This article is written by Divya Kathuria, a student of Raffles University.
India is a member of International Labour Organization since 1919 and therefore, must keep special emphasis on the rights of labour and thus, their welfare. As per ILO, “Labour welfare may be understood and including such services facilities and amenities which may be established in vicinity of undertaking to perform their work in healthy and congenial environment and to avail facilities which improve their health and bring high morale.” Labour welfare is an inclusive term in itself mainly, due to the subjectivity of term ‘welfare’. That is the reason, this term will include all the amenities provided to labourers varying from one sector to another, time to time and also, from state to state and through this article, I will deal with the State of Punjab which has its own statutory provision for welfare of labour that is, The Punjab Labour welfare Fund Act, 1965.
Preamble, object and reasons, extent:-
- It provides for the constitution of a fund
- The fund be for the financing of activities to promote welfare in the State
- The fund be also for conducting such activities
- The fund be for certain other purposes related to welfare of labour in Punjab
Besides these, the reason for bringing such an act is that the employers realize a large sum of money from the employees in the form of fine, unpaid wages, bonus, etc. which are not claimed by them get accumulated with the former and is not properly used for the betterment of labour .the Act provides for the constitution of the Labour Welfare Fund to carry on various activities for the betterment of labour where the constituted fund will act as an agent.
It extends to the territories which, immediately before the 1st November of 1966, were comprised in the State of Punjab, excluding the territory transferred to the Union Territory of Himachal Pradesh under Section 5 of the Punjab Reorganization Act 1966. This simply means that the act would cover within the State of Haryana as well which was a part of Punjab before 1966- 1st November. However, it excludes all those areas which are now a part of Himachal Pradesh and were earlier of Punjab.
What constitutes the welfare Fund
Section 3 of the Act explicitly explains what all can be there in Labour Welfare Fund. It is to be constituted by the State government in which all the unpaid accumulations have to be paid to the Board which it will keep separately until the claims regarding it have been settled. The fund mainly consists of:
- All fines paid by employees
- unpaid accumulations paid under Section 9
- grant and subsidies made by State government
- all voluntary donations for example:- philanthropic donations
- any fund transferred under section 10(5)
- any sum borrowed under Section 11.
The claims are settled in the manner as provided by Section 9. As per this section, all the unpaid accumulations are deemed as abandoned property. Any unpaid accumulation if is paid to the board will discharge the employer of making any payments to the employee to the extent of amount paid to the board and such liability is then, transferred to the board. The board after receiving such payment is bound to exhibit the notice on the notice board of the establishment in which the unpaid amount was earned (containing all specifications and particulars) and also, publish in the official gazette and in any 2 papers of regional language with regard to the amount of the claim and inviting claims by employees of any payment due to them. If any answer is received by the board in response to the published notice within 4 years of publication, the claim as much the board has with it has to be paid to the employee concerned. Further, in case of any other dispute or shortcoming, the board is obliged to transfer the claim to the authority appointed under Section 15 of the Payment of Wages Act, 1936 to decide that claim.
If the authority is finally satisfied that the employee has right to receive the payment then, unpaid accumulations in relation to which claim was made will cease to be an abandoned property and board can then be ordered to pay the dues claimed. However, the board will not pay any amount in excess to what it has received by the employer. In case of refusal, the employee has the right to appeal within 60 days of the authority’s decision to the Court of District Judge and the decision here will be final.
If no claim is made within prescribed time period or is denied by the authority and in appeal too then, the unpaid accumulations will follow the State as Bona vacantia that is, ownerless property and thus, finally become part of the fund and then, as per Section 10(5), it is lawful for the Board to continue any activity financed from the welfare fund of any establishment if the fund is duly transferred to the Board.
Section 9-A of the Act (as applicable in Haryana) mandates that an employer and an employee are required to make labour welfare contributions to the Punjab Labour Welfare Fund at specified rates that is, the calculation of PLWB is done through the contribution of company as well as the labourer. The latest amendment to the Act was made in 2014 in Section 9-A(l), for the words two and four rupees, five and twenty rupees has been substituted respectively. Therefore, an employer in Punjab would now mandatorily contribute Rs. 20 per employee per month on his behalf and Rs. 5 per employee per month on behalf of each employee to the Fund. This notification was published in gazette on 15th December, 2014.
The Haryana Legislature, by a notification dated 11 April 2012, has revised the rates of contributions required to be made under Section 9A. The rates of welfare contributions have now been increased for employers and employees from Rs 10 and Rs 5 to Rs 20 and Rs 10 respectively. Therefore, an employer would now be required to mandatorily contribute Rs 20 per employee per month on his own behalf and Rs 10 per employee per month on behalf of each employee, to PLWF. Commercial establishments located in Gurgaon are required to take specific note of this amendment and remit contributions at the increased rates.
Dues and Penalty
Any person who is convicted of contravening any of the provision under this act or rules made under it or who obstructs the inspector deliberately in discharging his duties under the act or rules or fails to produce any material necessary for inspection like register of records and documents can be imposed a fine which may extend up to five thousand rupees but, not less than two thousand rupees for committing the offence for the very first time. In case of subsequent or second time offence, he/she can be punished with an imprisonment that may extend to three months or fine extending up to ten thousand rupees while nothing less than three thousand.
The offence under this Act cannot be tried by any court inferior than that of a 1st class Judicial Magistrate and cognizance can be taken only by the complaint of an inspector.
The rules made under PLWF Act along with format of maintaining register of wages and of fines realized and unpaid accumulation can be accessed here: