Unit-V

-Ms. Namratha
Assistant Professor
BMSCL
Unorganised Workers Social
Security Act, 2008
• The labour or workforce in India is organized into two classes:
I. Organized labour: Where the workforce is aware of their rights, are
represented by trade unions and protected by law, such as workforce
in industries.
II. Unorganised labour: Where the workforce is weak, exploited and not
protected under most of the regulations and labour law.
• The non-applicability of labour laws to the unorganised sector is due
to–
a) their inability to pursue their common interests in the presence of
constraints such as casual nature of employment,
b) absence of definite employer-employee relationship,
c) ignorance and illiteracy.
• The unorganised sector workers are generally low paid and a majority
of them lack of job security and social security benefits like- health
care, maternity benefits, ESI, EPF, etc.
• they work under poor working conditions and receive low wages
compared to organised sector.
• Most of the work is seasonal which leads to migration of workers,
instability in residence and discontinuity in education of children.
• They also live in slums without proper amenities.
• The unorganised sector workers can be classified further:
1. Based on occupation:
• Small and marginal farmers,
• Landless agricultural labourers,
• fishermen,
• Animal husbandry,
• beedi rolling and packing,
• Construction workers, etc.
2. Nature of employment:
• Bonded labourers
• migrant workers
• casual labourers, etc.
3. Specially distressed categories:
• toddy trappers
• loaders and unloaders, etc
4. Service category:
• domestic workers,
• barbers
• fruit and vegetables vendors
• newspaper vendors, etc.
 Object of the Act
• The unorganised Workers Social Security Act, 2008, is an Act to
provide for the social security and welfare of unorganised workers
and for other matters connected therewith or incidental thereto.
 Definitions
Sec 2(a): ‘’employer’’
• means a person or an association of persons, who engaged or
employed an unorganised worker either directly or otherwise for
remuneration.

Sec 2(b): ‘’Home- based worker”

• means a person engaged in the production of goods or services for
an employer in his or her home or other premises of his or her choice
other than the workplace of the employer, for remuneration.
Sec 2(d): ‘’National Board’’
• means the National Social Security Board for unorganised workers
constituted under sec 5.
Sec 2(l): “ unorganised sector’’
• means an enterprise owned by individuals or self-employed workers
and engaged in the production or sale of goods or providing service of
any kind where the number of workers employed is less than 10.
Sec 2(m): ‘’Unorganised worker’’
• means a home-based worker, self-employed worker or a wage worker
in the unorganised sector.
 Social security Benefits
Sec 3: Framing of Scheme
The Central Govt shall formulate and notify, from time to time
suitable welfare schemes for unorganised workers on matters relating
to:

a) Life and disability cover

b) Health and maternity benefits
c) Old age protection
d) Any other benefit as may be determined by the Central Govt.
 Schemes included in the schedule I to this Act shall be deemed to be the
welfare schemes under this section.
 The State Govt may formulate and notify , from time to time, suitable
welfare schemes for unorganised workers, including schemes relating to:

a) Provident Fund
b) employment injury benefit
c) housing
d) educational schemes for children
e) skill upgradation of workers.
f) funeral assistance
g) old age homes
Sec 4: Funding of Central Govt Schemes
 Any scheme notified by the Central Govt may be:
i. Entirely funded by the Central Govt.
ii. Partly funded by the Central Govt and partly funded by the State Govt
iii. Partly funded by the Central govt, partly funded by the State Govt and partly
funded through contributions collected from the beneficiaries of the scheme or
the employers as may be prescribed in the scheme.
 Every Scheme notified by the Central Govt, shall provide for the efficient
implementation of the scheme such as:
i. Scope of the scheme
ii. Beneficiaries of the scheme
iii. Resources of the scheme
iv. Agency that will implement the scheme
v. Redressal of grievances
 National Social Security Board for
Unorganised workers
Sec 5: National Social Security Board
• Provides for establishment of the National Social Security Board.
• Central Govt, by notification constitute national board known as-
NSSB.
• to exercise certain powers and functions under this Act.
• NSSB shall consist of-
a) Union Minister for Labour and Welfare as ex-officio Chairperson
b) The Director General of labour Welfare as ex-officio Member
Secretary.
c) 34 members to be nominated by the Central Govt:
• 7 representing the unorganised sector workers.
• 7 representing employers of the unorganised sector
• 7 representing eminent persons from civil society.
• 2 representing members from Lok Sabha and from Rajya Sabha
• 5 representing the concerned central govt ministries and
departments
• 5 representing the State Govts.
 Chairperson and other members of the Board shall be persons of
eminence in the fields of labour welfare, management, finance, law
and administration.
 term of members of the National Board shall be 3 years.
 National board shall meet at least thrice a year, at such time and
place and shall observe such rules of procedure relating to the
transaction of business at its meetings
 the members may receive allowances as may be prescribed for
attending the meetings of the National Board.
 Functions of the National Board:
• Recommend to the Central Govt suitable schemes for different
sections of unorganised workers.
• Advice the central govt on matters referred to it
• Monitor social welfare schemes for unorganised workers by the
Central Govt
• Review the progress of registration and issue of identity cards to the
unorganised workers.
• Review the record keeping functions performed at the State level.
• Review the expenditure from the funds under various schemes
• Undertake such other functions as are assigned to it by the Central
Govt from time to time.
 State Social Security Board for
Unorganised workers
Sec 6: State Social Security Board
• Every State Govt-Board- SSSB
• Consists of:
 Minister of Labour and Employment of the concerned State as ex-officio
chairperson
 The Principal secretary or secretary (labour) as ex-officio member secretary
 28 members to be nominated by state govt:
i. 7 representing unorganised workers
ii. 7 representing employers of unorganised workers
iii. 2 representing members of legislative Assembly of the concerned state.
iv. 5 representing eminent persons from the civil society
v. 7 representing State Govt depts concerned.
 Chairperson and other members of the Board shall be from amongst
persons of eminence in the fields of labour welfare, mgt, finance, law
and administration
 term- 3 years
 meet at least once in a quarter
 members- allowances
 Functions of the State Board:
 Recommend the state govt in formulating the schemes
 Advice State govt on matters arising on administration of this Act
 Monitor social welfare schemes as are administered by SG.
 Review the record keeping functions performed at the District level
 Review the progress of reg and issue of ID cards to Unorganised
workers.
 Review expenditure from the funds under various schemes.
Sec 7: Funding of State Govt Schemes
• Any schemes notified by the state govt may be:
i. Entirely funded by state govt
ii. partly funded by state govt, partly through contributions collected
from the beneficiaries or employers.
• State govt may take financial assistance- CG.
Sec 8: Record keeping by District Administration
• Record keeping functions – performed by Dist. Administration
• State govt may direct that the record keeping functions shall be
performed by:
 Panchayath in rural areas
 Urban local bodies in urban areas
Sec 9: Workers facilitation centres
• by SG
• functions:
 Disseminate information on available social security schemes for the
unorganised workers
 Facilitate the filling, processing and forwarding of applications forms
for reg of unorg. Workers
 Assist –obtain registration from Dist. Administration
 Facilitate the enrolment of the registered unorg. Workers in social
security schemes.
 Registration
Sec 10: Eligibility for registration and social security
• Every unorganised worker shall be eligible for registration subject to
the fulfilment of the following conditions:
 He or she shall have completed 14 years of age.
 A self- declaration by him or her confirming that he or she is an
unorganised worker.

• Every eligible unorganised worker shall make an application in the

prescribed form to the Dist. Administration for reg
• shall be regd/issued-ID by dist. Adm
• It shall be a smart card-carrying a UIN
• If a scheme requires a registered unorganised worker to make a
contribution, he or she be eligible for social security benefits under
the scheme only upon payment of such contribution.
• Where a scheme requires the central or state govt to make a
contribution, the central or state govt, as the case may be, shall make
the contribution regularly in terms of the scheme.
Sec 11: Power of central Govt to give directions
• The Central Govt may give directions in respect of matters relating to
the implementation of the provisions of this Act to:
i. The National Board
ii. The Govt of a State or the State Board of that state.
Sec 12: Vacancies, etc not to invalidate proceedings
• No proceeding of the National Board or any State Board shall be
invalid on the ground merely of the existence of any vacancy or defect
in the constitution of the National Board or the State Board.
Sec 13: Power to make rules by Central govt
• The Central Govt may, by notification, make rules to implement the provisions
of this Act.
• The may provide for:
 the contributions to be collected from the beneficiaries of the scheme or the
employers u/s 4
 The number of persons to be nominated, the terms of office and other
conditions of service of members, the procedure to be followed in the discharge
of functions and the manner of filling vacancies of, National Board.
 the rules of procedure relating to the transaction of the business at the meeting
of the National Board u/s5.
 the allowances for attending the meetings of the National Board u/s 5
 the manner in which an application for registration is made.
 Any other matter as prescribed.
 Sec 14: Power to make rules by state govt
• The State Govt may, by notification, make rules to implement the provisions of this
Act.
• The rules may provide for:
 the contributions to be collected from the beneficiaries of the scheme or the
employers u/s 7
 the number of persons to be nominated, the terms of office and other conditions of
service of members, the procedure to be followed in the discharge of functions and
the manner of filling vacancies of, the National Board.
 The rules of procedure relating to the transaction of the business at the meeting of
the state board
the allowances for attending the meetings of the State Board
 the manner in which an application for registration is made
 Any other matter as prescribed
 Any other matter which is required to be, or may be, prescribed.
 Social security schemes for the
unorganised workers
1. Indira Gandhi National Old Age Pension Scheme
• by Ministry of Rural Development.
• provides financial assistance of-
 200 rupees for old people above the age of 60 years and
 500 rupees for those above the age of 80 years.
• Applies to those who are living below poverty line.
2. National Family benefit Scheme:
• by Ministry of Rural Development.
• a financial assistance of 10,000 rupees is extended to families living below the
poverty line when –
the sole bread earner in the family in the age group of 18-64 years dies -natural or
accidental death.

3. Janani Suraksha Yojana:

• by Ministry of Health and Family Welfare.
• it involves private sector hospitals to promote safe motherhood, pre-natal to post-
natal care, cash benefits, etc
• to women below poverty line.
• limited to first two births
• entirely funded by Central Govt.
4. Handloom Weavers’ Comprehensive Welfare Scheme:
• by Ministry of Textiles to help the weavers to avail social security benefits.
• includes 2 components:-
a) Health insurance scheme- provides health care facilities for all weavers
b) Insurance cover for natural death, accidental death, complete disability & partial
disability.
• The coverage is as follows:
a) Weavers in the age group of 18-50 will be covered under Pradhan Mantri Jeevan Jyoti
Bima Yojana and Pradhan Mantri Suraksha Bima Yojana
b) Weavers in the age group of 51-59 will be covered under Mahatma Gandhi Bunkar Bima
Yojana.
c) Scholarship will be paid to the maximum of 2 children of the weavers.
 Children should study between 9th and 12 th std.
 The amt of scholarship is Rs. 100 per month, per child and
 will be paid through the National Scholarship Portal.
5. Handicraft Artisans’ Comprehensive Welfare Scheme:
• by the Ministry of textiles
• to help the artisans to avail social security benefits.
• scheme involves 2 components:
a) Rajiv Gandhi Shilpi Swasthya Bima Yojana- provides health insurance
to an artisan’s family of four, including self and any 3, that is,
spouse, children or dependent parents.
b) Bima Yojana for handicrafts artisans provides life insurance
protection to handicrafts artisans through LIC irrespective of gender
between the age group of 18-60 years in case of natural or
accidental death or total or partial disability due to accident.
6. Pension to Master craft persons:
• The Pension to Master craft persons is by Ministry of Textiles to
provide social security benefits
• to senior master crafts persons-
 above the age of 60 years and
who are recipients of National/ State awards in handicrafts,
• will be provided with pension benefits so as to enable them to
disseminate their knowledge to the younger generation.
7. National Scheme for welfare of Fishermen and Training and Extension:
• by Department of Animal husbandry, Dairying and Fisheries
• to provide financial assistance to fishermen for their welfare.
• Objectives:
a) Provision of basic amenities like drinking water and sanitation in fishermen’s
villages
b) Better living standards for fishermen and their families.
c) Social security for active fishermen and their dependents.
d) Economic security.
• These objectives will be achieved through the following components:
a) Group Accident insurance for active fishermen
b) Development of model fishermen village
c) Training and extension
8. Janshree Bima Yojana:
• by the Dpt of Financial services
• implemented by LIC as health cum life insurance.
• scheme covers 45 low income occupational groups for those in the age
group of 18-59 years.
• scheme offers insurance cover:-
i. of 30,000 rupees for natural death
ii. of 75,000 rupees for accidental death or total permanent disablement
iii. of 37,000 rupees for partial permanent disablement.
• premium shall be 200 rupees per member per annum.
• 50% funding by central govt
• other 50% by nodal agency at ground level.
9. Aam Admi Bima Yojana:
• by Ministry of finance
• implemented by LIC as an insurance scheme especially for rural landless households.
• scheme is applicable to a member:
 who should be head of the family or
 the earning member in the family living below the poverty line or marginally above the
poverty line.
 The member should also be in the age group of 18-59 years
• The scheme offers insurance cover :
a) Of 30,000 rupees for natural death
b) of 75,000 rupees for accidental death or total permanent disablement
c) of 37,500 rupees for partial permanent disablement.
• The premium shall be 200 rupees per member per annum.
• 50% funding by the CG or SG or nodal agency
• other 50% by the social security fund.
10. Rashtriya Swasthya Bima Yojana:
• by Ministry of Health and Family welfare.
• this insurance scheme covers :
 below poverty line families in unorganised sector
 with no age limit
 such as, domestic helpers, rickshaw pullers, etc.
• This scheme through public private partnership provides for smart card
and insurance cover of up to 30,000 rupees per annum.
• It covers maternity benefits and hospitals charges of 100 rupees per
visit (max of 1000 rupees).
 Karnataka Shops and
commercial establishments Act,
1961
Introduction
• There is no specific Act by the Government of India as a Central
Government Act which comprehensively governs hours of work, payment
of wages, health and safety of workers/ employees, compensation and
employment of women and children in shops/ commercial establishments.
• To bridge this gap, various state governments have enacted a Shops and
Establishments Act to help regulate the conduct of commercial
establishments within their jurisdiction.
• The Karnataka Shops and commercial establishments Act, 1961 is an Act
to provide for the regulation of conditions of work and employment in
shops and commercial establishments in the state of Karnataka.
 Salient features of the Act
1. Enhancing age limit of a child from 12 to 14 years, in the definition
of child
2. Enhancing the age limit from 12 to 14 and 15 to 18 in relation to
hours of work of young persons.
3. Enhancing the age limit from 12 to 14 and 15 to 18 for the purpose
of prohibition of employment of young persons
4. Enhanced punishment for employment of children
5. Renewal of registration certificate once in five years instead of
every year
6. Compulsory issue of appointment orders by the employers to the
employees in writing indicating the name, designation and terms of
conditions, etc of appointment within 30 days from the date of
appointment in his establishment, by insertion of sec 6A.
7. Fixing of weekly holidays within 30 days from the date of
commencement of new establishment
8. Fixing of weekly holidays within 30 days from the date of
commencement of new establishment
9. Removal of the maximum limit of 6 month’s pay as compensation
payable by the employer to an employee who is removed or dismissed
from service without reasonable cause of proof of misconduct.
10. Enhancement of punishments of certain offences due to
contravention of the provisions of the Act.
 Definitions
Sec 2(a): Adult
• means a person who has completed his eighteen year, a person who
is eighteen years of age or more

Sec2(b):Apprentice
• Means a person, who is employed with or without payment of wages
for the purpose of being trained in any trade, craft or employment in
any establishment.
• Apprentice is a person who is fourteen years of age or higher.
 Sec 2(c): child
• Means a person who has not completed his fourteen year-
• meaning a person who is below 14 years of age.

Sec 2(e) commercial establishment means-

• commercial,
• trading,
• banking,
• eating house,
• a cafe or
• any other refreshment house,
• a theatre or any other place of public amusement and entertainment
 It also includes such establishments as the State government may declare by
notification to be a commercial establishment for the purposes of this Act.
 Sec 2(f): “Day” means
• a period of twenty-four hours starting from midnight.
• However, where the working hours of an employee extends beyond
midnight, ‘’day’’ means a period of twenty-four hours beginning from
the time when such employment commences irrespective of
midnight.
 Sec 2 (g):’’employee” means
• a person who is principally employed in connection with, any
establishment
• on a permanent, periodical, contract or on commission basis.
• he may or may not receive any reward for his labour and includes
apprentice, any clerical or other member
• of the staff of a factory or industrial establishment
• who falls outside the scope of Factories Act, 1948.
• However, it does not include employer’s family.
 Sec 2(h): employer means
• a person who has ownership or ultimate control over the affairs of an
establishment and includes-
 members of the family of an employer,
 a manager, agent or other person acting in general management or
control of an establishment.

Sec 2(i): Establishment means:

• A shop or a commercial establishment
 Sec 2(u) ‘’Shops’’
• means any premises where any trade or business is carried on or where
services are provided to customers.
• A shop includes-
 offices,
 store rooms
 godowns or
 warehouses
• whether in the same premises or otherwise,
• used in connection with the trade or business.
• It does not include-
 a commercial establishment or shops attached to the factories where the
persons employed in the shop falls within the scope of the Factories Act, 1948
 Sec 2(z): ‘’Young person’’ means:
A person who is not a child and who has not completed 18 years of age
 Registration of Establishments
Sec 4: Registration of Establishments
• It is the duty of an employer of every establishment to send to the
Inspector of the concerned area within 30 days, a statement in the
prescribed form along with such fees as may be prescribed.
• The statement shall contain:
a. The name of the employer and the manager, if any
b. Postal address of the establishment
c. The name if any of the establishment
d. Any other particulars as may be prescribed
• On receipt of the statement and the fees, if the inspector is satisfied
about the correctness of the statement-
shall register the establishment in the register of establishments and
shall issue a registration certificate to the employer.
• Registration certificate issued shall be valid for a period of 5 years
and shall be renewed before its expiry on payment of such fees as
may be prescribed.
• Registration certificate issued or renewed before the commencement
of Karnataka Shops and Commercial Establishments (Amendment)
Act, 1977 shall continue to be valid till the expiry of the period of
registration certificate already granted.
Sec 5: Change to be communicated to the Inspector
• It is the duty of the employer of every establishment to inform any
change in the information contained in the statement u/s 4, to the
Inspector of the concerned area within 15 days of such change.
• The Inspector on receiving such information and on being satisfied
about its correctness, shall make the change in the register of
establishments and shall amend the registration certificate or issue a
fresh registration certificate, if necessary
Sec 6: Closing of establishment to be communicated to Inspector
• It is the duty of the employer of every establishment to inform in
writing the closure of the establishment to the Inspector of the
concerned area within 15 days of such closure and return the
registration certificate.
• The Inspector on receiving such information and on being satisfied
about its correctness, remove such establishment from the register of
establishments and cancel the registration certificate.
• However, if the Inspector does not receive any information, but is
satisfied that the establishment has been closed, he may remove such
establishment from the register of establishment.
Sec 6A: for issue of appointment orders
• It is the duty of the employer of every establishment employing a
person in or in connection with his establishment to issue an
appointment order in writing indicating the name, designation, pay
scale and terms and conditions of his employment and serve the
same on such person within 30 days from the date of appointment in
the establishment.
• In case the employees were appointed in any establishment prior to
the commencement of the Karnataka Shops and Commercial
establishments (Amendment) Act, 1997, the employer of such
establishment shall, if he has not yet issued any appointment order in
writing to such employee, issue in writing an appointment order to
the employee within 30 days of the commencement of the Act.
 Hours of work
Sec 7: Daily and weekly hours
• No employee in an establishment is required to work or allowed to
work for more than 9 hours a day and 48 hours a week.
• No employee in an establishment is required to work or allowed to
work for more than 10 hours a day in case of overtime except on days
of stock-taking and accounts preparation.
• In case of overtime the total number of overtime hours worked by an
employee shall not exceed 50 hours in a period of 3 continuous
months.
• No young person in an establishment is required to work or allowed
to work for more than 5 hours a day.
Sec 8: Extra wages for overtime work
• Where an employee works in any establishment for more than 9
hours in any day or for more than 48 hours in any week he shall in
respect of such over time work be entitled to wages at twice the rate
of normal wages
Sec 9: Interval for rest
• Where an employee works in any establishment the work period of
the employee shall be organized in such a way that the work period
shall not exceed 5 hours and that no employee is required to work for
more than 5 hours before he/ she has had an interval of rest of at
least 1 hour.
Sec 10: Spread over
• Spread over refers to the period between start and end of work.
• Where an employee works in any establishment the total work period of the
employee shall be organized in such a way that it does not exceed 12 hours in
any day including the interval for rest.
Sec 11: Opening and closing hours
• No establishment shall on any open before and close after the hours as
determined by the State Government by a notification.
• If there was any customer who was being served or was waiting to be served
in any establishment at the closing hours, the customer may be served during
the quarter of an hour (15 minutes) immediately following such closing hours.
• The state govt may determine different opening and closing hours for different
establishments or different classes of establishments in a locality or for
different times of the year.
Sec 12: Weekly Holidays
. Every establishment shall remain closed for at least one day of the
week.
• It is the duty of the employer to fix such a day at the beginning of the
year or within 30 days from the date of commencement of the
establishment.
• the same shall be informed to the Inspector of the concerned area and
display it as a notice in a conspicuous place in the establishment.
• the employer shall not alter such date more than once in 3 months.
• In case of any change, the same shall be informed to the Inspector and
make necessary changes to the notice in the establishment.
. Every employee in an establishment shall be given at least one whole
day in a week as a holiday for rest.
 The State Govt may allow an establishment to remain open
throughout the week if it is satisfied that the establishment employs
additional staff for meeting the requirements of this section.
 It shall be unlawful to call an employee at, or for an employee to go
to, his establishment or any other place for any work in connection
with the business of his establishment on a weekly holiday given to
the employer or on a day on which such establishment remains
closed.
. No deduction shall be made from the wages of an employee in any
establishment on account of the holiday given to him under this
section. If any employee is employed on daily wages, he shall
nonetheless be paid his wages for the weekly holiday.
Sec 13: Selling outside establishments prohibited after closing hours
• No person shall carry on, in or adjacent to a street or public place,
the sale of any goods after the closing hours fixed u/s 11 for a
particular class of establishments in a locality.
• however, this section shall not apply to the sale of newspapers and
such other articles as may be exempted by notification by the state
govt.
 Annual leave with wages
Sec 14:Application of this chapter:
The provisions of this Act regarding leave with wages shall not affect
the right of an employee under any other law or under the terms of any
award, agreement or contract of service provided that such award.
Agreement or contract of service provides for a longer leave with
wages or weekly holidays.
Sec 15: Annual leave with wages
1. Every employee in an establishment is entitled to leave with wages where the
number of days of leave is calculated as follows:
a) One day of leave for every 20 days of work performed by the employee in case of
adult
b) One day of leave for every 15 days of work performed by the employee in case of
a young person.
 However, it is important to note that, in case:
a) The day of leave is due to an agreement or contract with the employer or for
reasons beyond the employer’s control.
b) In case of female employee, maternity leave not exceeding 12 weeks.
c) The leave earned in the year prior to the year in which the leave is enjoyed shall
be deemed to be days on which the employee has worked in an establishment for
the purposes of computation of leave under this section ( however, employee
shall not earn leave for that period)
2. Every employee is entitled to leave with wages for a period not
exceeding 12 days, on the grounds of any sickness, suffering due to an
accident or any other reasonable cause during the course of 12
months.
3. If an employee is discharged or dismissed from service during the
course of the year he shall be entitled to leave with wages at the rates
laid down under this section even if he has not worked for the entire
period entitling him to earn leave.
4. If an employee entitled to any leave on the grounds of any sickness,
suffering due to an accident or any other reasonable cause is
discharged or dismissal from service the employer shall pay him the
amount payable under this Act in respect of the period of the leave to
which he was entitled at the time of his discharge or dismissal, in
addition to any other amount payable.
5. In calculating leave under this section, a leave of half a day or more
shall be treated as one full day’s leave whereas less than half a day of
leave shall not be considered.
6. If an employee in a year does not take any leave that he is entitled to
under this section, such leave shall be carried forward to the
succeeding year provided that the total number of the days of leave
that may be carried forward to a succeeding year shall not exceed 30
days in the case of an adult and 40 days in the case of a young person.
If the employee had applied for leave with wages but was not
granted leave in accordance with any scheme laid down under this sec,
shall be entitled to carry forward the leave without any limit.
7. An employee who wishes to take leave as per this sec may at any
time apply in writing to the manager of the establishment at least 10
days before the date on which he/ she wishes to take leave, provided
that the number of times in which leave may be taken during any year
shall not exceed 3 times or as may be agreed upon between the
employer and the employee.
8. An employee who wishes to take leave on the grounds of any
sickness, suffering due to an accident or any other reasonable cause
shall be granted such leave even if the application for leave is not made
10 days prior to such leave.
9. For the purpose of ensuring continuity of work in an establishment,
the employer may enter into an agreement with the employees to
formulate a scheme in writing to regulate the grant of leave.
[Link] any scheme has been formulated, it shall be in force for a period
of 12 months from the date on which it comes into force and may be
renewed, with or without modification every 12 months. The scheme
shall also be displayed at convenient places in the premises of the
establishment
11. An application for leave which does not contravene the provisions
of this Act shall not be refused, unless the refusal is in accordance with
the scheme which has been formulated through an agreement
between the employer and the employees.
12. If the employment of an employee who is entitled to leave with
wages is terminated by the employer before he has taken the entire
leave to which he is entitled or if having applied for and having not
been granted such leave, the employee quits his employment before he
has taken the leave, the employer shall pay him the amount payable
under sec 16 in respect of the leave not taken.
Where the employment of the employee is terminated by the
employer, such payment shall be made before the expiry of the second
working day after the termination and where an employee quits his
employment, on or before the next pay day.
Sec 16: Wages during leave period
• If an employee is granted leave u/s 15 and is entitled to wages
during such leave period, the wages shall be calculated at the rate of
the preceding month’s average daily earning of the employee.
• the calculated wages shall be inclusive of dearness allowance and
exclusive of any overtime wages and bonus.
Sec 17: Payment in advance in certain cases
• Where the employee has been granted leave with wages for not less
than 4 days in the case of adult and not less than 5 days in the case of
a young person, the wages for such leave period shall be paid before
the leave begins.

Sec 18: Mode of recovery of unpaid wages

• Where the employee has been granted leave and is entitled to wages
for such leave period, if the employer does not pay the wages for such
leave period, then it can be recovered as delayed wages under the
provisions of the Payment of wages Act, 1936.
Sec 19: Power to make rules
• The state govt in order to give effect to the provisions of the Act
regarding payment of wages during leave period may make rules
directing employers to keep registers containing such particulars as
may be prescribed.
• the registers should be made available for examination when
demanded by the Inspectors.
Sec 20: Power to exempt establishment
• Where the state govt is satisfied that the leave rules applicable to
employees in an establishment provide benefits which in its opinion
are not less favourable than those for which this chapter makes
provision, it may, by notification, exempt the establishment from all or
any of the provisions of this chapter, subject to such conditions as
may be specified in the notification.
 Wages and compensation
Sec 21: Application of the Payment of Wages Act
• Subject to the provisions of the Act, Payment of wages Act, 1936 shall
apply to all or any class of employees and their employers in
establishments to which the Karnataka Shops and Commercial
Establishments Act applies.
Sec 22: Application of the Workmen’s Compensation Act
• Subject to the provisions of this Act, the Workmen’s Compensation
Act, 1923 shall apply to all or any class of employees and their
employers in establishments to which the Karnataka Shops and
Commercial Establishments Act applies.
Employment of Children and Women
Sec 24: Prohibition of employment of children
• It prohibits the employment of children.
• That is, a person below the age of 14 years as an employee or
otherwise in any commercial establishment.
Sec 25: Prohibition of employment of women and young persons during
night
• It prohibits employment of women and young persons- that is, a
person between 14 to 18 years of age as an employee or otherwise in
any commercial establishment during night time (8 PM to 6 AM)
• However, the state govt u/s 11 may fix other working hours during
night time for certain classes of establishment.
 Enforcement and Inspection
Sec 26-Inspector
• It provides for the appointment of Inspectors for inspection and to exercise such
powers and performs such functions necessary under the Act.
1. Deemed to be public servant
2. The Labour commissioner of the state of Karnataka shall be the Chief
Inspector for the purposes of this Act and extend to the whole of Karnataka.
3. The State Govt may by notification, appoint such persons as it deems fit to be
Inspectors, Additional Inspectors and Assistant Inspectors for the purposes of
this Act.
4. State Govt shall appoint Inspectors for such local limits as it deems fit
5. If any area has more than one Inspectors, the State Govt may, by notification,
declare the powers of each Inspector shall exercise separately.
Sec 27: Powers and duties of Inspectors
• The Inspectors along with his Assistants may enter any place that he
believes to be an Establishment under the Act in the State of Karnataka
at reasonable times.
• Every establishment, employer and employee shall produce the
registers, records and notices to be maintained under this Act when
demanded by the Inspector
• The Inspector shall examine the premises, registers , records and
notices for carrying out the purposes of this Act.
• The Inspector shall examine and take evidence from any person as he
deems necessary.
• The Inspector shall exercise all such powers and perform all such
functions necessary for carrying out the purposes of this Act.
Sec 28: Inspectors to be Public Servant
Sec 29: Employer to produce registers, records, etc for inspection
• Every establishment, employer and employee shall produce the
records, registers and notices to be maintained under this Act when
demanded by the Inspector.
 Offences and Penalties
Sec 30: Penalties
• 1. Any person who is convicted for contravening the provisions of this Act regarding:
a. Registration of establishment
b. Change to be communicated to Inspector
c. Closing of establishment to be communicated to Inspector
d. Issue of appointment orders
e. Daily and weekly hours
f. Interval for rests
g. Spread over
h. opening and closing hours
i. Weekly holidays
j. Selling outside establishment prohibited after closing hours
k. Annual leave with wages
l. Wages during leave period
 Shall be punished with fine, which may extend to Rs. 1000 in the first
instance and , for a second or any subsequent offence, the fine may
extend to 2000 rupees

2. Any person who is convicted for contravening the provisions of this

Act regarding:
a. Maintenance of registers and records and display of notices.
b. Employer to produce registers, records, etc for inspection
c. Extra wages for over time work
d. payment of advance in certain cases
 shall be punished with Rs. 250
• Any person who is convicted for contravening the provisions of this
Act regarding sec 24 which prohibits the employment of children, that
is person below the age of 14 years as an employee or otherwise in
any commercial establishment
• shall be punished with imprisonment for a term which shall not be
less than 3 months and may extend to 6 months or with fine which
shall not be less than Rs. 10,000 but which may extend to Rs. 20,000
or with both, in the first instance and
• for the second and subsequent offences, the employer shall be
punished with imprisonment of a term not less than 6 months and
may extend to 1 year.
Sec 31: procedure
Sec 32: limitation of prosecutions
Sec 33: Penalty for obstructing Inspectors, etc.- Rs.500
Sec 34: Maintenance of registers and records and display of notices
Sec 37: Delegation of powers
Sec 39: Notice of dismissal
Sec 40: power to make rules
Liberalisation, Privatisation and
Globalisation
 Liberalisation:
• means elimination of state control over economic activities.
• It implies greater autonomy to the business enterprises in decision-
making and removal of government interference.
• it was believed that the market forces of demand and supply would
automatically operate to bring about greater efficiency and the
economy would recover.
• This was to be done internally by introducing reforms and externally by
relaxing state control on industrial sector, financial sector, tax reforms,
foreign exchange markets and trade & investment sectors.
• Hence, Liberalisation provided for an open economy.
  Privatisation:
• Privatisation is closely associated to globalisation and liberalisation.
• Privatisation is the transfer of control of ownership of economic resources
from the public sector to the private sector.
• It means a decline in the role of the public sector as there is a shift in the
property rights from the state to private ownership.
• Public sector had been experiencing various problems, since planning, such
as low efficiency and profitability, mounting losses, excessive political
interference, lack of autonomy, labour problems and delays in competition of
projects.
• Therefore, privatisation was introduced by two ways:-
1. By withdrawal of the govt from ownership and management of public
sector companies.
2. By outright sale of public sector companies.
  Globalisation
• It is the outcome of the policies of liberalization and privatization.
• It is essentially means integration of national economy with the world
economy.
• refers to the increasing interconnectedness of countries economies,
cultures and societies through the flow of goods, services, technology,
information and people across national borders.
• This is done by opening the domestic markets for inflow of foreign
goods, reducing customs duties on imports, increasing FDI, etc.
 Effect of Liberalisation,
Privatisation & Globalisation
 Positive effects of Liberalisation, Privatisation and Globalisation:
1. Globalisation saw a decline in the number of people living below the poverty line
in developing countries, due to increased investments, trade and rising
employment opportunities.
2. Improvement in various economic indicators of less developed and developing
countries such as employment, life expectancy, literacy rates, per capita
consumption, etc.
3. Free flow of capital and technology enables developing countries to speed up the
process of industrialisation and lay the path for faster economic progress.
4. Products of superior quality are available in the market due to increased
competition, efficiency and productivity of the businesses and this leads to
increased consumer satisfaction.
5. Free flow of finance enable the banking and financial institutions in a
country to fulfil financial requirements through internet and electronic
transfers easily and help businesses to flourish.
6. MNCs bring with them foreign capital, technology, know-how,
machines, technical and managerial skills which can be used for the
development of the host nation.
  Negative effects of Liberalisation, Privatisation and Globalisation:
1. Domestic companies may be unable to withstand competition from efficient MNCs
which have flooded Indian markets since liberalisation.
2. Skilled and efficient labour get absorbed by these MNCs that offer higher pay and
incentives leaving unskilled labour for employment in the domestic industries.
3. With increased dependence on foreign technology, development of indigineous
technology has taken a backseat and domestic Research and development has
suffered.
4. Globalisation poses certain risks for any country in the form of business cycles,
fluctuations in international prices, specialisation in few exportables and so on.
5. Globalisation leads to fusion of cultures and inter-mingling of societies to such an
extent that there may be a loss of identities and traditional values. It gives rise to
mindless aping of western lifestyles and mannerisms however ill-suited they may be.
6. It leads to overcrowding of cities and puts pressure on the amenities and facilities in
urban areas.
 Special Economic Zones Act,
2005
• SEZ are geographically delineated enclaves in which regulations and
practices related to business and trade differ from the rest of the
country
• therefore all units therein enjoy special privileges.
• SEZ Act, 2005 provides the legal framework for establishment of SEZs
and also for units operating in such zones.
 main objectives of SEZ Act, 2005:
1. Generation of additional economic activity:
SEZs are designed to boost overall economic growth by attracting
business and investments.
2. Promotion of exports :
SEZs are intended to facilitate and increase India’s exports,
particularly by providing a favorable environment for export-oriented
industries.
3 Creation of employment:
SEZs are expected to create numerous job opportunities for the
local workforce as new industries and businesses are established within
the zones.
4. Promotion of investment:
The SEZ Act aims to attract both domestic and foreign investment
into the designated zones, leading to increased production and
economic activity.
5. Development of infrastructure:
Act encourages the development of infrastructure within SEZs,
such as roads, utilities and communication networks, to support the
growth and operations of businesses.
 Salient features of SEZ
1. A special Economic Zone is a designated duty free enclave, to be
treated as foreign territory for the purpose of trade operations and
duties and tariffs.
2. SEZ does not require license for imports.
3. Manufacturing, trading and service activities are allowed in SEZ.
4. SEZ typically have well-developed infrastructure, including
transportation networks, power supply and telecommunications.
5. SEZ create jobs by attracting companies to set up operations within
the zone.
6. Contribute to overall economic growth by boosting exports,
attracting investment and increasing industrial output.
 Effects of SEZ
1. Farmers may become landless due to large scale acquisition of land.
2. Increase in unemployment
Though employment generation is one of the key objectives of SEZ,
companies invest more money in capital oriented techniques. The farmers who
lost their source of income don’t get jobs in SEZs.
3. Neglects agricultural sector
4. Govt loses revenue due to tax free facilities.
5. Increases financial disequilibrium- industrialists become richer, poor remain
poor.
6. Establishment of SEZs harm environment- pollution of air, water and soil by
industries and factories.