Abstract of the Payment of
Wages Act, 1936
and the Rules made
thereunder
Whom the Act affects
1.
The Act
applies to the payment of wages to persons in the factory or industrial
establishment receiving less than Rs. 400 a month.
2.
No
employed person can give up by contract, or agreement, his rights under the
Act.
Definition of
Wages
3.
“Wages”
means all remuneration payable to an employed person on the fulfillment of the
terms of his employment.
(a)
Any
remuneration payable under any award or settlement between the parties or order
of a Court.
(b)
Any
remuneration payable in respect of overtime work or holidays or 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 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
payable under any framed under any law for the time being in force.
It does not
include:
(1)
Any
bonus which does not from 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 an 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
traveling allowance or the value of any traveling concession;
(5)
Any sum
paid to the employed person to defray special expenses entitled on him by the
nature of his employment; or
(6)
Any
gratuity payable on the termination of employment in case other than those
specified in sub-clause (d)
Responsibility for and
Method of Payment
4.
The
manager of the factory is responsible for the payment under the Act of wages to
persons employed under him, and any contractor employing persons is responsible
for payment to the persons he employed and in the case of an industrial
establishment, the person responsible, if any, and employer are jointly and
severally responsible for such payment.
5.
Wage-periods
shall be fixed for the payment of wages at intervals not exceeding one month.
6.
Wages
shall be paid on a working day within 7 days of the end of the wage-period or
within 10 days if 1030 or more persons are employed.
7.
Payments
in kind are prohibited. However, when an
employed person gets bonus exceeding one-fourth of his earning) exclusive of
dearness allowance) for the year to which the bonus relates, such excess shall
be paid or invested in the manner prescribed by the State Government.
Fines and
deductions
8.
No deductions
shall be made from wages except those authorized under the Act (See paragraph
9-16 below). Any loss of wages resulting
from the imposition for good and sufficient cause, of any of the following
penalties, namely –
(1)
The
withholding of increment or promotion (including the stoppage of increment at
an efficiency bar);
(2)
The
reduction to a lower post or time scale or to a lower stage in a time scale; or
(3)
Suspension-
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 the State Government, shall not
be deemed to be a deduction from wages.
9. (1) Fines
can be imposed only for such acts and omissions as the employer may, with the
previous approval, in the case of establishments, belonging to Municipalities
of the Municipal Commissioner, or the Chief Officer, or Secretary, as the case
may be, within whose jurisdiction the establishment is situated, and in other
cases of the Chief Inspector of Factories, specify by a notice displayed at or
near the main entrance of the Factory or industrial establishment and after
giving the employed person an opportunity for explanation.
(2) Fines: -
(a)
Shall
not exceed three paise in the rupee;
(b)
Shall
not be recovered by installments, or later then sixty days of the date of
imposition:
(c)
Shall
be recorded in a register an applied to such purposes beneficial to the
employed persons employed in the factory or establishment as are approved by
the Municipal Commissioner, Chief Officer, Secretary or Chief Inspector of
Factories, as the case may be, but in case of any factory or establishment to
which the Bombay Labour Welfare Fund Act, 1953 applied all such realizations
shall be paid into the fund constituted under the said Act.
(d)
Shall
not be imposed on a child.
10. (a) deductions
for absence from duty can be made only on account of the absence of the
employed person at times when he should be working and such deductions must not
exceed an amount which is in the same proportion to his wages for the
wage-period, as the time he was absent in that period is to the total time he
should have been at work.
(b) If ten or more employed persons,
acting and concert, absent themselves, without reasonable cause and without due
notice, the deduction for absence can include wages for eighty days in lieu of
notice but -
(i)
No
deduction for breaking a contract can be made from a person under fifteen years
or a woman.
(ii)
There
must be a provision in writing which forms part of the contract of the
employment, requiring that a specific period of notice of intention to cease
work not exceeding fifteen days or the period of notice which the employer has
to give to discharge a worker must be given to the employer and that wages may
be deducted in lieu of such notice.
(iii)
The
above provision must be displayed at or near the main entrance of the factory
or industrial establishment.
(iv)
No
deductions of the nature can be made until a notice that this deduction is to
be made has been posted at or near the main entrance of the factory or
industrial establishment.
(v)
No
deduction must exceed the wages of the employed person for the period of which
the notice he gives of leaving employment is less than the notice he should
give under his contract.
11.
Deductions
can be made for damage to or loss of goods expressly entrusted to an employed
person or for loss of money for which he is required to account, where such
damage or loss is due to his neglect or default.
Such deduction cannot exceed the amount of
the damage or loss caused and be made only after giving the employed person an
opportunity for explanation.
12.
Deductions
can be made equivalent to the value thereof -
(1)
For
house accommodation supplied by the employer or by Government or any Housing
Board set up under any law for the time being in force (whether the Government
or the Board is the employer or not) or nay other authority engaged in the
business of subsiding house accommodation which may be specified in this behalf
by the State Government; or
(2)
For
amenities or services (other than the supply of tolls and raw materials)
required for the purposes of employment, supplied by the employer.
The deductions referred to above can be made
if house accommodation, amenity or service is accepted by the employed person
as a term of his employment and in the case of amenity and service if such
amenity or service is authorized by the order of the State Government.
13. (a) Deductions can
be made for the recovery of advances, or for adjustments of overpayment of wages
(b)
Advances
made before the employment began can only be recovered from the first payment
of wages for a complete wage period but no recovery can be made of advances
given for traveling expenses before employment began.
(c)
Advances
of unearned wages can be made at the paymaster’s discretion during employment
but must not exceed the amount of four months’ wages without the permission of
an Inspector.
These advances can be recovered by installments, spread
over not more than 12 months and the
installments must not exceed one-third or if the wages are not more than Rs.
20/- one-forth of wages for any wage-period.
14.
Deductions
can be made for subscription to and for repayment of advances from any
recognized provident fund.
15.
Deduction
can be made for payments to co-operative societies approved by the State
Government or to the postal insurance subject to any conditions imposed by the
State Government.
16.
Deduction
can be made with the written authorization of the person employed for payment
of any premium on his life insurance policy to the Life Insurance Corporation
of India or for the purchase of securities of the Government of India or of any
State Government in furtherance of any savings scheme of any such Government.
Inspections
17.
An
Inspector can enter on any premises, and can exercise powers of inspection
(including examination of documents and taking of evidence), as he may deem
necessary for carrying out the purposes of the Act.
Complaints of Deductions or Delays
18.
(1) Where irregular deductions are made from
wages, or delays in payment take place, an employed person can make an
application in he prescribed form within one year to the Authority appointed by
the State Government for the purpose. An
application delayed beyond this period may be rejected unless sufficient cause
for the delay in shown.
(2) An Inspector under the Act or a
representative union registered as such under the Bombay Industrial Relations
Act, 1946 or any law corresponding to that Act in force in any part of the
State, or when authorities in writing by the employed person, any legal
practitioner or official of registered trade union, or with the permission of
the Authority, any other person can apply to the Authority for a direction
under sub-section (3) of Section 1 on behalf of an employed person. In case an employed person is dead, his legal
representative can also make an application for a similar direction.
(3) A single application may be presented by or on behalf
of any member of person belonging to the same factory or industrial
establishment the payment of whose wages has been delayed.
19.
The
Authority may award compensation to the employed person in addition to ordering
the payment of delayed wages or the refund of illegal deduction, it may also
direct the payment of such compensation in cases, where the amount deducted or
the delayed wages are paid by the employer to the employed person or his legal
representative before the disposal of the application.
If a malicious or vexatious complaint is
made, the Authority may impose a penalty not exceeding Rs. 50/- on the
applicant and order that it be paid to the employer.
Appeal against the Authority
20.
An
appeal against an order or a direction made by the Authority may be preferred
within thirty days, in Greater Mumbai to the Court of Small Causes and
elsewhere to the District Court.
(a)
by the
paymaster if the total amount directed to be paid exceeds Rs.300 and the amount
payable under the order appealed against is deposited with the Authority.
(b)
By an
employed person or any legal practitioner or any official of a registered trade
union authorized in writing to act on his behalf or a representative union
registered as such under the Mumbai Industrial Relations Act, 1946 or any law
corresponding to that Act in force in any part of the State or any Inspector
under the said Act or any other person authorized by an Authority to make an
applicant under sub-section (2) of Section 15 and in the case of death of the
employed person by his legal representative, if the total amount of wages withheld
from him or his co-workers, exceeds fifty rupees;
Punishment for Breaches of the Act
21.
Any one
delaying he payment of wages beyond the due date, or making any unauthorized
deduction from wages is liable to a fine up to Rs. 2000/- but only if prosecuted
with the sanction of the State Government or any officer authorized by it in
this behalf. No court shall take
congnisance of such complaint unless the application for refund of the amount
deducted or for payment of delayed wages has been granted wholly or in part by
the Authority or the Appellate Court.
22.
The paymaster who –
(1)
Does
not fix a wage-period or
(2)
Makes
payment in kind or
(3)
Fails
to display at or neat the main entrance of the factory this Abstract in English
and in the language of the majority of the employed person. Or
(4)
Breaks
certain rules made under the Act, is liable to a fine not exceeding Rs. 200/-
A complaint to this effect can be made only by the
Inspector or with his sanction.
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