An introduction to the most important labour laws in India. The presentation gives just an idea of what is the Act all about. It acts like a handbook to a budding HR executive.

1. Basics of important
labour laws in India
An handbook for the HR executive working in industrial sector.
Prepared and presented by Harikrishna Akoju

2. Contents
 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
 Employees’ State Insurance Act, 1948
 Factories Act, 1948
 Industrial Disputes Act, 1947
 Payment of Bonus Act, 1965
 Payment of Gratuity Act, 1972
 Workmen’s Compensation Act, 1923
 Maternity Benefit Act, 1961
 Contract Labour (Regulation and Abolition) Act, 1970

3. Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952
 A Central Board is appointed by Govt. of India for implanting the law. Further,
State Boards are appointed which are headed by Commissioners.
 Law came into existence w.e.f. March 4, 1952 and is applicable to any factory
or establishment with more than 20 employees.
 The law states the following three schemes:
 Employees’ Provident Fund Scheme, 1952
 Employees’ Deposit Linked Insurance Scheme, 1976
 Employees’ Pension Scheme, 1995
 Employees with wage above INR15,000/- (Basic+DA) per month are eligible to
be a member of the EPF.

4. Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952 (Contd..)
 Employee’s share is 12% of basic+DA towards PF
 Employer’s share is 12% of basic+DA, out of which only 8.33% is towards PF
and the rest 3.67% is towards the pension fund.
 Form 11 for new EPF account.
 Form 19 is for withdrawal of PF account.
 Form 10C if for withdrawal of Pension Scheme account.
 Form 13 is for transfer of PF or Pension scheme in new PF account.

5. Employees State Insurance Act, 1948
 Applicable to employees earning below INR15,000 (Basic+DA) per month.
 Applicable for factories, shops or establishments employing more than 10.
 ESI contribution is 6.5% of the gross salary; out of which employee contributes
1.75% from is gross salary and the remaining 4.75% is contributed by the employer.
 The benefits provided to the employees and their families are:
 Medical benefit
 Sickness benefit
 Maternity benefit
 Disablement benefit
 Dependant benefit
 Funeral Expenses
 Others benefits

6. Factories Act, 1948
 Section 2(m):
“Factory" means any premises including the precincts thereof- (i) whereon ten or more workers are
working, or were working on any day of the preceding twelve months, and in any part of which a
manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or
(ii) whereon twenty or more workers are working, or were working on any day of the preceding
twelve months, and in any part of which a manufacturing process is being carried on without the
aid of power, or is ordinarily so carried on,- but does not include a mine subject to the operation of
3*[the Mines Act, 1952 (35 of 1952),] or 4*[a mobile unit belonging to the armed forces of the
Union, a railway running shed or a hotel, restaurant or eating place].
 The main objective of the act is to ensure safe, healthy an good working conditions for the
workers working in the factories.
 Many safety, welfare measures relating to working hours, cleanliness, sanitation, leaves and
wages, etc. have been elaborately prescribed in the act which every factory in India has to
adhere to.
 Every factory is liable for inspection by a Chief Inspector appointed by a State Govt.

7. Industrial Disputes Act, 1947
 To address disputes among employers and workmen.
 To promote measures to securing amity among the stakeholders, prevent illegal strikes,
retrenchments etc.
 To promote collective bargaining.
 Setting up a permanent mechanism for conciliation and arbitration.
 The Act clearly defines the strike and lay-off rights, wages, workmen etc.
 The Act defined authorities like:
 Works Committee (Sec 3)
 Conciliation Officers (Sec 4)
 Board of Conciliation (Sec 5)
 Court of Inquiry (Sec 6)
 Labour Court (Sec 7)
 Industrial Tribunal (sec 7-A)
 National Tribunal (Sec 7-B)

8. Payment of Bonus Act, 1965
 Every establishment with more than 20 employees.
 The Act clearly gives the organizations exempt from the Act.
 Employees are eligible to receive bonus when they receive salary upto
Rs.10,000/- per month. However, for calculation purposes, Rs.3,500/-per
month maximum will be taken.
 Minimum bonus to be paid is 8.33% of basic+DA and the maximum is 20%.
 The Act gives the employees the statutory right to a share in the profits of the
employer.
 Every employee is covered provided worked not less than 30 days in that
establishment.

9. Payment of Gratuity Act, 1972
 All establishments with more than 10 employees.
 Gratuity is paid after rendering continuous service for 5 years on
 Superannuation
 Retirement or termination
 Death or disability
 Gratuity = (Monthly Salary x 15 das x no. of years of service)/26
 Max Gratuity payable is Rs.10,00,000/-

10. Workmen’s Compensation Act, 1923
 The Act is meant to provide compensation to workmen in case of disability
due to accidents occurring while in duty.
 The disability may be death, permanent, partial or temporary and contracting
occupational disease.
 An accident report should be sent by the employer to the Commissioner
within 7 days. Concerned employee has to send a ‘notice of accident’.
Employer has to get the employee examined by a qualified medical
practitioner.
 The amount of compensation depends on the nature of accident, monthly
wage of employee, Relevant Factor as specified in section IV of the Act.
 Funeral expenses of Rs.2500/- is also included in the Act.
 There is a limitation prescribed in the Act for each type of disability.

11. Maternity Benefit Act, 1961
 All establishments with more than 10 employees.
 The Central Industrial Relations Machinery (CIRM) in the Ministry of Labour is
responsible for enforcing the Act. CIRM is also known as Chief Labour
Commissioner (Central) Organization.
 Every pregnant who served at least 80 days in 12 months before the expected
date of delivery (EDD). However, if a women is earning less than Rs.15,000/-,
she may be offered ESI scheme.
 She may request for light work 10 weeks before the EDD.
 She has to submit a written notice to the employer before 7 weeks before the
EDD that she will be absent for 6 months before and after her delivery.
 Two nursing breaks until the child becomes 15 months old.

12. Contract Labour (Regulation and Abolition)
Act, 1970
 Establishment with more than 20 employees.
 An Act to regulate the contract labour employment.
 Principal Employer should register and the Contractor has to obtain licence.
 The Act defines all the responsibilities of the Principal Employer and the
Contractor.
 It emphasises on the rights regarding payment of wages, ESI etc to the contractor
by the Contractor.
 The Contractor has to maintain registers, muster roll, etc. And he has to submit
half yearly and yearly returns to Licencing Officer.
 Act defines prohibition of contract labour, providing canteens, rest rooms and
other facilities to contract labour, effect of non-registration, licencing and other
rules.
 All the above Acts are applicable to contract labour.

13. “
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Thank you…
Harikrishna Akoju