Employee Relation & Labour law

Unit – 3
The Factories Act, 1948:
The Factories Act, 1948 is an important piece of legislation in India that aims to regulate the
working conditions in factories. It was enacted to ensure the health, safety, welfare, and proper
working conditions of workers. Here are some key provisions of the Factories Act:
1. Objectives:
 To regulate the working conditions in factories.
 To ensure the health, safety, and welfare of workers.
 To prevent the exploitation of labor.
2. Applicability:
 It applies to factories employing 10 or more workers, where power is used, or 20 or more
workers, where power is not used.
3. Key Provisions:
 Licensing and Registration: Factories need to obtain a license for operation, and certain
provisions of the Act are applicable once the factory is registered.
 Working Hours: It regulates the number of working hours per day and week, rest intervals, and
overtime.
 Health and Safety: The Act sets standards for ventilation, temperature, cleanliness, and safety
measures. It also mandates the provision of first aid facilities.
 Welfare Measures: It requires the provision of amenities like washrooms, drinking water,
canteens, and restrooms for workers.
 Child Labor and Young Workers: The Act restricts the employment of children and young
persons and provides for their working conditions.
 Annual Leave with Wages: It mandates a certain number of days of paid leave for workers
based on their length of service.
 Safety Officers: Factories employing a certain number of workers are required to appoint safety
officers.
 Penalties for Violations: The Act prescribes penalties for contraventions, which may include
fines or imprisonment.
The Shop and Establishment Act, 1948:
The Shop and Establishment Act is a state-level legislation that governs the operation of shops,
commercial establishments, and workplaces. The main objective is to regulate the conditions of
work and employment in shops and commercial establishments.
1. Objectives:
 To regulate the conditions of work and employment in shops and commercial establishments.
 To provide for statutory obligations of employers and rights of employees.
2. Applicability:
 It applies to all establishments engaged in retail or wholesale trade, commercial establishments,
offices, and other similar places of work.
3. Key Provisions:
 Registration: Establishments covered by the Act need to be registered within a specific period
from the date of commencement of work.
 Working Hours and Rest Intervals: It prescribes the maximum number of hours of work per
day and week, rest intervals, and prohibitions on overtime.
 Holidays and Leave: The Act mandates provisions for weekly holidays, annual leave, and
casual and sick leave.
 Employment of Women and Children: It sets rules for the employment of women and children,
including restrictions on night work.
 Maintenance of Records: Employers are required to maintain specific records related to
employment, wages, and attendance.
 Display of Notices: Certain notices related to working hours, holidays, and other statutory
information must be displayed in the establishment.
 Penalties for Violations: The Act outlines penalties for non-compliance with its provisions,
which may include fines.
It’s important to note that the specifics of the Shop and Establishment Act can vary from state to
state in India, as it is primarily a state-level legislation. Therefore, the exact provisions may differ
depending on the jurisdiction.

The Factories (Amendment) Bill 2016 aimed to amend the existing Factories Act, 1948, which
regulates the working conditions in factories. The proposed amendments were intended to
modernize and streamline various aspects of the Act to align it with current industrial practices
and technologies. Some of the key proposed amendments included:
1. Definition of Factory: The Bill sought to redefine and clarify the term “factory” to accommodate
changes in the industrial landscape, including those related to technology and automation.
2. Working Hours and Overtime: It aimed to provide more flexibility to employers regarding
working hours and overtime, especially in industries with continuous processes.
3. Employment of Women: The Bill proposed allowing women to work in night shifts, provided that
appropriate safety measures and facilities are in place.
4. Annual Leave with Wages: It aimed to increase the maximum limit of annual leave with wages
from 240 to 270 working days.
5. Occupational Health and Safety: The Bill intended to strengthen provisions related to
occupational health and safety, including the requirement for first aid facilities and emergency
response.
6. Electronic Record-Keeping: It proposed allowing the maintenance of records in electronic form,
which would align with modern record-keeping practices.
7. Single License for Multiple Processes: The Bill sought to introduce provisions for a single
license for multiple processes in a factory, reducing administrative burdens for employers.
8. Exemption of Small Factories: The proposed amendments aimed to provide certain
exemptions for small factories, with a view to promoting ease of doing business.
Please note that the Bill may have undergone further changes or even been enacted into law
after my last knowledge update. To get the most current and accurate information about the
status and provisions of the Factories (Amendment) Bill 2016, I recommend consulting official
government sources or legal databases.

The Payment of Wages Act, 1923, is an important labor legislation in India that regulates the
payment of wages to certain classes of employed persons. It was enacted to ensure that workers
receive their wages on time and in the full amount due to them. The Act applies to employees in
certain specified categories, including those employed in factories, railways, and industrial or
other establishments.

Key Provisions of the Payment of Wages Act, 1923:

1. Fixation of Wage Periods: The Act allows for the fixation of wage periods, which cannot exceed
one month.
2. Time of Payment: Wages must be paid before the expiry of the 7th day (in the case of
establishments employing less than 1,000 workers) and before the expiry of the 10th day (in the
case of establishments employing 1,000 or more workers) after the end of the wage period.
3. Mode of Payment: Wages can be paid either in cash or through checks or by crediting the
wages to the employee’s bank account.
4. Deductions: Certain authorized deductions are allowed, such as those for income tax, provident
fund contributions, and other authorized purposes. Unauthorized deductions are prohibited.
5. Fines and Deductions for Damage or Loss: Any fine imposed on an employee must be
reasonable, and the total amount of fines in any wage period must not exceed three percent of
the wages payable.
6. Maintenance of Records: Employers are required to maintain records and registers containing
particulars of employees, the work performed by them, the wages paid to them, and receipts by
them.
7. Inspectors: The Act empowers inspectors to conduct inspections and inquire into any complaint
regarding non-compliance with the provisions of the Act.
8. Penalties: Penalties are prescribed for offenses such as non-payment of wages, unauthorized
deductions, and other violations of the Act.
Amendments to the Payment of Wages Act:
 The Payment of Wages Act has been amended over the years to address changing labor
dynamics and to improve the effectiveness of wage regulation. Some notable amendments
include:
1. The Payment of Wages (Amendment) Act, 2005: This amendment introduced provisions
related to the payment of wages through electronic means, such as direct bank transfers, in
addition to traditional methods like cash and checks.
2. The Payment of Wages (Amendment) Act, 2017: This amendment enabled employers to pay
wages by crediting them to the bank accounts of employees, among other changes. It aimed to
encourage digital payments and reduce the use of cash.
It’s important to note that the specific provisions and amendments to the Payment of Wages Act
may vary depending on the jurisdiction and may be subject to change. Employers and
employees should refer to the latest version of the Act and any subsequent amendments for the
most up-to-date information.

Employees’ Compensation Act, 1923:

The Employees’ Compensation Act, 1923, is a significant piece of legislation in India that
provides for compensation to employees and their dependents in case of injury or death arising
out of and in the course of employment. It is aimed at providing financial security to workers and
their families in the event of work-related accidents or injuries.
Key Provisions of the Employees’ Compensation Act:
1. Employer’s Liability for Compensation: The Act makes it obligatory for employers to pay
compensation to employees for injuries caused by accidents arising out of and during the course
of employment.
2. Eligibility for Compensation:
 Covers all employees, including temporary, casual, and part-time workers, who suffer injuries or
death due to accidents at the workplace.
 The Act also covers certain occupational diseases specified under the law.
3. Amount of Compensation:
 The amount of compensation is based on the nature and extent of the injury, the wages of the
employee, and other factors.
 In case of death, the Act provides for compensation to be paid to the dependents of the
deceased employee.
4. Notice of Accident and Claim: The Act requires both the employer and employee to provide
notice of any accident resulting in injury or death within a specified time frame.
5. Medical Expenses: The Act also covers the cost of medical treatment and hospitalization for
injured employees.
6. Employer’s Defenses: The Act outlines certain defenses available to employers, such as
contributory negligence on the part of the employee or the existence of a willful disobedience of
safety rules.
7. Adjudication of Claims: The Act establishes a mechanism for the adjudication of claims, which
may involve the Employees’ Compensation Commissioner or the appropriate authority.
8. Penalties: It prescribes penalties for non-compliance with the provisions of the Act.
Amendment in 2016: In 2016, the Act was amended to change its name from the “Workmen’s
Compensation Act” to the “Employees’ Compensation Act.” This change reflects a more inclusive
approach, acknowledging that compensation is provided to all employees, irrespective of their
gender.
It’s important for both employers and employees to be aware of the provisions of the Employees’
Compensation Act to ensure that their rights and responsibilities are upheld in cases of work-
related injuries or accidents.

The Industrial Disputes Act, 1947 is an important piece of legislation in India that governs
industrial relations and provides a framework for the prevention and resolution of industrial
disputes. The act was enacted to promote industrial peace and harmony and to protect the rights
of both employers and employees.
Here are some key provisions and aspects of the Industrial Disputes Act, 1947:
1. Definition of Industrial Dispute: The act defines an industrial dispute as any disagreement or
difference between employers and employers, or between employers and workmen, or between
workmen and workmen, which is connected with the employment or non-employment or the
terms of employment or with the conditions of labor.
2. Authorities under the Act:
 Works Committee: This is a bipartite forum consisting of equal representatives of employers
and employees, established to promote harmonious relations between them.
 Conciliation Officers: They are appointed by the appropriate government to mediate and
conciliate in industrial disputes.
 Board of Conciliation: It is a tripartite body consisting of independent members, nominated by
the appropriate government, to mediate and help in the settlement of disputes.
 Courts of Inquiry: They are appointed by the government to inquire into any matter connected
with an industrial dispute or any matter appearing to be connected with an industrial dispute.
3. Prohibition of Strikes and Lockouts during Pendency of Proceedings: During the pendency
of conciliation or arbitration proceedings, or while a settlement or award is in operation, the act
prohibits the initiation of strikes by workmen and lockouts by employers.
4. Layoff and Retrenchment: The act provides provisions for the conditions under which workmen
can be laid off or retrenched, and it lays down certain procedures that employers must follow.
5. Compulsory Arbitration: In cases where the parties are unable to reach a settlement through
negotiation or conciliation, the appropriate government can refer the dispute to compulsory
arbitration.
6. Notice of Change: Employers are required to give notice of any change in terms and conditions
of employment to the workmen likely to be affected by such changes.
7. Provisions for Closure of an Undertaking: The act contains provisions for the closure of an
undertaking and the responsibilities of employers in such cases.
8. Penalties for Illegal Strikes and Lockouts: The act prescribes penalties for illegal strikes and
lockouts.
9. Retrenchment Compensation: In case of retrenchment, the act mandates the payment of
compensation to the workmen.
10. Conditions for Valid Layoff: The act outlines the conditions that must be met for a layoff to be
considered valid.
11. Rights of Workmen: The act provides certain protections and rights for workmen, including the
right to seek redress in case of wrongful termination.
12. Applicability: The act applies to all industrial establishments, including those in the public and
private sectors.
It’s important to note that the Industrial Disputes Act, 1947 has undergone several amendments
over the years to adapt to changing industrial and economic conditions in India. It plays a crucial
role in regulating industrial relations and ensuring fair treatment of both employers and
employees in the country.