SUMMARY NOTES OF LABOUR LAW (CHAPTER1)-Payment of the Bonus Act,1965.

Q. State the applicability of the Act?

  • Every factory
  • Establishment in which 20 or more persons are employed on anyway during the preceding accounting year

Establishment includes all its departments, undertakings and branches

However where separate balance sheet and profit and loss are prepared , such department ,undertaking or branch shall be treated as a separate establishment

  • Government’s notification in official gazette to any establishment employing more than 10 persons but less than 20, after giving 2 months notice to employer.
  • Once applicable always applicable
  • An establishment in public sector means owned controlled or managed by

A government company

A corporation in which not less than 40% of its capital is held by government or RBI

  • Also if an establishment

Sells goods manufactured/renders services in competition with establishment in private sector and

Income for such sale/service is not less than 20% ,then too the provisions of the act shall apply

Q. State all the exemptions from the provisions of the Act?

  • The appropriate government shall consider the financial position
  • Opinion must be formed that it will be not be in public interest to apply the provisions of this Act by the appropriate government.
  • By way of publishing the notification of exemption granted in the Official Gazette
  • The exemption may be granted for such period as may be specified in the notification

Q. State the classes of employees for whom the Act is not applied?

  • LIC and general insurance companies’ employees
  • Seamen
  • Dockworkers
  • Employees under authority of Central Government/State Government or local authority
  • Social Welfare Institutions
  • RBI
  • IFCI,UTI,IDBI,SFC,NHB,NABARD,SIDBI etc
  • Inland Water Transport

Q. Define employee?

Employee means

  • Other than an apprentice
  • Whose salary is not exceeding Rs.10000/- per month
  • To do any skilled,unskilled,manual,supervisory,managerial,administrative,technical or clerical work
  • Whether the terms of employment is express or implied

Q. State the classes of employees eligible to bonus?

  • Temporary workman
  • Employee of a seasonal factory
  • Part time employee
  • Retrenched employee
  • Probationer
  • Dismissed employee
  • Piece-rated worker

Q. Reasons for disqualifications for bonus?

  • A employee is dismissed from receiving bonus ,if he is dismissed from service for

Fraud

Violent behavior

Theft, misappropriation or sabotage

Q. Define salary/wages?

  • It means all remuneration
  • includes dearness allowance
  • and food allowance

Q.Who all are eligible for bonus ?

  • Every employee shall be entitled to bonus provided he has worked for not less than 30 days in an accounting year

Q. Explain minimum bonus?

  • If there is no allocable surplus or inadequate allocable surplus
  • Then minimum bonus shall be 8.33% of the salary/wages or Rs 100, whichever is higher.
  • And if employee has not attained age of 15 then the figure is Rs 60 instead of Rs 100.

Q. Explain maximum bonus?

  • Maximum bonus shall be , the proportion the allocable surplus bears to the total salaries and wages earned by employee, subject to maximum of 20% of such salary/wage

Q. State the reasons in which employee’s absence shall be deemed as presence?

  • Paid leave
  • Lay off
  • Temporary disablement due to accident caused
  • Maternity leave

Q. Explain set-on and set-off?

  • Set-on

where in any accounting year the allocable surplus exceeds the amount of maximum bonus payable, then the surplus shall be subject to a limit of 20% of salaries and wages of employees , be carried forward for being ‘set on’ in succeeding accounting year and so on upto and inclusive of the 4th accounting year.

  • Set-off

where in any accounting year, there is no allocable surplus or the allocable surplus falls short of the amount of minimum bonus payable and there is no sufficient amount carried forward for set on, such deficiency shall be carried forward for sett off in the succeeding accounting year and so on upto and inclusive of the 4th accounting year.

Q. Define customary bonus or interim bonus?

  • If an employer has paid any pooja bonus or other customary bonus to an employee or has paid part of bonus , then he (employer) shall be entitled to deduct the amount of bonus of so paid from the amount of bonus payable finally under the act.

Q. Specify the deductions of certain amounts from bonus?

  • If an employee has caused any financial loss to employer by willful misconduct or negligence only.
  • If an employer has paid any pooja bonus or other customary bonus to an employee or has paid part of bonus , then he (employer) shall be entitled to deduct the amount of bonus of so paid from the amount of bonus payable finally under the act.

Q. How much is the time limit for payment of bonus?

  • Within 8 months from close of accounting year
  • And it may be extended to a period not exceeding 2 years
  • In case any dispute, one month from date on which award or settlement comes into operation

Q.State the powers of inspector?

  • Furnish such information as may be consider necessary by him
  • Enter and inspect the premises
  • Examine the employer or any person, he has reasonable cause to believe is the employee
  • Make copies, extracts and also search, seize such records
  • Also can exercise other powers as may be prescribed

SUMMARY NOTES OF LABOUR LAW (CHAPTER 2)-Payment of the Gratuity Act,1972.

Q. Define an employee?

  • An employee is

Any person other than apprentice

Employed on salary/wages to do any skilled,unskilled,manual,supervisory,managerial,administrative,technical or clerical work

Whether the terms of employment is express or implied

  • Does not include person who holds a post under Central or State government
  • Employees employed through contractor will get gratuity from contractor , not from thr main employer

Q. Describe wages?

  • Wages means

All emoluments earned by employee while on duty or on leave

Includes dearness allowance

Q. Describe the meaning of ‘continuous service’?

  • An employee is said to be continuous service for a period

If he was in uninterrupted service

Including service which may be interrupted due to sickness, accident, leave, absence without leave, lay-off, strike, lock-out, and cessation of work, not due to fault of employee

  • Where employee is not in continuous service within the above clause, he shall be deemed to be in continuous service

For a period of 1 year , if he has worked not less than

190 days in case he is employed in a mine or establishment which works for less than 6 days a week and

240 days in any other case

For a period of 6 months, if he has worked not less than

95 days in case of a mine or in establishment which works for less than 6 days a week and

120 days in any other case

  • For purpose of above 2nd clause, the number of days on which employee has worked also includes due to

Paid leaves

Laid offs

Temporary disablement due to accident cause

Maternity leave not exceeding 12 weeks

Q. When is gratuity payable?

  • On termination of an employee due to superannuation, resignation, retirement or death
  • After continuous service of 5 years
  • Continuous service of 5 years is not necessary where termination of employee was due to death or disablement

Q. Explain nomination?

  • Every employee who has completed one year of service shall make a nomination within 30 days of completion of one year service
  • Nomination should be made in favour of one or more members of family
  • If employee does not have family,the nomination may be made in favour of any person
  • But if ,he subsequently acquires a family ,then , within 90 days fresh nomination should be made in favour of his family

Q. Explain how the amount of gratuity calculated?

  • In case of monthly rated employees

Gratuity = Last drawn monthly wages x 15/26 x No. of years of service

  • In case of piece-rated employees

Gratuity = average of 3 months wages immediately preceding the termination of employment

  • In case of seasonal establishment

Gratuity= @7 days wages

  • The maximum limit of amount of gratuity is Rs. 1000000/-

Q. Explain forfeiture of gratuity?

  • Gratuity of an employee shall be forfeited if he has been terminated from service for any act of

Which caused damage/loss/destruction property

Riotous or disorderly conduct

Act involving moral turpitude

Q. State the procedure of recovery of gratuity?

If gratuity is not paid by the employer within the prescribed time, then the controlling authority ,on an application by the aggrieved person may issue a certificate for that amount to the District collector, who shall recovers the same along with compound interest as arrears of land revenue

SUMMARY NOTES OF LABOUR LAW (CHAPTER 2)-The Employees Provident Fund And Miscellaneous Provisions Act,1952.

Q. State the applicability of the act?

  • The act applies to

Every factory where in 20 or more persons are employed

Establishment notified by central government in the official gazette in which 20 or more persons are employed

  • The central government may give notification in official gazette and after giving 2 months notice may apply the provisions of the act to any establishment employing more than 10 but less than 20 employees
  • Once applicable always applicable
  • Where employer and majority of employees agreed that the provisions should be made applicable to their respective establishment
  • Persons employed in normal course of business should only be considered as employees and therefore,
  • Persons employed for

Short duration

Urgent necessary

Employed due to abnormal contingency

Casual worker are not considered as employees

Q. State the non-applicability of act to certain employees?

  • Act shall not apply to following establishments-

registered under co-operative societies act employing less than 50 persons and working without aid of power

belonging to central government/ state government

set up by any central/state government

if central government is of the opinion that having regard to financial position of establishment, it may by notification by official gazette exempt that establishment

Q. Define wages?

  • Basic wages include

All emoluments earned by employee but does not include

Food concession

Any DA, HRA, overtime, bonus, commission or any other allowance

Any presents made by employer

Q. Define employee?

  • Employee means any person

Who is employed for wages

For any kind of work

In connection with work of an establishment

Who gets his wages directly or indirectly from the employer

Also includes any person employed through a contractor

Q. Explain in detail the employees provident fund scheme?

  • Quantum of contribution

Employer’s contribution shall be 10% of pay (i.e., basic wages +DA +FA+RA

Employee’s contribution shall be 10 % of pay

However , any employee may voluntarily contribute a higher amount

  • Increase in rate of contribution

Central government empowered to increase the rate of contribution to 12 %

  • Employee earning more than Rs 6500

If salary of employee exceeds Rs.6500 , the employer’s contribution shall be10%/12% of Rs.6500

  • Diversion to employee’s pension scheme

Out of employer’s contribution of 10%/12%, the employer’s contribution of 8.33% shall be diverted to employee’s pension scheme

Q. Explain the quantum of contribution to pension fund?

  • Employer’s contribution to employee’s provident fund scheme shall not exceed 8.33% of basic wages,DA ,FA and RA
  • Such sums are payable by employers within such time such manner as may be specified in scheme
  • The net assets of employee’s family pension fund as on date of establishment of fund
  • Central government ,after due appropriation ,specified shall contribute (1.16%- presently)
  • Monthly pension= pensionable salary X (pensionable service + 2)/70
  • The pension fund shall vest in central board and be administered as may be specified

Q. Explain the quantum of contribution in employees deposit linked insurance scheme?

  • The Employer shall be liable to pay, as the Central Government may by notification in the Official Gazette, specify. Currently the rate notified is 0.5%.
  • However, such amount shall not exceed 1% of the aggregate of the basic wages, dearness allowance and retaining allowance (Presently, the rate of contribution is0.5%)
  • The Central Government also contributes to the Insurance Fund at the rate of 0.25% of pay of every employee.
  • Expenses of Administration:

The employer shall pay further sums of money, as determined to meet all the expenses in connection with administration of the Insurance Scheme.

However, such payment shall not exceed 0.25% of the contribution. Currently the rate notified is 0.1%.

  • Benefit to nominee of employee

If an employee dies during employment, his nominee or family member gets accumulated balance to the credit of employee.

In addition, they will get

An amount equal to average monthly wages drawn(subject to a maximum of rs.6500) during the twelve months preceding the month in which the member died,mulitiplied by 20 times.(maximum benefit shall be Rs.130000).

An amount equal to average balance in the account of the deceased in the fund during the preceding twelve months or during the period of his membership, whichever is less. However if the average balance exceeds Rs.50000, the amount payable shall be Rs.50000 plus 40% of the amount in excess of Rs.50000 subject to an overall of Rs.100000.

Q. Explain the composition of central board of trustees?

  • Chairman and Vice Chairman -appointed by Central Government
  • Central Provident Fund Commissioner
  • Maximum5 officials representing Central Government - appointed by Central Govt
  • Maximum 15 officials representing State Government - appointed by Central Govt
  • 10 persons representing employers - appointed by Central Govt in consultation with association of employers.
  • 10 persons representing employees - appointed by Central Govt in consultation with organization of employees

Q. State the composition of executive committee?

  • Chairman - appointed by the Central Government
  • 2 persons – additional Secretary, Financial Advisor.
  • 3 persons - representatives of the State Government
  • 3 persons - representatives of the employers
  • 3 persons- representatives of the employees
  • Central Provident Fund Commissioner as a member.

Q. Explain the functions of the central board?

  • Rights

The Central Government shall have the right to administer the Fund vested in it in such manner as may be specified in the Scheme.

The Central Board shall have the right to perform such other functions as it may be required to perform

The Central Board shall have the right to appoint Additional, Deputy, Regional or Assistant Provident Fund Commissioners and other staff

The Central Board shall have the right to delegate its powers and functions to any of its officers.

  • Duties

The Central Board shall maintain proper accounts of its income and expenditure in such form and in such manner after consultation with the Comptroller and Auditor General of India

The accounts of the Central Board shall be audited annually by the Comptroller and Auditor General of India and any expenditure incurred by C. & A.G. in connection with such audit shall be reimbursed by the Central Board.

The accounts of the Central Board as certified by the Comptroller and Auditor General of India together with the audit report therein shall be forwarded to the Central Board which shall forward the same to the Central Government

Further, it is the duty of the Central Board to submit to the Central Government an Annual Report of its work and activities. The Central Government shall cause a copy of the Annual Report, the audited accounts together with the report of the Comptroller and Auditor General of India and the comments of the Central Board thereon to be laid before each House of Parliament

Q. Protection against the fund?

  • The amount standing to the credit of any member in fund

Shall not be capable of being assigned or charged

Shall not be liable to attachment under any decree or order of any court

Shall not be capable of being claimed by official assignee or receiver

Shall be free from any debt or other liability

Q. State the liability of transfer/ sale of establishment to new owner?

  • The employer may transfer the establishment to new owner by way of gift/sale/lease etc.,
  • the earlier employer and the person to whom the establishment is transferred will be jointly and severally responsible for contributions
  • However, the liability of transferee is only to the extent of assets obtained by him by the transfer.

Q.Explain transfer of accounts?

  • If the new establishment is covered under PF Act

An employee who is a member of Provident Fund may leave an establishment and obtain employment in another establishment which may be covered under the Act.

In such a case, the amount standing to his credit shall be transferred to his account in the new establishment

  • If the new establishment is not covered under PF Act

An employee who is a member of Provident Fund may leave the establishment and obtain employment in another establishment which may not be covered under the Act, but which may have a Provident Fund of its own.

In such a case, at the request of employee, the amount standing to his credit shall be transferred to his account in the new establishment if the rules of such provident fund permit such transfer.

The transfer shall be made within such time as may be specified by the Central Government.

  • If the old establishment was not covered under PF Act

An employee may be employed in an establishment to which the provisions of the Act do not apply, but such establishment may have its own Provident Fund.

If the employee leaves such establishment and obtains employment in any other establishment which is covered under the Act, then at the request of the employee, the amount standing to his credit will be transferred to his account in the new establishment.

SUMMARY NOTES OF ETHICS (CHAPTER1)

Q. State the 7 sins laid down by Mahatma Gandhi?

  • Science without humanity
  • Commerce without morality
  • Politics without principles
  • Knowledge without character
  • Wealth without work
  • Pleasure without conscience
  • Worship without sacrifice

Q. State the five sources of ethical thinking?

  • The utilitarian approach
  • The rights approach
  • The fairness or justice approach
  • The common good approach
  • The virtue approach

Q.Explain the benefits of business ethics?

  • Improved society
  • Manages values associated with quality management,strategic planning and diversity management
  • Avoid criminal acts “of omission” and lower fines
  • Easier change management
  • Enhanced employee growth
  • Strong teamwork and greater productivity
  • Ensure personnel policies are legal
  • Promote a strong public image

SUMMARY NOTES OF ETHICS (CHAPTER 2)

Q. Explain the corporate governance measure?