UNIVERSITY OF PETROLEUM AND ENERGY STUDIES
COLLEGE OF LEGAL STUDIES
DEHRADUN
LABOUR LAW – II II PROJECT ON
SALIENT FEATURES OF THE PAYMENT OF WAGES ACT, 1936
Submitted to:
Submitted by:
Ms. Priya Misra
Anika Bajpai
Asst. Professor
B.A LLB (Hons) (VIIIth Sem)
COLS,UPES
Roll No. 18 Sec ‘A’
SAP ID: 500012061
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ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals. I am highly indebted to Ms. Priya Mishra, my subject teacher for her guidance and constant supervision as well as for providing necessary information regarding the project & also for her support in completing the project.
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INDEX
Introduction Breif on Payment of Wages Act Summary of the Provisions of the Act Relevant Provisions of the Act Relevant Cases Conclusion
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INTRODUCTION
The Payment of Wages Act, 1936 is a central legislation which applies to the persons employed in the factories and to persons employed in industrial or other establishments specified in subclauses (a) to (g) of clause (ii) of section 2 of this Act. This Act does not apply on workers whose wages payable in respect of a wage period average Rs. 1600/- a month or more. Since the minimum wages in Delhi are much higher, this Act has become almost redundant in its present form. The Ministry of Labour has already initiated the process for suitable amendment of this Act.
The main objective of the Act is to avoid unnecessary delay in the payment of wages and to prevent unauthorized deductions from the wages. Every person employed in any factory, upon any railway or through sub-contractor in a railway and a person employed in an industrial or other establishment. The State Government may by notification extend the p rovisions to any class of persons employed in an y establishment or class of establishment. The benefit of the Act prescribes for the regular and timely payment of wages (on or before 7th day or 10th day of after wage period is greater than 1000 workers) an d Preventing unauthorized deductions being made from wages and arbitrary fines.
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BRIEF ON PAYMENT OF WAGES ACT
Wages are averaging less than Rs. 6500.00 per month only are covered or protected by the Act by the amendment in 2005 by {Section 1(6)}.Wages means contractual wages and not overtime wages. They are not to be taken into account for deciding the applicability of the Act in the context of section 1(6) of the Act. Wages must be paid in current coin or currency notes or in both and not in kind. It is, however, permissible for an employer to pay wages by cheque of by crediting them in the bank account if so authorized in writing by an employed person.
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Summary of the provisions of the Act
The provisions of the Act regarding the imposition of fines on the employed person are as follows such as, The employer must exhibit on his premises a list of acts or omissions for which fines can be imposed, Before imposing a fine on an employed person he must be given an opportunity of showing cause against the fine, The amount of fine must not exceed 3 percent of the wages, A fine cannot be imposed on an employed person who is under the age of 15 years, A fine cannot be recovered b y installments or after 90 days from the day of the act or omission for which it is imposed, The moneys realized from fines must be applied to purposes beneficial to employed persons. Subsection 8(3), 10(1-A) & Rule 15} deals with Any person desiring to impose a fine on an employed person or to make a deduction for damage or loss shall explain personally or in writing to the said person the act or omission, or damage or loss in respect of which the fine or deduction is proposed to be imposed, and the amount of fine or deduction, which it is proposed to impose, and shall hear his explanation in the presence of at least one other person, or obtain it in writing.
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RELEVANT PROVISIONS OF THE ACT
The objective of the Act is two fold: 1. The date of Payment of Wages. 2. The deduction from the wages whether as fine or otherwise.
WAGE•
Wage includes any remuneration:• Payable under any award or settlement between the parties or order of a Court; • Over time work or holiday or any leave period; • Any additional remuneration under the terms of employment. Wage does not includes any bonus, pension fund or provident fund, travelling allowance and any gratuity.
WAGES TO BE PAID IN CURRENT COINS OR CURRENCY NOTES.
All wages shall be paid in current coins or currency notes or in both.b. After obtaining the authorization, either by Cheque or by crediting the wages in employees banks Account {Section 7
6}Andhra Pradesh State Amendment: “Provided further that the State Government may, by notification in the Andhra Pradesh Gazette, specify the industrial establishments , the employers of which shall pay to the persons employed therein, the wages either by cheque or by crediting the wages in their bank account”-[Vide Andhra Pradesh Act 15 of 1982, sec.2 (w.e.f 7-10-1982).
TIME OF PAYMENT OF WAGES •
The wages of every person employed is paid. When less than 1000 persons are employed shall be paid before the expiry of the 7th day of the following month. When more than 1000 workers, before the expiry of the 10th day of the following month. (Section 5).
COVERAGE OF EMPLOYEES
Drawing average wage upto Rs.6500 pm as amended with effect from 6th September 2005.
DEDUCTION MADE FROM WAGES
Deductions such as, fine, deduction for amenities and services supplied by the employer, advances paid, over payment of wages, loan, granted for house-building or other purposes, income tax payable, in pursuance of the order of the Court, Provident Fund contributions, cooperative societies, premium for Life Insurance, contribution to any fund constituted by employer or a trade union, recovery of losses, Employees State Insurance contribution etc. (Section 7).
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DEDUCTION FOR ABSENCE FROM DUTIES FOR UNAUTHORISED ABSENCE
Absence for whole or any part of the day – If ten or more persons absent without reasonable cause, deduction of wages upto 8 days {Section 9}
DEDUCTION FOR DAMAGE OR LOSS
For default or negligence of an employee resulting into loss. Show cause notice has to be given to the employee. {Section 10}
DEDUCTIONS FOR SERVICE RENDERED
When accommodation amenity or service has been accepted by the employee. {Section 11}
Deductions for recovery of Advance .• Deduction for recovery of loans.• Deductions for
payment to co-operative societies and Insurance schemes.
AUTHORITIES UNDER THIS ACT INSPECTORS- AUTHORITY TO HEAR CLAIMS.
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Any commissioner for Workmen’s Compensation; or Any Regional Labour Commissioner. Any Assistant Labour Commissioner Presiding Officer of any Labour Court or Industrial Tribunal. APPEAL:
An Appeal may be preferred from the following orders or directions of the Authority:-an order directing the employer or the persons responsible for payment of wages, to refund the deductions wrongfully made or to pay the delayed wages ;an order directing payment of compensation to the employee under Section 15(3);an order imposing penalty whether on the employee or the employer under Section 15(4).An Appeal can be made within thirty days of the date on which the order or direction was made before the District Court within whose jurisdiction the industrial establishment is situated. PENALITIES
Makes contravention of Sec’s.5, 7, 9, 11 and 13 of the Act, by any person responsible for the payment of wages to an employed person, punishable with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees.
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RELEVANT CASES
In N. E Railway v/s Durga Prasad (1980) Lab IC 390 (All):
It was held that the Act applies to persons employed in any factory or/ and to persons employed upon by Railway or by a person fulfilling a contract with a Railway Administration.
In Raghunathmal Bank Ltd. v/s Labour Court, Hyderabad 1977 Lab IC 1295 {AP}
It was held that An employee whose monthly wages are more than what is prescribed under Section 1 (b) is barred from invoking the provisions of the Act.
In Steel and General Mills v/s Addl District Judge, (1972) I LLJ 284
It was held that the Amount claimed by employees for the periods of lay- off falls within the definition of wages.
In Managing Director, Mining & Allied Machinery Corpn v/s R.K. Bhattacharya, 1971 Lab IC 1339 (Cal.)
If the employee refuses to carry out his work in pursuance of stay in strike or any other cause which is not reasonable or a tool down strike or any other cause, it will be deemed to amount to absence from duty.
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CONCLUSION
The Payment wages act is a regulation drawn up to protect the employee’s rights from being infringed by the employer. The employee should be paid on time and should not be harassed for anything. The employer is at a stronger position always and hence the Act has been made so as to empower the worker and make his position stronger and to save him from being exploited at the hands of the employer. It also gives legal remedies to the worker if the employer takes the undue advantage of his position and has a malafide intention with regard to his wages and payments.
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