1. Chapter 5
Compensation and salary
Administration

2. Laws governing employee service
condition

3. Labour
• The term ‘labour’ means productive work
especially physical work done for wages.
• Labour law also known as employment law is
the body of laws, administrative rulings, and
precedents which address the legal rights of,
and restrictions on, working people and their
organizations.

4. • There are two broad categories of labour law:
First, collective labour law relates to the
tripartite relationship between employee,
employer and union.
Second, individual labour law concerns
employees' rights at work and through the
contract for work.The law relating to labour
and employment

5. Factories Act , 1948
• The Factories Act provides for the health, safety,
welfare, service conditions and other aspects of
workers in factories.
• It applies to all factories employing more than 10
people and working with the aid of power or
employing 20 people and working without the
aid of power. It covers all workers employed in
the factory premises or precincts directly or
through an agency including a contractor,
involved in any manufacture.

6. • Some provisions of the Act will vary according
to the nature of work of the establishment.

7. • Licensing and renewal of license under the Act.
• Provision of adequate safety measures within the
factory premises.
• Provision of adequate welfare measures like
crèche, canteen, wash room etc for the workers.
• Payment of wages as per the provisions of the
Act.
• Payment of overtime wages.
• Maintenance of registers.
• Submission of returns.

8. Employee State
Insurance Act , 1948
• This Act provides for the provision of
• benefits to employees in case of
• sickness, maternity and employment
• injury. All employees including
• casual, temporary or contract
• employees drawing wages less than
• Rs 10000 per month are covered.

9. • Remittance of contribution every month.
• Maintenance of registers.
• Submission of returns as per the provisions of
the Act.

10. Employee's Provident
Fund and
Miscellaneous
Provisions Act , 1952
• The PF Act provides for the compulsory
institution of contributory provident funds,
pension funds and deposit linked insurance
funds for employees.
• This Act applies to industries specified in
Schedule I employing 20 or more persons and
any other class of establishments employing
20 or more persons notified by the
Government.

11. Maternity Benefit Act ,
1961
• Maternity Benefit Act aims to regulate the
employment of women in certain establishments for
certain periods before and after child-birth and to
provide for maternity benefits including maternity
leave, wages, bonus, nursing breaks etc.
• It is applicable to every factory, mine or plantation
including those
• belonging to Government, irrespective of the number
of employees, and to every shop or establishment
wherein 10 or more persons are employed or were
employed on any day of the preceding 12 months.

12. Payment of Gratuity
Act , 1972
• The Act provides for a scheme for the payment
of gratuity to employees engaged in factories,
mines, oilfields, plantations, ports, railway
companies, shops or other establishments.
• The Act enforces the payment of 'gratuity', a
reward for long service, as a statutory retrial
benefit. Every employee irrespective of his wages
is entitled to receive gratuity if he has rendered
continuous service of 5 years or more than 5
years.

13. • Payment of gratuity to employees leaving the
establishment after completion of 5 years.
• Notice of opening to concerned labour
authority.
• Displays required under the Act.
• Maintenance of registers of allocable surplus,
bonus etc.
• Submission of annual returns.

14. The Weekly Holidays
Act , 1942
• The Weekly Holidays Act provides for grant of
weekly holidays to persons employed in
shops, restaurants and theatres.
• Provision of weekly holidays.

15. Facilities to be provided to contract
labourers
• 1) Rest rooms
• 2) Canteen
• 3) Latrines and urinals
• 4) Drinking water
• 5) First aid facilities

16. Maintenance of records
• 1) Register of persons employed.
• 2) Muster roll
• 3) Register of wages
• 4) Register of deductions for damage or loss
• 5) Register of fines
• 6) Register of advances
• 7) Register of overtime

17. Salary administration

19. Trade unions
• Trade Unions are voluntary organization of
Workers as well as Employers formed to protect
and promote the interest of their members. They
are the most suitable organizations for balancing
and improving the relations between the
employer and the employees. Trade Unions have
made headway due to rapid industrial
development. The workers come together to
maintain and improve their bargaining power on
wages and working conditions. The first organized
Trade Union

20. • in India named as the Madras Labour Union was
formed in the year 1918. From the beginning itself,
Trade Unions were not confined to workers alone.
From 19thCentury itself there were Employer’s
associations in the form of Chamber of Commerce,
Industrial Associations etc. to protect and promote the
interests of their members in a concerted manner.
After independence, expansion of industrial activity
and grouping worker’s Trade Unions acted as a spur for
strengthening and expansion of employers’
organization

21. • Collective bargaining is process of joint
decision making and basically represents a
democratic way of life in industry. It is the
process of negotiation between firm’s and
workers’ representatives for the purpose of
establishing mutually agreeable conditions of
employment. It is a technique adopted by two
parties to reach an understanding acceptable
to both through the process of discussion and
negotiation.

22. • ILO has defined collective bargaining as,
negotiation about working conditions and
terms of employment between an employer
and a group of employees or one or more
employee, organization with a view to
reaching an agreement wherein the terms
serve as a code of defining the rights and
obligations of each party in their
employment/industrial relations with one
another.

23. • Collective bargaining involves discussions and
negotiations between two groups as to the
terms and conditions of employment. It is
called ‘collective’ because both the employer
and the employee act as a group rather than
as individuals. It is known as ‘bargaining’
because the method of reaching an
agreement involves proposals and counter
proposals, offers and counter offers and other
negotiations.

24. Important Prerequisites for a Successful
Collective Bargaining are listed below:
(1) The parties must attain a sufficient degree of organisation. If the
workers’ organisation is weak, employers can say that it does not
represent the workers and will refuse to negotiate with it. Unless
the workers are able to form strong and stable unions, collective
bargaining will not be successful.
(2) Freedom of association is essential for collective bargaining. Where
there is no freedom of association, there can be no collective
bargaining. Freedom of association implies that the workers as well
as the employers will have the right to form an organisation of their
own to protect their interests.
(3) There should be mutual recognition between both the groups.
Collective bargaining cannot begin if the employers do not
recognise the workers’ organisation. The conflict of interests makes
the two groups hostile to each other. They must recognise each
other and realise that adjustment and understanding is essential for
the achievement of organisational goals.

25. (4) There must exist a favourable political climate, essential for successful collective
bargaining. If the government encourages collective bargaining as the best method
of regulating conditions of employment, it will be successful. Where the
governments restrict trade union activities, there can be no collective bargaining.
(5) Agreement must be observed by those to whom they apply. The workers’
organisation must be strong enough to exercise its authority over its members. If
the trade union has no power over its members, collective bargaining will not be
effectively implemented.
(6) A give and take policy must prevail in the organisation. The difference between two
parties can be adjusted only by compromise so that an agreement can be reached.
Neither side should be too rigid on its demand. Their attitudes should be flexible
and both sides should be ready to give up some of its demands. Unions should not
rigidly insist upon unreasonable demands and should be ready to reduce its
demands to come to an agreement.
(7) Sometimes unfair labour practices are resorted to by both the employers and the
trade unions. These will restrict the development of collective bargaining. Unfair
labour practices should be avoided by both the sides, as this will create an
atmosphere of goodwill.

26. • Maruti suzuki strike case study
• http://www.citehr.com/354574-details-about-
maruthi-suzukis-strike.html