Chapter10. (Self - Study) Sailent Features of WCA 1923 Minimum Wages Act, EPF Act Etc.
Chapter10. (Self - Study) Sailent Features of WCA 1923 Minimum Wages Act, EPF Act Etc.
E1-E2: ELECTRICAL
CHAPTER-10
SALIENT FEATURES OF:
(a) WORKMEN'S COMPENSATION ACT 1923
(b) MINIMUM WAGES ACT 1948
(c) EPF & MISC PROVISION ACT 1952
Compensation
In case of death the minimum amount of compensation fixed is Rs,. 80,000 and
Rs. 90,000 in case of permanent total disablement. The existing wage ceiling for
computation of maximum amount of compensation is Rs. 4000. The maximum
amount of compensation payable is Rs. 4.56 lakh in the case of death and Rs. 5.48 lakh in
the case of permanent total disablement. The Indian Workmen's Compensation Act
1923 provides for the payment of compensation by the employer to his employees
(for their dependents in the event of fatal accidents) if personal injury is caused to
them by accidents arising out of and in the course of their employment. The maximum
compensation payable is upon the following scale (as per W.C.
Amendment Act 2000).
Objectives:
The Minimum Wages Act was formulated to provide for fixing minimum rates of wages
in certain employments. The Act also governs certain service conditions such as working
hours, weekly rest days and payment of overtime for employees covered under
the act.
Applicability:
The Minimum Wages Act extends to whole of India and applies to all
establishments employing one or more persons and engaged in any of scheduled
employments. It covers every employee who is engaged in any scheduled employment,
including an out worker to whom materials are given out for manufacturing or
processing at his own premises. There are 45 scheduled employments in the Central
sphere and 1232 in the state sphere for which minimum wages have been fixed. To
protect the wages against inflation they were linked to rise in the Consumer Price Index.
The variable dearness allowance came into being in 1991 and the allowance is
revised twice a year . At present 22 states /Union Territories have these provisions.
Enforcement:
There is a Labour Commission with subsidiaries till the regional level and which appoints
inspectors for enforcement of the provision of the minimum wages. They are the Labour
Enforcement Officers who conduct crash inspection programmes. They inspect the wage
records and see that holidays, overtime and bonuses as prescribed in the minimum Wages
Act are followed. If the regulations are not followed then the employers can be
prosecuted. The nature of violation decides whether the Labour Commission offices
arbitrate or the state courts. The scheduled list of employment is not exhaustive, there are
many trades which are out of it. Most of the times minimum wages are paid not on hourly
or daily basis but on piece rates which are very low.
its total nmber of members. One of such independent persons would be appointed
chairman of the Board by the Central Government.
(7) Overtime
If any employee whose minimum rate of wages is fixed under the Act works on any day
in excess of the number of hours constituting normal working day, the employer
is required to pay him at the overtime rate fixed under this Act or under any law
of the appropriate Government for the time being in force whichever is higher.
(10) Inspections
(11) Claims
The appropriate Government may appoint Labour commissioner or any other officer with
experience as a judge of a civil court or as a stipendiary Magistrate to hear and decide for
any specified areas, all claims arising out of the payment of less than the minimum rates
of wages as well as payment for days of rest or for work done.
Summary:
The Minimum Wages Act aims to extend the concept of social justice to
the employees employed in certain scheduled employments including agriculture.
The Act provides for statutory fixation and revision of minimum rates of wages
by the Central or State Governments within a specified period.
The appropriate Govt. is empowered to extend the application to any other
employment in respect of which it is of the opinion that the minimum
rates of wages are to be fixed under the Act.
The minimum rates of wages vary from state to state, area to area and
from employment to employment.
14. Overtime
15. Wages of worker who works for less than normal working day
16. Wages for two or more classes of work
17. Minimum time rate Wages for piece work
18. Maintenance of registers and records
19. Inspectors
20. Claim
21. Single application in respect of a number of employees
22. Penalties for certain offences
22A.General provision for punishment of other offences
22B. Cognizance of offences
22C. Offences by companies
22D. Payment of undisbursed amounts due to employees
22E. Protection against attachment of assets of employer with government
22F. Application of Payment of Wages Act, 1936 to scheduled employments
23. Exemption of employer from liability in certain cases
24. Bar of suits
25. Contracting out
26. Exemptions and exceptions
27. Power of State Government to add to Schedule
28. Power of Central Government to give directions
29. Power of Central Government to make rules
30. Power of appropriate government to make rules
30A. Rules made by Central Government to be laid before Parliament
31. Validation of fixation of certain minimum rates of wages
Applicability
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 applies to
the whole India except Jammu & Kashmir. Employees' Provident Fund and
Miscellaneous Provisions Act 1952 is applicable to:
Every establishment which is engaged in any one or more of the industries
specified in Schedule I of the Act or any activity notified by Central Government
in the Official Gazette.
Employing 20 or more persons .
Cinema Theatres employing 5 or more persons.
The establishment to which this Act applies shall continue to be governed by this Act ,
even if the number of employees falls below 20 at a later date.
Contributions
Employees Provident fund scheme takes care of the members at the time of
retirement, medical care, housing, family obligations, education of children, finance
of insurance policies. etc. In terms of section 6 of the Act, the employee may contribute
12 or 10 %, as the case may be, of the basic wages, dearness allowance including the cash
value of any food concession and retaining allowance. An allowance paid to an
employee for retaining his services when the establishment is not working is
retaining allowance. The rate of contribution shall be 10% in the case of certain
establishments
any covered establishment with less than 20 employees;
any sick industrial company with in the meaning of SICA
any establishment which has at the end of the financial year accumulated losses
equal to or exceeding its entire net worth;
any establishment in the business of jute, beedi, brick, coir.
If the employee so desires, he may opt to contribute a higher rate also. However,
employer does not have to match the voluntary contribution over and above the statutory
rate. The employer‟s contribution of 12% or 10% shall be up to 8.33% of the
basic wages, dearness allowance and retaining allowance towards Employees‟
Pension Scheme and the balance 1.67%/ 3.67% towards the provident fund. The
employer‟s contribution to the Employees deposit linked insurance scheme shall be
0.5 % of the basic wages, dearness allowance, retaining allowance. In addition, the
employer has to pay @ 1.10% of „pay‟ Contribution and .01% towards administrative
charges of fund and insurance scheme respectively. The employee does not have to make
any contribution to the pension fund account. These amounts must be paid within 15 days
from close of every month with the PF commissioner into the respective accounts
maintained with the State bank of India. If the amount is not paid, employer is
liable to pay “damages”. In addition, criminal prosecution can also be launched.
Filing of returns
The employer shall within 15 days of the applicability of the Act send the
particulars of all branches, departments, owners, occupiers, director, partners or
any other person in charge of and responsible for the conduct of business, in form
5 A (Return of ownership), in duplicate, to the commissioner. In the event of any change,
the same too should be intimated within 15 days to the regional commissioner.
The commissioner shall on receipt of the return of ownership verify the particulars
submitted therein and after having been satisfied allot an establishment code No. This
code shall be mentioned on all forms, challans, statements, returns and all future
correspondence. A return in the prescribed form 5 in respect of employees
qualifying to be members of the fund for the first month during the preceding month
shall be filed within 15 days of the close of every month be sent to the CPFC. A
monthly return of contributions in the prescribed form 6 has to be filed with the
commissioner within 25 days of the close of the month. Annual return of contributions
in form 6 A reflecting the employer and employees contribution in respect of each
employee is to be submitted within one month of the close of the period of currency to
the commissioner.
Modes of recovery
The recovery officer shall proceed to recover the amounts in any one or more of the
modes given below.
a. attachment and sale of moveable or immoveable property of the establishment or
employer
b. arrest of the employer and his detention in prison or
c. appointing a receiver for the management of the moveable or immoveable
Properties of the establishment or employer (Section 8 B)
Offences by Companies
In case of an offence by a company, every person who at the time of the offence was
committed was - in charge of the company and - was responsible for the conduct of
business of the company as well as the company itself shall be deemed to be guilty of
the offence and shall be liable to be proceeded against and punished accordingly.
Unless a person fulfills both the requirements i.e. being in charge as well as
responsible to the company for the conduct of its business, no prosecution shall lie
against him. The words „deemed‟ is significant as the company is an artificial person
and the person in charge of the company and responsible for the conduct of
business bears a vicarious liability for being prosecuted in respect of the offence
committed by the company.
However, the person prosecuted can take the defense that the offence was committed
without his knowledge or that he had exercised all due diligence to prevent the
commission of the offence. if, however, it is proved that the offence was committed with
the consent or connivance or is attributable to any neglect on the part of any
director, manager, secretary or any other officer of the company then such
director, manager, secretary or any other officer shall be deemed to be guilty of that
offence and shall be liable to be punished.
Transfer of accounts.
(1) Where an employee employed in an establishment to which this Act applies leaves his
employment and obtains re-employment in another establishment to which this Act
does not apply, the amount of accumulations to the credit of such employee in the Fund
or, as the case may be, in the provident fund of the establishment left by him
shall be transferred, within such time as may be specified by the Central
Government in this behalf, to the credit of his account in the provident fund of the
establishment in which he is re-employed, if the employee so desires and the rules in
relation to that provident fund permit such transfer. (2) Where an employee employed in
an establishment to which this Act does not apply leaves his employment and obtains
re-employment in another establishment to which this Act applies, the amount of
accumulations to the credit of such employee in the provident fund of the
establishment left by him may, if the employee so desires and the rules in relation to such
provident fund permit, be transferred to the credit of his account in the Fund or, as the
case may be, in the provident fund of the establishment in which he is re-employed.
Summary:
The objective of the Employees‟ Provident Funds and Miscellaneous Provisions
Act is to make some provisions for the future of the industrial worker
after his retirement or for the dependants in case of his early death and to
inculcate the habit of saving among the workers.
All categories of employees drawing pay not exceeding Rs.6500 /- per month are
eligible for membership of the fund irrespective of their length of service.
All the three schemes, namely, the Employees‟ Provident Funds scheme, 1952;
the Employees‟ Pension scheme; and the Employees‟ Deposit-Linked Insurance
scheme, 1976 are administered by the Central Board of Trustees which is
a tripartite body.
The Central Provident Fund Commissioner is the Chief Executive Officer
of the Organisation and ex-officio member secretary to the board.
DIFFERENT SECTIONS OF EMPLOYEES' PROVIDENT FUNDS &
MISCELLANEOUS PROVISIONS ACT, 1952:
Section 1: Short title, extent and application
Section 2: Definitions
Section 2A: Establishment to include all departments and branches.
Section 3: Power to apply Act to an establishment, which has a common provident fund
with another establishment.
Section 4: Power to add to Schedule I.
Section 5: Employees' Provident Fund Schemes.