years, unless the court for reasons recorded decides for a lesser term of
imprisonment or fine.
Gratuity trust

Formation of Gratuity Trust:

 Gratuity trust must be set up as an irrevocable trust
 Gratuity trust must be set up for providing gratuity benefits to the employees trust
to act as a separate legal entity.
 Employer can appoint trustees for monitoring and administration of the fund
 The trust must get an approval from under the Income Tax Act, 1961 to be
recognized as approved gratuity trust.
 Trustees can chose to manage the fund as per by laws of the trust. Common
practice is to enter into a master policy with the insurance company to provide
death-cum-retirement benefits to the employees.
 All the monies contributed to the fund by the employer or received or accruing
by way of interest or otherwise to the fund may be deposited in such separate
bank account or utilized for making contribution to the group gratuity scheme
under master policy entered into with the insurance company.
New amendment under gratuity
act

 The existing upper ceiling on the gratuity amount under the Act is INR 10
Lakh. ... Currently, the Government has issued a notification specifying the
maximum limit to Rs. 20 Lakh.” This transition in the Act has been introduced
for the implementation of the Seventh Central Pay Commission.
 New amendment of laws

Overview of Labour Law Reforms:

 The central government proposes to replace 29 existing labour laws with four Codes. The objective is to
simplify and modernise labour regulation.

 The major challenge in labour reforms is to facilitate employment growth while protecting workers’
rights. Key debates relate to the coverage of small firms, deciding thresholds for prior permission for
retrenchment, strengthening labour enforcement, allowing flexible forms of labour, and promoting
collective bargaining.

 Further, with the passage of time, labour laws need an overhaul to ensure simplification and updation,
along with provisions which can capture the needs of emerging forms of labour (e.g., gig work). This note
discusses these challenges and the approaches taken by the four Codes.
 Industrial relation code

 In consonance with the Industrial Disputes Act of 1947 under Section 22, it was made
mandatory for employees to give a 6 week notice period before going for a strike in case
of any public utility, this has been amended and public utility has been replaced with
“Any industrial establishment”. Along with that, if there is any ongoing dispute settlement
in the court, the employees who want to go on strike have to give a 60 day notice period
to their employers even if the proceedings have been completed. According to this new
provision, the scope to go on strike has been reduced significantly.
 Another amendment introduced in this Bill under Section 83 of the Industrial Relations
Code is that a reskilling fund will be provided by the employer to any employee who has
been retrenched and the amount that the person will get will be the amount as what he
would get in the last 15 days of work.
Social security code bill, 2020

 A provision of this Bill under Section 6(1) states that a new board would be set up
called The National Social Security Board which would advise the government on
new schemes that would benefit the workers in the unorganized sector or the
workers who work on a temporary basis.
 Any employers who hire a person on a temporary basis (gig workers), have to
contribute at least 1 or 2% of their annual turnover for the social security of these
gig workers.
Occupational safety, health, and
working conditions bill, 2020

 The definition of “Inter-State migrant workers” under Section 2 (zf) had changed from
what it was in the 2019 Bill. Now it defines the term as when a person from another
willingly comes to another State in search of work and has an income which is Rupees
18,000 or less will be termed as Interstate Migrant Workers, this new bill also gives a lot
of advantages to the interstate migrant workers as well.
 The definition of “Factory” has been amended from what it was in the 2019 Bill and
according to this Bill, it excludes Mining from the definition. The other amendments
include that the total working hours of an employee have been fixed to eight hours a
day, and women can work in any workplace and if they are required to work in any
dangerous workplace, the employers are bound to take necessary precautions
before.
 Coverage: Most labour laws apply to establishments over a certain size (typically 10 or above). Size-
based thresholds may help firms in reducing compliance burden. However, one could argue that basic
protections related to wages, social security, and working conditions should apply to all
establishments. Certain Codes retain such size-based thresholds.

 Retrenchment: Establishments hiring 100 or more workers need government permission for closure, layoffs
or retrenchments. It has been argued that this has created an exit barrier for firms and affected their
ability to adjust workforce to production demands. The Industrial Relations Code raises this to 300, and
allows the government to further increase this limit by notification.

 Labour enforcement: Multiplicity of labour laws has resulted in distinct compliances, increasing the
compliance burden on firms. On the other hand, the labour enforcement machinery has been ineffective
because of poor enforcement, inadequate penalties and rent-seeking behaviour of inspectors. The
Codes address some of these aspects.
 Contract labour: Labour compliances and economic considerations have resulted in increased use of
contract labour. However, contract labour have been denied basic protections such as assured
wages. The Codes do not address these concerns fully. However, the Industrial Relations Code introduces
a new form of short-term labour – fixed term employment.
 Trade Unions: There are several registered trade unions but no criteria to ‘recognise’ unions
which can formally negotiate with employers. The Industrial Relations Code creates provisions
for recognition of unions.

 Simplification and updation: The Codes simplify labour laws to a large extent but fall short in
some respects. Further, the Code on Social Security creates enabling provisions to notify
schemes for ‘gig’ and ‘platform’ workers; however, there is a lack of clarity in these definitions.

 Delegated Legislation: The Codes leave several key aspects, such as the applicability of social
security schemes, and health and safety standards, to rule-making. The question is whether
these questions should be determined by the legislature or be delegated to the government.
 KEY CHANGES

 Definition of Industrial Dispute has been modified to include the dispute

arising out of discharge, dismissal, retrenchment or termination of such
worker.
 Metro railway has been included in the definition of railways.
 Maximum number of members in the Grievance Redressal Committee
has been increased from 6 to 10 in an industrial establishment employing
20 or more workers
 Negotiating union or negotiating council" been inserted in the definition.
 The "Trade Union dispute" has been added, which provides dispute
relating to Trade Union arising between two or more Trade Unions or
between the members of a Trade Union inter se;
 KEY CHANGES

 Definition of wages has been revised:-

 the First part includes all salary components express in terms of money
are capable of being so expressed like basic salary, all reimbursements,
all allowances, all benefits.
 Second part of the definition provide specific exclusion like:- Bonus
payable under any law, Conveyance allowance, House rent allowance,
Overtime Allowance, House Accommodation, Supply of light water
medical attendance, other amenities/ service excluded by a General or
special order of the appropriate government, Commission, contribution
to provident fund/pension, Any sum paid to defray special expenses,
Gratuity, Retrenchment Compensation, Remuneration payable under
any award or settlement between the parties
 KEY CHANGES
 The Third part of the definition provides that the total excluded components should not
exceed 50% of the total remuneration. The third part of the definition provide limit as
the definition very clearly specifies the list of exclusions so anything which is paid to the
employees other than the exclusion would be covered and within this specific
exclusion the limit cannot be more than 50%
 A new feature of “Recognition of Negotiating Union” has been introduced. The Code
provides for a negotiation union in an industrial establishment, having registered trade
unions, for negotiating with the employer
 If there is only one trade union in an industrial establishment, the employer is required to
recognise such trade union as the sole negotiating union of the workers.
 In case of multiple trade unions, the trade union with support of at least 51% of workers
on the muster roll of that establishment will be recognised as the sole negotiating union
by the employer
 KEY CHANGES

 The provisions of Standing Orders on Industrial establishments will be

applicable having 300 or more than 300 workers as notified by the
appropriate Government.
 The Code prohibits strikes or lock-outs in any establishment unless a prior
notice of 14 days is provided. Similar provisions existed in the Industrial
Disputes Act, 1947 for public utility services (such as, railways and airlines).
The Code expands these provisions to apply to all industrial establishments.
This will impact the ability of workers to strike and employers to lock-out.
 An industrial disputes can be voluntarily referred to arbitration by the
employer as well as the workers. The parties to the dispute are required to
execute a written agreement referring the dispute to an arbitrator
 KEY CHANGES

 Code provides single registration for an establishment instead of multiple

registrations. This will design a centralized database and develop an
ease of doing business.
 Appointment letter made Statutory.
 Working Hours For Women: Working Hours for Women as per this new
proviso female workers/women can work during night shifts with their
consent. Also, the time slot for such night shift shall be from 7 p.m. and
before 6 a.m., which shall also be approved by the central or state govt.
 Rights and duties of employees and employers: Rights and duties laid
down in the Code for employees too, employees shall take care of their
own health, shall comply with specified safety and health measures,
shall report unsafe situations to the inspector.
 KEY CHANGES

 Offences and Penalties: Under the Code, an offence which leads to the death of
an employee will be punishable with imprisonment of up to two years, or a fine up
to five lakh rupee or, both. Further, the court (Chief Inspector-cum-Facilitator or
Inspector-cum-Facilitator or an officer of the appropriate Government or a
person authorized to discharge any duty or to exercise any powers under this
Code) has been granted a discretionary power wherein, it may direct that at
least 50% of such fine be given as compensation to the heirs of the victim. The
Code further states that where no penalty has been laid down for violation of the
provision of the Code by the employer, the employer will be penalized with a fine
between two to three lakh rupees. And where the employee violates any
provisions of the Code, he will be subject to a fine of up to Rs. 10,000
 KEY CHANGES

 The appropriate government for the factory governed by the central

government will be central government, including establishment of contractors
for the purposes of such establishment. In other cases the concerned State
Government where it is situated.
 The code has also covered Audio visual production' include feature films, non-
feature films, television, web-base serials, talk shows, reality shows etc and under
the new definition of Audio Visual- Worker” singer, news reader, dancer, stunt
person, technical, artist and work like supervisory etc has been covered subject
to some wages ceiling to be notified by the central government.
 The definition of Contract Labour has been modified and includes inter-State
migrant worker but excludes part time employee, regularly employed n
mutually accepted standards of the conditions of employment and entitled to
Social Security benefits.
 KEY CHANGES

 The new definition of Core Activity provides that activity for which
establishment is set-up and other activity like housekeeping, Security,
canteen etc not to be treated as core activity.
 Principal employer to provide welfare facilities, where the contract
labour is deployed.
 Principal employer shall be liable to make payment of wages to the
contract labour deployed by him
 KEY CHANGES

 The work hours for different classes of establishment and employees shall be as per the rules
prescribed by central or state government. Further, in relation to overtime work, an employee
shall be paid twice the rate of daily wages. The code in regard to leaves states that no
employee shall work for more than 6 days a week, however, an exception has been
provided for motor transport workers.
 Definition of “ Employee” has been incorporated and includes person doing any skilled,
semiskilled or unskilled, manual, operational, supervisory, managerial, administrative,
technical or clerical work for hire or reward.  As per new definition of “Employer” a person
who employs, whether directly or through any person or on his behalf, or on behalf of any
person, one or more employees in his establishment. and would be
 Head of the department
 Occupier of the factory
 Manager of the factory under clause (f) of sub-section (1) of sec 7 of the Factories Act.
 Owner of the mine, agent or manager.
 The person who, or the authority which has ultimate control over the affairs of the
establishment and where the said affairs are entrusted to a manager or managing director,
such manager or managing director;
 Contractor; and legal representative of a deceased employer
 KEY CHANGES

 The definition of the “Factory” has been revised under section 2 (w) and threshold limit of
employees is now 20 in case of use of power and 40 in case without power and has
specifically excludes, hotels, restaurant, eating place, Electronic Data Processing Unit or
a Computer Unit etc.
 The definition of "hazardous substance" provides any substance, has potential to cause
physical or health hazards to human being, other living creatures etc
 A new definition “Industrial premises” provides a premises in which any industry, trade,
business etc is being carried on with or without the aid of power includes a godown.
 Definition of “Inter State Migrant worker” has been modified and ceiling limit of Rs 18000/-
has been introduced
 Definition of "machinery" has been inserted includes any article or combination of articles
assembled, used or intended to be used for converting any form of energy to perform
work
 KEY CHANGES

 Definition of "manufacturing process" has been taken from Factory Act and provides
such other processes as the central Government may notified.
 Definition of “metro railways” has been added and Metro railways has been treated as
railways.
 Definition of “newspaper establishment” has been drastically changed and has
covered all type of establishment carried on by individual, partners, created firm, body
corporate subsidiaries of a common holding company etc.
 Definition of the “Occupier” has been amended and instead of clause a, b and c in
second proviso, a consolidated definition has been given.
 Definition of the “principal employer” has been modified to the extent that the
manager has been excluded from the definition of the principal employer
 Definition of the “producer” has been added means a person who is making
arrangement for necessary of production is also included
 KEY CHANGES

 Definition of “Sales Promotion Employees” has been revised including a persons in

supervisory capacity, managerial, administrative capacity getting salary up to Rs
18000/- per month or as may be notified by the Central Government from time to
time.
 Definition of “worker” has been revised and includes persons in supervisory
capacity and working journalists, sales promotion employees getting salary up to
Rs. 18000/- per month or as may be notified by the Central Government from time
to time Thank
 Conclusion

 The workers have been a strong pillar in the development of the economy from time immemorial
and these laws are needed to be reformed with the needs and development of the working
class so that the laws are also evolved with the passing of time and so that the rights of the
workers are also protected.
 The new amendments were very much necessary with regard to the global crisis that has hit
because of which hundreds have lost their jobs and these laws also help to strike a balance with
the employer-employee relationship which is very much needed.
 THANK YOU 
FOR FURTHER QUERY/ COMPLIANCE/LEGAL SUPPORT,
CONTACT :

HRADIANCE FOUNDATION
(REGISTERED WITH MCA, MSME & NITI AYOG)

EMAIL – HELPDESK.HRADIANCE@GMAIL.COM
CONTACT NO – 9874961111/ 8910819973
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