INDORE INSTITUTE OF LAW

CRASH COURSE
LL.B. (Hons.) II SEM.
LABOUR AND INDUSTRIAL LAW- II

Q.1 Discuss the need and objectives of the Minimum Wages Act,
1948.

Q.1 न्यूनतम वेतन अधिधनयम, 1948 की आवश्यकता और उद्दे श्ययों पर चचाा करें ।

Q.2 Discuss employer’s responsibility for payment of wages under

the Workman’s Compensation Act, 1923?

Q.3 कमाकार मुआवजा अधिधनयम, 1923 के तहत मजदू री के भुगतान के धिए धनययक्ता
की धजम्मेदारी पर चचाा करें ?

Q.3 Discuss the main objectives and scope of the Payment of Wages
Act, 1936?

Q.3 वेतन भुगतान अधिधनयम, 1936 के मुख्य उद्दे श्ययों और दायरे पर चचाा करें ?

Q. 4 What is the definition of deduction? What are the different types

of deductions that are allowed under the Payment of Wages Act, 1936,
act?

Q. 4 कटौती की पररभाषा क्या है ? वेतन भुगतान अधिधनयम, 1936 अधिधनयम के तहत

धकस प्रकार की कटौधतययों की अनुमधत है ?

Q.5 Discuss the object and extent of Workmen’s Compensation Act,

1923.

Q.5 कमाकार मुआवजा अधिधनयम, 1923 के उद्दे श्य और सीमा पर चचाा करें ।
Q.6 Explain the term ‘Factory’ and ‘Inspector’ under Factories Act,
1948. Refer decided cases.

Q.6 कारख़ाना अधिधनयम, 1948 के तहत ‘कारख़ाना’और 'इों स्पेक्टर' शब्द की व्याख्या
करें । धनर्ाधयत मामियों का सोंदभा िें।

Q.7 Discuss the provisions relating to working hours and welfare

measures under the Factory Act, 1948

Q.7 कारख़ाना अधिधनयम, 1948 के तहत काम के घोंटयों और कल्यार्कारी उपाययों से

सोंबोंधित प्राविानयों पर चचाा करें ।

Q.8 What are different types of wages under the Minimum Wages
Act, 1948.

Q.8 न्यूनतम वेतन अधिधनयम, 1948 के तहत धवधभन्न प्रकार के वेतन क्या हैं ।

Q.9 Discuss the procedure for claiming compensation under the

Workman’s Compensation Act, 1923

Q.9 कमाकार मुआवजा अधिधनयम, 1923 के तहत मुआवजे का दावा करने की प्रधिया
पर चचाा करें ।

Q.10 Explain the following:

(a) Family Pension Scheme, 1971

(b) Payment of Gratuity Act,1972

(c) The provisions relating to health under the Factory Act,

1948

(d) The provisions relating to safety under the Factory Act,

1948

Q.10 धनम्नधिखित कय समझाइये:

(ए) पाररवाररक पेंशन ययजना, 1971

(बी) ग्रेच्युटी भुगतान अधिधनयम, 1972

(सी) कारख़ाना अधिधनयम, 1948 के तहत स्वास्थ्य से सोंबोंधित प्राविान

(डी) कारख़ाना अधिधनयम, 1948 के तहत सुरक्षा से सोंबोंधित प्राविान

Q.1 Discuss the need and objectives of the Minimum Wages Act,
1948.

The system of paying minimum wages to the employees has been globally accepted as a system
to combat poverty and stabilise the economy. The Minimum Wages Act, 1948 was brought into
force by the Parliament of India in order to provide due remuneration to the workers and to
prevent unfair exploitation of the workers by the employers. The Act lays down the minimum
rates of wages and fixing of minimum wage rates for both skilled and unskilled labour and aims
to provide a decent standard of living for them. The Act grants power to both the Central and
state governments to regulate, review and revise the rate of minimum wages paid to the
employees employed in the scheduled employment under their respective jurisdiction. The Act
does not discriminate between men and women, it pays all the employees equally for doing the
same work.

The purpose of minimum wage is to protect the workers from unduly low pay. It enables them to
earn adequate wages for the work done by them and to maintain a minimum living standard. It
also acts as a tool to eradicate poverty and to remove discrimination between men and women.
This system has been designed and developed in a way to supplement and reinforce other social
and employment policies, including collective bargaining, which is used to set terms of
employment and working conditions.

Need for a meaningful minimum wage

In India, the minimum wages fixed for the labourers are so low that it is not enough even for two
meals a day, leave aside the needs of health, education and shelter. The main objective behind
minimum wages of the workers should be primarily because of two reasons:

• Social objective: Minimum wage is essential for abolishing poverty by providing a

basic standard of living to the employees.
• Economic objective: The rate of minimum wage should be fixed in such a way that
would motivate the workers to put in maximum efforts at their jobs and thus improve
the economy of the country and their standard of living.
Need for Minimum Wages Act, 1948
The Minimum Wages Act, 1948 was enacted by the Indian Legislature to deal with matters
relating to providing the minimum wage to the workers so that they can afford their basic needs
and maintain a decent standard of livelihood. The Act further ensures a secure and adequate
living wage for all labourers and it also guarantees that an employee earns enough to provide for
his family. The Act authorises both Central and state governments in fixing the rate of minimum
wage. The Minimum Wages Act, 1948 has also laid down a provision for revision of minimum
wages in order to cope with the changing prices of basic commodities.

The Act seeks to provide better protection of the rights of the employees by establishing advisory
boards to resolve any dispute between the employer and employee regarding the payment of
minimum wage to the employees. The Act further appoints a Commissioner for Workmen’s
Compensation or any other officer of the Central Government exercising functions as a Labour
Commissioner for any region, with an experience as a judge in order to hear and decide cases
concerning non-payment or payment of less than the minimum wages to the employees. The Act
also states provisions for penalising any employer who fails to provide the minimum wage to the
employer and contravenes any rule or order made under the Act.

Thereby, it can be said that the enactment of this Act was extremely crucial since it aims to
expand the concept of social justice to the workers of scheduled employment and also provide
them with the rates of minimum wages fixed by the statute. It also protects the rights and interests
of the workers and prevents the workers from being wrongfully exploited by their employers.

Objectives of Minimum Wages Act

The significance of the Minimum Wages Act, 1948 is mentioned below:

1. To fix the minimum rates of wages that are to be provided to the employees and revise
such rates of wages every five years.
2. To secure an adequate living wage for all the labourers in the interest of the public.
3. To fix the daily working hours of the employees.
4. To prevent exploitation of the workers by the employers.
5. To ensure that the labourers can maintain a decent standard of living.
6. To provide basic physical needs, good health and a level of comfort to the employees.
7. To penalise the employers when they fail to provide minimum wages to the workers.
8. To establish advisory boards to regulate and administer the provisions of the Act.
9. To lay down the powers and duties of the inspectors for the purposes of this Act.
10. To prevent any employer from wrongfully infringing the right of any employees.
11. To establish appropriate authorities where the employees can seek redressal when the
employer has failed to pay the daily wage.
 12. To authorise the Central and state governments to make rules and regulations for the
purposes of this Act.

Application of Minimum Wages Act

The Minimum Wages Act, 1948 is applicable to the whole of India as laid down in Section 1 of
the Act. It applies to any employment if it employs 1000 employees in the respective state.
However, it does not apply to any employees in any undertaking owned by the Central
Government or of the federal railway, except with the consent of the Central Government.

Essential provisions under Minimum Wages Act

The significant provisions of the Minimum Wages Act, 1948 are mentioned below.

Minimum rates of wages

Under Section 3 of the Act, the minimum wages payable to the employees are to be fixed by the
appropriate government. However, this Section also mentions that the rate of wages shall be
revised every five years. The appropriate government may fix:

1. The minimum rate of wages for time work,

2. the minimum rate of wage for piece work,
3. a minimum rate of remuneration to apply in the case of employees employed on piece
work for the purpose of securing to such employees a minimum rate of wages on a
time work basis,
4. a minimum rate of wage to substitute the for the minimum rate which would otherwise
be applicable, in respect of overtime work done by employees.
In fixing or revising minimum wages under Section 3 of the Act:

1. Different minimum rates of wages may be fixed for; different classes of work,
different scheduled employment, different localities, different age groups, etc.
2. Minimum wages may be fixed by the wage period such as; by the hour, by the day,
etc.
Section 4 of the Minimum Wages Act, 1948 states that the minimum wages fixed by the
appropriate government must consist of:

1. A basic rate of wages and a special allowance must be adjusted at necessary intervals
by the appropriate government to match the cost of living of the employees.
2. The cost of living allowance and the cash value of the concessions in respect of
supplies of essential commodities must be computed by a competent authority and at
such intervals specified by the appropriate government.
Section 5 states that in order to fix or revise the minimum wage of the employees the appropriate
government may establish as many committees and subcommittees necessary to hold enquiries in
matters regarding fixing and revision of minimum wage. Further, the appropriate government by
notification to the Official Gazette publish its proposal for the information of the individuals who
are likely to be affected by such information and thereby specify the date which must not be less
than two months from the date of notification of the proposals that will be taken into
consideration.

Advisory board

Under Section 7 the appropriate government must appoint advisory boards for coordinating the
work of the committees and subcommittees mentioned in Section 5 and also for advising the
appropriate government generally in the matter of fixing and revising minimum rates of wages.

Central Advisory Board

In the matters of fixation and revision of minimum rates of wages of the employees, the Central
Government shall appoint a Central Advisory Board. The Central Advisory Board shall consist
of:

1. Members to be nominated by the Central Government representing employers and

employees in the scheduled employment, who shall be equal in number, and
2. Independent persons not exceeding one-third of its total number of members. One
such member shall be appointed as the Chairperson by the Central Advisory Board.

Committees

Section 9 of the Act states that the members of committees, sub-committees, and Advisory
Boards shall be appointed by the appropriate government. Individuals who are appointed to these
committees shall be representatives of employers and employees in scheduled employments and
shall be equal in number. The appropriate government shall appoint such an independent person
to be the Chairman of the committee.

Wages in kind under the Act

Section 11 of the Minimum wages Act, 1948 mentions how the wages will be payable to the
employees.

1. Minimum wages under this Act shall be paid in cash.

2. The appropriate government under necessary circumstances by notification to the
Official Gazette authorise the payment of the minimum wages either wholly or partly
in kind.
 3. The appropriate government by notification to the Official Gazette authorised a
provision for the supply of essential commodities at concession rates.
4. The cash value of wages and the concession rates shall be authorised in the prescribed
manner stated under the Act.
The payment of wages to the employees under this Act should be done in accordance
with Section 12 of the Act, which states that the employer shall pay the minimum rate of wages
fixed to every employee working under him within such time and manner prescribed under the
Act.

Fixing hours for a normal working day

Section 13 specifies that the appropriate government may:

1. Fix the working hours of a normal day including one or more specified intervals.
2. Provide a day of rest in every period of seven days to all the employees or a class of
employees, and adequate remuneration must be provided to the employees during the
day of rest.
3. Provide payment to the employees on the day rest which shall not be less than the
overtime rate.
When an employee works more than the specified number of hours constituting a normal working
day, the employer shall be liable to pay him for every hour or part of the hour at the overtime rate
fixed under this Act or under any law of the appropriate government for the time being in force.

Furthermore, under Section 15 if an employee has worked less than the required number of hours
constituting a normal working day they shall be entitled to receive wages in accordance with
work done by him on that day as if he has worked a full day. However, he might not receive the
wages of a full day under certain circumstances.

Maintenance of registers and records

Under Section 18 of the Minimum Wages Act, 1948 every employer will be liable to maintain
registers and records relating to the number of employees employed under him, the work done by
them, the wages paid to them, the work performed by them, maintain the receipts given by the
employers and any other relevant information.

Inspectors

In this Act, the appropriate government by notification to the official gazette shall appoint
inspectors in a manner prescribed under the Act. The inspectors shall be liable to exercise their
functions within the local limits of their jurisdiction.

1. The inspectors shall enter the premises or places within the local limits of their
jurisdiction where the employees are employed to work in respect of which minimum
 rates of wages have been fixed under this Act, for the purpose of examining the
register, record of wages, etc.
2. To examine any person on the premises or places who is an employee.
3. Seize or take copies of registers, records of wages, or other required documents under
this act which he may consider relevant in case of commission of any offence.
4. The inspector will be required to exercise any other power as may be prescribed under
the Act.
Every inspector under this Act will be deemed to be a public servant within the meaning of the
Indian Penal Code,1860.

Claims

The appropriate government may by notification to the Official Gazette appoint any
Commissioner for Workmen’s Compensation or any officer of the Central Government
exercising functions as a Labour Commissioner for any region, with an experience as a judge to
hear and decide cases in a particular region about matters relating to non-payment or payment of
less than the minimum wages to the employees.

When an application under Section 20 of the Minimum Wages Act, 1948 is made to the authority,
the authority shall give adequate opportunities of being heard to both the applicant and the
employer. Under this Section, every direction of the authority shall be binding and final. The
authority appointed under the Act shall have the powers of a civil court under the Code of Civil
Procedure, 1908 for the purposes of taking evidence, enforcing the attendance of witnesses,
production of documents, etc.

Procedure before the authority

The procedure before the authority in the matters relating to non-payment or payment of less than
the minimum wages to the employees shall take place in the following manner as prescribed
under the Act.

• The prescribed authority shall give adequate opportunities of being heard to the
employer, applicant or any other person relevant to the case.
• In case of non-payment of wages, or delay in the payment of wages the authority shall
direct the refund of such amount to the applicant of the amount unpaid, or delayed
along with the compensation for the damages suffered by the employee.
• No compensation will be awarded to the employee if the authority is satisfied that the
delay in payment of wages of the employee was a bona fide error. The authorised
person was unable to make the payment even though they exercised due diligence.

Penalties for offences

Section 22 of the Minimum Wages Act, 1948 an employer who fails to provide minimum rates of
wages to the employees or contravenes any rule or order made under Section 13 of the Act shall
be punished with imprisonment for a term which may extend to six months or fine not less than
five hundred rupees or both.

Exemptions of the employers in certain cases

When an employer is accused under this Act and brought before the court he will be exempted
from such offence under the following circumstances:

1. The employer has used due diligence in the execution of all the provisions of the Act.
2. The other person has committed the offence without his knowledge, connivance or
consent. Then in that case the other will be held liable as if he were the employer and
the employer will be discharged.

Q.2 Discuss employer’s responsibility for payment of wages under

the Workman’s Compensation Act, 1923?

Introduction

Every employee needs a secured job and wants to get compensation for the expenses he has
incurred. This is a requirement that needs to be fulfilled by the company whether it is small scale
or large scale. After all, a company’s success depends on its employees. Therefore, the protection
of employees’ and their safety is a top priority of a company. This article is all about how much
compensation is given, under what conditions, who is entitled to claim compensation and a lot
more.

Main features of the Act

The “Employees Compensation Act, 1923” is an Act to provide payment in the form of
compensation by the employers to the employees for any injuries they have suffered during an
accident. Earlier this Act was known as the Workmen Compensation Act, 1923. When the
employer is not liable to pay compensation-

1. If the injury does not end in the entire or partial disablement of the employee for a period
exceeding three days.
2. If the injury, not leading in death or permanent total disablement, is caused by an
accident which is directly attributable to:

• The employee having at the time of the accident is under the influence of drink or drugs;
 • The willful disobedience of the employee to an order if the rule is expressly given or
expressly framed, for the purpose of securing the safety of employees; or
• The willful removal or disregard by the employee of any safety guard or other device
which has been provided for the purpose of securing the safety of employees.

Principles Governing Compensation

Who will be receiving the compensation on behalf of the deceased?

• A widow or a minor who is a legitimate son or unmarried daughter or a widowed mother

is entitled to compensation;
• If the family of the deceased is wholly dependant on the earnings of the employee at the
time of his death or a son or daughter who has attained the age of eighteen years;
• A widower;
• A parent other than a widowed mother;
• A minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or
illegitimate or adopted if married and a minor or if widowed and a minor;
• A minor brother or an unmarried sister or a widowed sister if a minor;
• A widowed daughter-in-law;
• A minor child of a predeceased son;
• A minor child of a predeceased daughter where no parent of the child is alive, or;
• A paternal grandparent if no parent of the employee is alive.

Nature of Liability

To be eligible for the Employees’ Compensation Act’s benefits there are some requirements which
need to be fulfilled:

1. He must be an employee of the Company or Organisation.

2. He must have been injured at the workplace or the job was as such that you have been
injured.

Doctrine of added peril

When an employee performs something which is not required in his duty, and which involves extra
danger, the employer cannot be held liable to pay compensation for the injuries caused. In the case
of Devidayal Ralyaram v/s Secretary of State. It was ruled that the doctrine of added peril was used
as defense and the employer was not liable for the compensation.
Adjudication of Compensation
The adjudication is done by the commissioner in calculation of the amount of compensation. The
quantum of compensation is calculated from the date of the accident.

Self-inflicted Injury
If a worker inflicts an injury to himself or herself it is a self-inflicted injury. The injury may be
intentional or accidental but the employer is not liable for such injuries. There are some types of
jobs that have a high risk for self-inflicted injuries which include-

• Law enforcement
• Medical employees
• Farmers
• Teachers
• Salespeople

Contributory negligence
Employees owe a duty to their employers to carry out their work with reasonable care so as to avoid
accidents and injury. Employers are vicariously liable for the negligence of their employees but are
entitled to claim a contribution or indemnity from their negligent employee in appropriate
circumstances. So if there is negligence on the part of both employee and the employer then the
employer will be liable to pay compensation to the extent of his own negligence, not of the
employee. Hence, the compensation amount may reduce as the employer will not be liable for the
negligence of the employee.

Section 3: Employer’s liability for Compensation

Employer’s liability in case of occupational diseases

There are certain occupations which expose employees to particular diseases that are inherent-

• Infra-red radiations;
• Skin diseases due to chemical or leather processing units;
• Hearing impairment caused by noise;
• Lung cancer caused by asbestos dust and Diseases due to effect of extreme climatic
conditions.

Example- Miners are at a risk of developing a disease called silicosis. Sometimes miners also
develop lung diseases due to exposure to dust. The people who work in agricultural lands, develop
diseases through spraying of pesticides. These pesticides are toxic in nature and are health hazards
to many farmers.

There are thousands of workplaces where occupation itself is dangerous in nature.

Provided that the employer shall not be liable:

(a) if any injury does not result in the total or partial disablement of the employee for a period
exceeding three days;

(b) if any injury does not result in death or permanent total disablement caused by an accident
which is directly attributable to-

• if the employee is under the influence of drink or drugs at that time,

• the willful disobedience of the employee to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of employees,
• the wilful removal by the employee of any safety guard or other devices which he knew
to have been provided for the purpose of securing the safety of employees.

Part A of Schedule III

If an employee contracts any disease that is mentioned in occupational diseases or the employee is
employed for a continuous period of six months (this does not include the service period) and not
less than that, the employer shall not be liable to pay the compensation as the disease will be deemed
to be injury and it shall be considered as out of course of employment.

Part B of Schedule III

1. Diseases caused by phosphorus or the toxic substance present, all include exposure to
risk concerned.
2. Diseases caused by mercury or toxic substances found exposure to the risk concerned.
3. Diseases caused by benzene or the toxic substances found which pose risk to the
concerned.
4. Diseases caused by nitro and amino toxic substances of benzene involve risk to the
concerned.
These diseases are considered occupational diseases, and they are deemed to be out of the course
of employment and therefore the employer will not be liable to pay the compensation.

Part C of Schedule III

If an employee contracts a disease that is mentioned as an occupational disease which is specific to
that employment, during a continuous period that is less than the period mentioned under this part
of Schedule 3 is known as occupational diseases. It will be deemed that the disease has arisen out
of and in the course of the employment, the contracting of such disease will be deemed to be an
injury by accident within the meaning of this Section:

Pneumoconiosis is a disease caused by sclerogenic mineral dust (silicosis, anthracosilicosis,

asbestosis) and silico-tuberculosis if silicosis is an essential factor in causing the resultant
incapacity or death, such diseases are considered as occupational diseases.

Section 3(3)

The Central Government or the State Government gives a notification in the Official Gazette which
species the diseases which will be deemed to be occupational diseases under the provisions of sub-
section(2) and in the case of notification by the state government, these diseases are declared by
the Act.

Section 3(4)

No compensation will be payable to an employee unless the disease is directly attributable to a

specific injury that arises out of or in the course of employment.

Employment
Underemployment, an employee is one who works under the employer and has to work as per the
terms of the company or the employer.

Personal injury
A personal injury can be compensated only in some circumstances. Injury sustained by the
employee must be a physical injury. Example- If a person is discriminated on the basis of:

• Age
• Sex
• Sexual Orientation
• Transsexual person
• If a person is having a disability
• Religion and belief
• Colour, Nationality
• Pregnancy and Maternity leave
• Marriage or Civil Partnership
In the case of Richmond Adult Community College v McDougall (2008), M has suffered injuries
mentally, psychological disorders as he was offered a job as a database assistant in a college. But
when it learned about the medical history and the psychological disability M was suffering from,
the college withdrew the offer. M brought a disability discrimination claim from the college. The
tribunal accepted that m was suffering from mental impairment but she was not disabled within the
meaning of Section 1 of the Disability Discrimination Act, 1995.

Case Law- G.S.R.T.C. v. Ashok Kumar Keshavlal Parekh

Accident
The Act provides that compensation is provided to employees and their dependants only if the
injuries from the accident includes occupational diseases. The accident must occur in the course of
employment the Act also applies to railway servants and persons employed in any such capacity as
specified in Schedule 2 of the Employees Compensation Act. The people employed in factories,
mines, plantations, vehicles, construction works, and certain other hazardous occupations come
under Schedule 2.

A fatal accident is one where there is death or a high risk of loss of life of the employee. In the case
of a fatal accident, the employee might die or suffer severe disablements and injuries. On the other
hand, non-fatal accidents are those accidents that do not have a high probability of death. In the
case of non-fatal accidents, the employee or the workman might suffer disabilities or any type of
personal injury.

Both fatal and non-fatal accidents are covered by the Employees Compensation Policy, provided
such accidents result in the mentioned contingencies in the act. Fatal accidents are taken as those
which result in death, or permanent total disablement, permanent partial disablement or fatal
injuries. If any of these contingencies occur, the employees’ compensation policy would pay the
claim faced by the company. In the case of non-fatal accidents though, the covered contingencies
might not occur. The employee or worker might not face any type of disablement or injury from
such accidents. If the employee or workman suffers from a type of disablement and the disablement
does not last for more than 3 days, the claim would not be paid. As a result, in several employees’
compensation policies, non-fatal accidents are usually not covered unless they cause a disablement
which lasts for more than 3 days.

Arising out of and in the course of employment

Three factors determine whether the act is arising out of or in the course of employment:

• When the injury occurred, the employee must have been engaged in the business of the
employer. Also, he must not be doing something for his personal benefit. The accident
must occur where the employer was performing his duties.
• The injuries occurred because of the risk incidental to the duties of the work or services
or if the nature or condition of employment is inherent.
Reference Case law: N.A. Chauhan v. N.K. Shah

Willful disobedience of orders or safety devices, etc.

If the employee disobeys the order expressly given or denies to obey any rules. The rules are made
for the safety of the workmen but if they disobey the accident might happen.
The accident can take place if the employee willfully disregards the safety guards or any other
device.If the employee knew that he has been provided safety for the purpose of securing
employees and still disregards it is said to be done wilfully.

Compensation under Agreement

A compensation agreement ensures that an individual will get paid for the services he or she has
provided to a company as an employee. A compensation agreement ensures that an individual will
get paid for the services he or she provides to a company as an employee.

The question of compensation and negligence of employee

The question of compensation and negligence of employees is explained above in contributory
negligence. When there is negligence on the part of the employer and employee, the employer is
liable to pay compensation only to the extent of his negligence. He will not be liable to pay the full
amount of compensation. So in the case of negligence of the employee, he will get only a part of
compensation.

Alternative Remedy under Section 3(5)

Any right to compensation cannot be conferred by an employee in respect of injuries,if he has
instituted a suit for damages in a civil court, in respect of any injury against any employer. No suit
for damages shall be maintainable by an employee in any court of law.

Liability of Insurance Company

If any claim is due to the insurance company, the company cannot escape liability arising out of
claim simply because notice was not issued to the company. For instance, if a notice is issued to
the owner of the vehicle it is sufficient to get insurance from the company. In the case of Ram
Karan v. Vijayanand the petition was filed by Ram Karan under section 482 of the code of criminal
procedure because he had been illegally deprived of the benefits of the premature release. It was a
violation of Articles 14, 19 and 21 of the Constitution of India. It was held that he was entitled to
be released as per the rules.

Liability of Insurance Company or owner of vehicle

The question is whether the insurance coverage is available to the insured employer-owners? The
owner of motor vehicles, in relation to their liabilities under the Employment Compensation Act
on account of motor accident injuries caused to their employees would include additional statutory
liability foisted on the insured employers under Section 40 of the Compensation Act.

Section 4: Amount of compensation

Where death results from the injury-
In case the employee dies, an amount equal to fifty percent of the monthly wages multiplied by a
factor as per given in the Schedule 4 of the act or rupees eighty thousand is given whichever is
more.

Where permanent total disablement results from the injury-

In case the employee has total disablement the amount given is sixty percent or rupees ninety
thousand whichever is more.

Where permanent partial disablement results from injury-

In the case of permanent partial disablement, the compensation provided is equal to disability as
sixty percent or rupees ninety thousand.

Liability of Insurer
The liability of the insurer is determined on the basis of the wages of the employee. The amount of
wages is covered under the insurance policy. The company will be liable to indemnify only that
portion of the amount which is under wages.

Causal connection between disease and occupation

The amount of compensation is paid when the insurer certifies that the injury is the result of an
occupational disease.

Application of law of pleadings

An application for pleadings can be filed by the employee under the amount of compensation when
he/she thinks that the amount that is decided is not appropriate with respect to the injury incurred.

Section 4-A: Compensation to be paid when due and penalty for default
• When the employer does not accept liability for compensation to the extent claimed, he
shall be bound to make a payment may be provisional and such payment shall be
deposited to the employee or the commissioner.
• The commissioner can direct the employer to pay interest in addition to the amount at
the rate of twelve percent per annum. The rate of interest can also increase which may
be specified by the Central Government.

Section 5: Method of calculating Wages

The basis for the calculation of compensation is the monthly wage system. It means the amount of
wages deemed to be payable for a month.
When the employer has been giving service to the employer during a continuous period of not less
than twelve months preceding the accident, and when the employer is liable to pay compensation,
the employee will be liable one-twelfth of the total wages. The employer is required to pay the
compensation which is due for payment to employees in the last twelve months of that period.

Section 6: Review
1. Any half monthly payment can be reviewed by the commissioner under this act if there
is an agreement between the parties or if there is an order given by the commissioner. A
certificate of a qualified medical practitioner will be accompanied that there is a change
in the condition of the employee subject to the rules and regulations under the Act.
2. Any half monthly payment may be reviewed, can be continued, increased, decreased or
ended under the act or if the accident is found which resulted in permanent disablement.
Such an employee may get less amount because he had already received by way of half
monthly payments.

Section 7: Communication of Payments

Commutation of half- monthly payments- Any right to receive half- monthly payment agreement
between the parties is commutation of payments. If the parties do not agree and the payment
continues for not less than six months then on the application of either party, the Commissioner
will redeem the payment of a lump sum amount which was agreed by the parties.

Section 8: Distribution of Compensation

Rights of heirs of dependents

1. Compensation will not be provided to the employee whose injury has resulted in death
and lump sum payment will also be not provided who is under a legal disability. The
compensation may be deposited to the commissioner and a direct payment will not be
allowed by the employer to the employee.
2. In the case of a deceased employee, an employer can make payment to any dependant
advances. The compensation will amount to equal to three months’ wages of the
employee and the amount shall not exceed the compensation payable to the dependant.
If the amount exceeds, it may be deducted by the commissioner from the compensation
and repaid to the employer.
3. An amount not less than ten rupees which is payable may be deposited with the
commissioner on behalf of that person.
4. The receipt of the commissioner will be sufficient discharge of the amount if any
compensation is deposited with him.
5. When any compensation is deposited with the commissioner and he is payable to any
person, he may if the person to whom the compensation is to be payable is not a woman
or a person with a legal disability then he may pay the money to the person who is
entitled to get the compensation.
 6. When any lump sum amount is deposited with the commissioner and he is payable to a
woman or a person who is legally disabled, such amount can be invested for the benefit
of any other woman or a person with a disability. The commissioner may direct the
amount in such cases.

Section 9: Compensation not to be assigned, attached or charged

Compensation not to be assigned, attached or charged, save as provided by this Act, no lump sum
or half- monthly payment payable under this Act shall in any way be capable of being assigned or
charged or be liable to attachment or pass to any person other than the workman by operation of
law, nor shall any claim be set off against the same.

Section 10: Notice and claims of the accident

A claim for compensation cannot be entertained by a commissioner unless the notice of the accident
is given in a certain manner.

Condonation of delay
It means that if the employee has delayed in claiming for the compensation it is said to be
condoned.

Section 10A: Power to acquire statements from employers regarding fatal

accidents
When a commissioner receives information about the death of an employee, because of an accident
that is arising out of or in the course of employment, he can send a registered post or a notice to the
employer of the employee, to submit a notice within thirty days of service. The statement or notice
shall be in a prescribed form mentioning the circumstances under which the death took place. Also
stating that whether the employer is liable or not to deposit compensation on the death of the
employee.

Section 10B: Reports of fatal accidents and serious bodily injuries

A notice is required to be given to any authority when any law is in force for the time being, if any
accident occurs on the premises of the employer which results in the death of employee or serious
bodily injury the person on behalf of employer is required to give a notice within seven days of the
death. This person shall send a report to the commissioner giving details of the death or serious
bodily injury. It will be done only when it is provided by the state government that instead of
sending the report to the commissioner it is sent to another authority to whom a notice can be given.
“Serious bodily injury” means injury to a limb or permanent loss of sight or hearing or fracture of
limbs or the insured person is absent from work for more than twenty days.

Q.3 Discuss the main objectives and scope of the Payment of

Wages Act, 1936?
Payment of Wages Act

The Payment of Wages Act, 1936, governs the payment of wages to specific groups of
employees. Know all about it here.

The Payment of Wages Act of 1936 (Act) is primarily intended to help industrial workers who do not earn
a lot of money. It covers all employees who work in a factory, through a subcontractor, or directly with the
railway administration, and also those who operate in the industrial sector, as defined in the Act. The limit
was raised to INR 24,000 per month by the Indian government in 2017. Therefore, employees with wages
up to the ceiling limit are covered by the Act. If you are a citizen of the country, you should definitely
know about all the details of the payment of wages act, 1936.

The objective of the Payment of Wages Act, 1936

Wages and several other essential terms are defined in Section 2 of the Payment of Wages Act, 1936, as
follows:

• Appropriate Administration

• Appropriate government, according to section 2(i) of the Act, means:

• Railways, air transportation, mines, and oilfields are all under the federal government’s control.

• In all other circumstances, the State Government is in charge.

The Act’s principal goal is to prohibit improper wage deductions and eliminate unnecessary wage delays.
Everyone who works in a factory, on a railway, or as a subcontractor on a railway, and everyone who
works in industrial or other facilities needs to follow the payment of wages Act. The State Government
may extend the provisions to any class of employees in any establishment or class of establishments by
issuing a notification. The Act provides for the regular and timely payment of wages (on or before the 7th
day or the 10th day once the wage period has exceeded 1000 workers) and the prevention of improper
deductions from wages and arbitrary fines.

Importance of Payment of Wages Act, 1936

The policy primarily targets individuals in the industry who earn less than INR 24000 per month. The Act
further stipulates that a worker cannot contract out of any privilege or right conferred upon him by the Act.
The major goal of the Act is to control the timely payment of a few types of employees who operate in the
industry. If there is a problem or a grievance, prompt and effective action may be taken to resolve the
claims and difficulties with the help of this act. There are provisions in the statute for a remedy for wages
earned while working in the office. Still, it does not include any procedures for any form of investigation
into the office if there is a dispute.

The Payment of Wages Act, 1936 is applicable to each individual who works in the industry. The act
ensures the salary of the employees will be done within one month only. The salary term cannot exceed
one month under any circumstances. As a result, it is obvious that payment of wages under the act can be
chosen on a day-to-day, week-to-week, month-to-month, or fortnightly basis. It indicates that wages should
be paid on time and without delay, and if they aren’t, the employer or their representatives will be held
responsible.

Q.4 What is the definition of deduction? What are the different

types of deductions that are allowed under the Payment of Wages
Act, 1936?

A deduction is made for the employee’s loss, which would be applied to his salary. The government
permits these deductions for acts performed by employees in various industries. Deductions are used to
subtract a specified amount from an employee’s salary. As a result, when the employer pays his
employee’s salary, he deducts only what is required by law, not what is convenient for him. The
deductions are imperative based on the law and are beneficial to the employee. To get a better
understanding of the notion, consider what cannot be referred to as a deduction under the Payment of
Wages Act of 1936:

• If the company has halted the employee’s increment,

• If the employee has been placed on leave,

• If the person was demoted because of poor performance.

• Only when the organisation has reasonable grounds, can the grounds mentioned above be used.

the different types of deductions that are allowed under the act
With the authorisation of the proper authority, fines can be imposed on both the employee and the
employer. The employer may impose a fine on the employee following the act’s rules and regulations, and
is done for the benefit of both the employer and the employee.

Fines should not be imposed on the worker until he clarifies and explains the demonstration or omission he
made. The total amount of the fine should not exceed 3% of his annual salary. This increases the
importance of the Payment of Wages Act, 1936.

The act has established various rules and regulations for the betterment and effective operation of the
industry. The legislation allows workers to work freely without fear of being hampered by pay or salary
delays. The code has paved the road for employees to work with dignity, and the necessary mechanisms
have been established. The act’s provisions aid in the development of trust between the employer and the
employee, allowing for optimum production to be attained through employee motivation. The notion of
wage payment and deductions under the code is critical to the industry’s operating and producing intended
output and ensuring that the benefit is supplied to the employee.
Q.5 Discuss the object and extent of Workmen’s Compensation
Act, 1923.

The object of the Workman’s Compensation Act, 1923

The object of this Act is to make provision for the payment of compensation by
certain class of employers to their workman for injury by accident. The reasons that
compelled the initiation of the Bill were attributed to the growing complexity of
industry with the increasing use of machinery and consequent danger to workman
along with the comparative poverty of workman themselves that rendered it advisable
that they should be protected as far as possible from hardships arising from accidents.

the nature of liability to pay compensation under the Act

Nature of Liability: The Workman’s Compensation Act created a new type of liability.
It is not strictly a liability arising out of tort, but is a sort of liability arising out of the
liability to pay compensation at a rate fixed in the Act itself to any workman
incapacitated by an accident arising out of and in the course of his employment.

The principles governing the compensation under the Act

The main principle governing the compensation is not dependent on the suffering
caused to the workman or expenses incurred by him in his treatment but on the
difference between his wage earning capacity before and after the accident. The
liability for the payment of compensation is not dependent upon the neglect or
wrongful Act on the part of the employer.
Define Commissioner
Commissioner- S 2(I)(b) of the Act says that “Commissioner” means a Commissioner
for Workman Compensation appointed u/s 20 of the Act. There is difference of
opinion amongst the High Courts whether Commissioner is a Civil Court or not.
According to Patna High Court, Commissioner is Civil Court subordinate to the High
Court. But according to the latest decision of Madhya Pradesh High Court in
Yashwant Rao v. Sampat, Commissioner is a tribunal and not a Civil Court.
Compensation
Compensation – 2(I)(c) says that “Compensation” means compensation as provided
for by this Act. Compensation under this Act is not the same thing as damages in
Torts. Once the compensation is determined by the Commissioner on the basis of a
medical certificate issued by a qualified medical practitioner, it cannot subsequently
be upset on the ground that another doctor had after one an half years found some
improvement in the injured organ of the workman.
 Dependant-
Meaning of Dependant- S. 2(I)(d) of the Act defines dependant. Under this sub-
section relations of a workman are divided into three classes. However, there is no
preferential right amongst dependants to maintain claim application. The dependants
are not classified in different categories in the sense that those specified in category I
will exclude other. Dependants belonging to any category may claim simultaneously.
Employer-
In view of S. 2(I)(e) employer includes the following-
(i) anybody of persons whether incorporated or not,
(ii) any managing agent or an employer,
(iii) legal representative of a deceased employer, and
(iv) when the services of a workman are temporarily lent on hire to another person by
the person with whom the workman has entered into a contract or service or
apprenticeship, means such other person while the workman is working for him.
Partial Disablement
Section 2g "partial disablement" means, where the disablement is of a temporary
nature, such disablement as reduces the earning capacity of a workman in any
employment in which he was engaged at the time of the accident resulting in the
disablement.
total disablement
Section 2 (L): "total disablement" means such disablement, whether of a temporary or
permanent nature, as incapacitates a workman for all work which he was capable of
performing at the time of the accident resulting in such disablement.
Wages under the WCA
The term ‘wages’ as defined in S. 2(I)(m) includes any privileges or benefit which is
capable of being estimated in money. The definition is not exhaustive. The following
are not wages;
(i) raveling allowance or the value of any traveling concession;
(ii) Contribution paid by the employer of a workman towards; (a) any pension,
or (b) any provident fund; and
(iii) Any sum paid to a workman to cover any special expenses incurred on
him by the nature of his employment,
(iv) Leave carried forward of next year.
Accident-
The expression “accident” has not been defined in the Act. It means any unexpected
mishap, untoward event, or consequence brought about by some unanticipated or
undersigned Act which, could not be provided against. The basic and indispensable
ingredient of the accident is the unexpectation. Whether a particular occurrence is
accident or not, it must be looked upon not only from the point of view of the person
who causes it but also from the point of view of the person who suffers it.
Q.6 Explain the term ‘Factory’ and ‘Inspector’ under Factories
Act, 1948. Refer decided cases.

“factory” means any premises including the precincts thereof— (i)

whereon ten or more workers are working, or were working on any day of
the preceding. twelve months, and in any part of which a manufacturing
process is being carried on with the aid. of power, or is ordinarily so
carried on, or

Inspector under the Factories Act, 1948

Every District Magistrate shall be an Inspector for his district. (5) The State Government
may also, by notification as aforesaid, appoint such public officers as it thinks fit to be
additional Inspectors for all or any of the purposes of this Act, within such local limits as it
may assign to them respectively.

the objectives of factory inspector

Ensuring safety and hazard free working conditions to the workers engaged in the factories.
Ensuring safety to the people living in the vicinity of factories.

Inspector appointed under Factories Act

Inspection staff is appointed by the government of that state and that too through notification
which is given in the official gazette. Official gazette is a government magazine which is
published by the state or central government.

Q.7 Discuss the provisions relating to working hours and welfare

measures under the Factory Act, 1948

Factories Act 1948

The Factories Act, 1948, sets the safety standards for workers employed in factories. It is applied to
factories manufacturing goods, including weaving cloth, knitting of hosiery and other knitwear, clothing,
and footwear production, dyeing and finishing textiles, manufacturing footwear, etc.

The Factories Act, 1948, regulates the working hours for all workers. According to the Act, a working
week should not exceed 60 hours.
The objectives of this Act are to regulate the hours or working time in factories so that workers are not
overworked or unduly exhausted. The Act’s main objectives are also to protect workers’ health and safety.

Objectives of Factories Act, 1948

• To protect the health and safety of workers

• To ensure that factories adhere to global best practices in the factories

• To provide a fair and decent livelihood for all working-class people

• To reduce any social or industrial tensions

The Factories Act was passed in 1948 by the Parliament of India. The Act is landmark legislation aimed at
deriving maximum profit for the industrial sector in India. The Factories Act is also known as the Factories
(Amendment) Act, 1951, and it has been amended four times since its inception to meet the needs of
India’s industrial scenario and business practices. The Factories Act, 1948, falls under the category of
Labour Laws in India.

The Factories Act, 1948, repealed the Child Labour (Prohibition and Regulation) Act 1956; this Act was
applied to factories only employing 20 or more workers.

Period of application
The Factories Act was implemented in India following the general elections held in 1951 for the
Legislative Assembly of States and Union Territories that fall under the Indian Union, with effect from
June 15, 1951.

The Factories Act, 1948, was further amended in 1951, 1960, 1961, and 1972. In addition to this
amendment, the Rules of 1951, 1960, and 1961 have been amended. The Factories Act was applied to the
newly formed States in 1965 by the Chief Secretaries of these States.

It applies only to certain factories employing ten or more workers (including apprentices).

Provisions of Factories Act, 1948

Factories Act, 1948, limits work hours to 48 hours a week, and overtime work should not be more than
nine hours a day. Factory Schedule Rules specify that a limited working day shall not exceed ten
consecutive hours; this regulation does not apply during a public holiday or when an emergency requires
immediate action and substantial loss has occurred.
The Factories Act, 1948, sets the safety standards for workers employed in factories. It is applied to
manufacturing goods, including weaving, knitting of hosiery and other knitwear, clothing and footwear
production, dyeing and finishing textiles, etc.

The Factories Act, 1948, regulates the hours of work and minimum wages
The Factories Act, 1948, mandates the payment of minimum wages to the workers by prescribing a fixed
pay rate. An employer shall pay their employees at least the prescribed minimum wage rate. If an
employee is paid less than minimum wage, the employer should pay that employee at least what the law
requires. This Act reminds employers that any failure on their part to comply with its provisions will have
serious legal consequences.

The Act requires employers to allow a weekly holiday to their workers. It further makes it obligatory for
the employer to provide proper sanitary facilities and a clean potable water supply in the factory or
workplace. Strict action will be taken against the employer if they fail in providing these facilities to the
workers.

Employers are also required to set up first aid boxes in their factory, store first aid records, and ensure
proper arrangements for transporting injured workers to a hospital or in-house medical facilities.

Apart from these, the Act has several relevant provisions defining the duty of an employer who has in-
house medical facilities and the duty of a doctor who is an official medical officer at the factory. The Act
also defines the procedure to be followed if a complaint of any kind is received by or made to the
government’s labour department.

The Factories Act, 1948, also provides for implementing some administrative measures regarding which
subsequent governments have framed appropriate rules.

Some of these measures are as follows:

1. The Factory Act, 1948, has provisions for the constitution of a Child Labour Committee in every
factory. This committee should consist of employers, workers, representatives from local
authorities and a medical officer. The committee is responsible for regulating and controlling
employment in the age group of 14 to 18 years at factories where more than 20 persons are
employed.

2. An industrial dispute between the employer and worker(s) can be resolved by a Conciliation
Officer appointed by the government. The authority of this officer is to conciliate and not to
mediate.

3. The governments appoint labour officers to look after factory workers’ interests; this officer is a
government official. The labour officers must see that no violation of any provisions of the
Factories Act, 1948, takes place at any factory in their territories.
 4. The state governments or local authorities have set up welfare funds in every factory. This fund
may be established for general or specific purposes depending upon entrepreneurs’ or local
authorities’ initiatives.

Welfare measures
The three main components of welfare measures are occupational health care, appropriate
working hours, and appropriate remuneration. It speaks of a person’s complete health, including
their physical, mental, moral, and emotional states. The goal of welfare measures is to integrate
the socio-psychological demands of the workforce, the particular technological requirements, the
organisational structure and procedures, and the current socio-cultural environment. It fosters a
culture of work dedication in enterprises and society at large, ensuring increased employee
happiness and productivity.

Washing facilities (Section 42)

• All factories should supply and maintain enough appropriate washing facilities for the
use of the employees.
• For male and female employees, separate, well-screened facilities must be provided;
these facilities also need to be easily accessible and maintained clean.
• The standards for appropriate and suitable facilities for washing must be set by the
state government.

Facilities for storing and drying clothing (Section 43)

• The state government has a specific authority. It specifies that the state government
has the authority to give instructions to the manufacturers regarding where to store the
worker’s clothing.
• They can also provide them with instructions on how to dry the workers’ clothes. It
refers to the circumstance in which workers are not dressed for work.

Facilities for sitting (Section 44)

• All factories should provide and maintain seating arrangements in appropriate areas
for all workers who are required to work in a standing position in order to take
advantage of any chances for rest that may arise throughout the course of the job.
• According to the chief inspector, workers in any factory involved in a certain
manufacturing process or working in a specific room are able to perform their work
effectively while seated.
First aid appliance (Section 45)
• All factories must have first aid kits, appliances, or cupboards stocked with the
required supplies during all working hours, and they must be easily accessible for all
manufacturing employees to access. Accordingly, there must be more first aid boxes
or cupboards than the usual ratio of one for every 150 industrial employees, which
must be fewer than that.
• The first aid box or cupboard should only include the recommended supplies.
• Throughout the factory’s operating hours, each first aid box or cupboard should be
kept under the supervision of a specific person who is accountable for it on a separate
basis and must be readily available at all times during the working hours of the
factory.

Canteen (Section 46)

• A canteen must be provided and kept up by the occupier for the benefit of the workers
in any specified factory where more than 250 people are usually employed, according
to rules that the state government may set.
• Food must be served, and prices must be established for it.

Shelters, restrooms and lunch rooms (Section 47)

• Every factory with more than 150 employees must have appropriate and suitable
restrooms or shelters and a lunchroom with drinking water where employees can eat
food they have brought with them and that is kept for their use. If a lunchroom is
available, employees should stop eating in the work area.
• The shelters or restrooms need to be well-lighted, ventilated, kept clean, cool, and in
good condition.
• The state government sets the standards.

Creches (Section 48)

• Every factory with more than 30 female employees must have a suitable room for the
use of children under the age of six of such women.
• Such rooms must be well furnished, well-lighted, and ventilated, and they must be
kept clean and hygienic. They must also be under the care of women who have
received training in child and infant care.
• In addition, facilities for washing and changing clothes can be made available for the
care of the children of female workers.
• Any factory may be forced to provide free milk, refreshments, or both to such
children.
• Small children can be fed by their mothers in any industry at necessary intervals.
Q.8 What are different types of wages under the Minimum Wages
Act, 1948.

Types of wages

In 1948 a tripartite committee, known as the ‘Committee on Fair Wages’ was established. The
committee’s report was the benchmark for the formulation of wage policy in India. The
committee not only set guidelines for wage rates in the country but also laid down three kinds of
wages namely:

1. Minimum wage: This is the type of wage provided for bare subsistence so that the
workers can maintain a decent standard of living such as providing for education, medical
requirements and an adequate level of comfort.
2. Fair wage: Any wage paid to the employees that are more than the minimum wage is
known as a fair wage. It is the wage that seeks to maintain a level of employment in
the industry and also looks after the industry’s capacity to pay sufficient remuneration
to the employees.
3. Living wage: A living wage not only meets the minimum requirement of the
employees provided by the employers but also allows individuals or families to afford
adequate shelter, food, and other necessities. It also includes health, sanity, education,
dignity, comfort, and provide for any contingency.

Q.9 Discuss the procedure for claiming compensation under the

Workman’s Compensation Act, 1923

Workman’s Compensation Act, 1923

Compensation
Compensation – 2(I)(c) says that “Compensation” means compensation as provided
for by this Act. Compensation under this Act is not the same thing as damages in
Torts. Once the compensation is determined by the Commissioner on the basis of a
medical certificate issued by a qualified medical practitioner, it cannot subsequently
be upset on the ground that another doctor had after one an half years found some
improvement in the injured organ of the workman.
Dependant-
Meaning of Dependant- S. 2(I)(d) of the Act defines dependant. Under this sub-
section relations of a workman are divided into three classes. However, there is no
preferential right amongst dependants to maintain claim application. The dependants
are not classified in different categories in the sense that those specified in category I
will exclude other. Dependants belonging to any category may claim simultaneously.
Employer-
In view of S. 2(I)(e) employer includes the following-
(i) anybody of persons whether incorporated or not,
(ii) any managing agent or an employer,
(iii) legal representative of a deceased employer, and
(iv) when the services of a workman are temporarily lent on hire to another person by
the person with whom the workman has entered into a contract or service or
apprenticeship, means such other person while the workman is working for him.
Partial Disablement
Section 2g "partial disablement" means, where the disablement is of a temporary
nature, such disablement as reduces the earning capacity of a workman in any
employment in which he was engaged at the time of the accident resulting in the
disablement.
total disablement
Section 2 (L): "total disablement" means such disablement, whether of a temporary or
permanent nature, as incapacitates a workman for all work which he was capable of
performing at the time of the accident resulting in such disablement.
Wages under the WCA
The term ‘wages’ as defined in S. 2(I)(m) includes any privileges or benefit which is
capable of being estimated in money. The definition is not exhaustive. The following
are not wages;
(i) raveling allowance or the value of any traveling concession;
(ii) Contribution paid by the employer of a workman towards; (a) any pension,
or (b) any provident fund; and
(iii) Any sum paid to a workman to cover any special expenses incurred on
him by the nature of his employment,
(iv) Leave carried forward of next year.
Accident-
The expression “accident” has not been defined in the Act. It means any unexpected
mishap, untoward event, or consequence brought about by some unanticipated or
undersigned Act which, could not be provided against. The basic and indispensable
ingredient of the accident is the unexpectation. Whether a particular occurrence is
accident or not, it must be looked upon not only from the point of view of the person
who causes it but also from the point of view of the person who suffers it.
the expression ‘notional extension of time and place’ mean
It means that the employment of a workman may begin or may end not only when the
employee begins to work or leaves his tools but also when he used the means of
access and egress (the action or right of going or coming out) to and from the place or
employment.
 the employer is not liable to pay compensation to the workman
(i) If the injury did not result in total or partial disablement for a period exceeding
three days; and
(ii) In respect of any injury, not resulting in death, caused by the accident
indirectly attributable to – (a) The workman having been at the time of accident under
the influence of drink or drug; or (b) the willful removal or disregard by the workman
of any safety guards or other device which he knows to have been provided for the
purpose of securing the safety of the workman.

the remedies available to a workman in respect of injuries sustained by him

during the course of employment
(i) The workman can file a suit against employer for compensation u/s 3 of the
Workman’s Compensation Act, 1923, or
(ii) the workman can file a suit in the Civil Court for damages against; the
employer, or
(iii) the workman can enter into an agreement with the employer providing for
the payment of compensation in view of the provisions of S. 25 of the Workman’s
Compensation Act, 1923. The above remedies are alternative.
total disablement-
It means –
(i) disablement whether of a temporary or permanent nature, as incapacitates a
workman for all work which he was capable of performing at the time of the accident
resulting in such disablement and
(ii) the aggregate percentage of the loss of earning capacity amounts to 100%
pr more.
difference between total disablement and partial disablement
A partial disablement only reduces the earning capacity of a workman while a total
disablement incapacitates workman from all work, which he was capable of
performing at the time of the accident.
Q.10 Explain the following:

(a) Family Pension Scheme, 1971

(b) Payment of Gratuity Act,1972

(c) The provisions relating to health under the Factory Act, 1948

(d) The provisions relating to safety under the Factory Act, 1948
(a) Family Pension Scheme, 1971

In India, a family pension is provided to the family members of a deceased government. It is

a financial support system that is given to the family after the death of the employee. The
pension is usually paid to the spouse or dependent children of the employee.

In the case of Family Pension the widow is eligible to receive family pension on death of her
spouse after completion of one year of continuous service or even before completion of one
year if the Government servant had been examined by the appropriate Medical Authority and
declared fit for Government service.

Rule 54 of CCS (Pension) Rules, 1972  The employee has no control over
the family pension as he is not required to make any contribution to it. It is not a
property of the deceased employee/pensioner, therefore the entitlement for
family pension cannot be decided by succession certificate.  The rules do not
provide for any nomination, instead it designates the persons who are entitled to
receive family pension. Thus, no other person except those designated under the
rules is entitled to receive family pension

ADMISSIBILITY OF FAMILY PENSION Sub rule 2 of Rule 54 (i) after

completion of ONE YEAR of continuous service; (ii) before completion of one
year of continuous service, the deceased Govt. servant immediately prior to his
appointment was examined by the appropriate medical authority and declared fit
for Government service; (iii) after retirement from service and was on the date
of death in receipt of a pension;

2. CATEGORY OF FAMILY MEMBERS Sub rule 6 of Rule 54 For the

purpose of grant of family pension, the family shall be categorized as below: (i)
Spouse (ii) Children (iii) Parents (iv) Disabled Sibling

ELIGIBILITY CRITERIA OF FAMILY MEMBERS

RATE OF FAMILY PENSION (A) Enhanced Family Pension  If an employee

died while in service, family pension will be paid at enhanced rates i.e. 50% of
last pay for a period of l0 years. Sub rule 3 (i) of Rule 54  If an employee died
while in service, there shall be no requirement of minimum 7 years service. This
amended Rule has been effective from 1st October, 2019.  Families of
employees who died before completing service of 7 years within 10 years
before 1st October, 2019 will also be eligible for family pension at enhanced
rate.
On death of pensioner, family pension will be paid at enhanced rates i.e. 50% of
last pay for a period of 7 years from the day following the date of death or up to
the date on which pensioner would have attained the age of 67 years, whichever
is earlier. Sub rule 3 (ii) of Rule 54 (B) Ordinary Family Pension After the
completion of period of Enhanced Family Pension, ordinary family pension will
be paid at the rate of 30% of last pay. Sub rule 3 (i) & (ii) of Rule 54

If family pension is authorized to parents, it will be paid at the rate of 30% of

the last pay.

MAXIMUM LIMIT OF FAMILY PENSION  Maximum limit of Family

Pension at Enhanced Rate is Rs. 1,25,000/- per month.  Maximum limit of
Family Pension at Ordinary Rate is Rs. 75,000/- per month.  If the surviving
child is eligible for two family pensions, the amount of both the family pensions
shall be limited to Rs. 1,25,000/- per month at enhanced rate and Rs. 75,000/-
per month at ordinary rate.

NON ADMISSIBLITY OF FAMILY PENSION If a person is convicted for

the murder or abetting in the murder of the Govt. servant, such a person shall be
debarred from receiving the family pension. The family pension shall be
payable to next eligible member of the family. Sub rule 3 (ii) of Rule 54

FAMILY PENSION IN CASE OF MISSING EMPLOYEE/PENSIONER 

In the case of a missing employee/pensioner/family pensioner, the family can
apply for the grant of family pension & gratuity to the Head of Office of the
organization where the employee/pensioner had last served, 6 months after
lodging of Police report.  Filing of FIR should not be insisted upon.
Cognizance of a person's disappearance can be taken by the Head of Office on
the basis of an authenticated Daily Diary (DD)/General Diary Entry (GDE).

SANCTION OF FAMILY PENSION IN CASE OF DECEASED

PENSIONER If spouse name is indicated in the PPO, pension disbursing
authority will start the family pension after receiving death information of
pensioner in writing. Sub rule 81 (2) of Rule 54

(b) Payment of Gratuity Act,1972

The Payment of Gratuity Act, 1972

The Payment of Gratuity Act, 1972 is an Indian law that makes companies pay a one-time gratuity to
retired employees or an employee who resigns after a minimum of 5 years of service. The law applies to
all companies of at least 20 employees. [1]
The gratuity is 15 days' wages for every year of employee service, or partial year over six months.

In India, gratuity is a type of retirement benefit. It is a payment made with the intent of monetarily helping
an employee after his or her retirement. It was held by the Supreme Court of India in Indian Hume Pipe Co
Ltd v Its Workmen that the general principle underlying a gratuity scheme is that by service over a long
period the employee is entitled to claim a certain amount as a retirement benefit. [2]

The Payment of Gratuity Act was passed by the Parliament of India on 21 August 1972 and it came into
force on 16 September 1972.

Application and extent

The act applies to all factories, mines, oilfields, plantations, ports and railway companies. But in the case
of shops or establishments, other than those stated before, it applies to those organisations with 15 or more
people employed on any day of the preceding 12 months.

If the number of employee is below 10, the employer must still pay gratuities. Thus, no employer will be
able to refuse gratuity under this act based on the number of employees. The act does not apply to
apprentices and persons who hold civil posts under the Central Government or State Governments and are
subjected to any other act or rule other than this act. [3]

Payment of gratuity: Eligibility and calculation

Under Section 4, payment of gratuity is mandatory. [3] Gratuity shall be payable to an employee on
termination of employment after he has rendered continuous service for not less than five years in a single
organisation. The termination can be due to: Superannuation, Retirement or resignation, and Death
or disablement due to accident or disease. As per Section 4(1), the completion of continuous service of 5
years is not required where termination of employment is due to death or disablement. In such case
mandatory gratuity is payable. [3] The unpaid gratuity amount is seized by government which is further used
in holiday, vacations, parties and other fun related activities.

Gratuity is paid at a rate of 15 days' wages for every completed year of service or part thereof in excess of
six months. The wages here means wages last drawn by the employee. The "15 days' wages" will be
calculated by dividing the last drawn wages by 26 and multiplying the result with 15. But under Section
4(3), the maximum gratuity that is payable is fixed at ₹20,00,000. Any gratuity amount paid in excess of
₹20,00,000 is taxable in the employee's hands. [4]

(c) The provisions relating to health under the Factory

Act, 1948

Health
Sections 11-20 of Chapter III of the Act deal with the Health of the Factories Act, 1948.

Cleanliness (Section 11)

Every factory needs to be kept clean and clear of any effluvia from drains, latrines, or other
annoyances. In particular:

• Dirt must be cleaned daily from floors, benches, staircases, and passages by sweeping
or by another method, and it must be properly disposed of.
• The floor should be disinfectant-washed at least once a week.
• During the manufacturing process, the floor becomes moist; this must be drained via
drainage.

Disposal of wastes and effluents (Section 12)

Every factory has to have a method in place for treating wastes and effluents produced by the
manufacturing process they use.

Ventilation and temperature (Section 13)

• In order to ensure worker comfort and prevent health problems,
sufficient ventilation must be created for the circulation of air in a factory, which
should be maintained at a specific temperature.
• Walls and roofing should be made of a material that is intended for a particular
temperature that shouldn’t go over as much as possible.
• Certain precautions must be taken to protect the employees in facilities where the
manufacturing process requires extremely high or low temperatures.

Dust and fume (Section 14)

• Every factory has to have efficient measures to remove or prevent any dust, fumes, or
other impurities that might harm or offend the employees employed and cause
inhalation and buildup in any workroom.
• No factory may operate an internal combustion engine unless the exhaust is directed
outside, and no other internal combustion engine may be used. Additionally,
precautions must be made to avoid the buildup of fumes that might endanger the
health of any employees inside the room.

Overcrowding (Section 16)

• There should be no overcrowding in factories that might harm the health of the
workers.
• All employees must have ample space in a room to work in the building.

Lighting (Section 17)

 • Every area of a factory where employees are employed must have adequate natural,
artificial, or both types of lighting installed and maintained.
• All glass windows and skylights that provide lighting for the workroom in factories
must be kept clean on the inside and outside.
• The production of shadows should not cause eye strain during any manufacturing
process, and all factories must have preventative measures that should not cause glare
from the source of light or via reflection from a smooth or polished surface.

Drinking (Section 18)

• All factories must have the appropriate installations in place, and maintain convenient
locations with an adequate supply of clean drinking water.
• The distance between any drinking water and any washing area, urinal, latrine,
spittoon, open drain carrying sullage or effluent, or another source of contamination in
the factory must be 6 metres unless the chief inspector approves a shorter distance in
writing. The labelling must be legible and in a language that workers could
understand.
• In all factories with more than 250 regular employees, there needs to be a suitable
method for providing cold drinking water during hot weather.

Latrines and urinals (Section 19)

• All factories should have enough restrooms, and urinal accommodations of the
required types must be offered in a location that is convenient and always accessible
to workers.
• Male and female employees must have separate enclosed rooms.
• These locations must be thoroughly cleaned, kept in a hygienic state, and have
sufficient lighting and ventilation.
• Sweepers must be used to maintain latrines, urinals, and washing facilities clean.

Spittoons (Section 20)

• All factories must have spittoons in easily accessible locations, and they must be kept
clean and hygienic.
• The state government specifies the number of spittoons that must be given, their
placement in any factory, as well as their maintenance in a clean and hygienic manner.
• Except for spittoons designed, for this reason, no one should spit within the premises
of a factory. A notice must be posted if any violations occur, with a fine of five rupees.

(d) The provisions relating to safety under the Factory

Act, 1948
Safety
Safety is covered in Chapter IV of the Act and is covered in Sections 21–41 of the Factories Act,
1948.

• Employment of young persons on dangerous machines (Section 23):

No young person is permitted to operate dangerous machines unless he has been adequately
taught the hazards associated with the machine and the measures to be taken, and has received
suitable training in working at the machine or adequate supervision by a person who has complete
knowledge and experience of the equipment.

• Prohibition of employment of women and children near cotton openers (Section

27):
Women and children are not permitted to work in any area of a cotton pressing facility while a
cotton opener is in operation. Women and children may be employed on the side of the partition
where the feed-end is located if the inspector so specifies.

• Hoists and lifts (Section 28):

o Every hoist and lift must be of strong mechanical structure, enough
strength, and sound material. They also need to be regularly maintained,
completely checked by a qualified person at least once every six months,
and a register kept for the mandatory exams.
o A cage that is properly designed and installed must enclose all hoist and lift
ways to prevent people from being trapped between any of the equipment.
o No larger load should be carried; the maximum safe operating load must be
marked on the hoist or lift.
o Every hoist or lift gate must have interlocking or another effective system
installed to prevent the gate from opening except during landing.
• Protection of eyes (Section 35):
The state government may require effective screens or appropriate goggles to be provided for the
protection of persons employed or in the vicinity of the process during any manufacturing process
carried out in any factory that involves risk to the eyes due to exposure to excessive light or
injury to the eyes from particles or fragments thrown off during the process.

• Precautions against dangerous fumes, gases etc (Section 36):

No person shall be required or permitted to enter any chamber, tank, vat, pit, pipe, flue, or other
confined space in any factory where any gas, fume, vapour, or dust is present to such a degree as
to involve risk to persons being overcome, unless such chamber, tank, vat, pit, pipe, flue, or other
confined space is provided with an adequate manhole or other effective means of egress.

• Explosive or inflammable dust, gas etc (Section 37):

 o Any factory involved in manufacturing processes that produce dust, gas,
fume, or vapour of a nature that could explode on ignition must take all
reasonably practicable precautions to prevent any explosion through
o The effective enclosure of the plant or machinery.
o The removal or prevention of the accumulation of such dust, gas, fume, or
vapour, etc., or
o Otherwise by the exclusion or effective enclosure of all potential ignition
sources.
• Precautions in case of fire (Section 38):
o In order to protect and maintain safety to allow people to escape in the case
of fire, all factories should have precautionary measures in place to avoid
the breakout and spread of fire, both internally and externally. The required
tools and facilities for extinguishing the fire must also be made accessible.
o All factory employees who are familiar with fire escape routes and have
received sufficient training on the procedure to be followed in such
circumstances must have access to appropriate measures.