07/21/2024

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Tamil Nadu labour laws

This article is authored by Aaron Thomas. The article looks into the history, origin and character of labour laws. The labour laws applicable in Tamil Nadu have been expanded at length in this article and it demonstrates the effect it has on workers and employers alike. The laws that have been enacted by the Central and State Governments have been mentioned in this article. Through meticulous research and analysis, this article aims to demystify complex legal concepts, making them accessible to a diverse audience.  

It has been published by Rachit Garg.

Introduction

The state of Tamil Nadu has a rich cultural heritage, a dynamic workforce and a vibrant economy. At the centre of this bonhomie atmosphere is an intricate web of labour laws that govern the rights and obligations of both employers and employees. These labour laws may be those enacted by the state or the centre and enforced by either the centre or the state or they may be jointly enforced by the centre and the state. A cogent understanding of all these laws is crucial for both employees and employers to navigate the labyrinth of duties and obligations that have been explicit in this Act. This article aims to provide a comprehensive understanding of the labour laws applicable in the state of Tamil Nadu and it aims to serve as a practical guide for any individual navigating through Tamil Nadu labour laws. This article shall also contain case laws that laid down crucial jurisprudence for every Act mentioned in this Article.

Definition and scope of labour laws

The definition of labour law in general reads as follows:

“The body of rules either deviating from or supplementary to the general rules of law, which regulates the rights and duties of a person accepting the work of a subordinate.”

The aforementioned definition explicates labour laws as the corpus of rules that an employer has to follow while availing of the services of his employee. But what exactly are an employee and an employer? How does one differentiate between an employee and an employer? If an individual is his own master (running his own business), is he an employee or employer? These questions that give an unequivocal definition of what an employer and employee are have to be explicitly set down before we enunciate on the nuances of Tamil Nadu Labour Laws. 

The difference between an employee and employer in labour law, as opposed to an individual working for another in any other field, lies in his state of dependance. The subordination of an employee to his employer is of paramount importance in determining the responsibilities of the employer. The most precise expression of this subordination is the ‘right to direct an employee’. By virtue of this principle, for an employee-employer relationship to exist, the employee must be subject to the working conditions and working hours mandated by the employer for a particular job. This principle can be found in the law of torts as well, wherein the master is exempt from any prosecution arising out of vicarious liability from the actions of an independent contractor because the master does not possess the right to command over the independent contractors. 

This brings us on to the question of whether individuals who are not subordinate to another and are in charge of their own employment and the activities thereof come under the definition of ‘employees’. By the principles of labour law, these individuals are also employees, vis-à-vis their economic dependence on their labour and the subsequent restrictions to the freedom of movement arising therefrom. Examples of these individuals are hairdressers, taxi drivers, etc. So it goes to reason that an individual who enjoys a comfortable level of autonomy with regard to their actions and time would not be classified as an employee; this is the case for presidents, executives, and corporation heads. Although they are still technically employees, they are subordinate to the corporation, which is a legal person. However, the corporation cannot directly supervise or control the executives at any moment. These executives, which include the general directors, executive officers, and statutory representatives of the corporation, assume the role of employer and inherit the rights and duties labour law has established for them.

Labour law does not concern itself with just the relationship between employee and employer; it also deals with many matters concerning worker safety and wellbeing. These laws direct the course of action with regard to the performance or acceptance of the work of a subordinate and the benefits to him. Oftentimes, these benefits are not extended to just the labourer; the legal heirs would also benefit. It has to be noted that, as of late, the statutes in labour law that address societal distress, such as the one mentioned above, often tend to disregard the bond of kinship and grant benefits based on economic criteria. Those who were economically dependent on the labourer but lacked any legal relationship with him would be eligible to receive any benefit mandated by labour laws. The law is peculiar with regard to whom the benefits are extended; children of the labourer above the age of eighteen are excluded as they are considered legally capable of engaging in work. The example above shows the exceptions to the general principles of labour laws and these exceptions can be found throughout these laws.

Character

The entirety of labour law was not formulated from scratch; it is a concoction of a multitude of heterogeneous laws that are imported from all the classical branches and subdivisions of law and are clustered around one social phenomenon: ‘the performance of work by a social worker’. After all these laws are brought together into a singular piece of legislation with the intent of serving the needs of a particular sector of society, they morph the characteristics and subsequent interpretations of the existing rules that were brought together to form such legislation. This morphing is indubitably for the benefit of those who avail themselves of this law, as these laws are moulded to serve the particular purpose for which the legislation is intended. These laws are brought together not by reason of similarity in their legal nature but by the identity of the social situation to which they apply. An example of this phenomenon is the French administrative law. Labour law, by virtue of its concocted genesis, possesses a spontaneous character and a particular spirit. The legislators are well aware of the autonomy of labour laws and have hence created special labour courts for the administration of labour laws.  

History of labour laws 

Origin

Labour law is by no means a new discipline. There have been some duties and obligations on the employer and the employee ever since one man started working for another. Unlike today, labour laws were not always governed by public law. In ancient times, when slaves were the property of their masters, labour laws were private laws as they laid down the statutes surrounding slaves. Parallels cannot be drawn from ancient labour laws to modern labour laws. Unlike modern labour laws, ancient labour laws were not in place to protect an individual in service of another. The cardinal onus of ancient labour laws was to keep in check the tendency of an employer to abuse his power. The laws that were present in ancient Greece and Rome were enacted with the sole intent of protecting the servants from unscrupulous exploitation by their masters. With time, these laws became stronger and more codified. In the middle ages, we find detailed regulations dealing with ‘dependent’ labourers.

A vast majority of the regulations present at the time were not brought into effect by the government, be it provincial or municipal. These regulations were established by the guilds. These guilds bear a great semblance to today’s trade unions. These guilds effectively functioned through cartelization. A number of these guilds would band together and lay down regulations regarding wages, working conditions, etc.; the employers would have no choice but to accept these working conditions if they wanted to hire a labourer. These guilds didn’t restrict themselves to making rules and regulations that just concerned labourers; they also protected the interests of the nation and its people by imposing strict legislation through the government. 

These guilds also protected the interests of businesses in their respective regions. In the Middle Ages, night work was prohibited. There were many practical reasons behind this prohibition but the rationale behind this decision was the control of production, i.e., to prevent other businesses from doubling their production by working the night. These guilds eventually started working to the detriment of the employees by considering only the guild’s interests and ignoring the needs of the labourers. These guilds were made illegal by making cartelization unlawful and thus the paraphernalia for this illegalization ultimately worked to the detriment of the labourers by stripping them of the protection or higher wages that would have been granted to them by these guilds. The labourers, however, found ways to get around these laws and still unionise under different veils and guises. 

Modern history

The unprecedented decimation brought about by the First World War left almost half of Europe in dire need of labourers for reconstruction. This large-scale reconstruction effort put the plight of labourers in the limelight.

In Great Britain, the Whitley Commission recommended that ‘industrial councils’ be established throughout the world. The third Inter-Allied Labour and Socialist Conference, in its February 1918 report advocated for the establishment of an international body for the protection of labour rights. As the end of the war neared, a meeting was organised in Berne in 1919 by the International Federation of Trade Unions (IFTU). The meeting was boycotted by the president of the American Federation of Labour (AFL), Samuel Gompers, as the IFTU wanted the delegates of central powers to be treated on par with the others. Gompers considered it a disgrace for the others to be treated on par with the delegates of the Central Powers, and he wanted them to be in a subservient position for causing the war. Unhindered by America’s absence, the Berne meeting transpired as scheduled. The final report demanded an end to wage labour and the establishment of socialism. 

The proposal to establish an international parliament to legislate upon labour laws was set forth by the British. This idea was vehemently opposed by the Americans because of one covenant; the British wanted to make the enforcement of the labour laws enacted by the international parliament mandatory for the member nations, but the Americans resolutely opposed this idea. Despite British protests, they caved into the demands of the Americans and made it so that the laws enacted by this international parliament would only serve as recommendations. 

The final report of the Commission was issued on March 4, 1919, and the final report was adopted by the Peace Conference without amendment on April 11. This report is enshrined in Chapter VIII of the Treaty of Versailles. Thus, the International Labour Organisation was formed through the Treaty of Versailles and Albert Thomas became its first Director General. 

Indian origin and history

The very first labour legislation in India was the Apprentice Act of 1850. This act was enacted to enable children who were brought up in orphanages to find employment when they came of age. The Apprentice Act was followed by the Factories Act of 1881. Upon a glossary oversight of this act, one would unambiguously conclude that this Act was enacted as a welfarist measure but they would be wrong if it was enacted with British interest in mind. 

Although there existed a plethora of major union organisations of workers based on different political ideologies, the first central union trade organisation was the All India Trade Union Congress, which was established in the year 1920. At around this time, workers at Buckingham and Carnatic Mills in Madras went on a strike led by B.P. Wadia. The management of the company brought a civil suit against the protesting workers and the company was awarded an injunction and damages from the labourers for breach of contract. This legal prosecution outraged labourers throughout India and afterwards, there were widespread protests. These protests finally yielded the enactment of the Trade Union Act of 1926. This act gave the labourers immunity against certain criminal and civil offences. The act also included many provisions that facilitated better cooperation between the labourers, their masters, and the government. 

Tamil Nadu history

The history of the Labour Department in Tamil Nadu can be traced as far back as the 1920s. In the genesis of the Labour Department, it predominantly concerned itself with the welfare of unorganised labour. The department has hence evolved to include, within its ambit of functions, the welfare of the organised sector too. The Tamil Nadu government has adopted several liberalisation policies and has become one of the most industrialised states in the country. The government has been vehemently enforcing the Industrial Disputes Act to conciliate and settle industrial disputes to create a congenial atmosphere. The government has also been enforcing a slew of other Acts that were created by them and also the Acts that were created by the Central government.

Presence of labour laws in the Indian Constitution

Labour is an item on the concurrent list and thus, the Union and State governments are empowered to legislate on labour matters and administer them. The majority of important legislation has been enacted and enforced by Parliament. A wide variety of items have been legislated upon; these include but are not limited to, training and safety of workers, employment, bonded labour, women and child labour, adjudication of industrial disputes, compensation in case of accident, gratuity, provision for paying bonuses, etc.

Labour law can broadly be classified as follows:

  1. Labour laws are enacted by the Central Government, where the Central Government has the sole responsibility for enforcement.
  2. Labour laws are enacted by the Central Government and enforced both by Central and State Governments.
  3. Labour laws enacted by the Central Government and enforced by the State Governments.
  4. Labour laws enacted and enforced by various State Governments that apply to the respective States.

Labour laws find their roots in the provisions of the Constitution and the International Conventions and Recommendations. Labour laws derive their strength from the Fundamental Rights and Directive Principles of State Policy enshrined in Chapter III and Chapter IV of the Constitution. In Chapter III, Articles 16, 19, 23, and 24 deal with the relevance of protecting and safeguarding the interests of labourers as human beings. In Chapter IV, the Articles that deal with the same are 39, 41, 42, 43, 43A, and 54. 

Labour laws in Tamil Nadu

We shall now expand on the Labour Acts that are applicable in Tamil Nadu. The Acts discussed will include those that have been formulated and enforced by the Tamil Nadu government and also the Central Government. Acts that have been enacted by the state in conjunction with the state government will also be deliberated below.

The Trade Union Act, 1926

History 

Trade unionism has seen an eruption in popularity owing to the growth of industrialism and capitalism. Since the majority occupation in India is agriculture, trade unionism has historically been restricted to industrial areas. The process of setting up trade unions in the unorganised sector is going through a period of rapid development now. The earliest recorded trade union in India is the Bombay Millhands Association, founded in 1890. A slew of other trade unions followed and they are listed below in chronological order:

  • The Amalgamated Society of Railway Servants of India and Burma, 1897
  • Printers Union, 1905
  • The Bombay Pastel Union, 1907
  • The Kamgar Hitwardhak Sabha, 1910

It had been mentioned previously that the need for labour rights and unionism was accentuated by the First World War. The plight in India was no different; National Trade Unions began to form after World War I.

The Indian Trade Unions Bill received the assent of the legislature on March 25, 1926. It was brought into force on June 1, 1927, as the ‘Indian Trade Unions Act of 1926’. This name was changed to just ‘Trade Union Act, 1926’ by Section 3 of the Indian Trade Unions (Amendment) Act, 1964.

Objective and scope

The cardinal objective of this act is to explicitly state the necessary mandates for registering a trade union in India and to regularise labour-management relations. This Act applies to the whole of India and it applies to all kinds of unions of workers and associations of employees. The broad application of the Act can be classified as:

  • To lay down the requisites for registering a trade union in India
  • To make clear the obligations and liabilities that have been imposed upon a trade union.
  • To make clear to the judiciary and the executive the rights of a registered trade union.

Definitions

Under Chapter I of the Act, we can see the multitude of definitions that have been laid down for the convenience of comprehension in the latter chapters. Under Section 2(g) of the Act the definition of trade dispute is provided;

A trade dispute may include a dispute between an employer and an employee, between an employee and an employee or between employers and employers. These disputes may be connected to the employment, non-employment, terms of employment or working conditions of the said job. Employers in this instance are any individual that may be engaged in trade or commerce and does not necessarily have to be associated with the employer implicated in the dispute.

Trade Union

A trade union includes any combination that may be permanent or temporary, formed for regulating the relations between workmen and employers, between workmen and workmen, between employers and employers or for imposing restrictions on how business or trade is conducted. This restriction can also be imposed on two or more trade unions with certain exceptions.

Registration

Chapter II of the Act deals with the registration of trade unions. It is not mandatory to register a trade union, but to avail themselves of the civil and criminal protection granted to them, they must be registered.  

  • A trade union can be started by employees or employers; the minimum mandate for either is seven. If more than half of the applicants of the proposed trade union give notice to the Registrar dissociating themselves from the application, the application becomes null. 
  • The application must encompass a copy of the trade union and the following:
  • The names, occupations and addresses of those making the application,
  • The name of the trade union and the proposed place of its headquarters,
  • The names, ages, addresses, titles, and occupations of the three office bearers.
  • If the Union has been in existence one year prior to the date of application for recognition as a trade union under the law, a general statement of assets and liabilities of the trade union shall be submitted along with the application.

The provisions to be contained within the rules of the trade union, which have to be submitted along with the application, are as follows:

  • The name and objective of the union,
  • The entirety of the purposes for which the union shall use its general fund. These purposes should be lawfully applicable under this act. An ambit for an annual audit shall also be laid down.
  • The name of its members includes the ad-hoc members that may be admitted by the Union by virtue of overlap between the labourer’s field of work and the field in which the union carries out its business.
  • The amendment methods and the appointment and removal of the executive board shall also be prescribed.
  • The circumstances under which a member of the union may receive compensation from its part,
  • The manner in which the trade union may be dissolved.

The Registrar may call for any further documents to satisfy the veracity of the trade union or to make sure that this trade union does not resemble any other existing trade union or so nearly resembles such a name as is likely to deceive the public or the members of either trade union. The Registrar, if content that the proposed union has complied with all the requirements of the Act with regard to registration, shall grant a certificate of registration to the trade union.

The Registrar can cancel the certificate if it is found that it was obtained by deceit or if the union itself submits an application for dissolution. The Union has to be given adequate grounds to be heard before they are cancelled, failure of which will deem the cancellation order illegal.

Any person aggrieved by not receiving a certificate of registration by the Registrar or if the Registrar decides to cancel or withdraw the certificate at a later date is eligible to file a complaint, within such a period as prescribed, to the High Court with appropriate jurisdiction or to a court not inferior to the Court of an additional or assistant judge of a principal civil court of original jurisdiction. The appellate authority may dismiss the appeal or pass an order directing the registrar to issue a certificate of registration to the trade union.

The registered headquarters of the office shall be deemed to be the registered office of the trade union. All correspondence from any individual or entity to the trade union shall be sent to the address of the headquarters. A change of address for the headquarters should be addressed to the Registrar within 14 days of such a change.

Legal presence

  • A registered trade union is a body corporate under its registered name. This body will also have perpetual succession and a common body seal with the power to acquire property and to sue and be sued.
  • Certain acts do not apply to the Trade Union Act; these are-
  1. The Societies Registration Act, 1860
  2. The Companies Act, 1956
  3. The Co-Operative Societies Act, 1912

General corpus

Chapter III of the Act deals with the rights and liabilities of registered trade unions. The Act specifies how the general fund of the union should be spent, namely:

  • The payment of salaries of the office bearers,
  • The management of trade disputes on behalf of the trade union and the compensation for members of the trade union for loss arising out of the trade dispute
  • Providing allowances to a member or their dependents for any unfortunate circumstances,
  • Providing for the socio-cultural development of the members or their dependents 
  • To fund the legal obligations of the trade union,
  • The regular publication of a journal which debates issues pertaining to employers or workers,
  • To further the goals of the trade union in improving the working conditions of the workers.
  • Any work that may be notified by the appropriate government.

The Act stipulates that there should be a separate fund for the contributions to or from that fund for the purpose of furthering the political or civic interests of one of its members. The expenditures from this fund are listed below:

  • The payment for a member of the union in an election for any legislative body also extends to the activities before, during, or after the election.
  • The advertisement of the candidate by handing out any literature or activities of the sort
  • The registration fee or the charges for maintaining an individual in an office.

No individual shall be compelled to contribute to the general fund or the political fund. In the event of non-contribution, an individual shall not be exempt from any benefits or privileges of the Union.

Exemptions and prosecution

  • No member of a registered trade union shall be liable to punishment for any act or agreement entered into for the benefit of the Union unless the agreement entered into was an agreement to commit an offence. No civil suit can be brought against the trade union, any office bearer, or any member for any action taken in anticipation of or in furtherance of any objective of the trade union solely on the grounds that such action encourages another individual to breach the employment contract or interfere with another person’s trade, business, or employment. Any legal proceeding cannot be brought against a trade union for a tortious act of a member, provided that the individual acted without the knowledge or prior consent of the executive of the trade union.
  • An agreement between a trade union and its members may not be deemed void or voidable merely because the agreement is a restraint of trade. There are no provisions in these sections that will enable civil courts to prosecute the trade union for restricting a business, by agreement, against selling any goods or transacting business.

Rights of stakeholders

  • The account book of the trade union or the list of members shall be open to inspection by an office bearer or by an employee at such times as have been prescribed by the rules of the Union.
  • Any individual who has attained the age of fifteen can become a member of a trade union. This member shall enjoy all the rights and privileges of the Union and shall also dutifully follow the rules and regulations set down by the Union.

Office bearers

The Act stipulates the qualifications and grounds for dismissal of an office bearer or any executive. The grounds are as follows:

  • If the executive/office bearer is not 18 years of age
  • If he has been convicted by a Court in India and subsequently imprisoned, he cannot hold office unless a period of 5 years has elapsed since the date of exoneration.
  • At least half of the office-bearers of the trade union have to be associated with the industry the trade union engages in.

Change of name & amalgamation

  • For a trade union to change its name, it should receive the consent of not less than two-thirds of the total members.
  • Two or more registered trade unions can become one trade union by amalgamation without affecting either of their general funds. For the amalgamation to happen, a minimum of half of the members of either trade union must vote and among the tabulated votes, not less than 60% should be in favour of the amalgamation. After amalgamation, the rights of creditors to either trade union remain the same.
  • A written notice should be sent to the Registrar in case of a change of name or amalgamation. The letter seeking permission for registration of change in name should be signed by the Secretary and seven members of the trade union and sent to the Registrar of the state in which the headquarters of the trade union is situated. For amalgamation, a written letter containing the signature of the Secretary and seven members of both the trade union’s party to the Amalgamation should be sent to the Registrar of the state where the proposed headquarters of the amalgamated trade union is to be situated. 
  • If the new name proposed by a trade union is similar to that of an existing one, the Registrar would deny registering the change of name. If the Registrar is content that the name is not similar to another trade union, he will register the change of name.

Dissolution

  • The letter for dissolution should be sent to the Registrar within 14 days of any course of action for dissolution. The Registrar, if content that the dissolution has been effected in accordance with the rules that have been set down by the trade union, shall grant permission for dissolution
  • If there is absence of rules in the rulebook of a registered trade union for the division of the general fund after dissolution, the Registrar shall divide the funds amongst the members.

Returns

As mentioned above, the trade union will have a general fund, and some may have a political fund. The steps for regulating these funds are as follows:

  • The audited statement, which includes the income and expenditure for the year ending on 31st December, as well as the assets and liabilities of the trade union that existed on that day, should be sent to the Registrar.
  • If a rule of the trade union has been altered by the office bearers, it should be sent to the Registrar within fifteen days of making the alteration.
  • The Registrar or any officer authorised by him has the right to examine any document at the registered office of the trade union at any time.

Regulations

Chapter IV of the Act deals with regulations. The appropriate government may, at any time, make regulations for enforcing the provisions of this Act. These provisions include making amendments to the manner in which trade unions shall be registered, transfer of registration, the qualifications of the auditor, the inspections and upkeep of the records, etc. These regulations shall be published in the Official Gazette and such publication shall be brought into force as an Act.

Penalties & procedures

Chapter V of the Act specifies the penalties and procedures.

  • If a trade union fails to submit its returns to the Registrar by the stipulated date, the office bearers shall be liable to a fine. This fine shall increase if there is continued delay. Any individual who willfully furnishes false entries into the statement shall be liable to a fine.
  • If an individual willfully deceives a person who is seeking to join a trade union by giving false information regarding any trade union,  he shall be liable to a fine.
  • Only if a person files a complaint can a case be filed and tried. No court inferior to that of a District Judge or a Magistrate of the First Class.

Related cases

The Managing Director, Luminous Power Tech Vs. Manoj Kumar and Ors.

Facts and history

In the case, writ petition before the High Court of Shimla has been filed by Luminous Power Technologies through its Managing Director. It has been filed seeking to quash the order passed by the Labour Court-cum-Industrial Tribunal, Kangra at Dharamshala. The petitioner company was expanding its units in Hosur Tamil Nadu and for the job they ordered twenty-five men to relocate and start work. Of the twenty-five workers who were ordered to relocate, only thirteen did so immediately, the other twelve did not relocate and as such they were prohibited from entering the premises of the factory at Gagret, Tehsil Amb, District Una. The workers then filed a complaint notice before the Labour Conciliation Officer and the respondents countered that this complaint was only filed because the petitioners did not want to be transferred. The act of the Labour-cum-Conciliation officer in issuing the notice has also been challenged, as he did not issue the notice to the competent authority dealing with the matter.

The respondents highlighted clause two of the appointment letter which stipulated that the Management has the right to transfer any workman to any part of India for the purposes of furthering the objectives of the company. It was argued that this clause legally binds the workman as per the Indian Contract Act, 1973. There was also an allegation that the Union was not registered. After the hearing, the Labour-cum-Industrial court cancelled the transfer order passed by the petitioner company. As for the legality of the Union, the Tribunal was of the opinion that the Union was still in the process of registration and it was not fully registered and their application had also been rejected once. There was also no trace of unfair labour practices on the side of the Company. 

Procedure

  • The petitioner heavily relied on the terms and conditions of the appointment letter served to the workmen. In this letter, it is explicitly stated that the job is transferable and thus transfer from one factory to the other was wholly justified. 
  • The petitioner also relied on the fact that Luminous Powers Technology Workers Union was not a registered trade union under the Trade Union Act and this fact was clearly depicted in the letterhead of Workers Union. Hence the complaint made by Manoj Kumar, President of the Union was untenable.
  • The respondents stated that the requisite documents for the registration of the Union had already been submitted. When the management came to know about the submission of documents for the formation of the Union, it was said that they actively tried to thwart the process of registration.
  • The respondents made certain demands; these included
  1. The transfer be cancelled and the workmen be retained with full wages;
  2. Neutrality be maintained in the registration process;
  3. Continuity in service.
  • The petitioner contended that they did not interfere in any way in the registration process of the new Union.

Issues

  • Whether the demand notice issued by an unregistered trade union is maintainable. 

Judgement

  • The Union, admittedly, had not been registered under the Trade Union Act and as such it cannot be classified as a trade union under the Act. 
  • A case that had a similar subject matter was the State of Bihar v. Kripa Shankar Jaiswal (1960). In this case, it was held that a dispute becomes an industrial dispute even if it is sponsored by a non-registered trade union. This view of the Supreme Court was again reiterated in the case of The Management of Pradip Lamp works v. Workmen of Pradip Lamp Works (1969). 
  • As there exists little to no ambiguity on the matter referred to above, this Court also holds that the Labour-cum-Industrial Tribunal was not wrong in entertaining the notice served to them by the Union. When the efforts for reconciliation failed, the Labour-cum-Conciliation officer was right in submitting the report to the appropriate government. 
  • The Court held that they could not review or reweigh the evidence that has already been subject to extensive review by the Tribunal.  Therefore, the award passed by the Labour-cum-Industrial Tribunal is upheld and the present petition is dismissed.

The Tamil Nadu Shops and Establishment Act, 1947

History

The Tamil Nadu Shops & Establishment Act of 1947, was enacted shortly after India gained independence. The Bill received the assent of the Governor and became an Act in 1948, post-publication in the Fort St.George Gazette on February 10, 1948. The Act was amended in 2018 through the Tamil Nadu Shops & Establishment (Amendment) Act, 2018. The latest amendment to the Act came in 2023. The purpose of this amendment was to ensure a prominent display of the names of shops and establishments on name boards in Tamil. This amendment further encompasses certain changes to the provisions of the Act to be in line with the Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016, which was approved by the Union Ministry of Labour and Employment.

Scope

This Act covers the entire state of Tamil Nadu and it monitors the functioning of businesses and establishments in the state. It lays down rules and regulations governing the working conditions and upkeep of shops, movie theatres, restaurants, other establishments, etc. This Act also aims to protect the working conditions of employees by safeguarding their wages, working time, working conditions, prevention of child labour, holidays, etc.

The provisions in the 1947 Act mandate that any shop or establishment carrying out its operations in Tamil Nadu must get a Shop and Establishment licence. This provision was amended in 2018, mandating only shops or businesses that employ more than ten people to register and obtain the licence. Parallels can be drawn from this Act to the central-level legislation that exists on the matter, which is the Model Shops and Establishment Act of 2016.

Definitions

Chapter I of the act defines a multitude of terms that are imperative in later chapters. Some of the important definitions have been enunciated below:

  • A ‘child’ is someone who has not completed 14 years of age.
  • A ‘commercial establishment’ need not necessarily be a shop that carries out day-to-day sales; it may also be an institution that undertakes any activity in the interest of profits. Some examples of these are banks, advertising agencies, industrial undertakings, joint stock companies, insurance agencies, etc
  • The definition of an ‘employed person’ differs depending upon the field of labour the person engages in. The definitions are as follows:
  1. In the case of a shop, it shall be a person employed in connection with the principal business of the shop;
  2. If it is a factory, it shall be a person employed as clerical staff;
  3. If it is a commercial establishment, it shall be a person engaged with the business of the establishment;
  4. If it is a restaurant, it shall be a person undertaking the responsibility of preparing or serving the food prepared; 
  5. If it is a theatre, it shall have a person employed to ensure the smooth functioning of the establishment; 
  6. If it is an establishment that does not fall under the categories listed above, a person who is connected to the business can also be listed as an employed individual.
  7. For all of these establishments, the cleaning staff shall also be designated as employees of the establishment. This designation, however, does not extend to the family that may be dependent on the employee.
  • ‘Wages’ are defined under this Act as any remuneration that is capable of being expressed in terms of money and would be receivable if the terms of the contract of employment were fulfilled.
  • No provision contained in this act shall extend to the following individuals/establishments;
  1. A person in a managerial position,
  2. A person who travels a lot for work
  3. Establishments that come under the Central or State Governments or the RBI,
  4. Establishments in oil and mine industries,
  5. Temporary establishments (those not exceeding 15 days).

Shops

Chapter II of the Act deals with the regulations surrounding shops. This chapter includes rules and regulations mandating working hours, the jurisdiction of sales, the wages of employees, etc., of the shops. These facets of the Act have been expanded below.

  • The act lays down the closing time for the shops within the State. This time is fixed by the State Government. This time may vary for different shops and also for different times of the year. No sales are to occur outside of a shop after the closing time.
  • The working hours of employees are restricted to eight hours a day and workers are forbidden from working more than forty hours a week. This period may be extended to ten hours a day which would permit the worker to work fifty hours a week, provided that overtime wages are duly paid. No person working in a shop is allowed to work for more than four hours continuously without being given a break.

Establishments other than shops

Chapter III of the Act wholly deals with establishments that are not shops. This chapter lays down the rules and regulations for establishments other than shops. 

  • Just as for shops, Establishments Other Than Shops too have a stipulated opening and closing time and no Establishments Other Than Shops are to open or close before the times mandated. The opening and closing times are fixed by the government. The government may fix different times for different areas or for different times of the year.
  • Wholly in accordance with the provision for shops, the working time for employees employed in Establishments Other than Shops is barred at eight hours a week and subsequently forty hours a week. This time may be extended, provided that overtime wages are paid. An employee should not work more than four hours a week unless he has an interval of one hour.
  • The employees of Establishments Other Than Shops shall be allowed a whole day’s holiday every week.

Child employment

Chapter IV of the Act lays down rules and regulations regarding child labour and the labour of young persons.

  • Children are prohibited from working in any establishment.
  • Young persons (those between 14 & 18), are only allowed to work between 6 a.m. and 7 p.m. Young persons are also prohibited from working overtime.

Health and safety

Chapter V of the Act lays down the precautionary and preliminary measures to be taken whilst running an establishment.

  • The premises of every establishment should be well-ventilated and should be kept clean at all times using lime washing, painting, colour washing, etc. This regular upkeep should be done according to the prescribed methods and standards.
  • The premises of every establishment should be kept well-lit during working hours. If an inspector, upon inspection, finds the lighting of the establishment lacklustre, he may serve a notice to the establishment advising them to do what is necessary before a certain date.
  • There should be fervent precautions taken for the prevention of a fire breakout and measures should also be present to curb a raging fire.

Holiday with wages

Chapter VI of the Act mentions the provisions for granting paid holidays to an employed person.

  • Any person employed in an establishment after twelve months of continuous service shall be entitled to a paid holiday not exceeding 12 days. This paid holiday shall be granted every year after the completion of twelve consecutive months of employment. This holiday can be granted for absence on the basis of medical grounds or an application moved by the employee under reasonable grounds.
  • If an employee, eligible for the benefit of paid leave is discharged by his employer or he quits on his own volition before availing of the 12 paid leaves, he shall be entitled to the amount for the un-availed holidays under this Act. This benefit also extends to employees who were refused the grant of a holiday or if the employer dismisses the employee when he is sick or suffering from an accident.
  • The pay that the employee receives on paid leave should be equal to the daily average for the days he actually worked.

Wages

Chapter VII is concerned with the payment of wages and it specifies the deductions that can be made from wages.

  • The employer shall be liable for payment of wages to his employee(s). The time interval during which the employee will be paid is to be fixed by the employer. This period shall not exceed one month.
  • The payment of wages should happen on a working day. If employment is terminated by the employer, wages as specified by the Act shall be payable to the employee. 
  • Wages must be paid without any deduction, except for the specific circumstances listed in this Act. 

Fines

  • No fine shall be levied against the employed person unless he has been given adequate opportunity to be heard regarding the matter of his fine.
  • A fine levied at one instance on any employed person should not exceed half of his wage.
  • An employed person under the age of fifteen cannot be fined.
  • A fine cannot be recovered from an individual after the expiration of sixty days from the date on which it was imposed. A fine is considered to be imposed on the day of the act for which the fine was levied.

Deductions for absence from duty

  • Wages can be deducted for the absence of an employed person, from the place of his employment for a period of time where he was required to work. 

Deductions for damage or loss

  • If, by the acts of an employed person, there is monetary damage to the employer, the employer is entitled to deduct wages, provided that the employee is given adequate opportunity to show cause against the deduction. 

Deduction for services rendered

  • If an employed person accepts accommodation, amenity, or any service from the employer during the tenure of employment, deductions can be made to the wage. This deduction shall not exceed the value of the actual amenities provided. Insurance that has been provided by the employer is also a deductible expense.

Dismissal and wages thereof 

An employer shall not dismiss an employed person from service if he has completed six months of service, except for a reasonable cause and the employer should give one month’s notice to the employee or a month’s wage. If the employed person has been found guilty of misconduct, no such notice or wage has to be served or paid, respectively. The employed person has the right to appeal the grounds of dismissal by the employer. The appellate authority has the right to reinstate the employed person and give compensation for the time he spent unemployed. 

Appointment, powers and duties of inspectors

The State Government shall appoint Inspectors to further the objectives of this Act. Every inspector who is appointed by the government shall be considered a public servant. He is empowered by this Act to enter into the premises of any establishment licensed under this Act and examine the records, registers, etc. The onus of enforcement of this Act falls upon the Inspectors.

Penalties for offences

  • An employer that doesn’t pay the employee’s wages can be fined.
  • An individual can be fined if he wilfully obstructs an Inspector from exercising the powers conferred on him by this Act. 
  • The State is empowered to amend the provisions of offences at any time.

Related case laws

P. Sarathy Vs. State Bank of India

Facts and history of the case

In this case, Mr. P. Sarathy ( further referred to as the appellant), was appointed as a Clerk at the State Bank of India (further referred to as the respondent). After a couple of years, the appellant was promoted to the post of Branch Manager, but shortly afterwards he was placed on suspension. Upon enquiry of the reason for his suspension, he was served a chargesheet following which departmental proceedings were issued against him. Ultimately, three years after his suspension, he was removed from service. Aggrieved by this decision, he filed an appeal before the Local Board of the Bank, which is a local authority that governs the activities of a bank in a particular area. This appeal was dismissed and the appellant filed an appeal under Section 41(2) of the Tamil Nadu Shops and Establishments Act before the Deputy Commissioner of Labour, Madras. The appeal so filed was dismissed by citing the case of Bank of India v. C. K Raman (1988), in which the Madras High Court held that nationalised banks do not come under the ambit of the Act. After the rejection of the appeal, the appellant instituted a suit at the City Civil Court contending that the dismissal of his appeal was illegal and ultra vires and he prayed for him to be reinstated to his job and to be remunerated for the hardships faced by him during this time. This suit was dismissed by the courts after decreeing that the contentions put forth by the appellant would not stand. Hereafter, an appeal was filed before the High Court.

There were two appeals filed before the Hon’ble court. The first one was admitted on 7th March 1995 by the additional judge of the Madras High Court, and he found that the order of dismissal handed out to the appellant by the Labour Commissioner was lamentable. The respondent filed an appeal to the order passed and contended that the suit was instituted at the Civil Court beyond the period of limitation as prescribed under the Limitation Act. The Court refused to go into the merits of the case as it had already been examined by the Commissioner.

Issues 

The only issue that comes up for consideration is whether the suit instituted exceeded the statute of limitations and hence if it is in violation of the Limitation Act. 

Proceedings

  • The common period of limitation within which a suit can be filed is mentioned under Article 58 of the Limitation Act, of 1963. 
  • The appellant contended that the civil proceedings were instituted in a court of due authority and it was contended that if the period in which the proceedings were taking place is excluded, the suit would be well within the limitations. 
  • Learned Counsel for the respondent contended that the ‘civil proceedings’ instituted before the appellate authority provided for by Section 41(2) of the Tamil Nadu Shops and Establishments Act 1947, is not a court, therefore the time spent in proceedings in that court cannot be excluded. 
  • Section 41 of the Act mandates that no employer shall dispense of the services of an employed person without providing ample cause or without giving one month’s notice or one month’s pay in advance. The general exception to this rule is when a person has been dismissed on a charge of misconduct which has been proven with satisfactory evidence. Such persons that have been dispensed off, have the right to appeal to the appropriate authority within the stipulated time. 
  • Subsection 2 of Section 41 mandates that any employee terminated from employment must approach the prescribed authority within thirty days from the date of termination of service. Citing these Sections, the appellant contended that reparations should be granted to him

Judgement

  • The Court held that the appeal before the Deputy Commissioner of Labour at Madras was within the stipulated period.
  • The Court observed that the Deputy Commissioner of Labour has the jurisdiction to decide upon an order of dismissal, passed by employers. The order so passed is binding on an employee or employer. Therefore it can be said that the Deputy Commissioner of Labour may not be called a ‘civil court’ as defined by the Civil Procedure Code, but is definitely a ‘court’.
  • The Court highlighted that Section 14 of the Limitation Act includes all the courts and not just a ‘civil court’. Any tribunal or authority that has the authority to pass orders that would be legally binding would come under the purview of this Section. 
  • The Court cited the case of Pritam Kaur v. Sher Singh, in which the Court contemplated Section 14 of the Limitation Act. It was held in that case that the term ‘court’ included those of the character of the one mentioned in the case at hand.
  • The Court ultimately decided that the Authority constituted under Section 41(2) was in fact a court as per the meaning given in Section 14 of the Limitation Act.

The Tamil Nadu Labour Welfare Fund Act, 1972

History

The Tamil Nadu Labour Welfare Fund Act Bill was sent to the President by invoking the powers granted to the Governor under Article 175 of the Constitution. The President gave his assent to the Bill on December 2, 1972, and it subsequently became an Act after publication in the Tamil Nadu Government Gazette Extraordinary on December 6, 1972.

Scope

This Act encompasses many guidelines and regulations that aim to improve the economic condition of labourers and others within the State. This Act is applicable throughout the State of Tamil Nadu.  This Act provides provisions for the setting up of a Welfare Fund that shall systematically collect money in the prescribed manner from the employees and the government, which shall be used to improve the living conditions of workers and their dependents. This Act also stipulates the guidelines for establishing a board to oversee and regulate the accumulation and distribution of funds. There are also measures to keep in check the power and authority exercised by the Board and any establishment that comes under the purview of the Act.

Definitions

We must comprehensively understand the definitions for better clarity and understanding of the provisions later in the Act. The primary definitions have been discussed below:

  • An employee is a person who has been employed to do any form of labour, skilled or unskilled, technical, clerical, etc., for thirty days. This act excludes from the definition of employee those who hold a managerial position, a person who works in a managerial capacity and draws a salary that exceeds a certain amount or a person who has been employed on an ad-hoc basis or part-time basis.
  • An employer is a person who has absolute control over the operation of an establishment. This person may be known as a manager, superintendent, etc.
  • There are many definitions for an establishment in which an employee and employer work. These are:
  • A factory
  • A motor transport undertaking
  • A charitable establishment
  • A catering Service
  • A plantation
  • Any other establishment may be notified by the Government.

Labour welfare fund

The primary intent of this Act is to create a fund that would work to the benefit of the labourers or any other individual mentioned in the Act. This is done by putting an impetus on the employee to donate to the Labour Welfare Fund and double the amount invested by the employee must be invested by the company that he works for. Employers and employees invest money in this fund, which also includes any donations.

Tamil Nadu welfare Board

This Act also provides for the establishment of the ‘Tamil Nadu Welfare Board’. This body shall be classified as a ‘body corporate’ and shall have perpetual succession and a common seal. 

Constitution

The board shall have a chairman and this must be the Labour Minister of the incumbent government. The other members of the board are as follows:

  • There shall be an adequate number of representatives representing the employees and employers.
  • The Board may also contain some officials or non-officials as prescribed by the government. Or members of the State Legislature.

Term

The term of the non-official members of the Board shall be three years and the members that are also part of the State Legislature shall be unfit for membership when they cease to be members of the Legislature.

Disqualification

Members of the Board may be ineligible for a seat on the board if they fulfil any of the criteria below:

  • If he is a person of unsound mind,
  • If the person has any arrears or any sum due to the Board,
  • If the person is insolvent,
  • If the person has been convicted of any crime by a criminal court in India,.

Removal

Removal of a member of the Board is on two grounds:

  • If he has fulfilled any of the criteria mentioned above,
  • If the person has been absent from three consecutive meetings of the Board without providing to the Board a satisfactory reason.

Suspension of the Board

The presiding board can be suspended and another board can take effect for not more than six months if the government is satisfied that the Board has abused its power or neglected its duties. The Board is given an opportunity during this six-month tenure to show cause as to why it should not be disbanded.  A member of the board can resign from his position, provided that he submits a written application to the Government. 

Unpaid accumulations

A large portion of this Act deals with unpaid accumulations. The claims to unpaid accumulation and the interest on unpaid accumulation have been discussed below. 

  • Any unpaid accumulation that has been paid to the board in a lump sum shall be matched by the employer. The employer is absolved of any liability when he pays the requisite sum to the Board. 
  • If the employer fails to pay the board the amount that he is required to, the Secretary shall serve the employer with a notice requesting payment of the due amount. If the due amount is not paid within 30 days, a fine shall be levied on the principal amount. The interest rate for this fine must be one per cent for the first three months, and for each passing month, the amount shall be one and a half per cent. 

Contribution to the fund

  • Every employee must donate to the fund an amount that he wishes but this amount shall not exceed twenty rupees. The employer, in respect of the employee, shall make a contribution not exceeding forty
  •  rupees. 
  • The employer is empowered under the Act to deduct this amount from the employee’s salary in a manner as may be prescribed by the government.

Utilisation of the fund

  • The Fund shall be maintained by the Board for use at a later date for the benefit of the employees or their dependents within the state. This fund shall also be used to carry out the provisions of this Act or any activity that may be specified by the government at any time. Community necessities, vocational training, and preschool for the children of the employees are just some of the measures that shall be carried out with the economic backing of the fund. 
  • Unpaid accumulations, along with fines, shall be utilised by this board explicitly for the welfare of the employees. The Board is empowered under the Act to borrow funds from any local authority with the prior approval of the Government. If a new fund is created by a decree of the government or otherwise, there is no mandate for amalgamating the old fund with the new one; they both can be used independently.

Dispute and audit

  • Any dispute concerning the utilisation of the funds or the income received by the Board must be referred to the government and the decision of the government is final on the matter. 
  • The accounts of the Board must be audited by a certified auditor and the report must be forwarded annually to the Government. These accounts will be published in the public domain by the government in the prescribed manner.

Inspector

The Government shall, under this Act, appoint inspectors within local limits for the inspection and implementation of the provisions of the Act. The powers of the Inspector under this Act are as follows:

  • To ascertain whether the provisions of the Act are being carried out,
  • To inspect any document in possession of the employee or employer with respect to the sums payable to the Fund;
  • The inspector under this Act is empowered to enter any premises of any of the establishments mentioned in the Act. He may do so with any assistance he deems necessary.
  • The onus to ensure the proper implementation of this Act lies with the Inspector. 

Any person who refuses to produce an audit, register, or document or copies of any such document that is requested by the Inspector shall be punished with imprisonment for a term that may extend to three months. For any repetition of such an offence, the period of imprisonment and the fine shall be increased from five hundred rupees to one thousand rupees. For convicting an individual under the aforementioned provisions, no court inferior to a Presidency Magistrate or a Magistrate of the First Class shall try the offence. Suo moto cognizance cannot be taken by a court and if a party decides to lodge a case before a competent court, they shall do so within six months of the commission of the offence. 

Related case laws

United India Insurance Company Limited and Ors. Vs. Secretary, Tamil Nadu Labour Welfare Board

History and facts of the case

In this case, the appellant filed a writ petition to quash the respondent’s demand for payment to the Tamil Nadu Labour Welfare Fund which has been instituted by the Tamil Nadu Labour Welfare Fund Act, 1972. The appellant further seeks to prevent the respondent from making any demand under Section 2 of the said Act. The learned single judge of the Madras High Court that heard the petition considered all the facts and circumstances of the case and subsequently dismissed the writ petitions with costs. The opinion of the learned judge was that Insurance Companies are not establishments of the Central Government and hence they are mandated to contribute under the Act. The appellant has filed a writ petition against such an order. 

Procedure

  • The appellants contended that Government Companies were registered under the Indian Companies Act and were subsidiaries of the General Insurance Corporation of India. The business schemes for such companies have similar authority to a law as the schemes are tabled before the parliament and only come into effect after much deliberation. These companies are wholly under the control of the Central Government, these include insurance companies. Despite unequivocally being a part of the Central Government, the respondent has demanded payment from the year 1972. This dogmatic demand shall not stand as it is tacitly against public policy.
  • Another contention put forth by the appellants was that the Tamil Nadu Act, 1972 was not applicable to the appellant’s company as they were incorporated under the Indian Companies Act. The Tamil Nadu Act solely concerned itself with the welfare and labour within the state of Tamil Nadu and it should not be applied to companies that insure the life of medi-claim, carriers, fire accidents, etc.
  • The learned counsel for the appellants would further denote that, upon a glossary perusal of Section 2(d) of the Tamil Nadu Act, it would become clear that it does not specify whether Government controlled companies or insurance companies would come under the purview of this Act. The counsel also highlighted the settled position of law that a State Act cannot override a Central Act
  • The learned counsel for the respondent contended that the appellant’s companies would fall under the category of establishments encompassed in Section 2(d)(v) of the Tamil Nadu Act, 1972, and hence the companies are bound to make a contribution. In the case of State Electricity Board v. Govindarajulu Manu, the High Court of Madras took the view that, even though the Electricity Board is a governmental body, it would come under the purview of the Tamil Nadu Labour Welfare Fund Act. This would entail an obligation upon them to contribute to the Act unless they have obtained any exemption under Section 40 of the Tamil Nadu Act.

Issues

  • Whether Insurance Companies operating within the State of Tamil Nadu have to contribute to the Tamil Nadu Labour Welfare Fund Act or not.

Judgement

  • The Court relied heavily on the decision of the learned single judge. The Court also upheld the view of the single judge in holding that Insurance Companies are not establishments of the Central Government. 
  • The Court dismissed all the writ petitions accordingly. 

The Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen), 1981

History

This Act received the assent of the President on August 5, 1981. The constitutionality of this Act was questioned before the High Court by way of writ petitions filed by several establishments, and after the conclusion of the hearings, the High Court struck down certain crucial provisions of the Act. The State Government, aggrieved by the decision of the High Court appealed to the Supreme Court. The case, ‘State of Tamil Nadu & Ors Vs. Nellai Cotton Mills Ltd. And Ors, 1990’ served as a landmark case for the constitutionality of the Act, and shall be expanded upon in the latter parts of the Article.

Objective

This Act aims to provide permanent employment status to the workmen of establishments in the state of Tamil Nadu. The conferment of permanent status is subject to a slew of stringent prerequisites, which have been enunciated in the Act. The Act extends to the whole State of Tamil Nadu. Only those establishments that employ more than fifty workmen shall come under the purview of the provisions of the Act.

Definitions

  • ‘Employer’ is the owner of an establishment. Some of these establishments include but are not limited to, a factory, any industrial establishment by the State Government or any other industrial establishment.
  • Any individual employed in an establishment to do any sort of labour comes under the definition of a ‘workman’. Those who are employed in a managerial, supervisory, or administrative capacity do not come under the definition of ‘workman’.

Conferment of permanent status

  • Those workmen that have been in continuous employment in an industrial establishment for not less than four hundred and eighty days within a time period of twenty-four calendar months, shall be made permanent employees of that establishment.
  • Continuous employment is subject to certain breaks; these are as follows:
  • If the workman was on paid leave, which he had earned after working the requisite amount.
  • The temporary absence arising out of any accident and subsequent recovery.
  • In the case of females, maternity leave shall also not hinder ‘continuous employment’, as long as it does not exceed twelve weeks.

Inspectors

  • Appointment of inspectors is done by the government. The appointed inspectors are deemed to be public servants.
  • The onus of carrying out the provisions of this Act rests upon the inspectors. They are empowered to employ the assistance of a subordinate to inspect, at any reasonable time, the premises, register, records, or any evidence that might be related to the Act.  

Offences and penalties

  • A court inferior to that of a metropolitan magistrate or a judicial magistrate of the first class shall not try an offence under this Act.
  • An offence under this Act can only be instituted with prior approval of the prescribed authority.
  • An employer that violates the provisions of this Act shall be punishable with a fine, which shall increase in case of continuing offence.

Related case laws

The Superintending Engineer, Vellore Electricity Distribution Circle, Tamil Nadu Generation and Distribution Corporation Limited Vs. The Inspector of Labour, Authority under the Industrial Establishments (Conferment of Permanent Status to Workmen) Act and Ors.

History and facts 

This case is concerned with the writ petition filed before the High Court of Madras by the Tamil Nadu Electricity Board. The respondents in this case are the workmen who filed an application under Section 3 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, praying that they be conferred permanent status. These men had fulfilled the prerequisite of 480 days of service in 24 calendar months. The petitioners stated that the respondents did not have their names in the list of 18,006 contract labourers eligible for permanent status prepared by the Hon’ble Justice Khalid Commission. A probable exclusion for the lack of their names in the list could be because the certificate was only handed out to contract labourers, who had worked under the contractors. There was also no proof with the Board that the respondents worked the 480 days in 24 calendar days as they claimed. There was also the perplexing question of whether the working hours of some of the respondents could be counted at all as they had not been paid directly by the Tamil Nadu Board.

Proceedings

  • The learned counsel for the petitioner contended that for a grant of absorption, the Board is bound by their own service regulations which shall prevail over general laws. The very application of the Conferment of Permanent Status made by the workmen will not stand as there are special enactments in force. 
  • The counsel for the petitioner vehemently contended that the service conditions and regulations related to conferring permanent status to the workers have been formulated by the Board by virtue of the powers conferred under Section 79 of the Electricity Supply Act, 1948, and as such the Act through which complaint has been moved is wholly untenable.
  • The conferment of permanent status should be done in strict adherence with the recruitment rules in force. The rules to be applied in this instance are the ones in the Tamil Nadu Act, although these are akin to those enacted in general by the State.
  • In the case of Secretary, State of Karnataka and others v.. Umadevi and others (2006), the Supreme Court reiterated that the benefit of regularisation or permanent status cannot be conferred in violation of the recruitment rules in force. The Supreme Court also highlighted the principle of equal opportunity being a constitutional mandate. It was also held that the duration served by an employee cannot be dressed as the sole criteria for conferment of permanent status. 
  • In the Conferment of Permanent Status to Workmen Act 1981, permanent status cannot be conferred to those who have fulfilled the mandate of 480 days by working for contractors or any individual other than the recognized board. 
  • The Court vehemently urged the competent authorities to make the appointment process conform to the constitutional scheme of appointments. The court also said that those workers employed on a temporary or casual basis cannot be made permanent simply by fulfilling the criteria of completing 480 days of service.
  • The counsel for the petitioner contended that the Tamil Nadu Electricity Board was not an Industrial Establishment as defined under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, this would render the complaint filed by the complainants null and void. 

Issues

  • Whether upon working for a certain period of time, the employee would be entitled to permanency or not.

Judgement

  • The Court held that all appointments made by the ‘State’ should be by providing equal opportunities to all the candidates; any other practice shall be deemed unconstitutional. 
  • No individual can claim permanent workman status as soon as they have served for 480 days. They must also conform to the other mandates that have been laid down by the specific laws in effect. Thus, the order passed by the Inspector of Labour is in violation of the constitutional scheme of appointment as well as in violation of the service regulations issued by the Tamil Nadu Electricity Board. 
  • The court observed that the current trend of Contract Labourers/Temporary employees/Daily wage employees on completion of services or 480 days of service applying for permanent status is a lamentable one.
  • The Court stated that it had repeatedly mandated clarification on the terms and conditions of the appointment rules. This case was such a case that warranted the need for such clarity.
  • The Court wanted to stop the conferment of permanent status to workmen in a lenient way and all individuals should be given an equal opportunity. 
  • The Court had no hesitation in coming to the conclusion that the decision of the Inspector of Labour was erroneous and constitutionally invalid. 

Tamil Nadu Factories Act, 1950

Objective and scope

The Tamil Nadu Factories Act, 1950, mirrors the Indian Factories Act, 1948. The central level Act has been adopted, with considerable changes for the state of Tamil Nadu. The purpose of this Act is to regulate almost every aspect related to the labourer and the establishment he works for. The regulatory provisions of the Act are extremely explicit and vast in nature. The Act even specifies the percentage of humidity to be kept in and around the areas of production. This Act also explains the established processes of factories within Tamil Nadu. The Act concerns itself with the working conditions of labourers and the benefit that is to be extended to them and their dependents.

Definitions

Some of the crucial definitions that have been mentioned in the Act for a better understanding of the provisions of the Act have been listed below:

  • ‘Family’ is defined as the natural descendants of the employee of the place wherein the manufacturing process occurs or any dependent of the employee.
  • A ‘Manager’ is someone who has been appointed by the occupier of the factory for the purpose of carrying out or supervising the activities of the factory.
  • ‘District Magistrate’ includes the Additional District Magistrate.

Licence

  • The premises for the establishment of the factory have to be first approved and registered under the rules provided in this Act.
  • The application for registration of the factory shall be submitted to the Chief Inspector, along with the fee payable for the grant of the licence. This fee shall be drawable from any Nationalised bank to the name of the Deputy Chief Inspector of Factories region. 
  • If the Chief Inspector is satisfied with the documents provided for the establishment of the factory, he may grant a licence for the same. If the Chief Inspector deems it necessary to call for more documents to ensure the veracity of the establishment and its activities, he may do so. 
  • The licence shall be renewed from time to time and the application for the same must be submitted to the Deputy Chief Inspector, not less than two months before the expiry of the licence. 
  • If the application is received one month before the date of expiry, a fine of ten per cent of the fee payable shall be levied. If the application is received just before the date of expiration, a fine of twenty per cent of the fee payable shall be levied. If the application is received after the date of renewal, a fine of thirty per cent shall be levied. 
  • If the Deputy Chief Inspector is content with the documents submitted, he shall grant a licence to the factory.
  • There may be a refusal to grant a licence if the application is not accompanied by the requisite documents, the Chief Inspector may also call for additional documents. The licence will be refused if there is an imminent threat to the lives of the factory workers because of gas, dust, etc. An imminent threat could also arise if the building in which the factory is housed is in a structurally unsound condition and the necessary steps have not been taken to address these issues.

Inspecting staff

  • A person can be appointed as an inspector only if he possesses the necessary qualifications mandated in this Act. A medical inspector can only be appointed if he possesses a degree in medicine. 
  • The powers of inspectors are vast. An inspector is authorised to photograph or document the working conditions of the workers of the factory, and he is also authorised to take copies of registers or records or any other documents that he deems necessary to inspect the working conditions of the factory.
  • The inspector must also appear before the court to prosecute or defend his actions while discharging his duty.

Health

  • The premises of the factory have to be kept clean by regular sweeping, mopping, dusting, etc. The cleaning standards vary according to the difference in room size. The rooms are segregated into rooms of less than five hundred cubic feet, less than two thousand five hundred cubic feet and more than two thousand five hundred cubic feet. 
  • If the Chief Inspector is convinced that any part of the factory has not been kept clean to the requisite standards, he may order the seizure of a specific part of the factory or the whole factory.
  • The aspects of ventilation and temperature have been discussed at length in the Act. There are very stringent criteria as to what should be the limits of temperature and air movement. The Act explains the places in which hygrometers must be established to ensure proper humidity in the factory.

Leave

  • Every year, there should be a certain amount of paid leave given to the employee. Paid leaves, when granted, should be recorded in the ‘Leaves with Wages Register’. This register should be kept for a minimum of three years. If the worker doesn’t avail of the paid leaves, it shall be recorded in the register.
  • If an employee is absent from work due to any illness and wants to avail sick leave, he may be required to submit a certificate signed by a registered medical practitioner or by a registered or recognised medical practitioner. 

Employment of young persons and women

  • The Chief Inspector may restrict women or young persons (persons under eighteen years of age), from working in a specific factory as it may be dangerous for their health and safety.
  • A person who has been restricted from working in such a factory shall be provided with alternate work that would not be detrimental to their health and safety.

Related case laws

D. Krishnan and Ors. Vs. Special Officer, Vellore Co-operative Sugar Mill and Ors.

Facts and history 

This case was appealed to the Supreme Court after the decision of the High Court of Judicature at Madras. There were two appellants in this case and both of them were employed under the respondent. The appellants were promoted in their respective works. Appellant No. 2 was the in-charge of the canteen in 1991 whereas appellant no. 1 was given the same duty in 1996. The appellants had presented claims for receiving overtime wages as they had put in the necessary overtime work for specific hours each day. The appellants had made repeated requests to the Labour Welfare Officer and had received verbal promises regarding the same on many occasions. There was also another case pending before the Labour Court (Jayavalu Case) whose facts were similar to the one in this case and as such its decision would apply squarely to this case; and the decision in this case was in favour of the labourer. 

Frustrated that their complaint was falling on deaf ears even after the decision in the Jayavelu case, the appellants filed a petition under the Industrial disputes Act, 1947. The respondents countered the plea by stating that no impetus had been placed on the appellants by the respondents to do any overtime work and they had never done so either. The respondents contended that Jayavalu’s case had no similarity to the case at hand and as such the jurisprudence set down in that case does not apply to this case. 

The decision of the Labour Court on this matter unequivocally held that the workers had in fact worked overtime and were entitled to the payment accordingly. The contention by the respondents that the appellants were managers and not workers was squarely rejected by the Labour Court. The respondents challenged this decision before the High Court. The High Court, in its judgement, dismissed the writ petition and affirmed the award of the Labour Court. The decision of the learned single judge was challenged before a Division Bench of the High Court. The Division Bench of the High Court held that the reliance of the Labour Court wholly on documentary evidence alone was untenable. The Division Bench also held that the punch time cards which formed the basis of the petitioner’s case did not constitute sufficient proof. The claim that there was no order on the workmen to work any overtime should also fail. The Division Bench ultimately quashed the judgement of the Labour Court and Single Judge and against this decision an appeal had been filed.

Proceedings

  • Colin Gonsalves, the learned senior counsel for the appellants, submitted that a simple enquiry under Section 33C(2) was fully justified citing  the case of Chief Mining Engineer East India Coal Co. Ltd v. Rameshwar and Ors 1967. The counsel contended that the argument of the workmen actually being managers were wholly untenable as they would not be designated as managers solely if they are given some minor managerial positions. 
  • Dayan Krishnan, the learned Counsel for the respondent, submitted that inorder to submit a claim for overtime wages, the overtime has to be authorised by a competent authority and there was no such authorisation on record, therefore the claim under Section 59 of the Factories Act was not tenable. The counsel also contended that the proceedings were executory in nature.

Issues

  • Whether documentary evidence is necessary to prove this case or not.

Judgement

  • The court held that the nature of proceedings was executionary and in executionary proceedings there were some presuppositions of adjudication which would lead to the determination of a right. There had not been a lot of adjudication in this case and it primarily relied on the documentary evidence of both parties. 
  • According to the Tamil Nadu Factories Rule, 1950, only an employee who was authorised to work overtime can claim overtime wages. The appellants had not disputed the respondents’ claim that there were no overtime slips issued to the appellants.
  • The Court finally came to the conclusion that a sole reliance on documentary evidence was not enough to prove the case. 

Tamil Nadu Industrial Establishments (National, festival and special holidays) Act, 1958

Objective and scope

The Bill received the assent of the Governor on December 4, 1958. It became an Act after publication in the Fort. St. George Gazette Extraordinary on December 10, 1958. The impetus behind the enactment of the Act is the grant of National, festivals or special holidays for the employees employed within an industrial establishment in Tamil Nadu. The Act also provides provisions for the payment of employees when they are on any such leave. 

Definitions

  • ‘Employee’ is any person who has been employed in an industrial establishment to do labour that may be skilled, unskilled, or any other form of labour. 
  • ‘Employer’ is any person who has absolute control over the establishment and its employees.
  • ‘Wages’ are defined as they are in other Acts; they denote any compensation that can be expressed in monetary terms. These wages shall be paid at fixed intervals and after completion of pre-agreed work. 

Grant of national and special holidays

  • For the following days, a whole day of holiday should be granted as per the Act;
  1. 26th January
  2. 1st May
  3. 15th August
  4. 2nd October
  • And there shall be another five days of full days off. This is exclusionary to any date that the government may declare a holiday, having due regard to any emergency or special circumstances prevailing in the State.

Wages

  • An employee should be paid full wages for all of the holidays granted under the Act.
  • If an employee voluntarily or by order works on a holiday, he shall be entitled to twice the wage that he would normally get on a workday.

Inspectors

  • The Government appoints the appropriate persons as inspectors for the supervision and enforcement of the provisions of this Act. These inspectors shall be deemed to be public servants.
  • The Inspector is empowered under this Act to enter the premises of any of the establishments this Act applies to at reasonable hours. 
  • The Inspector is empowered to procure and examine any necessary document, register, etc, that he may deem necessary for furthering the purposes of this Act.
  • If an individual willfully obstructs or fails to provide any document that the Inspector demands in writing, which would be necessary for the enforcement of the provisions of the Act, he shall be punished with a prison term of three months, a fine, or both.

Related case laws

Madura Coats Limited Vs. Inspector of Factories, First Circle, Madurai and Ors.

Facts and history

This case has reached the Supreme Court of India by way of appeal from the Madras High Court. Madura Coats Limited is an industrial establishment as per the definition provided in the Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958 (further referred to as the ‘Act’), and they owned mills in Tamil Nadu. The Payment of Bonus Ordinance Rules of 1975 governed the payment of bonuses. Bonus for the year 1974-75 was due for the workers and the management refused to pay this bonus by stating that payment of bonuses would be against the provision of the Payment of Bonuses Act as amended by the ordinance. The non-payment of wages by the mill management led to a strike. A complaint was lodged against the Commissioner of Labour, Madras. The parties reached a settlement and in this settlement, the workers were to immediately stop the strike and the management should not cut the pay for the days that the workers went on strike. However, when the wages were paid to the workers, the management withheld the wages for the days that the workers went on strike. The inspector of factories addressed a communication to the management stating that they should pay the wages. The management filed a writ petition to the High Court and the High Court refused to interfere and the petition was dismissed. As far as the definitions go, the right of the workmen to receive wages for the national or festival holidays is not absolute as it is subjective to the right of the management under sub-section (2) of Section 5 to call upon them to come to work on such holidays. The employer however has no right in deciding the holidays. Therefore the right of the employee to claim wages for the national and festival holidays is co-extensive with the right of the management to call upon the workers to work on such a holiday. 

Issues 

  • Whether an employer is statutorily bound to pay wages if the workmen are on strike, for any of the national or festival holidays falling within the periods of strike under the Act or not.

Procedure

  • The case was referred to a division bench by Natarajan (learned single judge bench), he referred the case to a divisional bench as he questioned the correctness of the view taken in the Lotus Mills case. 
  • Judge Ramanujam, speaking on behalf of the Division Bench, accepted that the special right conferred on the management was somewhat inconsistent with other sections of the Act. He also stated that the misconception that the Act confers the right not to work on a holiday appears to be unwarranted.

Judgement

  • The Court ordered the respondents to pay the workers their wages for the national or festival holidays falling within the periods of the strike. The previous judgement of the High Court is reversed and the impugned notice issued by the Inspector of Factories is quashed. 

Tamil Nadu Professional Tax Act, 1992

Objective

This Act specifies the amount to be paid as tax by each and every salaried individual within Tamil Nadu. The Act provides definitions for an unambiguous comprehension of the provisions of the Act and many provisions include detailed procedures in case of actions taken in contravention of the Act.

Definitions

  • An ‘employee’ is someone who has been employed under any establishment and receives remuneration from an establishment established under the Central or State government. An employee is also someone who has been employed in any private institution within the State.
  • An ‘employer’ is a person who has employees under him who receive regular pay from the establishment under which they are hired.
  • A ‘half year’ is from the 1st day of April to the 30th of September and from the 1st day of October to the 31st of March of a calendar year. ‘One month’ means a calendar month.

Professional tax

  • Any company, Hindu Undivided family, etc., that does business or trade shall file their tax returns at the beginning of the half year with the concerned municipality. This tax can be paid in monthly instalments if permission for the same is requested by the tax collecting officer and he makes the necessary changes for the same.
  • The tax rate shall be revised and made public by the executive authority once every five years, and these are the rates that should be followed by the general populace while filing taxes.
  • The tax can be paid in many ways, which include cheques and cash.

Penalty

  • A penalty can only be levied after proper notice has been served by the Commissioner and a time period of thirty days has passed since the notice has been received. 
  • A penalty can be levied if the employer fails to pay the half-yearly tax within the stipulated time period. Penalty is levied in the form of fines and these fines can increase as the non-compliance goes on.

The Tamil Nadu Beedi and Cigar Workers (Conditions of Employment) Rules, 1968

Objective

This Act aims to lay down the rules and regulations related to setting up and working in an establishment that produces beedi and cigars. The primary intent of the Act is to safeguard the lives of the workers engaging in the industries that come under its purview. 

Definitions

Under Chapter I of the Act, definitions are given that would provide more clarity to the provisions later in the Act. The most crucial of them are:

  • ‘Health Officer’ is someone who has been appointed by the Government for a specific area, irrespective of whether that area comes under any specific local authority.
  • ‘Public Health Authority’ is any Health Officer that has Jurisdiction over an area in which the Beedi industrial premises are situated.

Licencing

  • The application seeking permission for the selection of a site to establish an industrial premise shall be accompanied by the following items
  1. The premise to be used to set up the manufacturing establishment and the surrounding premises should be submitted.
  2. The emergency exits, natural lighting, etc. should also be mentioned in the submission.
  3. The receipt showing that the appropriate fee has been paid for the application should also be submitted.
  4. The licence should only be granted after the appropriate authority has made sure that the site has no prior developments or activity going on within twelve months of the date of submission of the application.
  • The application for renewal of the licence must be sent to the appropriate authority not less than one month before the date of renewal of the original licence. Attached to the application, must be the treasury receipt showing the payment of the renewal fee and the original licence. 
  • If an application for renewal of the licence has been submitted after the due date, an additional fee shall be remittable from the party. This fee will vary depending on the time period caused by the delays.
  • If the licence has been lost, stolen, or destroyed, an application shall be submitted for issuing a duplicate licence. The receipt showing payment of the due fee for issuance of a duplicate licence shall also be attached to the application.
  • If the licence has to be amended, an application is attached to the original licence, a statement showing the amendment required and the new plans. Along with the application, the fee receipt should also be submitted.

Health and welfare

Chapter III of the Act outlines the provisions related to health and welfare. 

  • All of the surfaces of the establishment shall be cleaned from time to time to prevent the accumulation of dust. Appropriate measures should be taken to maintain the painted walls, and timely repainting should also take place. Proper records shall be kept of all the activities that have been undertaken in furtherance of cleanliness.
  • There should be sufficient washrooms for male employees. There should be a minimum of one washroom for every one hundred male employees. For female employees, a separate washroom shall be provided. The same criteria apply to urinals. Cleaning of the washrooms should be done periodically and now and then they should be cleaned with appropriate tools for deep cleaning of washrooms. Washing areas are also to be provided to the employees; this too shall be segregated on a gender basis. 
  • First aid must be made available at every establishment under this Act. The exact number of items to be stocked at the First-Aid Centre has been laid down in the Act. The charge of the First-Aid box or cupboard shall be kept with a person who is trained in First-Aid treatment and who shall always be readily available during the working hours of the industrial premises. 
  • Every industrial establishment that employs more than two hundred and fifty employees shall have a canteen and this canteen must not be situated close to a washroom. The premises of the canteen shall be kept clean and build-up of dirt or water must be prevented. The canteen shall have a separate dining hall, kitchen, store, and pantry. The food served must be on a profit, no-loss basis.

Working conditions

Chapter IV of the Act lays down the working conditions of the employees employed in any establishment that comes under the purview of the Act. 

  • The working hours, rest intervals, and holidays shall be published by the employer in a place where they are clearly visible to the employees. A record of the work done by each and every employee must also be kept.
  • Leaves granted to an employee must be recorded in a leave book. This leave book shall be the property of the employee and duplicate records shall be maintained by the employer.

Miscellaneous

  • If the beedi or cigar that a worker uses is not to the requisite standard, it shall be rejected. No more than five per cent of the total number of cigars or beedi an employee manufacturer produces shall be rejected by the employer.
  • Any information that is required by an Inspector while inspecting the premises of the industry shall be furnished by the employer within seven days of the inspector requesting it in writing.

Related case laws

Rajangam, Secretary, District Beedi Workers’ Union and Ors. Vs. State of Tamil Nadu and Ors.

Facts and history

In this case, a writ petition was filed under article 32 of the Constitution by the District Beedi Workers Union before the Supreme Court. In the complaint there were allegations of manipulation of records regarding employees, non payment of appropriate dues for work done, failure to implement the provision of labour laws, etc. Another petition with the same subject matter was clubbed together with this appeal. 

The Supreme Court by an order dated 24th October, 1989 appointed an organisation by the name ‘Society for Community Organisation Trust (SOCCO), for making the necessary investigation into the allegations and to submit a report to the court. Along with the submission of the report there should also be a suggestion scheme for consideration of the Court. There were two other schemes submitted; one by the petitioners and the other by the State of Tamil Nadu. The Court then decreed that only one policy shall be implemented and instructed the parties to sort out their differences by having discussions. After the discussions conclude, the final draft shall be sent to the Labour Ministry of the Government of India.

The Ministry of Labour of the Union Government filed an affidavit that addressed a myriad of concerns. The Ministry wanted to dispose of the issue, for this they provided many suggestions;

  • The Beedi and Cigar Workers (Conditions of Employment) Rules, 1968 should be strictly adhered to and thus the discrepancies that exist in furnishing the books (as per in this case) should be done away with. The working conditions of the workers should be improved as per the Act.
  • Child labour should be prohibited as per the Act and child labour should be stopped within a period of three years. 
  • The contract labour system is indispensable in this trade and it should be legitimised. 
  • A governmental labour establishment should be located in every local area and it should be competent to answer the requirements on the matter. 
  • The welfare fund instituted for the Beedi Workers should be made operational and funds should be dispersed immediately in case of the death of a worker. 
  • Every employer should be insured for a minimum of Rs. 50,000 and the premium should be paid by the employer and the cost should not be transferred to the worker.

Issues

  • Whether there is a need for an external agency to supervise the implementation of the provisions of the Act or not.

Judgement

  • The Court was of the view that the implementation of the scheme that would be adopted by the Supreme Court would require supervision from an independent external agency.
  • The Court also stipulated a time period of three years for the completion or implementations of the provisions of the scheme. 
  • The Secretary of the Tamil Nadu Board, would mainly be in charge of the field job and shall be paid a sum of Rs. 1,500 per month and an allowance to meet out of pocket expenses as long as he does the work as Secretary of the Board.
  • The case had been disposed of by the Court with the view that the concerned authorities would adopt or implement rules and regulations for the best of the nation.

Tamil Nadu Catering Establishment Rules, 1959

Objectives

This Act aims to explicit the provisions related to the catering establishments that are functioning in Tamil Nadu. Under the ambit of this Act, processes from registration to provisions for washing facilities have been mentioned in detail. The Act applies to the entirety of the state of Tamil Nadu. 

Registration certificate

  • The application for grant of registration to begin operations must be sent to the inspector along with the fee payable for the application. The fee payable varies according to the number of employees in the establishment.
  • The registration certificate shall be granted only after the inspector inspects all the necessary certificates. If the inspector deems it necessary to call for further necessary documents, he is empowered to do so under this Act.
  • If the certificate of registration has to be amended, an application has to be sent to the inspector. This application has to be accompanied by the original certificate, the proposed changes, and the requisite fee for renewing the application. 
  • An application must be sent for renewal of the registration certificate before the expiration date of the existing certificate. The original certificate, along with the amount for registration, must be accompanied by the application. If the application for renewal has been submitted late; fines shall be levied on the submitter. 
  • If the registration certificate has been lost, an application must be moved to the Inspector to whom the certificate was last renewed. The application must also contain the requisite fee for issuing a duplicate certificate.

Holidays and leaves

  • The employer must send to the inspector the list of holidays for which the establishment shall grant holidays to its employees. A copy of this letter must be displayed on the premises of establishments where it will be clearly visible to all the employees. If any employee has any objections to the proposed holidays, he may send a letter to the appropriate jurisdiction. The inspector, after receiving and analysing the objections received by the employees, shall approve the proposed list of holidays.
  • If the majority of the employees or an employer of the establishment wishes to change the specified holidays. They may do so by applying to the Inspector for the same. 
  • Employees are entitled to a certain number of paid leaves with wages. The employers would fix certain time periods in which the employees can avail of these leaves. If the employee does not want to avail of his leave at the time specified by the employee, he may inform the employer regarding the same, and this leave shall be adjusted for an alternative period.

Health and sanitation

  • For an individual to be employed at an establishment that comes under the purview of this Act, he must produce a certificate of physical fitness from a medical practitioner. If he is employed without a physical certificate, he should produce the medical certificate within one month of the date of employment.
  • All the employees of the establishment are subject to a medical examination once a year by a Medical Practitioner, the records of which should be kept by the employer. If it is found that any employee has been affected by a transmittable disease or is a carrier of one, he shall immediately cease working in the establishment. 
  • If an employee has been infected with a transmittable disease and thus becomes a hazard to the other employees in the establishment, he should inform the employer, and the employer in turn shall ascertain if the employee is carrying a hazardous disease. If it is found that the employee is carrying a hazardous disease, he will not be allowed to further work in the establishment.
  • There should be ample living, sleeping, and washing facilities for the employees in every establishment. There should also be a first-aid kit for every establishment and the contents of this first-aid kit shall vary according to the number of workers employed. 

The Motor Transport Workers Act, 1961

Objective

The Motor Transport Workers Act is an Act that has been legislated by the Union Government to explicit mandates concerning the people who work in any Motor Vehicle Department. This Act is enacted to protect the welfare of motor transport workers and to regulate the working conditions of their work. 

Definitions

This Act has provided many crucial definitions, these are:

  • ‘Adolescent’ is a person who has completed fifteen years of age but has completed eighteen.
  • ‘Child’ is someone who has not completed fifteen years of age.
  • ‘Employer’ is someone who has ultimate authority over the functioning of the motor transport undertaking. 

Registration

  • All motor transport undertakings have to be registered under this Act.
  • An application has to be submitted to the prescribed authority and after approval of the application, a certificate of registration shall be granted.

Inspectors

  • The government shall appoint one Chief Inspector for a state and he shall be considered a public servant. 
  • The Chief Inspector or other inspectors are empowered under this Act to stop and inspect any vehicle that they deem necessary and they have the authority to hold the vehicle for as long as may be reasonably necessary. They may examine any document, registration, or licence for the purpose of carrying out the provisions of this Act.
  • The Inspectors are authorised to enter, with assistance, as they deem fit, to inspect any premises that would be using a motor vehicle. They are empowered to seize or take copies of any of the documents that may be necessary for carrying out this Act.

Health and welfare

  • If there are more than one hundred workers employed in a particular area, the Government shall provide one or more canteens for them. The Government shall also constitute a canteen management committee for each canteen.
  • The Government should provide restrooms in those places where workers are required to halt at night. These restrooms must be sufficiently lighted and ventilated and decent cleanliness should also be maintained in these washrooms according to the guidelines set by the Government.
  • The Government is bound by this Act to provide for uniforms that would protect the workers from rain or cold. There should also be facilities to wash these uniforms for a specific cost. 
  • There shall be medical facilities for the workers and these facilities should be placed at a convenient distance so that they are easily accessible.

Working conditions

  • No worker is allowed to work more than eight hours a day or forty eight hours a week; unless prior approval is obtained from the concerned authority. If approval is granted, a worker can work for up to ten hours a day or fifty-five hours a week. The employer is also authorised to make the workers work overtime if any breakdown of machinery in the department occurs or there is any unforeseen traffic jam. 
  • The working time for adolescents varies from that of adults. Adolescents are not allowed to work for more than six hours a day and they are not allowed to work between 10 P.M and 6 A.M.
  • It should be made so that no worker must work for more than five hours continuously without a break of at least half an hour. Once a working day is done, there should be a break of at least nine hours before the next working day starts. 
  • A child shall not be employed in any of the establishments that come under the purview of this Act.
  • If an adolescent wants to be employed, he shall procure a fitness certificate from a certified surgeon. This surgeon shall assess the individual and ascertain if he is fit for the work in the motor transport undertaking. If he is fit for the work at hand, he may join the department by submitting the certificate of fitness. This certificate is valid for a period of twelve months.
  • If an adolescent joins the department without a fitness certificate, the inspector shall serve a notice to the adolescent requesting that he submit the certificate. 

Leaves and wages

  • If a worker works overtime or works on a rest day, he shall be entitled to twice his normal wage. 
  • A worker who has worked for a period of two hundred and forty consecutive days shall be entitled to at least leave of twelve working days with wages. An adolescent who has worked consecutively for two hundred and forty days shall be entitled to at least sixteen working days with wages. 
  • If a worker does not avail of all the leaves granted to him in a calendar year, the restover leave shall be carried over to the next year [Calendar year commences on the first of January].
  • A worker who is availing paid leave shall be paid full wages on the days of absence. The wages should be calculated from the most recent payslip that he received. 

Penalties and procedures

  • If an individual willfully obstructs an Inspector from entering any premises for making any inspection or willfully neglects to provide the Inspector with any help in carrying out the provisions of this Act, shall be punished with a prison sentence that may extend to three months, a fine, or both.
  • If an individual willfully refuses to produce any document or register that the Inspector demands, he shall be punished with a prison sentence that may extend to three months or with a fine or both. 
  • If an individual knowingly furnishes a false certificate, he shall be punished with a prison sentence that may extend to one month, a fine, or both.
  • If an individual is guilty of an offence under this Act that he has committed before, the term of imprisonment shall increase to six months, and the fine shall also double, or he may be punished with both.
  • Courts are not empowered to take suo moto cognizance of any offence committed under this Act. Only if a complaint has been made in writing and has been submitted or if there has been a previous sanction from the Inspector can a case be lodged. Prosecution under this Act can only begin if the complaint has been made three months from the date of the alleged offence.

Related case laws

R. Bharanidaran Vs. The Managing Director, Tamil Nadu State Transport Corporation and Ors.

Facts and history

In this case, the writ petition has been filed before the Supreme Court against the order passed by the Principle Labour Court, Vellore; in which the claim of the petitioner to reinstate him into the workforce was rejected. 

The petitioner had acquired his conductor licence and he registered his licence in the District Employment Exchange. The respondent had employed the petitioner and the petitioner worked for a continuous period of 252 days in a 12 month period. The petitioner claimed that since he worked for more than 16 hours for 126 days under the respondent, he was entitled to receive permanent status. The petitioner contended that he and many other temporary employees were removed from service abruptly without any notice and this led to them filing a complaint under the Industrial Disputes Act. They also alleged that the provisions of the Industrial Disputes Act were also not being adhered to. 

Procedure

  • The petitioner submitted that he had received a call letter for the post of ‘conductor’. However, even though he attended the interview and possessed all of the necessary qualifications for the post, he was above the age limit for the job. The petitioner raised the grievance that the age limit should not be applicable on temporary positions.
  • Mr. C.S.K Sathish learned counsel for the respondent raised the contention for affirming the judgement of the Labour Court based on the fact that the petitioner was given ample opportunity to be enlisted into the workforce but failed to do so because of his own shortcomings. He failed to secure minimum marks on the test that was held for the post.
  • The counsel for the petitioner relied heavily on the judgement in M. Sekaran v. General Manager (2005), because in the case it was held that preference should be given for employees that have been ousted from service. 
  • The counsel for the petitioner also held that the rejection of the complaint by the Labour Court was erroneous as they claimed that the petitioner had not completed 240 days of continuous employment. This claim was untenable as the petitioner had worked for 252 days in a 12 month period and was paid an average of Rs. 150/- per day.
  • To rebut the argument presented by the petitioner above, the respondents drew the Court’s attention to the case of Tamil Nadu State Transport Corporation v. N. John Henri Raj and other (2008), in which it stated that merely because an employee worked overtime it would not be counted as two days even if he worked for double the hours in a single day.
  • The respondents also pointed out that an employee cannot be asked to work overtime beyond a certain amount of hours as it would be contrary to the provisions of the Motor Transport Workers Act. 
  • The petitioners were discontent with the labour court, primarily because it didn’t count sixteen hours of work in one day as work done for two days even though the employee was being paid two times the wages. Working for sixteen hours a day would be in contradiction to almost all the Labour Laws within the state of Tamil Nadu. 

Issues

  • Whether the work done by an employee for more than eight hours a day would constitute a separate working day and should be calculated as such.

Judgement

  • The Supreme Court stated that the worker had worked 16 hours a day and was given rest on the next day, the absence from work was not the fault of the employee but it was done to give the employee some rest. Therein, the single day of work done by the employee would in fact count as two.
  • In this case, for arriving at 240 working hours, the off days have to be taken into account as paid holidays. 
  • The Supreme Court held that Sundays and paid holidays should be taken into account and should be counted as days worked by the employee, and these days shall also be factored in while calculating the days of continuous service. 
  • In this case, the respondents having allowed the employee to work past the allowed working hours cannot refuse granting him permanency on the basis of the contentions taken on in this case.
  • The Court held that the award of the Labour Court was erroneous and was set aside. 

The Inter-State Migrant Workmen (Regulation Of Employment And Conditions Of Service) Act, 1979

Objective

The Act solely concerns itself with the welfare of inter-state migrant workmen. This Act provides provisions for the regulation and working conditions of workers. This Act also enunciates the duties of contractors and Inspectors. 

Definitions

The most crucial definitions that are paramount in understanding the provisions of the Act are as follows.

  • ‘Contractor’ is someone who has agreed to complete a certain work. The term contractor does not include those that merely supply goods or manufactured items to the establishment. 
  • ‘Establishment’ is defined under the Act as any Government office or department, or as any place where trade, business, or manufacture is carried on.
  • An ‘inter-state migrant workman’ is any person who has been recruited in one state to work in an establishment in another state.
  • ‘Principal Employer’ is someone who has complete authority over the establishment and is responsible for the control and functioning of the establishment.
  • ‘Workman’ is any person who has agreed to do certain work, regardless of the nature of the work he shall be known as a workman.

Registration

  • The Government shall appoint such persons with the necessary qualifications as the registering officers. The Government shall also define the limits within which a registering officer shall exercise his powers.
  • An application must be made to the registering officer and within one month of such an application, the registering officer shall approve the application or return the application for further consideration.
  • If the registering officer comes to know that the registration of an establishment was obtained by furnishing fraudulent documents, he has the authority to revoke the registration. This can be done only after approval has been obtained from the appropriate Government official. 
  • No inter-state migrant worker shall be employed unless the principal employer has established the establishment under this Act.

Licensing of work

  • The appropriate government shall, by order, appoint those persons who seem fit to be licensing officers. The government shall also define the limits within which the officer shall exercise his powers.
  • An application for grant of a licence shall contain the location of the work, the nature of the work and the work that the inter-state migrant workmen will do. The licensing officer may investigate to certify the veracity of the documents submitted or claims made in this regard. 
  • If the licensing officer finds that a licence has been obtained by furnishing false documents or if the holder of the licence has failed to act within the boundaries of the licence or this Act, the licence shall be cancelled. The licence shall be revoked only after ample opportunity has been given to the licence holder to show cause for the alleged misconduct.

Duties of contractors

  • The contractors have to submit a form with such particulars as may be prescribed to the specified authority of the State from which the inter-state migrant is from and also to the State in which the worker shall work.
  • The contractor is bound to provide the worker with a passbook that contains a passport size photo of the worker and the name of the worker in Hindi, English, or any other language as per the geographical location. The passbook shall also contain the following items;
  • The location of the workplace,
  • The duration of the employment,
  • The wages provided to the worker,
  • The displacement allowance is payable,
  • The return fare is payable to the worker once his period of deployment is completed.
  • The contractor should also submit a declaration to the appropriate authority after a worker has come back from work in another state. In the declaration, the contractor should state that the worker has been paid full wages for his work in the other state. 

Wages and working conditions

  • The wages that are to be paid to an inter-state migrant worker shall be done so in cash. The wages paid should not be in violation of the Minimum Wages Act of 1948. Those workers who do the same work should be paid the same amount of money.
  • There should be a displacement allowance that should be paid to the worker. This allowance should be fifty per cent of the monthly wages that the worker receives. A journey allowance shall also be provided to the worker. This allowance shall not be less than the fare from the place of residence of the worker to the place of employment. 
  • The contractor should ensure prompt payment of wages, ensure accommodation is provided to workers, ensure no gender discrimination takes place, etc. 
  • The contractor is responsible for the proper payment of wages to the workmen employed by him. The wages should be paid before the stipulated time period and should also be paid in full. 

Inspectors

  • The appropriate government shall be the one appointing the inspectors for the purpose of carrying out the provisions of this Act.
  • The Inspectors are empowered to enter any premise that employs inter-state migrant workers with any assistants to inspect the working conditions, payment of wages, facilities provided to workmen, registers, or records. 
  • The Inspector can search any individual found in an establishment to determine if he is an inter-state migrant worker. The inspector can require a person to give such information as his name, address, etc.

The Plantation Labour Act, 1951

Objective

This Act was enacted to regulate the working conditions and welfare of those labourers who work for the plantations and any associated establishment that comes under the purview of this Act. This Act fervently protects the rights of plantation workers.

Definitions

  • An ‘adolescent’ is someone who is between the ages of fourteen and eighteen.
  • ‘Adult’ is someone who has completed eighteen years of age.
  • ‘Child’ means someone who is under fourteen years of age.
  • ‘Employer’ is someone who has ultimate authority over the plantation.
  • ‘Plantation’ under this Act includes offices, schools, dispensaries, and any other premise used for any purpose connected with such a plantation, but it does not include any factory on the premise of the plantation.

Registration

  • The State governments shall be the ones appointing the registering officers and shall also define the limits within which they discharge their powers.
  • The employer of a plantation shall register the plantation within sixty days of the commencement of the operations. After receiving the application, the registering officer will issue a certificate of registration to the plantation. 
  • If there is any change in the ownership or management of the plantation, such change shall be communicated to the registering officer within thirty days.
  • If a person is aggrieved by the decision of the registering officer, he can submit an appeal to the appellate authority within thirty days of the order of the officer.

Inspectors

  • The State Government shall appoint a Chief Inspector for the state and many aptly qualified persons to be inspectors of the plantations. The Chief Inspector has the authority to specify the local limits within which the inspectors shall exercise their powers. All the inspectors appointed shall be deemed to be government employees.
  • The Inspectors shall make such an inquiry as to ascertain if the provisions of this Act are being implemented. The Inspector is empowered to enter the premises of any plantation, with assistants if necessary, to inspect the functioning of the plantation. Upon inspection, if he finds any irregularity in documentation, he shall order the employer to rectify it. 

Health and welfare

  • Every plantation should have clean, safe drinking water that is easily accessible to all of its workers. 
  • There should be sufficient latrines for males and females employed on the plantation. These latrines should be kept in a clean and sanitary condition.
  • Every plantation should have a medical facility with sufficient first-aid that is easily accessible to all the persons employed there.
  • In a plantation that employs more than one hundred and fifty workers, one or more canteens shall be provided. The appropriate government shall also prescribe the number of employees to work in the canteen and the food to be served in the canteen.
  • There should also be adequate recreational facilities for the workers and their children. Where the children of the workers aged between six and twelve exceed twenty-five in number, there should be proper educational facilities for the children. 

Safety

  • Effective provisions should be made by the employer for safe handling, storage, and transport of chemically hazardous items that might be used in and around the plantation. The plantation will have to comply with rules that may be made by the State Government that restrict women and adolescents from using or handling hazardous chemicals. 
  • Adequate training has to be given to every worker who works in handling, mixing, blending, and using any chemically hazardous chemicals. A worker who is routinely exposed to any chemically hazardous substances shall be subject to routine medical checkups. The results of these checkups should be recorded and maintained by the employer. 

Working hours

  • An adult worker should not be allowed to work in excess of forty-eight hours a week and an adolescent should not work for more than twenty-seven hours a week.
  • In case of overtime, no worker should be allowed to work for more than nine hours a day or more than fifty-five hours a week. The wages for overtime should be double that of normal wages.
  • One day should be given as a rest day in a week to all workers. A worker is allowed to work on a rest day, if he, of his own volition, decides to do so. 
  • A worker should work for more than five hours consecutively in one day; there should be at least half an hour break in between.
  • Children are prohibited from working in a plantation. Only if there is prior permission from the State Government can women work between the hours of 6 A.M and 7 P.M. Adolescents are only allowed to work in a plantation if they are given a fitness certificate from a certified medical practitioner and the adolescent should carry this certificate with him during the time he is employed.

Leaves with wages

  • How many leaves with wages are to be granted to a person is calculated as given below:
  • For an adult, one day for every twenty working days;
  • For an adolescent, one day for every fifteen working days.
  • If a worker does not avail of the leave granted to him in a year, that leave shall be carried over and added to the paid leave of next year. Thirty days of leave is the limit to the number of leaves that can be accumulated.
  • The wage that is to be paid to the worker during the leave period is to be calculated on a time-rate and piece-rate basis. The wage to be paid to the worker should be paid before he avails of the paid leave.
  • Workers are eligible for sick allowance and women are also eligible for maternity allowance.

Penalties and procedures

  • If a person wilfully prevents an Inspector from discharging his duties, he shall be punishable with imprisonment, which may extend to six months with a fine or with both.
  • If a person willfully refuses to produce any document or register that is demanded by the Inspector, he shall be punishable with imprisonment, which may extend to six months, or with a fine or both. 
  • If a person knowingly uses or attempts to use a false certificate of fitness with the intent of securing employment at any plantation that comes under the purview of this Act, he shall be punished with imprisonment that may extend to two months, with a fine, or with both.
  • If a person is guilty of the same crime twice, the prison sentence shall extend to twelve months,  and the fine shall also be increased.

Related case laws

M.C. Mehta Vs. State of Tamil Nadu and Ors.

Facts and history

This case came before the Supreme Court of India through a writ petition. The case deals with the employment of children in industrial establishments and related consequences and circumstances. Our constitution makers knew enough to understand the paramount importance of protecting the rights and interests of children of the country, they realised that children would not be able to contribute their mite to the nation unless they received basic education. This petition was filed by M.C Mehta by invoking Article 32 of the Constitution to protect the children engaging in child labour in the factories of Sivakasi. The workplace conditions of the match manufacturing industry were extremely hazardous for children and as a result many deaths occurred. The Court also gave directions for the constitution of a committee which would consist of three advocates to study the plight of children in these factories and in general within the State of Tamil Nadu. The Court took cognizance of various committee reports that had been proposed by various stakeholders. 

Impact

This being a case that dealt with a prominent societal issue, the impact this had on society has to be also examined. 

The Court noted that Sivakasi was not the only centre employing child labour, across India, in three hundred different industries at least thirteen thousand children were being engaged in child labour. According to the 1971 census, 4.66 per cent of the child population in India consisted of working children. There were also many other reports that highlighted the gravity of the situation. In this case the Supreme Court dealt with not only the issue in the Sivakasi establishments but throughout the whole of India.

Constitutional mandates

  • Article 24 of the Constitution mandates that there should be no child under the age of fourteen working in any hazardous situation.
  • Article 39(f) of the Constitution states that children should be given adequate facilities to develop in a healthy manner and in conditions of freedom and dignity.
  • Article 41 provides for the right to work, right to education and the right to public assistance. These rights have to be enforced by the State for the benefit of the citizens. 
  • Article 45 is the provision for providing free and compulsory education for children until they reach the age of fourteen. 

Analysing the above mentioned articles, one would unequivocally come to the viewpoint that the best interest of the children is of paramount importance for our nation and it is highlighted in such manner in the Constitution. 

Statutory provisions

  • Section 24 of the Plantation Labour Act, 1951, mandated that no child under the age of twelve shall be allowed to work in any plantation.
  • Section 67 of the Factories Act, 1948, mandated that no child below the age of fourteen shall be allowed to work in any factory.
  • Section 21 of Motor Transport Workers Act, 1961, mandates that no child can be allowed to work in any capacity in any motor transport undertaking. 
  • Section 3 of the Apprentices Act, 1961, mandates that no individual under the age of fourteen shall be qualified for apprenticeship training in any trade.

Issues

  • Should primacy be given to the right to work over the rights of children. What is the optimal method to approach this dilemma?

Judgement

  • The Supreme Court came to the conclusion that there were many reasons for child employment but emphasised that poverty is the leading cause.
  • The Court held that the prima-facie answer to the problem of child labour, which is education; is not the actual solution. Even if education was provided on a large scale the children in poor families would not receive any education. 
  • The Court stated that the least they could do to enforce the rights of children was the strict adherence to the Child Labour (Prohibition and Regulation) Act, 1986.
  • There is a strong case for primacy to be given to the right to work and what has been provided in Article 47 relating to raising the standard of living of the population. Here the Supreme Court said that primacy should be given to the rights of the children so that the future of our nation is safe. 

The Tamil Nadu Contract Labour (Regulation and Abolition) Rules, 1975

Objective

This Act has the primary intent of protecting the interests of the labourers that have been employed on a contractual basis by their principal employer. The Act also protects the welfare of the contractors by providing guidelines and regulations for the employment and subsequently working conditions of the labourers. The provisions under the ambit of this Act are extremely wide, and the crucial ones have been enunciated below.

State Advisory Board

Composition

  • The State Advisory Board shall consist of a Chairman who is appointed by the Government.
  • There should be an official representing the government on the board.
  • Two people representing the public sector and private sector should be present on the Board. There should also be two people representing the contractors.
  • The Board should also have six representatives of the trade unions.

Term of Office

  • An official member of the Board shall hold office at the pleasure of the Government, the same applies for non-official members.
  • If a member is unable to attend a meeting of the Board, he shall intimate the Government in writing as to the cause of his absence and any decision that is taken in his absence shall be binding upon him too.

Resignation, cessation, disqualification and meetings

  • A member shall send a letter addressed to the Chairman of the Board as to when the member wishes to vacate his seat from the Board.
  • If a member without sufficient cause fails to attend three consecutive meetings of the Board, he shall cease to be a member of the Board.
  • A person shall be disqualified from nomination or as continuing as a member if he is insolvent or of unsound sound or if he has been convicted of an offence.
  • The Chairman decides the seat of the meeting and he also presides over all the meetings of the Board. 
  • The notice for conducting a meeting should be sent to all the members at least fifteen days before the meeting. In case of an emergency meeting, a notice shall be sent at least seven days before the meeting takes place.

Registration

  • The application for registration under this Act should be submitted to the Registering Officer with the appropriate jurisdiction. All applications should be accompanied by the treasury receipt showing payment of fees for registering the establishment.
  • For granting a certificate of registration, the following particulars must be present in the form:
  • The address of the establishment,
  • The name under which the establishment shall be known,
  • The type of trade and business to be carried on at the establishment,
  • The application submitted may be rejected by the registering officer if the application is not complete or if the applicant fails to submit any document that has been requested by the officer.
  • If an amendment to the certificate of registration has to be made, the original certificate along with the intended change and the treasury certificate showing the payment of the appropriate fee should be sent to the registering officer.
  • The licensing officer should make a decision within thirty days as to whether the licence has been accepted or refused. If no order has been passed within the stipulated time period, the licence is deemed to be granted.
  • Every licence that has been granted under this Act is deemed to be valid for a period of two years. For renewal of a licence, an application has to be made three months before the date of expiry.

Health and welfare

  • The contractor shall provide an adequate amount of restrooms for the workers, within seven days of the establishment of hiring them. The restrooms should also be split on a gender basis and proper ventilation should be ensured in all the restrooms. 
  • If there are more than one hundred workers employed, canteens should be provided by the contractor. The canteen should easily be able to accommodate at least thirty per cent of the workers employed at a time, and its premises should be kept clean at all times. 
  • The canteen shall be run on a ‘no-profit, no loss’ basis. The prices of the dishes served should be clearly visible to the workers.
  • A sufficient amount of latrines should also be made available to the workers. There should be separate latrines for male and female workers, these latrines should also be partitioned off for privacy and shall have a proper door and fastenings.
  • Every establishment that comes under the purview of this Act shall have a First Aid Kit and there should be no less than one kit for one hundred and fifty labourers.

Wages and registers

  • The wages shall be fixed by the contractor with the concurrence of the labourer. The wage period should not exceed one month and the wages should be paid within three days of the expiration of this period.
  • The wages to be paid to an employee should be paid directly to him or any person authorised by him. 
  • Every contractor should maintain a register of the wages paid and these records should be certified by the labourer. All the registers that are to be kept under this Act should be kept in Tamil or English.

Related case laws

Bharat Sanchar Nigam Limited Vs. The Deputy Chief Commissioner of Labour (Central) & Ors

Facts and history

The petitioner was a company incorporated under the Companies Act and has numerous telephone exchanges throughout the state of Tamil Nadu. The primary business it is engaged in is the maintenance and installation of telephone lines and cables. For the purpose of carrying out the business, the company has employed many employees under the company’s name. For carrying out housekeeping, cleaning, etc., the petitioner obtained a Certificate of Registration under the Contract Labour (Regulation and Abolition) Act, 1970. The contractors have the obligation to pay the contract labourers the amount fixed by the District Collectors, which shall vary from time to time. The work done by the employees of the company and those engaged on a contractual basis are of totally different nature. The work done by the non-employees of the company is unskilled work and this work is not essential for the company. The only ones the petitioner has on the contract labourers is to make sure that they receive their wages in a timely manner. The minimum wages fixed by the District Collectors of respective districts are generally higher than the minimum wages fixed by the Ministry of Labour. The second respondent is not a recognized union and as such it has no locus standi in the case.

Procedure

  • The petitioner alleged that the wages fixed by the District collector under the Tamil Nadu Contract Labour (Regulation and Abolition) Rules, 1975, are legally valid and proper. However the first respondent has unilaterally fixed the wages to be paid to the contract labourers and hence this petition has been filed.
  • The second respondent (the Union), had raised its voice for the workers of BSNL because the workers there were receiving substandard wages. 
  • The petitioner contended that they had no control over fixing the wages for the labourers. 
  • The petitioner relied on the judgement in Allied Industries v. E.S.I. Corporatio (1993), wherein it was held that the order of the authority has to be remitted and set aside and the wages made paid to the appellants has to be redetermined, upon any inferment.
  • It became clear, after examination of much evidence and records, that the Deputy Chief Labour Commissioner (Central) is the competent authority to determine the wages rates, holidays, hours of work and other conditions of service of the contract workers. 
  • The petitioner raised the contention that the minimum rates fixed by the District Collector alone would apply and the minimum wage applied by the Government of India would not apply. 
  • The respondent contended that the work done by the contract labourers are of a similar nature to the work done by the employees. The contention that the contractors had no control over the work of the contract labourer and hence no control over the payment of their wages were also repudiated.

Issues

  • Whether contracted labourers should be receiving the same remuneration as regular employees or not.

Judgement

  • In the present case it was held that, after taking into account the fact that the contract workers were engaged in work for less than eight hours a day would make them only eligible for payment on a pro rata basis.
  • The writ petition has been dismissed with no costs implied.

Significance and recent developments

As has been enunciated time and time again in the cases above, the Tamil Nadu Labour laws plays an impertinent role in the development and moreover the maintenance of decorum among the labour fraternity of Tamil Nadu. The Acts concern themselves with almost all the nuances of any aspect of labour, from the setting up of shops to the setting up of trade unions and the closure of these establishments, have all been regulated by the labour laws. This framework is slightly delicate as can be seen in the upset of the framework by the new Union labour codes that have been introduced. 

The new Union Codes

In 2019 and 2020 the Union Government had replaced 29 central labour laws with four labour codes, namely, Code on Wages (2019), Code on Social Security (2020), Industrial Relations Code (2020) and the Occupational Safety, Health and Working Conditions Code (2020), these dealt with worker safety, industrial relations, social security and safety of workers. The workers in Tamil Nadu would have a lot to lose if these Codes were implemented because it would destroy certain rights which they had worked extensively for. These labour codes are yet to be implemented as they face some difficulties in implementation in certain states.

There are eighteen boards in Tamil Nadu established under The Tamil Nadu Manual Workers (Regulation of Employment and Conditions of Work) Act 1982 and these boards offer several benefits to workers including old age pension, educational assistance for children and maternity assistance. There are also two boards that have just been announced for the salt and gig-workers and these boards provide sector specific benefits. There are also eighteen other boards that have been constituted for the welfare of the labourers, although labour welfare boards are not unique to Tamil Nadu, their multiplicity definitely furthers the interests of the citizens. In the new labour codes there is no clause to ensure regulation upon the working conditions of the workers, there is an absence of any clause that states that welfare boards will be protected. 

There is a rough estimate that ninety three percent of India’s workforce is in the informal sector, the number stands at more than two crore in Tamil Nadu. As per the estimates of the Tamil Nadu Labour Welfare and Skill Development Department, about forty lakh workers are registered with unorganised workers welfare boards. The concerns of the labourers have almost been wholly ignored in the new codes. The framework that has been established by the Tamil Nadu Welfare Department that protects the rights of workers in the unorganised sector is most ideal and it has to be protected by the concerned authorities. 

The 2021 Foxconn protests in Tamil Nadu saw thousands of young contract worker women demanding better wages, working conditions and actual contracts. The new code is in no way reassuring to the contract workers as the Contract Labour Act of 1970 which had been absorbed into the new code provided many safeguards which are absent in the new codes. The new codes vaguely defined that the workers are to receive welfare schemes and did not specify in what way they would receive the amounts under these “welfare schemes”. The framework that has been established  by the Tamil Nadu labour department is definite and it supports the rights of the workers and the calculation of the amounts to be distributed to the workers is also mentioned. The support to the unorganised framework comes despite the neglect from the Central Government. 

While the labour codes are still pending, industrial states have eased labour laws, especially those relating to worker welfare and conditions. Tamil Nadu has extended the working hours from eight to twelve. States like Uttar Pradesh and Madhya Pradesh are looking forward to making similar changes like this. However, Tamil Nadu had not eased the working conditions of those labourers working in hazardous conditions and the weekly working hours were still capped at forty eight. This allows establishments to implement the four day work week, this has to be with the consent of the workers. The new code affects major industrial states like Tamil Nadu, Maharashtra, Haryana and West Bengal and as such they are yet to frame and notify them. Another aspect that could change is the ideology imposed by the government. The Tamil Nadu government had emphasised federalism and social justice for a considerable period of time. Many of the features of the new code like setting threshold for application of social security schemes, retrenchment and closure, specifying safety standards has been delegated to the State Government for deliberation and codification into laws. The government of Tamil Nadu being a fervent follower of federalism should subject themselves to the new labour codes that would undermine the sea of worker safety that has been provided to the workers. It is also imperative that the Tamil Nadu government ensures the continuation of the welfare boards in Tamil Nadu as it is a cardinal tenet of their framework. The Tamil Nadu government was also hostile to the proposal of a floor wage. 

The framework established by the Tamil Nadu Labour Acts is more than capable of dealing with any issue dealing with worker safety, worker welfare, etc., any transgression on the autonomy of this already functioning system would be a travesty. As can be seen in the above passages, the labour Acts have a definite system of appeals and authorities of first hearings and also proper distribution systems for welfare funds and provident funds. All this is harmoniously brought into one concoction and it works extremely well and it gives us the framework we see today.

Conclusion

As is evident from the article above, there are a multitude of labour laws that are in effect in Tamil Nadu at the present moment. These laws may be enacted by the Central Government or State Government and enforced by them independently or jointly. Some of the Central acts in power in Tamil Nadu are also amended to adapt to the socio-economic situation prevailing in Tamil Nadu. It is imperative that these statutes be amended periodically to safeguard the interests of both employees and employers. A congenial relationship between the Acts enacted by the centre and state is extremely important to ensure the smooth functioning of both systems. 

Frequently Asked Questions (FAQs)

Are there multiple labour laws enacted by the Tamil Nadu government?

Yes, there are multiple labour laws enacted by the Tamil Nadu Government for the regulation of establishments and to protect the interest of the labourers that have been employed in those establishments.

Is the Central labour laws working in congruence with the State labour laws?

Yes, although Central labour laws and State labour laws are separate legislations, they work in consonance with each other for the welfare of the workers and employees.

When did the Tamil Nadu Labour Department come into force?

The Tamil Nadu Labour Department has been working since the 1920s and during the initial days, they primarily looked after the welfare of non-industrial labour and subsequently diverged into other sectors of labour. 

How do Tamil Nadu labour laws address broader issues such as child labour, forced labour, and other forms of exploitation in the workforce?

There are provisions in many of the Acts applicable in the state that address child labour. In many of the Acts, the definition of a ‘child’ varies. 

What role does the Labour Department play in upholding and enforcing labour laws across Tamil Nadu?

Even though there are provisions for inspectors or Boards that oversee the implementation and efficacy of the Acts within the state, it is crucial that a labour Department overlooks the entirety of the labour sector in Tamil Nadu; the implementation of the labour Acts is also the responsibility of the State Government. 

References

  • https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwj0nsLS1p2EAxVdxjgGHds7BN4QFnoECA0QAQ&url=https%3A%2F%2Fwww.jstor.org%2Fstable%2F23391676&usg=AOvVaw1eIqIYUfxytt6eXFZ5WPrb&opi=89978449
  • https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjNguOW152EAxVk2TgGHeTsDDYQFnoECBQQAQ&url=https%3A%2F%2Fwww.indiacode.nic.in%2Fhandle%2F123456789%2F1530%3Fview_type%3Dbrowse%26sam_handle%3D123456789%2F1362&usg=AOvVaw0eQDfbS_wY9dmBTHPNArnE&opi=89978449 

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