Labour & Industrial Law- Mr.

Yashassvi Virendra
Shatakshi kakkar

11.07.2023- Unit 1: History of Labour Law and ILO

The evolution of labour law-
• Slavery: not construed as individuals but property of the masters directed to perform
any and all functions as instructed by the masters.
Nature of slavery-
▪ Bonded- if you owe something, that person or his family member is pledged as
labourer
▪ Chattel- a slave whose generation becomes slave of owners and their generation
▪ Gladiators
British introduced the modern jurisprudence of labour law in India.
Two types of courts-faujdari (criminal) and diwani (civil)
Indian Slavery Act, 1843: First anti-slavery Act made for Indians. It helped in strengthening
the British empire as the local administration was getting weaker day-by day. The source of
revenue for princely kings were taken away. The Britishers took away the name of slavery
but did the same things such as taking away of land in name of tax punishments. (Features of
Act from PPT)
Rule of law-
▪ Law is supreme
▪ No arbitrariness
▪ Natural justice is to be followed
Parens patriae
Salus populi est suprema lex
One cannot form any law that violates the public rights.
State is dutybound to frame laws dealing with law
Telephone Canteen Employees’ Association v. UOI (1998)
Government Branch Press v. D.B. Belliwapa (1979)
Both these formed part of State under Article 12. In the first case it was regarding regulation
of canteen workers. It was held that you should act as welfare state and if someone is
working for you, you should extend good conditions for them.

Crown Aluminium Works v. Workmen (1958)

Challenges for welfare state:

▪ Rules vis-à-vis balancing of convenience- whenever there is a rule BoC has to be
seen, the rules should not favour just one of the parties.
▪ Utilitarian judicial intervention- betterment of majority, you can’t just make all
provisions for just one party.
▪ Conflict of negative rights (rights for which we can make the state accountable-right
to not commit suicide; you have to maintain a safe environment for workers) v.
positive rights (rights that the state are bound to give- right to life; you have the right
to work)

Illustration 1: Can SC suspend labour laws for 2 years after earthquake because of
which the entire industrial infrastructure has collapsed?
Article 14 of equality is for both employer and employee. The earthquake is an extraordinary
situation and to ensure maximum growth of welfare state the labour laws could be suspended
for 2 years. Not only the workers’ rights are to be considered but of the employers as well. the
balance of convenience was in favour of the employers hence justifying the act.
Yardstick of Policy Making:
▪ Institutionalization of Rule of Law
 ▪ Separation of Power
▪L
16.07.2023
Theories of Labour Welfare Legislations
1. Supervision Theory/Police Theory: when an employee is entering into a premise
there can be certain restrictions. It is a balance of positive and negative rights. One
shall assign work and give wages but at the same time certain restrictions shall be
placed like safety requirements. It is the duty of the employer to impose these
restrictions. One can impose certain conditions and restrictions but they should not be
extremely regressive in nature and should be balanced with a positive outcome. For
e.g.- in pharmaceuticals company there are certain safety requirements regarding
chemicals and all.

2. Philanthropic Theory: for upliftment of labour. The company engages into

philanthropic services such as opening schools in the premises. A proper functioning
of the industry can be done by adjusting the profits towards such philanthropic
activities. Whatever is spent on philanthropic activities is adjusted and reduces tax
liability. E.g.- Diwali policies, CSR Policies, Reliance has opened an NGO, building
community hospitals.
3. Trusteeship Theory: Company is parent of the employee and provides for welfare of
the employees. Also called paternalistic theory of labour welfare. The revenue earned
by company flows from top to the bottom so that all levels of employees are
benefitted. E.g.- creche facilities.

4. Functional Theory: Incentive based theory. Also known as efficiency theory. The
benefit is of the company but at the same time a part of that benefit is offered to the
employee. This theory is works well when both the parties have identical aim. E.g.
sales target is given to an employee and when he achieves it he is getting certain
benefit, ESOPs.

5. Public Relation Theory: Promotes representation of the employee in public as the

agent of employer. Identity of the organisation is so high that the employee is under
an obligation to perform well.

6. Placating Theory: All the other are appeasing theories where the employer is
working for the benefit of the employees but this is not such theory. In this theory the
employers are given an advantage over the employers. If there is a breakdown of rules
there should be a deterrent rule. If normal functioning of the premise is broken by an
employee, the employer has the right to terminate it. E.g., under the Industrial Dispute
Act, if employees are going for unlawful strike employers have the right to close
down the premises or even terminating of the services.

Relevant Constitutional Provisions:

Articles- 14, 15, 19, 23, 24, 32, 39, 41, 42, 43, 43-A, 136, 226.

International Labour Organisation (for externals- read the slides for a small 5 marker
question)à
Est. by Treaty of Versailles in 1919. (PPT)
ILO doesn’t have power to impose sanctions of its members. However it is the only member
of UN that includes private participation. The basis of ILO Is the tripartite principle.(PPT)

Unit 6: Industrial Employment (Standing Orders) Act, 1946

Standing orders are the guidelines given for the functioning of the concerned institution.
Instructions given for general administration of an industrial premise.
Objectives of the Standing Orders are:
• to create a transparency between employer and employees so that there is clarity on
what work is to be discharged, how, what will be the payments, what shall be the
 working hours etc.
• to maintain uniform standing orders in respect of the working relationship, workers
and factories
• to ensure that T&Cs of employment are made aware to the workers and their
exploitation is minimised
• to promote industrial peace and harmony by promoting fair industrial practices.
Every employer is duty bound to get their standing orders certified.

22.07.2023
The Schedule to the Act provides for matters to be provided in Standing Orders are:
• classification of workmen
• period and hours of work, holidays etc.
• shift working
• attendance and late coming
• minimum wage
• termination of employment, notice period etc.
Standing Order: Rules relating to working in a factory which are mentioned in the Schedule
to the Act.
Section 1(3): in preceding 12months if at any given point of time, more than 100 employees
are working in an industrial establishment, the Act shall be applicable, the Standing Orders
would have to be certified and if not, penalty would be imposed.
Procedure for certification of Standing Order [Section 3(1)]: Employer has to prepare
Standing orders and send 5 copies to Certifying Officer [Labour Commissioner] for approval.
A Standing Order once certified cannot be modified before 6 months but on the discretion
of the Labour Commissioner if sufficient cause is shown the same can be done.
Section 5: till the Standing Orders are being certified, the Model Standing Order prepared
by Government will automatically apply as per Section 12A.
Section 9: When the employer gets the standing order certified, the same have to be the
displayed in some common area in English as well as the prevalent vernacular language.
Limitation period if of 30 days- post certification of standing order, within 30 days if any
st
appeal is to be made should be made, on the 31 day the Standing Orders are deemed
applicable.

Important definitions:
• Appellate Authority [Section 2(a)]
• Appropriate Government [Section 2(b)]
Certifying Authority [Section 2(c)]
• Employer [Section 2(d)]
• Industrial Establishment [Section 2(e)]

Definition of Standing OrderàApplicability of the Standing OrderàSchedule containing

details of the Standing OrdersàSection 3àSection 12AàSection 4àSection 5

26.07.2023- Unit 5: Trade Union Act, 1926

Section 2(g)- Trade Dispute:
Section 2(h)- Trade Union:
Create a bridge between whatever kinds of dispute that occurs.
Definition of ‘workmen’ is taken from the Factories Act which is an inclusive definition.
In the following areas trade unions are not allowed by law [Proviso to Section 2]:
i. In agreement between partners as to who owns the business.
ii. In agreement between an employers and those employees by him as to such
employment- who shall be employed- to protect the hire & fire rights of employer.
iii. In agreement relating to the nature of business that the employer has to conduct- to
protect the expansion of business.
Section 4- Mode of Registration:
 1) At a given time there must be minimum 7 members of an Industry for registering the
trade union. Provided that 10% or 100 members whichever is less should be
employed in the industry at the time of making application for registration.
2) After application but before registration, if half of the members leave the trade union,
the registration shall become invalid. E.g.- if there are 500 members, 251 ceases to
exist, members are now 249 then the registration becomes invalid. If the members are
still 251 or more and rest have ceased to exist, then there is no effect on registration.
Section 5- Application for Registration:
1) Application to be made to the Registrar- along with copies of rules of trade union and
a statement containing (a) names, occupation, addresses of the members, (aa)…. (b)
name of trade union and its head office’s address and (c) title, name, age, address,
occupation of the office bearers of the trade union.
2)
Section 6- Provisions to be contained in the rules of a trade union:
6(c) talks about ‘purpose’ which is given in detail in Section 15.
Section 17- Criminal conspiracy in trade dispute:

29.07.2023
Section 20- Right to inspect books of Trade Union: every trade union member has this
right.
Section 21- Rights of minors to membership of Trade Union
Section 21A- Disqualification of office-bearers of trade unions:
Section 24: Amalgamation of trade unions: there are two conditions on the basis of which
two trade unions can merge- books of account shall be merged- criminal prosecution is
pending on any trade union, those liabilities will continue to exist against the individual trade
union and not carry forward to the amalgamated trade union- civil liabilities will carry
forward to the amalgamated trade union.

Unit 2: Employees’ Compensation Act, 1923

Objective- Restoration of the employee’s same status as it was before the accident.
There has to be an injury. It has to be physical injury specified in the Schedule and not legal
injury.
Calculation of compensation for employee that is dead will be preferred in examination.
Section 2(d)- “dependant”: covers all the possible connected persons of the deceased
Section 2(dd)- “employee”
Section 2(e)- “employer”
Section 2(m)- “wages”- basic salary, allowances, bonuses, food grain consideration will be
included- operational compensations such as travel allowance are excluded- consideration
Schedule III- memorize- list of occupational diseases
Section 3- Employer’s Liability for Compensation:
Three criteria has to be seen-
1. Whether the work comes under course of employment or not? Course of employment
starts when the employee leaves his house for work and ends when the employee
returns to his home.
2. The work was done for whose benefit?
3. Was there any wilful disobedience on part of the employee?

E.g. X & Y work in a mine. Employees should not work after 7 PM. No one should stay in
mine after 8 PM. The bell rang at the appropriate time of 7 PM, but X & Y could not hear the
bell. There was an accident and X & Y suffered permanent disablement.
The first plea taken by the employer was that they were not following the standing orders.
The Court held that just because the time was extended the employees were still working for
the benefit of the employer and they should not be deprived of the compensation. Moreover
they were fulfilling all the other requirements except the timing of the work.

E.g. There is a factory whose shift end at 4 PM. There are two workers who sat in the
common area having chit-chat and started having dinner. There was a fire due to natural
mishaps around 10 PM and these two workers suffered temporary disablement.
The plea of the workers was that the shift timings were only for the work and not for other
things, moreover, they were allowed by the employer to sit in the common area which is
allowed in normal due course.
The Court held that the shift ended at 4 and the common area was allotted for the shift
duration, if the time of accident had been 5/5:30 could have been considered as legitimate but
staying post 6 hours is not legitimate. Hence the compensation were denied.

E.g. There is a factory whose shift end at 4 PM. There was a lunch break from 2-3. There are
two workers who sat in the common area having chit-chat and started having lunch. There
was a fire due to natural mishaps around 2:30 PM and these two workers suffered temporary
disablement.
The compensation would be provided as the lunch break comes within course of
employment. The common area is for the employees to sit and relax between long work
hours which improves work output and therefore comes within the benefit of employer.

E.g. There was an artillery factory and Subedar was in-charge. There was a railway track
nearby but the standing orders were not to take the route f railway track but another route.
Since, Subedar was transferred to MP from Assam and he was new to this place, he was
unaware of this fact and he used the railway track path since he was getting late. There was
an accident that took place.
The compensation was given because coming to join is deemed to begin course of
employment, hence the act of Subedar was within the course of employment.

E.g. There was a lineman whose shift is from 7 AM to 4 PM, form Monday to Saturday. On a
Sunday around 8 PM there was a power failure and the lineman was called by his Supervisor
without any order or written direction as there was no other lineman available. The lineman
himself decided to rectify the defect and he was electrocuted causing his death.
He should get the compensation. It was an emergency situation and would come within his
scope of duty. The emergency was within curse of employment.

E.g. A security agency placed Y on Z Corporation’s premise. There was a fire and Y died.
First liability will come on Z to pay compensation and then Z can legally claim that from the
Security Agency.

14.08.2023
Section 21- Venue of Proceedings and Transfer and it is provided by the Commissioner for
the area in which:
i. Accident took place which resulted in injury.
ii. Dependent claiming the compensation ordinarily reside.
iii. Employer has registered office.
In a situation where a labour from NOIDA met with an accident in Punde, Labour
Commissioner from NOIDA will send a notice in Pune to inquire whether a proceeding has
been initiated or not and will transfer the proceedings before him and commence with the
proceeding before him in exactly the same manner as if the proceeding was originally filed
before him.
Section 1-A- The Commissioner has to send a notice to find out if the money has been
transferred or if the proceedings have begun.
Section 2- Jurisdictional Clause
Section 4- Amount of Compensation
Sub-Clause Situation Compensation
a Death from injury Maximum Compensation=
Schedule IV 50% of monthly wages X Relevant Factor

Minimum Compensation= Rs. 1,20,000

b Permanent Total Disablement Maximum Compensation=
(PTD) 60% of monthly wages X Relevant Factor
Schedule I
Minimum Compensation= Rs. 1,40,000
c Permanent Partial Disablement If injury is specified in Part II of
Schedule I Schedule=
Percentage of loss earning capacity of the
injury of the compensation which would
have been payable in case of PTD

If injury is not specified in Part II of

Schedule=
As assessed by the Medical Officer
 d Temporary Disablement Half monthly payment of sum equivalent to
(Partial or Total) 25% of monthly wages of employee will be
paid in accordance with the provision of sub-
section 2.

Section 2-A- Employee to be reimbursed in case of medical expenditure. Any amount

incurred in restoring the labourer is to be reimbursed but any money incurred after the death
of the person is to be deducted from the compensation.
Section 2(m)- Wages- include bonus but not target based bonuses. It includes any benefit
that can be estimated into money but does not include travelling allowance, contribution paid
by employer towards pension/PF or so paid to cover any special expenses entailed on him by
nature of employment.
Section 5- method of calculating wages:
S. No. Situation Monthly Wages
1. Employee has worked for a continuous 1/12th of the total wages which he has been
period of not less than 12 months, paid to him by the employer.
immediately preceding the accident
2. Whole or continuous period of service Average monthly wage shall be the
immediately preceding during which average monthly wage earned by another
employee was in service for less than 1 employee who worked on the same work
month and under the same employer.
3. In other cases including those where it Monthly wages shall be 30 times the total
is not possible to calculate monthly wages earned in respect of last continuous
wages as mentioned in situation 2. period of service immediately preceding
the accident divided by number of days
comprising such period

Que. 1: B is a 32-year-old resident of Sonipat and is an explosive specialist. He was

employed in X Corporation on 01.01.2021. X Corporation is a road construction company
who work in mountain and high-altitude road construction, having its registered office in
Delhi. B regularly conducted blasting of boulders and rocks for X Corporation. B earns a
monthly salary of Rs. 50,000. He is offered an annual clearance allowance of Rs. 2,50,000 +
50,000 as annual bonus and travel allowance of Rs. 50,000. On 15.02.2022 while blasting a
mountain in Manali an accident occurred and B became permanently deaf.
a. Whether B is entitled to claim any compensation from X?
Yes, as injury occurred during the scope of employment and is in the scope of the Schedule of
the Act.
b. If yes, which place can he file for compensation?
By virtue of Section 21, B can file for compensation in Manali, Sonipat or Delhi.
c. What shall be the amount of compensation?
Total wages= 50,000 X 12 + 3,00,000 = 9,00,000
Monthly wages= 9,00,000/12= 75,000
Compensation= 50% of Monthly Wages X Relevant Factor = 50% X 75,000 X 203.85= Rs.
91,73,250

Que. 2: B is a 33-year-old resident of Nagpur who is appointed by X Shipping Corporation,

having its registered office in Pune for the purpose of loading and unloading of its goods on
the ship which carries cargo from Jamnagar to Mumbai. B has joined the crew of the ship on
01.02.2021 on a monthly salary of Rs. 12,000 and work benefit of Rs. 3,00,000 which
includes 2,00,000 for HRA & DA and 1,00,000 for TA. Prior to B, A had worked on the same
post having salary of Rs. 11,000 and work benefit of Rs. 3,00,000 which includes 2,00,000
for HRA & DA and 1,00,000 for TA. Ship of X met with an accident on 20.02.2021 and B
died leaving behind a wife C aged 28, a two-year-old son D, a younger brother G aged 22 and
a widowed mother aged 72 years.
a. Whether B is entitled to claim any compensation from X?
Yes, as accident occurred during the scope of employment and has caused death of the
employee.
b. If yes, who all can claim compensation?
The compensation can be claimed by the wife, son and widowed mother only and not the
younger brother as per Section 2(d) of the Act. The Compensation will be divided equally
among all the three dependants.
c. What shall be the amount of compensation?
Since, 12 months of B’s employment were not completed, salary of a prior employee will be
taken.
Monthly wages of A= 11,0000 + 2,00,000/12= 11,0000 + 16,667= Rs. 27,667
Compensation= 50% of Monthly Wages X Relevant Factor = 50% X 27,667 X 201.66= Rs.
27,89,630

Que. 1: B, a 27-year-old resident of Hapur joins the National Fire Brigade having its office in
New Delhi for the job of a water regulator in fire rescue operations on 01.01.2021 on
contractual basis. B was offered a monthly salary of Rs. 2,000/day for first 10 days and
thereafter Rs. 3,000/day for the next 15 days before getting a regularised salary of Rs. 2.5
lakhs/month along with work benefits of Rs. 3 lakhs (1 lakh- DA, 1 lakh- HRA, 1 lakh- TA).
Work benefits are available from the first day. B while preparing a rescue operation on
25.01.2021 died while performing his duty. B left behind a father (72 years), a wife (25
years), a minor son(2 years), two unmarried sisters (16 & 24 years)
a. Whether B is entitled to claim any compensation from X?
Yes, as injury occurred during the scope of employment and caused the employee’s death.
b. If yes, which place can he file for compensation?
By virtue of Section 21, family members can file for compensation in Hapur, Delhi, or
wherever the accident took place.
c. If yes, who all can claim compensation?
All the family members left behind can claim compensation by virtue of Section 2(d) of the
Act.
d. What shall be the amount of compensation?
Per day salary = [2,000 X 10 + 3,000 X 15] / 25 = 65,000/25 = 2600
Per day allowance = 2,00,000/365 = 547.95
Monthly wages= [2600+547.95] X 30 = 94,439
Compensation= 50% of Monthly Wages X Relevant Factor = 50% X 94,439X 213.57= Rs.
1,00,84,615

26.08.2023- Unit 3: Factories Act, 1948

Section 2(m) defines Factory as any premise/establishment-
a) where 10 or more members- undertake a manufacturing process- with aid of power-
in the preceding 12 months.
b) where 20 or more members- undertake a manufacturing process- without aid of
power- in the preceding 12 months.
Child- below 15 [Section 2(c)]
Adolescent- 15 to 18
Adult- above 18
Section 67- A child below the age of 14 years cannot be allowed to work in a factory. Such a
person can work subject to conditions of Sections 68 & 69 wherein it is required for child
above 14 years of age and adolescents to carry a certificate of fitness.
Section 68- non-adult workers have to carry tokens i.e., a certificate of fitness or token
giving reference to such certificate.
Section 69- Certificate of fitness- who can give and under what conditions.
Section 70-
• An adolescent who has been given the certificate of fitness; he may be presumed as an
adult depending on the conditions of the certificate.
• A female adolescent or a male adolescent aged between 15-17 years who has been
granted fitness certificate. can only be asked to work between 6 AM to 7 PM.
Section 71-
• A child can be employed only for 4.5 hours a day and maximum 5 hours [including
break] and he cannot be allowed to work during the night.
• Child can’t work from 10 PM to 6 AM.
• Female child shall be required to work only during 8 AM to 7 PM.

02.09.2023- Unit 13: The Maternity Benefit Act, 1961

Section 2- Application of the Act- who shall be considered as an eligible employer.
Relevant definitions-
• Section 3(b)- Child includes a still-born child
• Section 3(b)(a)- Commissioning mother
• Section 3(d)- Employer- a private body will also be covered under this Act and a regional
authority will act as a nodal agency which will check whether or not all compliances are
being fulfilled or not.
• Section 3(j)- Miscarriage- only miscarriage by natural cause is allowed i.e., termination
due to medical reasons and not voluntarily.
• Section 3(n)- wages- It includes cash allowances including DA & HRA, incentive bonus,
money value of concessional supply of food grain and other articles but it does not
include- any other type of bonus; overtime earnings and any deductions or payment made
on account of fines; contribution paid by employer towards pension/PF; and gratuity
payable on termination of service

Section 4- Employment of Women prohibited during certain periods-

No woman shall work in any establishment and no employer shall knowingly employ a
woman in any establishment- during the 6 weeks immediately following the day of
delivery/miscarriage/medical termination of pregnancy.
As per Section4(3) any pregnant woman can take leave or relaxed work for a time period
mention u/s 4(4) i.e., any period of one month immediately preceding the period of six
weeks, before the date of her expected delivery or any period of 6 weeks for which the
pregnant woman does not avail leave of absence.

Section 5- Right to payment of maternity benefit.

In case an employer was deceived by a woman employee whereby she concealed her
pregnancy and delivery and continued to come for work because of which the employer was
penalized. In such case the employer can recover the amount from the woman employee and
it will account for misconduct on part of the woman employee, barring her from availing
further maternity benefit.
As per Section 5, Maternity benefit payment shall be given to woman employee (pregnant)
& it will be calculated at the rate of =
average daily wage for the period of actual absence, i.e., the period immediately preceding
the day of delivery + the actual day of delivery+ any period immediately following that day.
Average daily wage means average of women's wages payable to her for the days during the
period of 3 months immediately preceding the date from which she absents herself on
account. of maternity.
As per Section 5(2), maternity benefit will be extended to woman who have actually worked
in an establishment of the employer for a period of not less than 80 days i.e., 80 days or
more in 12 months immediately preceding the date of her expected delivery.
As per Section 5(3), maximum period for maternity benefit shall be 26 weeks of which not
more than 6 weeks precede the date of her delivery.
As per Section 5(4), if a woman adopts an infant up to the age of 3 years, only in such case
can she claim maternity benefit.
In case, child survives & mother dies- the benefit of 26 weeks will then be given to child, i.e.,
payment of wages will be given to the child.
Section 9- if the child dies & mother survives- 6 weeks benefit will be given & if any benefit
rd
is availed prior to delivery in the 3 trimester, it will be unaffected i.e., maternity benefit of
that period will be given to the woman. Post miscarriage the woman can get 6 weeks of
benefit
If both the mother and child die then the nominee mentioned in the claim for maternity
benefit will be given the maternity benefit.
E.g.- If the mother dies on 01.08.2023 & child died on 14.08.2023, maternity benefit for the
time period when child was alive will be given, i.e., for 2 weeks in this example.

Section 6- talks about notice of claim for maternity benefit & payment.
Section 12- talks about dismissal during absence of pregnancy. There cannot be arbitrary
dismissal, the misconduct should be apparent on the face of it.
Que. Whether the employer in a given circumstance dismiss an employee during the
pregnancy?
Ans. It has to be first checked whether there was any misconduct or not. If it is solely
because the woman has not served notice, advise her to approach the concerned inspector as
provided for in the provision.
Sections 4, 5 6 & 12- Important- circumstances under which employer can dismiss. How
and when should the notice claiming maternity benefit should be served.

02.09.2023- Unit 3: Factories Act, 1948 [Purvish Sir]

Facts: Kaleen owns a carpet manufacturing business. Carpets are handwoven, no power is
required for manufacturing process. Raw materials are procured by the manufacturers and
given to the thekedars, the thekedar further supplies the raw material to mazdoors. The
mazdoors are skilled to handweave the carpet. The mazdoors include his family members as
well who are skilled. The mazdoor after handweaving the carpet will supply it to the thekedar
who will pay the mazdoor per piece. The mazdoor has three options regarding the place
where he can handweave the carpets:
1. Thekedar’s own premises
2. Thekedar’s premises
3. Premises of Kaleen
Kaleen has no problem where carpets are being woven and how many people are involved
st
therein. On 1 January, 2023 a factory inspector went to the premises of Kaleen and found the
following discrepancies, because of which the show cause notice was issued. The
discrepancies are-
i. There are about 21 persons working in the premises of Kaleen and are involved in the
manufacturing process whose name does not appear on the muster roll (attendance
register).
ii. The names of 8 persons appearing in the muster roll but not involved in the
manufacturing process- their work was to collect carpets from the thekedars and the
mazdoors. The manufacturer claims that these people are not involved in the
manufacturing process.
iii. There are 8 persons whose name are correctly enrolled in the muster roll according
to the work but as per the __________ urinals and washrooms were not present in the
premises.
Answer: Apply the definition of factory [Section 2(m)]; workers [Section 2(l)];
manufacturing process [Section 2(k)]; and power [Section 2(g)] to prepare a reply to the
show cause notice on behalf of Kaleen.

Section 78 deals with the chapter of annual leaves with wages. It states that the provision of
this chapter will not operate to the prejudice of any right to which a worker may be entitled
under any other law, terms of any award, agreement/settlement, contract of service.

Section 79 provides for annual leave with wages- Employee who has worked for 240 days
or more only then can he obtain the benefit of paid leave.
i. For Adult: 1 day for every 20 days of work performed during the previous calendar
year.
ii. For Child: 1 day for every 15 days of work performed during the previous calendar
year.
Explanation 1 provides from 3 categories of annual leave.
(a) Maternity benefit Act-26 weeks for the purpose of calculating annual leave for female
workers- only 12 weeks will be considered..
(b) Public holiday not considered.
(c) Any day when employee can work but is barred by the employer + Holidays mentioned in
the Standing Order = Paid Leave (PL)
For e.g. - During G 20 summit, Offices in NCR were not formally closed but employees were
told if they can come they should, otherwise it will be regarded as PL for that employee.

Que. 2021-2022: 280 days. 2022-2023: 297 days. 2023-2024: 300 days. 2024-2025: PL?
Ans. For 2024-2025, an adult worker will get (300/20)= 15 days PL.
For 2024-2025, child worker will get (300/15) = 20 days PL.

Que. 01/01/2022-2023: 280 days. Holidays in the year =10 days. She went on maternity
leave for 26 weeks starting form 01/03/2023. She joined office on 01/10/2023 & worked
continuously till 31/12/2023.
Ans: Paid leaves available to her = 280/20 = 14 days Holiday in the calendar year = 10 days.
Maternity benefit leave = 84 days.
As per 1948 Act only 12 weeks holiday is given.
Actual working days of the woman = Jan + Feb + Oct + Nov + Dec = 31+28+31+30+31 =
151 days.
PL for next year = 14+10+ 84+151=259/20 = 13 days.

Note: Paid leaves are accrued next year & it is accrued on the basis of working days of the
previous year, i.e., PL of 2023-2024 will be calculated on the basis of working days of 2022-
2023. Also, for maternity. by benefit, 12 weeks holidays will be calculated & not 26 weeks.
Maternity leave of 26 weeks will be given in the current year but for calculating PL for the
next year, 12 weeks of this 26 weeks will be calculated.

Note: 30 days leave can be carried forward to next year.

Section 79 states that fraction greater on equal to will be rounded off to the next number. For
e.g. 18.4 = 18 but 18.6 = 19.

In case of death, Superannuation, resignation- Legal Representative is eligible for dues from
employer.

Que. 2021-2022-18 days (utilized 3 leaves). 2022-2023=20days (utilized 2 leaves). 2023-

2024 = 15 days; Earned = l0 days. 2024-2025 = PL = ?
Ans. Earned = 10 days = used none
Carried forward leaves = 15 (2021-22) + 18 (2022-23)= 33day
But maximum 30 days can be carried forward as per S.79(5) Proviso
Paid leaves till 23-24=30+15= 45 days
Paid leaves for 25-26=30+10= 40 days

As per Section 79(6) Proviso- annual leave has to be utilized over a span of 3 times/leaves in
total.
Section 79(6) deals with notice for leave.
Section 79 (7) talks about leave with wages & in what circumstances will the wages be paid.
i. Public Utility Service: 30 days.
ii. Otherwise: 15 days.
As per Section 79(12) right of the employee to utilize his paid leave in any way possible-
employer cannot force him to adjust it.
Section 80 defines wages as Salary + DA + cash equivalent through food grains (if any).
[Encashment through food grains for a Standard family].
Section 81 talks about payment in advance (for A/c purpose only).
• For adult-Not less than 4 days (leave)
• For child - Not less than 5 days (leave)
• After giving notice of leave-immediately.
• Credit wages for paid leave so that at the end of month when salary is given-you are
not at loss at the month end and avoid a situation where wages for paid leave is
credited next month or at a later stage.

Que. A’s salary in 2021-22 is 10,000. Next year 10% increased is 11,000 (has to be utilized
in 2022-23). At what rate will he get wages during his leave if he utilizes it from 1 June,
2022. Rs.10,000 of 2021-22 was earned from 10 day leave which has to be utilized in 2022-
23.
Ans. On the basis of his last drawn salary i.e. Rs.11,000.

Chapter IVA was inserted in 1946 Act after the 1976 Amendment to regulate industries that
affect health of workers & the environment. This chapter is to be considered while
establishing a new industry that deal with pollutants.
Section 41A deals with constitution of site Appraisal committees which decide whether a
new industry should be established in that geographical location or not. It is headed by Chief
Inspector, followed by the representative of Central Board for prevention & control of water
& Air pollution, a representative of State board for prevention & control of water & air
pollution, representative of Department of Environment in State, Meteorological dept of GOI,
expert in field of occupational health & a representative the town planning dept of State govt.
& not more than 5 other members who may be co-opted by State gout who shall be-
(a) Scientist having specialized knowledge of hazardous process.
(b) Representative of local authority within whose jurisdiction the factory is its be
established.
(c) Not more than 3 persons as deem fit by the State gout.

Section 41B deals with compulsory disclosure of information by the occupier.

Section 41C is about specific responsibility of occupier in relation to hazardous process.
Section 41D deals with power of central govt to appoint inquiry committee.
Section 41E deals with emergency standards.
Section 41F gives permissible limit of exposure of toxic & Chemical Substance.
Section 41G talks about worker’s participation in safety management.
Section 41H talks about right of workers to warn about imminent dangers.

Chapter 11 talks about the Inspecting staff and is. from Section 8-10.
Section 8 & 9 deal with Inspectors & his power and Section 10 is related to certifying
surgeons.

Section 7A deal with general duties of occupier.

Sharan Bahadur vs. Chief of factories- Certificate of fitness granted by the surgeon without
inspecting one premises of a fertilizes factory, to children above 14 years but below 15 years.
Inspector was held liable

Section 92 allows for imposing penalty on the occupier and manager of the factory in case of
an offence. First offence-Imprisonment up to 2 years & 1 lakh fine. If contravention
continues then Rs.1000/-day till it continues.
Section 94 talks about enhanced penalty after. previous conviction.

Note: A preliminary investigation conducted by the Chief Inspector will be considered as

preliminary Investigation Reposit necessary for filing FIR in commercial matters.
(Preliminary Investigation Report provision given in Lalita Kumari judgment)
Note: Factories Act, 1948 (Chapter X) has 3 different stages:
i. At the stage of permissions: Taking approval and Installation
ii. At the stage of function.
iii. At the stage of post penalty.
Inquiry committee Inspector

16.09.2023- Payment of Gratuity Act, 1972

Gratitude given by employer to employee in the form of gratuity bonus at the end of Service.
If an industry has no specific legislation to provide for gratuity bonus, this Act will be
applicable, i.e., this Act has a pretty universal application. Pan India application, except for
port & plantation in J&K. otherwise it is applicable in J&K also.
Maximum amount given under this Act is 20 lakh and to give this bonus, industry should
have 10 workers in preceding 12 months.
Appropriate govt. is defined u/s. 2(a) of the Act. Major port, mine, oilfield, railway company-
central govt. is the competent authority.
Employee should be in uninterrupted service fora period of 1 year. If by fault of employer,
employee was unable to work, that will also be calculated as uninterrupted service, for e.g.-
paid leaves, sick leaves, lawful strike etc.
Gratuity is calculated on 6-month basis. If it is for 11 years 4 months it will be counted as 11
years. If it is 11 years, 6 months, 1 day it will be round off as 12 years. If 6 months exceeds of
an employee, a new year will start. Section 2A of the Act.
E.g. 12 years 6 months =12 years; 13 years 2 months =13 years; 14 years 7 months =15 years

Section 2A(2)(a) states that if industry worths 6 days a week and working on an annual basis
i.e., 12 months then 190 days. In case worker working below the ground in a mine, 190 days
will be taken into consideration for uninterrupted service of employee. In general case, 240
days will be counted to calculate gratuity bonus i.e., the employer has to work for 240 days in
a year to receive gratuity bonus form the employer.
In case the employee is leaving in less than a year or is retiring etc. employee should work for
a period of 95 days in 6 months (below ground level) or for 120 days in 6 months to receive
his gratuity bonus.

Section 4 deals with payment of gratuity, it is given on the termination after he has rendered
service for 5 years. Generally, gratuity is 15 days of salary offered by employer in a particular
year if someone has worked for a year.

If death occurs within 1 year then 5 years will not apply- t is given on 3 months of salary.
Gratuity Bonus = 15/26 X (basic Salary + DA) X No. of years of Service [if food grain is
offered then equivalent amount of provided food grain will also be calculated]

If industry is seasonal, calculation is different because 1 week wage per season is offered.
Gratuity Bonus = 7/26 X (basic Salary + DA) X No. of Season

Gratuity is calculated from the date of joining. If a person has worked for 4 years, he will not
receive gratuity. If a person works from 0-6 months, he will be

Que. X is a fire fighter & has joined on 01/01/2015 at basic salary of Rs. 25,000/- month, DA
of Rs.1000/-, HRA of Rs. 500/- month. X submitted his resignation on 01/05/23. Calculat3
his gratuity. Except Sunday, he has not taken any leave.
Ans. Time line of employment- Joined on 01/01/15; Resigned on 01/08/23. The 240 days
criteria is complete.
For purpose of calculating gratuity, it will be considered that employee has been working for
8 years 6 months. [If the person would have worked for 241 days then it will be carried
forwarded & rounded off to another year, i.e., his employment period will be 9 years for
calculating bonus. In another situation, if a person has worked for 150 days, it will be 7
months, thus it will be rounded off to 1 year, i.e., his employment period will be 9 years for
calculating gratuity bonus.]
Wage- Rs. 26,000
Gratuity Bonus = 15/26 X 26,000 X 8.5 = Rs. 1,27,500

As per Section 4(6), gratuity can be denied on these grounds-

i. Tort of damaging company.
ii. Did immoral stuff to company.
iii. Misused company's fund.
iv. Wilful omission or negligence in work.

As per Section 6, nomination can be made & such nominee will receive the gratuity bonus of
the employee. For making this nomination, a notice is to be served. Employer has the right to
deny such nomination if it violates/not recognized under Indian law. Legal heirs are
mentioned u/s 6(6) of the Act.

Section ___ mentions how to approach employer under this Act.

The gratuity payment has to be made within 30 days. If it is not paid within 30 days, interest
will de paid along with gratuity bonus. Employer is entitled to recover gratuity bonus from
the employee in case of fraud shown on his part to receive gratuity.

20.09.2023- Unit 4: Industrial Disputes Act, 1947- [Purvish Sir]

Objective of this act is to resolve disputes related to industries.
Problems with this act is the definition of “industry”.
Definition of “industry” before Bangalore Water Supply Judgement was- “any
trade/business/service/manufacturing industry, where the employees are called”. Supreme
Court then laid down the Triple Test to determine what constitutes an industry. This
judgement was then added to the definition of “industry” in the Act.
Triple Test to determine what constitutes an “industry” is as follows-
• Test 1: Any systematic activity which is organised, structured, continuous, persistent
and which includes element of planning or method. [in the example of Kaleen, it
would satisfy the definition of a factory but not an “industry” because there was no
systematic activity].
 • Test 2: Systematic activity has to be carried out with the cooperation of employer and
the employee wither directly/indirectly/contractual. If the first test fails, the second
test ought to fail.
• Test 3: Production, supply, distribution of goods or services should be done with a
view to satisfy human wants or desire.

The SC has held that even though some activities may Satisfy these triple tests, they will be
excluded from the definition of "industry". Domestic services (maid, home drivers etc);
Professional activity (employed person > 10); Agriculture Activities/operations;
Khadi/village industry, Hospital & Dispensaries; Education, Scientific, Research & Training
institutions; Charitable institutions; Govt. related services / Sovereign function (legislative,
executive, Judiciary); cooperative society.

Dominant nature test says that the idea is the dominance of the activity done by workmen is
its be tested whether the same would fall with in the excluded category on otherwise. If the
activity itself satisfies the triple test and does not fall within exclusions, then for such
activities. the establishment would become an industry for that purpose for e.g., sweeper in
educational institution are not to be included in Section 2(j)(ii)(3) as his nature of work does
not relate to teaching i.e., education purpose.

Industrial dispute means dispute b/w employer-employee; employer-employer; employee-

employee.

Administrative staff in educational institution are aiding in teaching process & thus for their
dispute Industrial Dispute Act can’t be invoked as educational institution is excluded from
“industries” definition.

Whosoever is directly involved in the teaching process is excluded from the definition of
“industry”. Similarly, workers from other establishment such as, drivers in hospital, security
guard in MNCs etc. will be included in the definition of industry but, administrative staff,
finance department in educational institute will be excluded from definition of industry.

Workman under this Act is different from worker under Factories Act. A person employed
for manual, skilled, unskilled, clerical, supervisory on technical work for hire i.e., on
payment of wages & this workman is appointed directly/indirectly/contractual basis in an
industry.

Dispute Resolution Mechanism

i. In house mechanism i.e., trying to resolve dispute internally, with the help of an
internal mediator.
ii. Reaching out to Labour Commissioner for dispute resolution.
iii. Labour Commissioner may send the matter for conciliation first & if dispute can’t be
solved by conciliation; it will be sent to Labour Court.
In house mechanism involves dispute resolution by a works committee. It is mandatory to
have it in industry with 100 or more employees & they have a representative for workers &
management & employee & they will try to resolve the dispute within the establishment
whatever the nature of the dispute is if it is related to industrial dispute. Number of members
is not specified but there has to be equal representation of employer & employee.

Section 2(q) defines Strike as cessation of work by a body of person employed in any
industry

05.10.2023- Topic 4: Industrial Dispute Act, 1947

Section 2(k)- industrial dispute- defined- any dispute between employer & employee for
reasons related to working, working hours, working conditions, wages, amount of wage,
compensation etc., the consequences of such disputes are strike, layoff & retrenchment.
When employees go on strike, employer can react in the following manner- layoff, lockout,
retrenchment.
Right to work is a fundamental right under Article 19 of the Indian Constitution- it is a
positive right- hence you also have the right not to work- going on strike can’t be held
accountable.
Dispute between two employers-
Dispute between two employees-
Section 2(q)- Strike- defined- direct dispute between employer and employee

11.10.2023- Topic 4: Industrial Dispute Act, 1947

Stikes & Lockouts [Chapter V]
Strikes are form of protest generally done by employees against the employer for fulfilling of
their demands pertaining to conditions of their employment as well as unemployment.
Section 22: Prohibition of strikes & lockouts [for public utility services]-
1. In cases of a public utility service no employee can go on strike. Public utility service
include water, food, medical, transport, banking industries etc. as life of general public
will come at a halt. There is not an absolute bar and sub-clauses (a) to (d) of clause 1 lay
down the criterion which should be fulfilled before going on strike.

a. Notice of strike should be given be 6 week prior of going to strike; OR

b. Strike can’t be done within 14 days of giving the notice; OR
c. Before the period of strike has expired ; OR
d. When the conciliation proceedings are pending before a conciliation officer (defined
in Section 4) and 7 days after the conclusion of proceedings.

2. The second clause states that no employer of a public utility service shall lock out the
workman. There is not an absolute bar and sub-clauses (a) to (d) of clause 2 lay down the
criterion which should be fulfilled before doing lockout.

Section 23: General Prohibition of strikes & lockouts-

No employee can go on strike and no employer can declare a lock-out in the give 4 situations:
a. When the conciliation proceedings are pending before a conciliation officer and 7
days after the conclusion of proceedings.
b. When the proceedings are pending before a labour court and 2 months after the
conclusion of proceedings.
c. When the proceedings are pending before a arbitrator and 2 months after the
conclusion of proceedings.
d. During any period in which settlement or award is in operation.

Section 24: Illegal strikes & lockouts-

1. A strike/lockout shall be illegal (i) If it is commenced/declared in contravention of
Section 22 or 23. (ii) If it is continued in contravention of order made under Section 10(3)
or Section 10A(4A).
2. If strike has commenced or lockdown is declared and post that there is a reference of
dispute to a Board/Arbitrator/Labour Court/Tribunal the continuance of such strike or
lockdown is not illegal.
3. If an illegal strike/lockout is going on a lockout/strike in its consequence shall not be
deemed as illegal.

Section 25: No person shall in support of illegal strike/lockout expend or apply money in its
direct furtherance.
Layoff & Retrenchment [Chapter VA]
Retrenchment means termination of service/employment.
In absence of any specific work contract the retrenchment provision under Industrial Disputes
Act shall be borrowed.
Section 25A: Application of Sections 25C to 25E-
Section 25B: Definition of continuous service-
Meaning
Where a
Section 25C: Right of workmen laid-off for compensation-
Section 25D: Duty of an employer to maintain muster rolls of workmen-
Section 25E: Workmen not entitled to compensation in certain cases-
Section 25F: Conditions precedent to retrenchment of workmen-
a. Notice of one month has to be provided or wages for the period of notice has to be
given to the workmen before retrenching him.
b. Workmen has been paid compensation 15 days’ average pay for every year of
continuous service.
c. Notice in prescribed manner has been served on the appropriate government.
Section 25FF: Compensation to workmen in case of transfer of undertakings-

07.10.2023- Gratuity, Insurance & Provident Fund- Purvish Malkan Sir

Payment of Gratuity Act, 1972
Que. Salary per annum Rs. 18,00,000 last drawn. Employee met with an accident on
31.03.2021 arising out of and in the course of employment. He sustained 100% disabilities.
He joined his employment on 01.08.2008. The age at the time of accident was 48 years. What
will be the amount he is receiving?

Monthly Wage = 18,00,000/12 = 1,50,000

Compensation = 60% of monthly wages X Relevant Factor = 90,000 X 159.80 = 1,43,82,000
Gratuity = 5769 X 15 = 86,535 X 12 years 8 months (rounded off to 13 years) = 11,24,955

Total amount to be paid to him = 1,55,06,955

Employees’ Provident Fund & Miscellaneous Provision Act, 1952
Que. CTC of an employee is Rs. 3,60,000 per annum. What is his salary?
Monthly CTC = 3,60,000/12 = 30,000
CTC = 110% of Salary
30,000 = 110% of Salary
Monthly Salary = (30,000 X 100)/110 = Rs. 27,273
Que. CTC of an employee is Rs. 18,00,000 per annum. Employee met with an accident on
25.07.2023 during and arising out of course of employment and sustained an injury causing
permanent disability. He joined services on 01.02.2013. He was 39 years old at the time of
accident. Find out -the last PF Contribution, the last salary received in hand.
Monthly CTC= 18,00,000/12 =1,50,000
Monthly Salary = (1,50,000 X 100)/110 = 1,36,364

Compensation= 60% of monthly Salary X Relevant Factor = 0.6 X 1,36,364 X 186.90 =

1,52,91,859

Gratuity = 78672 X 10 years 5 months 25 days (rounded off as 10 years) = 7,86,720

Last drawn salary = 1,36,364 – 13,636.40 = 1,22,728

Last PF Contribution by the employee = 10% of monthly salary = 0.1 X 1,36,364 =
13,636.40
Amount received after accident = 1,52,91,859 + 7,86,720 = 1,60,78,579

NOTE: Maximum contribution that can be levied upon the employer for PF could not
exceed 12% at any time.

Employees’ State Insurance Act, 1948

Under this Act, both the Employer & Employee will contribute towards insurance.
The Act covers for the following expenses- Medical expense, sickness treatments, disability,
maternity, death, dependency & funeral expenses.
This Act will be applicable to all the establishments where 20 or more persons are working at
any time in the last 12 months.

The contribution of an employer in addition to the salary towards premium of employees’

insurance is 4.75%.
The contribution of an employee is 1.75% of his salary towards premium of his insurance.
The total premium is therefore 6.5%.
NOTE: CTC- 14.75% (10% of PF + 4.75% of Insurance Premium) = Salary
E.g. Salary is Rs. 1,000. Employer’s contribution towards PF is Rs. 100. Employer’s
contribution towards Insurance Premium is Rs. 47.50.
Que. CTC of an employee is Rs. 10,00,000 per annum. Death of employee occurs due to
accident on arising out of and during the course of employment. Period of work is 14 years.
Age of the employee at the time of death is 41 years. Calculate amount that family will
receive after death; calculate PF contribution of the employer; calculate the insurance
contribution of both the employer and the employee.

Monthly CTC= 83,333

Monthly Salary = (83,333 X 100)/ 114.75= Rs. 72,621

Compensation = 50% of monthly Salary X Relevant Factor = 0.5 X 72,621 X 181.37 = Rs.
65,85,635

Gratuity = 72621/26 = 2793 X 15 X 14 = Rs. 5,86,530

Total amount paid to him = 65,85,635 + 5,86,530 = Rs. 71,72,165

PF Contribution by the Employee = 72,621 X 10% = Rs. 7,262

Insurance Contribution by Employer 72,621 X 4.75% = Rs. 3,449

Insurance Contribution by Employee = 72,621 X 1.75% = Rs. 1,271