Labour Law – II – Problem Sums

1. A car shed belonging to the owner “Y” was occupied in the

process of removal of the outer cover from coffee seeds with
the help of twenty workmen. The inspector of the factory
prosecuted him for not setting the factory as per the standard
prescribed by the factories Act. But “Y” contended that it is
not a factory as there is no production except removal of
outer layer of coffee seeds. Decide
Issues Involved:
1. Whether "Y's" car was considered a factory under the
Factories Act, 1948?
2. Whether removing the outer cover from coffee seeds
qualifies as a manufacturing process under the Factories Act?
3. Whether "Y" be prosecuted for non-compliance with the
Factories Act's standards, even if the activity seems non-
traditional?
Legal Provisions:

1. Section 2(m) of the Factories Act, 1948: Defines a "factory" as

premises employing 10+ workers with power or 20+ workers
without power, where a manufacturing process occurs.
2. Section 2(k): Defines "manufacturing process" as activities
involved in making, altering, or preparing goods for sale.

Legal Analysis:

3. Removing the outer cover from coffee seeds is a

"manufacturing process" under Section 2(k), as it prepares
goods for sale.
4. The car shed, employing twenty workers, qualifies as a factory
under Section 2(m), even without power.
Relevant Case Law:

Alkali Metals (P) Ltd. v. ESI Corpn.: The High Court ruled that a
manufacturing process doesn't need to result in a final product, just
the preparation of goods.

Solution: The car shed is a factory under the Factories Act because
it involves a manufacturing process (removing outer cover from
coffee seeds) and employs 20 workers. The inspector's action
against "Y" is valid, and "Y" must comply with the Act.

2. A girl child aged 17 years is terminated from services for

refusal to do the Night shift work in a factory. Advise her.

Issues Involved:
 Whether a factory can legally employ a 17yrs old girl at work?
 Whether allotment of night shift work to a girl child sounds
legal?
 Whether it is legal to terminate her for refusing to work in
night shifts?

Legal Provisions:

Factories Act, 1948:

Section 67: Prohibits the employment of children under 14 in

factories.

Section 68: Adolescents (14+) can work with a fitness

certificate and a reference token.

Section 71: Restricts children's working hours: no more than

4.5 hours a day, no night work, and for female children, only
between 8 AM and 7 PM.
 Child Labour (Prohibition and Regulation) Act, 1986: Regulates
the conditions of work for children.

Constitution of Indian:

Article 24: Bans child labour in hazardous industries.

Article 39(e): Protects the health and strength of children,

preventing unsuitable labour.

Article 39(f): Promotes opportunities for children’s healthy

development.

These laws ensure child protection from hazardous and

excessive labor in factories and other industries.

Legal Analysis:

 Under Section 71 of the Factories Act, children (male or

female) cannot work at night, and female children are
restricted to working between 8 AM and 7 PM.
 Since the 17-year-old is considered an adolescent under
Section 68, her refusal to work a night shift cannot be
grounds for termination, as it violates both the Factories
Act and the Child Labour Act.

Relevant Case Law:

M.C. Mehta vs State of Tamil Nadu (1996): The Supreme Court

ruled that employing children in factories violates their rights to
education and health, particularly in hazardous industries.

Solution: Terminating the 17-year-old for refusing a night shift is

illegal. She is protected by both the Factories Act and the Child
Labour Act. She can file a complaint with the labor commissioner or
approach the labor court for unfair dismissal. Legal remedies are
available for wrongful termination.
3. A workman while working without wearing spectacles
provided to him sustained injuries and lost his eye sight totally. His
employer pleaded the negligence of the workmen. Decide whether
the workman is entitled for compensation.

Issues:
1. Whether the employer is liable for the accident?
2. Whether the workman is entitled for compensation?

Relevant Legal provisions:

Section 35 of the Factories Act, 1948: Requires employers to
provide protective eyewear (goggles/screens) when there are risks
to the eyes from particles, fragments, or excessive light. The
employer must ensure that PPE is available and used properly.

Relevant Case Law:

Finch v. Telegraph Construction and Maintenance Co. Ltd.:

 In this case court held that Hanging goggles in the office is

insufficient; workers must be informed of their location to
comply with Section 35.
 Employers must provide PPE (Personal Protective
Equipments’) at their own cost and ensure workers are
trained in its proper use.
 PPE must be readily available, not just stored in the
workplace, and employers must ensure the equipment is used
correctly and maintained.
 Workers should be aware of PPE limitations, and other safety
measures should also be discussed.
Solution:

If the employer provides suitable PPE and training, they are not
liable for accidents.
If the employer fails to provide proper eye protection or training,
the worker may claim compensation. However, if the accident is
due to worker negligence, they may not be entitled to
compensation.

4. The Manager of a Steel factory asks employees to work for 70

hours including overtime in a week. Discuss the reason whether the
workmen is bound to work for such long hours in a week.

Issues:
1. Whether the manager asking the employee to work for 70 hrs
in a week (including overtime) is valid?

Relevant Legal Provisions:

Section 59 of the Factories Act, 1948: Workers who work over 9

hours a day or 48 hours a week are entitled to overtime pay at
twice their ordinary rate.
Section 64:
Total weekly hours (including overtime) cannot exceed 60 hours.
Overtime in a quarter cannot exceed 50 hours.

Relevant Case Law:

Hindustan Machine Tools Ltd. vs Labour Court:

The company violated Section 64(4) by making workers work over

50 hours of overtime. The Labour Court ordered payment of
overtime wages, which was upheld by the High Court.

Solution: Employers cannot require workers to work more than 60

hours in a week (including overtime). the employer must pay
overtime wages for additional hours worked as per Section 59 of
the Factories Act. If workers exceed this limit 60hrs including
overtime and asked to work for 70hrs they can claim it as not
legally valid.

5. X has been manufacturing bricks and has engaged several

workers. The Inspector of factories prosecuted him. X argues that
there is no Manufacturing as he does not use any machinery and
was making bricks with the man power. Advise X.
Same as Problem sum 1
Issues:
1. ‘Whether manufacturing bricks amounts to a
‘manufacturing process’?
2. Whether the prosecution of X by the inspector of
factories is valid?
Solution:
1. The process of manufacturing bricks qualifies as a
‘manufacturing process’ as defined under Section 2(k) of
Factories Act.
2. The prosecution of X by the inspector is valid as X must
comply with the standards/provisions of Factories Act.

6. Is the financial capacity of the industry can be presented to

excuse payment of minimum wages as a relevant factor?
Issues:
 Whether employers should provide transparent financial
reporting to justify claims of financial incapacity?
 Whether industry can be presented as an excuse for payment
of minimum wages or not?

Legal Analysis:

Relevant Legal Provisions:

 Section 1: Minimum wages act is applicable to whole India
  Section 2: Speaks about definition causes
 2(b): Appropriate Government, it can be both central or state
 2(d): Cost of Living Index: Appropriate govt. will fix the cost of
living index for that geographical location and announce it in
the official gazettes.
 2(h): Speaks about wages
 2(i): Speaks about employees
 Section 3: Speaks about fixing of minimum wages
 Section 4: Speaks about minimum wages includes basic wages
+ cost of living index wages
 Section 5: Speaks about fixing a committee by appropriate
govt. To get solution on fixing the minimum wages by hearing
both employer and employees.
 The Minimum Wages Act, 1948 ensures fair wages to workers,
protecting their living conditions. Payment of minimum wages
cannot be evaded based on the financial capacity of the
employer.

Relevant Case Laws:

Bijay Cotton Mills Ltd. v. State of Ajmer (1954): The Supreme Court
ruled that the Minimum Wages Act is constitutional and aligns with
Article 43 of the Constitution, emphasizing workers' rights over
financial constraints of employers.
Woolcombers of India v. Workers Union: Employers must pay
minimum wages regardless of their financial capacity.
VVF Ltd. Employees Union v. VVF India Ltd.: The Court endorsed an
"industry-cum-region" test for wage revisions, balancing financial
capacity and comparison with similar companies.
A.K. Bindal v. Union of India (2003) and Mukand Ltd. v. Mukand
Staff (2004): These cases acknowledged that while financial
capacity matters, it should not override the obligation to pay fair
wages.
Solution: While financial capacity may be considered, it cannot be
used as an excuse to avoid paying minimum wages. The legal focus
prioritizes workers' rights, and strong regulations are needed to
ensure compliance and balance both employer and employee
interests with transparancy.

7. Is it possible to fix the minimum wages on a national level?

A Quick Analysis:
Both the central and state governments have control over fixing the
minimum wages of employment. Wage rates of employment differ
across occupations, skills, sectors, and regions. Given the extent of
difference between various kinds of employable work, there is no
set wage rate that can be set for each specific work across the
country.

Why India has no national minimum wage?

Under the Code on Wages Act, 2019, workers from all industries are
entitled to receive minimum wages fixed by their respective state
governments. Matters concerning labor and its welfare come under
the purview of, both, the state and central governments as per
constitutional law, thereby resulting in multi-jurisdictional
regulation.

Earlier, only workers from a particular set of industries (40 percent

of the entire workers’ population) were entitled to receive
minimum wages. Nevertheless, since passing the Wage Code in
2019, there has been no new development on implementing a
national minimum wage for Indian workers.
The government has not prioritized the implementation of a
minimum wage plan as it is highly polarizing and would adversely
impact the employers of the Nation.

Conclusion:
India does not have a national minimum wage due to the complex
division of labor laws between the central and state governments.
Under the Code on Wages Act, 2019, minimum wages are set by
state governments for specific sectors and regions. While workers
from various industries are entitled to a minimum wage, the lack of
a national standard reflects the diverse nature of employment
across occupations, skills, and areas. The government has not
prioritized a national wage plan, as it would be highly controversial
and could negatively impact employers.

Can Add Problem 6 – Minimum wages act case laws and solutions.

8. A time barred claim of an employee was admitted by

authority on reasonable grounds without giving an opportunity of
hearing to the employer. Is the admission valid?

Issues:
 Whether it is valid to hear a time barred claim of an employee is
valid on reasonable grounds or not?
 Whether without giving an opportunity to hear employer is valid
or not?

Legal Analysis:
 The admission of a time-barred claim by an authority without
giving an opportunity of hearing to the employer may not be
valid under Indian labour law principles.
 According to Section 5 of the Limitation Act, 1963, a time-barred
claim can be admitted by a court or authority only if sufficient
cause is shown for the delay in filing the claim. However, the
employer must be given an opportunity of hearing to ensure
fairness and procedural justice.
 The Constitution of India under Article 14 (Right to Equality) and
Article 21 (Right to Life and Personal Liberty) mandates a fair
hearing for both parties before a decision is made. The Industrial
Disputes Act, 1947, particularly Section 11A, empowers labour
 courts and tribunals to make decisions on disputes but mandates
due process, including giving the affected party (in this case, the
employer) an opportunity to present its case.
 “Audi alteram partem” is a Latin phrase that means “listen to the
other side” or “let the other side be heard as well”. It's a
fundamental legal principle

Relevant case laws:

Rajasthan State Road Transport Corporation (S.R.T.C) v. Krishna
Kant (1995): The Supreme Court held that the principle of
natural justice, including the right to a fair hearing, must be
observed in administrative proceedings.

Collector, Land Acquisition v. Mst. Katiji (1987) 2 SCC 107: In this

case court held that the court can accept the condone delay
petition under section 5 of limitation act if there are valid
reasons for delay.

 Solution: Based on the above legal analysis and the authority’s

admission of the time-barred claim without hearing the
employer may be considered invalid, as it violates principles of
natural justice and procedural fairness at the same time in case
of valid reasons for condone delay for time barred, the
authorities can admit the employee’s petition after hearing both
employer and employee by giving fair equal opportunity.

9. A group of workmen demand that they be paid a ‘Fair Wages’

under the Minimum wages Act. The employer states that he is duty
bound to pay only a minimum wage which he was doing. State
whether the payment of wages Authority can entertain this claim
of the workmen.

Issues:
1. Whether the workmen have the right to demand ‘Fair
Wages’?
 2. Whether the employer is bound to pay only the
Minimum Wages?

Legal Analysis:

Relevant Legal Provisions:

 Section 1: Minimum wages act is applicable to whole India
 Section 2: Speaks about definition causes
 2(b): Appropriate Government, it can be both central or state
 2(d): Cost of Living Index: Appropriate govt. will fix the cost of
living index for that geographical location and announce it in
the official gazettes.
 2(h): Speaks about wages
 2(i): Speaks about employees
 Section 3: Speaks about fixing of minimum wages
 Section 4: Speaks about minimum wages includes basic wages
+ cost of living index wages
 Section 5: Speaks about fixing a committee by appropriate
govt. To get solution on fixing the minimum wages by hearing
both employer and employees.
 The Minimum Wages Act, 1948 ensures fair wages to workers,
protecting their living conditions. Payment of minimum wages
cannot be evaded based on the financial capacity of the
employer.

Relevant Case Law:

Woolcombers of India Ltd. vs Woolcombers Workers Union & Anr.:

 In this case, the Supreme Court addressed the dispute over

wages, defining three key concepts:
 Fair Wage: Lies between minimum and living wages, and must
be paid by the employer.
  Industry-cum-region formula: The determination of basic
wages and dearness allowance should be based on this
formula, along with the employer's financial condition.

Solution:

 Workers have the right to demand fair wages, which must be

paid by the employer.
 While minimum wages set the lowest limit, fair wages must
be determined using the industry-cum-region test,
considering the employer's financial condition.

10. In a factory employing 999 persons, the wages of the

workmen have been fixed to be paid on 7th march, employees did
not receive the payment and on 12th march the employee is
claiming for the delay of payment of wages. Is there any delay in
the payment of wages?

Legal Analysis:

Under the Payment of Wages Act, 1936:

 Section 4: Employers must fix the date for payment of wages,

which should not exceed one month.
 Section 5: Wages must be paid before:
o The 7th day of the month if there are fewer than 1,000
workers.
o The 10th day of the month if there are more than 1,000
workers.

 Section 20 - Penalty for delay in payment of wages

 Punishable with fine which shall not be less than 1500/-
rupees but which may extend to 7500/- rupees.
 If any person fails or wilfully neglects to pay the wages of any
employed person by the date fixed by the authority, in this
behalf, he shall, without prejudice to any other action that
 may be taken against him, be punishable with an additional
fine which may extend to Rs.750 for each day for which such
failure or neglect continues.
 For subsequent conviction of the same offence, Imprisonment
for a period of not less than one month and not more than six
months, and a fine of not less than Rs.3750, but not more
than Rs.22500.
 In this case, with fewer than 1,000 workers, the employer was
required to pay wages by March 7. The employee's claim is for
a delay until March 12, indicating the employer failed to make
timely payment, violating Section 5.

Relevant Case law: In Cit vs. Madras Radiators & Pressings Ltd., the
court confirmed that delays beyond the prescribed wage period
(one month) lead to penalties under the Act.

Solution:

 There are 999 workers, so wages should have been paid by

March 7 (under Section 5 of the Payment of Wages Act, 1936).
 The employee claims a delay until March 12, meaning the
employer missed the deadline.
 This violates Section 5 of the Act, and the employer is liable
under Section 4 for not paying on time.
 The employer must pay the wages with a penalty as per
Section 20 of the Act.

16. A settlement arrived between the management and the

employees, for the variance in the payment of remuneration
between male and female employees performing the same work
and work of a similar nature. Women employees question the
legality of settlement. Advise them.

Legal analysis:

The Equal Remuneration Act, 1976 :

This Act, aims to eliminate gender-based wage discrimination,
ensuring equal pay for men and women doing similar work and
fostering a fair, inclusive workplace.
Key Provisions:
1. Equal Pay (Section 4): Employers must pay men and women
equally for similar work by adjusting wages upwards, not
downwards.
2. Non-Discriminatory Hiring (Section 5): Employers cannot practice
gender discrimination during hiring.
3. Advisory Committee (Section 7): Committees can guide
employers on categorizing work and ensuring equal pay.
4. Registers (Section 8): Employers must maintain records of worker
categories, job descriptions, gender of employees, and wage
details.
5. Penalties (Section 10): Violations lead to fines or imprisonment.

Indian Constitutional Support:

Article 14: Ensures equality before the law, promoting equal
treatment.
Article 15: Bans gender-based discrimination.
Article 16: The Indian Constitution guarantees equal opportunity in
public employment and prohibits discrimination based on religion,
race, caste, sex, descent, place of birth, or residence.
Article 39(d): Calls for equal pay for equal work.
Article 42: Supports fair and gender-equal working conditions.

Relevant case laws:

Case 1: Air India vs Nergesh Meerza & Ors. 1981

In this case, the Supreme Court ruled that the principle of equal pay
for equal work applies to both men and women performing the
same or similar duties. The Court held that discrimination in pay
based on gender, even when the work is the same, violates the
fundamental right to equality under Article 14 of the Indian
Constitution.

Case 2: C. B. Muthamma vs Union Of India & Ors on 17 September,

1979

In this case the women employee’s promotion has been kept on

hold based on the sex discrimination which was challenged in the
court as fundamental rights got infringed under the Article 14 and
Article 16 of Indian constitution and court held that women should
be given equal rights for the equal work without any kind of
discriminations.

17. A woman suffering from illness arising out of pregnancy

claims additional leave for a period of one month. She produces the
Proof of her illness certificate issued by the certified medical
practitioner. Decide whether she can be given an additional period
of leave under the law.

Issues: Whether woman suffering from illness arising out of

pregnancy claims additional leave for a period of one month can be
extended or not?

Legal Analysis:
Maternity Benefit Act, 1961:
 Section 5: Entitles a woman to 26 weeks of maternity leave
for the birth of a child, which can be taken up to 8 weeks
before the expected delivery date.
 Section 9: If the woman suffers from illness arising out of
pregnancy, childbirth, or nursing, she can avail additional
leave.
 Section 10: Requires a woman to give notice to the employer
about her maternity leave, and in cases of illness related to
pregnancy, childbirth, or nursing, medical certification is
required.
The Employees' State Insurance Act, 1948 (ESI Act) (if applicable):

 Under the ESI Act, women employees who are covered can
avail medical benefits, including leave for pregnancy-related
illness if it is certified by a doctor.
Factories Act, 1948:
Similar to the Maternity Benefit Act, the Factories Act also provides
for maternity leave and benefits to women employed in factories.

Relevant Case Laws:

Municipal Corporation of Delhi v. Female Employees (2007): The

Supreme Court held that maternity leave should be granted as per
the provisions of the Maternity Benefit Act, 1961. The Court
emphasized the entitlement to leave in the event of any illness
arising from pregnancy or childbirth.

Solution:

 Maternity Leave: Under Section 5 of the Maternity Benefit

Act, the woman is entitled to 26 weeks of maternity leave. If
her illness is pregnancy-related, Section 9 allows for
additional leave with medical certification.
 Medical Certification: The woman can claim extra leave under
Section 9 if the illness is linked to pregnancy or childbirth,
supported by a doctor's certificate.
 Leave Beyond Maternity Benefits: If the illness continues after
26 weeks, additional leave may be granted based on company
policy or relevant laws.
 The woman is entitled to additional leave under Section 9 of
the Maternity Benefit Act, 1961, if her illness is pregnancy-
related and backed by medical proof. The employer must
grant this leave.
18. Two Establishments one Primary and one secondary were run
by the same management. Can they constitute as one
establishment under the Employees Provident Fund Act?
Issue: Whether the primary and secondary establishments, despite
being separate entities in terms of same scope, can be treated as a
single establishment or not?
Relevant Sections of the EPF Act, 1952:
Key sections to consider under the EPF Act include:
1. Section 1(3) – Applicability of the Act to establishments
employing 20 or more employees.
2. Section 2(e) – Defines "employee" and includes those
employed directly or indirectly under an establishment.
3. Section 2A – Provides for the definition of “establishment”
and discusses when multiple units under common control
may be considered a single entity.
4. Section 16 – Exemptions under the Act, especially for
establishments with certain conditions.
Legal Analysis
In the EPF Act, separate units under one management aren’t
automatically combined as a single entity. They may be considered
one establishment if certain factors show interdependence, such
as:
1. Common Management and Control of Unified management
can support classification as a single establishment.
2. Functional Unity with Interdependence in staff, resources, or
processes may indicate a single entity.
3. Financial Integration with Shared financing or pooled funds
can strengthen this classification.
 4. Based on the “functional integrity,” “common
administration,” and “common financial management.” Of
the establishment and its branches, simply sharing
management is insufficient; a combination of these factors is
typically required for single-establishment treatment under
the EPF Act.

Relevant case law:

M/S L. N. GADODIA VS REGIONAL PROVIDENT FUND
COMMISSIONER 2011
In this case, two businesses run by the same family with shared
financial and management control were claimed to be separate
entities. However, the Regional Provident Fund Commissioner
argued that they should be treated as one due to their common
administration and financial integration. The Supreme Court
agreed, stating that, although legally separate, the two firms' close
operational links meant they could be combined under the section
2A EPF Act under for employee benefits.
Solution:
The primary and secondary establishments, despite being separate
entities in terms of same scope, can be treated as a single
establishment under Section 2A of EPF act for employee benefits.

19. “Gratuity is paid not for long and meritorious services”

Examine this statement in the light of the forfeiture clause
lay down under the payment of Gratuity act 1972

Key Issues:
1. Whether gratuity cannot be paid and forfeiture is possible or not?
2. Whether forfeiture of not paying gratuity is against the employee
rights and their full time employment meritorious service or not?
Legal Analysis and Sections under Payment of Gratuity Act 1972:
 Section 4: States who are entitled to gratuity and under what
conditions.
 Section 4(6): Details when gratuity can be forfeited
o If an employee is dismissed for misconduct, or done any
damages to the working environment properties.
o If convicted of a serious crime.
 Gratuity is meant to support employees after they leave a job.
However, the rules about forfeiture show that it’s not an
absolute right.
 Forfeiture of gratuity is valid when an employer dismissed an
employee due to misconduct, or any damages done by the
employee to the working establishment or has been convicted
of serious crimes.
Relevant Case Laws

Case1: Jaswant Singh Gill vs M/S. Bharat Coking Coal Ltd. &
Ors 2006
In this case supreme court held that the charge sheet has
been filed against the plaintiff for the shortage of stocked coal
in Bharat coking Coal Ltd which belongs to government,
where the plaintiff’s gratuity has been forfeited under section
4(6) of payment of Gratuity Act for misconduct.
Case 2: Surendra Prasad vs The Union Of India & Ors 2023
In this case Calcutta high court has forfeited the gratuity of
the plaintiff under section 4(6) of Payment of gratuity
act since he has been convicted for multiple criminal
offences.
 Solutions
1. As discussed in legal analysis and the relevant case laws according
to the section 4(6) of Payment of gratuity act forfeiture is possible
when the employee has been dismissed for misconduct, done any
damages to the establishment and got convicted for serious crimes.
2. Also forfeiture of not paying gratuity under section 4(6) will not be
considered as it is against the employee rights and against
meritorious service.
3. Apart from the caused discussed under section 4(6) in case of any
delay in payment of gratuity then it will be considered against the
employee rights.

20. A woman worker is terminated from service, when she applied

for maternity leave under the maternity benefit act. Advice

Issues Involved
1. Whether the termination due to pregnancy falls under violation
or not?
2. Whether such termination false under gender discrimination or
not?
3. Whether the women’s entitlement to get maternity benefits or
not?

Relevant Sections of the Maternity Benefit Act

1. Section 3: Grants women the right to maternity leave (26 weeks
for up to two children).
2. Section 4: Prohibits termination of employment during maternity
leave.
3. Section 5: Outlines the entitlement to maternity benefits during
the leave period.
4. Section 12: Prevents dismissal on the grounds of pregnancy.
5. Article 226 of Indian constitution to file Writ petitions against
infringement of fundamental rights

Legal Analysis
 Section 4 clearly states that no woman shall be dismissed
while on maternity leave. Therefore, termination during this
period is generally deemed unlawful.
 The employer bears the burden to prove that the termination
was for reasons unrelated to the maternity leave, which can
be difficult if the timing aligns closely with the leave
application.
 Termination might be seen as punishment for taking a legal
right to maternity leave, which is not allowed by labor laws.

Relevant Case Laws

Neera Mathur vs. Life Insurance Corporation of India (1992)
Neera was fired while on maternity leave. LIC claimed she hide her
pregnancy when she joined. Neera challenged her dismissal in the
High Court, saying it was wrong and discriminatory.
The Supreme Court ruled in her favour, stating the termination was
illegal. The court ordered LIC to reinstate her with pay and benefits,
emphasizing the need to protect pregnant employees' rights and
follow maternity leave laws. This case highlighted the legal
protections for pregnant workers and the judiciary’s role in
supporting women's rights at work.
Solution:
The termination of a worker after applying for maternity leave
under the Maternity Benefit Act is likely unlawful and the worker
has strong grounds for challenging the termination based on
statutory protections. Can file writ petition under Article 226 of
Indian Constitution in High court and seek remedy against unlawful
termination and get maternity benefits.
21.A workman goes to attend to his work riding on a bicycle and is
involved in an accident in the course of the journey. Is he eligible
for compensation under ESI act?
Issues
1. Whether an employee is eligible for ESI benefits if an injury
occurs while they are working?
2. Whether employees eligible for ESI benefits if they have an
accident while traveling to work, even if it happens outside
their workplace?
Legal Analysis and Provisions Involved:
Section 2(8):
This section defines "employment injury" as any personal injury to
an employee caused by an accident or occupational disease. For an
injury to qualify as an employment injury, it must meet the
following conditions:
 It must occur during the employee’s work hours.
 The employment must be insurable under the ESI Act.
 The accident or disease can occur either within or outside
India.
Relevant Case Laws
Case Law 1: The Regional Director, ESI Corp v. Francis De Costa &
Anr (1996)
In this case, the employee was riding a bicycle to work and was
involved in an accident with a lorry. The court ruled that even
though the accident occurred outside the factory premises, the
employee was on their way to work. The court stated that if there
is any doubt about ESI eligibility, the benefit of that doubt should
be given to the employee. Therefore, this employee was eligible to
claim ESI benefits.
Case Law 2: T. Rajappa v. Employees State Insurance Corporation
(1991)
In this case, the court clarified that, according to Section 2(8), if an
accident is proven to have happened during the course of
employment, the employee is entitled to compensation. However,
the employee cannot claim ESI benefits if any of the following
criteria are not met:
1. The employee earns more than ₹21,000 in basic salary or
₹25,000 in net salary.
2. The employee is a seasonal worker.
3. The injury was caused by personal ill will (e.g., due to
animosity from others).
4. The employee has already claimed compensation under
other acts, like the Workmen’s Compensation Act or the
Maternity Act.
5. The incident is not covered under the ESI Act.
In this particular case, the court found that the injury resulted from
personal animosity, showing no connection to the employee’s
work. Thus, the employee was not eligible for ESI benefits.
Solution:
Based on Section 2(8) and the case laws mentioned, it is clear that
to claim ESI benefits, all eligibility criteria must be met. The injury
must occur during the course of employment for the employee to
qualify for ESI benefits.

21. Ram worked with a company for 10 years and 5 months and
now he is in dilemma whether to transfer the PF from previous to
current or withdraw the total amount. If he withdraws, can he get
100% including employer’s contribution?
Issues:
Whether Ram can transfer or to withdraw the EPF amount from
previous employer to current employer or not?

Act and Sections:

Employees' Provident Funds and Miscellaneous Provisions Act,
1952:

Section 5: Establishes the requirement for an employee to

contribute to the Provident Fund (PF) during employment, and the
employer is obligated to match the employee’s contribution.
Section 6: Deals with the employer's contribution to the PF,
ensuring that both the employee and employer contribute equally.
Section 7: Provides for the establishment of the Employees’
Provident Fund Scheme and the rules governing the withdrawal,
transfer, or settlement of the accumulated PF balance.

Legal analysis:
 Ram worked for the company for 10yrs and 5 months is
eligible to transfer both his employee and 1st employers
contribution to the current employer.
 Ram’s EPF account will be linked with 12 digit UAN(Universal
Account Number) which will be unique for each and every
employee, even after the transfer from one employer to
another employer his UAN number stands the same and his
service period will get continued.
 In case of Partial withdrawal employee can apply with Form
31 either through online or through offline to EPFO and claim
the partial withdrawal.
 In case of termination, resignation, job loss, dismissal etc. and
not joined any another company within 6 months period then
he can claim the full EPF contribution through Form 19 and
Pension scheme amount under Form 10C as final settlement,
Note: His service period will get closed.
  In case of retirement, his service got over with the employer,
where can claim the full EPF contribution and Employee
Pension Scheme contribution as final settlement using Form
19 and Form 10C.

Relevant Case law:

THE MAFATLAL GROUP STAFF ASSOCIATION VS REGIONAL
PROVIDENT FUND COMMISSIONER - 1994
 In this case The Supreme Court ruled that the employee's and
employer's contributions form a single PF balance.
 Employees can withdraw both contributions if they leave
without joining a new employer within two months. (Note:
Currently it has been extended to 6 months)
 If the employee joins a new employer, the PF balance must be
transferred to the new employer’s account.

Solution: According to legal analysis and the above case law we

conclude that Ram must transfer his EPF Account with old
employer to current employer account with his unique UAN
number, in case if he need to withdraw, he can apply through Form
31 for partial withdrawal from his EPF account. He cannot claim
100% of his EPF amount when he is in employment with 2nd
employer.

23. Two schools, one Primary and one Secondary, were run by the
same management. Can they Constitute as one establishment
under the EPF act?

Key Sections under the EPF Act:

Section 1(3): Applicability to establishments with 20+ employees.

Section 2(e): Defines "employee" to include those employed
directly or indirectly.
 Section 2A: Defines "establishment" and allows for multiple units
under common control to be treated as a single entity.
Section 16: Exemptions for certain establishments.

Legal Analysis: Under the EPF Act, separate units may be treated as
a single establishment if they share:

Common Management and Control: Unified management can

justify a single entity.
Functional Unity: Interdependence in staff, resources, or processes.
Financial Integration: Shared funds or financial resources. A
combination of these factors, not just shared management, is
required for classification as a single establishment.
Relevant Case Law:

M/S L. N. Gadodia vs Regional Provident Fund Commissioner

(2011):

The Supreme Court ruled that two businesses with shared

management and finances could be treated as a single entity under
Section 2A for EPF purposes.

Solution: Separate establishments with common management,

financial integration, and operational links can be treated as a
single entity under Section 2A of the EPF Act for employee benefits.

25. "X" was employed in a steel factory. He was given 6 months

training and then employed permanently. EPF was deducted from
his salary even during his training period. Advise X
Issues:
1. Whether X’s employer deducted Employees' Provident Fund (EPF)
contribution during the training period is lawful or not?
2. Whether X as a trainee is entitled to EPF benefits or not?
Legal Analysis and Relevant Sections:
Employees' Provident Funds and Miscellaneous Provisions Act,
1952:

Section 2(f): Defines "employee."

Section 6: Mandates EPF contributions by both employer and

employee.

Apprentices Act, 1961:

Section 18: Apprentices are not considered employees for EPF

purposes.

Relevant Case Laws:

Virender Singh vs Haryana Tourism Corporation Ltd. (2004): Court

ruled that apprentices under the Apprentices Act are excluded from
EPF contributions, while employees receiving wages and training
are eligible for EPF benefits.

Solution: X’s eligibility for EPF depends on whether the training was
part of a formal apprenticeship under the Apprentices Act, 1961, or
regular employer-provided training. If it was a formal
apprenticeship, EPF deductions are not valid. If not, the employer’s
EPF deductions are legal.

22. The Romania University has a printing press as a part of the

department of publication and press. With a view to cater the
needs of students. The regional provident fund commissioner
directed the university to pay the provident fund contribution in
respect of the workmen of the press. The university refused to
comply with the direction of the commissioner on the ground that
the printing press of the university should not be treated as a
factory. Decide.

Relevant case law:

ANDHRA UNIVERSITY VS REGIONAL PROVIDENT FUND

COMMISSIONER 1986 AIR 463 SC

Judgement: The Supreme Court considered whether the printing

press operated by Andhra University, as part of its academic
functions, qualifies as a factory under the Employees' Provident
Fund (EPF) Act. The Regional Provident Fund Commissioner (RPFC)
had directed the university to comply with the EPF Act regarding its
'Publications and Press Department,' which handled printing. The
Andhra Pradesh High Court upheld the RPFC's decision, ruling that
the printing press was indeed a factory under the EPF Act. The
Supreme Court agreed, emphasizing that the EPF Act should be
interpreted liberally for the benefit of employees, and upheld the
RPFC's action.

Solution: Here the Romania university printing press will be

considered as factory even though used for internal university
purposes for the employee benefits.

24. The respondent cooperative society purchased a Press from

another cooperative society on 21st March 1961. The
establishment had been set up by the vendor originally in 1946 and
at the time of purchase by the respondent there was only 9
workmen employed. As the number of workers employed by the
respondent went beyond 20 the Employees’ Provident Fund Act,
1952 and the Employees’ Provident Fund Scheme 1952 became
applicable to the respondent’s establishment with effect from April
1961. For not complying with the provisions of the aforesaid Act
and Scheme the Provident Fund Inspector, Trivandrum (appellant
herein) launched prosecutions against the respondent. Decide.

Issues: Whether the Co-operative societies are the main

management controller of the press which falls under state govt PF
schemes or not?

Legal Ananlysis:

1. Cooperative Society Under State Control:

If the respondent cooperative society is under the control of
the State Government and provides its own provident fund or
similar benefits to employees, it may be exempt from the EPF
Act under Section 16(a).
2. No EPF Scheme Provided:
If the cooperative society does not provide a scheme similar
to the EPF Act or is not under the control of the State
Government, the EPF Act provisions will apply, and the
Provident Fund Inspector is justified in prosecuting the society
for non-compliance.

Case Law Reference:

 In the Mafatlal Group Staff Association v. Regional Provident

Fund Commissioner, the court emphasized that if an
establishment is under state control, and employees are
entitled to similar benefits, the EPF Act can be exempted.

Solution:

 If the respondent cooperative society is indeed controlled by

the State Government and provides similar benefits to the
employees as the EPF Act, then the exemption under Section
16(a) of the EPF Act would apply, and the prosecution against
the respondent may not be valid.
  However, if the cooperative society does not meet these
criteria (i.e., it is not controlled by the State Government or
does not provide equivalent benefits), the EPF Act would
apply, and the prosecution for non-compliance would be
justified.

Thus, the court will need to assess whether the respondent

cooperative society is under the control of the State Government
and whether it offers a provident fund scheme equivalent to the
EPF Act to determine the applicability of Section 16(a).

25. Can a part-time employee be treated as an employee for the

purpose of calculating the number of employees?

Legal Analysis:

Under Indian labor law, whether a part-time employee can be

counted for the purpose of calculating the number of employees
depends on the specific provisions of the applicable laws.

Relevant Acts & Sections:

Industrial Disputes Act, 1947:

Section 2(s) defines "workman" to include part-time employees, as

long as they meet the criteria of performing manual, supervisory, or
clerical work.

The term "employee" generally includes part-time workers unless

specifically excluded in certain statutes.

Factories Act, 1948:

Section 2(m) includes part-time workers in the count of "workers"
for determining factory-related thresholds, such as the number of
employees required for certain provisions (e.g., welfare facilities).

A part-time employee who works for less than 6 hours a day or a

lesser number of hours may still be counted in the total number of
employees for factory purposes.

Shops and Establishments Act (varies by state):

This Act applies to both full-time and part-time employees, and

part-time employees are counted when determining the total
number of employees in a commercial establishment.

Employee Provident Fund (EPF) Act, 1952:

According to Section 1(3), all employees (including part-time

employees) earning above a certain wage threshold are eligible for
EPF, meaning they are counted in the employee total for PF
calculations.

Case Laws:

Citu v. Union of India (1982): The Supreme Court held that part-
time workers, though working fewer hours, are still entitled to the
same rights as full-time employees, including for the purpose of
calculating the total number of employees under labor laws.

Solution:

Yes, part-time employees can be treated as employees for the

purpose of calculating the number of employees under most labor
laws, including the Industrial Disputes Act, Factories Act, and EPF
Act, unless specifically excluded. Part-time employees are included
in determining thresholds for benefits and statutory obligations,
unless explicitly stated otherwise in the relevant law.

Case laws related to Bonus

26. Y” was employed in an Industry and regular wages were paid to

him. The industry got heavy profit during the year. “Y” and
others demanded a bonus. Advice “Y” and others.

Legal Analysis:
Payment of Bonus Act, 1965:

 Governs the entitlement of employees to receive a bonus

based on profits or productivity.
 Section 10: Mandates the payment of a minimum bonus of
8.33% of the salary or wages to employees if the
establishment has made profits.
 Section 11: Allows payment of a maximum bonus of 20% of
the salary or wages, depending on the allocable surplus.
 Section 2(13): Defines an "employee" as one earning not more
than ₹21,000 per month.
 Section 16: Provides exemptions for newly set-up industries
(not applicable if the industry is established beyond the initial
5 years and has made a profit).
 Section 28: Penal consequences for not paying bonus

Eligibility:

 Employees drawing wages of ₹21,000 or less per month.

 Employees who have worked for at least 30 working days in a
financial year.
 Allocable Surplus:

 Determined as per Sections 5 and 6 of the Act, ensuring that

statutory deductions (such as depreciation) are accounted for.

Case law: J.K. Chemicals Ltd V. Govt of Maharastra – In this case

court held that company would not be relieved from its liabilities to
pay minimum statutory bonus, but there should not be any
misconduct or already received advance in bonus.

Solution:
"Y" and others are entitled to a minimum bonus under Section 10 if
the allocable surplus exists. In case of disputes, they should seek
redressal through legal channels. The employer's failure to comply
may result in penal consequences under Section 28 of the Act.

27. “B” an employee has been paid Pooja bonus before; he is found
guilty of the act of misconduct. Whether the employer can
recover that amount on the ground that he had a right of
adjustment under the Act, Decide.

Issues: whether the employer can recover the Pooja bonus already
paid to "B," an employee found guilty of misconduct, by invoking a
right of adjustment under applicable laws or not?.

Legal Analysis:

 Section 17 of the Payment of Bonus Act, 1965 deals with the

adjustment of customary or interim bonuses against the
bonus payable under the Act. This section states that if an
employer pays an employee a bonus before it is due, the
employer can deduct the amount paid from the bonus due to
the employee for that accounting year. The employee will
only receive the remaining balance.
  17-B Employers can also deduct bonuses paid to employees
for misconduct that causes financial loss to the employer. The
employer can only deduct the amount of the loss from the
bonus due to the employee for that accounting year. The
employee will receive the remaining balance, if any.
 Case law: J.K. Chemicals Ltd V. Govt of Maharastra – In this
case court held that company would not be relieved from its
liabilities to pay minimum statutory bonus, but there should
not be any misconduct or already received advance in bonus.

Solution: Under section 17B employers can deduct the bonus if

found B under misconduct and it is legally valid.

28. “A” an employee with more than one year’s continuous service
in a company was dismissed from service on account of
insubordination. The Company refuses to pay bonus due to him.
‘A’ challenges the refusal. Decide.

Same as problem 27

29. ‘A’ a company was in profit for some years and loss in some
other years. It had paid a bonus while it was earning profit. It
refused to pay the minimum bonus while it was at loss. It sought
exemption under section 36, and applied to the appropriate
government, which has rejected its application. The company
appealed to the high court. Decide.
Issues:
Whether company can sought for exemption in giving bonus or
not?
Legal Analysis:

Payment of Bonus Act, 1965:

Section 10: Mandates payment of a minimum bonus of 8.33% of

salary or wages to employees, even in the case of financial losses.
Section 36: Allows the appropriate government to grant exemption
to a company from paying bonuses if it faces financial hardship.

Section 22: Specifies that previous losses or unabsorbed

depreciation can be carried forward for calculating "allocable
surplus," but this does not affect the obligation to pay the
minimum bonus under Section 10.

Eligibility for Exemption Under Section 36:

Exemption is granted only if the employer provides convincing

evidence of severe financial hardship. Mere losses in a financial
year may not suffice unless the overall financial situation is
unsustainable.

Relevant case law:

Mahalakshmi Textile Mills, Pasumalai vs Government Of Madras

In this case the Mill, requested an exemption on giving bonus under

section 36 of the act, where court rejected the petition saying it has
not provided valid financial hardship of the company in convincing
manner to the govt to consider the excemption.

Solution:

According to the legal analysis and the above case law it is very
clear that to get an exemption in giving bonus the company must
provide valid financial losses evidences to get approved. So to get
the exemption of giving bonus Company A must provide a valid
financial loss hardship evidences to get approval otherwise that
petition will get rejected.