Tag Archives: labour

Gratuity Act – Abstract

16 Nov

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

16 Nov

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 1st 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

Provident Fund under The Employee’s Provident Funds Act ,1952

15 Nov

The Employees� Provident Funds and Miscellaneous Provisions Act, provides for compulsory contributory fund for the future of an employee after his retirement or for his dependents in case of his early death.

It extends to the whole of India except the State of Jammu and Kashmir and is applicable to:

  1. every factory engaged in any industry specified in Schedule 1 in which 20 or more persons are employed;

  2. every other establishment employing 20 or more persons or class of such establishments which the Central Govt. may notify;

  3. any other establishment so notified by the Central Government even if employing less than 20 persons.

EMPLOYEES ENTITLED

Every employee, including the one employed through a contractor (but excluding an apprentice engaged under the Apprentices Act or under the standing orders of the establishment and casual laborers), who is in receipt of wages upto Rs. 6,500 p.m., shall be eligible for becoming a member of the funds.

The condition of three months� continuous service or 60 days of actual work, for membership of the scheme, has been done away with, w.e.f. 1.11.1990. Workers are now eligible for joining the scheme from the date of joining the service.

EMPLOYEES� PENSION SCHEME, 1995

The Government has framed the Employees� Pension Scheme, 1995, w.e.f. 16.11.1995. The existing Employees� Family Pension Scheme has been merged under the new scheme.

The new scheme envisages providing monthly pension to employees on superannuation, pensioning to widows on death after superannuation, monthly pension for children of the subscribers, monthly pension to members on account of permanent total disablement during service, etc.

The new scheme shall be compulsory for all the existing members of the Family Pension Scheme and those who become members of the Employees� Provident Fund Scheme on or after 16.11.1995. Besides, the following employees shall have an option to join the new Scheme:

  1. Employees who ceased to be members of the Pension Fund between 1.4.1993 to 15.11.1995.

  2. Employees who are members of the Provident Fund as on 16.11.1995 and not members of the Pension Fund.

Members who have died between 1.4.1993 to 15.11.1995 shall be deemed to have exercised the option of joining the scheme on the date of the death.

Members referred in clause (a) shall exercise the option to become members of the scheme by returning the amount of withdrawal benefit received, if any, together with interest @ 8.5% p.a.

Employees referred in clause (b) shall be deemed to have joined the scheme w.e.f. 1.3.1971 on remittance of past period contribution with interest thereon.

TERM OF SCHEME

Every member of the Employees� Pension Fund Scheme shall continue to remain the member till the earliest happening of any of the following events:

  1. he attains the age of 58 years; or

  2. he avails the withdrawal benefit to which he is entitled vide para 14 of the scheme; or

  3. he dies; or

  4. the pension is vested in him.

Every employer shall send to the Commissioner, within three months of the commencement of the scheme, a consolidated return of the employees entitled to become members of the new scheme.

EMPLOYER�S CONTRIBUTION

The employer is required to contribute the following amounts towards Employees� Provident Fund and Pension Fund

  1. In case of establishments� employing less than 20 persons or a sick industrial (BIFR) company or �sick establishments� or any establishment in the jute, beedi, brick, coir or gaur gum industry. �10% of the basic wages, dearness allowance and retaining allowance, if any.

  2. In case of all other establishments� employing 20 or more person-12% of the wages, D.A., etc.

A part of the contribution is remitted to the Pension Fund and the remaining balance continues to remain in Provident Fund account.

Where, the pay of an employee exceeds RS. 6500 p.m., the contribution payable to Pension Fund shall be limited to the amount payable on his pay of RS. 6500 only, however, the employees may voluntarily opt for the employer�s share of contributions on wages beyond the limit of RS. 6500 to be credited to the Pension Fund.

VOLUNTARY APPLICATION OF THE ACT

The employer and majority of employees of an establishment may agree for the voluntary application of the provisions of the Act in relation to that establishment. For this purpose, an application to the Central Provident Fund Commissioner, has to be made, who may, by notification, extend the provisions of the Act to that establishment, w.e.f. the date of such agreement or any subsequent date specified in such agreement.

The employer is required to contribute the following amounts towards Employees� Provident Fund and Pension Fund

  1. Where the parties voluntarily get themselves covered by the Act, they are completely and fully governed by the Act. But their liability to make contribution is, in case of establishments� employing less than 20 persons or a sick industrial (BIFR) company or �sick establishments� or any establishment in the jute, beedi, brick, coir or gaur gum industry. �10% of the basic wages, dearness allowance and retaining allowance, if any.

  2. In case of all other establishments� employing 20 or more person-12% of the wages, D.A., etc.

PENALTY FOR DEFAULT IN PAYMENT

If the employer defaults in making payment of any contribution, arrears, accumulations, administrative charges, to the Fund, he shall be liable to pay, by way of penalty, damages at the following rates:

Period of Default
Rate of Damages (%p.a.)
(i)  Less than 2 months
17
(ii)  2 months and above but less than 4 months
22

(iii)  4 months and above but less than 6 months

27
(iv)  6 months and above
37

DISPUTE, DETERMINATION AND RECOVERY

In case, where a dispute arises regarding applicability of the Act, the Central Provident Fund Commissioner or any other officer (to whom the powers of determination have been delegated), may decide the dispute and determine the amount due from an employer, under the Act or the schemes framed thereunder. Before making any order the officer shall conduct such inquiry as he may deem necessary and shall allow a reasonable opportunity to the employer for representing his case.

Further, where an officer has reason to believe that an amount due from the employer has escaped determination, he may re-open the case within five years and re-determine the amount due from the employer.

INTEREST

The employer shall be liable to pay simple interest @ 12% p.a. on any amount due from him under the Act, from the date on which it becomes due till the date of its actual payment.

MODES OF RECOVERY

Any amount of contribution, damages, accumulations required to be transferred, or administrative charges, due from an employer, may be recovered from him in any of the following modes-

  1. attachment and sale of the movable or immovable property of the establishment/employer;
  2. arrest of the employer and his detention in prison;
  3. appointing a receiver for the management of the movable or immovable properties of the establishment/employer.

The Recovery Officer pursuant to a recovery certificate issued by the authorised officer specifying shall make the recovery the amount of arrears.

STAY OF RECOVERY PROCEEDINGS

The authorised officer may grant time for the payment of the amount, and thereupon the Recovery Officer shall stay the proceedings until the expiry of the time so granted.

OTHER MODES OF RECOVERY

Besides, the modes aforesaid, the authorised officer may recover the amount by any of the following modes:

  • Recovery from any person of amount due from him to employee who is in arrears.
  • Application for release of money, to the Court in whose custody there is money belonging to the employer.
  • Recovery by distraint and sale of movable property.

    APPEAL

    Any person aggrieved by an order of determination or re-determination may prefer an appeal to the PF Appellate Tribunal. He shall however, deposit 75% of the amount determined in the order being appealed against, before filing an appeal.

    The Appellate Tribunal may waive or reduce the amount to be deposited for admitting an appeal, after recording reasons for the same.

    Regards,

    Pinal Mehta

    ESI – Explained

    15 Nov

    Introduction

    The Employees State Insurance Act, provides for certain benefits to employees in case of sickness, maternity and employment injury.

    The Act extends to the whole of India. It applies to all factories (including Government factories but excluding seasonal factories) employing ten or more persons and carrying on a manufacturing process with the aid of power or employing 20 or more persons and carrying on a manufacturing process without the aid of power and such other establishments as the Government may specify.

    A factory or other establishment to which this Act applies, shall continue to be governed by its provisions even if the number of workers employed therein falls below the specified limit or the manufacturing process therein ceases to be carried on with the aid of power, subsequently

    The Act does not apply to the following:

    1. Factories working with the aid of power wherein less than 10 persons are employed;

    2. Factories working without the aid of power wherein less than 20 persons are employed;

    3. Seasonal factories engaged exclusively in any of the following activities viz. Cotton ginning, cotton or jute pressing, decortication of groundnuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any manufacturing process incidental to or connected with any of the aforesaid activities, and including factories engaged for a period not exceeding seven months in a year in blending, packing or repackaging of tea or coffee, or in such other process as may be specified by the Central Government;

    4. A factory which was exempted from the provisions of the Act as being a �seasonal factory� will not lose the benefit of the exemption on account of the amendment of the definition of �seasonal factory�;

    5. Mines subject to the Mines Act, 1952;

    6. Railway running sheds;

    7. Government factories or establishments, whose employees are in receipt of benefits similar or superior to the benefits provided under the Act and Indian naval, military or air forces.

    The appropriate Government may exempt any factory or establishments or class of factories or establishments or any employee or class of employees from the provisions of this Act.

    EMPLOYEES ENTITLED
    Every employee (including casual and temporary employees), whether employed directly or through a contractor, who is in receipt of wages upto Rs. 6,500 p.m. is entitled to be insured under the E.S.I. Act. However, apprentices engaged under the Apprentices Act are not entitled to the E.S.I. benefits. Coverage of part time employees under the ESI Act will depend on whether they have contract of service or contract for service with the employer. The former is covered whereas the latter are not covered under the E.S.I Act.

    Besides, in the following cases, the employees have been held to be covered under the Act:

    1. persons employed in a canteen of a club,
    2. drivers employed by the Transport organisation,
    3. persons engaged in distribution and sale of products,
    4. persons carrying administrative work of processing the orders and executing sales,
    5. hawkers employed for sale of products,
    6. employees of cycle stand and canteen run in cinema theatres by contractors,
    7. members of editorial and administrative staff of a printing press publishing newspaper,
    8. a home worker rolling beedies at home,
    9. medical representative,
    10. persons employed in a hospital attached to and maintained by factory,
    11. part-time doctor employed for ambulance room,
    12. book binders engaged by a contractor, and
    13. sales clerk working in a factory.

    EXEMPTION FROM MATERNITY BENEFIT ACT, 1961 AND WORKMEN�S COMPENSATION ACT, 1923.

    An employer/establishments covered under the E.S.I. Act is exempt from the provisions of Maternity Benefit Act and Workmen�s Compensation Act. It is specifically provided that when a person is entitled to any of the benefits provided by the Act, then he shall not be entitled to recover any similar benefits admissible under the provisions of any other enactment.

    EMPLOYER�S / EMPLOYEES� CONTRIBUTION


    The employer is required to contribute at the rate of 4.75% of the wages paid/payable in respect of every wage period. The employees are also required to contribute at the rate of 1.75% of their wages, except when the “average daily wages in a wage period” are equal to or less than Rs. 40. Employees earning less than and upto Rs. 40 per day are exempted from payment of contribution.

    It is the employer�s responsibility to deposit his own as well as employee�s contributions in respect of all employees including the contract labour, into the E.S.I. Account.

    The employer may deduct the employees contribution from his wages in respect of the period for which the contribution is payable.

    EMPLOYEES� BENEFITS


    SICKNESS BENEFIT

    Every insured employee is entitled to the cash benefit for the period of sickness occurring during any benefit period and certified by a duly appointed medical practitioner if the contributions in respect of him were payable for not less than (78 days) in the corresponding contribution period.

    However, in the case of a newly appointed employee, eligible for the first time who has got shorter contribution period of less than 156 days, he shall be entitled to claim sickness benefit if he pays contribution for not less than half the number of days available for working in such contribution period. The benefit is payable at the standard benefit rate, corresponding to his daily average wages. The benefit is, however, not payable for any day on which the employee works, remains on leave, holiday or strike, in respect of which he receives wages.

    Sickness benefit shall be allowed to an employee for any day on which he remains on strike, if: –

    1. he is receiving medical treatment and attendance as an indoor patient in any E.S.I. hospital or a hospital recognised by the E.S.I. Corporation for such treatment; or

    2. he is entitled to receive extended sickness benefit for any of the diseases for which such benefit is admissible; or

    3. he is in receipt of sickness benefit immediately preceding the date of commencement of notice of the strike given by the Employees� Union to the Management of the factory/establishment.

    No sickness benefit shall be payable for the first two days of sickness following, at an interval of not more than 15days, after the sickness in respect of which sickness benefits were last paid.

    Further no sickness benefit shall be payable to any person for more than 91 days in any two consecutive benefit periods.


    CONDITIONS TO BE OBSERVED

    Any person in receipt of sickness benefit:

    1. shall remain under medical treatment at the ESI dispensary or hospital and carry out the instructions of the medical officer;

    2. shall not do anything which retards or reduces his chances of recovery;

    3. shall not leave the area where medical treatment is provided without medical officer�s permission;

    4. shall get himself examined by the medical officer.

    MATERNITY BENEFIT

    A periodical cash benefit is payable to an insured woman employee, in case of confinement, miscarriage, medical termination of pregnancy, premature birth of a child, or sickness arising from pregnancy, miscarriage, etc., occurring or expected to occur in a benefit period, if the contributions, in respect of her were payable for atleast (70 days) in the two immediately preceding contribution periods.

    The benefit is payable at twice the standard benefit rate or Rs. 20, whichever is higher, for all days on which the she does not work for remuneration during the period prescribed as under.


    MEDICAL BOUNS

    Rs. 250 on account of confinement expenses shall be paid to an insured woman and an insured person in respect of his wife, if confinement occurs at a place where necessary medical facilities under ESI Scheme are not available.


    DISABLEMENT BENEFIT

    Disablement benefit is payable in the form of cash installments, to an employee who is injured in the course of his employment and is, permanently or temporarily, disabled, or contacts any occupational disease. It is sufficient if it is proved that the injury was caused by an accident arising out of, and in the course of employment, no matter when it occurred, and where it occurred.

    The accident shall be deemed to have arisen out of and in the course of employment unless there is evidence to the contrary,

    1. where an accident happens while the employee is travelling in employer�s transport, to or from his place of work;

    2. where an accident happens in or about any premises at which the employee is employed for the purposes of his employer�s trade or business, while the employee is taking steps, in an emergency, to rescue, secure or protect persons who are injured or imperiled or to avert or minimize serious damage to property;

    3. where the employee is at the time of the accident acting in contravention of any law or any safety rules and instructions, if the employee is acting for the purpose of, and in connection with, the employer�s trade or business.

    The employee claiming any disablement benefit is required to furnish a medical certificate as prescribed under the regulations. The employee is also required to observe certain conditions as to medical examination etc., as prescribed for sickness benefit.

    The benefit for temporary disablement is, however, not payable for any day on which the employee works, remains on lease, holiday or strike, in respect of which he receives wages.

    However, disablement benefit for temporary disablement shall be allowed to an employee for any day on which he remains on strike, if:

    1. he is receiving medical treatment and attendance as an indoor patient in any ESI hospital or a hospital recognised by the ESI corporation, for such treatment; or

    2. he is in receipt of such disablement benefit immediately preceding the date of commencement of notice of the strike given by the Employee�s Union to the management of the factory/establishment.


    NOTICE OF INJURY

    The insured employee who sustains an employment injury should give a notice of the same to the employer or manager or supervisor or foreman, etc., by means of entry in the Accident Book or otherwise in writing or even orally. This notice is very important for claiming the disablement benefit.


    ACCIDENT REPORT BY THE EMPLOYER

    In case of an accident in the establishment, the employer should prepare an �Accident Report� in Form 16 (in triplicate) and submit to the local office and the Insurance Medical Officer. The third copy is the office copy. The reports are to be submitted within 48 hours in ordinary cases and immediately in death cases.


    EMPLOYER TO ARRANGE FIRST AID

    The employer shall make arrangements for the first aid and medical treatment and transport as an insured person may require, in case of an accident.


    BENEFITS NOT TO BE COMBINED

    An employee shall not be entitled to receive for the same period-

    1. both sickness benefit and maternity benefit; or

    2. both sickness benefit and disablement benefit for temporary disablement; or

    3. both maternity benefit and disablement benefit for temporary disablement.

    The employee shall be entitled to choose any one of the aforesaid benefits, at his option.


    ABSTENTION VERIFICATION

    The employer should furnish and verify the particulars in Form 28, in respect of the abstention of an employee from work, for which sickness/maternity/temporary disablement benefit has been claimed.

    PAYMENT OF BENEFIT IN CASE OF DEATH


    If an employee dies during any period for which he is entitled to a cash benefit, the amount of such benefit shall be payable up to and including the day of his death. The amount of benefit shall be paid to the nominee or, where there is no nomination, to the heir or legal representative of the deceased employee.


    FUNERAL EXPENSES

    If an insured employee dies, the eldest surviving member of his family or the person who incurs the expenditure of funeral of the deceased employee, is entitled to reimbursement of such expenditure subject to a maximum of Rs. 1,500. The claim for the payment of funeral expenses should be submitted in the prescribed form along with prescribed documents within 3 months of the death of the insured employee.


    DEATH REPORT

    Incase of the death of an insured employee at the place of employment, the employer should immediately report to the local office and to the nearest E.S.I dispensary or hospital.

    INSPECTORS-THEIR DUTIES AND POWERS


    The E.S.I. Corporation may appoint Inspectors to carry out the purposes of the Act, within the local limits assigned to each of them.


    DUTIES

    The duties of an Inspector are:

    1. Inquiring into the correctness of any of the particulars stated in any return of contribution;

    2. Ascertaining whether any of the provisions of the Act has been complied with; and

    Such other duties as may be authorised by the Corporation or specified in the regulations.


    POWERS

    The Inspectors are vested with following powers to carry out their duties and functions aforesaid:

    1. To require any employer or contractor to furnish to him necessary information;

    2. To enter, at any reasonable time, any office, establishment, factory or other premises of the employer or contractor, and require the person in change thereof to produce for examination accounts, books and documents relating to the employment of persons and payment of wages, or to furnish to him necessary information;

    3. To examine the employer or contractor, his agent or servant, or any person found in the factory, establishment, office or other premises, or any employee; and

    4. To make copies of, or take extracts from, any register, account books or other document maintained in such factory, establishment, office etc.

    OBLIGATIONS OF EMPLOYERS

    1. The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the Act becomes applicable to it, and obtain the employer�s Code Number.

    2. The employer should obtain the declaration form from the employees covered under the Act and submit the same alongwith the return of declaration forms, to the E.S.I. office. He should arrange for the allotment of Insurance Numbers to the employees and their Identity Cards.

    3. The employer should deposit the employees� and his own contributions to the E.S.I. Account in the prescribed manner, whether he has sufficient resources or not, his liability under the Act cannot be disputed. He can not justify non-payment of E.S.I. contribution due to non-availability of finance.

    4. The employer should furnish a Return of Contributions alongwith the challans of monthly payment, within 30 days of the end of each contribution period.

    5. The employer should not reduce the wages of an employee on account of the contribution payable by him (employer).

    6. The employer should cause to be maintained the prescribed records/registers namely the register of employees, the inspection book and the accident book.

    7. The employer should report to the E.S.I. authorities of any accident in the place of employment, within 24 hours or immediately in case of serious or fatal accidents. He should make arrangements for first aid and transportation of the employee to the hospital. He should also furnish to the authorities such further information and particulars of an accident as may be required.

    8. The employer should inform the local office and the nearest E.S.I. dispensary/hospital, in case of death of any employee, immediately.

    9. The employer must not put to work any sick employee and allow him leave, if he has been issued the prescribed certificate.

    10. The employer should not dismiss or discharge any employee during the period he/she is in receipt of sickness/maternity/temporary disablement benefit, or is under medical treatment, or is absent from work as a result of illness duly certified or due to pregnancy or confinement

    DISPUTES & REMEDIES

    EMPLOYEES STATE INSURANCE CORPORATION

    The Employees State Insurance Scheme is administered by the Employees� State Insurance Corporation, which is constituted by the Central Government. It consists of representatives of the Central Government, medical profession and members of Parliament. The Corporation is vested with the following powers.

    • To promote measures for the improvement of the health and welfare of insured employees and for the rehabilitation and re-employment of those who have been disabled or injured

    • To appoint inspectors for purposes of the Act.

    • To determine the amount of contribution payable in respect of employees of a factory or establishment, which has not furnished or maintained any particulars, registers or records.

    EMPLOYEES INSURANCE COURT

    Any dispute arising under the Act shall be decided by the Employees Insurance Court and not by a Civil Court. It is constituted by the State Government for such local areas as may be specified and consists of such number of judges, as the Government may think fit. It shall adjudicate on the following disputes and claims.

    Disputes as to �

    1. Whether an employee is covered by the Act or whether he is liable to pay the contribution, or

    2. The rate of wages or average daily wages of an employee, or

    3. The rate of contribution payable by the employer in respect of any employee, or

    4. The person who is or was the principle employer in respect of any employee, or

    5. The right to any benefit an the amount and duration thereof, or

    6. Any direction issued by the Corporation on a review of any payment of dependents� benefit, or

    7. Any other matter in respect of any contribution or benefit or other due payable or recoverable under the Act.

    Claims as to �

    1. Recovery of contributions from the principle employer,

    2. Recovery of contributions from a contractor,

    3. Recovery for short payment or non-payment of any contribution under section 68,

    4. Recovery of the value or amount of benefits received improperly under section 70,

    5. Recovery of any benefit admissible under the Act

    No dispute shall be admitted unless the employer deposits with the Court 50% of the amount due from him as claimed by the Corporation.

    APPEAL

    An appeal shall lie to the High Court within 60 against an order of the Employees� Insurance Court if it involves a substantial question of law.

    Regards,

    Pinal Mehta

    Legal Tip – Food allowance not to be `basic wage’ for provident fund contributions

    15 Nov

    Food allowance not to be `basic wage’ for provident fund contributions

    Food allowance cannot be treated as cash value for food concession. Basic wage means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include-

    (i)                The case value of any food concession

    (ii)             Any dearness allowance

    (iii)           Any presents made by the employer

    Regards,

    Pinal Mehta

    Labour Laws : Bombay Shop & Establishment Act 1948

    13 Oct

    THE BOMBAY SHOPS & ESTABLISHMENTS ACT 1948
    APPLICABILITY.
    n 1. The Act extends to the State of Maharashtra.
    n 2. Is intended to regulate the conditions of work and employment in commercial establishments, shops, eating houses, restaurants, theatres, etc.
    n 3. The Act applies to all employees (including apprentices) and also covers indirect labour, that is contract labour.

    OBLIGATIONS OF THE EMPLOYER

    1. Obtain a license from the authorities.
    2. Display it in the premises.
    3. Inform the authority of any changes.
    4. Renew the license to maintain validity.
    5. Opening Hours not earlier than 8.30 AM.
    6. Closing hours not later 8.30 PM.
    7. Working Hours: Maximum 9 hours a day and 48 hours in any week
    8. Rest interval: At least 1 hour – Within 5 hours from starting time.
    9. Spread-over in a CE shall not exceed 11 hours
    10. Overtime at double the rate of payment for work done beyond the limits of hours of work.
    11. Special provisions regarding hours of work, etc. for ‘Young persons’ (those are more than 15 years of age but are less than 17 years)
    12. A paid weekly-off if employee has put in employment for 6 days.

    LEAVE & HOLIDAYS

    1. Leave:

    a. 5 days for every 60 days worked, if the person has been employed for not less than 3 months in a year.
    However, where an employee has worked not less than 240 days during a year shall be allowed leave for not less than 21 days in a year.
    b. Above leave is inclusive of intervening weekly-offs and paid holidays.
    c. In case of termination of service unavailed leave is to be encashed.
    d. Advance of 50% of leave wages to be paid before he proceeds on approved leave.

    LEAVE & HOLIDAYS
    2 Holidays: January 26th, May 1st, August 15th, and October 2nd. are compulsory paid holidays under the Act.

    Note: If an employee is required to work on any of these holidays he will be eligible for a compensatory holiday in addition to double the payment for the holiday on which he has worked.

    IMPORTANT PROVISIONS

    1. The Act brings in the applicability of:
    ? The Payment of Wages Act,
    ? Maternity Benefit Act,
    ? Workmen’s Compensation Act, and
    · The Industrial Employment Standing Orders Act where there are more than 50 workmen.

    IMPORTANT PROVISIONS

    2. Notice of termination of Service: Notice of termination will be governed as under:
    a. Upto 3 months of Employment: NIL.
    b. More than 3 months: 14 days notice in writing (or wages in lieu thereof).
    c. Employment one year or more:- at least 30 days notice in writing (or wages in lieu thereof).

    IMPORTANT PROVISIONS

    3. Restrictions on double employment are imposed on the employee as well as the employer.
    4. Various provisions exist for maintenance of registers, records and display of notices.

    THE EMPLOYEES’ STATE INSURANCE ACT & SCHEME

    BENEFITS

    • 1. The ESI Act,1948 provides for the following benefits to employees:
    • · Sickness Benefit
    • · Medical Benefit
    • · Maternity Benefit
    • · Disablement Benefit
    • · Dependent’s Benefit
    • · Rehabilitation Allowance
    • · Funeral Expenses.
    • 2. A Unique Multi-dimensional Contributory Social Security Scheme based on Insurance.
    • 3. Coverage of employed persons as per the Act COMPULSORY .

    APPLICABILITY

    1. The Act is applicable to:
    a. All factories.
    b. Section 1(5) permits, extension of the provisions of the Act, to any other class of establishments, industrial, commercial or agricultural.
    2. Although “shop” is not defined it has been held by judicial interpretation to cover an activity where goods or services are sold. No premises is necessary.
    3. The Act applies to all employees drawing salary, exclusive of overtime earnings, upto Rs.10,000 per month. Rs. 25,000/- for persons with disability(Rule 50).
    4. “Employee” includes:
    · indirect labour (contract workers)
    · trainees and apprentices other than those engaged under the Apprentices Act,1961.

    CONTRIBUTIONS PAYABLE

    1. Contributions based on ‘wages’.
    2. Definition of ‘wages’ in Section 2(22) is very wide.
    3. Contribution Rates (Rule 51):
    · Employer’s Contribution: 4.75% of wages.
    · Employees’ Contribution: 1.75% of wages.
    Note: For payment of contributions overtime earnings are to be included.

    CONTRIBUTION & BENEFIT PERIODS

    1. The quantum of benefits that employees are eligible to receive during a benefit period is linked to the contributions actually paid in the respective contribution period. (Regulation 4).
    2. CONTRIBUTION PERIOD BENEFIT PERIOD
    1st. April to 30th. September. 1st.Jan to 30th. June
    1st. October to 31st. March 1st. July to Dec. 31st.

    • DUTIES OF AN EMPLOYER

    The Employer must ensure to:
    • 1. Register the factory/establishment. (Regulation 10B).
    • 2. Complete filling the Declaration Forms the same day the employees join employment. (Regulation 11).
    • 3. Submit declarations forms in Form 3 within 10 days. (Regulation 14).
    • 4. Issue Temporary Identification Certificates (TIC) received from ESIC to the Insured Persons.
    • 5. Assist the ESIC. (Regulation 16).
    • 6. Help in issuing Identity Cards. (Regulation 17).
    • 7. Issue a certificate of employment to employee who falls sick before issuance of the TIC to enable him to get treatment.
    • 8. Remit the ESI contributions every month before the 21st.of the month. (Regulation 31).
    • 9. Send Return of Contribution Cards within 42 days of the end of the Contribution Period. (Regulation 26). In case of Closure: 21 days.
    • 10. Contractor maintains register in Form 7.
    • 11. Pay 15% p.a. interest for delay/default in sending contributions. (Regn.31-A)
    • 12. Pay damages, where levied, for delayed payments. (regulation 31- C).
    • 13. Keep challans in proper custody. In case of contractor’s employees retain xerox of all challans. (VERY IMPORTANT).
    • 14. Maintain Register of employees.
    • 15. Maintain Inspection Book. (Regulation 102-A).
    • 16. Arrange immediate First Aid assistance.
    • 17. Maintain Accident Book. (Form 13).
    • 18. Prepare and send Accident Report (Regulation 68). (Form 16).

    • DUTIES OF AN EMPLOYER
    IN CASE OF FATAL ACCIDENTS

    In case of fatal accidents, the employer must send intimation by telegram/special messenger to:
    • a. Inspector of Factories.
    • b. Administrative Medical Officer, ESIC.
    • c. District Magistrate.
    • d. Police Station.
    • e. Nearest Relative.
    • f. Form 24 to Factory Inspector.
    • g. Form 16 to AMO, ESIC.

    • In case of fatal accidents, the employer must send intimation by telegram/special messenger to:
    • a. Inspector of Factories.
    • b. Administrative Medical Officer, ESIC.
    • c. District Magistrate.
    • d. Police Station.
    • e. Nearest Relative.
    • f. Form 24 to Factory Inspector.
    • g. Form 16 to AMO, ESIC.
    • OTHER IMPORTANT PROVISIONS OF THE ACT
    1. Section 53: Bars an injured employee (or his/her dependents) from claiming/receiving benefits under the Workmen’s Compensation Act or any other law, including a claim under tort.
    • 2. Section 61: Bars an employee entitled to receive benefits under the ESIS from any other enactment.
    • 3. Section 68: Provides that the employer will pay twice the contribution or difference in benefits received due to default in payment of contributions by him (whichever is higher).
    • 4. Section 73: Prohibits the employer from dismissing, discharging or punishing an employee who is receiving sickness, disablement or maternity benefit during such period

    • 5. Sections 45 to 45-I: Wide powers given to the Corporation.
    • 6. Regulation 97 deals with discontinuation or reduction of benefits.
    • 7. Regulation 98 states that if the service conditions of the employer permit the employer may discharge/reduce on due notice an employee:
    • · Receiving TDB for 6 months or more.
    • · Receiving medical treatment for 6 months or more.
    • · Receiving medical treatment for infectious diseases like TB, for 18 months or more.

    BENEFITS UNDER THE ESIC

    1. Rule 54 gives Table of Average Daily Wages and Standard Benefit.
    • 2. SICKNESS BENEFIT:
    • Except first 2 days, cash benefit approx. equal to 50% wages upto 91 days – Rule 55.
    • 3. EXTENDED SICKNESS BENEFIT:
    • For TB, leprosy, & Mental Diseases: upto 309 days, provided he is in employment for 2 years. (By Notification).
    • 4. MATERNITY BENEFIT:
    • Qualifying Period of Contribution: Min. 70 days.
    • 12 weeks benefit @ twice the Standard Benefit. (Rule 56)
    • 5. MISCARRIAGE: Upto 6 weeks benefit. (Rule 56-A).
    • 6. Medical Bonus: Rs.250.
    • 7. DISABLEMENT BENEFIT:
    • Excluding first 3 days, TBD @ Standard Benefit + 40% till incapacity remains. (Rule 57).
    • 8. DEPENDENT’S BENEFIT: @ Standard Benefit + 40% – Rule 58.
    • 9. MEDICAL BENEFIT: Medicines from panel doctor — Section 56.
    • 10. FUNERAL BENEFIT: Rs.2500 – Rule 59.
    • 11. MEDICAL BENEFIT (POST RETIREMENT): For self and spouse medical benefit on payment of Rs.10 per month. Or lump-sum payment. Conditions: Minimum 5 years as an Insured Person and must superannuate. (Rule 61).

    BENEFITS UNDER THE ESIC
    • 12. REHABILITATION ALLOWANCE: For attending to artificial limbs centre. (By Notification).
    • DEBARRING OF BENEFITS: Regulation 99A debars an IP from receiving SB or TDB on any day of strike except:
    • · Where he is receiving medical treatment as an indoor patient.
    • · Where he is receiving extended sickness benefit.
    • · Where he is receiving SB or TDB immediately before commencement of strike.
    • · Where the IP has undergone vasectomy/tubectomy operation.

    THE WORKMEN’S MINIMUM HOUSE-RENT ALLOWANCE ACT, 1983.
    Applicability
    • 1. A State enactment to provide for minimum house rent allowance to workmen employed in Maharashtra.
    • 2. Applies to factories and establishments employing fifty or more workmen in the area in which it is in force by notification. Does not cover contract workmen or indirect workmen.
    • 3. ‘Workman’ in this Act means workman as defined in the I.D.Act.
    • 4. ‘Wages’ means basic and dearness allowance.

    QUANTUM & CONDITIONS FOR PAYMENT OF HRA

    1. 1. Section 4 mandates payment of HRA not less than 5% of the workman’s Basic + DA, or Rs.20, which ever is higher,
    a) provided where the service is less than a month he shall be paid proportionate HRA.
    b) ‘Service during the month’ includes lay-of, any kind of paid leave, including weekly offs, lockout where wages are paid, days of disablement for employment injury, maternity leave of 12 weeks for which HRA is to be paid.
    2. Where more favourable terms through agreement, settlement or award are available the workmen will be eligible for such terms.

    QUANTUM & CONDITIONS FOR PAYMENT OF HRA

    3. Where workmen are provided residential accommodation by the employer and a deduction is made then,
    a) If the amount deducted is higher than HRA, then the deduction stands reduced to the extent of the HRA under the Act and no HRA is payable. (Section 4[4] a)
    b) If the amount deducted is lesser than the HRA payable under the Act, the HRA payable will stand reduced to the extent of the deduction and the balance shall be paid to the workman. (Section 4[4] b)
    c) When free accommodation is provided, and no deduction is made, then no HRA is payable. (Section 5).

    4. In case of non-payment of HRA application can be made to the Controlling Authority (CA). The CA after giving opportunity to the applicant and the employer can determine the HRA payable and issue directions as required.
    5. In case of a dispute regarding HRA such dispute shall be deemed to be in industrial dispute under the ID Act and the provisions of such Act shall apply.
    6. Section 8 read with Rule 4 provides for registers and records to be maintained and permits records already maintained by the employer to be adequate compliance.

    Regards,

    Pinal Mehta