Employees’ Provident Funds Scheme, 1952


Every worker wants security & maintenance for old age. The provident Fund act-1952 deals with provident funds relating to only Govt., railways and local authorities. Therefore, it was considered desirable to introduce a private scheme for industrial workers. As a result, the provident fund act 1952 was passed which initially provided for payment of pension fund to employees in industries specified in schedule-1.


Employee Definition:
“Employee” as defined in Section 2(f) of the Act means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets wages directly or indirectly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment.

All the employees (including casual, part time, Daily wage contract etc.) other then an excluded employee are required to be enrolled as members of the fund the day, the Act comes into force in such establishment.

Basic Wages:
“Basic Wages” means all emoluments which are earned by employee while on duty or on leave or holiday with wages in either case in accordance with the terms of the contract of employment and witch are paid or payable in cash, but dose not include

a. The cash value of any food concession;

b. Any dearness allowance (that is to say, all cash payment by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other allowance payable to the employee in respect of employment or of work done in such employment.… Read the rest

Workers Compensation Act, 1923

The Workers Compensation Act, aims to provide workmen and/or their dependents some relief in case of accidents arising out of and in the course of employment and causing either death or disablement of workmen. It provides for payment by certain classes of employers to their workmen compensation for injury by accident. The latest amendment to the Act was made in 1984.

Object and scope of the Act:

The passing of the Act in 1923 was the first step towards social security of workmen. The main objective of the Act is to provide for the payment of compensation by certain classes of employers to their workers for injury by accident.

The theory of Act is that “The cost of the product should bear the blood of the workmen”.

The Act came into force on the first day of July, 1924. The growing complexity of industry with increasing use of machinery and consequent dangers to workmen rendered it advisable that they and their families should be protected, as far as possible, from hardship arising from accidents. Keeping in view this fact an Act called the Workmen’s Compensation Act was passed which came into force on 1st July 1924.it applies to the whole of India except the state of Jammu & Kashmir. The Act provides for cheaper & quicker disposal of disputed relating to compensation through special tribunals than possible under the Civil Law. The Act looks upon compensation as relief to the workmen & not as damages payable by the employer for a wrongful act.… Read the rest

The Payment of Wages Act, 1936

The Payment of Wages Act, 1936 is a central legislation which has been enacted to regulate the payment of wages to workers employed in certain specified industries and to ensure a speedy and effective remedy to them against illegal deductions and/or unjustified delay caused in paying wages to them. It applies to the persons employed in a factory, industrial or other establishment, whether directly or indirectly, through a sub-contractor.

The Central Government is responsible for enforcement of the Act in railways, mines, oilfields and air transport services, while the State Governments are responsible for it in factories and other industrial establishments.

The basic provisions of the Act are as follows:

The person responsible for payment of wages shall fix the wage period up to which wage payment is to be made. No wage-period shall exceed one month.
All wages shall be paid in current legal tender, that is, in current coin or currency notes or both. However, the employer may, after obtaining written authorization of workers, pay wages either by cheque or by crediting the wages in their bank accounts.

All payment of wages shall be made on a working day. In railways, factories or industrial establishments employing less than 1000 persons, wages must be paid before the expiry of the seventh day after the last date of the wage period. In all other cases, wages must be paid before the expiry of the tenth day after the last day of the wage period. However, the wages of a worker whose services have been terminated shall be paid on the next day after such termination.… Read the rest

The Payment of Bonus Act, 1965

The practice of paying bonus in India appears to have originated during First World War when certain textile mills granted 10% of wages as war bonus to their workers in 1917.  In certain cases of industrial disputes demand for payment of bonus was also included.  In 1950, the Full Bench of the Labour Appellate evolved a formula for determination of bonus.  A plea was made to raise that formula in 1959.  At the second and third meetings of the Eighteenth Session of Standing Labour Committee (G. O.I.) held in New Delhi in March/April 1960, it was agreed that a Commission be appointed to go into the question of bonus and evolve suitable norms.  A Tripartite Commission was set up by the Government of India to consider in a comprehensive manner, the question of payment of bonus based on profits to employees employed in establishments and to make recommendations to the Government.  The Government of India accepted the recommendations of the Commission subject to certain modifications.  To implement these recommendations the Payment of Bonus Ordinance, 1965 was promulgated on 29th May, 1965.  To replace the said Ordinance the Payment of Bonus Bill was introduced in the Parliament.

The Bonus Formula:

The Bonus Formula was first evolved in the case of Mill Owners Association, Bombay v. Rashtriya Mill Mazdoor Sangh, Bombay, (1950). The formula, which came to be known as ‘the Full Bench Formula or the Available Surplus Formula is as follow:

“As both labour and capital contribute to the industrial concern it is fair that labour should derive some benefit if there is surplus after meeting prior or necessary charges.… Read the rest

The Minimum Wages Act, 1948


Wages means all remuneration capable of being expressed in terms of money, which Would, if the terms of contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such. Employment it includes house rent allowance but does not include the value of any house accommodation, supply or light, water, medical attendance or other amenity or service excluded by general or special order of appropriate Government; contribution paid by the employer to Pension/ Provident Fund or under scheme of social insurance; traveling allowance or value of traveling concession; sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or any gratuity payable on discharge.

As of now there is no uniform and comprehensive wage policy for all sectors of the economy in India. Wages in the organized sector are determined through negotiations and settlements between employer and employees. In unorganized sector, where labor is vulnerable to exploitation, due to illiteracy and having no effective bargaining power, minimum rates of wages are fixed/ revised both by Central and State Governments in the scheduled employments falling under their respective jurisdictions under the revisions of the Minimum Wages Act,1948.

The concept of Minimum Wages was first Evolved by ILO in 1928 with reference to Remuneration of workers in those industries Where the, level of wages was substantially Low and the labor was vulnerable to Exploitation, being not well organized and Having less effective bargaining power.… Read the rest

The Mines Act 1952

The mines act, 1952 which was enacted to amend and consolidate the law relating to the regulation of Lob our and safety in mines came into force with effect from July 1, 1952. The act extends to whole of India and it aims at providing for safe as well as proper working conditions in mines and certain amenities to the workers employed therein.

For the purpose of the act, a mines means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on and includes, i) all borings, bore holes and oil wells. ii) All shafts, in or adjacent to and belonging to a mine whether in the course of being sunk or not. iii) all power stations for supply electricity solely for the purpose of working the mine or a number of mines under the same management; iv)  conveyors or serial ropeways provided for the bringing into removal from a mine of minerals or other articles or for the removal of refuse there from; v) unless exempted by the central Government by the notification in the official gazette, any premises or part thereof, or adjacent to and belonging to a mine on which any process ancillary to the getting, dressing or preparation for sale of minerals or of coke is carried.

The provisions of  the act, except those relating to powers of inspectors/other authorized persons, facilities to afforded to such persons, working hours for adolescents and employment of children and women do not apply to; (a) any mime or part thereof in excavation is being made for prospecting purposes only and not for the  purpose of obtaining minerals for use or sale provided that not more than 20 persons are employed on one day, the depth of the excavation for coal,15 meters, and no part of such excavation extends below superjacent ground; and  (b) any mine engaged in the extraction of  kankar, Murrum, laterite boulder, gravel shingle, ordinary sand ( excluding moulding sand, glass-sand).… Read the rest