Project-labour Law Topic- Payment Of Wages Act

PROJECT- Labour Law TOPIC- Payment Of Wages Act

2013-2018 Submitted to:

Submitted By:

Ms. Jyoti Yadav

Shanti Swaroop Singh B.A. LLB (H)- A Semester 6 A8111113011

AMITY LAW SCHOOL

ACKNOWLEDEGMENT I would like to express my special thanks to gratitude to my teacher Ms, Jyoti Yadav who gave me the golden opportunity to do this wounderful project on the topic of Payment Of Wages Act which also helped me in doing a lot of research and i came to know about so many new things i am really thankful to them. And i also would like to thank my parents and friends who helped me a lot of finalizing this project with in limited time frame Thanking you

Payment Wages Act 1936 INTRODUCTION The Payment Of Wages Act,1936 is one of the most important labour welfare legislatios, which aims to prevent the exploitation of labourers.The need of protect the wages earned by the workers employed in industrial establishments was felt necessary in early 20th century. As such, a Bill on Payment Of Wages Act in pursuance of the recommendations of the Royal Commission on Labour. The Payment Of Wages Act was passed in 1936 and it came into force on March 21,1937. The Act has been amended from time to time and drastically in 1982 to be more effective and beneficial. (i)

Extent and application : The Act extends to the whole of india.It applies to the payment of wages 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. Section 1 (5) empowers the state government to extend the provisions of the Act to the payment of wages to any class of persons employed in any industrial establishment or in any class of persons employed in any class or group of industrial establishments. Such application can be after giving three months notice in the Official Gazette of its intention to extend the provisions of the Act. The Stat Government will thus be competent to extend the application of the act, other conditions being confirmed, if(a)

Three months official notification is given; and

(b)

It relates to an industrial establishment. The Act does not apply to wages payable in respect of wages period if the average wages for such wages periods is more than Rs.1000/- a month to a person employed. All employee whose monthly wages are more than what is prescribed

under section 1 (b) is barred from invoking the provisions of the Act. (ii)

Object: The main object of Payment Of Wages Act,1936 is to remove the irregularities in payment of wages and unauthorised deductions by the employer. it ensures payment of wages and in a particular form and at regular intervals without any unauthorised deductions. The preamble of the Act States that the object of the Act is” to regulate the payment of wages to certain classes of employed person.” The regulation contemplated by the Act is 2 fold; first the date of payment of wages and secondly the deductions from wages whether as fine or otherwise.To ensure payment of wages to person covered by the act certain provisions have been made in this Act.

Purpose of the 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 provisions to any class of persons employed in any 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) and Preventing unauthorized deductions being made from wages and arbitrary fines.

Salary statics 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.

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 by 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.

SALIENT FEATURES:This Act has been enacted with the intention of ensuring timely payment of wages to the workers and for payment of wages without unauthorized deductions. The salary in factories/establishments employing less than 1000 workers is required to be paid by 7th of every month and in other cases by 10th day of every month. A worker, who either has not been paid wages in time or an unauthorized deductions have been made from his/her wages, can file a Claim either directly or through a Trade Union or through an Inspector under this Act, before with the Authority appointed under the Payment of Wages Act. The power for hearing and deciding Claims under this Act has been vested at present with the Presiding Officer of a Labour Court.

The procedure and Competent authority which deals with employment matters The procedure to employ a person has to follow for claiming deducted or delayed wages.If contrary to the provisions of the Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed, he has to make an application for claiming the same to the Authority appointed under the Act.Such application can be made by the employed person himself or a legal practitioner or an official of a registered trade union. Such application has to be made within a period of 12 months from the date on which the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made. There is a competent Authority to entertain and decide an application for payment of subsistence allowance. The subsistence allowance payable to an

employee placed under suspension pending Departmental Enquiry is covered within the definition of wages given under Section 2(6) of the Act and, therefore, the Authority is competent to entertain and decide an application for payment of subsistence allowance. The Authority under the Payment of Wages Act is a Court of summary jurisdiction having powers to deal with the simple matter of delay in payment of wages or deduction from wages. It is not within the competence of the Authority to decide the question of the status of an employed person. The matter is a complicated question of law as also of fact. There is an agreement between an employer and his employees authorizing the deduction of union subscription from the salaries of the employer null and void under Section 23 of the Act, Such agreement being beneficial and advantageous to the employees is not null and void under Section 23 of the Act.

Employer's duty Employer's required to display the abstracts of the Act in his factory or establishment. Every employer must display in his factory or establishment a notice containing the abstracts of the Act and the rules made thereunder in English and also in the language understood by the majority or the persons.

Main Provision Of the Act The main provision of this Act may be explained with reference to the following heads: (1)

Meaning and Definition of Wages (sec,2(vi): According to Section 2(vi) of the payment of Wages Act,1936, “Wages” means all remuneration, whether by way of salaries, allowances or otherwise,expressed in terms of money or capable of being so expressed which would, if the terms of employment, expressed or

implied were fulfilled, by payable to a person employed in respect of his employment or of work done in such employ. Definition:- sec 2 (vi) "wages" 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; (5) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or (6) any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d).

5. Time of payment of wages (1) The wages of every person employed upon or in (a) any railway factory or industrial or other establishment upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day, (b) any other railway factory or industrial or other establishment shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable:

Provided that in the case of persons employed on a dock wharf or jetty or in a mine the balance of wages found due on completion of the final tonnage account of the ship or wagons loaded or unloaded as the case may be shall be paid before the expiry of the seventh day from the day of such completion. (2) Where the employment of any person is terminated by or on behalf of the employer the wages earned by him shall be paid before the expiry of the second working day from the day on which his employment is terminated: Provided that where the employment of any person in an establishment is terminated due to the closure of the establishment for any reason other than a weekly or other recognised holiday the wages earned by him shall be paid before the expiry of the second day from the day on which his employment is so terminated. (3) The State Government may by general or special order exempt to such extent and subject to such conditions as may be specified in the order the person responsible for the payment of wages to persons employed upon any railway (otherwise than in a factory) or to persons employed as daily-rated workers in the Public Works Department of the Central Government or the State Government from the operation of this section in respect of wages of any such persons or class of such persons: Provided that in the case of persons employed as daily-rated workers as aforesaid no such order shall be except in consultation with the Central Government. (4) Save as otherwise provided in sub-section (2) all payments of wages shall be made on a working day.

9. Deductions for absence from duty (1) Deductions may be made under clause (b) of sub-section (2) of section 7 only on account of the absence of an employed person from the place or places where by the terms of his employment, he is required to work such absence being for the whole or any part of the period during which he is so required to work. (2) The amount of such deduction shall in no case bear to the wages payable to the employed person in respect of the wage-period for which the deduction is made in a larger proportion than the period for which he was absent bears to the total period within such wage-period during which by the terms of his employments he was required to work: Provided that subject to any rules made in this behalf by the State Government if ten or more employed persons acting in concert absent themselves without due notice (that is to say without giving the notice which is required under the terms of their contracts of employment) and without reasonable cause such deduction from any such person may include such amount not exceeding his wages for eight days as may by any such terms be due to the employer in lieu of due notice. Explanation: For the purposes of this section an employed person shall be deemed to be absent from the place where he is required to work if although present in such place he refuses in pursuance of a stay-in strike or for any other cause which is not reasonable in the circumstances to carry out his work. 10. Deductions for damage or loss

(1) A deduction under clause (c) or clause (o) of sub-section (2) of section 7 shall not exceed the amount of the damage or loss caused to the employer by the neglect or default of the employed person. (1A) A deduction shall not be made under clause (c) or clause (m) or clause (n) or clause (o) of sub-section (2) of section 7 until the employed person has been given an opportunity of showing cause against the deduction or otherwise than in accordance with such procedure as may be prescribed for the making of such deductions. (2) All such deductions and all realisations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages under section 3 in such form as may be prescribed. 20. Penalty for offences under the Act (1) Whoever being responsible for the payment of wages to an employed person contravenes any of the provisions of any of the following sections namely section 5 except sub-section (4) thereof section 7 section 8 except sub-section (8) thereof, section 9 section 10 except sub-section (2) thereof and section 11 to 13 both inclusive shall be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees. (2) Whoever contravenes the provisions of section 4 sub-section (4) of section 5 section 6 sub-section (8) of section 8 sub-section (2) of section 10 or section 25 shall be punishable with fine which may extend to five hundred rupees. (3) Whoever being required under this Act to maintain any records or registers or to furnish any information or return (a) fails to maintain such register or record; or

(b) wilfully refuses or without lawful excuse neglects to furnish such information or return; or (c) wilfully furnishes or causes to be furnished any information or return which he knows to be false; or (d) refuses to answer or wilfully gives a false answer to any question necessary for obtaining any information required to be furnished under this Act shall for each such offence be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees. (4) Whoever (a) wilfully obstructs an Inspector in the discharge of his duties under this Act; or (b) refuse or wilfully neglects to afford an Inspector any reasonable facility for making any entry inspection examination supervision or inquiry authorised by or under this Act in relation to any railway factory or industrial or other establishment; or (c) wilfully refuses to produce on the demand of an Inspector any register or other document kept in pursuance of this Act; or (d) prevents or attempts to prevent or does anything which he has any reason to believe is likely to prevent any person from appearing before or being examined by an Inspector acting in pursuance of his duties under this Act; shall be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees.

(5) If any person who has been convicted of any office punishable under this Act is again guilty of an offence involving contravention of the same provision he shall be punishable on a subsequent conviction with imprisonment for a term which shall not be less than one month but which may extend to six months and with fine which shall not be less than five hundred rupees but which may extend to three thousand rupees. Provided that for the purpose of this sub-section no cognizance shall be taken of any conviction made more than two years before the date on which the commission of the offence which is being punished came to the knowledge of the Inspector. (6) If any person fails or wilfully neglects to pay the wages of any employed person by the date fixed by the authority in this behalf he shall without prejudice to any other action that may be taken against him be punishable with an additional fine which may extend to one hundred rupees for each day for which such failure or neglect continues.

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 against anything during the employment. It has however given a lot of protections to employees and will continue to do so in the future as well.