TAMIL NADU LABOUR WELFARE FUND ACT, 1972

Act No. 36 of 1972

An Act to provide for the constitution of a fund for promoting the welfare of labour and for certain other matters connected therewith in the State of Tamil Nadu.

S.1 Short title, extent and commencement

(1) This Act may be called the Tamil Nadu Labour Welfare Fund Act, 1972.

(2) It extends to the whole of the State of Tamil Nadu.

(3) It shall come into force on such date1 as the Government may, by notification, appoint.

1. 1st January, 1973.

S.2 Definitions

In this Act, unless the context otherwise requires,--

• (a) "Board" means the Tamil Nadu Labour Welfare Board established under section 4;
• (b) "employee" means--
  • (i) any person who is employed for hire or reward to do any work, skilled or unskilled, manual, supervisory, clerical or technical in an establishment for a period of 30 days during the period of 1[the preceding twelve months] whether the terms of employment be express or implied, but does not include any person--
    • (a) who is employed mainly in a managerial capacity; or
    • (b) who being employed in a supervisory capacity 2[draws wages exceeding three thousand and five hundred rupees per mensem] or exercises either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or
    • (c) who is employed as an apprentice or on part-time basis.

    E
    

    S.3 Labour Welfare Fund

    (1) The Government shall constitute a fund called the Labour Welfare Fund, and notwithstanding anything contained in any other law for the time being in force or in any contract or instrument, all unpaid accumulations shall be paid, at such intervals as may be prescribed, to the Board, and be credited to the Fund and the Board shall keep a separate account therefore until claims thereto have been decided in the manner provided for in section 13.

    (2) There shall also be credited to the Fund--

    • (a) unpaid accumulations paid to the Board under sub-section (2) of section 13;
    • (b) all fines including the amount realised under Standing Order 20 of the Model Standing Orders issued under the Tamil Nadu Industrial Employment (Standing Orders) Rules, 1947 1[and under the certified standing orders of the establishment] from the employees by the employers, notwithstanding anything contained in any agreement between the employer and employee;
    • (c) d
      

    S.4 Establishment of the Board

    (1) With effect from such date as the Government may, by notification, appoint in this behalf, there shall be established a Board by the name "Tamil Nadu Labour Welfare Board".

    (2) The Board shall be a body corporate having perpetual succession and a common seal, and shall, by the said name, sue and be sued.

    
    

    S.5 Constitution of the Board

    The Board shall consist of a Chairman who shall be the Minister-in-charge of Labour and of the following members appointed by the Government namely:--

    • (a) such number of representatives of employers and employees as may be prescribed:

      Provided that both employers and employees shall have equal representation on the Board;

    • (b) such number of members of the State Legislature as may be prescribed; and
    • (c) such number of officials and non-officials as may be prescribed.
    
    

    S.6 Appointment of the Chairman and the members to be notified

    The appointment of the Chairman and the members shall be notified in the Tamil Nadu Government Gazette.

    
    

    S.7 Term of office of the members

    The term of office of the members of the Board other than the official members shall be three years from the date of their appointment and they shall be eligible for reappointment They shall continue as such members until the appointment of the successors:

    Provided that a member of the State Legislature shall cease to be a member of the Board, from the date on which he ceases to be a member of the State Legislature.

    
    

    S.8 Disqualifications and removal

    (1) No person shall be chosen as, or continue to be, a member of the Board, if he--

    • (a) is an officer or servant under the Board ; or
    • (b) is an undischarged insolvent ; or
    • (c) is of unsound mind; or
    • (d) has been convicted by a criminal court for an offence involving moral turpitude, unless such conviction has been set aside; or
    • (e) is in arrears of any sum due to the Board.

    (2) The Government may remove from office any member who--

    • (a) is or has become subject to any of the disqualifications mentioned in sub-section (1); or
    • (b) is absent without leave of the Board for more than three consecutive meetings of the Board.
    
    

    S.9 Resignation of office by member and filling up of casual vacancies

    (1) Any representative of employer or employee or Member of the State Legislature, or non-official member may resign his office by giving notice thereof in writing, to the Government, and on such resignation being accepted, shall be deemed to have vacated his office.

    (2) A casual vacancy in the office of a member may be filled up as soon as may be and a member so appointed to fill such vacancy shall hold office for the remainder of the term.

    
    

    S.10 Power to appoint committees

    For the purpose of advising the Board in the discharge of its functions and in particular for carrying into effect any of the matters specified in sub-section (2) of section 17, the Board may constitute one or more committees consisting of atleast one member of the Board and equal number of representatives of employees and employers.

    
    

    S.11 Acts of the Board or committee not to be invalidated by informality, vacancy, etc.

    No act done or proceeding taken under this Act by the Board or any committee shall be invalidated merely on the ground--

    • (a) of any vacancy or defect in the constitution of the Board or the committee; or
    • (b) of any defect or irregularity in the appointment of a person acting as a member thereof; or
    • (c) of any defect or irregularity in such act or proceeding not affecting the merits of the case.
    
    

    S.12 Functions of the Board

    The functions of the Board shall be the administration of the Fund and such other functions as may be assigned by or under this Act.

    
    

    S.13 Unpaid accumulations and claims thereto

    (1) All unpaid accumulations shall be deemed to be abandoned property.

    (2) Any unpaid accumulation paid to the Board in accordance with the provisions of section 3 shall on such payment, discharge an employer of his liability to make payment to an employee in respect thereof, but to the extent only of the amount paid to the Board, and the liability to make payment to the employee to the extent aforesaid shall, subject to the succeeding provisions of this section, be deemed to be transferred to the Board.

    1[(3) As soon as possible after the payment of any unpaid accumulation is made to the Board, the Board shall--

    • (a) exhibit on the notice-board of the establishment in which the unpaid accumulation was earned; and
    • (b) publish in the Tamil Nadu Government Gazette, and in such other manner as may be prescribed, a notice inviting claims by employees, their heirs, legal representatives or assigns for any payment due to them.]

    
    

    S.14 Interest on unpaid accumulations, or fines after notice of demand

    (1) If an employer does not pay to the Board any amount of unpaid accumulations, or fines realised from the employees, within the time specified by or under this Act, the Secretary may serve or cause to be served a notice on such employer to pay the amount within the period specified therein which shall not be less than thirty days from the date of service of such notice.

    (2) If the employer fails, without sufficient cause, to pay any such amount within the period specified in the notice, he shall, in addition to that amount, pay by way of penalty to the Board simple interest--

    • (a) for the first three months at one per cent. of the said amount for each complete month or part thereof after the last date by which he should have paid it according to the notice; and
    • (b) for each complete month or part thereof thereafter at one and a half per cent, of that amount during the time he continues to make default in the payment of that amount:

    Provid
    

    S.15 Contribution to the Fund by employee and employer

    1[(1) Every employee shall contribute a sum not exceeding ten rupees, per year, as may be prescribed, from time to time, to the Fund and every employer shall, in respect of each such employee, contribute a sum not exceeding twenty rupees, per year, as may be prescribed, from time to time, to the Fund and the Government shall, in respect of each such employee, contribute a sum not exceeding ten rupees, per year, as may be prescribed, from time to time, to the Fund.]

    (2) Notwithstanding anything contained in any other law for the time being in force the employer shall be entitled to recover from the employee the employee's contribution by deduction from his wages in such manner as may be prescribed and such deduction shall be deemed to be a deduction authorised by or under the Payment of Wages Act, 1936 (Central Act IV of 1936) 2[or the Tamil Nadu Shops and Establishments Act, 1947 (Tamil Nadu Act XXXVI of 1947)].

    1. Substituted by Act 44 of 19
    

    S.16 Grants and advances by the Government

    The Government may, from time to time, make grants or advance loans to the Board for the purposes of this Act on such terms and conditions as the Government may, in each case, determine.

    
    

    S.17 Vesting and application of Fund

    (1) The Fund shall vest in, and be held and applied by, the Board as trustees subject to the provisions, and for the purposes, of this Act. The moneys therein shall be utilised by the Board to defray the cost of carrying out measures which may be specified by the Government from time to time to promote the welfare of employees and of their dependants.

    (2) Without prejudice to the generality of the provisions of sub-section (1) the moneys in the Fund may be utilized by the Board to defray expenditure on the following, namely:--

    • (a) community and social education centres;
    • (b) vocational training;
    • (c) community necessities;
    • (d) entertainment and other forms of recreation;
    • (e) convalescent homes for tuberculosis patients;
    • (f) holidays homes in health resorts;
    • (g) part-time employment for housewives of employees;
    • (h) pre-schools;
    • (i) nutritious food to children of employees;
    • (j) employme
      

    S.18 Power of Board to borrow

    The Board may, from time to time with the previous sanction of the Government and subject to the provisions of this Act and to such conditions as may be prescribed in this behalf borrow any sum required for the purposes of this Act.

    
    

    S.19 Deposit of Fund and placing of accounts and audit report before the State Legislature

    (1) All moneys and receipts forming part of the Fund shall be deposited in the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (Central Act 11 of 1934), or in the State Bank of India constituted under the State Bank of India Act, 1955 (Central Act 23 of 1955), or any corresponding new Bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970), 1[or in the State Cooperative Bank or in any Central Co-operative Bank as defined in section 73-A of the Tamil Nadu Co-operative Societies Act, 1961 (Tamil Nadu Act 53 of 1961) or in any corporation owned or controlled by any State Government or the Central Government] and such account shall be operated upon by such officers of the Board as may be authorised by the Board and in such manner, as may be prescribed.

    (2) The accounts of the Board, as certified by the auditor, together with the audit report thereon, shall be forwarded yearly to
    

    S.20 Power of Government to give directions to the Board

    The Government may give the Board such directions as in their opinion are necessary or expedient in connection with expenditure from the Fund or for carrying out the purposes of the Act and it shall be the duty of the Board to comply with such directions.

    
    

    S.21 Appointment and powers of Secretary

    (1) The Board may with the previous approval of the Government appoint a Secretary who shall be the Chief Executive Officer of the Board.

    (2) It shall be the duty of the Secretary to ensure that the provisions of this Act and the rules made thereunder are duly carried out and for this purpose he shall have the power to issue such orders not inconsistent with the provisions of this Act and the rules made thereunder as he deems fit including any order implementing the decisions taken by the Board under this Act or the rules made thereunder.

    
    

    S.22 Inspectors

    (1) An Inspector of Factories appointed under sub-section (1) of section 8 of the Factories Act, 1948 (Central Act LXIII of 1948), shall be an Inspector for the purposes of this Act in respect of all factories within the local limits assigned to him.

    (2) The Government may, by notification, appoint such other persons as they think fit to be Inspectors for the purposes of this Act and may define the local limits within which and the class of establishments in respect of which they shall exercise their functions.

    (3) Subject to any rules made in this behalf, an Inspector shall have power to do all or any of the following matters within the local limits for which he is appointed--

    • (a) to make such examination and hold such inquiry as may be necessary for ascertaining whether the provisions of this Act have been and are being complied with;
    • (b) require the production of any prescribed register and any other document in possession of the employer in c
      

    S.23 Allotment of certain officers and staff to the Board

    (1) As soon as may be after the commencement of this Act, the Government may after consulting the Board direct by general or special order that such of the officers and other servants serving immediately before the notified date in connection with the affairs of the State as are specified in such order shall be allotted to serve in connection with the affairs of the Board with effect on and from such date as may be specified in such order:

    Provided that no such direction shall be issued in respect of such officer or other servant without his consent for such allotment:

    Provided further that the conditions of service applicable immediately before the notified date to any such person shall not be varied to his disadvantage except with the previous approval of the Government.

    (2) With effect on and from the notified date the officers and other servants specified in such order shall become employees of the Board and shall cease to be officers or servants of the Gov
    

    S.24 Transfer of Provident Fund to the Board

    (1) The moneys standing to the credit under the Provident Fund Account of any officer or servant allotted from the service of the Government to the Board's service, on the date specified in the order under sub-section (1) of section 23 shall stand transferred to and vest in the Board with effect on and from such date.

    (2) The Board shall, as soon as may be, after such date constitute in respect of the moneys and other assets which are transferred to and vested in it under sub-section (1), a similar fund and may invest the accumulations under the Fund in such securities and subject to such conditions, as may be specified by the Board with the approval of the Government.

    
    

    S.25 Government to credit the leave salary and pensionary contribution in respect of the officers and servants allotted to Board's service

    The Government Shall credit to the account of the Board the leave salary and pensionary contributions in respect of the officers and servants allotted to the service of the Board in proportion to the leave at the credit of such officers and servants or in proportion to the length of their service under the Government as the case may be, according to the terms and conditions as are applicable to them under the Government on the date specified in the order under sub-section (1) of section 23.

    
    

    S.26 Appointment of clerical and other staff by Board

    The Board may, subject to the provisions of section 23, appoint such other officers and servants as it considers necessary for the efficient performance of its functions:

    Provided that the expenses of the staff so appointed and other administrative expenses shall not exceed such percentage of the annual income of the Fund as may be prescribed.

    
    

    S.27 Powers of Government to call for records

    The Government or any officer authorised by the Government may call for the records of the Board, inspect the same and may supervise the working of the Board.

    
    

    S.28 Mode of recovery of sums payable to Board

    Any sum payable to the Board or into the Fund under this Act shall, without prejudice to any other mode of recovery, be recoverable on behalf of the Board as an arrear of land revenue.

    
    

    S.29 Penalty for obstructing inspection or for failure to produce documents, etc.

    Any person who wilfully obstructs an Inspector in the exercise of his powers of discharge of his duties under this Act or fails to produce for inspection on demand by an Inspector any register, record, or other documents maintained in pursuance of the provisions of this Act or the rules made thereunder or to supply to him on demand true copies of any such document shall, on conviction, be punished--

    • (a) for the first offence, with imprisonment for a term which may extend to three months, or with fine which may extend to five hundred rupees, or with both; and
    • (b) for a second or subsequent offence, with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees, or with both:

    Provided that, in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, in any case where the offender is sentenced to fine only, the amount of fine shall not be less than fif
    

    S.30 Cognizance of offences

    (1) No court shall take cognizance of any offence punishable under this Act except on a complaint by, or with previous sanction in writing of, the Secretary.

    (2) No court inferior to that of a Presidency Magistrate or a Magistrate of the First Class shall try any offence punishable by or under this Act.

    
    

    S.31 Offences by companies

    (1) If the person committing an offence under this Act is a company, every person, who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly:

    Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge, or that he exercised all due diligence to prevent the commission of the offence.

    (2) Notwithstanding anything contained in sub-section (1) where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director,
    

    S.32 Limitation of prosecution

    No court shall take cognizance of an offence punishable by or under this Act unless a complaint thereof is made within six months of the date on which the offence is alleged to have been committed.

    
    

    S.33 Power to supervise the welfare activities of an establishment

    In regard to any money set apart in any establishment specifically for the purpose of promoting the welfare of the employees in such establishment the Board shall have powers--

    • (i) to require the production of any document in possession of the employers of the establishment in connection with such money to satisfy itself as to whether such money is being applied for such purpose;
    • (ii) to call for any information from such employers of the establishment as it may deem relevant; and
    • (iii) to issue such directions to the employers of such establishment as it may deem fit for the purpose of utilising the Fund for promoting the welfare of the employees.
    
    

    S.34 Penalty for non-compliance with the direction of the Board

    Any person who wilfully fails to produce any document required by the Board or to furnish any information called for by the Board or wilfully fails to comply with any directions issued by the Board under section 33 shall on conviction be punished with--

    • (a) for the first offence, with imprisonment for a term which may extend to three months, or with fine which may extend to five hundred rupees, or with both; and
    • (b) for a second or subsequent offence, with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees, or with both:

    Provided that, in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, in any case where the offender is sentenced to fine only, the amount of fine shall not be less than fifty rupees.

    
    

    S.35 Annual Report

    The Board shall as soon as may be after the end of each year, prepare and submit to the Government before such date and in such form as may be prescribed a report giving an account of its activities during the previous year and the report shall also give an account of the activities, if any, which are likely to be undertaken by the Board in the next year; and the Government shall cause every such report to be laid before the State Legislature as soon as may be after it is received by the Government.

    
    

    S.36 Supersession of the Board

    (1) If the Government are of opinion that the Board is unable to perform, or has persistently made default in the performance of the duty imposed on it by or under this Act or has exceeded or abused its powers, they may, by notification, supersede the Board for a period not exceeding six months as may be specified in the notification:

    Provided that before issuing a notification under this sub-section, the Government shall by notice require the Board to show cause within such period as may be specified in the notice why it should not be superseded and shall consider the explanations and objections, if any, of the Board.

    (2) Upon the publication of a notification under sub-section (1) superseding the Board,--

    • (a) the Chairman and all the members of the Board shall, as from the date of supersession, vacate their offices as such;
    • (b) all the powers and duties which may, by or under the provisions of this Act, be exercised or performed by or on behalf
      

    S.37 Delegation of powers

    (1) The Government may, by notification, authorise any authority or officer to exercise any of the powers vested in them by or under this Act except the power to make rules under section 41 and may in like manner withdraw such authority.

    (2) The Board may, by general or special order in writing, delegate to the Secretary or other officer of the Board such of its powers and functions under this Act except the power to make regulations under section 42 as it may deem necessary and it may in like manner withdraw such authority.

    (3) The exercise of any power delegated under sub-section (1) or sub-section (2) shall be subject to such restrictions and conditions as may be specified in the order and also to control and revision by the Government or by such officer as may be empowered by the Government in this behalf or, as the case may be, by the Board or such officer as may be empowered by the Board in this behalf.

    (4) The Government or the Board, as the case may be,
    

    S.38 Members of Board, Secretary, Inspectors and all officers and servants of Board to be public servants

    The members of the Board, the Secretary, Inspectors and all officers and servants of the Board, and any person entrusted with the execution of any function under this Act, shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (Central Act XLV of 1860).

    
    

    S.39 Protection of action taken in good faith

    (1) No suit, prosecution or other legal proceedings shall lie against any person for anything which is, in good faith, done or intended to be done in pursuance of this Act or any rule or order made thereunder.

    (2) No suit or other legal proceeding shall lie against the Government or the Board for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or any rule or order made thereunder.

    
    

    S.40 Exemption

    The Government may, by notification, exempt any establishment or class of establishments from all or any of the provisions of this Act 1[or of any rules made thereunder] subject to such conditions as may be specified in the notification.

    1. Inserted by Act 13 of 1994, section 2 (deemed to have come into force on the 1st April, 1975).

    
    

    S.41 Power to make rules

    (1) The Government may make rules for the purpose of carrying into effect the provisions of this Act.

    (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for-

    • (a) all matters expressly required or allowed by this Act to be prescribed;
    • (b) the intervals at which or the period within which any of the sums referred to in section 3 shall be paid to the Board or into the Fund, the manner of making such payment and the agency for, and manner of, collection of any such sum;
    • (c) the manner in which the accounts of the Fund shall be maintained and audited;
    • (d) the allowances, if any, payable to the members of the Board;
    • (e) the manner in which the employee's contribution may be deducted from his wages;
    • (f) the form of notice regarding unpaid accumulations;
    • (g) the procedure for making grants from the Fund;
    • (h) the procedure for defraying the expenditure inc
      

    S.42 Power to make regulations

    (1) The Board may, by notification 1[issued whether prospectively or retrospectively] make regulations not inconsistent with this Act, and the rules made thereunder for the purposes of giving effect to the provisions of this Act.

    (2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for--

    • (a) all matters expressly required or allowed by this Act to be prescribed by regulations;
    • (b) the terms and the conditions of appointment and service and the scales of pay of officers and servants of the Board including the payment of travelling and daily allowances in respect of journeys undertaken by such officers and servants of the Board;
    • (c) the supervision and control over the acts and proceedings of the officers and servants of the Board and the maintenance of discipline and conduct among the officers and servants of the Board;
    • (d) the procedure in regard to the transaction of
      

    S.43 Amendment of section 8, Central Act IV of 1936

    In section 8 of the Payment of Wages Act, 1936 (Central Act IV of 1936), in sub-section (8), in the last sentence the following shall be added at the end, namely:--

    "but in the case of any establishment to which the Tamil Nadu Labour Welfare Fund Act, 1972 applies all such realisations shall be paid into the Fund constituted under the aforesaid Act."