Understanding MLWF Act: Manager Classification and Employee Exclusions

Hello Everyone,

I had to get my company registered under MLWF. I had gone through the complete act. However, I wanted to understand who is a manager under the act. As the act says that Managers and Supervisors do not come under the Act. Corporates have so many people designated as Managers these days, so is my company.

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.

Treesa George

Dear 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.

Arun J.

Thank you very much for your feedback.

It was only in January 2013 that we registered our company. Additionally, we included most of our employees in the registration process based on the recommendation from the consultant. Therefore, in June, can I show a reduced number?

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.

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.

Dear Sir,

MLWF stands for Maharashtra Labor Welfare Fund, where employees and employers contribute a certain amount to the welfare fund. This amount is utilized by the government for the welfare of workers.

Arun J.

The meaning ascribed to the word 'Manager' under the Factories Act and the Bombay Shops Act cannot be imported into Bombay Labour Welfare Fund Act to define 'Manager' under the said Act since the purpose and objects for designating a manager under the Factories Act and Shops Act are for holding them responsible for administration of the respective establishments under those laws as is evident from the various provisions of those laws and thus is different from the purposes and objectives of 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. But the word 'employee' has been defined as a person employed for hire to do skilled, unskilled, manual, clerical, supervisory or technical work excluding managers & supervisors drawing wages exceeding Rs 3500/-p.m..Therefore a manager is some one who is not doing any of the above categories of work which an employee does bt doing something other than that which implies that he must be some one who i s 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.

B.Saikumar

Mumbai

09930532927

Hi Anand,

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).

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 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.

Thank you very much for all your insights. However, it seems like a very controversial discussion. After studying the facts, to be honest, I couldn't come to a conclusion on this matter. Nevertheless, I will attempt to determine what can be done by June.

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

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.