JAN

2015

PAGES

Hello Readers,
The Compliance Calendar for January includes
remittances for PF, ESI, Labour Welfare Fund and
CLRA.
In important judgements, the Honourable Punjab &
Haryana High Court has held that abandonment of
employment depends upon intention of a workman.
The Honourable Karnataka High Court has
pronounced thata more beneficial gratuity scheme,
over payment of gratuity act, is permissible. The
Honourable Uttarakhand High Court has opined that
back-wages should berightly denied in the absence
of proof for unemployment. The Honourable
Bombay High Court has pronounced that full back
wages on reinstatement should be paidwhen
workman proved unemployment during interregnum
and when termination of workman is not on technical
ground. The Honourable Bombay High Court has
ruled that ahospital engaged in welfare activities is
an 'industry under I.D. Act'.
In news to note, a separate bill to regulate small
factories is being drafted by labour ministry. The
employees' provident fund organization (EPFO) has
constituted a five member sub-committee on
construction workers. The EPF Appellate Tribunal
has held that bifurcation of minimum wages into
allowances is not illegal. Central Government has
released a notification for amendment in Apprentice
Act, 1961. ESIC has released booklets for employee
& employers online. The Bonus Act has got an
amendment. RBI has extended timing for RTGS
transactions till 8PM. The Labour Ministry has
prepared a mega housing scheme to offer affordable
houses to over 5 crore subscribers of retirement
fund body EPFO.
We hope you find the contents of this newsletter
relevant and useful. We welcome your suggestions
and inputs for enriching the content of this
newsletter. Please write to contactadp@adp.com

Compliance Calendar for Dec 2014

02

Important Judgments
Abandonment of employment depends
upon intention of a workman
More beneficial gratuity scheme,
over payment of gratuity act,
is permissible
Back-wagesshould berightly denied in the
absence of proof for unemployment
Full back wages on reinstatement
should be paid when workman proved
unemployment during interregnum and
when termination of workman is not on
technical ground
A hospital engaged in welfare activities
is an 'industry under I.D. Act.

04
04
05
05
06

News to note
Separate bill to regulate small factories
drafted by labour ministry
EPFO panel on Construction workers
Bifurcation of minimum wages
into allowances-not illegal
Central Government released notification
for amendment in Apprentice Act, 1961
ESIC releases booklets for
employee & employers on line,
through the below links
Bonus Act gets an amendment
RBI extends Timing for RTGS
Transactions till 8PM.
Labour Ministry prepares a mega
housing scheme to offer affordable
houses to over 5 crore subscribers of
retirement fund body EPFO

07
07
08
08
09
09
09
10

PAGE 02

Compliance Calendar for the month of Jan 2015

Activity

Due Date

Due Under

Mode

Professional Tax - States - Remittances

10th Jan 15

Andhra Pradesh & Madhya Pradesh

State wise regulations

By Challan

15th Jan 15

Gujarat

Gujarat PT regulations

By Challan

20th Jan 15

Karnataka

Karnataka PT regulations

By Challan

21st Jan 15

West Bengal

West Bengal
PT regulations

By Challan

30th Jan 15

Maharashtra, Assam & Orissa

State wise regulations

By Challan

20th Jan 15

Karnataka

Karnataka PT regulations

Online

Labour Welfare Fund Remittances

20th Jan 15

Kerala

Kerala
State Labour Welfare Fund

By Challan

PF Central
15th Jan 15

Remittance of Contribution

EPF & MP Act 1952

By Challan

15th Jan 15

International worker with

wages and Nationality

EPF & MP Act 1952

Statement in IW 1

ESI Central
21st Jan 15

Remittance of Contribution
(Main code and Sub Codes)

ESIC Act 1948

By Challan

PAGE 03

Compliance Calendar for the month of Jan 2015

Activity

Due Date

Due Under

Mode

CLRA Central
31st Jan 15

Return by Principal Employer

CLRA, 1970

By Form XXV

Employment Exchange (Compulsory Notification of Vacancies) Act, 1959

15th Jan 15

By Form
ER-1 & ER-2

Strength & Occupation Return

Factories Act, 1948 Central

31st Jan 15
During the
month

Annual Return Medical Examination,

Pressure Vessel examination,
Safety Committee Meeting &
Canteen Committee Meeting

Factories Act

By Form 22

Maternity Benefit Act, 1948

31st Jan 15

Return

By Form K

Minimum Wages Act, 1948

31st Jan 15

Return

By Form III

Payment of Wages Act, 1936

31st Jan 15

By Form IV,
VI & VII

Return

Tamil Nadu Indl Est (Conferment of Permanent Status) Act, 1981

31st Jan 15

Return

By Form 2 &
Copy of Form 1

Tamil Nadu Labour Welfare Fund Act, 1972

31st Jan 15

Particulars of contribution

By Form A

Payment of Subsistance Allowance Act

31st Jan 15

Return

By Form 2

PAGE 04

ABANDONMENT OF EMPLOYMENT DEPENDS UPON INTENTION OF A WORKMAN

In a case of Dal Chand vs. M/s. K.B. Hydraulic Engineering Works (regd) and another, the
Honourable Punjab & Haryana High court through Honourable Justice Mr. Rajiv Narain Raina
pronounced that
Abandonment of employment by a workman is
dependent upon his intention.
Failure of the management in allowing workman for
resumption of duties during conciliation proceedings
would justify the claim of the workman that he has not
abandoned his job of his own accord.
Reinstatement would be appropriate when the
management has alleged that the workman has
abandoned his job of his own accord and, as such, it
amounted to violation of section 2(oo) of the Industrial
Disputes Act, 1947.
Any termination or even abandonment of job on the
part of a workman would attract section 25F of the
Industrial Disputes Act and if its compliances not made,
the abandonment of job would be treated as illegal and
the workman will be entitled to reinstatement.
When the labour court has held that the management
has wrongly presumed that the workman has kept
away from work and abandonment has been rightly
granted whereas instead of 10% back-wages full backwages should have been awarded.

MORE BENEFICIAL GRATUITY SCHEME, OVER PAYMENT

OF GRATUITY ACT, IS PERMISSIBLE
In an case of R.Balurao, s\o Late Ramachandran
Shivabhatjois vs. Divisional controller, KSRTC,
Mysore, and others, the honourable Karnataka High
Court through Hon'ble Justice Mr.Ram Mohan Reddy
pronounced that
An employee is entitled to gratuity under a provision of
any other law or regulation or scheme framed
thereunder if the same is more beneficial than those as
provided under the Payment of Gratuity Act, 1972.
An employee is not entitled to gratuity if he is not able to
claim the same under any provision of law.

PAGE 05

BACK-WAGES SHOULD BERIGHTLY DENIED IN THE

ABSENCE OF PROOF FOR UNEMPLOYMENT
In a case of Laxmi Sugar Mills Co. Ltd. vs. presiding
officer, labour court, haridwar & Anr., the Honourable
Uttarakhand High Court through the verdict by the
honourable Justice Mr. Alok Singh pronounced that
Awarding reinstatement to a workman, after 10 years of

termination of his services, seems to be totally unjustified.

Lump sum compensation is appropriate after 10 years of

termination of services of the workman instead of

reinstatement.
When no material was ever produced before the labour

court by the workman to show that they were not engaged

gainfully or totally remained idle after termination of their
services till impugned award was passed, non-grating
back-wages by the labour court is justified.

FULL BACK WAGES ON REINSTATEMENT SHOULD BE PAID WHEN WORKMAN

PROVED UNEMPLOYMENT DURING INTERREGNUM AND WHEN TERMINATION
OF WORKMAN IS NOT ON TECHNICAL GROUND
In a case of Shashikantgangaramnarkar vs.
Advance Transformers and Equipment Pvt Ltd,
Mumbai and Another, the Honourable Bombay
High Court through the verdict by Honourable
Justice Mr. M.S. Sonak. J pronounced that
Denial of 50% back-wages by the labour court on

reinstatement of the workman without stating any

reason needs modification hence the workman
would be entitled to full back-wages.
When the workman, in his evidence, before the

labour court stated that after termination he

remained unemployed and made efforts for
employment but could not get the same, would justify
full back-wages.
Failure of the employer to rebut the evidence of

unemployment during interregnum would justify the

claim of the workman for full back-wages.
Labour court erred in not granting full back-wages to

the workman on his reinstatement when the

termination was not on only technical ground.

PAGE 06

If a workman states that he remained unemployed during pendency of the proceedings before the

labour court, the burden of proof to prove employment by the workman shifts upon the employer to rebut
the same.
Grant of full wages would be justified on reinstatement when the petitioner-workman has served the

employer for a long period without any blemished past record.

Daniel of back-wages, which were to be awarded, would justify levy of interest on payment to the

workman concerned.
When there is denial of back-wages and the termination is held as illegal, the High Court, in writ petition,

will interfere in the award.

A HOSPITAL ENGAGED IN WELFARE ACTIVITIES

IS AN 'INDUSTRY UNDER I.D. ACT.
In a case of Union of India through director & Ors. Vs. Mohan P. Gore, the honourable Bombay High Court
through the verdict by Honourable Justice Mr. M.S. Sonak pronounced that
An institution is an industry if it yields profits but the same is siphoned off for altruistic objects or if it

makes no profit but hires the services of employees as in like business, but the goods and services,
which are the output of that institution, are made available at the low or no costs, to the indigent needy
who are priced out of the market.
If an institution is oriented on a humane mission, which is fulfilled by the men who work, not because

they are paid wages but because they share the passion for the cause and device job satisfaction from their
contribution, it may not be covered by the definition of 'industry' as observed in the case of Bangalore Water
Supply and Sewerage Board v Rajappa, 1978 LIC 467 (SC) by Justice Mr. Krishna Iyer.
The scope and parameters of the definition of State under the Article 12 of the Constitution of India and

Industry under section 2(j) of the Industrial Disputes Act, 1947 are completely different.
A hospital engaged in charitable activities is also an industry under section 2(j) of the Industrial Disputes

Act 1974.

PAGE 07

SEPARATE BILL TO REGULATE SMALL FACTORIES

DRAFTED BY LABOUR MINISTRY
The Small Factories (Regulation of Employment and Condition of Service) Bill, 2014, which has been

uploaded on the labour ministrys website for public comments till November 10, is likely to be introduced
in the winter session December-end the labour ministry said the draft was finalized after extensive
discussions by the working group constituted by it.
The draft denies a small factory as any premise wherein a manufacturing process is carried on and

which employs less than 40 workers and seeks to exempt employers from complying with 14 act.
(for complete bill visit: labourlawreporter.com)
The employers can register and even close down their factories by electronically notifying it to the

authorities concerned. While mandatory registration of a small factory is to be done within 60 days of its
commencement after paying the prescribed fees, in the case of closure, the owner/employer needs to
electronically notify this to the chief inspector within 15days of closing the factory. On 'Financial
inclusion'. The draft proposes that wages of over Rs. 1000 Shall be paid to the workers by depositing
them in the bank account of the workers, electronically. It shall be the responsible of the employer to get
a zero balance account opened. It adds.
On minimum wages, the draft mandates that no employer shall pay less than the fixed minimum wages,

but proposes no penalty for non-compliance, adding that any claim in this matter is to be decided by an
authority to be set up by the State Government. The draft includes proposals on child labour, health and
safety standards, maternity benefits, leave entitlement, bonus, and gratuity among other things. The bill
having 55 section also has provision regarding unfair labour practices, service conditions, adjudication
of disputes, etc.

EPFO PANEL ON CONSTRUCTION WORKERS

The Employees' Provident Fund Organization (EPFO) has

constituted a five member sub-committee on construction

workers under the tripartite central board of trustees to suggest
a mechanism for increasing social security coverage for
workers in the sector. The sub-committee will be chaired by the
central provident commissioner, said an EPFO circular dated
October 15, and will include one government representative to
be nominated by the labour secretary and an additional central
PF commissioner. The employers will be represented by
SS Patil and Ravi Wig, while the employees will be represented
by Ramen Pandey of congress-led INTUC and MJ Rao of the
BJP - led Bhartiya Mazdoor Sangh. The tenure of the subcommittee shall be At the pleasure of the Chairman according
to the circular.

PAGE 08

BIFURCATION OF MINIMUM WAGES INTO ALLOWANCES-NOT ILLEGAL

An appeal was filed by the appellant, before the Employees' Provident Fund Appellate Tribunal against the

order dated 06.07.2011, passed by the EPF authority, under section 7A of the act, assessing P.F dues and
allied dues on allowances also which is illegal.
The EPF Appellate Tribunal observed that the employer has bifurcated the minimum wages into different

heads like basic wages, house rent allowance, conveyance allowance, etc. The employer has been paying
employees' contribution only on the basic wages as provided under the Employees' Provident Funds and
Miscellaneous Provident Act, 1952 excluding allowances. The EPF authority pleaded that PF dues can
never be calculated on wages lower than minimum wages. Accordingly, the EPF authority initiated
proceeding under section 7A of the act, taking into consideration the minimum wages under the minimum
wages act and directed the employer to pay the contribution so determined. The EPF appellate tribunal
opined that minimum wages has not been defined under the Employees' Provident Funds and
Miscellaneous Provident Act, 1952. Only basic wages is defined under the Act. EPF authority has no power
to hold whether minimum wages amount to basic wages or not. While interpreting a provision of any Act, the
court only has to interpret the law and cannot legislate it. If a provision of law is misused and subjected to
abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. There is
no compulsion to hold that the definition of basic wages should be equated to the definition of minimum
wages as defined under section 2(b) read along with section 6 of the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 and not on Minimum Wages Act. Hence, impugned order is set aside.
Appeal is allowed.

CENTRAL GOVERNMENT RELEASED NOTIFICATION FOR

AMENDMENT IN APPRENTICE ACT, 1961
The qualification, period of apprenticeship training, holding of test, grant of certificate and other conditions

relating to the apprentices in optional trade shall be such as may be prescribed.

The employer may engage apprentices from other States for the purpose of providing apprenticeship

training to the apprentices.

The Central Government shall prescribe the number of apprentices to be engaged by the employer for

designated trade and optional trade.

Several employers may join together either themselves or through an agency, approved by the

Apprenticeship Adviser, according to the guidelines issued from time to time by the Central Government in
this behalf, for the purpose of providing apprenticeship training to the apprentices under them.
Every employer shall make suitable arrangements in his workplace for imparting a course of practical

training to every apprentice engaged by him.

Such of the trade apprentices who have not undergone institutional training in a school or other institution

recognised by the National Council or any other institution affiliated to or recognised by a Board or State
Council of Technical Education or any other authority which the Central Government may, by notification in
the Official Gazette, specify in this behalf, shall, before admission in the workplace for practical training,
undergo a course of basic training and the course of basic training shall be given to the trade apprentices in
any institute having adequate facilities.
Every trade apprentice who has completed the period of training may appear for a test to be conducted by

the National Council or any other agency authorised by the Central Government to determine his
proficiency in the designated trade in which he has undergone apprenticeship training.

PAGE 09

ESIC RELEASES BOOKLETS FOR EMPLOYEES & EMPLOYERS ONLINE,

THROUGH THE BELOW LINKS
Employer:
http://esic.nic.in/CIRCULARS/ESIC%20Employers%20Booklet%20English.pdf
Employees:
http://esic.nic.in/CIRCULARS/ESIC%20Employees%20Booklet%20English.pdf

BONUS ACT GETS AN AMENDMENT

Annual Returns - Every employer shall on or before the 1st day of February in each year upload annual

returns in Form D on the web portal of the Ministry of Labour and Employment giving information as to
the particulars specified in respect of the preceding year, Provided that the annual returns shall be filed
within the time limit specified in section 19 of the Act.
Every employer on or before the 1st day of February in each year may file annual returns in the Form D to

the Inspector giving information as to the particulars specified in respect of the preceding year.
Provided that during inspection, the inspector shall require the production of the accounts, books,

register and other documents if the same are maintained in manual form or in electronic form, as the
case may be.

RBI EXTENDS TIMING FOR RTGS TRANSACTIONS TILL 8PM.

With effect from 29.12.2014 RBI has

extended the working hours for

Weekdays / Regular Days to 08.00 Am
to 08.00 PM from existing 09.00 AM to
04.30 PM and it further extended the
working hours for RTGS on Saturdays /
Sunday to 08.00 Am to 03.30 PM from
existing 09.00 AM to 02.00 PM.

PAGE 10

LABOUR MINISTRY PREPARES A MEGA HOUSING SCHEME TO OFFER

AFFORDABLE HOUSES TO OVER 5 CRORE SUBSCRIBERS OF
RETIREMENT FUND BODY EPFO
The Ministry intends to collaborate with PSU banks, housing finance companies, state-owned

construction firms like NBCC and authorities like DDA, PUDA, HUDA to build houses at a price to be
fixed by the government.
Labour Ministry is preparing a scheme under which affordable houses will be provided to the

Employees' Provident Fund Organisation (EPFO) subscribers, particularly those who are in the low
income bracket," a source in the ministry said.
In a recent note, the Prime Minister's Office had asked EPFO to promote affordable housing for its

subscribers and use its funds for the purpose.

According to the note, deployment of 15 per cent of EPFO funds as loan for low cost housing would

generate a credit flow of Rs 70,000 crore and can create 3.5 lakh additional low-cost homes.The Labour
Ministry is keen on a scheme under which EPFO subscribers could withdraw their PF deposits to make
part-payment of the total cost of the house.
The Ministry also intends to provide subsidy to the EPFO subscribers in low-income bracket to help

them avail benefits of various low-cost housing schemes of the government.

Financial institutions, sources said, would be roped in to provide housing loan at low interest rates under

the priority sector lending for construction of affordable houses under the scheme.
The scheme, however, will be optional for EPFO subscribers as there is no need to provide affordable
houses to those who already own one.
Under the housing scheme, there

would be three different income

categories--Low Income, Middle
Income and High Income. Houses and
financial incentives under the scheme
will be offered on the basis of the
income of a subscriber.
The subscribers would be facilitated to

pay equated monthly instalments of

their home loan through their
provident fund account.
The source said that under the

scheme EPFO may use its funds to

create a corpus for providing housing
loan at affordable interest rate to its
subscribers.

PAGE 11

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