AMENDMENTS IN LABOUR LAWS

PREVIOUSLY

1-TheActappliedtowagespayableuptoacertainlimitforawage
period,usuallyamonth.

2- ThewordsusedintheActwerepersonsemployedand
notworkmenoremployees.ItmeansthattheActwas
applicabletoallemployeesandworkmendrawingwagesnot
abovetheprescribedlimit.

3- TheActappliedonlytothepersonsemployedinfactoriesorin
railwayswhetherdirectlyorthroughacontractor.

PRESENTLY

1- TheActnowappliestoeveryindustrialandcommercial
establishmentincludingafactoryandBank.

2- Thesamewordsnamely,personsemployedandnotworkmen
oremployeesarestillusedintheAct.

3- ThelimitofwagesasacriterionfortheapplicationoftheAct
hasbeenabolished.ItmeansthattheActisnowapplicableto
allpersonsemployedintheindustrialandcommercial
establishmentsirrespectiveofthewagelimit.

THE WORKMENS COMPENSATION ACT, 1923

Previously the Act applied to all workmen employed in any

capacityasspecifiedinscheduleIIoftheActanddrawingwages
notexceedingacertainlimit.Itdidnot,however,applytothose
employed on casual basis or employed otherwise than for the
purposeoftheemployerstradeorbusiness.

Sincecasualworkmanhasbeendeletedfromtheclassificationof
workmen as given in Standing Order I of the W.P. Standing
OrdersOrdinance,1968,theActwillnowapplytoallworkmen
employed in any capacity as specified in Schedule II except
thoseemployedotherwisethanforthetradeorbusinessofthe
employer.

The Act uses the word workman but at the same time lays
emphasis on employment in any such capacity as specified in
scheduleII.

Theconditionofwagelimithasalsobeendeleted.Henceevery
workman employed in any specified capacity irrespective of
wage limit will now be entitled to the prescribed rate of
compensationintheeventofdeathortotaldisablement.

W.P. STANDING ORDERS ORDINANCE, 1968

No gratuity shall be payable for the period where

contributionhasbeenmadetoanapprovedpension
fundasdefinedintheIncomeTaxOrdinance,2001
andtheemployerscontributionisnotlessthe50%
of the limit prescribed in the aforesaid Ordinance
with the workmen also contributing the remaining
amount.

Gratuity is already not payable for the period of

existence of provident fund to which the
employers contribution is not less that the
workmanscontribution.

There is, however, no bar if provision is made for

gratuity in addition to the provident fund in the
employers own rules or is so provided under a
settlementarrivedatwiththeCBA.

COMPANIESPROFITS (WORKERS
PARTICIPATION), ACT, 1968
Previous definition of worker : Worker in relation to a company
meansanemployeeofthecompanywhofallswithinthedefinitionof
workerasdefinedintheIRO,2002andisintheemploymentofthe
companyfornotlessthansixmonths.
Present definition: Worker in relation to a company means an
employee of the company including employed by or through a
contractorworkingfororinthecompanyforaperiodofnotlessthan
sixmonths.

COMPANIES PROFITS (WORKERS

PARTICIPATION) ACT, 1968
(AS AMENDED)
Paragraph 4 : Disbursement of benefits:Theshareofaworkerinannual
allocation to the fund shall be expressed in units or factions of units
(worked out to two places of decimal) of the face value of rupees ten
determinedinthefollowingmanner,namely:(a)

Thenumberofavailableunitsshallbesodividedinthreepartsforthe
threecategoriesofworkersmentionedbelowthataworkerinthefirstof
thosecategoriesgetsfourunitsforeachtwounitsthataworkerinthe
secondofthesecategoriesgetsorforeachoneunitthataworkerinthe
lastofthesecategoriesgets:-

CATEGORIES
1-

Workersdrawingaveragemonthlywagesnotexceeding
Rs.7,500.00

2-

Workersdrawingaveragemonthlywagesexceeding
Rs.7500.00butnotexceedingRs.15,000.00

3-

Workersdrawingaveragemonthlywagesexceeding
Rs.15,000.00.

4-

Notwithstandinganythingcontainedinthescheme,noworkershall,in
anyoneyear,beentitledoutoftheannualallocationtounitsexceeding
theamountoffourtimesoftheminimumwagesforunskilledworkers
(4600x4=18,400).

EMPLOYEES OLD-AGE BENEFITS, ACT, 1976

(AS AMENDED)
1- The number of persons for the application of the Act shall be
twentyinsteadoftenforindustriesorestablishmentssetupafter
July,1,2006.
2- Surviving spouse entitled to pension on the same basis as is
being used for the calculation of old-age pension instead of
minimumpensionwitheffectfrom1-7-2007.
3- Bothold-ageandinvaliditypensiontobecalculatedonthebasis
oflastmonthswageseffective1-7-2007.
4- Minimum pension raised from Rs. 1300/- to Rs. 1500/- p.m.
Monthly rate of pension, other than minimum pension, already
allowedraisedby15%effective1-7-2007.

PERIOD OF WORK:Itincludesthenormalworkhours,overtime
hoursandrestintervals(section3%ofFactoriesAct,1934).
WORK HOURS : It means the normal work hours excluding the
restinterval.
OVERTIME :Itmeansthehoursoverandabovethenormalwork
hoursincludingtherestintervals.
HOLIDAYS: Weekly holidays, annual holidays, compensatory
holidays,festivalholidays.
LEAVES : Casual leave, sick leave, shortleave, specialleave with
orwithoutpay.
RELAY/SHIFT:Whenworkofthesamekindiscarriedbytwoor
more sets of workers working during different periods of the day,
each of such sets in called a relay, and the period or periods for
whichitworksiscalledshift.

THE FACTORIES ACT, 1934

WORK HOURS NON CONTINUOUS PROCESS
WEEKLY WORK-HOURS:
No adult worker shall be allowed or required to work in a
factoryformorethanfortyeighthoursinanyweek,or
wherethefactoryisaseasonalone,formorethanfifty
hoursinanyweek;
Providedthatanadultworkerinafactoryengagedonwork
which for technical reasons must be continuous
throughoutthedaymayworkforfiftysixhoursinany
week.
DAILY WORK-HOURS:
No adult worker shall be allowed or required to work in a
factoryformorethanninehoursinanyday;provided
thatamaleseasonalworkerinaseasonalfactorymay
worktenhoursaday.
INTERVALS FOR REST:
a)
Onehouraftersixhoursworking
or
b)
Halfanhourafterfivehoursworking.
and
c)
At least two intervals of half an hours each before a
worker is required to work for more than eight and a
halfhours.

WORK HOURS FACTORIES

(CONTINUOUS PROCESS)
1.

Ordinarilyeighthoursshift.

2.

Whenshiftsarechangednoshiftmaybeemployedformore
than16hoursinoneday,thatis,twoperiodsof-8hourseach
withanintervalof8hours.

3.

Thepersonswhohaveworkeddoubletimeshallatnextchange
ofshifthaveaholidayof24consecutivehours.

4.

Noworkershallbeemployedformorethan14consecutive
dayswithoutacompensatoryrestperiodof24consecutivehrs.

5.

Thesystemofshiftshouldbeapprovedbythechiefinspector
offactoriesortheinspectorsoauthorised.

6.

Theaverageweeklyhoursofworkperweekinanyperiodof
threeweeksshallnotexceed56.

7.

Maximumovertime12hoursinaweek.

8.

Weekmeansaperiodofsevendaysbeginningatmid-nightof
Sunday.

9.

Daymeansaperiodof24hoursbeginningatmid-night.

FACTORY ACT, 1934

(AS AMENDED)
Spread over: The period of work of an adult worker in a factory
shall be so arranged that along with his intervals for rest under
section37,theyshallnotspreadovermorethantwelvehoursinany
day, save with the permission of the Provincial Government and
subjecttosuchconditionsasitmayimpose,eithergenerallyorinthe
caseofanyparticularfactory.
Women Workers:TheprovisionsofchapterIVshallalsoapply to
womenworkerssubjecttothefollowingconditions:
(a)

Noexemptionfromtheprovisionsofsection36(daily)work
hours)maybegrantedinrespectofwomenworkers.

(a)

Nowomanshallbeallowedtoworkinanyfactoryexcept
between6a.m.and7a.m.

Providediftheemployerarrangesforthetransportfacilities,the
womenmayworkupto10p.m.intwoshifts.
Note:Spreadoverisapplicableonlytoanon-continuousprocess
section43.

FACTORIES ACT, 1934

(AS AMENDED)
Spread over (Section (38)
1- Noncontinuousprocessrunonthebasisofsixfulldaysaweek:
Normalworkinghours: 8hoursperday
Restinterval
: hoursafterfivehours
working
Overtime
: 3hoursincluding
hoursrestinterval
onalldays
(1962PLC1380).
Totalperiodperweek
: 72hours
2- Noncontinuousprocessrunonbasisoffiveandahalfdaysper
week:
Normalworkinghours : 8hoursoneachofthe
fivefulldays.
Restinterval
: hoursoneverydayof
thefullfivedays.
Overtime
: 3hourincludinghalfan
hourrestintervalonall
fivedays.
Normalworkhours
: 5hoursonhalfday.
Totalperiodperweek
: 65hours.

THE FACTORIES AT, 1934

HOLIDAYS & LEAVES
1- Weekly Holiday: (Non-continuous process).
Sunday or on any day in three days before or after Sunday
Noticetotheinspectoroffactoriesnecessary.
2- Weekly Holiday (Continuous Process)
Onedayinaweekdependingupontheshiftposition.
Aworkercanberequiredtoworkforfourteenconsecutivedays
withoutanyweeklyholidayifthecircumstancessorequire.The
holidaysomissedhastobeallowedascompensatoryholidayas
soonasthecircumstancespermit.
NB:Weeklyholidaynotencashable.
3- Annual leave (All factories)
14daysaftercompletionofoneyearsservice-accumurableupto
28days.
4- Sick leave (all factories)
16daysonhalfaveragepayinayear
5- Casual leave (all factories)
10dayswithpayinayear.
6- Festival holidays (all factories)
AsnotifiedbyProvincialGovt.

W.P. SHOPS & ESTABLISHMENTS

ORDINANCE, 1969
(AS AMENDED)
1- Daily, weekly hours and overtime:
SaveasotherwiseexpresslyprovidedinthisOrdinance,noadult
employee shall be required or permitted to work in any
establishmentinexcessofninehoursadayandfortyeighthours
aweek,andnoyoungpersoninexcessofsevenhoursadayand
fortytwohoursaweek.
Overtimepermissiblebutnotmorethan624hoursperannumin
thecaseofanadultandfourhundredandsixtyeightinthecase
ofayoungpersoninayear.
2- Payment for overtime:
Atdoublethenormalrateofwagesforeveryhour.
Provided that no such overtime shall be payable to contract
workersinreceiptofwagesbeingcalculatedonpieceratebasis.
3- Spreadover
The period of work of an adult and young person shall be so
arranged that inclusive of the interval for rest or meals under
section7,itshallnotspreadovermorethantwelvehoursinthe
caseofadultandninehoursinthecaseofyoungperson.
Providedthatthetotalperiodofworksoworkedout,incaseof
an adult worker, shall not exceed sixty hours and by a young
personfiftyfourhoursaweek.

PERMANENT/TEMPORARY/CASUAL
WORKMEN.
CLASSIFICATION

PREVIOUS LAW

PRESENT LAW

1.Permanent
workman

Aworkmanwhohasbeen
engagedonpermanentbasis
andhassatisfactorilycompleted
theprobationaryperiodofthree
months.

Aworkmanwhohasbeen
engagedonworkofpermanent
naturelikelytolastformore
thanninemonthsandhas
satisfactorilycompleteda
probationaryperiodofthree
months.

2.Temporary
workman

Aworkmanwhohasbeen
engagedforworkwhichisof
anessentiallytemporarynature
likelytobefinishedwithina
limitedperiod.

Aworkmanwhohasbeen
engagedforworkwhichisof
anessentiallytemporarynature
likelytobefinishedwithina
periodnotexceedingnine
months.

3.Probationer

Aworkmanprovisionally
employedtofillapermanent
vacancyinapostandhasnot
completedthreemonthsservice
therein.

Sameasbefore.

4.Casualworkman

Aworkmanwhoseemployedto
fillapermanentvacancyina
postandhsnotcompletedthree
monthsservicetherein.

Omitted.

5.Badli

Aworkmanappointedinthe
postofpermanentworkmanor
probationerwhoistemporarily
absent.

Same-butacquirespermanent
statusifemployedfor
continuousperiodofthree
monthsormoreorfor183days
duringanyperiodof12
consecutivemonths.

6.Apprentice

Alearnerwhoispaidan
allowance.

Anapprenticewithinthe
meaningofapprenticeship
ordinance,1962.

7.Contractworker

Aworkerwhoworkson
contractbasisforaspecific
periodofremunerationtobe
calculatedonpieceratebasis.

CONTRACT / PIECE RATED WORKER

1.

Contractworkerinreceiptofwagesbeingcalculatedonpiece
ratebasisnotentitledtoovertimepaymentundersection9of
theW.P.Shops&EstablishmentsOrdinance,1969.

2.

Ontheotherhandsection47(3)oftheFactoriesAct,1934
providesthattheProvincialGovt.inconsultationwiththe
industryconcernedmayfixtimeratesasnearlyaspossible
equivalenttotheaveragerateoftimeratedworkers,andthe
ratessofixedshallbedeemedtobetheordinaryratesof
thoseworkersforthepurposeofovertime.

W.P. SHOPS & ESTABLISHMENTS

ORDINANCE, 1969
(AS AMENDED)
Spreadoverinacommercialestablishmentorofficerunonthebasis
offiveandahalfdaysaweek:
1- Normalworkinghoursoneverydayonthefivefulldays:8hour
2- Restintervalineveryfullday:1houraftersixhoursworking
3- Overtimeoneveryfullday:2hours
4- Normalworkinghoursonthesixthhalfday:5hours.
Totalworkhoursperweek:11x5+5:60
Threeconditionshavebeenobservedintheabovespreadover.
- Oneisrestintervalaftersixhoursworkingoneveryfullday
- Theotheristhespreadoverinclusiveofrestintervalshallnot
exceedtwelvehoursinaday.
-

Thethirdisthatthetotalperiodincludingtheovertimehours
andrestintervalsshallnotexceedsixtyhoursinaweek.

Thefourthisthatrestintervalisnotincludedinnormalwork
hoursbutincludedinspreadoverandthetotalperiod.

W.P. SHOPS & ESTABLISHMENTS

ORDINANCE, 1969
1.

(a).
Except as otherwise provided in this
Ordinance every person employed in any establishment
shall, in addition to the leave and holidays as may be
admissible to himundersections14, 15 and 16be allowed
asholiday,onedayineachweek.
(b)
No deduction on account of any holiday
allowedundersubsection(1)shallbemadefromthewages
ofanyemployeeofanyestablishment.
(c)Ifanemployeeisemployedondailywages,heshallnone
thelessbepaidhisdailywagesfortheholiday,andwherean
employee is paid on piece rate, he shall receive for the
holidaytheaverageofthewagesreceivedintheweek.
(d)
The choice of the closed day shall rest with
employer who shall intimate such choice to the prescribed
authority.

2.

Opening and Closing hours:

(a)No establishment shall on any day remain open after 8
p.m.
(b)
Noemployeeshallberequiredorpermittedto
work continuously in any establishment for more than six
hoursinthecaseofanadultandformorethanthreeanda
halfhoursinthecaseofayoungperson,unlesshehasbeen
allowed an interval for rest or means of not less than one
hour.
(c)Except with the permission of the Govt. on woman or
young person shall be employed in any establishment
otherwisebetweenthehoursof9a.m.and7p.m.

INDIAN CONTRACT LABOUR REGULATION

AND ABOLITION ACT, 1970
DEFINITION OF CONTRACT LABOUR AND
CONTRACTOR
Section 2(B) A workman shall be deemed to be employed as
contractlabourinorinconnectionwiththeworkofanestablishment
whenheishiredinorinconnectionwithsuchworkbyorthrougha
contractor.
Section 2 (C) Contractor in relation to an establishment means a
person who undertakes to produce a given result for the
establishment other than a mere supply of goods or articles or
manufacturestosuchestablishment,throughcontractlabourorwho
supplies contract labour for any work of the establishment and
includesasub-contractor.

W.P. STANDING ORDERS ORDINANCE, 1968

Section 2(f) (iv) - industrialestablishmentmeans(1)

____________________

(2)

____________________

(3)

____________________

(iv) The establishment of a contractor, who directly

or indirectly, employs workman in connection
withtheexecutionofacontracttowhichheisa
party,andincludesthepremisesinwhich,orthe
site at which, any process connected with such
workiscarriedon.

IRO, 2002
CONTRACTOR / EMPLOYER
Section 2 (x) (f) Employerinrelationtoanestablishment
includes a contractor or establishment of a contractor
who or which undertakes to procure the labour or
servicesofworkmenforusebyanotherestablishmentfor
anypurposewhatsoeverandforpaymentinanyformand
onanybasiswhatsoever.

COMPANIES PROFITS (WORKERS

PARTICIPATION) ACT, 1968
Previous definition of worker : Worker in relation to a
company means an employee of the company who falls
withinthe definition of workeras defined in the IRO,2002
and is in the employment of the company for not less than
sixmonths.
Present definition :Workerinrelationtoacompanymeans
an employee of the company including employed by or
through a contractor working for or in the company for a
periodofnotlessthansixmonths.

COMPANIES PROFITS (WORKERS

PARTICIPATION), ACT, 1968
The Act applies to every company engaged in an industrial
undertakingwhichsatisfiesanyoneofthefollowingconditions:1)
a

Thenumberofworkersemployedbyitatanytimeduring
yearis50ormore.

2)
Thepaidupcapitalofthecompanyasonthelastdayof
its accounting year is rupees 20 lakhs or more. This condition now
appliesonlytocompaniesestablishedbeforeJuly1,2006.
For the companies established thereafter the condition
willbe5millionsrupeesormore.
3)
Thevalueofthefixedassetsofthecompany(atcost)as
onthelastdayofaccountingyearisrupeesfortylakhsormore.This
conditionalsonowappliestocompaniesestablishedbeforeJuly1,
2006. For companies established thereafter the condition will be
rupeestwentymillionsormore.
Every Company making profits in a year has to pay 5% of its net
profit to the workers participation fund for distribution among the
workersaccordingtotheirentitlement.