Labour Law II: Previous Year Questions Solved, 2018–2023

About these notes

These notes answer every question, sub-part and OR-alternative from the six Labour Law II question papers of NLUO, Cuttack, available in the NLUO Library's collection of LL.B. question papers. The papers cover 2018 to 2023. No Labour Law II paper was available for 2020, 2021, 2024 or 2025.

The six papers

Paper	Examination	Held	Answers
Paper 1	End Semester / Repeat / Improvement / Back Examination	October 2023	14
Paper 2	Mid-Semester	February 2023	9
Paper 3	End-Semester	May 2022	8
Paper 4	End-Semester	May 2019	10
Paper 5	Mid-Semester	March 2019	8
Paper 6	End-Semester	May 2018	8

After the six papers comes a list of high-frequency topics: what repeats most, and where each topic is answered.

How each answer is built

1. Meaning or introduction
2. Main legal provision
3. Relevant Articles and Sections
4. Case law: facts, issue, decision and principle
5. Simple explanation or example
6. Conclusion

Short notes use a shortened form of this structure. Every answer is kept within 400 words, in easy English, with legal words explained in brackets and the important Sections, Articles, Acts and case names marked out.

Repeated fact patterns

Several fact patterns repeat across years with only the names and numbers changed:

• maternity leave on adoption and surrogacy;
• the "Thanos" ESI motorbike-accident problem;
• minimum wage, fair wage and living wage;
• notional extension.

Paper 1, Section A: October 2023 End-Semester Examination

Paper: End Semester / Repeat / Improvement / Back Examination, held on 17 October 2023. NLUO, Cuttack; BA LLB / BBA LLB, Semester VII. Full marks: 25/45/70. Paper 1 has 14 answers in all (Section A and Section B).

Q1(A). Central Perk Co. Ltd.: wages cut below the minimum wage (10 marks)

Question: Central Perk Co. Ltd. had three categories of employees at the following pay scale: Category 1 - Cooking Staff at a minimum wage of Rs. 500 per day; Category 2 - Baristas at Rs. 400 per day; Category 3 - Servers at Rs. 300 per day. The above minimum wage was as per the minimum wage fixed by the concerned State government. In the year 2019-20, Central Perk gained massive profits, and increased the wages of each category by Rs. 250. Subsequently, in the year 2022-23, Central Perk suffered heavy losses and decided to take necessary measures to curtail their expenses. In view of the same, they revised the pay scale of their employees to: Category 1 - Rs. 400 per day; Category 2 - Rs. 300 per day; Category 3 - Rs. 200 per day. The employees challenged this revision of pay on the ground that it lowered their wages below the government-prescribed minimum wage. The management contended that just as they had enhanced the wages by Rs. 250 from 2019 to 2022 on making profits, on account of suffering losses they had the right to revise the pay. Presuming that the Minimum Wages Act is applicable on Central Perk Co. Ltd., decide the said case, citing relevant provisions and case law(s), if any. Also, explain the procedure of fixing and revising of minimum wage.

Issue

This is a problem on the Minimum Wages Act, 1948 (MWA). The question is whether an employer can cut wages below the government-fixed minimum wage, even during losses.

Main legal provisions

• Section 12, MWA: every employer must pay at least the minimum wage fixed by the government for that job (the scheduled employment). This duty is absolute. It does not depend on whether the employer is earning a profit or suffering a loss.
• Section 25, MWA: any agreement or contract that gives a worker less than the minimum wage under the Act is void to that extent.

Fixing and revising minimum wages

Section	What it provides
Section 3	The appropriate government fixes and revises minimum wages for scheduled employments.
Section 3(1)(b)	Minimum wages must be revised at intervals of a maximum of 5 years.
Section 4	The minimum wage may consist of a basic rate plus a cost-of-living (dearness) allowance.
Section 5	The procedure for fixing and revising minimum wages: the Committee method or the Notification method.

The two methods under Section 5 are:

1. Committee method: the government appoints committees to make an enquiry and give recommendations.
2. Notification method: the government publishes its proposals in the Official Gazette and invites objections before finalising them.

Case law

Application and decision

• Central Perk cannot cut wages below the government-notified minimum wage (Rs. 500, Rs. 400 and Rs. 300 per day), even though it is suffering losses.
• Only the increase above the minimum wage, which was given voluntarily during the years of profit, could arguably be adjusted. The wage can never go below the statutory minimum.
• The revised pay (Rs. 400, Rs. 300 and Rs. 200 per day) falls below the original minimum wage floor, so the revision is illegal.

Conclusion

Central Perk's pay cut is invalid to the extent that it goes below the notified minimum wage. The employees can enforce payment of at least the minimum wage.

Q1(B) (OR). Constitutional provisions on labour welfare (10 marks)

Question: Explain the Constitutional provisions on social welfare provided for labour rights in India. Also, provide a glimpse of these provisions based on your understanding of important texts such as the Report of the Royal Commission on Labour, 1931, and the Indian National Congress's Karachi Resolution, 1931.

Introduction

The Indian Constitution protects workers through Fundamental Rights (FR) and Directive Principles of State Policy (DPSP). These provisions were inspired by earlier reports and resolutions from the freedom movement.

Fundamental Rights

Article	Protection for workers
Article 14	Equality before law; the basis of "equal pay for equal work".
Article 19(1)(c)	Right to form trade unions.
Article 21	Right to life, read to include the right to livelihood, health, dignity and safe working conditions.
Article 23	Bans forced labour ("begar") and trafficking.
Article 24	Bans child labour (below 14 years) in factories, mines and hazardous work.

Directive Principles of State Policy

Directive Principles are guiding goals for the State. Under Article 37, they are not directly enforceable in court.

Article	Directive for workers
Article 39(a)	Adequate means of livelihood.
Article 39(d)	Equal pay for equal work.
Article 39(e)	Health of workers not to be abused.
Article 41	Right to work and public assistance.
Article 42	Just and humane conditions of work, and maternity relief.
Article 43	Living wage.
Article 43A	Workers' participation in management.

Historical background

Royal Commission on Labour in India (Whitley Commission), 1931

• It studied the poor condition of Indian workers: recruitment abuses, long hours and unsafe factories.
• It recommended reforms: better recruitment, health and safety rules, and regulated hours of work.
• Many pre-independence labour laws followed its advice.

Indian National Congress's Karachi Resolution, 1931

• It was a resolution on Fundamental Rights and Economic Policy, drafted mainly by Jawaharlal Nehru.
• For a future free India, it promised: a living wage for industrial workers, limited working hours, healthy working conditions, protection of women workers, and the right to form unions.
• The Resolution became the blueprint for the labour-related Directive Principles later written into the Constitution.

Conclusion

The Constitution's labour provisions are not just legal text. They carry forward promises first made in 1931, through the Royal Commission's factual findings and the Congress's political vision.

Q2(A). Monica's surrogacy maternity leave (10 marks)

Question: Chandler and Monica opted to go for surrogacy through a woman named Erica, who was expected to deliver her baby on 13 September 2022. On 13 September 2022, Erica delivered a baby boy but the date of handing over the baby to Chandler and Monica was decided as 29 November 2022. Monica gave a notice to her employer on 1 September 2023, seeking maternity leave from 29 November 2022 onwards. The employer rejected her request on the ground that since she did not deliver the baby herself, she is not entitled to any maternity leave. Monica challenged the decision of the employer. Presuming that the Maternity Benefit Act is applicable to the establishment where Monica works, decide the case citing relevant provisions. Also, elaborate on any other benefits that Monica may be entitled to.

Issue

This problem arises under the Maternity Benefit Act, 1961 (MB Act), as amended in 2017 to cover surrogacy. Is a mother who did not deliver the baby herself entitled to maternity leave?

Main legal provision

• Before 2017, the Act covered only women who delivered the baby themselves.
• The Maternity Benefit (Amendment) Act, 2017 added the concept of a "commissioning mother".
• A commissioning mother or an adopting mother is entitled to maternity benefit for 12 weeks from the date the child is handed over to her.

Relevant Sections

Section	What it provides
Section 5(4), MB Act	A commissioning mother, and an adopting mother who adopts a child below 3 months, get 12 weeks' leave from the date the child is handed over.
Section 5(1), MB Act	Normal maternity benefit is paid at the average daily wage for the period of actual absence immediately before, on and after the day of delivery.

Case law

Decision on the facts

• The employer's reason, that "she did not deliver the baby herself", is legally wrong after the 2017 amendment. Monica, as a person for whom Erica delivered the baby, is covered as a commissioning parent.
• But there is a problem of time. Her 12-week benefit runs from the date of handing over, 29 November 2022. She gave notice only on 1 September 2023, about 9 to 10 months later.
• So, although her right exists in law, her claim for leave from 29 November 2022 is by now time-expired in practice, since the 12-week window is long over.

Date	Event
13 September 2022	Erica delivers the baby boy.
29 November 2022	The baby is handed over to Chandler and Monica; the 12-week period starts.
1 September 2023	Monica gives notice seeking leave from 29 November 2022; the 12-week window has long ended.

Other benefits Monica may be entitled to

• Medical bonus, if no free pre-natal and post-natal care is given.
• Nursing breaks.
• No dismissal during maternity leave.
• Creche facility, if the establishment has 50 or more employees.

Conclusion

Monica's legal right to maternity benefit as a commissioning mother is valid. But her specific 12-week claim from November 2022 cannot practically be enforced now because of the delay.

Q2(B) (OR). Code on Social Security, 2020 and the Maternity Benefit Act: progress or cosmetic? (10 marks)

Question: Does the Social Security Code, 2020 (consolidation of maternity benefit provisions) read with the Maternity Benefit Act, 1961 provide for the progression of women's rights or are the changes merely cosmetic? Also, highlight whether the above legislations have broken the 'gendered division of labour' in workplaces.

Introduction

The Code on Social Security, 2020 (CoSS), in Chapter VI (Sections 59 to 72), re-enacts the Maternity Benefit Act, 1961 (MB Act). The question is whether this is real reform or only repackaging.

What has genuinely improved (progression)

The 2017 Amendment, now carried into the CoSS:

• raised paid leave from 12 weeks to 26 weeks (for up to 2 children);
• added leave for commissioning and adopting mothers;
• made creche facilities compulsory (establishments with 50 or more employees);
• allowed a work-from-home option after the leave, where the nature of the work allows it.

These are real, substantive gains for women's health and job security.

Why critics call the changes "cosmetic"

1. Re-arrangement, not reform: the CoSS mostly re-arranges the same MB Act rules into Code form. It does not add any new right that did not already exist after 2017.
2. Burden on the mother alone: the entire legal and financial burden of child-rearing still falls only on the mother and her employer (through leave and creche costs). India still has no matching paid paternity or parental leave in the private sector.
3. Risk to women's hiring: the cost of a mandatory creche can make employers reluctant to hire women, so the rule can work against women's employment.

The gendered division of labour

What has changed	What has not changed
The benefits: more days of rest and more protection for women.	The assumption behind the law: that child care is women's work.
The quantity of protection given to women.	Child-rearing is still treated as the mother's job and her employer's cost, not as a duty shared by both parents.

Conclusion

The CoSS, 2020 read with the MB Act shows genuine progress in the quantity of protection given to women. But it does not break the underlying gendered division of labour, because responsibility for child care is still placed on the woman alone.

Q3. Living wage, fair wage and minimum wage (5 marks)

Question: Explain the concept of living wage, fair wage, and minimum wage.

Meaning

These are three levels of wages, from the lowest to the highest, developed by the Committee on Fair Wages, 1948.

Level	Position	What it covers	Basis
Minimum wage	The lowest level	Bare survival needs (food, clothing and shelter), keeping the worker fit for work.	Fixed compulsorily under the Minimum Wages Act, 1948 (now the Code on Wages, 2019), regardless of the employer's capacity to pay.
Fair wage	The middle level, above the minimum wage	A little more than bare survival.	Depends on the employer's ability to pay, the productivity of the industry, and the wages prevailing in similar industries.
Living wage	The highest and most ideal level	Not just necessities but a degree of comfort: education for children, health insurance and some amenities.	The goal set by Article 43 of the Constitution (a Directive Principle); rarely achieved in practice.

Case law

Conclusion

The three levels form a ladder. The law compels the minimum wage today and directs the State to work towards the living wage in the future.

Paper 1, Section B: October 2023 End-Semester Examination

Section B, Q1. Sardar Khan's accident at Wasseypur (ESI Act) (15 marks)

Question: Sardar Khan was an employee working at Wasseypur Co. Ltd. On 2 February 2021, Wasseypur issued the following notification to its employees: "All employees are directed NOT to go inside the Cafeteria building with immediate effect, as it has come to the knowledge of the management that the roof is in deplorable condition and may collapse. The management is undertaking repair work of the Cafeteria, and until the same is completed, the Cafeteria is temporarily shifted to the Ground Floor of the Guest House building." On 3 February 2021, Sardar Khan and 2 other employees went into the Cafeteria building to see what the actual condition of the roof was. While they were inside the building, the roof collapsed and Sardar Khan sustained severe injuries leading to temporary disablement. He claimed benefit for the said accident under the Employees' State Insurance Act. The employer contended that Sardar Khan had acted in breach of an express order issued by the management regarding the impending danger, and therefore the employer is not liable to provide any benefit. Presuming that the ESI Act is applicable to Wasseypur, decide the given case, citing relevant provisions. Elaborate on the presumptions of accident given under the Act.

Introduction

This is a problem under the Employees' State Insurance Act, 1948 (ESI Act). The Act gives cash and medical benefit for an "employment injury", that is, an injury by accident "arising out of and in the course of employment".

Main legal provision: presumptions as to accidents

• Presumptions: Sections 51A to 51E, ESI Act lay down presumptions as to accidents.
• If an accident happens while the employee is doing something for the purpose of, and in connection with, the employer's trade or business, it is deemed to arise out of employment.
• This holds even if the employee was, at the time, acting against a rule or order, provided the act was done for the purpose of, and in connection with, the employer's business.
• Disobedience no bar: Section 51B specifically says that disobedience of an express order does not disentitle the employee, so long as the act was done for the purpose of, and in connection with, the employer's trade or business.

Case law

Application and decision

• Sardar Khan entered the Cafeteria (his normal workplace, temporarily relocated) during working time, for a reason connected with his duties there, not on a private errand.
• Though he disobeyed the order, Section 51B still protects him, because his act stayed connected with the employer's premises and business and was not a purely personal detour.
• So Wasseypur cannot refuse the benefit merely because of the disobedience.

Conclusion

Sardar Khan is entitled to ESI benefit for his temporary disablement, subject to the specific facts showing that his entry was work-connected.

Section B, Q2. Notice, claim and the employer's defences under the Employees' Compensation Act (12 marks)

Question: Explain the process of notice and claim for filing compensation under the Employees' Compensation Act. Also, elucidate the defences available to an employer against payment of compensation.

Introduction

The Employees' Compensation Act, 1923 (EC Act) gives compensation to a worker, or to the worker's family, for injury or death by accident arising out of and in the course of employment.

Notice and claim: Section 10

1. Notice: notice of the accident must be given to the employer as soon as practicable after the accident.
2. Time limit: no claim is entertained unless notice is given and the claim is made within two years from the accident (or from the death).
3. Form: the notice can be oral or written.
4. Defects excused: a small defect in the notice does not defeat the claim if the employer already knew of the accident, or if the delay is reasonably excused.
5. Report of fatal accidents: Section 10B requires a report of any fatal accident or serious bodily injury to be sent to the Commissioner within seven days. (Section 10A lets the Commissioner require the employer to file a statement about a fatal accident.)

Defences available to the employer: proviso to Section 3

An employer is not liable to pay compensation if:

• (a) the injury did not disable the worker for more than 3 days;
• (b) the worker was, at the time, under the influence of drink or drugs;
• (c) the worker wilfully disobeyed a safety order; or
• (d) the worker wilfully removed or ignored a safety guard or device.

Important exception

Defence	Injury causing disablement	Death or permanent total disablement
(a) Disablement for not more than 3 days	Available	Not applicable
(b) Drink or drugs	Available	Not available
(c) Wilful disobedience of a safety order	Available	Not available
(d) Wilful removal or disregard of a safety guard or device	Available	Not available

Conclusion

The EC Act balances the worker's right to compensation with limited, fact-specific defences for the employer.

Section B, Q2 (OR)(a). 'Continuous service' under the Payment of Gratuity Act, 1972 (4 marks)

Question: [OR to Q2 above] Answer the following: a. 'Continuous Service' as provided under the Payment of Gratuity Act, 1972.

Meaning

"Continuous service" means uninterrupted service, counted for gratuity eligibility. It is defined in Section 2A, Payment of Gratuity Act, 1972.

Legal provision

Service is treated as continuous even if it is interrupted by:

• sickness;
• accident;
• authorised leave;
• absence without leave, if it is not treated as a break under the employer's rules;
• lay-off;
• strike or lock-out;
• cessation of work not caused by the employee's fault.

Deemed continuous service

Where actual service is broken, an employee is still deemed to be in continuous service if the employee actually worked the minimum number of days in the previous period:

Deemed continuous service for	Establishments working below ground, or working less than 6 days a week	Other establishments
1 year (days worked in the previous 12 months)	190 days	240 days
6 months	95 days	120 days

Conclusion

"Continuous service" protects the worker's gratuity eligibility even through normal, permitted breaks in work.

Section B, Q2 (OR)(b). Partial and total disablement under the Employees' Compensation Act, 1923 (4 marks)

Question: [OR to Q2 above] Answer the following: b. Explain "partial disablement" and "total disablement" in relation to its temporary or permanent nature as provided under the Employees' Compensation Act, 1923.

Meaning

Disablement means loss of the power to work because of an accident. The Employees' Compensation Act, 1923 classifies it by degree (partial or total) and by time (temporary or permanent).

Partial disablement: Section 2(1)(g)

• Temporary partial disablement reduces the worker's earning capacity in the job the worker was doing at the time of the accident.
• Permanent partial disablement reduces earning capacity in every job the worker could have done. Such injuries are listed with fixed percentages in Schedule I (for example, loss of a finger).

Total disablement: Section 2(1)(l)

• Total disablement, temporary or permanent, makes the worker unfit for all work the worker was capable of doing at the time of the accident.
• Certain injuries listed in Schedule I (like the loss of both hands) are always deemed permanent total disablement, even if some earning capacity technically remains.

Kind	Section	Effect on earning capacity
Temporary partial	Section 2(1)(g)	Reduced in the job being done at the time of the accident; can improve with time.
Permanent partial	Section 2(1)(g), Schedule I	Reduced in every job the worker could have done; will not improve.
Temporary total	Section 2(1)(l)	Unfit for all work the worker could do at the time of the accident; can improve with time.
Permanent total	Section 2(1)(l), Schedule I	Unfit for all such work; will not improve. Listed injuries, like loss of both hands, are always deemed permanent total disablement.

Conclusion

The level of compensation depends on correctly classifying the injury under these four combinations.

Section B, Q2 (OR)(c). Eligibility and disqualification under the Payment of Bonus Act, 1965 (4 marks)

Question: [OR to Q2 above] Answer the following: c. Explain 'Eligibility' and 'Disqualification' under the Payment of Bonus Act, 1965.

Meaning

Eligibility tells us who can get bonus. Disqualification tells us who loses the right to bonus despite being eligible.

Point	Eligibility: Section 8	Disqualification: Section 9
Rule	Every employee who has worked for at least 30 working days in the accounting year is eligible for bonus.	An employee is disqualified from bonus, even if otherwise eligible, if dismissed from service for misconduct of the kinds listed below.
Conditions or grounds	The employee's salary or wage must be within the ceiling fixed under the Act.	(a) fraud; (b) riotous or violent behaviour while on the employer's premises; (c) theft, misappropriation or sabotage of the employer's property.

Conclusion

Eligibility and disqualification work together so that bonus goes to genuine, well-behaved workers only.

Section B, Q3. Ying Yang Co. Ltd.: branch losses, bonus, set-on and set-off (12 marks)

Question: Ying Yang Co. Ltd. has its registered head office in Hyderabad, while two branches are located in Kolkata and Mumbai. The income-expenditure accounts, filing of taxes and maintaining of balance sheet was done jointly by the registered office at Hyderabad. In the year 2018, statutory bonus was paid to the employees of Hyderabad, Kolkata and Mumbai. In the subsequent year, the Kolkata branch suffered losses, compared to the Hyderabad and Mumbai offices. Hence, employees of the Kolkata office were not given statutory bonus. However, the employees claimed bonus based on the fact that the Hyderabad and Mumbai branches still made profits, and overall the company was not suffering from a loss. Presuming that the Payment of Bonus Act is applicable to Ying Yang Co. Ltd., decide the case, citing relevant provisions. Also, explain the concept of set-on and set-off.

Introduction

This is a problem under the Payment of Bonus Act, 1965, which links bonus to the profits of the establishment.

Main legal provision: Section 3

• Where an employer has different branches or departments, and separate balance sheets and profit-and-loss accounts are maintained for each branch, each such branch is treated as a separate establishment for bonus purposes.
• But if the accounts of the branches are shown in one combined document with the head office, the whole business is treated as one establishment.

Application to the facts

• The head office at Hyderabad jointly handled the income-expenditure accounts, tax filing and the balance sheet for all three locations (Hyderabad, Kolkata and Mumbai).
• The facts do not mention separate accounts kept branch-wise.
• So, under Section 3, Kolkata, Hyderabad and Mumbai are treated as one single establishment.

Decision

The company, taken as a whole, was not in loss: the profits of Hyderabad and Mumbai covered Kolkata's loss. The Kolkata employees therefore cannot be denied bonus merely because their branch, taken alone, made a loss. They are entitled to statutory bonus like the employees of the other branches.

Set-on and set-off: Section 15 and the Fourth Schedule

Point	Set-on	Set-off
When it applies	In any year, the allocable surplus (the share of profit available for bonus) is more than the maximum bonus payable (20% of wages).	The allocable surplus is less than the minimum bonus payable (8.33%).
What happens	The extra amount is carried forward ("set on"), to be used for bonus in a bad year.	The shortfall is met ("set off") from any amount already set on from earlier years.
Period	Up to 4 following years.	Again, up to 4 years.

Conclusion

The Kolkata employees get bonus because the company is one establishment and is in profit overall. Any future shortfall can be managed through set-on and set-off.

Section B, Q4. Short notes (any 2 of 3; 3 marks each, 6 marks in all)

Q4(a). Liability of the principal employer under the Contract Labour (Regulation and Abolition) Act (3 marks)

Meaning. The Contract Labour (Regulation and Abolition) Act, 1970 (CLRA) regulates workers hired through a contractor to work for a principal employer, the main company that benefits from the work.

Legal provisions.

• Section 20: if the contractor fails to provide the facilities required under the Act (canteen, rest-rooms, first aid, drinking water, latrines), the principal employer is liable to provide them. The principal employer can recover the cost from the contractor.
• Section 21: the principal employer is responsible for ensuring timely payment of wages to contract workers, through a representative. If the contractor defaults, the principal employer must pay the wages himself, and can recover them later from the contractor.

Conclusion. The CLRA ensures that contract workers are not left helpless because of a contractor's default.

Q4(b). Employees' Provident Fund (3 marks)

Meaning. The Employees' Provident Fund (EPF) is a retirement savings scheme under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It applies to establishments with 20 or more employees.

Legal provision. Both the employer and the employee contribute 12% of basic wages plus dearness allowance every month.

Contribution	Rate	Where it goes
Employee's share	12%	Fully to the EPF account.
Employer's share	8.33% (out of 12%)	Employees' Pension Scheme (EPS).
Employer's share	3.67% (the rest of the 12%)	EPF account.

Conclusion. EPF gives salaried workers financial security for old age.

Q4(c). Employees' Insurance Courts (3 marks)

Meaning. The Employees' Insurance Court (EIC) is a special court set up by the State Government under Section 74, ESI Act, 1948, to decide disputes about ESI benefits.

Legal provisions.

• Section 75 lists the matters the EIC decides, for example: whether a person is an "employee"; the rate of wages or contribution; and a person's right to any benefit and its amount.
• Medical questions: under Section 54A, read with Section 75(2A), questions about the extent of disablement are decided by the Medical Board, with an appeal to the Medical Appeal Tribunal or directly to the EIC. If such a question comes up before the EIC, it has the Corporation refer it for decision and then decides the claim on that basis.

Conclusion. The EIC ensures that ESI disputes are resolved quickly by a dedicated forum, while medical questions stay with medical experts.

Paper 2: Mid-Semester Examination, February 2023

NLUO, Cuttack, BA LLB / BBA LLB, Semester VIII. Examination held on 28 February 2023. Full Marks: 25.

Q1. Smoky Industries and the 'X wages' in the beedi industry (8 Marks)

Question: M/s Smoky Industries are owners of beedi factories. They manufacture and sell beedis within the State of Karnataka. The Government of Karnataka issued a notification in order to revise minimum wages for certain classes of employment in the beedi industry. As per the notification the Government fixed a sum of Rs. 7.40 as the minimum wages for 1000 beedis rolled and further provided that the workmen employed in the beedi industry should be entitled to get at least Rs. 4 per day as 'X wages', where the employer failed to supply sufficient quantity of raw material. The said notification also provided that where no raw material was supplied by the employer to the employee when the latter was willing to work and report for duty or for collecting the raw material, the employee should be entitled to get full 'X wages'. Smoky Industries challenged the said notification of the government.

(a) Identify, citing relevant provisions, the concept referred to as 'X wages'. Does the govt. have the power to fix such wages?

(b) Also, decide the case with relevant judicial decision(s).

Model answer

Issue. The problem arises under the Minimum Wages Act, 1948 (MWA) and concerns piece-rated workers, that is, workers paid by output (here per 1000 beedis rolled) and not by the hour.

(a) What 'X wages' are: Section 17, MWA.

• Where an employee is on piece work for a job for which a minimum time-rate (and not just a piece-rate) has also been fixed, the employer must guarantee at least that minimum time-rate wage.
• This applies even if output is low through no fault of the worker.
• The 'X wages' (Rs. 4 per day) are exactly this: a guaranteed fallback payment, so that a willing worker is never left with zero income because the employer failed to supply raw material.

Government's power: Section 3, MWA.

• Section 3 gives the appropriate government full power to fix and revise minimum rates of wages for scheduled employments, including piece-rate work.
• Section 3(2)(c) specifically allows a minimum time-rate (a "guaranteed time rate") to be fixed as a fallback for piece-rated jobs.
• This power does not depend on the employer's capacity to pay.

(b) Case law.

Application and decision. The government has the power to fix 'X wages'. The challenge by Smoky Industries fails: the notification is a valid use of Sections 3 and 17, MWA, and protects piece-rated beedi workers from the employer's own default in supplying material.

Conclusion. The notification is valid, and Smoky Industries must pay the guaranteed 'X wages'.

Q1 (OR). 'Wages' under the Code on Wages, 2019 and the Minimum Wages Act, 1948; fixation of floor wage (8 Marks)

Question: Compare and contrast the term 'WAGES' as provided under the Code on Wages, 2019 and the Minimum Wages Act, 1948. Also provide a critical observation on the process of the fixation of floor wage based on the understanding of the Code on Wages, 2019.

Model answer

Introduction. Both laws define "wages", but the Code on Wages, 2019 (CoW), which has replaced the Minimum Wages Act, 1948 (MWA) along with three other Acts, uses a wider and more uniform definition.

'Wages' under the MWA: Section 2(h). All remuneration payable for work done, expressed in money. It excludes:

• value of house accommodation, light, water and medical care;
• provident fund / pension contribution;
• travelling allowance;
• gratuity.

'Wages' under the CoW: Section 2(y). A wide definition covering all remuneration by way of salary, allowance or otherwise. It also excludes items such as:

• bonus;
• house accommodation;
• employer's PF / pension contribution;
• conveyance allowance;
• HRA;
• overtime;
• commission;
• gratuity;
• retrenchment compensation.

Comparison.

Point	MWA, 1948	CoW, 2019
Provision	Section 2(h)	Section 2(y)
Scope	All remuneration for work done, expressed in money	Wide: all remuneration by way of salary, allowance or otherwise
Uniformity	Each labour Act had a slightly different definition, causing confusion	One definition common across the four Codes (Wages, Social Security, Industrial Relations, OSH)
Cap on exclusions	No such safeguard	50% cap: excluded payments above 50% of total remuneration are added back as wages

Floor wage: Section 9, CoW.

• The Central Government fixes a "floor wage", taking into account the minimum living standards of a worker.
• It may fix different floor wages for different regions.
• State Governments must not fix any minimum wage below the floor wage.
• If a State's existing minimum wage is already higher than the floor, it cannot be reduced to match the floor.

Critical observation. The floor wage is a national safety net below which no State can go. However, the Code still allows wide regional gaps above the floor, so real wage inequality between States may continue.

Conclusion. The CoW modernises and unifies the definition of wages and adds the floor wage as a new national minimum safeguard.

Q2. Rachel Green: maternity leave for an adopting mother on a contractual honorarium (8 Marks)

Question: Ms. Rachel Green was a Senior Executive at Bloomingdales Ltd., on a contractual basis from July 2015, on a consolidated monthly honorarium of Rs. 25,000 per month. Ms. Green decided to adopt a one-month-old baby, and the legal process of adoption was due to be completed on 15th February 2019, on which she would be handed over the child. In view of the same, Rachel through a written application requested her employer for permission to avail maternity leave. The employer denied the same, contending that Rachel is engaged on a consolidated monthly honorarium and not on any pay scale like permanent officers or employees. Further, she has no right to demand maternity leave because as per condition No. 10 of the agreement regarding the terms and conditions on which Rachel was appointed, she is entitled to only 8 days of casual leave during a year and not for any other leave. Moreover, since she was not delivering the child herself, she cannot claim any maternity leave or other benefits. Decide the case, citing relevant provisions and cases. Also, elucidate on benefits available to a female employee under the Maternity Benefit Act.

Model answer

Issue. The problem arises under the Maternity Benefit Act, 1961 (MB Act) and concerns an adopting mother.

Relevant law.

• Section 5(4), MB Act (inserted by the 2017 Amendment): a woman who legally adopts a child below 3 months of age gets 12 weeks' maternity benefit from the date the child is handed over to her.
• Section 27, MB Act: the Act applies despite anything inconsistent in any other law or in any agreement or contract of service. Any contract term giving a woman less than what the Act guarantees is void to that extent.

Application and decision.

• Rachel's contractual / honorarium status cannot defeat her right.
• The adoption of a one-month-old baby falls squarely under Section 5(4).
• She should be granted 12 weeks' leave from 15 February 2019, the date of handing over.

Other benefits under the MB Act.

• Medical bonus.
• Nursing breaks after return to work.
• Creche facility (establishments with 50 or more employees).
• No dismissal during maternity leave.
• No arduous work or long hours of standing, if she asks, during the month before the six weeks preceding expected delivery (Section 4(3)).

Conclusion. Rachel is entitled to maternity leave and connected benefits, and the employer's contractual defence fails.

Q2 (OR). Do the MB Act and the Code on Social Security reinforce the 'gendered division of labour'? (8 Marks)

Question: Do the Maternity Benefit Act, 1961 and the new Social Security Code, 2020 (consolidation of maternity benefit provisions) reinforce 'gendered division of labour'? Explain.

Model answer

How the laws help women. The MB Act, 1961, now carried into Chapter VI (Sections 59 to 72) of the Code on Social Security, 2020 (CoSS), gives:

• 26 weeks' paid leave;
• creche facilities;
• coverage of commissioning and adopting mothers.

This is real protection for a woman's health and job.

How the laws still reinforce the gendered pattern.

1. The whole scheme is built only around the woman's body and the woman's job. There is no matching central paid paternity leave for fathers in the private sector.
2. Because the cost of leave and creche falls on the employer only when it hires women, the law can unintentionally make employers hesitant to hire women (an indirect, informal discrimination risk).
3. The CoSS, 2020 largely re-numbers the same MB Act sections; it does not introduce shared parental leave.

Conclusion. Despite genuine welfare gains, both laws still reinforce the gendered division of labour, because they do not spread child-care responsibility between both parents.

Q3. Covid-era ordinances suspending labour laws and ILO Conventions C.144 and C001 (6 Marks)

Question: Ordinances were passed by multiple State Governments in India to suspend operations of many labour laws during the 2020-21 fiscal year. Such ordinances were justified as the 'need of the hour' to tackle the Covid pandemic by the state governments. Keeping in mind that India is a Welfare State, are such steps on the part of the states an indication of India's violation of the ILO Tripartite Consultations (International Labour Standards) Convention, 1976 (C.144) and C001 - Hours of Work (Industry) Convention, 1919 (No. 1)? Critically examine the above based on your understanding of the Indian Constitution.

Model answer

Introduction. During 2020-21, several State Governments used emergency ordinances and notifications to suspend labour law protections (for example, by extending daily working hours) in the name of Covid-19 relief.

The ILO standards.

Convention	Requirement
C.144: Tripartite Consultation Convention, 1976	The government must consult both employer and worker representative bodies before making major labour-related decisions.
C001: Hours of Work (Industry) Convention, 1919	The first-ever ILO Convention; sets 8 hours a day / 48 hours a week as the standard limit.

Constitutional angle. India is a welfare state, guided by:

• Article 38: a social order for the welfare of the people;
• Article 42: just and humane conditions of work;
• Article 43: living wage and decent conditions of work.

One-sided ordinances made without consulting worker representatives sit uneasily with this welfare vision.

Conclusion. Such ordinances were rightly seen as inconsistent with India's welfare-state commitment and with the spirit of C.144 and C001, as confirmed by the Supreme Court's stand in the Gujarat Mazdoor Sabha case.

Q3 (OR). Eligibility for bonus, bonus formula, set-on and set-off (6 Marks)

Question: Elucidate on the concept of eligibility of bonus, bonus formula, set-on and set-off of bonus.

Model answer

1. Eligibility: Section 8, Payment of Bonus Act, 1965. Every employee who has worked for at least 30 working days in the accounting year is eligible for bonus.

2. Bonus formula: Sections 4 to 6.

1. Find the "available surplus": gross profits (computed under the Act's Schedules) minus prior charges, namely depreciation, direct taxes payable and other specified deductions.
2. Find the "allocable surplus": 60% of the available surplus (67% for certain foreign companies).
3. Bonus is paid out of the allocable surplus.

3. Minimum and maximum bonus: Sections 10 and 11.

• Minimum bonus: 8.33% of yearly salary or wages (or a fixed minimum amount), payable even if there is no profit or there is an actual loss.
• Maximum bonus: up to 20% of yearly salary or wages, if the allocable surplus is large enough.

4. Set-on and set-off: Section 15.

Concept	When it arises	What happens
Set-on	Allocable surplus is more than the maximum bonus (20%) payable	The excess is carried forward for up to 4 years, to help pay bonus in a weak year
Set-off	Allocable surplus is less than the minimum bonus (8.33%)	The shortfall is met from any surplus already set on from earlier years

Conclusion. Eligibility decides who gets bonus, the formula decides how much money is available, and set-on / set-off keep bonus payments stable across good and bad years.

Q4(a). Short note: Fair Wage, Minimum Wage and Living Wage (3 Marks)

Question: Write a short note on any 1 of the following: (a) Concept of Fair Wage, Minimum Wage and Living Wage.

Model answer

Meaning. These are three rising levels of wages, taken from the report of the Committee on Fair Wages, 1948.

Level	Content	Basis
Minimum wage	Bare survival level: food, shelter, clothing	Compulsory under the Minimum Wages Act, 1948 / Code on Wages, 2019
Fair wage	Above the minimum	Linked to the employer's paying capacity and industry norms
Living wage	The highest, ideal level, giving comfort and dignity	The goal set by Article 43 of the Constitution

Conclusion. Indian law compels the minimum wage now, while directing the State to work towards the living wage as the final goal.

Q4(b). Short note: Disqualification of bonus under the new Code (3 Marks)

Question: Write a short note on any 1 of the following: (b) Disqualification of Bonus as per the new Social Security Code.

Model answer

Legal provision. Under Section 29 of the Code on Wages, 2019 (formerly Section 9 of the old Bonus Act), an employee is disqualified from bonus, even if otherwise eligible, if dismissed from service for:

1. fraud;
2. riotous or violent conduct while on the employer's premises;
3. theft, misappropriation or sabotage of the employer's property; or
4. conviction for sexual harassment (a ground added by the CoW).

Serious dishonesty or violence at the workplace cancels a worker's bonus claim, even if the worker has worked the required number of days.

Conclusion. Disqualification protects the bonus fund from being paid to seriously misbehaving employees, and this rule now lives in the Code on Wages, 2019.

Q4(c). Short note: ILO Social Protection Floors Recommendation (3 Marks)

Question: Write a short note on any 1 of the following: (c) Social Recommendation Floor.

Model answer

Meaning. The topic refers to the ILO Social Protection Floors Recommendation, 2012 (No. 202), a set of guidelines and not a binding treaty.

Main idea. Every country should guarantee, at a minimum, a basic "floor" of social security to all people in need across their whole life, such as:

• basic income security for children;
• basic income security for working-age people (in case of sickness, unemployment, maternity or disability);
• basic income security for the elderly;
• access to essential healthcare.

It is a safety net below which no person, however poor or informal their job, should be allowed to fall.

Relevance to India. The Code on Social Security, 2020, which brings gig, platform and unorganised workers under some social security net, and schemes like e-Shram, are efforts to move towards such a floor.

Conclusion. R. 202 guides countries like India to widen social security to informal and unorganised workers, not just formal employees.

Paper 3: End-Semester Examination, May 2022

NLUO, Cuttack, BA LLB / BBA LLB, Semester VIII. Examination held on 4 May 2022. Full Marks: 45.

Q1. Sansa Stark: maternity leave for an adopting mother on a contractual honorarium (12 Marks)

Question: Ms. Sansa Stark was a Project Officer at Winterfell Industries Ltd., on a contractual basis from July 2015, on a consolidated monthly honorarium of Rs. 25,000 per month. Ms. Sansa decided to adopt a one-month-old baby and the legal process of adoption was due to be completed on 15th February 2019, on which she would be handed over the child. In view of the same, Sansa through a written application requested her employer for permission to avail maternity leave. The employer denied the same, contending that Sansa is engaged on a consolidated monthly honorarium and not on any pay scale like permanent officers or employees. Further, she has no right to demand maternity leave because as per condition No. 10 of the agreement regarding the terms and conditions on which Sansa came to be appointed, she is entitled to only 8 days of casual leave during a year and not for any other leave, more particularly maternity leave. Above all, since she was not delivering the child herself, she cannot claim any maternity leave or other benefits. Decide the case, citing relevant provisions of law and cases. Also, elucidate on benefits available to a female employee under the Maternity Benefit Act.

Model answer

Issue. Whether a woman on a contractual consolidated honorarium, who is adopting a child, is entitled to maternity leave. The governing law is the Maternity Benefit Act, 1961 (MB Act).

Relevant law.

• Section 5(4), inserted by the Maternity Benefit (Amendment) Act, 2017: a woman who legally adopts a child below 3 months of age gets 12 weeks' maternity benefit, counted from the date the child is handed over to her.
• Section 27, MB Act: the Act overrides any inconsistent agreement and applies despite any contract term. "Condition No. 10" of Sansa's appointment letter (only 8 days' casual leave and no other leave) is therefore void to the extent that it denies her statutory maternity benefit.

Application.

• Winterfell's argument that Sansa is on a "consolidated honorarium" and not a regular pay scale does not matter: she is still a woman employee.
• Adopting a child below 3 months fits Section 5(4) squarely.
• She is entitled to 12 weeks' leave from 15 February 2019.

Other benefits under the MB Act.

• Medical bonus (if free pre-natal and post-natal care is not provided).
• Nursing breaks after resuming work.
• Creche facility (in establishments with 50 or more employees).
• Protection from dismissal during the leave period.

Conclusion. Sansa's petition should succeed; she is entitled to 12 weeks' paid leave and connected benefits.

Q2. Thanos's ESI claim: casual and causal connection, notional extension (12 Marks)

Question: Thanos is an employee in the factory of Captain Steven Rogers. Thanos was going to the factory on his motorbike when he met with an accident 0.5 km away from the factory gate. Consequently, he became permanently and totally incapacitated to work in the factory. He claimed benefit under the ESI Act on the ground that it was an employment injury since he was going to the factory to report on duty. Rogers refused to entertain the claim stating that the accident was like any other road accident and was not an employment injury. In light of the given facts, answer the following, with relevant case laws:

(a) Explain the concepts of casual connection and causal connection.

(b) What is the doctrine of notional extension?

(c) Decide the given case with reasons.

Model answer

Issue. The problem tests "employment injury" under the Employees' State Insurance Act, 1948 (ESI Act): an injury caused by accident "arising out of and in the course of employment".

(a) Casual connection v. causal connection.

Casual connection	Causal connection
A mere coincidence: the accident merely happens to occur around the time or place of work.	A real link: some condition, risk or feature of the employment actually contributed to the accident.
The job itself adds no risk.	The employment contributes to the accident.
Does not support a compensation claim.	Supports a compensation claim.

(b) Doctrine of notional extension. Employment normally starts and ends at the factory gate. Courts and the law notionally extend it, within a reasonable time and space, when the employee is on the direct, immediate route connected with work.

The ESI-specific rule: Section 51E, ESI Act (added by the 2010 Amendment). For ESI claims specifically (unlike the older common law), a commuting accident is deemed an "employment injury" if there is a "nexus between the circumstances, time and place" of the accident and the employment.

(c) Application and decision.

• Thanos was going directly to the factory, on his normal commute.
• The accident occurred only 0.5 km from the gate, close in both time and place to his shift.
• This shows a strong nexus under Section 51E, even though he used his own motorbike.
• The stricter "employer control" test of Saurashtra Salt applied to a claim under the older EC Act, not to an ESI claim.

Conclusion. Thanos's claim should succeed under Section 51E, ESI Act, despite Rogers' objection.

Q3(a). Formula for payment of gratuity (part of 5 Marks with Q3(b))

Question: Elucidate the following: (a) The formula for payment of gratuity.

Model answer

Meaning. Gratuity is a lump-sum reward paid by the employer for long, continuous service, under the Payment of Gratuity Act, 1972.

Legal provision: Section 4(2). For employees other than those paid on a piece-rate basis, in establishments other than seasonal ones:

For every year worked, the employee earns 15 days' wages as gratuity, multiplied by the number of years worked to give the total amount (subject to a statutory ceiling).

Conclusion. The formula rewards long service with a proportionate lump sum on leaving the job.

Q3(b). Forfeiture of gratuity (part of 5 Marks with Q3(a))

Question: Elucidate the following: (b) Forfeiture of Gratuity.

Model answer

Meaning. Forfeiture means that the employer refuses to pay all or part of the gratuity that would otherwise be due.

Legal provision: Section 4(6). Gratuity can be wholly or partly forfeited if the employee's service is terminated for:

Ground for termination	Extent of forfeiture
(a) Wilful omission or negligence causing damage or loss to the employer's property	Only to the extent of that damage or loss
(b) Riotous or disorderly conduct or violence, or an offence involving moral turpitude, committed during employment	Wholly or partly

Conclusion. Forfeiture under Section 4(6) is an exception, strictly and narrowly applied.

Q4(a) and (b). EPF Act: applicability to Ronaldo and the meaning of 'fund' (4 Marks)

Question: Explain the following: Mr. Ronaldo works in a brick kiln and earns a Basic wage + D.A. of Rs. 10000 as part of his wages. The principal employer employs 24 employees and the establishment is covered under the aforementioned schemes as provided under the provisions of 'The Employees Provident Funds and Miscellaneous Provisions Act, 1952'.

(a) Whether the provisions of the Act apply to Ronaldo?

(b) What is implied by 'fund' under the Act? Are there other funds specified within the Act? [Part of 4 x 2 = 8 Marks]

Model answer

(a) Applicability to Ronaldo.

• The EPF Act, 1952 applies to establishments employing 20 or more persons (Section 1(3)). The brick kiln, with 24 employees, is covered.
• Once an establishment is covered, every employee is a compulsory member unless "excluded" for drawing pay above the wage ceiling (Rs. 15,000 per month) at the time of joining.
• Ronaldo's Basic + DA is Rs. 10,000, well below the ceiling, so he is not excluded. The Act applies to him compulsorily.

(b) Meaning of 'fund'. "Fund" means the Employees' Provident Fund, the retirement savings account established under the Employees' Provident Fund Scheme, 1952 (Section 5), administered by the Central Board of Trustees.

Other funds under the Act.

Scheme	Section	Purpose
Employees' Provident Fund Scheme, 1952	Section 5	Retirement savings (PF)
Employees' Pension Scheme, 1995	Section 6A	Monthly pension after retirement (EPS)
Employees' Deposit-Linked Insurance Scheme, 1976	Section 6C	Life-insurance-type benefit for the employee's family on death while in service (EDLI)

Conclusion. Ronaldo is a covered member, entitled to benefit from all three funds.

Q4(c) and (d). EPF / EPS contribution rates and the EDLI Scheme (4 Marks)

Question: Explain the following (same facts as Q4(a) and (b): Mr. Ronaldo, brick kiln, Basic + DA Rs. 10,000, 24 employees, covered under the EPF Act):

(c) Mention the percentage of contributions to be paid towards the 'fund' under the Employee Provident Scheme and Employee Pension Scheme by both employer and employee in general.

(d) Under the Employees' Deposit Linked Insurance Scheme (EDLI Scheme), what is the maximum percentage of the contributory amount payable by the employer? Also, while making contribution under EDLI Scheme, what is the maximum percentage of contribution allowed for a deposit for the purposes of administration of the EDLI Scheme, and whether such responsibility is borne by both employer and employee? Explain. [Part of 4 x 2 = 8 Marks]

Model answer

(c) EPF / EPS contribution. Both employer and employee contribute 12% of Basic wages + Dearness Allowance every month.

Contributor	Rate	Where it goes
Employee	12%	Entirely to the Provident Fund
Employer	8.33% (of its 12%)	Employees' Pension Scheme (capped, as it is calculated on the wage ceiling of Rs. 15,000)
Employer	3.67% (balance of its 12%)	Provident Fund
Employer only	0.5%	EDLI Scheme (capped at the Rs. 15,000 ceiling, so effectively up to about Rs. 75 per employee per month)

(d) EDLI Scheme.

• The employer alone contributes 0.5% of wages towards the Employees' Deposit-Linked Insurance Scheme, capped at the Rs. 15,000 wage ceiling.
• Administrative charges: a small administrative charge is payable for running the EDLI Scheme. The employer alone bears it. Currently this charge stands waived (nil) under government notification, subject to periodic renewal.
• Who bears the burden: employees contribute nothing to the EDLI Scheme or its administrative charges. The entire cost, both the 0.5% contribution and any administrative charge, is borne only by the employer.

Q5(a). Maternity benefit periods under the MB Act (4 Marks)

Question: Explain the provisions for the 'various' maternity benefit periods (preceding and/or post expected date of delivery) applicable to women employees under the Maternity Benefit Act, 1961. [Part of 2 x 4 = 8 Marks]

Model answer

Meaning. The Maternity Benefit Act, 1961 fixes how many weeks of paid leave a woman gets and how that time is split around her expected date of delivery.

Category	Provision	Total period	Maximum before expected delivery
Woman with fewer than 2 surviving children	Section 5(3)	26 weeks	Not more than 8 weeks (the rest after delivery)
Woman with 2 or more surviving children	Section 5(3)	12 weeks	Not more than 6 weeks
Commissioning or adopting mother	Section 5(4)	12 weeks, from the date the child is handed over	No "before delivery" split, since she did not carry the pregnancy

The law gives more total rest for a first or second child, and lets the mother take some of it before the baby is born and the rest after.

Conclusion. The period and its split depend on how many surviving children the woman already has, and on whether she is a birth mother or a commissioning / adopting mother.

Q5(b). Other benefits under the MB Act (4 Marks)

Question: Apart from the above mentioned, explain the other benefits provided under the Maternity Benefit Act, 1961 as provided in the classroom deliberations and discourse. [Part of 2 x 4 = 8 Marks]

Model answer

Besides paid leave, the Maternity Benefit Act, 1961 gives several other protections.

Benefit	Provision	Content
Medical bonus	Section 8	A fixed cash sum if the employer does not provide free pre-natal and post-natal medical care
Miscarriage leave	Section 9	6 weeks' paid leave after a miscarriage or medical termination of pregnancy
Tubectomy leave	Section 9A	2 weeks' leave after a tubectomy operation
Illness leave	Section 10	Extra leave (up to 1 month) for illness arising out of pregnancy, delivery or related surgery
Nursing breaks	Section 11	Two breaks of prescribed duration each day until the child is 15 months old
Creche facility	Section 11A	Compulsory in establishments with 50 or more employees, with a set number of visits allowed each day
No dismissal	Section 12	A woman cannot be discharged or dismissed during maternity leave
Work from home	No section stated	An option after the leave period ends, where the nature of the work permits it, if mutually agreed with the employer

Conclusion. Together these provisions give all-round protection to a woman during and after pregnancy.

Paper 4: End-Semester Examination, May 2019

NLUO, Cuttack | BA LLB / BBA LLB, Semester VIII | Full Marks 45 | Held on 2 May 2019

Q1. House Stark Ltd.: appropriate government and absorption of contract labour (7 Marks)

Question: House Stark Ltd., a Central Government Company, is engaged in the manufacture and sale of various types of iron and steel materials in its plants located in various States of Westeros. The business of House Stark includes import and export of several products and bye-products through Baratheon Marketing Organization, a marketing unit of the Company, having a network of branches in different parts of Westeros. The work of handling the goods in the stockyards of House Stark was being entrusted to contractors after calling for tenders in that behalf. The Government of Essos issued a notification dated July 15, 2018 under Section 10(1) of the CLRA Act prohibiting the employment of contract labour in four specified stockyards of House Stark at Dragonstone. The Labour Union representing the cause of 353 contract labourers filed a Writ Petition in the Essos High Court seeking a direction to House Stark to absorb the contract labour in their regular establishment in view of the prohibition notification of the State Government dated July 15, 2018. A learned Single Judge of the High Court allowed the writ petition and directed that the contract labour be absorbed and regularised from the date of the prohibition notification - July 15, 2018 - within six months from the date of the judgment i.e., April 25, 2018. House Stark challenged the decision of the High Court in the Supreme Court. Assuming that the CLRA Act 1970 is applicable in the given set of facts, decide what is the correct significance of the expression 'appropriate government' under the CLRA Act? Further decide, with appropriate provisions and case laws, whether automatic absorption of contract labour, working in the establishment of the principal employer, as regular employees follows on issuance of a valid notification under Section 10(1) of the CLRA Act prohibiting contract labour in the concerned establishment. [07 Marks]

Issues

The problem arises under the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA Act) and raises two distinct issues:

1. What is the significance of the expression "appropriate government" under the CLRA Act, and which government is the appropriate government for House Stark?
2. Does automatic absorption of contract labour as regular employees of the principal employer follow from a valid notification under Section 10(1) prohibiting contract labour?

Relevant law (1): "Appropriate government" under Section 2(1)(a)

Type of establishment	Appropriate government
An establishment over which the Central Government has control, for example a Central Government company, a railway, a mine or a major port	Central Government
All other establishments	State Government

Application: Since House Stark is expressly a Central Government company, only the Central Government is the appropriate government for it. A notification issued by "the Government of Essos" (a State-level authority, on these facts) would therefore itself be without jurisdiction, unless Essos is shown to be acting as, or for, the Central Government here.

Relevant law (2): Effect of a prohibition under Section 10(1)

• Section 10(1) only allows the appropriate government to prohibit employment of contract labour in a specific process or establishment.
• It does not, by its own words, say that the prohibited contract workers automatically become employees of the principal employer.

Case law

Application and decision

The Single Judge's order directing automatic absorption is incorrect in law on two counts:

1. a possible jurisdictional defect regarding the "appropriate government"; and
2. the settled SAIL position rejecting automatic absorption.

House Stark's appeal should therefore succeed.

Conclusion

Q2. Daenerys Targaryen: maternity benefit for a commissioning mother (7 Marks)

Question: Mrs. Daenerys Targaryen is a Project Officer working in Lannister Inc. Ltd. on a contractual basis since 2 January 2018. She had performed marriage with Mr. Khal Drogo as per the Dothraki rites. Since, after completion of 5 years of marriage, she could not conceive and deliver a baby, Daenerys on consultation with her husband decided to have a child through the surrogacy procedure. In furtherance of the said desire, on 20 June 2018, an embryo was successfully transplanted in the womb of a surrogate mother. On 15 March 2019, the surrogate mother went into labour and delivered twin babies and the said twin babies were immediately placed in the hands of Daenerys and Khal on the same day. The couple incurred expenses of more than Rs. 8 lakhs in the surrogacy procedure. In order to take care of the newly born twin babies, Daenerys applied for maternity/child care leave to her employer at Lannister Inc. Ltd. The said application was considered by the employer and it was held that there is no provision to grant maternity leave to female employees who beget a child by the surrogacy procedure. Furthermore, Lannister Inc. Ltd. claimed that contractual employees were not entitled to any maternity leave and that maternity leave as a right is extended only to permanent regular employees. Mrs. Targaryen, finding that time is running fast and it is necessary to look after the twin babies, decided to file a writ petition claiming that she is entitled to maternity leave. Assuming that the Maternity Benefit Act 1961 is applicable to Lannister Inc. Ltd., citing relevant provisions, case laws and reasons, decide whether or not Daenerys' petition should be allowed. If allowed, what benefits is she entitled to and from when will the benefits commence? If not, then what alternatives are available to her? [07 Marks]

Issues

The problem arises under the Maternity Benefit Act, 1961 (MB Act) and tests the "commissioning mother" provision. The issues are:

1. Does the MB Act provide maternity benefit to a woman who begets a child through surrogacy?
2. Can the benefit be denied because the woman is a contractual, and not a permanent regular, employee?
3. If the petition is allowed, what benefit is available and from when does it commence? If not, what alternatives are open?

Relevant law: Section 5(4), MB Act

• Section 5(4) was added by the 2017 Amendment.
• It gives a "commissioning mother" maternity benefit for 12 weeks.
• The 12 weeks run from the date the child is handed over to her.

Lannister's defences and why they fail

Lannister's defence	Why it fails
There is no provision to grant maternity leave to a woman who begets a child through surrogacy.	The Act does cover surrogacy through Section 5(4). After the 2017 Amendment, the claim that "there is no provision" is legally wrong.
Contractual employees are not entitled to maternity leave; it is extended only to permanent regular employees.	Maternity benefit is not limited to permanent or regular employees (MCD v. Female Workers (Muster Roll)). Daenerys's contractual status is not a bar.

Decision

• Assuming Daenerys is the genetic (egg-providing) mother, her writ petition should be allowed under Section 5(4).
• Benefit: maternity benefit for 12 weeks.
• Commencement: from 15 March 2019, the date on which the twins were handed over to her.

Alternatives if she is not the genetic mother

If her own egg was not used, she may not strictly fit the textual definition of "commissioning mother". Her alternatives are:

• to argue under Article 21 (the right to found a family and to motherhood) for equal treatment; or
• to use ordinary earned or adoption leave available under her contract or service rules.

Conclusion

On the facts given, Daenerys is entitled to 12 weeks' maternity benefit from 15 March 2019.

Q3. Seaman's compensation claim; "arising out of and in the course of employment" (7 Marks)

Question: Delineate the procedure to claim compensation if a seaman meets with an accident while aboard a ship, deeming it as arising out of and in the course of employment. Further, citing relevant case laws, elaborate on the concept of 'arising out of and in the course of employment'. [07 Marks]

Introduction

Seamen are covered as "employees" under the Employees' Compensation Act, 1923 (EC Act). Because of the nature of their work (long voyages, and being away from a fixed office), some special procedural rules apply to them.

Procedure for a seaman's claim

1. Notice of the accident: notice of the accident or injury should be given as soon as practicable. For seamen, it may be given through the ship's master, or on return to port, given the practical difficulty of giving notice in the middle of a voyage.
2. Special provisions (Section 15, EC Act): the Act applies to masters and seamen with modifications set out in Section 15 itself. For example, notice and the claim may be served on the master of the ship as if he were the employer; no notice is needed where the accident happened and the disablement began on board; and a claim for the death of a master or seaman must be made within one year after news of the death reaches the claimant (or within eighteen months where the ship is lost with all hands), though the Commissioner may admit a late claim for sufficient cause.

Meaning of "arising out of and in the course of employment"

The phrase has two parts:

Part	Meaning
"Arising out of" employment	The accident is connected to some risk of the employment.
"In the course of" employment	The accident happened during the period and at the place of employment. For a seaman this includes being on board the ship, which is treated as his place of work throughout the voyage.

Case law

Conclusion

Seamen's compensation claims get special procedural rules under Section 15, but the claimant must still prove, directly or by legitimate inference, that the accident arose out of and in the course of employment, in line with Mackinnon Mackenzie.

Q4. EPF Act: exempted establishments and the Pension Scheme (7 Marks)

Question: An establishment, even if exempted by the appropriate govt. from the application of the schemes under the EPF Act, the employer is still subject to the application of the EPF Act with regard to specific provisions. What are the provisions of the EPF Act which are applicable to the employer that can be raised as a dispute and fall within the jurisdiction of the EPF Commissioner? Also elucidate on the Pension Scheme under the EPF Act. [07 Marks]

Exemption under Section 17, EPF Act, 1952

Under Section 17, the appropriate government can exempt an establishment from running the statutory Provident Fund Scheme if the establishment maintains its own private provident fund that is at least as favourable to the employees.

Provisions that still apply despite the exemption

Exemption only changes who manages the provident fund money. It does not remove the employer's basic duties under the Act. The following matters remain enforceable and can be raised as a "dispute" before the EPF Commissioner, who has powers under Section 7A to inquire into and determine dues:

1. whether the Act applies to the establishment at all;
2. whether contributions were correctly and timely paid into the fund, whether private or statutory; and
3. liability for damages under Section 14B for delay or default in contribution.

Pension Scheme under Section 6A

The Employees' Pension Scheme, 1995 is framed under Section 6A.

Feature	Position under the Pension Scheme
Main benefit	A monthly pension after retirement, from age 58
Funding	Mainly by diverting 8.33% of the employer's contribution (subject to the wage ceiling)
On the employee's death	Widow's and children's pension
On disablement	Disablement pension
10 or more years of eligible service	Monthly pension for life
Less than 10 years of eligible service	A lump-sum withdrawal benefit instead of a pension

Conclusion

Exemption is limited. It does not free the employer from the Act's core obligations or from pension contribution.

Q5. Dena Bank: forfeiture of gratuity (7 Marks)

Question: Dena Bank Ltd. dismissed an employee, after holding a domestic enquiry, for various charges, including stealthily removing the gold ornaments pledged by a customer and re-pledging the same with private financiers for raising funds for his professional gains. The bank forfeited the gratuity payable to him without passing an order forfeiting the whole or part of the gratuity payable to the employee. The contention of the respondent is that the right to receive gratuity is a statutory right. He filed an application under Section 7(4)(b) of the Payment of Gratuity Act before the Controlling Authority (Asst. Labour Commissioner). The said application was dismissed. The respondent employee then filed an appeal before the Regional Commissioner (Central). Decide, in the light of the above facts, whether or not the employee is entitled to claim gratuity. What are the grounds of forfeiting gratuity? What obligations are there on the employer before forfeiting the gratuity? [07 Marks]

Issues

The problem arises under the Payment of Gratuity Act, 1972 and concerns the limits of an employer's power to forfeit gratuity:

1. Is the dismissed employee entitled to claim gratuity?
2. What are the grounds for forfeiting gratuity?
3. What must the employer do before forfeiting gratuity?

Grounds of forfeiture: Section 4(6)

Gratuity may be forfeited, wholly or partly, if the employee's service is terminated for:

1. wilful omission or negligence causing loss or damage to the employer's property; here forfeiture is limited to the extent of that loss; or
2. riotous or disorderly conduct or any other act of violence, or any act which constitutes an offence involving moral turpitude, committed in the course of employment.

Employer's obligations before forfeiting

• Forfeiture is not automatic.
• The employer must pass a specific, reasoned order stating whether the whole or only a part of the gratuity is forfeited.
• The employer must follow natural justice, giving the employee a fair opportunity to explain, either before or as part of the disciplinary proceedings.
• Gratuity is a hard-earned statutory right, so any restriction on it must strictly follow the Act's own conditions.

Application and decision

• Dena Bank forfeited the gratuity without passing any order forfeiting the whole or a part of it. This is a clear procedural failure.
• The alleged misconduct (dealing dishonestly with pledged gold ornaments) could justify forfeiture under Section 4(6)(b)(ii) only if it constitutes an offence involving moral turpitude committed in the course of employment. A finding of misconduct in the bank's domestic enquiry does not by itself establish an offence; that is a matter for a criminal court.
• But because the bank failed to pass a reasoned forfeiture order, the forfeiture, as done, is not valid.

Conclusion

Since no lawful forfeiture order was passed, the employee is entitled to succeed in his claim, or at least to have the matter sent back for a valid, reasoned order.

Q6. Case comment: Roshan Deen v. Preeti Lal, 2002 SCC (L&S) 97 (4 Marks)

Question: Discuss the facts, issues and the decision rendered by the Supreme Court in the case of Roshan Deen v. Preeti Lal, 2002 SCC (L&S) 97.

Facts

• Roshan Deen, a young workman, was badly injured (losing both legs and hands) while working with machinery at Preeti Lal's mill.
• He claimed compensation under the Employees' Compensation Act, 1923.
• His advocate later obtained his thumb impression on a settlement / relinquishment document for a small sum, without properly explaining it to him.
• Relying on this settlement, the Commissioner first dismissed his claim.

Issues

1. Can a settlement obtained through fraud validly take away a workman's statutory right to compensation?
2. Can the High Court, using its supervisory writ power under Article 227, reverse the Commissioner's own order recalling that fraudulent settlement?

Decision

• The Commissioner later recalled his own dismissal order, relying on Section 17, EC Act, which makes void any agreement by which a workman gives up his right to compensation.
• The High Court wrongly reversed this recall.
• The Supreme Court restored the Commissioner's recall order. It held that a court, and even a quasi-judicial authority like the Commissioner, has inherent power to recall an order obtained by fraud.
• Writ jurisdiction under Article 227 exists to advance justice, not to snatch away relief from an injured workman.

Principle

• Section 17 protects workmen from being pressured into giving up their compensation rights.
• Fraud vitiates everything, including formal settlements and even a tribunal's own earlier orders.

Conclusion

The case is a strong precedent protecting injured workmen from fraudulent settlements.

Q6 (OR). "Young person" under the Factories Act (4 Marks)

Question: Who is a 'young person' under the Factories Act? How does the Factories Act restrict the employment of 'young persons'? Is such employment of 'young persons' a violation of the Child and Adolescent Labour (Prohibition and Regulation) Act? [04 Marks]

Meaning: Section 2, Factories Act, 1948

Term	Meaning under the Factories Act
Child	A person who has not completed 15 years of age
Adolescent	A person who has completed 15 but not 18 years of age
Young person	A person who is either a child or an adolescent

Restrictions under the Factories Act

• Section 67: a child below 14 years cannot be employed or permitted to work in any factory at all.
• Sections 68–69: an adolescent (15–18) may work only after obtaining a certificate of fitness from a certifying surgeon, and must carry a token.
• Section 71: restricted daily working hours, and a ban on night work for children.
• Section 87: the government can prohibit young persons from dangerous operations altogether.

The Child and Adolescent Labour (Prohibition and Regulation) Act, 1986

• Child (below 14): completely prohibits employing a child in any occupation or process, subject to narrow exceptions (such as family enterprises after school hours, or child artists) with safeguards.
• Adolescent (14–18): prohibits employing adolescents in the hazardous occupations and processes listed in its Schedule (Section 3A), and regulates their conditions of work in other establishments.

Is employment of young persons in a factory a violation?

Who is employed	Result
A child below 14	Always a violation of both laws.
An adolescent in a non-hazardous process, with the Factories Act's fitness-certificate and working-hour rules followed	Lawful; not automatically a violation.
An adolescent in a factory process listed as hazardous	A violation.

Conclusion

Employment of a "young person" is judged by age and by whether the specific work is hazardous, reading both statutes together.

Q7(a). Short note: Gratuity formula for different categories of workers (2 Marks)

Question: Write short notes on any 2 of the following: [3 x 2 = 06 Marks] (a) Gratuity formula for different categories of workers.

Meaning

The Payment of Gratuity Act, 1972 does not use one single formula for every kind of worker. It adjusts the formula to the way the worker is paid.

Legal provision: Section 4(2) and its proviso

Category of employee	Gratuity rule
Monthly-rated employee	15 days' wages for each completed year of service. Formula: (15/26) × last drawn wages × years of service.
Piece-rated employee	The same principle of 15 days' wages per year, but wages are computed on the average of the total wages earned in the last 3 months, excluding overtime.
Employee of a seasonal establishment	7 days' wages for each season of work, instead of the 15-day rule.

Conclusion

All categories of workers get a fair, tailored gratuity calculation.

Q7(b). Short note: Benefits covered under MGNREGA (2 Marks)

Question: Write short notes on any 2 of the following: [3 x 2 = 06 Marks] (b) Benefits covered under the MGNREGA.

Meaning

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) guarantees rural work itself, unlike the other laws in this course, which regulate existing jobs.

Key benefits

• At least 100 days of guaranteed unskilled manual work per year for every rural household that volunteers.
• Right to work within 15 days of applying; if work is not given, an unemployment allowance must be paid.
• Equal wages for men and women, with at least one-third of the workers being women.
• Worksite facilities: drinking water, shade, first aid, and a creche if 5 or more small children are present.
• Wages within 15 days of the work, with compensation for delay.

Conclusion

MGNREGA gives rural households an income floor and social-security-like protection through guaranteed work.

Q7(c). Short note: ESI Corporation (2 Marks)

Question: Write short notes on any 2 of the following: [3 x 2 = 06 Marks] (c) ESI Corporation.

Meaning

The Employees' State Insurance Corporation (ESIC) is the body corporate set up under Section 3 of the ESI Act, 1948 to run the ESI Scheme.

Composition

• Representatives of the Central Government and the State Governments.
• Representatives of employers and of employees.
• Representatives of the medical profession.
• Members of Parliament.
• A Director General as the chief executive.

Functions

• Administers the ESI Fund under Section 26, into which all contributions and other money are paid.
• Provides medical, cash and other benefits.
• Runs hospitals and dispensaries for insured workers.
• Is assisted by a Standing Committee and a Medical Benefit Council between full meetings of the Corporation.

Conclusion

ESIC is the administrative backbone that makes the ESI Act's promises real for workers.

Paper 5: Mid-Semester Examination, March 2019

NLUO, Cuttack | BA LLB / BBA LLB, Semester VIII | Full Marks 25 | Held on 8 March 2019

Q1. Peaky Blinders Ltd.: overtime wages and payment in kind (5 Marks)

Question: Employees of Peaky Blinders Ltd. applied to the Authority alleging that they had worked for 51 hours a week, although according to the provisions and rules framed under the Minimum Wages Act 1948, they were required to work only for 48 hours during a week; thus they have worked overtime for three hours per week, and hence they were entitled to extra wages payable as per rules framed under the said Act for the overtime work done by them. It is common ground that the employees are monthly rated employees, and that they are workers in a scheduled employment. The Authority contended that for the duration worked as overtime hours, they had paid the employees an equivalent amount of grains and common/general medicines for their use. In the light of the given facts, answer the following questions:

a) Decide with relevant provisions and case laws whether or not Peaky Blinders Ltd. is liable to pay overtime wages.

b) How is overtime under the Minimum Wages Act calculated?

c) What is the procedure for fixing minimum wages? [05 Marks]

Issue

The problem arises under the Minimum Wages Act, 1948 (MWA) and concerns overtime pay: can the employer discharge its overtime liability by giving grains and medicines of equivalent value?

Relevant law

• Section 13 (normal working hours): fixes normal working hours for scheduled employments, commonly 48 hours a week / 9 hours a day.
• Section 14 (overtime): if an employee works beyond the normal hours, the employer must pay overtime for every extra hour, at the overtime rate fixed under the Act, which is usually double the ordinary rate of wages.
• Section 11 (payment in kind): wages must ordinarily be paid in cash. Payment partly in kind (such as grains or medicines) is allowed only if the appropriate government has specifically authorised it by notification.

(a) Is Peaky Blinders Ltd. liable to pay overtime wages?

• Peaky Blinders Ltd. is liable to pay the wage shortfall.
• The 3 extra hours a week are overtime under Section 14.
• Payment must be at double the ordinary rate, and in the proper form (cash, unless payment in kind is authorised).
• Grains and medicines given at their ordinary value fall short of this.

(b) How overtime is calculated

Every hour worked beyond the normal working hours fixed under Section 13 is overtime under Section 14, and is paid at the overtime rate fixed under the Act, usually double the ordinary rate of wages.

(c) Procedure for fixing minimum wages: Sections 3 and 5

Method	How it works
Committee method	The government appoints committees to hold enquiries and give recommendations.
Notification method	The government publishes its proposals in the Gazette and invites objections before finalising them.

Minimum wages must be revised at least once every 5 years.

Conclusion

The workmen are entitled to proper overtime wages in cash, at double the ordinary rate.

Q2. Brad Pitt: commuting accident and employment injury under the ESI Act (5 Marks)

Question: Mr. Brad Pitt was working as a Refrigerator Operator in M/s. Angelina Breweries Ltd. One day when he was on his way to the factory to join duty he was run over by a motor vehicle causing his death on the spot. His family moved the ESI Court claiming benefits payable on the ground that their son died as a result of employment injury. The employer, Angelina Breweries, argued that Brad was killed in a road accident while walking on a public road. Thus, his death was not out of and in the course of employment. In the light of the given facts, answer the following:

a) Decide, with relevant case laws and justification, whether or not Brad Pitt's family is entitled to claim under the ESI Act.

b) Explain the Doctrine of Notional Extension.

c) Elucidate on the presumptions of employment injury under the ESI Act. [05 Marks]

Issue

This is an "employment injury" problem under the Employees' State Insurance Act, 1948 (ESI Act): is a fatal accident on a public road, while the employee is on his way to join duty, an employment injury?

(b) Doctrine of Notional Extension

• Employment is normally seen as starting and ending at the factory gate.
• But it is notionally extended to a reasonable time and space around the actual work, especially when the accident happens on the direct route to work.

The specific ESI rule for commuting accidents

Section 51-E of the ESI Act, added by the 2010 Amendment, deems a commuting accident to be an employment injury if there is a "nexus between the circumstances, time and place" of the accident and the employment. This is a wider, more worker-friendly test than the older common-law doctrine of notional extension.

(c) Presumptions of employment injury: Sections 51-A, 51-B and 51-E

Section	Presumption / deeming rule
Section 51-A	An accident happening during authorised working hours, at the place of work, is presumed (unless proved otherwise) to have arisen out of employment.
Section 51-B	An accident is still treated as arising out of and in the course of employment even though the employee was then acting in breach of any law or of the employer's orders, or without instructions, if the act was done for the purpose of and in connection with the employer's trade or business.
Section 51-E	A commuting accident is deemed an employment injury if there is a nexus between the circumstances, time and place of the accident and the employment.

(a) Application and decision

• Brad Pitt was walking directly to the factory "to join duty".
• This shows a clear time-and-place nexus with his employment under Section 51-E, even though he died on a public road.
• The employer's "ordinary road accident" argument does not, by itself, defeat the claim.

Conclusion

Applying Section 51-E, Brad Pitt's family should succeed in claiming ESI benefit.

Q3(a). Tirumala Tirupati Devasthanam: exemption from the Bonus Act (part of 5 Marks, with Q3(b))

Question: Enlist the exempted categories of institutions from the application of the Bonus Act 1965, and answer the following: a) The Tirumala Tirupati Devasthanam (TTD) is a vast and unique religious organisation, not founded for making profits. It only attracts people who want to offer worship to Lord Venkateswara. The workmen of the transport department of TTD claimed bonus. The trustees pleaded that it is a religious institution and therefore exempt from the application of the Bonus Act. Give your answer with reasons. [Part of 05 Marks, with Q3(b)]

Exempted categories: Section 32, Payment of Bonus Act, 1965

Section 32 exempts several categories from the whole Act, including:

• the LIC;
• hospitals, educational institutions and other institutions not established for purposes of profit;
• the Reserve Bank of India;
• universities;
• non-profit Chambers of Commerce;
• the Red Cross and similar charitable institutions; and
• certain government and public financial bodies.

Application to TTD

• TTD is described as a religious institution, not founded for profit, existing only to serve worshippers.
• This fits Section 32(v): an institution not established for purposes of profit.
• Its transport department appears to be an ancillary service for pilgrims, not an independent, profit-driven business.

Decision

Since TTD, as a whole, is not run for profit, it should be treated as exempt under Section 32, and the transport workmen's bonus claim should fail. The position would differ only if it were separately shown that the transport wing is run as a distinct commercial venture purely for profit, which the facts do not indicate.

Conclusion

On these facts, TTD's plea of exemption succeeds.

Q3(b). Odisha Water Supply and Drainage Board: claim for bonus (part of 5 Marks, with Q3(a))

Question: Enlist the exempted categories of institutions from the application of the Bonus Act 1965, and answer the following: b) The Odisha Water Supply and Drainage Board is established to serve public interest by ensuring better amenities of life and raising the standard of life of the community at large. The workmen demanded payment of bonus. The management contended that it is an institution meant to serve public interest. Are the employees entitled to claim bonus? Give your answer with reasons. [05 Marks, together with Q3(a)]

Legal provision

Section 32, Payment of Bonus Act, 1965 exempts only specific, listed categories. It does not give a general "public interest" exemption to every statutory body.

Case law

Decision

• Following this reasoning, the Board's "public interest" argument is, by itself, not enough to escape the Bonus Act.
• The Board does not fall within any specific Section 32 category.
• Its workmen are therefore entitled to claim bonus, subject to satisfying the Act's normal profit / surplus conditions.

Conclusion

The employees are entitled to claim bonus, unlike in TTD's genuinely non-profit religious case.

Point	TTD (Q3(a))	Odisha Water Supply and Drainage Board (Q3(b))
Nature of the body	Religious institution not founded for profit	Body serving public interest
Falls within Section 32?	Yes: an institution not established for purposes of profit	No: there is no general "public interest" exemption
Result	Exempt; bonus claim fails	Not exempt; workmen can claim bonus

Q4. Bhopal Gas Leak and the 1987 amendment to the Factories Act (4 Marks)

Question: The Bhopal Gas Leak tragedy was an eye opener to the industrial community. The Factories Act was amended in 1987 to incorporate certain restrictions on industrialists if they intend to commence any factory involving hazardous processes. Delineate the specific responsibilities cast under the provisions relating to it. [04 Marks]

Introduction

After the 1984 Bhopal Gas tragedy, the Factories (Amendment) Act, 1987 inserted Chapter IV-A (Sections 41A–41H) into the Factories Act, 1948, specifically for factories carrying on hazardous processes.

Key responsibilities under Chapter IV-A

Section	Responsibility / right
Section 41A	The State Government may appoint a Site Appraisal Committee, which examines applications for the initial location (or expansion) of a factory involving a hazardous process and makes recommendations to the State Government.
Section 41B	The occupier (owner) must compulsorily disclose information about hazards, safety measures and emergency plans to workers, nearby residents and local authorities.
Section 41C	The occupier must maintain up-to-date safety data, appoint qualified persons to supervise hazardous processes, and arrange regular medical check-ups for exposed workers.
Section 41D	The government may set up an Inquiry Committee after a major accident.
Section 41G	Workers' participation in safety management: the occupier must set up a Safety Committee with equal numbers of workers' and management representatives to promote co-operation on safety and health and review safety measures.
Section 41H	Workers get a right to warn about imminent danger: they may bring a reasonable apprehension of imminent danger to the notice of the occupier or manager and the Inspector.

Conclusion

Chapter IV-A shifted the regulation of hazardous industry from reactive to preventive.

Q5(a). Case note: Consumer Education and Research Centre v. Union of India, 1995 II LLJ 768 (2 Marks)

Question: Write short notes on any 2 of the following: [3 x 2 = 06 Marks] (a) Consumer Education and Research Centre and Others v. Union of India, 1995 II LLJ 768.

Facts

Workers in the asbestos industry were suffering from asbestosis and other serious lung diseases because of poor safety measures and long-term exposure to dust. A public interest petition was filed on their behalf.

Issue

Is a worker's right to health and safe working conditions part of the fundamental right to life under Article 21?

Decision

• The Supreme Court held yes. The right to health and medical care of a worker, during and after employment, is an integral part of a meaningful right to life.
• Article 21 was read together with Articles 39(e), 41 and 43 (Directive Principles on worker welfare).
• The Court directed compulsory health insurance, periodic medical examinations and health record-keeping for asbestos workers.
• It ordered compensation for the affected workers.

Principle

Occupational health is a fundamental right, not merely a statutory benefit that an employer can dilute.

Conclusion

The case strongly links workplace health and safety law to Article 21.

Q5(b). Short note: The bonus formula (2 Marks)

Question: Write short notes on any 2 of the following: [3 x 2 = 06 Marks] (b) Explain the Bonus formula.

Meaning

The Payment of Bonus Act, 1965 links bonus to a company's real, computed profit, not merely to its accounting profit.

Legal provision: Sections 4–6, 10 and 11

1. Compute the "available surplus": gross profits (computed as per the Act's Schedules) minus prior charges such as depreciation and direct taxes.
2. Compute the "allocable surplus": 60% of the available surplus (67% for certain foreign companies).
3. Pay bonus within the statutory limits set out below.

Limit	Rate	When payable
Minimum bonus (Section 10)	8.33% of yearly wages	Payable even in a loss year
Maximum bonus (Section 11)	20% of yearly wages	If the allocable surplus allows

Conclusion

The formula ties bonus to genuine profit while still guaranteeing a floor payment.

Q5(c). Short note: Living wage, fair wage and minimum wage (2 Marks)

Question: Write short notes on any 2 of the following: [3 x 2 = 06 Marks] (c) Living wage, fair wage and minimum wage.

Meaning

These are three rising levels of wages, drawn from the Committee on Fair Wages, 1948.

The three levels

Wage level	Meaning and legal status
Minimum wage	Covers bare survival needs. Compulsory under the Minimum Wages Act, 1948 / Code on Wages, 2019, regardless of the employer's capacity to pay.
Fair wage	A level above the minimum wage, linked to the industry's capacity to pay and to prevailing wage rates.
Living wage	The highest, ideal level, giving comfort and dignity, as envisioned by Article 43 of the Constitution.

Conclusion

Indian labour law enforces the minimum wage compulsorily and treats the living wage as a constitutional goal to work towards.

Paper 6: End-Semester Examination, May 2018

Paper details: NLUO, Cuttack; BA LLB / BBA LLB, Semester VIII; end-semester examination held on 4 May 2018; full marks 45.

Q1. Gabbar Singh's piece-rate wage case (8 marks)

Question: Gabbar Singh is the owner of a beedi factory in Rampur. He employed workers at a wage of Rs. 80 for every 1000 beedis that they rolled. Additionally, he provided them with food supplies at a concessional rate. The Govt. of U.P. issued a notification directing that a fixed sum of Rs. 100 as minimum wages for 1000 beedis rolled has to be paid. It further provided that all workmen employed in the factory shall be entitled to at least Rs. 30 per day where the employer has failed to provide sufficient quantity of raw material. If the workmen show up on duty and are willing to work, and no raw material was supplied by the employer, the workmen would nonetheless be entitled to Rs. 30. Gabbar challenged the notification on the ground that the govt. was exceeding its power in fixing a wage for piece-rated workers. Further, since he was providing them with food supplies at a concessional rate in addition to wages, he cannot be directed to pay as per the notification. In the light of the given facts, answer the following with relevant case law(s):

a. Explain the concept indicated through the 'at least Rs. 30 per day of wage' in this case. Does the govt. have the power to fix such wages?

b. What is the difference between minimum wage, fair wage and living wage?

c. Is food supply at a concessional rate included under minimum wages? Give reasons. [08 Marks]

Introduction

The problem arises under the Minimum Wages Act, 1948 (MWA), now repealed and replaced by the Code on Wages, 2019. The workers here are piece-rated beedi rollers.

(a) The "at least Rs. 30 per day" guarantee and the government's power

• It is protected by Section 17, MWA.
• Where a minimum time-rate (and not just a piece-rate) is also fixed, a worker who is willing to work but is denied raw material through the employer's own fault must still get this guaranteed minimum.

Power of the government: Section 3 gives the government full power to fix such wages for piece-rated work. This power does not depend on the employer's capacity to pay.

(b) Minimum wage, fair wage and living wage

Wage	What it means	Basis
Minimum wage	Bare survival level	Compulsory, regardless of the employer's capacity to pay
Fair wage	A level above the minimum	Linked to the industry's capacity to pay
Living wage	The highest, ideal level of comfort and dignity	The goal under Article 43 of the Constitution

(c) Is concessional food part of the minimum wage? (Section 4)

Under Section 4, the minimum wage may consist of either:

1. a basic cash rate plus a cost-of-living allowance; or
2. a basic rate plus the cash value of concessions on essential commodities supplied at concessional rates, but only if the government's notification itself authorises this.

Application to the facts

• The Government of U.P.'s notification separately fixes the cash minimum wage (Rs. 100 per 1000 beedis) and the Rs. 30 per day guarantee.
• The notification does not authorise any offset for food.
• So Gabbar's concessional food supply cannot reduce his cash wage liability.
• His objection that the government exceeded its power also fails: Section 3 empowers it to fix wages for piece-rated work, whatever the employer's capacity to pay, and the Act itself was upheld against an Article 19(1)(g) challenge in Bijoy Cotton Mills v. State of Ajmer.

Conclusion

The notification is valid. Gabbar must pay the full notified cash wages, in addition to any food concession he gives voluntarily.

Q2. Thanos's ESI claim: road accident on the way to work (8 marks)

Question: Thanos is an employee in the factory of Captain Steven Rogers. Thanos was going to the factory on his motorbike when he met with an accident 0.5 km away from the factory gate. Consequently, he became permanently and totally incapacitated to work in the factory. He claimed benefit under the ESI Act from Captain on the ground that it was an employment injury, since he was going to the factory to report on duty. Rogers refused to entertain the claim stating that the accident was like any other road accident and was not an employment injury. In the light of the given facts, answer the following, with relevant case law(s):

a. Explain the concepts of casual connection and causal connection.

b. What is the doctrine of notional extension?

c. Decide the given case, with reasons. [08 Marks]

Introduction

The problem tests the meaning of "employment injury" under the Employees' State Insurance Act, 1948 (ESI Act): an injury by accident "arising out of and in the course of employment".

(a) Casual connection v. causal connection

Point	Casual connection	Causal connection
Meaning	A mere coincidence of timing or location	The employment itself genuinely contributed to, or increased the risk of, the accident
Link with an employment risk	No real link	A real link
Effect on a claim	Does not support compensation	Supports a compensation claim

(b) Doctrine of notional extension

Employment is normally understood to begin and end at the factory gate. Under this doctrine it is notionally extended, within reasonable limits of time and space, to the direct route to work.

The ESI-specific rule: Section 51-E

For ESI claims specifically, Section 51-E (2010 Amendment) deems a commuting accident to be an employment injury where there is a "nexus between the circumstances, time and place" of the accident and the employment.

Point	Notional extension (Saurashtra Salt)	Section 51-E, ESI Act
Test	Employer's control of the means of access, or a special hazard on the employer's own route	Nexus between the circumstances, time and place of the accident and the employment
Employer control of transport	Mainly required; an ordinary public conveyance is not covered	Not required
Scope	Narrower (the classic test)	Broader

(c) Decision

• Thanos was going directly to the factory.
• The accident happened only 0.5 km from the factory gate, so it was close to the employment in both time and place.
• This satisfies Section 51-E even though he was riding his own motorbike, because this ESI-specific provision does not require employer control of the transport, unlike the older Saurashtra Salt test.
• Rogers' plea that it was "like any other road accident" therefore fails.

Conclusion

Thanos's claim should succeed under Section 51-E.

Q3. Jurisdiction of the Employees' Insurance Court (4 marks)

Question: Explain briefly the jurisdiction of the Employees' Insurance Court. Does the EIC have jurisdiction to determine a question of disablement? [04 Marks]

Meaning

Jurisdiction: Section 75

The EIC decides questions and disputes such as:

• whether a person is an "employee" under the Act;
• the rate of wages or of contribution payable;
• who is the "principal employer";
• a person's right to any benefit, and its amount and duration.

Disablement questions: Section 54A and Section 75(2A)

The Act takes disablement questions away from the EIC at the first stage. Under Section 54A and Section 75(2A), the following questions are decided first by the Medical Board; an appeal then lies either to the Medical Appeal Tribunal (with a further appeal to the EIC) or directly to the EIC:

• whether an injury caused permanent disablement;
• the extent of loss of earning capacity.

Forum	What it decides
Employees' Insurance Court	Legal disputes under Section 75: employee status, rate of wages or contribution, principal employer, right to and amount and duration of benefits; appeals on disablement questions under Section 54A(2)
Medical Board	Whether the injury caused permanent disablement, and the extent of loss of earning capacity
Medical Appeal Tribunal	Appeals on those disablement questions

Conclusion

The EIC does not have jurisdiction to determine the extent of disablement at the first stage. That question goes first to the Medical Board; the EIC can decide it only on appeal under Section 54A(2), either after the Medical Appeal Tribunal or directly.

Q4. PWD contractor's fatal accident case (5 marks)

Question: An employee engaged by the contractor of PWD met with a fatal accident while digging a plot. His father claimed compensation against the contractor and the PWD. The Commissioner ordered that 1/3 of the compensation was payable by the contractor and 2/3 by the PWD. The principal employer challenged the award on the ground that the contractor should have been directed to pay the entire amount. In the light of the above facts, enumerate the conditions to be fulfilled by the contractor to make the principal employer liable. What are the remedies of the employer against a stranger? [05 Marks]

Introduction

This is a problem on principal employer liability under the Employees' Compensation Act, 1923 (EC Act), where a contractor's worker is injured or killed.

Conditions for the principal employer's liability: Section 12(1)

The principal (here, the PWD) becomes liable to pay compensation, as if the workman were its own employee, when:

1. the principal, in the course of or for the purpose of its trade or business, contracts with a contractor;
2. the contract is for the execution of the whole or part of any work;
3. that work is ordinarily part of the principal's own trade or business; and
4. the work is executed in or about the principal's premises, or under the principal's control or supervision.

Right of indemnity: Section 12(2)

A principal employer who pays compensation is entitled to be fully indemnified (reimbursed) by the contractor, since it is the contractor who actually engaged the workman.

Application to the facts

• If digging this plot was ordinarily part of the PWD's business and was under its control, the PWD is liable to the family under Section 12(1). Any plea of "no liability at all" fails.
• Under Section 12(2), however, the PWD is entitled to recover the full amount from the contractor by way of indemnity, not merely two-thirds.
• So the PWD has a valid grievance about the Commissioner's 1/3 and 2/3 split, and can claim complete reimbursement from the contractor.

Remedies of the employer against a stranger

A "stranger" is a third party unconnected with the employment. Where the accident is actually caused by the wrongful act of such a stranger, the employer who pays compensation may be subrogated to the workman's right to sue that stranger, that is, it steps into the workman's shoes. It can then recover what it paid, applying ordinary principles that prevent double recovery.

Conclusion

The PWD remains liable to the family under Section 12(1), but it can recover the full amount from the contractor under Section 12(2).

Q5. Scope of the employer's liability for compensation (8 marks)

Question: Explain the scope of the employer's liability for compensation arising out of and in the course of employment, in case of death, accident and occupational diseases. What is the amount of compensation payable in the above cases? [08 Marks]

Introduction

The Employees' Compensation Act, 1923 (EC Act) makes an employer liable for personal injury caused by accident and, separately, for certain occupational diseases.

Accidents: Section 3(1)

The employer is liable if personal injury is caused by an accident arising out of and in the course of employment. Only limited defences are available:

• a minor injury, where disablement does not last more than 3 days;
• the workman was under the influence of drink or drugs;
• wilful disobedience of safety rules;
• wilful removal of safety devices.

Occupational diseases: Section 3(2) and the Third Schedule

• Certain listed diseases, linked to specific kinds of work or exposure, are set out in Parts A, B and C of the Third Schedule.
• Once the worker is shown to have contracted such a disease during the relevant employment, it is deemed to be an "injury by accident arising out of and in the course of employment".
• The worker does not need to prove a specific accident separately.

Amount of compensation: Section 4

Type of harm	Compensation	Basis
Death	50% of monthly wages multiplied by a factor based on the worker's age, subject to a statutory minimum amount (periodically revised), plus funeral expenses	Age factor in Schedule IV
Permanent total disablement	60% of monthly wages multiplied by the age factor, subject to a statutory minimum	Age factor
Permanent partial disablement	A proportionate percentage of the amount payable for permanent total disablement	Percentage loss of earning capacity (Schedule I)
Temporary disablement (total or partial)	Half-monthly payments of 25% of monthly wages	For the period of disablement, up to 5 years

Conclusion

The EC Act's compensation scheme is graded by both the type of harm and its degree and permanence.

Q6(a). Short note: Set-on and set-off (4 marks)

Question: Write short notes on: [2 x 4 = 08 Marks] (a) Set-on and set-off

Meaning

Set-on and set-off are two balancing mechanisms under Section 15 of the Payment of Bonus Act, 1965, read with its Fourth Schedule. They keep bonus payments stable across good and bad years.

Set-on and set-off compared

Point	Set-on	Set-off
When it applies	The allocable surplus exceeds the maximum bonus payable (20% of wages) in an accounting year	The allocable surplus is less than the minimum bonus payable (8.33%)
What happens	The extra amount is carried forward ("set on") to help pay bonus in a year with lower profits	The shortfall is met ("set off") from any amount already carried forward from earlier years under set-on
Period	Up to 4 succeeding years	Up to 4 years

Conclusion

These mechanisms make bonus payments more predictable for both employer and employees.

Q6(b). Short note: Employees' Pension Scheme (4 marks)

Question: Write short notes on: [2 x 4 = 08 Marks] (b) Employees' Pension Scheme

Meaning

The Employees' Pension Scheme, 1995 (EPS), framed under Section 6A of the EPF Act, 1952, provides a monthly pension to employees after retirement.

Funding

• It is funded mainly by diverting 8.33% of the employer's monthly EPF contribution, calculated on the wage ceiling (Rs. 15,000 when this paper was set; Rs. 25,000 from 17 September 2026).
• There is also a limited government contribution.
• The employee makes no separate contribution to EPS beyond the normal EPF share.

Benefits

• Monthly pension for life after age 58, if the employee has 10 or more years of eligible service.
• A lump-sum withdrawal benefit if service is less than 10 years.
• Additional cover: disablement pension, and widow and children's pension if the employee dies while in service.

Conclusion

EPS gives organised-sector workers income security after their working years end.

Q7. Case comment: Bakshish Singh v. M/s Darshan Engineering Works, AIR 1994 SC 251 (4 marks)

Question: Write a case comment on Bakshish Singh v. M/s Darshan Engineering Works, AIR 1994 SC 251. [04 Marks]

Facts

• Bakshish Singh worked as a Fitter at Darshan Engineering Works from 1968.
• He resigned in 1978 after more than 10 years of continuous service, drawing wages of Rs. 335 a month.
• The employer refused full gratuity, arguing that he was entitled to it only on reaching the normal retirement (superannuation) age of 58.
• Section 4(1)(b) of the Payment of Gratuity Act, 1972 grants gratuity on "retirement or resignation" after 5 years' continuous service.
• The Punjab and Haryana High Court had struck down Section 4(1)(b) as violating Article 19(1)(g), the employer's right to carry on business.

Issue

Is Section 4(1)(b) an unreasonable restriction on the employer's fundamental right to carry on business, because it forces payment of gratuity on resignation and not only on formal retirement?

Principle and comment

• Gratuity is earned as a right for service already rendered; it is not a favour that depends on reaching a fixed retirement age.
• A 5-year qualifying period, with payment on resignation as well as retirement, is a reasonable condition.
• It is justified under Article 19(6) in the interest of social and economic justice.
• An employer cannot claim a "right to exist" while denying workers such basic statutory dues.

Conclusion

The case firmly protects the resigning employee's right to gratuity against challenge by the employer, including a constitutional challenge.

Quick revision

High-frequency topics. Each of these appeared, in some form, in nearly every paper in this collection. They are the first topics to revise when time is short.

• Minimum wage, fair wage and living wage: Paper 1 Q3; Paper 2 Q1 and Q4(a); Paper 5 Q1 and Q5(c); Paper 6 Q1(b). Always asked, and always easy marks.
• Notional extension and the "Thanos"-style ESI motorbike or road accident: Paper 3 Q2; Paper 5 Q2; Paper 6 Q2. The same doctrine (Saurashtra Salt) plus Section 51-E, asked in three different years.
• Contractual or honorarium employee denied maternity, adoption or surrogacy leave: Paper 1 Q2A; Paper 2 Q2; Paper 3 Q1; Paper 4 Q2. The same principle every time: Section 5(4), Section 27, and MCD v. Female Workers.
• Bonus (eligibility, formula, set-on and set-off): Paper 1 Section B Q2 (OR)(c) and Section B Q3; Paper 2 Q3 (OR); Paper 5 Q3(a), Q3(b) and Q5(b); Paper 6 Q6(a).
• Gratuity (continuous service, formula, forfeiture): Paper 1 Section B Q2 (OR)(a); Paper 3 Q3(a) and Q3(b); Paper 4 Q5 and Q7(a); Paper 6 Q7.
• EPF, EPS and EDLI contribution percentages: Paper 1 Section B Q4(b); Paper 3 Q4; Paper 4 Q4; Paper 6 Q6(b). Learn by heart: 12%, 8.33%, 3.67% and 0.5%.
• Employees' Compensation Act (presumptions, principal employer, defences): Paper 1 Section B Q1 and Section B Q2; Paper 4 Q3; Paper 6 Q4 and Q5.