LABOUR LAW II

POINTS TO REMEMBER

Compiled by,
Ms. POURNA DHEVI N,
Guest Faculty, SOEL, TNDALU.
MODULE I – ORIGIN AND DEVELOPMENT OF SOCIAL SECURITY

1) ILO’s Definition on Social Security

The ILO has defined social security as ‘the surety that society furnishes,
through appropriate organization, against certain risks to which the members are
exposed. These risks are essentially contingencies against which the individuals of
small means and meagre resources cannot effectively provide by their own ability
or presight or even in private combination with their fellow workers—these risks
being sickness, maternity, invalidity, old age, and death. It is the characteristics of
these contingencies that they imperil the ability of the working class to support
itself and its dependent in health and decency’.
2) Indian Constitution and Social Security
It can be studied under 3 heads:
i) Preamble and Social Security
ii) Fundamental Rights and Social Security
iii) Directive Principles of State Policy and Social Security.
 MODULE II - THE EMPLOYEE’S COMPENSATION ACT, 1923

1) Arising out of and in the course of Employment:

i) There must be casual connection or association between the employment and
the accidental injury.
ii) the accident must take place at a time and place of employment.
2) Doctrine of Notional Extension:
The doctrine of notional extension provides that in order to attract the provisions
of the said Acts there should be a causal connection between place of accident and place
of work.
There may be some reasonable extension in both time and place, and a worker
may be considered to be in the course of his employment even if he has not arrived
at or left the premises of his employer.
This Doctrine was first laid down in the case SS Salt Manufacturing Co. v. Bai
Velu Raja.
3) Kinds of Disablement:
i) Death

ii) Permanent Total Disablement

iii) Permanent Partial Disablement

iv) Temporary Disablement whether total or partial.

4) Disablement:
i) Partial disablement 2(1)(g) – Disablement is of temporary
nature, reduces earning capacity of employee. (READ
DEFINITION)
ii) Total disablement 2(1)(l)- Permanent disablement, loss of
earning capacity. (READ DEFINITION)
5) Calculation of Compensation:
i) Injuries resulting in death: Sec. 4(1)(a)

50
𝑋 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑤𝑎𝑔𝑒𝑠 𝑋 𝑟𝑒𝑙𝑒𝑣𝑎𝑛𝑡 𝑓𝑎𝑐𝑡𝑜𝑟 (𝑜𝑟) 𝑅𝑠. 1,20,000 𝑤ℎ𝑖𝑐ℎ𝑒𝑣𝑒𝑟 𝑖𝑠 ℎ𝑖𝑔ℎ𝑒𝑟.
100
For calculating the monthly wages for this purpose, of a workman who is earning more than
eight thousand, it shall be deemed to be eight thousand only and the remaining amount will not
be considered.

ii) Injuries resulting in Permanent Total Disablement: Sec. 4(1)(b)

60
𝑋 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑤𝑎𝑔𝑒𝑠 𝑋 𝑟𝑒𝑙𝑒𝑣𝑎𝑛𝑡 𝑓𝑎𝑐𝑡𝑜𝑟 (𝑜𝑟) 𝑅𝑠. 1,40,000 𝑤ℎ𝑖𝑐ℎ𝑒𝑣𝑒𝑟 𝑖𝑠 ℎ𝑖𝑔ℎ𝑒𝑟.
100

For calculating the monthly wages for this purpose, of a workman who is earning more than
eight thousand, it shall be deemed to be eight thousand only and the remaining amount will not
be considered.

iii) Injuries resulting in Permanent Partial Disablement: Sec. 4(1)(c)

Section 4 (1)(c) deals with the amount of compensation in case of

permanent partial disablement either caused by the injures specified in Part II of
Schedule I or caused by injuries other than specified therein.
a) Injuries specified in Part II of Schedule I:

The compensation payable shall be the proportion of the percentage of

loss of earning capacity caused by the injury to that of the compensation payable
in case of permanenttotal disablement specified therein.

Step 1 - 60 x monthly wages x relevant factor = A (compensation of permanent

100 total disablement)

Step 2 - A x percentage of loss of earning capacity ( mentioned in schedule) =

compensation payable for Permanent partial disablement specified in Part II of Schedule I
 b) Injuries other than specified in Schedule I:

Step 1 - 60 x monthly wages x relevant factor = A (compensation of

permanent
100
total disablement)

Step 2 - A x percentage of loss of earning capacity (assessed by medical practitioner) = compensation

payable for Permanent partial disablement not specified in Part II of Schedule I

iv. Injuries resulting in Temporary Disablement,

whether total or partial:Sec. 4(1)(d)

Here, the compensation is paid as recurring half monthly payments from

the 16th day of expiryof the three days waiting period, if such disablements last
for less than 28 days. This method of compensation will prevail until the
disablement lasts or for a period of five years, whichever is shorter. The
compensation payable is enlisted in the Schedule IV.

Half monthly wage = 1/2 x monthly wages

= 15 days wages
𝐿𝑎𝑠𝑡 𝑑𝑟𝑎𝑤𝑛 𝑠𝑎𝑙𝑎𝑟𝑦 𝑝𝑒𝑟 𝑚𝑜𝑛𝑡ℎ
= 𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑑𝑎𝑦𝑠 𝑥 15
 MODULE III - THE EMPLOYEES’ STATE INSURANCE ACT, 1948

1) BENEFITS

i) Sickness benefit – Sec. 46 (1)(a)

Sec. 2(20) – Sickness defined (Read the definition)

Rule 55 of ESI (Central) Rules, 1950

Eligibility: contributed for atleast 78 days

(If he has contributed for less than 156 days, he

should have worked for atleast 50% of the
available working days)

Rate of benefit: 70% of standard benefit rate

Period of benefit: Maximum 91 days

ii) Maternity benefit – Sec. 46(1)(b)

Sec. 2(3) – Confinement Defined

Sec. 2(14B) – Miscarriage Defined

Rule 56 of ESI (Central) Rules, 1950.

Eligibility: contributed for atleast 70 days in the preceding

2 consecutive contribution periods

Rate of benefit: Equal to standard benefit rate

Confinement Expenses Rs. 5,000

Period of benefit:

i. Confinement i. Maximum 26 weeks

(upto 2 living children)

Maximum 8 weeks can be

availed before confinement
and rest can be availed after
confinement.

ii. Maximum 12 weeks

(more than 2 living
 children)

-Maximum 6 weeks can be

availed before confinement and
remaining can be availed after
confinement.

ii. Miscarriage/ Medical 6 weeks

Termination of Pregnancy

iii. Sickness arising out of Additional 1 month

confinement,
miscarriage or medical
termination of
pregnancy

iv. Adoptive mother 12 weeks (for adopting a child less

than 3 months of age)

v. Commissioning mother 12 weeks from the date of handing

over of the child

iii) Disablement benefit – Sec. 46(1)(c)

Employment injury – Sec. 2(8)

Insurable Employment - Sec. 2(13A)

Kinds of Disablement

Permanent Total -
Sec. 2(15B)
Permanent
Disablement
Permanent Partial
Disablement
- Sec. 2(15A)
Temporary
Disbalement -
Sec. 2(21)

Rule 57 of ESI (Central) Rules, 1950.

Eligibility Temporary Disablement

has to last for
atleast 3 days
excluding the
 day of
accident

Permanent Must be
covered under
the definition
of
“employee”

Period of Temporary Until

benefit disablement
lasts

Permanent Provisional or
for life

Rate of Temporary Full rate

benefit Permanent Full rate
Total

Permanent Based on loss

Partial of earning
capacity

iv) Dependents benefit – Sec. 46 (1) (d)

Sec. 2(6A) – Dependent Defined

Rule 58 of ESI (Central) Rules, 1950.

Dependent Rate of Period of

benefit Benefit

Widow 3/5th of full For life or until

rate she remarries

Legitimate/ 2/5th of full Until 25 years of

adopted son rate age
 Unmarried 2/5th of full Until 25 years of
legitimate/ rate age
adopted
daughter

Parent other 3/10th of full For life

than a rate
widowed
mother or
grand
parents

Any other 2/10th of full Until 18 years of

male and rate age (if male)
female
dependant
Until 18 years of
age or till they
marry (if
female)

v) Medical benefit – Sec. 46 (1) (e)

Rule 60 and 61 of ESI (Central) Rules, 1950.

Full medical care, Extended medical care, Immunisation, Family Welfare and
Supply of special aids.

vi) Funeral Expenses – Sec. 46 (1) (f)

Rule 59 of ESI (Central) Rules, 1950.

Rate of benefit – Rs. 15,000

Paid to: Eldest surviving member of the family or the person who has actually
incurred the expenses.
 2) ESI CORPORATION – WINGS

i) Standing Committee.

ii) Medical Benefit Council.

(Note: Read the Composition of ESI Corporation and its wings)

3) EMPLOYEES INSURANCE COURT

i) Section 74 to 83 (Read all the provisions).

Appeals from EI court to High Court – within 60 days only when there is a
question of law.
 MODULE IV - MATERNITY BENEFIT ACT, 1961

1) Eligibility – worked for atleast 80 days in the last 12 months.

2) Prohibition of work for a certain period

An employer shall not knowingly employ a woman in any establishment during the 6
weeks immediately after her Delivery, miscarriage or medical termination of pregnancy.

On request of the pregnant woman, the employer shall not give any work for 1 month
immediately preceding the period of 6 weeks of her expected delivery which

• is of arduous nature
• involves long hours of standing or
• is likely to
i. Interference with her pregnancy or the normal development of the foetus
ii. Cause her miscarriage
iii. Adversely affect her health.
3) Medical bonus – Rs. 3500
4) Nursing breaks – 2 nursing breaks + ordinary intervals until child attains 15 months
of age
5) Creche facility – employer should set up creche when 50 or more employees are
working in his establishment
- The women can visit creche 4 times a day (including ordinary intervals)

MODULE V – EMPLOYEE’S PROVIDENT FUND AND MISCELLANEOUR

PROVISIONS ACT, 1952

Read all the 3 schemes and the Authorities under the Act
 PAYMENT OF GRATUITY ACT, 1972

1) Eligibility – 5 years of continuous service.

i) In a mine or in establishment which works for less than 6 days in a week

An employee shall be deemed to be in continuous service of 1 year or 6 months

if he has worked under the employer for not less than

a. 190 days during preceding 12 months

b. 95 days during preceding 6 months, respectively.

ii) In case of non-seasonal establishment

An employee shall be deemed to be in continuous service of 1 year or 6 months

if he has worked under the employer for not less than

a. 240 days during preceding 12 months

b. 120 days during preceding 6 months, respectively.

iii) In case of a seasonal establishment

If he has actually worked for not less than 75% of the number of days on which the
establishment was in operation, he is deemed to be in continuous service for a period of 1 year
or 6 months.

2) When gratuity becomes payable?

Superannuation, Retirement, Death, Disablement due to accident or

disease.
3) Rate of Gratuity
For completed years of service is more than 6 months,

Rate of Gratuity = 15 days wages x Number of years of continuous service

 4) Rate of Gratuity for the Employee Employed in a Seasonal Establishment

Rate of Gratuity = 7 days wages for each season

5) Maximum Gratuity - Rs. 20 lakhs

6) Forfeiture of Gratuity – Section 4(6)

Grounds for forfeiture

i) Loss or damage to the property of the employer – Forfeited to the extent of
damage or loss
ii) Riotous or violent behaviour - Total or partial forfeiture
iii) Offence involving moral turpitude – Total or partial forfeiture

Compulsory Insurance – Section 4A

 MODULE VI - FACTORIES ACT, 1948

Read all the provisions in general

1) ANNUAL LEAVE WITH WAGES

i) Adult – 1 day leave for every 20 days he has worked.
ii) Young person – 1 day leave for every 15 days he has worked.

THE TN SHOPS AND ESTABLISHMENT ACT, 1947

1) Shop – Sec. 2(16) – Read definition

2) Establishment – Sec. 2(6) – Read definition
3) Read all the provisions.

Note: Have a comparative reading of Factories Act and The TN Shops and
Establishment Act for the provisions discussed in the class