Why payment of wages act 1936 was enacted

The investigations revealed the existence of abuses in both directions and the material collected was placed before the Royal Commission on Labour which was appointed in The Commission collected further evidence on the subject The Government of India re-examined the subject in the light of the Commission's Report and in February a Bill embodying the conclusions then reached was introduced and circulated for the purpose of eliciting opinion.

A motion for the reference of the Bill to a Select Committee was tabled during the Delhi Session of , but was not reached, and the Bill lapsed. The present Bill is based upon the same principles as the original but has been revised throughout in the light of criticisms received when the original Bill was circulated.

With a view to remove these difficulties, it is now proposed- a to widen the coverage of the Act so as to make it applicable to all factories to which provisions of the Factories Act, , have been extended by the State Governments; b to include in the definition of "industrial establishment" air transport services other than military, naval and air forces and motor transport services, c to permit deductions from wages of employees on account of grant of advances for various purposes such as purchase of cycles or grant of loans for house-building purposes and loans from labour welfare fund, travelling allowance, etc.

The notes on clauses explain the various changes proposed to be made. With the aforementioned objects in view, the Bill seeks to make the following amendments in the Act:- i The provisions of the Act are being made applicable automatically and without any notification by the State Government to persons employed in the various categories of industrial establishments falling within the purview of the existing definition of the industrial establishment in the Act clause 3 a of the Bill.

In order to bring this law in uniformity with other labour laws as also to make it more effective and practicable, it is proposed to make, inter alia, the following changes:- i Enhancing the wage ceiling of Rs. Time of payment of wages. Deductions for absence from duty. Deductions for services rendered.

Deductions for recovery of advances. Single application in respect of claims from unpaid group. Bar of suits. All about the Code on Wages, Effective minimum wage policy can spur sustainable, inclusive growth: Economic Survey. Govt clears wage code in new wave of labour reforms.

Centre Govt passes Ordinance for e-transfer of salaries of Employees in Pvt. Sector to boost Cashless Transactions. Help us improve! Please suggest corrections. Download our APP. The Payment of Wages Amendment Ordinance, 3 of , 5. The Adaptation of Laws Order, The Payment of Wages Amendment Act, 68 of The Payment of Wages Amendment Act, 53 of The Repealing and Amending Act, 56 of The Payment of Wages Amendment Act, 29 of The Payment of Wages Amendment Act, 19 of The Payment of Wages Amendment Act, 38 of Short title, extent, commencement and application- 1 This Act may be called the Payment of Wages Act, TOP 2.

In this Act, unless there is anything repugnant in the subject or context,- i "employed person" includes the legal representative of a deceased person; ia "employer" includes the legal representative of a deceased employer: ib "factory" means a factory as defined in clause m of section 2 of the Factories Act, 63 of and includes any place to which the provisions of that Act have been applied under sub-section 1 of section 85 thereof; ] ii ["industrial or other establishment" means] any.

Responsibility for payment of wages- Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under this Act: Provided that, in the case of persons employed otherwise than by a contractor - a in factories, if a person has been named as the manager of the factory under [clause t of sub-section 1 of section 7 of the Factories Act, 63 of ] b in industrial or other establishments, if there is a person responsible to the employer for the supervision and control of industrial or other establishments C upon railways otherwise than in factories , if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned.

Fixation of wage-periods- 1 Every person responsible for the payment of wages under section 3 shall fix periods in this Act referred to as wage-periods in respect of which such wages shall be payable. Time of payment of wages- 1 The wages of every person employed upon or in-. TOP 6. Wages to be paid in current coin or currency notes- All wages shall be paid in current coin or currency notes or in both: [provided that the employer may, after obtaining the written authorisation of the employed person, pay him the wages either be cheque or by crediting the wages in his bank account.

Deductions which may be made from wages- 1 Not-withstanding the provisions of sub-section 2 of section 47 of the Indian Railways Act, 9 of , the wages of an employed person shall be paid to him without deductions of any kind except those authorised by or under this Act.

TOP ii in any other case, fifty percent of such wages; provided that where the total deductions authorised under sub-section 2 exceed seventy five percent, or as the case may be, fifty percent, of the wages, the excess may be recovered in such manner as may be prescribed. An employer can deduct the wages under section 7 2 b of the Act for absence from duty. Absence from duty by an employee must be on his own volition and it cannot cover his absence when he is forced by circumstances created by the employer from carrying out his duty.

In the case in hand as the absence of the employees was not vountary in as much as, they were not allowed to resume their work without signing the guarantee bound no deduction can be made under the Act. Workers Union v. French Motor Car Co. Ltd; LLR page ]. If the workman did not work, although the work was offered to him, he is not entitled to wages.

State of U. Kothari Madras Ltd. Second Addl. District Judge-cum. It is too well-settled that "go-slow" is a serious misconduct being a covert and a more damaging breach of the contract of employment.

Bank of India v. The workman cannot be denied the wages when he reports himself on duty but the work is not taken from him by the employer.

Compensation up to 10 times cannot be granted incase of back wages awarded by the Industrial Tribunal. Khubilal, 64 F. The Prescribed Authority has been cenferred power to entertain the application even beyond the period of 12 months. Rahat Hussain Khan v. Appeal is not made to a person designata but to a court. Revision lies against the appellate order to the High Court.

Bank Ltd. The requirement of making deposit at the time of filing of appeal does not destroy the remedy of the appeal. TOP 8. Fines- 1 No fine shall be imposed on any employed person save in respect of such acts and omissions on his part as the employer, with the previous approval of the State Government or of the prescribed authority, may have specified by notice under sub-section 2.

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.

Appeal is not made to a persona designata but to a court. Thus, payment in kind or bitcoin will not be acceptable. Illustration- X, an employee gets paid Rs. In January, X is given kg of sugarcane instead of his wages of Rs. This form of wages is prohibited by the Act. Deductions from wages are not permitted unless they are strict as per the grounds and procedures given under the Payment of Wages Act, Any payment made by the employee to his employer or his agent shall be deemed to be a deduction under this Act.

Any loss resulting from the imposition of the following penalties shall not be a deduction under this Act:. Deductions other than those authorised under the section 7 of the Payment of Wages Act, are unlawful deductions. For example , Deduction of Rs. List of authorised deductions is mentioned in section 7 of the Payment of Wages Act, It is an exhaustive list and any deductions from the wages of the employees made on the ground other than those mentioned under section 7 will be termed as an unlawful deduction.

Some of the authorised grounds are:. An employer can impose fine on the employee through Section 7 2 a , which is an authorised deduction under the Act. Section 8 of the Act states the obligations of the employer before imposing any fines on the employee, which are:. An employer can deduct wages for absence from the duty through Section 7 2 b which is an authorised deduction under the Act.

Section 9 of the Act prescribes the mechanism for application of such deduction of wages in respect of employees who are absent from duty. The guidelines are provided below:. Then the employer cannot make deductions more than amount exceeding wages of 8 days. Anant Ram v. To further contribute to the misery of labourers, there existed a variety of wage period and even then the wages were not paid on time, that is, wages were delayed for months and the working class which hardly was acquainted with the concept of savings, required the timely payment to support their families by providing food, giving clothes and maintaining shelter above their heads.

These basic requirements are necessary for any human to survive, and denial of the same to the workers, though indirectly, led to a major crisis for labours. This is how the combined effect of the factors of colonisation, industrial revolution in Britain and lack of proper trade unionism resulted into exploitation of the labourers of which the deduction from wages and delayed payment of wages was only some of the factors besides others such as poor working condition, low wages, long working hours etc.

History of the Act The issue of deduction in wages and payment of wages not being uniformed was not paid much heed to, labour being the oppressed the class, until in a Private Bill was introduced in the Legislative Assembly by the name of Weekly Payment Bill which addressed these issue, but at the time the government declined the Bill by citing that the issue is already under consideration.

In , the Government of India kept in touch with the state or provincial governments and asked them to investigate and collect the requisite information, material etc.

The material collected clearly showed that the issues very much existed, that is, the high amount of wages were being deducted arbitrarily by the employers and payment of wages to the workers were not prompt and uniform which had put the workers in the worst situation possible.

The material collected from the provincial governments by the Government of India was kept before the Royal Commission on Labour designated in under the Chairmanship of John Henry Whitley: to enquire into and report on the existing conditions of labour in industrial undertakings and plantations in British India, on the health, efficiency and standard of living of the workers, and on the relations between employers and employed, and to make recommendations. The report is comprehensive that almost all the labour welfare legislations and industrial laws which we now have from Trade Union Act , Industrial Dispute Act to Payment of Wages Act , and Minimum Wages Act etc.

Some of the findings and recommendations of the Commission which are worth citing are as follows: It appeared that fining was a fairly general practice in perennial factories and in railways. It was much less common in mines and other forms of industrial activity and is practically unknown on plantations. It appeared to be most prevalent in cotton textile mills, and for this reason it probably attained greater dimensions in the Bombay Presidency than elsewhere.

The average deduction by way of fine was around one percent of the total wage of a worker, but it was significant to look for the individual cases rather on average. Moreover there were deductions on many other grounds such as medical attendance, education, reading rooms, interest on advances of their own wages, charities, religious purposes selected by the employer and various other benefits or causes which were made compulsory.

Another common practice followed in some mills was the deduction of two days' pay for one day's absence. Deductions from wages fall roughly into three classes, namely, fines which are imposed for disciplinary reasons, deductions on account of damage sustained by the employer and deductions for the use of material and tools and for other benefits provided by the employer. And in all three cases the Commission considered that there were strong grounds for legislative regulation.

The employer, or more commonly his subordinate, determines when a deduction should be made and fixes its amount which is recovered from the wages due to the worker, such practices in other countries have led to number of statutory regulations. The Commission observed the fact that in many cases the workers' wages suffice for little more than the purchase of the primary necessities of life makes even a small deduction a definite hardship, while the larger deductions increased their indebtedness and even crippled their resources for some time.

Children should be exempt from fine due to their helplessness, inexperience and low scale of wages. The payment of a fine should not be spread over too long a period, and the Commission recommend that the maximum period should be one month from the date on which the fine was imposed. The minimum amount which could be deducted by way of fine should not exceed in any month half an anna in the rupee of the worker's earnings. The sum realised as fine should be utilised for some purpose beneficial to the employees as a class and should be approved by some recognised authority.

In order to protect the workers from arbitrary fines, a notice specifying the acts and omissions in respect of which fines may be imposed should be posted and any other fine should be deemed to be illegal.

Any deduction made for goods having been damaged should not exceed the wholesale price of the goods damaged and the damage should directly be attributable to carelessness and negligence of the worker. In deductions for damages of goods, the employers should maintain the registers of the same which will in any case provide the material necessary to determine whether or not further regulation is required.

Deductions may be made on account of provision for housing accommodation and of tools and raw materials. Imposition of any fine and deduction made which is not permitted by law should be made penal.

On basis of these recommendations of the Commission, the Government of India rethought the subject and in February the Payment of Wages Bill, , was presented in the Legislative Assembly and coursed for the purpose of extracting opinions but could not take the shape of the Act because of the dissolution of the Assembly.

In the Payment of Wages Bill, in light of indistinguishable standards from the prior Bill of yet altogether overhauled was presented in the Legislative Assembly on 15th February The Bill was referred to the Select Committee. The Select Committee displayed its report on 2nd September