E-Library

What is the field of operation of the Act?

In the first instance the operation of the Act is confined to the municipal areas specified in Schedule I to the Act. But the State Government is required to extend the operation of the Act to other areas having population of 25,000 and more. {Section 1}

What types of premises are governed by the Act?

Broadly speaking the premises governed by the Act are shops, commercial establishments, residential hotels, clubs, restaurants, eating houses, theatres and other places of public amusement or entertainment. {Preamble}

Is the Act applicable to the establishments of the Central Government and the State Government?

The establishment of the Central Government and the State Government are exempted from all provisions of the Act {Section 4 & Schedule II Entries 1 & 2}

Is the Act applicable to a Shop or commercial establishment situate within the precincts of a factory?

If such a shop or commercial establishment is not connected with the manufacturing process of the factory the provisions of the Act will apply to it. Otherwise the provisions of the Factories Act will apply to it. {Section 70

Is an establishment where services are rendered to customers a shop?

According to the definition of a shop, an establishment where goods are sold or an establishment where services are rendered to customers is a shop. {Section 2(27)}

Is an establishment carrying on the business of playing music on occasions such as marriages and other social functions a shop?

A place where services are sold on retail basis is also a shop. Therefore, an establishment engaged in arranging for musical performance on occasions such as marriages etc., is a shop.

Is an association of flat owners, which is formed to look after the welfare and common interests of the flat owners/residents, a shop or a commercial establishment?

Such an association, which is only for the benefit of its members and which is neither carrying on any trade or business nor rendering any services to outsiders, will not come within the definition of the term "shop" or "commercial establishment".

Can a church be treated as a shop or commercial establishment?

A church is neither a shop nor a commercial establishment. It will be stranger than fiction to hold that the devotee who goes to the church is a "customer" and the church is a commercial establishment or shop where "services are rendered".

What is the procedure for getting an establishment registered under the Act?

(a) The employer of an establishment has to apply to the Inspector of the local area concerned in the prescribed form (Form A) along with the prescribed fees for getting the establishment registered under the Act.

(b) On receipt of the application and the fees the Inspector, on being satisfied about the correctness of the particulars contained in the application, will register the establishment and will issue a registration certificate.

(c) If there is any change in the said particulars, the employer has to notify the same to the Inspector by applying in the prescribed form (Form E) accompanied by prescribed fees and get the registration certificate suitable amended.

(d) The employer has to get the registration certificate renewed every year by applying to the Inspectors in the prescribed form (Form B) accompanied by prescribed fees. {Section 7 & 8 Rule 5 & 8}

If an employer, whose establishment is already registered, starts a new business in addition to the original business on the same premises, is he required to obtain a fresh registration for the new business?

As the establishment of the employer is already registered, he has only to notify to the Inspector under section 8 of the Act the change that he has started a new business in addition to the original business on the same premises.

Is it necessary for an employer to notify the closing of his establishment?

An employer is required to notify to the Inspector the closing of his establishment within 10 days of his doing so. The Inspector will then cancel the registration of the establishment. {Section 9}

What should be done if a registration certificate is lost?

If a registration certificate is lost, destroyed or defaced the employer should obtain a duplicate copy of the certificate by making a necessary application and paying the prescribed fees to the Inspector who had issued the certificate. {Rule 7}

What is the provision about the renewal of a registration certificate?

A registration certificate will be valid upto the end of the year for which it is granted. It should be renewed every year. The application for renewal should be made not less than fifteen days before the date of expiry of the registration certificate. A registration certificate may be renewed, at the option of the employer, for a period of three years. {Section 7(2A) & (2AA)}

What are the restrictions on the working hours of employees in shops and commercial establishments?

The main restrictive provisions of the Act about the working hours of employees in shops and commercial establishments are as follows:

a. The general rule about the opening hours of shops is that they are not allowed to be opened earlier than 7 a.m. But shops selling goods like milk, vegetable, fish etc., are allowed to be opened from 5 a.m. onward. {Section 10}

b. This general rule about the closing hours of shops is that they must be closed at the latest by 8.30 p.m. But shops selling goods like pan, bidi, etc., are allowed to be kept open upto 11 p.m. {Section 11}

c. Commercial establishment are not allowed to be opened earlier than 8.30 a.m. and closed later than 8.30 p.m. in a day {Section 13}

d. An employee in a shop or commercial establishment cannot be required or allowed to work for more than 9 hours in a day and 48 hours in a week. {Section 14}

e. He must be allowed an interval of rest of at least one hour after five hours of continuous work {Section 15}

f. His spread-over cannot exceed 11 hours in a day. {Subsection 16 & 17}

g. Every shop and commercial establishment must remain closed on one day of the week. No deduction can be made from the wages of any employee in a shop or commercial establishment on account of any day on which it has so remained closed. {Section 18}

Note: The above restrictions can be relaxed in certain circumstances.

What are the restrictions on the working hours of employees in residential hotels, restaurants and eating houses?

The main restrictive provisions of the Act about the working hours of employees in residential hotels, restaurants and eating houses are as follows:

a. A restaurant or eating house cannot be opened earlier than 5 a.m. and closed later than 12 midnight for service. {Section 19}

b. An employee in a restaurant or eating house may be required to commence work from 4.30 a.m. onwards. He cannot be required to work after 00.30 a.m. {Section 19}

c. An employee in a residential hotel, restaurant or eating house cannot be required or allowed to work for more than 9 hours in a day and 48 hours in a week. {Section 21}

d. He must be allowed an interval of rest of at least one hour after five hours of continuous work. {Section 22}

e. His spread-over cannot exceed 12 hours in a day. {Section 23}

f. He must be given at least one day in a week as a holiday. No deduction can be made from his wages on account of such holiday. {Section 24}

Note: The above restrictions can be relaxed in certain circumstances.

What are the restrictions on the working hours of employees in theatres and other places of public amusement or entertainment?

The main restrictive provisions of the Act about the working hours of employees in theatres and other places of public amusement or entertainment are as follows:

a. A theatre or other place of public amusement or establishment must be closed at the latest by 00.30 a.m. {Section 26}

b. An employee in a theatre or other place of public amusement or entertainment cannot be required or allowed to work for more than 9 hours in a day or 48 hours in a week {Section 28}

c. He must be allowed an interval of rest of at least one hour after five hours of continuous work. {Section 29}

d. His spread-over cannot exceed 11 hours in a day. {Section 30}

e. He must be given at least one day in a week as a holiday. No deduction can be made from his wages on account of such holiday. {Section 31}

Note: The above restrictions can be relaxed in certain circumstances.

Is there any restriction placed by the Act on the employment of children?

The employment of children is totally prohibited. Anybody who is below the age of 15 years is considered to be a child. No child can be required or allowed to work whether as an employee or otherwise in any establishment. {Section 32}

Are there any restrictions place by the Act on the employment of women?

Restrictions are placed on the closing hours for women as well as on giving then dangerous work. Thus no woman can be required or allowed to work, whether as an employee or otherwise, in any establishment after 9.30 p.m. In other words, women cannot be required or allowed to attend work late in the evening. Similarly no woman working in any establishment, whether as an employee or otherwise, can be required or allowed to perform work involving danger to her life, health or morals. {Subsection 33 & 34A}

Are there any restrictions placed by the Act on the employment of young persons?

Anybody who is between the age of 15 years and 17 years is considered to be a young person. No young person can be required or allowed to work, whether as an employee or otherwise, in any establishment:

a. after 7.00 p.m.;

b. for more than 6 hours in any day; and

if the work involves danger to life, health or morals. {Section 33, 34 & 34A}

What are the provisions of the Act about the grant of annual leave to the employees?

The main provisions of the Act about the grant of annual leave with wages are as follows:

a. An employee is entitled to annual leave with pay for 21 days for 240 days of work.

b. An employee who has not worked for one year is entitled to leave with pay for 5 days for every 60 days of work.

c. An employee is entitled to be paid before his leave begins half the amount of his leave pay.

d. Leave with pay can be accumulated upto 42 days.

A discharged employee is entitled to leave pay for the balance of leave to his credit. { Subsection 35 to 37}

Are the employees of shops and establishments entitled to any additional holidays over and above leave with pay?

In addition to annual leave with pay an employee of a shop or re-establishment is entitled to a paid holiday on 26th January, 1st May, 15th August and 2nd October every year. {Section 35(4)}

Is the Payment of Wages Act, 1936 applicable to employees of establishments covered under the Bombay Shops and Establishments Act?

Section 38 of the Bombay Shops and Establishments Act gives power to the State Government to extend the application of the Payment of Wages Act to any class of establishments or any glass of employees to which the Bombay Shops and Establishments Act applies. Accordingly the State Government has extended the application of the Payment of Wages Act to establishments situated in Greater Bombay, Thane, Poona, Sholapur, Kolhapur and Nagpur.

Is the Workmen's Compensation Act, 1923 applicable to employees of establishments covered under the Bombay Shops and Establishments Act?

According to Section 38-A of the Bombay Shops and Establishments Act, the provisions of the Workmen's Compensation Act are application to employees of establishments to which the Bombay Shops and Establishments Act applies.

Can an employee working in a clerical capacity in an establishment covered by the Bombay Shops and Establishments Act claim compensation under the Workmen's Compensation Act, 1923? Is he required to prove that he is a workman under the Workmen's Compensat

An employee working in a clerical capacity in an establishment to which the Bombay Shops and Establishments Act applies is entitled to claim compensation under the Workmen's Compensation Act. By virtue of Section 38-A of the Bombay Shops and Establishments Act he is deemed to be a workman within the meaning of the Workmen's Compensation Act and, therefore, it is not necessary for him to prove that he is a workman under the said Act.

Is the Industrial Employment (Standing Orders) Act, 1946 applicable to employees of establishments covered under the Bombay Shops and Establishments Act?

According to Section 38-B of the Bombay Shops and Establishments Act the provisions of the Industrial Employment (Standing Orders) Act, in its application to the State of Maharashtra, are applicable to all establishments wherein fifty or more employees are employed and to which the Bombay Shops and Establishments Act applies.

Is the Maternity Benefit Act, 1961 applicable to employees of establishments covered under the Bombay Shops and Establishments Act?

Section 38-C of the Bombay Shops and Establishments Act as well as the proviso to sub-section (1) of Section 2 of the Maternity Benefit Act give power to the State Government to extend the application of the Maternity Benefit Act to women employees in any establishment or class of establishments. Accordingly the State Government has extended the application of the Maternity Benefit Act to all shops, commercial establishments, residential hotels, restaurants and eating houses to which the Bombay Shops and Establishments Act applies but the Employees' State Insurance Act does not apply.

What are the measures to be taken by an establishment in respect of the health and safety of the employees?

Every establishment must take appropriate measures as

a. per the provisions of the Act and the Rules:

b. to keep the premises clean;

c. to keep the premises ventilated;

d. to keep the premises sufficiently lighted during working hours;

e. to protect the premises against fire; and

if a manufacturing process is carried on in the premises to provide and maintain a first-aid box.

What are the powers of the Inspectors appointed under the Act?

An Inspector appointed under the Act has power:

a. to enter any place which is an establishment;

b. to make examination of the premises, registers, records and notices;

c. to take evidence of any person;

if he suspects that an employer has committed an offence under Section 52 or 55, to seize the necessary registers, records or other documents and retain them for a reasonable period for examination thereof or for prosecution of the employer. {Section 63}

What is the rate of wages prescribed under the act for overtime work?

When any employee is required to work overtime, i.e. in excess of the limit of hours of work, he must be paid for a such work at double the rate of his ordinary wages. The limit of hours of work for the purpose of calculating overtime is 9 hours in any day and 48 hours in any week {Section 63}

What are the requirements of the Act regarding notice of termination of service of an employee?

(1) If an employer wants to terminate the services of any employee who has been in his continuous service employment for one year or more, the employer can terminate his services by giving him 30 days' notice in writing or wages in lieu of such notice.

(2) If an employer wants to terminate the services of any employee who has been in his continuous service employment for less than one year but more than three months, the employer can terminate his services by giving him 14 days' notice in writing or wages in lieu of such notice. {Section 66}

What is the effect of the termination of services of an employee without giving such person notice or wages in lieu of notice as per Section 66 of the Act?

If the services on an employee are terminated without giving such person any notice or wages in lieu of notice, as per Section 66 of the Act, his termination is bad in law and he is entitled to reinstatement with continuity of service and full back wages.

Is it necessary to give such notice even when an employee is discharged or dismissed for misconduct?

When an employer terminates the services of any employee (by way of discharge or dismissal) for misconduct, the employer need not give any notice to the employee. {Section 66 Proviso}

What is the effect of other laws conferring on an employee rights or privileges which are more favourable than those conferred under the Shops and Establishments Act?

If the rights or privileges conferred on an employee under any other law, contract, custom, usage, award, settlement or agreement are more favourable than those conferred under the Shops and Establishments Act, then, the former will prevail over the latter. {Section 69}

What type of registers or record is required to be maintained under the Act by an employer?

Every employer or manager of a shop or commercial establishment has to maintain various registers like register of employment, a register of leave, a visit book, etc, as detailed in Rules made under the Act. He has also to maintain certain records and display certain notices as per the Rules. {Section 62 & Rule 20}

Is an employee permitted to work in any establishment when he is given a holiday or when he is on leave?

An employee who is given a holiday or who is on leave in accordance with the provisions of the Act is prohibited from working in any establishment on such holiday or during such leave. {Section 65}

Is the Act applicable to a shop or commercial establishment situate in any factory precincts?

If any shop or commercial establishment situate within the precincts of a factory is not connected with the manufacturing process of the factory, it will be governed by the Shops and Establishments Act. But the State Government can apply all or any of the provisions of the Factories Act to such shop or commercial establishment. {Section 70}

Is the establishment of a legal practitioner a commercial establishment?

The professional activity of a legal practitioner could not be included in the definition of "commercial establishment".

It is permissible for the Government to exempt establishments from the provisions of the Act?

Exemptions are of two kinds, temporary exemption from the "operation" of the provisions of the Act and permanent exemption from the "application" of the provisions of the Act are as follows:

a. The Government, by issuing a general notification, can temporarily exempt all establishments from all or some of the provisions of the Act by suspending the operation of such provisions on account of any holidays or festive occasions.

The Government, by issuing a special notification, can permanently exempt any establishment from all or some of the provisions of the Act by making such provisions inapplicable to that establishment on account of the special requirement of that establishment. {Subsection 4 & 6}

Can a Nationalized Bank claim exemption from the provisions of the Act?

A Nationalized Bank is not an establishment of the Central Government nor is there any specific exemption from the provisions of the Act for Nationalized Banks as in the case of the Reserve Bank of India and the State Bank of India. A Nationalized Bank cannot, therefore, claim exemption from the provisions of the Act.

What are the offences under the Act and punishment for them?

There is a large number of offences under the Act and the majority of them are punishable with fine which would be not less than fifty rupees and which may extend to five hundred rupees. {Subsection 52 to 61}

Did the Bombay Shops and Establishments Act, an existing State Act, stand automatically or impliedly repealed on coming into operation of the Motor Transport Workers Act, a Central Act?

The provisions of the two Acts are neither inconsistent nor repugnant and, therefore, there is not question of either automatic or implied repeal of the Bombay Shops and Establishments Act on coming into operation of the Motor Transport Workers Act.

Which establishment are covered by the Act?

The Act is applicable to:

a. every factory engaged in any industry specified in Schedule I to the Act and employing 20 or more persons;

b. every other establishment employing 20 or more persons specified by the Central Government in this behalf.

Any establishment to which the Act applies shall continue to be governed by the Act even if the number of persons employed therein at any time falls below 20. {Section 1(3) & (5)}

Would the Act continue to apply to an establishment which has closed its manufacturing activities and does not employ a single employee?

Where there is neither an establishment nor an employer nor an employee, there is no point in saying that the Act would continue to apply. In such circumstances any continued application of the Act would be in vacuum.

Is the Act applicable to a factory which is closed down but is employing a few employees to look after the assets of the establishment?

Where a factory is closed down for good and only four security men are retained for keeping a watch over the assets and properties of the establishment, the Act would not continue to be applicable to the factory

Is the Act applicable to charitable institutions?

The plea that an establishment is a charitable institution is not relevant to the determination of the question of the applicability of the Act

Are "home workers" in the beedi industry entitled to the benefit of the Act?

The workers employed at their homes in the manufacture of beedis are also entitled to the benefit of the Act and the Schemes framed thereunder.

Is a trainee an "employee" under the Act?

The provisions of Section 2(f)(ii) of the Act and Para 2(f)(iv) of the Scheme framed under the Act are to be kept in mind while considering if a trainee is an employee or not. These provisions show that a trainee who is an apprentice engaged under the Apprentices Act, 1961 or who is an apprentice according to the certified standing orders applicable to the establishment is excluded from the definition of an employee under the Act.

Is a partner of a firm an employee under the Act?

For the purpose of the Employees Provident Funds Act a partner of a partnership firm cannot be said to be an employee of the firm having regard to the provisions of the Indian Partnership Act. A person cannot be both an employer and employee.

Does the Act apply to a poly clinic?

A poly clinic is covered by the entry in respect of "establishments of hospital" as well as the entry in respect of "establishment of Medical Practitioners and Specialists" and therefore the Act applies to a poly clinic. The object (of the two entries) is to bring all medical establishments employing 20 or more persons under the purview of the Act.

Can the Act be extended to other factories or establishments?

The Central Government has been given wide powers to extend the application of the Act. It can apply the provisions of the Act-

a. to any factory or establishment even if such factory or establishment is employing less than 20 persons; {Section 1(3)(b) Proviso}

b. to any factory or establishment whatsoever if the employer and the majority of the employees of such factory or establishment have agreed that the provision of the Act should be made applicable to it on and from the date of such agreement or from any subsequent date specified in such agreement; {Section 1(4)}

c. to any factory employing 20 or more persons but not engaged in any industry specified in Schedule I to the Act. {Section 4}

where, immediately before the Act becomes applicable to any establishment there is a provident fund which is common to the employees in that establishment and employees in any other establishment, to such other establishment. {Section 3}

It is permissible to exempt any establishment from the operation of the Act because of their financial position?

The Act permits the Central Government, subject to specified conditions, to exempt any class of establishments from the operation of the Act, if having regard to their financial position or other circumstances of the case, it is necessary or expedient to do so. {Section 16(2)}

Are there any establishments to which the Act is not applicable at all?

The Act is not applicable -

a. to any factory or other establishment registered under any Central or State law relating to co-operative societies, employing less than 50 persons and working without the aid of power;

b. to any establishment belonging to the Central Government or a State Government and having a scheme of contributory provident fund or old age pension;

to any establishment set up under any Central or State Act and having a scheme of contributory provident fund or old age pension; {Section 16(1) and (c)}

Are the orders issued by the Central Government or the orders passed by the Central Provident Fund Commissioner appealable?

An appeal lies to the Provident Funds Appellate Tribunal-

1. against any order passed under the proviso to subsection (3) of section 1, applying the provisions of the Act to any establishment employing less than twenty persons;

2. against any orders passed under subsection (4) or section 1, applying the provisions of the Act to any establishment on the application of the employer and employees;

3. against any notification of the Central Government under section 3, applying the provisions of the Act to any establishment having a common provident fund with another fund with another establishment to which the Act is applicable;

4. against any order passed under subsection (1) of section 7A, deciding any dispute regarding the applicability of the Act to any establishment and determining the amount due from any employer under the Act or any Scheme framed under the Act;

5. against any order passed under section 7B reviewing his own order;

6. against any order passed under section 7C, re-opening any case and redetermining the amount due from any employer;

7. against any order under section 14B, levying for de-fault any damages upon any employer by way of penalty.

Is a Writ Petition against an order under Section 7A of the Act maintainable?

Under Section 7-I of the Act an appeal against such order lies to E.P.F. Appellate Tribunal and as such a Writ Petition against such order is not maintainable.

Who is the authority to decide disputes regarding the applicability of the Act to an establishment or as to the quantum of the moneys due from any employer?

If any dispute arises regarding the applicability of the Act to an establishment or as to the amount of moneys due from any employer under the Act or any Scheme, the Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner, or any Assistant Provident Fund Commissioner may decide the same by holding an enquiry. {Section 7(A)}

In what manner can the employer recover the moneys paid by him for or on behalf of a contractor?

If the employer pays any contribution or administrative charges for or on behalf of a contractor, he can recover the same from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor. The contractor can, then recover the employee's contribution from the wages of the employee. {Section 8(A)}

What are the various modes in which the Central Regional Provident Fund Commissioner can recover arrears of any amount due from any employer under section 8 of the Act?

The Central Regional Provident Fund Commissioner can recover such arrears-

1. by issuing a certificate to the Recovery Officer to recover the arrears from the employer by one or more of the modes mentioned in section 8-B;

2. by requiring any person from whom any money is due to the employer to deduct the amount of arrears from such money and pay the same to him, i.e., the Central Regional Provident Fund Commissioner;

3. by issuing a notice to any person from whom any money is due to the employer, requiring to pay the amount of arrears to him, i.e., the Central Regional Provident Fund Commissioner;

4. by applying to the Court, in whose custody there is any money belonging to the employer, for payment of the amount of arrears from such money to him, i.e., the Central Regional Provident Fund Commissioner;

by distraint and sale of the moveable property of the employer in the manner laid down in the Third Schedule to the Income Tax Act, 1961. {Subsection 8(B) to 8(G)}

Can Recovery Officer impose interest on the amount mentioned in the Recovery Certificate?

The position of a Recovery Officer in exactly that of an executing court. He can recover only the amount specified in the certificate. If the certificate does not include any interest, it is beyond the competence of the Recovery Officer to demand such amount.

Can the amount standing to the credit of any member in the Fund be assigned, charged or attached?

The amount standing to the credit of a member in the Fund cannot be assigned, charged or attached under any decree or order of any Court. Similarly, the amount standing to the credit of a member in the Fund at the time of his death is free from any debt or other liability incurred by the member before his death and cannot be attached under any decree or order of any Court. {Section 10}

What does it mean when section 10(2) of the Act says that the amount standing to the credit of a member in the Fund at the time of his death and payable to his nominee shall vest in the nominee?

Vesting of the amount in the nominee is for limited purpose of receiving the amount from the employer and handing over the same to the heirs entitled thereto. The nominee is merely authorized to receive the amount for the benefit of heirs of the deceased.

Can a nominee of a deceased employee claim an absolute right in respect of the amount of provident fund of the deceased employer?

The nominee cannot claim an absolute right to the amount excluding the right of the heirs. An heir of the deceased employee can always initiate legal proceedings against the nominee for claiming his share in accordance with the law of succession.

What are the powers of the Inspectors appointed under the Act?

An Inspector appointed under the Act has power-

1. to require any employer or contractor to furnish any information required by him;

2. to enter and search any establishment or premises and require any one found in charge thereof to produce any accounts, books, registers and other documents relating to employment or wages for his examination;

3. examine any employer or his agent, servant or employee found in such establishment or premises;

make copies of any book, register or other document or seize such books, register or other document. {Section 13}

If any establishment has departments or branches, are these departments or branches, to be treated as separate establishments or parts of the same establishments?

Where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. {Section 2(A)}

What happens to a private provident fund of an establishment when that establishment is covered under the statutory Provident Fund Scheme?

On the application of the statutory Provident Fund Scheme to an establishment, the accumulations in the private provident fund in that establishment standing to the credit of the employees who become members of the statutory Provident Fund must be transferred to the statutory Provident Fund. The accumulations will be credited to the accounts of the employees entitled thereto in the statutory Provident Fund. {Section 15}

What are the offences under the Act what is the punishment for them?

a. If any person, for the purpose of avoiding any payment to be made under the Act or the Schemes, knowingly makes any false statement or false representation, he would be punished with imprisonment upto one year, or with fine upto Rs. 5000.00 or with both.

b. If any employer makes default in payment of the employer's contribution or the employee's contribution payable under the Employees' Provident Funds Scheme or paragraph 38 of the said scheme relating to the payment of administrative charges, or under section 17(3)(a) of the Act relating to the payment of inspection charges, he would be punished with imprisonment upto three years but it shall not be less than one year and a fine of Rs. 10000.00 in case of default in payment of the employee's contribution which has been deducted by the employer from the employees' wages and six months and a fine of a Rs. 5000.00 in any other case.

c. If any employer makes default in payment of the employer's contribution or the administrative charges payable under the Deposit Linked Insurance Scheme under section 6-C or contravenes the provisions of section 17(3)(a) relating to the payment of inspection charges, he would be punished with imprisonment upto 1 year, but which shall not be less than 6 months, plus fine upto Rs. 5000.00

d. If any person contravenes or makes default in complying with any other provision of the Act or any condition for exemption from any scheme, he would be punished with imprisonment upto six months but which shall not be less than 1 month and with fine upto Rs. 5000.00 or with both.

If any person convicted of an offence under the Act or the Schemes commits it again, he would be punished with imprisonment upto five years but which shall not be less than two years, plus fine upto Rs. 25000.00 {Section 14 & 14(AA)}

Is there any period of limitation for exercising the powers of levying damages under section 14-B of the Act?

No period of limitation is prescribed in the Act for exercising the power of levying damages under section 14-B of the Act.

Are there any guidelines for quantifying damages Leviable under section 14-B of the Act for making default in payment of contribution?

In 1991, the Central Government, by inserting Para 32-A in the Employees' Provident Funds Scheme, has laid down different rates of damages depending upon the period of default. Courts have held that it is not just and fair to levy damages at a flat rate for different periods of default.

Is any damage leviable on the employer delaying any payment due from him under the Act or the Schemes?

If any employer makes default-

i. in the payment of any contribution to any Fund;

ii. in the transfer of accumulations as required under Section 15(2) or Section 17(5);

in the payment of any charges payable under the Act or Schemes the Central/Regional Provident Fund Commissioner can levy and recover from the employer by way of penalty such damages not exceeding the amount of arrears, as may be specified in the scheme. The Central Board may reduce or waive the damages levied by the Commissioner in certain case. {Section 14(B)}

Could the employer be punished under section 14-B in case the remittance of contribution by him is delayed in a bank of post office?

If the remittance of contribution to Provident Fund is delayed on account of the delay in a Bank or post office, the employer cannot be penalized for it under section 14-B.

Is the employer liable to pay the contribution when he is not in a position to pay wages to the employees?

The employer is liable to pay the employer's contribution as well as the employee's contribution irrespective of the fact that wages have been paid to the employees or not.

Is there any offence under the Act which is cognizable?

The offence relating to default in payment of any contribution especially the employee's share deduct from the wages of the employees by the employer is cognizable. That means a person committing such offence can be arrested by the police without warrant. {Section 14(AB)}

Is it permissible under the Act to exempt any establishment from the operation of any Scheme?

The Act permits the Central Government or the State Government, subject to specified conditions, to exempt any establishment from the operation of all or any of the provisions of any Scheme if the Government thinks it fit to do so having regard to the adequacy of the benefits similar to those of the Schemes available to the employees of such establishment. {Section 17(1)}

Are exempted establishment exempted from the provision of the Act?

The provisions of sections 6, 7-A, 8 and 14-B shall, so far as may be, apply to the employer of the exempted establishment and where such employer contravenes, or makes default in complying with any of the said provisions or any other provision of the Act, he shall be punishable under section 14 as if the said establishment had not been exempted. {Section 17(1A)}

Are any employer allowed to maintain a Provident Fund account in relation to their establishments?

The Central Government is empowered to authorize any employer of an establishment employing one hundred or more persons to maintain a Provident Fund account in relation to the establishment so as to ensure prompt service to the members of the Fund. {Section 16(A)}

Equal pay for equal work

No employer shall pay to any worker employed by him remuneration at rates less favourable than those at which remuneration is paid by him to the workers of the opposite sex for performing the same work or work of similar nature. {Section 4(1)}

No discrimination to be made while recruiting men and women

No employer shall make any discrimination against women while making recruitment for the same work or work of a similar nature. {Section 5}

Exceptions

The provisions of the Act shall be inapplicable when special treatment is given to women under any law or when special treatment is accorded to women in connection with the birth of a child. {Section 15}

Claims and Complaints

a) Complaints with regard to the contravention of any provision of the Act and claims arising out of non-payment of wages at equal rates to men and women workers for the same work or work of similar nature shall be heard and decided by an authority appointed by the appropriate Government. An appeal shall lie against any order of the authority to an appellate authority appointed by the appropriate Government (Section 7)

b) Monies due from an employer arising of the decision of the authority or the appellate authority can be recovered by making an application under Section 33-C(1) of the Industrial Disputes Act, 1947. (Section 7(8))

Penalties

If any employer:-

(a) makes any recruitment in contravention of the provisions of the Act, or

(b) makes any payment of remuneration at unequal rates to men and women workers, for the same work or work of a similar nature, or

(c) makes any discrimination between men and women workers in contravention of the provisions of the Act, he would be punished with fine upto Rs. 10000.00 {Section 10}

Maintenance of Register

Every employer shall maintain in the prescribed form (Form D) a register in relation to the workers employed by him. {Section 8 & Rule 6}

What is meant by equality of work?

The equality of work is not based on the designation or the nature of work alone. There are several other factors, which are equally relevant. They are qualifications, responsibilities, reliabilities, experience, confidentiality, functional need and requirements commensurate with the position in the hierarchy.

The object of the Maternity Benefit Act, 1961

The Object of the Act is (1) to provide for maternity benefit to women workers in certain establishments; (2) to regulate the employment of women workers in such establishments for certain period before and after child birth.

Establishments are covered by the Act

The Act applies to (1) every establishment being a factory, mine, plantation or circus; (2) every shop in which 10 or more persons are employed; (3) any other establishment to which the Act is applied by the State Government under the proviso to Section 2(1)

Note: (1) The Act applies to a factory, mine or plantation belonging to Government. (2) The Act does not apply to any factory or other establishment to which the provisions of the Employees' State Insurance Act apply. {Section 2}

Is there any justification for denying the benefits of the Maternity Benefit Act to women workers on the ground that they are not regular employees but they are on the muster roll?

The Supreme Court, in Municipal Corporation of Delhi v. Female workers (Muster Roll) & Anr. (2000 I C.I.R. 879) has said; "We have scanned the different provisions of the Act, but we do not find anything contained in the Act which entitles only regular woman employees to the benefit of maternity leave and not those who are engaged on casual basis or on muster roll on daily wage basis."

Restrictions placed by the Act on the employment of women

The restrictions placed by the Act on the employment of women are as follows:

The employer is prohibited from knowingly employing a woman in any establishment during the six weeks immediately following the day of her delivery or her miscarriage;
A woman also, on her part, is required to abstain from working in any establishment during the said period;

A pregnant woman can also request her employer not to give her any work which is of an arduous nature or which involves long hours of standing, etc. during the period of one month immediately preceding the period of six weeks, before the date of her expected delivery or any period during the said period of six weeks for which the pregnant woman does not avail of leave of absence, under the Act. On such a request being made by her, the employer shall not give her such work during such period. {Section 4}

To whom maternity benefit is payable in case of death of a woman?

If a woman entitled to maternity benefit dies before receiving such benefit, the employer shall pay such benefit to the person nominated by the woman and in case there is no such nominee, to her legal representative. {Section 7}

Restrictions placed by the Act on the termination of employment of a woman

When a woman absents herself from work in accordance with the provisions of the Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such absence. {Section 12}

Time for payment of maternity benefit

The amount of maternity benefit for the period preceding the date of her expected delivery shall be paid in advance to the woman on production of proof that the woman is pregnant and the amount due for the subsequent period shall be paid to the woman within 48 hours of production of proof that the woman has been delivered of a child. {Section 6}

Period for which a woman is entitled to maternity benefit and the rate of the benefit

(i) The maximum period for which any woman shall be entitled to maternity benefit shall be 12 weeks of which not more than 6 weeks shall precede the date of her expected delivery. If a woman dies during this period, the maternity benefit shall be payable only for the days up to and including the day of her death. If a woman, having been delivered of a child, dies during her delivery or during the period immediately following the date of her delivery for which she is entitled for the maternity benefit, leaving behind in either case the child, the employer shall be liable to the maternity benefit for the entire period but if the child also dies during the said period, then, for the days up to and including the date of the death of the child.

(ii) But no woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit, for a period of not less than 80 days in the 12 months immediately proceeding the date of her expected delivery.

For the purpose of calculating the days on which a woman has actually worked in the establishment, the days for which she has been laid off or was on holidays declared under any law to be holidays with wages during the period of 12 months immediately preceding the day of her delivery, the actual day of her delivery and any period immediately following that day. For the purpose of this provision, 'the average daily wage' means the average of the woman's wages payable to her for the days on which she has worked during the period of 3 calendar months immediately preceding the date from which she absents herself on account of maternity, or the minimum rate of wage fixed or revised or under the Minimum Wages Act, 1948 or 10 rupees, whichever is the highest. {Section 5}

Is a woman entitled to maternity benefit, also entitled to any medical bonus?

A woman entitled to maternity benefit under the Act shall also be entitled to receive from her employer a medical bonus of 2500 rupees, if no pre-natal confinement and postnatal care is provided for by the employer free of charge. The medical bonus shall be paid along with the second installment of the maternity benefit. {Section 8 & Rule 5}

Can a woman claim the maternity benefit from her employer if she works elsewhere during the period for which she has been permitted to absent herself under the provisions of the Act?

If a woman works in any establishment after she has been permitted by her employer to absent herself under the provisions of the Act for any period during such authorized absence, she shall forfeit her claim to the maternity benefit for such period. {Section 18}

Is it permissible under the Act to exempt any establishment for the provisions of the Act?

The appropriate Government can exempt any establishment from the operation of all or any of the provisions of the Act or of any rule made under the Act if the benefits provided by the establishment are not less favourable that those provided in the Act. {Section 26}

Is a woman entitled to any leave with wages for illness in addition to the period of absence allowed to her under the provisions of the Act?

A woman suffering from illness arising out of pregnancy delivery, premature birth of child or miscarriage shall be entitled, in addition to the period of absence allowed to her under the provisions of the Act, to leave with wages at the rate of maternity benefit for a maximum period of one month. {Section 10}

Is a woman entitled to any leave with wages for miscarriage?

In case of miscarriage, a woman shall be entitled to leave with wages at the rage of maternity benefit, for a period of 6 weeks immediately following the day of her miscarriage. {Section 9}

Is it necessary for a woman claiming leave with wages for miscarriage to satisfy the condition that she had worked for a period of not less than 80 days in the 12 months immediately preceding the date of miscarriage?

Such condition has to be satisfied for claiming Maternity Benefit under Section 5 of the Act. There is no condition of any sort to be satisfied for claiming leave wages for miscarriage under Section 9 of the Act.

What are the other obligations of the employer under the Act?

Under the Act the employer is required: (a) to exhibit the abstract of the provisions of the Act and the rules made thereunder in a conspicuous place in every part of the establishment in which women are employed {Section 19 & Rule 5}; (b) to maintain a muster roll in the prescribed form {Rule 3}; (c) to submit annual returns in the four prescribed forms. {Rule 16}

What is the punishment for the contravention of the provisions of the Act?

(1) If any employer fails to pay any amount of maternity benefit to a woman entitled under the Act or discharges or dismisses such woman during or on account of her absence from work in accordance with the provisions of the Act, he shall be punishable with imprisonment which shall not be less than three months but which may extend to one year and with fine which shall not be less than two thousand rupees but which may extend to five thousand rupees. The Court may, however, for sufficient reasons to be recorded in writing, impose a sentence of imprisonment for a lesser term or fine only in lieu of imprisonment. (2) If any employer contravenes the provisions of the Act or the rules made thereunder, he shall, if no other penalty is elsewhere provided by or under the Act for such contravention, be punishable with imprisonment which may extend to one year, or with fine which may extend to five thousand rupees, or with both. Where the contravention is of any provision regarding maternity benefit or regarding payment of any other amount and such maternity benefit or amount has not already been recovered, the Court shall, in addition, recover such maternity benefit or amount as if it were a fine and pay the same to the person entitled hereto. {Section 21}

What is the object of the Payment of Wages Act, 1936?

The main object of the Act is to avoid unnecessary delay in the payment of wages and to prevent unauthorized deductions from the wages.

To which establishments is the Act applicable?

The Act is applicable to the payment of wages to persons employed:

a. in factories;

b. upon railways;

c. in other establishments specified in sub-clauses (a) to (g) of section 2(ii) of the Act.

The Act empowers the State Government to extend its provisions to the persons employed in any establishments over and above the aforesaid establishments. {Section 1}

Are all wages covered or protected by the Act?

Wages averaging less than Rs. 10000.00 per month only are covered or protected by the Act.

Are overtime wages to be taken into account for deciding the applicability of the Act?

Wages means contractual wages and not overtime wages. They are not to be taken into account for deciding the applicability of the Act in the context of section 1(6) of the Act.

Can any employer fix a period longer than one month for paying wages to a person employed by him?

The period to be fixed for paying wages to an employed person must not exceed one month. That means, an employer can choose to pay wages to a person employed by him for a period of every week or every fortnight, but not for a period of every two months or every three months, {Section 4}

What are the requirements of the Act in respect of time of payment of wages?

The following are the requirements of the Act in respect of time of payment of wages:

a. Wages must be paid on a working day and not on a holiday.

b. Establishments employing less than 1000 persons must pay wages before the expiry of the 7th day of every month and other establishments must pay wages before the expiry of the 10th day of every month.

When the employment of any person is terminated, the wages earned by him must be paid before the expiry of the second working day from the day of termination. {Section 5}

What are the requirements of the Act in respect of method of payment of wages?

Wages must be paid in current coin or currency notes or in both and not in kind. It is, however, permissible for an employer to pay wages by cheque of by crediting them in the bank account if so authorized in writing by an employed person. {Section 6}

What is the provision of the Act regarding deductions from the wages payable to an employed person?

The Act prohibits all kinds of deductions except those which are authorized by or under the Act. {Section 7}

What are the provisions of the Act regarding the imposition of fines on the employed person?

The employer must exhibit on his premises a list of acts or omissions for which fines can be imposed.
Before imposing a fine on an employed person he must be given an opportunity of showing cause against the fine.
The amount of fine must not exceed 3 percent of the wages.
A fine cannot be imposed on an employed person who is under the age of 15 years.
A fine cannot be recovered by installments or after 90 days from the day of the act or omission for which it is imposed.
The moneys realized from fines must be applied to purposes beneficial to employed persons. {Section 8}

Is the employer free to impose fines in respect of any act of omission on the part of employed persons?

Fines can be imposed in respect of only those acts or omissions of the employed persons which are approved by the authority prescribed under section 8(1) of the Act. {Rules 10 to 12}

What is the procedure prescribed for the imposition of fine and for making deductions for damage or loss?

Any person desiring to impose a fine on an employed person or to make a deduction for damage or loss shall explain personally or in writing to the said person the act or omission, or damage or loss in respect of which the fine or deduction is proposed to be imposed, and the amount of fine or deduction, which it is proposed to impose, and shall hear his explanation in the presence of at least one other person, or obtain it in writing. {Subsection 8(3), 10(1-A) & Rule 15}

Apart from the employer himself, who else is responsible for the payment to the persons employed by him of wages required to be paid under the Act?

a. In factories, if any person has been named as the manager of the factory, then the person so named is also responsible for such payment.

b. In industrial establishments, if there is a person responsible to the employer for the supervision and control of the industrial establishment, then the person so responsible is also responsible for such payment.

c. Upon railways, if the employer is the railway administration and the railway administration has nominated a person in this behalf, then the person so nominated is also responsible for such payment. {Section 3}

What is the meaning of the word pay-master?

In the Maharashtra Payment of Wages Rules, 1963, the word paymaster is used to denote an employer or other person responsible under section 3 of the Act for the payment of wages required to be paid under the Act. {Rule 2(q)}

What is the procedure an employed person has to follow for claiming deducted or delayed wages?

a. If contrary to the provisions of the Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed, he has to make an application for claiming the same to the Authority appointed under the Act.

b. Such application can be made by the employed person himself or a legal practitioner or an official of a registered trade union.

c. Such application has to be made within a period of 12 months from the date on which the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made.

d. When any application under Subsection (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under Section 3, or give them an opportunity of being heard, and, after such further enquiry, if any, as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employed person of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and not exceeding three thousand rupees but not less than one thousand five hundred rupees in the latter, and even if the amount deducted or delayed wages are paid before the disposal of the application, direct the payment of such compensation, as the authority may think fit, not exceeding two thousand rupees.

e. The amount directed to be paid by the Authority ca be recovered as if it were a fine.

f. If the employed person is not satisfied with the order of the Authority, he himself or a legal practitioner or an official of a registered trade union, if the amount claimed by him is more than Rs. 25.00, can, within 30 days from the date of the order prefer an appeal to the Appellate court. {Subsection 15 & 17}

Can the Authority refuse to entertain an application presented to it?

The Authority may refuse to entertain an application presented to it, if after giving the applicant an opportunity of being heard the Authority is satisfied, for reason to be recorded in writing that -

a. the applicant is not entitled to present an application;

b. the application is barred by limitation, or

c. the applicant shows no sufficient cause for making a direction under Section 15.

The Authority may refuses to entertain an application presented to it if the application is insufficiently stamped or otherwise incomplete. When the Authority refuses to entertain an application for the said reason, he shall return it with an indication of the defects. The application so refused may be presented again after the defects have been made good. {Rule 7 or Central Rules}

If any employee is prevented from making an application for payment of deducted or delayed wages within the prescribed period of limitation of twelve months, can the Authority admit his application after the expiry of the said period?

Under the second proviso to Section 15(2) of the Act the Authority is given power to condone the delay in making the application within the said period if sufficient cause is shown by the applicant for not making the application within the said period.

Is it correct to contend that the expression "ten times the amount deducted" appearing in Section 15(3) of the Act means that the compensation awarded under that section must be always in multiples of the wages deducted?

The compensation awarded under section 15(3) may not be in multiples of the wages deducted. The Authority is free to fix such compensation at the proportionate rate which it may think to be fair and just subject to the maximum of ten times the amount deducted.

Is the compensation awarded under section 15(3) of the Act penal or in the nature of recompensation?

Compensation awarded under section 15(3) is not penal but is in the nature of a payment by way of recompensation for loss or privation by reason of deduction from the wages paid.

Can a group of employed persons make a single application for claiming deducted or delayed wages?

This can be done if they are working in the same establishment and if deductions have been made from their wages for the same cause and during the same wages period or if their wages have remained unpaid for the same wage period. {Section 16}

Has the employed person to pay any court-fees for making and application for claiming deducted or delayed wages?

In the State of Maharashtra and in some other States the employed person is exempted from paying any Court-fees, other than fees for service of process, for making such application; but at the same time the Government is empowered to recover the amount of such court-fees from the employer of the employed person if the employed person succeeds in the application. {Section 15A}

Can the employer also prefer an appeal against the order of the Authority?

If the employer is aggrieved by the order of the Authority, he also can, within 30 days of the date of order, prefer an appeal to the Appellate Court if the amount ordered to be paid by him is more than Rs. 300.00 or the order imposes on him a financial liability of more than Rs. 1000.00

If an employer wants to file an appeal against any order of the Authority directing payment of wages, is he required to comply with any condition at the time of filing the appeal?

Section 17(1A) of the Act provides that no such appeal shall lie unless the amount payable under the order has been deposited by the employer with the Authority.

Can the amount required to be deposited under Section 17(1A) be paid after the filing of the appeal?

The amount required to be deposited under Section 17(1A) must be paid at the time of filing of the appeal. The appeal filed un-accompanied by the certificate of deposit is not maintainable.

If a person is prevented from filing an appeal to the Appellate Authority within the prescribed period of limitation of thirty days, can the Appellate Court accept his appeal after the expiry of the said period?

The Act makes no provision for condonation of the delay in filing the appeal.

If the employer, instead of availing of the remedy of appeal under section 17 of the Act, files a writ petition under Article 226/227 of the Constitution of India, is the writ petition maintainable?

The writ petition is not maintainable if by filing it the employer has deliberately chosen to circumvent the provisions of law.

Is it competent for the Authority to entertain and decide an application for payment of subsistence allowance?

The subsistence allowance payable to an employee placed under suspension pending Departmental Enquiry is covered within the definition of wages given under Section 2(6) of the Act and, therefore, the Authority is competent to entertain and decide an application for payment of subsistence allowance.

Is it competent for the Authority under the Act to examine the justifiability of an order of suspension?

If an order of suspension has been passed by an officer competent to pass it, the authority under the Act cannot examine its validity to see as to whether it was justified in law or not.

Can the Authority under the Payment of Wages Act decide the question of the status of an employed person?

The Authority under the Payment of Wages Act is a Court of summary jurisdiction having powers to deal with the simple matter of delay in payment of wages or deduction from wages. It is not within the competence of the Authority to decide the question of the status of an employed person, i.e., whether he is a Mistry or Veldar. The matter is a complicated question of law as also of fact.

Can there be attachment of property pending the disposal of a claim for deducted or delayed wages?

The Authority or the Appellate Court can attach the property of an employer pending the disposal of such claim if it is satisfied that the employer is likely to evade payment of any amount that may be ordered to be paid by it. {Section 17A}

Can an employee file a suit against his employer seeking injunction restraining the employer from making any deductions from his wages?

No such suit can be filed because according to section 22(d) of the Act no Court can entertain any suit for the recovery of any deduction from wages insofar as the sum so claimed can be recovered by an application under section 15 of the Act.

Can any employed person relinquish his rights under the Act?

An employed person is prohibited from contracting out of the Act, i.e. from giving up any right conferred upon him by the Act, and any contract or agreement made by him relinquishing such rights is null and void. {Section 23}

Is an agreement between an employer and his employees authorising the deduction of union subscription from the salaries of the employer null and void under Section 23 of the Act?

Such agreement being beneficial and advantageous to the employees is not null and void under Section 23 of the Act.

Is an employer required to display the abstracts of the Act in his factory or establishment?

Every employer must display in his factory or establishment a notice containing the abstracts of the Act and the rules made thereunder in English and also in the language understood by the majority or the persons employed in the factory or establishment. {Section 25}

Form No. VI and Rule 24 regarding the display of the abstract of this Act has been deleted by Government of Maharashtra vide notification date 30-Mar-2001 MGG Pt. I-L. Ext. date 30-Mar-2001 P. 213

What is the responsibility of an employer in respect of wages remaining unpaid on account of the death of an employed person on account of the whereabouts of an employed person not being known?

An employer shall stand discharged of his liability to pay such wages if he pays them to the nominee of the deceased person, and in case he is not able to do so, if he deposits them with the prescribed authority. {Section 25A}

Is deducting some amount or union levies from wages of employees and paying the same to the union invalid under section 7 of the Act?

If such deduction and payment is made with the consent of the employees and / or with the approval of a competent Court, it is not invalid under Section 7 of the Act.

What are the conditions imposed on deductions for recovery of advances of wages?

An advance of wages shall not exceed four months wages.
The advance may be recovered in installments by deduction from wages spread over not more than 18 months.
No installment shall exceed one-third of the wages for the month.
The rate of interest charged for advances shall not exceed 6 1/4% per annum. {Rule 18}

Are the provisions of section 9(2) of the Payment of Wages Act permitting deduction in wages for participation in illegal strike affected by the provisions of section 26 of the Industrial Disputes Act providing for penalty for illegal strikes?

The Payment of Wages Act and the Industrial Disputes Act operate in different fields and the provisions of section 26 of the Industrial Disputes Act providing for penalty for illegal strikes do not affect the right of the management to effect a cut in wages to the extent permitted by Section 9(2) of the Payment of Wages Act.

What is the object of the Minimum Wages Act, 1948?

The object of the Act is to provide for fixing and revising minimum wages in certain employments in order to stop sweated labour and prevent the exploitation of unorganized labour.

Which employments are intended to be benefited by fixation of minimum rates of wages?

The Government is required to fix minimum rates of wages payable to employees employed in the employments specified in Part I or Part II of the Schedule appended to the Act. {Section 3}

Is the list of employments specified in the Schedule to the Act exhaustive?

The list is not an exhaustive one. The appropriate Government can add any employment to either part of the Schedule. {Section 27}

Is it competent for a government to bring a teacher within the purview of the Act by amending the Schedule to the Act?

A teacher would not come within the definition of "employee" given under Section 2(i) of the Act. It is beyond the competence of a Government to bring the teachers of an educational institution under the purview of the Act.

Is the Act applicable to daily rated employees?

The Act is expected to fix the minimum wages in respect of employees whether they are casual, daily rated, temporary or permanent. The Act is applicable to daily rates employees also.

What is the procedure the Government has to follow for fixing and revising minimum wages?

a. by appointing one or more committees and sub-committees consisting of representatives of employers and employees and also of independent persons to hold necessary enquiries and by taking into consideration the advice tendered by the committee or committees; or

b. by formulating and publishing its proposals and taking into consideration the representations received in response to the proposals. {Section 5}

Is the task of the Government over once it fixes minimum rates of wages payable to employees employed in a scheduled employment?

The task of the Government is not over once it fixes minimum rates of wages payable to employees employed in a scheduled employment. The minimum rates of wages of fixed are required to be reviewed and, if necessary, revised by the Government at intervals not exceeding five years. {Section 3(1)(b)}

Is it permissible for the employer to pay minimum wages in kind?

As a rule minimum wages payable under the Act must be paid in cash. The employer, however, can pay them in kind with the permission of the appropriate Government. {Section 11}

Can attendance bonus be treated as part of the minimum wage fixed under the Act?

Attendance bonus is in the nature of an incentive. It is an additional payment made to the workmen as a means of increasing production. It cannot be treated as part of the minimum wage fixed under the Act.

Can the supply of essential commodities at concessional rates from part of the minimum wage?

Such supply cannot form part of the minimum wage unless it is authorized by the appropriate Government by a notification in the Official Gazette under section 11(3) of the Act.

What is the obligation of the employer in respect of payment of wages under the Minimum Wages Act, 1948?

Where minimum wages are fixed and enforced under section 5 of the act in respect of any employment covered by the Act, the employer is bound to pay to every employee engaged in that employment wages at a rate not less than the minimum rate to fixed and enforced. {Section 12}

Is an employer, who is not paying basic wages and cost of living allowance separately as fixed under the Act but who is paying wages more than prescribed minimum rates under the Act, committing any illegality?

The minimum rate of wages fixed under the Act is remuneration payable to the worker as one package of fixed amount, Neither the scheme of the Act nor any provision of the Act provides that the rate of minimum wages is to be split into basic wages and cost of living allowance and therefore where an employer is paying total sum which is higher than the minimum rate of wages fixed under the Act including cost of living allowance, the employer is not committing any illegality.

What is the number of hours which constitutes a normal working day for the employees covered by the Act?

A normal working day prescribed for the employees covered by the Act is of 9 hours. {Section 13 & Mah. Rule 24}

Are the employees covered by the Act entitled to overtime wages?

If an employee covered by the Act works for more than 9 hours on any day or 48 hours in any week, he is in respect of overtime work entitled to wages at double the ordinary rate of wages. {Section 14 & Mah. Rule 26}

Can an employee getting wages higher than the minimum wages fixed under the Act claim overtime wages under Section 20(2) of the Act?

Where an employee gets wages higher than the minimum wages fixed under the Act he cannot claim any benefit under the Act.

Can an Industrial Tribunal adjudicate upon a dispute relating to the fixation of wages of employees covered under the Act?

Section 24 of the Act does not bar the jurisdiction of an Industrial Tribunal to adjudicate upon a dispute relating to the fixation of wages of employees covered under the Act.

Can an Industrial Tribunal fix wages at rates higher than the rates of minimum wages fixed under the Minimum Wages Act?

An Industrial Tribunal adjudicating a dispute relating to wages is not bound by the minimum rates of wages fixed under the Minimum Wages Act and it is open to it to fix wages at rates higher than the rates of minimum wages fixed under the Act.

What is the position of the employer who is unable to pay minimum wages fixed under the Act?

The employer is bound pay minimum wages fixed under the Act and it is irrelevant whether he has the capacity to pay them or not.

What is the procedure the employee has to follow for making a claim under the Act?

The procedure for making a claim is as follows:

a. An employee having any claim under the Act has to make an application to the Authority appointed under the Act.

b. Such application can be made by the employee himself, or any legal practitioner or any official of a registered trade union.

c. Such application has to be made within six months from the date on which the claim amount became payable.

d. In appropriate case the Authority can, over and above directing the payment of the difference between minimum wages payable and wages actually paid, award compensation upto ten times the amount of the difference.

e. The amount directed to be paid by the Authority can be recovered as if it were a fine imposed by a Magistrate.

f. Every direction of the Authority will be final. {Section 20}

Are the employees of a Students' Hostel entitled to minimum rates of wages fixed for hotels and restaurants?

The intension of the Legislature was to include employment on hotels and restaurants under purview of the Minimum Wages Act. When the Legislature specifically omitted the term "Students' Hotels" in the Schedule, it thereby excludes it from the purview of the Minimum Wages Act.

Can the Authority appointed under the Act to decide the claims of the employees award compensation to the tune of ten times of the amount of the difference between wages payable and wages actually paid, in every case?

The limit of "ten times the amount of such excess" mentioned in section 20(3)(i) of the Act is the maximum limit. When the Authority awards heavy compensation under the said section, it must give reasons for doing so.

Has an employee to pay any court-fee for making an application to the Authority?

In the State of Maharashtra an employee is exempted from paying any court-fee, other than the fee for service of process, for making such application; but at the same time the Government is empowered to recover the amount of such court-fee from the employer if the employee succeeds in the application. {Section 21A}

Can a group of employees make a single application for claiming minimum wages?

A single application can be made on behalf or in respect of any number of employees.

Is an employer required to maintain any register and record?

Every employer must maintain a muster-roll-cum-wage register and also a bound inspection book. {Rule 27 & 28}

What are the offences under the Act and what is the punishment for them?

If any employer -

a. pays to any employee less than the minimum rates of wages fixed for that employees' class of work; or

b. contravenes any rule or order made by the appropriate Government under Section 13 regarding hours of work;

he would be punished with imprisonment upto five years or with fine upto Rs. 10000.00 or with both. The offences under Section 22 of this Act shall be cognizable and non-bailable. {Section 22, 22B}

Is it permissible for an employee to recover minimum wages payable under the Act by filing a suit in a Civil Court?

The Act prohibits Civil Courts from entertaining any suit for recovery of minimum wages payable under the Act. {Section 24}

Is it permissible for an employee to relinquish his rights under the Act?

An employee is prohibited from contracting out of the Act, i.e. from giving up any of his rights under the Act and any contract or agreement made by him relinquishing or reducing his right to a minimum rate of wages or any privilege or concession accruing to him under the Act is null and void. {Section 25}

What is the Object of the Payment of Bonus Act, 1965?

The object of the Act is to maintain peace and harmony between labour and capital by allowing the employees to share the prosperity of the establishment reflected by the profits earned by the contributions made by capital, management and labour.

To which establishments is the Act applicable?

The Act is applicable to:

a. (a) every factory

b. (b) every other establishment employing 20 or more persons.

The Government can, however, apply the Act to any establishment employing less that 20 but not less than 10 persons. An establishment to which the Act applies shall continue to be governed by the Act irrespective of any fall in the number of person employed therein. {Section 1}

Are the establishments in public sector covered by the Act?

According to sub-section (2) of Section 20, save as otherwise provided in sub-section (1), nothing in the Act shall apply to the employees employed by any establishment in public sector. By the said sub-section (1) the provisions of the Act are made applicable in relation to an establishment in public sector which sells any goods produced or manufactured by it or renders any services in competition with an establishment in private sector and earns income from such sale or services or both an quantified in the said sub-section.

Who are entitled to be paid bonus?

Every employee who is drawing a salary or wage upto Rs. 10000.00 per month and who has worked for minimum period of 30 days in a year is entitled to be paid bonus. {Section 2(13) & 8}

Is the ceiling limit of a salary or wage of an employee fixed under Section 2(13) of the Act illegal and invalid?

The provision imposing the ceiling is constitutionally valid.

Can an employee be held ineligible for payment of Bonus under the Act on the ground that he is a managerial employee?

An employee, irrespective of whether he is managerial or not, so long as he came within the definition of employee by virtue of drawing salary falling within the maximum prescribed under Section 2(13) of the Act, he would be eligible for payment of bonus under the Act.

Is a seasonal worker entitled to get bonus?

Section 8 relates to the eligibility for bonus. The only requirement of that section is that the employee should have worked in an establishment for not less than thirty working days in an accounting year. Therefore, if a seasonal worker has worked in an establishment for more that thirty working days, he shall be entitled to get bonus.

What is to be included in and excluded from a salary or wage for the purpose of calculating bonus?

For the purpose of calculation of bonus a salary or wage includes a basic salary or wage and dearness allowance but does not include other allowances, overtime salary or wage, house rent allowance, traveling concessions, bonus, employer's contribution to provident fund, retrenchment compensation, gratuity or commission. {Section 2(21)}

Is an employee entitled to get bonus on the basis of his entire salary or wage?

If an employee is drawing a salary or wage not exceeding Rs. 3500.00 per month, he is entitled to get bonus on his entire salary or wage. If an employee is getting a salary or wage exceeding Rs. 3500.00 per month, but not exceeding 10000.00 per month, the bonus payable to him is to be calculated as if his salary or wage were Rs. 3500.00 per month. An employee getting a salary or wage exceeding Rs. 10000.00 per month is not entitled to get bonus. {Section 12}

What is the amount of minimum bonus payable by the employer to his employees every year?

The employer is bound to pay to his employees every year a minimum bonus of 8.33% of the salary or wage or Rs. 100.00, whichever is higher, whether be has any allocable surplus or not. {Section 10}

What is the amount of maximum bonus payable by the employer to his employees in any year?

When in any year the allocable surplus exceeds the amount of minimum bonus payable to the employees, the maximum bonus payable by the employer to his employees in that year is 20% of the salary or wage. {Section 11}

What is the meaning of "available surplus" and "allocable surplus" and What is the connection between allocable surplus and bonus?

Bonus payable under the Act is linked with profits. The employer has to calculate "gross profits" of his establishment in the manner specified in section 4. Then from "gross profits" so calculated he has to deduct the sums referred to in section 6 as prior charges. The balance is called "available surplus". A percentage of the available surplus calculated in accordance with the provisions of sub-section (4) of section 2 is called "allocable surplus". Where, in respect of any year the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer must pay to every employee in respect of that year bonus in proportion to the salary or wage earned by the employee during the year subject to a maximum of twenty percent of such salary or wage. {Subsection 2(4), 4 , 5, 6 & 11}

What is the principle behind fixing a minimum and maximum limit for payment of bonus?

The principle behind fixing a minimum and maximum limit for payment of bonus is that the rate of bonus should not fluctuate widely from year to year.

What is the principle of set on and set off of allocable surplus?

The principle of set on and set off of allocable surplus is as follows:

Where for any year the allocable surplus exceeds the amount of maximum bonus payable to the employees, then, the excess shall, subject to a limit of twenty percent of the total salary or wages of the employees, be carried forward for being set on in the succeeding year and so on to be utilized for the purpose of payment of bonus.

Where for any year there is no available surplus, or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees, and there is no amount or sufficient amount carried forward and set on which could be utilized for the purpose of payment of the minimum bonus, then, such minimum amount or the deficiency, as the case may be, shall be carried forward for being set off in the succeeding year and so on. {Section 15}

Can any amount be deducted from the bonus?

(1) If in any year the employer has paid any amount to an employee as customary bonus, then he can deduct such amount from payable to the employee for that year. (2) If an employee is found guilty of misconduct causing financial loss to the employer, then the employer can deduct the amount of loss from the amount of bonus payable to the employee for the year in which he was found guilty of misconduct. {Subsection 17 & 18}

What is the meaning of customary bonus?

Customary bonus is bonus which is being paid by way of tradition or custom at a uniform rate over a number of years and which has no link with profit.

What is the time limit for making payment of bonus to the employees?

If there is no dispute about payment of bonus, bonus must be paid within a period of 8 month from the close of the accounting year. If there is a dispute about the payment of bonus pending before any authority, bonus must be paid within one month from the date on which the award in respect of such dispute becomes enforceable or the settlement in respect of such dispute comes into operation. In all cases bonus must be paid in cash. {Section 19}

What is the remedy provided under the Act for recovering bonus due but not paid?

If any bonus is due to an employee under a settlement, award or agreement, he can make an application for its recovery to the Government and the Government may issue a certificate to the Collector to recover the same as an arrear of land revenue. Such application should be made within one year from the date on which bonus became due to the employee from the employer. {Section 21}

How to raise a dispute about bonus payable under the Act?

A dispute about bonus payable under the Act will have to be raised by the employees concerned in accordance with the provisions of the Industrial Disputes Act, 1947, or any corresponding State law, as is applicable to them, as such a dispute is deemed to be an industrial dispute within the meaning of such laws. {Subsection 22 & 39}

What are the offences under the Act and what is the punishment for them?

If any person contravenes any provision of the Act or any rule made thereunder; or fails to comply with any direction given to him; he would be punished with imprisonment upto 6 months, or with fine upto Rs. 1000.00 or with both. {Section 28}

It is open to the employer to pay bonus based on production or productivity?

If is open to any employer to pay bonus linked with production or productivity instead of bonus based on profits, if there is an agreement to that effect between him and his employees, but subject to the provisions of the Act in respect of payment of minimum and maximum basis. {Section 31A}

Are there any categories of employees who are excluded from the application of the Act?

The employees of Life Insurance Corporation of India, Reserve Bank of India, Unit Trust of India, Central Government and State Government industrial establishments and Universities and other educational institutions are some of the excluded categories. {Section 32}

Is it open to employees and employers to agree for grant of bonus under a formula different from that under the Act?

Employees can enter into an agreement or a settlement with their employer for granting them bonus under a formula different from that under the Act, i.e. bonus linked with production or productivity; but subject to the provisions of the Act in respect of payment of minimum and maximum bonus. {Subsection 31A & 34}

Can workmen of an establishment claim the bonus payable under the Payment of Bonus Act, 1965, over and above attendance bonus?

As attendance bonus which was being paid by the establishment was outside the purview of the Payment of Bonus Act, 1965, workmen of the establishment can claim the bonus payable under the Act over and above the attendance bonus.

Is the Government competent to exempt any establishment from the mandatory provision of the Act regarding payment of minimum bonus?

Both sections 10 and 36 are contemporaneous provisions in the Act. It is patent from the phraseology of section 36 that the Government has the competence to exempt any establishment even from section 10 notwithstanding that section 10 is mandatory.

Is it permissible under the Act to exempt any establishment from the provisions of the Act?

The Act permits the Government to exempt any establishment from all or some of the provisions of the Act for a specified period and subject to specified conditions if, having regard to the financial position and other relevant circumstances of the establishment, it is of opinion that it will be in public interest to do so. {Section 36}

Can an establishment whose application under Section 36 of the act for exemption for a particular period is rejected by the Government, make a second application for the same period?

The Government has no power to entertain the second application for the same period.

Is an establishment employing employees to whom the Payment of Bonus Act is not applicable because of Section 32 of the Act required to seek any specific exemption under Section 36 of the Act?

An exemption under Section 36 of Act from all or any of the provisions of the Act may be sought by an establishment to which the Act is applicable and whose employees are otherwise entitled to bonus. In the case of establishment employing employees to whom the Act is not applicable because of Section 32, the question of seeking any specific exemption under Section 36 of the Act does not arise.

Are the newly set up establishments exempted from paying bonus to their employees?

The newly set up establishment is exempted from paying bonus to its employees in the first five years following the year in which the employer sells the goods produced or manufactured by him. If, however, the employer derives profit in any of the first five year, he has to pay bonus for that year. The provisions of set on and set off are not applicable in such cases. {Section 16}

Can an establishment be deemed to be newly set up by reason of a change in the ownership of the establishment?

When the ownership of an establishment is transferred from one person to another, the establishment remains the same and it cannot be said to be a new establishment in the hands of the transferee.

In what circumstances an employee is disqualified from receiving bonus?

If an employee is dismissed from services for (a) fraud; (b) riotous or violent behaviour while on the premises of the establishment; (c) theft, misappropriation, or sabotage of any property of the establishment; he is disqualified form receiving bonus. {Section 9}

Is an employee, who is illegally dismissed from service and whose dismissal is set aside by the Labour Court, entitled to get bonus for the years during which he was out of service due to the dismissal, despite the provision of Section 8 of the Act that a

Section 8 of the Act speaks of an employee working in the establishment for not less than thirty working days in an year to make him eligible for bonus for that year. But, when an employee, for no fault of his and involuntary, is prevented from working in the establishment for the prescribed number of days, it does not axiomatically follow that he is ineligible for bonus.

Is an employee, who is dismissed from service on the ground that he had committed theft, fraud and dishonesty in connection with the business of the establishment in the accounting year 1984-85, disqualified from claiming bonus for the accounting year 198

If the employee is entitled to bonus for the accounting year 1981-82, the employer cannot say that the payment will not be made because the employee is dismissed on some future date.

Is an employee entitled to be paid bonus for the period during which he is laid off and is paid lay off compensation?

According to section 14 of the Act an employee shall be deemed to have worked on the days on which he has bee laid off. During the period of lay-off he is paid lay-off compensation which is not excluded from the purview of the definition of wages under the Act. He is therefore entitled to be paid bonus for the period.

Is an employee entitled to be paid bonus for the period during which he is suspended from employment and is paid subsistence allowance?

An employee must be taken to have not worked during the period of his suspension. During the period of his suspension he is paid subsistence allowance which is not salary or wages for work done and which is not an amount paid by way of remuneration. He is therefore entitled to be paid bonus for the period.

If a management has a number of departments, undertakings or branches, should they be treated as separate establishments or as one composite establishment?

If an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, unless a separate balance-sheet and profit and loss account are prepared and maintained in respect of them, all such departments of undertakings or branches should be treated as parts of the same establishment for the purpose of computation of bonus, and once they are treated as parts of the same establishment, they should be continued to be treated as such. {Section 3}

Is the employer required to maintain any registers under the Act?

Every employer is required to maintain, in the prescribed form, the following three registers:

a. a register showing the computation of the allocable surplus;

b. a register showing the set-on and set-off of the allocable surplus;

c. a register showing the details of the amount of bonus payable to each of employees, the amount of deductions if any, and the amount actually paid.

The employer is also required to send, in the prescribed form, an annual return to the Inspector appointed under the Act. The time limit for sending the annual return is thirty days from the expiry of the time limit specified in section 19 for payment of bonus. {Section 26 & Rule 4 and 5}