practical handbook for major compliances under labour laws - Cifo

PRACTICAL HANDBOOK 

FOR 

MAJOR COMPLIANCES 

UNDER 

LABOUR LAWS 

BY 

SANTOSH BAGWE 

C:santosh/personal/compliance under labour laws

COMPLIANCES UNDER LABOUR LAWS 

INDEX 

Sr. No. Particulars 

1 The Apprentices Act,1961 

2 The Contract Labour (Regulation & Abolition) Act, 1970 

3 The Employee’s Provident Fund & Miscellaneous Provisions Act, 1952 

4 The Employees’ State Insurance Act, 1948 

5 The Employment Exchanges (Compulsory notification of vacancies) 

Act, 1959 

6 The Equal Remuneration Act, 1976 

7 The Factories Act, 1948 

8 The Indian Fatal Accidents Act, 1985 

9 The Industrial Dispute Act, 1947 

10 The Industrial Employment (Standing Orders) Act, 1946 

11 The Maternity Benefit Act, 1961 

12 The Minimum Wages Act, 1948 

13 The Payment of Bonus Act, 1965 

14 The Payment of Gratuity Act, 1972 

15 The Payment of Wages Act, 1936 

16 The Workmen’s Compensation Act, 1923 


APPROPRIATION OF LABOUR LAWS 

Broadly Labour laws can be appropriated as under: 

1) Labour laws related to welfare measures 

2) Labour laws related to payroll 

3) Labour laws related to administration 

4) Labour laws related to social measures 

5) Labour laws related to fire-fighting role of Personnel and HR Manager 


Labour Laws relating to welfare measures 


1 The Employee’s Provident Fund & Miscellaneous Provisions Act, 1952 

2 The Employees’ State Insurance Act, 1948 

3 The Maternity Benefit Act, 1961 

4 The Payment of Gratuity Act, 1972 

5 The Workmen’s Compensation Act, 1923 

Labour Laws relating to payroll 


1 The Equal Remuneration Act, 1976 

2 The Minimum Wages Act, 1948 

3 The Payment of Bonus Act, 1965 

4 The Payment of Wages Act, 1936 

Labour Laws relating to administration 


1 The Factories Act, 1948 

2 The Indian Fatal Accidents Act, 1985 


Labour Laws relating to Social Measures 


1 The Apprentices Act,1961 

2 The Contract Labour (Regulation & Abolition) Act, 1970 

3 The Employment Exchanges (Compulsory Notification of Vacancies) 

Act, 1959 

Labour Laws relating to fire fighting role of Personnel and HR Manager 


1 The Industrial Dispute Act, 

2 The Industrial Employment (Standing Orders) Act, 1946 


The Apprentices Act, 1961 

Applicability: It is a statutory obligation of every industry/establishment having 

training facilities according to syllabus in a designated trade under the 

Apprentices Act, 1961 to train a number of apprentices according to ratio of 

the trade in their establishment. 

Major Compliance: 

1) General Obligations: 

a) To provide the apprentice with training in his trade in accordance 

with Act and rules. 

b) To ensure that a qualified person is placed in charge of the training. 

c) To carry out obligation under the contract. 

2) Registration of contract of apprenticeship: 

To send the apprenticeship advisor the contract of apprenticeship within 3 

months of date on which it was signed. 

3) Payment to apprentice: 

To pay to every apprentice during the period of apprenticeship such stipend 

at a rate prescribed under the Act. 

4) Working hours for apprentice: 

a) Total number of hour: 42 to 48 hours per week. 

b) Trade apprentice undergoing basic training: 42 hours. 

c) Trade apprentice undergoing 2 nd year: 42 to 45 hours. 

d) Trade apprentice undergoing 3 rd and subsequent years: As per the 

workers in the trade in the same establishment. 

e) No trade apprentice shall be engaged between the hours of 10 p.m. to 

5 p.m. without the permission of Apprenticeship Advisor. 

f) Graduate or technician apprentice: Normal hours of work of the dept. 

5) Health, welfare and safety of apprentice: as per Factories Act. 

6) Compensation for injury: as per Workmen Compensation Act. 

7) Compensation for termination of apprenticeship: 6 months’ last drawn 

stipend by both parties 

Note: Apprentices advisors (Inspector) – Labour Minister – Sion Chunabbhati opp. 

Priyadarshani Bldg in Mumbai. 


The Contract Labour (Regulation & Abolition) Act, 1970 

Applicability: 

Applicable to: 1) every establishment in which 20 or more workmen are employed or 

were employed on any day of the preceding twelve months as 

contract labour. 

2) every contractor who employs or who employed on any day of the 

preceding twelve months twenty or more workman. 

Not applicable to: Establishment which carry on work of a casual nature 

occasionally. 

Effect of non-registration: The principal employer cannot employ contract labour 

in establishment. 


1) It is obligatory on every contractor not to undertake or execute any work 

through contract labour without obtaining a valid licence from the licencing 

officer. 

2) Obligation to provide certain amenities: 

A) Provision of canteens 

B) Rest Rooms 

C) Drinking water and other facilities like latrines and urinals 

D) First-aid facilities 

E) Creaches 

3) It is obligatory on principal employer to see that wages of the workers are 

paid every month on a fixed date and time and on termination of their 

employment before the expiry of 2 nd working day after termination. 

Maintenance of Records: 

Form No. XXIV Half yearly Return in duplicate within 30 days by contractor 

Register Particulars 

Form No. XII Register of Contractor - Maintained by Principal employer for 

each establishment 

Form No. XIII Maintained by Contractor for each establishment 

Form No. XIV Contractor to issue an employment card to each worker within 3 

days of employment 

Form No. XV A service certificate in case of termination of wokman 

XVI-A muster roll, XVII-Register of wages, XX-deduction for damange, XXI – 

Register of fines, XXII- Register of advances, XXIII-Register of overtime 


Notes: Company has to register every year 

1) In a year labour should not work above 240 workig days 

2) Every 80 days employer should break labour service – need to update every 

80 days with the contractor 

3) Contractor should pay minimum wages to the labour 

Documents require: 

1) License with the contractor & registration of the company 

2) Contractor – PF no., ESIC no., 

Offices of Labour Laws in Mumbai: 

1) Mumbai – Labour office is at Tardeo – AC Market 

2) Thane – Makhmali Talav 

3) New Mumbai – Khanda Colony - Panvel 


The Employee’s Provident Fund & Miscellaneous Provisions Act,1952 


1) Applicable to every establishment in which 20 or more persons are 

employed. 

2) Every employee drawing wages and DA upto Rs.6500/- will be eligible to 

become a member. 

Main Compliance: 

1) Declaration by person taking up employment in writing that whether or 

not he is a member of the fund and his account number, particulars of 

the last employer. 

2) In case of contractor, it is the responsibility of the principal employer to 

ensure that provisions of this act are complied by Contractors. 

Payment to be made to PF authorities: 

Challan No. Payment Particulars Due Date 

A/c No.1 Employee and Employer Pf Due 15 th of the Following 

month 

A/c No.2 Admn and Inspection Charge 

1.1 % of Salary 

15 th of the Following 

month 

A/c No.10 Pension Fund 15 th of the Following 

month 

A/c No.21 Insurance Fund 

0.5% of Basic + DA 

A/c No.21 Insurance Fund Inspection and 

Admn Charge 

0.01% 

C:santosh/personal/compliance under labour laws 


month 


month

Settlement: 

Submission of Returns: 

Form No. Particulars Due Date 

Form 9 Details of employees on the 1 st 

Within 1 month of 

day of coverage 

coverage 

Form 2 Nomination Form Immediately on joining 

the fund 

Form 5 Addition of members 15 th of the Following 

month 

Form 10 Deletion of members 15 th of the Following 

month 

Form 12 Detail of payments made 21st of the Following 

month 

Form 3A A memberwise ledger cards 

posted monthly 

31 st May Each Year 

Form 6A Abstract of Form 3A for the 

year 

31 st May Each Year 

Form 5A Return of ownership Once in the beginning 

Form 19 Withdrawal of PF in case of 

retirement/resignation 

Form 13 Transfer of PF 

Form 31 Loan (minimum service 5yrs) 

1) Settlement before completion of 10yrs 

Form 19 (PF withdrawal) 

Form 10c (Pension withdrawal) 

2) Settlement after completion of 10yrs 

Form 19 & 10D 

3) Death of the Employee 

Form 20 & 10D 


Working Notes: 

PF contribution by Employer & Employee is 12% on the Basic & DA 

6,500/- is a standard amount to calculate pension 

Salary Employee - 12% Employer - 12% 

(Basic + DA) PF A/c Provident Fund Pension 

Less than 6,500/- 12% 3.67% 8.33% 

6,500/- 12% 3.67% 8.33% 

More than 6,500/- 12% (Salary x 12%) 

– (8.33% of 

6,500) 

8.33 % of 6,500 

Examples: Amt in Rupees 

Salary Employee - 12% Employer - 12% 

(Basic + DA) PF A/c Provident Fund Pension 

1. 2,500 300 92 208 

2. 3,500 420 128 292 

3. 7,500 900 359 541 

4. 20,000 2,400 1,859 541 

1. Employee Contribution 

PF = 2,500 x 12% = 300 

Employer Contribution 

PF = 2,500 x 3.67% = 92 

Pension = 2,500 x 8.33% = 208 

3. Employee Contribution 

PF = 7,500 x 12% = 900 

Employer Contribution 

PF = (7,500 x 12%) = 900 – 541 = 359 

Pension = 6,500 x 8.33% = 541 


The Employees’ State Insurance Act, 1948 


1) Applicable to every establishment in which 20 or more persons are 

employed. 

2) Every employee drawing wages and DA upto Rs. 10,500/- will be eligible 

to become a member. 

3) Monthly Challan – 21 st of the next month is the last date of submission 

Contribution 6.5% of Basic + DA 

1.75% deduct from Employee Salary on Basic + DA 

4.75% employer contribution 

4) Half yearly return – 6A 

5) Company should inform within 48 hours to the Factory Inspector and 

ESIC inspector if any fatal accident (which can be result into death) 

If the person fail to inform it is being created as a death or murder against 

a Company 


The Employment Exchanges (Compulsory Notification of Vacancies) 

Act, 1959 

Notification of vacancies to employment exchanges: Employer in every 

establishment in any sector before filing up any vacancy shall notify that 

vacancy to employment exchange. But Acts says about only notification 

and doesn’t impose obligation on employer to recruit any person through 

the employment exchange. 

Act not applicable to: 

a) Agriculture Industry 

b) Domestic Service 

c) Duration is less than 3 months 

d) Unskilled office work 

e) Staff of Parliament, employment through UPSC or like agency 

f) Employment carries a remuneration less than Rs.60/- per month. 

Time limit for the notification of vacancies: 

a) Local employment exchange: 15 days before the date on which applicants 

will be interviewed. 

b) Central employment exchange: 4 weeks before the date on which 

applicants will be interviewed. 

Submission of returns: 

a) Quarterly Return: Form No. ER-1 within 30days of due dates. 

b) Biennial Return: Form No.ERIL within 30 days of due date as notified in 

the official gazette 


The Equal Remuneration Act, 1976 


1) No Employer shall pay to any worker at rates less favourable than 

those at which remuneration is paid by him to the workers of the 

opposite sex for performing the same work or work of a similar 

nature. 

2) No employer for complying above provision reduce the rate of 

remuneration. 

3) No discrimination while recruitment against women except where 

the employment of women is prohibited or restricted under any 

law. 

Maintenance of Register: in form no. D relation to the workers employed. 


The Indian Fatal Accidents Act, 1985 

Object: To Provide compensation to families for loss occasioned by the 

death of a person caused by actionable wrong. 

Main Provision: 

1) In case of a death of a person by wrongful act, neglect or default, 

the party responsible shall be liable to an action or suit for 

damages. 

2) Every such action or suit shall be for the benefit of the wife, 

husband, parent and child of the person whose death shall have 

been so caused. 

3) Not more than one action or suit shall be brought in respect of 

same subject - matter of complaint. 


The Industrial Employment (Standing Orders ) Act, 1946 

Applicability: The Act applied to every industrial establishment which 

means: 

1) Tramway or motor transport 

2) Air transport other than for defense purpose 

3) Dock-wharf or jetty 

4) Inland vessel 

5) Mine, quarry or oil fields 

6) Plantation : 

a) A factory under Factories Act 

b) A Railway under Railways Act 

c) The establishment who for the purpose of fulfilling a contract 

with the owner of any industrial establishment employs workmen. 

Certification of standing order: 

1) Within 6 months from the date of applicability, the employer shall 

submit to the Certifying Officer 5 copies of the draft standing orders 

proposed by him for adoption in his industrial establishment. 

2) Such standing order should be in conformity with Model Standing Order. 

3) Encl: A statement giving prescribed particulars of the workmen employed 

and the name of the trade union if any. 

Posing of Standing order: The certified standing order shall be prominently 

posted in English and in local language on special boards or near the entrance 

and in all departments where the workmen are employed. 

Payment of subsistence allowance: 

1) If any workmen is suspended pending inquiry, the employer shall pay 

subsistence allowance to the workers at following rates: 

a) 1 st 90 days: 50% 

b) 91 to 180 days: 75% 

c) After 180 days: 100% 


The Maternity Benefit Act, 1961 


1) To every establishment being a factory, mine or plantation including Govt. 

establishment and wherein person are employed for the exhibition of 

equestrian acrobatic and other performances. 

2) To any establishment in which 10 or more persons are employed or were 

employed on any day of the preceding 12 months 

Prohibition of employment by workmen during certain period: 

During 6 weeks immediately following the day of delivery or miscarriage 

Prohibition of work by workmen during certain period: 

During 1 month immediately preceding the period of six week before the 

date of expected delivery, if the work 

which is of an arduous nature or 

which involved long hours of standing or 

which in any way is likely to interfere with her pregnancy or normal 

development of the foetus or is likely to cause her miscarriage or to 

adversely affect her health. 

Payment of Maternity Benefit: 

1) Payment of maternity benefits at the rate of the average daily wages for 

the period of actual absence. 

2) Average daily wages: Wages paid during the period of 3 calendar months 

immediately preceding the date of her expected delivery.. 

3) The workmen must have actually worked for a period of not less than 80 

days in the twelve months immediately preceding the date of her 

expected delivery. 

4) Maximum period entitled: Maximum 12 weeks of which not more than 6 

weeks shall precede the date of her expected delivery. 

Leave for 

1) Miscarriage: 6 weeks immediately following the day of her miscarriage 

2) Medical termination of pregnancy: 6 weeks immediately following the day 

of her pregnancy. 

3) Tubectomy operation: 2 weeks immediately following the day of her 

pregnancy. 

Nursing Breaks: Every women delivered of a child who returns to duty after 

such delivery shall be allowed in the course of her daily work two breaks for 

nursing he child until the child attains the age of 15 months 



The Minimum Wages Act, 1948 

1) To make payment of overtime in excess of number of hours constituting 

normal working day at the rate fixed under the Act or any other law 

whichever is higher. 

2) Minimum wages payable shall be paid in cash. 

3) If the custom is to pay wages in kind, then wages can be paid in kind. 

4) Govt. can authorise supply of essentital commodities at concessional rate. 

5) In respect of any scheduled employment, a notification u/s 5 is in force, 

then employer shall pay wages at a rate not less than the minimum rate 

fixed under notification. 

6) Any contract allowing to pay wages less than minimum is null and void. 

7) Sri Dharam Motor Services v. Industrial Tribunal, Madrass : A worker 

can be asked to work for more than 6 days a week provided he is paid 

extra on the overtime rate. 


The Payment of Bonus Act, 1965 

Applicability: to every factor and other establishment in which 20 or more 

persons are employed on any day during an accounting year. 


1) Minimum Bonus: 8.33% if salary or wages earned during accounting year 

or Rs.100 whichever is higher, whether or not the employer has any 

allocable surplus in the accounting year. 

2) Maximum Bonus: 20% of salary or wages only if allocable surplus exceeds 

the amount of minimum wages bonus payable under the act 

3) Time Limit: Within 8 months from the close of accounting year. 

4) Salary or wage calculation: 

Salary or wage exceeding Rs.2500 : Rs.2500 

Salary or wages less than Rs.2500 : Actual 

Salary or wages: Basic + DA 

Maintenance of Registers and Returns: 

Sr.No. Particulars Register 

1 Computation of allocable surplus Form A 

2 Set on and Set off the allocation surplus Form B 

3 Detail of amount of bonus due to each of the 

employee, deduction u/s 17 and 18 and actual 

Amount disbursed 

Form c 

4 Return to be submitted within 30 days after 

the expiry of the time limit 


Form D

The Payment of Gratuity Act, 1972 


1) To every factory and other establishment in which 10 or more persons 

are employed. 

2) Once this is applicable, later on even if employees are reduced to less 

than, this Act remains applicable. 


1) Duty of employer to give notice of application of the Act to controlling 

authority. 

2) Payment to Gratuity: 

a) Eligibility: Continuous 5 years of service 

b) In case of death of employee, payment has to be made to minor. 

c) Amount of Gratuity: 

Normal: Last drawn salary/26*15*no of year of service 

Seasonal: Last drawn salary/26*7*no of year of service 

Salary: Basic+ DA 

d) Maximum amount: Rs.350000 

e) Time limit: within 30 days of form due date 

3) Duty of employer to determine the amount of gratuity and give notive in 

writing to the person to whom the gratuity is payable and to the 

controlling authority. 

4) Duty of the employer to give notice of opening, change or closure of 

establishment 

5) Duty of the employer to obtain nominations from the employees. 

Ex. 

If the salary (Bonus + DA) = 5,000 

5000/26 (working days) x 15 (days service) x nos of year service completed 


The Payment of Wages Act, 1936 

Person Responsible under the Act: 

Nature of Employer Person Responsible 

Factory Manager under Factories Act, 1948 

Industrial Establishment A person responsible to the employer 

for supervision and control of the 

Industrial Establishment 

Railway Railway Administration 


1) Authorised persons have to fix the wage period which should not be more 

than 1 month. 

2) Time Limit for payment of wages 

Particulars Time limit 

Less than 1000 persons Before expiry of 7 th working day of 

wage period 

More than 1000 persons Before expiry of 10 th working day of 

wage period 

Termination of employee Before expiry of 2 nd working day of 

termination 

3) Wages must be paid in current coin and currency note or cheque or 

crediting in Bank account (provided for cheque and credit subject to 

written authorization) 

4) Obligation for imposing fine: 

a) Previous approval of authority of State Govt. 

b) Notice to be exhibited in premises 

c) Opportunity of showing cause against fine to employee 

d) Total fine should not exceed 3 % of wages payable 

e) Age of employee must be more than 15 years 

f) Fine can’t be recovered in installment and after the expiry of 60 

days on which it was imposed. 

g) Fine recovered must be applied for purposes beneficial to the 

persons employed in the factory. 


The Workmen’s Compensation Act, 1923 

Employer’s liability for compensation: 

1) Employer is liable to pay compensation as per Chapter II in case of 

personal injury by accident arising out of and in the course of 

employment. 

2) In following cases, employer is not liable: 

a) if injury doesn’t result in total or partial disablement for a period 

not exceeding 3 days 

b) if injury has not resulted in death and is caused by accident 

because of following : 

i) influence of drink or drugs, or 

ii) willful disobedience of an order expressly given or a ruled 

framed for the purpose of securing safety of workmen, or 

iii) willful removal of any safety guard or other device provided 

for the purpose of securing the safety of workman. 

3) Occupational disease shall be deemed to an injury if it is proved that 

a) continuous service 

Nature of employment Continous Service 

Part A of Schedule III NA 

Part B of Schedule III 6 months 

Part C of Schedule III CG will specify 

b) the disease has arisen out of and in the course of the employment. 

4) More than one employer in case of part C, then payment of compensation 

will be in proportion as commissioner may decide. 

Amount of Compensation: 

Particulars of Injury Amount of Compensation 

Death from Injury 50 % of monthly wages* relevant factor 

or Rs.50000/- whichever is more 

Permanent total disablement 60 % of monthly wages* relevant factor 

or Rs.65000/- whichever is more 

Permanent partial disablement 

a) Injury in Part II of Schedule I 

b) No specified in injury in Schedule I 

Temporary disablement whether partial 

or total 


% specified in schedule 

% decided by qualified medical 

practioner 

Half monthly payment equivalent to 25% 

of monthly wages paid as per provision of 

Act

Method of calculating wages: 

Continuous period of employment Wages 

preceding the accident 

Not less than 12 months 1/12 th of the payment in last 12 months 

Less than 1 month a) Average monthly amount during 12 

month earned by a workman on same 

work by same employer or 

b) if there was no workman, then by a 

workman on same work in same locality 

In other case where it is not possible to 

calculate monthly wages 

Total wages earned immediately 

preceding the accident/no of day * 30 

Reports and Returns: 

1) Commissioner may ask statement in the prescribed form within 30 days 

of notice about the opinion of employer whether he is or not liable to 

deposit compensation. 

2) Employer is liable to report about fatal accidents and serious bodily 

injuries within 7 days of death or serious bodily injury. 

3) SG may direct any employer to send a return specifying the number of 

injuries in respect of which compensation has been paid by employer 

during the previous year.

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