NIPM – Kerala Chapter.

1. NIPM – Kerala Chapter. Legal Update – 2015. An interactive session On Recent Amendments to Labour Legislations And Recent Trend setting judicial pronouncement in regard to Management of Contract Labour. Designed, Prepared & conducted By K.Vittala Rao. Management Consultant,Bangalore. 23rd May, 2015. Email: vittalarao@gmail.com

2. Recent Amendments to Labour Legislations. Legislations covered: • Apprentices Act. • Employees Provident Fund & Miscellaneous Acts • Factories Act. • Small Factories Act. • Industrial Disputes Act. • Payment of Bonus Act. • The Labour Laws (Exemption from furnishing Returns and Maintaining Registers by certain Establishments)Amendment Act,2014. • Rajasthan Model. • Wage Code Bill, 2015 • Industrial Relations Bill 2015

3. Session I Recent Amendments to Labour Legislations.

4. Apprentices (Amendment)Act,2014Brought into force from 22nd December, 2014.

5. Apprentices (Amendment)Act,2014 To simplify workflow for establishments while engaging apprentices Sec.2 (1)(d) has been amended. An employer in the private sector having pan-India operations has to go to each State/UT for work relating to engagement of apprentices which they feel that such process is cumbersome. Such employers prefer to go to respective Regional Directorate of Apprenticeship Training (RDAT) under DGE&T for engagement of apprentices. The amendment is aimed at implementation of Apprenticeship Training Scheme in those organizations which are operating business /trade in more than four States, will rest with the Central Government.

6. Apprentices (Amendment)Act,2014 Change in the definition of “Worker” Of late majority of employers hire contractual workers in their premises instead of employing regular workers thereby resulting in reduction in number apprentices to be engaged and causing training facilities going unutilized. Under the Act, contractual workers are not counted while locating the apprenticeship seats in the establishment. Accordingly, new definition of worker in clause “(r)” of section 2 of the Act is substituted Expanding the scope of Apprenticeship The scope of the apprenticeship training is enhanced in order to bring the internship/on-the-job training of other courses, all graduates in various fields such as B.A, B.Com., B.Sc., etc. may be brought under Act to enhance their skills and employability’ This is brought under the category “non-engineering”. Accordingly, Section 2(j)(K) & Section 6 is amended

7. Apprentices (Amendment)Act,2014 Government regulation on additional new trades: Optional Trades At present, the Employers can not start training in the trade/occupation under the Act in spite of having immediate potential of employment unless the government notified such trade/occupation in the Official Gazette. Now, Companies may be allowed to starts new trade without waiting for notifying such trades in the official gazette of India. But it may be obligatory for the establishment to disclose the duration and syllabi of the Optional Trades on the web-portal to check the quality of training Accordingly, section 2 & section 37 are amended. Further new section would be added to regulate optional trades..

8. Apprentices (Amendment)Act,2014 Trade-wise and Unit-wise regulation and deployment of apprentices in the service & informal sector. Employers’ associations exhorted that present system of location of seats restrict their freedom in engaging the apprentices as per their requirement and they have to engage apprentices where they don’t need. To encourage employers to engage more number of persons as apprentices, these are more liberalized provisions. The Central government shall prescribe the number of apprentices to be engaged in designated trade and optional trade. Several employers may join together themselves or through an agency approved by App Advisor according to the guidelines issued from time to time by the Central Government, for the purpose of providing training to the apprentices. Accordingly, Sec.2 (p),(q) & Sec.8 has been amended.

9. Apprentices (Amendment)Act,2014 • Age requirement : Sec 3. • Not less than 14 yrs in case of designated trades . • Not less than 18 yrs in case of designated trades in case of Hazardous industries. • Qualification: Sec. 5 A: • The qualification, period, holding test, grant of certificate and other conditions shall be as prescribed. • [Rules are yet to come]

10. Apprentices (Amendment)Act,2014 The word “may be prescribed” has been substituted by “in any designated trade”. “Designated trade has been defined as any trade or occupation or any subject field In engineering or non engineering or technology or any vacational course, which the Central Government shall notify. The scope of engaging is much wider so that number of apprentices to be engaged will , obviously, be more.

11. Apprentices (Amendment)Act,2014

12. Apprentices (Amendment)Act,2014 To encourage employers to engage more number of persons as apprentices, these are more liberalized provisions. The Training of apprentices, can, now, be taken care of by an outsider.

13. Apprentices (Amendment)Act,2014 This amendment further encourages the employers to engage persons and impart apprenticeship training, not only in designated trades, but also optional trades. The Training pertaining to basic training, related instructions etc can, now be entrusted to an Institute having adequate facilities.

14. Apprentices (Amendment)Act,2014

15. Apprentices (Amendment)Act,2014 Sec 22 ( 1): Every employer shall formulate its own policy for recruiting any apprentice who has completed the period of apprenticeship in his Establishment. • Prior to this amendment: • It is not obligatory on the part of the Employer to provide any permanent employment to an apprentice after completion of the Training and not it is obligatory to accept any such employment. Sec 22 ( 1) • However, notwithstanding the above, if there is an agreed clause incorporated in the Contract, then, the Employer shall offer the employment . Sec 22 ( 2 ) • The Supreme Court in the case of NarendrakumarVs State of Punjab, 1985, upheld this provision. “The object of this provision is to guarantee to the extent of the existence of the vacancies, that the apprentices will not be rendered jobless after they complete the Training”. • The reasons for the amendment of Sec 22 ( 1 ) is in this background.

16. Apprentices (Amendment)Act,2014 • Penal provisions amended: • Any employer who contravenes the provisions of this Act including not engaging the required number of apprentices , then he shall be given one month’s notice for explaining the reasons for such contravention. • If the Employer fails to offer satisfactory explanation or fails to offer any explanation, then, after being heard, he shall be punishable with fine of Rs. 500 per month for each short fall of apprentices for the first 3 months and thereafter Rs 1000 per month till such number of seats are filled up. • If the employer engages as an apprentice who is not qualified or fails to carryout the terms & conditions of a contract of apprenticeship, he shall be punishable with a fine of one thousand rupees or imprisonment of six months or both.

17. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Amendment 2014. Came into force from 1st September,2014.

18. Employees Provident Funds and Miscellaneous Provisions Act, 1952

19. Employees Provident Funds and Miscellaneous Provisions Act, 1952

20. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Pensionable salary

21. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Calculation of pension. Hence, arising out of this amendment, the pension will be calculated on two Calculations & the total, thus, arrived shall be the pension, subject to a Minimum of Rs. 1000 per month.

22. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Calculation of pension.

23. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Limit on payment of pension.

24. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Limit on contribution to pension.

25. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Withdrawal benefit: If a member has not rendered the eligible service required prescribed in paragraph on the date of his exit [10 yrs of contribution] or on attaining 58 yrs, he shall be entitled to withdrawal benefit as laid down in Table “D” or may opt for the scheme certificate. There is no change in this provision.

26. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Benefits to members; Pension Scheme.

27. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Return of capital: • Pension is payable for 20 years starting at the age of 58 years. • The member has an option to commute the pension to 1/3 of the amount. He will get the commuted amount: 1/3 X 100 times= The commutation amount. • The pension will be balance 2/3 per month for next 20 years. • After 20 years, the withdrawal benefit will be the pension so paid every month multiplied by 100. • If the employee do not opt for commutation, then he will receive full pension for 20 years and thereafter, the withdrawal amount equivalent to pension amount multiplied by 100.

28. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Example: Ex: 1 Pension so calculated is Rs 4500. In case he opts for commutation: 1/3 of Rs.4500 will be the commuted amount. This will be Rs.1500. Commuted amount payable to him on superannuation: 1500 X 100 = Rs.1,50,000 Pension per month will be Rs. 3000 per month. Withdrawal benefit after 20 years of pension: Rs. 3000 X 100 = Rs.3,00,000. Ex: 2 Pension so calculated is Rs 4500. He does not opt for commutation: His monthly pension will be Rs. 4500 PM for 20 years. Withdrawal benefit after 20 years: Rs.4500 X 100 = Rs.4,50,000.

29. Employees Provident Funds and Miscellaneous Provisions Act, 1952 EDLI: This additional benefit has prospective effect. Members who have died prior To 1st September, 2014, shall be governed as per the pre-amendment calculation.

30. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Provisions relating to International workers: • A new International worker who is not an existing Member of the Scheme, will only become Member of PF & not Pension Scheme. • For an international worker who is an existing member of the Pension Scheme as on 1.9.2014, out of Employer’s contribution, 8.33 % of salary is still required to be paid.

31. Employees Provident Funds and Miscellaneous Provisions Act, 1952 Amendments on the way. • Number of employees for coverage under the Act will be 10 as against 20. • HRA is likely to be deleted in the exclusion definition. It means, HRA will also attract PF contributions. • There appears to redefine the definition of “Salary”.

32. Factories Act. Amendment- 2014.

33. Factories Act. Amendment- 2014. The Amendment aims to ensure adequate safety measures and promote the health and welfare of the workers employed in Factories. The statement of Objects and Reasons states that the amendments are based on the changes in the manufacturing practices and technologies, ratification of ILO conventions, judicial decisions, recommendations of various committees and decision taken in the conference of Chief Inspector of Factories.

34. Factories Act. Amendment- 2014. Salient features: • Definitions of Factory, hazardous process, manufacturing process. It also adds hazardous substance and disability. • Ensure safety. • Workers’ safety. • Facilities for workers. • Overtime and paid leave. • Employment of women and persons with disability • Power to make Rules • Compounding of offences • Penalties.

35. Factories Act. Amendment- 2014 On account of changed process and usage of various chemicals, hazardous substances and processes, the listed activities in First Schedule do not match which the definition and controls stipulated under Environment Protection Act, it has been aligned with the same. “Disability” has been defined to identify persons affected due to process to ensure safety and social security for them.

36. Factories Act. Amendment- 2014 Definition of “Hazardous Substance”: The Environment ( Protection) Act. “Means any substance or preparation which, by reason of its chemical or physio-chemical properties or handling, is liable to cause harm to human beings, other living creatures, plants, micro-organism, property or the environment. • Definition of “ Disability” • Persons with Disabilities etc Act, 1995. • “ Disability “ means: • Blindness. • Low vision. • Leprosy-cured. • Hearing impairment. • Locomotors disability • Mental retardation • Mental illness. • “Person with disability means a person suffering from not less than forty percent of any disability as certified by a medical authority.

37. Factories Act. Amendment- 2014

38. Factories Act. Amendment- 2014 Amendments at a glance:

39. Factories Act. Amendment- 2014

40. Factories Act. Amendment- 2014

41. Factories Act. Amendment- 2014

42. The Small Factories (Regulation of employment & conditions of services) Bill 2014. In view of the amendment of the Factories Act,2014, wherein the “Factory” is being defined as 20 & 40 in case of power & no power respectively, such excluded factories are to be covered under legislation. Hence, this proposed Bill. Once, this Bill is enacted, then, those excluded under the Factories Act, shall get covered under this new Bill.

43. The Small Factories (Regulation of employment & conditions of services) Bill 2014. The Bill is a very comprehensive inclusive of certain basic elements of Factories Act, Payment of wages Act, Minimum Wages Act, Maternity Benefit Act, Payment of Bonus Act, Social security, unfair labour practices, powers of labour courts, returns to be filed, joint responsibilities of Directorate of Factories and Labour Commissioner etc. This Bill is a combination of all the above Acts.

44. The Small Factories (Regulation of employment & conditions of services) Bill 2014.

45. The Small Factories (Regulation of employment & conditions of services) Bill 2014. “ Small Factory” has been defined as: Premises where the manufacturing activities take place with workers employing less than 40. Definitions namely, Wages, Week, Day, Employer, are as defined under the Factories Act. “ Worker” has been defined as one who is employed directly whether full time or part time or through a contractor. But do not include persons engaged in Administrative/ supervisory/ managerial cadre. If the Small Factory is engaging in “Hazardous Process”, then the provisions related to such process under the Factories Act shall apply. The Authorities under this Act are both the Labour Commissioner and the Directorate of Factories.

46. The Small Factories (Regulation of employment & conditions of services) Bill 2014. It is the Registration of “Small Factory” not licensing . • The Chapters under the Bill covers: • Safety & Health Hazardous in non hazardous small factory. • Resolution of Disputes by Labour Courts & powers of the Labor Court. • Procedure in dealing with complaints of unfair labour practices. • Application of the provisions of the Industrial Disputes Act. • Retrenchment & termination. • Payment of Gratuity. • Health Insurance . • Provident Fund. • Maternity Benefit. • Leave benefits.[ 7 days CL & 7 days SL plus the Annual leave]. • Other service conditions like, attendance, late coming, absents etc. • Shift working & rest intervals, Hours of work. • Payment of Overtime @ double the normal wages. • Appointment letters, welfare facilities like First Aid, crèche, toilets/urinals etc. • No discrimination of female employees in terms of salary, service conditions, promotions, transfers, deputations etc. • Payment of Bonus, Payment of wages, Payment of Minimum wages

47. The Payment of Bonus (Amendment) Rules 2014. Rule 5: • Every employer shall on or before 1stFeb,in each year,upload annual returns in FORM D on the web-portal of the Ministry of Labour & Employment giving information as to the particulars specified in respect of the preceding year, provided that the annual returns shall be filed within the limit specified in Sec 19 of the Act. • Every employer shall on or before 1st Feb,in each year, upload annual returns in FORM D to the Inspector. The Inspector shall require production of accounts, books, register & other documents, if the same are maintained in annual form or electronic form. • In the Principal Rules, for FORM D, the new FORM D shall be substituted. This notification along with new FORM D has been gazette by Central Government on November, 10, 2014. The date of coming into force is expected.

48. The Labour Laws (Exemption from furnishing Returns and Maintaining Registers by certain Establishments)Amendment Act,2014. This Act applies to small establishments who are employing 40 or less persons. The object of this Act is to exempt such establishments from furnishing Returns and Maintaining Registers. This Act is enacted in the year 1988. Now, few amendments are passed. The Amended Act is published by the Central Government on 10.12.2014. The Amendment Act has come into force from 1st January, 2015. [Notification of central gazette dated 31st December, 2014.]

49. The Labour Laws (Exemption from furnishing Returns and Maintaining Registers by certain Establishments)Amendment Act,2014. The amendment mainly aims at: • Submission of Annual Returns as prescribed. • The First Schedule list all the Labour Laws applicable. • The Second Schedule : Annual Returns in FORM I, FORM II-Register, FORM III- Muster Roll-Cum-Wage Register.

50. Industrial Disputes Act, 1947. Insertion of Sec.9C: Grievance Redressal Machinery. This amendment has brought into effect in the year 2010. • Enhancing the wage limit to Rs.10,000 as against Rs.1600 in the definition of “Workman”. • Sec. 9C – Grievance Redressal Machinery.