Sunday, February 21, 2010

Employees’ Provident Fund & Miscellaneous Provisions Act, 1952


Applicability

i) Every establishment which is a factory engaged in any industry
specified in Schedule 1 and in which 20 or more persons are
employed and

ii) Any other establishment employing 20 or more persons which
Central Government may, by notification, specify in this behalf.
(Infancy period of 3 years has been withdrawn by ordinance w.e.f.22-9-97)

iii) any establishment employing even less than 20 persons can be
covered voluntarily u/s 1(4) of the Act.



Eligibility
Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment.



Benefits
Employees covered enjoy a benefit of Social Security in the form of an unattachable, unwithdrawable (except employees and employers contribute equally throughout the covered persons employment. This sum is payable normally on retirement or death. Other Benefits include Employes’ Pension Scheme and Employee’s Deposit Linked insurance Fund.




Penal Provisions

Liable to be arrested without warrant being a cognisable offense. Defaults by employer in paying contributions or inspection/ administration charges attract imprisonment up to 3 years and fines up to Rs. 10,000 (S.14.) For any retrospective application, all dues have to be paid by employer with damages up to 100% of arrears.


Benefits at a glance

1. Advance for Purchase of Dwelling Site.
2. Advance for Purchase of Dwelling House/flat.
3. Advance for Construction of a House.
4. Advance for Repayment of housing loan to State Govt. housing board or any other govt. recognised housing finance body.
5. Advance for IIIness viz. Hospitalisation for more than month, major surgical operations or suffering from TB, leprosy, paralysis, cancer, heart ailment etc.
6. Advance for Marriage of Self/Son/Daughter/Sister/Brother.
7. Advance for Post MatriculationEducation of Son/Daughter.
8. Advance for Damage to the property Due to Natural calamity (Flood Riot/Earthquake).
9. Advance for Member affected by cut in the supply of electricity.
10. Advance for Member who is physically handicapped.

[ A member employee can also withdraw full amount standing to his credit. in fund (para 69).....]

a) on Resignation.
b) On Retirement from the service on attaining the age of 58 yrs.
c) on Retirement on account for permanent or total incapacity to work.
d) immediately before Migration from India for permanent settlement abroad or for taking up employment abroad.
e) on Termination due to voluntary retirement Scheme, retrenchment, closure of the factory/establishment
.

Payment Of Wages Act, 1936


Applicability

i) Every person employed in any factory, upon any railway or through subcontractor in a railway and a person employed in an industrial or other establishment.
ii) The State Government may by notification extend the provisions to any class of person employed in any establishment or class of establishments.



Eligibility
Every person who is employed in any of the above mentioned establishments and who is drawing less than Rs. 1,600 per month.



Benefits :

The Act prescribes for
i) The regular and timely payment of wages (on or before 7th day or 10th day after last day of the wage period in respect of which the wages are payable)
ii) Preventing unauthorised deductions being made from wages and arbitrary fines.



Penal Provisions
Penalties are from Rs. 200-1000. Repeat offenses attract 1 to 6 months imprisonment and fine from Rs. 500-3000.
Delay wage payments attract penalty of Rs. 100 per day of delay.

Payment Of Gratuity Act, 1972

Applicability
Every factory (as defined in Factories Act), mine, oilfield, plantation, port and railway.

Every shop or establishment to which Shops & Establishment Act of a State applies in which 10 or more persons are employed at any time during the year end.

Any establishment employing 10 or more persons as may be notified by the Central Government.

Once Act applies, it continues to apply even if employment strength falls below 10.

Eligibility
Any person employed on wages/salary.

At the time of retirement or resignation or on superannuation, an employee should have rendered continuous service of not less than five years,

In case of death or disablement, the gratuity is payable, even if he has not completed 5 years of service.

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Benefits
The quantum of gratuity is to be computed at the rate of 15 days wages (7 days wages in case of seasonal establishments) based on rate of wages last drawn by the employee concerned for every completed year of service or a part thereof exceeding 6 months.

The total amount of gratuity payable shall not exceed the prescribed limit.

In case where higher benefit of gratuity is available under any gratuity scheme of the Co., the employee will be entitled to higher benefit

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Calculation of Gratuity
Gratuity = Monthly Salary x 15 days x No. of yrs. of service
26
Max. Gratuity payable under the Act is Rs. 3,50,000/- (w.e.f. 24-9-1997)


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Penal Provisions
Nonpayment of gratuity payable under the Act is punishable with imprisonment up to 2 years (minimum 6 months) and/or fine up to RS 20,000/-. Other contravention/offenses attract imprisonment up to 1 year and/or fine up to RS 10,000.

Payment of Bonus Act, 1965

Applicability
(a) Every factory (as def. in Factories Act), & (b) Every other establishment in which 20 or more persons (less than 20 but 10 or more if appropriate Govt. notifies) are employed on any day subject to certain exemptions.
ii) Employees' drawing remuneration of Rs. 3,500/- or more and those who have worked for less than 30 days are not eligible to receive bonus under the Act.
iii) Bonus to be paid within eight months from the expiry of the accounting year.




Eligibility

i) Every person (other than an apprentice) drawing salary up to RS 3,500 per month.
Ii) Every person drawing salary between RS 2,501/- and RS 3,500/- per month. The bonus payable to him is to be calculated as if his salary were RS 2,500/- p.m.

Disqualification for bonus -
Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for-

(a) Fraud; or
(b) Riotous or violent behaviour while on the premises of the establishment; or

(c) Theft, misappropriation or sabotage of any property of the establishment.

Payment of minimum bonus -
Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year :

Provided that there an employee has not employed fifteen years of age at the beginning of the accounting year, the provision of this section shall have effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted.

Payment of maximum bonus -
(1) Where in respect of any accounting year referred to in Sec.10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage.

(2) In computing the allocable surplus under this section, the amount set on or the amount set-off under the provisions of Sec.15 shall be taken into account in accordance with the provisions of that section.









Benefits

i) Subject to other provisions :— Minimum bonus shall be 8.33% of salary/wages earned or RS 100 whichever is higher.
Ii) If allocable surplus exceeds the amount of minimum bonus, then bonus shall be payable at higher rate subject to a maximum 20% of salary/wages.
Iii) Computation of bonus is to be worked out as per Schedule I to IV of the Act.


Penal Provisions
Penalty - If any person -

(a) Contravenes any of the provisions of this Act or any rule made thereunder; or
(b) To whom a direction is given or a requisition is made under this Act fails to comply with the direction or requisition.

He shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

Workmen's Compensation Act, 1923

Applicability
Employer includes any person whether incorporated or not and any agent of employer and when services are temporarily lent or let on hire to another person, then means such other person.





Eligibility

Any workman who is injured by accident arising out of and in the course of his employment in specified list of employment contracts any disease specified therein as an occupational disease peculiar to that occupation.

"partial disablement" means, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time of the accident resulting in the disablement, and, where the disablement is of a permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time .

"total disablement"
means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement .

Provided that permanent total disablement shall be deemed to result from every injury specified in Part I of Schedule I or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to one hundred per cent or more;



EMPLOYER'S LIABILITY FOR COMPENSATION. -

(1) If personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter :

Provided that the employer shall not be so liable -
(a) in respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding three days;

(b) in respect of any injury, not resulting in death or permanent total disablement, caused by an accident which is directly attributable to -
(i) the workman having been at the time thereof under the influence of drink or drugs, or

(ii) the willful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen, or

(iii) the willful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workmen,


(2) If a workman employed in any employment specified in Part A of Schedule III contracts any disease specified therein as an occupational disease peculiar to that employment, or if a workman, whilst in the service of an employer in whose service he has been employed for a continuous period of not less than six months (which period shall not include a period of service under any other employer in the same kind of employment) in any employment specified in Part B of Schedule III, contracts any disease specified therein as an occupational disease peculiar to that employment, or if a workman whilst in the service of one or more employers in any employment specified in Part C of Schedule III, for such continuous period as the Central Government may specify in respect of each such employment, contracts any disease specified therein as an occupational disease peculiar to that employment, the contracting of the disease shall be deemed to be an injury by accident within the meaning of this section and, unless the contrary is proved, the accident shall be deemed to have arisen out of, and in the course of, the employment :



(2A) If a workman employed in any employment specified in Part C of Schedule III contracts any occupational disease peculiar to that employment, the contracting whereof is deemed to be an injury by accident within the meaning of this section, and such employment was under more than one employer, all such employers shall be liable for the payment of the compensation in such proportion as the Commissioner may, in the circumstances, deem just.


(3) The Central Government or the State Government, after giving, by notification in the Official Gazette, not less than three months' notice of its intention so to do, may, by a like notification, add any description of employment to the employments specified in Schedule III, and shall specify in the case of employments so added the diseases which shall be deemed for the purposes of this section to be occupational diseases peculiar to those employments respectively, and thereupon the provisions of sub-section (2) shall apply In the case of a notification by the Central Government, within the territories to which this Act extends or, in case of a notification by the State Government, within the State as if such diseases had been declared by this Act to be occupational diseases peculiar to those employments.


(4) Save as provided by Sub-sections (2), (2A) and (3), no compensation shall be payable to a workman in respect of any disease unless the disease is directly attributable to a specific injury by accident arising out of and in the course of his employment.


(5) Nothing herein contained shall be deemed to confer any right to compensation on a workman in respect of any injury if he has instituted in a Civil Court a suit for damages in respect of the injury against the employer or any other person; and no suit for damages shall be maintainable by a workman in any Court of law in respect of any injury -
(a) if he has instituted a claim to compensation in respect of the injury before a Commissioner; or

(b) if an agreement has been come to between the workman and his employer providing for the payment of compensation in respect of the injury in accordance with the provisions of this Act.




REMEDIES OF EMPLOYER AGAINST STRANGER. -
Where a workman has recovered compensation in respect of any injury caused under circumstances creating a legal liability of some person other than the person by whom the compensation was paid to pay damages in respect thereof, the person by whom the compensation was paid and any person who has been called on to pay an indemnity under section 12 shall be entitled to be indemnified by the person so liable to pay damages as aforesaid.






Benefits:

Amount of compensation shall be payable by the employer
i) Where death results from injury 40% of monthly wages x relevant factor or Rs. 20,000/- whichever is more.
ii) Where permanent total disablement results from the injury 50% of monthly wages x relevant factor or Rs. 24,000/- whichever is more (relevant factor depends upon the age of a workman)
iii)Where permanent, partial disablement or temporary disablement results from injury as per prescribed schedule.





Penal Provisions
Any contract by a worker waiving his right to be compensated under this Act is null and void. Compensation should be paid early–delay beyond 1 month attract interest @ 6% p.a. and penalty of up to 50% of the compensation. Certain other offenses attract fine up to RS 5,000.

EMPLOYEES’ STATE INSURANCE ACT, 1948

Applicability

1) All factories excluding seasonal factories employing 10 or more persons and working with electric power.

2) All factories excluding seasonal factories employing 20 or more persons and working without electric power.

3) Any establishment which the Government may specifically notify as being covered.

4) Shop employing 20 or more persons.

Note: As soon as the above conditions are fulfilled the employer should furnish the details in Form-01 to ESI office for registration under the ESI Act, 1948 & Obtaining of the employer’s Code No.


Eligibility
1) Any person employed for wages (up to Rs. 6,500) in or in connection with the work of a factory or establishment end.

2) Any person who is directly employed by the employer in a factory or through his agent on work which is ordinarily part of the work of the factory or incidental to purpose of the factory.


Benefits
1) Free medical treatment is offered to covered employees at hospital and dispensaries run by the ESI Corporation.

2) About 7/12th of employees normal wage will be payable to him by ESI during sickness.

3) Maternity benefit for 12 weeks of which not more than 6 weeks should be preceding confinement.

4) Injury during/in course of employment resulting in temporary/permanent disablement entitles the covered employee to a regular payment to substitute his lost wages.

5) Death during course of employment entitles specified dependents to a regular payment.

6) One time payment of Rs. 1,500 to help meet funeral expenses.


Penal Provisions
1) For employees’ contribution : Imprisonment for minimum 2 yrs. to maximum 5 yrs. and/or fine of Rs. 25,000/- .

2) For employer’s contribution : Imprisonment for minimum 6 months to maximum 3 yrs. and/or fine of Rs. 10,000/- .

Sunday, February 7, 2010

Module V: Compensation and Insurance

The Maternity Benefit Act 1961

Short title, extent and commencement.-

(1) This Act may be called the Maternity Benefit Act, 1961.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date as may be notified in this behalf in the Official Gazette,-(a) in relation to mines in the territories to which this Act extends, by the Central Government; and(b) in relation to other establishments in a State, by the State Government:


Application of Act.-
(1) It applies, in the first instance, to every establishment being a factory, mine or plantation including any such establishment belonging to Government:Provided that the State Government may, with the approval of the Central Government, after giving not less than two months' notice of its intention of so doing, by notification in the Official Gazette, declare that all or any of the provisions of this Act shall apply also to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise
(2) Nothing contained in this Act shall apply to any factory or other establishment to which the provisions of the Employees' State Insurance Act, 1948, (34 of 1948) apply for the time being.


Right to payment of maternity benefit.-
(1) For the purpose of this , 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 three calendar months immediately preceding the date from which she absents herself on account of maternity, or one rupee a day, which ever is higher.
(2) No woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom the claims maternity benefit, for a period of not less than one hundred and sixty days in the twelve months immediately preceding the date of her expected delivery.
3) The maximum period for which any woman shall be entitled to maternity benefit shall be twelve weeks, that is to say, six weeks up to and including the day of her delivery and six weeks immediately following that day.Provided that where a woman dies during this periods, the maternity benefit shall be payable only for the days up to and including the day of her death:Provided further that where a woman, having been delivered of a child, dies during her delivery or during the period of six weeks immediately following the date of her delivery, leaving behind in either case the child, the employer shall be liable for the maternity benefit case the child, the employer shall be liable for the maternity benefit for the entire period of six weeks immediately following that day of her delivery but if the child also dies during the said period, then, for the days up to and including the day of the death of the child.

Payment of maternity benefit in case of death of a woman.- If a woman entitled to maternity benefit or any other amount under this Act, dies before receiving such maternity benefit or amount, or where the employer is liable for maternity benefit , the employer shall pay such benefit or amount to the person nominated by the woman in the notice given under section 6 and in case there is no such nominee, to her legal representative.

Leave for miscarriage.- In case of miscarriage, a woman shall, on production of such proof as may be prescribed, be entitled to leave with wages at the rate of maternity benefit, for a period of six weeks immediately following the day of her miscarriage.


Leave for illness arising out of pregnancy, delivery, premature birth of child, or miscarriage.- A woman suffering from illness arising out of pregnancy, delivery, premature birth of child or miscarriage shall, on production of such proof as may be prescribed, be entitled, in addition to the period of absence allowed to her under section 6, or, as the case may be, under section 9, to leave with wages at the rate of maternity benefit for a maximum period of one month.

Protection of action taken in good faith.- No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of this Act or of any rule or order made there under.