4.3.3 Employees State Insurance Act , 1948
Figure 13
The Employee State Insurance ( ESI ) scheme provides protection to workers and their dependents in contingencies such as sickness disablement due to employment , injury or occupational hazard .
Under the ESI Scheme the employee contribution is 1.75 per cent of the wages and that of employer is 4.75 per cent of the wages . Employees earning a daily average wage of ` 50 are exempted from making any contribution . Employees whose gross salary / wages are in excess of 15,000 pm can opt out of the scheme .
Labour Laws - Key Issues
4.4 Disputes
1 |
Restriction on hours worked |
48 hours per week |
|
by employees |
maximum |
2 |
Number of Indian employees which triggers employer |
10 |
|
obligation to provide employees state insurance |
|
3 |
Number of Indian employees which triggers employer |
20 |
|
obligation under provident fund scheme , bonus act |
|
4 |
Number of years of continuous service which |
5 years |
|
makes an employee eligible for gratuity |
|
5 |
Minimum bonus to be paid to an employee drawing |
8.33 per cent |
|
a basic wage of ` 10,000 or less |
|
6 |
Prohibited age of employing young children in factories |
14 years |
7 |
In case of retrenchment due to / or closure , number of |
100 |
|
employees which triggers employer obligation to seek prior government approval |
|
8 |
On retrenchment / lay off / closure |
Compensation is payable to employee |
There are various labour laws and each may vary from state to state . Specifically , the statutes requiring payment of gratuity , bonus , provident fund contributions , etc . need strict adherence , as non-compliance would entail penal consequences and may even result in prosecution .
4.4.1 Industrial Dispute Act , 1947
The Act aims for amicable settlement of conflicts between the employer and the employee and also contains provisions in respect of issues that may arise in an industrial or commercial undertaking .
4.4.2 Trade Unions
As per current regulations , trade unions are to be registered under the Trade Unions Act with a minimum of seven members .
4.4.3 Dismissal and Layoff
An employer can remove an employee on ground of misconduct or fraud . Such misconduct can include a criminal charge on that employee or his continuous absence from duty . Layoff , on the other hand is termination of service of an employee for any reason other than disciplinary action .
30