Considerations Before Signing an Employment Contract

Posted by Nidhi Kumari
November 9, 2017

Self-Published

Overtime working is a very common thing in a corporate sector. Whether it is to meet the deadline or because of a demanding work or you simply wish to influence your management team that you are working hard, you agree to work for fifteen hours a day or so and forgo anything resembling a normal life. Working overtime refers to the time in excess of one’s regular working hours. In India, normal working hours constitute 8-9 hours per day and 48 hours per week. Generally, if someone is working more than the normal working hours, one is eligible to get compensated for the same.

In many Employment Agreement, it is normally stated that an employee must work for extra hours as required by the company. Working overtime must be at the discretion of an employee, not forced down by an agreement.

Factories Act, 1948

The Factories Act, 1948 (the Factories Act) lays down provisions for the health, safety, welfare and service conditions of workmen working in factories. It contains provisions for working hours of adults, employment of young persons, leaves, overtime, etc. It applies to all factories employing more than 10 people and working with the aid of power, or employing 20 people and working without the aid of power. It covers all workers employed in the factory premises or precincts directly or through an agency including a contractor, involved in any manufacturer. Some provisions of the Act may vary according to the nature of work of the establishment.

Some Major provisions of the Factories Act are explained below:

a) Section 11 of the Act provides that every factory shall be kept clean and free from effluvia arising from any drain, privy or other nuisance. Section 13 of the Act focuses on ventilation and temperature maintenance at the workplace. Every factory should work on proper arrangements for adequate ventilation and circulation of fresh air.

b) Section 18 of the Act specifies regarding arrangements for sufficient and pure drinking water for the workers.

c) Section 19 further mentions that in every factory there should be sufficient accommodation for urinals which should be provided at a conveniently situated place. It should be kept clean and maintained.

d)Section 21 of the Act provides for proper fencing of machinery. And that any moving part of the machinery or machinery that is dangerous in kind should be properly fenced

  1. ) Further, s 45 of the said Act specifies that every factory should have a properly maintained and well equipped first aid box or cupboard with the prescribed contents. For every 150 workers employed at one time, there shall not be less than 1 first aid box in the factory. Also in the case where there are more than 500 workers, there should be well-maintained ambulance room of prescribed size and be containing proper facility.
  • Industrial Employment (Standing Orders) Act, 1946

The Industrial Employment (Standing Orders) Act, 1946 (the IESO Act) is applicable to every industrial establishment wherein 100 or more workmen are employed or were employed on any day of the preceding twelve months. The IESO Act Amis to bring uniform terms and conditions of service in various industrial establishments. The IESO Act requires every employer in an industrial establishment to clearly define and publish standing orders with respect to conditions of employment/service rules and to make them known to the workmen employed by it. The Act further specifies that every employer is required to submit to the Certifying Officer five draft copies of the standing orders which he intends to adopt for his establishment.

Further, the IESO Act requires the display of standing orders in a prominent place for the knowledge of workers.

  • Shops and Commercial Establishments Act (of respective States)

The Shops and Commercial Establishments Act(s) of the respective States generally contain provisions relating to registration of an establishment, working hours, overtime, leave, privilege leave, notice pay, working conditions for women employees, etc. The provisions of the Shops and Commercial Establishments Act apply to both white-collar and blue-collar employees. IT and IT-enabled services have been given relaxations by various State Governments in respect of the observance of certain provisions of their respective Shops and Commercial Establishments Act.

  • Contract Labour (Regulation & Abolition) Act, 1970

 The main objectives of the Contract Labour (Regulations & Abolition) Act, 1970 (the Contract Labour Act) are: (i) to prohibit the employment of contract Labour; and (ii) to regulate the working conditions of the contract Labour, wherever such employment is not prohibited.

The Act defines a “worker” as a workman who shall be deemed to be employed as “contract Labour” in or in connection with the work of an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer.

The Contract Labour Act regulates the employment of contract Labour in certain establishments and provides for its abolition in certain circumstances. It applies to every establishment or contractor wherein/with whom 20 or more workmen are employed or were employed on any day of the preceding twelve months as contract Labour. The Government may, however, by notification in the Official Gazette, make the provisions of the Contract Labour Act applicable to establishments or contractor employing less than 20 workmen.

The Contract Labour Act is not applicable to establishments in which work only of an intermittent or casual nature is performed.

The Contract Labour Act prohibits the employment of contract Labour on jobs that are perennial in nature. For such jobs, permanent employees need to be employed.

The Contract Labour Act provides that no contractor shall undertake any work through contract Labour, except under and in accordance with a license issued in that behalf by the licensing officer.

In terms of s 7 of the Contract Labour Act, the principal employer has to make an application in the prescribed form accompanied by the prescribed fee payable to the registering officer for registration.

  • The Employee’s Compensation Act, 1923 (formally known as “The Workmen Compensation Act, 1923”)

The Employee’s Compensation Act, 1923 (the EC Act) aims to provide financial protection to workmen and their dependents in case of any accidental injury arising out of or in course of employment and causing either death or disablement of the worker by means of compensation.

This Act applies to factories, mines, docks, construction establishments, plantations, oilfields and other establishments listed in Schedules II and III of the said Act, but excludes establishments covered by the ESI Act.

The Act provides for payment of compensation by the employer to the employees covered under this Act for injury caused by accident. Generally, companies take insurance policies to cover their liability under the EC Act.

Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 (the ISMW Act) is an Act to regulate the employment of inter-state migrant workmen and to provide for the conditions of service and for matters connected therewith.

The ISMW Act applies to (i) any establishment in which five or more inter-state migrant workmen are employed or who were employed on any day of the preceding twelve months; and (ii) every contractor who employs or who employed five or more inter-state migrant workmen on any day of the preceding twelve months.

For the purpose of the ISMW Act, an inter-state migrant workman means any person who is recruited by or through a contractor in one state under an agreement or other arrangements for employment in an establishment in another state, whether with or without the knowledge of the principal employer in relation to such an establishment.

  • Weekly Holiday Act, 1942 

The Weekly Holiday Act, 1942 provides for the grant of weekly holidays to persons employed in shops, restaurants and theatres. The Act provides that every shop shall remain entirely closed on one day of the week, which day shall be specified by the shop-keeper in a notice permanently exhibited in a conspicuous place in the shop. Further the state government may require in respect of shops or any specified class of shops that they shall be closed at such hour in the afternoon of one week-day in every week in addition to weekly day off.

  • The Plantation Labour Act, 1951

The Plantations Labour Act (PLA) seeks to provide for the welfare of Labour and to regulate the conditions of workers in plantations. This Act empowers the State Governments to take all feasible steps to improve the lot of the plantation workers. The passing of PLA has helped in creating conditions for organizing the workers and the rise of trade unions.

The Act defines an employer as, the person who has the ultimate control over the affairs of the plantation and where the affairs of the plantation are entrusted to any other person, such other person shall be the employer in relation to that plantation.

Plantation: Any plantation to which this Act applies and includes offices, hospitals, dispensaries, schools and any other premises used for any purposes connected with such plantation.

The Act makes it mandatory for every employer to get their plantation registered within 60 days of its coming into existence.

  • The Mines Act, 1952

The Mines Act, 1952 (Mines Act) aims to secure safety and health and welfare of workers working in the mines. “Mine” is defined under the Mines Act as a place where any excavation work is carried on for the searching and obtaining of minerals.

The Mines Act provides that persons working in the mine should not be less than 18 years of age.

The Mines Act lays down provisions for appointment of one chief inspector who would be regulating all the territories in which mining is done and an inspector for every mine who would be subordinate to the chief inspector. Moreover, the District Magistrate is also empowered to perform the duties of an inspector subject to the orders of the Central Government. The chief inspector or any of the inspectors may make such inquiry, at any time whether day or night, in order to check whether the law is being abided in the mines or not.

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