Is It Legal to Combine Employee Counts Across Multiple Factory Units for Apprenticeship Quotas?

An employee had three manufacturing units at different places, each registered separately as a factory under the Factories Act, 1948, and each employing 50 employees.

The competent authority under the Apprentice Act, 1961, clubbed the three units and determined the total strength of apprentices to be inducted into the units.

Is the clubbing valid?

A bus conductor died of a heart attack after working hours while he was sleeping in the bus, which was standing at a bus depot. The nominee of the deceased conductor claimed compensation under the Workmen's Compensation Act, 1923.

Is the employer liable to pay the compensation to the nominee?

On the basis of an agreement signed between the trade union and the management, it was agreed to pay a bonus of 30% of wages to all eligible employees under the Payment of Bonus Act, 1965.

Is the agreement valid?

Under the Payment of Gratuity Act, 1972, an employer can withhold the payment of gratuity to an employee when the latter fails to vacate the accommodation allotted to him by the employer.

Please comment on this statement giving legal reasons.

An employer defaults in making payment of P.F. contributions to the Provident Fund. The period of default is 5 months. Is the employer liable to pay damages, and if so, at what rate of damages?

Thank you for such a good question. Actually, the employer is liable to pay damages, and the rate is set by the competent authority.

Yes, the payment of Gratuity may be withheld for non-vacation of the employer's accommodation. However, it can't be denied. Even any outstanding dues may be adjusted from it.

Regards

[QUOTE=Shaziaaa;1254343]
An employer defaults in making payment of P.F. contributions to the Provident Fund. The period of default is 5 months. Is the employer liable to pay damages, and if so, at what rate of damages?

The rate of damages for delayed payment of 5 months is 15%. The slab is as follows:-

Period of delay %age of damages
up to 60 days 5%
61-120 10%
121-180 15%
181-onwards 25%

Regards

I don't think the clubbing is correct. In the said act, the same is not provided, but depending upon certain logic, they may interpret the theory of clubbing together if all three units are interrelated in the manufacturing process.

Regards

Minimum waiting period is 5 years. Beyond 5 years, gratuity is payable, and every completed service of 6 months is treated as a year.

For example, a service of 5 years and 6 months is treated as 6 years.

Yes, the agreement is valid. The maximum 20% bonus is a statutory requirement, but more may be paid on mutual understanding. IT rebate will be limited to 20% amount only. In the agreement, the phrase "under the Payment of Bonus Act, 1965" may be avoided.

Regards

I am afraid this answer is incorrect. In the fourth year, the employee could not have completed 240 days of continuous service having worked only for 6 months. Therefore, the employee under these circumstances will not be eligible for payment of Gratuity.

Vasant Nair

Q1: An employee had three manufacturing units at different places, each registered separately as a factory under the Factories Act, 1948, and each employing 50 employees.

The competent authority under the Apprentice Act, 1961, clubbed the three units and determined the total strength of apprentices to be inducted into the units.

Is the clubbing valid?

Ans: According to the law, nothing is specified, but logically, the authority can decide on the issue, and we have to obey it.

Q2: Under the Payment of Gratuity Act, 1972, an employer can withhold the payment of gratuity of an employee when the latter fails to vacate the accommodation allotted to him by the employer.

Ans: Under the act, we cannot withhold the amount; however, the charges can be adjusted while doing full and final settlement. Gratuity is a part of full and final settlement. If the employee does not vacate the premises, you can issue him a show-cause notice by marking CC to the Labour Office to avoid any future legal hurdles.

Q3: A bus conductor died of a heart attack after working hours while he was sleeping in the bus, which was standing at a bus depot. The nominee of the deceased conductor claimed compensation under the Workmen's Compensation Act, 1923.

Is the employer liable to pay the compensation to the nominee?

Ans: No! But you should be sure and must prove that he was not on duty at the time of death. The death should not be a result of any accident, and it should be natural. A medical certificate is also required.

Q4: On the basis of an agreement signed between the trade union and the management, it was agreed to pay a bonus of 30% of wages to all eligible employees under the Payment of Bonus Act, 1965.

Is the agreement valid?

Yes, the minimum set bonus is 20%! There is no maximum limit defined, but once you have given the privilege, you cannot withdraw it under the act.

Regards,

Manish Gupta

Dear Member,

In my opinion, according to Section 4(2) of the Payment of Gratuity Act, 1972, we are to consider one year for the calculation of gratuity if the service rendered by the employee is more than six months. Therefore, in this case, we are to pay gratuity for only five years of service. Section 4(2) may be read as follows:

Sec. 4(2): For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned.

In my opinion, "in excess of six months" means more than six months, and therefore, we are to consider one year if the service is in excess of six months.

Regards,
R.N.Khola

"Minimum waiting period is 5 years. Beyond 5 years, gratuity is payable, and every completed service of 6 months is treated as a year. For example, a service of 5 years and 6 months is treated as 6 years."

Dear Member,

Which section/rule requires 240 days for a bonus?

With Regards,

R.N. Khola

"Today's bonus becomes a part of CTC. But 240 days are required for the bonus."

YES, the nominee is eligible to receive compensation whether the person is on duty or off duty. He/she is always under duty, and may just be experiencing pain or needing rest. Therefore, the nominee can claim compensation.

Yes, the nominee is eligible to receive compensation whether the person is on duty or off duty. He or she can claim compensation in either case.

Dear Member,

Please inform Mr. Kundan Suman that he is required to work for 240 days. Section 8 stipulates that a minimum of 30 days of work in an accounting year is necessary to qualify for receiving a bonus.

Regards,
R N Khola

When the employee of a bank resigns from services by giving a notice of 15 days, is he entitled to pending leave encashment?

I believe that with premature resignation, the employee causes a loss to the bank, considering the bank's investment in his training, experience, low-rate loan schemes, etc. Even if the employee has joined services with another employer or bank, it seems that he resigned for his own benefit. Given these circumstances, I think he cannot claim the balance of leave encashment.

Friends, please help me and provide material on this matter.

Clubbing is right under the Apprentice Act, 1961.

If a conductor dies in a bus owned by the company, it amounts to the worker dying on the owner's premises, whether on duty or not.

Under the Industrial Disputes Act, agreements are enforceable to pay bonus at agreed terms.

Recoveries can be made from the gratuity for any amount due from an employee or for any loss owing to any act of indiscipline.

The employer is liable to pay damages if the delay is unexplained. Interest is payable in any case. Damages up to 100% can be imposed.

The eligibility for a bonus is 180 days worked in a year.

The eligibility for gratuity is for 4 years and six months of continuous service.

Hi,

Yes. Employers can apply to the Chief Inspector, and two or more factories shall be treated as a single factory.

MANOKAVIN

Clubbing is not valid. Clubbing is not valid as the place of the factory is different, and all the factories have their separate identity in the office of the factory officer.

Hi Shaziaaa,

Definitely, when an employer is late in making payments of contributions beyond the stipulated date (i.e., before the 15th day of each month), they are liable to pay damages under section 14B and interest under section 7Q of the EPF & MP Act, 1952. The rates of damages are as follows:
1. up to 2 months - 17%
2. 2 to 4 months - 22%
3. 4 to 6 months - 27%
4. 6 months and above - 37%

Therefore, by this analogy, your employer is liable to pay 27% damages on the contributions due, and additionally, interest shall be levied at 12% per annum.

KIRAN KALE
KOLHAPUR.

Dear Galatage,

No, not at all. An employee should complete 5 or more years to be entitled to gratuity.

KIRAN KALE, KOLHAPUR.

Dear Galatage,

Upon completion of 30 days of service for the unit covered under the Bonus Act, an employee shall be eligible to receive a bonus for that accounting year.

KIRAN KALE, KOLHAPUR.

I agree with Laldee, only in the case of disciplinary actions could the employer cease the payment of gratuity.

KIRAN KALE,

Dear Shaziaaa,

The contents of the agreement have superseded the provision of the Bonus Act, which states a maximum limit of a 20% bonus. However, the 30% can be bifurcated as 20% bonus + 10% ex-gratia payment when agreed upon by the employer through a settlement.

KIRAN KALE.

Neeta Y. Chawda joined as a Montessori teacher on the date 22/09/2000, at Rs 2000 fixed per month for a one-year probation period. It was mentioned in the appointment offer that she would be confirmed after the expiry of the probation period in Gujarat Mineral Development Corporation Ltd (a government of Gujarat enterprise).

After serving continuously for one year and four months, when she demanded confirmation and all benefits from her organization, another one year was extended. She has been in service for nine years and is still awaiting confirmation and all benefits. What will the future hold? Please suggest.

Dear Mr. BNP Singh,

Are you sure whatever you have posted is 100% correct and in line with specific legal provisions? I am afraid it is not. I appeal to other members to not post anything related to law unless you are 100% sure about it. The original query is not about Income Tax, but Mr. BNP Singh has unnecessarily included Income Tax in his reply and has created confusion. I am afraid that, as per the prevailing provisions under Income Tax Rules in India, no specific rebate is applicable to Bonus, and the entire amount of Bonus is treated as income. Information regarding IT Rebate on Bonus posted by Mr. BNP Singh is wrong, misleading, and factually incorrect.

NO. AS PER THE GRATUITY ACT, AN EMPLOYEE SHOULD COMPLETE FIVE YEARS OF CONTINUOUS SERVICE.

Prakash Salunkhe

An employee is a member of the Employee Family Pension Fund Scheme. He superannuates after completing 33 years of continuous service and having a pensionable salary of Rs. 12,000 per month. Calculate the monthly pension he is entitled to receive under the scheme.

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"It is not obligatory to appoint a presenting officer in the part of an employer in a domestic enquiry."

Comment on this statement giving legal reasons.

In a domestic enquiry, the employer is not legally required to appoint a presenting officer. This means that the employer can choose whether or not to have a representative present the company's case during the enquiry process. The decision to appoint a presenting officer typically depends on the complexity of the case, the seriousness of the allegations, and the company's internal policies. However, it is important to note that even though it is not mandatory, having a presenting officer can help ensure a fair and thorough investigation, especially in situations where legal expertise or advocacy skills are needed to represent the employer's interests effectively.

Dear Shaziaa,

Employee shall be eligible for Superannuation pension. Please find the calculation below for a new entrant:

1. Under Section 10(2) EPS 1995, since 33 years have been completed, his pensionable service shall be increased by adding a weightage of 2 years. Hence, he shall be eligible for a pensionable service of 35 years.

2. Under Section 11(3), the maximum pensionable salary shall be limited to Rs. 6,500 per month. Hence, the monthly pension he is entitled to is: (35 x 6500) / 70 = Rs. 3,250 per month.

You have not mentioned whether the employee was a member of the ceased Family Pension scheme or not. If yes, then the calculation would be different. Please revert if the calculation is required.

Regards,
David

Dear Mr. Khola,

This applies only after an employee completes the qualifying criteria of 5 years.

Regards, Vasant Nair

NO. He will not get compensation as his death did not occur during working hours. If personal injury is caused to a workman by accident 'arising out of and in the course of his employment', his employer shall be liable to pay compensation in accordance with the provisions of Chapter II of the Workmen's Compensation Act, 1923.

As per Section 3 of the W.C. Act, 1923, the employer is not liable to pay compensation to his nominee because the death occurred after working hours and further due to a heart attack while sleeping in the bus, which he was not supposed to do.

"If personal injury is caused to a workman by an accident ARISING OUT OF AND IN THE COURSE OF HIS EMPLOYMENT, his employer shall be liable to pay compensation in accordance with the provisions of Chapter II of the W.C. Act, 1923."

For the payment of a bonus, an employee/worker needs to work for at least 30 days in the financial year.

On the basis of an agreement signed between the trade union and the management, it was agreed to pay a bonus of 30% of wages to all eligible employees under the Payment of Bonus Act, 1965.

Is the agreement valid?

The Payment of Bonus Act provides that the maximum bonus limit is 20% only. The agreement is not valid in the eyes of the law. Section 11(1) provisions have to be taken into consideration before entering into an agreement. Section 31-A provides a special provision with respect to payment of bonus linked with production or productivity. The proviso in subsection by Act 66 of 1980 stipulates that such employees shall not be entitled to be paid such bonus in excess of twenty percent of the salary or wage by them during the relevant accounting year.

I am thoroughly confused by the post and responses given by CiteHR members.

Law generally stipulates the minimum and maximum limits for the payment of certain wages and benefits to employees. Getting what is stipulated as the minimum in the act is an employee's right, and if not paid, it is a violation of the law. Maximum limits are stipulated to protect the employer's liability, and employees cannot demand more as their right. However, if an employer is willing to pay more than what is prescribed as the maximum (20% bonus, in this case), it cannot be treated as illegal.

If the payment of a bonus in excess of 20% is a violation of the law, then what is the penalty/punishment for this violation? Can both the employer and employees be penalized for this violation?

There are many live examples where a bonus in excess of 20% is being paid. Do you mean it is a violation of the law and it is illegal?

Dear Sir,

Regarding the bonus of 30%, it can be given as a maximum of 20% as per the bonus act, and the balance as ex gratia payment.

Regards,
T.S. SRINIVASAN

Dear Sir,

On the basis of an agreement signed between the trade union and the management, it was agreed to pay a bonus of 30% of wages to all eligible employees under the Payment of Bonus Act, 1965. Is the agreement valid?

Organization can pay a bonus of the maximum allowable 20% and the balance of 10% as ex-gratia payment.

Regards,
T.S. SRINIVASAN

I fully agree with the remarks, i.e., an employer cannot withhold the gratuity amount of an employee even if he is not vacating the company's accommodation.