Payment of Wages Act, 1936

An Act to regulate the payment of wages to certain classes of employed persons

Payment of Wages Act, 1936

Section 1(6): This Act applies to wages payable to an employed person in respect of a wage period if such wages for that wage period do not exceed six thousand five hundred rupees per month or such other higher sum which, on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organisation, the Central Government may, after every five years, by notification in the Official Gazette, specify Section 2(ia): Employed Person includes the legal representative of a deceased employed person

Limits of the Law: Michel Foucault

The judges of normality are present everywhere. We are in the society of the teacher-judge, the doctor-judge, the educator-judge, the social-worker judge; it is on them that the universal reign of the normative is based; and each individual , wherever he may find himself , subjects it to his body, his gestures, his behaviour, his aptitudes, his achievements.

The Canvass of the Law

Imagine you are a group of workers who have not been paid for the past two months What actions will you take? There are three different groups who volunteer Instructor provides each of these groups some information

Wages
Section 2 (vi): Wages means all remuneration (whether by way of salary, allowance or otherwise) expressed in terms of employment, express or implied, were fulfilled, be 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

Wages
Any additional remuneration payable under the terms of employment (whether called a bonus or by any other name); 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 Any sum to which the person employed is entitled under any scheme framed under any law for the time being in force

Wages
But does not include Any bonus (whether under a scheme of profit sharing or otherwise) which 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; 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 appropriate government

Wages
Any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon Any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or Any gratuity payable on the termination of employment in cases other than those specified in sub clause (d)

Bakunins Anarchism
Real humanity presents a mixture of all that is most sublime and beautiful with all that is vilest and most monstrous in the world How do they get over this? Why, they call one divine and the other bestial, representing divinity and animality as two poles, between which they place humanity They either will not or cannot understand that these three terms are really but one, and that to separate them is to destroy them

How Do We Deal With Wrong?

In order to establish something as wrong, a social stage is always required It requires endorsement and legitimacy from others to establish that something is wrong Right and wrong are therefore questions of politics Consequently, they are also questions of power Further, they are also questions of knowledge Because they require the creation of the knowledge that enables us to see something as wrong

Anger
One of the functions of the state and the law is to domesticate anger The promise of justice disciplines the existence of subjects Even if injustice is done in a court of law, workers are expected to accept it stoically The authority and interpretations of the court are more important than the cause of justice The time consumed in the processes of justice can often derail its very cause

Responsibility
Section 3(1): Every employer shall be responsible for the payment of all wages required to be paid under this Act to persons employed by him Section 3(2): Notwithstanding anything contained in subsection (1), it shall be the responsibility of the employer to make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment

Fixation of Wage Periods

Section 4(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 Section 4(2): No wage period shall exceed one month

Time of Payment of Wages

Section 5(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

Time of Payment of Wages

Section 5(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 Section 6: All wages shall be paid in current coin or currency or in both

Deductions
Section 7(1): Notwithstanding the provisions of the Railways Act, 1989, the wages of an employed person shall be paid to him without deductions of any kind except those authorized by or under this Act Explanation I Every payment made by the employed person to the employer or his agent shall, for the purposes of this Act, be deemed to be a deduction from wages Explanation II Any loss of wages resulting from the imposition, for good and sufficient cause, upon a person employed of any of the following penalties, namely:

Deductions
(i) the withholding of increment or promotion (including the stoppage of increment at an efficiency bar); (ii) the reduction to a lower post or time scale or to a lower stage in a time scale; or (iii) suspension Shall not be deemed to be a deduction from wages in any case where the rules framed by the employer for the imposition of any such penalty are in conformity with the requirements, if any, which may be specified in this behalf by appropriate government by notification in the Official Gazette

Fines
Section 8(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 appropriate government or of the prescribed authority, may have specified by notice under sub section (2) Section 8(2): A notice specifying such acts and omissions shall be exhibited in the prescribed manner on the premises in which the employment is carried on or in the case of persons employed upon a railway (otherwise than in a factory), at the prescribed place or places

Fines
Section 8(3): No fine shall be imposed on any employed person until he has been given an opportunity of showing cause against the fine, or otherwise than in accordance with such procedure as may be prescribed for the imposition of fines Section 8(4): The total amount of fine which may be imposed in any one wage period on any employed person shall not exceed an amount equal to three per cent of the wages payable to him in respect of that wage period Section 8(5): No fine shall be imposed on any employed person who is under the age of fifteen years

Fines
Section 8(6): No fine imposed on any employed person shall be recovered from him by instalments or after the expiry of [ninety] days from the day on which it was imposed Section 8(7): Every fine shall be deemed to have been imposed on the day of the act or omission in respect of which it was imposed Section 8(8): All fines 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; and all such realisations shall be applied only to such purposes beneficial to the persons employed in the factory or establishment as are approved by the prescribed authority

Deductions
Section 9 provides for deductions on account of absence from duty Section 10 provides for deduction on account of damage or loss Section 11 provides for deduction on account of services provided to an employee Section 12 provides for deductions for recover y of loans Section 13 provides for deductions for payments to cooperative societies and insurance schemes Section 14 provides for appointment of inspectors to see whether the act is being implemented appropriately

Inspections
Section 14 provides that employers should provide reasonable facilities for inspectors Section 15 provides for the appointment of authority who will look into the claims of employees for wrongful deduction Section 16 provides for a claim to be considered as a single claim if the employees form an unpaid group of the same establishment and deductions are for the same wage period Section 17: An appeal against the order of the authority can be made in a district court Section 18: Authorities have the power of Civil Court

Fines
Section 20: Fines between Rs. 1500 and Rs. 7500 Section 20: Repeat convictions imprisonment between one month and six months Section 21: Court can take cognizance only after authority has sanctioned making of the complaint Section 22: Courts will not entertain suits on matters pending before the authority Section 23: Provisions of the Act cannot be given up by employees Section 24: Central and state government officers may be empowered to implement the provisions of this Act

Nomination
Section 25: Undisbursed wages may be paid to a nominee if an employee dies Section 26: Appropriate government regulates the rules and processes of authority

LIC Versus Anwar Khan

LIC had fixed the age of retirement of Development Officers as 58 According to an agreement between LIC and Development Officers Association, the age of retirement was 60 Anwar Khan, an employee of LIC had filed a suit The suit was decreed LICs first appeal was unsuccessful in 1982 LICs second appeal was still pending Meanwhile Anwar Khan approached the authority under Payment of Wages Act, 1936

LIC versus Anwar Khan

LIC argued that Development Officers were not covered under the Payment of Wages Act, 1936 as their wages were higher than Rs. 1000 Assistant Labour Commissioner ruled in favour of Anwar Khan and ordered the payment of wages An order for double the wages as compensation was also passed LIC filed an appeal Appellate Authority ruled that Anwar Khan was eligible for wages However it reduced the compensation to an amount equal to the back wages

LIC versus Anwar Khan

The single judge bench and the division bench of the High Court dismissed the appeal of LIC Anwar Khans case had reference to Section 15(2) of the Payment of Wages Act, 1936 and UP Dookan Aur Vanijya Adisthan Adhiniyam, 1962 Section 15(2): Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person, or any payment of wages has been delayed, such person himself, or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector under this Act, or any other person acting with permission of the authority may apply to such authority for a direction

LIC versus Anwar Khan

Provided that every such application shall be presented within twelve months from 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, as the case may be. Provided further that any application may be admitted after the said period of twelve months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period. Assistant Labour Commissioner held the suit to be maintanble because no evidence had been provided that Anwar Khans job had supervisory roles

LIC versus Anwar Khan

LIC was an establishment under the Adhiniyam Therefore under the provisions of the Adhiniyam, non payment made the LIC subject to the Payment of Wages Act, 1936 Section 15(3) of Payment of Wages Act, 1936: When any application under sub section (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3, or give them an opportunity of being heard, and, after such further enquiry, if any, as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employee person,

LIC versus Anwar Khan

Of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and not exceeding three thousand (twenty five) rupees but not less than one thousand five hundred rupees in the latter, and even if the amount deducted or delayed wages are paid before the disposal of the application, direct the payment of such compensation, as the authority may think fit, not exceeding two thousand rupees [twenty five]

LIC versus Anwar Khan

Provided that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to (a) a bona fide error or bona fide dispute as to the amount payable to the employed person; or (b) the occurrence of an emergency, or the existence of exceptional circumstances, the person responsible for the payment of the wages was unable, in spite of exercising reasonable diligence; or (c ) the failure of the employed person to apply for or accept payment

LIC versus Anwar Khan

Section 18 of Adhiniyam: The wages of an employee, if not paid as provided under this Act , shall be recoverable in the manner, provided in the Payment of Wages, Act 1936, as if the same wages were payable under that Act

Supreme Court Judgement

Learned counsel for the respondent submitted that proviso to Section 15(3) cannot be pressed into service because the dispute is relatable to amount payable In this case the LIC disputes the entitlement The question of payability of an amount arises only when somebody is entitled to an amount In this case, undisputedly there is dispute about the entitlement of the claimant The matter is pending before the High Court Therefore, the High Courts view holding the claimant to be entitled to compensation is clearly untenable

Supreme Court Judgement

Accordingly, the amount awarded as compensation is set aside However, we find that pursuant to the directions given a sum of Rs. 1,28,000 has been deposited and a sum of Rs. 60,000 has been withdrawn by the legal heirs of the claimant Though we hold that proviso to Section 15(3) has application, considering the fact that the amount has been withdrawn, we direct that there shall be no recovery