Professional Documents
Culture Documents
Siva Kumar
Compiled from:
Elements of Mercantile Law by N.D.Kapoor (2007), http://labour.nic.in/act/welcome.html Various postings in www.citehr.com
Law
What is law?
Law includes all the rules & principles which regulate our relations
Object of law?
To establish socio-economic justice and remove the existing
Mercantile/Business/Commercial Law
What is it mean?
It deals with contractual situations and the right & obligations
Industrial Employment (Standing Orders) Act, 1946 Employees PF & Miscellaneous Provisions Act, 1952
obligation not a Social obligation) Agreement = Offer + Acceptance (In genuine consent)
Offer and acceptance - 2 parties one party making the offer, other party accepting the offer, terms of offer must be definite and the acceptance must also be according to the mode prescribed and must be communicated to the offeror. Intention to create legal relationship Lawful consideration - something in return Capacity of parties - competent, major, sound mind, not disqualified from contracting by any law
2. 3. 4.
Free and genuine consent same mind on all the material terms of the contract Lawful object legal, moral, not opposed to public policy Agreement not declared is void Certainty and possibility of performance not vague or indefinite Legal formalities contract should be in writing
6. 7. 8. 9.
Note: Workmen who are covered under ESI Act, 1948 are not entitled to
compensation under this Act as disablement and dependants benefit is available to workmen under the former act.
Disablement?
Disablement means loss of capacity to work or to move
It may result in loss or reduction of his/her earning capacity. Disablement may be
Partial
Total
Further it may be
Permanent Temporary
Compensation for
Death
Minimum amount
Rs. 80,000
Permanent total disablement Permanent partial disablement Temporary disablement (total & partial)
Rs. 90,000
25% of monthly wages shall be payable every half month till the disablement lasts
Note: Where the monthly wages of workman exceed Rs. 4000, his monthly wages shall be deemed to be Rs.4000 only.
Object?
To regulate the conditions governing the registration of trade
unions Obligations imposed upon a registered trade union and Rights & liabilities of registered trade unions
contract must run with mutual trust and confidence Min: 2 competent persons Max: on banking business should not exceed 10, any other business not exceeding 20 Profit must be distributed in agreed ratio Documents which contains the agreement is called Partnership Deed and it contains
nature of business, principal place of business, name and address of the partners, management, accounts
Deed must be duly stamped as required by the Indian Stamp Act, 1889
(2005) or such other higher sum which, on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organisation, the Central Government may, after every five years, by notification in the Official Gazette.
after obtaining written authorization of the employed person, payment can be made either by cheque or by crediting the wages in bank account
Deductions from wages Fines (shall not exceed 3% of wages payable to him in that wage period)
Absence of duty Services like house accommodation, amenities etc Recovery of advances
Recovery of loans
Payments to co-operative societies & insurance schemes Other deductions such as income tax, PMs Relief fund etc
with sufficient precision the conditions of employment under them & to make the said conditions known to workmen employed by them.
holidays, pay days & wage rates Shift working Attendance & late coming Conditions of procedure in applying for, and the authority which may grant leave & holidays Requirement to enter premises by certain gates, & liability to search Closing & reopening of sections in Industrial Establishment, temporary stoppages of work & the rights & liabilities of workmen & employer arising therefrom. Termination of employment & respective notice Suspension or dismissal for misconduct & related actions Redress mechanism against unfair treatment
Certifying Officer shall send a copy of draft standing orders to be sent to trade union or workmen
Certify & send copies to employer, workmen & trade unions within 7 days
By preventing & settling industrial disputes between the employers & workmen By securing & preserving amity & good relations between the employers & workmen through an internal Works Committee By promoting good relations through an external machinery of conciliation, Courts of Inquiry, Labor Courts, Industrial Tribunals & National Tribunals By redressal of grievances of workmen through a statutory machinery By improving job security
The employment or non-employment The terms of employment The conditions of labor of any person
Important Terms
Lay off Failure/Refusal/Inability of an employer to give employment
to a workman due to Shortage of coal, power or raw material. Accumulation of stocks. Breakdown of machinery. Natural calamity. Lock out Temporary closing of a place of employment or suspension of work or refusal by employer (Employers weapon) Closure Closing the business due to actual loss or apprehended loss Retrenchment Employees terminated on account of surplus labor Strike Cessation of work by workmen Unfair labor practices
Conciliation Machinery
Work committees
Conciliation Officer Board of Conciliation
Courts of Inquiry
Adjudication Machinery
Labor Courts Industrial Tribunal National Tribunal
process
10 or more persons are engaged if power is used or
Object? To protect children & to provide for some health & safety measures.
Site Approval for a factory before it is constructed Submission of plans of Factories Registration & Licensing of Factories Appeal to State/Central Govt within 30 days if permission is refused by Chief Inspector/State Govt respectively Notice by the occupier
Name & address of the factory, owner & occupier Address for communication Nature of manufacturing process Total rated horsepower Name of the manager No. of workers likely to be employed etc
Health of workers
Cleanliness Disposal of wastes & effluents Ventilation & Temperature Dust & fume
Artificial humidification
Overcrowding Lighting Drinking water Latrines & Urinals Spittoons
Safety of workers
Fencing of machinery Work on near machinery in motion Employment of young persons on dangerous machine Striking gear & devices for cutting off power Self acting machines Casting of new machinery Prohibition of employment of women & children near cotton opener Hoists & Lifts Lifting machine, chains, ropes & lifting tackles Revolving machinery
Safety of workers
Pressure plant
Floors, stairs and means of access Pits, sumps, openings in floors etc Excessive weights
Protection of eyes
Precautions against dangerous fumes Precautions regarding the use of portable electric light Precautions against explosive or inflammable dust, gas, fire etc.
Welfare of workers
Washing facilities
Facilities for storing & drying clothes Facilities for sitting First aid appliances
Canteens
Shelter, rest rooms & lunch rooms Creches (>30 women workers) Welfare officers (>500 workers)
Working hours
Not more than 48hours per week or 9 hours per day Intervals of rest fixed by factory Women employees 6AM to 7PM
means of extinction of the evils of the society, namely, want, disease, dirt, ignorance and indigence
Applicability of the Act for employees is Rs. 10000/- per month (Gross
Salary).
Benefits? Sickness benefit Maternity benefit Disablement benefit Dependants benefit Medical benefit Funeral expenses
Employee?
Any person employed for wages in or in connection with the work of
a factory or establishment Directly employed by the principal employer Employed through an intermediate employer Contract employees Apprentice, not being an apprentice engaged under the Apprentices Act, 1961 or under Standing Orders
Wages?
All remuneration paid in cash to an employee except employer
contribution to pension & provident funds, travelling allowance, special expenses paid and gratuity payable on discharge
Contribution?
Contribution Sum of money payable to ESI Corporation by the principal
employer & employee Contribution period Must not exceed 6 consecutive months
Contribution by Employer Employee Rate of Contribution A sum equal to 4.75% of the total wage bill of all employees rounded to the next higher rupee + 1.16% Admin charges A sum equal to 1.75% of his/her wages rounded to next higher rupee
Rs.50 per day Default in payment of contribution to pay simple interest at 12% or more per annum, till the date of its actual payment All disputes arising out of this are resolved by Employees Insurance Court
Authorized Officer?
Central PF Commissioner Additional Central PF Commissioner Deputy PF Commissioner Regional PF Commissioner
Contribution is made to
Employees Provident Fund Scheme Employees Pension Scheme & Fund Employees Deposit Linked Insurance Scheme (EDLI) & Fund
Contribution
ESI is covered to employees whose wages are upto Rs.10,000 per month Basic Salary = Basic Wages + Dearness Allowance including cash value
Employee Contribution
Employers Contribution
contribute money or moneys worth to a common stock and employ it in some common trade or business(for common purpose) and who share the profit or loss arising there from
Separate legal entity Limited liability limited by shares limited by guarantee Perpetual succession Common seal Transferability of shares Separate property Capacity to sue
Company Vs Partnership
Company
Regulated under Companies Act 1956 Exits after registration under Co.Act 1956
Partnership
Partnership Act 1932 Registration not mandatory
Managed by Directors, Board of Every partner should take part in Directors the management Property and rights is Transferable to any or all nontransferable to shareholders partners
Company Vs Partnership
Shares are transferable when the transferee becomes the member Shareholders is not the agenthas no power
Members Min Max Public 7 No limit Pvt 2 50
Shares cannot be transferred without the concern of all partners Each partner is an agenthas power Min-2 Max- banking 10 others 20
Bound by law and audited annually No statutory provisions Only it can be dissolved (Wound by Dissolved by death/ insolvency of partner or wound if it is for fixed provisions of companies Act 1956) period.
Private Co.
No public invitation
2 No restrictions
Special priviliges
whole time Director or Manager List of directors agreed to act as director with their written consent Declaration relating to companies act and formalities related to registration
employment exchanges.
Act is applicable to vacancies in posts of a technical and scientific nature carrying a basic pay Rs.210 per month occurring in establishments or to be circulated to the Employment Exchanges outside the State or Union Territory
Act is not applicable to any employment in
agriculture, horticulture etc domestic service, the total duration of which is less than three months, to do unskilled office work, connected with the staff of Parliament.
(4) Number of vacancies - (a) Regular, (b) Temporary (5) Pay and allowances (6) Place of work (name of town/village and district in which it is situated). (7) Probable date by which the vacancy will be filled (8) Particulars regarding interview/test of applicant - (a) Date , Time & Place of interview/test (b)
Designation and address of the person to whom applicants should report
(9) Whether there is any obligation or arrangement for giving preference to any category of persons such as Scheduled Castes, Scheduled Tribes, ex-Servicemen and physically handicapped persons in filling up the vacancies, and if so, the number of vacancies to be filled by such categories of persons. (10) Any other relevant information
Submission of Returns Quarterly in Form ER-I - Within 30 days by 30th June, 31st March, 30th September
& 31st December
BIENNIAL Return Form ER-II Within 30 days of the due date as notified in the Official Gazette
commands, take care of his property and promote his interest, endeavor to learn his trade or business, & perform all the conditions of his contract not contrary to law. He must not leave his masters service during the term of his apprenticeship
Object?
To provide for the regulation & control of training of
apprentices
Types
Technician (Vocational) Apprentice
Undergo training for 2 years inorder to hold a certificate in vocational course after completing secondary stage of school education, recognized by All India Council of Technical Education
Employers responsibilities
Total number of hours/week = 42 to 48 (6AM to 10PM) Employer shall look after Offer & Acceptance of employment Practical & basic training of apprentices & related instructions Health, Safety & Welfare of apprentices Leave / Overtime hours Payment of stipend Compensating for injury during training Holding test & granting certificate Records, settlement of disputes
certain periods before & after child birth & to provide for maternity benefit & other certain benefits
Wage?
Remuneration in cash + Cash Allowances including DA & HRA + Incentives
80 days in the 12 months immediately proceeding the date of her expected delivery ) at a rate of the average daily wage for the period of her actual absence Maternity benefit is given for a maximum period of 12 weeks, of which not more than 6 weeks shall precede the date of her expected delivery
Liabilities of Employer
Pregnant women are prohibited to work in establishments during a
period of 6 weeks immediately following the day of her delivery or her miscarriage
Employer is liable to pay maternity benefit to her nominee or that
of 15 months
6 weeks leave shall be allowed for miscarriage on production of the
prescribed proof
the employees, in recognition of their right, to share in the prosperity of the establishment reflected by the contributions made by capital, management & labor
higher - paid to all employees whose salary is up to Rs.3500 per month & worked for not less than 30 days for that year Bonus is no longer linked with production & profitability and so it is a statutory liability for an employer on completion of 5 years after 1st Accounting year even if there is no profit 60 or 67% of available surplus is allocated for bonus
establishments and to provide for its abolition in certain circumstances and for matters connected therewith.
Liability of Principal Employer
To ensure provision for canteen, restrooms, sufficient supply of drinking
water, latrines and urinals, washing facilities. Principal employer entitled to recover from the contractor for providing such amenities or to make deductions from amount payable
Every contractor shall maintain Muster Roll, Register of wages, Register of Deductions, Register of Overtime, Register of Fines, Register of Advances, Wage slip & display the abstract 0f rules & Act in English & regional language.
Registration of Establishment
Principal employer employing 20 or more workers through the
contractor or the contractor(s) on deposit of required fee in Form 1 as given below. If the number of workmen proposed to be employed on contract on any days(a) is 20 (b) exceed 20 but does not exceed 50 (c) exceed 50 but does not exceed 100 (d) exceed 100 but does not exceed 200 (e) exceed 200 but does not exceed 400 (f) exceeds 400 Rs.60 Rs.150 Rs.300 Rs.600 Rs.1200 Rs.1500
after consultation with the Board (and not Courts) can order the prohibition of employment of contract labour.
Licensing of Contractor
Engaging 20 or more than 20 workers and on deposit of required fee
in Form IV as given below. If the number of workmen employed by the contractor on any day(a) is 20 (b) exceed 20 but does not exceed 50 (c) exceed 50 but does not exceed 100 (d) exceed 100 but does not exceed 200 (e) exceed 200 but does not exceed 400 (f) exceed 400 Rs.15.00 Rs.37.50 Rs.75.00 Rs.150 Rs.300.00 Rs.375.00
amount as a retirement benefit Gratuity is paid out at the time of superannuation (if you retire at the age of 58), when you retire (at any other age) or resignation, and in the event of your death or being rendered disable because of an accident or illness. You need to have at least 5 full years of service with an employer to qualify for gratuity.
Rate of Gratuity
Every completed years of service * 15 days wages {(Monthly Basic + DA) /26} * 15 days Shall not exceed Rs. 3,50,000 as per Act & it is not taxable
Maximum gratuity
days from the date the gratuity become payable or shall be applied before 30 days if date of superannuation is known
If it is not paid by the employer within 30 days, then he shall pay simple
shall recover the gratuity amount + compound interest from the employer
similar nature No discrimination to be made while recruiting [or promoting/training /transferring] men and women workers except where the employment of women in such work is prohibited or restricted by any law and it shall not affect any reservations for SC, ST, Ex-Servicemen etc.
The appropriate Government shall constitute one or more Advisory Committees to increase employment opportunities for women
Penalties
If an employer
Omits or fails to produce any register, muster-roll, any information or other document relating to the employment of workers - he shall be punishable with simple imprisonment for a term which may extend to 1 month or with fine which may extend to Rs.10,000 or with both Makes any recruitment or discrimination in wages in contravention of the provisions of this Act - he shall be punishable with fine of Rs.10,000 to Rs.20,000 or with imprisonment for a term of 3 months to 1 year or with both for the first offence, and with imprisonment which may extend to 2 years for the second and subsequent offences If any person being required so to do, omits or refuses to produce to an Inspector any register or other document or to give any information, he shall be punishable with fine, which may extend to Rs.5000
India and some of the states have formulated different professional tax slabs for men, women, and the senior citizens of the respective states.
Half yearly Income Less than Rs.21000 Between Rs.21001-Rs.30000 Between Rs.30001-Rs.45000 Between Rs.45001- Rs.60000
Rs.585
Rs.810
Date of payment
15th of succeeding month + additional 5 days grace
Inter-state Migrant Workmen (Regulation of Employment & Conditions of Service ) Act, 1979
Object? To regulate the employment of inter-State migrant workmen and to provide for their conditions of service and for matters connected therewith.
Inter-State migrant workman
Any person who is recruited by or through a contractor in one State under
an agreement or other arrangement for employment in an establishment in another State, whether with or without the knowledge of the principal employer in relation to such establishment;
Duties of Contractors
To furnish prescribed particulars to the specified authority in State from which an interState migrant workman is recruited and in the State in which such workman is employed, within 15 days from the date of recruitment and also to intimate if there are any changes in employment To issue to every inter-State migrant workman, a passbook affixed with a passport size photograph of the workman and indicating in Hindi/Regional and English languages
(i) the name and place of the establishment wherein the workman is employed; (ii) the period of employment; (iii) the proposed rates and modes of payment of wages; (iv) the displacement allowance payable; (v) the return fare payable to the workman on the expiry of the period of his employment and in such contingencies as may be prescribed and in such other contingencies as may be specified in the contract of employment; (vi) deductions made; and others.
punishable with imprisonment - 3 months to 1 year or with fine of Rs.10,000 to Rs.20,000 or with both. Continuing offence shall be punishable with imprisonment for a term of 6 months to 2 years.
relating to
provident fund, employment injury benefits, housing, educational schemes for children, skill upgradation, funeral assistance and old-age homes