BACKGROUNDER · Payment of Gratuity Act, 1972 Check list 148 11. Employee State Insurance Act, 1948...

BACKGROUNDER

Challenging Opportunitiesfor

Practising Company Secretariesin

Labour Laws

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NOVEMBER 2016

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PREFACE

Industrialization is considered to be one of the key engines to supportthe economic growth of any country. The commence of industry and itsgrowth is not a venture of the employer alone; yet it involves the hardwork and tough grind of each and every stakeholder of the industryincluding the labourers, supervisors, managers and entrepreneurs. Withthe initiation of the concept of welfare state in the early realm ofindependence of our country, various legislative efforts have made theirfirst move in the direction of welfare, equitable rights, social justice,social equity and equitable participation of the labour as a stakeholderat parity.

A plethora of labour laws have been established to ensure elevatedhealth, safety, and welfare of workers; to protect workers againstoppressive terms as individual worker is economically weak and haslittle bargaining power; to encourage and facilitate the workers in theorganization; to deal with industrial disputes; to enforce social insuranceand labour welfare schemes and alike.

Company Secretaries as the expert professionals in the vicinity ofcompliance and governance play crucial role in directing the desiredimplementation and deployment of these labour law towards the labourrights and welfare. Hence, the cavernous indulgence of the professionalsin the facts and facets of entire range of labour laws is necessitated atpar.

Recently, the Labour Department, Government of Haryana vide itsNotification No.11/38/2016-4Lab dated 10th August, 2016 formulatedThird Party Certification/Audit Scheme for the factories, shops andcommercial establishments in the State to liberalise the enforcement oflabour laws in pursuance of implementation of the “Business ReformAction Plan 2016- Ease of Doing Business” as formulated by theDepartment of Industrial Policy and Promotion, Ministry of Commerceand Industries, Government of India . The Third Party Certification/AuditScheme authorizes Practising Company Secretaries to conduct audits ofcompliance of various labour laws.

With a view to advance the understanding and support critical analysis

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of labour laws under the recurrent position, this book as a consolidatedguide on the entire array of labour laws will assist the CompanySecretaries to augment their perspective of professional services underlabour laws.

I commend the sincere efforts of Dr. Rajesh Agarwal, Director, ICSI-CCGRTand his team in preparing the manuscript. I also take this opportunity toconvey my heartfelt gratitude to CS Ashish Doshi, Council Member &Chairman, ICSI-CCGRT Management Committee under whose leadershipthis book been accomplished.

I sincerely believe that this book will be of paramount academicimportance even for other professionals, such as Chartered Accountants,Cost Accountants, Industry executives and students pursuing CompanySecretaryship and other professional courses.

New Delhi CS Mamta BinaniNovember 07, 2016 President, ICSI

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INDEX

Chapter Content Page No.

1. Introduction to Labour Law framework 1

1.1 Brief introduction 1

1.2 Coverage of labour laws 1

1.3 Categories of labour laws 1

1.4 Enacted by central government and soleresponsibility of enforcement by central 2government

1.5 Enacted by central government and enforcedby both central and state government 3

1.6 Enacted by central government andenforced by state government 4

1.7 Enacted by state government andenforced by state government 5

1.8 Purpose and objectives of labour laws 6

2. Opportunity for Practice 7

2.1 Functions of Company Secretary underCompanies Act, 2013 7

2.2 Available opportunities and Scope 7

2.3 Excelling in labour laws 7

2.4 The landmark judgment on Factories Act bySupreme Court 8

2.5 Occupier of factory to be only directors 9

2.6 Bhopal Gas Tragedy case 10

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2.7 Concern of regulators on compliance 10

2.8 Company secretary professionals areexpert as per Companies Act, 2013 10

3. Areas of Practice in labour laws 11

3.1 Brief on areas of practice in labour laws 11

3.2 Documentation relating to employment 11

3.3 Company Policy and Employee Handbook 12

3.4 Advisory Services 12

3.5 Employee’s compensation structuring andallied services 14

3.6 Employee Stock Options & Share Plans 15

3.7 Employment Termination/ Downsizing 16

3.8 Transfer of Employment 16

3.9 Labour and Compliance Audits / HR audit – legal 17

3.10 Employment Litigation 17

3.11 Expatriate Taxation, Social Security & 18

Immigration Issues

3.12 The gist of practice 18

4. Understanding the applicable laws in anorganization 20

4.1 Applicable laws and their compliance 20

4.2 Starting point – identifying all applicablelabour laws 20


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4.3 Next step – preparation of check lists 21

4.4 Technology could help 21

4.5 Responsibility of Compliance 22

4.6 Greater Role for practicing CompanySecretaries in ensuring Compliance 22

4.7 Non compliance 23

4.8 Conclusion 23

5. Overview of few (select) labour laws 25

5.1 Classification of labour laws 25

5.2 Labour laws relating to wages of workmen 25

5.3 Labour laws relating to Working Hours,Conditions of Service and Employment 25

5.4 Labour laws relating to Equality andEmpowerment of Women 27

5.5 Labour laws relating to deprived anddisadvantaged sections of the society 27

5.6 Labour laws relating to industrial relations 27

5.7 Labour laws relating to social security 27

5.7.1 Health related 27

5.7.2 Compensation related 27

5.7.3 Welfare related 28

5.7.4 Unorganized sector related 28

5.7.5 Employers’ liability related 28


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5.7.6 Retirement benefit related 28

5.8 Few forms under labour laws (illustration) tounderstand magnitude of compliance 28

5.9. Scope of practice is enormous & challengingas well as rewarding 31

6. Factories Act, 1948 Compliance 32

6.1 Importance of Factories Act 32

6.2 Various compliance requirements 32

6.3 Labour Laws Provision v. Board of DirectorsResponsibility 32

6.4 Appointment of occupier (director) who wouldhave the ultimate control over the factory 33

6.5 Draft Resolution for Appointment of………(Director's Name) as Occupier under the 33Factories Act, 1948

6.6 Appointment of the manager who would beresponsible for day-to-day affairs of the factory 35(with draft resolution)

6.7 Answerability for offences (with draft resolution) 36

6.8 Information to inspector of factories 37

6.9 Resolution authorizing the secretary or otherauthorized person to advise the inspector of 37factories about the appointment

6.10 The compliance issues 37

6.11 Display on the notice board 38

6.12 Provisions relating to various health andwelfare measure 38


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6.13 Floor space / rest room requirements 39

6.14 Nomination form 39

6.15 Mode of form of intimation before occupyingor use of the premises 40

6.16 Ensuring Compliance - system to be in place 41

6.17 Declaration from the Manager 41

6.18 Suggested draft declaration from the Manager 41

6.19 Monthly Compliance Certificate from theManager to the Occupier 43

6.20 Suggested draft monthly compliance certificate(draft certificate in ideal circumstances) 43

6.21 Intimation regarding proposed action on thecompliance 44

6.22 Review of the compliance report and initiatingrequired action on the compliance 45

6.23 Compliance Report to the Board 45

6.24 Certificate of compliance 46

6.25 Action points arising on the compliance certificate 47

6.26 Compliance certificate taken on record by the Board 48

6.27 Compliance other than the Factories Act, 1948 18

6.28 Role of practicing company secretary(especially in SME sector) 49

6.29 The actual work /job involved for thepracticing company secretary professional 50in relation to Factories Act


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6.30 Prescribed returns and registers underFactories Act, 1948 Compliance checklist 51

7. The Industrial Disputes Act, 1947 100

7.1 Brief on Industrial Disputes Act, 1947 100

7.2 Obligations of Employers 100

7.3 Rights of Employers 101

7.4 Conditions of service etc., to remain unchangedunder certain circumstances during pendency 101or proceedings

7.5 Offences and Penalties 103

The Industrial Disputes Act, 1947 Compliance 104checklist

8. The Registration of Foreigners Act, 1939read with the Registration of Foreigners 116Rules, 1992 as Amended in 1999

8.1 Brief on expatriate appointment in India 116

8.2 Opportunity for PCS in case of expatriateappointment 117

8.3 Registration procedure 117

8.4 Time Limit within which Registration Reportrequired to be Presented 118

8.5 Mode of presenting registration report 118

8.6 Foreigner’s address in India 118

8.7 Issue of residential permit 119

8.8 Conditions to be Fulfilled upon Issue ofResident Permit 120


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8.9 Rules to be observed by the Foreigner 121

8.10 Duplicate certificate of registration 122

8.11 Extension/Renewal of Residential Permit 122

8.12 Surrender of the Residential Permit 123

8.13 Consequences of not leaving the Country uponExpiry Date of Permit 123

8.14 Visa application 123

8.15 Visa renewal of foreigners from India itself 124

8.16 One more area of challenging practice forprofessional 124

9. The Employees Provident Funds andMiscellaneous Provisions Act, 1952 125

9.1 Brief about the Provident Fund andMiscellaneous Provisions Act, 1952 125

9.2 Compliance related issues from the point ofPractice 125

9.3 Duties and responsibilities of the employer(returns) 125

9.4 Scheme certificate 126

9.5 Death benefits 126

9.6 Compliance 126

The Employees’ Provident Funds andMiscellaneous Provisions Act, 1952 Check list 127

10. Payment of Gratuity Act, 1972 145

10.1 A brief about the Payment of Gratuity Act, 1972 145


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10.2 Compliance related issues vis-a-visresponsibility of employer 145

10.3 Compliance required – the forms and otherrequirements 146

Payment of Gratuity Act, 1972 Check list 148

11. Employee State Insurance Act, 1948 164

11.1 A brief about ESI 164

11.2 Compliance required under ESI Act 164

11.3 The duties and responsibilities of the employer 164

11.4 Record requirement under ESI Act 166

11.5 Various important forms prescribed under the ESI Act 166

11.6 Rate of contribution of the wages 168

12. The Payment of Wages Act, 1936 169

12.1 Brief and applicability of the Act 169

12.2 Employer’s responsibility for Payment of wages 170

12.3 Maintenance of registers and records 171

12.4 Display requirements 171

12.5 Compliance requirements (returns) 171

The Payment of Wages Act, 1936 ComplianceChecklist 172

13. The Minimum Wages Act, 1948 179

13.1 A brief introduction 179


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13.2 Display requirement 179

13.3 Record requirement 179

13.4 Compliance requirement (returns) 179

13.5 Other prescribed forms under the MinimumWages Act 180

The Minimum Wages Act, 1948 ComplianceChecklist 181

14. The Payment of Bonus Act, 1965 193

14.1 Brief of Payment of Bonus Act 193

14.2 Duties of Employer 193

14.3 Records to be maintained 193

14.4 Compliance required 194

The Payment of Bonus Act ComplianceChecklist 195

15. The Employees’ Compensation Act, 1923 199

15.1 The purpose / objective of the Act 199

15.2 Employers Liability for Compensation (Accidents) 199

15.3 Employer shall not be liable 199

15.4 Records prescribed / required to be maintained 200


The Employees’ Compensation ActCompliance Checklist 202

16. Maternity Benefit Act, 1961 207

16.1 Brief on Maternity Benefit Act 207


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16.2 Display requirement 207

16.3 Records to be maintained 207


Maternity Benefit Act, 1961 ComplianceChecklist 208

17. The Equal Remuneration Act, 1976 212


17.2 Penalties 212

17.3 Registers to be maintained 212

17.4 Various forms under this act 212

The Equal Remuneration Act, 1976Compliance Checklist 213

18. The Industrial Employment (Standing Orders)Act, 1946 215


18.2 Applicability of the Act 215

18.3 Model Standing order 215

18.4 Obligations of Employers 215

18.5 Penalties 216

The Industrial Employment (Standing Orders)Act, 1946 Compliance Checklist 217

19. The Contract Labour (Regulation andAbolition) Act, 1970 221



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19.2 Registration of establishment 221

19.3 Prohibition of employment of contract labour(Sec 10) 221

19.4 Liability of principal employer 221

19.5 Registers and other records to be maintained 222


The Contract Labour (Regulation and Abolition)Act, 1970 Compliance Checklist 224

Annexure

I Month wise checklist for submission ofvarious returns Under labour laws 233

II Event based compliance 240

III Notice to be displayed 241


Challenging Opportunities for PCS in Labour Laws 1

1.1. Brief Introduction

Labour laws are the one dealing with employment laws in anyorganization – whether it is a manufacturing organization ortrading organization or shops and establishment. The labour lawsaddress the various administrative rulings (such as employmentstanding orders) and procedure to be followed, compliance tobe made and it address the legal rights of, and restrictions on,working people and their organizations. As such, the labour lawsmediate in many aspects of the relationship between tradeunions, employers and employees. In other words, Labour lawdefines the rights and obligations as employees, union membersand employers in the workplace.

1.2. Coverage of labour laws

By and large the labour law covers the industrial relations,certification of unions, labour management relations, collectivebargaining and unfair labour practices and very importantly theworkplace health and safety with good environmental conditions.Further the labour laws also focus on employment standards,including general holidays, annual leave, working hours, unfairdismissals, minimum wage, layoff procedures and severance payand many other issues related to employer and employee andthe various compliance requirements.

1.3. Categories of labour laws

There are two broad categories of labour law. Firstly collectivelabour law relates to the tripartite relationship betweenemployee, employer and union, and secondly individual labourlaw concerning the employees' rights at work and through thecontract for work. The labour movement has been instrumentalin the enacting of laws protecting labour rights in the 19th and

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Introduction to Labour Law Frame Work

Challenging Opportunities for PCS in Labour Laws2

20th centuries. Labour rights have been integral to the socialand economic development since the industrial revolution.

Under the Companies Act, 2013 the role of the company secretaryhas been considerably widened in as much as now he is not onlyresponsible for the compliances under the company law but alsoin respect of compliances under all other applicable laws. Section205 of the Companies Act, 2013 while spelling out the functionsof company secretary clearly states that the functions of thecompany secretary shall include(a) to report to the Board aboutcompliance with the provisions of this Act, the rules made thereunder and other laws applicable to the company.

Obviously the labour laws deals with the employees – one ofthe important factors of production acquires a significant placewhile we talk about compliance.

1.4. Enacted by central government and sole responsibility ofenforcement by central government

Labour legislations when analyzed one could come to a clear cutunderstanding that there are labour laws enacted by the CentralGovernment, where the Central Government has the soleresponsibility for enforcement as a first category. The followingare few labour legislations which fall in this category.

(1) The Employees’ State Insurance Act, 1948

(2) The Employees’ Provident Fund and Miscellaneous ProvisionsAct,1952

(3) The Mines Act, 1952

The Iron Ore Mines, Manganese Ore Mines and Chrome OreMines Labour Welfare (Cess) Act, 1976

(4) The Iron Ore Mines, Manganese Ore Mines and Chrome OreMines Labor Welfare Fund Act, 1976

(5) The Mica Mines Labour Welfare Fund Act, 1946

(6) The Limestone and Dolomite Mines Labour Welfare Fund Act,1972

(7) The Beedi Workers Welfare Cess Act, 1976

(8) The Cine Workers Welfare (Cess) Act, 1981


(9) The Beedi Workers Welfare Fund Act, 1976

(10) The Cine Workers Welfare Fund Act, 1981

(11) The Dock Workers (Safety, Health and Welfare) Act, 1986

1.5. Enacted by central government and enforced by both centraland state government

When one moves further, it can be seen that labour laws enactedby Central Government and enforced by Central and StateGovernments both. The following are some of the examples ofsuch legislations.

(1) The Minimum Wages Act, 1948(2) The Payment of Bonus Act, 1965(3) The Payment of Gratuity Act, 1972(4) The Payment of Wages Act, 1936(5) The Maternity Benefit Act, 1961(6) Dangerous Machines (Regulation) Act, 1983(7) The Apprentices Act, 1961(8) The Equal Remuneration Act, 1976.(9) The Industrial Disputes Act, 1947

(10) The Industrial Employment (Standing Orders) Act, 1946.(11) The Child Labour (Prohibition and Regulation) Act, 1986.(12) Sales Promotion Employees Act, 1976(13) Private Security Agencies (Regulation) Act, 2005(14) The Contract Labour (Regulation and Abolition) Act, 1970(15) The Building and Other Constructions Workers’ (Regulation

of Employment and Conditions of Service) Act, 1996(16) The Building and Other Construction Workers Cess Act, 1996(17) Unorganized Workers Social Security Act, 2008(18) The Inter-State Migrant Workmen (Regulation of Employment

and Conditions of Service) Act, 1979(19) The Labour Laws (Exemption from Furnishing Returns and

Maintaining Registers by Certain Establishments) Act, 1988(20) The Cine Workers and Cinema Theatre Workers (Regulation

of Employment) Act, 1981


(21) Working Journalists (Fixation of Rates of Wages) Act, 1958(22) Merchant Shipping Act, 1958(23) Dock Workers (Regulation of Employment) Act, 1948(24) Dock Workers (Regulation of Employment) (Inapplicability to

Major Ports) Act, 1997.

1.6. Enacted by central government and enforced by stategovernment

When we move down further, it is seen that there are regulationsconcerning labour laws enacted by Central Government andenforced by the State Government. The following are the list ofsuch laws.

(1) The Factories Act, 1948

(2) The Weekly Holidays Act, 1942

(3) The Employees’ Compensation Act, 1923

(4) The Trade Unions Act, 1926

(5) The Motor Transport Workers Act, 1961

(6) The Employment Exchange (Compulsory Notification ofVacancies) Act, 1959

(7) The Plantation Labour Act, 1951

(8) The Bonded Labour System (Abolition) Act, 1976

(9) The Beedi and Cigar Workers (Conditions of Employment)Act, 1966

(10) The Personal Injuries (Compensation Insurance) Act, 1963

(11) The Personal Injuries (Emergency Provisions) Act, 1962

(12) The Sales Promotion Employees (Conditions of Service) Act,1976

(13) The Working Journalists and Other Newspapers Employees(Conditions of Service) and Miscellaneous Provisions Act,1955

(14) The Children (Pledging of Labour) Act, 1938

(15) The Employers’ Liability Act, 1938


1.7. Enacted by state government and enforced by stategovernment

Finally, there are labour laws enacted and enforced by the variousState Governments, which apply to respective States only.

Let us look at the labour laws of Madhya Pradesh – likewiseeach state has got its own laws enacted and implemented.

Madhya Pradesh State Labour Laws

(1) Factories Act, 1948 and Madhya Pradesh Factories Rules,1962

(2) Payment of Wages Act, 1936 and Madhya Pradesh Paymentof Wages Rules, 1962

(3) Madhya Pradesh Shops & Establishment Act, 1958

(4) Madhya Pradesh Industrial Relations Act, 1960

(5) Madhya Pradesh Industrial Relations Rules, 1961

(6) Madhya Pradesh Industrial Employment (Standing Orders)Act, 1961

(7) Contract Labour (Regulation & Abolition) Act, 1970 andContract Labour (Regulation and Abolition) Madhya PradeshRules,1973

(8) Workmen’s Compensation Act, 1923

(9) Workmen’s Compensation (Madhya Pradesh) Rules, 1962,

(10) Madhya Pradesh Workmen’s Compensation (OccupationalDiseases) Rules, 1963

(11) Workmen’s Compensation Act, 1923 and Workmen’sCompensation (Madhya Pradesh) Rules

(12) The Inter-state Migrant Workmen (Regulation of Employmentand Conditions of Service) Act, 1979 and Inter- State MigrantWorkmen (Regulation of Employment and Conditions ofService) M.P. Rule, 1981

(13) MP Labour Welfare Fund Act

(14) Maternity Benefit Act, 1961 and MP Maternity Benefit Rules

(15) Minimum Wages Act, 1948 and MP Minimum Wages Rules


(16) Payment of Gratuity Act, 1972 and MP Payment of GratuityRules

1.8. Purpose and objectives of labour laws

The labour laws are social, safety, protection of employees rightsand hence they deal with the payment of wages, industrialrelations, working hours, conditions of service and employment,equality and empowerment of women, laws related to Deprivedand Disadvantaged Sections of the Society and as well lawsrelating to society security.

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2.1. Functions of company secretary under Companies Act, 2013

Under the Companies Act, 2013, while spelling out the functionsof company secretaries for the first time in the history of theCompanies Act, the role of the company secretary has beenconsiderably widened in as much as now he is not only responsiblefor the compliances under the Company law but also in respectof compliances under all other applicable laws.

2.2. Available opportunities and scope

Here is the great opportunity for the practicing company secretariesin assisting and helping the organizations to find out the number oflaws which are applicable to them at the first place. The companieswhere no company secretary is required to be employed or companysecretary is not employed, the practicing company secretaries havegot a great opportunity to explore the areas of compliance in thosecompanies under various laws that are applicable – it is a vast scopefor the practicing secretaries since the laws are innumerable.

In this connection, if one asks a question to anyone includingcompany secretary in a company or a practicing professional asto how many Acts/ laws are applicable to that company, by andlarge one may not be able to get the exact number of laws/ Actsapplicable to that company. Laws are innumerable and none hasreally got an idea as to how many laws would be applicable.Laws are innumerable and one needs to be focused in ensuringcompliance.

2.3. Excelling in labour laws

If one desires to excel in the area of labour laws, ampleopportunities are thrown open to them since day in and day outthe employers are required to deal with the employee related

Opportunity for Practice

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issues and there are various compliances required to be doneeither in the form of filing returns, making payments, maintainingrecords and registers, complying with various conditions etc.

There is more scope in manufacturing units when compared tothe other sectors since the working conditions and safety isinvolved significantly in manufacturing sectors and thegovernment is very much concerned about it. Even within themanufacturing sector, certain specific industries are subjectedto stricter compliance failing which heavy penalties andimprisonment would be involved to the level of directors andsenior management. For example, factories manufacturingchemicals, hazardous chemical and dangerous chemicals aresubjected to severe compliance.

2.4. The landmark judgment on Factories Act by Supreme Court

In October 1996, the Supreme Court fixed the responsibility forviolations of the rules under the Factories Act, 1948 on anominated Director of a company and not on any of the employeesas some companies chose to do by appointing one of itsemployees as "Occupier of the Factory". The Court's ruling inthe case of J K Industries Limited v. The Chief Inspector of Factoriesand Boilers and others (1997) 1LLJSC 772 have far-reachingconsequences as the designated Director under the FactoriesAct, 1948 will henceforth be liable for all the illegal acts of theunit along with the Manager. Each of them is liable for offencespunishable with imprisonment or fine or with both (which mayextend to the extent of two years imprisonment or fine of Rs. 1lakh or with both). The Apex Court, while delivering the judgmentmade the following observations:

“The Legislature has attempted to plug the loopholes whichexisted earlier and enable the Directors to escape their liabilityby passing on the buck, as they say, to an employee. It is muchtoo obvious that when top persons of the company are madeconscious of their responsibility and duties for theimplementation of the safety and welfare measures in a factoryand to carry out the duties prescribed under the Act, at the painof punishment in case they choose to overlook, there are muchgreater chances that proper care would be taken for maintenance


of the factory, particularly in regard to the safety measures andwelfare of workers”.

2.5. Occupier of factory be only by directors

The court held that in the case of a company, which owns afactory, it is only one of the Directors of the Company who canbe notified as the occupier of the factory for the purposes of theAct and the company cannot nominate any other employee asthe occupier of the factory. Where the Company fails to nominateone of its Directors as the occupier of the factory, the Inspectorof Factories shall be at liberty to proceed against any of theDirectors of the Company, treating him as the deemed occupierof the factory, for prosecution and punishment in case of anybreach of contravention of the provisions of the Act or for offencescommitted under the Act.

The Court further held that Proviso (II) to Section 2(n) of the Actwas intra-vires the substantive provisions of Section 2(n) of theAct and constitutionally valid and not ultra-vires Articles 14, 19(1)(g) and 21 of the Constitution of India. While delivering thejudgment the Court also made reference to various Sections ofthe Factories Act, 1948 especially the notice to be sent to theChief Inspector of Factories once the occupier is appointed, thevast difference between the occupier, who would have theultimate control over the affairs of factory and the Manager,who would have the control over day to day affairs of the factory.There is a vast difference between a person having the ultimatecontrol of the affairs of factory and manager who have day today affairs of the factory. In the case of a company, the ultimatecontrol of the factory, where the company is the owner of thefactory, always vests in the company through its Board ofDirectors. The Manager or any other employee, of whateverstatus can be nominated by the Board of Directors of the companyto have immediate or day to day or even supervisory controlover the affairs of the factory. From the above it is clear that asper Section 2 (n), in a resolution nominating an employee or anofficer as the occupier by stating that he shall have "ultimatecontrol over the affairs of the factory", a company cannot bepermitted to defeat the object of the amendment. The SupremeCourt further observed that though the expression ‘ultimate


control’ was used in Section 2(n) even prior to the 1987amendment read with the provision to Section 100 (2), it gavean opportunity to the companies owning the factory to dilute therigour of the provision by not notifying one of its Directors to bethe occupier and instead nominating some employee or the otherto be the "Occupier" for purposes of punishment and penalty.

2.6. Bhopal Gas Tragedy case

One would not have forgotten the Bhopal disaster (Bhopal gastragedy, the world’s worst industrial disaster occurred on thenight 2-3rd December, 1984 at the Union Carbide India Limitedpesticide plant in Bhopal. In this case the management had paidhuge amount of compensation and some of senior employeesincluding former Union Carbide India Limited chairman wereconvicted to two years imprisonment.

2.7. Concern of regulators on compliance

In the light of the above facts, each and every organization isconcerned very much on compliance – especially on variouslabour laws applicable to them. Though the companies do havetheir HR department, still they prefer to take all pre-caution andensure near total compliance and hence they seek the expertisefrom professionals like company secretaries.

2.8. Company secretary professionals are expert as per CompaniesAct, 2013

Chapter 1 of the Companies Act 2013 under Section 2(38)wherein, the company secretary is recognized as an “expert”and the company secretaries being the compliance officer whounderstand the corporate laws well, they would be able to explorethe great and challenging opportunities thrown open under thelabour laws.

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3.1. Brief on area of practice in labour laws

When one talks about the areas of practice, a question wouldarise as to what areas, the company secretary professional wouldbe able to take up practice and render service.

Let us briefly look at the areas, which could be of practice forthe practicing professionals. The company secretary professionalcould provide informed, confidential advice on the full range oflabour and employment related issues. Before venturing into thepractice one has to gather the full knowledge on labour lawsand also keep dated on various developments which are takingplace in labour and employment related issues relating to thespecific industry to which the service is rendered.

To begin with, the following are some of the areas, one couldrender professional services.

3.2. Documentation relating to employment

— Preparation of the entire set of the employment dossier suchas (Drafting and reviewing)– Offer Letter

– Appointment Letter

– Employment Agreement

– Confidentiality Agreement

– Non-Disclosure Agreement

– Secondments and deputation Agreements

– Non-compete and non-solicit agreement

– Severance and release Agreements

– Invention Assignment Agreement

Areas of Practice in Labour Laws

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– Grant Letter– Training bonds– Consultancy Agreements– Resignation Letter– IP assignment agreement– Termination Letter, etc.

3.3. Company Policy and Employee Handbook

Organizations are always interested and have their written downpolicies and procedures in place. By and large all organizationsformulate their “code of conduct and policies” which are foundin the Employee Handbook and this is provided to each of theemployee at the time of joining the organization and thishandbook also gets updated from time to time with requiredmodifications depending upon the regulatory changes, customsand other factors.

The purpose of the handbook is to communicate to theorganization’s employees the organization’s mission statement,vision statement, values, cultures and practices, as also supportthe employment contract by setting out procedures, rules andregulations for the employees within the organization in its dailyoperations including dealing with clients/customers.

Here comes the expertise of the company secretary professionalwho specializes in drafting the required policy and proceduredocuments customized to suit the organization, the “EmployeeHandbook” to suit the requirements of the organization for aspecific industry. The handbook could be structured to incorporateprecise detailed clauses on standard employment practicesincluding in relation to resignation / termination / leave policies,prohibition of harassment, employment benefits, discipline andgrievance, separation, confidential information, intellectualproperty rights, etc. amongst many other employment relatedmatters.

3.4. Advisory Services

- Render advice on all labour and employment mattersincluding but not limited to


- implications relating to non-adherence of the restrictiveprovisions in employment contracts (non-solicit and non-compete obligations)

- protection of confidential and proprietary information byimposing adequate and enforceable obligations on employees

- compensation payable for overtime hours

- mandatory holidays and leave applicable to employees

- procedure to be adopted for retrenching and terminatingemployees

- payment of statutory entitlements (provident fund, gratuity,etc.).

Most organizations would come into the purview of the followinglabour laws when one looks into the manufacturing sector. Thepracticing company secretary professionals need to familiarizethemselves on these labour law acts before venturing into full-fledged practice. The advise may be called for on the applicabilityof various acts which are enacted by central and stategovernments and the procedures to be followed and records tobe maintained and the various compliance to be ensured.Following are illustrative examples of few acts amongst manyother acts which are applicable, depending upon theorganization, industry in which the organization is doing abusiness. (naming only a few acts as an illustration)

– Employees' Provident Fund Act– Payment of Bonus Act– Payment of Gratuity Act– Contract Labour Regulations– State-specific Shops & Establishments enactments, etc.– Industrial Disputes Act– Trade Unions Act

At times, a doubt would also arise such us, in case ofcompensation payable to an employee, whether the EmployeeState Insurance Act would be applicable or Employees’Compensation Act would be applicable etc. In such a conflicting


situation, the company secretary professional with their expertknowledge could resolve and provide the right solution to theorganization depending upon the facts and circumstances of eachsuch case or situation.

It goes without saying that the company secretary professionalwould be able to advise the organizations to which they renderservice, on

- the applicability of numerous human relation laws- the obligations and compliances required and- the consequences of non-compliance- issues related to provident fund contributions- payment of gratuity- payment of bonus- superannuation/retirement benefits- termination and safety regulations- Discrimination and harassment issues, etc.

3.5. Employee’s compensation structuring and allied services

A key concern of structuring employee benefits and incentives isthe tax implications on both the employee and the employer.Having regard to taxation laws applicability, the companysecretary professional could advise the concerned organizationson the structuring of a tax-efficient compensation package.Before venturing into this task / assignment the companysecretary professional should get themselves augment / possessa buoyant human resources knowledge with properunderstanding so that advises on employee benefits and thestructuring of tax-efficient compensation packages could bedesigned in its correct perspective which is beneficial to bothi.e., the organization and also to its employees while designingthe package of compensation.

Additionally the company secretary professionals could alsoutilize their expertise in employee taxation and advise on varioustax related matters such as tax deduction at soure, exemptions,tax computations, advance tax payment etc. The advise andservices on taxation matter could further be extended to senior


level employees for negotiating the compensation structure. Evenfurther extension is possible for rendering service in getting thetax return filed, assisting in appeal matters, assisting them forscrutiny assessment etc.

One of the extended service on this area is providing the incometax return filing for the interested employees of the organizationwhere one renders service which of course would be a seasonalvolume based practice since the tax returns are required to befiled after the end of the financial year – by 31st of July everyyear. Since the return filing is now made in e-mode, the companysecretary professionals have to get familiarized with thetechnology and would possess requisite knowledge of thesoftware which are used for this purpose.

3.6. Employee Stock Options & Share Plans (ESOP and ESPS)

Employee Stock Option Plans (ESOP / ESPS) enable clients tostructure their ESOP Scheme in a manner beneficial to thecompany by optimizing performance of the employees. ESOPrelated services are rendered to private as well as publiccompanies in India. Since the company secretary professionalshave considerable understanding and experience inimplementing, preparing and finalizing all relevant documentationwith respect to ESOP, the following services could be rendered:-

- Preparing the plan

- ESOP Agreement- Grant Letter- Trust Deed- Relevant resolutions etc.

While providing service on this area and advising on structuringthe equity-based employee compensation plans to attract andretain best talent in the industry / organization, properassumption of stock options as part of Merger & Amalgamationtransaction could be designed, which of course is fairly verycomplex especially in view of the several guidelines/regulationswhich regulate the issue of stock options by the Companies Act,2013 coupled with market regulators act of Security ExchangeBoard of India’s regulations. Most of the foreign companies offer


the stock option to Indian employee and rendering service /extending practice in this area would be most challenging andrewarding. One has to have a thorough understanding of therelevant, current, updated regulations on this area.

3.7. Employment Termination/Downsizing

In our country the employment is not of hire and fire or it doesnot envisage an “at-will” employment relationship. Therefore,when it comes to termination of employment a strategic adviceis needed by the organizations before they effect for employmenttermination, downsizing and reduction in the labour force. Asevery one of us is aware, more and more organizations are tryingto be most efficient with minimum employees – most functionsare outsourced (example HR function, payroll and even the entireaccounting function etc.) in order to have greater efficiency at aminimum cost.

Here again a great opportunity for the company secretaryprofessional and they could advise on applicable labour lawsand employment laws, apart from guidance on regulatoryrequirements mandated for employers by understanding that theinterest of the employer should be well secured in the event oftermination of the employee's employment, for which purposeexpert professional could ensure that clauses on confidentiality,post-employment non-solicitation, data protection are adequatelydrafted and put in place to avoid any future litigations.

3.8. Transfer of Employment

In cases where there is a transfer of one undertaking to anotherby way of merger/ amalgamation / acquisition/takeover / saleof assets or otherwise, issues such as the transfer of employeesof the transferor to the transferee creates certain legalcomplications.

The company secretary professional could advise organizationinvolving these restructuring activities on the implications ofvarious labour law arising out of such transactions and assistthe organizations in structuring such transactions in a mannerso that the transfer of employment complies with all the requiredstatutory requirements – whether state regulations or centralregulations.


3.9. Labour and Compliance Audits / HR audit – legal

In order to ensure sound corporate governance, companysecretary professional could assist the companies in conductingdue diligence to ensure compliance with applicable labour laws.Due diligence is one of the core competence area of companysecretary professional accordingly, practicing companysecretaries could assist the companies in rectifying andcorrecting any lacunae which are highlighted upon conductingthe due diligence exercise.

Depending upon the need and requirement of an organization,the company secretary professionals could conduct periodic HRLaw audits for their clients and such HR audit typically couldencompasses appraisal of the level of compliance with

- applicable labour laws

- taxation laws and

- corporate laws relating to

• hiring/ firing of employees,

• terms of employment,

• employee compensation,

• stock option plans

• stock purchase option etc.

The HR audit could also include review of the employment-relateddocumentation and the policy and procedure manual of thecompany, especially with respect to such issues asconfidentiality, assignment of intellectual property and non-competition.

This exercise of providing HR audit by the company secretaryprofessional could lead to the various suggestions on measuresfor legal process re-engineering in order to achieve greaterefficiency, cost effective and minimum disputes leading tolitigations in future.

3.10. Employment Litigation

On this subject one would recall that while a few years back


employment litigation was not very prevalent in our country buttoday the scenario is undergoing a rapid change. The companysecretary professional who would like to excel in this area withtheir drafting skills could represent the organizations inemployment litigation cases. On this area the services whichcould be rendered would include -

- advising companies clients on the litigation strategy

- drafting and issuing legal notices

- responding to legal notices

- drafting claim documents and

- coordinating with local counsel to pursue litigation in theappropriate courts across India.

(Since the company secretary professional have the expertknowledge in corporate laws, adequate skills of drafting pleadingconveyance – this is one of the challenging area of practice)

3.11. Expatriate Taxation, Social Security & Immigration Issues

Here again if one is inclined to excel in representingorganization’s interest in employment related Indian immigrationmatters, one could undertake this assignment. The area ofpractice could be (on the immigration law assignments)

- Rendering advice to companies and employees who wish tocome to India on deputation, secondment or on employment,

- Advice on expatriate taxation etc.

- Thereafter if needed assisting them for routine tax filing andassisting in their assessments etc.

3.12. The gist of practice

Much would depend upon the need of the industry / organizationhaving regards to its type of business, segment where it isserving, combination of people working and many other factors.Company secretary professional who would like to excel in thearea of practice of labour laws have to understand the relevantlaws applicable to a particular type of organization and getfamiliarized and render service.


In the forthcoming chapters, few illustrated compliances arediscussed with specific reference to a particular labour act andas well with particular reference to the industry so that one couldget a fair idea of work, procedure, and documents involved whilerendering service and ensuring compliance.

***


4.1. Applicable laws and their compliance

Under section 205(1)(a) of the Companies Act, 2013, one of thefunctions is that the company secretary is required to report tothe board the compliance not only under the Companies Act butalso compliance relating to all other Acts that are applicable tothe company. This particular provision which has been includedfor the first time in the Companies Act is very significant andcalls for a larger responsibility on the part of the companysecretaries both in employment and in whole time practice.

Since provision relating to compliance of all applicable laws isalready there in the SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015, this mechanism of reviewingand ensuring compliance is expected to be in place in all thelisted companies. Now, the same provisions finding a place inthe Companies Act 2013, this would now be applicable not onlyto the listed companies but to all categories of companies whichare registered and incorporated under the Companies Act.

4.2. Starting point – identifying all applicable labour laws

First and fore most important thing as a starting point for anyorganization is to know as to what are the applicable labourlaws to a particular organization so that the organization couldget the compliance issues addressed and documents preparedand records kept. Though most common labour laws involvingcondition of employment, their wages remuneration, leave,working hours, work safety, retirement benefit laws, healthrelated laws are applicable, in some of the specialized industries,industry specific laws are also applicable. For example, if afactory is situated in a village /commune then the applicablelaw in that region / area would be of “Village and CommunePanchayats Act of 1973” and if the industry is producing plastic

Understanding the Applicable Law in an Organization

20


materials then the specific act of Recycles Plastics Manufactureand Usage Rules, 1999 would be applicable and similarlyBiomedical Waste (Management and Handling) Rules, 1988 forbiomedical producing units. In case of micro, small mediumenterprises (SME sector) the specific act of Micro, Small andMedium Enterprises Development Act, 2006 would be applicable.

Hence it is very important to identify at the first instance theapplicable labour laws and understand them fully as to therequirement, records maintenance, compliance, returns to befurnished, their periodicity, any specific inspection and sampletesting requirements and other related matters.

4.3. Next step – Preparation of check lists

As seen above, identifying the applicable labour laws itself is amammoth task and once identification is made, then comes thenext task of identifying the compliance required in respect ofeach laws.The compliance would have two parts(i) One relating to payment of fees, cess, charges and

(ii) The second submitting the periodical returns, such as monthly,quarterly, half yearly and in some cases compliance wouldbe event based.(example bonus returns as and when bonusis paid – employees joined and left under Factories Act asand when this happens etc.)

A comprehensive checklist needs to be prepared – preferablyspelling out the nature of compliance, due date on which thecompliance is required to be made and column for filling up thedate of actual compliance.

4.4. Technology could help

Now that technology is in place, the company secretaryprofessionals make use of the technology and prepare thecompliance checklist by using the of IT technology which hasgot a facility of sending out reminders just before the complianceis due by pop-up-window etc., advance reminding system couldalso be built up – action points arising on any matter could alsobe highlighted. Basically a corporate compliance system needsto be designed for ensuring total compliance.


4.5. Responsibility of Compliance

The practicing company secretary professionals being an expertin the relevant field of labour laws have got a greaterresponsibility to ensure that the compliance relating to all theapplicable laws to the organization is complied with.

The practicing company secretary could ensure that compliancerelating to all other laws except Companies Act and marketregulations are ensured /done by the respective departmentalheads responsible for the function and the practicing companysecretary could periodically run a check and monitor wherenecessary the compliance and report to the Managing Director /Chief Executive Officer / Board members accordingly as the casemay be. Here again, the practicing company secretary has toplay a very vital role since he has to report to the ManagingDirector / Board that all compliances required to be done areinfact done. Needless to mention, that the highest governingbody, i.e., the board of directors would place reliance on thereport provided by the practicing professional on compliancematter.

4.6. Greater Role for Practicing Company Secretaries in ensuringCompliance

The compliance aspect of any business exhibits that the companyis a compliant company and it also helps building up thecompany’s image and brand – the practicing company secretarywho is in the field of labour law practice has got a greater role toplay in ensuring compliance by taking the following steps:-

(a) Identification of all applicable labour laws in the firstinstance.

(b) Running the checks as to what is required to be compliedwith in respect of each law.

(c) Preparing the check list for compliances separately for

– Payment related (by and large handled by financefunction).

– Return related – routine and event based (this is handledby respective department).


(d) Having a monitoring checklist and regularly checking thatthe compliance is done in time.

(e) It would help indicating the due date – creating reminder –compliance done etc.

(f) Finally preparing report to board on compliance matter in anappropriate format.

(g) Submitting the report.

4.7. Non-Compliance

In spite of having a system in place, the possibility of non-compliance cannot be ruled out. Such non-compliance could occurdue to various reasons and in such a case, the practicing companysecretary has to initiate action to set right the non-complianceeither to late compliance, or any suitable action which also needsto form part of his reporting to board.

In every board meeting normally there will be an item calledreview of matter arising out of previous meetings or action takenreport by whatever name it is called. Any non-compliance isdefinitely required to be addressed by the board and necessaryaction taken in setting right the same. Obviously the board wouldonly provide decision and the company secretary, after havingthe decision from board has to ensure for necessaryimplementation as directed / guided by the board.

4.8. Conclusion

All along, the compliance of all applicable laws was mandatoryunder the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015 applicable to the listed companies. TheCompanies Act 2013, now categorically spells that it is one ofthe functions of the company secretary who is responsible forthe compliance of all other laws.

The responsibility and the role of company secretary standsenlarged to a greater extent. Since every company would like toensure compliance of all applicable laws trying to achieveexcellence in corporate governance thereby aiming to ensurethat all the stakeholders would feel proud to be associated withthe company, it is important for the company secretary to ensurethat he exercises his professional skill and diligence in ensuring


the total compliance by shouldering a higher responsibility asexpected and anticipated by the law makers.

In a smaller organization – it may be possible to have acompliance register designed and maintained for all thecompliance and periodic checking. However, the largeorganizations with multi location operations with many branches,the maintenance of physical register may not be possible andalso impracticable due to complexity of multiple laws requiringcompliance. In this case, the IT professional could be of greathelp and a system of compliance management in e-mode couldbe designed – checklist put in place – reminding mechanismbuilt in and finally monitoring.

In order to strengthen effective compliance management of allapplicable laws company secretary who is a corporateprofessional has a greater challenge and delightful opportunityto bring about a differentiating factor in achieving excellence incompliance management coupled with corporate governance indays to come.

In larger companies who have a full time company secretarymay also need at the initial stages the assistance and help of anoutside expert in identifying the applicability of various laws,designing the compliance management system in place andgetting the standard operating procedures (SOP) prepared.Thereafter the company may take the routine compliance forward.These companies may also need periodical updation, getting toknow the latest amendments etc. which could be rendered bythe practicing professional.

In smaller and medium companies, the practicing secretariescould take up the total responsibility of labour law complianceand offer single window operating system in providing the servicein this area.

***


5.1. Classification of labour laws

The labour laws could be classified with reference to the objectivefor which the enactment has taken place. Government is ratherinterested in ensuring that the object of the enactment isachieved rather than tracing the offender and punishing them.Most of the labour laws, by implementation process ensuredinspection process and prescribed inspection book. Wheneverthe inspector comes for inspection, after carrying out theinspection, the inspector makes in writing his observations, non-compliance and he directs that the compliance be furnished andhe also takes a committed date from the employer. Later theemployer is supposed to send a compliance report providing thestatus of the inspection report and action taken and compliancedone.

Let us briefly look into the classification of labour laws from theobjective point so that the compliance expected is betterunderstood.

5.2. Labour laws relating to wages of workmen

Payment of Wages Act, 1936, Minimum Wages Act, 1948,Payment of Bonus Act, 1965, Working Journalists (Fixation ofRates of Wages) Act, 1958 are some of the few acts amongstothers relating wages of workmen.

5.3. Labour laws relating to Working Hours, Conditions of Serviceand Employment

In our earlier chapter we discussed in detail the provisions ofthe Factories Act, 1948 which talked about many workingconditions including floor space, lighting, ventilation, drinkingwater facility, canteen and many other things.

Overview of Few (Selected) Labour Laws

25


There are specific industry related labour laws as listed belowamongst many other laws are there in order to take care of theworkmen employed in these specific industries.

(i) Plantation Labour Act, 1951

(ii) Mines Act, 1952.

(iii) Working Journalists and other Newspaper Employees’(Conditions of Service and Misc. Provisions) Act, 1955.

(iv) Merchant Shipping Act, 1958

(v) Motor Transport Workers Act, 1961

(vi) Beedi & Cigar Workers (Conditions of Employment) Act, 1966

(vii) Contract Labour (Regulation & Abolition) Act, 1970

(viii) Sales Promotion Employees Act, 1976

(ix) Inter-State Migrant Workmen (Regulation of Employment andConditions of Service) Act, 1979

(x) Dock Workers (Safety, Health & Welfare) Act, 1986

(xi) Building & Other Construction Workers (Regulation ofEmployment & Conditions of Service) Act, 1996

(xii) Building and Other Construction Workers Welfare Cess Act,1996

(xiii) Cine-Workers and Cinema Theatre Workers (Regulation ofEmployment) Act, 1981

(xiv) Dangerous Machines (Regulation) Act, 1983

(xv) Dock Workers (Regulation of Employment) Act, 1948

(xvi) Dock Workers (Regulation of Employment) (Inapplicability toMajor Ports) Act, 1997

(xvii) Employment of Manual Scavengers and Construction of DryLatrines(Prohibition) Act, 1993

(xviii) Industrial Employment (Standing Orders) Act, 1946

(xix) Mines and Mineral (Development and Regulation) Act, 1995(xx) Private Security Agencies (Regulation) Act, 2005.


5.4. Labour laws relating to Equality and Empowerment of Women

There are labour laws relating to equality and empowerment ofwomen such as Maternity Benefit Act, 1961 and EqualRemuneration Act, 1976.

5.5. Labour laws relating to Deprived and Disadvantaged Sectionsof the Society

There are also labour laws taking care of Deprived andDisadvantaged Sections of the Society such as Bonded LabourSystem (Abolition) Act, 1976, Child Labour (Prohibition & Regulation)Act, 1986 and Children (Pledging of Labour) Act, 1933 etc.

5.6. Labour laws relating to industrial relations

There are laws relating to industrial relations such as (i) TradeUnions Act, 1926, (ii) Industrial Employment Standing Order Act,1946 and (iii) Industrial Disputes Act, 1947.

5.7. Labour laws relating to social security

There are numerous labour laws relating to social security andthe government is much concerned on adherence of these lawsand any non-compliance leads for severe and stringent penaltyand punishment involving senior management and the boardmembers.

5.7.1 Health related

Employees’ State Insurance Act, 1948 has been enacted in orderto provide medical facilities to the workmen includinghospitalization, treatment of outpatient whenever the workmenfall sick and also medical benefits, maternity benefits,disablement benefits, dependent benefits and Funeral benefits.

5.7.2 Compensation related

In order to provide compensation and relief in case of accidentsinvolving partial, full disablement of workmen affecting hisearning capacity the Employees’ Compensation Act, 1923, FatalAccidents Act, 1855, Personal Injuries (Compensation Insurance)Act, 1963 and Personal Injuries (Emergency Provisions) Act, 1962are in place.


5.7.3 Welfare related

Many welfare regulations are in pace to take care of the welfareof the workmen in general and also industry specific such as (i)Beedi Workers Welfare Cess Act, 1976, (ii) Beedi Workers WelfareFund Act, 1976, (iii) Cine workers Welfare Cess Act, 198, (iv)Cine Workers Welfare Fund Act, 198, (v) Iron Ore Mines,Manganese Ore Mines and Chrome Ore Mines Labour WelfareCess Act, 1976, (vi) Iron Ore Mines, Manganese Ore Mines andChrome Ore Mines Labour Welfare Fund Act, 1976, (vii) Limestoneand Dolomite Mines Labour Welfare Fund Act, 1972 and (viii)Mica Mines Labour Welfare Fund Act, 1946 amongst many others.

5.7.4 Unorganized sector related

Similarly to take care of the unorganized sector workmen thereis a labour law titled as Unorganized Workers’ Social SecurityAct, 2008.

5.7.5 Employers’ liability related

Then to safeguard the interest of the workmen, there is an actspecially providing for the liability of employers’ titled asEmployers’ Liability Act, 1938.

5.7.6 Retirement benefit related

Employees’ Provident Fund & Miscellaneous Provisions Act, 1952and Payment of Gratuity Act, 1972 are in place to take care ofthe post retirement life of the workmen.

5.8. Few forms under the Labour laws (illustration)

To have a better understanding on the magnanimous amount ofcompliance involved in labour law areas, few forms which areprescribed under the act is given in the next few pages. Thiswould give a fair idea of the compliance requirement expectedby the regulator and the work involved in maintaining the recordsand submitting the various returns at the prescribed time.

Form Content / brief details

1 Application for permission to construct, extend or takein to use any building as a factory

1A Certificate of stability


1B Form of application for grant of certificate ofcompetency to a person under sub-rule (1) of rule 3 a

1C Form of application for grant of certificate ofcompetency to an institution under sub-rule (1) ofrule 3 a

1D Form of certificate of competency issued to a personor an institution in pursuance to rule 3a

-- Information required by the Director of Factories,Boilers, Industrial Safety and Health under rule 3 ofthe Karnataka Factories Rules, 1969 read with section6 (1) a, b & c of Factories Act, 1948

2 Application for registration and grant of license,renewal of licence and notice of occupation specifiedin Sections 6 & 7 (to be submitted in triplicate).

3 Registration and licence to work factory3A Notice of change of manager4 Certificate of fitness5 Humidity register6 Record of lime-washing, painting, etc.7 Report of examination of pressure vessel or plant8 Register of compensatory holidays9 Register of overtime and payment12 Notice of periods of work for child workers14 Register of leave with wages for the year . . . . .15 Leave book16 Health register17 Notice of dangerous occurrence which does not result

in death or bodily injury (see instructions on thereverse)

18 To be filled by Chief Inspector21 Half yearly return22 Muster roll cum register of wages/salary/subsistence

allowance

23 Register of accidents and dangerous occurrences


24 Special certificate of fitness25 Form of nomination26 Register of fees for the issue of certificates or for

medical examinations27 Certifying surgeons visit note28 Register of exemptions29 Particulars of rooms in the factory30 Certificate stating that workers trained to work in

machinery under Rule 58 of Factories Act, 194831 Form prescribed for report examination of hoist or

lift32 Form prescribed for report examination of cranes and

other lifting machines33 Register of tight fitting clothing34 Register of water sealed gas holders35 Report of examination of eater sealed gas holders37 Certificate of fitness38 Health register39 Record of eye examination40 Sickness, absenteeism register20 Combined annual return1 Register of fines deductions for damages or loss and

advancesCombined For obtaining required clearance from depts. /form authorities concerned

B First class boiler attendant certificate of competency

B Second class boiler attendant certificate ofcompetency

IV Annual Return

IV Annual Return under the Payment of Wages Act, 1936

Forms down loaded from the site

http://labour.kar.nic.in/fandb/f_feecharts.htm

http://labour.kar.nic.in/fandb/f_feecharts.htm


5.9. Scope of practice is enormous & challenging & as wellrewarding

As seen the volume of work involved and compliance required tobe done, especially when regulators both from Ministry ofCorporate Affairs under the Companies Act and as well as marketregulation from the point of SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015 looking forward centpercent compliance, there is a vast scope in labour laws relatedarea and even in other laws as well.

The reality is SME sector is not enough equipped to meet thechallenges where the practicing company secretary professionalcould render services and assist and ensure the requiredcompliance done.

In case of multinational and bigger organization, they needexpertise, they see experts from outside and many companiesare even outsourcing the HR function payroll function etc. Evenmany organizations from abroad are outsourcing the payrollfunction since India is economical from the cost perspective andalso having regards to the talent.

It is high time that company secretary professionals venture intothe newer avenues – especially one which is untapped – andmake use of the challenging opportunities and reap the harvest.

***


6.1. Importance of Factories Act, 1948

The Factories Act, 1948 is an important legislation and theultimate responsibility of a factory lies with an occupier. TheFactories Act is administered by the State Government and eachState Government has framed separate Factories Rules. Forexample, in Maharashtra, the Factories Rules, are 1963 prevalentwhile the Union Territory of Pondicherry; the Tamil Nadu FactoriesRules of 1950 read with The Pondicherry Industrial EstablishmentsAct, 1964.Under the Factories Act, 1948 read with the relevantFactories Rules, the following compliance will be applicable forfactories.(The Factory Rules of Maharashtra and Pondicherry arereferred while listing the requirements). In other States also, therequirement would be the same but the relevant sections andrules may be different.

The level of compliance may vary depending upon the nature ofbusiness of the factory, i.e., whether chemical factory, factoryproducing dangerous chemical products or hazardous chemicalproducts, etc.

6.2. The various compliance requirements

Under the Factories Act along there are numerous requirementsof compliance right from display of information on notice board,records maintenance, floor space, rest room requirements,nomination forms in case of unforeseen circumstances etc. Letus look into each one of them so that the compliancerequirement is fully understood.

6.3. Labour Laws Provision v. Board of Directors Responsibility

The provisions in the Factories Act, 1948 are made mainly toensure that the company ensures the Safety, Health and goodworking environment to its employees. To ensure the above, the

Factories Act, 1948 Compliance

32


Board of Directors needs to have policy guidelines and a goodreporting system with review so that the compliance is takencare of. The compliance is not only from the regulatory point ofview but also in the interest of its own employees with whomthe company is running its business. To start with, it is a goodidea to give a presentation to the board of directors and highlightthe importance.

6.4. Appointment of occupier (director) who would have theultimate control over the factory

The next step is to have a formal resolution by the board ofdirectors for the appointment of occupier / directors. The Boardof Directors should pass a resolution to appoint one of theDirectors - generally the Managing Director as the occupier ofthe factory, who would ensure the required compliance. If thecompany has more than one unit, then it can identify theDirector(s) under whose control the factory is functioning andcan appoint more than one occupier for different factories. TheOccupier, thus appointed would be responsible in respect of thefactory / factories for which he is responsible to ensurecompliance. The organization can have more than one occupierin case of multi-location units.

Obviously in small and medium (SME sector) companies thepracticing company secretaries have a great scope in assistingthe management towards ensuring the required proceduralrelated issues The draft resolution is given below by way ofillustration and the practicing personnel could draft suitableresolution and have it in place.

6.5. Draft Resolution for Appointment of (the Director's Name)as Occupier under the Factories Act, 1948

Considering the applicable provisions of the Factories Act,1948,it has been debated whether a Director alone has to be appointedas Occupier or it would also be any other person not necessarilya Director in charge of the factory engaged in the manufacturingoperations. It was pointed out that this controversy has now beenlaid at rest by a recent decision of the Supreme Court of India inthe case of J K Industries Limited v. The Chief Inspector of Factories& Boilers and others where it has been held that in the case of a


company which owns a factory, it is only one of the directors ofthe company who can be notified as the Occupier of the Factory‘who has ultimate control over the affairs of the factory’ for thepurposes of the Factories Act and the Company cannot nominateany employee to be the Occupier of the factory. However, ifcompany does not inform any such director, then proceedings ofprosecution and punishment can be initiated against any one ofthe directors. This is rule of ‘strict liability’.

Attention was invited to the provisions contained in Section 101of the Factories Act, 1948, in terms of which where the Occupieror Manager of a factory is charged with an offence punishableunder this Act, he shall be entitled, upon complaint duly madeby him and on giving to the prosecutor not less than three cleardays’ notice in writing of his intention so to do, to have anyother person, whom he charges as the actual offender, broughtbefore the Court at the time appointed for hearing the chargeand if, after commission of the offence has been proved, theOccupier or Manager of the Factory as the case may be, provesto the satisfaction of the Court.

I. That he had used due diligence to enforce execution of theabove Act; and

II. That the said other person is deemed to have committed theoffence in question without his knowledge, consent orconnivance.

III. That the Occupier or the Manager shall be discharged fromany liability under the Act in respect of such offence. TheBoard was advised that, in the circumstances, even if aDirector was so appointed as the Occupier of a factory, hecould have recourse to the remedy provided for in theaforesaid Section 101 of the Factories Act, 1948. In fact thereis an express reference to such recourse even in the aforesaidSupreme Court Judgment referred to above.

The Board decided to appoint............. (The Director’s name anddesignation) as Occupier in respect of the Company's factoriesat (name of the factory / factories) and passed the followingResolutions:


RESOLUTION FOR THEAPPOINTMENT OF

OCCUPIER (DIRECTOR)-------------------------------------

RESOLVED

that …………… (the Director's name and designation)……………. beand is hereby appointed Occupier of the factory / factories ofthe Company at ………………… (location / locations).

6.6. Appointment of the manager who would be responsible forday-to-day affairs of the factory

The Managing Director being the Chief Executive Officer of thecompany and the whole time Director(s) being in-charge of thetotal operation of the unit, it is always not possible for them tolook after the day to day affairs of the factory. The law makersalso don't expect that the board members should be involved onday-to-day affairs of the factory and look into the routine matters.However, the ultimate responsibility lies with the director, whois appointed as the occupier of the factory.

In practice, since the factory's operations are run by the expertsin the field such as works manager, production manager, cellmanager the day to day operations of the factory and the routinematters relating to safety measures, health relating to factoryworkmen, maintenance of plan and system of work in thefactories, risk related matters in connection with use, handling,storage and transportation of materials, working environmentand other safety related measure are looked after by therespective factory manager /works manager / productionmanager/ cell manager etc. In the light of the above, the Boardof Directors also recognizes the fact that the day to dayresponsibility of running the factory rests with the factorymanager and accordingly, the board passes a resolution to thateffect. The Board of Directors should resolve for the appointmentof the manager for day-to-day affairs by passing a suitableresolution, a draft of which is provided below.

This resolution could be in continuation of the earlier resolutionpassed in respect of the appointment of occupier of factory,appointing one of the directors as an occupier.


Further resolution spelling out theResponsibility of the manager

who is in charge of the day-to-day control of the factory

RESOLVED

That, it is hereby understood that notwithstanding the aforesaidnomination of (the name of the Director and his designation) ofthe Company, as the Occupier, he would not actually be in theimmediate control over the affairs of the said Factories as infact he could not be considering the circumstances and the natureof his duties vis-à-vis the Company and it be hereby reiteratedthat (the name of the Manager and his designation) as specifiedabove, who is in immediate charge of the Factory / Factories isvested with immediate control over the affairs thereof and heshall be solely liable, answerable and responsible for the fulland timely observance of and compliance with all the provisionsand requirements of the Factories Act and Rules made thereunder and in so far and to the extent they are to be observed andcomplied with by them by virtue of this Resolution and theconsequential authority so vested in him.

6.7. Answerability for offences

There could be minor non-compliances, certain rectifications,calling for certain action upon the visit of the factory Inspectoretc., in connection with the Factories Act and regulations. Sincemost of the routine matters need to be attended then and there,they need not, come to the occupier on routine basis and themanager in-charge could take suitable action and answer thesame including the offences if any arising on day to dayoperations. It is better, that the board makes this point clear andputs it in the form of a resolution. Many companies generallytake a resolution to this effect as foreign nationals manage manyof the multinational companies. Given below is the suggesteddraft of the resolution, which could be taken by the board ofdirectors, in continuation of the earlier resolution.Further resolution stating that the manager would be answerablefor the offences if any immediately after a charge is made

RESOLVED

That, in the event of the said..............(name of the Director and


his designation) being charged with an offence punishable underthe Factories Act or the Rules made there under,.............(the nameof the Manager and his designation) of the Company as specifiedabove, shall appear before the Court at the hearing and confirmthat notwithstanding the aforesaid formal nomination of (thename of the Director and his designation) he is in immediatecontrol over the affairs of the said factory / factories andanswerable for compliance of all provisions, rules and regulationsapplicable under the Factories Act and the Rules there under.

6.8. Information to inspector of factories

The resolutions passed by the board for the appointment ofoccupier, appointment of manager, making the managerresponsible for day-to-day operations of the factory etc. need tobe communicated to the Inspector of Factories. The board maypass the following resolution authorizing the company secretaryto inform the same. (Many States and Union Territories havespecified the form in which the details are required to be filledup and submitted to the inspector of factories along with thecertified copy of resolution and this may have been checked upwhile intimating the same to the relevant inspectorate offactories.

6.9. Resolution authorizing the secretary or other authorizedperson to advise the inspector of factories about theappointment

RESOLVED

That the Company Secretary (or other authorized person) of theCompany be and is hereby authorized to advise the Inspector ofFactories of the appointment of................... (name of the Directorand his designation) as occupier of the factoriesat................(location / locations).

6.10. The compliance issues

Having the occupier in place, manager appointed for day to daymanagement of factories, now let us look into the compliancesin terms of records, maintenance and up keeping of otherrequirements one by one.


6.11. Display on the notice board

Prominent display of the following information is required in thefactory premises at or near the main entrance of theestablishment:

(a) Form No.11 showing clearly for every day the period of workfor adult workers pursuant to section 6(1).

(b) Abstract of the Act and Rules made thereunder alongwithname and address of the Inspector and the Certifying Surgeonas required under section 108.

(c) Form No. 7 showing the list of National and Festival Holidaysduly approved by the Inspector under the PondicherryIndustrial and Establishment Act (similar Acts would be therefor other states).

(d) Under the Payment of Gratuity Rules {Rule 4(1)} notice inEnglish and in vernacular language showing in bold letters,the name of the officer with designation, authorized by theemployer to receive on his behalf the notice under the Act orthe Rules.

(e) An abstract of the Payment of Gratuity Act, 1972, and Rulesin Form U, in English and vernacular language.

The practicing professional could advise suitably on therequirement of display and even they could help and assist theorganization in getting abstracts translated in vernacularlanguage since it is the requirement that the display of abstractbe in English and as well in vernacular language.

6.12. Provisions relating to various health and welfare measure

The practicing professional could advise the various requirementswith reference to health and welfare related provisions so thatthe compliance is ensured by the organization. Following are tobe ensured:(a) Cleanliness of walls and ceilings;(b) Standard Lighting;(c) Provision for drinking water;

(d) Proper toilets with sign boards;


(e) Proper drainage system/maintenance of drains;

(f) Periodical White washing, colour washing of toilets;

(g) Employment of sweepers;

(h) Provision of Spittoons;

(i) Disclosure of information to workers (hazardous process etc.);

(j) Disposal of industrial wastes;

(k) Provision of ambulance vans in case of hazardous process;

(l) Washing facilities;

(m) First aid appliances;

(n) Notice regarding first aid ;

(o) Ambulance room or dispensary room;

(p) Canteen facility is another requirement but the same willnot be applicable where less than 250 workers are employed;

(q) Register of compensatory holidays;

(r) Overtime register; and

(s) Register showing white washing, lime washing done etc. arealso required to be maintained.

6.13. Floor space / rest room requirements

The practicing company secretary professional should bring tothe notice of the occupier the provisions of section 16(2) andrule 120(1) which require provision of every workroom of factoryin existence on the date of commencement of this act at least(9.2 cubic metres) and of a factory built after the commencementof this act at least (4.2 cubic metres) of space for every workeremployed.

Adequacy and suitable shelters or rest rooms are required to beprovided to the workmen. Adequate suitable lunch rooms arerequired to be provided.

6.14. Nomination form

Under the Payment of Gratuity Act, 1972, duplicate copy of the


nomination in prescribed Form “F” duly attested by the employer(as a token of recording of the nomination) is required to bereturned to the employee. In addition to the above, there mayother requirements under the various labour laws read with rulesof the local state Government.

The practicing professional could ensure that the nomination isin place, the copy duly attested by employer is given to therespective employees.

6.15. Mode of form of intimation before occupying or use of thePremises

The Occupier shall, at least fifteen days before he begins tooccupy or use any premises as a factory send to the ChiefInspector a written notice containing:

(a) Name and situation of the factory.(b) Name and address of the occupier.(c) Name and address of the owner of the premises or building

(including the precincts thereof) referred to in section 93.(d) Address to which communication relating to the factory may

be sent.(e) Nature of manufacturing process:

(i) Carried on in the factory during the last twelve months inthe case of factories in existence.

(ii) On the date of commencement of this Act.

(iii) To be carried on in the factory during the next twelvemonths in the case of all factories.

(f) Total rated horsepower installed or to be installed in thefactory which shall not include the rated horsepower of anyseparate standby plant.

(g) Name of the manager of the factory for the purpose of thisAct.

(h) Number of workers likely to be employed in the factory.

(i) Number of workers employed during the last twelve monthsin the case of a factory in existence on the date of thecommencement of this Act.


(j) Such other particulars as may be prescribed.

6.16. Ensuring Compliance - system to be in place

Once the intimation is given, the actual compliance part isrequired to be ensured and also continuous compliance isrequired to be ensured thereafter. The Director Occupier and theManager have to evolve a better system to ensure the safety,health and environment of the workmen employed in the factory.

6.17. Declaration from the Manager

The Director Occupier may like to take a declaration from theManager stating that the Manager would ensure the statutorycompliance while running the day-to-day factory and in turn theManager has to ensure the same. This declaration is taken toshow that the manager who is appointed for running the day today operation is actually a capable executive, to whom theresponsibility is entrusted and not a dummy person for recordpurposes. In case of any compliance issue, the authorities maylike to rely on this document and the operations were really runby an able and efficient executive of the company.

To make it clean and transparent, the Manager may give adeclaration to the Director-Occupier as per the following formatand he shall ensure the compliance on an ongoing basis. Thesuggested draft declaration form is given below: -

6.18. Suggested draft declaration by the manager

I son of......................., residing at .....................is working for gainswith (Company's name) thereafter-called Company, as(designation) at its factory located at (place) (responsible forthe operations of the factory / factories at (location /locations))effective from...................

I hereby confirm and declare as under: -

1. That I have the expertise to run similar factories and amfully aware of and conversant with the requirements of theFactories Act and the Rules made there under for the runningof factories and that I am aware of and conversant with thevarious health, safety and welfare regulations and methodsto be followed in such factories.


2. That keeping in view my ability, I have been sufficientlyempowered by the Board of Directors of the Company in themeeting of the Board held on (date of board meeting) andthat I have been furnished a certified true copy of theresolution passed in the said meeting and that I have beeninter-alia entrusted independent responsibility for effectiverunning and monitoring of the said factory on day to daybasis including compliance of the various requirements ofthe Factories Act and the Rules made there under.

3. That I shall at all times ensure and keep ensured that all theprovisions of the Factories Act and the rules made there underare complied with and that I shall every month give acertificate to (name of the Director - Occupier) and thenominee Occupier that there has been due discharge ofresponsibility and compliance of the provisions of theFactories Act and the Rules made there under and that thiscertificate will be effective and binding on me.

4. That in the event,............................(name & designation ofthe Director-occupier) and nominee Occupier of the factoryis charged with an offence punishable under the FactoriesAct and the Rules made there under, I, as the immediateperson responsible for complying with the same hold myselfresponsible and shall on being called upon, on a charge beingframed under the said Act and the Rules made there underagainst him, make myself available before the concernedCourt (whether in employment with (name of the company)or not) at the time appointed for hearing the charge, provided,the charge relates to the period of my employment.

5. That I shall at all times exercise due diligence in complyingwith the requirements of the said Act and the Rules madethere under and that I shall be answerable in terms of Section101 of the said Act notwithstanding the nomination of (nameof the Director Occupier) as Occupier under Section 2(n) ofthe said Act.

6. That due to my proximity with the operation of the said factoryand being responsible for day to day operations, I shall beliable for non compliance of the provisions of the FactoriesAct and Rules made there under and accordingly hold myselfliable for contravention, if any.


7. This declaration is given by the undersigned knowing wellthat (name of the Director occupier), the nominee Occupierand/or the Board of the Company shall on its faith andstrength place his/its reliance that all the provisions of theFactories Act and Rules made there under have been compliedwith.

Place:

Date: ...........................................................

Signature of the Manager

6.19. Monthly Compliance Certificate from the Manager to theOccupier

The Manager, who is in-charge of day to day operation couldissue a certificate on a monthly basis, every month, in thebeginning of the month, for the earlier month, a compliancecertificate to the Director- Occupier as per the suggested formatis given below. This would ensure that the factory compliance isin place, if there is non-compliance; necessary rectification actioncould be taken. On the basis of this certificate, the director-occupier could issue his compliance certificate to the boardmembers.

6.20. Suggested draft monthly compliance certificate

(Draft certificate in ideal circumstances)

Addressed to: -

Director-Occupier of the Factory Place where he is located

Subject : Compliance Certificate for the month of ............Regarding : Factories Act and the Rules made thereunder inrespect of (location/locations) Works.

Certified that there has been due compliance of the FactoriesAct, 1948 and the Rules made there under during the monthof.............................and in particular, I confirm, declare and certifyas under: -

That health, safety and welfare of all the workers while theywere at work has been adequately taken care of.

That the existing provisions and maintenance of plant and


systems of work in the factory are safe and without risk of healthand wherever and whenever required, corrective actions are beingtaken.

That suitable arrangements exist in the factories for ensuringsafety and absence of risks to health in connection with the use,handling, storage and transport of articles and substances. Thatthe workers are continuously kept informed, instructed, trainingand supervision as are necessary given to them to ensure thehealth and safety of all workers at work.

That the maintenance of all places of work in the factoriesincluding maintenance of such means of access to and egressfrom, such places are regularly carried out and work place istotally safe and without risk to health.

That provision, maintenance or monitoring of such workingenvironment in the factories for the workers are safe, without risksto health and adequate as regards facilities and arrangement for.

That there exists a written statement of the general policysuitably modified from time to time with respect to the healthand safety of the workers at work and the organization andarrangements for the time being in force for carrying out thatpolicy. That the said statement is put in Notice Boards at differentlocations and it is ensured that it is brought to the knowledge ofall the workers.

That periodical safety drills are undertaken by involving all theworkers and the workers are trained on various aspects relatingto safety and health.

This declaration is given by the undersigned knowing well thatyou as the Occupier will on its faith and strength place reliancethat all the provisions of the Factories Act and Rules made thereunder have been complied with.

Place: Signature of the Manager

Date: ---------------------------------

6.21. Intimation regarding Proposed Action on the Compliance

The Manager may add the necessary action points under therelevant paragraph spelling out the proposed action which are


planned in case part compliance/non-compliance. For example:Under para 1 of the certificate the Manager may like to informthe Director-Occupier that the workers are being educated aboutthe safety requirement by adding the following remarks.

The workers are being educated about the requirement of safetyand necessary precautions to be taken on the shop floor asrequired. Similarly, the Manager may like to inform the Director-Occupier about the planned medical room facilities to be providedon an ongoing basis by adding the following remarks.

The Improvements to the medical room facilities have be includedin the list of projects planned and expect initiation work in(indicate the month here), completion by (indicate the month).

In the last para, the Manager may like to inform about the safetydrills and training by adding the suitable remarks, which couldbe:

At..........(Location), the safety drills and formal safety trainingfor employees would be commenced after appointment of SafetyOfficer, which is expected to be completed by.................(indicatethe month). Currently periodical safety drills are undertaken forthe security personnel.

6.22. Review of the compliance report and initiating requiredaction

The Occupier Director can review the action plans on a month tomonth basis on an ongoing basis and ensure that the complianceis strictly made as required under the Factories Act, 1948, notonly to satisfy the regulatory authorities but also environmentto safe guard the interest of his own workmen in the factory inrespect of their safety, health, etc.

6.23. Compliance Report to the Board

Whenever the Board meets periodically, the concerned OccupierDirector has to place the compliance certificate under theFactories Act, 1948 so that the Board is kept informed about therequired compliance in each of its Board meeting. The Boardmembers could discuss the various action points so that themembers can add value to it for the improvement over theexisting compliance, after their detailed deliberations,


discussions and review. The draft compliance report (on idealcircumstances) by the Director-Occupier is given below.

6.24. Certificate of compliance

BOARD OF DIRECTORS

Subject: Compliance Certificate up to the month of (monthhere) Regarding Factories Act and the Rules made there under

The Board had nominated me as Occupier under Section 2 (n) ofthe Factories Act, 1948 in the meeting of the Board held on (date).

Pursuant to the resolution passed in the said meeting, all theManagers who have been vested with the powers and immediatecontrol of the respective factories have given certificatesindividually confirming due compliance of the provisions of theFactories Act and the Rules made there under. Based on thecompliance certificates received from them and relying them tobe true in bona fide good faith. I hereby certify that there hasbeen due compliance of all the provisions of the Factories Act,1948 and the Rules made there under upto the month of (month)in particular I confirm, declare and certify as under:

a. That health, safety and welfare of all the workers while theywere at work has been adequately taken care of.

b. That the existing provisions and maintenance of plant andsystems of work in the factory are safe and without risk ofhealth and wherever and whenever required, correctiveactions are being taken.

c. That the workers are continuously kept informed, instructed,trained and supervised as are necessary given to them toensure the health and safety of all workers at work.

d. That the maintenance of all places of work in the factoriesincluding maintenance of such means of access to and egressfrom such places are regularly carried out and workplace istotally safe and without risk to health.

e. That provision, maintenance or monitoring of such workingenvironment in the factories for the workers are safe, withoutrisks to health and adequate as regards facilities andarrangement for their welfare at work;


f. That there exists a written statement of the general policysuitably modified from time to time with respect to the healthand safety of the workers at work and the organization andarrangements for the time being in force for carrying outthat policy. That the said statement is put in Notice Boardsat different locations and it is ensured that it is brought tothe knowledge of all the workers.

g. That periodical safety drills are undertaken by involving allthe workers and the workers are trained on various aspectsrelating to safety and health.

h. That I have exercised due care to the best of my abilitynotwithstanding the fact that I am not involved in day to dayaffairs of the factories due to my pre-occupation with mymain responsibilities elsewhere as Managing Director/Occupier to enforce execution of the provisions of theFactories Act and the Rules framed there under and that Ihave not given any consent or acted in connivance with thesaid Managers whereby offence could have been committedwith my knowledge under the said Act and Rules in anymanner.

i. This declaration is given by the undersigned knowing wellthat the Board will on its faith and strength place reliancethat all the provisions of the Factories Act and Rules madethere under have been complied with.

For (the Company's name)Place: Signature of the Occupier/DirectorDate: with Name and Designation.

6.25. Action points arising on the compliance certificate

Based on the certificate issued by the Manager(s) the actionpoints could also be indicated by the Occupier Director asinformed / intimated by the Manager (s) to enable the Board tohave detailed discussions on the action points arising out ofthis.

The above procedure, if strictly followed, the compliance couldbe monitored to a greater and fuller extent and noncompliancecould be avoided. It is not the question of only introducing the


procedure but strictly adhering to it with regular review andfollow up along with the action plan from time to time, whichwould ensure the compliance. The compliance should not onlybe for the purpose of meeting the requirement of the law andlaw enforcement agencies but also to ensure the adherence ofthe compliance in its true spirit so that the health, safety andenvironment problems are taken care of, for the workmen throughwhom the company works with and achieves its targets.

6.26. Compliance Certificate taken on Record by Board

The Board may record the compliance certificate in its minutebook along with the action points agreed upon which could formpart of review in their next meeting while discussing the "matterarising out of previous meetings" / " Meeting Action Points" / "Action Taken Report" – whatever be the name on the actionpoints. This would help the board to review the action periodicallyand ensure that the required compliance is done and all pendingactions are attended to. Compliance certificate placed in eachboard meeting would also give the comfort level on thecompliance to the board and the board members can be restassured that the compliance are in place. Since non-executivedirectors are not involved on day-to-day management of thecompany, the compliance certificate would give a greater comfortlevel to them since the directors are now made responsible forthe compliance under Factories Act, 1948.

6.27. Compliance other than the Factories act, 1948

Apart from the compliances under Factories Act, there are othercompliance under various laws such as the Income Tax, otherLabour Legislations, ESIC, FERA/FEMA etc. for which a separatecompliance certificate may be issued by the Managing Directorstating that the required compliance are met with. Needless tomention that the required compliance in terms of returns,payment, submission of documents are to be complied with bythe respective executives who are in-charge of the respectivefunction, preferably with a help of a check list of compliance.

In the forthcoming chapters we shall also see the other majorlaws where practicing company secretary could extend theirservices to organizations.


6.28. Role of practicing company secretary (especially in SMEsector)

The Company Secretary in whole-time employment inmultinational and larger companies can play a major role inassisting the Managing Director and the Board in ensuring thecompliance. One of the job objectives of the whole time CompanySecretary could be to “Monitor and report on the statutorycompliance of all the company's operations through the controlof a compliance certificate process”. The Company Secretarywhile preparing the agenda should ensure that an agenda itemalways appears in the Board meeting titled "matters arising outof previous meetings" so that the points raised and the actionplan agreed upon is discussed at this meeting and a thoroughreview is taken. He can make a note of various action pointsarising out of the meeting and assist the Managing Director andthe other Executives of the Company for necessary action andits implementation.The question would arise in case of small medium enterprisesand also in those companies who does not have a full timecompany secretary and also in some of bigger companies wherethey need expertise in the labour law field. Here comes theopportunity for the practicing company secretary professionalswho can always keep Executives of the Company updated aboutlatest amendments and assist them to have a continuousmonitoring and follow up action. At the time of Board meeting,the practicing company secretary professional could review thevarious aspects relating to labour law compliance with theManaging Director and help and assist in getting a summarynote for the Board members prepared so that the compliance isbetter attended to. For this purpose, the practicing CompanySecretary professional should equip himself properly to givecorrect legal advice on all relevant aspects of the company'soperations.Authorization of Practicing Company Secretaries for conductingThird Party Certification Audits of compliance of various labourlaws:

The labour Department, Government of Haryana vide itsNotification No. 11/38/2016-4 Lab dated 10th August, 2016


formulated Third Party Certification/ Audit Scheme for thefactories, shops and commercial establishments in the State toliberalize the enforcement of labour laws in pursuance ofimplementation of the “Business Reform Action Plan 2016- Easeof Doing Business” as formulated by the department of IndustrialPolicy and Promotion, Ministry of Commerce and Industries,Government of India.

In this Third Party Certification / Audit Scheme, “ComplianceAuditor” would be a qualified Practicing Company Secretary andwho has not been an employee or on the regular pay role of theestablishment or has not been a consultant of the company forthe last three years. The units which submit Third PartyCertification regularly on annual basis shall not be inspectedthrough the random list of inspections.

6.29. The actual work /job involved for the practicing companysecretary professional in relation to Factories Act along couldbe summarizes as below:

As said elsewhere, bigger companies and multinationalcompanies would be able to manage the compliance requirementsin their organizations while the practice would be available forSME sector. Even many of bigger organizations are also interestedin outsourcing the function or taking the assistance of outsideexpert in which case, the practice is open for company secretaryprofessional. Let us briefly list down the actual work involved.

(i) The starting point could be making a brief presentation tothe board members highlighting the requirements ofcompliance, action required to be taken by the organization.

(ii) Drafting of required resolutions for the following:

a. Appointment of occupier / director for factories managedby each of the director.

b. Appointment of manager who looks after the day to dayaffairs of the factory.

c. Declaration letter of manager subsequent to hisappointment.

d. Monthly format of compliance certificate to be issued bythe manager to the managing director/director.


e. For each board meeting the required compliancecertificate to be placed by the occupier / director.

Reviewing the compliance certificate and any action arising outof compliance matter / non-compliance, the practicingprofessional could assist them to address.

Ensuring the periodical compliance and either maintaining thenecessary records and assisting the organization for itsmaintenance and review of the same on ongoing basis.

Besides there are certain returns to be submitted which isdiscussed below and the company secretary professional couldhelp in getting it submitted for the SME sector.

Whenever the factory inspector visits and carryout the inspection,the practicing professional could assist and provide necessaryclarification during the inspection.

Normally the inspector writes on the inspection book, any actionpoint arising during his inspection and here again the practicingprofessional could ensure that those points raised at theinspection by the inspector is set right and complied with.

6.30. Prescribed returns and registers under Factories Act

The following are the various returns and registers which areprescribed under the Factories Act and the practicing professionalcould ensure these are all done from time to time as prescribed.

Sr. No. Brief details Form No. Compliance requirements

1 Application for permission 1 Before commencement ofto construct, extend or take construction or extensioninto use any building as afactory

2 Application for Registration 2 After commencement ofand Grant of Amendment factoryof Licence And notice ofoccupation

3 Certificate of Stability 3 Once in five years

4 Licence to work a factory 4 Obtained first time andrenewed each year


5 Certificate of fitness for 5 Every yearyoung person

6 Humidity Register 6 Record of reading ofHygrometer on daily basisat 9 am 2.pm and 5.30 pm

7 Record of Lime washing, 7 On an ongoing basispainting, etc.

8 Report of examination or 8 Certificate to be obtainedtest of pressure vessels or from competent personplant each year

9 Register of Compensatory 9 On an ongoing basisHolidays

10 Overtime, register for 10 On an ongoing basisexempted workers

11 Notice of periods of work 11 As per weekly shift changefor adult workers

12 Register of adult workers 12 On an ongoing basis13 Notice of periods of work 13 As per weekly shift change

for child workers14 Register of child Workers 14 On an ongoing basis14 Register of leave with wages 15 On an ongoing basis15 Leave Book 16 On an ongoing basis16 Health Register 17 On an ongoing basis17 Report of accident inclu- 18 As and when occurred

ding dangerous occurrenceresulting in death or bodilyinjury

18 Report of dangerous occu- 18A As and when occurredrrence which does not resultin bodily injury

19 Notice of poisoning or disease 19 As and when occurred

20 ABSTRACT of the FactoriesAct, 1948 and the concerned 20 Permanent displaystate government rules,(year)

21 Annual Return 21 31st December each year22 Half Yearly Return 22 30th June each year23 Notice of Change of Manager 23 when change take place24 Muster Roll 25 On an ongoing basis25 Register of accidents, major 26 As and when occurred

accidents dangerous occu-rrences


26 Certificate of fitness for 27 On an ongoing basisemployment in hazardousprocesses / dangerousoperations

27 Attendance Card 28 On an ongoing basis28 Certificate of fitness for 29 Every year

employment in hazardousprocesses and operations

29 Register containing particulars 31 On an ongoing basisof monitoring of workingenvironment required

30 Details of Closure 32 As and when take place31 Prescribed under Rule 132 3332 Register of workers employed 34 On an ongoing basis

for work on or near movingmachine

33 Particulars of rooms in the 35 On an ongoing basisfactory

34 Nomination for payment of 36 At the time of workmenwages in lieu of the quantum joiningof leave to which he wasentitled in the event of deathof worker.

35 Register of examination of 37gasholders

36 Report of examination of 38water-sealed gasholder

37 Certificate of fitness for 39dangerous operations

38 Test Report Dust Extraction 40system

39 Report of examination of 41hoists and lift

40 Certificate of Fitness 4241 Prescribed under sub-rule (4) 43

of rules 81G

The above table itself is self-explanatory; the amount ofexpectation from the regulator under one single Factories Act1948 specifying so many registers and records and it is quite achallenging opportunity for practicing professional.


Factories Act Compliance ChecklistsThe Factories Act, 1948

Sections/ Brief details of Sections/Rules Document ComplianceRules reference status

ObjectivesTo ensure adequate safety measuresand to promote the health andwelfare of the workers employed infactories

Sec 6 Approval, Licensing & Registration Approval of site,Rule 3 to of Factories construction or11 Prior permission of the Chief extension of a

Inspector shall be obtained for the Factoryusage of any site for the locationof a factory or construction of a Form 1building in factory or installation Application toof Plant & Machinery in the factory. construct factoryPlease refer the stated rules for (In triplicate)information on further provisionson registration, renewal, transfer of Registration andlicense etc. grant of license- if not received any reply it will be shall be issued indeemed to be granted within 3 Form No 3 as permonths from the date of application rule 4(4)

Application forrenewal of license inForm No. 2 (Intriplicate)Renewal of Licenseregistered in FormNo.3

Sec 7 Notice by Occupier Notice of Occupa-tion in Form-2

Rule 12 Occupier to send a written noticecontaining the prescribedparticulars to the Chief Inspector atleast 15 days before an occupierbegins to occupy or use a premisesas a factory and at least 30 daysbefore the date of resumption ofwork in case of seasonal factoriesi.e. factories working less than 180working days in a year.


Rule 12A New factory manager is appointed, Notice of change ofthe occupier shall send to the Manager shall beinspector a written notice and to in Form 3Athe chief inspector a copy thereofwithin 7 days from the date onwhich such person takes over charge

Sec 10 Certifying surgeons

-certifying surgeon with approval ofstate government can appointqualified medical practitioner toexamine the workers of the factory

Measures to be taken by factoriesfor Health, Safety and welfare ofworkers

I. Health

Cleanliness

Sec 11(1) The factory premises shall be kept Form 7 – Record ofclean at all times and provision for whitewashingeffective drainage system, shall bearranged.

Regarding painting the followingprovisions shall be complied:

i) Floor of every workroom to becleaned at least once in everyweek by washing usingdisinfectant wherevernecessary

ii) Repainting or re-varnishing ofsurface otherwise thanwashable water paint shall becarried out once in every 5years and where it is waspainted with washable waterpaint with one coat of suchpaint once in a period of 3 years,and washed in every six months

ii i) White washing or colourwashing to be carried out atleast once in 14 months



iv) Cleaning or painted orvarnished surfaces to be carriedout once in every 14 months bymeans of prescribed method.

v) Metallic or wooden doors,windows and other frameworkshall be painted/ varnishedonce in every 5 years.

-The dates on which such processesare carried out shall be entered inregisters kept for the purpose

Sec 12 Disposal of waste and effluents

Rule 17 Arrangements in line with rules laid The arrangementsdown by state government, shall be shall be in accor-made by Occupier for the treat- dance with thosement of wastes and effluents to prescribed by therender them innocuous. relevant Water and

Air Pollution Boardsappointed under theWater(Preventionand Control ofPollution Act), 1974and Air(Preventionand Control OfPollution) Act, 1981

Sec 13 Ventilation and temperatureRule 17A,18-28 Reasonable ventilation systems

shall be provided to secure healthyworking conditions.

Where the nature of work carriedon generates excessively hightemperature, following measuresshall be adopted:- Separating such process from theworkroom,- Insulating the hot parts,

Sec 14 Dust and fume

Exhaust appliances should be fitted,



as far as possible, to the point oforigin of dust, fumes or otherimpurities.

Sec15 Artificial Humidification The temperatureRule 18-28 Making standards for humidification shall be registered

and methods for ensuring humidity in Humidity registerof the air, and to secure adequate in prescribed Formventilation and cooling of the air in No. 6the work rooms.

-if humidity of the air is artificiallyincreased, the water used for thatpurpose shall be taken from publicsupply or other source of drinkingwater effectively purified before use

-if Inspector feels that water isn’tpurified, he will give an order to themanager in writing specifying themeasures to be carried out beforethe specified date

Sec 16 (1,2) Overcrowding

Overcrowding shall be restricted byproviding a minimum working spaceof 14.2 cu.m. per worker at thefactory, 9.9 cu.m. of each workplaceshall be displayed

-no account shall be taken of anyspace which is more than 4.2 metersabove the level of the floor of the room

-the chief inspector in writing mayexempt such conditions if it isunnecessary in the interest of thehealth of the workers employedtherein

Sec 16(3) A notice specifying the maximumnumber of workers that can beemployed in the work room shall bedisplayed as directed by the ChiefInspector by order in writing

Sec 16(4) The Chief Inspector may exempt thissection by passing an order



Sec 17 LightingRule-29-33 Sufficient and suitable lighting,

natural or artificial or both, shallbe provided at all working places inthe factory. Further glare due toexcessive lights or from reflectionand shadows causing eye strainsshall be prevented.

Rule 29 Apply to factory indulged inmanufacturing process for morethan 48 hours a week

-if well-constructed the Chiefinspector shall give opinion for non-requirement

Rule 30 Lighting of interior parts

-general illumination over thoseinterior parts shall be not less than65 lux measured in the horizontalplane at a level of 91.4c.m abovethe floor

-if mounting height of light sourceexceeds 7.6 meters measured fromthe floor or structure of room,general illumination at the saidlevel shall not be less than 22 luxand where work is actually doneshall be not be less than 65 lux

-illumination over all other partsover which the person employedpass shall be not less than 5.5luxat floor level

Rule 31 Prevention of glare

-artificial light in the factory is lessthan 4.9 meters above the floor level,no part of the light source havingbrightness greater than 1.5 candlesper sq. meters shall be visible to thepersons whilst normally employedwithin 30.5 meters of the sourceexcept angle of elevation from the



eye to the source or part of the fittingas the case may be exceeds 200.

-to provide suitable opaquematerial to prevent glare or othermeans

Rule 32 Power of chief inspector to exempt-If rules mentioned in 29 to 31 areinappropriate or not practicableChief inspector by order in writingmay exempt

Sec 18 Drinking waterRules 34-39 Arrangements for pure drinking

water at convenient places awayfrom sanitation facilities shall bemade. All places of supply shall bemarked legibly in the languagesunderstood by majority of workmen.Further cool water supply bearranged where the strength ofworkmen employed exceeds 250during hot weather

Rule 34 Quantity of drinking water-each employee of factory shall beprovided at least 4.5 liters per dayreadily available at all times duringworking hours

Rule 35 Source of supply

-from public water supply system

-from any other source approved inwriting by the Health officer

Rule 36 Means of supply

-kept in suitable vessels, receptaclesor tanks or fitted with taps with dustproof covers

-suitable arrangement for splitwater

-clean once every day



Rule 37 Cleanliness of well or reservoir

-if supply from well or reservoirsterilized once a week or morefrequently if the inspector by writtenorder requires the date forsterilizing-no such requirement if healthofficer satisfies before consumption

Rule 38 Report from health officer-the inspector may direct the managerto obtain a report from health officerabout the fitness for humanconsumption of water supplied

Rule 39 Cooling of water

-the cooled water shall be suppliedin every canteen, lunch-room, andrest-room and also at accessiblepoints throughout the factory

-the water centre is provided forevery 150 persons employed at anyone time in the factory

-if more than 500 persons, from 150to 500 persons there will be onewater centre and another watercentre is for every 500 personsthereafter

Sec 19 Latrines & Urinals

Rules 40-49 -Latrines and urinals separate forladies and gents shall be providedat convenient locations accessibleto workers at all times, which shallbe kept clean at all times.-an enclosed accommodation shallbe provided for male and femaleworkers and shall be adequatelylighted and ventilated-no latrine or urinal shall, unlessspecially exempted in writing by theChief Inspector, communicate withany workroom except through an



intervening open space or ventilatedpassage

The method of construction andfacil ities vary with number ofworkmen employed, which can bereferred from the section.

If more than 250 workers areordinarily employed, the floors andinternal walls up to a height of 90c.m. of the latrines and the urinalsand the sanitary blocks shall belaid in glazed tiles or otherwiseprescribed.

-the floors, portions of the walls andblocks so laid or finished and thesanitary pans of latrines andurinals shall be thoroughly washedand cleaned at least once in everyseven days with suitable detergentsor disinfectants or with both.

-sweepers must be appointed whoseprimary duty is to clean

Rule 40 Latrine accommodation

-where women are employed thereshall be one latrine for every 20women

-where males are employed, onelatrine seat for every 20 malesprovided if exceeds 100 in number,one latrine seat for every 20 malesupto the first 100, and one for every50 thereafter.

Rule 43 Signboards to be displayed

-a notice in the languageunderstood by majority of workers“for men only” or “for women only”with picture as the case may be

Rule 44 Urinal accommodation

Urinal accommodation shall beprovided for the use of workers and



shall not be less than 61c.m in lengthfor every 50 workers.Where it exceeds 500, one urinal forevery 50 workers upto to first 500employed and one for every 100thereafter.The chief inspector may grantexemption from the aboveprovisions if less than 20 workers.

Rule 45 Urinals to conform to public healthrequirements-factory employing more than 250workers shall comply withrequirements of public healthauthorities.

Rule 46 Certain Latrines and urinals to beconnected to sewage system- all latrines and urinals other thanseptic tank latrines and any type oflatrines and urinals to be approvedby Public health authority of afactory situated in such localityshall be connected with sewagesystem if the factory is situatedwithin 30.5 meters of an existingsewer.

Rule 47 Whitewashing and colour washingof urinals-walls, ceilings and partitions ofevery latrine and urinal shall bewhitewashed at least once in everyperiod of 4 months and date of whitewashing is entered in register (form7)

Sec 20 Spittoons-Check whether sufficient number ofspittoons are provided atconvenient places and maintainedin a clean and hygienic condition-Check whether notice containingthis provision and the penalty for



its violation has been prominentlydisplayed at suitable places in theFactory premises

Rule 51 Type of spittoons-a galvanized iron with a conicalfunnel-shaped cover. A layer ofdisinfectant liquid shall always bemaintained in the container-a container filled with dry, cleansand and covered with a layer ofbleaching powder-any other type approved by the ChiefInspector

Rule 52 Cleaning of spittoons-cleaned at least once every day andcleaned by scrapping out the top ofsand once every day

Rule 52-A Planting of trees-if 100 or more workers areemployed in the factory, the occupiershall plant and maintain trees withinthe premises of the factory andnumber, type and layout of treesshall be approved by the DistrictAgricultural Officer concerned-if it isn’t possible to plant trees dueto non-availability of space, DAOmay recommend to the governmentfor grant of exemption

II. SafetySec 21 Fencing of machinery

-certain types of machinery or theirparts such as moving part of primemover and every fly-wheel, headraceand tailrace of every water wheeland water turbine, any part of astock-bar, every part of electricgenerator, any part of transmissionmachinery and dangerous part ofthe machinery shall be securelyfenced by safeguards of substantial



construction and shall beconstantly maintained and kept inposition-examination of the parts of themachinery will be made while it isin motion.

Sec 22 Safety measures in case of work on Register-FORM 35Rule 53 or near machinery in motion (to record the

The examination of any part of a names of speciallymachine while in motion shall be trained adultcarried out only by specially trained workers)adult male workers wearing tightfitting clothing and whose name hadbeen recorded in the Register

-such worker shall not handle a beltat moving pulley unless

- the belt is not more than 15 cm. inwidth

-pulley is only for drive not merely afly-wheel or balance wheel (belt isn’tpermissible)

-belt joint is either laced or flushwith the belt-the belt including the joint and thepulley rim are in good repair-reasonable clearance between thepulley and any fixed plant orstructure-secure foothold and wherenecessary secure handhold areprovided for the operator-any ladder used for examination oroperation securely fixed or lashedor firmly held by second person-set screw, bolt and key on anyrevolving shaft, spindle, wheel orpinion and all spur, worm and othertoothed or friction gearing in motionshall be securely fenced to preventsuch contact



- no women or young person allowedto clean, lubricate or adjust any partof the prime mover or anytransmission machinery

Schedule VI Regarding safety-safe access shall be provided to allbearing clutches, belt shifting leversand all such other appliancesrequired to be handled or operatedwhile the machinery is at work-all ladders used in replacing beltsor in attending similar overheadmachinery shall be made for thatwork and provided with books or aneffective non-skid device-no transmission machinery inmotion shall be cleaned with cottonwaste, rags or similar materials heldin hand-all belts shall be regularlyexamined to ensure that the jointsare safe and the belts are kept inproper tension-each water gauge glass of a boilershall be fitted with an efficient guard-all condenser pipes of steam or steamengines and exhaust pipes of oilengines shall be adequately guarded

Sec 23 Employment of young person’s onRule 54 dangerous machinery

The working by young person’s onmachines considered to bedangerous by the state governmentshall be allowed only if

Full instructions as to dangersarising in connection with themachine is provided by the employer

• Sufficient training to thehandling persons has beenprovided



• Adequate supervision by aperson with thoroughknowledge and experience ofthe machine is exercised

Rule 54 -list of such machines

Power presses other than hydraulicpresses milling machines used inthe metal trades

-guillotine machines

-circular saws

-platen printing machines

-decorticator

-oil expeller

Sec 24 Striking gears and devices for cuttingoff power

-suitable striking gears or otherefficient mechanical appliancesshall be provided and maintainedand used to move driving belts toand from fast and loose pulleyswhich form part of the transmissionmachinery

-gear or appliances shall be soconstructed, placed and maintainedas to prevent the belt from creepingback on to the fast pulley

-suitable devices for cutting offpower in emergencies shall beprovided and maintained in everyworkroom

-Check When a device, which caninadvertently shift from "off" to "on"position, is provided in a factory tocut off power, arrangements shallbe provided for locking the devicein safe position to preventaccidental starting of thetransmission machinery or other



machines to which the device isfitted.

Sec 25 Self-acting machines

Safeguards in the manner prescribedin this section shall be provided forworkers from being injured during themovement of self-acting machines.

Allowed to run inward or outwardtraverse within a distance of 45c.mfrom fixed structure not being partof machine

Sec 26 Casing of new machineryRule 54A In all machinery driven by power

and installed in any factory after thecommencement of this act

• Every set screw, bolt or key onany revolving shaft, spindle,wheel or pinion shall be sosunk, encased or otherwiseeffectively guarded as toprevent danger

• All spur, worm, and othertoothed or friction gearingwhich does not require frequentadjustment while in motionshall be completely encased,unless it is so situated as to beas safe as it would be if it werecompletely encased.

• The following parts of machineswill be deemed to be machineryto be guarded by the makers forthe purpose of section 26(1)

-reciprocating knife of the guillotinemachine

-revolving drums and cylinders inall machines such as groundnutseed crusher, soap mixtures andfoundry tumblers



-abrasive wheels

-if anyone doesn’t comply with anyprovision he shall be punishablewith imprisonment for a term whichmay extend to 3 months or with fineextending to Rs.500 or with both

Sec 28, 29 Hoists, lifts and lifting machines, Register inRule 55, 55A chains etc., Form 36

Maintenance and safeguardprocedures for the operations ofhoists and lifts provided in thesection shall be followed. Themaximum safe working load shallbe marked on every hoist and liftand loads carried shall not exceedthe limit. The hoist and lifts shall bethoroughly examined by acompetent person at least once inevery period of six months for hoistsand lifts and 12 months for othersand the results shall be recorded inthe register

1. -all parts of lifting machineincluding working gear whetherfixed or movable of every liftingmachine and every chain, ropeor lifting tackle will be of goodconstruction ,sound materialand adequate strength and freefrom defects

2. -no lifting machine except fortest be loaded beyond the safeworking load plainly markedtogether with identificationmark and duly entered inregister, where it isn’tpracticable a table showing thesafe working loads of every kindand size of lifting machine orrope, chain displayed inprominent position on thepremises



3. -any person working near wheeltrack of a travell ing craneeffective measures shall betaken to ensure that the cranedoesn’t approach within sixmeters of that place

4. -the lifting machine or a chainor rope deemed to be examinedif a visual examinationsupplemented if necessary, byother means and by dismantlingof parts of the gear has beencarried out to ensure the safetyof the parts.

5. No person under 18 years of ageshall be employed in handlingthe lifts and hoists.

Sec 30 Safety measures in the case of useof revolving machinery

A notice indicating the maximumsafe working peripheral speed ofevery grindstone or abrasive wheelshall be displayed in the factory

Sec 31 Pressure plant

Effective measures to ensure thatsafe workingPressure of any plant machinery,used in manufacturing processoperated at pressure aboveatmosphere pressure, does notexceed the limits.

Rule 56 The pressure vessels or plant shall Report in FORM 8be subject to the following tests to for examinationbe carried out by a Notified Person: of pressure vessels• Externally, once in 6 months and shall be prepared

internally once in 12 months or and kept in thein the event of impossibility of factory and shall besuch an exercise a hydrostatic signed by the persontest once in every 2 years. making the exami-

• If pressure vessel or plant in nation or test



continuous process whichcannot be frequently opened theperiod of internal examinationmay be extended to 4 years

• Hydrostatically tested once inevery 4 years

• Hydrostatic test before beingbrought into use in the factory

Rule 56-A Water sealed gas holder Report shall be in-gas holder means a water sealed Form 8-A andgas holder which has a storage maintained in acapacity of not less than 141.5 Registercubic meters

-if more than one gas holder in thefactory every gas holder shall bemarked in a conspicuous positionwith a distinguishing number

-examined at least once in everyperiod of 12 months

- in case of a gas holder if lift hasbeen in use for more than 10 yearsinternal state of sheet shall withinone year of the rule coming intoforce and thereafter at least once inevery period of 4 years be examinedby means of electronic or otheraccurate devices

-if such electronic or other accuratedevices are not available chiefInspector may permit the cutting ofsamples from the crown and sidesof the holder

-a permanent register duly signedby the occupier or manager shall bemaintained giving the details ofdistinguishing number, dates ofexamination, date of painting, natureof repairs and name of personscarrying out such repairs



Rule 56-B Testing or examination of pressure Form 8-Bplant or vessel :

-the fees payable for examinationare such as

• Rs.400 per plant or vesselirrespective of its size orcapacity for the externalexamination

• Rs.1000 per plant or vessel upto4kgf/sp.cm for the Hydrostatictest

• Rs.2000 per plant or vesselabove 4kgf/sp.cm for theHydrostatic test

• Rs.1000 per plant or vesselirrespective of the size orcapacity for the internalexamination

• Rs.4000 per plant or vesselirrespective of the size orcapacity for the non-destructiveultrasonic thickness gaugingtest

Sec 33 Pits sumps, openings in floor etcEvery fixed vessel, sump tank, pit oropening in the ground or in a flooron account of its depth, situationetc. shall be either securely coveredor securely fenced.

Sec 34 & Excessive weights :Rule 57 1. -no man, young person, women

shall unaided by the another personlift, carry or move by hand exceedingthe maximum limit in weight set outin the following schedule• -adult male = 50kgs• -adult female = 30kgs• -adolescent male = 30kgs• -adolescent female = 20kgs



• -male child =16kgs

• -female child =13kgs

Sec 35 Rule 58 Protection of eyes Ref. the schedules ofEffective screens or suitable Rule 58 for the listgoggles for the protection of of various processpersons, employed shall beprovided where:• Risk of injury to the eyes from

the particles or fragmentsthrown off in the course ofprocess

• Risk to the eyes by reason ofexposure to excessive light

Sec 36 Precautions against dangerousfumes, gases, etc.Provide for restrictions for entry ofpersons into any chambers or otherplaces where gas, fume, vapor ordust is likely to be present at levelsinjurious to persons. Rules for entry:• A certificate in writing has been

given by a competent personstating that space is reasonablyfree from dangerous gas, etc

• Suitable breathing apparatusand a belt securely attached toa rope.

Rule 59 Minimum dimensions of manholes

-every chamber, tank, vat, pipe, flueor other confined space whichpersons may have to enter andwhich may contain dangerous fumesunless there is other effective meansof egress, be provided with amanhole which may be rectangular,oval or circular in shape and whichshall

-in case of rectangular or oval shapebe not less than 40.6c.m long and30.5c.m wide



-in case of a circular shape be notless than 40.6c.m in diameter

Sec 36 A Precautions regarding the use ofportable electric light

Restrictions are placed on the usageof portable Lights exceeding 24 voltsand portable lights in chamber,tanks, etc. which are likely to containinflammable gas, fumes or dust

Sec 37 Explosive or inflammable dust, gas,etc.

Every factory where manufacturingprocess produces dust, gas, fumesor vapour of such characters and tosuch extent to be likely to explodeon ignition, al l practicablemeasures shall be taken to preventsuch explosion.

Rule 60 Exemptions :

-section 37(4) shall not apply forfollowing process

-the gas holder shall contain onlythe following gases separately ormixed at a pressure greater thanatmospheric pressure namely towngas, coke-oven gas, producer gas,blast furnace gas, or gases otherthan air used in manufacture but notapplicable to any gas holdercontaining acetylene or mixture ofgases

-where acetylene gas is used as asource of heat in connection withan operation it shall be compressedand contained in a poroussubstance in a cylinder

Sec 38 Precautions in case of fire

In every factory all practicablemeasures shall be taken to tacklethe outbreak of fire and its spread,



both internally and externally andto provide and maintain

• Safe means of escape for allpersons in the event of fire and

• The necessary equipment andfacilities for extinguishing fire

• Workers familiar with means ofescape in case of fire withtrained and adequately trainedin the routine

Rule 61 Fire protection :

-all processes involving seriousexplosion and flash fire hazardsshall be located in segregatedbuilding minimum number ofemployees are exposed

-in all work places having seriousfire or flash fire hazards, passagesbetween machines, installationshould be at least 90c.m wide. Forstorage of piles, the clearancebetween the ceiling and the top ofthe pile should not be less than 2m

-the quantity of flammable liquidsshall be minimum required for theprocess carried on in such room andcontaining suitable containersprovided not more than 20 liters offlammable liquids having a flashpoint of 210C or less shall be keptor stored in any work room

Sec 40 Safety of building and machinery

-if it is derelict position or dangerto the human life or safety, theInspector will serve notice to theoccupier in writing prohibiting itsuse until it has been properlyrepaired or altered

Sec 40B Safety Officers

The State Government is empowered



for directing the occupier to employsuch number of safety officers, asspecified by it in the followingcircumstances

• Where more than 1000 workersare employed

• Where manufacturing processinvolves risk of bodily injury,poisoning or disease or anyother hazard to the health of thepersons employed.

Sec 41 B Compulsory disclosure ofinformation by the occupier

The employer handling hazardoussubstances shall disclose thefollowing information to theworkers, General Public, ChiefInspector and Local Authority

1. Information on likely dangersincluding health hazards andthe methods to overcome suchhazards.

2. Details on characteristics andquantity of wasteand manner of their disposal

3. On site emergency plan toovercome any possible risks

4. The nature of process involvinghazardous substances shall beintimated within 30 days ofintended implementation

Rule 61-R Road safety in factory premises

-speed limit shall be displayed atconspicuous places such asentrance to the factory and distanceof 500 meters along the roads insidethe factory premises

-parking places with clear markingshall be provided



-no vehicle is allowed or requiredto enter the factory unless it is dulyregistered

-no driver or operator is allowed todrive unless he holds valid drivinglicense

-record of details of vehicle, driveror persons accompanying thevehicle and other information suchas TREM CARD as found necessaryis maintained

-proper traffic signals shall bedisplayed at sharp turns or ‘U’ turnswherever necessary

-all traffic signals, markings andcautionary notices shall bedisplayed in Tamil

Rule 62 B Health and safety policy of thecompany

The company shall prepare a writtenstatement on the Health and SafetyPolicy of workers at Factoryincluding the following aspects

• Arrangements for involving theworkers

• Fixing the responsibility of thecontractors, Sub- Contractors,Transporters and otheragencies entering the premises.

• Providing a resume of healthand safety performance of theFactory in its Annual Report

• Relevant techniques andmethods, such as Safety Auditsand Risk Assessment forperiodical assessment on statusof health, safety andenvironment and taking allremedial measures.



• Stating its intentions tointegrate health and safety, inall decisions, including thosedealing with purchase of plant,equipment machinery andmaterial as well as selectionand placement of personnel

• Arrangements for informing,educating and training andretaining its own Employees atdifferent levels and the public,wherever required

A copy of that declared Health andSafety Policy signed by the Occupiershall be made available to theInspector.

Sec 41C Specific responsibility of Occupieron hazardous processes• Maintain accurate and up-to-

date health/ medical records ofworkers who are exposed to anychemical, toxic or other harmfulsubstances

• Appoint persons competent tosupervise the handling of suchprocess

• Medical examination of thelabourers before and aftercontinuance of work at aninterval of not exceeding12months

Rule 62-N Medical examination Health registers inFirst time employment- certificate forms 39 and form 17of fitness in form 27 granted by thefactory medical officer

-if employed in hazardous processshall be examined once in 6 months

-the details of pre-employment andperiodical examinations carried outshall be recorded in the Healthregisters in forms 39 and form 17



-no person shall be employed for thefirst time without a certificate offitness in form 27 granted by thefactory medical officer

Rule 62-O Occupational health centres

-if hazardous process is in factoryemploying upto 50 workers thereshould be health centre

-minimum of 5 persons trained infirst-aid procedure and among themone shall be always availableduring the working period

-a fully equipped first-aid-box

-if employing 51 to 200 workersthere shall be a room with floor areaof 15sq.metres with floors and wallsmade of smooth and impervioussurface

-a part time medical officer shall bein charge of the centre and visit thefactory twice in a week

-if employing above 200 workers,full time factory medical officer forfactories upto 50 workers and onemore medical officer for everyadditional 1000 workers or partthereof

-there shall be one nurse, onedresser cum compounder and onesweeper cum ward boy throughoutthe working period

Rule 62-P Ambulance van

-if hazardous process in factorythere shall be facility of ambulancevan with driver cum mechanic andhelper trained in first aid for thepurpose of transportation of seriouscases of accidents or sickness



Rule 62-R Making available health records toworkers

-if carrying out any hazardousprocess ,health records shall bemaintained with conditions of oncein every six months or immediatelyafter the medical examinationwhichever is earlier

-certification of worker havingnotifiable disease in third schedule

-give medical report to the workerson application from him

Rule 64 Ambulance room

-the room should be kept open andused for first aid treatment and rest

-it shall have a floor area of atleast24 sq. meters and kept ventilated andlighted by natural and artificialmeans

- a prominent notice containing theparticulars of name, address andtelephone number of the medicalpractitioner in charge and name ofnearest hospital and its telephonenumber

Sec 41E Emergency standards-if the standards of safety prescribedis inadequate, the Centralgovernment may direct the DirectorGeneral of factory advise service andlabour Institutes or any institutionspecialized in standards of safety inhazardous process to lay downemergency standards forenforcement of suitable standards inrespect of such hazardous process

Sec 41F Permissible limits of exposure ofchemical and toxic substancesThe maximum permissible



threshold limits of exposure ofchemical and toxic substances inmanufacturing processes shall beas per the value indicated in IIschedule to the Act

Sec 41G Workers participation in safety Refer Rule 61 M forRule 61M management/ safety committee further details on

-where 250 or more workers are safety Committeeordinarily employed or whichcarries on any process declared tobe dangerous u/s 87 of the Act, thereshall be a safety committeeconsisting of a senior official asChairman and safety officer assecretary of the committee and arepresentative each from theproduction, maintenance andpurchase departments

-tenure of the committee is 3 years

-meeting shall be held at least oncein a quarter

-minutes of the meeting shall berecorded and produced to theInspector on demand

III. Welfare

Sec 42, 43 Washing facilities

Every factory should provide andmaintain adequate and suitablewashing and drying facilities atconveniently accessible places.

Rule 62 -suitable washing facilities shouldbe provided including soap and nailbrushes or other suitable means ofcleaning-it includes a trough with soaps orjets at intervals of not less than61c.m-wash basins with taps attachedthereto



-if persons employed in injurious ornoxious substance one tap for every15 persons and for other persons

-upto 20 = 1 tap

-21 to 35 = 2 taps

-36 to 50 = 3 taps

-51 to 150 = 4 taps

-151 to 200 = 5 taps

-200 to 500 = 5+one tap for every50 persons

-exceeding 500= 11 + one tap forevery 100 persons

-separate wash basin for womenonly

-water supply to washing facilitiesshall be capable of yielding 27.3litres a day for each person and shallbe from source approved in writingby the Health officer and if notpossible he may certify for not lessthan 4.5liters per day for every person

Rule 62-A All classes of factories shall providefacilities for keeping clothing notworn during working hours and forthe dying of wet clothing

Sec 44 Facilities for sitting

-suitable arrangements has to beprovided to the persons working ina standing position

Sec 45 & First aid Appliancesrule 63 Various First Aid Appliances and

materials provided in this sectionshall be maintained

-it is distinctively marked with thered cross on a white backgroundwith the contents



Sec 46 Canteens Ref Rules 65 to 70Canteen facilities shall be provided for further detailsand maintained by the occupier in on canteen main-any factory, which employs more tenance, pricingthan 250 workers. Further the rules and periodicallaid down by the State Government medical exami-for operating the canteen needs to nationbe followed by a Canteen Management Committee shall beconstituted in line with theProvisions of Rule 70

Rule 65 -the canteen building shall be Register in Formsituated not l ess than 15.2 meters No.7from any latrine, urinal, boiler house.Chief Inspector may relax theprovisions if it is reasonable- it shall accommodate at least adining hall, kitchen room, pantryand washing places separately forworkers-the minimum height of the buildingshall be not less than 3.7 meters andall the walls and roof shall be ofsuitable heat-resisting materialsand shall be water-proof-the doors and windows of a canteenbuilding shall be of fly-proofconstruction and shall al lowadequate ventilation-records of dates on which limewashing, colour washing ,varnishing or painting is carried outshall be maintained in theprescribed register (form no.7)

Rule 66 Dining hall :-it shall accommodate at a time atleast 30% of the workers working ata time-the floor area of the dining hallexcluding service counter and anyfurniture except tables and chairsshall be not less than 0.9 sq. meter



-sufficient tables, chairs or benchesshall be available provided soapsand towels should be at washingplaces

Rule 67-A Medical examination of canteens Form 40staff

-every member of canteen should bemedically examined for dysenteryand typhoid at intervals of not morethan 6 months and bloodexamination at intervals of not morethan 12 months

Rule 70 Managing committees

-the manager shall appoint acanteen management committeeconsisting of equal number ofpersons nominated by the occupierand elected by workers

-number of elected workers shall bein the proportion of one for every1000 workers employed in thefactory provided that in no caseshall there be more than 5 or lessthan 2 workers on the committee

-it shall be dissolved by themanager 2 years after the lastelection

Sec 47 Shelters, rest rooms and lunchrooms

Rule 72 In every factory where more than 150 Refer Rule 72 forworkers are employed, the occupier specified Standardsshould make adequatearrangements for shelters or restrooms and lunch rooms-it shall be sufficiently lighted andventilated and maintained in a cooland clean condition-the floor and walls to a height of91.4c.m shall be so laid and heightof every room in the building shall



be not less than 3.7 meters from thefloor level to the lowest part of theroof and there shall be 1.1sq.metersof floor area for every personemployed

Sec 48 & Crèches Refer Rule 73 torule 73 to In every factory wherein more than 76 A for specified76 30 women workers are ordinarily standards

employed, the facilities of suitablerooms should be maintained for theuse of children under six years ofage of such women.

Rule 74 -the height of the room shall be notless than 3.7 meters from the floorto the lowest part of the roof andthere shall be not less than 1.9sq.meters for each child as per rule 73

Rule 75 Wash room

-wash room’s floor and internalwalls shall be to a height of 91.4c.mwith adequate light and ventilationand one basin for every 4 childrenand at least supply of water perchild is 22.7 liters per day

Rule 76 Supply of milk and refreshment

-at least 284.1 milliliters of cleanpure Milk shall be available for eachchild on every day and mother ofthe child is allowed in the course ofher daily work intervals of 15minutes to feed the child. Forchildren above 2 years of age thereshall be provided an adequatesupply of wholesome refreshment.

Crèche staff and cloths for crèchestaff :

-the occupier shall appoint aqualified nurse or midwife withsufficient number of ayahs, thenumber calculated is one ayah forevery 30 children



Rule 76A Exemption

-the number of married women orwidows employed doesn’t exceed 15or factory works less than 180 daysin a calendar year or number ofchildren kept in crèche is less than5 in the preceding year

-the alternative is to include a crèchebuilding which has a minimumaccommodation at the rate of 1.9meters per child

Sec 49 Welfare Officers

In every factory wherein 500 or moreworkers are ordinarily employed,the occupier should appoint suchnumbers of Welfare Officers, as maybe prescribed. This provision shallalso apply to seasonal factories likeSugar factories.

-as per TN (welfare officers)Rules1953 the occupier shall appointwelfare officer if workers of thefactory are 500 or more and if itexceeds 2000 assistant welfareofficer is to be appointed for every2000 workers

-in case 500 or more but not morethan 2000 workers are employedmajority of them are women if sothe welfare officer shall be a woman

Sec 51 Working Hours of Adult

Maximum Weekly Hours for anadult worker shall not exceed 48hours

Sec 52 Weekly holidays- the worker can have holiday on oneof the three days either before orafter the said day

-it can be substituted by Chief



Inspector but no substitution willbe made if worker works more than10 days consecutively without aholiday

No adult worker shall work for morethan 6 days consecutively without aHoliday for the whole day. Wherethe holiday is maintained on anyday other than the first day of theweek, notice shall be delivered atthe inspector ’s office and alsodisplayed at the factory not laterthan the day before the said day orthe holiday to be cancelledwhichever is earlier

Sec 53 Compensatory holidays

Rule 77 Compensatory holidays shall beprovided to workers who aredeprived of their weekly holidays asper Sec 52, within the next twomonths immediately following thatmonth

Rule 77 -not more than two holidays in one Form 25 & FORMweek 25A for muster-notice as to compensatory holidays roll of adultgiven shall be displayed workers-the manager shall maintain thedetails of the compensatoryholidays in muster roll preserved for3 years

Sec 54 Daily hoursDaily hours for an adult worker shallnot exceed 9 hrs, which can beexceeded to facilitate change ofshifts.

Sec 55 Intervals for rest

Maximum permissible hours ofcontinuous work is for 5 hours anda rest Interval of at least half an houris provided to an adult Worker. The



shift and relay timings shall bedisplayed

-the state government may exemptfrom the provision that total numberof hours worked by a worker withoutan interval doesn’t exceed 6hrs

Sec 56 Spread over

Inclusive of rest intervals, the dailyworking hours cannot exceed 10.5hours

-the chief inspector may increase thespread over upto 12hrs for reasonsto be specified in writing

Sec 57 Night shifts

Where a worker works in a factoryworks on a shift which extendsbeyond midnight the weekly orcompensatory holiday shall be aperiod of 24 consecutive hoursbeginning when his shift ends.

Sec 58 Prohibition of overlapping shifts

In respect of work on multiple shifts,the period of shifts should bearranged in such a manner, that notmore than one relay of workers isengaged in work of the same kind atthe same time.

Sec 59 Extra wages for overtime

Overtime wages at twice theordinary rate of wages shall be paidwhere a worker works for more than9 hours in a day or 48 hours in aweek

Rule 78 Muster roll for exempted factories Form 10

-the manager of factory in whichworkers are exempted u/s 51 or 54,shall keep a muster roll in form no10 showing normal piece work rateof pay or rate of pay per hour of allexempted employees



Rule 78B Overtime slips

-period of overtime shall be enteredin the overtime slip in duplicate anda copy of the slip signed by theManager or by a person authorizedby him.

-An overtime slip shall be preparedand one copy shall be handed overto the concerned employee.

Sec 60 Restriction on double employment

-no adult worker is allowed to workin any factory on any day on whichhe has already been working in anyother factory.

Rule 78-C -with previous approval of theInspector, an adult worker may beemployed in more than one factoryon the same day subject to thefollowing conditions

-he shall not be employed for morethan 9hrs in all on any one day

-he shall receive a weekly holidayin accordance with the provisionsof sec 52

-every worker required to work inanother factory on the same dayshall carry with him a card in whichthe following particulars shall beentered such as his normal periodsof work as the notice of period ofwork for the day and the period orperiods he has worked in the firstfactory for the day.

Sec 61 Notice of periods of work for adults Form 11Rule 79 Notice of period of work showing

clearly the periods during which theadult workers may be required towork shall be displayed andcorrectly maintained in every



factory. Any proposed change in thesystem of work in the factory,necessitating a change in the noticeshall not be made without notifyingthe inspector.-if adult workers aren’t required towork during the same periods, themanager shall classify them intogroups according to the nature oftheir work-if group isn’t required to work onsystem of shifts, the manager fixesthe period-if shift basis is made, the managerdraws the scheme for shift.

Sec 62 Register of adult workers Form 12Rule 80 A register of adult workers

incorporating details such as nameof worker, nature of work etc. shallbe maintained at the factory.Inspector may by order in writingthat such muster roll or registershall to the corresponding extent bemaintained in place of, and betreated as, the Register of AdultWorkers in the factory.

Sec 63 Hours of work to correspond withnotice u/s61 and register u/s62-no adult worker is allowed to workin the factory unless the notice ofperiods of work is displayed in thefactory and entries made beforehand against his name in the register

Sec 64 Power to make exempting rules

The state government may makerules in respect of adult workersproviding for exemption from theabove provisions- subject to thefollowing limitation.

-The total number of hours of workin any day shall not exceed ten



-The spread over inclusive for restshould not exceed 12 hours in anyone day.-The total number of hours ofovertime shall not exceed 50 for anyone quarter.-The total number of weekly hours,including overtime shall not exceed60.

Sec 66 Additional provisions regulatingemployment of women in a factory• No exemption may be granted

to female workers towardsprovisions of Sec 54

• Women workers shall not beemployed except between thehours of 6 am and 7 pm

• The state government bynotification may vary the limitsso that no such variation shallauthorize the employment ofany women between the hrs of10 p.m. to 5 a.m.

Sec 67 Prohibition of employment of youngchildren

Children who have not completed 14years of age shall not be employed

Sec 68 Employment of children andadolescents

• Certificate of fitness under Sec69, granted to such youngperson to be obtained.

• The child adolescent carries atoken giving reference to suchcertificate, while at work

Sec 69 & Certficate of fitness Certificate inRule 86A A certifying surgeon shall cetify that Form 5

such young person is fit for the work,before such person is employed



-if lost, copy of certificate fromcertifying surgeons is obtained

-a fee of Rs.100 shall be charged forsuch certificates or renewal or suchduplicates and the fee paid byoccupier to the treasury and receiptattached with the application

Sec 70 Effect of certificate of fitness grantedto adolescent

-an adolescent having certificate offitness not less than 14 years butnot attained the age of 17yrs

-no female adolescent workers areallowed to work except between 6a.m. and 7 p.m.

- The state government bynotification may vary the limits sothat no such variation shallauthorize the employment of anyfemale adolescent between the hrsof 10 p.m. to 5 a.m.

Sec 71 working hours of children

• Working hours shall not exceed4.5 hours per day

• No night shifts are allowed

• There shall be only two shiftsand they shall not overlap

• Cannot work in a factory ifalready works in anotherfactory

• No female child is allowed towork in any factory exceptbetween 8 A.M to 7P.M.

Sec 72 Notice of periods of work forchildrenA notice showing the period duringwhich children may be required to



work daily shall be displayed in thefactory.

Sec 73 Register of child workers

A register recording details such asname, nature of work etc. shall bemaintained in every factory. No childwill be allowed to work if name isnot registered in the register

Rule 80 Register of adult workers and young Form 12& 86 persons

-young persons who have completedage of 14 years but not completedthe age of 18 years and carryingtoken and certificate laid down insec 68 and 69 record the particularsof persons-it should be preserved for 3 yearsafter the last entry made

Rule 93 Payment of wages if the worker dies Nomination in-if a worker dies before resumes Form 34work, balance of his pay due for theperiod of leave with wages notavailed shall be paid to nomineewithin one week of the receipt ofintimation of the death of the worker

Rule 96 Notification of accidents Form 18 & for m-occurrence of an accident shall be 18B for report ofinformed to Inspector further details-in case of a dangerous occurr- of accidentence specified in item 1 and 2 ofschedule(p.no 547) notice to DistrictMagistrate or sub divisional officerand the officer in charge of policestation

Sec 75 Power to require medicalexamination

-where the inspector is of opinionthat any person working in factorywithout certificate of fitness is ayoung person or



-with certificate but no longer fit towork in the capacity, he may servenotice to manager to examine himby certifying surgeon till that hecan’t work in any factory

Sec 79 Annual leave with wages

Basis of leave

Where a worker has worked for aminimum period of 240 days ormore during any calendar year, heis entitled to leave with wages• For adults - 1 day for every 20

days of work• For child – 1 day for every 15

days of wok• If a worker does not in any one

calendar year take the whole ofthe leave allowed to him, anyleave not taken by him shall beadded to the leave to be allowedto him in succeeding calendaryear

• A worker in writing may applyto the manager not less than 15days before the date on whichhe wishes his leave to begin

Sec 80 Wages during leave period

-leave allowed u/s 79, a worker shallbe allowed at a rate equal to thedaily average of his total full timeearnings for the days on which heactually worked during the monthimmediately preceding his leaveexclusive of DA and cash equivalentof the advantage accruing throughconcessional sale to the worker offood grains and other articles-if not worked on any day during thecalendar month immediatelypreceding his leave calculated for



the days on which he actuallyworked during the last calendarmonth preceding his leave

Sec 81 Payment in advance in certain cases

-a worker who has been allowed forleave for not less than 4 days in caseof an adult, and 5 days in case ofthe child shall before his leavebegins be paid the wages due for theperiod of the leave allowed

Sec 83 Power to make rules

-the manager is advised to keep the Form 15 leave withregisters required for inspection wages registerand preserved for 3years

Sec 87 Dangerous operation Form 17A-operations carried out in factory Health register &exposes any person employed in it form 27 for certifi-to a serious risk of bodily injury, cate of fitness &poisonous or disease, the certifying form 37 for dangeroussurgeon has to give certificate with operation &regard to fitness of employees Form 39 for pre--pre-employment health register has employment healthto be maintained in form 39 and register as per ruleafter employment periodical 95 &premedical check register maintainedin form 17

Sec 88 Notice of certain accidents Form 18

-In case of accident resulting indeath or physical injury, the personinjured is prevented from workingfor a period of 48hrs, the Managershall send Notice to such authoritiesin the prescribed form.

Sec 89 Notice of certain diseases

-the Manager shall send notice tothe authorities if such workers areaffected with diseases mentioned inIII schedule



-the medical practitioner shall sendreport to the chief inspector as tohis examination of the workers andif not sent shall be punishable withfine extending to Rs.1000

Sec 91A Safety and occupational healthsurveys

-the chief inspector or the DirectorGeneral of Factory Advice Service &Labour Institute or any authorizedperson after giving notice to theoccupier shall undertake safety andoccupational health surveys and theoccupier shall afford all facilitiesfor survey including examinationand testing of plant and machineryand collection of samples

Sec 92 General penalty for offences

-for contravention of any provisionsof this act the occupier shall bepunishable with imprisonment fora term extending to 2yrs or with fineextending to Rs.1 lakh or both & ifcontravention continues Rs.1000for each day of continuance

Sec 93 Liability of owner of premises incertain circumstances

-if separate buildings are leased todifferent occupiers for use asseparate factories, the owner of thepremises shall be responsible formaintenance such as roads,drainage, water supply etc.

-if independent or self-containedfloors or flats are leased to differentoccupiers, owner of the premisesare held liable for commonmaintenance and fencing, safemeans, maintenance of hoists andlifts, precaution in case of fire etc.



Sec 96 Penalty for wrongfully disclosingresults of analysis u/s91

-if any contravention, shall bepunishable with imprisonmentextending to 6 months or with fineextending to Rs.10000 or with both

Sec 96A Penalty for contravention of theprovisions of section 41B,41C,41H

-if any contravention of abovesection, shall be punishable withimprisonment extending to 7 yearsand with fine extending to Rs.2 lakhsand if it continues Rs.5000 for eachday of continuance

Sec 97 Offences by workers

-If the worker contravenes anyprovision of this act liable to fine ofRs.500

Sec 98 Penalty for using false certificate offitness

-certificate of fitness granted u/s 70knowingly an attempt to use it to bemade by another person shall bepunishable with imprisonment fora term extending to 2 months or fineextending to Rs.1000 or with both

Sec 99 Penalty for permitting doubleemployment of child

-if a child works in a factory on anyday on which he has already beenworking in another factory, parentor guardian shall be punishablewith fine extending to Rs.1000 unlessit appears to the court the childworked without consent of parentor guardian

Sec 101 Exemption of occupier in certaincases

-if occupier of the factory is chargedwith an offence punishable under



this act , he shall be entitled up oncomplaint duly made by him and ongiving to the prosecutor not less than3 clear days’ notice in writing of hisintention

-he has to prove to the satisfactionof the court

-That he has used due diligence toenforce the execution of this act

-said person committed the offencewithout his knowledge, consent

-if the offender has not come forhearing the court may adjourn notexceeding 3 months

Sec 105 Cognizance of offences

-no court shall take cognizance ofan offence except on complaint orwith previous sanction in writing ofan inspector

-no court below that of a presidencymagistrate or magistrate of firstclass shall try any offencepunishable under this act

Sec 106 Limitation of prosecution

-no court shall entertain unlesscomplaint is made within 3 monthsof the date on which the allegedcommission of offence came to theknowledge of an inspector

-If the offence consists of disobeyingwritten order made by an inspector,complaint may be made within sixmonths of the date on which theoffence is alleged to have beencommitted

Sec 108 Display and services of notice-allnotices

• Notice should be in English andanother language understoodby majority of the workers.



• It should be displayed in aconvenient place

• It should be clean and legible

VARIOUS FORMS TO BE FILED

1. FORM 21 FOR HALF-YEARLY RETURN ENDING 30TH JUNE

2. FORM 22 FOR COMBINED ANNUAL RETURN FOR THE YEAR ENDING 31STDECEMBER

(Combined Returns as per GO No. 25/16.08.2004 covering Factories Act,Maternity Benefit Act, Payment of Wages Act & Bonus Act)

3. FORM 25-B FOR SERVICE CARD FOR THE MONTH

4. FORM 25-C FOR PHOTO IDENTITY CARD

5. FORM 29 FOR PARTICULARS OF ROOMS IN THE FACTORY

6. FORM 35 FOR CERTIFICATION OF AN ADULT WORKER TO WORK ON SHIFTBELTS, LUBRICATE OR DO OTHER ADJUSTING OPERATIONS

7. FORM 41 FOR REPORT OF PERSONAL ACCIDENT INSURANCE

Rule/Section Returns to be maintained/filed under the FormsFactories Act

Rule 14 Record of examination and reexamination of Form 17young persons

Rule 100(2) -Annual return CombinedReturns as per GONo. 25/16.08.2004covering factoriesAct, MaternityBenefit Act,Payment of WagesAct & Bonus Act

Rule 103 -Muster roll Form 25

Rule 103A -Muster roll for overtime weekly work Form 25 A

Rule 103 B -Time card Form 25 B

Rule 104 -Register of accidents Form 26

Rule 104 -Register of dangerous occurrence Form 26A

Rule 14 Pre-employment Medical fitness certificate Form 27



Rule 105(a) -Register of exemptions Form 28Rule 105&106 -Particulars of rooms and factories Form 29Rule 93 -Nomination by worker Form 34Rule 95 Medical examination register for worker Form 37

employed in dangerous operations examina-tion once in 6 months

Rule 61K(4) - Record of eye examination Form 38Rule 95 -pre-employment health register Form 39Rule 95 -Inspection register as per Rule 105 & 106 to include parti-

culars of Form28,29,7

Rule 99 Abstract of the Act to be displayedRule 113 Display of name board of the factory in Tamil

and EnglishSection 92 General Penalty: ( Chapter X)

In case of any contravention of the provisionsof the Act or the Rules thereunder or of anyorder in writing given thereunder, theoccupier or the owner of the factory shall bepunishable with imprisonment which mayextend upto a period of 2 years or fine uptoRs. 1 lakh, or with both, and if thecontravention continues with a further finewhich may extend upto Rs. 1000/- per dayduring which the default continues.

If any person who has been guilty of a offenceinvolving a contravention of the sameprovision, he shall be punishable on asubsequent conviction imprisonment upto 3years or with fine from Rs. 10000/- to Rs.200000/-Any person who does not comply with theprovisions of Sections 41B, 41C or 41H, that is inrespect of industries carrying on hazardousprocesses shall be punishable with imprisonmentupto 7 years and with fine upto Rs. 200000 and incase of continued contravention with a furtherfine of Rs. 5000 per dayIf any worker contravenes any provisions ofthe Act or the Rules made there under, he shallbe punishable with a fine extending upto Rs.500/-


7.1. Brief on Industrial Disputes Act, 1947

The Industrial disputes Act, 1947 is the backbone of labour law.The noble aims of the act to secure industrial peace and harmonyby providing machinery and procedure for the investigation andsettlement of industrial disputes by negotiations instead of bytrial of strength through strikes and lock-outs. This legislation ismade to ensure social justice to both employers and employeesand thereby promote Industrial progress.

7.2. Obligations of Employers

a. To constitute works committee if any establishment haveone hundred or more workmen employed or have beenemployed on any day in the preceding twelve month.

b. Not to make any change in the service conditions of theworkmen, without giving a notice as mentioned under section9A.

c. Not to declare, support or finance an illegal lock-out, in theestablishment.

d. To assist the conciliation officer/board and the arbitrator inresolving any dispute.

e. To implement all agreements, settlements and awards.f. To maintain a muster-roll of the workmen employed in the

establishment, even at the time when workmen have beenlaid-off, and to ensure that the names of the workmen whopresent themselves for work at the appointed hours, areentered therein.

g. Not to lay-off or retrench any workman or close down anundertaking, without obtaining prior approval of thegovernment if so required.

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The Industrial Disputes Act, 1947


h. To pay lay-off, retrenchment and closure compensation, andcompensation to workmen for illegal lock-out, as prescribedunder the provisions of the Act.

7.3. Rights of Employers

a. Right to appeal against the awards of the labour court orIndustrial Tribunal, before the High court.

b. Right to retrench or lay-off workers declare lock-out and closedown an undertaking as per the Act.

7.4. Conditions of service etc., to remain unchanged under certaincircumstances during pendency or proceedings

(1) During the pendency of any conciliation proceeding before aconciliation officer or a Board or of any proceeding beforean arbitrator or a Labour Court or Tribunal or National Tribunalin respect of an industrial dispute, no employer shall -

(a) in regard to any matter connected with the dispute, alter,to the prejudice of the workmen concerned in suchdispute, the conditions of service applicable to themimmediately before the commencement of suchproceeding ; or

(b) for any misconduct connected with the dispute, dischargeor punish, whether by dismissal or otherwise, anyworkmen concerned in such dispute, save with theexpress permission in writing of the authority beforewhich the proceeding is pending.

(2) During the pendency of any such proceeding in respect of anindustrial dispute, the employer may, in accordance with thestanding orders applicable to a workman concerned in suchdispute or, where there are no such standing orders, inaccordance with the terms of the contract, whether expressor implied, between him and the workman-

(a) alter, in regard to any matter not connected with thedispute, the conditions of service applicable to thatworkman immediately before the commencement of suchproceeding or

(b) for any misconduct not connected with the dispute,


discharge or punish, whether by dismissal or otherwise,that workman;

Provided that no such workman shall be discharged ordismissed, unless he has been paid wages for one monthand an application had been made by the employer to theauthority before which the proceeding is pending for approvalof the action taken by the employer.

(3) No employer shall during the pendency of any suchproceeding is pending for approval of the action taken by theemployer.

(a) by altering, to the prejudice of such protected workman,the conditions of service applicable to him immediatelybefore the commencement of such proceedings or

(b) by discharging or punishing whether by dismissal orotherwise, such protected workman, save with theexpress permission in writing of the authority beforewhich the proceeding is pending.

(4) In every establishment, the number of workmen to berecognized as protected workmen shall be one percent ofthe total number of workmen employed therein subject to aminimum number of five protected workmen and a maximumnumber of one hundred protected workmen, the appropriateGovernment may made rules providing for the distribution ofsuch protected workmen among various trade unions, if any,connected with the establishment and the manner in whichthe workmen may be chosen and recognized as protectedworkmen.

(5) Where an employer makes an application to a conciliationofficer, Board, an arbitrator, a Labour Court, Tribunal orNational Tribunal for approval of the action taken by him, theauthority concerned shall, without delay, hear suchapplication and pass, within a period of three months fromthe date of receipt of such application, such order in relationthereto as it deems fit:

Provided that where any such authority considers it necessaryor expedient so to do, it may, for reasons to be recorded in writing,extend such period by such further period as it may think fit .


No proceedings before any such authority shall lapse merely onthe ground that any period specified had expired without suchproceedings before completed.

7.5. Offences and Penalties

Offence by a company, body corporate or other association, itsdirector, manager secretary, agent or other officer concernedwith its management, shall be deemed to be guilty of the offenceunless he proves that the offence was committed without hisknowledge or consent.


Compliance Checklists

The Industrial Disputes Act, 1947


Objectives• The Act is enacted as a social

security measure and providesfor prevention and settlementof Industrial disputes.

• The Act envisages collectivebargaining, contracts betweenUnion Representing workmenand management, a matter,which is outside the realm ofcommon law.

Sec 2(s) Definitions :

Workman :

Workman means any personincluding an apprentice employedin any industry to do any manual,unskilled, skilled work and includesany person who has beendischarged, dismissed or retrenchedin connection with an industrialdispute and being employed in asupervisory capacity draws wagesupto ten thousands rupees.

Industrial Dispute :

Industrial Dispute means anydispute or differences betweenemployers and employers,employers and workmen or betweenworkmen and workmen which isconnected with the employment ornon-employment or the terms ofemployment or with the conditionsof labour of any person.

Sec 3 Constitution of Works Committee Refer Rules 3 to 21A Work Committee, consisting of of TN Industrialrepresentatives of employers and Disputes (Rules)employees, shall be constituted to 1958 for provisions


promote measures for securing and on Election,preserving amity and good relations meetings etcbetween the employer and workmenIn Industrial Establishments inwhich 100 or more workmen areemployed and where theGovernment had directed so.

Rule 4 Number of employer:

-number of members is fixed by theemployer and total number ofmembers shall not exceed 20

Rule 5 & 6 Representatives of the employer andworkmen:

-the employer can divide theworkmen into different electoralconstituencies who is entitled to vote

Rule 8 Qualification of candidates forelection:-not less than 19 years of age andservice of not less than 5 years inthe establishment-service qualification shall notapply to the first election in anestablishment in existence for lessthan 5 years

Rule 9 Qualification of voters:

-workmen employed for more thansix months shall be entitled to vote

Rule 11 Nomination of candidates for Form Aelection:-every nomination is made in formA-nomination paper shall be signedby the candidate and attested by atleast two other voters

Rule 18 Number of meetings:

-the committee shall meet not lessthan once in every month



-copies of the decision arrived ateach meeting shall be sent to thedeputy commissioner of labour andlabour officer having jurisdictionover the area in which theestablishment is situated within 14days of the date of the meeting

Rule 25 Memorandum of settlement:-a settlement arrived a tin the courseof conciliation proceedings shall bein form B-the conciliation officer shallmaintain record of all settlementsin a register in form c Form B &form C

Rule 25-B Application to labor court by Form C-1workmen:-the aggrieved individual workmanshall apply in form C-1 to the laborcourt having jurisdiction over thearea

Rule 26 Arbitration agreement: Form D-an arbitration agreement for thereference of an industrial disputeto an arbitrator shall be made inform D and send to secretary to thegovernment of Chennai in charge oflabor by registered post

Sec 9A Change in conditions of serviceChange in conditions of serviceshall not be undertaken withoutproviding notice to workmen likelyto be affected in respect of anymatter specified in Fourth Scheduleto the Act. A notice period of 21 daysshall be provided before effectingany change.

Sec 9C Setting up of Grievance SettlementAuthorities and reference of certainindividual disputes to suchauthorities.



Check if, Where there are fifty ormore workmen are employed orhave been employed on any day inthe preceding twelve months, aGrievance Settlement Authority forthe settlement of industrial disputesconnected with an individualworkman employed in the Factory(establishment).

Sec 10A Voluntary reference of dispute toarbitration

Any industrial dispute whetherexisting or which is apprehended,the employer and workmen shallrefer to arbitration before thedispute has been referred to LabourCourt or Tribunal.

The reference shall be to suchpersons specified as arbitrators inthe arbitration agreement.

Rule 28 Application: Form E

-the application for the reference ofan industrial dispute to a board,court, labor court or Tribunal shallbe made in form E with parties tothe dispute, total number ofworkmen, estimate number ofpersons affected

Rule 30 Notice to parties to nominate Form Frepresentatives:

-the state government shall beforeconstituting board issue a notice inform F requiring them to intimatethe name of the nominee

Rule 36 Summons: Form G, form H,-summons to the parties to the Form Idispute form G

-summons to witnesses to appearand give evidence in form H



-summons for production ofdocuments in form I

Sec 10B Terms and Conditions of servicepending settlement of disputes

The employer and the workmenwhilst pending settlement ofdisputes shall observe such termsand conditions of employment asspecified in the order, made by theState Government, includingpayment of money by the employerto the workmen. (Tamil NaduAmendments inserted in TN Act in1982)

Sec 17B Payment of full wages pendingdisputes in higher courts

Whenever any dismissed workers/non-employed workers, set-aside byLabour Court/Industrial Tribunaland the matter taken-up by HigherCourts – High Court/Supreme Court,the workmen shall be paid suchwages based on latest wages andallowances drawn immediatelyprior to the dispute provided theworkmen had not been employed inany establishment during thisperiod.

Sec 22 Prohibition of lock-outs Report ofLockouts by employer shall not be employer as tomade without providing notice lock-out in publicof lockout within six weeks before utility service form Qintended lockout. However thenotice of lockout shall not benecessary where there is a Lock outalready in existence and anintimation shall be sent to theAssistant Labour Commissioner.

-No person employed in publicutility service shall go on strike inbreach of contract without giving to



the employer notice of strike within6 weeks before striking or

- Within 14 days of giving suchnotice or

- Before the expiry of the date ofstrike specified in such notice or

- Any proceedings pending before theconciliation officer and 7 days afterthe conclusion of such proceedingsby form O

- In case of employer by Form P

Section 23 General prohibition of strikes andlock-outs

A workman who is employed shallnot go on strike in breach ofcontract and an employer of anysuch workman shall not declare alock-out—

1. during the pendency conciliationproceedings before a Board andseven days after the conclusion ofsuch proceedings2. during the pendency ofproceedings before 1*[a LabourCourt, Tribunal or NationalTribunal] and two months after theconclusion of such proceedingsduring the pendency of arbitrationproceedings before an arbitratorand two months after theconclusion of suchproceedings, where a notificationhas been issued under sub-section(3A) of section 10A;3. during any period in which asettlement or award is operation, inrespect of any of the matters coveredby the settlement or award

Layoff and Retrenchment



Sec 25C Compensation to workmen

Every workman who has completedone year of continuous service shallbe compensated by employer withwages, which shall be equal to fiftypercent of total wages andallowances normally paid (for alldays during which he is actuallypaid off). However if a workman islaid off for more than 45 days nocompensation shall be payable inrespect of the lay-off after the first45 days

Sec 25D Maintenance of muster rolls of Registerworkmen

Muster rolls shall be maintainedirrespective of the fact that theworkmen have been laid off. Aregister shall be provided for makingentries by workmen who may presentthemselves for work at theestablishment.

Sec 25F Retrenchment of workmen Form R, Rule 61Workmen who have been in service notice of retrench-for minimum of one year shall be ment is given withinretrenched only on fulfillment of 3 days from thefollowing conditions: date on which• One month’s notice in writing notice served toshall be given stating reasons for workmenretrenchment.

• The workmen shall be paidcompensation equivalent to fifteendays average pay for everycompleted year of service at the timeof retrenchment.

• Notice is served on theAppropriate Government

Sec 25FF Compensation to workmen in caseof transfer of undertakingWhere the workmen are retrenched



consequent to transfer ofundertaking they shall becompensated as per provisions ofsec 25F

Sec 25FFA Notice of intention of closure of Form R-3Rule 61AA undertaking

The intention of closure of unit shallbe given at least sixty days prior tothe decision to the AppropriateGovernment.

Sec 25FFF Compensation in case of closure ofundertaking

Where an undertaking is closeddown on account of unavoidablecircumstances beyond the controlof the employer the workmen shallbe compensated equivalent to amaximum of three months pay.

Sec 25G Procedure for retrenchment

The employer shall ordinarilyretrench workmen in the order oflast person in each category.

Sec 25H Reemployment of retrenched refer Rule 63 forworkmen further details

Opportunity shall be provided toretrenched workmen in case ofreemployment. Further the workmenwho offer themselves foremployment shall have preferenceover others -arrange for the displayon the notice board in the premisesof the establishment of the detailsof the vacancies to be filled-give notice of the vacancies inwriting to the eligible retrenchedworkmen and such notice isdispatched by register post toaddress of workmen-send notice to the registered trade



union or unions of workmen givingthe number of vacancies and thenames of the retrenched persons

-the employer can seek assistanceof the Employment exchange in thearea for substitution of retrenchedemployees to suitable candidates

- a retrenched workmen has to replyon the receipt of notice of vacancieswithin 10 days if he fails he will loseall his claims.

Special provisions relating to layoffand retrenchment

Applicability

The provision of the chapter appliesto establishments in which not lessthan 100 workmen are employed onany day.

Sec 25 K Application of chapter V B

- the provision of this chapter shallapply to an industrial establishmentnot being an establishment of aseasonal character in which not lessthan 100 workmen employed on anaverage per working day for thepreceding 12 months

- but for seasonal characterestablishment decision ofappropriate government will be final

Sec 25M Prohibition of layoff Form Q3 forRule 60-8(1) Application

The employer shall not Lay offworkmen without prior permissionof Government or any specifiedauthority unless such Lay off iscaused due to shortage of power ornatural calamity.

-where the permission to lay off hasbeen granted by the said authoritythe employer shall give to the



Commissioner of Labour a notice ofcommencement in form Q-1,termination of such lay-off in formQ-2

Sec 25N Conditions precedent to Form R-1Rule 61-A retrenchment

Only workmen who have been incontinuous service of one year onfulfillment of following conditions:

The workmen had been given threemonths’ notice in writing indicatingreasons for retrenchment.

Prior permission of government orappropriate authority is obtained.

Application for permission forretrenchment shall be made in FormR-2

a copy of such application shall beserved by registered post on thepresident or secretary of registeredtrade union functioning in theestablishment and notice in thisregard displayed on notice board atthe main entrance to theestablishment for the informationof all the concerned workmen

If permission is not obtained it isdeemed to be illegal

Sec 250-O Procedure for closure of undertaking Rule 61-B To check withPrior permission for closure of unit Application for excel sheetshall be obtained at least ninety closure in formdays before the date of intended R-4closure where there are 100 or By registered postmore workmen during preceding12months (in up 300 or moreworkmen). Copy of such applicationshall also be served simultaneouslyon the representatives of workmen.

-every employee before the date of



application for permission entitledto receive compensation equal to 15days average pay for everycompleted year of continuousservice or any part thereof in excessof 6 months

-Not applicable to construction worksuch as buildings, bridges, roads,canals, dams

Sec 25T Prohibition of unfair labour practice

The employer, workman or tradeunion registered under the TradeUnions Act 1926 or not (sec 16 of1926) shall not commit any unfairlabour practice.

Sec 26 (2) Penalty :

-any employer commences orcontinues any lock out which isil legal under this act shall bepunishable with imprisonment of 1month or fine of Rs.1000 or both

Sec 33 Conditions of service to remain Form Sunchanged during pendency ofproceedings :

- No employer can alter to theprejudice of the workmen concernedin such dispute, conditions ofservice applicable to themimmediately before thecommencement of such proceedings- with the dispute, discharge orpunish whether by dismissal orotherwise any or- For any misconduct connected Form T Mworkman concerned in such dispute

For alter any matter not connectedwith dispute the conditions ofservice applicable to that workmanimmediately before the



commencement of proceedings orfor any misconduct not connectedwith dispute, discharge or punishby dismissal or otherwise but theworkmen has to be paid one monthwages



8.1. Brief on expatriate appointment in India

Multinational companies in India are marching towardsglobalization and bringing the best global practices and benchmarking their products and services to the best standards of theworld in order to do business and compete in international market.To achieve this, most of the multinational companies search forthe best talented executives from the international market, groupcompanies, parent companies and they bring the expatriate inIndia to run the business/manage the business. Whenever, anexpatriate is appointed as a managerial person in a company,his appointment would also call for approval from the CentralGovernment since he is not a citizen of India. Schedule V of theCompanies Act, 2013 (Part I of Schedule V on appointments spellsout that the managerial person has to be resident in India.

Hence the appointment is subject to the approval of theGovernment of India as per the provisions of Companies Act,2013. However, if an expatriate joins the company as anexecutive and not in the capacity of a managerial person, thenthe Government approval is not required for such appointment.Once such expatriate completes one year stay in India, hebecomes eligible for the appointment as managerial personnelsince one year stay in India would be treated at par with residentof India under Schedule V of the Companies Act, 2013 for thisrestricted purpose only. For the purposes of appointment onlythe Companies Act 2013 has the provision spelling out that “forthe purpose of this schedule, resident in India includes a personwho has been staying in India for a continuous period of not lessthan twelve months immediately preceding the date of hisappointment as a managerial person and who has come to stayin India: - (i) for taking up employment in India, or(ii) for carrying

The Registration of Foreigners Act, 1939 read withthe Registration of Foreigners Rules, 1992 as Amendedin 1999

116


on a business or vocation in India”).It may also be noted that thesubsequent para states that non-resident taking up employmentin India should enter India only after obtaining proper employmentVisa. The relevant provision is given below for the benefit of thereaders: -

“Provided that a person, being non-resident in India shall enterIndia only after obtaining a proper employment Visa from theconcerned Indian mission abroad. For this purpose such personshall be required to furnish, along with the Visa application form,profile of the company, the principal employer and terms andconditions of such person’s appointment”.

In both the cases, whether the expatriate is appointed asmanagerial personnel or not, they need to get themselvesregistered in India under the Registration of Foreigners Act of1939 read with the Registration of Foreigners Rules, 1992. Theyalso need to get the “Resident Permit” in India during their stayproviding the necessary details.

8.2. Opportunity for PCS in case of expatriate appointment

Here comes another opportunity for the practicing companysecretary professional to practice. The practicing professionalcould render service to the multinational and other companieswhere expatriate are employer whether managerial personnelor otherwise (both cases), in getting the registration done forforeign personnel under the Registration of Foreigners Act, 1992and arrange to organize the required resident permit and as longas they stay, the practicing professional could assist them ingetting the resident permit renewed. Before venturing into thisarea of practice, the practicing professionals of companysecretary needs to get familiarized the procedure involved andvarious submissions of documents and allied matters. In thischapter, the registration procedure and the other related mattersare being discussed, in order to provide an overview of theRegistration of Foreigners Act, 1992.

8.3. Registration procedure

As per Rule 6 of the Registration of Foreigners Act, 1992,everyforeigner entering into India shall be required to present in personor through an authorized representative to the appropriate


Registration Officer specified in Rule 7, a report which is knownas Registration report within the time specified in that rule.

8.4. Time Limit within which Registration Report required to bepresented

In the case of a foreigner who enters into India on a valid VISA ofemployment (known as X VISA) he is required to submit theregistration report within two weeks from the date of arrival inIndia.

8.5. Mode of Presenting the Registration Report

As per rule 6.2 every registration report shall be made in writingin English or in Hindi language and in quadruplicate and shallcontain a true statement of the foreigner’s address in India andof the other particulars specified in item 2 to 10 in Para IV ofForm A specified for this purpose and also such of the particularsspecified in items 12 to 16 thereof, as may be appropriate.

8.6. Foreigner’s Address in India

For the purpose of the above referred rule 6.2 a foreigner’saddress in India shall be, the place of his residence in India or ifhe has no residence, the place at which, at the time of makinghis registration report, he is for the time being living or at whichhe first intends to live after his arrival in India. RegistrationOffices/Registration Officers. The Central Government mayappoint Registration officers for the purposes of these rules asspecified in rule 3 of the Registration of Foreigners Rules, 1992for such areas the Government thinks fit. In most places -Metropolitan cities -state capital and other important cities, thereis an office known as office of the Foreigner’s Registrationofficer’s established as a Special Branch at the DeputyCommissioner of Police office.

In Mumbai, the office is of Common Wealth Branch, SB II, CID,Mumbai where the Foreigners Regional Registration officer isfunctioning. (F.R.R.O as known). Similarly at Pune city, the officeis at the Office of Deputy Commissioner of Police as a specialbranch known as officer of the Foreigner’s Registration Officer’s.Similarly in other cities, such officers would be there inappropriate places. Submission of form of Registration of


Foreigners Form No. A under Rules 5,6,7 and 8 is specified forthe purpose of registration which is a one page simple form whichcould be obtained from the Foreign Registration Office(FRO)which is generally attached to the Commissioner of Policeoffice.

The “Registration of Foreigners” form is required to be filled upand submitted with the following enclosures to the ForeignersRegistration Office (FRO) for the purpose of registration.

a. Application form in the same format i.e. in Form A underRules 5,6,7 and for each of the family member also requiredto be filled and submitted (who would be dependent on theapplicant)

b. Two photographs of each applicant

c. Agreement of employment/company letter etc. along withdetails of transfer of skill

d. Indemnity bond executed on Rs. 100/- stamp paper in thename of President of India along with witness by an Indianperson as specified.

e. Copy of Passport

f. Copy of VISA

8.7. Issue of residential permit

Once the application for registration of foreigners is submittedto the FRO at the concerned location, the authorities would verifythe details; they would call for the original documents such asPassport, VISA and residential proof etc. After the verification ofdocuments, the concerned FRO would issue the Residentialpermit pursuant to paragraph 7 of the Foreigners order, 1948.

The Residential permit is also known as certificate of registration.In Mumbai, the same is issued in the form of a booklet (a bookletof 32 pages which is also known as the Blue book; an amount ofRs. 100/- payable towards the bluebook and the receipt is issuedby the FRO). The cover of the Blue book states “RegistrationReport and Residential Permit”- issued by Foreigners RegionalRegistration Officer, Mumbai.


In Pune, the residential permit is issued in a A4 Sheet along witha copy of the application form submitted to them, dulyauthenticated by the FRO office. The content of the residentialpermit is the same - in the blue book, issued at Mumbai it isprinted in the middle of the book and at Pune, it is in the form ofa letter. Similarly, in other cities also, the practice may differ.However, the content is the same as specified under paragraph7 of the Foreigners Order, 1948.The practice of issuing the permitmay differ from State to State and place to place as per thepractice followed by the FRO office. However the content of theresidential permit which is issued under paragraph 7 of theForeigners Order,1948 would basically contain the RegistrationNumber allotted along with the date, specifying the name of theapplication, nationality and the details passport and VISA. Thepermit also would state the purpose of the applicant’s visit suchas Student/Tourist/Business/Social/Employment Visa etc., andthe period of permitted stay in India which is in any case couldnot be beyond his/her VISA period.

Generally, the FRO office would permit the applicant to stay inIndia for the validity period of the VISA, held by the foreignerwhich would vary from one year to three years. The residentpermit is granted on the strength of the VISA issued to theforeigner. If the VISA is for one year, the resident permit alsowould be issued for the same period.

8.8. Conditions to be fulfilled upon Issue of Resident Permit

The following rules must be observed by the foreigner uponregistration (this is also printed in the blue book issued byMumbai - provided separately at Pune - In other cities also, thesimilar practice would be prevalent) as given below:-

(i) This permit must be surrendered at the time of final departurefrom India to the Registration Officer of the place from whichhe/she leaves India.

(ii) In the event of he/she not departing from Indiabefore................. he/she will, unless he/she obtains thepermission of the Central Government to remain for a longerperiod, be liable to prosecution for contravention of theprovision of Foreigners Act, 1946 punishable with


imprisonment for a period of FIVE years and with fine andwill also be liable to expulsion from India.

(iii) Application for an extension of period must be made at leastsixty days before expiry and must be addressed to theGovernment of India through the State Government. TheGovernment has discretion to reject any application whichdoes not disclose the adequate grounds for extension.

(iv) Change Of Visa Purpose Not Permitted.

8.9. Rules to be observed by the Foreigner

The following rules are required to be observed by the foreignerwhich is a condition of the registration permit, upon its issue tohim/her permitting him/her to stay in India.

1. Every registered foreigner is required: -

(i) On demand of any Registration Officer or Magistrate orany police Officer not below the rank of Head Constableto produce this certificate and his passport or such otherproof of identity as may be required of him by suchMagistrate or Officer.

(ii) To surrender his/her certificate of registration if he/sheis about to depart finally from India either to theRegistration Officer of the place where he/she isregistered or of the place from where he/she intends todepart or to the immigration office at the port/check postof exit from India.

(iii) To intimate in person or through an authorizedrepresentative or by post under certificate of posting theRegistration Officer of the district in which his/herregistered address is situated:(a) before he/she leaves his/her registered address, if

he/she proposes to be absent from his registeredaddress for a continuous period of eight weeks ormore, the address or addresses at which he/sheproposes to stay and the date on which he/sheexpects to return to his/her registered address.

(b) if he/she proposes to change his/her registered


address or to leave India, the particulars of his/ hernew address and the date of the proposed change ordeparture and

(c) any circumstances which in any way affect theaccuracy of any of the particulars set out in his/hercertificate of registration.

(iv) If he/she stays for more than eight weeks at anyplace(other than a hotel or other premises where travelers areaccommodated) in any district other than the district inwhich his/her registered address is situated to report his/her presence in that other district to the RegistrationOfficer thereof within seven days of his/her arrival.

2 Failure to comply with the foregoing provisions will renderthe holder of this certificate liable to be punishable withimprisonment or fine or both, under section 5of theRegistration of Foreigners Act, 1939 (XVI of1939).

8.10. Duplicate Certificate of Registration

Registration of Foreigner’s Rules 1992, vide rule 17 provides thatif any certificate of registration, issued under these Rules is lostor destroyed, the foreigner to whom it was issued, shall make orsend to the Registration Officer of the district of his/herregistered address a report of circumstances in which it was solost or destroyed together with an application in writing for theissue of a duplicate copy of the certificate of registration. Theconcerned FRO, would then issue a duplicate certificate ofregistration.

8.11. Extension/Renewal of Residential Permit

Upon the expiry of the VISA, the foreigner needs to get a newVISA, in which case an application for the extension of stay inIndia needs to be made. Once again all the documents referredabove at the time of making an application would be requiredand in addition, the original resident permit needs to be givenback to the FRO office. The FRO office, upon verification of thedocuments would grant the permission to stay in India on thesame resident permit for the further period of the VISA validityand the endorsement would be made on the backside of theearlier resident permit which may read.


“The said foreigner entered India on ......... On the strength ofnew X Visa No ......... I/O .................. I/A ..................V/T .........and he/she reregistered old registration no.........

Hence as per Visa terms, Permitted to stay in India till .........

8.12. Surrender of the Residential Permit

The residential permit must be surrendered at the time ofdeparture from India to the Registration Officer of the Place (Port)from which He/She leaves India.

8.13. Consequences of not leaving the Country upon Expiry Dateof Permit

In the event of He/She not departing from India on or before theexpiry date of the residential permit, he/she would, unless hasobtained the permission from Central Government to remain inIndia for a longer period, be liable for prosecution forcontravention of the foreigner Act, 1946 punishable withimprisonment for a period of five years and/or with fine and alsoliable for expulsion from India.

8.14. Visa application

If the VISA is required to be obtained from the VISA departmentof the High Commission of India from the country to which theforeigner belongs, then the foreigner needs to be in his countryand present the VISA application along with the requireddocuments plus the passport. The VISA department of HighCommission of India would then, upon satisfactory documentaryevidence for the grant of VISA would issue a VISA for a furtherperiod, which again may vary from one year to three years. (byand large, nowadays, the VISAs are being issued for a year).

VISA application form could be obtained in each country withthe High Commission of India, in the respective countries.

The application form is required to be filled up giving all thedetails and accompany the required documents such asemployment agreement with the company in India, A letter fromthe company secretary stating that the respective foreigner isworking in India stating the designation and also stating that heis holding resident permit as required. The letter may further


state that the foreigner be granted multiple entry business visafor the period of contract stating that the current visa of theforeigner is expiring on what date

8.15. VISA renewal of foreigners from India itself

Whenever the VISA of the foreigners due to expire, it is notnecessary for the expatriate to travel to his / her country and getthe VISA renewed. The VISA renewal can be done from Indiaitself by following necessary procedure and making theapplication – undergoing the police verification etc. The Ministryof Foreign Affairs would extent the VISA and intimates the sameto FRO. Then the concerned FRO would put the extension periodas per the VISA terms and sign the same. However, whilestamping it, they would also give the reference of the Governmentletter issued by the Ministry of Foreign Affairs, extending theVISA, stating “ As per Government letter no ............ dated............Permitted to stay in India till ............ date/month/year.

The practicing professional could get to know this procedure aswell so that they could advise the foreign nationals that VISAextension could be done from India itself.

8.16. One more area of challenging practice for professional

Since more and more talent search are looked into by industriesand many expatriates are taking up assignment in multinational,larger companies, in joint venture firms etc, these companieslook forward in getting the expert’s services in the related areasuch as registration of foreign national, obtaining resident permitfor them, advising then on an ongoing basis the obligations andother issues

Further, no one would like to undertake a travel for getting theVISA renewed from their country – either the foreigner has toincur cost and travel or the sponsoring company has to bear thecost towards such travel. If VISA could be renewed or extendedfrom India itself, there is enormous amount of cost saving andthe practicing company secretary professional could adviseaccordingly and render the service.

***


9.1. A brief about the Employees’ Provident Funds andMiscellaneous Provisions Act, 1952

The objective of the act to establish and provide for the institutionof provident funds, pension funds and Employees deposit linkedinsurance fund for the benefits of the employees working in thefactories and other shop and establishments. This act isapplicable for all factories and establishment in which 20 or moreemployees are employed. The act provides benefits to theemployees towards the provident fund scheme, pension schemeand employees deposit linked insurance.

Correspondingly, to avail and provide the benefits of the schemeto the employees all three related acts i.e. (i) Employees ProvidentFund Scheme 1952, (ii) Employees’ Pension Scheme 1995 and(iii) Employees Deposit Linked Insurance 1976 would beapplicable.

9.2. Compliance related issues from the point of Practice

Without getting into the details of membership of the scheme,the details of contribution to Provident Fund and Employees’pension scheme, let us look into the duties and responsibilities ofthe employer so that the required compliance could be dischargedas prescribed by the act and regulated by the regulator.

9.3. Duties and responsibilities of the employer (returns)

The employer is required to furnish / provide the followinginformation relating to the provident fund scheme in respect ofhis organization.

(a) Ownership and names of responsible persons of theorganization

(b) Form No.2 Declaration and nomination

The Employees’ Provident Funds andMiscellaneous Provisions Act, 1952

125


(c) Form no. 5 whenever a new member Joining the scheme uponservice

(d) Form No 10 whenever any member leaving the service of thecompany

(e) Form 12A with monthly challans of deposit made to the PFscheme

(f) Form 9 for details of employees(g) Form 3A/6A at the end of the financial year – each year(h) Any other information as may be required under Para 76 of

the scheme.9. 4. Scheme Certificate

The scheme Certificate shows the service and the family detailsof a member and the scheme certificate is issued if the memberhas not attained the age of 58 while leaving an establishmentand he applies for this certificate. When the members joinsanother establishment, they can surrender the scheme certificateissued and the service stated in the certificate is added with theservice he is gaining from the new establishment.After attaining the age of 50 or above, the member can apply forPension by surrendering this scheme certificate (if total serviceis at least 10 years)If a member dies holding a valid scheme certificate, his familywill get pension (Death when NOT in service)

9.5. Death benefitsUpon death of the member the members family or to nomineewould get the provident fund amount accumulated in his accountand the family would get pension (or parent / nominee). Capitalreturn of the pension facility is also available. Insurance amountthrough employees deposit linked insurance (EDLI) would be paidto the family or to his nominee- the EDLI contribution is entirelymade by the employer and no amount is taken from the member.

9.6. ComplianceMember is submitting the information relating to his nomineeand the nominee is determined as per the information submittedby the member and the prescribed form for submitting thenomination is FORM-2.


The Employees’ Provident Funds andMiscellaneous Provisions Act, 1952

COMPLIANCE CHECKLISTS

Section/Clause Description Forms Compliancestatus

Schedule I Applicability-the factory in which 20 or morepersons employed (5 or more incase of cinema theatres)-any other establishmentemploying 20 or more persons asper notification of CentralGovernment-any establishment employingless than 20 persons coveredvoluntarily u/s 1(4)of the actC.P.F number to contractors byhome workers Eligibility-at the time of joining employmentwages up to Rs. 15,000/-

Sec 2A Establishments inclusive ofbranches and departments-it includes branches ordepartments situated in same ordifferent location

Sec 6 Contributions to PF fund-12% of basic wages (dearnessallowance + retaining allowanceif any ) by employer who on hisown motion may pay PF on moreamounts-inspection charge by employer.18% of wages (DA +retainingallowance)-employees contribution equals tothe employers contribution-the government contributes1.16% of maximum 15,000/-Loan Facility :-Advance for purchase orconstruction of house property


-Advance for il lness (non ESIemployee)-Advance for marriage andeducation etc.

Sec 8 Mode of recovery of money duefrom employers

-contribution payable toinsurance fund

-damages recoverable u/s14-B

-accumulation required to betransferred u/s15(2)or 17(5)

-any charge payable by him underany provision of this act

-recovered u/s 8-B to 8-G

8A Recovery of money by employersand contractors

-incase of contract basis employerrecovers from contractorsemployer ’s and employees’contribution and cost ofadministering fund either bydeduction from any amountpayable to contractors or as a debtpayable to the contractor-a contractor recovers from suchemployee the employeecontribution by deduction fromthe basic wages, DA, retainingallowance

Sec 8-B Issue of certificate to the recoveryofficer-if any arrears as to above theauthorized officer issuescertificate to Recovery officer whorecovers the amount specifiedfrom the establishments on thefollowing(i) attachment and sale of movableor immovable property of theestablishment



(ii) arrest of the employer and hisdetention in prison(iii) appointing a receiver for themanagement of the movable orimmovable properties of theestablishment or as the case bethe employer

Sec 16 Act not apply to certainestablishments

-company registered under Co-operative Societies Act, 1912

-the establishment of companiesunder Central or StateGovernment entitled to the benefitof contributory PF or old agepension in accordance with thescheme or rule framed by state orcentral government governingsuch benefits

-to any other establishment newlyset up under any central,provincial or state act

Sec 16-A Authorizing certain employers tomaintain PF accounts

-more than 100 or more employeesin the establishment maintain PFaccount

-no authorization shall be madeif the employer had committed andefault in the payment ofprovident fund contribution orhad committed any other offenceunder this act during the threeyears immediately preceding thedate of such authorization.

Sec 17-A Transfer of accounts : Form 13 revised

-employees finds the job in otherestablishment, such PF accountshall be transferred



Sec 17-B Liability in case of transfer ofestablishment :

-incase of transfer ofestablishment by sale, gift, leaseor license the person to whomsuch transfer is made is liablejointly and severally to pay thecontribution and other sums duefrom the employer under this actin respect of the period up to thedate of such transfer

-liability of the transferee shallbe limited to the value of the assetsobtained by him by such transfer

Paragraph - 33 Under Employees ’Provident fund Form 2scheme :

Declaration by persons already atthe time of institution of the fund:

-the person has to declare formembership and his nominee tothe commissioner

- signature or thumb-impressionof the employee has to be obtained

Para - 34 Declaration by person taking upemployment after the fund hasbeen established :

-before making employment ofperson to state in writing to checkwhether he is a member of the fundif so get the account number

-if he is unable to furnish a/cnumber he will require suchperson as to particulars of himand his nominee which shall beentered in Declaration form by theemployer and obtain thesignature or thumb-impression ofthe person concerned



Para 35 Preparation of contribution cards: Form 3 or-preparation of contribution card Form 3Afor an employee becomingmember of the fund

Para 36 Duties of employers : Form 5-submission of consolidated return together withof employee entitled to become form 2members within 15 days of closeof each month

-if employee leaves service ‘Nil’return has to be submitted

-recoveries to be sent within 25days of the close of the month

-maintenance of inspectionnotebook

Para 36-A Employers to furnish particulars of Form 5Aownership :

-submission of form as toparticulars of all branches anddepartments, owners, occupiers,directors, partners, manager toRegional commissioner

-if any change in such particularswithin 15 days of such changeintimate to Regionalcommissioner

Para 36-B Duties of contractors :

-within 7 days of close of everymonth submit to the principalemployer as to recovery ofcontribution from employees

Para 38 Mode of payment of contribution : Form 6A

-deposit of amount to the fund byseparate bank drafts or chequewithin 15 days of close of everymonth-if payment is by cheque, it shouldbe drawn only on local bank



-monthly abstract has to besubmitted within 25 days of closeof month-submission of consolidatedAnnual contribution statementwithin one month of close of theperiod as to recovery andcontribution-monthly statement ofcontribution-statement of accounts to beissued to the employees by theemployer-the employer shall send a NILreturn if no such recoveries havebeen made from the employees

Para 40-A Supply of Pass Books to themembers :-provide pass book to everyemployee becoming member of thefund

Para 41 Currency of contribution cards-the contribution cards issuedunder the scheme shall be currentfor one year

Para 43 Submission of contribution cards Form 6to the Commissioner :

-within 1 month from the date ofexpiry of period of currency of thecontribution cards send it toCommissioner with a statement

- it includes coverage of familypension scheme also

Para 45 Inspection of records by members:

-employee by request in writing isallowed to inspect within 72 hrsof making such request and notentertained more than once inevery two months



Para 57 Inter state transfer of accounts : Form 13

-where a member of fund ceasesto be employed in one region andsecure employment in eitheranother region or same region inan establishment to which thisscheme applies or an exemptedestablishment or not coveredunder the act apply to thecommissioner for transfer ofaccount

Para 64 Assignment of policies to the fund:

-policy shall within 6 months ofthe first payment be assigned byendorsement to the central boardand delivered to thecommissioner

-if policy isn’t assigned forfinancing of member ’s l ifeinsurance policies any amountpaid from the fund in respect ofsuch policy with interest is repaidby the member, if not, the employerhas to deduct in lump sum or insuch installments as per thecommissioner instruction

-the amount so repaid orrecovered shall be credited to themember’s account in the fund

Para 68 - J Advance from the fund for illness Form 31in certain cases :

-a member is allowed non-refundable advance from hisaccount in the fund in cases ofhospitalization lasting for onemonth or more or major surgicaloperation in a hospital orsuffering from TB, leprosy,(paralysis, cancer, mental,derangement or heart ailment)



and granted leave for treatmentby his employer

- the advance shall be granted ifthe employer certifies thatemployees’ state Insurancescheme facility and benefits aren’tavailable to the employee

- a member may be allowed non-refundable advance from hisaccount for treatment of his familyas to above diseases

-amount advanced shall notexceed member’s basic wages +DAfor six months or his own shareof contribution with interest in thefund whichever is less

Para 68-NN Withdrawal within one year Form 10 Cbefore the retirement :-the member can claim up to 90%standing to his credit at time afterattainment of age of 54 years orwithin one year before his actualretirement whichever is later

Para 70 Accumulations of a deceased Form 20member to whom payable :-on the death of member theamount standing to his creditbecomes payable to nominee-if no nominee, payable tomembers of his family in equalshares

Para 73 Annual statement of member’saccount :-annual return as to statement ofhis account showing openingbalance, amount contributed,total amount of interest has beengiven through employer ofestablishment where theemployee last worked



Para 76 Punishment for failure to paycontribution :

-fails to submit any return or

-deduct from wages or otherremuneration of a member or anypart of the employer ’scontribution

-non compliance with any otherrequirement

-punishable with imprisonmentextent to one year or fine extent toRs.4000 or with both

Sec 6-A Employees’ pension scheme

-applicable to every employeewho is the member of Employeeprovident fund

-employee not required tocontribute to the scheme

- eligibility for pension scheme iscompletion of membership for 10years

-sum payable to such pensionscheme from employer ’scontribution not exceeding 8.33%of wages

-sum payable by the employers ofexempted establishments u/s17(6)

-net assets of the Employees’family pension fund as on the dateof establishment o the pensionfund

-sums as the Central Governmentafter due appropriation byparliament by law in this behalfspecify

-Minimum Pension of Rs. 1000/-per month.



Para 3 Employees pension fund :-a part of contributionrepresenting 8.33% of theemployees’ pay shall be remittedto the Employees’ pension fundwithin 15 days of the close of theevery month by a separate bankdraft or cheque on account of EPFcontribution by the employer

Para 5 Recovery of damages for defaultin payment of any contribution :-<2 months = 5%-2< but <4 months = 10%- 4< but <6 months = 15%-> 6 months = 25%

Para 11 Determination of pensionablesalary :-pensionable salary shall beaverage monthly pay drawnincluding piece rate basis duringthe contributory period of servicein the span of 12 months precedingthe date of exit from themembership of the EPF

Para 12 Monthly member’s pension-a member shall be entitled tosuperannuation pension if he hasrendered service of 10 years ormore and retires on attaining ageof 58 years-early pension ceases to be in theemployment before attaining theage of 58 years

Para 14 Benefits on leaving service before Form 10-Cbeing eligible for monthlymember’s pension :-if member hasn’t renderedeligible service on the date of exitor attaining age of 58 yearswhichever is earlier, he will beentitled to a withdrawal benefit



Para 16 Benefits to the family on thedeath of a member :-pension to the family shall beadmissible from the date offollowing the death of the memberif the member dies-while in service provided that atleast one month’s contributionhas been paid to the EPF-after the date of exit but beforeattaining age of 58, from theemployment having renderedservice entitling to monthlymember’s pension-after commencement of paymentof monthly member’s pension-the monthly window pensionshall be in cases equal to themonthly member’s pensionadmissible as if the member hadretired on the death of death orRs.450 whichever is more-monthly children pension shallbe equal to 25% of the amountadmissible to the widow ordeceased member as monthlywidow pension payable and notless than Rs.150p.m until thechild attains age of 25 years-if deceased member is notsurvived by any widow but bychildren or if the widow pensionis not payable the children shallbe entitled to a monthly orphanpension equal to 75% of amountof monthly widow pensionprovided minimum monthlyorphan pension for each orphanshall be not less than Rs. 250p.m.

Para 19 Preparation of contribution cards:-preparation of Employeespension fund contribution card of



employee becoming member of theEmployees pension fund

Para 20 Duties of employers :-submission of consolidatedreturn to commissioner within 3months of commencement ofscheme-if no employee entitled to becomea member NIL return has to besubmitted-a return of employees leavingservices has to be submittedwithin 15 days of close of eachmonth-maintenance of such accounts inrelation to amount contributed-submission of electronic formatof returns specified by thecommissioner

Para 21 Employer to furnish particulars ofownership :-submission of particulars ofbranches and departments,owners, occupiers, directors,partners, managers and any otherperson who has control overfactory to the commissioner-if any change in above intimationto commissioner has to be madewithin 15 days of such change

Para 22 Duties of contractors :-within 7 days of close of everymonth submission of statementby contractors as to particularsof employee of whom Employees’Pension fund are payable

Para 24 Declaration by persons taking upemployment after the fund hasbeen established :-obtain scheme certificate fromemployees as to past employment



Para 31 Rounding up of the benefits :-all items of benefits shall becalculated to the nearest rupee,50 paise or more to be counted asnext higher rupee and fraction ofrupee less than 50 paise shall beignored

Para 39 Exemption from the operation ofthe pension scheme :-if exemption is granted by theappropriate government to anyestablishment, withdrawalbenefits available to the credit ofthe employees under the ceasedfamily pension scheme shall bepaid subject to the consent of theemployees to the pension fund ofestablishments so exempted-pending disposal of applicationfor exemption employer’s share ofthe contribution shall not beremitted to the pension fund

Para 39-A Submission of return : Form I-submission of the monthly returnin electronic format by exemptedestablishment to thecommissioner

Para 42 Punishment for failure to submitreturn :-deducts from wages or fails tosubmit return or submit falsereturn or fails to produce anyrecord-non compliance with any otherrequirement, punishable withimprisonment extent to one yearor with fine of Rs.5000 or withboth

Sec 6-C Employees’ Deposit-LinkedInsurance Scheme-payable by employer not being



more than 1% (one-fourth of thecontribution) of basic wages, DA,Retaining allowance

-contribution @.50% required tobe paid up to maximum limit of15,000

-administrative charge payable byemployer .01% of 15,000, in caseof exempted establishment .005%total wages paid

-the insurance scheme providematters specified in Schedule IV

-if any contravention penalty willbe not less than 6 months extentto one year or fine of Rs.5000

Para 8-A Recovery of damages for defaultin payment of any contribution :-where the employer makes anydefault in payment it may berecovered from the employer byway of penalty, damages at belowrates-<2 months = 5%-2< but <4 months = 10%- 4< but <6 months = 15%-> 6 months = 25%

Para 9 Employer’s contribution not to bededucted from the wages ofemployees :-not entitled to deduct employer’scontribution from wages ofemployee

Para 10 Duties of employers : Form 5-submission of consolidatedreturn of employees, who is ,alongwith nomination made by him andleaving service of the employerduring preceding month entitledto become members of Insurance



scheme within 15 days ofcommencement of the scheme

-if no employee qualifying tobecome member of Insurancefund NIL return has to besubmitted

-submission of monthly abstractof aggregate amount of wages ofmembers on which contributionis payable by employer to thecommissioner within 25 days ofthe close of the month

-maintenance of records as toamount contributed to Insurancefund

Para 13 Administration account :

-contribution shall be credited toseparate account calledInsurance Fund CentralAdministration Account

Para 14 Deposit – linked Insurance Fundaccount :

-amount received as employer’scontribution and CentralGovernment contribution toInsurance fund is credited toDeposit-linked Insurance fundaccount

Para 19 Forms and manner ofmaintenance of accounts :

-central board maintain itsaccounts of its income andexpenditure including itsadministrative account andaccounts shall be prepared forfinancial year and books shall bebalanced on 31st March eachyear

• Form I – receipts and payments(contribution a/c)



• Form II – receipts andpayments(administration a/c)• Form III- balance sheet

Para 22 Scales of assurance benefit andthe minimum average balance tobe maintained by an employee :-on death of employee, the personis entitled to receive the Providentfund accumulation equal toaverage balance in account ofdeceased in the fund duringpreceding 12 months or duringthe period of membershipwhichever is less except averagebalance exceeds 50000+40% ofamount excess of 50,000 subjectto ceiling of one lakh or Theaverage monthly wages drawn(subject to a maximum of rupeessix thousands five hundred)during the twelve monthspreceding the month in which hedied, multiplied by twenty times.Whichever is higher. Now furtherincreased by 20% in addition tothe Benefits.

Para 23 Assurance benefit to whom Form -5(IF)payable :-assurance amount shall bepayable to the nominee and ifnominee eligible for only a partrest to the members of his familybut not applicable to son whoattained majority and marrieddaughters whose husbands arealive

Para 24 Assurance amount to be paid-nominee send a writtenapplication to the commissionerthrough the employer

Para 25 Registers and records etc.-maintenance of registers and



records in the form or design ofany identity card, token or discfor the purpose of identifying anyemployee or his nominee ormember of his family entitled toreceive the benefit

Para 29 Punishment for failure to submitreturns etc.,-deducts from wages or fails tosubmit return or submit falsereturn or fails to produce any record-non compliance with any otherrequirement, punishable withimprisonment extent to one yearor with fine of Rs.4000 or both

Sec 14 (1A) Penalties :-whoever for the purpose ofavoiding any payment to be madeunder this act knowingly makesany false statement of falserepresentation, he shall bepunishable with imprisonment ofone year or fine of Rs.5000 or both-any employer who doesn’t complywith the requirement of depositingthe contribution deducted fromthe employees salaries shall bepunishable with imprisonmentfrom 1 year to 3 years or fine ofRs.5000 or both-in any other case shall beimprisonment from 6 months to 3years and also with a fine ofRs.5000- Contributions received by theTrust shall be invested by theBoard of Trustees in accordancewith the investment patternapproved by the Government ofIndia. The rate of interest shall bedeclared in conformity with theprovisions of the Act.



- Loans and Advances toemployees shall be provided asper the provisions of the Act.- the Bye-Laws created foroperation of the Trust relating tothe aspects of Audit of Accounts,Approval of Payments etc. shallbe complied with.



10.1. A brief about the Payment of Gratuity Act, 1972

The gratuity act provides for a scheme for the payment of gratuityto employees engaged in factories, mines, oilfields, plantations,ports, railway companies, shops or other establishments.The Act enforces the payment of 'gratuity', a reward for longservice, as a statutory retiral benefit. Every employees respectiveof his wages is entitled to receive gratuity if he has renderedcontinuous service of five years or more.As per the decided case between Delhi Cloth and General MillsCo; Ltd. Vs the Workmen, the gratuity is not paid to an employeegratuitously or merely as a matter of boon and the gratuity ispaid for the service rendered by him to the employer. Paymentof gratuity arises to an employee at the time of separation fromhis employment after he has rendered continuous service fornot less than five years: Separation could be of termination ofservice or upon attaining superannuation or on resignation or onthe employee’s death or disablement due to employment injuryor disease.One may like to note at this juncture that the “Working Journalistsand Other Newspaper Employees (Conditions of service) andMiscellaneous Provisions Act, 1955”, provides for payment ofgratuity if the employee has put in three years of continuousservice as eligibility condition.

10.2. Compliance related issues vis-à-vis responsibility of employer

Since we are on the compliance related issues from the point ofpracticing company secretary professional, let us look into theduties and responsibilities of the employer so that the compliancecould be well addressed.(a) Every employer, other than an employer or an establishment

Payment of Gratuity Act, 1972

145


belonging to, or under the control of, the Central Governmentor a State Government, shall, subject to the provisions ofsub-section (2), which talks about the employee.

(b) obtain an insurance in the manner prescribed, for his liabilityfor payment towards the gratuity under this Act, from theLife Insurance Corporation of India established under the LifeInsurance Corporation of India Act, 1956 (31 of 1956) or anyother prescribed insurer:

(c) The appropriate Government may, subject to such conditionsas may be prescribed, exempt every employer who hadalready established an approved gratuity fund in respect ofhis employees and who desires to continue such arrangementand every employer employing five hundred or more personswho establishes an approved gratuity fund in the mannerprescribed.

(d) Where an employer fails to make any payment by way ofpremium to the insurance or by way of contribution to allapproved gratuity fund, he shall be liable to pay the amountof gratuity due under this Act (including interest, if any, fordelayed payments) forthwith to the controlling authority.

10.3. Compliance required – the forms and other requirements

The following are prescribed by the act, which needs to becomplied with

(a) Form A Rule 3(1)

Notice of opening (basically providing the information aboutorganization and number of people employed – industrydetails – seasonal or otherwise

(b) Form B Notice of change

(c) Form C Notice of closure

(d) Form D Notice for excluding husband from family

(e) Form E Notice of withdrawal of notice for excluding husbandfrom family

(f) Form F Nomination

(g) Form G Fresh Nomination


(h) Form H Modification of nomination

(i) Form I Application of Gratuity by an Employee

(j) Form J Application for gratuity by a Nominee.

(k) Form K Application for gratuity by a Legal Heir.

(l) Form L Notice for payment of gratuity

(m) Form M Notice rejecting claim for payment of gratuity

(n) Form N Application for direction to controlling Authority.

(o) Form O Notice for appearance before the Controlling Authority

(p) Form P Summons to appear before Controlling Authority.

(q) Form Q Particulars of application under Section 16

(r) Form R Notice for Payment of Gratuity

(s) Form S Rule 18(8) : Notice for payment of gratuity asdetermined by Appellate Authority


The Payment of Gratuity Act, 1972

STATUTORY COMPLIANCE CHECKLISTS

Sections / Brief Details of Sections/Rules Document ComplianceRules Reference status

Sec 1(3) Applicability

It shall apply to every factory, mine,oil field, plantation, port, railways,company, shop, establishment inwhich 10 or more employeesemployed or were employed on anyday of preceding twelve months.

Sec 2A(1) Continuous Service Check whetherContinuous service means un- employee is ininterrupted service,which may be continuousinterrupted on account of: service or not.

Sec 2A(2) 1. sickness, Check whether2. accident, leave, limit specified3. absence from duty without leave, in Sec 2A(2) is4. lay-off, strike or a lock- out or complied with5. cessation of work not due to anyfault of the employee,whether such uninterrupted orinterrupted service was renderedbefore or after the commencementof this Act.If an employee is not in continuousservice for a period of one year, heshall be deemed to be in continuousservice, if the employee has, duringimmediately preceding 12 calendarmonths, worked under the employerfor not less than-[1] 190 days if the employee wasemployed below the ground, say ina mine.[2] 190 days if the employee wasemployed in a establishment whichworks less than 6 days in a week.

[3] 240 days in any other cases.If an employee is not in continuousservice for a period of 6 months , he


shall be deemed to be in continuousservice, if the employee has, duringimmediately preceding 6 calendarmonths, worked under the employerfor not less than-

Sec 2A(3) [1] 95 days if the employee was Check whetheremployed below the ground, say in limit specifieda mine. in Sec 2A(2) is

complied with.

[2] 95 days if the employee wasemployed in a establishment whichworks less than 6 days in a week.

[3] 120 days in any other cases.

For the purposes of clause (2), thenumber of days on which anemployee has actually worked underan employer shall include the dayson which—

(i) He has been laid- off under anagreement or as permitted bystanding orders made under theIndustrial Employment (StandingOrders) Act, 1946 or under theIndustrial Disputes Act, 1947 or,under any other law applicable tothe establishment;

(ii) he has been on leave with fullwages, earned in the previous year;

(iii) he has been absent due totemporary disablement caused byaccident arising out of and in thecourse of his employment; and

(iv) in the case of a female, she hasbeen on maternity leave; so, however,that the total period of suchmaternity leave does not exceedtwelve weeks.

Where an employee, employed in aseasonal establishment, is not in



continuous service of 1 year or 6months , he shall be deemed to be incontinuous service for such periodif he has actually worked for not lessthan 75% of the number of days onwhich the establishment was inoperation during such period.

Sec 4 Payment of gratuity Check whetherThe amount of Gratuity shall be employee ispaid in the following cases to the discontinued ofemployee on the termination of his service foremployment after he has rendered reasonscontinuous service for not less mentionedthan five years,-- under SEC 4.

(a) on his superannuation, or

(b) on his retirement or resignation,or

(c) on his death or disablement (Fiveyear Service not required) due toaccident or disease:

In case of the death of the employee,gratuity shall be paid to

1. His nominee or

2. If no nomination is made, to hisheirs

3. No nomination is made and heirsare minor: The minor share shall bedeposited with the controllingauthority who shall invest the samefor the benefit of the minor withBanks or Financial Institution tillsuch minor attains majority.

Sec. 4(2) Wages calculation Check whether15 days’ wages for every completed the of gratuity isyear as if the month comprises of paid as per the26 days at the last drawn wages. i.e formula15/26 NO.OF COMPLETED YEAR OFSERVICE SALARY= BASICSALARY+DEARNESS ALLOWANCE



A. Calculation Piece-rated employee Check whether@ 15 days wages for every the gratuity iscompleted year on an average of 3 calculated asmonths’wages per the formula.LAST DRAWN WAGES*15/26*COMPLETED YEAR OF SERVICE. LASTDRAWN WAGES = TOTAL WAGES OFLAST 3 MONTHS (before termination)B. Calculation Seasonal employee @ Check whether7 days’ wages for every completed the of gratuityyear of service. is calculated as

per the formulaC. Calculation of Monthly ratedemployeeIn case of monthly rated employee,15 days wages shall be calculatedby dividing the monthly rate ofwages last drawn by him by 26 andmultiplying the quotient by 15.= Monthly rate of wages last drawnby him/26*15

Sec 4(3) Maximum limit on gratuity

The maximum amount shall not Check whetherexceed Rs. 10,00,000/- (Ten Lakhs) the amountw.e.f 24th May 2010. of gratuity

calculated iswithin limit

Sec 4(4) For the purpose of computing the Check whethergratuity payable to an employee computation iswho is employed, after his disable- in accordancement, on reduced wages, his with Sec 4(4).wages for the period preceding hisdisablement shall be taken to be thewages received by him during thatperiod, and his wages for the periodsubsequent to his disablement shallbe taken to be the wages as soreduced.

Sec 4(6) Note : Nothing in this section shallaffect the right of an employeereceive better terms of gratuity under



any award or agreement or contractwith the employer.

Notwithstanding anything containedin sub-section (1),--

(a) the gratuity of an employee, Check whetherwhose services have been termi- any gratuity isnated for any act, wilful omission or forfeited onnegligence causing any damage or account ofloss to, or destruction of, property reasonbelonging to the employer, shall be mentionedforfeited to the extent of the under Sec 4(6)damage or loss so caused;

(b) the gratuity payable to anemployee 1[ may be wholly orpartially forfeited]—

(i) if the services of such employeehave been terminated for his riotousor disorderly conduct or any otheract violence on his part, or

(ii) if the services of such employeehave been terminated for any actwhich constitutes an offenceinvolving moral turpitude, providedthat such offence is committed byhim in the course of his employment.

Sec 4A COMPULSORY INSURANCE

(1) With effect from such date as Check whethermay be notified by the appropriate employer hasGovernment in this behalf, every registered withemployer, other than an employer or the controllingan establishment belonging to, or Authority.under the control of, the CentralGovernment or a State Government,shall, obtain an insurance in themanner prescribed, for:

Sec 4A(3) His liability for payment towards the Check whethergratuity under this Act, from any default is(a) Life Insurance Corporation of made by theIndia established or employer

under sec 4A(5).



Sec 4A(5) (b) any other prescribed insurer.

Sec 4A(6) Duty of the Employer:

1. Every employer shall within such Check whethertime as may be prescribed get his employer hasestablishment registered with the obtained anycontrolling authority in the prescri- insurancebed manner mentioned

under Sec 4A.2.No employer shall be registeredunder the provisions of this sectionunless he has taken an insurance orhas established an approvedgratuity fund.

Liability of Employer: Where anemployer fails to make any paymentby way of premium to the insuranceor by way of contribution to anapproved gratuity fund, he shall beliable to pay the amount of gratuitydue under this Act (includinginterest, if any, for delayedpayments) forthwith to thecontrolling authority.

Penalty:

Whoever contravenes theprovisions of sub- section (5) shallbe punishable with fine which mayextend to Rs.10000/- and

In the case of a continuing offencewith a further fine which may extendto Rs.1000/- for each day duringwhich the offence continues.

Sec 5 POWER TO EXEMPT.-

Sec 5(1) The appropriate Government may, by Check whethernotification, and subject to such any exemptionconditions as may be specified in is given bythe notification, exempt any estab- government aslishment, factory, mine, oilfield, per Sec 5(1)plantation, port, railway companyor shop to which this Act applies



from the operation of the provisionsof this Act if, in the opinion of theappropriate Government, theemployees in such establishment,factory, mine, oilfield, plantation,port, railway company or shop arein receipt of gratuity or pensionarybenefits not less favourable than thebenefits conferred under this Act.

Sec 5(2) The appropriate Government may,by notification and subject to suchconditions as may be specified inthe notification, exempt anyemployee or class of employeesemployed in any establishment,factory, mine, oilfield, plantation,port, railway company or shop towhich this Act applies from theoperation of the provisions of thisAct, if, in the opinion of theappropriate Government, suchemployee or class of employees arein receipt of gratuity or pensionarybenefits not less favourable than thebenefits conferred under this Act.

Sec 5(3) A notification issued under sub- Check whethersection (1) or sub- section (2) may any exemptionbe issued retrospectively a date is given bynot earlier than the date of government ascommencement of this Act, but no per Sec 5(1)such notification shall be issued soas to prejudicially affect theinterests of any person

Sec 6 Nomination.-

Sec 6(1) Each employee, who has completed Check whetherone year of service, shall make, nomination haswithin such time, in such form and in been made withinsuch manner, as may be prescribed, time stipulated innomination for the purpose of the Sec 6(1).second proviso to sub- section (1)of section 4.



Note:1. An employee may, in hisnomination, distribute the amount ofgratuity payable to him under thisAct amongst more than one nominee.2. If an employee has a family at thetime of making a nomination, thenomination shall be made in favourof one or more members of hisfamily, and any nomination madeby such employee in favour of aperson who is not a member of hisfamily shall be void.3. If at the time of making anomination the employee has nofamily, the nomination may be madein favour of any person or personsbut if the employee subsequentlyacquires a family, such nominationshall forthwith become invalid andthe employee shall make, withinsuch time as may be prescribed, afresh nomination in favour of oneor more members of his family.4. A nomination may, subject to theprovisions of sub- sections (3) and(4), be modified by an employee atany time, after giving to hisemployer a written notice in suchform and in such manner as may beprescribed, of his intention to do so.5. If a nominee predeceases theemployee, the interest of thenominee shall revert to theemployee who shall make a freshnomination, in the prescribed form,in respect of such interest.6. Every nomination, freshnomination or alteration ofnomination, as the case may be,shall be sent by the employee to hisemployer, who shall keep the samein his safe custody.



Sec 7 Determination of amount of gratuity

1. The employer shall determine the Check whetheramount of Gratuity and intimate the employer haspersons eligible to receive and also to performed asthe Controlling Authority as soon as per the section 7.it becomes payable.

2. The payment shall be made within30 days from date on which itbecomes payable.

3. Interest such rate of notified bythe central government from time totime shall be paid for any delay.

Note: (1) A person who is eligible forpayment of gratuity under this Actor any person authorised, in writing,to act on his behalf shall send awritten application to the employer,within such time and in such form,as may be prescribed, for paymentof such gratuity.

(2) As soon as gratuity becomespayable, the employer shall ,whether an application referred toin sub-section (1) has been made ornot, determine the amount of gratuityand give notice in writing to theperson to whom the gratuity ispayable and also to the controllingauthority specifying the amount ofgratuity so determined.

(3) The employer shall arrange topay the amount of gratuity withinthirty days from the date it becomespayable to the person to whom thegratuity is payable.

4. If the amount of gratuity payableis not paid by the employer withinthe period specified, the employershall pay, from the date on whichthe gratuity becomes payable to thedate on which it is paid, simple



interest at such rate, not exceedingthe rate notified by the CentralGovernment from time to time forrepayment of long-term deposits, asthat Government may, bynotification specify:5. Provided that no such interestshall be payable if the delay in thepayment is due to the fault of theemployee and the employer hasobtained permission in writing fromthe controlling authority for thedelayed payment on this ground.6. If there is any dispute as to theamount of gratuity payable to anemployee under this Act or as to theadmissibility of any claim of, or inrelation to, an employee for paymentof gratuity, or as to the personentitled to receive the gratuity, theemployer shall deposit with thecontrolling authority such amountas he admits to be payable by himas gratuity.

Sec 8 RECOVERY OF GRATUITY.-

Note:

If the amount of gratuity payable Check whetherunder this Act is not paid by the any applicationemployer, within the prescribed time, is filed under Sec 8.to the person entitled thereto, thecontrolling authority shall, on anapplication made to it in this behalfby the aggrieved person, issue acertificate for that amount to theCollector, who shall recover thesame, together with compoundinterest thereon 1[ at such rate asthe Central Government may, bynotification, specify], from the dateof expiry of the prescribed time, asarrears of land revenue and pay thesame to the person entitled thereto



Sec 9 Penalties

• Imprisonment for 6 months or fine Check whetherupto Rs.10,000 or with both for employeravoiding to make payment by making committed anyfalse statement or representation. default• Imprisonment not less than 3 mentionedmonths and upto one year or with in Section 9.fine not less than 10,000 which mayextend to 20,000 on default incomplying with the provisions of Actor Rules.• Where the offence relates to non-payment of gratuity employer shallbe punishable with imprisonmentnot less than 6 months, which mayextend to 2 years

Sec 10 Exemption of employer fromliability in certain cases.-Where an employer is charged withan offence punishable under this Act,he shall be entitled, upon complaintduly made by him and on giving tothe complainant not less than threeclear days' notice in writing of hisintention to do so, to have any otherperson whom he charges as theactual offender brought before thecourt at the time appointed forhearing the charge; and if, after thecommission of the offence has beenproved, the employer proves to thesatisfaction of the court--1.that he has used due diligence toenforce the execution of this Act, and2.that the said other personcommitted the offence in questionwithout his knowledge, consent orconnivance.

Sec 11 Cognizance of OffencesNote:No court shall take cognizance ofany offence punishable under this



Act save on a complaint made by orunder the authority of theappropriate Government: Providedthat where the amount of gratuityhas not been paid, or recovered,within six months from the expiry ofthe prescribed time.

PAYMENT OF GRATUITY RULES, 1973

Rule 3(1) Notice of opening, Change or Closure Check whetherof the establishment: Form A is filedWithin 30 days of the rules with in timebecoming applicable to the company i.e. 30 days.a notice in Form A has to be sub-mitted to the controlling authorityof the area by the employer.

3(2) Within 30 days of change in name, Check whetheraddress, or nature of the employer Form B is fileda notice in Form B is required to with in timebe filed by the Employer with the mentioned incontrolling authority of the area. Rule 3.

3(3) Where an employer intends to close Check whetherdown the business, Within 60 days Form C is filedof intended closure a notice in Form with in timeC shall be filed with the controlling mentioned inAuthority. Rule 3.

Rule 4 Display of Notice

The employer shall display a notice Check whethernear the main entrances or at a notice isplace easy to attract the employees, displayed at ain bold letters in English language place mentionedas well as in language under- in Rule 4.stood by the majority of employees,Specifying the name of the office withdesignation authorised by theemployer to receive notice under thesaid Act or Rules.

Rule 5 5. Form of notice under proviso toSection (2)(h)(ii) (Definition of familyfor women)(1) A notice under Rule 5 shall be in Check whetherForm 'D' and sent in triplicate by a notice in



the employee to the employer, who Form D givenshall, after recording its receipt on by employeeone copy thereof, return the copy to to employer.the employee and send the secondcopy to the controlling authority ofthe area.

(2) An employee may withdraw the Check whethernotice referred to in sub-rule (1) by a notice ingiving another notice in triplicate in Form E givenForm 'E' to the employer, who shall by employee tofollow the same procedure as in employersub-rule (1).

Rule 6 Nomination:

A nomination shall be submitted in Check whetherForm F by the employee in duplicate: Form F is(i) In case of employees who is submittedalready in employment for one or within Stipulatedmore year on the date of commen- time mentionedcement of these rules within 90 under rule 6.days from such date,

(ii) In case employee completes oneyear of service after the date ofcommencement of these rules within30 days from the completion of oneyear of service.

Note: The employer shall accept Check whetherForm F, even though it is filed Form G isbeyond the time limit mentioned submittedabove, provided that on producing within Stipu-sufficient grounds for delay. lated time

mentioned(2) Duty of the Employer: under rule 6.

Within 30 days of receipt of nomi- Check whethernation in Form F, the employer shall Form H is1.collect the service particulars of submitted withinemployee, Stipulated time2. verify with records of the estab- mentionedlishment, under rule 6.3. After obtaining a receipt thereof,the employer or person authorisedby the employer shall return the



duplicate copy of Form F dulyattested to the employee as a tokenof recording the nomination.

(3) An employee who has no familyat the time of making a nominationshall, within ninety days ofacquiring a family, submit in themanner specified a freshnomination, as 6 in duplicate inForm 'G' to the employer,

(4) A notice of modification of anomination, including cases wherea nominee predeceases anemployee, shall be submittedinduplicate in Form 'H' to theemployer.Note:

1. A nomination or a fresh nomina-tion or a notice of modification ofnomination shall be signed by theemployee or, if illiterate, shall bearhis thumb-impression, in thepresence of two witnesses, who shallalso sign a declaration to that effectin the nomination, fresh nominationor notice of modification ofnomination, as the case may be.

2. A nomination, fresh nominationor notice of modification ofnomination shall take effect from thedate of receipt thereof by theemployer.

Rule 7 7. APPLICATION FOR GRATUITY

7(1) An employee who is eligible for pay- Check whetherment of gratuity under the Act, or Form I isany person authorized in writing, submittedto act on his behalf, shall apply, within Stipulated

7(2) ordinarily within thirty days from time mentionedthe date the gratuity became under rule 7(1).payable, in Form 'I' to the employer



7(3) A nominee of an employee who is Check whethereligible for payment of gratuity under Form J isthe second proviso to sub-section submitted(1) of Section 4 shall apply, within Stipulatedordinarily within thirty days from time mentionedthe date the gratuity became under rule 7(2).payable to him, in Form 'J' to theemployer :

Rule 8 (3) A legal heir of an employee who Check whetheris eligible for payment of gratuity Form K isunder the second proviso to sub- submittedsection (1) of Section 4 shall apply, within Stipulatedordinarily, within one year from the time mentioneddate the gratuity became payable under rule 7(2).to him, in Form 'K' to the employer.Note: The employer shall acceptForm F, even though it is filed beyondthe time limit mentioned above,provided that on producingsufficient grounds for delay.

NOTICE FOR PAYMENT OF GRATUITY

(1) Within fifteen days of the receipt Check whetherof an application under Rule 7 for a notice in Form Lpayment of gratuity, the employer is issued by theshall, - employer to

Rule 9 (i) If the claim is found admissible employees ason verification, issue a notice in per Rule 8(i)Form 'L' to the applicant employee,nominee or legal heir, as the case Check whethermay be, specifying the amount of a notice in Form Mgratuity payable and fixing a date, is issued by thenot being later that the thirtieth employer today after the date of receipt of the employees asapplication, for payment thereof, or per Rule 8(ii)

(ii) if the claim for gratuity is notfound admissible, issue a notice inForm 'M' to the applicant employee,nominee or legal heir, as the casemay be, specifying the reasons whythe claim for gratuity is notconsidered admissible



MODE OF PAYMENT OF GRATUITYNote:The gratuity payable under the Actshall be paid in cash or,

if so desired by the payee, in demand draft orbank cheque to the eligibleemployee, nominee or legal heir, asthe case may be :

Provided that in case the eligible employee,nominee or legal heir, as the casemay be, so desires and the amountof gratuity payable is less than onethousand rupees, payment may bemade by postal money order afterdeducting the postal money ordercommission there for from theamount payable :

Provided further that intimationabout the details of payment shallalso be given by the employer to thecontrolling authority of the area.

***



11.1. A brief about ESI

Employees State Insurance Act is a social welfare legislationenacted with the object of providing certain benefits toemployees in case of sickness, maternity and employment injury.

Under the Employees State Insurance Act, employees will receivemedical relief, cash benefits, maternity benefits, pension todependents of deceased workers and compensation for fatal orother injuries and diseases.

11.2. Compliance required under ESI

There are specified documents to be maintained for the purposeof inspection and also various forms are required to be submittedas specified and the employer obvious would have hisresponsibilities and duties to ensure that the necessary thingsare done in relation to documents, submission of forms and othercompliance.

Let us look into these entire aspect one after another to have abetter understanding so that the practicing company secretaryprofessional could help / assist / render necessary services tothe needing employer.

11.3. The duties and responsibilities of the employer

(a) The starting point is registration with the ESI Corporation forthe coverage of the benefits and the employer should gethis factory or establishments registered with the ESICorporation.

(b) The registration is required to be done within 15 days afterthe Act becomes applicable to it, and obtain the employerscode number from the ESI Corporation.

The Employees’ State Insurance Act, 1948

164


(c) Employer is required to obtain the declaration form, fromthe employees covered under the Act and submit the samealong with the return of declaration forms, to the ESI office.He should arrange for the allotment of Insurance Numbersto the employees and their Identity Cards.

(d) Employer should deposit the employees’ and his owncontributions to the ESI Account as per the due date basedon contribution period in the prescribed manner, whether hehas sufficient resources or not, his liability under the Actcannot be disputed. He cannot justify non-payment of ESIcontribution due to non-availability of finance.

(e) Employer should furnish a Return of Contribution along withthe challans of monthly payment, within 30 days of the endof each contribution period.

(f) Employer should not reduce the wages of an employee onaccount of the contribution payable by him (employer).

(g) Employer should cause to be maintained the prescribedrecords/registers namely the register of employees, theinspection book and the accident book.

(h) Employer should report to the ESI authorities of any accidentin the place of employment, within 24 hours or immediatelyin case of serious or fatal accidents. He should makearrangements for first aid and transportation of the employeeto the hospital. He should also furnish to the authorities suchfurther information and particulars of an accident as may berequired.

(i) Employer should inform the local office and the nearest ESIdispensary/hospital, in case of death of any employee,immediately.

(j) Employer must not put to work any sick employee and allowhim leave, if he has been issued the prescribed certificate.

(k) Employer should not dismiss or discharge any employeeduring the period he/she is in receipt of sickness/maternity/temporary disablement benefit, or is under medicaltreatment, or is absent from work as a result of illness dulycertified or due to pregnancy or confinement.


11.4. Record requirement under ESI Act

Since the ESI authorities carries out the inspection periodically,the act has prescribed that the following records would berequired to be maintained and produced for inspection as andwhen inspection takes place to the inspector of ESIC.

1. Attendance Register / Muster Roll

2. Salary / Wage Register / Payroll

3. EC (Employee’s & Employer’s Contribution) Statement

4. Employees’ Register

5. Accident Book

6. Return of Contribution

7. Return of Declaration Forms

8. Receipted Copies of Challans

9. Books of Account viz.

- Cash/Bank

- Expense Register

- Sales Register

- Purchase Register

- Petty Cash Book

- Ledger

- Supporting Bills and Vouchers

- Delivery Challans (if any).

10. Form of annual information on company

11.5. Various forms prescribed under the ESI Act (Important ones)

Form 01 Employers' Registration Form

Form 01(A) Form of Annual Information on Factory/Establishment

Form 1 Declaration Form


Form 1A Family Declaration FormForm 1B Changes in Family Declaration FormForm 3 Return of Declaration FormsForm 4 Identity CardForm 4(A) Family Identity CardForm 5 Return of ContributionsForm 6 Register of employeesForm 8 Special Intermediate CertificateForm 10 Abstention verification in r/o Sickness Benefit/

Temporary Disablement Benefit/MBForm 12 Sickness of Temporary Disablement BenefitForm 12 A Maternity Benefit for SicknessForm 13 Sickness or Temporary disablement or maternity

benefit for sicknessForm 13 A Maternity benefit for sicknessForm 14 Sickness or temporary disablement or maternity

benefit for sicknessForm 14 A Maternity Benefit for SicknessForm 16 Accident report from employerForm 17 Dependent’s or funeral benefit (Death Certificate)Form 18 Dependent’s Benefit (Claim Form)Form 18 A Dependent’s Benefit (Claim for periodical

payments)Form 19 Maternity Benefit (Notice of Pregnancy)Form 20 Maternity Benefit (Certificate of Pregnancy)Form 21 Maternity Benefit (Certificate of expected

confinement)Form 22 Claim for Maternity BenefitForm 23 Maternity Benefit (Certificate of confinement or

miscarriage)Form 24 Maternity Benefit (Notice of work)Form 25 Claim for Permanent Disablement BenefitForm 26 Certificate for permanent disablement benefitForm 27 Declaration and certificate for dependant’s

benefit


11.6 Rate of contribution of the wages:

For employer- 4.75%

For employee:- 1.75%

But in those areas where the act is implemented first time, initiallycontribution for first twenty-four months as under Rate ofcontribution of the wages:

For employer- 3% of wages

For employee- 1% of wages

(W.e.f. 6th Oct., 2016)

***


12.1. Brief and applicability of the Act

The Payment of Wages Act will apply to persons employed inany factory or employed (otherwise than in a factory)upon anyrailway by a railway administration or, either directly or througha sub-contractor, by a person fulfilling a contract with a railwayadministration, and to persons employed in an industrial or otherestablishment.

In this act "factory" means a factory as defined in section 2(m)of the Factories Act, 1948 and includes any place to which theprovisions of that Act have been applied under section 85(1)thereof.

"Industrial or other establishment" means any-

(a) Tramway service, or motor transport service engaged incarrying passengers or goods or

(b) both by road for hire or reward;

(c) Air transport service other than such service belonging to, orexclusively employed in the military, naval or air forces ofthe Union or the Civil Aviation Department of the Governmentof India;

(d) Dock, Wharf or Jetty; Inland vessel, mechanically propelled;

(e) Mine, Quarry or Oil-field;

(f) Plantation;

(g) Workshop or other establishment in which articles areproduced, adapted or manufactured, with a view to their use,transport or sale;

(h) Establishment in which any work relating to the construction,

The Payment of Wages Act, 1936

169


development or maintenance of buildings, roads, bridges orcanals, or relating to operations connected with navigation,irrigation, or to the supply of water or relating to thegeneration, transmission and distribution of electricity or anyother form of power is being carried on.

This Act applies to wages payable to an employed person inrespect of a wage period if such wages for that wage period donot exceed Rs 18000/- per month or such other higher sum which,on the basis of figures of the Consumer Expenditure Surveypublished by the National Sample Survey Organisation, theCentral Government may, after every five years, by notificationin the Official Gazette, specify."

12.2. Employer’s responsibility for Payment of wages

Every employer shall be responsible for the payment of all wagesrequired to be paid under the payment of wages act to personsemployed by him and in case of persons employed,-

(a) In factories, if a person has been named as the manager ofthe factory under clause (f) of subsection (1) of section 7 ofthe Factories Act, 1948 (63 of 1948);

(b) In industrial or other establishments, if there is a personresponsible to the employer for the supervision and controlof the industrial or other establishments;

(c) Upon railways (other than in factories), if the employer isthe railway administration and the railway administrationhas nominated a person in this behalf for the local areaconcerned;

(d) In the case of contractor, a person designated by suchcontractor who is directly under his charge; and

(e) In any other case, a person designated by the employer as aperson responsible for complying with the provisions of theAct, the person so named, the person responsible to theemployer, the person so nominated or the person sodesignated, as the case may be, shall be responsible for suchpayment.


12.3. Maintenance of registers and records

It is the responsibility of the employer to maintain such registersand records giving particulars of persons employed by him, thework performed by them, the wages paid to them, the deductionsmade from their wages and such other particulars. Every recordand register maintained shall be preserved for a period of 3 yearsafter the date of last entry made therein.

(a) Register of wages in form no. II

(b) Register of deductions for damage or loss in form no. III

(c) Register of advance in form no. IV

(d) Inspection book is required to be maintained

12.4. Display requirement

Abstract of the act is required to be displayed always

Notice of dates of payment to be displayed always

Display of rates of wages to be displayed always

12.5 Compliance requirement (return)

Annual return submission in form no. V

Due date of submission is on or before 15th of February of eachyear


The Payment of Wages Act, 1936


Sections/ Brief Details of Sections/Rules Document ComplianceRules Reference status

Objective

Regulate the payment of wages tocertain classes of employed persons

Coverage of employees

Drawing average wage up toRs.18,000/- p.m.

Sec 3 Responsibilities for payment ofwages

Every employer shall be responsiblefor the payment of al l wagesrequired to be paid under this Actto persons employed under this Actsuch as

-as manager of factory underclause (f) u/s 7(1) of factories act

-person responsible to employer forsupervision and control of theestablishment

-in case of contractor a persondesignated by such contractordirectly under his charge

-in any other case, a persondesignated by the employer as aperson responsible for complyingwith provisions

Sec 4 Fixation of wage periods

The wage period fixed for paymentof wages shall not exceed one month

Sec 5 Time of payment of wages

1. The wages of every factory inwhich less than one thousandpersons are employed, shall be paidbefore the expiry of the seventh day


&When more than 1000 workers,before the expiry of the 10th day

2. where the employment of anyperson is terminated by or on behalfof the employer, the wages earnedshall be paid before the expiry ofthe second working day from the dayon which his employment isterminated

Sec 7(3) Limits on total amount ofdeductions:

-in cases where such deductions arewholly or partly made for paymentsto the co-operative societies*75% ofwages

-in any other case 50% of wages

Sec 8 & Fines Form I

-appropriate Government approvalis required

-fine amount shouldn’t exceed theamount equal to 3% of the wagespayable to him in respect of thatwage period

-no fine to employed person belowage of 15 years

-no fine imposed on any employedperson shall be recovered byinstallments or after the expiry of90 days from the date on which itwas imposed

-all fines and all realizations shallbe recorded in a register to be keptby the person responsible forpayment of wages under section 3in such a form as may be prescribed

Rule 3 Register of fine

-no register of fine is maintained



unless particulars required in FormXIII are contained in any otherrecords maintained by thepaymaster under any other labourlaw

Sec 9 Deduction for absence from dutiesfor unauthorized absence

-Absence for whole or any part ofthe day if 10 or more personsabsence without reasonable cause,deduction of wages up to 8 days

Sec 10 Deduction for damage or loss Form II asFor default or negligence of an per rule 4employee resulting into loss, show (register ofcause notice to be given to the damage oremployee. loss kept for

3 years)Rule 5 Register of wages

-details of person employed

-the work performed by theemployed person

-the gross wages earned by eachperson

-the total of all deductions madefrom these wages

-the wages actually paid to eachperson employed for each wageperiod

-date of payment

-signature or left thumb-impressionof the person

Rule 5-B Wage slip

-wage slip containing provisions inrule 5 issued to employed person

-such wage slip is not needed if thepaymaster issues wage slip under



rule 27(2) of Tamilnadu minimumwages rules 1953

Rule 6-A Notice of rates wages to be paid to Form VIworkers

-notice is displayed near mainentrance of the factory specifyingrates of wages payable to differentclasses of workers

-notice shall be in English and inthe language of the majority of thepersons employed

-if more than 100 persons displayedin each section in the department.

Rule 17 Advances Form III

-an advance of wages not alreadyearned shall not without previouspermission of Inspector exceed anamount equal to the wages earnedduring preceding two calendarmonths or if not employed twice thewages he likely is to earn

-any advance may be recovered ininstallments by deduction fromwages spread over not more than12 months

-no installment by which an advanceis repaid shall exceed 1/3 or wherethe wages for any wage period aren’tmore than Rs.20, ¼ of the wages forany wage period in respect of whichthe deduction is made

Sec 11-A Deduction in respect of houseaccommodation :

Deduct the amount from wages asper specification of StateGovernment for houseaccommodation in writing

Rule 17-A Loan granted to an employed person



for the purchase of house-buildingsites as per u/s7(2)(fff) shall notexceed 10000 and interestchargeable shall not exceed 6% p.a

Rule 18-A Display of notice prescribed underRule 6-A:

-copies of notice under rule 6-A shallbe sent to Inspector in duplicatewithin whose jurisdiction thefactory is situated every year notlater than 15th January

-if change in notice, intimation madeno later than fortnight from the dateonwhich such alteration was made

Rule 18-B Notice to Inspector Form VII

-every paymaster shall send anotice in form VII so as to reach theinspector whose jurisdiction thefactory is situated not later than31st January every year

Sec 11-C Deductions in respect of professiontax

-required by the local authority inwriting to deduct the amount fromemployed person

Sec 13-A Maintenance of registers andrecords

-Maintain records and registers forpersons employed and preserve itfor 3 years after the date of last entrymade therein.

Sec 15 (2) Claims arising out of deductions fromwages or delay in payment of wages

-Form A for individual application(within 12 months from the date ofdeduction)

-Form B for group application



-Form C for application by aninspector or person permitted by theauthority or authorised to act-Form D for certificate ofauthorization

Sec 15(3) Refund along with compensation not Form E &exceeding 10 times the amount Form F fordeducted and not exceeding 3000 record ofbut not less than 1500 order of

direction-wages paid before the disposal ofapplication not exceeding Rs.2000

Sec 17 Appeal Form G-by the employer or personresponsible for payment of wages,compensation exceeds Rs.300 OR-by employed person or any legalpractitioner or any inspector or anyperson authorised to act u/s 15(2)wages withheld Rs.20 OR fromunpaid group to which employedperson belongs exceeds Rs.50-within 30 days of the date order wasmade

Sec 20 Penalties :-contravention of section 5,section7, section 8 except sub section (8)and section 11 to 13 shall bepunishable with fine not less thanRs.1500 which may extent to Rs.7500-contravention of section 4, section5& 6 and section 25 shall bepunishable with fine which mayextend to Rs.3750-contravention of section 3 shall bepunishable with fine which mayextend to Rs.3000-fail to maintain record or registeror furnish information or gives falseanswer to question necessary forobtaining information shall be



punishable with fine not less thanRs.1500 which may extent to Rs.7500-willfully obstructs an inspector indischarge of his duties or refuses toaccord an Inspector any facility formaking any entry, inspection,supervision or refuses to produceon demand of Inspector any registeror other document shall bepunishable with fine not less thanRs.1500 which may extent to Rs.7500-any person convicted of any offencepunishable under this act is againguilty of an offence involvingcontravention of same provisionshall be punishable with fine notless than Rs.3750 which may extentto Rs.22500-fails to pay the wages of anyemployed person by the date fixedby the authority shall be punishablewith an additional fine extent toRs.750 for each day.

Rule 22 & sec 25 Abstract of the act : Form V

-a notice containing such abstractsof this act and of rules made thereunder in English and in the languageof the majority of persons employedin the establishment

Sec 25-A Payment of undisbursed wages incases of death of employed person :

-to be paid to the person nominatedby him

-if no nomination or cannot be paidto the nominated person suchamount so deposited withprescribed authority who shall dealwith the amounts so deposited insuch manner as may be prescribed



13.1. A brief introduction

The minimum wages act would like to ensure making the wagepayment as set by the government to skilled and unskilledworkmen. The minimum wages is set taking into considerationof a 'living wage' that is the level of income for a worker whichwill ensure a basic standard of living including good health, dignity,comfort, education and provide for any contingency.

13.2. Display requirement

Form IXA Abstract of the Act and Rules to be displayed Form

13.3. Record requirement

Form V Muster roll cum wage register

(unless registers in Form 17 & 19 appended toMaharashtra Factories Rules 1963 and a register inform II appended to the Maharashtra Payment ofWages Rules 1963 are maintained)

Form I Register of Fines

Form II Register of deduction for damage or loss caused tothe employer by neglect or default or the employedperson

Form IV Overtime register for workers for monthending……………..

Form X Register of Wages Form Inspection book

13.4. Compliance required (return)

Annual return is required to be submitted in Form III every yearon or before 15th February

The Minimum Wages Act, 1948

179


13.5. Other prescribed forms under the Minimum Wages Act

Form VI Form of Claim by an Employee for payments lesserthan the stipulated Minimum Wages

Form VIA Form of Group Application by Employees for paymentslesser than the stipulated Minimum Wages

Form VII Form of application by an Inspector or person actingwith the permission of the authority for complaintagainst the wages paid Form

Form VIII Form of Authority in favour of a Legal Practitioner orany Official of a Registered Trade Union Form

Form IX Form of summons subsection to the Opponent toappear before the Authority Form

Form XI Wage Slip Form


MINIMUM WAGES ACT, 1948



Objective

To provide for fixing minimum rates ofwages in certain employments

Sec. 3 Fixing of minimum rates of wages

The appropriate Government shall fixMinimum Wages for employees in anemployment specified in Part I or Part IIof the Schedule and in an employmentadded to either part by notificationunder section 27.The appropriate Government may inrespect of employment specified in partII of the Schedule may fix minimum ratesof wages for a part of the state or for anyspecified class or classes of suchemployment in the whole state or partthereofThe appropriate Government may fix- • a minimum rate of wages for time work• a minimum rate of wages for Piecework at piece rate• Piece work for the purpose of securingto such employees on a time work basis• Overtime work done by employees forpiece work or time rate workers.

Sec. 4 Minimum Rates of Wages

Such as Basic rates of wages, specialallowance and with or without the costof living allowance and cash value ofthe concessions

Sec. 5 Procedure for fixing and revisingMinimum Rates of Wages

Appointing Committee in case ofscheduled employment and sub-committee to hold enquiries and advise


in respect of fixation and revision andby notification publishing its proposalsnot less than 2 months from the date ofnotification for taking proposals intoconsideration

Sec. 9 Composition of Committee

Appropriate Government may nominateRepresentatives of employer andemployee in scheduled employment inequal number and independent personsnot exceeding 1/3rd of its total numberand one such independent person to beappointed as the Chairman.

Sec 11 Wages in kind

-wages paid normally in cash but partlycan be paid by cash and kind with theappropriate government notification

Sec.12 Payment of Minimum Rates of Wages

Employer to pay to every employeeengaged in scheduled employment at ratenot less than minimum rates of wagesas fixed by Notification without makingdeduction other than those prescribed.

Rule 20 Mode of computation of the cash valueof wages:

-average retail prices at the nearest marketfor the period of 3 months immediatelypreceding the month for which wages iscomputed taken into account for cashvalue of wages paid in kindTime and conditions of payment of wagesand the deductions permissible from thewages.

Payment of wages:

- The wages of a worker shall be paid ona working day

- In the case of establishments in whichless than 1000 persons are employedbefore the expiry of the seventh day



Rule 21 - In the case of other establishmentswages shall be paid before the expiry ofthe 10 of the day after the last day ofwage period.

- In case of termination of employmentby or on behalf of the employer or due toresignation of employee, wages shall bepaid within two days after terminationof such employment.

- Notices in Form IX-A containing theminimum rate of wages fixed, togetherwith abstracts of the Act, the rules andthe name and address of the Inspectorshall be displayed in English and in alanguage understood by the majority ofthe workers at the main entrance andmaintained in a clean and legiblecondition.

Deduction from wages:

-In case of scheduled employment thefollowing may be deducted

• Fines in respect of such Acts andOmissions as may be specified by theCentral Government

• Deductions for Absence of duty

• Deductions for damage to or loss ofgoods or money where damage is directlyattributed to his neglect or default.

• Deductions for house accommodationsupplied by the employer or by a StateGovernment or any authority constitutedby the State Government for providinghousing accommodation

• Deductions for such AMENITIES &SERVICES supplied by the employer asspecified by the Central Government.(AMENITIES & SERVICES do not include thesupply of tools and protectives requiredfor the purposes of employment)

• Deductions for recovery of advances



or for adjustment of over – payments ofwages.(Provided such advances does notexceed an amount equal to wages for 2calendar months & in no case shall themonthly installments of deductionsexceed one fourth of the wages earned inthat month & the entire advance shall berecovered within a period of 12 months)

• Deductions of income tax payable

• Deductions made by the order of Courtor other competent authority

• Deductions for subscription to and forrepayment of advances from anyprovident fund under Provident Fund Act1925

• Deductions for payment to co-operativesocieties

• Deductions made with writtenauthorization for payment of anypremium on his life insurance policy toLIC under Life Insurance Corporation Act,1956.

-in case of fine the amount imposedshouldn’t exceed on wage period or anamount equal to 3% and in case ofdamage the amount shouldn’t exceed thecost of replacement or book value of thearticle whichever is less and if exceedsamount equal to 1/3 of the wages payablethe deduction shall be made ininstallments

-register in form I (register of fine)andform II (register of deduction for loss ordamage caused to the employer)andform III annual return submitted by theemployer and form III isn’t required ifcombined annual return submitted inform no.22 as per TN rules 1950

Sec. 13 Fixing Hours for Normal Working day

• The appropriate Government may fix-



e number of hours of work constituting anormal working day inclusive of one ormore specified intervals.

• provide for a day of rest in every periodof seven days with remuneration.

• To provide for payment for work on aday of rest at a rate not less than theovertime rate

Rule 24 Number of Hours of work which shallconstitute a normal working day

(1)The normal Working hours are asfollows

• In the case of an adult 9 hours

• In the case of a child 4 ½ hours &

• In the case of an adolescentemployed in any plantation 6 ¼ hours

(2) No worker shall be allowed to workfor more than 9 hours in any day &48hours in any week and allowed to workmore than limit fixed but not exceeding10hrs in a day and weekly 54hrs

(3) The period of work shall never exceed5hrs with adequate interval of half anhour(4) Period of work of an adult apart fromothers than employment in anyplantations inclusive of his interval forrest under sub-rule(3), they shall notspread over more than twelve hours inany day(5) he is certified to work as an adult ora child by a competent medicalpractitioner approved by the GovernmentThese provisions in the case of workersin agricultural employment including inplantations be subject to modificationsnotified by the Government.

Fixation of Minimum Rates of Wages

• The appropriate government to fix



minimum rates of wages. The employeesemployed in para 1 or B of Scheduleeither at 2 or either part of notificationu/s 27.

• To make review at such intervals notexceeding five years the minimum ratesor so fixed and revised the minimumrates.

Sec 14 Overtime Form IV

-in case minimum rate of wages is fixedby the hour basis Overtime has to be paidon the time exceeding the normal workinghours or the rate mentioned by thegovernment.

Rule 26 Extra Wages for overtime

When a worker works on any day andfor more than 48 hrs in any week he shallbe entitled to wages in respect ofovertime work

• In the case of any other scheduledemployment, at double the ordinary rateof wages.

Rule 24-B Night Shifts

Where a worker works on shift whichextends beyond midnight

• ‘a holiday for the whole day’ for thepurpose of rule 23, mean a period of 24consecutive hrs beginning from the timewhen his shift ends

• The following day in such a case shallbe deemed to be the period of 24hrsbeginning from the time when such shiftends, and the hours after mid-nightduring which the worker was engaged inwork shall be counted towards theprevious day.

Weekly Holiday

• Unless permitted by Government noworker shall be allowed to work on the



first day of the week except where he hasa holiday for the whole day on one of the3 days immediately before or after thesaid day.

Rule 23 • Any worker who has worked on the saidday and has had a holiday on one of thefive days immediately preceding it, thesaid day shall be included in thepreceding week for the purpose ofcalculating his weekly hours of work.(Forthis purpose “WEEK” shall mean a periodof seven days beginning at midnight onSaturday night)

No substitution of the weekly holidaysshall be made in the case of anyplantation if it is to result in any workerworking for more than 54 hours in a weekunder Plantations Labour Act 1951

Sec.15 Wages of workers who works for lessthan normal working days

The worker would be entitled to receivewages in respect of work done by him onthat day as if he had worked for a fullnormal working day: Provided he shallnot be entitled to receive wages for a fullnormal working day

• In any case where his failure to work iscaused by his unwillingness to work andnot by the omission of the employer toprovide him with work &

The following are the circumstanceswhere an employee employed for a periodof less than the requisite number ofhours constituting a normal working dayshall not be entitled to receive wages fora full normal working day

Rule 25 • Tempest, fire, rain, breakdown ofmachinery or stoppage of or any cut inthe supply of power, epidemic, civilcommotion or other causes beyond thecontrol of the employer.



• Refusal to work

• Strike or stay - in – strike

(2) if the work has been interrupted forthe reasons stated above and, if theemployee has started work for the day,he shall be paid wages at half theminimum rates of wages fixed for normalworking day if the interruption occursbefore the interval and if the interruptionoccurs after the interval he shall be paidwages for full normal working day.

Sec. 16 Wages for two class of work

Where an employee does two or moreclasses of work to each of which adifferent minimum rate of wages isapplicable, wages at not less than theminimum rate in respect of each suchclass.

Sec. 17 Minimum time rate wages for piece work

If an employee is employed on piece workfor which minimum time rate and notminimum piece rate is fixed, he shall be paidwages not less than minimum time rate

Sec. 18 Maintenance of Registers and records

• Register of Fines – Form I Rule 21(4)• Annual Returns – Form III Rule 21 (4-A)• Register for Overtime – Form IV Rule 25• Register of Wages–Form X, Wages slip–Form XI, Muster Roll–Form V Rule 26• Representation of register – for threeyear Rule 26-A Sec. 18-shall be preserved for 1 yr.Form of registers and records• A register of wages shall be maintainedby every employer at the work spot orthe principal office attached to it andshall include-• The minimum rates of wages payableto each employed person



Rule 27 • Total overtime worked in the wage Form XIperiod• Overtime earnings in the wage period• Gross wages of each person• All deductions made from wages• The wages actually paid to each personand the date of payment• Wage sl ip containing the aboveparticulars shall be issued by theemployer• Every employer shall get the signatureor thumb impression of the employee atthe time of payment of wages.• Entries in the Wage books and wageslips shall be authenticated by theemployer or any person authorised byhim.• A muster roll shall be maintained by Form Vevery employer at the work spot or (muster roll)principal office attached to it and it shallbe written up every day on which work isperformed.

Sec 20 Claims(2) If the employee has any claim, hehimself, or any legal practitioner or anyofficial of a registered trade unionauthorized in writing to act on his behalfor any Inspector or any person actingwith the permission of the authorityUnder sub-section (1) may apply to suchauthority for a direction

Provided that every such applicationshall be presented within 6 months fromthe date on which the minimum wagesbecome payable and if presented withdelay sufficient cause has to be given

(4) When application is entertained theauthority shall hear the applicant andthe employer or give them an opportunityof being heard.



(5) If the Authority hearing anyapplication under this Section issatisfied that it was either malicious orvexatious, it may direct that a penaltynot exceeding fifty rupees be paid to theemployer by the person presenting theapplication.

(6) Any Amount directed to be paid underthis section may be recovered If theAuthority is a Magistrate, by anyAuthority as if it were a fine imposed bythe Authority as a magistrate, or

If the Authority is not a Magistrate, byany Magistrate to whom the Authoritymakes application in this behalf, as if itwere a fine imposed by such Magistrate.

(7) Every direction of the Authority underthis Section shall be final.

Applications

An application by or on behalf of anemployed person or group of employedpersons shall be made in duplicate.

Each application in form VI or form VIIshall contain the following

• Name of Applicant

• Period of service of each applicant

• Minimum wages payable in respectof each applicant

• Wages actually paid in respect ofeach applicant

• Difference between the minimumwages payable & the wages actually paidin respect of each applicant

Authorization

The Authorization to act on behalf of anemployed person shall be given in formVII by an instrument which shall be



presented to the Authority bearing theapplication & shall form part of therecord

Appearance of Parties

(1) The Authority shall serve upon theemployer by registered post a notice toappear before him on a specified date.

(2) If the employer or representative failsto appear on the specified date theAuthority may hear and determine theapplication ex parte.

(3) If the applicant or representative Form VI byfails to appear on the specified date employee orthe Authority may dismiss the Form VII byapplication. inspector or

person actingwith consentof authority

Rule 30 Preservation of records

Files relating to the claims U/S 20 of the Form VIII inAct shall be preserved for a period of favour of legal3 years from the date of final decisions. practitioner

Destruction of records Form IX byopponent

The records may be destroyed either byway of tearing or by burning in thepresence of head of the office providedthat records of secret or confidentialnature shall be destroyed by way ofburning only

Sec. 22 PENALITIESAny employer shall be levied penalty- For paying less than minimum ratesof wages- For contravention of any provisionspertaining to fixing hours for normalworking day etc.- For contravening any rule or ordermade U/S 13



Shall be punishable with imprisonmentupto 6 months or with fine upto Rs.500/- or with both

Sec 22A General provisions for punishment of&22B other offences

Any employer who contravenes anyprovisions of this Act or Rules shall bepunishable with fine which may extendto Rs.500/-

-no cognizance of an offence is madeunless complaint is made within 6months of the date of offence

Sec 22D Payment of undisbursed amounts dueto employees

Such amounts could not or cannot bepaid to the employee on account of hisdeath before payment or on account ofhis whereabouts not being known, bedeposited with the prescribed authoritywho shall deal with the money sodeposited in state treasury within onemonth from the date of expiry of 3 monthsfrom the date of realization of an amount

-send original challan to the authoritywithin a week from the date of depositwith statement in duplicate in form A

-the authority with intervals of 6 monthspublish a statement in form B

-can be claimed within 3 years from thedate of deposit of the money withapplication in form C



14.1. Brief of Payment of Bonus Act

The payment of Bonus Act provides for payment of bonus topersons employed in certain establishments of the basis ofprofits or on the basis of production or productivity and formatters connected there with. It extends to the whole of Indiaand is applicable to every factory and to every otherestablishment where 20 or more workmen are employed on anyday during an accounting year or 10 or more workmen in casethey are employed in Maharashtra State. As discussed earlier,this is one of the acts relating to the payment of wages /remuneration related act to workmen.

14.2. Duties of Employer

• To calculate and pay the annual bonus as required under theAct

• To submit an annual return of bonus paid to employees duringthe year, in Form D, to the Inspector, within 30 days of theexpiry of the time limit specified for payment of bonus.

• To co-operate with the Inspector, produce before him theregisters/records maintained, and such other information asmay be required by them.

• To get his account audited as per the directions of a LabourCourt/Tribunal or of any such other authority

14.3. Records required to be maintained

a. Register A : For Available and Allocable Surplus

b. Register B : For Set Off and Set on

c. Register C : For Bonus Payment

The Payment of Bonus Act, 1965

193


In addition to the above unclaimed bonus register is also requiredto be maintained.

Inspector book is another requirement under the Payment ofBonus Act 1965. Audited annual accounts would be required tobe shown at the time of inspection when demanded by the bonusinspector.

14.4. Compliance required

There is only one requirement of submission of annual returneach year within 30 days from the date of payment / disbursementof bonus to the employee in Form No. D

The bonus is required to be made within eight months of thefinancial years ending or within one month from the date ofenforcement of the award or coming into operation of asettlement following an industrial dispute regarding payment ofbonus. However if there is sufficient cause extension may beapplied for.


The Payment of Bonus Act, 1965



Objectives :

1. provide for payment of bonus topersons employed in certainestablishments

2. Allow employee to share prosperity ofestablishments

Applicability

-Every Factory and every otherestablishment employing not less than20 persons on any day during anaccounting year.

-The state government can howeverextend its provisions to anyestablishment employing less than 20persons but more than 10 persons.

-the employee has worked not less than30 working days in that year.

- Employee means any person (other thanan apprentice)employed on a salary orwage not exceeding twenty onethousands rupees per month in anyindustry to do any skilled or unskilledmanual, supervisory, managerial,administrative, technical or clericalwork for hire or reward, whether theterms of employment be express orimplied.

Sec 2(21) Definition :

-A register showing the computation of Form A - asthe allocable surplus referred to in per rule 4(a)clause (4) of Section 2

- A register showing the details of the Form C - asamount of bonus due to each of the per rule 4(c)employees, the deduction u/s 17(likepuja bonus) and 18(like loss due to


fraud) and the amount actuallydisbursed.

Sec 8 Eligibility for bonus and its payment

Employees who are in services for notless than 30 working days in anaccounting year and shall also includethe seasonal worker who had worked formore than 30 working days.

Sec 9 Disqualification

Workmen dismissed for reasons of fraud,violent behavior, theft, misappropriation& sabotage of any property of theestablishment etc.

Sec 10 Minimum BonusPayment of minimum bonus at 8.33% ofsalary or wage earned or Rs.100whichever is higher whether or not theemployer has any allocable surplus inthe accounting year Rs.100 in case ofemployees above 15 years & Rs.60 incase of employees below 15 years .

Sec 11 Maximum bonusWhere the allocable surplus afteradjusting carry forward losses exceedthe minimum limit, bonus shall be paidat 20% of salary or wages.

Sec 12 Calculation of bonusThe salary or wage of an employeeexceeds seven thousand rupees or theminimum wage for the scheduledemployment as fixed by the appropriategovernment, whichever is higher permensem, the bonus payable to suchemployee under sec 10 or, as the casemay be under sec 11 shall be calculatedas if his salary or wages were seventhousands rupees or the minimum wagefor the scheduled employment, as fixedby the appropriate government,whichever is higher.



Sec 13 Deductions in certain casesThe Bonus shall be paid in accordancewith attendance and deductions aremade for days of leave

Sec 14 Computation of number of working daysThe employee is deemed to have workedon all the following days during theaccounting year1. Days of layoff of establishment2. leave with salary or wages3. Absence due to temporarydisablement caused by accident duringhis employment4. the employee has been on maternityleave with salary or wage

Sec 15 Set-on and set-off of allocable surpluswhere allocable surplus exceed amount Form Bof maximum bonus payable to employees, - as perthe excess shall subject to 20% of total rule 4(b)salary be carried forward for being set-on in subsequent years up to 4thaccounting year as per schedule IV

Sec 17 Adjustment of interim bonus :-any interim or puja bonus paid duringthe year are eligible for deduction frombonus payable under this act

Sec 18 Deduction from bonus :-the loss caused by employee shall beliable for deduction in the sameaccounting year

Sec 19 Time limit for payment of bonus-Within 8 months from the close ofaccounting year.-within one month from the date on whichthe award becomes enforceable or thesettlement comes into operation inrespect of dispute

Sec 26 Maintenance of registers and records :-registers of computation of allocable



surplus, set on and off register, detailsof bonus payment, deduction u/s 17,18and amount actually disbursed

Sec 28 Penalty.-If any person-- (a) contravenes any ofthe provisions of this Act or any rulemade there under and any direction orrequisition made there under, shall be :-Punishable with imprisonment for aterm which may extend to six months, orwith fine which may extend to onethousand rupees, or with both.

Sec 31A Payment of bonus with regard toproduction-If before or after commencement of theact if agreement between employee oremployer as to production basis bonusdoesn’t exceed 20% but sec 10 will notapply

Rule 5 Submission of return Form DUnder Section 19,within 30 days ofexpiry of the time limit specified in Sec.19 for payment of bonus to the inspector .



15.1. The purpose / objective of the Act

Employees’ Compensation Act, aims to provide workmen and/ortheir dependents some relief in case of accidents arising out ofand in the course of employment and causing either death ordisablement of workmen. It provides for payment by certainclasses of employers to their workmen compensation for injuryby accident. Act does not apply where workman is covered underESI Act - Since a workman is entitled to get compensation fromEmployees State Insurance Corporation, a workman covered underESI Act is not entitled to get compensation under Employees’Compensation Act, as per section 53 of ESI Act, 1948.

15.2. Employers Liability for Compensation (Accidents)

The employer of any establishment covered under this Act, isrequired to compensate an employee:

(a) Who has suffered an accident arising out of and in the courseof his employment, resulting into

(i) death

(ii) permanent total disablement

(iii) permanent partial disablement, or

(iv) temporary disablement whether total or partial, or

(b) Who has contracted an occupational disease?

15.3. Employer shall not be liable

(a) In respect of any injury which does not result in the total orpartial disablement of the workmen for a period exceedingthree days;

The Employees’ Compensation Act, 1923

199


(b) In respect of any injury not resulting in death, caused by anaccident which is directly attributable to

(i) the workmen having been at the time thereof under theinfluence or drugs, or

(ii) the wilful disobedience of the workman to an orderexpressly given, or to a rule expressly framed, for thepurpose of securing the safety of workmen, or

(iii) The willful removal or disregard by the workmen of anysafeguard or other device which he knew to have beenprovided for the purpose of securing the safety ofworkmen. The burden of proving intentional disobedienceon the part of the employee shall lie upon the employer.

(iv) when the employee has contacted a disease which isnot directly attributable to a specific injury caused bythe accident or to the occupation; or

(v) when the employee has filed a suit for damages againstthe employer or any other person, in a Civil Court.

15.4. Records prescribed / required to be maintained

a. Form A Deposit of Compensation for fatal accident(death)

b. Form AA Deposit of Compensation for non-fatal accidentto a woman or a person under legal disability

c. Form B Receipt of Compensation

d. Form C Statement of Disbursements

e. Form D Compensation for non-Fatal Accidents

f. Form E Receipt of Compensation Deposited under Section8(2) of the Act

g. Form F Application for Compensation by Workman

h. Form G Application for Order to Deposit Compensation

i. Form H Application for Commutation

j. Form J Notice where indemnity is claimed - Rule 39(1)


k. Form JJ Notice where indemnity is claimed - Rule 39(3)

l. Form K Memorandum of Agreement TemporaryDisablement

m. Form L Memorandum of Agreement PermanentDisablement

n. Form M Memorandum of Agreement Half Monthly Wageson Temporary Disablement

o. Form N Notice to record a Memorandum of Agreement

p. Form O Notice of refusal of Registration of agreement

q. Form P Show cause Notice for Registration of agreement

r. Form Q Show cause Notice for Registration of agreementto both the parties

The Employees’ Compensation Act, 1923 has also specified fora register in Form R showing the Agreements to be maintainedby the Commissioner Known as “Register of Agreements”


Reporting of the fatal accident in prescribed Form EE

There is no other requirement of any periodical returns sincethis act is applicable based on unforeseen event / circumstances.


The Employees’ Compensation Act, 1923(Being followed in lieu of ESI Act)



Objectives :

1. The act is a social security legislation2. Provides for payment of compensationfor workmen for injuries by accidents3. The accidents and injuries includethose arising out of and during the courseof employment4. Covers workmen and contractorsemployed by the companyNote : Establishment/Employees coveredby ESI Act would not be covered by thisact

Words and The word ‘workman’ and ‘workmen’ inexpressions the Act are substituted by the words

‘employee’ or ‘employees’ wherever theyoccur.

Schedule II Clerks were not covered forcompensation under the Act. But now,Clerks are covered for compensation.Please refer to schedule-II for specifiedemployments.

Sec.4(a) Amount of compensation

The minimum ceiling l imit ofcompensation is Rs.1,20,000/- or 50%of the monthly wages of deceasedmultiplied by the relevant factor,whichever is more.

Sec.4(b) The minimum ceiling l imit ofcompensation for permanent totaldisablement is Rs.1,40,000/- or 60% ofthe monthly wages of deceasedmultiplied by the relevant factor,whichever is more

Sub-Sec.2A Entitles an employee to reimbursementof Sec. 4 of actual medical expenditure incurred


by him for injuries caused during thecourse of employment.

Explanation The Explanation II was omitted and a newII to clauses sub-section (1B) has been added after(a)&(b) of Sub-section 1A of sec.4 whereby theSec.4 maximum wage limit has been revised

to Rs. 8000/-p.m.

Sub-sec.(4) The existing limit of funeral expensesof Sec.4 has been revised to Rs.5000/-

Sec 8 Distribution of compensation

Compensation in respect of a fatal injuryor lump sum payment to women/ legallydisabled must be distributed onlythrough the commissioner

Payment made directly by the employershall not be considered payment ofcompensation

Sec 9 Compensation not to be assigned,attached or charged

No lump-sum or half monthly paymentpayable under this Act shall in anywaybe capable of being assigned or chargedor be liable to attachment or pass to anyperson other than the workman byoperation of law nor shall any claim beset off against the same

Sec 10 Notice and claim

No claim for compensation shall beentertained by a commissioner unlessnotice of the accident has been given inthe manner hereinafter provided as soonas practicable after the happening thereofand unless the claim is preferred beforehim within two years of the occurrence ofthe accident or in case of death withintwo years from the date of death

Sec 10 A Power to require from employers StatementStatement regarding fatal accidents

A statement giving circumstances of



death, indicating whether employer isliable to deposit compensation or notshould be submitted within 30 days ofnotice served by Commissioner

Sec 10 B Reports of fatal accidents and serious Form EERule 11 bodily injuries

A notice in Form EE of any accident orbodily injury be given within 7 days fromthe date of accident

Sec 16 Return as to compensation Return

Return specifying number of injuries inrespect of which compensation has beenpaid in the previous year shall be madebefore the 15th February every year(1stJan to 31st Dec) containing particularsprovided in Notification GO MS No 1858/25.10.1989

Rule 12 Right of employer to presentmemorandum

Information regarding results ofinvestigation of inquiry made intocircumstances or causes of the accidentmay be presented to the Commissionerby the Employer

Sec 18A Penalties

Whoever fails to maintain a notice bookrequired under u/s 10(3) or

Fails to send to the commissioner astatement required u/s10A(1) or

Fails to send a report required u/s 10Bor

Fails to make return required u/s 16shall be punishable with fine extendingto Rs.5000

No prosecution shall be instituted exceptby or with the previous sanction of acommissioner



No court shall take cognizance of anyoffence unless complaint is made withinsix months of the date on which thealleged commission of the offence cameto the knowledge of the Commissioner

Sec.25A Time limit for disposal of cases relatingto compensation

Commissioner shall dispose of thematter relating to compensation within3 months from the date of reference

Rule 6 (1) Deposit under Section 8(1)

If injury results in death the statementshall be in Form A. Form A

In any other case the statement shall be Form AAin Form AA

For both case the receipt shall be in Receipt inForm B Form B

Rule 6 (3) Statement of disbursements to be Form Cfurnished on application by the employershall be in Form C

Rule 9 Deposit of compensation for non-fatal Form Daccidents, other than to a woman orperson under legal disability to be Receipt insubmitted by the employer as & when Form Ean injury occurs.

Receipt for compensation to be given bythe Commissioner to the employer onreceipt of form D in Form E

Rule 11 Report of fatal accidents Within 7 days Form EEof death or serious bodily injury.

Rule 20 Application for compensation by work- Form Fman to be presented in duplicate toCommissioner by Regd. Post or in person.Application for order to deposit Form Gcompensation.Application for commutation to be made Form Hby the applicant and sent to thecommissioner.



Rule 48 Memorandum of Agreement concerning Form Kinjury resulting in

a) temporary disablement Form M

b) Permanent disablement Form Lto be sent by the employer to the (each incommissioner. duplicate)

Rule 49 Notice to record memorandum of Form Nagreement to be issued by thecommissioner to the parties concernedon receiving a memorandum ofagreement.

Rule 49 Notice to not record memorandum of Form Oagreement to be issued by thecommissioner to the parties concernedon receiving a memorandum ofagreement , stating reasons for failureto record the memorandum of agreement

Rule 50 Notice of showcause to be issued by the Form Pcommissioner to the parties stating adate for hearing the parties and givingthem an opportunity to show cause whythe said agreement ought not to beregistered.Notice of showcause to be issued by the Form Qcommissioner to the parties stating adate for hearing the parties and givingthem an opportunity to show cause whythe said agreement ought not to beregistered and directing them to makeall representations on the scheduleddate

Rule 52 Registration of Memorandum accepted Form Rfor record to be maintained by thecommissioner in a Register bin Form R



16.1. Brief on Maternity Benefit Act

Motherhood is a very special experience in a woman’s life. Awoman needs to be able to give quality time to her child withouthaving to worry about whether she will lose her job and her sourceof income. That is where the concept of maternity leave and thebenefits it entails, comes in handy. The Maternity Benefits Act,1961, gives her the assurance that her rights will be looked afterwhile she is at home to care for her child.

The object of the Act is to regulate the employment of women incertain establishments for certain periods before and afterchildbirth and to provide for maternity benefits and certain otherbenefits.

16.2. Display Requirement

Abstract of the act is required to be displayed always

16.3. Records to be maintained

(a) Form A – Muster roll

(b) Form 10 - Maternity Benefit Register

Inspection book is required to be maintained in addition to theabove.


Annual return in form 11 is required to be submitted on or before15th January every year

Maternity Benefit Act, 1961

207


The Maternity Benefit Act, 1961



Objectives :

• To regulate employment of womanfor certain periods before and after childbirth and to provide for maternity benefit

• Payment of maternity benefit shallapply to women workers to whom ESI Actdoes not apply.

• The Act applies to all establishmentsin which ten or more people areemployed

Sec 4 Employment of, or work by, womenprohibited during certain period

-An employer is prohibited from theemployment of women during the sixweeks subsequent to their delivery ormiscarriage.

Sec 5 Right to payment of maternity benefit Form A & E

-The maternity benefit shall be at the rateof average daily wage for the period ofactual absence.-The maximum period of entitlementshall be 80 working days in the 12months immediately preceding the dateof her expected delivery and givingwritten notice to employer about 7 weeksbefore the date of her delivery that she isabsent for 6 weeks before and afterdelivery.

-A woman worker shall not be entitled tomaternity benefit if she had actuallyworked in an establishment of theemployer from whom she claimsmaternity benefit for a period of less than80 days in the 12 months immediatelypreceding the date of her expecteddelivery.


- Women earning less than 15000 maybe offered ESI scheme will not be eligiblefor maternity benefit and will receivethe maternity benefit under ESI schemeas per amendment bill 2007 no XXXVIIIof 2007 dated on 1st May

-qualifying period will not be applicableto a woman who has immigrated intothe state of Assam and was pregnant atthe time of the immigration

Sec 6 Notice of claim for maternity benefit and Form 'D'payment thereof.

-Maternity benefit shall be payable toemployee or any other persons as perthe nomination.

-whenever the payment is made as above,a receipt shall be obtained by theemployer in FORM E from the person towhom the payment is made

-The amount of benefit up to the period-expected delivery shall be paid inadvance. The balance due for thesubsequent period shall be paid within48 hours form delivery of child

-if notice is not given, she can give noticeafter the delivery

- failure of notice to be given will notdisentitle the women for the maternitybenefit, she can approach the Inspectorwho is by own motion or by writtenapplication order such payment ofbenefit

Sec 7 Payment or maternity benefit in case of Form Cdeath of a woman

-Payment of maternity benefit shall bemade to the nominee or legal heir in caseof death of employee

Sec 8 Payment of medical bonus

Every women entitled to receivematernity benefit for medical bonus of



Rs 2500/- to Rs 3500/- to if no pre-natalconfinement and post-natal careprovided by employer free of charge, TheCentral government before every 3 yearsby notification in the official gazetteincrease the amount of medical bonussubject to the maximum of 20000.

Sec 9 Leave with wages for miscarriage Form D

Leave for six weeks at the rate ofmaternity benefit shall be payable onproof of miscarriage being shown.

Sec 9A Leave with wages for tubectomy Form Boperation

Entitled to leave with wages at the rateof maternity benefit for a period of twoweeks immediately following the day ofher tubectomy operation.

Sec 10 Leave for illness arising out of pregnancydelivery, premature birth of child, ormiscarriage

-Leave for a maximum period of onemonth shall be payable at the rate ofmaternity benefit.

Sec 11 Nursing breaks

Women workers after delivery shall beallowed two breaks of apart from normalrest periods until the child attains theage of 15 months.

Sec 18 Forfeiture of maternity benefit.

After authorized absence as per section6, she can forfeit her claim to thematernity benefit.

Sec 19 Abstracts of Act and rules there under Form Jto be exhibited

An abstract of the provisions of this Actand the rules made there under in thelanguage or languages of the localityshall be exhibited in a conspicuousplace by the employer in every part of



the establishment in which women areemployed.

Rule 15 Display of provisions

-An abstract of act and provisions shallbe displayed in the local language

Sec 20 Registers, etc.

Registers, records and muster-rolls shallbe maintained and Records shall bepreserved for a period of two years fromthe date of last entry made therein

Rule 14 Maintenance of records

-Records should be preserved for 2 yearsfrom the date of last entry:

Rule 16 Annual returns

The employer of every establish¬mentshall on or before 31st day of January inevery year submit to the Inspector returnsin Form K giving information as to theparticulars specified in respect of thepreceding year.

Article 19 State policyUnderconstitution The temporary workers and workersof India 42 engaged on muster roll basis also areand 43 eligible to get the benefit




The Equal Remuneration Act is a gift of “the InternationalWomen’s year” to women workers. It is made to give effect tothe provision of Article 39 of the Constitution of India whichcontains a directive principle of equal pay for equal work forboth men and women. The Act provides for the payment of equalremuneration to men and women workers for the same work orwork of a similar nature and for the prevention of discriminationon the ground of gender against women in the matter ofemployment.

17.2. Penalties

If any employer (a) makes any recruitment in contravention ofthe provisions of the Act, or ((b) makes any payment ofremuneration at unequal rates to men and women workers, forthe same work or work of similar nature, or (c) makes anydiscrimination between men and women workers incontravention of the provisions of the act, he would be punishedwith fine upto Rs 10,000/-

17.3. Registers to be maintained

Every employer shall maintain up to date a register in relation tothe workers employed by him in Form D at the place whereworkers are employed.

17.4. Various forms under this act

s. Form A Complaint form regarding contravention of the act

t. Form B Claim regarding non-payment of wages

u. Form C Authorization form to whom authorization given

The Equal Remuneration Act, 1976

212


The Equal Remuneration Act, 1976



Objectives :

To provide for the payment of equalremuneration to men and womenworkers and for the prevention ofdiscrimination, on the ground of sex,against woman, in the matter ofemployment and for connected orincidental thereto

Sec 4 Payment of Remuneration at Equal Ratesto Men and Women Workers

• The employer shall pay equalremuneration to men and women forsame work or work of similar nature andthe equality shall not be achieved byreducing the rate of remuneration of anyworker but by increasing it.

• The employer shall not for thepurpose of complying with theprovisions of sub section (1) reduce therate of remuneration of any worker.

Sec 5 No discrimination to be made whilerecruiting men and women workers

• Discrimination shall not be madeby the employer against women in thematter of employment such as onpromotion, training or transfer etc.

• This section shall not affect anypriority or reservation for SC or ST, ex-serviceman, retrenched employees in thematter of recruitment to the posts in anestablishment or employment.

Sec 8 Maintaining of Register Rule 6The employers shall maintain registerupto date for all workers employed inForm D at the place where the workersare employed Form D


Sec 10 Penalty

A. When any employer omits or fallsto maintain any register or otherdocument in relation to workers, Simpleimprisonment up to one month or fine Imprisonmentup to Rs. 10,000 or both. up to 1 month

B. If the employer :

• makes any recruitment Incontravention to the provisions of theAct, or

• makes any payment of remunerationat unequal rates to men and womenworkers, for the same work or work of asimilar nature, or

• makes any discrimination betweenmen and women workers incontravention of the provisions of theAct, or

• Omits or falls to carry out anydirection made by the appropriateGovernment under sub-section (5) ofsection 6.

• Fine shall be not less than Rs. 10,000which may extend to Rs. 20,000 orsimprisonment not less than 3 monthswhich may extend up to one year orwith both for 1st offence, and up totwo years for second and subsequentoffences.




The purpose of the Industrial employment (Standing Order) Act,1946, is to uniform the service conditions of workmen employedin the industrial Establishments.

Prior to the enactment of the Act, the employer was free to fixthe service conditions of his workmen according to his own willand wish. As a result of this there were existed different sets ofservice conditions in different industrial establishments. Thisact has taken away the freedom of the employer to unilaterallyfix the service conditions of his workmen. It has replacedcontractual terms of service by statutory terms of service.

18.2. Applicability of the Act

Every Industrial establishment in which one hundred or moreworkmen are employed on any day of the preceding 12 months.

In the state of Maharashtra fifty or more workmen are employedin preceding 12 months and every establishment covered by theBombay Shops and Establishments Act, 1948.

18.3. Model Standing order

“Model standing order” means the standing orders prescribedby the central Government or a state government for the purposesof the act to serve as a model.

18.4. Obligations of Employers

a. Submission of draft standing orders for certification

b. Not to Modify Standing orders without approval of theCertifying officer

c. Display of standing orders: The employer should display thetext of certified standing orders in English and in the language

The Industrial Employment (Standing Orders) Act, 1946

215


understood by the majority of his workmen, at or near thefactory gate and in all departments where the workmen areemployed.

d. To pay subsistence allowanceWhen any workman is suspended by the employer pendinginvestigation or inquiry into complaints or charges ofmisconduct against him, the employer shall pay to suchworkman subsistence allowance. For the first 90 days of thesuspension period- 50% of his wages For the remaining dayof the suspension period- 75% of his wages, if the delay inthe completion of domestic enquiry against such workmanis not directly attributable to his conduct. In the State ofMaharashtra beyond the 180 day of suspension period 100%of his wages.No subsistence allowance is payable to a suspendedworkman if he takes up any employment during the period ofsuspension.

e. To comply with the Standing OrdersThe employer should act in conformity with the certifiedstanding orders, in dealing with day-to-day affairs of theworkmen. Certified standing orders have the law like anyother statutory instrument.

18.5. Penaltiesa. If employer does not submit draft standing orders as required

or makes any change in the standing orders without followingthe proper procedure, he would be punished with fine up toRs 5000.if continues the offence the fine would be Rs 200per day after the first offence.

b. if any employer does any act contravention of the certifiedstanding orders, he would be punished with fine upto Rs 100.if he continues the offence, the fine would be Rs. 25 per day.


The Industrial Employment (Standing Orders) Act, 1946



Objectives :

1. Employer to define with precision theconditions of employment.

2.The conditions be made known toworkmen and conditions shall not bechanged prejudicial to workmen

Sec 3 Submission of Draft Standing Order

Within 6 months from the date of the Actbecoming applicable, the Employer shallsubmit to the certifying officer 5 copiesof the draft Standing Order proposed byhim for adoption in his industrialestablishment.

It should be accompanied by a statementgiving prescribed particulars ofworkmen employed

Sec 5 & Notice under section 5 to be sent by the Form ARule 6 certifying officer, on receipt of draft

standing orders to the trade unionrequiring any objections from their end.If it is not possible to follow the Form AAprocedure under Rule 6, he shall requirethe Employer to publish a copy of thedraft standing order and a notice in FormAA on the notice board.

Sec 8 Register of Standing Orders Form B

A copy of all standing orders as finallycertified under this Act shall be filed bythe Certifying Officer in a Register in theprescribed form maintained for thepurpose, and the Certifying Officer shallfurnish a copy thereof to any personapplying there for on payment of theprescribed fee.


Sec 9 Posting of Standing Orders

The text of Certified Orders shall beprominently posted. The language of textshall be both in English and a languageunderstood by a majority of workmen orat near the entrance where the majorityof the workmen enter the industrialestablishment.

Sec 10A Payment of subsistence allowance

Payment of allowance to suspendedworkmen pending investigation. The rateof wages shall be 50% of normal wagesfor first 90 days of suspension, andthereafter at 75% for remaining periodof suspension.

If any dispute arises regarding thesubsistence allowance payable to aworkman under subsection (1), theworkman or the employer concerned mayrefer the dispute to the Labour Courtconstituted under the Industrial DisputesAct, 1947.

Sec 13 Penalties and procedure

An employer who fails to submit draftstanding orders as required by Sec. 3, orwho modifies his standing ordersotherwise than in accordance with Sec.10, shall be punishable with fine whichmay extend to five thousand rupees, andin the case of a continuing offence witha further fine which may extend to twohundred rupees for every day after thefirst during which the offence continues.

Standing Service Records Form Vorder 1 of Maintenance of particulars of eachschedule I-B workman.

Certification of service

Certificate specifying the nature of workand period of employment shall beprovided on discharge of workmen.



Confirmation

Issue of letter of confirmation inaccordance with conditions inappointment letter. The letter to be servedwithin 30 days from confirmation

Transfer

Reasonable Notice to be given toworkman and reasonable joining timeshall be allowed

Rule 7-A(1) Appeal to be made by any person desiring Form IVto prefer an appeal and forward it inquintuplicate to the appellate authorityaccompanied by a certified copy ofstanding orders.

Rule 7-A of Notice of changes in shift working. Form IV-ASchedule I Any notice of discontinuance or of

restarting of a shift working shall bedisplayed conspicuously by theemployer on a notice board at the mainentrance to the establishment. A copy ofsuch notice to be given to the secretaryof the registered union.

MATTERS TO BE PROVIDED IN STANDING ORDER UNDER THIS ACT

1. Classification of workmen, e.g. whether permanent, temporary,apprentices, probationers, or badlis or fixed term employment.

2. Manner of intimating to workmen periods and hours of work,holidays, pay-days and wage rates.

3. Shift working.

4. Attendance and late coming.

5. Conditions of procedure in applying for, and the authority whichmay grant, leave and holidays.

6. Requirement to enter premises by certain gates, and liability tosearch.

7. Closing and re-opening of sections of the industrial



establishment, and temporary stoppages of work and the rightsand liabilities of the employer and workmen arising there from.

8. Termination of employment, and the notice thereof to be givenby employer and workmen.

9. Suspension or dismissal for misconduct, and acts or omissions,which constitute misconduct.

10. Means of redress for workmen against unfair treatment orwrongful exactions by the employer or his agents or servants.

10-A. Age for retirement or Superannuation vide Bombay Act No. XXIof 1958.

10-B. Employment or re-employment of probationers or temporary orcasual workmen, and their conditions of service MaharashtraAct LIV of 1974.



The purpose of the contract labour(Regulation and Abolition)Act, 1970 is to prevent the exploitation of contract worker (ifabolition),Regulate the employment of Contract labour andensure health and welfare provision of contract labour.

19.2. Registration of establishment

Principal employer means the owner or occupier or the personwho exercises ultimate control and supervision and managesthe affairs of the establishment employing 20 or more workersthrough the contractor or the contractor(s) on deposit of requiredfees with Form 1 for registration of establishment.

19.3. Prohibition of employment of contract labour (SEC 10)

The appropriate government may after consultation with thecentral board or state board prohibit by notification in the officialgazette employment of contract labour in any process, operationor other work in any establishment. Means the central governmentor a state government can prohibit any establishment fromemploying contract labour for performing any work afterconsidering.

a. Whether the conditions of work and benefit is satisfactory.

b. Whether work is incidental (non essential) or Necessary.

c. Whether perennial(recurrent) nature

d. Whether it is done ordinarily through regular workmen

e. Whether it is sufficient to employ whole time workmen.

19.4. Liability of principal employer

a. Basically a contractor is responsible for payment of wages

The Contract Labour (Regulation and Abolition)Act, 1970

221


to workmen employed by him as contract labour, before theexpiry of the specified period. Every principal employer isrequired to nominate a representative duly authorized by himto present at the time of disbursement of wages by thecontractor and it is the duty of such representative to certifythe amounts paid as wages. In case the contractor fails tomake payment of wages within the prescribed period or makesshort payment, the principal employer is made liable to makepayment of wages in full or the unpaid balance and recoverfrom the contractor.

b. To ensure provision for canteen, restrooms, sufficient supplyof drinking water, latrines and urinals, washing facilities.

c. Principal employer entitled to recover from the contractorfor providing such amenities or to make deductions fromamount payable.

19.5 Registers and other records to be maintained.

By Principal Employer: To maintain a register of contractors inForm XII

By Contractor: To maintain a register of contract labour a registerin Form XIII and

a. Display Notices in English and local languagesRate of wages

Hour of work

Wage period

Date of payment of wages

Names and addresses of the inspectors having jurisdiction

b. Muster Roll

c. Register of wages

d. Register of deduction

e. Register of Over Timef. Register of Finesg. Register of advancesh. Wage slips



a. Every principal employer has to send yearly return not laterthan the 15th Feb following the end of the year. FORM “XXV”Rule 82(2)

b. Every Contractor has to send half yearly return not later than30 days in duplicate copy to the Licensing Officer. FORM“XXIV” Rule 82(1).


THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970



Objectives

An act to regulate the employment ofcontract labour in certainestablishments and to provide for itsabolition in certain circumstance andfor matters connected therewith.

Applicability

• To every contractor who employs inpreceding 12 months 20 or moreworkmen.

• To every establishment in which 20 ormore workmen are employed or wereemployed on any day of the preceding12 months as contract labour.

Section 7 • The principal employer who intendsread with to appoint Contract Labour throughrule 17 contractors is required to make his

establishment registered with theregistering officer of the area in whichthe establishment sought to be registeredis located.

• Application has to be made beforeappointing such labour for which theregistering officer shall grant certificateof registration.

Section 9 If the registration is not done or if theregistration has been revoked, theprincipal employer cannot employcontract labour.

Licensing of Contractors

• The contractor engaged to supply Form IV –workmen shall possess valid license Applicationwhich shall be in force at all times duringhis tenure as contractor with theestablishment.


• Form of certificate of principal Form Vemployer that the contractor has beenengaged by him• Notice of commencement & completion Form VIAof work done by the contractor

• To be submitted by the contractorwithin 15 days

• To be submitted by the principalemployer within 15 days.

Renewal of license Form VIB

Contractor has to file an application fortemporary registration of establish-ments employing contact labourLicence to Contractors• The Contractors can undertake orexecute any work through contractlabour only after receiving licence fromthe Registering Officer.

• Application has to be made in theprescribed form and shall contain theparticulars regarding the location,nature of process, operation or workwhich contract labour is to be employed(Sec 13).

• Licence shall be valid for such periodas may be prescribed in the licence andshall be renewed from time to time forsuch period and on payment of such feesand on such conditions as may beprescribed.

Section 13 Canteens

Provision for canteen facility where thestrength of contract workers employedexceed 100 If the contractor fails toprovide the canteen within the time laiddown the same shall be provided by theprincipal employer within sixty days ofthe expiry of the timer allowed to thecontractor.



Section 17 Rest roomsRule 41(1) Provision for rest rooms where the

contract labour are required to halt atnight in connection with work.If the amenity referred to in above sub-rule (1) is not provided by the contractorwithin the period prescribed theprincipal employer shall provide thesame within a period of Sixty days of theexpiry of the period.

Section 19 First Aid Facilityr/w Section If first aid facility has not been provided20 & Rules for by the contractor within 60 days of43 & 44 the applicabil ity of the act to the

establishment or 30 days after theemployment of contract labour, thePrincipal Employer had to provide forthe same with 30 days of the expiry ofthe period described.Provision of First Aid Box accessibleduring working hours. Where the abovefacilities are not provided by contractorthe establishment shall provide themand recover the expenses from thecontractor. Refer Rules 58 – 62

Section 20 Liability of principal Employer in certaincasesIf any amenity required to be providedunder section 16, section 17, section 18or section 19 for the benefit of thecontract labour employed in anestablishment is not provided by thecontractor within the time prescribedtherefore, such amenity shall beprovided by the principal employerwithin such time as may be Prescribed.

Section 21 Payment of Wages• The establishment (Principal employer)shall nominate its authorizedrepresentative to be present at the timeof disbursement of wages.• The objective is to ensure proper



payment of wages to contract workers.Refer Rules 63 – 73.• If contractor fails to make the paymentto the contract labourers, then theprincipal employer shall make thepayment to the labourers and the sameto be deducted from contract employer.

Section 29 Maintenance of Records and Registers Form No. XIIr/w Chapter • Register of contractors in Form No. XIIVII of the are to be maintained. Within sevenRules days of commencement and completion

of work under each contractor, thePrincipal Employer has to submit areturn in Form XIII to the inspectorindicating the actual date ofcommencement or the completion ofwork by the contract labour.

• Annual returns in Form XXV in duplicate Form No. XXVto be sent to the registering officerconcerned by the 15th of February of thefollowing year.

Rule 74 - Register of Contractors Form XII

Rule 75 - Register of workmen maintained by theContractor FormXIII

Rule 76 -Employment Card FormXIV

Rule 77 -Service certificate Form XV

- Annual Return to the Registered Officer Form XXVbefore 15th of February

Rule 78(1)(a) - Muster Roll Form XVI

Rule 78(2) - Register of Wages and issue of wageslips Form XVII

Rule 78(2)(a) - Register of Wages cum Muster roll Form XVIII(In case wage period does not exceed afortnight)

Rule 78(2)(b) - Wage Slip Form XIX

Rule 78(2)(a) - Register of Deduction Form XX

Rule 78(2)(a) - Register of Fines Form XXI



Rule 78(2)(d) - Register of Advances Form XXII

Rule 78(1)(a) - Register of Overtime Form XXIII

Rule 82(2) -Annual Return by the principal employer CombinedReturns asper GO No.25/16.08.2004coveringfactories Act,MaternityBenefit Act,Payment ofWages Act &Bonus Act

Exhibition of Notices

1. Hours of work

2. Nature of duty

General Note

A It is suggested that the Manual designedby the Company for the appointment ofContract Labour may be referred.

B EID Parry's Policy is to restrict theappointment of Contract Labour belowthe age of 18 years.

Section 24 if any person contravenes any of the Imprison-provisions of this Act or the Rules made ment -thereunder, shall be punishable with 3 months.imprisonment upto 3 months or withfine upto Rs. 1000/- or with both.



SI No Particulars Complied Remarks(Yes/ No)

1. Whether employer has obtainedregistration number to employcontractors

2. Whether contractor has obtainedlicence to employ contract labourers

3. Whether licence of all contractors hasbeen verified

4. Whether the contractor has filed formVI-A with the Inspector within 7 daysof commencement/ completion ofwork

5. Whether the form VI-A has beenverified for all applicable contractors

6. Whether application has been made60 days before expiry of licence inForm VII

7. Whether Register of Contractors ismaintained in form VII

8. Whether contractor is maintainingRegister in Form IX of contractlabourers employed by him

9. Whether identity card is issued bycontractor to contract labour in FormX

10. Whether employer has filed return inForm XIX-A within 7 days of thecommencement/completion of work

11. Whether half yearly return has beenfiled by the contractor on or before31st July and 31st December

12. Whether half yearly return has beenfiled by all contractors

13. Whether annual return has been filed


by the employer on or before 15thFebruary

14. Whether the number of contractlabourers appointed by contractor iswithin the maximum limit mentionedin the licence

15. Whether payment is made bycontractor to contract labourers within7 days

16. Whether authorised representativesof the employer was present whenwages are paid to contract labourersby contractor

17. Whether contractor is registered withPF department

18. Whether contractor regularly depositsmoney with PF. Whether all obligationsunder the said act have been complied

19. Whether the contractor paysminimum wages as per the MinimumWages Act to its contract labours

20. Whether minimum wages ratesprescribed by the state governmenthas been obtained and verified withthe payment made by the contractors

21. Whether the contractor has issuedinsurance policy to cover all contractlabourers employed by him

22. Whether the contractor has depositedhalf yearly contribution towards labourwelfare fund

23. Whether contractor has obtainedcertificate under the Inter StateMigrant Workmen… Act, if applicable



24. Whether the company has obtainedindemnity bond, undertaking etc fromcontractor before issuing certificate inForm V

25. Whether contractor is registeredunder ESI

26. Whether all statutory ESI deduction ismade and payment (including bonus)made within prescribed time

27. Whether returns under ESI is regularlyfiled

28. Whether Administration Departmenthas certified the attendance

29. Whether returns under ESI is regularlyfiled

30. Whether Administration Departmenthas certified the attendance

31. Whether payment is made as per thecontract

32. To verify whether the contractagreement is valid

33. To verify whether the contents ofcontract agreement does not violateany issues

34. Whether complaint has been receivedfrom any contract labour or concernedauthority

35. Whether an Abstract of Act and rulesas approved by Commissioner hasbeen displayed at the place of workby the contractor

36. Whether contractor has displayed thenotice of wages at the place of work



37. Whether payment to cease contactlabours is made by next day

38. Whether any remarks were made byInspector during inspection andcomments thereupon

39. Whether records are kept for theperiod of three calendar years

40. Status on disputes between contractlabours and contractors



Annexure – I

Month wise checklist for submission of various returnsunder labour laws

Given below is a month wise submission requirement of variousreturns under labour law

Month Form-Name of the statue Name of return / To be sent toand due compliancedate

January

15 Challans - The Employees Remittance of Through StateProvident Fund & MP Act, 1952 contribution Bank of India

15 ER-1 - The Employment Quarterly return Assista ntExchange Act, 1959 employment

officer Churchga te

15 A-1 - The Mumbai Labour Welfare Statement of WelfareAct, 1953 contribution of Commissioner

return along with Elphinstonecheque Road Mumbai

21 Challans - The Employees State Remittance of Through StateInsurance Act, 1948 contribution Bank of India

25 5, 10 and 12A - The Employees Return of ConcernedProvident Fund Act, 1952 employees region of the

qualifying/ provident officeleaving monthlyremittance state-ment

30 Form III - The Professional Tax Monthly return Any scheduleAct, 1975 along with cheque bank

30 XXIV - The Contract Labour (R & A) Half yearly return Assista ntAct, 1970 by contractor Labour

commissionerTardeo Mumbai

31 27 - The Factories Act, 1948 Annual Return Directorate ofIndustrialSafety andHealth TardeoMumbai

31 11 - The Maternity Benefit Act, 1961 Annual Return Directorate ofIndustrialSafety andHealth TardeoMumbai


31 V - The (National and Festival) Annual Return Directorate ofHolidays Act, 1963 Industrial

Safety andHealth TardeoMumbai

February

1 III - The Minimum Wages Act, 1948 Annual Return

15 Challans - The Employees Provident Remittance of Through StateFund Act, 1952 contribution Bank of India

15 XXI - The Contract Labour (R & A) Act, Annual Return Assista nt1970 by employer Labour

commissionerTardeo Mumbai


qualifying / provident officeleaving monthlyremittancestatement

15 V - Payment of Wages Act, 1936 Annual Return


28 Form III - The Professional Tax Monthly return Any scheduleAct, 1975 along with bank

cheque

March

15 Challans - The Employees Remittance of Through StateProvident Fund Act, 1952 contribution Bank of India





cheque



April

15 APP-2 - The Apprenticeship Act, 1961 Hal yearly return DeputyMarch ending Apprentice

Advisor SIONMumbai


15 ER-1 - The Employment Exchange Quarterly return Assista nt(CNV) Act, 1959 employment

officer Churchga te





cheque

30 3A and 6A - The Employees Annua l Regional PFProvident Fund Act, 1952 Individual Commissioner

Returns andReturns ofContributions

May

12 6 - The Employees State Summary of RespectiveInsurance Act, 1948 contributions in local office

quadruplicatec ha lla ns




qualifying/ provident officeleaving monthlyremittancestatement



30 Form III -The Professional Tax Monthly return Any scheduleAct, 1975 along with bank

cheque

June






July


15 ER-1 - The Employment Quarterly return Assista ntExchanges Act, 1959 employment

officer Churchga te

15 28 - The Factories Act, 1948 Half yarly Return Directorate ofIndustrialSafety andHealth TardeoMumbai

15 A-1 - The Mumbai Labour Statement of WelfareWelfare Act, 1953 contribution of Commissioner

June ElphinstoneRoad Mumbai







cheque

15 XXIV - The Contract Labour (R & A) Half early Asst LabourAct, 1970 Return by commissioner

contractor Tardeo Mumbai

August






September






cheque

October


15 APP-2 - The Apprenticeship Hal yearly return DeputyAct, 1961 September ending Apprentice

Advisor SIONMumbai



15 ER-1 - The Employment Exchange Quarterly return Assista ntAct employment

officer Churchgate Mumbai

21 Challans - The Employees’ State Remittance of Through StateInsurance Act, 1948 contribution Bank of India

25 5, 10 and 12A - The Employees’ Return of ConcernedProvident Fund Act, 1952 employees region of the



cheque

30 3 - The Factories Act, 1948 Application for Directorate ofrenewal of Industriallicence Safety a n d

Health TardeoMumbai

31 VII - The contract Labour (R & A) Application for Asst LabourAct, 1970 renewal of commissioner

licence Mumbai

November

12 6 - The Employees’ State Summary of RespectiveInsurance Act, 1948 contributions in local office

quadruplicatec ha lla ns



25 5, 10 and 12A - The Employees’ Return of ConcernedProvident Fund Act, 1952 employees region of the



cheque



30 I & IV - The (National and Festivel) Application for Directorate ofHolidays Act, 1963 approval of Industrial

holidays with list Safety andHealth TardeoMumbai

December


15 B - The Bombay Shops and Renewal of RespectiveEstablishment Act, 1948 Registration Munic ipal

certificate Ward office





30 D - The Payment of Bonus Act, 1965 Annual Return Asst. LabourcommissionerMumbai



Annexure – II

Event based compliance

Date Name of the statue Form Name of return / To be sent tocompliance

When event The Employment Form 6 Notification of Assista ntoccurred Exchange Act vacancies employment

officer Churchgate Mumbai

Occurrence of The Factories Act, 24A Imm edia te Concerneddangerous / 1948 Intimation within factoryfatal accidents 12 hours inspector

Any accident The Factories Act, 24 As and when Concerned1948 takes place factory

inspector

Immediately The Employees’ 16 Accident report E.S.I. Localfatal/ death State Insurance Office& within 48 Act, 1948 Dispensaryhrs. in caseof minor


Annexure – III

Notice to be displayed

Sl. No. Legislations

Factories Acts

1 Annual Return of Holidays

2 First Aid Boxes and its in-charges and training to theemployees.

3 Notice of period of work for adult workers (Form-14)

4 Abstract of Factories Act, Form No. 23

Maternity Benefit Act

5 Abstract of Maternity Act (Form - K)

Minimum Wages Act

6 Abstract, Rate of Minimum Wages (Form - XI) and Address ofInspector (Form-XI)

Payment of Wages Act

7 Abstract of the Act and Rules (Form-V)

8 Notice of wage period, Date of Payment and Name andaddress of the Inspector appointed under the Act.

Payment of Gratuity Act

9 Display notice specifying the names of the officer withdesignation to receive notices on company's behalf. Rule -4(i)

10 Display of Abstract Form-U Rule-19

Contract Labour Act

11 Notice to display section 29(2)

(i) Wage Time

(ii) Time & Place for disbursement of wages


12 Payment to be made in presence of company's representative/authorized person and the candidate

13 Display in English & Vernacular Language

13.1 Rate of wages

13.2 Working Hrs.

13.3 Date of payment

13.4 Name & address of contractor under Rule - 81(1)

(i) Copy of above notice to the LO

14 Abstract to be displayed in English / Vernacular Language

***

Sl. No. Legislations

BACKGROUNDER · Payment of Gratuity Act, 1972 Check list 148 11. Employee State Insurance Act, 1948...

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Transcript of BACKGROUNDER · Payment of Gratuity Act, 1972 Check list 148 11. Employee State Insurance Act, 1948...