LABOUR LAWS

Labour laws emerged when the employers tried to restrict the powers of workers' organizations and
keep labour costs low. The workers began demanding better conditions and the right to organize so as
to improve their standard of living. Employer’s costs increased due to workers demand to win higher
wages or better working conditions.This led to a chaotic situation which required the intervention of
Government.In order to put an end to the disputes between the ever-warring employer and employee,
the Government enacted many labour laws.

In India the labour laws are so numerous, complex and ambiguous that they promote litigation rather
than the resolution of problems relating to industrial relations,The labour movement has contributed a
lot for the enactment of laws protecting labour rights in the 19th and 20th centuries. The history of
labour legislation in India can be traced back to the history of British colonialism

Service sector:

The part of the economy that includes individuals and businesses that produce services rather than
goods, The service sector includes education, finance, communications, health care, utilities,
wholesale and retail trade, and transportation.

Labour law:

Labour Law is the body of laws, administrative rulings, and precedents which address the
relationship between and among employers, employees, and labor organizations, often dealing with
issues of public law.

Labour laws for service sectors:

Tamil Nadu Shops and Establishments Act, 1947

Tamil Nadu Maternity Benefit Act, 1961

Contract Labour Act, 1970

Payment of Gratuity Act, 1972

Tamil Nadu Industrial Establishments (National and Festival)) Holidays Rules, 1959

Payment of wage Act, 1936

Employees state insurance Act, 1948

Employees provident fund and miscellaneous Act, 1952

Tamil Nadu shops and establishment Act, 1947:

This law regulates the employment of workers in shops and commercial establishments.

The Act provides for the opening and closing hours of shops and establishments, and provision of
weekly holiday with wages.

The officials of the Labour Department who are notified as Inspectors under the Act are competent to
initiate prosecution proceedings against the employers who violate the provision of this law.

The Act provides for the compounding of offences committed under this law. This Act gives pride of
place to the Tamil Language. This Act requires that in the name board of any shop or commercial
establishment the name of the establishment should be written predominantly in Tamil.

This Act is being enforced by 218 Assistant Inspectors of Labour, 68 Deputy Inspectors of Labour and
28 Inspectors of Labour

Tamil Nadu Maternity Benefit Act, 1961:

The law regulates the employment of women during six weeks immediately after delivery or
miscarriage or medical termination of pregnancy

The law safeguards women’s from being employed in hazardous nature of work to pregnant women.

To pay maternity benefits for a maximum period of twelve weeks of which six weeks before delivery
and six weeks after delivery provided the women works for a minimum of 80 days in a year.

To grant one month’s leave with wages, in addition to maternity benefits, for illness arising out of
pregnancy, delivery, pre-mature birth of a child, miscarriage, medical termination of pregnancy and
tubectomy operation.

To give two breaks of 15 minutes each to nursing mothers until the child attains the age of 15 months.

Not to discharges, dismiss during the period of absence allowed under the Act / Rules.

To exhibit abstract of the Act and the Rules in the premises.

Contract Labour Act, 1970:

The Contract Labour (Regulation and Abolition) Act, 1970 is enacted with an object to regulate the
employment of contract labour in certain establishments and to abolish this system in certain
circumstances and for matters concerned therewith.

This Act applies to any establishment in which 20 or more workmen are employed on any day of the
proceeding twelve months as contract labour and to every contractor who employs or employed on
any day of the proceeding twelve months 20 or more workmen.
Every contractor has to get license under this Act.

If the benefits under this Act, to the contract labour employed in an establishment are not provided by
the contractors within the time specified, the principal employer is liable to provide such amenities.

Payment of Gratuity Act, 1972:

To pay gratuity at the rate of 15 days salary per year of service to employees, who have put in a
minimum of 5 years’ service

Note: The calculation of gratuity should be made as follows:

Divide the monthly salary by 26 days and multiply by 15 days and further multiplied by number of
years of services. The last years’ service if more than six months to be taken as one year for
calculation and in all other years employee should work minimum of 240 days.

To pay gratuity within 30 days from the date of receipt of application by the employee in Form ‘I’.

To obtain nomination in Form F from employees on completion of one year service.

To serve Notice of opening in Form A to jurisdictional controlling authority.

To display abstract of the Acts and Rules in Tamil and English at the premises of establishment.

To maintain and use forms prescribed under the Rules

Tamil Nadu Industrial Establishments (National and Festival)) Holidays Rules, 1959:

To allow every employee in each calendar year, a holiday on 26th Jan, 15th Aug., 2nd Oct. and five
other holidays for such festivals as the employer may specify in consultation with employees.

To submit proposal for the specification of festivals if FORM No.I in duplicate along with a copy of
notice in FORM No.II to the Jurisdictional Inspector.

To display holidays list approved in FORM No.III in the premises of establishment.

The employer should send to the Inspector a statement showing the holidays allowed in the calendar
year under section 3 in FORM No. V and also display the same in the premises.

The employer should serve a Notice in FORM NO.V-A on the employee who is required to work on
any holiday, not less than 24 hours before such holiday.

To give twice the wages to employees who work on holidays or normal wages with a substituted
holiday.

Payment of wage Act, 1936:

Any person employed in any organization who is drawing a salary less than 6500 is eligible to avail
benefits under this Act
The Act provide for timely and regular payment of wages, on or before 7th in case of less than 1000
employees and on or before 10th in case of more than 1000 employees

The total deduction must not exceed 50% of the total salary

Every employer is required to maintain registers/records in Form No. I, II, III, IV to be kept for 3 years
from last entry.

Employee State Insurance Act, 1948:

To register the factory / establishment, within 15 days by filing Form 01 and to obtain employers code
number.

To obtain Declaration, in Form 1 before taking any person into employment, To send declaration forms
within 10 days to the ESI Local office along with Return of Declaration in Form 3.

To deduct 1.75% of the wages as employee’s contribution and add 4.75% as employee’s contribution
and deposit the same within 21 days of the last day of the calendar month.

To maintain a Register of Employees in Form 7 and make entries of contributions.

To make payment of ESI contributions within 21 days of wage period.

To send Return of Contributions in Form 6 to Local Office within 42 days from the closure of
contribution period.

To obtain particulars of employee’s family in Form 1-A and later, any changes in Form 15-B, within 10
days, and submit the same to the local ESI office.

To issue Identity Card, in place of slip, to the employees.

To maintain a bound Inspection Book, prescribed under Regulation 102 A – an Accident Book in Form
15 and to send Accident Report to the local office/dispensary and to others depending upon the
seriousness of the accident.

Employee’s provident fund and miscellaneous Act, 1952:

To obtain PF Code Number, soon after employing 20 or more persons, from the Regional/ Sub-
Regional PF Commissioner by submitting prescribed forms.

To allot individual PF Number, to each employee and maintain the list in Form 9.

To obtain Nomination and Declaration in Fom.2 from every employee including casual, Temporary,
Contract or Regular immediately and obtaining employer’s Code Number.

To deduct 12 % of earned salary (gross of basic + DA+ retaining allowance if any) in the payment.

To pay employee’s share of 12% and employer’s share of 3.67% to the Provident Fund in A/c. No.1
through prescribed common challan, within 15 days from the wage period.
To pay employer’s share of 8.33% to the Pension Fund in A/c. No. 2 through prescribed common
challan within 15 days from the wage periods

To pay PF Administration Charges at 1.10% to A/c. No. 10 through prescribed common challan within
15 days from the wage period.

To pay EDL I charges at 0.5% to A/c. No. 21 through prescribed common challan within 15 days from
the wage period.

To pay Inspection charges at 0.01% to A/c. No.22 through prescribed common challan within 15 days
from the wage period.

To maintain Contribution Card in Form 3-A separately for all PF members.

To send monthly statement of Contributions in Form 12-A along with copies of paid challan.

To send Form 5 along with the Declaration and Nomination in Form 2 and Form 10 along with Form 3-
A.

To send Annual Return in Form 6-A along with Form 3-A before 20th March of each year

Conclusion:

This self-certification by the IT-ITES companies will be regarded as sufficient compliance with the
requirements of the different Acts and the Rules made there under regarding the maintenance of
registers and filing of the returns. The first filing shall be manual. Thereafter, the subsequent returns
shall be maintained in electronic form. Any distortion of facts while making self-certification will be
dealt with stiff penalties. E-filing of returns will be permitted after all the offices of the concerned
Inspectors are computerized for receiving such returns.