Legal Tip :- Representation by a lawyer in enquiry rightly denied when the management is not represented by a legally trained person

Some workmen were found guilty of misconduct.

The management initiated an enquiry proceeding.

The enquiry was conducted by the management  about the alleged guilt of the workmen.

During the course of the enquiry, the workmen sought the assistance of a lawyer to help them in the enquiry proceedings.

But this plea was rejected by the enquiry officer.

The contention of workman was that the Presenting Officer was an experienced Personnel Manager and the workmen were illiterate and therefore they were not in a position to defend the charges leveled against them and so they should have been given the assistance of a lawyer.

The management contended that the Presenting Officer  was not a duly trained or experienced person in law and there was also no rules and regulation to the effect that the workmen in such type of enquiry would be entitled to get the assistance of a lawyer.

The Supreme Court held that when the management is not represented by a legally trained person, the workmen have no right to be represented by a lawyer.

Regards,

Pinal Mehta

Legal Tip:- A part-time worker is protected by the Industrial Disputes Act

A part-time worker is protected by the ID Act and cannot be fired at the will of employer

A part-time worker will be a workman and entitled retrenchment compensation as provided by section 25 F of the Industrial Disputes Act stating that termination without payment of retrenchment compensation will be illegal. A part-time worker can not be fired at the will of the employer since he /she is equally entitled to job protection guaranteed under the Industrial Disputes Act. Hence the termination will be treated as illegal and part-time employee will be entitled to reinstatement with consequential benefits.

Regards,

Pinal Mehta

Gratuity Act – Abstract

Gratuity Act

FORM ‘U’

ABSTRACT OF THE ACT AND RULES

1. Extent the Act.—The Act extends to the whole of India:

Provided that in so far as it relates to plantations a ports, it shall not extent to the State of Jammu and Kashmir. Section 1(2).

2. To whom the Act Applies.— The Act applies to (a) every factory, mine, oilfield, plantation, port and railway company; (b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or mote persons are employed, or were employed, on any day of the preceding twelve months; and (c) such other establishments a class of establishments, in which, ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
Section 1(3).

3. Definitions—-(a) “Appropriate Government” means (i) in relation to an establishment–

(a) belonging to, or under the control of, the Central Government,

(b) having branches in more than one State,

(c) of a factory belonging to, or under the control of, the Central Government,

(d) of a major port, mine, oilfield or railway company, the Central Government,

(ii) in any other case, the State Government. Section 2(a).

(b) “Completed year of service” means continuos service for one year. Section 2(b).

(c) “Continuos Service” means uninterrupted service and includes service which is interrupted by sickness, accident, leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employees concerned, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

Explanation I.—In the cease of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than–

(i) 190 days, if employed below the ground in a mine, or

(ii) 240 days, in any other case, except when he is employed in a seasonal establishment.

Explanation II,—- An employee of a establishment shall be deemed to be in continuos service if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during the year. Section 2(d)·

(d) “Controlling authority” means an authority appointed by an appropriate Government under Section 3. Section 2(d).

(e) “Family”, in relation to an employee, shall be deemed to consist of—

(i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents and the widow and children, of his predeceased son, if any,

(ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of her predeceased son, if any:

Provided that if a female employee, by a notice in writing to the Controlling Authority, expresses to her desire to exclude her husband from her family, the husband and his dependent parents shall no longer be deemed, for the purposes of this Act, to be included in the family of such female employee unless the said notice is subsequently withdrawn by such female employee.

Explanation:– Where the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family, and where a child of an employee has been adopted by another person and such adoption is under the personal law of the person making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee.
Section 2(h).

4. Nomination.—(1) Each employee, who has completed one year of service, after the commencement of the Payment of Gratuity (Central) Rules, 1972 shall make within thirty days of completion of one year of service, a nomination. Section 6(1) read with Rule 86(I1)

(2) If an employee has a family at the time of making a nomination, the nomination shall be made in favour of one or more members of his family and any nomination made by such employee in favour of a person who is not a member of his family shall be void. Section 6(3).

(3) If at the time of making a nomination, the employee has no family, the nomination can be made in favour of any person or persons, but if the employee subsequently acquires a family, such nomination shall forthwith become invalid and the employee shall make within 90 days fresh nomination in favour of one or more members of his family. Section 6(4) read with Rule 6(3).

(4) A nomination or a fresh nomination or a notice of modification of nomination shall be signed by the employee or, if illiterate, shall bear his thumb-impression in the presence of two witnesses, who shall also sign a declaration to that effect in the nomination, fresh nomination or notice of modification of nomination as the case may be. Rule 6(5).

(5) A nomination may, subject to the provisions of sub-sections (3) and (4) of Section 6, be modified by an employee any time after giving to his employer a written notice of his intention to do so. Section 6(5).

(6) A nomination or fresh nomination or notice of modification of nomination shall take effect from the date of receipt of the same by the employer. Rule 6(6).

5. Application for gratuity.—(1) An employee who is eligible for payment of gratuity under the Act, or any person authorised, in writing, to act on his behalf, shall apply ordinarily within thirty days from the date gratuity becomes payable:

Provided that where the date of superannuation or retirement of an employee is known, the employee may apply to such employer before thirty days of the date of superannuation or retirement. Rule 7(1).

(2) A nominee of an employee who is eligible for payment of gratuity shall apply, ordinarily within thirty days from the date the gratuity became payable to him, to the employer. Rule 7(2).

(3) A legal heir of an employee who is eligible for payment of gratuity shall apply, ordinarily within one year from the date the gratuity became payable to him, to the employer. Rule 7(3).

(4) An application for payment of gratuity filed after the expiry of the periods specified above shall also be entertained by the employer if the applicant adduces a sufficient cause for the delay. Rule 7(5).

6. Payment of gratuity.–(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years–

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement.

Disablement means such disablement which incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement. Section 4(1).

(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned:

Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:

Provided further that in the case of an employee employed in a seasonal establishment, the employer shall pay the gratuity at the rate of seven days’ wages for each season. Section 4(2).

(3) The amount of gratuity payable to an employee shall not exceed twenty months wages. Section 4(3).

7. Forfeiture of gratuity.–(1) The gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

(2) The gratuity payable to an employee shall wholly be forfeited–

(a) if the services of such employee have been terminated for his riotous or disorder conduct or of any other act of violence on his part, or

(b) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. Section 4(6).

8: Notice of opening, change or closure of the establishment.–(1) A notice shall be submitted by the employer to the controlling authority of the area within thirty days of any change in the name, address, employer or nature of business. Rule 3(2).

(2) Where an employer intends to close down the business he shall submit a notice to the controlling authority of the area at least sixty days before the intended closure. Rule 3(3).

9. Application to Controlling Authority for direction: If an employer—

(i) refuses to accept a nomination or to entertain an application for payment of gratuity, or

(ii) issues a notice either specifying an amount of gratuity which is considered by the applicant less than what is payable or rejecting eligibility to payment of gratuity, or

(iii) having received an application for payment of gratuity, fails to issue notice within fifteen days; the claimant employee, nominee, or legal heir, as the case may be, may within ninety days of the occurrence of the occurrence of the cause for the application, apply to the controlling authority for issuing a direction under sub-section (4) of Section 7 with as many extra copies as are the opposite party:

Provided that the controlling authority may accept any application on sufficient cause being shown by the applicant, after the expiry of the period of ninety days. Rule 10.

10. Appeal.— Any person aggrieved by an order of the controlling authority may, within sixty days from the date of the receipt of the order, prefer an appeal to the Regional Labour Commissioner (Central) of the area, who has been appointed as the appellate authority by the Central Government:

Provided that the appellate authority may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days. Section 7(7).

11 Machinery for enforcement of the Act or Rules in Central sphere:—All Assistant Labour Commissioners (Central) have been appointed as Controlling Authorities and all the Regional Labour Commissioners (Central) as Appellate Authorities.

12. Powers of the Controlling Authority:— The Controlling Authority for the purpose of conducting an inquiry as to the amount of gratuity payable to an employee or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, shall have the same powers as are vested in a court, under the Code of Civil Procedure, 1908, in respect of the following matters, namely—

(a) enforcing the attendance of any person or examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits; and

(d) issuing commissions for the examination of witnesses. Section 7(5).

13. Recovery of gratuity.–If the amount of gratuity payable is not paid by the employer, within the prescribed time to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon at the rate of nine per cent per annum, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto.
Section 8.

14. Protection of gratuity: No gratuity payable under the Payment of Gratuity Act and the rules made thereunder shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court. Section 13.

15. Penalties for offences.-(1) Whoever, for the purpose of avoiding any payment to be made by himself or of enabling any other persons to avoid such payment, knowingly makes or causes to be made any false statement or false representation, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. Section 9(1).

(2) An employer who contravenes, or makes default in complying with, any of the provisions of the Act or any rule or order made thereunder shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both:

Provided that if the offence relates to non-payment of any gratuity payable under the Payment of Gratuity Act, the employer shall be punishable with imprisonment for a term which shall not be less than three months unless the court trying the offence for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice. Section 9(2).

16. Display of Notice: The employer shall display conspicuously a notice at or near the main entrance of the establishment in bold letters in English and in the language understood by the majority of the employees specifying the name of the Officer with designation authorised by the employer to receive on his behalf notices under the Payment of Gratuity Act or the rules made thereunder. Rule 4.

17. Display of Abstract of the Act and Rules: The employer shall display an abstract of the Payment of Gratuity Act and the rules made thereunder in English and in the language understood by the majority of the employees at a conspicuous place at or near the main entrance of the establishment. Rule 20.

Regards,

Pinal Mehta

Minimum Wages – Abstract

Minimum Wages (Central) Rules

FORM IX-A

(Rule 22)

Notice

Abstracts of the Minimum Wages Act, 1948 and the
rules made thereunder

I. Whom the Act affects

1. (a) The Act applies to persons engaged in scheduled employments or in specified class of work in respect of which minimum wages have been fixed.

(b) No employee can give up by contract or agreement his rights in so far as it purports so reduce the minimum rates of wages fixed under the Act.

II. Definition of wages

(1) ‘Wages’ means all remuneration payable to an employed person on the fulfilment of his contract of employment and includes house rent allowance. It excludes–

(i) the value of any house-accommodation, supply of light, water, medical attendance or any other amenity or any service extended by general or special order of the appropriate Govt.;

(ii) contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of Social Insurance;

(iii) the travelling allowance or the value of any travelling concession;

(iv) the sum paid to the person employed to defray special expenses entailed by him by nature of his employment;

(v) gratuity payable on discharge.

(2) The minimum rate of wages may consist of–

(i) a basic rate of wages and special allowance called the cost of living allowance;

(ii) a basic rate of wages with or without a cost of living allowance and the cash value of any concessions, like supplies of essential commodities at concession rates; and

(iii) an all-inclusive rate comprising basic rate, cost of living allowance and cash value of concession, if any.

(3) The minimum wages payable to employees of scheduled employments notified under Section 5, read with Section 3 or as revised from time to time under Section 10, read with Section 3, may be–

(a) a minimum time rate,

(b) a minimum piece rate,

(c) a guaranteed time rate,

(d) an overtime rate,

differing with (1) different scheduled employments, (2) different classes or work, (3) different localities, (4) different wage-periods, and (5) different age groups.

III. Computation and conditions of payment

The employer shall pay to every employee engaged in scheduled employment under him wages at a rate not less than the minimum rate of wages fixed for that class of employee.

The minimum wages payable under this Act shall be paid in cash unless the Government authorises payment thereof either wholly or partly in kind.

Wage-period shall be fixed for the payment of wages at intervals not exceeding one month or such other larger period as may be prescribed.

Wage shall be paid on a working day within seven days of the end of the wage-period or within ten days if 1000 or more persons are employed.

The wages of a person discharged shall be paid not later than the second working day after his discharge.

If an employee is employed on any day for a period less than the normal working day, he shall be entitled to receive wages for a full normal working day provided his failure to work is not caused by his unwillingness to work but by the omission of the employer to provide him with work for that period.

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

Where an employees is employed on piece work for which minimum time rate and not a minimum piece-rate has been fixed, the employer shall pay to such employee wages at not less than the minimum time rate.

IV. Hours of work and holidays

The number of hours which shall constitute a normal working day shall be –

(a) in the case of an adult, 9 hours,

(b) in the case of a child, 4 ½ hours.

The working day of an adult worker inclusive of the intervals of rest shall not exceed twelve hours on any day.

The employer shall allow a day of rest with wages to the employees every week. Ordinarily, Sunday will be the weekly day of rest, but any other day of the week may be fixed as such rest day. No employee shall be required to work on a day fixed as rest day, unless he is paid wages for that day at the overtime rate and is also allowed a substituted rest day with wages. (See Rules 23).

When a worker works in an employment for more than nine hours on any day or for more than forty-eight hours in any week, he shall in respect of overtime worked be entitled to wages in scheduled employment other than agriculture, at double the ordinary rate of wages.

V. Fines and deductions

No deduction shall be made from wages except those authorised by or under the rules.

Deductions from the wages shall be one or more of the following kinds, namely:

(i) Fines: An employed person shall be explained personally and also in writing the act or omission in respect of which the fine is proposed to be imposed and given an opportunity to offer any explanation in the presence of another person. The amount of the said fine shall also be intimated to him. It shall be subject to such limits as may be specified in this behalf by the Central Government. It shall be utilised in accordance with the directions of the Central Government;

(ii) deductions for absence from duty;

(iii) deductions for damage to or loss of goods entrusted to the employee for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default. The employed person shall be explained personally and also in writing the damage or loss, in respect of which the deduction is proposed to be made and given an opportunity to offer any explanation in the presence of another person. The amount of the said deduction shall also be intimated to him. It shall be subject to such limits as may be specified in this behalf by the Central Government.;

(iv) deductions for house-accommodations supplied by the employer or by the State Government or any authority constituted by a State Government for providing housing accommodation.

(v) deductions for such amenities and services supplied by the employer as the Central Government may by general or special order authorise. These will not include the supply of tools and protectives required for the purposes of employment;

(vi) deductions for recovery of advances or for adjustment of overpayment of wages. Such advances shall not exceed an amount equal to wages for two calendar months of the employed person and the monthly instalment of deduction shall not exceed one-fourth of the wages earned in that month;

(vii) deductions of income-tax payable by the employed person;

(viii)deductions required to be made by order of court or other competent authority;

(ix) deductions for subscription to and for repayment of advances from any provident fund;

(x) deductions for payment to co-operative societies or deductions for recovery of loans advanced by an employer from out of a fund maintained for the purpose by the employer and approved in this behalf by the Central Government or deductions made with the written authorisation of the person employed, for payment of any premium on his like insurance policy to the Life Insurance Corporation of India established under the Life Insurance Act, 1956 (31 of 1956);

(xi) deductions for recovery or adjustment of amount other than wages, paid to the employed person in error or in excess of what is due to him;

Provided that prior approval of the Inspector or any other officer authorised by the Central Government in this behalf is obtained in writing before making the deductions, unless the employee gives his consent in writing to such deduction;

(xii) deductions made with the written authorisation of the employed person (which may be given once generally and not necessarily every time a deduction is made) for the purchase of securities of the Government of India or of any State Government or for being deposited in any Post Officer Savings Bank in furtherance of any Savings Scheme of any such Government.

Every employer shall send annually a return in Form III showing the deduction from wages so as to reach the Inspector not later than the 1^st February following the end of the year to which it relates.

VI. Maintenance of registers and records

Every employer shall maintain at the workspot a register or wages in the form prescribed specifying the following particulars for each period in respect of each employed person:

(a) the minimum rates of wages payable,

(b) the number of days in which overtime was worked,

(c) the gross wages,

(d) all deductions made from wages,

(e) the wages actually paid and the date of payment.

Every employer shall issue wage-slips in the form prescribed containing prescribed particulars to every person employed.

Every employer shall get the signature or the thumb-impression of every person employed on the wage-book and wage-slips.

Entries in the wage-book and wage-slips shall be properly authenticated by the employer or his agent.

A muster-roll, register of fines, register of deductions for damage or loss and register or overtime shall be maintained by every employer at the workspot in the form prescribed.

Every employer shall keep exhibited at main entrance to the establishment and its office, notice in English and in a language understood by a majority of the workers of the following particulars in a clean and legible form:

(a) minimum rate of wages,

(b) abstracts of the Acts and the rules made thereunder,

(c) name and address of the Inspector.

Register of wages, muster-roll, register of fines, register of deductions for damage or loss and register of overtime shall be preserved for a period of three years after the date of last entry made therein.

All registers and records required to be maintained by an employer under the rules shall be produced on demand before the Inspector provided that where an establishment has been closed, the Inspector may demand the production of the registers and records in his office or such other place as may be nearer to the employers.

VII. Inspectors

An Inspector can enter in any premises and can exercise powers of Inspector (including examination of document and taking of evidence) as he may deem necessary for carrying out the purposes of the Act.

VIII. Claims and complaints

Where an employee is paid less than the minimum rates of wages fixed for his class of work, or less than the amount due to him under the provisions of this Act, he can make an application in the prescribed form within six months to the Authority appointed for the purpose. An application delayed beyond this period may be admitted if the authority is satisfied that the applicant had sufficient cause for not making the application within such period.

Any legal practitioner, official of a registered trade union, Inspector under the Act or other person acting with the permission of the authority can make the complaint on behalf of an employed person.

(A single application may be presented on behalf of or in respect of a group of employed persons whose wages have been delayed, if they are borne on the same establishment and their claim relates to the same wage-period or periods.)

(A complaint under Section 22(a) relating to payment of less than the minimum rates of wages or less than the amount due to an employee under the provisions of the Act can be made to the court only after an application in respect of the facts constituting the offence has been presented under Section 20 and has been granted wholly or in part, and the appropriate Government or an officer authorised by it in this behalf has sanctioned the making to the complaint:

A complaint under Section 22(b) or 22(a) regarding contravention of the provisions relating to hours of work and weekly day of rest or other miscellaneous offences relating to maintenance of registers, submission of returns etc., can be made to the court by or with the sanction of an Inspector. The time-limits for making such complaints is one month from the date of grant of sanction by the Inspector, in the case of offence falling under Section 22(b) and six months from the date on which the offence is alleged to have been committed, in the case of offences falling under Section 22(a).)

IX. Action by the Authority

The Authority may direct the payment of the amount by which the minimum wages payable exceed the amount actually paid together with the payment of compensation not exceeding ten times the amount of such excess. The Authority may direct payment of compensation in cases where the excess is paid before the disposal of the application.

If a malicious or vexatious complaint is made, the Authority may impose a penalty not exceeding Rs. 50 on the application and order that it be paid to the employer.

Every direction of the authority shall be final.

X. Penalties for offence under the Act

Any employer who pays to any employee less than the amount due to him under the provisions of this Act or infringes any order or rules in respect of normal working day, weekly holiday, shall be punishable with imprisonment of either description for a term which may extend to six months or with fine which may extend to five hundred rupees or with both.

Any employer who contravenes any provision of the Act or of any rule or order made thereunder shall, if no other penalty is provided for such contravention by the Act, be punishable with fine which may extend to five hundred rupees. If the person committing any offence under the Act is a company, every person who at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. No such person will be liable to punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

Any director, manager, secretary or other officer of the company with whose consent or connivance an offence has been committed is liable to be proceeded against and punished under the Act.

Note.—(a) “company” means any body corporate and includes a firm or other association of individuals,

(b) “director” in relation to a firm means a partner in the firm.

Regards,

Pinal Mehta

THE REPORT OF THE SECOND INDIAN NATIONAL LABOUR COMMISSION – 2002

An Overview By Shivaji Rao, Executive (Law), NDDB (India)

The first National  Labour Commission 1929, had promised lot in the direction of social security, social welfare, wages, social insurance, industrial relations, industrial adjudication, collective bargaining etc,. In sequel to the recommendations made in the report of the first national commission on labour series of labour enactments were passed.

After the gap of almost 72 years the Second National Labour Commission has been  constituted and submitted its report in the year 2002 to the Government of India. At the outset the terms of reference to the commission are as under:

1. To suggest rationalisation of existing laws relating to labour in the organised sector, and
2. To suggest an umbrella legislation for ensuring a minimum level of protection to the workers in the unorganised sector.

Methodology:
Before penning down the report, the Commission followed the following methodology:

a)  arranged consultation / conferences in the major cities of India to get the opinion of the Industry, public, educationalists  and so on institutions’;
b) circulated a questionnaire across the industry and the society in terms of the reference
c) surveys conducted both in organised and unorganised sector

Recommendations:
The recommendations of the Commission consists of the chapters, namely –
1). The terms of the reference of the Commission
2).Introductory review,
3).Industrial Development and Progress after independence,
4).Impact of globalisation – in comparison with neighbouring countries,
5).Approach to review laws,
6).Review of laws,
7).Unorganised sector,
8).Social security,
9).Women and Child labour,
10).Skill development,
11).Labour administration,
12).Other matters.

Only relevant part of important chapters with special reference  to the organised sector and major recommendations of Commission thereof are dealt verbatim herein below:

I – General Recommendations

1. We recommend that the Central Government and the State Government should have a uniform policy on holidays, only 3 national holidays be gazetted – namely Independence Day, Republic Day and Gandhi Jayanti Day, two more days may be added to be determined by each State according to its own tradition and apart from these each person must be allowed to avail of 10 restricted holidays in the year, Government holidays should be delinked from holidays under the Negotiable Instruments Act.(5.29)

2. Flexibility in the hours of work per week and compensation for overtime. (5.32)

3. Attempt to change the basis of tenure in all jobs (permanent as well as non-permanent) to contractual and for stipulated periods, involves a basic change in attitude and notion. If transforming the basis of all  employment is a social necessity because it has become economic necessity for industrial and commercial enterprises, then, it is equally necessary to create social acceptability for the change and the social institutions that can take care of the consequences. (5.34 & 35).The fundamental change of this type has to be preceded by :
i)  evolution of socially accepted consensus on the new perceptional jobs
ii)  the evolution of a system of constant up-gradation of employability through training in a wide spectrum of multiple skills
iii) the setting up of a system of social security that includes unemployment insurance and provisions for medical facilities; and
iv) the institution of a mandatory system of two contracts – one, an individual contract and two, a collective contract with workers union.

4. The commission recommends that government may laid down list of highly paid jobs who are presently deemed as workman category as being outside the purview of the laws relating to workman and included in the proposed law for protection of non-workmen. Another alternative is that the Govt. fix a cut off limit of remuneration which is substantially high enough, in the present context such as Rs.25,000/- p.m. beyond which employee will not be treated as ordinary  “workman”. (6.19) wage ceiling of Rs.25000/-

5. Further the Commission recommended that it would be logically to keep all the supervisory personnel, irrespective of their wages / salary, outside the rank of worker and keep them out of the purview of labour law meant for workers. All such supervisory category of employees should be clubbed along with the category of persons who discharge managerial and administrative functions. The Commission would also recommend that such a modified definition of worker could be adopted in all the labour laws. We expect management to take care of the interest of supervisory staff as they will now be part of managerial fraternity. (6.20)  Modified definition of worker

6. Existing set of labour laws should be broadly grouped into  four or five groups of laws pertaining to:

(i)  Industrial relations
(ii) Wages
(iii) Social security
(iv) Safety
(v) Welfare and working conditions and so on

7. The Commission is of the view that the coverage as well as the definition of the term ‘worker’ should be the same in all Group of laws subject to the stipulation that social security benefits must be available to all employees including administrative, managerial, supervisory and other excluded from the category of workmen and others not treated as workmen or excluded from the category of workmen. (6.21)

I-A: Approaches in drafting the Law on Labour Management Relations:

Firstly, the Commission would prefer the gender neutral expression ‘worker’ instead of the currently used word ‘workman’.

Secondly, the law will apply uniformly to all such establishments.

Thirdly, we recognise that today the extent of unionisation is low and even this low level is being eroded, and that it is time that the stand was reversed and collective negotiations encouraged. Where agreements and understanding between two parties is not possible, there, recourse to the assistance of a third party should as far as possible be through arbitration or where adjudication is the preferred mode, through Labour Courts and Labour Relations Commissions of the type be proposed later in this regard and not governmental  intervention. A settlement entered into with recognised negotiating agent must be binding on all workers.

Fourthly, we consider that provisions must be made in the law for determining negotiating agents, particularly on behalf of workers.

Fifthly, the law must provide for authorities to identify the negotiating agent, to adjudicate disputes and so on, and these must be provided in the shape of labour courts and labour relations Commissions at the State, Central and National levels.

Sixthly, The Commission is of the view that changes in labour laws be accompanied by a well defined social secuirty package that will benefit all workers, be  they in ‘organised’ or ‘unorganised’ sector and should also cover those in the administrative, managerial and other categories which have been excluded from the purview of the term worker.

II – Industrial Relations and Trade Unions

1. It is necessary to provide minimum level of protection to managerial and other (excluded) employees too against unfair dismissal or removal. This has to be through adjudication by Labour court or Labour Relations Commission or arbitration.(6.22)

2. Central laws relating to the subject of labour relations are currently the ID Act, 1947, The TU Act, 1926, Industrial Employment (SO) Act, 1946, Sales Promotion Employees (Conditions of Service) Act, 1976. There are State level legislation too on the subject.  We recommend that the provisions of all these laws be judiciously consolidated into a single law called ” The Labour Management Relations Law” or “Law on Labour Management Relations”.  (6.26)

3. We would recommend the enactment of special law for small scale units. We have come to the conclusion that the reasonable threshold limit will be 19 workers. Any establishment with workers above that number cannot be regarded as “small”.  The composite law suggested by us for small enterprises has provisions for registration of establishment, (provisions pertaining to) securing safety, health and welfare, awards of work, leave, payment of wages, payment of bonus compensation in case of lay off, retrenchment and closure, resolution of individual and collective disputes of workers etc. The law suggested by us also has provisions pertaining to social security. We are of the view that a composite law will not only protect the interest of the workers in these enterprises but will make it easier for the small enterprises to comply with the same.  (6.28)

4. The commission has avoided the term ‘Industry’  with a view that the persons engaged in domestic service are better covered under the proposed type of umbrella legislation, particularly in regard to wages, hours of work, working conditions, safety and social security. (6.40)

5. Modification in the terms like ‘strikes’, ‘work stoppage’ etc. and the terms go slow and work to rule must be regarded as misconduct under Standing Orders and Provisions relating to unfair labour practice. (6.41)

6. Commission has recommended to the withdrawal of Essential Services Maintenance Act (6.49).

7. The Commission has suggested to identify a bargaining agent on the basis of check-off system, with 66% entitling the Union to be accepted as a single negotating agent and if no union has 66% support, then Unions that have the support of more than 25% should be given proportionate representation on the college. (6.66)

8. Check-off system in an establishment employing 300 or more workers must be made compulsory for members of all registered trade unions. (6.73)

9. Commission also recommended that recognition once granted, should be valid for a period of 4 years to be co-terminus with the period of settlement. No claim by any other Trade Union / Federation / Center for recognition should be entertain till at least 4 years have elapsed from the date of earlier recognition. (6.76)

10. Establishment employing 20 or more workers should have Standing Order or Regulations. There is no need to delimit the issues on which Standing Orders can or need be framed. As long as two parties agree all manner of things including multi-skilling, production, job enrichment, productivity and so on can also be added. The appropriate Government may prescribe a separate Model Standing Orders for units employing less than 50 workers. The Commission has drafted a draft Model Standing Orders in this regard. (6.77).

11. Every establishment shall establish a grievance redressal committee consisting of equal number of workers and employers representatives. The said committee be the body to which all grievance of a worker in respect of his employment will be referred for decision within a given time frame (6.80).

12. Commission’s view on Chapter V B (Special Provisions relating to Lay-off, Retrenchment & Closure in the Establishments employing not less than 100 workmen) of the ID Act :  The Commission has felt that, in the new circumstances of global competition, it may not be possible for some enterprises to continue and meet the economic consequences of competition. In such cases, one cannot compel non-viable undertakings to continue to bear the financial burden that has to be borne to keep the concern going. They should, therefore, have the option to close down. In these circumstances, the commission came to the conclusion the best and more honest equitable course will be to allow closure, provide for adequate compensation to workers and in the event of an appeal, leave it to the Labour Relations Commission to find ways of redressal – through arbitration or adjudication. (6.87).

13. Prior permission is not necessary in respect of lay-off and retrenchment in an establishment of any employment size. Workers will however be entitled to 2 months notice or notice pay in lieu of notice, in case of retrenchment. The commission also felt that the rate of retrenchment compensation should be higher in a running organisation than in an organisation which is being closed. It would however recommend that in the case of establishment employing 300 or more workers where lay-off exceeds a period of 1 month such establishments should be required to obtain post-facto approval of the appropriate government. The Commission recommends that the provisions of Chapter V B pertaining to permission for closure should be made applicable to all the establishments to protect the interest of workers in establishment which are not covered at present by this provision if they are employing 300 or more workers. Having regard to the national debate on the issue and  the principles outlined above the commission has recommended the compensation per completed year of service @ of 30 days on account of closure in case of sick industry which has continuously running to losses for the last 3 years and @ 45 days for retrenchment by such sick industry or body where retrenchment is done with a view to become viable. The commission also recommended higher retrenchment compensation @ 60 days wages and similarly a high rate of compensation for closure @ 45 days wages  for every completed year of service for profit making organisation . For establishment employing less than 100 workers, half of the compensation mentioned above, in terms of days of wages may be prescribed. However, notice is required to be given for both the cases of retrenchment and closure as that of big industry. (6.88).

14. The commission has recommended for maintenance of panel of arbitrators by the LRC concern, to settle the disputes. (6.93).

15. The matters pertaining to individual workers, be it termination of employment or transfer or any other matter be determined by recourse to the Grievence Redressal Committee, conciliation and arbitration / adjudication by the Labour Court.  Accordingly, Sec.2 a of the ID Act may be amended. (6.96)

16. The system of legal aid to workers and trade unions from Public Fund be worked out to ensure that workers and their organisations  are not unduly handicapped as a result of their inability to hire legal counsel.  (6.98)

17. Strike should be called only by the recognised negotiating agent and that too only after it had conducted a strike ballot among all the workers, of whom at least 51% of support the strike.  (6.101).

18. Workers participation in management – the legislative teeth should be provided. (6.102).

The Commission urges that these recommendations are taken up as a whole and not in a piece-meal manner that may destroy the context of inter-relation and holistic approach.  (6.104).

19. The provisions in respect of small establishments can be in the form of a separate law name Small Enterprises (Employment Relations Act) or be included in the general law as a separate chapter to ensure that the interest of the workers are fully protected, even while lessening burden on the management and providing them with vigilance in exercising managerial functions. (6.106)

III – Contract Labour/Casual Temporary Workers

(i) The Commission has recommended that contract labour shall not be engaged for core production /  service activities. However, for sporadic seasonal demand, the employer may engage temporary labour for core production / service activity. As mentioned by the commission that off-loading perennial non-core services like canteen, watch and ward, cleaning, etc. to other employing agencies has to take care of three aspects – (1) there have to be provisions that ensure that ensure that perennial core services are not transferred to other agencies or establishments; (2) where such services are being performed by employees on the payrolls of the enterprises, no transfer to other agencies should be done without consulting, bargaining (negotiating) agents; and (3) where the transfer of such services do not involve any employee who is currently in service of the enterprise, the management will be free to entrust the service to outside agencies. The contract labour will, however, be remunerated at the rate of a regular worker engaged in the same organisation doing work of a comparable nature or if such workers does not exist in the organisation, at the lowest salary of a worker in a comparable grade, i.e. unskilled, semi-skilled or skilled. (6.109).

(ii) The Commission would recommend that no worker should be kept continuously as a Casual or temporary worker against a permanent job for more than 2 years. (6.110)

IV – Wages

(i) The Commission recommends that every employer must pay each worker his one-month’s wage, as bonus before an appropriate festival, be it Diwali or Onam or Puja or Ramzan or Christmas. Any demand for bonus in excess of this upto a maximum of 20% of the wages will be subject to negotiation. The Commission also recommend that the present system of two wage ceilings for reckoning entitlement and for calculation of bonus should be suitably enhanced to Rs.7500/- and Rs.3500/- for entitlement and calculation respectively.(6.113).

(ii) There should be a national minimum wage that the Central Government may notify. This minimum must be revised from time to time. It should, in addition, have a component of dearness allowance to be declared six monthly linked to the consumer price index and the minimum wage may be revised once in five years. The Commission also recommends the abolition of the present system of notifying scheduled employments and of fixing/revising the minimum rates of wages periodically for each scheduled employment, since it feels that all workers in all employments should have the benefit of a minimum wage. (6.114)

(iii) There is no need for any wage board, statutory or otherwise, for fixing wage rates for workers in any industry. (6.118).

V – Working Conditions, Service Conditions etc

The Commission recommended enactment of a general law relating to hours of work, leave and working conditions, at the work place. For ensuring safety at the work place and in different activities, one omnibus law may be enacted, providing for different rules and regulations on safety applicable to different activities. (The Commission have appended a draft indicative law on hours of work and other working conditions after this chapter, and an omnibus draft indicative law on safety in the chapter on Labour Administration). Such general law on working conditions etc. may provide for the following (6.121) :-

a) The law should have a provision for letters of appointment along with a copy of Standing Orders of the establishment (in the local language); and issue of a photo identity card giving details of the name of the worker, name of establishment, designation, and so on.

b) It should specify the maximum number of working hours in a day/week, and payment of overtime at double the rates of wages. The limitation on employing workers on overtime needs to be relaxed, and  the Commission recommended that the present ceilings be increased to double to enable greater flexibility in meeting the challenges of the market. Sub section (2) of Section 64 of the Factories Act contains a provision that the State Government can give exemptions in certain circumstances. Sub section (2) of Section 64 of the Factories Act contains a provision that the State Government can give exemptions in certain circumstances. The Commission  recommend that the list of such contingencies may be suitably expanded in consultation with the representatives of the industry to include more occupations, processes and contingencies.

c) There should be reduced working hours for adolescents, prohibition of underground work in mines for women workers, prohibition of work by women workers between certain hours and so on.

d) On the question of night work for women there need not be any restriction on this if the number of women workers in a shift in an establishment is not less than five, and if the management is able to provide satisfactory arrangements for their transport, safety and rest after or before shift hours.

e)  No exemptions like EPZ or SEZ from labour laws.

f)  Appropriate government may be empowered to grant exemptions on case to case basis.

g) Establishment having a man power over a specified limit must provide for a canteen.

h) Other refreshment facilities exclusively based on gender be provided

i)  To rope in local bodies, NGOs etc. in creation of amenities, common market etc.

j)  Irrespective of number of women workers, a creche should be provided

k) Deletion of Employers’ Liability Act, 1938, Fatal Accident Act 1855 and relevant provisions of these Acts may be incorporated into the W.C. Act, 1923. (6.126)

l) A provision may be made in the Laws that all cases must be disposed of in a span of 3 hearings, and where this is not possible, the Labour Court should in its award give reasons for taking more hearings. The Labour Relations Commissions may also be entrusted with the responsibility to assess the work of the LCs particularly in the matter of expeditious disposal of cases. With the constitution of an All India Labour Judicial Services that the commission is recommending with a hope that to have a dedicated and competent set of man and woman as presiding officers of LCs who will be able to discharge responsibilities efficiently and expeditiously. (6.139)

VI – Social Security

The Commission has suggested the recommendations on social security.  The main recommendations amongst the other are  stated herein below :

i) Our Commission accepts the need to consider social security as a fundamental human right. (8.30)

ii) We recommend a system in which the State bears the responsibility for providing and ensuring an elementary or basic level of security, and leaves room for partly or wholly contributory schemes. This will mean that the responsibility to provide a floor will be primarily that of the State, and it will be left to individual citizens to acquire higher levels of security through assumption of responsibility and contributory participation. Such a system will temper and minimise the responsibility of the State, and maximise the role and share of individual and group responsibility. Thus, there will be three levels in the system.  (8.32)

iii) The Task Force on Social Security recommended that wage ceiling and employment threshold can and should be uniform with a provision for raising the wage ceiling and its eventual removal and lowering employment threshold and its ultimate removal. The Commission also agrees with it. (8.93)

iv) The term ‘workman’ may be replaced by the term ’employee’ so as to make the Workers’ Compensation Act applicable to all categories of employees; the term ’employee’ may be defined to mean any person employed in any employment specified in Schedule II; the entries in Schedule II may be revised so as to make it applicable to all classes of employees progressively; and restrictive clauses, wherever they occur in the Schedule, may be omitted. (8.96)

v) The Workmen’s Compensation Act should be converted from an employers’ liability scheme to a social insurance scheme, its coverage should be progressively extended to more employments and classes of employees, and the restrictive clauses in Schedule II of the Act should be removed. (8.97)

vi) The management of ESI Scheme should be professionalised (8.113)

vii) The PF Act be made applicable to all classes of establishment subject to such exception.(8.117)

viii)  The Commission suggests that EPFO organised an enquiry into the working of all exempted funds by an independent agency and review the entire scheme of granting exemptions from the provisions of the EPF Act. (8.126)

ix)  The Payment of Gratuity Act may be integrated with the EPF Act and converted into a social insurance scheme. (8.149)

x)  An unemployment insurance scheme could play substantial role in coping with unacceptable levels of employment resulting from the implementation of structural adjustment programmes and other economic reforms. (8.175)

xi)  The National Renewal Fund (NRF) was established in Feb-92 to provide a form of wage guarantee which had to be used for re-training, re-deployment, counselling etc. but in practice, NRF has mostly been utilised for implementing the VRS. There is need to restructure this fund to serve as a wage guarantee fund. (8.179)

xii) A provision be made for Payment of Educational Allowance to all employees (8.182).

xiii)  The insurance companies be required to develop two or more plans providing coverage for major risks faced by people leaving it to individual to choose from among them according to their capacity. (8.242)

xiv) A National Scheme for pension for physically handicap be introduced (8.365).

xv) A National Scheme be drawn up for payment of pension to leprosy affected persons, mentally sick people on the same lines as the pension for physically handicap person. (8.380)

xvi) Able bodied beggars should be given training and help to get employment. (8.386)

xvii) A permanent commission for disaster management should be set up on the lines of election commission. (8.393)

xviii) The Commission strongly recommends the constitution of high powered national security authority preferably under the Chairmanship of a Prime Minister of India. (8.415).

xix) A social security fund of India and social security of each State may be set up. (8.433)

xx) There will be three kinds of social security schemes :  1) social insurance type of contributory scheme, 2) subsidised insurance / welfare fund type of partly contributory and partly socially assisted schems and 3) social assistance scheme which will be wholly non-contributory. (8.343)

VII – Other  Recommendations

–  Recommendations on women & child labour :
–  Recommendations on skill development :
–  Labour Administration
–  Workers participation in management
–  Employment scenario in the country :
–  Review of wages and wage policy :
–  Labour statistic and research work :

VIII – Conclusions

The Commission in its 2700 pages long report inter-alia has stressed on the following:

Bilateral agreement, collective bargaining, identification of parties to bargain and for recognition.
Review on existing provisions in the Trade Union Act with regard to recognition / registration of trade union i.e.  10% support of the work force with method of identification of parties,  consequences – 66% support to recognise as TU Dispute Settlement
Grievance Settlement Committees,
Power to the labour  machinery to enforce awards
Disposal of disputes within 3 hearings
Independent from government interference
Self contained code / procedure
Review on strikes and lock outs
Essential Services Maintenance Act should be scrapped
Hire – fire policy, economic necessity
Social acceptability of contract system of appointments
Management (wants) to decide the working force – Sec. 9 A is must
Contract Labour  (R&A) Act, 1970 :  No contract labour should be deployed Core functions

The  Commission has suggested the above recommendations along-with 7 draft bills so that the concerned Ministry should not sit over the drafting exercise.

Critics on the Report:-

a) The report is not consonance with the National Policy on Industry – some of the parts of the Report consist number of negative covenants.
b) Inter union rivalry – 66% check off system is a myth
c) Validity of 4 years recognition of the Trade Unions
d) Strikes are weapons in the hands of few misled employees – Commission has recommended ballot system i.e. 51% of voting majority;
e) Employers features not dealt in the Report
f) CLRA Act  – out sourcing not in the employers interest
g) Closure – 300 is not adequate & is unrealistic
h)  Festival bonus – not in the interest of the employer
i)  Employment generation should be our goal accompanied by social benefit net
j)  Using of the words “outsourcing”,  “agri business”, “small scale industries”, “small and medium scale industries”, “manufacturing industry”  without defining them.

Regards,

Pinal Mehta