Compliances Under Labour Laws – Setting Up of Business Entities and Closure Important Questions

Compliances Under Labour Laws – Setting Up of Business Entities and Closure Important Questions

Question 1.
A factory owner was prosecuted for refusing to employ experienced women workers in his factory processing cotton through cotton openers. He pleaded bar of Section 27 of the Factories Act, 1948 in his defense. Will he succeed? Will it make any difference if the cotton openers are located in a separate for an off portion of the factory? [Dec. 1994 (5 Marks)]
Answer:
Section 27 of the Factories Act, 1948 prohibits the employment of women near cotton openers. But if cotton openers are located separately at far-off portions, the prohibition does not operate. It provides that if the feed-end of a cotton opener is in a room separated from the delivery end by a partition extending to the roof or to such height as the inspector may in any particular case specify in writing, women and children may be employed on the side of the partition where the feed-end is situated. The owner will succeed if cotton openers are situated separately from the place of employment.

Question 2.
45 workers of a canteen run by workers co-operative in an ordinance factory claimed that the factory manager should provide restrooms for the workers required under section 47 of the Factories Act, 1948. The manager refused. Comment. [Dec. 1994 (5 Marks)]
Answer:
In Kanpur Suraksha Karmachari Union v. Union of India, it was held that employees working in canteens in industrial establishments run by Managing Committee are no,t employees of the Managing Committee, but are employees of the occupier. In view of this, the workers working in the canteen shall be provided shelter, restrooms as per Section 47 of the Factories Act, 1948 by the occupier.

Question 3.
State the provisions of the Factories Acl, 1948 relating to ‘the employment of children. [June 1998 (5 Marks)], [Dec. 2001 (6 Marks)]
Answer:
Following are the special provisions relating to the employment of children.
General prohibition as to the employment of children [Section 67]: A child, who has not completed his 14th year of age, shall not be employed in any factory.

Working hours for children [Section 71]: Further restrictions on the employment of children relating to working hours are stated below:

  • A child shall not be employed or permitted to work for more than 4.5 hours on any day.
  • He is not permitted to work during the night, ie. during a period of at least 12 consecutive hours, including intervals, between 10 pm and 6 am.
  • The period of work shall be limited to two shifts only.
  • These shifts shall not overlap.
  • Shifts should not spread over more than 5 hours each.
  • No female child shall be required or allowed to work in any factory except between 8 am and 7 pm.

Question 4.
What are the elements necessary to constitute a factory under the Factories Act, 1948? [June 2002 (5 Marks)]
Answer:
Factory [Section 2(m)]: Factory includes any premises including the precincts where:
(a) 10 or more workers are engaged and a manufacturing process is being carried on with the aid of power or
(b) 20 or more workers are engaged and a manufacturing process is being carried on without the aid of power.

It does not include:

  • Mine under the Mines Act, 1952 or
  • Mobile unit belonging to the armed forces of the Union or
  • Railway running shed or
  • Hotel, restaurant, or eating place.

The explanation I: For computing, the number of workers all the workers in different groups and relays in a day shall be taken into account.

Explanation II: Mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any premises shall not be construed to make it a factory if no manufacturing process is being carried on in such premises.

Question 5.
State the provisions of the Factories Act, 1948 relating to ‘annual leave with wages. [Dec. 2003 (5 Marks)]
Answer:
Provisions relating to ‘annual leave with wages’ are as follows:
Basis of leave [Section 79]: Where a worker has worked for a minimum period of 240 days or more in a factory during any calendar year, ie. the year beginning from 1st January, he is entitled to leave with wages on the following basis:

For adults 1 day for every 20 days of work performed during the previous year
For children 1 day for every 15 days of work performed during the previous year

If a worker does not work from 1st January, he is entitled to these leaves at the above-mentioned rates provided he has worked for 2/3rd of the total number of days in the remaining part of the calendar year.

These leaves are exclusive of all holidays whether occurring during or at either end of the period of leave.

In calculating leave, a fraction of leave of half a day or more shall be treated as one full day’s leave and a fraction of less than half a day shall be ignored.

Accumulation or carry forward of leaves: If any work does not avail of earned leave during the calendar year, it can be carried forward to the next calendar year subject to the maximum of 30 days for an adult worker and 40 days for a child worker.

Payment in advance in certain cases [Section 81]: Where an adult worker has been allowed leave for not less than 4 days and a child worker for not less than 5 days, wages due for the leave period should be paid in advance, Le. before his leave begins.

Question 6.
Navratna Public Sector Undertakings have factories throughout the country. These undertakings have an impeccable record of best welfare measures and working conditions. Do these undertakings still require the appointment of welfare officers in their factories? [Dec. 2007 (3 Marks)]
Answer:
Navratna public sector undertaking will have to appoint welfare officers in their factories if the number of workers in the undertaking exceeds 500 or more. It will not be a deciding criterion that whether the undertaking has factories throughout the country or have an impeccable record of best welfare measures and working conditions.

Question 7.
Mamta Coir Foam Ltd. was having 25 workers during the previous year 2019-2020 and they are in the process of reviewing the compliances under the Factories Act, 1948. Advice the company in the following matters in complying with the provisions of the Factories Act, 1948:
(i) Weekly & daily hours
Answer:
Various provisions relating to working hours, the interval for rest, overtime, and employment of young persons are as follows:
Weekly working hours [Section 51]: An adult worker shall be allowed to work only for 48 hours in any week.
Daily hours [Section 54]: An adult worker (male or female) shall not be required or allowed to work in a factory for more than 9 hours in any day.

(ii) Intervals for rest
Answer:
Intervals for rest [Section 55]: No adult worker shall work continuously for more than 5 hours unless a rest interval of at least half an hour is given to him.

(iii) Extra wages for overtime
Answer:
Wages for overtime [Section 58]: Where a worker works in a factory for more than 9 hours in any day or more than 48 hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.

(iv) Employment of young person [Dec. 2018 (5 Marks)]
Answer:
Employment of young person:
General prohibition as to the employment of children [Section 67]: A child, who has not completed his 14th year of age, shall not be employed in any factory.

Employment of children & Adolescents – Conditions [Section 68]:
Children completing their 14th year or an adolescent shall not be required to work in any factory unless the following conditions are fulfilled:

  • The manager of the factory has obtained a certificate of fitness;
  • At work, a child or adolescent carries a token giving reference to the certificate.

Certificate of fitness [Section 69]: Before a young person is employed in the factory, a Certifying Surgeon has to certify that such person is fit for that work in the factory. To get this certificate, an application to a Certifying Surgeon has to be made by:

  • The young person himself or
  • Parent or guardian or
  • Manager of the factory.

Fee for the certificate: Any fee payable for a certificate shall be paid by the occupier and it cannot be recovered from the young person, his parents, or guardian.

Timing of works for a young person: No female adolescent or a male adolescent who has not attained the age of 17 years but who has been granted a certificate of fitness to work in a factory as an adult, shall be required or allowed to work in any factory except between 6 am and 7 pm.

Question 8.
Srivastava is the owner of a unit manufacturing Beedi in Jabalpur. 22 persons are employed in the unit. Of these 22 employees, one is a graduate for supervising the work and another apprentice learning work. The remaining 20 are employed not on the time wage system, but on the piecework system. Is the unit, a factory within the meaning of the term under the Factories Act, 1948? [June 2019 (3 Marks)]
Answer:
Factory [Section 2(m)]: Factory includes any premises including the precincts where:
(a) 10 or more workers are engaged and a manufacturing process is being carried on with the aid of power or
(b) 20 or more workers are engaged and a manufacturing process is being carried on without the aid of power.

It does not include:

  • Mine under the Mines Act, 1952 or
  • Mobile unit belonging to the armed forces of the Union or
  • Railway running shed or
  • Hotel, restaurant, or eating place.

The making of bidis was held to be a manufacturing process. [Chintaman Rao v. State MP, 1962 SC 388]
As per facts given in the case, the manufacturing unit of Srivastava fulfill the criteria in relation to a number of workmen’ and also the work is directly supervised by a supervisor who is an employee/workmen of Srivastava and hence his manufacturing unit is a factory within the meaning of Section 2(m) of the Factories Act, 1948.

Question 9.
A factory has 100 male employees and 50 female employees. Factory Manager is keen to know whether the factory has to provide following welfare to the workers employed as per Factories Act:
(i) First aid appliances
(ii) Canteens
(iii) Creches [Dec. 2019 (3 Marks)]
Answer:
Factories Act, 1948 provides for the following welfare to the workers:

  • First-aid appliances – one first-aid box not less than one for every 150 workers
  • Canteens when there are 250 or more workers
  • Creches when there are 30 or more women workers.

In the given case,

  1. Since a total of 150 workers are employed in the factory, it has to provide first aid appliances.
  2. The canteen facility need not be provided, as it applies to factories employing more than 250 workers.
  3. Since the factory has 50 female workers, it has to provide for a creche facility.

Question 10.
What are the provisions relating to the fixation of normal working hours for the normal working days under the Minimum Wages Act, 1948? [June 1998 (3 Marks)], [June 1999 (3 Marks)]
Answer:
Fixation of normal working hours for the normal working days [Section 13]: Fixing of minimum rates of wages without reference to working hours may not achieve the purpose for which wages are fixed. Thus, the Appropriate Government may:
(a) Fix the number of working hours that shall constitute a normal working day, inclusive of the specified interval.
(b) Provide a paid holiday in every period of 7 days.
(c) Provide for payment of work on a paid holiday at a rate not less than the overtime rate.

Question 11.
Mow is wages for overtime pay under the Minimum Wages Act, 1948? [Dec. 1999 (2 Marks)]
Answer:
Overtime [Section 14]: When an employee works on any day in excess of normal working hours for a day, the employer shall pay him an overtime rate fixed under the Act or under any other law of the Appropriate Government whichever is higher. Payment for overtime work can be claimed only by the employees who are getting the minimum rate of wages under the Act and not by those getting better wages.

Question 12.
State the provisions regarding payment of wages, when an employee works less than normal working hours prescribed by the Minimum Wages Act, 1948. [Dec. 1999 (2 Marks%
Answer:
Wages of a worker who works less than normal working days [Section 15]:
Where the minimum day rate of wages has been fixed for an employee and if he works for a period less than normal working hours, he shall be entitled to receive wages for that day as if he had worked for a full working day.

However, such employee shall not be entitled to receive wages for the full normal working day:

  1. If his failure to work is caused by his unwillingness to work and not by the omission of the employer to provide him with work, and
  2. Such other cases and circumstances as may be prescribed.

Question 13.
Write a short note on the Philosophy behind the enactment of the Minimum Wages Act, 1948. [Dec. 2008 (3 Marks)], [June 2011 (5 Marks)]
Answer:
Objects of passing Minimum Wages Act, 1948 are as follows:

  • To prevent exploitation of labor.
  • To provide for fixing minimum rates of wages in certain employments. The employments are those which are included in the schedule and are referred to as ‘Scheduled Employments’.
  • To empower the Appropriate Government to take steps to prescribe minimum rates of wages in the scheduled industries and
  • To empower the Appropriate Government to give effect to other provisions of the Act.

Question 14.
Write a short note on Manner of fixation/revision of minimum wages [Dec. 2009 (5 Marks)], [June 2012 (5 Marks)]
Answer:
Fixation of minimum wages [Section 3(2)]: The Appropriate Government may fix the minimum rate of wages as:

  • Minimum time rate
  • Minimum piece rate
  • Guaranteed time rate for those employed in piece work and
  • Overtime rate

Different minimum wages rates [Section 3(3)]: Different minimum rates of wages may be fixed for:

  • Different scheduled employments
  • Different classes of work for same scheduled employments
  • Adults, adolescents, children, and apprentices
  • Different localities

Further, minimum rates of wages may be fixed by any one or more of the following wage periods, namely:

  • By the hour
  • By the day
  • By the month
  • By such other large wage periods as may be prescribed.

Where such rates are fixed by the day or by the month, the manner of calculating wages for the month or for a day as the case may be indicated.

Question 15.
A company was running into losses and was unable to pay the minimum rates of wages to its workers. The workers pleaded that the employer must pay them the minimum rates of wages. The employer (company) intends to go to the court challenging the constitutional validity of the Minimum Wages Act, 1948. Will the company succeed? [June 2010 (4 Marks)]
Answer:
Payment of minimum rate of wages [Section 12]: It is to be noted that minimum wages must be paid irrespective of the extent of profits, the financial condition of the establishment.

The employer shall pay to every employee engaged in scheduled employment wages which should not be less than the minimum wages fixed by § the Appropriate Government. Payment of less than the minimum wages g notified by the appropriate Government is an offense.

Question 16.
A person engaged in a private motor transport company is paid wages of ₹ 20,700 p.m. Will the Payment of Wages Act, 1936 be applicable in this case?
Answer:
As per Section 1 (6), of the Payment of Wages Act, 1936 shall not apply to wages payable of a wage period which is more than ₹ 24,000 a month. Hence, the Payment of Wages Act, 1936 applies to a person engaged in a private motor transport company who is paid wages of ₹ 20,700 p.m.; as wages are less than ₹ 24,000.

Question 17.
What is the time for payment of wages under the Payment of Wages Act, 1936?
Answer:
Time of payment of wages [Section 5]: The wages of every person employed in:
(a) Any railway, factory or industrial, or other establishments upon or in which less than 1,000 are employed, shall be paid before the expiry of the 7th day of next wages period,

(b) Any other railway, factory or industrial or other establishments, shall be paid before the expiry of the 10th day of the next wages period.

Where the employment of any person is terminated, the wages shall be paid before the expiry of the 2nd working day from the termination of employment.

All payments of wages shall be made on a working day.

Question 18.
Shyam was appointed as Manager in the Factory of XYZ Lid. He requests the legal department of the company to send him a note regarding the payment of wages to the workers. Advice him suitably keeping in view the provisions of the Payment of Wages (Amendment) Act, 2017.
Answer:
Mode of payment of wages [Section 6]: All wages must be paid

  1. in coin or currency notes; or
  2. by cheque; or
  3. by crediting them into his bank account.

The Payment of Wages (Amendment) Act, 2017 removes the requirement of obtaining written authorization for payment of wages by cheque or through a bank account.

However, the relevant Central or State Government may specify certain industrial or other establishments where the employer should pay his employees only by:

  1. cheque; or
  2. crediting the wages in his bank account.

Question 19.
An employer made an alteration in the wage structure as a result of which certain allowances previously paid to an employee were stopped. However total wages were not less than before. Will the action stated above amount to ‘deduction’ under the Payment of Wages Act, 1936?
Answer:
Stopping allowances will not amount to a deduction if total wages are the same as the previously paid wages. Hence, it does not amount to ‘deduction’ within the meaning of Section 7 of the Payment of Wages Act, 1936.

Question 20.
An employed person has taken a loan of ₹ 2 lakh from a co-operative society approved by the government. The employer makes a deduction of 80% of wages payable to him in a wage period towards repayment of the loan. Is the action of the employer valid?
Answer:
The total amount of deductions u/s 7 in any wage period from the wages of any employed person shall not exceed 75% of wages for payments to co-operative societies. In the given case employer has deducted 80% of wages; hence the action of the employer is not valid.

Question 21.
An employee earning ₹ 4,000 p.m. was fined ₹ 150 for an act duly specified by a notice exhibited in the premises workplace. The employee opposed the deduction contending that amount deducted should not be more than ₹ 120 as per provisions of the Payment of Wages Act, 1936. Comment.
Answer:
As per Section 8 of the Payment of Wages Act, 1936, the total amount of fine which may be imposed in any one wage period on any employed person shall not exceed 3% of the wages payable to him in respect of that wage period. Thus, the maximum fine that can be imposed is ₹ 120 (4,000 × 3%). Hence, the employee is right and the action of the employer is in contravention of a provision of Section 8.

Question 22.
You are the Company Secretary of XYZ Ltd. 20 workers working in the factory of your company, acting in concert remained absent from duty for 2 days without any notice and without any reasonable cause. Factory Manager of your company seeks advice from you regarding what is the maximum amount that can be deducted on account of absence from duty of these workers.
Answer:
As per Section 9 of the Payment of Wages Act, 1936, deductions may be made on account of the absence of an employed person from the place where he is required to work. If 10 or more employed persons acting in concert absent without due notice and without reasonable cause, then a deduction of up to 8 days wages can be made. Hence, wages for 10 days can be deducted; 2 days wages for the absence of duty plus wages for 8 days for not giving due notice.

Question 23.
While working on a machine, a worker accidentally drops a valuable testing appliance which becomes defective. The employer deducts the value of the appliance from the wages of the worker. Is the deduction justified under the Payment of Wages Act, 1936? [Dec. 2007 (3 Marks)]
Answer:
As per Section 7(2) of the Payment of Wages Act, 1936, deductions from the wages of an employed person shall be made only in accordance with the provisions of this Apt, and it may be for damage to or loss of goods or for loss of money where such damage or loss is directly attributable to his neglect or default. Accidental loss is not covered by the said section; hence the action of the employer is not justified.

Question 24.
An establishment discontinued deduction towards contribution to ESI from its employee’s Salary and stopped remitting contribution when the number of its employees on rolls fell to 5. Do the provisions of the Employees State Insurance Act, 1948 cease to be applicable to the establishment under such circumstances?
Answer:
As per Section 1(6) of the Employees State Insurance Act, 1948, a factory or an establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under the Act or the manufacturing process therein ceases to be carried on with the aid of power. Hence, ESI Act continues to apply to an establishment and it should not stop from deducting contribution and remitting it to ESI Corporation.

Question 25.
Is any benefit payable under the ESI Act, 1948 liable to be attached in execution of any decree of a Court? [Dec. 1999 (5 Marks)]
Answer:
Benefits not assignable or attachable [Section 60]: No cash benefit payable under the Act shall be liable to attachment or sale in execution of any decree or order of any Court.

Question 26.
Write a short note on Benefits under the ESI Act, 1948 [Dec. 2005 (5 Marks)], [Dec. 2009 (5 Marks)]
Answer:
The insured persons and their dependents shall be entitled to the following benefits on the prescribed scale:

  • Periodical payments in case of sickness certified by a medical practitioner.
  • Periodical payments to an insured workman in case of confinement or miscarriage or sickness arising out of pregnancy.
  • Periodical payment to an insured person suffering from disablement as a result of employment injury.
  • Periodical payment to dependents of the insured person.
  • Medical treatment and attendance on the insured person.
  • Payment of funeral expenses on the death of the insured person at the prescribed rate.

Benefit not assignable or attachable: The right to receive any payment of any benefit under the Act shall not be transferable or assignable. No cash benefit payable under the Act shall be liable to attachment or sale in execution of any decree or order of any Court.

Question 27.
Distinguish between: Sickness Benefit & Medical Benefit [June 2011 (5 Marks)]
Answer:
Following are the main points of distinction between sickness benefit & medical benefit:

Points Sickness Benefit Medical Benefit
Meaning Sickness Benefit represents periodical payments to an insured person in case of his sickness certified by a duly appointed medical officer/practitioner. Medical Benefit represents full medical care in the form of medical attendance, treatment, drugs and injections, specialist consultation, and hospitalization.
Who is entailed Sickness benefit is available only to the insured person. Medical benefit is available to insured persons and also to members of their families.
Form It is payable in cash. It is basically a medical facility.

Question 28.
Sukrit is running a small fabrication unit with 5 workers. He is planning for expansion and it may require the addition of 10-15 employees. He is planning to register his business under Employees State Insurance (ESI) and extend the benefit to all his employees. He is keen in knowing from you the benefits available to him as an employer in extending the ESI facilities to his employees [Dec. 2019 (3 Marks)]
Answer:
Benefits for employers in extending the ESI facilities to employees (2)
1. Employers are absolved of all their liabilities of providing medical benefits to their employees and their family members or dependents in kind or in the form of a fixed cash allowance.

2. Employers are granted exemption pertaining to the applicability of the Maternity Benefit Act, 1961, Employees Compensation Act, 1923, etc. in respect of employees covered under the ESIC scheme. This results in employers possessing a productive and well-secured workforce, at their disposal which is an essential ingredient for better productivity of an organization.

3. Employers are absolved of any responsibility in times of physical distress of their employees or workers such as employment injury, sickness, or physical disablement thereby resulting in loss of wages since the responsibility of paying cash benefits shifts from the employer to the ESIC in respect of insured employees.

4. Any amount or sum paid by way of contribution under the Employees’ State Insurance Act, 1948 is deducted in computing ‘Income’ under the Income Tax Act, 1961.

Employees Provident Funds & Miscellaneous Provisions Act, 1952

Question 29.
While an employee may increase his share of provident fund contribution, is the employer also liable to proportionately increase his share of contribution under the Employees Provident Funds and Misc. Provisions Act, 1952? [June 2002 (3 Marks)]
Answer:
As per Section 6 of the EPF Act, 1952, the employer is required to pay PF Contribution @ 12% of (Basic wages + Dearness Allowance + Retaining [ Allowance). The employee is also required to pay a 12% contribution. However, the employer is liable to pay contribution only at statutory rate ie. 12%.

Question 30.
Under what circumstances can provident funds payable to an employee be attached in execution of a decree of the Court?[Dec. 2002 (3 Marks)]
Answer:
According to Section 10 of the EPF Act, 1952, the amount standing to the credit of any member/employee/exempted employee in a provident fund cannot be assigned or charged and shall not be liable to attachment under any decree or order of any Court. The Official Assignee/Receiver appointed under insolvency law shall not have any claim on such amount.

Any amount standing to the credit of a member/employee/exempted employee at the time of his death and payable to his nominee vest in the nominee and shall be free from any debt or other liability incurred by the deceased or the nominee before the death of the member or of the exempted employee and shall also not be liable to attachment under any decree or order of any Court.

Question 31.
An establishment discontinued deduction towards contribution to the provident fund from its employee’s salary and stopped remitting contribution of its share of the provident fund when the number of its employees on rolls fell to 15. Do the provisions of the EPF, 1952 cease to be applicable to the establishment under such circumstances? [Dec. 2008 (4 Marks)]
Answer:
As per Section 1 (5) of the Employees Provident Fund & Miscellaneous \ Provisions Act, 1952, an establishment to which the Act applies shall continue to be governed by the Act even if the number of persons employed, falls below 20 at any time. Thus, Act continues to apply even if the number of employees falls below 20.

Question 32.
Define the term ‘excluded employee’ as used in the Employees Provident Fund Scheme, 1952. [June 2010 (5 Marks)]
Answer:
Excluded employee means:

  1. An employee who has withdrawn the full amount of his accumulations in the Fund.
  2. An employee whose pay exceeds ₹ 15,000 p.m.
  3. An apprentice.

Explanation: Pay = Basic wages + Dearness allowance + Retaining allow-ance + Cash value of food concession.

Question 33.
Galaxy Hotels Ltd., located in Aurangabad (Maharashtra), is covered under the provisions of the EPF Act, 1952. Recently, it started a new restaurant in Belgaum (Karnataka) where 15 employees were employed. The provident fund authorities demanded contribution in respect of 15 employees in the new establishment contending that it is a part of Galaxy Hotels Ltd. Is the demand of provident fund authorities justified? [Dec. 2010 (4 Marks)]
Answer:
The expression ‘establishment’ is not defined in the Act. Establishment means the place where business is carried on. One company can have more than one establishment. Thus, ‘establishment’ is different from ‘owner’. As per the facts given, it appears that Galaxy Hotels Ltd. has two different establishments and as such the Act will apply if each establishment has more than 20 employees.

As per Section 2A, where an establishment consists of different departments or branches situated in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment.

Thus, as per Section 2A clubbing of different departments or branches has to be made for a particular establishment. There is no provision that two different establishments have to be clubbed for the purpose of determining the applicability of the Act.

Thus, a new restaurant in Belgaum is a separate establishment and the Act will apply if the numbers of employees employed are 20 or more. The demand of provident fund authorities is not justified.

Question 34.
Hotel Amravati is managed by a firm employing more than 100 employees and covered under the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952. Some of its partners started a new restaurant on the premises registering the restaurant as a new unit as per the applicable Slate enactment. The restaurant employed 15 employees and the management of the restaurant took a stand that the restaurant is a different establishment and is not covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. Will it succeed? [June 2011 (4 Marks)]
Answer:
As per Section 2A of the Employees Provident Fund & Miscellaneous Provisions Act, 1952, where an establishment consists of different departments or branches situated in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. As per the facts given in case a new restaurant is started in the same premises, hence it will be treated as part of the establishment hence the Act will apply. Thus, the stand taken by the management is not correct.

Question 35.
Does the bonus payable under the Payment of Bonus Act, 1965 carry with it the obligation of good behavior of employees? When is an employee disqualified from receiving a bonus under the Payment of Bonus Act? [June 1999 (3 Marks)]
Answer:
As per Section 9 of the Payment of Bonus Act, 1965, an employee shall be disqualified from receiving a bonus, if he is dismissed from service for:

  • Fraud, or
  • Riotous or violent behavior while on the premises of the establishment, or
  • Theft, misappropriation, or sabotage of any property of the establishment.

Question 36.
Tokyo Ltd. carried on three business ventures viz. manufacturing sugar, cement, and heavy engineering machinery, locating in three different places in North India. They employed workmen on different units. One of these units was financially faring ill. The workers of these units demanded a bonus on the basis of treating these three units as one establishment. Can the workmen succeed in getting a bonus? [June 2000 (3 Marks)]
Answer:
As per Section 3 of the Payment of Bonus Act, 1965, an establishment will include all its departments, undertakings, and branches. However, a department or undertaking or branch will be treated as a separate establishment if a separate balance sheet and profit & loss account are prepared right from 1 st year of establishing that undertaking, department, or branch.

In other words, if a branch or undertaking is treated as parts of the same establishment right from the first year then for subsequent years it cannot be treated as a separate establishment, even if for subsequent years, the separate balance sheet is prepared.

If Tokyo Ltd. has prepared a separate balance sheet and profit & loss account right from the beginning of the incorporation treating all the three units as separate establishments then workers are not entitled to the bonus as per profits of that unit. They cannot claim bonuses on the basis of the overall profit of the establishment. [KCP Employees Association, Madras v. The Management of KCP Ltd.]

Question 37.
A Company could not pay a bonus to its employee even after the expiry of six months from the close of its accounting year. Can the employees sue the employer for this reason? [June 2002 (3 Marks)]
Answer:
According to Section 19 of the Payment of Bonus Act, 1965, a bonus should be paid by the employer within a period of 8 months from the close of the accounting year. As per the facts given in case only 6 months have been passed, hence employees cannot sue the employer.

Question 38.
During the accounting year 2019-2020, Stingy Ltd. to which the Payment of Bonus Act, 1965 applies, suffered heavy losses. The Board of directors decided not to pay any bonus to its employees. The employees moved the Court for relief. Will they succeed? [Dec. 2005 (3 Marks)]
Answer:
Every employer shall be bound to pay to every employee a minimum bonus which shall be:

  • 8.33% of the salary or wage of the accounting year or
  • ₹ 100 (₹ 60 for an employee who has not completed 15 years of age) Whichever is higher.

Even if the employer suffers losses during the accounting year, he is bound to pay a minimum bonus as prescribed u/s 10 of the Payment of Bonus Act, 1965.

Question 39.
An employee was dismissed from service for an act of misconduct. The company did not pay a tiny bonus to the dismissed employee for the accounting year in which the dismissal took place. Is the action of the company justified? [Dec. 2007 (3 Marks)], [Dec. 2009 (3 Marks)]
Answer:
As per Section 9 of the Payment of Bonus Act, 1965, an employee shall be disqualified from receiving a bonus under the Act, if he is dismissed service for riotous or violent behavior (Le. misconduct) while on the premises of the establishment. Hence, the action of the company is justified.

Question 40.
Write a short note on Objects of the Payment of Bonus Act, 1965. [June 2009 (5 Marks)]
Answer:
Objects of the Payment of Bonus Act, 1965 are as follows:

  • To provide for the payment of bonus to persons employed in certain establishments.
  • To maintain peace and harmony between labor and capital by allowing the employees to share the prosperity of the establishment.
  • To prescribe the maximum and minimum rates of bonus.
  • To lay down the rules for computation of bonus.
  • To make other provisions like eligibility, disqualification, recovery of bonus and offense & penalties, etc.

Question 41.
To whom is Gratuity payable? [June 2000 (3 Marks)]
Answer:
Gratuity shall be payable to an employee himself. However, in the case of death of the employee:

  • It shall be paid to his nominee;
  • If no nomination has been made, to his heirs;
  • Where any such nominees or heirs is a minor, the share of such minor shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, until such minor attains majority.

Question 42.
Ramesh was occupying service quarters of a company at the time of retirement. He did not vacate the house after retirement. The company withheld the payment of gratuity to the retired employee on this ground. Can Ramesh claim the payment of gratuity and succeed against the employer? [Dec. 2006 (3 Marks)], [Dec. 2009 (4 Marks)]
Answer:
Gratuity shall be forfeited, If the employee’s services have been terminated for the grounds covered in Section 4(6) only. Gratuity cannot be forfeited on any other grounds. Hence, gratuity cannot be withheld for non-vacation of service quarters or houses by retiring employees. [Air India y. Authority under the Act]

Question 43.
The company declined to pay gratuity to a deceased employee’s wife stating that the employee had worked for 2 years only whereas eligibility for receiving gratuity accrues only if he served for a period of five completed years of continuous service. Will she succeed? [Dec. 2008 (4 Marks)]
Answer:
As per Section 4 of the Payment of Gratuity Act, 1972, the completion of continuous service of 5 years is not necessary where the termination of the employment of any employee is due to death or disablement. In the given case, as there is the death of the employee hence condition of completion of 5 years of service is not applicable. Hence, the wife of the deceased employee will succeed in claiming gratuity.

Question 44.
Suresh retired on attaining the age of superannuation. After retirement, it was noticed that he had misappropriated the traveling allowance drawn by him. The employer decided to deduct the misappropriated amount from the gratuity payable to him. Is the action of the employer legally tenable? [Dec. 2010 (4 Marks)]
Answer:
Gratuity shall be forfeited if the employee’s services have been terminated for the grounds covered in Section 4(6) only. Gratuity cannot be forfeited on any other grounds. As per the facts given in the case, Suresh retired on attaining the age of superannuation, and his service is not terminated by the employer. Once an employee retires on superannuation, it cannot be said that the service of the employee has been terminated by the employer. Hence, Suresh is entitled to receive the gratuity. The action of the employer is not legally tenable.

Question 45.
Lotus Info. Ltd. entered into a settlement with its workmen providing for payment of gratuity at the rale of one month’s salary for every completed year of service. An employee retired on superannuation and claimed gratuity as per the settlement. The employer pleaded that he is under no obligation to pay gratuity more than the rate prescribed under the Payment of Gratuity Act, 1972. Is the employer’s contention tenable in law? [Dec. 2011 (4 Marks)]
Answer:
An employee may sometimes be entitled to receive better terms of gratuity under any award or agreement or contract with the employer. In such case, nothing contained Section 4 shall affect the right of employees to receive better terms. [Section 4(5)]

As per the Payment of Gratuity Act, 1972 employee is entitled to receive gratuity at the rate of 15 days salary for every completed year of service. Whereas Lotus Info. Ltd. entered into a settlement with its workmen providing for payment of gratuity at the rate of one month’s salary for every completed year of service. As settlement with the employer provides a better term of gratuity, the employer is under obligation to pay gratuity more than the rate prescribed under the Payment of Gratuity Act, 1972. Hence, the employer’s contention is not tenable in law.

Question 46.
Write a short note on Forfeiture of gratuity [Dec 2011 (5 Marks)]
Answer:
As per Section 4(6)(a) & (b), Gratuity shall be forfeited, if employee’s services have been terminated:

Situations Extent of forfeiture
1. For any act of willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer. 1. Forfeited to the extent of the damage or loss or caused
2. For riotous & disorderly conduct or any other act of violence. 2. Wholly or partially forfeited
3. For any act which constitutes an offense involving moral turpitude provided that such offense is committed by him in the course of his employment. 3. Wholly or partially forfeited

Where the service has not been terminated on any of the above grounds, the employer cannot withhold gratuity due to the employee.

Question 47.
Write a short note on Protection of gratuity [June 2012 (5 Marks)]
Answer:
Protection of gratuity [Section 13]: Gratuity payable under the Act and gratuity payable to an employee employed in any establishment or exempted establishment shall not be liable to attachment in execution of any decree or order of any civil, revenue, or criminal court.

Question 48.
What defenses are available to an employer when a suit is filed. for compensation under the Employee’s Compensation Act, 1923 for fatal accidents? [Dec. 1997 (5 Marks)]
Answer:
According to Section 3(1) of the Employee’s Compensation Act, 1923, in the following cases, the employer shall not be liable to pay compensation:
1. When the injury does not result in disablement for a period exceeding 3 days.

2. When the injury is due to any of the following reasons:
The employee was at the time of the accident, under the influence of a drink or drugs.

  • The employee willfully disobeyed an order expressly given or a rule expressly framed for the purpose of securing the safety of workers.
  • The employee willfully disregards or removes any safety guards or safety devices that he knew to have been provided for the safety of workmen.

Note: When the employee dies due to an accident arising out of and in the course of employment above clauses cannot be pleaded.

Question 49.
To what extent is the compensation payable to an employee for personal injury sustained by him while on duty leading to
(i) his permanent total disablement; and
(ii) his death under the Employee’s Compensation Act, 1923? [June 2002 (7 Marks)]
Answer:
The amount of compensation is payable to an employee depends upon:

  • Nature of injury
  • Monthly wages of the employee
  • Relevant factor as specified in Schedule IV

Compensation for death: Compensation payable in case of death is as follows:
[latex]\frac{50 \times \text { Monthly wages } \times \text { Relevant factor }}{100}[/latex] or ₹ 1,20,000 whichever is more

In addition, funeral expenses of ₹ 2,500 are payable.

Example: An employee drawing monthly wages of ₹ 5,000 meets with an accident while working on a machine and dies. He was 34 years old at the time of death. The relevant factor as per Schedule IV for 34 age is 199.40. The amount of compensation will be calculated as follows:
[latex]\frac{50 \times 5,000 \times 199.40}{100}[/latex] = ₹ 4,98,500 or ₹ 1,20,000 whichever is more.
Hence, the compensation payable is ₹ 4,98,500.

Compensation for permanent total disablement: Compensation payable in case of permanent total disablement is as follows:
\(\frac{60 \times \text { Monthly wages } \times \text { Relevant factor }}{100}\) or ₹ 1,40,000 whichever is more

Example: An employee drawing monthly wages of 5,000 meets with an accident which results in permanent total disablement. He was 34 years old at the time of death. The relevant factor as per Schedule IV for 34 age is 199.40. The amount of compensation will be calculated as follows:

\(\frac{60 \times 5,000 \times 199.40}{100}\) = ₹ 5,98,200 or ₹ 1,40,000 whichever is more.
Hence, the compensation payable is ₹ 5,98,200

Time of payment of compensation [Section 4A]: It provides that compensation shall be paid as soon as it falls due.

Question 50.
State the circumstances under which an employee is not liable for Compensation under Employees Compensation Act, 1923 [Dec. 2019 (5 marks)]
Answer:
Circumstances where an employee is not liable for compensation under the Employees Compensation Act, 1923:
1. In respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding three days. State the circumstances under which an employee is not liable for Compensation under Employees Compensation Act, 1923.

2. In respect of any injury, not resulting in death or permanent total disablement caused by an accident which is directly attributable to:
(a) The workman having been at the time thereof under the influence of drink or drugs; or
(b) Wilful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workman; or
(c) Wilful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of the workman.

Question 51.
Which establishments are required to be registered under the Contract Labour (Regulation & Abolition) Act, 1970? When my registration is revoked or suspended? [June 1996 (8 Marks)], [June 2000 (3 Marks)]
Answer:
Registration of certain establishments [Section 7]: Every principal employer of an establishment to which the Act applies shall make an application to the registering officer in Form I for registration of the establishment within the prescribed time limit.

A registration fee which is related to the number of workmen employed as contract labor, is payable, if the application is complete in all respects the registering officer shall register the establishment and issue to the principal employer of the establishment a certificate of registration in Form II.

Revocation of registration in certain cases [Section 8]: The registration can be revoked in the following circumstances.

  • If the registering officer is satisfied that the registration has been obtained by misrepresentation or suppression of any material fact, or
  • That the registration has become useless and become ineffective for any other reason.

In both cases, the registering officer shall give an opportunity to the principal employer of the establishment to be heard. He will also obtain a previous approval of the Appropriate Government in case the registration is to be revoked.

Question 52.
Is it within the jurisdiction of a Labour Court to order abolition of contract labor in an industry under the Contract Labour (Regulation & Abolition) Act, 1970? [June 1998 (5 Marks)]
Answer:
It has been held by the Supreme Court in Vegolis (P) Ltd. v. The Work- fj men, that after enforcement of Contract Labour (Regulation & Abolition) § Act, 1970, the sole jurisdiction for the abolition of contract labor in any particular operation vested with the Appropriate Government and therefore g the Tribunals/Labour Court have no jurisdiction to abolish contract labor.

Question 53.
What are the provisions of the Contract Labour (Regulation & Abolition) Act, 1970 with regard to licensing of contractors? [June 1995 (5 Marks)], [June 2000 (3 Marks)]
Answer:
Licensing of contractors [Section 12]: The contractor can undertake or execute any work through contract labor only as per the license issued by the licensing officer. The license may contain certain conditions like conditions as to hours of work, fixation of wages and other essential amenities, etc. The license shall be issued on the payment of the prescribed fee and on the deposit of security for the due performance of the conditions prescribed in the license. The licensee fee varies depending on the number of workmen employed by the contractor. The license is not transferable.

Grant of license [SectIon 13]: An application for the grant of license has to be made in triplicate in Form IV. Every application for the grant of a license shall be accompanied by a certificate by the principal employer in Form V to the effect that the applicant has been employed by him as a contractor in relation to his establishment and that he undertakes to be bound by all the provisions of the Act and the Rules made thereunder.

The license is issued in Form VI after a necessary investigation by the licensing officer. It is valid for 12 months under the Central Rules and may be renewed from time to time for such a period and on payment of prescribed fees and on fulfilling prescribed conditions.

Question 54.
When the principal employer liable to provide for the welfare, health, and other facilities and pay wages to contract workers under the Contract Labour (Regulation & Abolition) Act, 1970? [June 1999 (8 Marks)], [June 2009 (5 Marks)]
Answer:
Contractors are required to take certain specific measures for the welfare and health of contract labor. The relevant provisions are as follows:

Canteens [Section 16]: The Appropriate Government has powers to make rules requiring contractors to provide one or more canteens for the use of contract labor. This provision is applicable to every establishment where 100 or more contract labor are ordinarily employed by a contractor and the employment of the contract labor is likely to continue for a prescribed period.

Rest Rooms [Section 17]: 1f contract labor is required to halt at night for work of an establishment and such work is likely to continue for the prescribed period, then restroom facility shall be provided and maintained by the contractor for the contract labor.

The restroom to be provided shall be sufficiently lighted and ventilated and shall be maintained in a clean and comfortable condition.

Other Facilities [Section 18]: It shall be the duty of every contractor employing contract labor to provide and maintain for the contract labor certain other facilities mention below:

  • Supply of wholesome drinking water;
  • Sufficient number of latrines & urinals;
  • Washing facilities.

First Aid Facilities [Section 19]: The contractor is required to provide and maintain a first aid box equipped with the prescribed contents where contract labor is employed by him. The first aid box should be readily accessible during working hours.

Liability of the principal employer In certain cases [Section 20]: If the prescribed amenities (canteens, restrooms, and other facilities, first aid box) are not provided by the contractor then such amenities shall be provided by the principal employer.

Question 55.
Explain the provisions of the Contract Labour (Regulation & Abolition) Act, 1970 relating to the welfare and health of contract labor? [Dec. 2000 (8 Marks)]
Answer:
Registration of certain establishments [Section 7]: Every principal employer of an establishment to which the Act applies shall make an application to the registering officer in Form I for registration of the establishment within the prescribed time limit.

A registration fee which is related to the number of workmen employed as contract labor, is payable, if the application is complete in all respects the registering officer shall register the establishment and issue to the principal employer of the establishment a certificate of registration in Form II.

Revocation of registration in certain cases [Section 8]: The registration can be revoked in the following circumstances.

  • If the registering officer is satisfied that the registration has been obtained by misrepresentation or suppression of any material fact, or
  • That the registration has become useless and become ineffective for any other reason.

In both cases, the registering officer shall give an opportunity to the principal employer of the establishment to be heard. He will also obtain a previous approval of the Appropriate Government in case the registration is to be revoked.

Question 56.
What are the provisions regarding responsibility for payment of wages to contract labor under the Contract Labour (Regulation & Abolition) Act, 1970? [June 1995 (5 Marks)], [Dec. 2001 (8 Marks)]
Answer:
A common complaint against the contractors has been that some of them do not pay proper wages to the contract laborers or those payments are not made in time or that arbitrary deduction are made from wages.

To take care of such malpractices, Section 21, has been incorporated which is discussed as below:

  1. A contractor shall be responsible for payment of wages to each contract labor before the expiry of the prescribed period.
  2. Every principal employer shall nominate a representative who shall be present at the time of payment of wages by the contractor.
  3. It shall be the duty of the contractor to ensure that wages are paid in the presence of the authorized representative of the principal employer.
  4. If the contractor fails to make payment of wages within the prescribed period or makes the short payments, then the principal employer shall be liable to make payment of wages and recover the amount so paid from the contractor. Such an amount can be recovered either by deduction from the amount payable to the contractor or as a debt payable by the contractor.

Question 57.
A contractor, having a valid license under the Contract Labour (Regulation & Abolition) Act, 1970, supplies 20 persons to Gamma Ltd. for completion of a project work spread over 20 days. Who is liable to make the payment of wages? [Dec. 2003 (3 Marks)]
Answer:
Licensing of contractors [Section 12]: The contractor can undertake or execute any work through contract labor-only as per the license issued by the licensing officer. The license may contain certain conditions like conditions as to hours of work, fixation of wages and other essential amenities, etc. The license shall be issued on the payment of the prescribed fee and on the deposit of security for the due performance of the conditions prescribed in the license. The licensee fee varies depending on the number of workmen employed by the contractor. The license is not transferable.

Grant of license [SectIon 13]: An application for the grant of license has to be made in triplicate in Form IV. Every application for the grant of a license shall be accompanied by a certificate by the principal employer in Form V to the effect that the applicant has been employed by him as a contractor in relation to his establishment and that he undertakes to be bound by all the provisions of the Act and the Rules made thereunder.

The license is issued in Form VI after a necessary investigation by the licensing officer. It is valid for 12 months under the Central Rules and may be renewed from time to time for such a period and on payment of prescribed fees and on fulfilling prescribed conditions.

Question 58.
A contractor made short payment of wages to a worker employed by him as contract labor. The worker sought the amount due from the principal employer. Will he succeed? [Dec. 2008 (4 Marks)]
Answer:
As per SectIon 21 of the Contract Labour (Regulation & Abolition) Act, 1970, if the contractor fails to make payment of wages within the prescribed period or makes the short payment, then the principal employer shall be liable to make payment of wages and recover the amount so paid from the contractor. Such an amount can be recovered either by deduction from the amount payable to the contractor or as a debt payable by the contractor.

Question 59.
Saravan is carrying out building contract works for industrial and commercial customers. He engages 25 workers on regular basis, wants to know about the applicability of the Contract Labour (Regulation and Abolition) Act, 1970 to him and licensing requirements if any for his business. Also, brief him on the details regarding the Registers to be maintained by the Principal Employer and the contractor [Dec. 2019 (5 Marks each)]
Answer:
Applicability of Contract Labour (Regulation and Abolition) Act, 1970 Every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labor. Every contractor who employs or who employed on any day of the preceding twelve months 20 or more workmen.

Licensing of Contractor

  • Engaging 20 or more than 20 workers and on deposit of required fee in Form IV.
  • Valid for a specified period.

Registers of Contractors to be maintained by, Principle Employer

  • To maintain a register of contractors in respect of every establishment in Form XII.

Contractor

  • To maintain a register of workers for each registered establishment in Form XIII.
  • To issue an Employment card to each worker in Form XIV
  • To issue a service certificate to every workman on his termination in Form XV

Question 60.
Explain the meaning of, and procedure for, ‘lay-off’ under the Industrial Dispute Act, 1947 [Dec. 1993 (4 Marks)], [June 2007 (5 Marks)]
Answer:
Lay-off is a temporary stoppage of work.
Lay-off [Section 2(kkk)]: Lay-off means the failure, refusal, or inability of the employer on account of:
(a) Shortage of coal, power or raw materials or
(b) Accumulation of stocks or
(c) Breakdown of machinery or
(d) Natural calamity or
(e) For any other connected reason, to give employment to a workman whose name is borne on the muster rolls and who has not been retrenched.

Explanation:

  1. If a workman presents himself for work on the appointed day and is not given work within 2 hours of his presence then he shall be deemed to have been laid off for that day.
  2. If the workman is asked to present in the second half of the shift and is given employment then, he shall be deemed to have been laid-off only for half of that day.
  3. If he is not given any work even in the second half of the shift, he shall be deemed to have been laid-off for the day and shall be entitled to full basic wages and dearness allowance.

Question 61.
With reference to the leading cases and relevant legal provisions distinguish between ‘justified strikes’ and ‘illegal strikes’. [Dec. 1994 (10 Marks)]
Answer:
Ans. Whether strike is justified or unjustified will depend upon the fairness and reasonableness of the demands of workers. If workmen go on strike without contravening statutory requirements, in support of their demands, the strike will be justified. In the beginning, the strike was justified but later on workmen indulged in violence, it will become unjustified.

Judicial views:
1. The justification of strikes has to be viewed from the standpoint of fairness and reasonableness of demands made by workmen and not merely from standpoint of their exhausting all other legitimate means open to them for getting their demands fulfilled.

2. If the strike was resorted to by the workers in support of their reasonable, fair, and bona tide demands in a peaceful manner, then the strike will be justified. Where it was resorted to by using violence or acts of sabotage or for any ulterior purpose, then the strike will be unjustified.

3. The law has made a distinction between a strike that is illegal and one which is not, but it has not made a distinction between an illegal strike that may be said to be justifiable and one which is not justifiable. Therefore, an illegal strike is always unjustified.

4. If the strike is followed by the lockout and vice versa, and both are un-justified. The Court evolved the doctrine of “apportionment of blame” to solve the problem. According to this doctrine, when the workmen and the management are equally to be blamed, the Court normally awards half of the wages.

5. It is well settled that in order to entitle the workmen to wages for the period of strike, the strike should be legal as well as justified. A strike is legal if it does not violate any provision of the statute. Again a strike cannot be said to be unjustified unless the reasons for it are entirely perverse or unreasonable. Whether a particular strike is justified or not is a question of fact which has to be judged in the light of the facts and circumstances of each case, it is also well settled that the use of force or violence or acts of sabotage resorted to by the workmen during a strike disentitled them to wage for the strike period.

Question 62.
Explain the provisions of the Industrial Disputes Act, 1947 relating to illegal strikes and lock-out. [June 1996 (5 Marks)], [June 2001 (9 Marks)]
Answer:
According to Section 24, a strike or lock-out shall be illegal if:

  • It is commenced or declared in contravention of Section 22 or 23 or
  • It is continued in contravention of an order made under Section 10(3) of Section 10A(4A).

Where a strike or lock-out in pursuance of an industrial dispute has already commenced and is in existence at the time of reference of the dispute to a Board, an arbitrator, a Labour Court or Tribunal, the continuance of such strike or lock-out shall not be deemed to be illegal, if such strike or lockout was not in contravention of the provisions of this Act or the continuance was not prohibited under Section 10(3)/ 10A(4A).

A lock-out declared in consequence of an illegal strike or strike declared in consequence of an illegal lock-out shall not be deemed to be illegal.

Prohibition of financial aid to illegal strikes and lock-outs [Section 25]: No person shall knowingly expend or apply any money in direct furtherance or support of any illegal strike or lock-out.

Question 63.
A, an employer in public utility service, declares a lock-out during the pendency of conciliation proceedings before a conciliation officer. Is the lock-out legal under the Industrial Disputes Act, 1947? [June 1997 (5 Marks)]
Answer:
As per Section 23 of the Industrial Disputes Act, 1947, the employer shall not declare a lock-out during the pendency of conciliation proceedings before a Board and 7 days the conclusion of such proceedings. Hence lock-out is illegal.

Question 64.
Can an employer, in the absence of any contract of employment or service rule, deduct full days wages of employees participating in a strike for the first half (which is crucial hours of a business transaction) of the day? [June 1997 (5 Marks)]
Answer:
Where employees are going on a strike for a portion of the day or for the whole day and there was no provision in the contract of employment or service rules or regulations for deducting wages for the period for which the employees refused to work although work was offered to them, and such deduction is not covered by any other provision, the employer is entitled to deduct wages proportionately for the period of absence or for the whole day depending upon the circumstances.

Question 65.
Define the term ‘industrial dispute’ as used in the Industrial Disputes Act, 1947. [June 1998 (5 Marks)]
Answer:
Industrial Dispute [Section 2{k)]: Industrial dispute means any dispute or difference between:

  • Employers and employers, or
  • Employers and workmen, or
  • Workmen and workmen,

The industrial dispute may be connected with:

  • Employment or non-employment or
  • Terms of employment or
  • With the conditions of labor, of any person.

Question 66.
Define and explain the term ‘workman’ under the Industrial Disputes Act, 1947? [Dec. 1998 (5 Marks)]
Answer:
Workman [SectIon 2(s)]: Workman means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward, whether the terms of employment be expressed or implied and includes:
(a) Any such person who has been dismissed, discharged, or retrenched in connection with, or as a consequence of that dispute, or

(b) Any person whose dismissal, discharge, or retrenchment has led to that dispute, but does not include any such person:

  • Who is subject to the Army Act, 1950/Air Force Act, 1950/Navy Act, 1957 or
  • Who is employed in the police service or as an officer or other employee of prison or
  • Who is employed mainly in a managerial or administrative capacity or
  • Who is employed in a supervisory capacity drawing more than? 10,000 p.m. as wages or
  • Who is exercising either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature?

Question 67.
Distinguish between ‘strikes’ & ‘lock-out’, [Dec. 1998 (5 Marks)]
Answer:
Following are the main points of distinctions between strike & lockout:

Points Strike Lock-out
Meaning Strike can take place only when there is a cessation of work or refusal to work by the workmen acting in combination or in a concerted manner. Lock-out means the temporary closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.
Reason The strike is a weapon of collective bargaining in the armor of workers. Lock-out is a weapon of collective bargaining in the hands of the employer.
Continuity of business In strike the place of business may not be is closed down. In lock-out, the place of business is closed down for the time being.
Wages On strike, workers are eligible for wages if the strike is legal and justified. In a lock-out, there is no question of any wages or compensation being paid unless the lock-out is held to be unjustified or illegal.

Question 68.
Discuss the different types of ‘strikes’ that may take place in an industrial establishment. Which of these constitute strike under Section 2(q) of the Industrial Disputes Act, 1947? [June 2000 (8 Marks)], [Dec. 2000 (10 Marks)]
Answer:
Types of strike and their legality can be discussed as below:
1. Stay-in, sit-down, pen-down, or tool-down strike: In such strikes, the workmen after taking their seats refuse to do work. Even when asked to leave the premises, they refuse to do so. All such acts on the part of the workmen acting in combination amount to a strike. Since such strikes are directed against the employer, they are also called primary strikes.

Where workmen enter the premises of their employment and refuse to take their tools in hand and start their usual work amounts to strike. If in pursuance of common understanding the employees enter the premises of the Bank and refuse to take their pens in their hands that would no doubt be a strike.

2. Go-slow: Go-slow does not amount to strike, but it is a serious case of misconduct. It is not a legitimate weapon in the armor of labor. Go-slow which is a deliberate delaying of production by workmen pretending to be engaged in the factory is one of the most pernicious practices that discontented and disgruntled workmen sometimes resort to. Thus, while delaying production and thereby reducing the output, the workmen claim to have remained employed and entitled to full wages.

3. Sympathetic strike: Cessation of work in the support of the demands of workmen belonging to other employers is called a sympathetic strike. This is an unjustifiable invasion of the right of the employer who is not at all involved in the dispute.

The management can take disciplinary action for the absence of workmen.

4. Hunger strike: Some workers may resort to fast on or near the place of work or residence of the employer. If it is peaceful and does not result in cessation of work, it will not constitute a strike. But if due to such an act, even those present for work, could not be given work, it will amount to strike.

5. Work-to-rule: Since there is no cessation of work, it does not constitute a strike.

Question 69.
State the authorities for settlement of industrial dispute under the Industrial Disputes Act, 1947 [June 2000 (12 Marks)], [Dec. 2009 (5 Marks)]
Answer:
Authorities for settlement of industrial dispute under the Industrial Disputes Act, 1947 are as follows:
1. Works Committee [Section 3]:

  • The Appropriate Government may by general or special order require the employer to constitute a works committee, where 100 or more workmen are employed.
  • The works committee will be comprised of the representatives of employers and workmen engaged in the establishment.
  • It shall be the duty of the works committee to promote measures for securing and preserving amity and good relations between the employer and workmen.

2. Conciliation officers [Section 4]:

  • The Appropriate Government may appoint Conciliation Officers as it thinks fit for mediating and promoting the settlement of industrial disputes.
  • The Conciliation Officer may be appointed for a specified area or for specified industries either permanently or for a limited period.

3. Boards of Conciliation [Section 5]:

  • The Appropriate Government may constitute a Board of Conciliation for promoting the settlement of an industrial dispute.
  • It shall be the duty of the Board to endeavor to bring a settlement of the dispute.
  • The Board may also do all things for a fair and amicable settlement of the dispute.
  • In case of settlements of the dispute, the Board shall send a report to the appropriate Government together with a memorandum of settlement signed by all the parties to the dispute.
  • In case no settlement is arrived at, the Board shall forward a report to Appropriate Government enlisting therein the steps taken by the Board for ascertaining the facts and circumstances related to the dispute and for bringing about a settlement.
  • The Board will also enlist the reasons on account of which in its opinion a settlement could not be arrived at and its recommendations for determining the disputes.

4. Courts of Inquiry [Section 6]:

  • The Appropriate Government may constitute a Court of Inquiry
  • for inquiring about any matter connected with an industrial dispute.
  • It is the duty of such a Court to inquire into matters referred to it and submit its report to the Appropriate Government within a period of 6 months from the commencement of the inquiry. The period is not mandatory and the report may be submitted even beyond the period of 6 months without affecting the legality of the inquiry.

5. Labour Courts [Section 7]:

  • The Appropriate Government is empowered to constitute Labour Courts for adjudication of industrial disputes relating to matters specified in the 2nd Schedule.
  • When an industrial dispute has been referred to a Labour Court for adjudication, it is the duty of the Labour Court to hold its proceedings expeditiously, and submit its award to the Appropriate Government soon after the conclusion of the proceedings.
  • No time period has been laid down for the completion of proceedings.

6. Tribunals [Section 7A]:

  • The Appropriate Government may by notification in the Official Gazette, constitute Industrial Tribunals for the adjudication of industrial disputes specified in the 2nd or 3rd Schedule.
  • The Industrial Tribunal gets its jurisdiction on a reference by the Appropriate Government u/s 10.
  • The duties of the Industrial Tribunal are identical with the duties of the Labour Court, ie., on a reference of any industrial dispute, the Tribunal shall hold its proceedings expeditiously and submit its award to the Appropriate Government.

7. National Tribunals [Section 7B]:

  • The Central Government has been empowered to constitute one or more National Tribunals for the adjudication of industrial disputes which involve questions of national importance or are of such a nature that industrial establishments situated in more than one State are likely to be interested in or affected by such disputes.
  • When a matter has been referred to a National Tribunal, it must adjudicate the dispute expeditiously and submit its award to the Central Government. [Section 15]

8. Setting up of Grievance Redressal Machinery [Section 9C]:

  1. Every industrial establishment employing 20 or more workmen shall have one or more Grievance Redressal committees for the resolution of disputes arising out of individual grievances.
  2. The Grievance Redressal Committee shall consist of an equal number of members from the employer and the workmen.
  3. The Chairperson of the Committee shall be selected from the employer and from among the workmen alternatively on a rotation basis every year.
  4. The total number of members of the Committee shall not exceed more than 6. However, as far as practicable, one woman member of the Committee has 2 members and in case the number of members is more than 2, the number of women members may be increased proportionately.
  5. The setting up of the Grievance Redressal Committee shall not affect the right of the workman to raise an industrial dispute on the same matter under the provisions of the Act.
  6. The Committee may complete its proceedings within 45 days on receipt of a written application by or on behalf of the aggrieved party.
  7. The workman who is aggrieved of the decision of the Committee may prefer an appeal to the employer against the decision of the Committee and the employer shall, within 1 month from the date of receipt of such appeal, dispose of the same and send a copy of his decision to the workman concerned.

Question 70.
Stale the objects & scope of the Industrial Disputes Act, 1947 [Dec. 2001 (10 Marks)], [June 2008 (5 Marks)] ?
Answer:
Industrial peace is essential for the growth and development of the industrial sector. Thus, the Industrial Disputes Act, 1947 was enacted to § provide machinery for peaceful resolution of disputes and to promote harmonious relations between employers and workers. As per the preamble, the Act is to make provision for the investigation and settlement of industrial disputes, and for certain other purposes. The legislation is enacted to ensure social justice to both employers and employees and advance the progress of the industry by bringing about the existence of harmony and cordial relationship between the employers and employees.

Objectives of the Act as laid down by the Supreme Court in Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate are as follows:

  • To secure amity and good relations between the employer and workmen.
  • To investigates and settles the industrial dispute.
  • To have a right of representation by trade unions.
  • To prevention of illegal strikes and lock-outs.
  • To provide relief to workmen for lay-off and retrenchment.
  • To promote of collective bargaining system.

Question 71.
An employee was engaged in a strike, which was declared legal and justified. He claimed wages for the strike period. Can he do so? [June 2002 (3 Marks)]
Answer:
It was held that workmen are entitled to wages for the period of a strike if the strike is legal as well as justified.
In Syndicate Bank v. Umesh Nayak, it was held that where the strike is legal but at the same time unjustified, the workers are not entitled to wages for the strike period.

In the given case employee can claim wages as the strike was legal and justified.

Question 72.
Write a short note on: ‘Voluntary reference of disputes to arbitration [June 2002 (5 Marks)], [June 2004 (5 Marks)]
Answer:
Section 10A provides for the settlement of industrial disputes by voluntary reference of such dispute to arbitrators. To achieve this purpose, the following provisions are made:
1. Where any industrial dispute exists or is apprehended the employer and the workmen may refer the dispute by a written agreement to arbitration. The presiding officer can be named arbitrator by the parties.

2. Where an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, the agreement shall provide for the appointment of another person as an umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award.

3. An arbitration agreement shall be in the prescribed form and shall be signed by the parties in the prescribed manner.

4. A copy of the arbitration agreement shall be forwarded to the Appropriate Government and the Conciliation Officer.

The Appropriate Government shall within 1 month from the date of the receipt of such copy, publish the same in the Official Gazette

5. The arbitrator shall investigate the dispute and submit an arbitration award signed by him the Appropriate Government.

6. Nothing in the Arbitration & Conciliation Act, 1996 shall apply to arbitrations u/s 10A.

Question 73.
Distinguish between: Lay-off & Lock-out [Dec. 2002 (5 Marks)], [June 2009 (5 Marks)]
Answer:
Following are the main points of distinction between lay-off & lock-out:

Points Lay-off Lock-out
Meaning Lay-off means the failure, refusal, or inability of the employer on account of:

(a) Shortage of coal, power or raw materials or
(b) Accumulation of stocks or
(c) Breakdown of machinery or
(d) Natural calamity or
(e) For any other connected reason to give employment to a workman whose name is borne on the muster rolls and who has not been retrenched.

Lock-out means the temporary closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.
Reason Lay-off is the result of trade reasons. Lock-out is a weapon of collective bargaining in the hands of the employer.
Continuity of business In lay-off, the business continues. In lock-out, the place of business is closed down for the time being.
Wages Workman is entitled to get specified wages for lay off period. In a lock-out, there is no question of any wages or compensation being paid unless the lock-out is held to be unjustified and illegal.

Question 74.
The service of the bus conductor was terminated on the ground of weak eyesight. Does it amount to a valid ground for retrenchment under the Industrial Disputes Act, 1947? [June 2003 (3 Marks)]
Answer:
In Anand Behari v. RSRTC, the services of bus conductors were terminated on the ground of weak eyesight which was below the standard requirement. The Supreme Court held that the termination is due to continued ill-health and that must have a bearing on the normal discharge of their duties. Hence, it is not retrenchment as per Section 2(oo) of the Industrial Disputes Act, 1947.

Question 75.
Two workers were employed on daily wages basis as night watchmen. As per the terms of the contract, their employment came to an end on completion of work. When their services were not required, their services were terminated and they were not paid any retrenchment compensation. Are the workers entitled to it under the Industrial Disputes Act, 1947? [Dec. 2003 (3 Marks)]
Answer:
According to Section 2(oo) of the Industrial Disputes Act, 1947, retrenchment does not include termination of the service of the workman as a result of the non-renewal of the contract of employment. Further, when persons are employed on daily wages for specific work there termination from work will not constitute retrenchment. As stated in a given case, the workman was employed on a casual basis on daily wages for a specific period and for the specific work. The termination of his service does not amount to retrenchment as per Section 2(oo). Hence, the workman will not succeed.

Question 76.
Sameer died suddenly while working in a factory. The workmen refused to resume work to express solidarity with the deceased worker. Does the action of the workmen amount to strike under the Industrial Disputes Act, 1947? [Dec. 2004 (3 Marks)], [Dec. 2006 (3 Marks)]
Answer:
According to Section 2(q) of the Industrial Disputes Act, 1947, a strike can take place only when there is a cessation of work or refusal to work by the workmen acting in combination or in a concerted manner.

If on the sudden death of a fellow worker, the workmen acting in concert refuse to resume work, it amounts to a strike.

Question 77.
Due to the accumulation of stocks, the company declared lay-off for 5 days. The workers union protested that it was not the legal right of the employer to lay off the workers and that they should be paid full wages for the period of lay-off. Will they succeed in a Court of law, if the employer refuses to concede to their demand? [June 2006 (3 Marks)]
Answer:
The failure of the employer to give employment to a workman on account of accumulation of stocks is one of grounds of lay off under Section 2( kkk) of the Act. When workers are laid off they are entitled to receive lay-off compensation as per Section 25C which is equal to 50% of (Basic wages + DA). In view of specific legal provisions mentioned above workers’ claim that they should be paid full wages for the period of lay-off is not justified.

Question 78.
Fragile Ltd. was running in continuous losses for 5 years. As a result, the company’s financial position worsened. The company declared the lay-off of 10 of its employees. The employees protested the lay-off. Is the action l of the employer justified? [Dec. 2006 (3 Marks)]
Answer:
Lay-off is a temporary stoppage of work. An employer can call lay-off only for those reasons that are covered in Section 2( kkk) of the Industrial Disputes Act, 1947. Worsening of financial position is not a valid ground of lay-off as per Section 2(kkk) of the Act. Thus, the action of the employer is not justified.

Question 79.
Prem and Qureshi established a legal consultancy firm. They employed three law graduates, a stenographer, and a typist to assist the firm. | After five years, the services of the stenographer were terminated without [ assigning any reason. He raised a dispute before the Labour Court asking for reinstatement or retrenchment compensation as contemplated by the | Industrial Disputes Act, 1947. Will he succeed? [Dec. 2006 (3 Marks)]
Answer:
The stenographer will not succeed because a legal consultancy firm is not an industry as per the existing definition of “industry” as given in Section 2(f) of the Industrial Disputes Act, 1947.

Question 80.
Efficiency Ltd. is in the process of reorganization of its business. It is likely to result in some labor being rendered surplus. It has proposed retrenchment of economic dead weight. Can the company do so? [Dec. 2007 (3 Marks)], [Dec. 2009 (4 Marks)]
Answer:
The management has the right to determine the volume of its labor force. If in a scheme of reorganization of business of the employer results in a surplus of the employee, no employer is expected to carry out the burden of such economic dead weight and retrenchment has to be accepted as inevitable. Thus, the action of the employer is justified.

Question 81.
The workers in a factory went on strike. The strike was legal. The employer deducted wages for the strike period on the ground that the % legality of the strike did not always exempt the workers from deduction of their wages for the period of the strike. Was the employer’s action justified? [June 2008 (3 Marks)] |
Answer:
The payment of wages for the strike period will depend upon whether j the strike is justified or unjustified. This also depends upon several factors such as service conditions of the workman, the cause which led to strike, the urgency of cause or demand of workman, the reason for not resorting to dispute settlement machinery under the Act or service rules /regulations, etc.

No wages are payable if the strike is illegal or it is unjustified.

In Syndicate Bank v. Umesh Nayak it was held that where the strike is legal but at the same time unjustified, the workers are not entitled to wages for the Strike period. Thus, in a given case, if the strike is justified then workers are entitled to wages, and if the strike is unjustified then they are not entitled to wages.

Question 82.
Write a short note on Tests for determination of ‘industry’ under the Industrial Disputes Act, 1947. [Dec. 2008 (5 Marks)], [Dec. 2012 (5 Marks)]
Answer:
According to Section 2(j), industry means any business, trade, undertaking, manufacture, or calling of employers and includes any calling service, employment, handicraft, or industrial occupation or avocation of workmen.

Important points relating to the definition of the industry:
The Supreme Court carried out an in-depth study of the definition of the term industry in the case of Bangalore Water Supply & Sewerage Board v. A Rajiappa.

Tests for determination of “industry”: In the above case, the Supreme Court laid down the following tests to determine whether an activity is covered by the definition of “industry” or not.

  • There is systematic activity.
  • It is organized by co-operation between employer and employee.
  • It is for the production and/or distribution of goods and services to satisfy human wants and wishes, not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making on a large scale, prasad or food.
  • The absence of profit motive or gainful objective is irrelevant wherever the undertaking is whether in the public, joint, private, or other sectors.
  • The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.

Question 83.
Services of workmen engaged on a casual basis for doing a particular urgent work were terminated after the completion of the said work. Workmen sought compensation as the termination amounted to retrenchment. Will they succeed? [Dec. 2008 (3 Marks)]
Answer:
It was held that workmen are entitled to wages for the period of a strike if the strike is legal as well as justified.
In Syndicate Bank v. Umesh Nayak, it was held that where the strike is legal but at the same time unjustified, the workers are not entitled to wages for the strike period.

In the given case employee can claim wages as the strike was legal and justified.

Question 84.
When can ‘individual dispute’ become an ‘industrial dispute’? [Dec. 2008 (5 Marks)]
Answer:
According to Section 2A of the Industrial Disputes Act, 1947, where an employer discharges, dismisses, retrenches, or terminates the services of an individual workman, any dispute or difference between the workman and his employer connected with or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.

A dispute may initially be an individual dispute, but the workmen may make that dispute as to their own, they may espouse it on the ground that they have a community of interest and are directly and substantially interested in the employment, non-employment, or conditions of work of the concerned workmen. All workmen need not join the dispute. Thus, an individual dispute may become an industrial dispute.

The only condition for an individual dispute turning into an industrial dispute is the necessity of a community of interest and not whether the concerned workman was or was not a member of the union at the time of his dismissal.

Question 85.
The workman of Bharat Chemicals went on a go-slow strike to compel the management to concede to their demands. The management contended that go-slow is serious misconduct and initiated disciplinary action against the erring workmen. Is the action of the management justified? [June 2009 (4 Marks)]
Answer:
Go-slow does not amount to strike, but it is a serious case of misconduct. It is not a legitimate weapon in the armor of labor.

Go-slow is a deliberate delaying of production by workmen pretending to be engaged in the factory, is one of the most pernicious practices that discontented and disgruntled workmen sometimes resort to. Thus, while delaying production and thereby reducing the output, the workmen claim to have remained employed and entitled to full wages. Thus the action of management is justified.

Question 86.
The workmen went on sympathetic strike by absenting themselves from work in support of the workmen belonging to some other employer. The management intends to take disciplinary action against those workmen. Is the intention of the management justified and legal? [Dec. 2009 (4 Marks)]
Answer:
Cessation of work in the support of the demands of workmen belonging to other employers is called a sympathetic strike. This is an unjustifiable invasion of the right of the employer who is not at all involved in the dispute. The management can take disciplinary action for the absence of workmen.

Question 87.
Distinguish between: Legal Strike & Justified Strike [June 2010 (5 Marks)]
Answer:
Following are the main points of distinctions between legal strike & justified strike:

Points Legal Strike Justified Strike
Meaning When a strike is called complying with the provisions of Sections 22, 23 & other provisions of the Industrial Disputes Act, 1947, it is called a legal strike. Whether strike is justified or unjustified will depend upon the fairness and reasonableness of the demands of workers. If workmen go on strike without contravening statutory requirements, in support of their demands, the strike will be justified.
Wages Workers are entitled to wages for the legal strike if it is justified and conducted in a peaceful manner. Workers cannot claim wages for a justified strike unless it is legal to strike.
Inter-dependence Every legal strike is not necessarily a justified strike. Every justified strike is not necessarily a legal strike.

Question 88.
Promod Electronics is a small-scale industry (SSI) employing 15 workmen. Due to a fall in demand for its products, the management decided to lay off its workmen. The workmen contended that they cannot be laid-off as there is no provision to lay-off in the terms and conditions of appointment. Examine the legality of the action of the management. [June 2011 (4 Marks)]
Answer:
Lay-off is a temporary stoppage of work. An employer can call lay-off only for those reasons that are covered in Section 2(kkk) of the Industrial Disputes Act, 1947. Fall in demand is not a valid ground for lay-off as per Section 2(kkk) of the Act. Thus, the action of the employer is not justified.

Question 89.
Arbitration and Conciliation for the resolution of the industrial dispute under the Industrial Disputes Act, 1947. [Dec. 2011 (5 Marks)]
Answer:
Types of strike and their legality can be discussed as below:
1. Stay-in, sit-down, pen-down or tool-down strike: In such strikes, the ) workmen after taking their seats refuse to do work. Even when asked j to leave the premises, they refuse to do so. All such acts on the part of the workmen acting in combination amount to a strike. Since such strikes are directed against the employer, they are also called primary strikes.

Where workmen enter the premises of their employment and refuse to take their tools in hand and start their usual work amounts to strike. If in pursuance of common understanding the employees enter the premises of the Bank and refuse to take their pens in their hands that would no doubt be a strike.

2. Go-slow: Go-slow does not amount to strike, but it is a serious case of misconduct. It is not a legitimate weapon in the armor of labor. Go-slow which is a deliberate delaying of production by workmen pretending to be engaged in the factory is one of the most pernicious practices that discontented and disgruntled workmen sometimes resort to. Thus, while delaying production and thereby reducing the output, the workmen claim to have remained employed and entitled to full wages.

3. Sympathetic strike: Cessation of work in the support of the demands of workmen belonging to other employers is called a sympathetic strike. This is an unjustifiable invasion of the right of an employer who is not at all involved in the dispute.

The management can take disciplinary action for the absence of workmen.

4. Hunger strike: Some workers may resort to fast on or near the place of work or residence of the employer. If it is peaceful and does not result in cessation of work, it will not constitute a strike. But if due to such an act, even those present for work, could not be given work, it will amount to strike.

5. Work-to-rule: Since there is no cessation of work, it does not constitute a strike.

Question 90.
Write a short on the General prohibition of strikes & lock-outs under the Industrial Disputes Act, 1947 [Dec. 2011 (5 Marks)]
Answer:
According to Section 23, workmen employed in an industrial establishment shall not go on strike in breach of contract, and employer of such workmen shall not declare a lock-out:

  • During the pendency of conciliation proceedings before a Board and 7 days the conclusion of such proceedings.
  • During the pendency of proceedings before a Labour Court/Tribunal and 2 months after the conclusion of such proceedings.
  • During the pendency of arbitration proceedings before an arbitrator and 2 months after the conclusion of such proceedings.
  • During any period in which a settlement or award is in operation.

Question 91.
Distinguish between: Lay-off & Retrenchment [June 2012 (5 Marks)]
Answer:
Following are the main points of distinction between lay-off & Retrenchment:

Points Lay-off Retrenchment
Meaning Lay-off is a temporary inability or refusal to give employment on account of a shortage of coal, power or raw materials or accumulation of stocks or breakdown of machinery or natural calamity or for any other connected reason. Retrenchment means the termination of the service by the employer.
Break-in service Lay-off does not involve a break of continuous service. Retrenchment involves the break of continuous service.
Reason Lay-off is the result of trade reasons. Retrenchment is on account of surplus labor.

Question 92.
The management of an industrial establishment declared an unjustified lock-out due to the illegal and unjustified strike by a section of the workers. Later on, when the strike was called off, the management did not pay wages for the lock-out period. Is the action of the management justified and legally tenable? Give reasons. [Dec. 2012 (4 Marks)]
Answer:
According to Section 24 of the Industrial Disputes Act, 1947, a lock-out declared in consequence of an illegal strike or strike declared in consequence of an illegal lock-out shall not be deemed to be illegal. Hence, the action of the management is not justified and legally not tenable.

Question 93.
A group of workmen from Bharat Railways Catering was having some conflict of interest with their management. They filed a case in front of the Labour Commissioner to decide upon their issues and concerns. During the pendency of the matter, they suddenly went on strike against the management stopping the entire work at the company. This strike was not supported by any prior notice before the strike in terms of the Industrial Disputes Act, 1947. [Dec. 2018 (5 Marks)]
Answer:
As per Section 22 of Industrial Disputes Act, 1947, employees in a public utility service shall not go on strike in breach of contract:
(a) Without giving to the employer notice of strike, within 6 weeks before striking, or
(b) Within 14 days of giving of such notice, or
(c) Before the expiry of the date of strike specified in any such notice or
(d) During the pendency of any conciliation proceedings before a conciliation officer and 7 days after the conciliation proceedings.

Thus, in the case of public utility service, employees have to give at least 14 days’ notice for a strike. The notice is valid only if the strike commences within 6 weeks, otherwise fresh notice is required.

According to Section 23, workmen employed in an industrial establishment shall not go on strike in breach of contract during the pendency of the matter before Board or Labour Court or Tribunal or during the pendency of arbitration proceedings and 2 months after the conclusion of such proceedings.

According to Section 24, a strike or lock-out shall be illegal if it is commenced or declared in contravention of Section 22 or 23.

Considering the above provision, the strike commenced by workmen of s Bharat Railways Catering is illegal

Question 94.
Write a short note on Arbitral Award for industrial dispute [June 2019 (3 Marks)]
Answer:
An arbitrator is appointed by the Government. Whether the dispute is before Labour Court, or Industrial Tribunal or National Tribunal, the parties can go to arbitration by written agreement. The arbitrators conduct the investigation into the dispute matters and give arbitration award (final decision or settlement or decree) as for making reference of an industrial dispute.

If an industrial dispute exists or is apprehended and the employer and the workman agree then they can refer to the dispute to arbitration. But such reference shall be made before the dispute has been referred under section 19 to a Labour Court or Tribunal or National Tribunal by a written agreement. The arbitrator may be appointed singly or more than one in number. The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be.

Question 95.
Discuss the obligations of a registered trade union to submit returns to the Registrar of a trade union. [Dec. 1995 (5 Marks)]
Answer:
Returns [Section 28]: A general statement of audited accounts as exists on the 31st day of December shall be sent annually to the Registrar on or before the prescribed date. The statement shall be prepared in the prescribed form and shall comprise prescribed particulars.

Similarly, a statement showing changes in office-bearers during the year together with a copy of the rules of the trade union is also required to be sent to the Registrar.

A copy of every alteration made in the Rules shall also be sent to the Registrar within 15 days of the making of the alteration.

Question 96.
During a strike, ten workers locked up the factory manager in his office for five days without food or water. He died due to shock and starvation. Would the workers or the trade union be liable for Manager’s death? Give reasons. [June 1996 (7 Marks)]
Answer:
According to Section 17 of the Trade Unions Act, 1926, Office-bearer or member of a registered trade union shall not be liable to punishment u/s 120B(2) of the Indian Penal Code in respect of any agreement made between the members for the purpose of furtherance of any object of the trade union. However, the office-bearer or member will be liable if the agreement relates to committing an offense. Hence, as per facts given in the case, the concerned 10 workers shall be held guilty of wrongfully confining and murdering the factory manager.

Question 97.
What are the objects of the Trade Union Act, 1926? [Dec. 1997 (5 Marks)]
Answer:
Objects of passing the Trade Union Act, 1926 are as follows:

  • To deals with the registration of trade unions.
  • To deals with rights, liabilities, and responsibilities of trade unions.
  • To ensures that funds of trade unions are properly utilized.
  • To give legal and corporate status to the registered trade unions.
  • To protect members of trade unions and their officials from civil or criminal prosecution so that they could carry on their legitimate activities for the benefit of the working class.

Question 98.
Avinash, a member of a registered trade union, was convicted and sentenced to imprisonment for a period of two years for breach of trust in 2015. On his release, Avinash intends to contest the election of office bearer of the trade union in 2019. Advise Avinash. [Dec. 1997 (7 Marks)]
Answer:
According to Section 21A of the Trade Union Act, 1926, a person shall be disqualified as an executive member or office-bearer of a registered trade union if:
(a) He has not attained the age of 18 years,
(b) He has been convicted by a Court for any offense involving moral turpitude and sentenced to imprisonment. (However, after 5 years from his release he will qualify again to become an executive member or office-bearer of a registered trade union)

In this case, Avinash was sentenced to imprisonment for breach of trust for 2 years ie. in the year 2015. So he can be released in 2017 and after that, he will have to wait for 5 more years ie. up to 2022 for contesting the election.

Question 99.
75 workers of several factories, 10 labor court advocates, 10 social workers, and 3 lady members of the legislative assembly formed a combination to protect the interest of factory workers in the XYZ industrial zone. On their application, the Registrar registered this combination under the Trade Union Act, 1926. Will this combination (union) enjoy all the privileges of a registered trade union? Why? [Dec. 1998 (5 Marks)]
Answer:
As per Section 4 of the Trade Union Act, 1926, any 7 or more members of a trade union may by subscribing their names to the Rules of the trade union apply for registration of the trade union.

However, in the case of the trade union of workmen it must have a minimum following members on the date of making an application which is engaged or employed in the establishment or industry with which it is connected:

  • 10% of the workmen or
  • 100 of the workmen

Section 21 specifically provides that, if the rules of trade union allow then any person who has attained the age of 15 years can become a member of a registered trade union. There is nothing in the Act that debars a trade union from admitting outsiders as its members.

As per Section 8, the Registrar, on being satisfied that all the requirements of the Act have been duly complied with, shall register the trade union by entering in a register, the particulars relating to the trade union. Then Registrar shall issue a certificate of registration in the prescribed form which shall be conclusive evidence that the trade union has been duly registered under the Act.

Keeping in view the above provisions, the combination satisfies all the relevant provisions for the registration and so it will enjoy all the privileges of a registered trade union.

Question 100.
Write a brief note on the cancellation of registration of the trade union. [June 2000 (6 Marks)]
Answer:
Cancellation of registration [Section 10]: A certificate of registration of a trade union may be canceled by the Registrar on the following grounds:

  • On the application of the trade union.
  • If the certificate has been obtained by fraud or mistake.
  • The trade union has ceased to exist or has wilfully contravened any provision of the Act.
  • Trade union ceases to have the requisite number of members.

Question 101.
Discuss the provisions relating to the registration of trade unions under the Trade Union Act, 1926. [Dec. 2000 (7 Marks)]
Answer:
Mode of registration [Section 4]: Any 7 or more members of a trade union may by subscribing their names to the Rules of the trade union apply for registration of the trade union.

However, in the case of the trade union of workmen it must have a minimum of the following members on the date of making an application who are engaged or employed in the establishment or industry with which it is connected:

  • 10% of the workmen or
  • 100 of the workmen

It is also provided that if after making an application for registration if some j, of the members, dissociate themselves from the application then it will not in- 5 validate the application. But if the number of applicants dissociating from the application exceeds half of the total number of persons who made the application will become invalid.

Application for registration [Section 5]: Every application for registration ! of a trade union shall be made to the Registrar. The application shall be accompanied by a copy of the Rules of the trade union and a statement j of the following particulars, namely:

  • The names, occupations, place of work, and address of the members making an application.
  • The name of the trade union and the address of its head office.
  • The titles, names, ages, addresses, and occupations of the office-bearers of the trade union.

If a trade union is in existence for more than 1 year before the date of an application then a general statement of the assets and liabilities in prescribed form is also required to be given.

Power to call for further particulars and to require alteration of name [Sec-tion 7]: The Registrar may call for further information and may refuse to register the trade union until such information is supplied.

If the name of a proposed trade union is identical with other existing trade unions in the opinion of the Registrar, he shall require the persons applying for registration to alter the name given in the application and shall refuse to register the trade union until such alteration has been made.

Certificate of registration [Section 8]: The Registrar, on being satisfied that all the requirements of the Act have been duly complied with, shall register the trade union by entering in a register, the particulars relating to the trade union. Then Registrar shall issue a certificate of registration in the prescribed form which shall be conclusive evidence that the trade union has been duly registered under the Act.

Question 102.
XYZ Ltd. employs more than 50 women workers. Is it necessary for the company to provide a creche facility under the Maternity Benefit Act, 1961? As a Company Secretary advise the directors of the company in this regard.
Answer:
Creche facility [Section 11 A] [Inserted by Maternity (Amendment) Act, 2017]
Every establishment having 50 or more employees shall have the facility of creche within such distance as may be prescribed, either separately or along with common facilities.

The employer shall allow 4 visits a day to the creche by the woman, which shall also include the interval for rest allowed to her.

Every establishment shall intimate in writing and electronically to every woman at the time of her initial appointment regarding every benefit available under the Act.

Question 103.
Bhaskar Bhat has recently opened a school for providing elementary education to kids. He has hired both male and female employees in teaching and non-teaching cadre. He approached you to seek advice on whether a school is required to comply with the provisions of the Maternity Benefit Act, 1961. Also, state who are eligible to avail for maternity benefits under the Act. [Dec. 2018 (3 Marks)]
Answer:
The Maternity Benefit Act, 1961 applies in the first instance:
1. To every establishment being a factory, mine, or plantation including any establishment belonging to Government and to every establishment wherein persons are employed for the exhibition of equestrian, acrobatic and other performances.

2. To every shop and establishment in which 10 or more persons are employed or employed on any day of the preceding 12 months.

However, the State Government may, with the approval of the Central Government, by giving not less than 2 months in the Official Gazette, declare that all or any of the provisions of the Act shall apply also to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise.

Question 104.
What are the objects of enacting the Child and Adolescent Labour (Prohibition & Regulation) Act, 1986?
Answer:
The Child and Adolescent Labour (Prohibition & Regulation) Act, 1986 was enacted to:

  • To prohibit the engagement of children below the age of 14 years in factories, mines, and hazardous employments and
  • To regulate their conditions of work in certain other employments.

Question 105.
Write a short note on Hours and Period of work under the Child and Adolescent Labour (Prohibition & Regulation) Act, 1986
Answer:
Hours and period of work [Section 7]:

  1. No adolescent shall be required or permitted to work in any establishment in excess of such number of hours as may be prescribed for such establishment or class of establishments.
  2. The period of work on each day shall be SO fixed that no period shall exceed 3 hours and that no adolescent shall work for more than 3 hours before he has had an interval for rest for at least 1 hour.
  3. The period of work of an adolescent shall be so arranged that inclusive of his interval for rest, it shall not be spread over more than 6 hours, including the time spent in waiting for work on any day.
  4. No adolescent shall be permitted or required to work between 7 p.m. and 8 a.m.
  5. No adolescent shall be required or permitted to work overtime.
  6. No adolescent shall be required or permitted to work in any establishment on any day on which he has already been working in another establishment.

Weekly Holidays [Section 8]: Every adolescent employed in an establishment shall be all each week, a holiday of one whole day, which day shall be specified by the occupier in a notice permanently exhibited in a conspicuous place in the establishment and so specified shall not be altered by the occupier more than once in 3 months.

Question 106.
Define ‘sexual harassment’ under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Also, state provisions relating to the prevention of sexual harassment.
Answer:
Sexual Harassment [Section 2(n)]: Sexual harassment includes any one or more of the following unwelcome acts or behavior (whether directly or by implication) namely:

  1. physical contact and advances or
  2. a demand or request for sexual favors or
  3. making sexually colored remarks or
  4. showing pornography or
  5. any other unwelcome physical, verbal or non-verbal conduct of sexual nature.

Prevention of sexual harassment [Section 3]: No woman shall be subjected to sexual harassment at any workplace. The following circumstances, among other circumstances, if it occurs or is present in relation to or connected with any act or behavior of sexual harassment may amount to sexual harassment:
(d) implied or explicit promise of preferential treatment in her employment or
(b) implied or explicit it threat of detrimental treatment in her employment or
(c) the implied or explicit threat about her present or future employment status or
(d) interference with her work or creating an intimidating or offensive or hostile work environment for her or
(e) humiliating treatment likely to affect her health or safety.

Question 107.
What is the complaint procedure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013?
Answer:
Complaint procedure: The aggrieved woman can make a written complaint of sexual harassment at the workplace to the Internal Complaints Committee (ICC) or to the Local Complaints Committee (LCC) (in case a complaint is against the employer), within a period of 3 months from the date of incident and in case of a series of incidents, within a period of three months from the date of the last incident.

If the aggrieved woman is unable to make a complaint in writing, reasonable assistance shall be rendered by the presiding officer or any member of the ICC or LCC for making the complaint in writing.

In case the aggrieved woman is unable to make a complaint on account of her physical incapacity, a complaint may be filed by her relative or friend or her co-worker or an officer of the National Commission for Woman or State Women’s Commission or any person who has knowledge of the incident, with the written consent of the aggrieved woman.

Question 108.
Managing Committee of Goa Tourism Ltd. wants to constitute an Internal Complaint Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Advise them in the light of the provisions of the Act on the constitution of such committee. [Dec. 2018 (3 Marks)]
Answer:
Internal Complaints Committee: The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 makes it mandatory for every employer to constitute an Internal Complaints Committee (ICC) which entertains the complaints made by any aggrieved women.

The members of the ICC are to be nominated by the employer and ICC should consist of:
(a) a Presiding Officer;
(b) not less than 2 members from amongst employees preferably committed to the cause of women or who have had experience in social work or have legal knowledge and
(c) one member from amongst non-governmental organizations or associations committed to the cause of women or a person familiar with the issues relating to sexual harassment.

In order to ensure the participation of women employees in the ICC proceedings, the Act requires that at least çne-half of the members of ICC nominated by the employer are women.

Local Complaints Committee: Provisions have been made under the Act to form Local Complaints Committee (LCC) for every district for receiving complaints of sexual harassment from establishments where the ICC has not been formed due to having fewer than 10 workers or if the complaint is against the employer himself.

Setting Up of Business Entities and Closure Questions and Answers

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