Q: Whether Bonus is payable on back-wages?
A: On this issue the High Courts differed in their opinion. As per the decision of the Madras High Court the case of Bonus is based on the principles of Labour and Management jointly contributing to the earning of profit. But when the workers had not been actually in service and hav made no contribution to profit, the employees will not be entitled to Bonus.
Rangarathinam Pillai v. Lab our Court, Coimb atore, 1969 II LLJ 41 (Mad.).
BONUS: IF PAYABLE TO APPRENTICE, PROBATIONERS, PART TIME , EMPLOYEE OR ON COMMISSION:
Our Company has Apprentices, Probationers, Part Time Employees. Some of the employees in addition to their salaries are paid commission.
Q: Whether bonus is payable to Apprentices, Probationers, Part Time Employees and on Commission paid to employees?
A: The definition of Employee u/s. 2(13) of the Payment of Bonus Act, 1965 only excludes from the scope of the term "employee" an apprentice. Therefore~apprentice shall not be eligible for bonus but probationer and part time employee shall be eligible for bonus under the Payment of Bonus Act, 1965.
Secretary Bank of Madura Ltd. v. General Secretary, Bank of Madura Employees Anion, Coimbatore & Anr. 1970 II LLJ 91 (Mad.H. C.).
The definition of salary or wage under Section 2(21) of the Payment of Bonus Act, 1965 does not include any commission payable to the employee as part of his salary or wage for the purpose of Bonus under the Payment of Bonus Act, 1965, therefore Bonus is not payable on commission.
All India Voltas and Volkart Employees' Federation, Bombay v. Mis. Voltas Ltd. & Anr. 1972 I LLJ 326 (Bom.H.C.).
BONUS: SALESMAN IF ENTITLED TO:
Our Company is engaged in the manufacturing of detergents. It has a sales network throughout the country. The company is employing large number of salesmen, whose main job is canvass for the Company's products. This is the 2nd year of Company's manufacturing activities. The Company made profits last year and therefore it paid bonus to its employees at the factory. On being advised that the salesmen are not entitled to bonus no bonus was paid to salesman. The salesman have now raised the demand of bonus.
Q: Whether salesman are entitled to Bonus under Payment of Bonus Act, 1965?
A.: Under the Payment of Bonus Act, 1965 only those persons who are employee within the meaning of S. 2(13) of the Payment of Bonus Act are entitled to Bonus under the Act. Salesman do not fall under any of the categories enumerated u/s. 2(13) of the Act and therefore as per the: decision of Bombay High Court in the case of Voltas Ltd. Salesman are not entitled to Bonus.
All India Voltas & Volkart Employees' Federation v. Voltas Ltd. 1972 I LLJ 326 (Bom.H.C.).
PRODUCTION BONUS - IF CAN BE CLAIMED BY SALES STAFF:
The workers of our company who are employed in the factory are represented by a Union which is in existence for the last 15 years. There is an elaborate Bonus Scheme under which the workers engaged in production are entitled to Production Bonus as per the terms of the Scheme which in turn is a part of the Settlement signed with the Union. In the factory there also exists a sales office and since Production Bonus has always been paid to the workers engaged in production, the staff members of the sales department were never paid Production Bonus. The staff members who are members of another Union this time have put up a demand for Production Bonus. The management resisted their claim mainly on the ground that they being not engaged in production, how can they demand Production Bonus which is meant exclusively for the workers engaged in production.
Friday, March 26, 2010
Chapter: 8.2.1 Quations of The Payment of Bonus Act
Bonus to Contract Labour - Who is to Pay?
A Public Limited Company has engaged a Garden Contractor. The Garden Contractor has engaged Thirty Five employees to maintain the Garden of the Company and two employees to maintain its Garden at the Rest House. The contract between the Company and Garden Contractor stipulates the rates of wages to be paid to the employees as well as their number. The contract also provides that the contractor is to pay the wages to the employees as mentioned in the contract. The contractor was to be paid only service charges at the rate of Rs. 2,000/- per month. Accordingly the Contractor was raising the bill of actual wages paid to the employees + Rs. 2,000/- as his service charges. The company was making the payment to the Contractor on this basis. The Company was also making all payments to the Contractor in respect of the other expenses incurred for maintaining the Gardens on the actual. The workmen of the Contractor demanded bonus from the Contractor on the plea that the contractor should pay the bonus to the employee like wages and should recover the same from the Company by billing the Company. The Contractor approached the management of the Company but the management refused to entertain the request of the Contractor. Being aggrieved, the employees raised the dispute. The Industrial Tribunal rejected the demand of the workmen in respect of Bonus against the Management of the Company. The matter went to High Court and the High Cart ; miffing the writ petition.
Q: Who is to pay Bonus to Contract Labour?
A: The nature of Contract has a direct bearing on this question. If the Contract is of a kind where the contractor undertakes to do certain work for a certain sum, in that case the
Contractor will be responsible for payment of bonus. But in your case in fact it is the company which is paying the wages through the Contractor at a fixed rate and the Contractor is paid only nominal service charges therefore it becomes inconceivable to expect the contractor to pay bonus to the contract employees. Assistance can be taken from the Obiter of Hochtief Gamon, case.
M/s. Hochtief Gamon v. State of Orissa, AIR 1975 (SC) 2226.
Bonus: Contract Employee if Can Demand
From Principal Employer
In our factory. there are about 300 workers. The Company has also engaged a canteen contractor who is employing about 25 workmen. The canteen workers employed by the contractor, through their union have raised demand of Bonus on the Company.
Q: Can contract employee legally demand Bonus from the principal employer?
A: The principal employer's liability to pay the wages to the workmen engaged in the canteen on contractors failure to pay the wages is recognized in Sec. 21(4) of the Contract Labour Regulation & Abolition Act, 1970. The wages due to the contract workmen does not include Bonus and Gratuity. This is made clear by the definition of wages in the Industrial Disputes Act and Payment of Wages Act. Therefore, the principal employer is not liable to pay Bonus to the contract workmen.
Cominco Binani Zinc Ltd. v. Pappachan, 1989
ICLR 151 = 1989 I LLJ 452 (Ker. H. C.)
Bonus - If Payable n Bakwages
By an Award the Industrial Tribunal granted reinstatement with back-wages to seven employees of our Company. The Industrial Tribunal also granted the employees 50% back wages. The amount of back wages was calculated and the calculations were shown to the employees concerned. However, there occurred a dispute in respect of the calculations of back wages as well as on the point of Bonus on back wages. The first one is resolved through mutual discussions. But the Bonus issue is again taken to the Court.
The Payment of Bonus Act, 1965
A Public Limited Company has engaged a Garden Contractor. The Garden Contractor has engaged Thirty Five employees to maintain the Garden of the Company and two employees to maintain its Garden at the Rest House. The contract between the Company and Garden Contractor stipulates the rates of wages to be paid to the employees as well as their number. The contract also provides that the contractor is to pay the wages to the employees as mentioned in the contract. The contractor was to be paid only service charges at the rate of Rs. 2,000/- per month. Accordingly the Contractor was raising the bill of actual wages paid to the employees + Rs. 2,000/- as his service charges. The company was making the payment to the Contractor on this basis. The Company was also making all payments to the Contractor in respect of the other expenses incurred for maintaining the Gardens on the actual. The workmen of the Contractor demanded bonus from the Contractor on the plea that the contractor should pay the bonus to the employee like wages and should recover the same from the Company by billing the Company. The Contractor approached the management of the Company but the management refused to entertain the request of the Contractor. Being aggrieved, the employees raised the dispute. The Industrial Tribunal rejected the demand of the workmen in respect of Bonus against the Management of the Company. The matter went to High Court and the High Cart ; miffing the writ petition.
Q: Who is to pay Bonus to Contract Labour?
A: The nature of Contract has a direct bearing on this question. If the Contract is of a kind where the contractor undertakes to do certain work for a certain sum, in that case the
Contractor will be responsible for payment of bonus. But in your case in fact it is the company which is paying the wages through the Contractor at a fixed rate and the Contractor is paid only nominal service charges therefore it becomes inconceivable to expect the contractor to pay bonus to the contract employees. Assistance can be taken from the Obiter of Hochtief Gamon, case.
M/s. Hochtief Gamon v. State of Orissa, AIR 1975 (SC) 2226.
Bonus: Contract Employee if Can Demand
From Principal Employer
In our factory. there are about 300 workers. The Company has also engaged a canteen contractor who is employing about 25 workmen. The canteen workers employed by the contractor, through their union have raised demand of Bonus on the Company.
Q: Can contract employee legally demand Bonus from the principal employer?
A: The principal employer's liability to pay the wages to the workmen engaged in the canteen on contractors failure to pay the wages is recognized in Sec. 21(4) of the Contract Labour Regulation & Abolition Act, 1970. The wages due to the contract workmen does not include Bonus and Gratuity. This is made clear by the definition of wages in the Industrial Disputes Act and Payment of Wages Act. Therefore, the principal employer is not liable to pay Bonus to the contract workmen.
Cominco Binani Zinc Ltd. v. Pappachan, 1989
ICLR 151 = 1989 I LLJ 452 (Ker. H. C.)
Bonus - If Payable n Bakwages
By an Award the Industrial Tribunal granted reinstatement with back-wages to seven employees of our Company. The Industrial Tribunal also granted the employees 50% back wages. The amount of back wages was calculated and the calculations were shown to the employees concerned. However, there occurred a dispute in respect of the calculations of back wages as well as on the point of Bonus on back wages. The first one is resolved through mutual discussions. But the Bonus issue is again taken to the Court.
The Payment of Bonus Act, 1965
Chapter: 8 The Payment of Bonus Act 1965
The Payment of Bonus Act 1965
Introduction
This is a central Act. The Act applies to every factory or every other establishment employing 20 or more persons employed on any day during an accounting year. However the Government is empowered to make it applicable to any establishment/ Factory employing less than twenty but more than ten persons.
The Government of Maharashtra has made it applicable to factories and other establishment employing ten or more but less than twenty persons, with effect from the accounting year 1983. The Notification is dated 11-04-1984.
Eligibility
At present every employee drawing a salary / wages up to Rs. 3,500/- per month and who has worked for minimum 30 days in a year is entitled to receive Bonus, The employee in respect of salary/wages more than Rs. 2,500/- per month but less than Rs. 3,500/- is entitled for bonus on the amount of Rs 2,500/- only. The rate of minimum bonus to be paid is 8.33% of the salary/wages or Rs. 100/- which ever is higher and the rate of maximum bonus payable in the year is 20% of the salary or wage. The principle behind fixing these limits is that rates should not widely fluctuate from year to year.
(Jalan Trading Company V/s Mazdoor Sabha, 1966 II (L) L.J. 546 (Supreme Court))
• Sec. 32 of the Act exclusive certain classes of employees
1) Employees employed by the Life Insurance Corporation of India.
2) Seamen as defined in clause 42 of Section 3 of the Merchant Shipping Act 1958.
3) Employees registered or listed under any Scheme made under the Dock workers (Regulation of Employments Act, 1948.
4) Employees employed by an establishment engaged in any industr carried on by or under the Authority of any department of the Central Government or State Government or Local Body.
5) (a) Employees employed by the Indian Red Cross Society or any institution of the like nature.
(b) Universities and Educational Institutions.
(c) Institutions including Hospitals, Chambers of Commerce and Social Welfare Institutions establishments not for the purpose of profit.
6) Employees employed through contractors on building operations.
7) Employees of the Reserve Bank of India.
8) Employees employed by Industrial Financial Corporation of India, Financial Corporations and State Financial Corporation, Deposit Insurance Corporation, National Bank for Agricultural and Rural Development, Unit Trust of India, Industrial Development Bank of India, Small Industries Development Bank of India, National Housing Bank and other Financial Institutions
Case Law
Canteen Stores Department is rendering exclusive service to Defence personnel. It is an establishment engaged in an Industry carried on by or under Authority of Central Government namely, Ministry of Defence. Hence, Section 32(4) is applicable and employees of the Establishment are not entitled to benefit of the Act.
The Act exempts the Local Authority from paying bonus to its employees. The submission was that the classification of employees of Local Authority and other employees is hit by Article 14 of the Constitution. Rejecting the connection, it is held that the classification has a nexus with the object which the Act intends to achieve namely not to burden such establishments which run in the public interest with an additional liability by way of payment of bonus.
Introduction
This is a central Act. The Act applies to every factory or every other establishment employing 20 or more persons employed on any day during an accounting year. However the Government is empowered to make it applicable to any establishment/ Factory employing less than twenty but more than ten persons.
The Government of Maharashtra has made it applicable to factories and other establishment employing ten or more but less than twenty persons, with effect from the accounting year 1983. The Notification is dated 11-04-1984.
Eligibility
At present every employee drawing a salary / wages up to Rs. 3,500/- per month and who has worked for minimum 30 days in a year is entitled to receive Bonus, The employee in respect of salary/wages more than Rs. 2,500/- per month but less than Rs. 3,500/- is entitled for bonus on the amount of Rs 2,500/- only. The rate of minimum bonus to be paid is 8.33% of the salary/wages or Rs. 100/- which ever is higher and the rate of maximum bonus payable in the year is 20% of the salary or wage. The principle behind fixing these limits is that rates should not widely fluctuate from year to year.
(Jalan Trading Company V/s Mazdoor Sabha, 1966 II (L) L.J. 546 (Supreme Court))
• Sec. 32 of the Act exclusive certain classes of employees
1) Employees employed by the Life Insurance Corporation of India.
2) Seamen as defined in clause 42 of Section 3 of the Merchant Shipping Act 1958.
3) Employees registered or listed under any Scheme made under the Dock workers (Regulation of Employments Act, 1948.
4) Employees employed by an establishment engaged in any industr carried on by or under the Authority of any department of the Central Government or State Government or Local Body.
5) (a) Employees employed by the Indian Red Cross Society or any institution of the like nature.
(b) Universities and Educational Institutions.
(c) Institutions including Hospitals, Chambers of Commerce and Social Welfare Institutions establishments not for the purpose of profit.
6) Employees employed through contractors on building operations.
7) Employees of the Reserve Bank of India.
8) Employees employed by Industrial Financial Corporation of India, Financial Corporations and State Financial Corporation, Deposit Insurance Corporation, National Bank for Agricultural and Rural Development, Unit Trust of India, Industrial Development Bank of India, Small Industries Development Bank of India, National Housing Bank and other Financial Institutions
Case Law
Canteen Stores Department is rendering exclusive service to Defence personnel. It is an establishment engaged in an Industry carried on by or under Authority of Central Government namely, Ministry of Defence. Hence, Section 32(4) is applicable and employees of the Establishment are not entitled to benefit of the Act.
The Act exempts the Local Authority from paying bonus to its employees. The submission was that the classification of employees of Local Authority and other employees is hit by Article 14 of the Constitution. Rejecting the connection, it is held that the classification has a nexus with the object which the Act intends to achieve namely not to burden such establishments which run in the public interest with an additional liability by way of payment of bonus.
Chapter: 7.1.2 The Modes in the Employees Provident Fund and Miscellaneous Provisions Act
Sec. 16 Act not to apply to certain establishments - This act shall not apply
a) to any establishment registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state relating to co-operative societies, employing less than fifty persons and working without the aid of power; or
b) to any other establishment belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefit of contributed provident fund or old age pension in accordance with any scheme or rule framed by the Central Government t or the State Government governing such benefits; or
c) To any other establishment setup under any Central provincial or State; act and whose employees are entitled to the benefits of contributory, provident fund or old age pension in accordance with any scheme or rule framed under that act governing such benefits.
On an application made by the employer and the majority of the employees in relation to an establishment employing more than 100 employees may authorize the employer by an order in writing to maintain a provident fund, in relation to the establishment. Provided that no authorization shall be made if the establishment has made a default or has committed an offence during the period of three years after the authorization.
Where the establishment is authorized to maintain a provident fund account the employer shall maintain such account submit such return deposit the contribution in such manner for the facilities of inspection and pay the charges and abide by such other terms and conditions as may be specified in the scheme.
The Government may by a notification in the Gazette exempt certain establishments from the purview of the Act.
The employer shall establish a Board of trustees for the administration of the provident fund consisting of such number of members as may be specified, t maintain detailed accounts, to show the contributions credited, withdrawals made and interest accrued in respect of each person and to invest the fund monies in accordance with the directions issued by the central government and to transfer where the provident fund account of any employee and perform such other duties as may be specified in the scheme.
Further the government may exempt the establishment or class of establishment from the operation of the pension scheme.
Where an employee employed in an establishment to which this act applies leaves his employment and obtains re-employment in another establishment to which this act does not apply, the amount of accumulations to the credit of such employee in the fund or as the case may be, shall be transferred within such time as may be to the credit of his account in the provident fund of the establishment in which he is reemployed and provided the employee permits the said transfer.
Where an employer in relation to an establishment transfers that establishment in whole or in part by sale, gift, lease or licence or in any other manner whatsoever, the employer and the person to whom the establishment is so transferred shall jointly and severally be liable to pay the contribution and other sums due from the employer under the act.
a) to any establishment registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state relating to co-operative societies, employing less than fifty persons and working without the aid of power; or
b) to any other establishment belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefit of contributed provident fund or old age pension in accordance with any scheme or rule framed by the Central Government t or the State Government governing such benefits; or
c) To any other establishment setup under any Central provincial or State; act and whose employees are entitled to the benefits of contributory, provident fund or old age pension in accordance with any scheme or rule framed under that act governing such benefits.
On an application made by the employer and the majority of the employees in relation to an establishment employing more than 100 employees may authorize the employer by an order in writing to maintain a provident fund, in relation to the establishment. Provided that no authorization shall be made if the establishment has made a default or has committed an offence during the period of three years after the authorization.
Where the establishment is authorized to maintain a provident fund account the employer shall maintain such account submit such return deposit the contribution in such manner for the facilities of inspection and pay the charges and abide by such other terms and conditions as may be specified in the scheme.
The Government may by a notification in the Gazette exempt certain establishments from the purview of the Act.
The employer shall establish a Board of trustees for the administration of the provident fund consisting of such number of members as may be specified, t maintain detailed accounts, to show the contributions credited, withdrawals made and interest accrued in respect of each person and to invest the fund monies in accordance with the directions issued by the central government and to transfer where the provident fund account of any employee and perform such other duties as may be specified in the scheme.
Further the government may exempt the establishment or class of establishment from the operation of the pension scheme.
Where an employee employed in an establishment to which this act applies leaves his employment and obtains re-employment in another establishment to which this act does not apply, the amount of accumulations to the credit of such employee in the fund or as the case may be, shall be transferred within such time as may be to the credit of his account in the provident fund of the establishment in which he is reemployed and provided the employee permits the said transfer.
Where an employer in relation to an establishment transfers that establishment in whole or in part by sale, gift, lease or licence or in any other manner whatsoever, the employer and the person to whom the establishment is so transferred shall jointly and severally be liable to pay the contribution and other sums due from the employer under the act.
Chapter: 7.1 The Modes in the Employees Provident Fund and Miscellaneous Provisions Act
• The Modes are
1. attachment and sale of the immovable as well as movable property of the establishment
2. arrest of the employer and detention in prison.
3. appointment of a receiver for the immovable and movable properties of the employer.
The authorized officer may forward the said certificate to the Recovery officer within whose jurisdiction the employer carries on the business or profession or resides or any of the movable or immovable properties are situated.
Where the establishment or the employer has property within the jurisdiction of more than one recovery officer and the recovery officer to whom the certificate is sent is not able to recover the entire amount by sale of the property or is in the opinion for the purpose of expediating the recovery of the whole or any part of the amount, it is necessary for him to send the certificate. If only a part of the amount is to be recovered, a copy of the certificate certified in the prescribed manner and specifying the amount to be recovered is sent to the recovery officer within whose jurisdiction the establishment or property resides.
Under section 11 of the Act where the employer is adjudicated insolvent or being a company an order for winding up is made the amount due from the employer in relation to which any scheme applies in respect of any contribution payable under the fund damages recoverable under section 14 B accumulations required to be transferred or charges payable by him under any other provision of this act or from the exempted establishment in respect of the contributions shall when the liability arises before the order of adjudication is made, be deemed to be included in the debts.
No employer can reduce the wages either directly or indirectly to which the scheme of the fund is applicable.
The appropriate government shall appoint by notification, inspectors for the purpose of this act or scheme. The inspector appointed will inquire into the correctness of the information furnished by the employer and whether the provisions of the act have been complied with.
Further in case of an exempted establishment the employer may require to furnish the information as may be necessary.
At any reasonable time, he may ask the employer to furnish the accounts books, registers and other documents relating to the employment of the persons.
He may examine the said records for the purpose of coverage of the establishment and make copies of the said extracts and documents maintained by the establishment and if he deems fit may seize the said documents to consider the relevancy of the offence and to exercise the powers under the scheme.
Any employer failing to make payment of contributions or makes a false statement or false representation shall be punished with imprisonment for a term of 1 year or with a fine of Rs. 5000/- or both.
Any employer who makes a default of payment of administrative charges shall be fined with Rs. 10,000/- and imprisonment of a year or both.
Where an offence has been committed under the act by a company or is attributable to any neglect on the part of any director or manager or any other officer, shall be deemed to be guilty of that offence and shall be liable to be produced against and punished accordingly.
Every employee who is the subscriber to any provident fund to which the act applies, shall continue to be entitled to the benefits accrued to him under the act.
1. attachment and sale of the immovable as well as movable property of the establishment
2. arrest of the employer and detention in prison.
3. appointment of a receiver for the immovable and movable properties of the employer.
The authorized officer may forward the said certificate to the Recovery officer within whose jurisdiction the employer carries on the business or profession or resides or any of the movable or immovable properties are situated.
Where the establishment or the employer has property within the jurisdiction of more than one recovery officer and the recovery officer to whom the certificate is sent is not able to recover the entire amount by sale of the property or is in the opinion for the purpose of expediating the recovery of the whole or any part of the amount, it is necessary for him to send the certificate. If only a part of the amount is to be recovered, a copy of the certificate certified in the prescribed manner and specifying the amount to be recovered is sent to the recovery officer within whose jurisdiction the establishment or property resides.
Under section 11 of the Act where the employer is adjudicated insolvent or being a company an order for winding up is made the amount due from the employer in relation to which any scheme applies in respect of any contribution payable under the fund damages recoverable under section 14 B accumulations required to be transferred or charges payable by him under any other provision of this act or from the exempted establishment in respect of the contributions shall when the liability arises before the order of adjudication is made, be deemed to be included in the debts.
No employer can reduce the wages either directly or indirectly to which the scheme of the fund is applicable.
The appropriate government shall appoint by notification, inspectors for the purpose of this act or scheme. The inspector appointed will inquire into the correctness of the information furnished by the employer and whether the provisions of the act have been complied with.
Further in case of an exempted establishment the employer may require to furnish the information as may be necessary.
At any reasonable time, he may ask the employer to furnish the accounts books, registers and other documents relating to the employment of the persons.
He may examine the said records for the purpose of coverage of the establishment and make copies of the said extracts and documents maintained by the establishment and if he deems fit may seize the said documents to consider the relevancy of the offence and to exercise the powers under the scheme.
Any employer failing to make payment of contributions or makes a false statement or false representation shall be punished with imprisonment for a term of 1 year or with a fine of Rs. 5000/- or both.
Any employer who makes a default of payment of administrative charges shall be fined with Rs. 10,000/- and imprisonment of a year or both.
Where an offence has been committed under the act by a company or is attributable to any neglect on the part of any director or manager or any other officer, shall be deemed to be guilty of that offence and shall be liable to be produced against and punished accordingly.
Every employee who is the subscriber to any provident fund to which the act applies, shall continue to be entitled to the benefits accrued to him under the act.
Chapter: 7 Employees Provident Fund any Miscellaneous Provisions Act, 1952
Employees Provident Fund any Miscellaneous Provisions Act, 1952
This is an Act to provide for the institution of Provident Funds (Pension Fund) and Deposit Linked Insurance Fund for employees in factories and other establishments.
The provisions are applicable to every establishment engaging 20 or more persons, the Act shall continue to govern any establishment though the number of persons may fall from 20.
This Act is a beneficient measure enacted for the purpose of institution of Provident Fund for employees, the provisions has e been made for the better future for the industrial workers, on their retirement and for the benefit of their dependents in case of death while in employment.
The Act is a beneficient piece of social welfare legislation aimed at promoting and securing the well being of the employees and the Court will not adopt a narrow interpretation which will have the effect of defeating the every object and purpose of the Act -1986 LIC 103 (S.C.)
Since the Act does not make any distinction between savages and salary it applies not merely to wage earners but also to salaried serf ants - AIR 1964 S.C. 980. Basic wages under this Act means all emoluments which are earned by an employee while on duty or in accordance w ith the terms of the contract of employment and which are paid or payable in case to him but does not include - cash value of food concession, any dearness allowance, HRA, OT. Bonus commission or any similar allowance payable to the employee or any if presents given by employer.
This definition of employee is completely different from that of a worker under the I.D. Act or Factories Act. The definition of employee brings in contract labour within the scope - AIR 1965 AP 200.
However, casual labour engaged by or through a contractor falls outside the scope of the definition - Nezeena Traders Ltd. V/s RPFC 1966 I LLJ 334.
The Act shall apply to all establishments consisting of different departments or its branches whether they are in the same place or different places unless this establishment has applied for exemption under section of the Act.
The employer shall pay contribution to the fund 81/3 of the Basic Wages, (D.A. and R.A.) and the employees contribution shall be equal to the contribution of the employer.
R.A. i.e. Retaining Allowance means an allowance payable for the time being to an employee of any factory or establishment during any period in which the establishment is not working for retaining his services.
Under Section 6 - A of the Act, the Central Government by its notification has framed a scheme called the Employees Pension Scheme for the purpose of providing superannuation pension, retiring pension or permanent total disablement pension to the employees of the establishment or class of establishments and widow or widowers pension, children pension or orphan pension payable to the beneficiaries. Under the Pension Scheme, the sums of employers' contribution not exceeding 81/3% of basic wages, D.A. and R.A., sums payable by the employers of exempted establishments, net assets of Employees Family Pensions Fund, any other sums after due appropriation of Parliament.
On the establishment of Pension Fund, the Family Pension Scheme shall cease to operate and all the assets of the ceased scheme shall be transferred to the Pension Fund.
Furthermore, the Act provides for Employees Deposit Linked Insurance Scheme for the purpose of Providing Life Insurance benefits to the employers. soon as this scheme is framed, the employer shall from time to time pay in respect of every employee an amount not being more than 1% of the aggregate of the basic wages, D.A. and R.A.
The Central Provident Fund Commissioner, or Additional Central Provident Fund Commissioner or Deputy Provident Fund Commissioner, or Regional Provident Fund Commissioner may by its order in case of whether the Act is applicable to any establishment decide this dispute and determine the amount due from any employer under the provisions of the Act, Scheme, Pension Scheme or Insurance Scheme.
The Officer conducting this enquiry may have the powers or the powers vested in the Court under the Code of Civil Procedure 1908 in respect of trying the suit namely, enforcing the attendance of any person or examining him on oath, requiring the discovery and production of documents, receiving evidence on affidavits, issuing commission for the examination of witnesses. The Commissioner should not necessarily pass any orders unless a reasonable opportunity is given to the employer to represent his case. Where the employer, employee or any other person is required to attend the inquiry fails to attend the enquiry without valid reasons or fails to produce documents or file any report or return in order to determine the amount due from the employer and where the order has been passed against an employee exparte he can within a period of 3 months from the date of communication apply to the office to set aside the said order provided, he is satisfied that there was sufficient cause for non appearance of the employer and that the show cause notice was not duly served on time;
1) Glamour V/s RPFC 1975 LIC 954
2) The News Paper Publishing Pvt. Ltd. V/s RPFC 1972 LIC 1392
3) Swamy V/s RPFC 1987 (I) LLN 94
4) Royal Talkies V/s ESIC AIR 1978 S.C. 1478
An employer aggrieved by an Order made under Sub-section 1 of Sec. 7A but where no appeal has been preferred and there is a discovery of new and important matter or evidence and which was not within the knowledge or could not be produced at that time when order was made and there is an apparent error on the fact of the record, the order can be reviewed, by the officer on his own mention and may grant the review by giving previous notice to all the parties to appear and be heard to support the order. The Commissioner is liable to reopen a matter within a period of 5 years from the date of communication of the order to re-determine the amount due from the employer if he has reasons to believe that by any reason there has been failure or omission on the part of the employer to make any document or report available or to disclose fully and truly all material facts necessary for determination of the dispute. No order for redetermining shall be passed unless the employer is given reasonable opportunity to represent his case. An employer is liable to pay simple interest at the rate of 12% p.a. or any amount due under this Act.
Under Sec. 7B of the Act any person aggrieved by the order passed under sec. 7A by the Regional Provident Fund Commissioner in which no appeal has been made can on the discovery of new evidence or facts which were not within his knowledge at the time of passing the order and on account of which the mistake was made can make a order for review before the same Commissioner who had passed the order.
Provided that the officer who has passed that order find the said application in order and if he comes to the conclusion that there is no sufficient ground for review he may reject the said application.
Where the officer comes to the conclusion that the said order needs to be reviewed then the said application should be heard by giving the parties an opportunity of being heard. Further proof of the said new evidence of having been discovered should be produced before the commissioner. This order has no appeal.
Where an order determining the amount due from the employer under section 7A or 7B has been passed, and the officer who has passed the said order has reason to believe that by reason of the omission or failure on the part of the employer to make any document or report available or to disclose fully or truly all materials facts necessary for determining the correct amount for any period has escaped his notice or, has in consequence of information in his possession reason to believe that any amount to be determined under section 7A or 7B has escaped from his determination for any period, he may within a period of years from the date of communication of the order may re-open the said case for the redetermination of the amount. The employer must be given an opportunity of being heard.
Under Sec. 7 (O) of the Act no appeal shall be entertained unless the employer has deposited an amount of 75% of the amount of claim determined by the officer under Sec. 7A of the Act.
If the employer fails to pay the amount determined by the officer then he is liable to pay 12% interest on the amount per annum till the actual payment is made.
Any amount due from the employer in relation to which any scheme applies in respect of contributions payable to the fund damages are recoverable under section 14 B.
Any amount due from the employer in relation to the exempted establishment in respect of damages recoverable under 14 B may be recovered as arrears.
The amount of contribution as well as the employees contribution in pursuance of any scheme and any charges for meeting the cost of administering the fund paid or payable by an employer in respect of an employee by or through a contractor either by deduction from any amount payable to the contractor under a contract or a contractor from whom the amounts mentioned may be recovered in respect of any employee employed by or through him may recover from such employee the employees contribution by deduction of basic wages, dearness allowance and retaining allowance payable to the employee. Notwithstanding any contract to the contrary, no contractor shall be entitled to deduct the employers contribution or the charges from the basic wages, dearness allowances or the retaining allowances.
Where any amount is in arrears the officer may issue and order to the Recovery officer under his signature and for the amount specified to recover t he said amount from the establishment.
This is an Act to provide for the institution of Provident Funds (Pension Fund) and Deposit Linked Insurance Fund for employees in factories and other establishments.
The provisions are applicable to every establishment engaging 20 or more persons, the Act shall continue to govern any establishment though the number of persons may fall from 20.
This Act is a beneficient measure enacted for the purpose of institution of Provident Fund for employees, the provisions has e been made for the better future for the industrial workers, on their retirement and for the benefit of their dependents in case of death while in employment.
The Act is a beneficient piece of social welfare legislation aimed at promoting and securing the well being of the employees and the Court will not adopt a narrow interpretation which will have the effect of defeating the every object and purpose of the Act -1986 LIC 103 (S.C.)
Since the Act does not make any distinction between savages and salary it applies not merely to wage earners but also to salaried serf ants - AIR 1964 S.C. 980. Basic wages under this Act means all emoluments which are earned by an employee while on duty or in accordance w ith the terms of the contract of employment and which are paid or payable in case to him but does not include - cash value of food concession, any dearness allowance, HRA, OT. Bonus commission or any similar allowance payable to the employee or any if presents given by employer.
This definition of employee is completely different from that of a worker under the I.D. Act or Factories Act. The definition of employee brings in contract labour within the scope - AIR 1965 AP 200.
However, casual labour engaged by or through a contractor falls outside the scope of the definition - Nezeena Traders Ltd. V/s RPFC 1966 I LLJ 334.
The Act shall apply to all establishments consisting of different departments or its branches whether they are in the same place or different places unless this establishment has applied for exemption under section of the Act.
The employer shall pay contribution to the fund 81/3 of the Basic Wages, (D.A. and R.A.) and the employees contribution shall be equal to the contribution of the employer.
R.A. i.e. Retaining Allowance means an allowance payable for the time being to an employee of any factory or establishment during any period in which the establishment is not working for retaining his services.
Under Section 6 - A of the Act, the Central Government by its notification has framed a scheme called the Employees Pension Scheme for the purpose of providing superannuation pension, retiring pension or permanent total disablement pension to the employees of the establishment or class of establishments and widow or widowers pension, children pension or orphan pension payable to the beneficiaries. Under the Pension Scheme, the sums of employers' contribution not exceeding 81/3% of basic wages, D.A. and R.A., sums payable by the employers of exempted establishments, net assets of Employees Family Pensions Fund, any other sums after due appropriation of Parliament.
On the establishment of Pension Fund, the Family Pension Scheme shall cease to operate and all the assets of the ceased scheme shall be transferred to the Pension Fund.
Furthermore, the Act provides for Employees Deposit Linked Insurance Scheme for the purpose of Providing Life Insurance benefits to the employers. soon as this scheme is framed, the employer shall from time to time pay in respect of every employee an amount not being more than 1% of the aggregate of the basic wages, D.A. and R.A.
The Central Provident Fund Commissioner, or Additional Central Provident Fund Commissioner or Deputy Provident Fund Commissioner, or Regional Provident Fund Commissioner may by its order in case of whether the Act is applicable to any establishment decide this dispute and determine the amount due from any employer under the provisions of the Act, Scheme, Pension Scheme or Insurance Scheme.
The Officer conducting this enquiry may have the powers or the powers vested in the Court under the Code of Civil Procedure 1908 in respect of trying the suit namely, enforcing the attendance of any person or examining him on oath, requiring the discovery and production of documents, receiving evidence on affidavits, issuing commission for the examination of witnesses. The Commissioner should not necessarily pass any orders unless a reasonable opportunity is given to the employer to represent his case. Where the employer, employee or any other person is required to attend the inquiry fails to attend the enquiry without valid reasons or fails to produce documents or file any report or return in order to determine the amount due from the employer and where the order has been passed against an employee exparte he can within a period of 3 months from the date of communication apply to the office to set aside the said order provided, he is satisfied that there was sufficient cause for non appearance of the employer and that the show cause notice was not duly served on time;
1) Glamour V/s RPFC 1975 LIC 954
2) The News Paper Publishing Pvt. Ltd. V/s RPFC 1972 LIC 1392
3) Swamy V/s RPFC 1987 (I) LLN 94
4) Royal Talkies V/s ESIC AIR 1978 S.C. 1478
An employer aggrieved by an Order made under Sub-section 1 of Sec. 7A but where no appeal has been preferred and there is a discovery of new and important matter or evidence and which was not within the knowledge or could not be produced at that time when order was made and there is an apparent error on the fact of the record, the order can be reviewed, by the officer on his own mention and may grant the review by giving previous notice to all the parties to appear and be heard to support the order. The Commissioner is liable to reopen a matter within a period of 5 years from the date of communication of the order to re-determine the amount due from the employer if he has reasons to believe that by any reason there has been failure or omission on the part of the employer to make any document or report available or to disclose fully and truly all material facts necessary for determination of the dispute. No order for redetermining shall be passed unless the employer is given reasonable opportunity to represent his case. An employer is liable to pay simple interest at the rate of 12% p.a. or any amount due under this Act.
Under Sec. 7B of the Act any person aggrieved by the order passed under sec. 7A by the Regional Provident Fund Commissioner in which no appeal has been made can on the discovery of new evidence or facts which were not within his knowledge at the time of passing the order and on account of which the mistake was made can make a order for review before the same Commissioner who had passed the order.
Provided that the officer who has passed that order find the said application in order and if he comes to the conclusion that there is no sufficient ground for review he may reject the said application.
Where the officer comes to the conclusion that the said order needs to be reviewed then the said application should be heard by giving the parties an opportunity of being heard. Further proof of the said new evidence of having been discovered should be produced before the commissioner. This order has no appeal.
Where an order determining the amount due from the employer under section 7A or 7B has been passed, and the officer who has passed the said order has reason to believe that by reason of the omission or failure on the part of the employer to make any document or report available or to disclose fully or truly all materials facts necessary for determining the correct amount for any period has escaped his notice or, has in consequence of information in his possession reason to believe that any amount to be determined under section 7A or 7B has escaped from his determination for any period, he may within a period of years from the date of communication of the order may re-open the said case for the redetermination of the amount. The employer must be given an opportunity of being heard.
Under Sec. 7 (O) of the Act no appeal shall be entertained unless the employer has deposited an amount of 75% of the amount of claim determined by the officer under Sec. 7A of the Act.
If the employer fails to pay the amount determined by the officer then he is liable to pay 12% interest on the amount per annum till the actual payment is made.
Any amount due from the employer in relation to which any scheme applies in respect of contributions payable to the fund damages are recoverable under section 14 B.
Any amount due from the employer in relation to the exempted establishment in respect of damages recoverable under 14 B may be recovered as arrears.
The amount of contribution as well as the employees contribution in pursuance of any scheme and any charges for meeting the cost of administering the fund paid or payable by an employer in respect of an employee by or through a contractor either by deduction from any amount payable to the contractor under a contract or a contractor from whom the amounts mentioned may be recovered in respect of any employee employed by or through him may recover from such employee the employees contribution by deduction of basic wages, dearness allowance and retaining allowance payable to the employee. Notwithstanding any contract to the contrary, no contractor shall be entitled to deduct the employers contribution or the charges from the basic wages, dearness allowances or the retaining allowances.
Where any amount is in arrears the officer may issue and order to the Recovery officer under his signature and for the amount specified to recover t he said amount from the establishment.
Chapter: 6.2.4 Part-time Workers in the Minimum Wages Act
• Part-time Workers
Any claim of employees in any of these employment working up to and inclusive of 4 hours per day - 60% of the total enrollment fixed for full time workers.
Explanation: For the purposes of this notification.
(1) Competent Authority means the Competent Authority appointed by the Government of Maharashtra, Industries, Energy and labour Department, Notification No. MWA 5284/5819/Lab. 7, dated the 3rd August, 1984.
(2) Zone System
(a) Zone-I shall comprise of the areas within the limits of all Municipal Corporations, and adjoining cantonment areas (if any).
(b) Zone-II shall comprise the areas with the limits of all "A" Class Municipal Council and adjoining cantonment areas (if any).
(c) Zone-III shall comprise rest of the areas of the State (excluding areas in Zone I and II).
(3) In cases where the employee is employed on a basis other than monthly basis, the minimum rates of daily wages payable shall be computed by dividing the minimum rate of monthly wages fixed for the category of the employees to which he belongs by 26, the portion being stepped up to the nearest paisa.
(4) The minimum rates of wages shall consist of all inclusive rate allowing for the basic rate, the cost of living allowance and cash value of concession, if any.
(5) The average Consumer Price Index Number in respect of Ten Centers in the State of Maharashtra for working class (New Series 1982 = 100) shall be the cost of living index number applicable to the employees employed in the said Scheduled Employment (in pursuance of Clause (d) of the Section 2 of the said Act) and the Competent Authority shall after expiry of every six months commencing on the first day of January and the first day of July calculate the average of the cost of living index number applicable to the said employees for those six months and ascertain the rise of such of such average over the Consumer Price Index Number 3()0. For such rise of every point, special allowance (hereinafter referred to as "the cost of living allowances") payable to the employees in the said scheduled employment for each of the six months immediately following the six months in respect of which such average has been calculated as aforesaid, shall be at the rate of Rs. 3.85 per month in respect of all Zones.
(6) The Competent Authority shall compute the cost of living allowance in accordance with the directions made under the preceding para.
(7) The cost of living allowance computed as aforesaid shall be declared by the competent authority by Notification in the Official Gazette, in the last week of July when allowance is payable for each of the months of July to December and last week of January when such allowance is payable for each of the months of January to June.
Provided that the Competent Authority shall declare the cost of living allowance payable in respect of the period from the date of revision of the rates of minimum wages to the end of June or December as the case may be immediately after the said date, with effect from which the Minimum rates of wages are revised.
Any claim of employees in any of these employment working up to and inclusive of 4 hours per day - 60% of the total enrollment fixed for full time workers.
Explanation: For the purposes of this notification.
(1) Competent Authority means the Competent Authority appointed by the Government of Maharashtra, Industries, Energy and labour Department, Notification No. MWA 5284/5819/Lab. 7, dated the 3rd August, 1984.
(2) Zone System
(a) Zone-I shall comprise of the areas within the limits of all Municipal Corporations, and adjoining cantonment areas (if any).
(b) Zone-II shall comprise the areas with the limits of all "A" Class Municipal Council and adjoining cantonment areas (if any).
(c) Zone-III shall comprise rest of the areas of the State (excluding areas in Zone I and II).
(3) In cases where the employee is employed on a basis other than monthly basis, the minimum rates of daily wages payable shall be computed by dividing the minimum rate of monthly wages fixed for the category of the employees to which he belongs by 26, the portion being stepped up to the nearest paisa.
(4) The minimum rates of wages shall consist of all inclusive rate allowing for the basic rate, the cost of living allowance and cash value of concession, if any.
(5) The average Consumer Price Index Number in respect of Ten Centers in the State of Maharashtra for working class (New Series 1982 = 100) shall be the cost of living index number applicable to the employees employed in the said Scheduled Employment (in pursuance of Clause (d) of the Section 2 of the said Act) and the Competent Authority shall after expiry of every six months commencing on the first day of January and the first day of July calculate the average of the cost of living index number applicable to the said employees for those six months and ascertain the rise of such of such average over the Consumer Price Index Number 3()0. For such rise of every point, special allowance (hereinafter referred to as "the cost of living allowances") payable to the employees in the said scheduled employment for each of the six months immediately following the six months in respect of which such average has been calculated as aforesaid, shall be at the rate of Rs. 3.85 per month in respect of all Zones.
(6) The Competent Authority shall compute the cost of living allowance in accordance with the directions made under the preceding para.
(7) The cost of living allowance computed as aforesaid shall be declared by the competent authority by Notification in the Official Gazette, in the last week of July when allowance is payable for each of the months of July to December and last week of January when such allowance is payable for each of the months of January to June.
Provided that the Competent Authority shall declare the cost of living allowance payable in respect of the period from the date of revision of the rates of minimum wages to the end of June or December as the case may be immediately after the said date, with effect from which the Minimum rates of wages are revised.
Subscribe to:
Posts (Atom)
Posts
