Who Counts as a Manager Under MLWF? Seeking Clarity for My Engineering Company

Hello Everyone, I had to get my company registered under MLWF. I have gone through the complete act. However, I wanted to understand who is considered a manager under the act. The act states that Managers and Supervisors do not come under it. Corporates have so many people designated as Managers these days, and so does my company.

Understanding Managerial Exclusion in MLWF

Secondly, we are an Engineering company and hardly have any labor category. Am I expected to pay MLWF for all of them or skip the Manager and above category?

Regards,
Treesa George

According to the Act, managers and supervisors are those who play a role in an administrative capacity. So, you don't need to pay MLWF for these individuals. Don't worry; you will not have any problems. We are also an engineering company, and we are following the same practice without any issues.

Go ahead and pay MLWF for laborers only.

Regards,
Arun J.

Thanks a lot for your feedback. It was only in January 2013 that we got ourselves registered. Moreover, we included most of our employees based on the recommendation from the consultant. So, in June, can I show a reduced number?

Yes, you can pay MLWF only for laborers, regardless of the figure you provided during registration. If in June 2013 the number is lower, there won't be any issues. You can seek suggestions from your consultant.

Arun J.

Sorry, but the advice given to you by our colleagues here will get you into trouble. Managers are not defined in the act, but both the Factories Act and the Shop and Establishment Act provide who is a manager. In the Factory Act, everyone is a worker, starting from the lowest unskilled to the factory head. Exceptions are provided specifically for some individuals in confidential positions (clearly defined). However, they are still workers, so you have to pay for them as well.

In the Mumbai Shop and Establishment Act, the number of managers is defined in Schedule II, which limits managers to 5% of the total number of employees. So, regardless of how many people you designate as managers, they are not considered as such under the Shop and Establishment Act.

I would advise you to stick with the numbers you have mentioned earlier. It's a small amount (Rs. 12 per person per half year). It's not worth getting into trouble over that.

Understanding the MLWF Act

What is the MLWF Act? Since our forum is a national or international platform, I believe that if our friends provide the full name of the Act(s), it will be more useful for knowledge and understanding.

Understanding the Definition of 'Manager' Under Various Acts

The meaning ascribed to the word 'Manager' under the Factories Act and the Bombay Shops Act cannot be imported into the Bombay Labour Welfare Fund Act to define 'Manager' under the said Act. This is because the purpose and objectives for designating a manager under the Factories Act and Shops Act are to hold them responsible for the administration of the respective establishments under those laws, as is evident from the various provisions of those laws. Thus, it is different from the purposes and objectives of the Labour Welfare Fund Act. The purpose of the Labour Welfare Fund Act is to cover employees for welfare activities, except managers.

The word 'Manager' is not defined by the Labour Welfare Fund Act. However, the word 'employee' has been defined as a person employed for hire to do skilled, unskilled, manual, clerical, supervisory, or technical work, excluding managers and supervisors drawing wages exceeding Rs 3500/- per month. Therefore, a manager is someone who is not doing any of the above categories of work, which an employee does, but is doing something other than that. This implies that he must be someone who is discharging functions of the nature of supervision and control, like taking decisions or giving directions to subordinates, etc., and therefore includes all those persons falling under this excluded category, but not merely those who are designated as managers under the Factories Act or Shops Act.

Regards,
B. Saikumar

[Phone Number Removed For Privacy Reasons]

I should have been more clear. The MLWF Act defines employees as excluding managers and supervisors. However, this is not just in name. It refers to those actually performing supervisory or managerial tasks. If you label everyone in the office as a manager or assistant manager, they are unlikely to accept it. You need to assess whether an individual is genuinely supervising or managing others, including how many people report to them. In the case mentioned above, I don't believe that approach would meet the criteria. Moreover, in a dispute, proving such designations and responsibilities for each person would be challenging, and it's not something I would prefer to do in front of a labor officer or court. Therefore, it may be more practical to consider compensating everyone (especially given the small amount at stake).

Furthermore, labor officers in Maharashtra seem to be following the Shop and Establishment Act, indicating that they will not recognize more than 5% of the employees in an office as managers. I encountered a case illustrating this just yesterday (quite a coincidence).

Regards

The Bombay Labour Welfare Fund Act 1953

The Bombay Labour Welfare Fund Act 1953 is applicable to all factories and establishments defined under the Bombay Shops & Estt Act, along with certain others. The employee's contribution is Rs.12, and the matching employer contribution is Rs.36 per month. The 'employee' covered under the Act is well-defined. Extension or importing definitions from other Acts are not warranted. Delay in payment attracts a penal interest of 2% per month. The question of who is a manager or supervisor is a matter of fact that has to be proven in case of any dispute.

There is absolutely no confusion about the meaning of 'manager' in the context of the Labour Welfare Fund Act, as the courts have clearly settled the issue, as reflected in the replies of some members above.

Regards,
B. Saikumar
Mumbai

How can an establishment be exempted under the Karnataka Labour Welfare Fund Act, 1965? Kindly guide us on the basis we can seek exemption from making contributions under the above act.

The definition of 'employee' in the Maharashtra Labour Welfare Fund Act 1953, Section 2, excludes a person who is employed mainly in a managerial capacity and supervisors drawing a salary in excess of Rs 3500/- carrying out functions mainly of a managerial nature. It also excludes an apprentice under the Apprentices Act 1961. Therefore, there is no need to import any definition from other Acts as it is clear that Managers and Supervisors are not employees as per this Act itself.