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(I) PAYMENT OF WAGES ACT, 1936
The Payment of Wages Act, 1936 is one of the old enactments dealing with employer-employee relationship. The limited purpose of the Act is to ensure prompt and full payment of wages to persons employed in industry. The State of Maharashtra has extended the provisions of the Act to all establishments covered by the Bombay Shops and Establishments Act, 1948.
APPLICABILITY
(a) Every person employed in any factory, upon a railway or through sub-contractor in a railway and any person employed in an industrial or other establishment.
(b) The Appropriate Government may by notification extend the provision to any class of person employed in any establishment or class of establishments.
ELIGIBILITY OF EMPLOYEES
Every person who is employed in any of the above mentioned establishments and who is drawing less than ` 10,000/- per month is eligible under the benefits of Payment of Wages Act, 1936.
BENEFITS UNDER THE ACT
The Act provides for regular and timely payment of wages on or before the expiry of 7th^ day of every month in cases of establishments employing less than 1,000 employees and on or before the expiry of 10th^ day of every month in cases of establishments with greater than 1000 employees. It also provides for prevention of unauthorised deductions being made from wages and charges of arbitrary fines.
OTHER IMPORTANT ISSUES
a. Wages are required to be paid in current coin or currency notes or in both but not in kind. The written authorisation of an employee is necessary for payment by Cheque/credit to Bank A/c.
b. The total deductions cannot exceed 75% of wages for payment to Co-op. societies and 50% in other cases.
c. Every employer is required to maintain registers/records in Form No. I, II, III, IV to be kept for 3 years from last entry.
d. Every employer is required to file Annual Return in Form V (In Maharashtra) regarding persons drawing gross wages below Rs. 1,000/- p.m.
e. The nomination facility has been extended to all the eligible employees by filing a declaration in Form-I to receive the wages standing to his credit at the time of his death.
PENALTIES FOR NON-COMPLIANCE
Penalties prescribed are from 1,500-7,500. Repeat offences attract 1 to 6 months imprisonment and fine from 3,750-22,500. Delayed wage payments attract penalty of ` 750 per day of delay.
(II) MINIMUM WAGES ACT, 1948
The reason for enactment of Minimum Wages Act, 1948 was poor bargaining power of workers’ organization in the country. The need for having minimum wage fixing machinery was stressed by the International Labour Organisation long back in 1928. Like the Payment of Wages Act, 1936, this Act also is exhaustively amended by many states to widen its application and its scope.
APPLICABILITY
Any person who directly or through Contractor/Agency or other person whether for himself or for any other persons employees one or more employees in any schedule employment in respect of which minimum rates of wages have been fixed under this Act.
ELIGIBILITY OF EMPLOYEES
Any person who is employed for hire or reward to do any work in a schedule employment and include an outdoor worker to whom any articles or materials are given for doing some work either at home or any other premises.
BENEFITS UNDER THE ACT
The Act prescribes the minimum rates of wages payable to employees for different scheduled employments for different classes of work and for adults, adolescents, and apprentices depending upon different localities, for one or more wage periods, viz. by hours, by the day, month or other large period. The Act has been extended to cover employees in the unorganized sector.
OTHER IMPORTANT ISSUES
a. The Act is a beneficial legislation and should be given widest meaning so long as the language is capable of bearing such a construction.
b. Register of wages is required to be maintained at the place of work in prescribed forms by every employer. Such records are to be preserved for 3 years from the time of last entry made therein.
c. An employee is prohibited from giving up any of his right or relinquishing or reducing his right to minimum wages under the Act.
d. The normal working day for an adult constitutes of 9 hours including the intervals of rest with maximum of 48 hours of working in a week.
PENALTIES FOR NON-COMPLIANCE
Imprisonment up to 6 months and/or fine up to ` 500 is imposable for contravention.
(III) PAYMENT OF BONUS ACT, 1965
The Payment of Bonus Act, 1965, gives to the employees a statutory right to a share in the profits of his employer. The Act enables the employees to get a minimum bonus equivalent to one month’s salary or wage (8.33% of annual earnings) whether the employer makes profit or not. But the Act also puts a ceiling on the Bonus and the maximum bonus payable under the Act is equivalent to 2½ months’ salary or wage (20% of annual earnings).
(IV) EMPLOYEE’S COMPENSATION ACT, 1923
The formerly known ‘Workmen’s Compensation Act, 1923,’ is now known as ‘Employee’s Compensation Act, 1923, and is an important enactment as it introduced a kind of social security scheme for the workers of this country. It enables an employee in the case of injury and his dependents in the case of his death, to claim the compensation at the cost of his employer organisation for such employment injury/ death.
APPLICABILITY
The Act applies to every employer:
i. Which includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer; AND
ii. When the services of a employee are temporarily lent or let on hire to another person by the person with whom the employee has entered into a contract of service or apprenticeship, means such other person while the employee is working for him.
ELIGIBILITY OF EMPLOYEES
Every employee to whom a personal injury is caused by accident arising out of and in the course of employment, his employer shall be liable to pay compensation in accordance with the provisions of Chapter II to the act.
BENEFITS UNDER THE ACT
Amount of compensation shall be payable by the employer:
a. Where death results from injury 50% of monthly wages X relevant factor or ` 1,20,000 whichever is more. (relevant factor depends upon the age of employee)
b. Where permanent total disablement results from the injury 60% of monthly wages X relevant factor or ` 1,40,000, whichever is more (relevant factor depends upon the age of an employee).
c. Where permanent partial disablement or temporary disablement results from injury as per prescribed schedule.
d. Where temporary disablement, total or partial, results from injury, a half monthly payment equivalent to 25% of monthly wage of workman.
e. The funeral expenses have been increased to ` 5,000/-.
OTHER IMPORTANT ISSUES
a. Any contract by an employee waiving his right to be compensated under this Act is null and void.
b. The intention of the Legislature and the circumstances under which law was enacted is to be seen. It is interpreted in favour of the weak.
c. Notice book is to be maintained. A statement, report return is to be filed when applicable.
PENALTIES FOR NON-COMPLIANCE
Compensation should be paid early — delay beyond 1 month, attract interest @6% p.a. and penalty of up to 50% of the compensation. Certain other offences attract fine up to ` 500.
(V) PAYMENT OF GRATUITY ACT, 1972
An employee expects and deserves, as a matter of right, some reward when he retires after a long meritorious service and the enactment of the Payment of Gratuity Act, 1972, has fulfilled this expectation of an employee.
APPLICABILITY
The Act applies to:
a. Every factory (as defined in Factories Act), mine, oil, field plantations, port & Railway Company.
b. Every shop or establishment in which TEN or more persons are/were employed.
c. Such other establishment in which ten or more employees employed or were employed on any day of the preceding 12 months.
ELIGIBILITY OF EMPLOYEES
The following persons are entitled to the benefits under the Act.
a. Any person [NOT Being an Apprentice] employed for wages in any kind of work (manual or otherwise) or in connection with work of factory, mine, plantation, oilfield, railway company, port or other establishment; and
b. At the time of retirement, resignation/termination, an employee should have rendered continuous service of not less than 5 years.
c. In case of death or disablement, the gratuity is payable, even if he has not completed 5 years of service.
d. Family in relation to male employee.
BENEFITS UNDER THE ACT
a. The quantum of gratuity is to be computed at the rate of 15 days’ wages (7 days wages in case of seasonal establishment) at the rate of wages last drawn by the employee concerned for every completed year of service or a part thereof exceeding 6 months.
b. "Wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the term and conditions of this employment and which are paid or are payable to him in case and includes, dearness allowance but does not include any bonus, commission, H.R.A., O.T. wages and any other allowance.
c. The total amount of gratuity payable shall not exceed ` 10,00,000/-
d. In case where employer offers the higher benefits of gratuity scheme, the employee will be eligible for such higher benefits.
c. Any other establishment employing 20 or more persons which Central Government may notify.
d. Any establishment employing even less than 20 can be covered by a specific Central Government notification.
e. A new category of ‘International Employee’ defined under the act bringing foreign nationals working in India under the umbrella of PF Act.
f. Contributions under the act are required to be carried out unless he/she is an ‘excluded employee’ and/or the other country has a reciprocating social security agreement with India.
ELIGIBILITY OF EMPLOYEES
Any person who is employed for wages in any kind of work of an establishment or employed through contractor in or in connection with the work of an establishment. Present wage ceiling is ` 6,500/- p.m.
BENEFITS UNDER THE ACT
The following benefits are available to employees under the Act:
(a) Final withdrawal at the time of Retirement/Leaving of service.
(b) Advance for
(i) Purchase of House
(ii) Repair of House
(iii) LIC Premium
(iv) Marriage of son/daughter, etc.
(c) Life-long Pension to the member and to his/her legal heirs after death.
(d) Insurance Benefit on members death while in service
(e) Interest @ 9.5% on deposits and the same is exempt from income tax.
OTHER IMPORTANT ISSUES
(a) Once the Act applies, it continues to apply even if employment strength falls below 20.
(b) Periodical returns have to be filed under the Act.
(c) Inspection Note Book has to be maintained.
PENALTIES FOR NON-COMPLIANCE
Any person who contravenes any of the provisions of the Act is liable to be arrested without any warrant being issued in respect of a cognizable offence. Whereas defaults by employer in paying contributions or inspections, administration charges attract imprisonment up to 3 years and fines up to ` 5,000. In case if offence is repeated, imprisonment may be extended to 5 years but not less than 2.
(VII) BOMBAY SHOPS & ESTABLISHMENT ACT, 1948
Legislation to regulate the conditions of work in shops and commercial establishments has been in force in the State of Maharashtra for nearly 57 years. The Act is an improved version of The Shop Act, 1939, and has undergone several improvements since its enactment.
APPLICABILITY
It applies to commercial establishments, residential hotels, restaurants, eating houses, theatres, clubs, other places of public amusement or entertainment and other establishments which fall within Municipal and Local Authorities limits of Mumbai, Pune, Solapur, Nashik, etc.
ELIGIBILITY OF EMPLOYEES
Application of Minimum Wages Act, Payment of Gratuity Act, Payment of Bonus Act, Protection under Industrial Dispute Act continue to be applied to every worker employed in every such commercial establishment.
OBLIGATIONS UNDER THE ACT
The Act has prescribed Maintenance of registers and records, exemptions in certain areas, categories, etc., weekly holidays, spread over of duties and discipline to the employees.
OTHER IMPORTANT ISSUES
i. An employee in a shop or commercial establishment cannot be required or allowed to work for more than 9 hours in a day or 48 hours in a week.
ii. Every shop or commercial establishment must remain closed on one day of the week and no deduction can be made from the wages of an employee in a shop or commercial establishment on account of any day on which it has remained so closed.
iii. Different working hours have been provided in cases of pan-beedi shops, restaurants and theatres.
iv. The Act also provides for restrictions of working hours, O.T. Benefits, Leave Benefits etc.
PENALTIES FOR NON-COMPLIANCE
Contravention of certain provisions of Law, penalties for obstructions to the Inspector, non-compliance leading to the prosecution as provided under the Act.
(VIII) EMPLOYEES’ STATE INSURANCE ACT, 1948
The Employees’ State Insurance Act, 1948, provides to the workers not only accident benefits but also other benefits such as sickness benefits, maternity benefits and medical benefits. Under the Act, the workers are also required to contribute to a social insurance fund which is to be utilised for conferring benefits to them.
APPLICABILITY
The Act applies to:
a. All factories excluding seasonal factories employing 10 or more persons;
(v) Improvement of work environment and facilities for Insured Persons (IPs) visiting ESIC Offices has been implemented.
OTHER IMPORTANT ISSUES
a. Once the Act applies it continues to apply even if employment strength falls below 20.
b. Register of Employees is to be maintained.
c. Reports and Returns have to be filed as applicable.
d. W.e.f. 1-4-2008, all employers employing more than 40 employees shall have to append a certificate duly certified by a Chartered Accountant in the revised format of Return of Contributions. Form 5 under Regulation 26 has been suitably amended.
e. The Return of Contributions is to be submitted for half year ending 30th^ September and 31st^ March every year on or before 11th^ November and 12th^ May every year respectively.
f. For every employer, where the number of employees is less than 40, the return is required to be furnished with self certification of the employer.
g. The Certificate by Chartered Accountant requires that the return as filled in by the employer is verified from the records and registers of the employer and the same is found to be correct.
h. The object of the amendment is to simplify and streamline the process of revenue enforcement and lay focus on registration and coverage of all coverable employees. Hence, Chartered Accountants should exercise proper care while certifying the above return.
PENALTIES FOR NON-COMPLIANCE
For Employees’ Contribution, Imprisonment for 2 years to maximum 5 years and/ or fine of 25,000/- For Employers’ Contribution Imprisonment for 6 months to maximum 3 years and/or fine of 10,000/-.
(IX) CONTRACT LABOUR (REGULATIONS & ABOLITIONS) ACT, 1970
The Contractor Labour (Regulations & Abolitions) Act, 1970, was passed to prevent exploitation of contract labour. The policy of the Act is to prohibit the employment of contract labour by regulating the same and wherever this is not possible, to improve the conditions of work of contract labour. Apart from providing for prohibition of employment of contract labour, the Act also provides for health and welfare of the contract labour.
APPLICABILITY
The Act applies to every establishment where the Contractor employs twenty or more contract employees. It also applies to the establishments in which the work is carried only on intermittent or casual nature or the seasonal character work exceeding 60 days.
ELIGIBILITY OF EMPLOYEES
a. The contract workman/employee means any person employed in or in connection with the work of an establishment to do any skilled, semi-skilled or unskilled manual, supervisory, technical or clerical work for hire or reward but does not include a person employed in a managerial or administrative capacity.
b. They are entitled for the benefits either directly or through contractor for statutory benefits and protection.
BENEFITS UNDER THE ACT
a. The contractor is required to provide canteens, rest-rooms, latrines, urinals, drinking water, washing facilities and first aid boxes for the use of contract labour.
b. He is also required to make prompt payment of wages to contract labour.
c. Principal employer is liable to pay wages and provide other amenities, if the contractor fails to do so.
OTHER IMPORTANT ISSUES
The contravention of the provisions regarding the employment of contract labour is a contravention under the Act for which the contractor will be liable to prosecutions and fines. The offences under the Act are cognizable offences.
PENALTIES FOR NON-COMPLIANCE
The contractor, for contravening any provisions, can be prosecuted under the Act and can be levied a fine. Contravention of any provisions of the Act shall be punishable with imprisonment to the extent of 3 months or with fine which may extend to 1,000/- or with both and in the case of continuing contravention, with an additional fine which may extend to 100/- per day.
