MODULE 1

Labour Legislations
1.1 Labour legislations and constitution of India
1.2 ILO and labour legislations in India
1.3 Foundation of Industrial and Labour Laws in India
1.4 Industrial Labour Laws and social justice
1.5 Central and state laws
1.6 Landmark judgments

Labour Legislations and Constitution of India

The Constitution of India protects the life and liberty of an individual. In the Olga Tellis case,
the SC held that Right to Livelihood is an integral part of Right to life and hence will be
protected under Article 21. Apart from this, the Constitution enlists several provisions which
guarantee protection of the interests of employees and safeguards them against any kinds of
discrimination in matters of public employment.

Essential provisions in the Constitution are:

 Article 14: Right to Equality
 Article 16: Equality of opportunity in matters of public employment
 Article 19: the right to form associations and unions
 Article 21: Right to livelihood under Right to Life
 Article 23: Prohibits traffic in human beings and forced labour
 Article 24: prohibits child labour below the age of 14 years
 Article 39(d): ensures equal pay for equal work for both men and women.

Article 14
 Article 14 of the Constitution talks about equal pay for equal work. The Supreme Court
has given several judgments related to this principle.
 In the case of Kishori Mohanlal Bakshi v. Union of India in 1962, the court ruled
that this principle couldn't be enforced in a court of law.
 However, in the case of Randhir Singh v. Union of India in 1982, the court changed
its stance and said that the principle of equal pay for equal work is applicable to all,
regardless of their gender. It also applies to cases where there are unequal scales of pay
based on classification or irrational classification, even if the employees perform the
same duties.
 The principle of equal pay for equal work has also been extended to casual workers
employed on a daily wage basis. In the case of Dhirendra Chamoli v. State of U.P, it
was held that casual workers should receive the same salary and conditions of service
as regular employees, even if they are not appointed to sanctioned posts.
 These principles were further applied in the case of State of Punjab v. Jagjit Singh,
where the court ruled that temporarily engaged employees, such as daily wage
employees or contractual employees, are entitled to a minimum pay scale similar to
regular employees.
 In the case of Daily Rated Casual Labour v. Union of India, it was held that daily
rated casual laborers should receive at least the minimum pay of regular workers in the
department, along with dearness allowance, without increments. Classifying employees
into regular and casual categories for the purpose of paying less than the minimum wage
is against the Constitution and international covenants.
Article 19
 Article 19 of the Constitution talks about the right to form an association.
 Damayanti v. Union of India, the Supreme Court stated that this right includes the
freedom to choose who can be a part of the association. The court emphasized that any
law that forces members into an association without their consent or takes away the
membership of those who have joined voluntarily would violate the right to form an
association.

Article 21
 Article 21 of the Constitution talks about the right to life.
 D.K. Yadav v. J.M.A. Industries, the Supreme Court stated that this right includes the
right to livelihood. It means that before an employee or worker is terminated from their
job, they should be given a fair opportunity to explain their side of the story. The process
of taking away someone's livelihood should be fair, just, and in line with the principles
of natural justice. Article 21 combines life with liberty and dignity, and livelihood is an
essential part of human dignity. The Court in this case overturned the decision of the
Labour Court and ordered the reinstatement of the employee.

Bonded Labour
 In the case of PUDR v UOI (1982), the Supreme Court said that paying wages below
the minimum limits set by the Minimum Wages Act is considered forced labour.
 In Bandhua Mukti Morcha v UOI (1984), the Supreme Court gave directions to free
and rehabilitate bonded labourers working in mining operations.
 In Neerja Chaudhary v State of M.P (1984), the Supreme Court expressed
disappointment with the government's lack of concern for rehabilitating released
bonded labourers.
 In Shankar Mukherjee v UOI (1990), the Supreme Court declared that the Contract
Labour Act, 1970, is a law for the well-being of labourers and should be interpreted in
their favor. The court also stated that the contract labour system is similar to bonded
labour and should be abolished because of its harmful effects.
 In PUCL v State of TN (2004), the Supreme Court recognized the important role
played by NGOs in preventing and emancipating bonded labourers. The court also
emphasized that the judiciary should have a compassionate approach towards bonded
labourers.

Randhir Singh v. Union of India:

 The court made an important observation regarding the principle of "equal pay for equal
work."
 The court referred to Articles 14, 16, 19, and 30 of the Constitution while discussing
this principle.
 The court emphasized that "equal pay for equal work" is not just an abstract concept
but a substantial doctrine with practical implications.
 The court stated that when interpreting Article 14 and 16, it is essential to consider the
Preamble and Article 39(d) of the Constitution.
 According to the court, the principle of "equal pay for equal work" can be derived from
these Articles and should be properly applied in cases where there are unequal scales
of pay without any valid or reasonable classification.
Amita v. Union of India:
 the Supreme Court made an important interpretation of Article 16(1) of the
Constitution.
 The court held that the phrase "matters relating to employment or appointment"
mentioned in Article 16(1) includes not only matters directly related to the employment
or appointment but also those that are incidental to the employment and form part of
the terms and conditions of such employment.
 This means that any issues or aspects related to employment, both before and after the
actual employment takes place, are covered under Article 16(1).
 The court's interpretation broadens the scope of Article 16(1) and recognizes that
matters beyond the initial appointment, such as terms and conditions of employment,
are integral to the employment relationship.

ILO and labour legislations in India

The ILO has played a key role in promoting international labour standards. It was set up in
1919 under the Treaty of Versailles. India is a founder member of ILO.
There are certain fundamental principles of the ILO that were laid down at the time of its
inception. These principles are known as the Charter of Freedom of Labour. The main
principles of ILO are as follows:
 Labour is not a commodity
 Freedom of expression and of association are essential to sustained progress.
 Poverty anywhere constitutes danger to prosperity everywhere.
 The war against want requires to be carried on with unrelenting vigour within each
nation and by continuance and concerted international effort in which the
representatives of workers and employers, enjoying equal status with those of the
governments, join them in free discussion and democratic decision making with a view
to promotion of common welfare.
The ILO has greatly influenced labour legislation in India. So much that most labour
legislations have been enacted in conformity with the ILO conventions.

Structure and Activities of ILO

ILO is a tripartite organization consisting of representatives of govts, employers and workers
of the member-countries. The structure of the organization has helped in welding together
employers and workers in various countries (including India) into independent organizations.
The ILO operates through its:
 Governing Body
 International Labour Office
 International Labour Conference which meets once a year to review the international
labour scene.

Industrial Labour Laws and Social Justice

The concept of social justice is a fundamental objective outlined in the Constitution,
emphasizing the State's responsibility to promote the welfare of its people. Industrial labor laws
play a crucial role in achieving social justice by protecting workers' rights and ensuring a fair
and equitable working environment.
The Constitution and Social Justice
  The Constitution highlights the importance of socio-economic justice as a key objective
of the State.
 Article 38 emphasizes the State's duty to promote the welfare of the people and establish
a social order based on justice in all aspects of national life.
 Article 39 requires the State to apply principles of social justice when making laws.
Understanding Social Justice
 Social justice is a concept that seeks to bring about positive changes in the lives of the
poor and needy.
 It does not involve making the rich poor to benefit the poor; instead, it focuses on
providing equal opportunities and basic necessities to all individuals.
 Social justice aims to improve social and economic conditions by ensuring that
everyone has access to essential resources and a dignified life.

Roles and Responsibilities

 Achieving social justice requires collaboration between the State and its citizens.
 The State has constitutional responsibilities to create laws and regulations that promote
social justice.
 Citizens have a moral responsibility to actively participate and support initiatives aimed
at achieving social justice.

Industrial labor laws and social justice are interconnected, as labor laws provide the framework
for protecting workers' rights and promoting equality in the workplace. By upholding the
principles of social justice, such as equal opportunity and fair treatment, industrial labor laws
contribute to creating a more just and inclusive society. It is the joint effort of the State and its
citizens that can bring about an ideal society where social justice prevails.
 MODULE 2

DISCIPLINE IN INDUSTRY

Discipline in Industry
1. Doctrine of hire and fire - History of management's prerogative
2. Fairness in disciplinary process
3. Punishment for misconduct - Meaning of misconduct
4. Domestic enquiry
https://www.ijlmh.com/wp-content/uploads/Fairness-in-Disciplinary-Process-%E2%80%93-
Misconduct-and-Disciplinary-Enquiry.pdf

1. What is meant by Misconduct? Explain the procedure that is to be followed in the conduct of a
Domestic inquiry with the help of relevant case laws
2. Mr. Kumar a workman has been charged with misconduct and thereafter a domestic enquiry
has been initiated against him. During the conduct of the domestic enquiry Mr. Deshmukh who
is the General Manager of the Company has appeared in the enquiry as an Enquiry Officer and
Mr. Deshpande has appeared as the Management Representative. At the time of leading
evidence Mr. Deshmukh has appeared as a witness on behalf of the management and Mr.
Deshpande has taken his evidence. Mr. Deshmukh has thereafter submitted his enquiry report
holding that the misconduct to be proved. Examine the facts of the case and advise Mr. Kumar
as to whether the principle of natural justice has been violated or not and remedies available to
him in the light of Legislative provisions and relevant case Laws.
3. What is domestic enquiry? Explain the essential ingredients of domestic enquiry with the help
of relevant judicial decisions.
4. Mr A was found sleeping at about 4 am in the night shift of the company. Mr A was also earlier
found sleeping in the night shift & was also warned about the consequences. You are the
Personal Manager of the Company and the Managing Director of the Company has directed
you to take appropriate disciplinary action. As a Personal Manager what action would you take
against the delinquent workman in the light of the relevant legislation
5. What is the procedure to be followed by an employer for dismissal of an employee with special
emphasis on natural justice, domestic enquiry and subsistence allowance?
6. What is domestic enquiry? Explain the essential ingredients of domestic enquiry with the help
of relevant judicial decisions.
7. Explain the following concepts in the light og the industrial employment (standing orders) act,
1946: Standing orders and Domestic enquiry
8. Explain the objects and scopes of standing orders act.

Industrial Discipline
Meaning:
Industrial Discipline refers to orderly working of the employees of an industrial undertaking in
accordance with established rules, regulations and convention. In an organization, discipline is
the orderly conduct of its members.

Doctrine of Hire and Fire

 Early labour laws were enacted to safeguard the interest of employers. It was governed
by the doctrine of laissez faire.
 Modern labour legislation, on the other hand, aims at protecting workers against
exploitation by employers.
 The advent of doctrine of welfare state is based on the notion of progressive social
philosophy which has rendered the old doctrine of laissez faire obsolete.
  The Doctrine of Hire and Fire as well as theory of Supply and Demand found free scope
under the old doctrine of laissez faire no longer holds good.
 According to the Doctrine of Hire and Fire, an employer is free to remove the employee,
whenever he/she wants, which is usually done on a discriminatory basis and purely on
the will of the employer.
 This is important from the view of the production as it increases the potential of
production, as everyone is competing for better production so that they can hired.
Hence, the production process keeps on getting better and better.
 There are reasonable restrictions also on the part of employer at times. Usually while
dealing with a labour class population such restrictions are not seen.
 This theory is seen bad as an employer cannot remove an employee merely based on
discrimination which the employer assumes to be a true fact and hence justify
discrimination.
 The regulations are meant to enhance the welfare of workers. The following are some
of the labour law that protect the workers from the hire and fire theory:
The Industrial Disputes Act, 1947: The law guides the hiring and firing rules of the
industrial sector. It requires that any company employing more than 100 workers needs
to get permission from the government before laying off workers which is rarely
granted. In the event of dismissal, a worker has up to 3 years to file an unfair dismissal
claim.

Misconduct
Meaning:
The expression misconduct as not been defined in any industrial legislation. However, majorly
misconduct can be categorized into three groups:
 Misconduct relating to work
 Misconduct relating to discipline
 Misconduct relating to integrity
Under the Model Standing Orders of the Industrial Employment (Standing Orders) Act, 1946,
the following shall be deemed to be misconduct:
 Wilful subordination or disobedience, whether alone or in combination with other, to
any lawful and reasonable order of a superior
 Theft, fraud or dishonesty in connection with the employer’s business or property
 Wilful damage to or loss of employer’s goods or property
 Taking or giving bribes or any illegal gratification
 Habitual absence without leave or absence without leave for more than 10 days
 Habitual late attendance
 Habitual breach of any law applicable to the establishment
 Riotous or disorderly behaviour during working hours at the establishment or any act
subversive of discipline
 Habitual negligence or neglect of work
 Frequent repetition of any act or omission for which a fine may be imposed to a
maximum of 2 percent of the wages in a month
 Striking work or inciting other to strike work in contravention of the provisions of any
law or rule having the force of law
In the case of Ravi Yashwant Bhoir v. District Collector, Raigad, the SC observed that the
word “misconduct” though not capable of precise definition, receives its connotation from the
context of delinquency in its performance and its effect on the discipline and nature of the duty.
It can be an unlawful behaviour, forbidden act, etc.
Punishment for misconduct
Major: Dismissal, Discharge and Suspension
Minor: Fine, Warning and Censure

Domestic Enquiry
 Domestic enquiry is like a trial in a court, but with some differences.
 In a court trial, crimes against the State or Society are addressed, while domestic
enquiry deals with offenses against the establishment, such as misconduct.
 The punishments for misconduct are based on the Standing Orders/Companies’ Rules
and Regulations that apply to the workplace.
 Court trials follow the Criminal Procedure Code, while domestic enquiries follow the
principles of “Natural Justice”
 Natural Justice refers to a fair and unbiased process that respects the rights of the
individuals involved in the enquiry.
 Domestic enquiry is not mandated by the Industrial Disputes Act or other substantive
laws like the Factories Act or Mines Act.
 However, it is included in the standing orders that are created under the Industrial
Employment (Standing Orders) Act.
 Domestic enquiry is a process outlined in these standing orders to address issues related
to misconduct and violations of company rules and regulations.
 While it is not a legal requirement, many establishments choose to conduct domestic
enquiries to ensure a fair and just resolution of internal matters.

Basic Principles for Domestic Enquiry

The Principle of Natural Justice:
 A domestic enquiry is a quasi-judicial proceeding and an essential requirement laid to carry
out a domestic enquiry is that the Principle of Natural Justice must be followed.
 These are a basic of the principles of Justice which are founded on Equity and Reason and
without which no Justice can be done.
 It is a matter of substance and not of form.
 It includes two basic principles of Equity:
 Nemo Judex in Propria cause sua: No one shall be a judge in his own case and he must
not have any personal interest in the case
 Audi alterem partem: No decision can be given against a party without a reasonable
hearing from both the parties.
 The management of the industrial establishments at all times must satisfy this principle to
maintain a neutral attitude towards the workmen and the employees at a workplace.
In the case of Union of India v. T.R. Verma (1957), it was held that the principles of natural
justice require that an employee who is charged with misconduct should be given a chance to
present relevant evidence. The employer's evidence should be heard in the presence of the
employee, and the employee should be allowed to cross-examine the witnesses presented by
the management. No evidence should be used against the employee without giving them a
chance to explain it. By following this procedure, the evidence gathered during an inquiry
cannot be questioned later.
Right to make representation
The delinquent employee must be informed about the charges levelled against him and shall
be provided with an opportunity to be heard so he can refute them and establish his innocence,
as these are his rights which cannot be denied by the employer or the organisation.
He must be given an occasion to cross-examine the witnesses in his defence and evidence at
the enquiry should be adduced in his presence. If proven guilty, the punishment awarded,
should be in proportion to the misconduct committed.
These principles of natural justice are specified in Sections 2(b), 5(2), 10A (2) and 13A of The
Industrial Employment (Standing Orders) Act, 1946.6
In the case of Union of India v. Mohd. Ramzan Khan (1991), it was held that a worker who
is accused of wrongdoing should have the right to challenge the findings of the inquiry report
and present their side of the story to the disciplinary authority. This means they should be given
an opportunity to explain their position and defend themselves against the allegations made.

OR

The principles of natural justice are an essential component of any fair and just legal process,
including domestic enquiries conducted under labour law. These principles serve as a safeguard
to ensure fairness, impartiality, and transparency in disciplinary proceedings involving
employees. Here are the key principles of natural justice that apply to domestic enquiries in the
context of labour law:
 Audi Alteram Partem (Hear the Other Side): This principle mandates that all parties
involved in a domestic enquiry, including the accused employee, have the right to be
heard and present their case. It requires that the employee be given adequate notice of
the allegations against them and an opportunity to respond, present evidence, and cross-
examine witnesses.
 Nemo Judex in Causa Sua (No One Should Be a Judge in Their Own Cause): This
principle states that the decision-maker or the person presiding over the domestic
enquiry should be impartial and free from any bias or conflict of interest. This ensures
that the proceedings are conducted in an unbiased manner, and the decision is based
solely on the merits of the case.
 Rule Against Bias: The principle of bias prohibits any decision-maker from having a
prejudiced or preconceived opinion about the case or the parties involved. It ensures
that the person responsible for deciding the outcome of the enquiry maintains an open
mind and considers the evidence and arguments objectively.
 Evidence: The principle of natural justice requires that the evidence presented in the
domestic enquiry should be relevant, reliable, and based on facts. The accused
employee should have the opportunity to challenge the evidence against them, present
their own evidence, and call witnesses to support their case.
 Reasoned Decision: After considering all the evidence and arguments, the decision-
maker should provide a reasoned decision explaining the basis for the findings and the
disciplinary action, if any, taken against the employee. This allows the employee to
understand the rationale behind the decision and exercise their rights of appeal or
review if necessary.
Adhering to the principles of natural justice in domestic enquiries is crucial to maintain a fair
and equitable work environment. These principles ensure that employees are afforded a fair
opportunity to defend themselves and protect their rights, while also promoting transparency
and accountability in the disciplinary process.

Process of Domestic Enquiry

1. Fact-Finding Enquiry or Preliminary Enquiry:
  A preliminary investigation is conducted to determine if there is any evidence
of misconduct by an employee.
 The preliminary investigation is important because it helps decide if further
action, such as a formal disciplinary inquiry, is necessary.
 The purpose of the preliminary investigation is to gather enough information to
frame a charge against the employee and satisfy the employer.
 The employee does not need to be present during the preliminary investigation.
 The complaint can be made by another employee or by the employee's
supervisor.
 The need for a preliminary investigation depends on the nature and severity of
the offense.
 The statements collected during the preliminary investigation are not directly
used in the formal inquiry unless the management presents them as evidence.
 If there are discrepancies between the statements given during the preliminary
investigation and the final inquiry, the inquiry officer may ask the witnesses for
clarification.
 According to a significant court ruling (Amulya Ratan Mukharjee v. Eastern
Railway, 1962), authorities must conduct a preliminary investigation or fact-
finding inquiry when they receive an employer's complaint. This informal
inquiry helps the authorities understand the facts of the case, determine if any
misconduct has occurred, and decide whether to proceed with a formal charge
against the employee.
2. Essentials of a fair enquiry: There are 3 principles governing the process for
conducting a domestic enquiry. They are:
 The service rules or the standing orders
 The method followed by courts of law
 The principles of natural justice
An enquiry cannot be initiated unless:
 The employee against whom charges are levelled must have clear information
and idea as to what accusations are alleged on him.
 The witnesses are examined ordinarily in the presence of the employee in
respect of the charges
 The employee is given a fair opportunity to examine witnesses including
himself in his defence if he so wishes on any relevant matter
 The enquiry officer records his findings with reason for the same in his report
3. Charge and Charge Sheet: A domestic enquiry begins when a charge sheet is
issued to the workman. The charge sheet bears all the details of the misconduct such
as the misconduct committed, the date and time of its commission and the relevant
section of the Standing Orders under which the misconduct falls.
The charge sheet must clearly set forth the charge and ask the delinquent to submit
his explanation within a reasonable time, i.e. within 24 or 48 hours depending on
the gravity of the misconduct. The employer is at the liberty to take disciplinary
action for the sake of disciple and proper order in his organization, but the question
has to be dealt in a reasonable manner and in accordance with common sense, if the
kind of misconduct committed has not been mentioned in the Standing Order.
Ingredients of a charge sheet:
 Name of the person charged
 Employee number
 Address
  Date, Time and Place of Occurrence
 Narration of the misconduct alleged
 Relevant clause and specific act of misconduct under the standing
orders/settlement
 Calling for an explanation within a stipulated time
 If the charge rests on a written report, a copy of that report to be enclosed.
Show Cause Notice:
After deciding the punishment for the misconduct proved against the Disciplinary
Authority should issue a show cause notice furnishing his order and proposing the
punishment and advising the employee to show cause why such a punishment should
not be awarded to him.
S. Shenbagaraj Vs Additional Commissioner of Industries and Commerce,
Chepauk and Ors. (2004), Madras H.C. -Held, though serving of such notice will not
make the process of enquiry invalid, it is advisable to give the employee a final
opportunity before punishment is inflicted.
Service of the Charge Sheet:
 The Standing Orders provide rules on how to give the charge sheet to the
employee who has done something wrong.
 The charge sheet should normally be given directly to the employee, and we
should always get a written acknowledgement from them.
 If the employee is not present or refuses to take the charge sheet when given to
them, we should send it to their local and permanent address by registered mail.
We should also ask two witnesses to confirm their refusal.
 If the postal service returns the charge sheet, the employer should display it on
the notice board if there is a rule for that. If there is such a rule, it is also
necessary to publish it in a local newspaper that many people read, using the
regional language.
 Just displaying the charge sheet on the company notice board is not enough.
In the case of Bata Shoe Co. v. DN Ganguli, the standing orders of the
company provided that the workman charged with an offence should be
supplied with a copy of such charges. They also provided that a workman who
refuses to accept the charge-sheet should be deemed to have admitted the
charges made against him.
Representation of the charge sheeted employee:
 The enquiry may proceed ex-parte if the employee refuses to take part in the
enquiry after presenting himself or when he does not report for the enquiry in
spite of a notice being served on him.
 A charge-sheeted employee may be represented by co-worker or the
union/association executives and any request by the delinquent employee
seeking for assistance of a lawyer for representing his case, should be decided
by the enquiry officer and not by the management.
 If the enquiry officer is either a practising lawyer or legally trained person, a
full opportunity should be given to the delinquent employee to represent his
case through the lawyer.
4. Appointment of Enquiry Office:
 In the Saran Motors Pvt. Ltd. v. Vishwanathan case in 1964, it was decided
that a proper and authorized person should be appointed to conduct an internal
investigation into any complaints made against an employee.
  The person chosen to be the investigation officer can be someone from inside
or outside the company, as long as there are no rules or Standing Orders
preventing it.
 The investigation officer is responsible for explaining the investigation process
and the charges against the employee.
Suspension Pending Enquiry:
 When an employee is suspended by the employer while an investigation or
inquiry into misconduct is ongoing, the employer is required to provide the
employee with a subsistence allowance.
 The subsistence allowance is determined based on the Industrial Employment
(Standing Order) Act, 1946. For the first 90 days of suspension, the allowance
is 50% of the employee's wages prior to the suspension. For the remaining
period of suspension, if the delay in completing the disciplinary proceedings is
not the fault of the employee, the allowance is increased to 75% of their wages.
 Suspension can occur when there are serious charges against an employee, and
it may be accompanied by serving them with a charge sheet.
 There are several circumstances that may warrant suspension, such as pending
or anticipated disciplinary proceedings, engaging in activities harmful to the
state's interests or security, involvement in criminal investigations or trials, or
when the employee's presence may impact discipline or public interest.
 If there is sufficient evidence from criminal or departmental proceedings
indicating the employee's guilt, suspension can be imposed, leading to
conviction, dismissal, or other consequences.
 The Industrial Employment (Standing Orders) Act, 1946 requires that the
suspended employee receives a subsistence allowance equal to half of their
wages for the first 90 days of suspension, and three-fourths of their wages for
the remaining period, as long as the delay in completing the disciplinary
proceedings is not caused by the employee's own behavior.
5. Consideration of explanation by employee:
After a charge sheet has been served on the accused workman may send his explanation
in either of the following ways:
 Admitting the charges and pleading for mercy
 Denying the charges in totality
 Requesting for more time to submit the explanation after inspection of certain
documents which is in possession of the management
 The employee may not submit the explanation at all
Actions for the above 4:
 If an employee admits to minor charges against them, a detailed investigation
may not be necessary. However, for serious misconduct, an investigation must
be conducted regardless of the employee's admission.
 When an employee denies the charges and claims they are false or motivated, a
proper investigation should be conducted before any punishment is given.
 If an employee has reasonable grounds and requests more time to provide their
explanation, an extension should be granted to avoid complications.
 If an employee fails to submit their explanation within the given time frame, the
management should take steps to conduct a thorough investigation.
Supply of relevant materials:
The enquiring authority may require documents in proof of charge of the alleged
misconduct. As per the Principles of Natural Justice, such copies of those documents
 should be supplied to the delinquent workman. In the case of Meenglass Tea Estate v.
Workmen 1963, the SC held that the workman who is to answer to change must not
only know the accusation but also the testimony by which the accusation is supported.
Examination of Witnesses:
 In the Tata Engineering and Locomotive Co. Ltd. vs. S.C. Prasad case in
1969, the Supreme Court provided some general rules for examining witnesses.
 According to the Supreme Court, if the employee denies the allegations
mentioned in the charge sheet during the internal investigation, it is the
responsibility of the management to prove those allegations.
 The employee should also be given a fair chance to present their own evidence
and support their defense during the investigation.
6. Final Report after the enquiry:
 The Enquiry Officer needs to create a detailed report that includes all the
findings from the investigation and submit it to the relevant authority for
deciding on any punishment, if necessary.
 When conducting the investigation, the Tribunals must follow the principles of
Natural Justice. If they do so, their decision cannot be challenged on the basis
that the procedure used was not the same as in a court of law or that the Evidence
Act's requirements for presenting evidence were not strictly followed.
 If the Enquiry Officer fails to adhere to the principles of Natural Justice, such
as not giving the employee a fair opportunity to be heard, present evidence, or
cross-examine witnesses, or if the Officer is biased against the employee, the
investigation will be considered invalid.
7. Punishment:
 The management should determine the punishment for an employee based
solely on the investigation findings, the employee's past record, and the
seriousness of the misconduct.
 The punishment given to the employee should be communicated to them in
writing as soon as possible.
 The communication letter should include references to the charge sheet, the
investigation, the findings, and the effective date of the punishment.

Industrial Disputes Act, 1947

Historical Perspective
 Before 1947, the Trade Disputes Act of 1929 was used to settle industrial disputes.
However, this law did not have provisions for resolving disputes under the Act.
 To address this, Rule 81A of the Defence of India Rules was implemented.
 It allowed the Central Government to refer industrial disputes to an adjudicator and
enforce their decisions. Rule 81 was extended for another six months by the Emergency
Powers (Continuance) Ordinance, 1946.
 However, there was a need for a dedicated law specifically designed to handle industrial
disputes and their resolution.

Applicability
 To whole of India
 Within the organised sector
 To all establishments, irrespective of the number of workers

Scheme of the Act

  The aim of the Act is to promote peace and harmony in industries.
 It achieves this by providing a process for investigating and resolving industrial
disputes.
 There are three main methods for settling disputes: conciliation, adjudication, and
voluntary arbitration.
 These mechanisms help ensure that disagreements between employers and workers are
resolved efficiently.
 The Act also offers protection to workers in cases of lay-offs, retrenchment, and closure
of businesses.
 Overall, the Act is designed to maintain a fair and balanced environment for both
employers and workers in the industrial sector.

Importance of the Act for HR Managers

 Compliance: By understanding and following the provisions of the Act, managers can
minimize legal disputes and litigations against the company. They can ensure that
proper procedures are followed in resolving disputes, reducing the risk of legal
complications.
 Industrial Relations: Understanding the law helps managers maintain harmonious
relationships between the company and its employees. This promotes a positive work
environment and improves overall industrial relations, which ultimately benefits the
company.
 Cost Savings: Knowledge of the law enables managers to conduct proceedings in line
with legal requirements. This helps in maintaining a good relationship between workers
and employers, reducing the need for frequent hiring and turnover. This can lead to cost
savings for the company.
 Adherence to Principles: Understanding the law allows managers to align their actions
with the principles laid down by the Parliament. This ensures that the company operates
within the legal framework and maintains ethical practices.

Industrial Disputes [Section 2(k)]

Definition: any disagreement or conflict between employers and employers, employers and
workers, or workers and workers. This dispute can be related to employment or non-
employment, terms of employment, or working conditions of any individual.

In the case of State of Bihar v. Kripa Shankar Jaiswal (1961), the court said that there is no
difference between industrial dispute and individual dispute. Every dispute whether raised
individually or collectively will be covered under industrial disputes. Not every dispute is
considered an industrial dispute. As per Section 2A, only when a dispute is related to a worker
being fired, dismissed, laid off, or terminated, it is treated as an industrial dispute. Matters such
as payment of bonuses, gratuity, and other related issues are considered collective disputes and
will be treated as an industrial dispute if they are taken up by a union or a significant number
of workers. Individual disputes on these matters do not fall under the category of industrial
disputes. true even if no other worker or workers' union is involved in the dispute.

Works Committee (Section 3)

 In industrial establishments with 100 or more workers, the government may require the
employer to form a Works Committee. This committee consists of representatives from
both the employer and the workers, with the number of worker representatives being
equal to or more than the employer representatives. The worker representatives are
 chosen from the workers in the establishment in consultation with their trade union, if
one exists.
 The main purpose of the Works Committee is to promote friendly and good relations
between the employer and the workers. They discuss and give input on matters of
common interest and try to resolve any significant disagreements related to those
matters.

Conciliation Offer (Section 4)

 The government can appoint conciliation officers whose job is to help settle disputes
between employers and workers. These officers are responsible for mediating and
promoting the resolution of industrial disputes.
 They can be appointed for a specific area or for specific industries in an area, either
permanently or for a certain period of time.

Strike (Section 2q)

A strike is when a group of workers in an industry stop working together or refuse to work,
either as a planned action or because they agree not to continue working or accept new
employment.
Kingfisher Strike case study: Workers at Kingfisher Airlines went on strike for many days
because the company didn't pay their salaries for nearly seven months. The employees
protested by demonstrating on the streets because they were facing severe financial difficulties.
Tragically, the wife of one employee took her own life due to the unbearable financial crisis
caused by her husband not receiving wages for months. This situation could have been resolved
peacefully if there had been better communication and dialogue between the employer and the
workers.
Cropton Greaves Ltd. v. Workmen: the Supreme Court made a ruling about workers' payment
during a strike. The court stated that if a strike is both legal and justified, the workers should
receive wages for the duration of the strike. However, whether a strike is justified or not
depends on the specific facts and circumstances of each case. If the workers engaged in force,
coercion, violence, or sabotage during a strike that was otherwise legal and justified, they
would not be entitled to wages for the strike period.
M/s Burn & Co. Ltd. v. Their Employees: the issue was the consequences of an illegal strike.
The Court ruled that simply participating in a strike does not automatically justify the
suspension or dismissal of the workers. However, in the case of an illegal strike, the main
concern becomes the type and severity of punishment. The Supreme Court emphasized the
importance of distinguishing between violent strikers and peaceful strikers when determining
the appropriate punishment.

Lockout (Section 2l)

When the employer temporarily closes or suspends work, or refuses to continue employing
their workers.

Ramchandra Spinning Mills v. State of Madras and Anr.: The Court stated that a lockout
occurs when an employer closes their business as a form of retaliation, coercion, or to exert
pressure on employees. It is considered a lockout when the employer's actions demonstrate
hostility or an act of conflict.

Prohibition on strikes and lockout [Section 22(l)]

there are restrictions on strikes or lockouts in the following situations:
  Workers cannot go on strike without giving the employer a notice of strike at least six
weeks in advance.
 Workers cannot go on strike within fourteen days of giving the notice.
 Workers cannot go on strike before the specified date mentioned in the notice.
 Workers cannot go on strike during conciliation proceedings with a conciliation officer
and for seven days after the proceedings have concluded.

Retrenchment [Section 2(oo)]

"Retrenchment" means when an employer ends a worker's employment for any reason, except
as a punishment through disciplinary action. However, it does not include:
 When a worker voluntarily decides to retire.
 When a worker reaches the retirement age mentioned in their employment contract.
 When the employment contract between the employer and the worker ends naturally or
is terminated according to the stipulations mentioned in the contract.
 When a worker's employment is terminated due to ongoing poor health.

Delhi Cloths and General Mills Co. Ltd. v. Sambu Nath Mukherji: The Supreme Court
explained that under the Industrial Disputes Act, retrenchment can occur for any reason. In this
case, the Court considered the situation where an employee's name was removed from the
company's records due to unauthorized absence, and concluded that it qualified as
retrenchment.

Conditions for retrenchment (Section 25F)

 If an employer wants to retrench a workman, they must give a written notice one month
in advance. This notice should mention the reasons for retrenchment. Alternatively, if
the employer does not provide the notice, they must pay the workman for that period.
 When retrenching a workman, the employer must give them compensation equal to 15
days' average pay for each year of continuous service.
 The notice of retrenchment should also be given to the appropriate Government.

Lay Off (Section 2kkk)

When an employer is unable to provide work to a worker who is already listed on the company's
employment records due to reasons such as shortage of coal, power, raw materials, stock
accumulation, machinery breakdown, natural disasters, or any other related reasons, and the
worker has not been permanently dismissed from the job

NATURE LAYOFF RETRENCHMENT

Temporary termination of Removal of excess workman
the workman at the diposal of to increase the efficiency of
the employer. the industry provided that it
Definition is done for any reason other
than punishment in
furtherance of imposing
disciplinary action.
Temporary Permanent
Nature

The industrial establishment The functions and operations

Workplace stops operating after the of the industrial
declaration. establishment continues.
 Workman is appointed back The employment of the
as soon as the lay off period workman is immediately
Re-hiring ends. terminated and there is no
relationship between the
employer and the workman.

Authorities under the Act

 Court of Inquiry: The government can set up a Court of Inquiry, consisting of an
independent person, to investigate and resolve matters related to industrial disputes.
 Labour Court: The government can establish one or more Labour Courts to settle
industrial disputes on specific matters listed in the Second Schedule. A Labour Court
is headed by a single person appointed by the government. Its main role is to conduct
hearings and issue awards.
 Labour Tribunals: The government can create one or more Industrial Tribunals to
adjudicate industrial disputes. A Tribunal is composed of one person appointed by the
government, and it may also have two assessors to provide advice. The proceedings are
similar to those in a court.
 National Tribunals: The government can form one or more National Industrial
Tribunals to handle industrial disputes of national importance. These disputes must
involve significant national issues.

Award
 An award is a decision made by a Labour Tribunal, Labour Court, or National Tribunal.
It can be an interim or final decision, including an arbitration award.
 The award issued by a Labour Court or Industrial Tribunal must be written and signed
by all members. It becomes enforceable after 30 days from the date of publication,
unless the government declares otherwise.

As per Section 18, the award is binding in the following cases:

 When the agreement was made during conciliation
 When it is an arbitration award for the party who initiated the arbitration
 When it is an arbitration or settlement award from the Labour Court, Industrial
Tribunal, or National Tribunal, and it applies to all parties involved or those who
participated in the dispute.

Judicial Precedent
Industrial Dispute v. Individual Dispute
Central Provinces Transport Pvt. Ltd. v. Raghunath Gopal Patwardhan:
Facts: Raghunath Gopal Patwardhan worked for Central Provinces Transport Limited Nagpur.
The company accused him of stealing goods and fired him. Patwardhan went to the Industrial
Court seeking reinstatement.
Issue: Is the case valid as an individual dispute?
Judgment: The Supreme Court ruled that the dispute was an individual one, not an industrial
one. The court explained that if the union or a large group of workers had taken up the cause,
it would have been considered an industrial dispute. The court also stated that the definition of
industrial dispute in Section 2(k) of the Act is broad enough to include a dispute between an
employer and an employee. For a dispute to be considered industrial, it needs support from
other workers in the industry, otherwise, it remains an individual dispute.
 The Industrial (Employment Standing Order) Act, 1946

Historical Perspective
 In the past, before the Employment Standing Orders were introduced, workers were
hired individually with unclear and uncertain terms of employment.
 Therefore, the Labour Investigation Committee in 1944-46 stated that every worker has
the right to know and understand the specific terms and conditions that they are
expected to follow in their job.

The Standing Orders Act is a legal framework that governs the establishment and maintenance
of standing orders in industrial establishments. The Act serves specific purposes and has a
defined scope in ensuring orderly and fair working conditions for employees.

Objects of the Standing Orders Act

 to define the conditions of employment.
 The goal of the Act was to establish consistent and clear terms of employment in
industrial establishments in order to reduce conflicts between employers and workers.
 The preamble of the Act states that employers should clearly define and communicate
the conditions of employment to the workers, ensuring that they are precise and well
understood.

Scope of the Standing Orders Act

 The Act applies to industrial establishments that employ a certain minimum number of
workers, as defined by the respective jurisdiction's laws or regulations.
 It covers a wide range of aspects related to employment, such as working hours, leave
policies, disciplinary procedures, termination and dismissal procedures, and grievance
redressal mechanisms.
 The Act provides a mechanism for the preparation, certification, and amendment of
standing orders, which are essentially the internal rules and regulations that govern the
conduct and behavior of employees.
 It establishes the role of certifying officers who are responsible for examining and
certifying the standing orders in accordance with the provisions of the Act.
 The Act also outlines the procedures for modifying, amending, or rescinding standing
orders, ensuring that changes are made in a fair and transparent manner.

Application of the Act

As per Section 1 of the Act, it applies to industrial establishments in India that have more
than a hundred workers currently or had more than a hundred workers on any day in the
previous year, unless the appropriate Government specifies that it also applies to industrial
establishments with less than a hundred employees.

Meaning of Standing Orders

According to Section 2(g) of the Act, "standing orders" are the rules that cover the following
things mentioned in the Schedule:
 How workers are classified, such as whether they are permanent, temporary,
apprentices, probationers, or substitutes.
 How and when information about work schedules, holidays, payday, and wage rates is
communicated to workers.
 How shift work is organized.
  Rules about attendance and being late.
 Conditions for applying for and granting leave and holidays, including the procedures
involved and the authority responsible.
 Rules about entering the premises through specific gates and the possibility of searches.
 Procedures for closing or reporting sections of the industrial establishment, temporary
work stoppages, and the rights and responsibilities of the employer and workers in such
situations.
 Procedures for terminating employment and the notice required from both the employer
and the workers.
 Disciplinary actions like suspension or dismissal for misconduct, and what actions or
behaviors are considered misconduct.
 Methods available to workers to seek fair treatment and address unfair demands or
actions by the employer, their representatives, or employees.
 Any other matter that may be specified or required by law.

Certification of Standing Orders

Section 4 of the Act explains the requirements for certifying standing orders:
 Standing orders can be certified under this Act if they include all the matters mentioned
in the Schedule that are relevant to the specific industrial establishment.
 The standing orders must also comply with the other rules and regulations mentioned
in this Act.
 It is the responsibility of the Certifying Officer or appellate authority to determine
whether the provisions of the standing orders are fair and reasonable.

Certification Process (Section 5)

 The Certifying Officer will send a copy of the Draft Standing Order to the workmen or
trade union. Along with it, a notice will be issued requesting any objections to be
submitted within 15 days from the date of receiving the notice.
 After receiving objections, both the employer and the workmen will be given a chance
to present their arguments. The Certifying Officer will then make a decision and issue
an order to modify the Standing Order if necessary.
 The Certifying Officer will certify the modified Standing Order and within seven days,
provide a copy of it along with the order for modification that was passed under Section
5(2).

Important Provisions
1. Duty of Employer (Section 3): An employer must submit five copies of a 'Draft
Standing Order' to the appropriate authority within six months of its application to the
industrial establishment. The draft should include the topics listed in the Schedule and
any Model Standing Orders (MSOs) applicable. Additionally, the employer should
attach documents containing information about the employed workmen.
2. Penalties (Section 13): If an employer violates Section 3 or Section 10 of the Act, it is
considered a punishable offense under Section 13. The employer may be fined Rs. 5000
initially, and an additional Rs. 200 per day for a continuous violation. Similarly, if there
is a breach of the certified standing order, the employer may be fined Rs. 100 initially,
and an additional Rs. 25 per day for a continuous violation. No prosecution can be
initiated under Section 13 without prior approval from the appropriate Government. If
 a prosecution is initiated, it can only be tried in courts that are equal to or higher than
the Metropolitan/Judicial Magistrate of Second Class.
3. Appeal (Section 6): Certifying Officer regarding the Standing Order, they can appeal
to the "appellate authority" within 30 days. The decision made by the appellate authority
regarding whether to confirm or amend the Standing Order will be final. If any
amendments are made, the appellate authority will send copies of the revised Standing
Order to the concerned parties within seven days.

Interelation with ID Act

 According to Section 2 of the Act, the terms "wages" and "workmen" have the same
meaning and coverage as defined in the ID Act.
 Section 10A of the Act provides the option to appeal to the Labour Court established
under the ID Act in case of a dispute concerning subsistence allowance.
 If any worker has a question regarding the application or interpretation of a standing
order, they can refer the question to the Labour Courts under the ID Act, as stated in
Section 13A of the Act.

Case Laws
The Bagalkot Cement Co. Ltd. v. RK Pathan & Ors. (1963)
The purpose of the Act was to make the employment conditions clear and definite. The act
intended to establish these conditions through standing orders defined by law. Previously, these
conditions were governed by contracts, but now they are governed by statutory standing orders.

The Buckingham Carnatic Co. v. Venkatiah and Anr. (1964)

The certified Standing Orders represent the relevant terms and conditions of service in a legal
form, and they are binding on the parties involved, just like private contracts that contain
similar terms and conditions of service, if not more.

Management of Continental Construction Ltd. v. Workmen of Continental Construction

The Court stated that an employer has the right to terminate the service of a probationary
employee, as recognized in the certified standing orders. However, the employer must ensure
that their actions are fair and comply with the principles of natural justice.

Conclusion
The Standing Orders Act serves the important objects of promoting industrial peace, defining
the rights and obligations of employers and employees, and providing a structured framework
for resolving disputes. Its scope extends to various aspects of employment within industrial
establishments, including the preparation, certification, and amendment of standing orders. By
establishing clear rules and regulations, the Act contributes to a fair and orderly working
environment for employees.

Domestic Enquiry
A domestic enquiry refers to an internal investigation conducted by an employer or
management within an organization to inquire into alleged misconduct or disciplinary issues
involving an employee. Here is a short note on domestic enquiry:
 Purpose: The primary purpose of a domestic enquiry is to establish the facts
surrounding alleged misconduct or disciplinary infractions committed by an employee
within the organization. It provides an opportunity for both the employer and the
 employee to present their respective cases and gather evidence to support their
positions.
 Process: A domestic enquiry follows a structured and fair process. It typically involves
the appointment of an inquiry officer or an internal committee to conduct the enquiry.
The employee facing allegations is provided with a written notice of the charges, along
with relevant documents and evidence supporting the allegations.
 Principles of Natural Justice: Domestic enquiries are conducted in accordance with
the principles of natural justice, ensuring fairness and impartiality. These principles
include the right to be heard, the right to present evidence, the right to cross-examine
witnesses, and the right to a fair and unbiased decision-maker.
 Procedure: The enquiry proceeds with the presentation of evidence by both the
employer and the employee. Witnesses may be called to provide testimony, and
documentary evidence may be examined. The employee is given an opportunity to
respond to the allegations, provide their defense, and refute any evidence presented
against them.
 Findings and Disciplinary Action: At the conclusion of the enquiry, the inquiry
officer or committee analyzes the evidence and makes findings of fact based on the
preponderance of evidence. If the employee is found guilty of the charges, the enquiry
officer or committee recommends an appropriate disciplinary action, which may
include warnings, suspension, termination, or other disciplinary measures as per the
organization's policies and procedures.
 Appeals: In some cases, the employee may have the right to appeal the findings or the
disciplinary action imposed. The appeal process allows for a review of the enquiry
process and the decision by an independent authority within the organization.
Domestic enquiries serve as an important mechanism for employers to ensure discipline,
maintain a fair work environment, and protect the interests of all parties involved. It provides
an opportunity for due process and allows for a fair determination of allegations before any
disciplinary action is taken against an employee.

Doctrine of Hire and Fire

The doctrine of "hire and fire" refers to the management perspective that grants employers the
right to hire and terminate employees at their discretion, without having to provide a specific
reason or justification for the termination. Here is a short note on the history of management's
perspective on the doctrine of hire and fire:
Historically, the doctrine of hire and fire has its roots in the concept of "employment at will,"
which emerged during the Industrial Revolution in the 18th and 19th centuries. This period
witnessed a significant shift in labor relations, with the rise of large-scale industrial production
and the emergence of factories.
During this time, employers held significant power and control over the workforce. They
argued that they needed the flexibility to manage their businesses efficiently, respond to market
demands, and adjust their workforce according to economic conditions. The doctrine of hire
and fire allowed employers to exercise this flexibility by terminating employees without cause
or notice.
The perspective of management regarding hire and fire was shaped by the principle of
unrestricted managerial authority. Employers believed that they should have the autonomy to
make hiring and firing decisions in order to maintain control over their businesses and protect
their interests. This perspective aligned with the laissez-faire economic ideologies prevalent
during that era, which emphasized minimal government intervention and maximum freedom
for businesses.
However, as industrialization progressed, labor movements emerged to address the power
imbalances between employers and workers. The workers' movements fought for better
working conditions, fair wages, and protection against arbitrary dismissals. These movements
led to the establishment of labor laws and regulations that sought to provide some level of
protection and stability for employees.
Over time, the doctrine of hire and fire has faced challenges as labor laws evolved to safeguard
workers' rights. Today, many jurisdictions have enacted laws that restrict employers' ability to
terminate employees without just cause or provide legal remedies for wrongful terminations.
While the doctrine of hire and fire was once prevalent and aligned with the interests of
employers, the perspective has shifted to recognize the need for balanced employment
relationships, where the rights and interests of both employers and employees are considered.
Overall, the history of management's perspective on the doctrine of hire and fire reflects the
evolving dynamics between employers and workers, influenced by economic, social, and legal
factors. It highlights the ongoing dialogue and negotiations around employment relationships
and the need to strike a balance between business interests and worker protections.
 MODULE 3

REMUNERATION FOR LABOUR

Remuneration for Labour

1. Concepts of wages (minimum wages, fair wages, living wages, Need-based minimum
wages)
2. Disparity in wages in different sectors, need for rationalization and national approach
3. Wage Board and Pay Commission
4. Principles of Wage Fixation
5. Concept of bonus - Computation of bonus

“The Payment of Wages Act,1936 provides that, Wages are to be paid in a particular form, at particular
time, at regular intervals & without unauthorized deductions” Discuss.

Mr Y was working for a cloth mill in Mumbai. There was a theft in the mill, and Mr Y was the prime
accused in the theft. The company conducted a proper enquiry on the same and dismissed him on the
ground of misconduct and negligence. The case proceeded with the prosecution of Mr Y for theft. He
was acquitted of the charges. After the acquittal he applied to the mill for reinstating. The mill owners
denied the reinstatement. In furtherance of this there was a complaint made by him to the labour
commissioner under the Industrial Disputes Act, 1947. The owners of mill reasoned their act by
mentioning that Mr Y was not employed at the time of the application, and hence there was no industrial
dispute, but was an individual dispute under section 16 of the Industrial Disputes Act, 1947. While the
matter was being adjudicated the mill went for liquidation and the state government took it up, and was
being run by them. The question of reinstatement is to be addressed. Decide:
Whether Mr Y was allowed to apply for reinstatement and payment of compensation for the loss of
wages as a part of industrial dispute
Whether the same is individual dispute or industrial dispute
Do the industrial relations code 2019 view individual dispute and industrial dispute differently?

Differentiate between minimum wages, living wages and fair wages.

What are minimum time rate wages piece of work.

What is minimum wage? Explain the procedure laid down under the minimum wages act 1948 for fixing
and revising rates of minimum wages.

State and explain the authorized deductions which may be made from wages under the payment of
wages act, 1936.

Payment of Wages Act, 1936

Objective
 To regulate the payment of wages to a certain class of employed persons
 Regulations covered by the Act is two fold:
o The date of payment of wages
o The deduction from wages whether fine or otherwise

Application of the Act

The Payment of Wages Act applies to the entire country of India as per Section 1 of the Act.
It is applicable to:
  People who work in factories.
 People who work on railways, either directly employed by the railway administration
or employed by a subcontractor working for the railway administration.
 People who work in industrial or other establishments mentioned in sub-clauses (a) to
(g) of clause (ii) of section 2 of the Act.

According to this law, the term "wages" is defined in Section 2(vi). It includes:
 Any form of payment (such as salary, allowances, or other types of compensation)
given in money or capable of being expressed in terms of money.
 This payment is what a person would receive if the terms of their employment, whether
stated clearly or understood, were fulfilled.
 Wages also include:
 Any payment specified in an award, settlement between the parties, or court order.
 Any additional payment for overtime work, holidays, or leave periods.
 Any extra payment mentioned in the employment terms, whether called a bonus or by
another name.
 Any amount that becomes payable due to the termination of employment, as specified
in a law, contract, or agreement. This payment may have deductions or not, but it should
not have a specific deadline for payment.
 Any amount that the employed person is entitled to receive under a scheme created by
a current law. However, wages do not include:
o Any bonus (whether it's a profit-sharing scheme or something else) that is not
part of the regular payment as stated in the employment terms, or not specified
in an award, settlement, or court order.
o The value of housing, light, water, medical services, or any other facility or
service that is not considered when calculating wages, as determined by a
general or special order from the government.
o Any contribution made by the employer to a pension or provident fund,
including any interest that may have accumulated.
o Any travel allowance or the value of any travel benefits provided.
o Any payment given to cover special expenses that the employed person incurs
due to the nature of their job.
o Any gratuity paid upon the termination of employment, except in specific cases
as mentioned in sub-clause (d).

Duty of Payment of Wages (Section 3)

 The employer has the responsibility to ensure the payment of all wages required under
this Act to the employees working for them.
 In the case of employees working in factories, if a person has been designated as the
manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories
Act, 1948.
 In the case of employees working in industrial or other establishments, if there is a
person appointed by the employer to oversee and manage the operations of the
establishment.

Deduction of Wages (Section 9)

 The employer can deduct wages for a day or a specific period of absence.
 The deduction should not be more than a proportionate amount based on the
relationship between the period of absence and the wage for that specific period.
  If an employee is present at the workplace but refuses to work without a valid reason,
it will be considered as being absent from duty.
 If 10 or more persons are absent from duty without giving prior notice and without a
reasonable cause, certain actions may be taken.

Meaning and Definition of Wage

According to Section 2(h) of the Minimum Wages Act, 1948 the term “wages” means all
remuneration capable of being expressed in terms of money which would if the terms of the
contract of employment express or implied were fulfilled be payable to a person employed in
respect of his employment or of work done in such employment and includes house rent
allowance but does not include:
 The value of any house accommodation, supply of light, water, medical attendance or
any other amenity or any service excluded by general or special order of the appropriate
government.
 Any contribution paid by the employer to any person fund or provident fund or under
any scheme of social insurance
 Any traveling allowance or the value of any traveling concession
 Any sum paid to the person employed to defray special expenses entailed on him by
the nature of his employment
 Any gratuity payable on discharge

Objective
 The ensure minimum wage to workers in organized sector
 Prevent exploitation of workers
 Empower govt to fix minimum wage

Minimum Wage
 The term Minimum Wage has not been defined in the Minimum Wages Act, 1948.
 It is the lowest wage in the scale below which the efficiency of a worker is likely to be
inspired.
 It includes not only the bare physical necessities but also a modicum of comfort
otherwise known as conventional necessities.
 The minimum wages must therefore provide not merely for the bare subsistence of life
but also for the preservation of the efficient of the worker.
 The minimum wage must also provide for the same measure of education, medical
requirements and amenities.
 Where a person provides labor or service to another for remuneration which is less than
the minimum wages, such labor is ‘forced labor’ within the meaning if Article 23 of the
Indian Constitution and thereby entitles the person to invoke Article 32 or Article 226
of the Constitution of India.
 The concept of fair wages was to be dynamic. There is no reason to assume that fair
wages fixed years ago should continue to be fair wages for all time and any fixation of
minimum wages, should be taken not as minimum wages but as fair wages because it
is above the fair wages once fixed.

Components of Minimum Wages under the Minimum Wages Act

 Section 4 of the Minimum Wages Act, 1948 explains the components of minimum
wages.
  Minimum wages can be comprised of:
o Basic wages and a special allowance that can be adjusted periodically to match
the changes in the cost of living for the workers in specific scheduled
employments.
o Basic wages with or without a cost of living allowance and the value of
concessions provided for essential commodities at discounted rates, if
authorized.
o An all-inclusive rate that covers basic wages, cost of living allowance, and any
concessions provided.
 The calculation of cost of living allowance and the value of concessions for essential
commodities at discounted rates will be done by the relevant authority. The intervals
and guidelines for such calculations will be determined by the appropriate government.

Fair Wage
 Fair wage is a mean between the living wage and the minimum wage.
 A fair wage is related to fair work-load and the earning capacity.
 It is more than minimum wage but less than the living wage.
 It is to be approximate to the need-based minimum, in the sense that the wage is
adequate to cover the normal needs of the average employee regarded as a human being
in a civilized society.
 Fair wage is fixed, taking into consideration, the present economic position and further
prospects of the industry.
 Between the two limits of Living Wage and Minimum Wage, actual wage would
depend upon a consideration of certain factors namely:
 The productivity off labor
 The prevailing rates of wages in the same industry for similar occupations in
the same or similar occupation in the same or neighboring localities
 The level of national income and its distribution
 The place of the industry in the economy of the country
 The concept of fair wages involves a rate sufficiently high to enable the worker to
provide a standard family with food, shelter, clothing, medical care and education for
children appropriate to his status in life but not at a rate exceeding the wage-earning
capacity of the class of establishment concerned. As time passed and prices rise even
the fair wage fixed for the time being tends to sag downwards and then revision
becomes necessary.
In the case of Hindustan Times Ltd. v. Their Workmen, the SC held defined fair wage as
something above the minim wage.
In the case of Kamani Metals and Alloys Ld. v. Their Workmen, the court observed that
fair wage lies between the minim wage which must be paid in any event and the living wage
which is the goal.

Living Wage
 The concept of “Living Wage” is the wage rate which prevails in most of the
economically advanced countries.
 The term living wage has not been defined under the Minimum Wages Act, 1948.
 As per the South Australian Act, 1912, it means a sum sufficient for the normal and
reasonable needs of the average employee living in a locality, where the work under
consideration is done or is to be done.
  The living wage must provide not merely for absolutely essentials such as food, shelter
and clothing but for condition of frugal comfort, estimated by current human standard.
 Living wages are wages without which working people cannot live and perform their
duties as a citizen.
 It varies from country to country depending upon the price level of necessaries of life,
and it is determined by the socio-economic conditions of a particular country.
 The living wage should enable the wage earner to provide for himself and his family
not merely the bare essentials of food, clothing and shelter but the measure of frugal
comfort including education for the children protection against ill health, requirements
for essential social needs and a measure of insurance against the more important
misfortune including old age.
 There is no statutory definition for the term ‘living wage’.
 As per Article 43 of the Constitution, the state shall endeavor to secure to all workers
living wages, conditions of ensuring a decent standard of life and full enjoyment of
leisure and social and cultural opportunities.

Need-based Minimum Wages

 The Indian Labour Conference in 1957 suggested that the minimum wage should be
based on people's needs and should ensure that industrial workers have their basic
requirements met, regardless of other factors.
 The need-based minimum wage is calculated using the following criteria:
o It considers a standard working class family to consist of 3 people who earn
money, and it doesn't take into account the earnings of women, children, and
adolescents.
o The minimum food requirements are determined based on the recommended
intake of 2,700 calories per day for an average Indian adult with moderate
activity, as suggested by Dr. Akroyd.
o Clothing needs are estimated at 18 yards per person per year, so for a family of
4, it would be a total of 72 yards.
o Housing costs should be based on the minimum rent charged by the government
in any area for houses provided under the Subsidized Housing Scheme for low-
income groups.
o Fuel, lighting, and other miscellaneous expenses should make up 20% of the
total minimum wage.
 However, the Minimum Wages Act of 1948 does not provide a specific definition of
the minimum wage. Employers tend to follow the definition given by the Committee
on Fair Wages in 1948, while trade unions prefer to consider the concept of a need-
based minimum wage.

Wage Fixation
Fixation of Minimum Rates of Wages [Section 3(1)(A)]
 Section 3 of the law states that the government responsible for a particular area must
determine the minimum wage rates for employees in specific types of jobs listed in Part
I and Part II of the Schedule. The government can also add more jobs to the list through
notification.
 For jobs listed in Part II, the minimum wage rates may not be set for the entire state.
Certain parts of the state may be excluded from the minimum wage requirement.
However, for jobs listed in Part I, the minimum wage rates must be determined for the
entire state without excluding any parts.
  The minimum wage rates do not have to be the same everywhere. Different rates can
be set for different zones or localities.
 The constitutional validity of Section 3 was challenged in the Bijoy Cotton Mills case.
The Supreme Court ruled that although setting minimum wage rates restricts the
freedom of contract guaranteed by Article 19(1)(g) of the Constitution, these
restrictions are not unreasonable. They are imposed in the public interest and to fulfil
one of the Directive Principles of State Policy stated in Article 43 of the Constitution.
 According to Section 3(1)(a), the government has the option to not set minimum wage
rates for a scheduled employment if fewer than 1000 employees in the entire state are
engaged in that job. However, if the government becomes aware that the number of
employees has increased to 1000 or more, they must establish a minimum wage rate for
that employment.

Manner of Fixation of Minimum Wages

 Section 3(2) of the law allows the government to set minimum wage rates for different
types of work:
o Minimum Time Rate: This applies to jobs where employees are paid based on
the hours they work.
o Minimum Piece Rate: This applies to jobs where employees are paid based on
the number of pieces they produce or complete.
o Guaranteed Time Rate: This is for employees working on a piece-rate basis to
ensure they earn a minimum wage based on the time they spend working. It
prevents workers from earning less than the minimum wage if the piece rate is
too low.
o Overtime Rate: This is a minimum rate that applies when employees work extra
hours beyond their regular working hours, regardless of whether they are paid
by time or piece rate.
 Section 3(3) allows for different minimum wage rates to be set in various situations:
o Different scheduled employments: Each type of job can have its own minimum
wage rate.
o Different classes of work within the same job: Different categories of work
within a specific job can have different minimum wage rates.
o Adults, adolescents, children, and apprentices: Minimum wage rates can vary
based on the age and status of the employee.
o Different localities: Minimum wage rates can differ based on the location or
area where the work is performed.
 The law also provides flexibility in determining the wage period for calculating
minimum wages. It can be fixed by the hour, day, month, or other larger periods as
prescribed. If the Payment of Wages Act, 1936, specifies a wage period, then the
minimum wages must be calculated accordingly.

Minimum Wage Rate (Section 4)

 The government in charge can set or update the minimum wage rate for specific jobs
as per Section 3.
 The minimum wage rate can be made up of different components:
o A basic rate of wages, which is the minimum amount paid to workers.
o A special allowance that can be adjusted from time to time based on changes in
the cost of living index for those workers. This allowance aims to match the
variations in the cost of living.
 o The government can also include the cash value of concessions for essential
goods at discounted rates, if authorized.
o Alternatively, an all-inclusive rate can be set, which covers the basic rate, the
cost of living allowance, and the cash value of concessions, if any.
 The competent authority, as directed by the government, will calculate the cost of living
allowance and the cash value of concessions at regular intervals based on specified
guidelines.

Procedure for fixing wages (Section 5)

Two methods can be used to fix or revise minimum wage rates:
 Committee Method: The government can appoint committees to hold inquiries and
provide advice on the wage rates. After considering the committee's recommendations,
the government will issue a notification in the Official Gazette to fix or revise the
minimum wage rates. The rates will come into effect on a specified date or after three
months if no date is mentioned.
It was held in Edward Mills Co. v. State of Ajmer (1955), that Committee appointed
under Section 5 is only an advisory body and that Government is not bound to accept
its recommendations.
 Notification Method: The government will publish its wage rate proposals in the
Official Gazette and provide a two-month period for affected parties to submit their
representations. The government will consider the representations and consult the
Advisory Board before issuing a notification to fix or revise the minimum wage rates.
The new rates will come into effect on a specified date or after three months if no date
is mentioned. Retroactive revisions are also possible.

The Advisory Board

 The Advisory Board is established by the government under Section 7 of the Act.
 Its purpose is to coordinate the work of committees and sub-committees appointed
under Section 5 and provide general advice to the government regarding minimum
wage fixation and revision.
 The board consists of representatives nominated by the government, including equal
numbers of employers and employees from the scheduled employment, and
independent members (up to 1/3 of the total members). An independent person is
someone who is neither an employer nor an employee in the relevant employment.
 The board's chairman is appointed by the government.
In the case of B.Y. Kashatriya v. S.A.T. Bidi Kamgar Union A.I.R. (1963), it was held that
it is not necessary that the Board shall consist of representatives of any particular industry or
of each and every scheduled employment

Central Advisory Board

 The Central Government appoints a Central Advisory Board under Section 8 of the Act.
 The board advises the Central and State Governments on fixing and revising minimum
wage rates and other matters related to the Minimum Wages Act.
 It also coordinates the work of advisory boards.
 The board consists of representatives nominated by the Central Government, including
equal numbers of employers and employees from the scheduled employment, and
independent members (up to 1/3 of the total members). The Central Government
appoints the board's chairman.
Manner of Payment (Section 11)
 Minimum wages must be paid in cash according to this Act.
 However, if it has been a common practice to pay wages partly or fully in goods instead
of cash, the government can allow such payments in certain situations. This permission
will be given through an official announcement in the Official Gazette.
 If the government believes that it is necessary to provide essential goods at discounted
rates to the workers, they can also authorize this provision through an announcement in
the Official Gazette.
 The value of wages paid in goods and the concessions for essential goods provided at
discounted rates will be estimated in a specific way determined by the government.

Authority and Penalty

 According to Section 20 of the law, a labor commission or another designated authority
has the power to address complaints related to not receiving minimum wages. If
someone has not been paid the minimum wage they are entitled to, they can approach
this authority within six months to resolve their claim.
 As per Section 22, if someone violates this law, they can be punished with
imprisonment for up to six months or a fine of up to Rs. 500, or both. This penalty
applies to those who do not follow the rules regarding minimum wages.

Wage Board

Historical Background
 Wage Boards have a long history in the Indian Industrial Relations Systems.
 In 1931, the Royal Commission on Labour recommended the establishment of Wage
Boards for determining wages.
 The First Five Year Plan envisioned setting up permanent Wage Boards at the state and
central levels to comprehensively address wage-related issues.
 However, this recommendation was not given enough attention, and wage disputes
continued to be resolved through Industrial Tribunals.
 The Second Plan recognized Wage Boards as a more acceptable mechanism for
decision-making, involving responsible roles for parties involved.

Establishment of Wage Boards

 The first Wage Board was established in 1957 for the cotton textile industry.
 Since then, more industries have been included under Wage Boards.

Objectives of Wage Boards:

 Improve industrial relations climate
 Represent consumer/public interests
 Standardize wage structure within the industry
 Align wage settlements with the government's social and economic policies.

Composition of Wage Boards

 1. Tripartite in nature: Consists of a chairperson, an equal number of employer and
employee representatives, and two independent members (an economist and a
consumer's representative).
2. Chairperson appointed by the appropriate Government in consultation with the Chief
Justice of the relevant High Court or Supreme Court.
3. Members representing employers and employees appointed by the appropriate
Government based on recommendations from their respective representative
organizations.

Functions of Wage Boards

 Primary function: Determine wages for employees in the industry.
 The Government or recognized employer/employee organizations can refer other
matters for determination by the Wage Board.

Procedure of Wage Boards

The Wage Board follows prescribed procedures, but in the absence of government-prescribed
procedures, they can develop their own procedures.

Criteria for Wage Board Award

 When developing a wage structure, the Wage Board considers various factors such as
industry needs, payment systems, prevailing wages, covered worker categories,
capacity to pay, employment levels, and public interest.
 Wage boards may also handle additional tasks like considering bonus grants and
creating gratuity schemes.

Award of Wage Board

The Wage Board's award:
 Must have majority opinion and be in writing, signed by all members, including the
chairman.
 Final and cannot be questioned by any court, but an appeal can be filed with the
National Labour Relations Commission.
 Comes into force on a specified date or, if not specified, from the date it is signed.
 Binding on all employees and employers in the activity, including future employees
and successors, for a period of three years, extendable by mutual agreement.

Enforcement of Wage Board Award

 After the award comes into force, every employee is entitled to be paid wages according
to the award.
 Employers must pay wages at rates equal to or higher than the award; employees
receiving higher wages can continue to do so.

Types of Wage Boards

 Most Wage Boards in India are non-statutory, except for the one governing working
journalists.
 Some states have statutory wage boards for specific industries.
 Wage boards generally operate with flexibility, collecting information through
questionnaires and holding discussions to gather input from concerned parties.
 The government examines the recommendations, generally accepting unanimous ones,
but there have been cases of modifications leading to concerns about partisan behavior.
Criticisms of Wage Boards
 Single machinery for wage fixation may not be suitable for all industries; different
industries may require Wage Boards, collective bargaining, or adjudication.
 Some recommendations are not implemented or followed, even when unanimous.
 Insufficient consideration given to linking wages with productivity.
 Procedural delays have been a significant issue.
 Suggestions have been made to address delays, such as not referring matters before a
Wage Board to adjudication and establishing a permanent division to support all Wage
Boards.

Pay Commissions
Introduction to Pay Commissions:
 Pay Commissions are established by the Central Government to recommend salary
structures for Central Government employees.
 State governments may also set up their own pay commissions.
 Five Pay Commissions have been established by the Government of India over the past
50 years.
 Pay Commissions cover a wide range of employees in the public sector.

Differences for Government Employees:

 Government employees have different methods for settling wage disputes compared to
private sector workers.
 Collective bargaining, conciliation, adjudication, or arbitration are not available to
government employees for wage settlement.
 A Joint Consultative Machinery is established by the Central Government to discuss
employee welfare, but arbitration is limited.

Role of Pay Commissions:

 Pay Commissions serve as an effective method for determining wages for government
employees.
 They study problems, collect data, and make recommendations to the government.
 The government has the final authority to accept, modify, or reject the
recommendations.

Principles Considered by Pay Commissions:

 Pay Commissions consider factors such as a living wage, social tests, inclusiveness,
comprehensibility, adequacy, and capacity to pay.
 The minimum wage should be realistic and match prevailing economic conditions.
 Fair comparison and comparable emoluments for comparable work are taken into
account.
 The government should pay fair wages, balancing the interests of employees and the
public.

Cost of Living and Dearness Allowance:

 Pay Commissions consider the cost of living and recommend dearness allowance (DA)
to compensate for price rises.
 DA is adjusted based on the consumer price index (CPI).
  Different Pay Commissions had varying criteria and limits for providing DA to
employees.

Challenges and Criticisms:

 Pay Commissions sometimes struggle to align recommendations with their principles.
 Political considerations may influence economic decisions.
 There are debates about the suitability of the current Consumer Price Index for
Industrial workers used for determining DA.

Overall, Pay Commissions play a crucial role in determining the salary structures of
government employees, considering various factors such as living wages, capacity to pay, and
the cost of living. However, challenges arise in implementing recommendations and
maintaining consistency with the principles established by the Pay Commissions.

Bonus
Meaning:
 Bonus is a payment made by an employer to maintain the industrial harmony and to
give Philip to the employees to exert their utmost to keep up the industry active and
aloft.
 The concept of bonus is not the product of any generosity of the employer but it is one
paid in the interest of industrial peace and to make available every employee a living
wage which is generally more than the actual wages.
 It is based on the ground that the workman should have a share in the prosperity of the
concern for which they have their contribution.
 The term ‘Bonus’ is not defined anywhere under the Payment of Bonus Act, 1965.
 It is paid in the terms of money to the employees as a gift or reward in addition to their
wages.

Objective
 The act was introduced with the aim of payment of bonus to persons employed in
establishments on the basis of profits or on the basis of production or productivity.

Applicability of the Act

The act is extent to the whole of India, and the act is applicable to:
 Every factory
 Other establishments where 20 or more persons are employed on any day during the
year
 Any establishment or class of establishment notified in the Gazette by the Appropriate
Govt.
 Part-time employees also include
The establishments covered under the Act shall continue to pay the bonus even if the number
of employees falls below subsequently.

Exempted Establishments – Section 32

 Employees of General Insurance Business or LIC
 Seamen defined under the Merchant Shipping Act
 Employees of RBI
  Employees of Unit Trust of India, IDBI, Deposit Insurance Corporation etc.
 Employees employed by Red Cross Society, university, hospitals etc.
 Employees under the Dock Workers (Regulations of Employment) Act, 1948
 Employees employed by Central/State Govt. establishments and local authorities
In the case of Batra Hospital Employees’ Union v. Batra Hospital & Medical Research,
the Delhi HC ruled that exemption under Section 32(v)(c) of the Act is only to establishments
established not for the purpose of profit. If an institution is making profits, it would not be
treated as ‘establishment not for the purposes of profits’.

Eligibility Criteria
Any person is eligible to receive a bonus under the act on fulfilment of the following criteria:
 The employee must receive salary/wage up to Rs. 21000/- per month (by the
amendment of 2015)
 The employee must have worked in the factory or establishment for not less than 30
days in a year as per Section 8 of the Act
 If an employee has not worked for all the working days in any accounting year, the
bonus payable to him under Section 13 will be proportionately reduced.
However, on the commission of certain acts, the employee gets disqualified from getting a
bonus, such as any frauds, violent behavior, riots, theft, misappropriation or sabotage of any
property as per Section 9 of the Act.

Maximum Time for Payment of Bonus

The bonus shall be paid within 8 months from the end of the accounting year or within a month
from the date of enforcement of the Act.

Calculation of Bonus

Minimum Bonus
 The Payment of Bonus Act, 1965 includes a provision called Section 10 that establishes
the concept of minimum bonus.
 The act is a law in India that ensures the payment of bonuses to eligible employees in
certain establishments.
 Section 10 mandates that every employer must pay a minimum bonus to eligible
employees.
 The minimum bonus is a fixed amount calculated based on the employee's salary/wage
and the profits of the establishment.
 The purpose of the minimum bonus is to guarantee employees a share of the profits,
regardless of the actual profits earned.
 This applies to the accounting year starting from any day in 1979 and every following
accounting year. The minimum bonus should be either 8.33% of the employee's salary
or wage earned during that accounting year, or a hundred rupees, whichever amount is
higher. It doesn't matter if the employer has any leftover funds in that accounting year
or not, they still need to pay the minimum bonus to their employees.
 It ensures that employees receive a fair share of the profits, even if the establishment's
financial performance is not exceptional.
 The act applies to establishments meeting certain criteria and excludes certain
categories of employees, such as government employees and charitable institutions.

Maximum Bonus
  Section 11 of the Payment of Bonus Act, 1965, specifies the concept of maximum
bonus that can be paid to employees by an employer.
 According to the act, the maximum bonus payable to an employee in any accounting
year is capped at 20% of the employee's salary or wage earned during that year.
 The 20% limit on maximum bonus applies regardless of the profits earned by the
employer.
 If an employer has allocated a higher percentage of bonus in any previous year, it cannot
be reduced in subsequent years unless there are certain specified conditions mentioned
in the act.
 The bonus calculation is based on a maximum salary or wage limit of Rs. 3,500 per
month, even if an employee's actual salary or wage exceeds this amount.
 The act provides for a minimum bonus of 8.33% of the employee's salary or wage,
regardless of whether the employer has any allocable surplus or not. This minimum
bonus provision is covered under Section 10 of the act.
 The concept of maximum bonus ensures that there is a limit on the percentage of bonus
that can be paid to employees, protecting the interests of both employers and
employees.
 The act aims to strike a balance between fair compensation for employees and the
financial viability of the employer.
 Employers are required to calculate and pay bonuses to eligible employees based on
the provisions outlined in Section 11 and other relevant sections of the Payment of
Bonus Act, 1965.

Adjusting Bonus (Section 17)

If, in any accounting year:
 An employer has already given the employee a puja bonus or any other customary
bonus, or
 An employer has paid a part of the bonus that is supposed to be given under this Act
before the actual due date.
In such cases, the employer can subtract the amount already paid as a bonus from the total
bonus amount that should be given to the employee according to this Act for that accounting
year. The employee will receive only the remaining balance of the bonus after deducting the
amount already paid.

Deduction of Bonus (Section 18)

If, during any accounting year, an employee is found responsible for misconduct that leads to
a financial loss for the employer, the employer has the right to deduct the amount of the loss
from the bonus that is supposed to be given to the employee under this Act for that accounting
year. The employee will receive only the remaining balance, if any, after deducting the amount
of the loss caused by their misconduct.

Penalty (Section 28)

If a person:
 Breaks any of the rules mentioned in this Act or any rule that was made based on this
Act, or
 Doesn't follow a given instruction or request mentioned in this Act,
Then, they can be punished. The punishment can be either imprisonment for up to six months
or a fine of up to one thousand rupees, or both.
 SHORT NOTES

Authorised deductions
The Payment of Wages Act is a legislation enacted to regulate the payment of wages to
employees in India. It provides certain safeguards and restrictions regarding the deductions that
can be made from an employee's wages. Here is a short note on authorized deductions from the
wages of an employee under the Payment of Wages Act:
 Statutory Deductions: Certain deductions are authorized by law and can be made from
an employee's wages. These include deductions for income tax as per the prevailing tax
laws, contributions to statutory social security schemes such as the Employees'
Provident Fund (EPF), and any other deductions mandated by the government, such as
contributions to the Employees' State Insurance (ESI) scheme.
 Deductions for Fines: If an employee has been found guilty of misconduct or violation
of workplace rules, the employer may impose a fine as a disciplinary measure.
However, the total amount of fines imposed in a wage period cannot exceed an amount
equal to 3% of the wages payable to the employee.
 Deductions for Absence from Duty: An employer can make deductions from an
employee's wages for the period of absence from duty, including unauthorized leave or
absence without reasonable cause. However, the deduction for such absence should not
exceed an amount proportional to the period of absence.
 Deductions for Damage or Loss: If the employee has caused damage or loss to the
employer's property or goods entrusted to them, the employer can deduct the amount
equivalent to the value of the damage or loss from the employee's wages. However, the
deduction should be reasonable and should not exceed the actual loss incurred by the
employer.
 Other Authorized Deductions: The Payment of Wages Act allows for deductions that
are authorized by a specific order of a court or any other competent authority. For
example, deductions for recovery of loans or advances granted to the employee,
payment of insurance premiums, or any other deductions specified by law or mutually
agreed upon between the employer and the employee.
It is important for employers to comply with the provisions of the Payment of Wages Act and
ensure that deductions from employees' wages are made in accordance with the authorized
deductions specified under the Act. Employees should be informed in advance about the
deductions made and provided with a wage slip that clearly indicates the deductions made and
the net amount paid to them.

Need for national minimum wages in India

India is a vast and diverse country with a significant population engaged in various industries
and sectors. The implementation of a national minimum wage system is crucial to address
several socioeconomic issues and promote fair labor practices. Here is a short note on the need
for national minimum wages in India:
 Reducing Exploitation: India has a large informal sector where workers often face
exploitation and are paid wages far below the minimum level required for a decent
living. A national minimum wage can help protect vulnerable workers from
exploitation by ensuring that they receive a fair and just wage for their labor.
 Poverty Alleviation: India has a considerable population living in poverty, and many
workers struggle to meet their basic needs due to low wages. Setting a national
minimum wage that is in line with the cost of living can help lift workers and their
families out of poverty, improving their standard of living and overall well-being.
 Ensuring Basic Rights: A national minimum wage guarantees that workers are
provided with a basic level of income that enables them to access essential services
such as food, shelter, education, healthcare, and transportation. It helps in fulfilling the
basic human rights of workers and ensures a dignified life for them and their families.
 Reducing Inequality: India faces significant income inequality, and low wages
contribute to this disparity. By implementing a national minimum wage, the income
gap between different sections of society can be narrowed, promoting a more equitable
distribution of wealth and reducing socioeconomic disparities.
 Boosting Productivity: Fair wages motivate workers and enhance their productivity.
When workers are compensated adequately, they are more likely to be motivated,
satisfied, and dedicated to their work. A national minimum wage can contribute to
increased productivity and efficiency in industries, benefiting both workers and
employers.
 Streamlining Compliance: Having a national minimum wage simplifies the
compliance process for employers, as they have a clear benchmark to follow. It reduces
ambiguity and ensures uniformity in wage standards across different states and regions,
promoting consistency and ease of compliance.
The implementation of a national minimum wage in India is essential to protect the rights
of workers, alleviate poverty, promote social justice, and ensure fair and equitable
compensation for labor. It not only benefits individual workers but also contributes to the
overall socioeconomic development of the country.
 MODULE 4

Labour Welfare - Social Security

1. Concept of social security: Scope of social security in India, problems of insecurity,
origin of social security, institutional growth of social security
2. Working conditions of labour
3. Obligation for health and safety of workmen: Legislative controls, factory, dock, mines,
and plantations
4. Changing concept of labour welfare
5. ILO Conventions and Recommendations, Ratification of ILO conventions by India

Define & Explain the scope of Social Security legislations in India.

Define the term ‘Social Security’. Explain the provisions under Employees Compensation Act,
1923 relating to social security.

Discuss the scope and applicability of Employees state insurance act

Define & Explain the scope of Social Security legislations in India.

Define the term ‘Social Security’. Explain the provisions under Employees Compensation Act,
1923 relating to social security.

“Social Security is one of the important pillars of Labour welfare.” What are the various
constitutional provisions and legislative provisions that provide social security in India?

Social security is one of the important pillars of labour welfare. What are the various
constitutional provisions that provide social security in India.

Discuss the concept of social security in relation to labour law in India.

Write a short note on unorganzied workers under the social security act 2008.

Define the term social security. Explain important legislation providing social security in india.

Annie works in a toy store and has a physical disability preventing her from carrying heavy
items. She recently found out her co-workers earn more than herr despite having the same
experience and working just as hard. When she asked her manager about it, she said it was
because you just dont carry as musch weight around here
What are the rights of an employee. Workman against being discriminated against at workplace
Which international conventions prohibit discrimination of workmen at workplace
What are the constitutional provisions supported by labour legislations in india to protect
against such discrimination.

Definition
According to International Labour Organisation,” Social security is the protection that a society
provides to individuals and households to ensure access to health care and to guarantee income
security, particularly in cases of old age, unemployment, sickness, invalidity, work injury,
maternity or
Concept of Social Security
 All industrialised countries of the world have developed measures to promote the
economic security and welfare of the individual and his family. These measures have
come to be called Social Security.
 Social security is a dynamic concept and an indispensable chapter of a national
programme that seeks to strike at the root of poverty, unemployment an diseases.
 The ILO in various Conventions has been giving due emphasis to social security and
various laws were added and existing legislations were amended. The ILO suggested
multiple methods of organizing, establishing and financing various social security
schemes.
 The status of social security legislations and measures is different in developed,
underdeveloped and developing countries. In underdeveloped countries, there are only
a very few social security scheme shaving a fairly low level of benefits.
 Social security may provide for the welfare of persons who become incapable of
working by reason of old age, sickness and invalidity/disability and/or are unable to
earn anything for their livelihood.

Scope of Social Security

Constitutional Provisions
The adoption of the Indian Constitution and the struggle for national emancipation played a
significant role in shaping labour laws in India. The constitution's provisions, including the
Preamble, Fundamental Rights, and Directive Principles of State Policy, reflect the promises
made by national leaders to establish a more just and equitable society after gaining
independence.

Constitutional Provisions and Labour Laws: The Indian Constitution serves as the supreme
law of the country, influencing all other laws, including labour laws. It envisions a "Socialistic
pattern of Society" and the formation of a "Welfare State," emphasizing socio-economic
justice. The Constitution's Seventh Schedule divides legislative powers between the central and
state legislatures, with the Concurrent List addressing most labour-related issues.

Directive Principles of State Policy: The Directive Principles of State Policy are guidelines in
the Constitution that aim to achieve socio-economic objectives and advance the welfare of the
people. They urge the government to pursue economic democracy and act constructively in
areas such as social order, living wages, and humane working conditions.

Key Constitutional Provisions:

Several articles in the Indian Constitution are particularly relevant to labour laws:
 Article 38: Emphasizes social justice and the need for a just social, economic, and
political order.
 Article 39: Mandates the state to incorporate social justice principles and promote equal
pay for equal work, distributive justice, and the right to livelihood.
 Article 42: Requires the state to provide maternity leave and ensure fair and humane
working conditions.
 Article 43: Stipulates that all industries must provide a "living wage" and comfortable
working conditions.

Fundamental Rights:
Part III of the Indian Constitution enumerates fundamental rights that protect individuals from
arbitrary state actions. Some key articles relevant to labour laws include:
 Article 14: Ensures equality before the law and equal protection of the laws, prohibiting
discrimination.
 Article 16: Prohibits the state from discriminating in public employment based on
various factors and guarantees equal opportunity.
 Article 19: Protects the right to free speech, peaceful assembly, and the formation of
unions or associations, crucial for workers' rights.
 Article 21: Guarantees the right to life and personal liberty, with a broad interpretation
encompassing various aspects that make life meaningful.
 Articles 23 and 24: Prohibit human trafficking, forced labor, and the employment of
children under 14 in hazardous occupations.

Preamble of the Indian Constitution

The Preamble serves as another source of authority for labour laws. It promises social,
economic, and political justice, liberty of thought and expression, equality of status and
opportunity, all of which are expanded upon in the Directive Principles of State Policy. These
principles guide the state in ensuring social order, just working conditions, education, worker
participation, public health, and more.

ILO
The International Labor Organization was founded in 1919 for the primary purpose of
promoting social justice and improving the living and working conditions of workers. It made
a beginning in this field by emphasizing the importance of comprehensive social security
measures in the Preamble to its Constitution, in which it promised “protection of the worker
against sickness, disease and injury arising out of his employment, the protection of children,
young persons and women, provision for old age and injury”.

In order to implement these measures, the ILO took certain steps:

 It formulated international standards by way of recommendations regarding the
definition of social security.
 It collected and spread the information about social security schemes in various
countries.
 It provided technical assistance and guidance so that social security schemes might be
properly formulated by means of co-operation with other social organizations.

The 1952 ILO Convention on Social Security (Minimum Standard) divided social security
into nine components:
 Medical Care: This should cover pregnancy, confinement and its consequences and
any disease which may lead to a morbid condition. The need for pre-natal and post-
natal care, in addition to hospitalization was emphasized.
 Sickness Benefit: This should cover incapacity to work following morbid condition
resulting in a loss of earnings. This calls for periodical payments based on the
convention specification.
 Unemployment Benefit: This should cover the loss of earning during a worker’s
unemployment period when he is capable and available for work, but remains
unemployed because of lack of suitable employment.
 Old age Benefit: This benefit provides for the payment – the quantum depending upon
an individual’s working capacity during the period before retirement.
  Employment Injury Benefit : This should cover the following contingencies resulting
from accident or disease during employment
 Morbid condition: Inability of work following a morbid condition, leading to
suspension of earnings, Total or partial loss of earning capacity which may become
permanent and Death of the breadwinner in the family, as a result of which the family
is deprived of financial support.
 Family Benefit: This should cover responsibility for the maintenance of children
during the entire period of a contingency.
 Maternity Benefit: This benefit should cover pregnancy, confinement and their
consequences resulting in the suspension of earnings. Provision should be for medical
care, including pre-natal confinement, post-natal care and hospitalization if necessary.
 Invalidism Benefit: This benefit, in the form of periodical payments should cover the
needs of workers who suffer from any disability arising out of sickness or accident and
who ware unable to engage in any gainful activity
 Survivors’ Benefit: This should cover periodical payments to a family following the
death of its breadwinner and should continue during the entire period of contingency.

The ILO has suggested various methods of organizing, establishing and financing various
social security schemes. For the benefit of the less developed countries, it has fixed the level
of benefits fairly low, so that the schemes may be practicable.

Social Security Legislations in India

1. Employees’ Compensation Act, 1923
2. Employees’ State Insurance Act, 1948
3. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
4. Maternity Benefit Act, 1961
5. Payment of Gratuity Act, 1972
6. Unorganised Workers Social Security Act, 2008

Employees’ Compensation Act, 1923

It is a social welfare legislation enacted with a view to provide for compensation in case of
personal injury caused by accident and certain occupational diseases arising out of and in the
course of employment and resulting in disablement or death.

Scope:
The Act applies to the persons covered under Schedule II, including those employed in
factories, mines, plantations, major ports and docks mechanically propelled vehicles,
construction works, newspaper establishment and certain other hazardous occupations other
than those employed in clerical capacity. The Act does not include (i) any person working in
the capacity of a member of the Armed Forces of the Union, (ii) Employees Covered by ESI
Act, 1948.

Provision relating to Social Security:

The provisions relating to Social Security are given under Section 3 of the Act which talks
about Employer’s Liability to Pay Compensation.
 Compensation for employment-related injuries or diseases: As per Section 3 of the
Act, an employer is liable to pay compensation to an employee who sustains an injury
or contracts an occupational disease during the course of employment. The
compensation covers both physical and mental injuries or diseases that arise out of and
in the course of employment.
 In the case of Mackinnom Mackenzie and Company (P) Ltd. v. Ibrahim Mohd.
Issak, the Sc held that in order to come within the Act the injury by accident must arise
both out of and in the course of employment
 Employer's liability to pay compensation: The act places the responsibility on the
employer to provide compensation to the affected employee or their dependents. The
employer is liable regardless of whether the injury or disease resulted from the
employer's negligence, as long as it occurred in the course of employment.
In the case of Malikarjun G Hiremath v. Branch Manager, the Oriental Insurance
Co Ltd., the SC held that as per the provisions of Section 3(1) of the Act, some casual
connection must be established between the death of the workman and his employment.
If the workman dies natural death because of a disease no liability would be fixed on
the employer. But if the employment is a contributory cause, then the employer would
be held liable.
 Compensation for disablement: The act provides for the payment of compensation in
case of temporary or permanent disablement caused by work-related injuries. The
amount of compensation is determined based on the nature and extent of the
disablement, and it may be a lump sum or periodic payments.
In the case of Basappa v. Basvaraj M Tuppad, a driver lost his one eye in an accident
arising out and in the course of employment because of which he was not able to
perform the duty as drive which he was performing at the time of accident. The SC held
that even though the physical disability was assessed 30% by the medical practitioner
but the same has resulted in 100% loss of earning capacity because he will not be able
to perform his duty.
 Compensation for death: In the unfortunate event of an employee's death due to a
work-related injury or disease, the act entitles the dependents of the deceased employee
to receive compensation. The compensation is usually a percentage of the employee's
wages and is provided to the dependents to support their financial needs.
In the case of Rudramma v. Marijogaiah, it was held hat the mother of the deceased,
when re-married, would not be deemed to be dependent upon the son for claiming
compensation under the Act.
 Medical expenses and rehabilitation: The act requires the employer to bear the costs
of medical treatment and rehabilitation of the injured employee. This includes expenses
for medical care, hospitalization, and any necessary aids or appliances required for the
employee's recovery or rehabilitation.
 Compensation procedure and dispute resolution: The act lays down the procedure for
filing compensation claims, including the time limits for submitting claims and the
involvement of commissioners for adjudication. It provides a framework for resolving
disputes related to compensation through the Employees' Compensation Commissioner
or the Employees' Compensation Appellate Tribunal.
Overall, the Employees' Compensation Act aims to provide social security to employees by
ensuring that they receive adequate compensation and support in case of work-related injuries,
disabilities, or death. It places the onus on employers to fulfill their responsibility towards the
well-being and financial security of their employees and their dependents in such unfortunate
situations.

Employees’ State Insurance Act, 1948

It is a piece of social security legislation. It is conceived as a means of eradicating the evils of
society, namely, want, disease, dirt, ignorance, old age and disablement. It was the first and
currently the only social security scheme in India.
Scope:
  The Act applies to non-seasonal factories employing 10 or more persons including the
government owned factory. Thus for the purposes of this Act, a factory means any
premises including precinct where 10 or more persons are employed irrespective of
whether power is used in the manufacturing process or not.
 All persons including those drawing wages above the wage limit will be taken into
account for the purposes of counting 10 persons for the coverage of the factory.
 The empowers the appropriate govt to extend the provisions of the Act to other classes
of establishments – industrial, commercial, agricultural or otherwise, by giving one
month’s notice.
 As per Section 1(5) of the Act, the Scheme has been extended, inter alia, to shops,
hotels, restaurants, cinemas including theatres, road, motor transport undertakings and
newspaper establishments employing 10 or more persons and also to private medical
and educational institutions employing 10 or more persons in most of the States/UTs.

Provision relating to Social Security:

 Medical Benefits: The ESI Act provides employees and their dependents with access
to medical facilities and healthcare services. The act establishes the Employees' State
Insurance Corporation (ESIC), which manages a network of dispensaries, hospitals, and
clinics. Insured employees and their family members are entitled to medical treatment,
including outpatient care, hospitalization, and specialized services.
 Cash Benefits: In addition to medical benefits, the ESI Act provides cash benefits to
insured employees in certain situations. These benefits include sickness benefits,
maternity benefits, disablement benefits, and dependent benefits. Sickness benefits are
provided to employees during periods of temporary illness and incapacity, while
maternity benefits are granted to female employees during pregnancy and childbirth.
Disablement benefits are provided in case of work-related injuries or disabilities, and
dependent benefits are given to dependents of insured employees in the event of their
death.
 Maternity Benefits: The act mandates that insured female employees are entitled to
maternity benefits, which include paid leave, medical care, and cash benefits. The
maternity benefit period is generally 26 weeks, extended to 12 weeks in certain cases,
and employees receive a percentage of their wages as cash benefits during this period.
 Employment Injury Benefits: Employment injury is given under Section 2(8) of the
Act. The ESI Act provides benefits to insured employees in case of employment-related
injuries, accidents, or occupational diseases. Employees are entitled to medical
treatment, rehabilitation, and cash benefits for temporary or permanent disablement
resulting from work-related incidents. In case of death due to employment injury, the
dependents of the deceased employee receive dependent benefits.
 Other Benefits: The ESI Act also includes provisions for funeral expenses, vocational
rehabilitation, and provision of physical aids and appliances to insured employees.
 Funding and Contributions: Both employers and employees contribute to the
Employees' State Insurance Scheme. The employer's contribution is a percentage of the
employee's wages, while the employee contributes a smaller percentage. These
contributions fund the ESI scheme and enable the provision of social security benefits
to the insured employees.
The Employees' State Insurance Act, 1948 establishes a robust social security framework by
providing medical, cash, and other benefits to employees and their dependents. It ensures that
employees have access to essential healthcare services and financial support during periods of
illness, maternity, disablement, or injury. The act contributes to the overall well-being and
social security of employees in India.

Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

It is a form of retirement, but unlike gratuity, where all the financial burden falls on the
employer, this is contributory, in the sense that besides putting in service, a worker has also to
contribute a part of his wages.

Scope:
The legislation is designed to insure workmen against old age an infirmity. It provides for the
institution of provident fund for employees in factories and establishments. In the case of
Andhra University v. Regional Provident Fund Commissioner of Andhra Pradesh, it was
held that the EPF Act, being a beneficial piece of social welfare legislation, aimed at promoting
and securing the well-being of the employees the court should not adopt a narrow interpretation
which will have the effect of defeating the very object and purpose of the Act.
The Act applies to every establishment which is a factory engaged in any industry in Schedule
I and in which 20 or more persons are employed. It also applies to any other establishment
employing 20 or more persons or class of such establishments which the Central Government
may by notification in the official gazette specify.

Provisions relating to Social Security:

 Provident Fund: The Act establishes the Employees' Provident Fund (EPF), which is
a savings scheme for employees. Both employers and employees contribute a portion
of the employee's wages to the EPF. These contributions accumulate over time and
provide a lump sum payment upon retirement, resignation, or in the event of the
employee's death.
 Pension Scheme: The Act also includes a pension scheme known as the Employees'
Pension Scheme (EPS). A part of the employer's contribution to the EPF is allocated
towards the EPS, which provides a monthly pension to employees upon reaching a
certain age or in the event of permanent disability.
 Insurance Scheme: The Employees' Deposit-Linked Insurance Scheme (EDLI) is
another provision under the Act. It provides life insurance coverage to employees
covered under the EPF. In case of the employee's death while in service, a lump sum
amount is paid to the nominee or legal heir as insurance benefits.
 Nomination and Withdrawal: The Act allows employees to nominate beneficiaries
who will receive the accumulated EPF funds and insurance benefits in the event of the
employee's death. Employees are also allowed to withdraw a portion of their EPF
savings for specified purposes such as education, marriage, medical treatment, housing,
etc.
 Administration and Management: The Act establishes the Employees' Provident Fund
Organization (EPFO) to manage and administer the EPF, EPS, and EDLI schemes. The
EPFO is responsible for maintaining the records of contributions, managing the funds,
and disbursing benefits to eligible employees.
The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 provides a
comprehensive social security framework by establishing the EPF, EPS, and EDLI schemes. It
ensures that employees have a financial cushion for retirement, disability, and life insurance
coverage. The Act promotes long-term savings and financial stability for employees,
contributing to their social security and welfare.

Maternity Benefit Act, 1961

The Act aims to provide all the facilities to a working woman in a dignified manner, so that
she may overcome the state of motherhood honourably, peacefully, undeterred by the fear of
being victimized for forced absence during the pre or post-natal period as per Section 5(1) of
the Act.
The Supreme Court in the case of Municipal Corporation of Delhi v. Female Workers (Muster
Roll) held that to become a mother is the most natural phenomenon in the life of a woman.
Whatever is needed to facilitate the birth of child to a woman who is in service, the employer
has to be considerate and sympathetic towards her. The employer must realize the physical
difficulties that a working woman would face in performing her duties at work while carrying
a baby in the womb or while rearing the child after birth.

Constitution of India
The Act is based on two parts of the Constitution called Article 39(e) and Article 39(f). These
parts talk about certain principles that the State should follow:
Article 39 says that the State should focus on these things:
 (e) The State should make sure that workers, both men and women, are not treated badly
and their health and strength are not harmed. It also says that children should not be
made to do work that is not suitable for their age or strength just because of economic
problems.
 (f) The State should provide children with opportunities and support so that they can
grow up in a healthy way and in conditions where they have freedom and dignity. It
also says that childhood and youth should be protected from being taken advantage of
and from being left without care and support.

Objective
 to provide maternity benefit to women workers
 to regulate the employment of women workers in such establishments for certain period
before and after child birth

Scope:
 The Act applies to different places where people work or perform certain activities.
This includes factories, mines, plantations, and even government-owned
establishments. It also includes places where equestrian, acrobatic, and other
performances are held. Additionally, it applies to shops or establishments where 10 or
more people work or have worked at any time in the past 12 months.
 The State Government has the power to include other types or categories of
establishments. They can do this by giving a notice to the Central Government at least
two months in advance. After that, the Central Government can officially announce and
publish the inclusion of those establishments in the Official Gazette.

Conditions:
 The woman must have worked in the establishment for at least 160 days in the 12
months before her expected delivery date.
 The woman needs to inform her employer in writing about her absence and provide the
name of a nominee. She cannot choose a date for her absence that is earlier than six
weeks before her expected delivery date.
 The employer must pay the benefit in advance for the period before the delivery, once
the woman provides proof of her pregnancy. The payment for the period after delivery
should be made within 48 hours of receiving proof that the woman has given birth.
  If the woman fails to notify her employer about her pregnancy, she will not lose the
right to receive the benefit.

Provisions relating to Social Security:

 Maternity Leave: As per Section 5(3) of the Act, eligible women employees were
entitled to a period of maternity leave. The maximum duration of maternity leave is
generally 12 weeks. This twelve week can be divided into 6 weeks of which one can
availed prior and up to the date of delivery and the other can availed after the date of
the delivery. However, after the 2017 Amendment, the maximum leave was extended
upto 26 weeks i.e. 8 weeks before the expected delivery date and extending up to 18
weeks after the child birth. During this leave period, the employee is entitled to receive
full wages, ensuring financial stability during the maternity period.
 Maternity Benefit Payment: The Act stipulates that during the period of maternity
leave, the employee is entitled to receive maternity benefit payment. The benefit
amount is a percentage of the employee's wages and is provided as cash assistance to
support the employee's financial needs during the maternity period.
In the case of B. Shah v. Labour Court, the SC held that the computation of maternity
benefit has to be made for all the days including Sunday and rest days which may be
wageless holidays comprised in the actual period of abence of the woman extending up
to six weeks preceding and including the days of delivery as also for all the days falling
within the 6 weeks immediately following the day of delivery thereby ensuring that the
woman worker gets paid for the said period.
 Nursing Breaks: Section 11 provides for nursing breaks for women employees after
they return to work post-maternity leave for a period of 15 months It mandates that
employers must provide reasonable time for women to nurse their child, ensuring the
well-being of both the mother and the baby.
 Prohibition of Dismissal: As per Section 12 of the Act the dismissal of a woman
employee during her maternity leave period is prohibited. It ensures job security for
women employees during and after their maternity leave, protecting their employment
rights.
 Medical Bonus: As per Section 8, the woman is entitled to a medical bonus of 2500 in
case the employer is not providing any pre-natal confinement or post-natal case.
 Additional Leaves: As per Section 10, an additional leave of one month in case the
woman suffers from any illness arising out of pregnancy, premature birth of child or
miscarriage. She will be entitled to this leave after providing proof for the same.
 Withholding of Maternity Benefit: As per Section 17, any woman can complain about
withholding of maternity benefit to the Inspector who will be a public servant under
Section 21 of IPC 1860. The limitation period for filing such complaint is one year as
per Section 23.

The Maternity Benefit Act, 1961 aims to provide social security and support to women
employees during the critical period of pregnancy and childbirth. It ensures that women have
adequate maternity leave, medical benefits, and financial assistance during this period. The Act
promotes gender equality, protects women's employment rights, and contributes to the overall
well-being and social security of women in the workforce.

Payment of Gratuity Act, 1972

It is a retirement benefit like the provident fund or pension. But unlike pension, but like
provident fund, it is a lump sum payment to which the employee becomes entitled after
rendering long and meritorious service to the employer.
Scope:
The Act extends to the whole of India and is applicable to:
 Every factory, mine, oil field, plantation, port and railway company
 Every shop or establishment governed by the Shops and Establishments Act of that
State, in which 10 or more persons are employed, or were employed on any day of the
preceding 12 months
 Any other establishment wherein 10 or more persons are employed or were employed
on any day of the preceding 12 months and which is so notified by the Central Govt.
which has extended the provisions of the Act to all the educational institutions in the
country having 10 or more employees, and to all trusts and societies registered under
the Societies Registration Act, 1860 employing 10 or more persons, motor transport
undertakings, clubs, chamber of commerce and industry associations, federation of
chambers of commerce and industry, local bodied and solicitor’s office employing 10
or more persons.
 Once this Act applies to any establishment, the establishment shall continue to be
governed by the Act irrespective of the fact that the number of employees working
therein has subsequently fallen below 10.

Provisions of Social Security:

 Payment of Gratuity: The Act mandates that employers must pay a gratuity amount to
eligible employees. The gratuity is a lump sum payment made by the employer as a
gratitude for the employee's long service. The amount is calculated based on the
employee's last drawn salary and the number of years of service completed.
 Eligible Events: The Act specifies the events in which an employee becomes eligible
for gratuity payment. These events include retirement, resignation, death, or
disablement due to an accident or illness. In the case of an employee's death or
disablement, the gratuity amount is payable to the employee's nominee or legal heir.
 Protection against Forfeiture: The Act prohibits employers from forfeiting or
withholding gratuity except in certain specified cases, such as termination of
employment due to employee misconduct. It ensures that employees receive their
rightful gratuity amount and protects their social security rights.
In the case of M/s Bharat Gold Mines v. Regional Labour Commissioner, the
Karnataka High Court held that the amount of gratuity of an employee under Section
4(6)(a) can only be forfeited to the extent of damage or loss to the employer.
In the case of Jaswant Singh Gill v. Bharat Cooking Coal Ltd., the SC held that
unless and until damage has been quantified, gratuity amount is not liable to forfeited
and that the deduction is only permissible to the extent of the loss caused.

The Payment of Gratuity Act, 1972 provides a social security net for employees by ensuring
that they receive a lump sum payment as gratuity upon retirement, resignation, death, or
disablement. The Act recognizes and appreciates the long-term service of employees, providing
them with financial security and support after their years of service.

Unorganised Workers Social Security Act, 2008

The Act seeks to provide social security and welfare of the unorganised workers and for other
matters connected therewith or incidental thereto.

Scope:
The Act applies to unorganized sector, namely, an enterprise owned by individuals, self-
employed works and those engaged in the production or sale of goods or providing service of
any kind whatsoever, where the enterprise employs workers the number of which is less than
10 as per Section 2(l).

Provisions of Social Security:

 Registration of Workers: The Act provides for the establishment of welfare boards at
the state level, responsible for registering and maintaining records of unorganized
workers. It enables workers to avail social security benefits by enrolling themselves
with the welfare boards.
 Social Security Schemes: The Act empowers the central and state governments to
formulate and implement various social security schemes for unorganized workers.
These schemes may include health and disability insurance, maternity benefits, life and
disability coverage, old age pension, housing assistance, educational schemes, and skill
development programs.
 National Social Security Fund: The Act establishes a National Social Security Fund
to provide financial resources for implementing social security schemes for
unorganized workers. Contributions from the central and state governments, grants,
donations, and other sources are utilized for the fund.
 Financing of Social Security Schemes: The Act outlines the mechanisms for financing
social security schemes. It provides for contributions from beneficiaries, employers,
and the government, ensuring a shared responsibility for funding social security
measures.
 Implementation and Administration: The Act assigns responsibilities to the central
and state governments, as well as welfare boards, for the implementation,
administration, and coordination of social security schemes. It emphasizes the need for
effective governance and monitoring mechanisms to ensure the delivery of benefits to
eligible workers.
 Penalties and Grievance Redressal: The Act includes provisions for penalties for non-
compliance with its provisions. It also establishes mechanisms for grievance redressal,
allowing workers to seek remedies for any grievances related to the implementation of
social security schemes.

The Unorganised Workers Social Security Act, 2008 aims to address the social security needs
of workers in the unorganized sector, who often face vulnerabilities and lack access to formal
social security systems. The Act emphasizes the importance of providing them with financial
protection, healthcare benefits, and social welfare measures, thereby contributing to their
overall well-being and social security.

Case Laws

BHEL Workers Association v. Union of India

 The B.H.E.L. Workers' Association filed writ petitions in court to raise concerns about
the mistreatment of contract workers.
 Within the premises of the respondent undertaking, around 16,000 contract workers
were being treated differently from the directly employed workers.
 The contract workers were under the control of contractors and faced unequal wages
and different conditions of service compared to the directly employed workers.
 The management paid the contractors who then deducted substantial commissions
before paying the contract workers, resulting in significantly lower wages compared to
the directly employed workers.
  The petitioner alleged that these circumstances violated the rights of the contract
workers under Articles 14 and 19(1)(f) of the Constitution.
 The petitioner sought a declaration from the court stating that the prevailing system of
contract labor in the respondent undertaking was illegal.
 They also argued that the contract workers should be considered as direct employees of
the respondent undertaking and entitled to equal pay as the directly employed workers.

Maternity Benefit Amendment Act 2017

The Maternity Benefit Amendment Act 2017 is an important piece of legislation in India that
aims to enhance and promote the rights of working women during the crucial period of
maternity. Here is a short note on the Maternity Benefit Amendment Act 2017:
The Maternity Benefit Amendment Act 2017 was enacted to amend and strengthen the
provisions of the existing Maternity Benefit Act, 1961. The primary objective of this
amendment act is to protect the health, well-being, and employment rights of women
employees during pregnancy and after childbirth.
Key features of the Maternity Benefit Amendment Act 2017 include:
 Extended Maternity Leave: The amendment extended the duration of maternity leave
from 12 weeks to 26 weeks for women working in establishments with 10 or more
employees. This extended leave is available for the first two children. For women
having a third child, the leave entitlement is 12 weeks.
 Maternity Leave for Adoptive and Surrogate Mothers: The amendment introduced
provisions for adoptive and commissioning mothers, providing them with 12 weeks of
maternity leave from the date the child is handed over to them.
 Work-From-Home Option: The amendment act allows women to work from home,
if mutually agreed upon with the employer, after availing the maternity leave. This
provision aims to facilitate a smoother transition back to work while ensuring the well-
being of the mother and child.
 Crèche Facilities: The amendment made it mandatory for establishments with 50 or
more employees to provide crèche facilities within a prescribed distance from the
workplace. Employers are required to allow women to visit the crèche multiple times a
day to nurse their child or feed them.
 Nursing Breaks: The amendment ensures that women are provided with nursing
breaks, in addition to regular intervals, to breastfeed their child for up to 15 months
after childbirth.
 Informing Women of Maternity Benefits: The amendment requires employers to
inform women employees of their maternity benefits at the time of their appointment.
The Maternity Benefit Amendment Act 2017 has been instrumental in recognizing and
addressing the specific needs of women employees during the maternity period. It promotes
gender equality, safeguards the health and well-being of women and children, and encourages
a supportive work environment that allows women to balance their work and family
responsibilities effectively.

Social Security Legislations

Social security legislations in India aim to provide a safety net and ensure the welfare and well-
being of individuals and families in various aspects of life. Here is a short note on social
security legislations in India:
  Employees' Provident Fund (EPF) Act: The EPF Act establishes a social security
scheme that requires employers and employees to contribute a portion of the employee's
salary towards a provident fund. The fund accumulates over time and provides financial
support to employees upon retirement, disability, or in certain other specified
circumstances.
 Employees' State Insurance (ESI) Act: The ESI Act provides medical and cash
benefits to employees working in specified industries or establishments. Employers and
employees contribute a percentage of the employee's wages towards the ESI scheme,
which covers medical expenses, sickness benefits, disability benefits, and maternity
benefits.
 Maternity Benefit Act: The Maternity Benefit Act ensures that women employees
receive paid leave during pregnancy and after childbirth. It mandates a minimum of 26
weeks of maternity leave and also provides for other benefits such as nursing breaks,
work-from-home options, and crèche facilities.
 Employees' Compensation Act: The Employees' Compensation Act, previously
known as the Workmen's Compensation Act, provides compensation to employees in
case of injuries or accidents arising out of and during the course of employment. It
ensures that employees are adequately compensated for work-related injuries,
disabilities, or death.
 Employees' State Insurance Corporation (ESIC): The ESIC is an autonomous body
established under the ESI Act. It administers the ESI scheme and provides medical care,
cash benefits, and other social security benefits to employees covered under the ESI
Act.
These are some of the key social security legislations in India that aim to provide financial
protection, healthcare benefits, and social welfare to employees, workers, and individuals.
These legislations contribute to the overall well-being, economic stability, and social
development of the workforce in the country.
 MODULE 5
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013

Fiona is working as an employee with Trident group of Companies’ office in New Delhi.
Trident is a Swiss company. She is working there on contract. She has complained of sexual
harassment by her sanitation supervisor for making unsolicited advances towards her. Explain,
as a member of the ICC, what steps can you take on receiving a complaint from Fiona and if
her complaint is maintainable.

Ms Priya works in an Advertising firm. She is extremely focused and dedicated to her work.
Her Boss and senior manager Mr Singh has on several occasions in the past, made remarks at
her appearance and dresses, specifically demanding her towear certain attire that makes her
more attractive in order to impress their clients. On the last such occasion he told her that all
she needs to do, is to impress the clients and him by her looks and she will be given her long
due promotion.
Does the behaviour of Mr Singh amount to sexual harassment at workplace as per the definition
of sexual harassment under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013? What are the duties of the employer that are mandated
by the Sexual Harassment of Women at Workplace (Prevention,Prohibition and Redressal) Act,
2013?

Madhavi has filed a complaint against her boss for sexual harassment at workplace. During the
proceedings before the Internal Complaints Committee, she was informed by the committee
about conciliation proceedings.
Under which provisions are conciliation proceedings allowed in cases of sexual harassment at
workplace under the Prevention of Sexual Harassment Act, 2013.
What are the functions of the Internal complaints committee.

Mr X, who is a manager of factory, was assaulted by the workmen of that company. He suffered
to six fractures and was hospitalized for over a month. The staffs were also threatened by the
workmen of that factory. Owing to constant b threats the staffs wrote to Mr X, the manager
regarding the threat, to their lives. The staffs in their complaint mentioned about the murder
threats, they received. This communication led Mr X issue a notice of closing the factory until
further notice. The notice the closing of the factory mentioned regarding the brutal assault of
Mr X and the constant threats that the members received. The aftermath of the notice lead to
the factory being closed for over 3 months. The workmen and the staff had a conciliation
meeting set up. As a result of the conciliation before the labour officer the workmen assured
that they would not cause any further trouble. This was followed by the claim of layoff by the
workers. They demanded compensation from the factory services. The workers approached the
labour court under section 33 A of the Industrial Disputes Act, 1947. The staff in the labour
court objected stating that the act was not layoff but was lockout because of the misbehavior
of the workmen.
Decide:
Does the act of the manager and staff fall under lock out or layoff? Reason it with judicial
pronouncements
Are the workers entitled to receive compensation for the same?
Is there compensation for lay off under Industrial Relations Code, 2019?
The sexual harassment of women at workplace law, 2013 is an important legislation for the
labour force in general and women in particular. Elucidate.

Ingala has filed a complaint against her boss for sexual harassment at workplace. During the
proceedings before the ICC, she was informed by the committee about conciliation
proceedings.
Under which provisions are concilaiiton proceedings allowed in cases of sexual harrasmenet at
workplace under posh act 2013.
What are the functions of the icc.

Meaning
 Sexual Harassment is defined in Section 2 (n) of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
 The Supreme Court has defined sexual harassment in the Vishakha Judgment as any
unwelcome, sexually determined physical, verbal, or non-verbal act against a women.
For example, a sexual remark about a colleague, asking for sexual favours, showing
pornography or conducting offensive acts at the workspace. All of this can affect the
personal as well as professional life of female workers.

ILO Framework
 Sexual harassment is a form of discrimination based on sex and it goes against human
rights. It is addressed in the ILO Discrimination (Employment and Occupation)
Convention of 1958 (No. 111). According to Convention No. 190, sexual harassment
is not specifically defined, but it is considered a type of gender-based violence and
harassment.
 Article 21 in the Indian Constitution gives everyone the right to life and personal
freedom. However, the Sexual Harassment of Women at Workplace Act, 2013 provides
protection against sexual harassment at work specifically for women. According to the
Act, only women can file a complaint about workplace sexual harassment, as stated in
Section 2(a)33. However, in the case of Malabika Bhattacharjee v. Internal
Complaints Committee, Vivekananda College, the Calcutta High Court ruled that a
complaint can be filed against a woman under the Act. The Act defines "respondent"
as "a person" against whom the aggrieved woman has made a complaint, as mentioned
in Section 2(m) of the Act.
 Union of India v. Mudrika Singh: the Supreme Court said that the right to be free
from sexual harassment is a fundamental part of the right to live with dignity under
Article 21 of the Indian Constitution. They also said that the Sexual Harassment of
Women at Workplace Act of 2013 is an important law and should not be used to punish
people over small things. The Supreme Court also understood that it can be difficult for
someone to report harassment when the person doing it is in a higher position at work.

Applicability of the Act

 Applicability is given under Section 1 of the Act.
 The Act applies to the whole of India. According to the Act, an "aggrieved woman" at
a workplace can be any woman, regardless of her age or employment status, who claims
to have experienced sexual harassment. It's important to note that the woman doesn't
have to be an employee; even a customer or client who faces sexual harassment at a
workplace can seek protection under the Act.
  For a woman to seek protection under the Act, the incident of sexual harassment must
have occurred at the workplace.
 The Act covers both organized and unorganized sectors in India, including self-
employed individuals or those working in organizations with less than 10 workers. It
applies to government bodies, private and public sector organizations, non-
governmental organizations, and organizations involved in commercial, vocational,
educational, entertainment, industrial, and financial activities. It also extends to
hospitals, nursing homes, educational institutes, sports institutions, stadiums used for
training, and even dwelling places or houses.

In the case of Saurabh Kumar Mallick v. Comptroller & Auditor General of India (2008),
the respondent argued that he couldn't be accused of sexual harassment at work because the
alleged misconduct happened in an official mess where the complainant resided. He also
claimed that since the complainant was in a senior position, he couldn't benefit from her, so it
wasn't sexual harassment. However, the Delhi Court rejected these arguments. The court ruled
that the official mess where the harassment took place was considered a workplace under the
POSH Act, and the respondent's actions constituted sexual harassment.

Complaints Committees
The Act provides for two types of committees:
 Internal Complaint Committee
 Local Complaints Committee

Internal Committee
 The company has established an Internal Complaints Committee (ICC) as mandated
under Section 4 of the Act.
 The ICC is responsible for handling cases of sexual harassment in a fair, sensitive, and
efficient manner.
 The committee receives complaints of sexual harassment at the workplace and initiates
inquiries according to the established procedure.
 After conducting the inquiry, the committee submits its findings and recommendations.
 The committee collaborates with the employer to implement appropriate actions based
on the investigation outcomes.
 Confidentiality is strictly maintained throughout the process, following established
guidelines.
 The ICC submits annual reports in the required format to track and monitor the progress
of addressing sexual harassment cases.
In the case of Global Health Private Limited & Mr. Arvinder Bagga v. Local Complaints
Committee, District Indore and Others (2017), the Court ruled that if an organization fails
to establish an Internal Committee (IC) as required by the POSH Act, a fine should be imposed.
In Vidya Akhave v. Union of India and Ors, 2015, The Bombay High Court ruled that it
would not interfere with an order of punishment passed by the Internal Complaints Committee
in relation to a sexual harassment complaint, unless the order is shockingly disproportionate.

Constitution of ICC
Chairperson or Presiding Officer:
 A senior-level woman from the same organization is appointed as the Chairperson.
 Having a woman as the Chairperson makes it easier for female employees to approach
the committee and report sexual harassment.
  In the case of Shobha Goswami v. the State of Uttar Pradesh and Others (2015), the
Allahabad High Court discussed the seniority criteria for the Chairperson. It was
determined that the Chairperson should be senior to the employee against whom the
complaint of sexual harassment has been filed.
Members amongst the employees:
 Two employees are chosen based on their social work, legal knowledge, or commitment
to women's rights.
 Organizing camps and orientation programs help educate employees about their
responsibilities as committee members.
External member:
 An external member could be a doctor, lawyer, or someone from an NGO working for
women's rights.
 In the case of Ruchika Singh Chhabra v. Air France India & Another (2018), the Delhi
High Court discussed the qualifications required for an external member.
 The purpose of the external member is to provide assistance to the complainant and
ensure an efficient inquiry process that addresses all issues faced by aggrieved female
employees.
 It is important to appoint an external member whose qualifications align with the
committee's purpose and goals.
 Note that the external member should have relevant qualifications, not just be a lawyer,
as in the mentioned case.
In the case of Ruchika Kedia v. Internal Complaints (2020), the Supreme Court found a
problem with the constitution of the Internal Complaints Committee (ICC). They said that the
external member of the ICC was not an independent third party as required by the law. The
external member was actually a lawyer representing the employer (bank) and was not
independent. The Supreme Court explained that the purpose of having an external member is
to have someone who is unbiased and can help the ICC.

Functions of the ICC

 To develop a policy against sexual harassment of women at the Institute.
 To ensure the implementation of the policy in letter and spirit through proper reporting
of the complaints and their follow-up procedures.
 To uphold the commitment of the Institute to provide an environment free of gender
based discrimination.
 To promote a social and psychological environment to raise awareness on sexual
harassment in its various forms.
 To create a secure physical and social environment to deter any act of sexual
harassment.
 To evolve a permanent mechanism for the prevention and redressal of sexual
harassment cases and other acts of gender based violence at the Institute.
In the Rashi v. Union of India And Another case, the Delhi High Court clarified that the
Internal Complaints Committee's (ICC) role is limited to investigating and reporting on sexual
harassment cases under the PoSH Act. If sexual harassment is proven, the ICC can recommend
appropriate action according to the service rules. If no sexual harassment is found, the ICC
should not comment on personal conduct or recommend action unrelated to sexual harassment.
The focus of the ICC should be solely on allegations of sexual harassment and determining the
validity of the complaint.

Powers and Responsibilities of ICC

Powers of the Internal Complaints Committee:
 Initiating inquiry: The ICC has the authority to start an investigation based on a
complaint filed against sexual harassment.
 Collecting evidence: The ICC can gather evidence and call witnesses to support the
investigation.
 Recommending measures: It can suggest actions and measures to prevent similar
cases of sexual harassment in the future.
Responsibilities of the Internal Complaints Committee:
 Receiving complaints: The ICC is responsible for receiving complaints related to
sexual harassment at the workplace.
 Conducting inquiry: It must carry out an inquiry into the complaint and present its
findings.
 Directing the employer: The ICC can instruct the employer to take necessary actions
to address the complaint and ensure a safe working environment.
 Submitting annual reports: The ICC is required to submit an annual report, following
the prescribed format, to provide updates on its activities and progress.

Complaint Mechanism
 Filing a written complaint: The complainant must write down the details of the
incident(s) of sexual harassment and submit the complaint in writing. This should be
done within three months from the date of the incident or the last incident in a series.
 Assistance from the Chairperson: The Chairperson of the ICC will help the
complainant in obtaining the written complaint. They will provide any necessary
support or guidance.
 Extension of time limit: If there are circumstances that make it difficult for the
complainant to file the written complaint within three months, the committee can
consider extending the time limit. This will be done only if the committee is satisfied
with the reasons given by the complainant.
 Email submission: The complainant can also send the complaint via email to any
committee member.
 Mandatory details in the written complaint: The written complaint should include
the full name of the complainant and other necessary information about the incidents
of sexual harassment.
 Filing by others: If the complainant is unable to file the complaint personally, it can
be filed by her legal heirs, spouse, parents, or another person who has witnessed the
sexual harassment. However, a written complaint must still be provided by the person
directly affected by the harassment.

Inquiry Procedure
 Forwarding the complaint to the respondent: Within 7 working days of receiving
the complaint, the ICC must provide a copy of the complaint to the respondent and
request their response.
 Respondent's response:
o The respondent has 10 working days to submit their response to the complaint.
o They can also include any relevant documents or provide witness information
to support their reply.
 Hearing both parties:
o The ICC will schedule a date for hearing the complainant and the respondent.
o The principles of natural justice will be followed during the hearing.
 o Neither party can have legal representation during the hearing.
 Timely completion of the inquiry: The ICC is required to conclude the inquiry within
90 days from the date of receiving the complaint.
 Interim relief for the complainant:
o During the inquiry, if requested by the complainant, the ICC may recommend
the employer to provide interim relief.
o Examples of interim relief include transferring the complainant to a different
workplace, granting leave for up to 3 months, or instructing the respondent not
to report on the complainant's performance.
 Submission of report:
o After the inquiry, the IC must submit a report to the employer (and the District
Officer if forwarded by the Local Committee) within 10 days.
o No re-examination of evidence is needed if parties present different versions.
o If sexual harassment is found, the IC recommends appropriate action based on
service rules. Without rules, actions can include apology, warning, withholding
promotion or salary, termination, etc.
o The IC may suggest deducting from the respondent's salary for compensation.
o The employer must act within 60 days of receiving the recommendation.
o If allegations are false or malicious, the IC can recommend action based on
service rules or Rule 10 if no rules apply.

Shri Debdulal Maity v. National Insurance Co. Ltd. & Ors, the Calcutta High Court
clarified that the Internal Complaints Committee (IC) is not required to automatically issue a
notice upon receiving a complaint. The IC must carefully consider whether the complaint
involves sexual harassment and if the incident occurred in the workplace. Based on this
evaluation, the IC can proceed with conciliation or initiate an inquiry accordingly.

In the case of Prof. Bidyut Chakraborty v. Delhi University and others, the Delhi High
Court ruled that the inquiry committee's decision was overturned because it violated the
principles of natural justice. The court highlighted the importance of conducting the inquiry in
line with these principles.
In another case, Ashok Kumar Singh v. University of Delhi, the Delhi court discussed the
process of cross-examination during an inquiry. It stressed the need to adhere to the principles
of natural justice when conducting the inquiry.

Duties of the employer as per the Act

Duties of the employer are given under Section 19 of the Act.
 The employer must ensure a safe workplace where employees are protected from any
form of sexual harassment, including incidents involving people outside the
organization.
 The employer should prominently display information about the penalties for sexual
harassment and the establishment of the Internal Committee as required by Section 4(1)
of the Act.
 Regular workshops and awareness programs should be conducted to educate employees
about the provisions of the Act.
 Orientation programs should also be held for the members of the Internal Committee to
help them understand their roles and responsibilities.
  The employer must provide the necessary resources and support to the Internal
Committee or the Local Committee (if applicable) to effectively address complaints
and conduct inquiries.
 The employer should assist in ensuring that both the respondent and witnesses are
present during the proceedings of the Internal Committee or the Local Committee, as
required.
 The employer should provide the Internal Committee or the Local Committee with any
information they need to properly investigate the complaint, considering the details
provided in Section 9(1) of the Act.
 If a woman chooses to file a complaint under the Indian Penal Code or any other
applicable law, the employer should provide assistance and support her in taking legal
action against the perpetrator.
 If the perpetrator is not an employee, but the incident occurred in the workplace, the
employer should take appropriate action as desired by the aggrieved woman.
 Treating sexual harassment as misconduct:
 The employer should treat sexual harassment as a misconduct under the organization's
service rules and take appropriate disciplinary action against the perpetrator.
 The employer is responsible for monitoring and ensuring that the Internal Committee
submits reports on time, as required by the Act.
The Vishaka guidelines give employees the right to hold their employers accountable if they
fail to fulfill their duties. The Delhi High Court, in the U.S. Verma, Principal Delhi Public
School Society v. National Commission for Women (2009) case, stated that employers have
a personal responsibility to ensure the safety of others and cannot avoid this responsibility by
delegating it. The Vishaka guidelines aim to create a work environment that is fair, secure,
comfortable, and free from discrimination.

Conciliation
According to section 10, the Internal Committee or the Local Committee can try to settle a
complaint through conciliation before starting a formal investigation under section 11. If the
aggrieved woman requests it, the committee can take steps to resolve the issue between her and
the accused person through conciliation. However, it's important to note that the settlement
cannot involve any exchange of money.
If a settlement is reached, the Internal Committee or the Local Committee will document the
agreement and send it to the employer or the District Officer, who will take action according
to the recommendation. Copies of the recorded settlement will be provided to both the
aggrieved woman and the respondent. In cases where such a settlement is reached, the Internal
Committee or the Local Committee will not conduct any further investigation.

Local Complaints Committee (LCC)

Introduction to LCC:
 For organizations with fewer than ten employees or unorganized sectors where a formal
Internal Complaints Committee (ICC) may not exist, the POSH Act provides for the
Local Complaints Committee (LCC).
 The LCC is established under Section 6 of the POSH Act to address sexual harassment
complaints in such workplaces.
Formation and Responsibilities:
 The LCC is formed by the District Officer for the entire district.
  In rural or tribal areas, a nodal officer is designated in each block, taluka, and tehsil. In
urban areas, the nodal officer is designated in each ward or municipality.
 The nodal officer receives complaints and forwards them to the concerned LCC within
seven days.
The LCC specifically handles complaints from the following categories:
 Employees of organizations with less than ten employees.
 Women working in the unorganized sector, such as housekeeping staff.
 Employees from organizations with more than ten employees if the complaint is against
the employer themselves.
Submission of Annual Report:
 Similar to the ICC, the LCC is required to submit an annual report to the District
Officer.
 The annual report should include:
o The total number of sexual harassment complaints received during the year.
o The total number of complaints resolved in that year.
o The number of cases pending for more than 90 days.
o Actions taken by the District Officer based on the LCC's recommendations.