Things to remember in Labour laws, Recruiter’s perspective:

Labour law is a cluster of legislations, there is no excuse for ignorance of law, it is

therefore essential for personnel / HR Depart. To look after the proper compliance of the
legislations.
Following is a list of some Acts with Imp Sections/point to remember which one should
understand and remember. More important one should know how to interpret the sections
properly.

Few things one should know about every Act.

1.Year of enactment of the Act

2. Objective
3. Definition
4. Scope & coverage
5. Administrative authority
6. Employee entitled
7. Obligations
8. Imp. Sections (some are in the following list)

For better understanding classify all the Acts into broad category like…Acts related to
social security, acts related to wages etc.

As far as Factories act & ID Act is concerned…. don’t guess anything just try to
understand every section remember as many sections as you can.

Following list contain few acts from which recruiter frequently ask questions, if at all
they ask anything other than Factories & ID.

* Apprentices
Year of Enactment: 1961
Imp. Sections / Things to remember
• Sec2 (aa)
• Sec 3
• Sec 14
• Sec 17
• Apprentice is a trainee not a worker.
• They are not covered under EPF ACT, ESI & PAYMENT OF BONUS ACT.

*The Contract labour, 1970

• Sec 10. (Analyse it critically)
• Contract labour are covered under EPF & ESI
• Sec 21
• Principal employer doesn’t have to pay gratuity & bonus to contract labours.
*The EPF ACT, 1952
• Sec 16
• Sec 17
• Employer’s contribution: Establishment with less than 20 people- 10% of basic,
D.A.
: Establishment with 20 MORE than 20 people- 12% of
basic, D.A.
• Towards deposit-linked insurance fund - 0.5%
• Central Govt. contribution to pension fund: 1.16% of the pay of the members.

* The ESI ACT, 1948

• Sec 53,
• Sec 61
• Employer’s contribution: 4.75% of the wages.
• Employee’s contribution: 1.75% of their wages.
• Employees earning less than or equal to Rs. 50 are exempted.
• Sec 72 & 73

*The Minimum Wages Act, 1948

• Sec 5
• Sec 9
• Sec 13
• Sec 16
• Sec 25
• Have a look at the schedule part 1 & 2

*The payment of Bonus Act, 1965

• Calculation of Bonus (Sec 4,5,6 & 7)
• Minimum Bonus
• Maximum bonus
• Set on & set of (Sec15)
• Sec 17
*Payment of gratuity, 1972
• Sec 5
• Continuous Service
• Calculation of gratuity Sec 4
• Maximum gratuity
• Deduction & forfeiture of gratuity
• Sec 6
• Protection of gratuity against attachment

*Payment of Wages act, 1936

• Unauthorised deductions
• Limit of deductions
• Analyse Sec 7 critically

*The Trade Union Act, 1926

• Registration of trade union
• Appointment of Office bearers
• Legal status of a registered TU
• Sec 23,25,26 & 27
• Obligation of TU

*The Workmen’s Compensation Act, 1923

• Sec 3
• Doctrine of notional extension
• Amount of Compensation
• Occupational diseases.

NOTE: Don’t confine yourself to these acts/sections, if possible cover all the Acts ,
but above things are must to know as these are bare minimum what a recruiter expect
from a student of personnel management.

Amit Parashar
Executive HR
Larsen & Toubro Ltd.