CS Excutive Industrial Labor and General Law

Industrial labor and
general law CS ExcutiveILGL Notes

APPLICABILITY • To every factory, Business organization, establishment
(Sec. 1) • With more than 20 employees, employed on any working day of A.Y.
• With employee between 10 to 19 (By passing a notification in official
gazette by Appropriate Government, giving a 2 months prior notice to
Corporate – year ending on closing
date of books
MEANINGS [Sec. 2(1)] Accounting year Company – Period of P & L
Any other – 1st April to 31st march
or year ending on closing
date of books
[Sec. 2(13)] Employee ANY Person (except apprentice)
doing any job, and getting salary/wage
less than Rs. 10,000 per month.
[Sec. 2(14)] Employer Owner or person who manages the
affair of establishment.
[Sec. 2(21)] Salary remuneration + DA + Food allowances +
cash payments (Nothing else)
Eligibility Employee Working days ≥ 30 days during A.Y.
(Sec 8)
Disqualification Employee has been dismissed from service for (any of the following)
(Sec 9) • Fraud,
• Riotous or violent behavior while on the premises of establishment.
• Theft misappropriation or sabotage of any property of establishment.
COMPUTATION AND PAYMENT OF MINIMUM BONUS [Sec. 10,11,12,13,14,15,17,18,19]
Age ≥ 15 yrs – Rs. 100 or 8.33% of salary or wages
Minimum Amount Employee age
(Sec 10) Age < 15 yrs – Rs. 60 or 8.33% of salary or wages
Once Applicable
Applicable Forever
Any means any, whether retrenched, temporary etc only apprentice is excluded
Establishment includes branches, departments and undertaking, except those whose books are
maintained separately.
Disqualified u/s 9 for any year will not receive any bonus for any year
Whichever is higher
Minimum bonus is must whether employer has allocable surplus or not
RAJNISH PANDEY – 9651594376 , rajnishpandey78616@gmail.com or at fb search – 9651594376 Page 3
Maximum Amount • if Allocable Surplus exceeds amt of minimum bonus then
(Sec 11) ® bonus = proportionate to wages or salary
® 20% of wages or salary
• If Allocable Surplus exceeds 20% of wages or salary then
® Excess amt is carried forward as per Sec. 15
Ceiling on salary or wages Lower of two
(Sec 12) • Actual Salary or wages
• Rs. 10000 per month
Proportionate reduction if employee has not worked on all working days in AY minimum
(sec 13) bonus shall be reduced proportionately.
Computation of working days the days on which employee is on leave (any kind) with salary
(Sec 14) or wages will be deemed as working days
Allocable Surplus > Max Bonus • Excess amt carried Forward
Set off and Set on • for being set on in 4 succeeding AY
(Sec 15) Allocable Surplus < Min Bonus • Deficiency Carried Forward
• for being set off in 4 succeeding AY
Adjustment of amt paid as • Customary Bonus (puja, diwali etc.)
Deduction from Bonus (Sec. 17) • Interim Bonus
Deduction of loss caused due to • Financial loss caused by Employee &
(Sec. 18) • Employee found guilty of misconduct
Time Limit for Payment • within 1 month of award becoming enforceable (in case of dispute)
(Sec. 19) • extension of 8 months from end of AY with permission of AG
Procedure Application by employer to AG
Stating reason of grant of extension
Total period including extension ≤ 2 yrs
Provision Applicable to New Establishments first 5 yrs – Sec 15 Not applicable
(Sec. 16) 6th year – excess/deficiency of 5 & 6 yr C/f
7th year – excess/deficiency of 5,6 & 7 yr C/f
8th year – Sec 15 applicable here onward
Whichever is
RAJNISH PANDEY – 9651594376 , rajnishpandey78616@gmail.com or at fb search – 9651594376 Page 4
Recovery of Bonus due from employer App. by – Employee, Legal heir, Authorised person
(Sec. 21) App. To – Appropriate Government (AG)
Time Limit – Within 1 year of bonus become payable
(May be extended by AG if sufficient cause given)
After satisfaction AG Issues Certificate of Recovery and
Delegates the power u/s 21 to a collector who shall proceed to
recover the amt in the same manner as arrears of land revenue
In Case of Dispute Relating to – Payment of Bonus or applicability of act
Filed with – any court, Tribunal or Arbitrator
It is Presumed that – Particulars contained in books of Account, B/S and
P&L A/c of employer duly audited, are accurate.
Table showing whose and what books should be audited and by whom. Under what section.
No. Meaning of Employer Section Nature of Books Audited by
1. A Company Sec. 24 B/S and P&L A/c Auditor qualified u/s 226
2. A Corporation Sec. 24 B/S and P&L A/c CAG
3. A Banking Company Sec. 25 Books of Accounts Chartered Accountant
4. Other than Company or Corporation Sec. 26 Books of Accounts Auditor qualified u/s 226
Inspectors Purpose of Appointment – To ascertain whether provison of act have been complied
(Sec. 27) Appointed by – AG (No. required & limits of exercising jurisdiction is also defined)
Power of Inspector – • Collect Information
• Enter into establishment
• Examine employer, his agents or servants
• Make copies of or take extracts from any book.
• Exercise other powers as prescribed [Sec. 27 (2)]
Non Applicabilty of the act Employees of 1. Insurance and Banking Companies
(Sec. 32) 2. Seamen, CG, SG or a Local authority
3. Educational Institutes

4. Indian Red Cross Society, NPO’s

5. Financial Institutes notified in off. Gazette
Exemption from Act Granted by – AG
(Sec. 36) On Grounds of – Financial Position
Order of Exemption – Shall be published as notification in Official Gazette
Contents of Order – Conditions and Period of Exemption
If Employer fails to get his accounts audited then Authority may get the account audited and

remuneration + expenses to auditor will be paid by



Leave a Comment