Economic Legislations

Payment of Wages Act, 1936

Minimum Wages Act, 1948
Payment of Bonus Act, 1965
Equal Remuneration Act, 1976

Wage, Salary, remuneration Consideration

paid by the employer for the work or services
by the employee
 Wage Structure
Bureau of Labour Statistics of USA(1919)

Pauper and Poverty Level

Minimum and Subsistence Level
Subsistence plus Level
Comfort Level
 Committee on Fair Wages
Distinct Levels of Wages
Living Wage (Highest Standard) not merely bare
subsistence includes some kind of insurance against
misfortunes
Fair Wage above the minimum wage but below the
living wage
Minimum Wage (Lowest Standard) - bare subsistence
of life including some measure of education, medical
requirements and amenities
 Constitutional Provisions
Art 38 Social Order minimizing inequalities
in income and status
Art 39
(d) Equal pay for equal work
(e) Protecting health and Strength of workers and
prohibition of child labour
(f)- exploitation of children
Art 41 securing right to work and to education;
public assistance in cases of unemployment, old
age, sickness and disablement, etc.,
 Contd..
Art 42 Conditions of Work and maternity
relief
Art 43
Living wage for workers
Decent standard life with leisure
Especially cottage industries
Art 43 A Workers Participation in
Management
 Payment of Wages Act,
1936
Regulates payment of wages and wage intervals
Eliminates malpractices in time and mode of
payment
Royal commission on Labour(1929) Draft Bill
(1933)
Speedy and effective remedy
Unauthorized deductions
Unjustified delays
 Three parts of this Act
Total 26 sections and III parts
Payment of Wages by the employer
Heads under which deductions can be made
Machinery for enforcing specific claims
 Applicability
Factory, industrial and other establishment &
railway
Directly or indirectly through sub contractor
Wage limit: Rs. 18,000/- increased from
10,000/- (2012) - notified by Central Govt for
every 5yrs
Central Govt railways, mines, oilfields and air
transport services
State Govt. All other establishments and power
to extend
 Wages Sec 2(vi)
Any sum employed person entitled to get
Includes legal representative [Sec 2(ia)]
Inclusion: Award or settlement, overtime work,
holiday wages, additional remuneration, termination
and under any scheme
Exclusion: bonus(profit sharing), house
accommodation, supply of light, water, medical
attendance, pension, PF, gratuity, travelling allowance
and other special expenses
Responsibility of the employer Sec 3
Every employer [includes legal representative- Sec
2(ib)]
Factory Manager
Industrial and other establishments supervision
and control
Railways Rly administration or nominated
person
Contractors, nominated, designated person
 Wage Period & Time of
payment Sec 4 &5
Person responsible will fix it
Should not one month
Factory, industrial and other establishment &
railway less than 1000 workers before the
expiry of 7th day
Other cases 10th day after the last day of
wage period
 Time of payment- Contd..
Dock, Wharf, jetty, mine 7th day from the day
of completion
Termination, closure 2nd working day
Exempted by Appropriate Govt railway, daily
rated workers in PWD
All payments only in working day
Wages to be paid in currency coin or currency
notes (sec 6)
Thro cheque or crediting in account written
authorization of employee
 Deductions(Sec 7 13)
Authorized deduction from wages - Sec 7
Fines - Sec 8
Absence from duty - Sec 9
Damages or loss - Sec 10
Services rendered - Sec 11
Advances or loans Sec 12
Payments to co-operative societies and
insurance - Sec 13
Authorized Deductions - Sec 7

General rule: Wages should be paid without

deductions of any kind except the authorized
ones
Gives detailed List of deductions - Sec 7(2)
Sec 8-13 - Restrictions, conditions &
procedures for the deductions (Proviso to Sec 7)
Total amount of deductions should not exceed
75% of wages payments made to cooperative
societies
50% in other cases
 Case laws
If the workman did not work, although the
work was offered to him, he is not entitled to
wages [Modi Industries v. State of Uttar
Pradesh, (1992) 64 FLR 471 (All)]
The workman cannot be denied the wages
when he reports himself on duty but the work
is not taken from him by the employer [J.D.A.
v. Labour Centre, (1990) 60 FLR 81 (Raj)]
 Fines - Sec 8
For imposing fines, approval from Appropriate Govt
is needed
Notice specifying acts and omissions should be
exhibited
Opportunity should be given to show cause
Not exceeding 3% of the wages
No fine against employed person below 15yrs
Recovery not through installments or after 90 days
Maintaining Registers and credited to Common
fund used for beneficial purposes
 Absence from duty Sec 9

Clause 7(2) (b)

Absence from place or places of work where
he is required to work
Whole or any part of the period
Proviso: 10 or more person acting in concert
without notice
Not exceeding 8 days wages
Absence includes stay in strike
 Sec 10 & 11
Deductions for damage or loss - Clause 7(2)
(c) & (o)
Not exceeding the damage or loss
Opportunity to show cause
Deductions for services rendered - Clause
7(2) (d) & (e)
House accommodation, amenity or service
Corresponding to the value of service
 Sec 12, 12A & 13
Deductions for recovery of advances - Clause 7(2)
(f)
Before employment first wage period completion
Wages not earned rules of appropriate govt
Deductions for recovery of loans - Clause 7(2)
(fff)
As per rules by made by Appropriate Govt
Deductions for payments to co operative societies
and insurance - Clause 7(2) (k)
Conditions imposed by Govt
 Maintenance of registers and
records Sec 13A
Contents of the register
Persons employed
Wages paid
Deductions
Receipts given
Such other particulars
 Inspectors Sec 14

Factory Inspector of Factories [Sec 8(1) Factories

Act]
Appropriate Govt may appoint Inspectors in other
cases
Public servant
Jurisdiction or local limits as fixed by the Govt
Powers: Examination, Inquiry, search, seizure,
supervision, order for production, taking copies
Search & seizure CrPC [Sec 94]
 Claims Sec 15

Claims:
Deduction from wages (deducted wages)
Delay in payment (delayed wages)
Penalty for malicious or vexatious claims
Person affected, legal practitioner or a registered
trade union , Inspector under this act or any other
person with the permission of the authority
Limitation Period: Within 12 months
 Authorities Sec 15(1)
Any Commissioner of EC
Officer of Central Govt
Regional Labour Commissioner or Asst. Labour
Commissioner with 2 yrs experience
Officer of State Govt
Not below the rank of Asst. Labour Commissioner with 2
yrs experience
Presiding officer of Labour court or Tribunal under
ID Act
Judge of a Civil court or a Judicial Magistrate
More than one authority if needed
 Enquiry - Sec 15(3)

Opportunity to the person responsible for wages

under Sec 3
Orders: Direction to
Refund the deduction
Pay the delayed wages
Pay compensation not exceeding 10 times of deduction
or not exceeding Rs.3500-1500 in case of delay
Payment made before disposal compensation not
exceeding Rs.2000
 Contd.. Sec 15

No compensation Bonafide error,

emergency, exceptional circumstances or
failure of employed person to apply
Application should be disposed within 3
months
Extension if both parties agrees for any
bonafide reason
 Contd..
Penalty:
Malicious or vexatious claims - up to Rs. 375 to
employer
In other cases up to Rs. 375 to the App. Govt
Any question as to the legal representative of
the employed person or employer, decision of
the Authority shall be final
Recovery of amount: As a fine imposed by a
Magistrate
 Sec 16 & 18
Single Application for a group: (Sec 16)
Claim from unpaid group
Same establishment, for the same cause during same wage
period
Maximum compensation to every person
Authority have power combine the separate pending
applications
Powers of the Authority: Same powers as that of a
Civil Court (Sec 18)
Taking evidence,
Enforcing attendance of witnesses
Compelling the production of documents
 Appeal - Sec 17
From the orders: Sec 15(2), (3) & (4)
To refund deductions wrongfully made or to pay
delayed wages
Direction to pay compensation or
An order imposing penalty
Appellate Authority: Small Causes Court or
District Court
Limitation period: Within 30 days
 Contd.. Sec 17

By the Employer: Total sum exceeds Rs. 300

or total financial liability exceeds Rs. 1000
Amount to be deposited for filing appeal
No Appeal: without certificate from authority
By Employed person or others: wages
claimed exceeds Rs. 20
Question of Law: High Court
No Second Appeal:
 Attachment Sec 17A
After filing claim petition or appeal
Employer or other responsible person is likely
to evade the payment
Authority or the court may direct the attachment
of the property sufficient to satisfy the amount
Attachment order can be passed after hearing
the parties
CPC provisions Attachment before Judgment
 Penalty for contravention
Sec 20

In Contravention of :
Sec 5 except Sec 5(4), Sec 7,9,11-13, Sec8
except Sec 8(8), Sec 10 except Sec 10(2) Fine
minimum Rs. 1500 and maximum Rs.7500
Sec 4, Sec 5(4), Sec 6, Sec 8(8), Sec 10(2) and
Sec 25 Fine up to Rs. 3750
Sec 3 fails to nominate a person responsible
Fine up to Rs. 3000
 Contd.. Sec 20
Fails to maintain registers & records, to furnish
information or giving false information - Fine
minimum Rs. 1500 and maximum Rs.7500
Obstructs the Inspector not giving facility to
conduct inquiry - Fine minimum Rs. 1500 and
maximum Rs.7500
Committing same offence - Imprisonment minimum
one month and may extend to 6 months and Fine
minimum Rs. 3750 and maximum Rs.22500
Fails to pay wages after the order of authority
Additional fine of Rs. 750 for each day.
 Procedure of Trial
Sec 21

For taking cognizance of any offence u/s 20

sanction from Authority or Appellate Court is
needed
Before sanctioning opportunity of showing cause
Complaint by Inspector is necessary Sec 4, 6, 26,
20(3) and 20(4)
While imposing fine, already awarded
compensation should be taken into consideration
 Bar of suits and Contracting out
Sec 22 & 23

Courts are barred from entertaining any suit

when the application or appeal is pending
Any contract, agreement an employed
person relinquishes any right Null and Void
Display of abstracts of this Act thro notice
In case of death of employed person to
nominated person or prescribed authority
 Case laws
Authority would have no jurisdiction to decide
about the termination of the service Northern
Eastern Railway V. Durga Prasad (1980 Lab IC 390
All)
An employee whose monthly wages are more
than stipulated limit of wages is barred from
invoking the provisions of this Act-
Raghunathammal Bank V. Labour Court, Hyderabad
(1977 Lab IC 1295)
 Case laws
Bonus
Limited Jurisdiction: Only two categories of
claims i.e., deducted and delayed wages and
incidental matters Shri Ambica Mills co Ltd., V.
S.B.Bhatt (1961AIR 970)
Dismissal of application for default: Rule 8 of
the Payment of Wages (Procedure) Rules, 1937.
Authority has power to set aside the order of
dismissal and rehear the application for good and
sufficient causes J. R. Puraswami V. S.G. Shukla
(1977 Lab IC 1499 All)
 French Motor Car Co. Ltd. Workers Union v. French
Motor Car Co. Ltd.,
(1990 LLR 366)

The jurisdiction of the Wages Court is to entertain

application only in two items of cases, namely, of
deductions and fine not authorised under sections 7
to 13 and of delay in payment of wages beyond the
wage periods fixed under section 4 and the time of
payment laid down in section. The question
whether the employees are entitled to get Variable
D.A. or not cannot be treated as deductions, and as
such, the Wages Court has no jurisdiction to
entertain this claim;