1.

Set-On and Set-Off Of Allocable Surplus [Sec 15] 

Set-On (In case of huge profits,) 

Excess allocable surplus remain after paying the maximum bonus of 20% on the wage
or salary of the employee, Should be carried forward to the next following year to be
utilized for the purpose of payment of bonus in case of the shortage of the allocable
surplus or losses occur. This is called as Set-On 

Set-Off (in case of losses occur) 

When there are no profits (available surplus or allocable surplus) or the amount falls
short or deficiency for payment of minimum bonus to employees 8.33%, such deficiency
amount should be adjusted to the current accounting year from the Set-On amount
which was carried forward in case of excess allocable surplus in the previous year. This
is called as Set-Off. 

Illustration: 

 In this Schedule, the total amount of bonus equal to 8.33 per cent of the annual
salary or wage payable to all the employees is assumed to be Rs.1,04,167.
Accordingly,

 Maximum bonus to which all the employees are entitled to be paid (20% of the
annual salary or wage of all the employees) would be Rs. 2,50,000.

  
Year Amount equal to sixty Amount payable as bonus Set on or set off Total set on or
per cent. or sixty-seven the year carried set off Carried
per cent., as the case forward Forward
may be, of a available
surplus allocable as
bonus

  Rs. Rs. Rs. Rs. of (year)

1. 1.04.167 1.04.167** Nil Nil  

2. 6,35,000 2,50,000* set on 2,50,000* set on 2,50,000* (2)

3. 2,20,000 2,50,000* (inclusive of Nil Set on 2,20,000 (2)

30,000 from year-2)
 4. 3,75,000 2,50,000* Set on 1,25,000 Set on 2,20,000 (2)
1,25,000 (4)

5. 1,40,000 2,50,000* (inclusive of Nil Set on 1,10,000 (2)

1,10,000 from year-2) 1,25,000 (4)

6. 3,10,000 2,50,000* Nil Set on Nil + (2)

1,25,000  (4)
60,000 (6)

7. 1,00,000 2,50,000* (Inclusive of Nil Set on  35,000 (6)

1,25,000 from year-4 and
25,000 from year-6)

8. Nil  1,04,167** (inclusive of Set off  69,167 Set off  69,167 (8)
(due to loss) 35,000 from year-6)

9. 10,000 1,04,167*** Set off  94,167 Set off  69,167  (8)

94, 1267 (9)

10. 2,15,000 1,04,167** (after setting Nil Set off  52,501 (9)
off 69, 167 from year-8
and 41,666 from year-9)

 
Notes: * Maximum 
** Minimum 
The balance of Rs.1,10,000 set on from Year-2 lapses. 

Special provisions [Sec 16] 

 In case of new establishments up to 5 years, employees’ bonus is payable only

in case of profits only but not in losses by the management or employer.

 Condition that the Profits are remaining amounts after deducting expenses,
depreciation and taxes.

The duties of the employer under the Act

 1. Section 4: The duty of the employer to pay equal
remuneration to both men and women workers for same
work or work of similar nature

 No employer shall pay to any worker, employed by him in an establishment or

employment, remuneration, cash or in kind at rates less favorable than those at
which he pays remuneration to the workers of the opposite sex for performing
the same work or work of a similar nature.

 The rate of remuneration of any worker will not be reduced to avoid complying
with Section 4(1).
 In respect of any establishment, the rates of remuneration payable before the
commencement of the Act for men and women for same or similar nature work is
different only on the ground of sex, then the highest of the rates will be payable
after the commencement of the Act.

2. Section 5: No discrimination to be made while recruiting

men and women workers

For any recruitment or any condition of service after recruitment like

promotions, training or transfer, for the same or similar nature work, the
employer will not make any discrimination against women except where the
employment of women in such work is prohibited or restricted by or under any
law for the time being in force.

Proviso: the provisions of the Act will not affect the priority given or reservation
for SC, STs, ex-service men, retrenched employees.

3. Section 8: Maintaining a Registrar

Rule 6 read with Section 8 provides that: The employer has to maintain
proper registers and relevant documents of all the employees and workers as
prescribed by law in Form D. The Form needs to have:

 category of workers
 Description of work
 No, if men employed
 Number of women employed
 Rate of remuneration
 Components of remuneration.

4. Relevant case laws

The Indian Courts have played a major role in upholding the doctrine and
ensuring proper enforcement of the social legislations for the benefit of the class
of people the legislation was enacted for.

1. A landmark case in the light of equal pay for equal work was the Judgment given
by the Hon’ble Supreme Court in the case of Randhir Singh v. Union of
India. Here, the Court adopted a sociological ideology and deviated from strict
interpretation to liberal interpretation for the employees. The court, in this case,
relied on ‘‘socialist’ as envisage in the Preamble to the Constitution in deciding
the case, and it was held that the principle of equal pay for equal work was
deducible from article 14 and 16 of the Constitution of India, may be properly
applied to the cases of unequal scale of pay based on classification, though
those drawing a different scale of pay do identical work under the same
employer.” Here, the court observed that “equal pay for equal work” is deducible
from Articles 14 &16, understood in the light of the Preamble and Art. 39(d).

Motor workers health and safety

Canteens. --(1) The State Government may make rules requiring that in every place wherein one
hundred motor transport workers or more employed in a motor transport undertaking ordinarily call on
duty during every day, one or more canteens shall be provided and maintained by the employer for the
use of the motor transport workers. (2) Without prejudice to the generality of the foregoing power, such
rules may provide for -- (a) the date by which the canteens shall be provided; (b) the number of
canteens that shall be provided and the standards in respect of construction, accommodation, furniture
and other equipment of the canteens; (c) the foodstuffs which may be served therein and the charges
which may be made therefor; (d) the constitution of a managing committee for a canteen and the
representation of the motor transport workers in the management of the canteen. (3) The State
Government may, subject to such conditions as it may impose, delegate to the chief inspector the power
to make rules with reference to clause (c) sub-section

(2). 9 Rest rooms- (1) In every place wherein motor transport workers employed in a motor transport
undertaking are required to halt at night, there shall be provided and maintained the employer for the
use of those motor transport workers such number of rest rooms or such other suitable alternative
accommodation, as may be prescribed. (2) The rest rooms or the alternative accommodation to be
provided under sub-section (1) shall be sufficiently lighted and ventilated and shall be maintained in a
clean and comfortable condition. (3) The State Government may prescribe the standards in respect of
construction, accommodation, furniture and other equipment of rest rooms or the alternative
accommodation to be provided under this section.

10. Uniforms- (1) The State Government may, by notification in the Official Gazette, make rules requiring
an employer of a motor transport undertaking to provide for the drivers, conductors and line checking
staff employed in that undertaking such number and type of uniforms, raincoats or other like amenities
for their protection from rain or cold as may be specified in the rules. (2) There shall be paid to the
drivers, conductors and line checking staff by the employer an allowance for washing of uniforms
provided under sub-section (1) at such rates as may be prescribed;

Provided that no such allowance shall be payable by an employer who has made at his own cost
adequate arrangements for the washing of uniforms

. 11. Medical facilities- There shall be provided and maintained by the employer so as to be readily
available such medical facilities for the motor transport workers at such operating centers and halting
stations as may be prescribed by the State government.

12. First-aid facilities- (1) There shall be provided and maintained by the employer so as to be readily
accessible during all working hours a first –aid box equipped with the prescribed contents in every
transport vehicle. (2) Nothing except the prescribed contents shall be kept in a first- aid box. (3) The
first-aid box shall be kept in the charge of the driver or the conductor of the transport vehicle who shall
be provided facilities for training in the use thereof.
wages" [sec 2 (iv)] means all remuneration (whether by way of salary allowances or
otherwise) expressed in terms of money or capable of being so expressed which would
if the terms of employment express or implied were fulfilled by payable to a person
employed in respect of his employment or of work done in such employment and
includes - 

(a) any remuneration payable under any award or settlement between the parties or
order of a court;

(b) any remuneration to which the person employed is entitled in respect of overtime
work or holidays or any leave period;

(c) any additional remuneration payable under the terms of employment (whether called
a bonus or by any other name);

(d) any sum which by reason of the termination of employment of the person employed
is payable under any law contract or instrument which provides for the payment of such
sum whether with or without deductions but does not provide for the time within which
the payment is to be made;

(e) any sum to which the person employed is entitled under any scheme framed under
any law for the time being in force, but does not include -

(1) any bonus (whether under a scheme of profit sharing or otherwise) which does not
form part of the remuneration payable under the terms of employment or which is not
payable under any award or settlement between the parties or order of a court;

(2) the value of any house-accommodation or of the supply of light water medical
attendance or other amenity or of any service excluded from the computation of wages
by a general or special order of the State Government;

(3) any contribution paid by the employer to any pension or provident fund and the
interest which may have accrued thereon;

(4) any travelling allowance or the value of any travelling concession;

7. DEDUCTIONS WHICH MAY BE MADE FROM WAGES. 

At the time of payment of the wage to employees, employer should make deductions
according to this act only. Employer should not make deductions as he like. Every
amount paid by the employee to his employer is called as deductions. 

The following are not called as the deduction 

 Stoppage of the increment of employee. 

  Stoppage of the promotion of the employee. 
 Stoppage of the incentive lack of performance by employee. 
 Demotion of the employee 
 Suspension of the employee 

The above said actions taken by the employer should have good and sufficient cause. 

Deductions [Sec 7 (2)] 

Deduction made by the employer should be made in accordance with this act only. The
following are said to be the deductions and which are acceptable according to this act.

 Fines, 
 Deductions for absence from duty, 
 Deductions for damage to or loss of goods made by the employee due to his
negligence, 
 Deductions for house-accommodation supplied by the employer or by
government or any housing board, 
 Deductions for such amenities and services supplied by the employer as the
State Government or any officer, 
 Deductions for recovery of advances connected with the excess payments or
advance payments of wages, 
 Deductions for recovery of loans made from welfare labour fund, 
 Deductions for recovery of loans granted for house-building or other purposes, 
 Deductions of income-tax payable by the employed person, 
 Deductions by order of a court, 
 Deduction for payment of provident fund, 
 Deductions for payments to co-operative societies approved by the State
Government, 
 Deductions for payments to a scheme of insurance maintained by the Indian Post
Office 
 Deductions made if any payment of any premium on his life insurance policy to
the Life Insurance Corporation with the acceptance of employee, 
 Deduction made if any contribution made as fund to trade union with the
acceptance of employee, 
 Deductions, for payment of insurance premia on Fidelity Guarantee Bonds with
the acceptance of employee, 
 Deductions for recovery of losses sustained by a railway administration on
account of acceptance by the employee of fake currency, 
 Deductions for recovery of losses sustained by a railway administration on
account of failure by the employee in collections of fares and charges, 
 Deduction made if any contribution to the Prime Minister’s National Relief Fund
with the acceptance of employee, 
  Deductions for contributions to any insurance scheme framed by the Central
Government for the benefit of its employees with the acceptance of employee, 

Limit for deductions [Sec 7 (3)] 

The total amount of deductions from wages of employees should not exceed 50%, but
only in case of payments to co-operative societies, deduction from wages of employee
can be made up to 75%

Tamil Nadu Shop and Establishment

Act Applicability
The Tamil Nadu Shop and Establishment Act applies to all shops and commercial establishments as
defined above. However, the following persons or types of establishments will NOT come under the
purview of the Tamil Nadu Shop and Establishment Act:

 Persons employed in any establishment in a position of management

 Persons whose work involves traveling and persons employed as canvassers and caretakers
 Establishments under the Central and (State) Government, Local Authorities, the Reserve
Bank of India, and Cantonment Authorities d) Establishments in mines and oil fields
 Establishments in bazaars in places where fairs or festivals are held temporarily for a period
not exceeding fifteen days at a time
 Establishments which, not being factories within the meaning of the Factories Act, 1948 are
in respect of matters dealt within this Act, governed by a separate law for the time being in
force in the (State).

Further, the regulations relating to opening and closing hours of shops, and grant of holidays will not
apply to hospitals, institutions for the treatment or care of the sick, chemists or druggists shops as
specified by time to time by the State Government.

Registration criteria for the catering or food

service establishment
Any food establishment or the food business operator whose annual turnover
is upto 12 lacs has to obtain a registration certificate which can be obtained
from either the state authority or the municipal authority as notified by the
commissioner of food safety.
But the food catering services in the establishments and units under the
Central Government Agencies like Railways, Air and Airports, Seaports,
Defence etc. whose annual turnover is upto 12 lacs have to go for the central
licensing and such food business activities are not covered under criteria of
the registration certificate.

An application in form A along with a photograph, requisite documents and a

fee of 100/- shall be submitted with the registration authority for the grant of
registration certificate. The authority will carry out the inspection and will either
grant or reject registration certificate. If no communication is received from the
registering authority within thirty days, the applicant may start his business
without waiting any further communication.

The registration certificate shall be displayed at a prominent place. The food

business operator (under registration criteria) has to follow the guidelines on
the general hygienic and sanitary requirements, prescribed under part – I of
schedule 4 of ‘The Food Safety and Standards (Licensing & Registration of
Food Businesses) Regulations, 2011’.

Some of the common requirements to be fulfilled by the catering or the food

service establishment:

Location of the food business unit should ensure that it is free from external
pollutants.

Adequate storage arrangement in a hygienic condition

The cooking/processing methods should ensure fresh food, free from any
contamination

Stalls, counters etc must be kept clean and all food handlers should maintain
good personal hygiene

Delivering of packaged food should ensure that only fresh food should be
packed and the containers  should be free from dust and other articles.

Penalties:
The penalty for unhygienic or unsanitary processing/manufacturing of the food
artcle is upto one lac.

Penalty for carrying food business activity without registration – Fine of upto
Rs. 2 lacs.

Penalty for obstructing a food safety officer from doing his duty or giving false
information – Imprisonment of upto 3 months plus a fine of  upto Rs. 1 lac

Penalty for obstructing a food safety officer from doing his duty or giving false
information – Imprisonment of upto 3 months plus a fine of  upto Rs. 1 lac &
for giving false information – Imprisonment of upto 3 months plus a fine of
upto Rs. 2 lacs