FACTORIES ACT, 1948
The Factories Act, is a social legislation which has been enacted for occupational safety, health and welfare of workers at work places. This legislation is being enforced by technical officers i.e. Inspectors of Factories, Dy. Chief Inspectors of Factories who work under the control of the Chief Inspector of Factories and overall control of the Labour Commissioner, Government of National Capital Territory of Delhi
APPLICABILITY
It applies to factories covered under the Factories Act, 1948. The industries in which ten (10) or more than ten workers are employed and are engaged in manufacturing process being carried out with the aid of power or twenty or more than twenty workers are employed in manufacturing process being carried out without the aid of power, are covered under the provisions of this Act
Salient Features of the Act
1. Approval of Factory Building Plans before construction/extension, under the Delhi Factories Rules, 1950 .
2. Grant of Licences under the Delhi Factories Rules, 1950, and to take action against factories running without obtaining Licence.
3. Renewal of Licences granted under the Delhi Factories Rules, 1950, by the Dy. Chief Inspectors of Factories .
4. Inspections of factories by District Inspectors of Factories, for investigation of complaints, serious/fatal accidents as well as suo moto inspections to check compliance of provisions of this Act relating to :-
I. Health II. Safety III. Welfare facilities IV. Working hours
V. Employment of young persons VI. Annual Leave with wages etc.
Definitions
FACTORY: means any premises:
- in which 10 or more than 10 workers are employed on any day of the preceding 12 months and are engaged in manufacturing process being carried out with the aid of power
- 20 or more than 20 workers are employed on any day of the preceding 12 months in manufacturing process being carried out without the aid of power, are covered under the provisions of this Act.
OCCUPIER : who has the ultimate control over the affairs of the factory. An occupier may be an owner, a lessee, or a mere licensee.
Worker: A worker means a person employed in a manufacturing process, directly or by or through any agency with or without the knowledge of the principal employer.
Manufacturing process: means any process for-
• Making, altering, repairing, delivery or
• Pumping oil, water or
• Generating, transforming power or
• Constructing, reconstructing or
• Preserving or storing any article in cold storage etc.
Approval, Licensing and Registration of Factories• Sec. 6 of the Act empowers the State Government to make rules for the submission of plans, approval, licensing and registration of factories . The application in writing along with the plans and specifications of the factory, for permission, is submitted to the Chief Inspector or the State Government.
• In case nothing is heard within 3 months from the appropriate authority, the permission is deemed to be granted.
• If the State Government or the Chief Inspector refuses to give permission, the applicant may appeal to the Central Government or the State Government respectively with in 30 days of the date of refusal.
Notice by Occupier( sec.7)
Sec 7 of the Act requires the occupier to give notice to the Chief Inspector 15 days before he occupies any premises as a factory. The notice contains:
• Name & situation of the factory.
• Name & address of the occupier.
• Name & address of the owner of the premises.
• Address to which communication relating to the factory may be sent.
• Nature of the manufacturing process to be carried on in next 12 months.
• Total rated horsepower installed or to be installed in the factory.
• Name of the manager of the factory.
• Name of the workers likely to be employed.
Health Safety & Welfare Provisions
The occupier is obligatory to provide for the health, safety and welfare of the workers in the factory and also to maintain inspection staff.
HEALTH
Sec. 11-20 carries provisions relating to health of the workers.
1. Cleanliness: effective drainage & use of disinfectants.
2. Disposal of wastes & effluents after treatment.
3. Adequate ventilation & temperature-
• Adoption of prescribed standards by the State Government.
• Notice by the Chief Inspector to the occupier to adopt measures for reduction of temperature.
4. Dust & Fume.
5. Artificial humidification as per State Government standards.
6. Overcrowding: 9.9/ 14.2 cubic meter of space per worker. Notice of maximum workers to be employed in a workroom shall be posted in each workroom as per the written order of the Chief Inspector.
7. Sufficient & suitable lighting as per State Government standards.
8. Drinking water: suitable drinking points to be legibly marked & to be 6 meters away from washing area , urinals etc, unless shorter distance is approved in writing by the Chief Inspector. Cold water in factories where more than 250 workers are employed.
9. Urinals
10. Spittoons: Contravention of notice regarding the use of spittoons shall be punishable with fine not exceeding Rs. 5.
SAFETY PROVISIONS
Safety provisions are absolute and obligatory on the occupier to follow.
1. Fencing of machinery.
2. Examination of machinery in motion by a trained adult male worker.
3. Restriction on young persons to work on dangerous machines as specified by the State Government.
4. Hoists and lifts to be of good mechanical construction and examined once in every 6 months.
5. Protection of eyes.
Safety of building and machinery
7. Precautions in case of fire.
8. Precautions against dangerous fumes.
9. Precautions against explosive or inflammable dust, gas. etc.
10. Safety officers.
The State Government may make rules requiring the provisions in any factory of such further devices and measures for securing the safety of persons employed as it may deem necessary.
WELFARE PROVISIONS
The various provisions in regard to welfare of the workers are:
1. Washing facilities: separate for male and female should be conveniently accessible and clean
2. Facilities for storing and drying clothing.
3. Facilities for sitting for those workers who are obliged to work in a standing position.
4. First- aid box with prescribed contents for every 150 workers & ambulance room in a factory employing more than 500 workers.
5. Canteens in factory employing more than 250 workers.
6. Sufficiently lighted , ventilated, and clean shelters, rest rooms and lunch rooms in factory employing more than 150 workers.
7. Creches for children under the age of 6 years in factories employing more than 30 women workers.
8. Welfare officers in factories employing 500 or more workers.
Employment of young persons
• Prohibition on employment of young children ( below 14 years)
• A child above 14 or an adolescent may be allowed to work in a factory if
1. A certificate of fitness is in custody of the manager of the factory and
2. Such child or adolescent carries, while he is at work, a token giving reference to such certificate.
• Certificate of fitness: granted by a certifying surgeon after examining him and ascertaining his fitness for work in a factory. An application by the young person shall be accompanied by a document signed by manager. It is valid for 12 months and can be renewed. It can also be revoked any time if the holder is no longer fit to work.
• Certificate of fitness entitles:
A child:
• That he has completed his 14 years.
• That he has attained the prescribed physical standards
• That he is fit for such work
An adult:
• That he has completed his 15th year
• That he is fit for a full day’s work
• Effect of certificate: An adolescent granted a certificate of fitness to work in a factory as an adult shall be deemed to be an adult for all the purposes of Factories Act.
• Working hours: No child shall be employed to work in a factory:
1. for more than 4-1/2 hours in a day 2. during the night
Register of child workers: The manager of every factory where children are employed shall maintain a register of child workers showing:
1. Name of each child worker in the factory,
2. Nature of his work,
3. The group in which he is included,
4. Where his group work on shifts,
5. The number of his certificate of fitness.
Safety provisions for women.
All provisions regarding the employment of adults apply to adult female workers except the following provisions:
• Work on or near the machinery in motion.
• Crèches.
• A woman shall not be allowed to work in a factory for more than 48 hours in any week or 9 hours in a day.
• A woman shall be required to work in a factory only between 6 am. to 7 pm. The State Government by notification may vary these limits in respect of any factory etc.
• Prohibition of employment in dangerous operations.
GENERAL PENALTY FOR OFFENCES: ( sec. 92)
• If in any factory there is any contravention of any of the provisions of this Act or of any rules made there under or of any order in writing given there under, the occupier and manager of the factory shall each be guilty of an offence and punishable with imprisonment for a term which may extend to two years or with fine which may extend to one lakh rupees or with both, and if the contravention is continued after conviction, with a further fine which may extend to one thousand rupees for each day on which the contravention is so continued :
• Where contravention of any of the provisions under section 87 (dealing with dangerous operations) has resulted in an accident causing death or serious bodily injury, the fine shall not be less than twenty-five thousand rupees in the case of an accident causing death, and five thousand rupees in the case of an accident causing serious bodily injury.
Wednesday, March 24, 2010
Factories Act
FACTORIES ACT, 1948
The Factories Act, is a social legislation which has been enacted for occupational safety, health and welfare of workers at work places. This legislation is being enforced by technical officers i.e. Inspectors of Factories, Dy. Chief Inspectors of Factories who work under the control of the Chief Inspector of Factories and overall control of the Labour Commissioner, Government of National Capital Territory of Delhi
APPLICABILITY
It applies to factories covered under the Factories Act, 1948. The industries in which ten (10) or more than ten workers are employed and are engaged in manufacturing process being carried out with the aid of power or twenty or more than twenty workers are employed in manufacturing process being carried out without the aid of power, are covered under the provisions of this Act
Salient Features of the Act
1. Approval of Factory Building Plans before construction/extension, under the Delhi Factories Rules, 1950 .
2. Grant of Licences under the Delhi Factories Rules, 1950, and to take action against factories running without obtaining Licence.
3. Renewal of Licences granted under the Delhi Factories Rules, 1950, by the Dy. Chief Inspectors of Factories .
4. Inspections of factories by District Inspectors of Factories, for investigation of complaints, serious/fatal accidents as well as suo moto inspections to check compliance of provisions of this Act relating to :-
I. Health II. Safety III. Welfare facilities IV. Working hours
V. Employment of young persons VI. Annual Leave with wages etc.
Definitions
FACTORY: means any premises:
- in which 10 or more than 10 workers are employed on any day of the preceding 12 months and are engaged in manufacturing process being carried out with the aid of power
- 20 or more than 20 workers are employed on any day of the preceding 12 months in manufacturing process being carried out without the aid of power, are covered under the provisions of this Act.
OCCUPIER : who has the ultimate control over the affairs of the factory. An occupier may be an owner, a lessee, or a mere licensee.
Worker: A worker means a person employed in a manufacturing process, directly or by or through any agency with or without the knowledge of the principal employer.
Manufacturing process: means any process for-
• Making, altering, repairing, delivery or
• Pumping oil, water or
• Generating, transforming power or
• Constructing, reconstructing or
• Preserving or storing any article in cold storage etc.
Approval, Licensing and Registration of Factories• Sec. 6 of the Act empowers the State Government to make rules for the submission of plans, approval, licensing and registration of factories . The application in writing along with the plans and specifications of the factory, for permission, is submitted to the Chief Inspector or the State Government.
• In case nothing is heard within 3 months from the appropriate authority, the permission is deemed to be granted.
• If the State Government or the Chief Inspector refuses to give permission, the applicant may appeal to the Central Government or the State Government respectively with in 30 days of the date of refusal.
Notice by Occupier( sec.7)
Sec 7 of the Act requires the occupier to give notice to the Chief Inspector 15 days before he occupies any premises as a factory. The notice contains:
• Name & situation of the factory.
• Name & address of the occupier.
• Name & address of the owner of the premises.
• Address to which communication relating to the factory may be sent.
• Nature of the manufacturing process to be carried on in next 12 months.
• Total rated horsepower installed or to be installed in the factory.
• Name of the manager of the factory.
• Name of the workers likely to be employed.
Health Safety & Welfare Provisions
The occupier is obligatory to provide for the health, safety and welfare of the workers in the factory and also to maintain inspection staff.
HEALTH
Sec. 11-20 carries provisions relating to health of the workers.
1. Cleanliness: effective drainage & use of disinfectants.
2. Disposal of wastes & effluents after treatment.
3. Adequate ventilation & temperature-
• Adoption of prescribed standards by the State Government.
• Notice by the Chief Inspector to the occupier to adopt measures for reduction of temperature.
4. Dust & Fume.
5. Artificial humidification as per State Government standards.
6. Overcrowding: 9.9/ 14.2 cubic meter of space per worker. Notice of maximum workers to be employed in a workroom shall be posted in each workroom as per the written order of the Chief Inspector.
7. Sufficient & suitable lighting as per State Government standards.
8. Drinking water: suitable drinking points to be legibly marked & to be 6 meters away from washing area , urinals etc, unless shorter distance is approved in writing by the Chief Inspector. Cold water in factories where more than 250 workers are employed.
9. Urinals
10. Spittoons: Contravention of notice regarding the use of spittoons shall be punishable with fine not exceeding Rs. 5.
SAFETY PROVISIONS
Safety provisions are absolute and obligatory on the occupier to follow.
1. Fencing of machinery.
2. Examination of machinery in motion by a trained adult male worker.
3. Restriction on young persons to work on dangerous machines as specified by the State Government.
4. Hoists and lifts to be of good mechanical construction and examined once in every 6 months.
5. Protection of eyes.
Safety of building and machinery
7. Precautions in case of fire.
8. Precautions against dangerous fumes.
9. Precautions against explosive or inflammable dust, gas. etc.
10. Safety officers.
The State Government may make rules requiring the provisions in any factory of such further devices and measures for securing the safety of persons employed as it may deem necessary.
WELFARE PROVISIONS
The various provisions in regard to welfare of the workers are:
1. Washing facilities: separate for male and female should be conveniently accessible and clean
2. Facilities for storing and drying clothing.
3. Facilities for sitting for those workers who are obliged to work in a standing position.
4. First- aid box with prescribed contents for every 150 workers & ambulance room in a factory employing more than 500 workers.
5. Canteens in factory employing more than 250 workers.
6. Sufficiently lighted , ventilated, and clean shelters, rest rooms and lunch rooms in factory employing more than 150 workers.
7. Creches for children under the age of 6 years in factories employing more than 30 women workers.
8. Welfare officers in factories employing 500 or more workers.
Employment of young persons
• Prohibition on employment of young children ( below 14 years)
• A child above 14 or an adolescent may be allowed to work in a factory if
1. A certificate of fitness is in custody of the manager of the factory and
2. Such child or adolescent carries, while he is at work, a token giving reference to such certificate.
• Certificate of fitness: granted by a certifying surgeon after examining him and ascertaining his fitness for work in a factory. An application by the young person shall be accompanied by a document signed by manager. It is valid for 12 months and can be renewed. It can also be revoked any time if the holder is no longer fit to work.
• Certificate of fitness entitles:
A child:
• That he has completed his 14 years.
• That he has attained the prescribed physical standards
• That he is fit for such work
An adult:
• That he has completed his 15th year
• That he is fit for a full day’s work
• Effect of certificate: An adolescent granted a certificate of fitness to work in a factory as an adult shall be deemed to be an adult for all the purposes of Factories Act.
• Working hours: No child shall be employed to work in a factory:
1. for more than 4-1/2 hours in a day 2. during the night
Register of child workers: The manager of every factory where children are employed shall maintain a register of child workers showing:
1. Name of each child worker in the factory,
2. Nature of his work,
3. The group in which he is included,
4. Where his group work on shifts,
5. The number of his certificate of fitness.
Safety provisions for women.
All provisions regarding the employment of adults apply to adult female workers except the following provisions:
• Work on or near the machinery in motion.
• Crèches.
• A woman shall not be allowed to work in a factory for more than 48 hours in any week or 9 hours in a day.
• A woman shall be required to work in a factory only between 6 am. to 7 pm. The State Government by notification may vary these limits in respect of any factory etc.
• Prohibition of employment in dangerous operations.
GENERAL PENALTY FOR OFFENCES: ( sec. 92)
• If in any factory there is any contravention of any of the provisions of this Act or of any rules made there under or of any order in writing given there under, the occupier and manager of the factory shall each be guilty of an offence and punishable with imprisonment for a term which may extend to two years or with fine which may extend to one lakh rupees or with both, and if the contravention is continued after conviction, with a further fine which may extend to one thousand rupees for each day on which the contravention is so continued :
• Where contravention of any of the provisions under section 87 (dealing with dangerous operations) has resulted in an accident causing death or serious bodily injury, the fine shall not be less than twenty-five thousand rupees in the case of an accident causing death, and five thousand rupees in the case of an accident causing serious bodily injury.
The Factories Act, is a social legislation which has been enacted for occupational safety, health and welfare of workers at work places. This legislation is being enforced by technical officers i.e. Inspectors of Factories, Dy. Chief Inspectors of Factories who work under the control of the Chief Inspector of Factories and overall control of the Labour Commissioner, Government of National Capital Territory of Delhi
APPLICABILITY
It applies to factories covered under the Factories Act, 1948. The industries in which ten (10) or more than ten workers are employed and are engaged in manufacturing process being carried out with the aid of power or twenty or more than twenty workers are employed in manufacturing process being carried out without the aid of power, are covered under the provisions of this Act
Salient Features of the Act
1. Approval of Factory Building Plans before construction/extension, under the Delhi Factories Rules, 1950 .
2. Grant of Licences under the Delhi Factories Rules, 1950, and to take action against factories running without obtaining Licence.
3. Renewal of Licences granted under the Delhi Factories Rules, 1950, by the Dy. Chief Inspectors of Factories .
4. Inspections of factories by District Inspectors of Factories, for investigation of complaints, serious/fatal accidents as well as suo moto inspections to check compliance of provisions of this Act relating to :-
I. Health II. Safety III. Welfare facilities IV. Working hours
V. Employment of young persons VI. Annual Leave with wages etc.
Definitions
FACTORY: means any premises:
- in which 10 or more than 10 workers are employed on any day of the preceding 12 months and are engaged in manufacturing process being carried out with the aid of power
- 20 or more than 20 workers are employed on any day of the preceding 12 months in manufacturing process being carried out without the aid of power, are covered under the provisions of this Act.
OCCUPIER : who has the ultimate control over the affairs of the factory. An occupier may be an owner, a lessee, or a mere licensee.
Worker: A worker means a person employed in a manufacturing process, directly or by or through any agency with or without the knowledge of the principal employer.
Manufacturing process: means any process for-
• Making, altering, repairing, delivery or
• Pumping oil, water or
• Generating, transforming power or
• Constructing, reconstructing or
• Preserving or storing any article in cold storage etc.
Approval, Licensing and Registration of Factories• Sec. 6 of the Act empowers the State Government to make rules for the submission of plans, approval, licensing and registration of factories . The application in writing along with the plans and specifications of the factory, for permission, is submitted to the Chief Inspector or the State Government.
• In case nothing is heard within 3 months from the appropriate authority, the permission is deemed to be granted.
• If the State Government or the Chief Inspector refuses to give permission, the applicant may appeal to the Central Government or the State Government respectively with in 30 days of the date of refusal.
Notice by Occupier( sec.7)
Sec 7 of the Act requires the occupier to give notice to the Chief Inspector 15 days before he occupies any premises as a factory. The notice contains:
• Name & situation of the factory.
• Name & address of the occupier.
• Name & address of the owner of the premises.
• Address to which communication relating to the factory may be sent.
• Nature of the manufacturing process to be carried on in next 12 months.
• Total rated horsepower installed or to be installed in the factory.
• Name of the manager of the factory.
• Name of the workers likely to be employed.
Health Safety & Welfare Provisions
The occupier is obligatory to provide for the health, safety and welfare of the workers in the factory and also to maintain inspection staff.
HEALTH
Sec. 11-20 carries provisions relating to health of the workers.
1. Cleanliness: effective drainage & use of disinfectants.
2. Disposal of wastes & effluents after treatment.
3. Adequate ventilation & temperature-
• Adoption of prescribed standards by the State Government.
• Notice by the Chief Inspector to the occupier to adopt measures for reduction of temperature.
4. Dust & Fume.
5. Artificial humidification as per State Government standards.
6. Overcrowding: 9.9/ 14.2 cubic meter of space per worker. Notice of maximum workers to be employed in a workroom shall be posted in each workroom as per the written order of the Chief Inspector.
7. Sufficient & suitable lighting as per State Government standards.
8. Drinking water: suitable drinking points to be legibly marked & to be 6 meters away from washing area , urinals etc, unless shorter distance is approved in writing by the Chief Inspector. Cold water in factories where more than 250 workers are employed.
9. Urinals
10. Spittoons: Contravention of notice regarding the use of spittoons shall be punishable with fine not exceeding Rs. 5.
SAFETY PROVISIONS
Safety provisions are absolute and obligatory on the occupier to follow.
1. Fencing of machinery.
2. Examination of machinery in motion by a trained adult male worker.
3. Restriction on young persons to work on dangerous machines as specified by the State Government.
4. Hoists and lifts to be of good mechanical construction and examined once in every 6 months.
5. Protection of eyes.
Safety of building and machinery
7. Precautions in case of fire.
8. Precautions against dangerous fumes.
9. Precautions against explosive or inflammable dust, gas. etc.
10. Safety officers.
The State Government may make rules requiring the provisions in any factory of such further devices and measures for securing the safety of persons employed as it may deem necessary.
WELFARE PROVISIONS
The various provisions in regard to welfare of the workers are:
1. Washing facilities: separate for male and female should be conveniently accessible and clean
2. Facilities for storing and drying clothing.
3. Facilities for sitting for those workers who are obliged to work in a standing position.
4. First- aid box with prescribed contents for every 150 workers & ambulance room in a factory employing more than 500 workers.
5. Canteens in factory employing more than 250 workers.
6. Sufficiently lighted , ventilated, and clean shelters, rest rooms and lunch rooms in factory employing more than 150 workers.
7. Creches for children under the age of 6 years in factories employing more than 30 women workers.
8. Welfare officers in factories employing 500 or more workers.
Employment of young persons
• Prohibition on employment of young children ( below 14 years)
• A child above 14 or an adolescent may be allowed to work in a factory if
1. A certificate of fitness is in custody of the manager of the factory and
2. Such child or adolescent carries, while he is at work, a token giving reference to such certificate.
• Certificate of fitness: granted by a certifying surgeon after examining him and ascertaining his fitness for work in a factory. An application by the young person shall be accompanied by a document signed by manager. It is valid for 12 months and can be renewed. It can also be revoked any time if the holder is no longer fit to work.
• Certificate of fitness entitles:
A child:
• That he has completed his 14 years.
• That he has attained the prescribed physical standards
• That he is fit for such work
An adult:
• That he has completed his 15th year
• That he is fit for a full day’s work
• Effect of certificate: An adolescent granted a certificate of fitness to work in a factory as an adult shall be deemed to be an adult for all the purposes of Factories Act.
• Working hours: No child shall be employed to work in a factory:
1. for more than 4-1/2 hours in a day 2. during the night
Register of child workers: The manager of every factory where children are employed shall maintain a register of child workers showing:
1. Name of each child worker in the factory,
2. Nature of his work,
3. The group in which he is included,
4. Where his group work on shifts,
5. The number of his certificate of fitness.
Safety provisions for women.
All provisions regarding the employment of adults apply to adult female workers except the following provisions:
• Work on or near the machinery in motion.
• Crèches.
• A woman shall not be allowed to work in a factory for more than 48 hours in any week or 9 hours in a day.
• A woman shall be required to work in a factory only between 6 am. to 7 pm. The State Government by notification may vary these limits in respect of any factory etc.
• Prohibition of employment in dangerous operations.
GENERAL PENALTY FOR OFFENCES: ( sec. 92)
• If in any factory there is any contravention of any of the provisions of this Act or of any rules made there under or of any order in writing given there under, the occupier and manager of the factory shall each be guilty of an offence and punishable with imprisonment for a term which may extend to two years or with fine which may extend to one lakh rupees or with both, and if the contravention is continued after conviction, with a further fine which may extend to one thousand rupees for each day on which the contravention is so continued :
• Where contravention of any of the provisions under section 87 (dealing with dangerous operations) has resulted in an accident causing death or serious bodily injury, the fine shall not be less than twenty-five thousand rupees in the case of an accident causing death, and five thousand rupees in the case of an accident causing serious bodily injury.
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.
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
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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.
(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.
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/- .
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.
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.
Sunday, January 17, 2010
The Industrial Employment ( Standing Orders) Act, 1946
The Industrial Employment ( Standing Orders) Act, 1946
It applies to every Industrial establishment wherein 100 or more workmen are employed or were employed on any day of the preceding 12 months
The Act does not apply to :
Any industry to which The Bombay Industrial Relations Act; 1946 apply.
Any industry to which The Madhya Pradesh Industrial Employment ( Standing Orders) Act 1961 apply
Object of the Act:
- Object of the Act is to require the employers in industrial establishments to define the conditions of employment under them and make the conditions known to workmen employed by them before they accept the employment .
- To maintain uniformity in terms and conditions of employment in respect of workmen belonging to the same category . The rules made in the regard to these conditions is called Standing Orders
MATTERS TO BE PROVIDED IN STANDING ORDERS UNDER THIS ACT
- Classification of workmen, e.g., whether permanent, temporary, apprentices, probationers, or badlis.
- Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates.
- Shift working.
- Attendance and late coming.
- Conditions of, procedure in applying for, and the authority which may grant leave and holidays.
Requirement to enter premises by certain gates, an liability to search. - Closing and reporting of sections of the industrial establishment, temporary stoppages of work and the rights and liabilities of the employer and workmen arising there from.
- Termination of employment, and the notice to be given by employer and workmen.
- Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.
- Means of redress for workmen against unfair treatment or wrongful exactions by the employer or his agents or servants.
- Any other matter which may be prescribed.
Submission of draft standing orders.-
Within six months of the application of the Act , to an industrial establishment, the employer shall submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in his industrial establishment.
Standing orders to be accompanied by particulars of workmen: The draft standing orders submitted shall be accompanied by a statement giving prescribed particulars of the workmen employed in the industrial establishment including the name of the trade union, if any, to which they belong.
Employers in similar establishments may submit a joint draft for their convenience.
Conditions for certification of standing orders.-
Standing orders shall be certified under this Act if--
(a) provision is made for every matter set out which is applicable to the industrial establishment, and
(b) the standing orders are otherwise in conformity with the provisions of this Act; the Certifying Officer is under an obligation to adjudicate upon the fairness or reasonableness of the provisions of any standing orders.
Certification of standing orders :
- Copy of the draft standing order to be sent to trade union or workmen: On receipt of the draft, the Certifying Officer shall forward a copy to the trade union, if any, of the workmen, or where there is no such trade union, to the workmen ,in the prescribed form requiring objections, if any, which the workmen may desire to make to the draft standing orders to be submitted to him within fifteen days from the receipt of the notice.
- After giving the employer and the trade union or representatives of the workmen an opportunity of being heard, the Certifying Officer shall decide whether or not any modification or addition to the draft submitted by the employer is necessary to render the draft standing orders certifiable under this Act, and shall make an order in writing accordingly
- The Certifying Officer shall thereupon certify the draft standing orders, after making any modifications and within seven days send copies of the certified standing orders to the employer and to the trade union or other prescribed representatives of the workmen.
Appeals
Any employer, workman, trade union or other prescribed representatives of the workmen aggrieved by the order of the Certifying Officer within 30 days from the date on which copies are sent by the certifying officer, appeal to the appellate authority, and the appellate authority, whose decision shall be final, shall by order in writing confirm the standing orders either in the form certified by the Certifying Officer or after amending the said standing orders by making such modifications or additions as it thinks necessary to render the standing orders certifiable under this Act. The appellate authority shall, within seven days of its order , send copies of the Certifying Officer, to the employer and to the trade union or other prescribed representatives of the workmen.
Date of operation of standing orders.-
Standing orders shall, unless an appeal is preferred , come into operation on the expiry of thirty days from the date on which authenticated copies are sent or where an appeal is preferred, on the expiry of seven days from the date on which copies of the order of the appellate authority are sent.
Register of standing orders.-
A copy of all standing orders as finally certified under this Act shall be filed by the Certifying Officer in a register in the prescribed form maintained for the purpose, and the Certifying Officer shall furnish a copy to any person on payment of the prescribed fee.
Posting of standing orders.-
The text of the certified standing orders shall be prominently posted by the employer in English and in the language understood by the majority of his workmen on special boards maintained for the purpose at or near the entrance through which the majority of the workmen enter the industrial establishment and in all departments where the workmen are employed.
Duration and modification of standing orders.-
A certified standing orders shall not, except on agreement between the employer and the workmen or a trade union or other representatives of the workmen be liable to modification until the expiry of six months from the date on which the standing orders or the last modifications thereof came into operation. An employer or workman or a trade union or other representative body of the workmen may apply to the Certifying Officer for the modification and such application shall be accompanied by five copies of the modifications proposed to be made, and where such modifications are proposed to be made by agreement between the employer and the workman or a trade union or other representative of the workmen, a certified copy of that agreement shall be filed along with the application.
Tuesday, December 22, 2009
TRADE UNIONS ACT,1926 module 4
IMPORTANT DEFINITIONS
Registrar" means
(i) A Registrar of Trade Unions appointed by the appropriate Government under section 3, and includes an additional or Deputy Registrar of Trade Unions; and
(ii) In relation to any Trade Union, the Registrar appointed for the State in which the head or registered office, as the case may be, of the Trade Union is situated;
Trade dispute
"Trade dispute" means any dispute between employers and workmen or between workmen and workmen, or between employers and employers which is connected with the employment, or non-employment, or the terms of employment or the conditions of labour, of any person, and "workmen" means all persons employed in trade or industry whether or not in the employment of the employer with whom the trade dispute arises; and
Trade Union
"Trade Union" means combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive condition on the conduct of any trade or business, and includes any federation of two or more Trade Unions;
Provided that this Act shall not affect -
(i) Any agreement between partner to their own business;
(ii) Any agreement between an employer and those employed by him as to such employment; or (iii) Any agreement in consideration of the sales of the goodwill of a business or of instruction in any profession, trade or handicraft.
REGISTRATION
S4•Mode of registration - Any seven or more members of a Trade Union may be subscribing their names to the rules of the Trade Union and by otherwise complying with the provisions of this Act with respect to registration, apply for registration of the Trade Union under this Act.
•S5. Application for registration - (1) Even application for registration of a Trade Union shall be made to the Registrar, and shall be accompanied by a copy of the rules of the Trade Union and a statement of the following particulars, namely:-
•(a) The names, occupations and addresses of the members making the application;
•(b) The name of the Trade Union and the address of its head office, and
•(c) The title, names, ages, addresses and occupations of the of the Trade Union.
(2) Where a Trade Union has been in existence for more than one year before the making of an application for its registration, there shall be delivered to the Registrar, together with the application, a general statement of the assets and liabilities of the Trade Union prepared in such form and containing such particulars as may be prescribed.
Registration - The Registrar, on being satisfied that the Union has complied with all the requirements of this Act in regard to registration, shall register the Trade Union by entering in a register to be maintained in such form as may be prescribed, the particulars relating to the Trade Union contained in the statement accompanying the application for Registration.
•Note: This section is mandatory. The Registrar cannot refuse to register a Trade Union if the application for registration complies with the technical requirement as laid down in this Certificate of Registration - The Registrar registering a Trade Union under Section 8, shall issue a certificate of registration in the prescribed form which shall be conclusive that the Trade Union has been duly registered under this Act.
•S10. Cancellation of Registration -
A certificate of registration of a Trade Union may be withdrawn o cancelled by the Registrar –
•(a) On the application of the Trade Union to be verified in such manner as may be prescribed, or
•(b) If the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or that the Trade Union has ceased to exist or has willfully and after notice from the Registrar contravened any provision of this Act or allowed any rule to continue in force which is inconsistent with any such provision, or has rescinded any rule providing for any matter, provision for which is required by Section 6:
•Provided that not less than two months previous notice in writing specifying the ground on which it is proposed to withdraw or cancel the certificate shall be given by the Registrar to the Trade Union before the certificate is withdrawn or cancelled otherwise than on the application of the Trade Union.
Rights and liabilities of registered trade unions
•S15. Objects on which general funds may be spent - The general funds of a registered Trade Union shall not be spent on any other objects than the following, namely:-
•(a) The payment of salaries, allowances and expenses to Officers" office bearers of the Trade Union;
•(b) The payment of expenses for the administration of the Trade Union including audit of the accounts of the general funds of the Trade Union;
•(c) The prosecution of defense of any legal proceeding to which the Trade Union or any member thereof is a party, when such prosecution or defense is undertaken for thee purpose of securing or protecting any rights of the Trade Union as such or any rights arising out of the relations of any member with his employer or with a person whom the member employs;
•(d) Thee conduct of trade disputes on behalf of the Trade Union or any member thereof;
•(e) The compensation of members for loss arising out of trade disputes;
•(f) Allowance to members or their dependants on account of death, old age, sickness, accidents or unemployment of such members;
•(g) The issue of or the undertaking of liability under policies of assurance on the lives for members or under policies insuring members against sickness, accident or unemployment;
•(h) The provision of educational, social or religious benefits for members (including the payment of the expenses of funeral or religious ceremonies for deceased members) or for the dependants of members;
•(i) The upkeep of a periodical published mainly for the purposes of discussing questions affecting employers or workmen as such;
•(j) The payment, in furtherance of any of the objects on which the general funds of the Trade Union may be spent, of contributions to any cause intended to benefit workmen in general, provided that the expenditure in respect of such contributions in any financial year shall not, at any time, during that year be in excess of one-fourth of the combined total of the gross income which has up to that time accrued to the general funds of the Trade Union during that year and of the balance at the credit of those funds at the commencement of that year; and
•(k) Subject to any conditions contained in the notification, any other object notified by the [appropriate Government] in the official Gazette.
S16. Constitution of a separate fund for political purposes -
A registered Trade Union may constitute a separate fund for political purposes-
•(a) The payment of any expenses incurred, either directly or indirectly, by a candidate or prospective candidate for election as a member of any legislative body constituted under [Note: Deleted by Act 42 of 1960] the Constitution or of any local authority, before, during or after the election in connection with his candidature or election; or
•(b) The holding of any meeting or the distribution of any literature or documents in support of any such candidate or prospective candidate; or
•(c) The maintenance of any person who is a member of any legislative body constituted under the Constitution or for any local authority; or
•(d) The registration of electors or the selection of a candidate for any legislative body constituted under the Constitution or for any local authority; or
•(e) The holding of political meetings of any kind or the distribution of political literature or political documents of any kind.
No member shall be compelled to contribute to the fund constituted under sub-section (2), and a member who does not contribute to the said fund shall not be excluded from any benefits of the Trade Union, or placed in any respect either directly or indirectly under any disability r at any disadvantage as compared with other members of the Trade Union (except in relation to the control of management of the said fund) by reason of his contributing to the said fund; and
contribution to the said fund shall not be made a condition for admission to the Trade Union.
PRIVELEGES GIVEN TO TRADE UNION
•S17. Criminal conspiracy in trade disputes - No officers or members of a registered Trade union shall be liable to punishment under sub-section (2) of Section 120-B of the Indian Penal Code, in respect of any agreement made between the members for the purpose of furthering any such object of the Trade Union as is specified in Section 15 unless the agreement is an agreement to commit an offence.
•18. Immunity from civil suit to certain cases - (1) No suit or other legal proceeding shall be maintainable in any Civil Court against any registered Trade Union or any or member thereof in respect of any act done in contemplation or furtherance of a trade dispute to which a member of the Trade Union is a party on the ground only that such act induces some other person to break a contract of employment, or that it is in interference with the trade, business or employment of some other person or with the right of some other person to dispose of his capital of his labour as he wills.
•(2) A registered Trade Union shall not be liable in any suit or other legal proceeding in any Civil Court in respect of any tortuous act done in contemplation or furtherance of a trade dispute by and agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to, express instructions given by the executive of the Trade Union
•Rights of minors to membership of Trade Union -
Any person who has attained the age of fifteen years may be a member of registered Trade Union subject to any rules of the Trade Union to the contrary, and may, subject as aforesaid, enjoy all the rights of a member and execute all instruments an give all acquaintances necessary to be executed or given under the rules:
•21A. Disqualification of office bearers of Trade Union -
(1) A person shall be disqualified for being chosen as, and for being a member of the executive or any other office-bearer or registered Trade Union if-
•(i) He has not attained the age of eighteen years;
•(ii) He has been convicted by a Court in India of any offence involving moral turpitude and sentenced to imprisonment, unless a period of five years has elapsed since his release.
•(2) Any member of the executive or other office-bearer of a registered Trade Union who, before the commencement of the Indian Trade Union (Amendment) Act, 1964, has been convicted of any offence involving moral turpitude and sentenced to imprisonment shall on the date of such commencement, cease to be such member or office-bearer unless a period of five years has elapsed since his release before the date].
•Dissolution -
(1) When a registered Trade Union is dissolved, notice for the dissolution signed by seven members and by the Secretary of the Trade Union shall, within fourteen days of the dissolution, be sent to the Registrar and shall be registered by him if he is satisfied the dissolution has been effected in accordance with the rules of the Trade Union, and the dissolution shall have effect from the date of such regulation.
•(2) Where the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do not provide for the distribution and funds of the Trade Union on dissolution, the Registrar shall divide the funds amongst the member in such manner as may be prescribed.
•Supplying false information regarding Trade Union -
Any person who, wit intent to deceive, gives to any member of a registered Trade Union or to any document purporting or applying to become a member of such Trade Union, any document purporting to be a copy of the rules of the Trade Union or of any alterations to the same which he knows, or has reason to believe, is not a correct copy of such rules or alterations as are for the time being in force, or any person who, with the like intent gives a copy of any rules of an unregistered Trade Union to any person on the pretence that such rules are the rules of a registered Trade Union, shall be punishable with fine which may extend to two hundred rupees.
•Cognizance of offence -
(1) No court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence under this Act.
•(2) No court shall take cognizance of any offence under this Act unless complaint thereof has been made by or with the previous sanction 32, by the person to whom the copy was given, within six months of the date on which the offence is alleged to have been committed.
Registrar" means
(i) A Registrar of Trade Unions appointed by the appropriate Government under section 3, and includes an additional or Deputy Registrar of Trade Unions; and
(ii) In relation to any Trade Union, the Registrar appointed for the State in which the head or registered office, as the case may be, of the Trade Union is situated;
Trade dispute
"Trade dispute" means any dispute between employers and workmen or between workmen and workmen, or between employers and employers which is connected with the employment, or non-employment, or the terms of employment or the conditions of labour, of any person, and "workmen" means all persons employed in trade or industry whether or not in the employment of the employer with whom the trade dispute arises; and
Trade Union
"Trade Union" means combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive condition on the conduct of any trade or business, and includes any federation of two or more Trade Unions;
Provided that this Act shall not affect -
(i) Any agreement between partner to their own business;
(ii) Any agreement between an employer and those employed by him as to such employment; or (iii) Any agreement in consideration of the sales of the goodwill of a business or of instruction in any profession, trade or handicraft.
REGISTRATION
S4•Mode of registration - Any seven or more members of a Trade Union may be subscribing their names to the rules of the Trade Union and by otherwise complying with the provisions of this Act with respect to registration, apply for registration of the Trade Union under this Act.
•S5. Application for registration - (1) Even application for registration of a Trade Union shall be made to the Registrar, and shall be accompanied by a copy of the rules of the Trade Union and a statement of the following particulars, namely:-
•(a) The names, occupations and addresses of the members making the application;
•(b) The name of the Trade Union and the address of its head office, and
•(c) The title, names, ages, addresses and occupations of the of the Trade Union.
(2) Where a Trade Union has been in existence for more than one year before the making of an application for its registration, there shall be delivered to the Registrar, together with the application, a general statement of the assets and liabilities of the Trade Union prepared in such form and containing such particulars as may be prescribed.
Registration - The Registrar, on being satisfied that the Union has complied with all the requirements of this Act in regard to registration, shall register the Trade Union by entering in a register to be maintained in such form as may be prescribed, the particulars relating to the Trade Union contained in the statement accompanying the application for Registration.
•Note: This section is mandatory. The Registrar cannot refuse to register a Trade Union if the application for registration complies with the technical requirement as laid down in this Certificate of Registration - The Registrar registering a Trade Union under Section 8, shall issue a certificate of registration in the prescribed form which shall be conclusive that the Trade Union has been duly registered under this Act.
•S10. Cancellation of Registration -
A certificate of registration of a Trade Union may be withdrawn o cancelled by the Registrar –
•(a) On the application of the Trade Union to be verified in such manner as may be prescribed, or
•(b) If the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or that the Trade Union has ceased to exist or has willfully and after notice from the Registrar contravened any provision of this Act or allowed any rule to continue in force which is inconsistent with any such provision, or has rescinded any rule providing for any matter, provision for which is required by Section 6:
•Provided that not less than two months previous notice in writing specifying the ground on which it is proposed to withdraw or cancel the certificate shall be given by the Registrar to the Trade Union before the certificate is withdrawn or cancelled otherwise than on the application of the Trade Union.
Rights and liabilities of registered trade unions
•S15. Objects on which general funds may be spent - The general funds of a registered Trade Union shall not be spent on any other objects than the following, namely:-
•(a) The payment of salaries, allowances and expenses to Officers" office bearers of the Trade Union;
•(b) The payment of expenses for the administration of the Trade Union including audit of the accounts of the general funds of the Trade Union;
•(c) The prosecution of defense of any legal proceeding to which the Trade Union or any member thereof is a party, when such prosecution or defense is undertaken for thee purpose of securing or protecting any rights of the Trade Union as such or any rights arising out of the relations of any member with his employer or with a person whom the member employs;
•(d) Thee conduct of trade disputes on behalf of the Trade Union or any member thereof;
•(e) The compensation of members for loss arising out of trade disputes;
•(f) Allowance to members or their dependants on account of death, old age, sickness, accidents or unemployment of such members;
•(g) The issue of or the undertaking of liability under policies of assurance on the lives for members or under policies insuring members against sickness, accident or unemployment;
•(h) The provision of educational, social or religious benefits for members (including the payment of the expenses of funeral or religious ceremonies for deceased members) or for the dependants of members;
•(i) The upkeep of a periodical published mainly for the purposes of discussing questions affecting employers or workmen as such;
•(j) The payment, in furtherance of any of the objects on which the general funds of the Trade Union may be spent, of contributions to any cause intended to benefit workmen in general, provided that the expenditure in respect of such contributions in any financial year shall not, at any time, during that year be in excess of one-fourth of the combined total of the gross income which has up to that time accrued to the general funds of the Trade Union during that year and of the balance at the credit of those funds at the commencement of that year; and
•(k) Subject to any conditions contained in the notification, any other object notified by the [appropriate Government] in the official Gazette.
S16. Constitution of a separate fund for political purposes -
A registered Trade Union may constitute a separate fund for political purposes-
•(a) The payment of any expenses incurred, either directly or indirectly, by a candidate or prospective candidate for election as a member of any legislative body constituted under [Note: Deleted by Act 42 of 1960] the Constitution or of any local authority, before, during or after the election in connection with his candidature or election; or
•(b) The holding of any meeting or the distribution of any literature or documents in support of any such candidate or prospective candidate; or
•(c) The maintenance of any person who is a member of any legislative body constituted under the Constitution or for any local authority; or
•(d) The registration of electors or the selection of a candidate for any legislative body constituted under the Constitution or for any local authority; or
•(e) The holding of political meetings of any kind or the distribution of political literature or political documents of any kind.
No member shall be compelled to contribute to the fund constituted under sub-section (2), and a member who does not contribute to the said fund shall not be excluded from any benefits of the Trade Union, or placed in any respect either directly or indirectly under any disability r at any disadvantage as compared with other members of the Trade Union (except in relation to the control of management of the said fund) by reason of his contributing to the said fund; and
contribution to the said fund shall not be made a condition for admission to the Trade Union.
PRIVELEGES GIVEN TO TRADE UNION
•S17. Criminal conspiracy in trade disputes - No officers or members of a registered Trade union shall be liable to punishment under sub-section (2) of Section 120-B of the Indian Penal Code, in respect of any agreement made between the members for the purpose of furthering any such object of the Trade Union as is specified in Section 15 unless the agreement is an agreement to commit an offence.
•18. Immunity from civil suit to certain cases - (1) No suit or other legal proceeding shall be maintainable in any Civil Court against any registered Trade Union or any or member thereof in respect of any act done in contemplation or furtherance of a trade dispute to which a member of the Trade Union is a party on the ground only that such act induces some other person to break a contract of employment, or that it is in interference with the trade, business or employment of some other person or with the right of some other person to dispose of his capital of his labour as he wills.
•(2) A registered Trade Union shall not be liable in any suit or other legal proceeding in any Civil Court in respect of any tortuous act done in contemplation or furtherance of a trade dispute by and agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to, express instructions given by the executive of the Trade Union
•Rights of minors to membership of Trade Union -
Any person who has attained the age of fifteen years may be a member of registered Trade Union subject to any rules of the Trade Union to the contrary, and may, subject as aforesaid, enjoy all the rights of a member and execute all instruments an give all acquaintances necessary to be executed or given under the rules:
•21A. Disqualification of office bearers of Trade Union -
(1) A person shall be disqualified for being chosen as, and for being a member of the executive or any other office-bearer or registered Trade Union if-
•(i) He has not attained the age of eighteen years;
•(ii) He has been convicted by a Court in India of any offence involving moral turpitude and sentenced to imprisonment, unless a period of five years has elapsed since his release.
•(2) Any member of the executive or other office-bearer of a registered Trade Union who, before the commencement of the Indian Trade Union (Amendment) Act, 1964, has been convicted of any offence involving moral turpitude and sentenced to imprisonment shall on the date of such commencement, cease to be such member or office-bearer unless a period of five years has elapsed since his release before the date].
•Dissolution -
(1) When a registered Trade Union is dissolved, notice for the dissolution signed by seven members and by the Secretary of the Trade Union shall, within fourteen days of the dissolution, be sent to the Registrar and shall be registered by him if he is satisfied the dissolution has been effected in accordance with the rules of the Trade Union, and the dissolution shall have effect from the date of such regulation.
•(2) Where the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do not provide for the distribution and funds of the Trade Union on dissolution, the Registrar shall divide the funds amongst the member in such manner as may be prescribed.
•Supplying false information regarding Trade Union -
Any person who, wit intent to deceive, gives to any member of a registered Trade Union or to any document purporting or applying to become a member of such Trade Union, any document purporting to be a copy of the rules of the Trade Union or of any alterations to the same which he knows, or has reason to believe, is not a correct copy of such rules or alterations as are for the time being in force, or any person who, with the like intent gives a copy of any rules of an unregistered Trade Union to any person on the pretence that such rules are the rules of a registered Trade Union, shall be punishable with fine which may extend to two hundred rupees.
•Cognizance of offence -
(1) No court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence under this Act.
•(2) No court shall take cognizance of any offence under this Act unless complaint thereof has been made by or with the previous sanction 32, by the person to whom the copy was given, within six months of the date on which the offence is alleged to have been committed.
Monday, December 21, 2009
INDUSTRIAL RELATIONS
module1
CHARACTERISTICS OF INDUSTRIAL RELATIONS
•Employer- employee interactions
•Web of rules.
•Multidimensional: Factors influencing Industrial relations:
1.Institutional factors.
2.Economic factors.
3.Technological factors.
•Dynamic and changing.
•Spirit of compromise and accomodation.
•Government’s role.
•Wide scope.
•Interactive and consultative in nature.
ESSENTIAL CONDITIONS
Certain conditions should exist for the maintenance of Industrial relations.
•Strong, well organised and democratic employees’ unions.
•Strong and organised employers’ unions.
•Spirit of collective bargaining and willingness to resort to volutary negotiations.
•Maintenance of industrial peace.
SIGNIFICANCE OF INDUSTRIAL RELATIONS
In good industrial relations, both labour and management realise their mutual obligations towards each other and resort to actions that promote harmony and understanding. Following benefits accrue from such a productive relationship:
•Industrial peace.
•Industrial democracy.
•Improved productivity.
•Benefits to workers.
INDUSTRIAL RELATIONS
An industrial relations system consists of the whole gamut of relationships between employees and employees and employers which are managed by the means of conflict and cooperation.A sound industrial relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust.
Actors in the IR system:
Three main parties are directly involved in industrial relations:
Employers: Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them. Management can also affect workers’ interests by exercising their right to relocate, close or merge the factory or to introduce technological changes.
Employees: Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions.
Government: The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal courts.
CHARACTERISTICS OF INDUSTRIAL RELATIONS
•Employer- employee interactions
•Web of rules.
•Multidimensional: Factors influencing Industrial relations:
1.Institutional factors.
2.Economic factors.
3.Technological factors.
•Dynamic and changing.
•Spirit of compromise and accomodation.
•Government’s role.
•Wide scope.
•Interactive and consultative in nature.
ESSENTIAL CONDITIONS
Certain conditions should exist for the maintenance of Industrial relations.
•Strong, well organised and democratic employees’ unions.
•Strong and organised employers’ unions.
•Spirit of collective bargaining and willingness to resort to volutary negotiations.
•Maintenance of industrial peace.
SIGNIFICANCE OF INDUSTRIAL RELATIONS
In good industrial relations, both labour and management realise their mutual obligations towards each other and resort to actions that promote harmony and understanding. Following benefits accrue from such a productive relationship:
•Industrial peace.
•Industrial democracy.
•Improved productivity.
•Benefits to workers.
INDUSTRIAL PEACE
The harmonious relation prevailing in the industry The impact of good industrial relations on production may be seen from the following facts:
1. Reduces Industrial disputes: Good industrial relations reduce the industrial disputes. Disputes are reflections of the basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lock-outs, go slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operations and increasing production.
2. High Morale: Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same i.e. to increase production. Every worker feels that he is a co-owner of the industry. The employer in his turn must realize that the gains of industry are not for him alone but they should be showed equally and generously with his workers. In other words, complete unity of the thought and action is the main achievement of industrial peace of workers int the society and their ego is satisfied. It naturally affects production, because a mighty co-operative efforts alone can produce great results.
3. Mental Revolution: The main object of industrial relations ins a complete mental revolution of workers and employers. The industrial peace lies ultimately in a transformed outlook on the part of both. It is the business of leadership in the ranks of workers employees and government to work out a new relationship in consonance with a spirit of true democracy. Both should think themselves as a partners of the industry and the role of worker in such a partnership should be recognized. On the other hand,workers must recognize employer authority. It will naturally have impact on production because they recognize the interest of each other.
4. New Programmes: New programmes for workers development are introduced in an atmosphere of peace such as training facilities, labour welfare facilities etc. It increases the efficiency of workers resulting in higher and better production at lower costs.
5. Reduced Wastage: Good industrial relations are maintained on the basis of co-operation and recognition of each other. It will help increase production. Wastages of man material and machines and reduced to the minimum and thus national interest is protected. Thus form the above discussion it is evident that good industrial relations is the basis of higher production with minimum cost and higher profits. It also results in increased efficiency o workers. New and new projects are introduced for the welfare of he workers and to promote the morale of the people at work
INDUSTRIAL UNREST /INDUSTRIAL DISPUTE
•Industrial unrest is the term used to describe activities undertaken by the workforce when they protest against pay or conditions of their employment. Actions may include strikes, lockouts etc.
•Industrial Dispute: Constitutes of organised protest against existing industrial conditions. The dispute must pertain to work related issues.
•Causes:
1.Employment.
2.Nationalisation.
3.Administrative related causes.
4.Political causes.
5.Psychological/ Social causes.
INDUSTRIAL DISCIPLINE
“Discipline should be viewed as a condition within an organisation whereby employees know what is expected of them in terms of organisation’s rules, standards and policies and what the consequences are of infraction.’ Rue & Byars.
To maintain harmonious relations and promote industrial peace, a Code of Discipline has been laid down by the 15th Indian Labour Conference in 1957, which applies to both public and private sector enterprises. The code aims at preventing disputes by providing for voluntary and mutual settlement of disputes through negotiations without interference of outside agency. It specifies various obligations for the management and the workers with the objective of promoting cooperation between their representatives .
6th semester INDUSTRIAL RELATIONS & LABOUR LAWS
INDUSTRIAL RELATIONS & LABOUR LAWS
Course Objectives
The objective of the course is to acquaint student’s with the origin and importance of Labour laws governing general functioning of employees in an organisation .And also to educate student with the important provisions under these laws .This will enable them to develop the right perspective of this delicate responsibility to deal with union constructively and to maintain industrial democracy.
Course Contents:
Module I: Basic Concepts
Industrial Relations, Industrial Peace, Industrial unrest and Industrial Discipline
Module –II: Laws Relating to Industry
The factories Act, 1948 - Definition - Approval licensing and registration of factories - Notice by occupier, Health, and welfare measures - weekly holidays. Leave with wages, Employment of women and young person - Penalties and returns.
The Industrial Disputes Act, 1947 - Definition - Persuasive, conciliation and voluntary process for the settlement of industrial disputes - power of the Govt. under ID Act - Instrument of economic coercion - Strike & lock out, Lay off Retrenchment, Transfer and closures - Discharge and Dismissal - Managements prerogative during pendency of proceeding
Module III: Laws Relating to Remuneration
The Payment of Wages Act, 1936 - Definition - Rules for payment of wages and deductions from wage.
The Minimum Wages Act 1948 - Fixing of minimum wages, Procedure for raising minimum wage - Concept of living wages, Fair wage and minimum wage.
The Employees State Insurance Act 1948 - Definition - Applicability of the Act - Insurable workmen - Contribution Benefit - Penalties.
The Employees Provident Fund and Miscellaneous Provisions Act, 1952 and Employees family pension scheme - definition - Coverage of the organization and employees under the Act - Employees Provident Fund and pension fund scheme - Calculation of contribution withdrawal of Provident Fund amount - Penalties for offence.
The Payment of Gratuity Act, 1972 - Definition - Scope and Coverage of the Act - Eligibility criteria - Calculation of Gratuity Nomination.
The Payment of Bonus Act 1965 - Applicability of Act - Coverage of employee - Calculation of bonus Rate of Payable bonus - available surplus - allocable surplus.
Module IV: Laws Relating to Trade Union
The Trade Union Act 1926. Statutory Definition - Registration of TU Immoduley granted to Registered Trade Union - Recognition of TU.
Module V: Compensation and Insurance
The workmen's compensation act 1923 - Definition - Rules regarding workmen's compensation - Defense available to employer and employees, E.S.I.C. Act, 1948, The Maternity Benefit Act 1961
Module VI: Misc Acts
The Industrial Employment (standing order) Act 1946 - Scope and coverage of the Act - Concept of standing order - its certification process - Modification - interpretation and enforcement of standing orders.
Course Objectives
The objective of the course is to acquaint student’s with the origin and importance of Labour laws governing general functioning of employees in an organisation .And also to educate student with the important provisions under these laws .This will enable them to develop the right perspective of this delicate responsibility to deal with union constructively and to maintain industrial democracy.
Course Contents:
Module I: Basic Concepts
Industrial Relations, Industrial Peace, Industrial unrest and Industrial Discipline
Module –II: Laws Relating to Industry
The factories Act, 1948 - Definition - Approval licensing and registration of factories - Notice by occupier, Health, and welfare measures - weekly holidays. Leave with wages, Employment of women and young person - Penalties and returns.
The Industrial Disputes Act, 1947 - Definition - Persuasive, conciliation and voluntary process for the settlement of industrial disputes - power of the Govt. under ID Act - Instrument of economic coercion - Strike & lock out, Lay off Retrenchment, Transfer and closures - Discharge and Dismissal - Managements prerogative during pendency of proceeding
Module III: Laws Relating to Remuneration
The Payment of Wages Act, 1936 - Definition - Rules for payment of wages and deductions from wage.
The Minimum Wages Act 1948 - Fixing of minimum wages, Procedure for raising minimum wage - Concept of living wages, Fair wage and minimum wage.
The Employees State Insurance Act 1948 - Definition - Applicability of the Act - Insurable workmen - Contribution Benefit - Penalties.
The Employees Provident Fund and Miscellaneous Provisions Act, 1952 and Employees family pension scheme - definition - Coverage of the organization and employees under the Act - Employees Provident Fund and pension fund scheme - Calculation of contribution withdrawal of Provident Fund amount - Penalties for offence.
The Payment of Gratuity Act, 1972 - Definition - Scope and Coverage of the Act - Eligibility criteria - Calculation of Gratuity Nomination.
The Payment of Bonus Act 1965 - Applicability of Act - Coverage of employee - Calculation of bonus Rate of Payable bonus - available surplus - allocable surplus.
Module IV: Laws Relating to Trade Union
The Trade Union Act 1926. Statutory Definition - Registration of TU Immoduley granted to Registered Trade Union - Recognition of TU.
Module V: Compensation and Insurance
The workmen's compensation act 1923 - Definition - Rules regarding workmen's compensation - Defense available to employer and employees, E.S.I.C. Act, 1948, The Maternity Benefit Act 1961
Module VI: Misc Acts
The Industrial Employment (standing order) Act 1946 - Scope and coverage of the Act - Concept of standing order - its certification process - Modification - interpretation and enforcement of standing orders.
Tuesday, November 4, 2008
Companies Act, 1956
Companies Act, 1956
Meaning and types of companies, Formation of a company, Memorandum and Articles of Association, Prospectus and Issue of Shares, Share Capital and Shareholders, Company Meetings and Proceedings, Powers and Liabilities of Directors ,meeting ,Managerial Remuneration and Winding up of Company
The Company Act 1956
This principal Act aims at:
• Protection of companies and investors.
• Facilitating the growth and development of the company.
• Safeguarding the interest of creditors.
• Attainment of the socio-economic goals fixed by the government policies.
• Regulating company affairs to preserve public interest.
Introduction
A company is a form of business organization. The definition of the term varies by country. In general, a company is same as a corporation.
Which is a union of natural persons that has its own legal status that is independent from the persons involved. It is a "creature" of statute; i.e., it is like a person created by law. Because it is recognized by governments as such (as a separate creature) it must file tax returns and pay taxes and conform to state and federal law. This separation of persons and corporation gives it special powers. Its status and capacity is determined by the law of the place of incorporation.
A CORPORATION IS DEFINED AS
A LEGAL ENTITY OR STRUCTURE CREATED UNDER THE AUTHORITY OF A STATE'S LAWS,
CONSISTING OF A PERSON OR GROUP OF PERSONS WHO BECOME SHAREHOLDERS.
THE ENTITY'S EXISTENCE IS CONSIDERED SEPARATE AND DISTINCT FROM THAT OF ITS MEMBERS.
LIKE A REAL PERSON, A CORPORATION CAN ENTER INTO CONTRACTS, SUE AND BE SUED, PAY TAXES SEPARATELY FROM ITS OWNERS, AND DO THE OTHER THINGS NECESSARY TO CONDUCT BUSINESS.
CHARACTERISTICS
- Independent corporate existence
- Perpetual succession
- Limited liability
- Transferable shares
- Separate property
- Power to sue / sued
- Common seal
- Separate management
Types of company
A. Private company B. Public company
Limited by shares
Limited by guarantee
Unlimited companies
Association not for profits
Government companies
Holding companies
Subsidiary companies
Types of company
PRIVATE COMPANY / PUBLIC COMPANY
Private company means a company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed, and by its articles,
(a) restricts the rights to transfer its shares, if any;
(b) limits the number of its members to fifty not including-
(i) persons who are in the employment of the company, and
(ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and
(c) prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company ;
(d) prohibits any invitation or acceptance of deposits from persons other than its member, directors or their relatives;
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definitions, be treated as a single member;
Public company means a company which -
(a) is not a private company;
(b) has a minimum paid-up capital of five lakh rupees or such higher paid-up capital, as may be prescribed;
(c) is a private company which is a subsidiary of a company which is not a private company.
A company limited by guarantee.
Commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into insolvent liquidation, but otherwise they have no economic rights in relation to the company. This type of company is common in England.
A company limited by shares.
The most common form of company used for business ventures. Specifically, a limited company is a "company in which the liability of each shareholder is limited to the amount individually invested" with corporations being "the most common example of a limited company .This type of company is common in England.
A limited-liability company.
"A company—statutorily authorized in certain states—that is characterized by limited liability, management by members or managers, and limitations on ownership transfer",
An unlimited liability company. A company where the liability of members for the debts of the company are unlimited. Today these are only seen in rare and unusual circumstances.
Incorporation of a Company
The incorporation of a Company is governed by the Companies Act 1956. The Companies Act is an Act to consolidate and amend the law relating to companies and certain other associations. It extends to the whole of India. Chapters I and II deal with the incorporation of a company and matters incidental thereto.
ADVANTAGES
- Limited liability. One of the key reasons for forming a corporation is the limited liability protection provided to its owners. Because a corporation is considered a separate legal entity, the shareholders have limited liability for the corporation's debts. The personal assets of shareholders are not at risk for satisfying corporate debts or liabilities.
- Corporate persona. Since a corporation is a separate legal entity, it pays taxes separate and apart from its owners (at least in the typical C corporation). Owners of a corporation only pay taxes on corporate profits paid to them in the form of salaries, bonuses, and dividends. The corporation pays taxes, at the corporate rate, on any profits.
- Attractive investment. The built-in stock structure of a corporation makes it attractive to investors.
- Capital incentive.
- Flexibility & autonomy
- Capacity to sue
- Operational structure. Corporations have a set management structure. The owners of a corporation are shareholders, who elect a Board of Directors, which then elects the officers. Other than the election of directors, shareholders do not participate in the operations of the corporation. The Board of Directors is responsible for managing and exercising the rights and responsibilities of the corporation. The Board sets corporate policy and the strategy for the corporation.
- Perpetual existence. A corporation continues to exist until the shareholders decide to dissolve it or merge with another business.
- Freely transferable shares. Shares of corporations are freely transferable, because as a separate entity, the existence of a corporation is not dependent upon who the owners or investors are at any one time. A corporation continues to exist as a separate entity, and is not terminated or dissolved even when shareholders die or sell their shares.
Disadvantage of incorporation
- Formalities ,expenses
- Corporate disclosure
- Divorce of control
- Increased social responsibility
- Greater tax burden
Salomon v. Salomon & Co. Ltd is a foundational decision of the House of Lords in the area of company law
Background
Aron Salomon was a successful leather merchant who specialized in manufacturing leather boots. For many years he ran his business as a sole proprietor. By 1892, his sons had become interested in taking part in the business. Salomon decided to incorporate his business as a Limited company, Salomon & Co. Ltd.
At the time the legal requirement for incorporation was that at least seven persons subscribe as members of a company i.e. as shareholders. The shareholders were Mr. Salomon, his wife, daughter and four sons. Two of his sons became directors; Mr. Salomon himself was managing director. Mr. Salomon owned 20,001 of the company's 20,007 shares - the remaining six were shared individually between the other six shareholders. Mr. Salomon sold his business to the new corporation for almost £39,000, of which £10,000 was a debt to him. He was thus simultaneously the company's principal shareholder and its principal creditor.
When the company went into liquidation, the liquidator argued that the debentures used by Mr. Salomon as security for the debt were invalid, on the grounds of fraud.
HELD: J.V. Williams J. accepted this argument, ruling that since Mr. Salomon had created the company solely to transfer his business to it, the company was in reality his agent and he as principal was liable for debts to unsecured creditors.
Piercing corporate veil
Ultra vires is a Latin phrase that literally means "beyond the powers". Its inverse is called intra vires, meaning "within the powers". It is used as a legal term in a number of common law contexts. In corporate law, ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation's Charter or in a clause in its ; in the laws authorizing its formation, or similar founding documents. Acts attempted by a corporation that are beyond the scope of its charter are void or voidable.
The corporate law concept of piercing (lifting) the corporate veil describes a legal decision where a shareholder or director of a corporation is held liable for the debts or liabilities .
Piercing the corporate veil is not the only means by which a director or officer of a corporation can be held liable for the actions of the corporation. Liability can be established through conventional theories of contract, agency, or tort law. For example, in situations where a director or officer acting on behalf of a corporation personally commits a tort, he and the corporation are jointly liable and it is unnecessary to discuss the issue of piercing the corporate veil. The doctrine is often used in cases where liability is found, but the corporation is insolvent.
Factors for piercing the veil
- Absence or inaccuracy of corporate records;
- Concealment or misrepresentation of members;
- Failure to maintain arm's length relationships with related entities;
- Failure to observe corporate formalities in terms of behavior and documentation;
- Failure to pay dividends;
- Intermingling of assets of the corporation and of the shareholder;
- Manipulation of assets or liabilities to concentrate the assets or liabilities;
- Non-functioning corporate officers and/or directors;
- Other factors the court finds relevant
Formation of company
- Promotion
- Preparation of memorandum of association
- Preparation of articles of association
- Preliminary Contract
- Registration of company
- Issue of prospectus
Promotion
Promotion of company is the process of conceiving an idea and developing it into concrete proposition or project.
Memorandum of association
The memorandum of association of a company, often simply called the memorandum (and then often capitalised as an abbreviation for the official name, which is a proper noun and usually includes other words), is the document that governs the relationship between the company and the outside world
A memorandum of association is required to state the name of the company, the type of company (such as public limited company or private company limited by shares), the objectives of the company, its authorised share capital, and the subscribers (the original shareholders of the company). A company may alter particular parts of its memorandum at any time by a special resolution of its shareholders, provided that the amendment complies with company law .
THERE ARE DIFFERENT CLAUSES TO BE MENTIONED IN THE MOA :
NAME CLAUSE
REGISTERED OFFICE CLAUSE
OBJECT CLAUSE
LIABILITY CLAUSE CAPITAL CLAUSE
Purpose
The MOA is designed to communicate to the public the state of affairs of the company and its purpose of being and operating. This aids various stakeholders of the company (creditors, suppliers, shareholders, etc.) to evaluate the extent of their risk and also possibilities of the company to overcome them at a future date.
Articles of association
The articles of association of a company, often simply referred to as the articles, are the regulations governing the relationships between the shareholders and directors of the company
EFFECT OF MEMORANDUM AND ARTICLES.
(1) Subject to the provisions of this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed by the company and by each members, and contained covenants on its and his part to observe all the provisions of the memorandum and of the articles.
(2) All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company
Incorporation by registration
(1) Any seven or more persons, or where the company to be formed will be a private company, any two or more persons, associated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with or without limited liability.
(2) Such a company may be either -
(a) a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act termed "a company limited by shares");
(b) a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the event of its being wound up (in this Act termed "a company limited by guarantee"); or
(c) a company not having any limit on the liability of its members (in this Act termed "an unlimited company
Prospectus
A prospectus is a legal document that institutions and businesses use to describe the share & securities they are offering for participants and buyers. A prospectus commonly provides investors with material information about mutual funds, stocks, bonds and other investments, such as a description of the company's business, financial statements, biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties and any other material information. In the context of an individual securities offering, such as an initial public offering, a prospectus is distributed by underwriters or brokerages to potential investors.
Share Capital
The issued share capital of a company is the total nominal value of the shares of a company which have been issued to shareholders and which remain outstanding .These shares, along with the share premium account, represent the capital invested by the shareholders in the company. The issued share capital may be less than the authorised share capital, the latter being the total value of the shares that are available for issue by the company.
Shareholder
One who owns shares of stock in a corporation or mutual fund. For corporations, along with the ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors. also called stockholder
TYPES OF SHARES
A company may have as many different types of shares as it wishes, all with different conditions attached to them. Generally share types are divided into the following categories:
Ordinary Shares
As the name suggests these are the ordinary shares of the company with no special rights or restrictions. They may be divided into classes of different value.
Preference Shares
These shares normally carry a right that any annual dividends available for distribution will be paid preferentially on these shares before other classes.
Cumulative preference
These shares carry a right that, if the dividend cannot be paid in one year, it will be carried forward to successive years.
Redeemable Shares
These shares are issued with an agreement that the company will buy them back at the option of the company or the shareholder after a certain period, or on a fixed date. A company cannot issue redeemable shares only.
Types of Meetings
Two types of meeting
1. Shareholders meeting
Statutory meeting
Annual General Meeting
Extra Ordinary General Meeting
2. Directors Meeting
Statutory meeting
This meeting is held by Public limited company compulsorily. The meeting should be held after one month but before six months of obtaining the certificate of commencement of business.
Annual General Meeting
The company gathering, usually held at the end of each fiscal year, at which the previous year and the outlook for the future are discussed and directors are elected by common shareholders. Shortly before each annual meeting, the corporation sends out a document called a proxy statement to each shareholder. The proxy statement contains a list of the business concerns to be addressed at the meeting and a ballot for voting on company initiatives and electing the new Board. This proxy ballot authorizes someone else at the meeting (usually the management team) to vote on investors' behalf.
Extra Ordinary General Meeting
All general meetings other than statutory meeting and annual general meeting is called Extra Ordinary General Meeting. This meeting is called by the directors or tribunal
2. Directors Meetings
Also known as Board Meetings. The directors have no individual rights (subject Articles of Association) to act on behalf of the company. They must act through the Board and their powers emanate from their collective decisions.
Regulations affecting the conduct of Board meeting and their powers (and limitations) are usually set out in their Articles of Association.
Powers of Directors
Powers of directors Subject to the provisions of the Act, the memorandum and the articles and to any directions given by special resolution, the business of the company shall be managed by the directors who may exercise all the powers of the company.... The powers given by this regulation shall not be limited by any special power given to the directors by the articles and a meeting of directors at which a quorum is present may exercise all powers exercisable by the directors.
In other words, the directors have the power to deal with any particular matter unless the Act, the articles or a (previously passed) special resolution says to the contrary.
Most companies do not have special articles and most have not passed special resolutions to restrict the directors' powers, so the reality is that in most companies the directors can make any decision unless the Act says it needs a resolution in general meeting is required.
Powers of Directors
1.General powers of the Board :
The board is entitled to exercise all such powers and to do all such acts and things as the company is authorised to do, provided the board shall exercise shall its powers subject to Companies Act, MOA, AOA.
2.Powers to be exercised in the board meetings
The board shall exercise the following powers on behalf of the company by means of resolution passed at the Board meeting:
Issue debentures.
Invest funds of the company.
Make loans.
Borrow money otherwise than on debentures.
3. Powers to be exercised with the approval of company in general meeting
To sell, lease or dispose of the whole of the undertaking of the company.
To remit or give time for repayment of any debt due to the company by a director.
To contribute to charitable or other finds not directly related to the business of the company.( Rs. 50,000 or beyond).
Borrowing of money beyond the paid-up capital of the company.
4. Power to make political contributions:
To any political parties or for any political purpose but should not exceed 5 % of the company’s net profit of three consecutive financial years.
Liabilities of Directors
Directors' legal duties fall into the following categories:
(1) general fiduciary duties imposed by the branch of the common law known as equity;
(2) the duty to observe care under the common law of negligence;
(3) duties under the Companies Acts, the Insolvency Act 1986 and related legislation, including for fraudulent and wrongful trading;
(4) duties imposed by the company itself;
(5) duties imposed by other legislation and common law provisions
Managerial Remuneration
Remuneration of directors The directors shall be entitled to such remuneration as the company may by ordinary resolution determine and, unless the resolution provides otherwise, the remuneration shall be deemed to accrue from day to day.
The total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its manager in respect of any financial year shall not exceed eleven per cent of the net profits of that company for that financial year computed in the manner laid down in sections 349 except that the remuneration of the directors shall not be deducted from the gross profits
Winding up of Company
Wind-up or windup can refer to a verb for terminating the existence of a company or other entity with a view to its liquidation and dissolution. In law, liquidation refers to the process by which a company (or part of a company) is brought to an end, and the assets and property of the company redistributed.
MODES OF WINDING UP :
There are three ways, in which a company may be wound up. They are :
- Winding up by the court.
- Voluntary winding up,
- Members Voluntary winding up.
- Creditors Voluntary winding up.
- Winding up subject to supervision of the court
WINDING UP BY THE COURT:
A company may be wound up by the court in following situations. Here, the court means "High Court".
If the company itself, has passed a special resolution in the general meeting
If there is a default, in holding the statutory meeting
If the company fails to commence it's business within one year from the date of it's incorporation, or suspends it's business for a whole year.
A company limited by shares, has to obtain a "certificate of commencement" of business from the registrar. Unless it obtains such certificate, it cannot carry on it's business operation.
If the number of members, in a public company is reduced to less than seven, and in case of private company less than two.
If the company is unable to pay its debits; where the financial position of the company is, such, that it has more liabilities than assets, and after disposing off the assets
If the court, itself is of the opinion that the company should be wound up.
VOLUNTARY WINDING UP
A company may , voluntary wind up it's affairs, if it is unable to carry on it's business, or if it was formed only for a limited purpose, or if it is unable to meet it's financial obligation, and etc. A company may voluntary wind up itself, under any of the two modes:
Members voluntarily winding up
Creditors voluntarily winding up
A company may voluntarily wind up itself, either by passing :
An ordinary resolution, where the purpose for which the company was formed has completed, or the time limit for which the company was formed, has expired.
Or
By way of special resolution
Both types of resolution shall be passed in the general meeting of the company.
WINDING UP SUBJECT TO SUPERVISION OF COURT
Winding up subject to supervision of court, is different from "Winding up by court." Here the court only supervise the winding up procedure. Resolution for winding up, is passed by members in the general meeting. It is only for some specific reasons, that court may supervise the winding up proceedings. The court may put up some special terms and conditions also.
Disqualifications of directors
A person shall not be capable of being appointed director of a company, if-
(a) he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
(b) he is an undischarged insolvent;
(c) he has applied to be adjudicated as an insolvent and his application is pending;
(d) he has been convicted by a Court of any offence involving moral turpitude
(e) he has not paid any call in respect of shares of the company
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