labour laws applicable to semiconductor industry in karnataka

LABOUR LAWS APPLICABLE TO
SEMICONDUCTOR INDUSTRY
IN
KARNATAKA
RESOURCE PERSON
VASANTKUMAR N. HITTANAGI
JOINT LABOUR COMMISSIONER,
BANGALORE.
Date 28-01-2011
1

FACTORIES ACT, 1948
APPLICABILITY OF THE ACT
ANY PREMISES WHEREIN 10 OR MORE
PERSONS WITH THE AID OF POWER OR 20 OR
MORE PERSONS WITHOUT THE AID OF
POWER ARE/WERE WORKING ON ANY DAY
PRECEDING 12 MONTHS, WHEREIN
MANUFACTURING PROCESS IS BEING
CARRIED ON.

REGISTRATION &
RENEWAL OF FACTORIES
TO BE GRANTED BY CHIEF
INSPECTOR OF FACTORIES ON
SUBMISSION OF PRESCRIBED
FORM, FEE AND PLAN.

EMPLOYER TO ENSURE HEALTH
OF WORKERS PERTAINING TO
• CLEANLINESS DISPOSAL OF WASTES
AND EFFLUENTS.
• VENTILATION AND TEMPERATURE.
• DUST AND FUME.
• OVERCROWDING.
• ARTIFICIAL HUMIDIFICATION.
• LIGHTING.
• DRINKING WATER .
• SPITTOONS.

WELFARE MEASURES
• WASHING FACILITIES.
• FACILITIES FOR STORING AND DRYING
CLOTHING.
• FACILITIES FOR SITTING.
• FIRST-AID APPLIANCES.

• CANTEENS WHEN THERE ARE 250 OR
MORE WORKERS.
• SHELTERS, REST ROOMS AND LUNCH
ROOMS WHEN THERE ARE 150 OR
MORE WORKERS.
• CRECHES WHEN THERE ARE 30 OR
MORE WOMEN WORKERS.
• WELFARE OFFICER WHEN THERE
ARE 500 OR MORE WORKERS.

WORKING HOURS, SPREAD OVER &
OVERTIME OF ADULTS
• WEEKLY HOURS NOT MORE THAN 48.
• DAILY HOURS, NOT MORE THAN 9 HOURS.
• INTERVALS FOR REST AT LEAST ½ HOUR ON
WORKING FOR 5 HOURS.
• SPREAD OVER NOT MORE THAN 10 ½ HOURS.
• EXTRA WAGES FOR OVERTIME DOUBLE THAN
NORMAL RATE OF WAGES.
• RESTRICTION OF EMPLOYMENT OF WOMEN
BEFORE 6 A.M. AND BEYOND 7 P.M.

• HOWEVER THE WOMEN EMPLOYEES
WORKING IN “ELECTRONICS,
TELECOMMUNICATIONS, INFORMATIC,
COMPUTER (HARDWARE & SOFTWARE)
ALLIED INDUSTRIES ” ARE GIVEN EXEMPTION
FROM THE WORKING HOURS THAT MEANS
THEY C AN WORK UPTO 10 PM. SUBJECT TO
THE FOLLOWING CONDITIONS
8

i) THE WRITTEN CONSENT OF THE
WOMEN EMPLOYEE NEEDS TO BE
OBTAINED
ii) THE WOMEN EMPLOYEES CANNOT
BE MADE TO WORK OVERTIME.
iii) AFTER 10:00 P.M. THE WOMEN
EMPLOYEES SHOULD BE PROVIDED
WITH TRANSPORT FACILITY TO
REACH THEIR HOMES.
9

ANNUAL LEAVE WITH WAGES
• A WORKER HAVING WORKED FOR 240
DAYS @ ONE DAY FOR EVERY 20 DAYS.
• ACCUMULATION OF LEAVE FOR 30
DAYS.

ANNUAL RETURNS
A COMBINED ANNUAL RETURN IN FORM 20
REQUIRES TO BE SUBMITTED WHICH GIVES
EXEMPTION FROM SUBMISSION OF SEVEN
ANNUAL RETURNS UNDER THE FOLLOWING
ENACTMENTS.
1. CONTRACT LABOUR (R & A) KARNATAKA
RULES, 1969.
2. KARNATAKA MINIMUM WAGES RULES, 1958.
3. PAYMENT OF BONUS RULES, 1975.
4. KARNATAKA PAYMENT OF WAGES RULES, 1963.
5. KARNATAKA MATERNITY BENEFIT RULES, 1963.
11

PAYMENT OF BONUS ACT, 1965
APPLICABILITY
IT APPLIES TO
A FACTORY
IT CONTINUES TO APPLY EVEN IF THE NO. IS
REDUCED.
EMPLOYEE SHOULD HAVE WORKED FOR NOT LESS
THAN THIRTY DAYS IN AN ACCOUNTING YEAR. THIS
INCLUDES LEAVE.

EMPLOYEE
1) ANY PERSON (OTHER THAN APPRENTICE)
EMPLOYED ON SALARY NOT EXCEEDING RS.
10,000/- P.M.
2) INCLUDES SKILLED, UNSKILLED, MANUAL,
SUPERVISORY, MANAGERIAL, ADMINISTRATIVE,
TECHNICAL CLERICAL PERSONS.

MINIMUM BONUS
8.33% OF THE SALARY EARNED DURING
THE ACCOUNTING YEAR
MAXIMUM BONUS
20% OF THE SALARY EARNED DURING THE
ACCOUNTING YEAR.

CUSTOMARY OR INTERIOR BONUS
IF POOJA BONUS OR OTHER
CUSTOMARY BONUS IS PAID
OR
A PART OF THE BONUS IS PAID
BEFORE THE DUE DATE THEN
THE BALANCE BONUS ONLY HAS TO
BE PAID ON THE DUE DATE.

TIME LIMIT FOR PAYMENT OF BONUS
WITHIN EIGHT MONTHS FROM THE
CLOSE OF THE ACCOUNTING YEAR.
EXTENSION OF EIGHT MONTHS
PERIOD UPTO 2 YEARS FOR SUFFICIENT
REASONS IS POSSIBLE.

MAINTENANCE OF REGISTERS
FORM A, B & C REGISTERS ARE TO BE
MAINTAINED.
RETURNS
FORM D TO BE SUBMITTED WITHIN 30 DAYS
AFTER THE EXPIRY OF TIME-LIMIT SPECIFIED FOR
PAYMENT OF BONUS.

THE MATERNITY BENEFIT ACT, 1961 AND
KARNATAKA RULES, 1966
THE ACT APPLIES TO
FACTORY
MATERNITY BENEFIT
MEANS
PAYMENT OF AVERAGE DAILY WAGE OF THE
PERIOD OF ABSENCE PRECEDING THE DAY
OF DELIVERY, THE ACTUAL DAY OF
DELIVERY AND PERIOD OF ABSENCE
IMMEDIATELY FOLLOWING THE DELIVERY
DAY

QUALIFYING SERVICE FOR ENTITLEMENT OF
MATERNITY BENEFIT
A WOMAN SHOULD HAVE WORKED FOR NOT
LESS THAN EIGHTY DAYS IN THE TWELVE
MONTHS IMMEDIATELY PRECEEDING THE
DATE OF HER EXPECTED DELIVERY.

MATERNITY BENEFIT: MAXIMUM PERIOD ENTITLEMENT
i) TWELVE WEEKS i.e. EIGHTY FOUR DAYS.
ii) SIX WEEKS i.e. FORTY TWO DAYS PRECEDING
THE DATE OF EXPECTED DELIVERY.
iii) SUCCEEDING THE DATE OF DELIVERY: SIX
WEEKS i.e. FORTY TWO DAYS INCLUDING DAY
OF DELIVERY.

PAYMENT OF MEDICAL BONUS
IF PRE-NATAL CONFINEMENT AND
POST-NATAL CARE IS NOT PROVIDED BY THE
EMPLOYER FREE OF CHARGE THEN THE
WOMAN ENTITLED TO MATERNITY BENEFIT
IS ALSO ENTITLED TO RECEIVE A MEDICAL
BONUS OF RS. TWO THOUSAND FIVE
HUNDRED RUPEES.

NURSING BREAKS
TWO NURSING BREAKS OF FIFTEEN MINUTES
DURATION FOR NOURISHMENT OF THE CHILD UNTIL
IT ATTAINS THE AGE OF FIFTEEN MONTHS IS TO BE
ALLOWED TO A WOMAN WHO RETURNS TO DUTY
AFTER THE DELIVERY OF THE CHILD. FIVE TO
FIFTEEN MINUTES DURATION SHALL BE ALLOWED
FOR THE PURPOSE OF JOURNEY TO AND FROM THE
CRECHE.
THIS IS IN ADDITION TO INTERVAL OF REST
ALLOWED TO THE WOMAN.

THE CONTRACT LABOUR
(REGULATION AND ABOLITION)
ACT, 1970 AND CONTRACT
LABOUR (REGULATION AND
ABOLITION) KARNATAKA
RULES, 1974.

THIS ACT APPLIES TO EVERY
ESTABLISHMENT IN WHICH
MORE THAN TWENTY
WORKMEN ARE EMPLOYED ON
ANY DAY OF THE PRECEDING
TWELVE MONTHS AS CONTRACT
LABOUR.

EVERY PRINCIPAL EMPLOYER TO
REGISTER THE ESTABLISHMENT.
CONTRACTOR TO OBTAIN LICENCE
ISSUED BY THE LICENSING OFFICER.
A CANTEEN SHALL BE PROVIDED WHERE
THE NUMBER OF CONTRACT LABOUR IS
ONE HUNDRED OR MORE.
THE CONTRACTOR SHALL PROVIDE
DRINKING WATER, LATRINES, URINALS,
WASHING FACILITIES, FIRST-AID
FACILITIES.

IF ANY AMENITY VIZ., CANTEEN,
RESTROOMS, DRINKING WATER,
LATRINES AND URINALS, WASHING
FACILITIES AND FIRST AID
FACILITIES IS NOT PROVIDED BY THE
CONTRACTOR THEN SUCH AMENITY
SHALL BE PROVIDED BY THE
PRINCIPAL EMPLOYER.
A CONTRACTOR SHALL BE
RESPONSIBLE FOR PAYMENT OF
WAGES TO EACH CONTRACT
WORKER.

THE PRINCIPAL EMPLOYER SHALL
NOMINATE A REPRESENTATIVE TO BE
PRESENT AT THE TIME OF
DISBURSEMENT OF WAGES BY THE
CONTRACTOR.
IN CASE THE CONTRACTOR FAILS TO
MAKE PAYMENT OF WAGES WITHIN
THE PRESCRIBED PERIOD OR MAKE
SHORT PAYMENT ,THEN THE PRINCIPAL
EMPLOYER SHALL BE LIABLE TO MAKE
PAYMENT OF WAGES IN FULL OR THE
UNPAID BALANCE DUE TO THE
CONTRACT LABOUR .
27

EMPLOYEES’ STATE INSURANCE ACT &
THE SCHEME, 1948
APPLICABILITY
THE ACT APPLICABLE TO FACTORIES USING
POWER & EMPLOYING 10 OR MORE PERSONS
AND TO NON- POWER USING MANUFACTURING
UNITS AND ESTABLISHMENTS EMPLOYING 20 OR
MORE PERSON UPTO RS. 15,000/- PER MONTH
w.e.f. 1.05.2010.

ELIGIBILITY
ALL EMPLOYEES DRAWING WAGES
/ SALARY UPTO RS. 15,000/- PER MONTH
ENGAGED EITHER DIRECTLY OR
THRU CONTRACTOR ARE COVERED
UNDER THE SCHEME.
CONTRIBUTION PERIOD
1 ST APRIL TO 30 TH SEPTEMBER , AND
1 ST OCTOBER TO 31 ST MARCH.

BENEFITS
ESI SCHEME TAKE CARE OF FOLLOWING
NEEDS OF THE MEMBERS:
MEDICAL, SICKNESS, EXTENDED SICKNESS
FOR CERTAIN DISEASES, ENHANCED
SICKNESS, DEPENDENTS MATERNITY,
BESIDES FUNERAL EXPENSES,
REHABILITATION ALLOWANCE, MEDICAL
BENEFIT TO INSURED PERSON AND HIS OR
HER SPOUSE.

SCHEME OF CONTRIBUTION
EMPLOYER’S EMPLOYEE’S
4.75% 1.75%
OF WAGES / SALARY

MANNER AND TIME LIMIT FOR MAKING
PAYMENT OF CONTRIBUTION
THE TOTAL AMOUNT OF CONTRIBUTION
(EMPLOYEE’S SHARE AND EMPLOYER’S SHARE) IS
TO BE DEPOSITED WITH THE AUTHORISED BANK
THROUGH A CHALLAN IN THE PRESCRIBED FORM
IN QUADRUPLICATE ON OR BEFORE 21 ST OF
MONTH FOLLOWING THE CALENDAR MONTH IN
WHICH THE WAGES FALL DUE.

THE KARNATAKA INDUSTRIAL
ESTABLISHMENTS
(NATIONAL FESTIVAL HOLIDAYS) ACT, 1963
AND
KARNATAKA RULES, 1964

HOW MANY HOLIDAYS IN A CALENDAR YEAR
TO BE GIVEN TO WORKERS
I. FIVE NATIONAL HOLIDAYS WITH WAGES.
II. FIVE FESTIVAL HOLIDAYS WITH WAGES.

THE NATIONAL HOLIDAYS
1. REPUBLIC DAY : 26 TH JANUARY
2. MAY DAY : 1 ST MAY
3. INDEPENDENCE DAY : 15 TH AUGUST
4. GANDHI JAYANTHI : 2 ND OCTOBER
5. KANNADA RAJYOTSAVA DAY : 1 ST NOVEMBER

CAN AN EMPLOYEE WORK ON ANY OF THE
NATIONAL OR FESTIVAL HOLIDAYS
i. YES.
ii. IN LIEU OF THIS, THE EMPLOYEE AT HIS
OPTION IS ENTITLE TO
(I) TWICE THE WAGES; OR
(II) WAGES FOR SUCH DAY OF WORK AND
TO AVAIL HIMSELF OF A SUBSTITUTED
HOLIDAY WITH WAGES ON ANY
OTHER DAY.

POLLING DAY HOLIDAYS
1. LOK SABHA AND ASSEMBLY POLLING
DAY
2. EMPLOYEE SHOULD BE ALLOWED A
DAY’S PAID HOLIDAY ON THAT DAY TO
CAST HIS VOTE.
3. HIS NAME SHOULD BE INCLUDED IN THE
VOTERS LIST.

EMPLOYEES’ PROVIDENT FUNDS & MISC.
PROVISIONS ACT
& THE SCHEMES, 1952
APPLICABILITY
EVERY ESTABLISHMENT WHICH IS A FACTORY
ENGAGED IN ANY INDUSTRY SPECIFIED IN
SCHEDULE 1 AND IN WHICH 20 OR MORE
PERSONS ARE EMPLOYED.

ELIGIBILITY
ALL THE EMPLOYEES (INCLUDING
CASUAL, PART TIME, DAILY WAGE,
CONTRACT ETC.) OTHER THAN AN
EXCLUDED EMPLOYEE ARE REQUIRED
TO BE ENROLLED AS MEMBERS OF THE
FUND ON THE DAY, THE ACT COMES
INTO FORCE IN SUCH ESTABLISHMENT.

BENEFITS
EMPLOYEES’ PROVIDENT FUND SCHEME
TAKES CARE OF FOLLOWING NEEDS OF THE
MEMBERS.
(i)
RETIREMENT;
(ii) MEDICAL CARE;
(iii) HOUSING ;
(iv) CERTAIN FAMILY OBLIGATIONS;
(v) EDUCATION OF CHILDREN;
(vi) FINANCING OF INSURANCE POLICES.

CLARIFICATION ABOUT
CONTRIBUTION
AFTER REVISION IN WAGE CEILING
RS. 5000 TO RS. 6500 w.e.f. 1.6.2001 PER
MONTH , THE GOVERNMENT WILL
CONTINUE TO CONTRIBUTE 1.16%
UPTO THE ACTUAL WAGE OF
MAXIMUM RS. 6500 PER MONTH
TOWARDS EMPLOYEES’ PENSION
SCHEME. THE EMPLOYER’S SHARE IN
THE PENSION SCHEME WILL BE RS. 541
w.e.f. 1.6.2001.

SCHEME OF CONTRIBUTION
CENTRAL EMPLOYER’S EMPLOYEE’S
GOVT.’S
1.16%
8.33% 0.5% 3.67% 12%
EMPLOYEE’S
PENSION
SCHEME
INSURANCE
SCHEME
EMPLOYEE’S
PROVIDENT FUND
SCHEME
* SUBJECT TO MAX. RS. 541 AND EXCESS OF RS. 541
ALONGWITH 3.67% GOES INTO EPF SCHEME.

PAYMENT OF GRATUITY ACT, 1972
APPLIES TO
FACTORIES
EMPLOYEE SHOULD HAVE WORKED FOR
ATLEAST 5 YEARS.
UPON RESIGNATION, RETIREMENT
GRATUITY PAYABLE IS @ FIFTEEN DAYS
LAST DRAWN SALARY MULTIPLIED BY
NO. OF YEARS OF SERVICE
MAX GRATUITY RS. 10 LAKHS
43

EMPLOYEES COMPENSATION ACT, 1923
ANY EMPLOYEE WHO MEETS WITH AN
ACCIDENT DURING THE COURSE OF
EMPLOYMENT AND ARISING OUT OF IT
RESULTING IN DEATH OR PERMANENT /
PARTIAL DISABILITY IS REQUIRED TO
BE PAID COMPENSATION AS PER THE
ACT.
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