Applicability & Statutory Records under Different Labour Laws

  • August 9, 2019
  • CA Chandan Agarwal's Office
Chandan Agarwal
Chandan Agarwal

Introduction:

Labour & Employment laws are enacted & enforced by both the Central as well as State Governments. Labour Laws fall within Concurrent List (Sl. No. 22, 24) of the Constitution of India. Labour Laws Compliance Management is both “significant” & “monetarily advantageous” to the corporate sector. Labour Laws in India are influenced by human rights and the conventions and standards that have emerged from the United Nations As per a survey carried out by the National Sample Survey Organization (NSSO) in the year 2009-10, the total employment, in both organized and unorganized sectors in the country was 46.5 crore comprising around 2.8 crore in the organized sector and the balance 43.7 crore workers in the unorganized sector (agriculture; construction; manufacturing and service).

1. The Contract Labour (Regulation and Abolition) Act,1970

Applicability of the Act

The Contract Labour (Regulation and Abolition) Act applies to the following entities:

  • It applies to any establishment in which twenty or more workmen are employed on any day of the of the accounting year as contract labour.
  • It applies to any contractor who employs or who employed twenty or more workers on any day of the accounting year.
  • Also, it does not apply to the establishments if any work performed in the intermittent nature.
  • It does not apply to the establishments if any work not performed for more than one-twenty days in a year.
  • It does not apply to the establishments situated in the special economic zone (SEZ).
  • It does not apply to the establishments if any work performed in the seasonal nature for more than sixty days in a year.

> STATUTORY REGISTERS & RECORDS

BY Principal Employer

  • Register of Contractors

BY CONTRACTOR

  • Muster Roll
  • Wages Register
  • Deductions Register
  • Register of fines
  • Register of Advances
  • Register of Overtime

2. Factories Act, 1948

> Applicability of the Act

Applicable to all factories wherein

– 10 or more persons are/were employed with the aid of power or

– 20 or more workers are/were employed without the aid of power, On any day in the preceding 12 months.

(State Governments may prescribe different number of workers to attract applicability of this Act).

> STATUTORY REGISTERS & RECORDS

  • Register of Adult Workers –Form 12
  • Notice of period of work for adults- Form 11
  • Register of leave with wages- Form 36
  • Certificate of Fitness- Form 39
  • Certificate of fitness for Dangerous operations- Form 32
  • Register of Compensatory Holidays- Form 25
  • Inspection Book – Form 35
  • Annual Return of Accidents (Form 31) – Before 31st January of each year
  • Half yearly Return (Form 22) – Before 15th July & 15th January of each year
  • Annual Return (Form 21) – Before 15th January of each year

3. Employees Compensation Act,1923

Applicability of the Act

The Employees Compensation Act applies to the following entities are listed below:

  • It applies to employees working in factories, mines, docks, construction establishments, plantations, oilfields and other establishments listed in Schedule II of the Employee’s Compensation Act.
  • It applies to persons recruited for working abroad and who is employed outside India as in Schedule II of the Act.
  • It applies to a person recruited as the driver, helper, mechanic, cleaner or any other in connection with a motor vehicle and to a captain or other member of the crew of an aircraft.
  • Also, the act does not apply to the members of armed forces of the Union & Workmen who are covered under ESI (Employee State Insurance) Act.

4. Maternity benefits Act,1961

Applicability of the Act

This Act applies to:

  • Every factory, mine or plantation (including those who are belonging to Government)
  • An establishment engaged in the exhibition of equestrian, acrobatic and other performances, irrespective of the no of employees, and
  • Every shop or establishment wherein 10 or more persons are working on any day of the preceding 12 months.

5. Payment of Wages Act,1936

> Applicability of the Act

As per section 1(6) of the Payment of Wages Act, the wages averaging less than INR 6,500 per month are covered and protected by the Act. Further, the Act is applicable to the payment of wages to persons employed in factories, upon railways, or in other establishment as specified in the Payment of Wages Act.

> STATUTORY REGISTERS & RECORDS

  • Register of wages, fine, damage, deductions & advances
  • Register of Fines
  • Register of Deductions for damage or loss
  • Register of Wages

6. Payment of Gratuity Act,1972

> Applicability of the Act

The Payment of Gratuity Act, 1972 (the Gratuity Act) is applicable to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments with ten or more employees.

> STATUTORY REGISTERS & RECORDS

  • The Employer must submit a Notice inForm ‘A’ to the Controlling Authority of the area within 30 days of coming under the ambit of the Payment of Gratuity (Maharashtra) Rules, 1972 as per Rule 3 (1).
  • The Employer must submit a Notice in Form ‘B’ to the Controlling Authority of the area within 30 days of any change in the name, address, employer or nature of business as per Rule 3 (2) of Payment of Gratuity (Maharashtra) Rules, 1972.
  • As per Rule 4 of Payment of Gratuity (Maharashtra) Rules, 1972, the employer should display a Notice at or near the main entrance of the establishment in English and in a language understood by majority of the employees specifying the name of the name of the officer with designation, authorized by the employer to receive on his behalf the notices under Payment of Gratuity Act, 1972 and Payment of Gratuity (Maharashtra) Rules, 1972.
  • A female employee willing to exclude her husband from family for the purposes of the Gratuity Act, 1972 {Section 2 (h) (ii)} should file a Notice in Form ‘D’ and send in triplicate to the employer. The employer must then record the receipt on one copy, return the copy to the employee and send the second copy to the controlling authority as prescribed under Rule 9 (1) of Payment of Gratuity (Maharashtra) Rules, 1972.
  • A female employee may withdraw the Notice referred to above by giving notice in triplicate in Form ‘E’. The same procedure is to be followed as above.
  • Every nomination, fresh nomination or alteration of nomination as the case may be, in various Forms F, G or H as prescribed under Rule 6 of the Payment of Gratuity (Maharashtra) Rules, 1972 should be kept in safe custody of the employer as per Section 6 (7) of Gratuity Act, 1972.
  • As per Section 7 of The Gratuity Act, 1972 it is the employer’s duty to determine the amount of gratuity and give notice in writing to the person to whom gratuity is payable and also to the Controlling Authority specifying the amount of gratuity so determined
  • Abstracts of the Gratuity Act, 1972 and Payment of Gratuity (Maharashtra) Rules, 1972 should be displayed in English and in the language understood by majority at a conspicuous place at or near the main entrance of the establishment as per Rule 20 of Payment of Gratuity (Maharashtra) Rules, 1972.

7. Minimum Wages Act,1948

> Applicability of the Act

The Minimum of Wages Act applies to the following entities:

  • It applies to all over India except Jammu and Kashmir.
  • It applies to any employment if it employs 1000 employees in the respective state.
  • It does not apply to any employees in any undertaking owned by the Central government or of the federal railway, except with the consent of the central government.
  • Applicable to all scheduled employments (as specified in the schedule of the Act and the entries of the state government in the schedule, e.g. factories, commercial establishments etc.)

> STATUTORY REGISTERS & RECORDS

    • Overtime Register
    • Register of wages
    • Wage Slip
    • Muster roll to be filled within 3 hours of commencement of shift
    • Record of all fines imposed and deductions made
    • Annual return showing deductions from wages, before 1st Feb following end  of the year

8. Payment of Bonus Act,1965

> Applicability of the Act

The Payment of Bonus Act implements to the following entities are listed below:

  • It applies to any factory or establishment containing twenty or more workers employed on any day during the year.
  • The act does not apply to the non-profit making organisations.
  • It is not applicable to establishments such as LIC, hospitals which are excluded under section 32.
  • It is not applicable to establishments where employees have signed an agreement with the employer.
  • It is not applicable to establishments exempted by the appropriate government like sick units.

> STATUTORY REGISTERS & RECORDS

  • Form A-Showing the computation of the allocable surplus
  • Form B-Showing the set-on and set-off of the allocable surplus
  • Form C -Showing the amount of bonus due to each of the employees and the amount actually disbursed
  • Form D- Annual Return.

9. EMPLOYEES STATE INSURANCE ACT, 1948,

> Applicability of the Act

The ESI scheme is applicable to all factories and other establishments as defined in the Act with 10 or more persons employed in such establishment and the beneficiaries’ monthly wage does not exceed Rs 21,000 are covered under the scheme.

> STATUTORY REGISTERS & RECORDS

  • Form 5- Return for Contribution
  • Registers of Employees (Form 6)
  • Accident Book (Form 11)
  • Inspection Book
  • Generation & Issue of temporary identification certificate (TIC)
  • Issue of permanent identity cards for employees (with photo of self and family)
  • Report of Accident (Form 12) to be filed to the nearest ESI Branch Office and the nearest medical officer

10. Sexual Harassment Act,2013

> Applicability of the Act

Under section 6(1) of the Act it is not mandatory for organizations having less than 10 workers. 

> STATUTORY REGISTERS & RECORDS

IC to submit an annual report, containing following details to Employer :-

  • Number of complaints received in a year
  • Number of complaints disposed off during the year
  • Number of workshops or awareness programmes carried out, during the year
  • Nature of action taken by the employer
  • Details of complaints received and disposed off during the year, Number of workshops or awareness programmes carried out during the year, needs to be published every year in the Annual Report of the Company.

11. Industrial Employment (Standing Orders) Act, 1946

Applicability of the Act

Every industrial establishment wherein 100 or more workmen are employed (State Govt. may prescribe for a lower no. of workmen e.g. State of Haryana; State of Delhi – 50 workmen).

12. Delhi Shop and Establishment Act

> Applicability of the Act

This Act is applicable to all shops, establishments & commercial establishments.

> STATUTORY REGISTERS & RECORDS

  • Form C- Register of Employees
  • Form D- Register of Wages of Employees
  • Form E- Register of Deductions
  • Notice exhibiting date of last white wash & varnishing
  • Any change in particulars filled in the forms for Registration (Form F & Form B), e.g. Details of Managing Director/Director, Manager, Working Hours, Close Day, Number of Employees etc. need to be intimated to the jurisdictional Labour Department within 7 days of the change – Form G to be filed Online.

13. Delhi Labour Welfare Fund Rules,1997

> Applicability of the Act

The provisions of the Act shall be restricted to establishments employing five or more persons, as per section 2(4) of the Act.

Categories of Employee to be covered: All Employees except those working in the managerial or supervisory capacity and drawing wages exceeding Rs.2500/- only per month.

> STATUTORY REGISTERS & RECORDS

    • Form A: Statement of Employees and Employers’ Contribution for the six months ending on the 30thJune and 31st December respectively.

Conclusion:

WHY LABOUR & EMPLOYMENT LAW COMPLIANCE MANAGEMENT

> SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

Obligation of Board of Directors of Listed entity includes [regulation 17(3)]:“The board of directors shall periodically review compliance reports pertaining to all laws applicable to the listed entity, prepared by the listed entity as well as steps taken by the listed entity to rectify instances of non-compliances”

> DUTIES OF COMPANY SECRETARY

Functions of the Company Secretary [Section 205(1)] shall include:

(a) to report to the Board about compliance with the provisions of this Act, the rules made there under and other laws applicable to the company;

  • (b) to ensure that the company complies with the applicable secretarial standards;
  • (c) to discharge such other duties as may be prescribed Mandate of Ensuring Legal Compliances by Companies has thus been created vide Companies Act, 2013, by vesting the responsibility of ensuring legal compliance on the ‘Company Secretary’.

> SECRETARIAL AUDIT

  • Every listed company and company belonging to other class of company shall annex with its boards report, a secretarial audit report given by a company secretary in practice. [Section 204(1)] Other class of companies –
  • Every public company having paid- up share capital of 50 crores rupees or more.
  • Every public company having a turnover of 250 crores rupees or more.

Scope of Secretarial Audit inter-alia includes : “Examining and reporting whether the adequate systems and processes are in place to monitor and ensure compliance with general laws like labour laws, competition law, environmental laws.”

> DIRECTOR’S RESPONSIBILITY STATEMENT

  • Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. [Section 134(5)(f)].

Source: https://taxguru.in/corporate-law/applicability-statutory-records-labour-laws.html

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