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  1. 1. Chapter 5Compensation and salaryAdministration
  2. 2. Laws governing employee servicecondition
  3. 3. Labour• The term ‘labour’ means productive workespecially physical work done for wages.• Labour law also known as employment law isthe body of laws, administrative rulings, andprecedents which address the legal rights of,and restrictions on, working people and theirorganizations.
  4. 4. • There are two broad categories of labour law:First, collective labour law relates to thetripartite relationship between employee,employer and union.Second, individual labour law concernsemployees rights at work and through thecontract for work.The law relating to labourand employment
  5. 5. Factories Act , 1948• The Factories Act provides for the health, safety,welfare, service conditions and other aspects ofworkers in factories.• It applies to all factories employing more than 10people and working with the aid of power oremploying 20 people and working without theaid of power. It covers all workers employed inthe factory premises or precincts directly orthrough an agency including a contractor,involved in any manufacture.
  6. 6. • Some provisions of the Act will vary accordingto the nature of work of the establishment.
  7. 7. • Licensing and renewal of license under the Act.• Provision of adequate safety measures within thefactory premises.• Provision of adequate welfare measures likecrèche, canteen, wash room etc for the workers.• Payment of wages as per the provisions of theAct.• Payment of overtime wages.• Maintenance of registers.• Submission of returns.
  8. 8. Employee StateInsurance Act , 1948• This Act provides for the provision of• benefits to employees in case of• sickness, maternity and employment• injury. All employees including• casual, temporary or contract• employees drawing wages less than• Rs 10000 per month are covered.
  9. 9. • Remittance of contribution every month.• Maintenance of registers.• Submission of returns as per the provisions ofthe Act.
  10. 10. Employees ProvidentFund andMiscellaneousProvisions Act , 1952• The PF Act provides for the compulsoryinstitution of contributory provident funds,pension funds and deposit linked insurancefunds for employees.• This Act applies to industries specified inSchedule I employing 20 or more persons andany other class of establishments employing20 or more persons notified by theGovernment.
  11. 11. Maternity Benefit Act ,1961• Maternity Benefit Act aims to regulate theemployment of women in certain establishments forcertain periods before and after child-birth and toprovide for maternity benefits including maternityleave, wages, bonus, nursing breaks etc.• It is applicable to every factory, mine or plantationincluding those• belonging to Government, irrespective of the numberof employees, and to every shop or establishmentwherein 10 or more persons are employed or wereemployed on any day of the preceding 12 months.
  12. 12. Payment of GratuityAct , 1972• The Act provides for a scheme for the paymentof gratuity to employees engaged in factories,mines, oilfields, plantations, ports, railwaycompanies, shops or other establishments.• The Act enforces the payment of gratuity, areward for long service, as a statutory retrialbenefit. Every employee irrespective of his wagesis entitled to receive gratuity if he has renderedcontinuous service of 5 years or more than 5years.
  13. 13. • Payment of gratuity to employees leaving theestablishment after completion of 5 years.• Notice of opening to concerned labourauthority.• Displays required under the Act.• Maintenance of registers of allocable surplus,bonus etc.• Submission of annual returns.
  14. 14. The Weekly HolidaysAct , 1942• The Weekly Holidays Act provides for grant ofweekly holidays to persons employed inshops, restaurants and theatres.• Provision of weekly holidays.
  15. 15. Facilities to be provided to contractlabourers• 1) Rest rooms• 2) Canteen• 3) Latrines and urinals• 4) Drinking water• 5) First aid facilities
  16. 16. Maintenance of records• 1) Register of persons employed.• 2) Muster roll• 3) Register of wages• 4) Register of deductions for damage or loss• 5) Register of fines• 6) Register of advances• 7) Register of overtime
  17. 17. Salary administration
  18. 18. Trade unions• Trade Unions are voluntary organization ofWorkers as well as Employers formed to protectand promote the interest of their members. Theyare the most suitable organizations for balancingand improving the relations between theemployer and the employees. Trade Unions havemade headway due to rapid industrialdevelopment. The workers come together tomaintain and improve their bargaining power onwages and working conditions. The first organizedTrade Union
  19. 19. • in India named as the Madras Labour Union wasformed in the year 1918. From the beginning itself,Trade Unions were not confined to workers alone.From 19thCentury itself there were Employer’sassociations in the form of Chamber of Commerce,Industrial Associations etc. to protect and promote theinterests of their members in a concerted manner.After independence, expansion of industrial activityand grouping worker’s Trade Unions acted as a spur forstrengthening and expansion of employers’organization
  20. 20. • Collective bargaining is process of jointdecision making and basically represents ademocratic way of life in industry. It is theprocess of negotiation between firm’s andworkers’ representatives for the purpose ofestablishing mutually agreeable conditions ofemployment. It is a technique adopted by twoparties to reach an understanding acceptableto both through the process of discussion andnegotiation.
  21. 21. • ILO has defined collective bargaining as,negotiation about working conditions andterms of employment between an employerand a group of employees or one or moreemployee, organization with a view toreaching an agreement wherein the termsserve as a code of defining the rights andobligations of each party in theiremployment/industrial relations with oneanother.
  22. 22. • Collective bargaining involves discussions andnegotiations between two groups as to theterms and conditions of employment. It iscalled ‘collective’ because both the employerand the employee act as a group rather thanas individuals. It is known as ‘bargaining’because the method of reaching anagreement involves proposals and counterproposals, offers and counter offers and othernegotiations.
  23. 23. Important Prerequisites for a SuccessfulCollective Bargaining are listed below:(1) The parties must attain a sufficient degree of organisation. If theworkers’ organisation is weak, employers can say that it does notrepresent the workers and will refuse to negotiate with it. Unlessthe workers are able to form strong and stable unions, collectivebargaining will not be successful.(2) Freedom of association is essential for collective bargaining. Wherethere is no freedom of association, there can be no collectivebargaining. Freedom of association implies that the workers as wellas the employers will have the right to form an organisation of theirown to protect their interests.(3) There should be mutual recognition between both the groups.Collective bargaining cannot begin if the employers do notrecognise the workers’ organisation. The conflict of interests makesthe two groups hostile to each other. They must recognise eachother and realise that adjustment and understanding is essential forthe achievement of organisational goals.
  24. 24. (4) There must exist a favourable political climate, essential for successful collectivebargaining. If the government encourages collective bargaining as the best methodof regulating conditions of employment, it will be successful. Where thegovernments restrict trade union activities, there can be no collective bargaining.(5) Agreement must be observed by those to whom they apply. The workers’organisation must be strong enough to exercise its authority over its members. Ifthe trade union has no power over its members, collective bargaining will not beeffectively implemented.(6) A give and take policy must prevail in the organisation. The difference between twoparties can be adjusted only by compromise so that an agreement can be reached.Neither side should be too rigid on its demand. Their attitudes should be flexibleand both sides should be ready to give up some of its demands. Unions should notrigidly insist upon unreasonable demands and should be ready to reduce itsdemands to come to an agreement.(7) Sometimes unfair labour practices are resorted to by both the employers and thetrade unions. These will restrict the development of collective bargaining. Unfairlabour practices should be avoided by both the sides, as this will create anatmosphere of goodwill.
  25. 25. • Maruti suzuki strike case study• http://www.citehr.com/354574-details-about-maruthi-suzukis-strike.html