Payment of wages act, 1936

MARCH 15, 2016Project by: - Ankush Chattopadhyay (13LLB011)

TABLE OF CONTENTS

1. Acknowledgement……………………………………………………………………..2

2. Introduction……………………………………………………………………………3

3. History…………………………………………………………………………………4

4. Object & Benefits……………………………………………………………………...5

5. Authorities……………………………………………………………………………..7

6. Conclusion……………………………………………………………………………..9

7. Bibliography………………………………………………………………………….10

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ACKNOWLEDGEMENT

This research was supported by the esteemed teachers of our institution as well as all the

students who are a part of the team. We are thankful to our colleagues who provided

expertise that greatly assisted the research, although they may not agree with all of the

interpretations provided in this paper.

We are also grateful to Prof. (Dr.) Dilip Maruti Dhiwal for his immeasurable assistance in

teaching the subjects and in clarifying all the doubts and questions we posed.

We have to express our appreciation to the Law Faculty of The North Cap University for

sharing their pearls of wisdom with us and for making and forging us not only into better

human beings but also into knowledgeable professionals.

We are also immensely grateful to all our peers and friends for their comments and their

continuous support without which it would have been a lot harder and nigh impossible to

finish this manuscript.

Although there were numerous people and entities helping and assisting us through our

journey, any errors that have been committed are our own and should not tarnish the

reputations of these esteemed professionals.

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INTRODUCTION

Prior to 1936, there was no law regarding the regulation of payment to workmen. It was as

early as 1925 that a Private Bill called the "Weekly Payment Bill" was for the first time

introduced in the Legislative Assembly. The Bill was, however withdrawn on an assurance

from the Government that the matter was under active consideration of the Government of

that time. This was an attempt to remedy some of the evils like delay in payment of wages,

non-payment of wages, deductions made from wages on account of fines imposed by the

employer etc.

During that period the Royal Commission on Labour in India draw attention to the abuses in

the system of wage payment, and made valuable recommendation as under:

Children should be exempted from fines imposed by the employer.

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 realized as fine should be utilized for some purpose beneficial to the

employees as a class and should be approved by some recognized authority.

A notice specifying the acts and omissions in respect of which fines may be imposed

should be posted and any other fine should deemed to be illegal.

Any deduction made for goods having been damaged should not exceed the wholesale

price of the goods damaged.

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.

Based on these recommendations of Royal Commission on labor in India, a Bill of Payment

of Wages Act was introduced in the Legislative Assembly in 1933. It was passed in 1936

and came into force on 21st March 1936. The Payment of Wages Act was amended in the

year 1937, 1957, 1964 and in 1976 according to the needs of the situation prevailing at that

time. The Payment of Wages (Amendment) Act, 1976 extends the Act to the whole of India.

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HISTORY

The Payment of Wages Act, 1936 has undergone numerous amendments and adaptations since

its introduction to the Indian Legal System. A list of those amendments and adaptations are as

follows:-

1. The Government of India (Adaptation of Indian Laws) Order, 1937.

2. The Repealing and Amending Act, 1937 (20 of 1937).

3. The Payment of Wages (Amendment) Act, 1937 (22 of 1937).

4. The Payment of Wages (Amendment) Ordinance, 1940 (3 of 1940).

5. The Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948.

6. The Adaptation of Laws Order, 1950.

7. The Part B States (Laws) Act, 1951 (3 of 1951).

8. The Payment of Wages (Amendment) Act, 1957 (68 of 1957).

9. The Payment of Wages (Amendment) Act, 1964 (53 of 1964).

10. The Central Labour Laws (Extension to Jammu and Kashmir) Act, 1970 (51 of 1970).

11. The Repealing and Amending Act, 1974 (56 of 1974).

12. The Payment of Wages (Amendment) Act, 1976 (29 of 1976).

13. The Payment of Wages (Amendment) Act, 1977 (19 of 1977).

14. The Payment of Wages (Amendment) Act, 1982 (38 of 1982).

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OBJECT AND BENEFITS OF THE ACT

The objectives of the Payment of Wages Act, 1936, is to regulate the payment of wages and

to ensure that wages are disbursed within the allotted timeframe. It is also the objective of

the act to make sure that there are no deductions except those made by authorized by law.

The Payment of Wages Act, 1936 is applicable to factories, railways, air services, mines,

plantations, dock, tramway services, quarry, oil fields and establishments as notified by

appropriate government.

The Payment of Wages Act, 1936 provides with the following measures of protection: -

• covers employees drawing wages upto rs. 6,500/- per month.

(Section 01)

• payment of wages by 07th day where there are less one thousand persons employed and

where one thousand or more are employed by 10th day of the month succeeding to

wage-period in respect of which the wages are payable.

(Section 5)

• authorized deductions from wages allowed include:

• fines,

• for absence from duty.

• for damage, loss of goods.

• house accommodation provided by the employer.

• for amenities and services supplied by the employer.

• for advances, loans, income-tax, on orders of court.

• provident fund, membership of the co-operative societies.

• membership of trade union, insurance premiums.

• pm’s national relief fund or similar funds as govt. authorizes.

(Section 7)

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• for effecting any deduction without giving due opportunity to the employee concerned

this is in consonance with the principles of natural justice.

• registers and records have to be maintained for all the payments and ductions/fines

made or imposed.

• employer is required to display notice of date of payment of wages at the entrance of the

establishment.

• “if ten or more employed persons acting in concert absent themselves without due

notice and without reasonable cause, such deduction from any such person may include

such amount not exceeding his wages for eight days.

• 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 circumstance to carry out his work.

(Proviso to sub-section 2 of section 9).

• in the event of un-due delayed payments, ‘authority’ under the act may direct without

prejudice to any other penalty to such employer, direct the refund to the employed

person of the amount deducted or delayed payment, together with such compensation as

may be deemed appropriate, impose fine up to 10 times the amount deducted.

(Section 15 (3))

• attachment of property of employer responsible for payment: prescribed authority

after giving the employer an opportunity may direct the attachment of so much of the

property of the employer or other person responsible for payment of wages.

(Section 17-a)

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AUTHORITIES

There are primarily two Authorities under this act:-

• Inspectors

o (1) An Inspector of Factories appointed under Factories Act, 1948 shall be an

Inspector for the purposes of this Act in respect of all factories within the

local limits assigned to him.

o (2) The [State Government] may appoint Inspectors for the purposes of this

Act in respect of all persons employed upon a railway (otherwise than in a

factory) to whom this Act applies.

o (3) The State Government may, by notification in the Official Gazette

appoint such other persons as it thinks fit to be Inspectors for the purposes of

this Act, and ‘may define the local limits within which and the class of

factories and industrial or other establishments in respect of which they shall

exercise their functions.

o (4) An Inspector may,-

(a) make such examination and inquiry as he thinks fit in order to

ascertain whether the provisions of this Act or rules made there under

are being observed;

(b) with such assistance, if any, as he thinks fit, enter, inspect and

search any premises of any railway, factory or [industrial or other

establishment] at any reasonable time for the purpose of carrying out

the objects of this Act;

€ supervise the payment of wages to persons employed upon any

railway or in any factory or industrial or other establishment;

(d) require by a written order the production at, such place, as may be

prescribed, of any register or record maintained in pursuance of this

Act and take on the spot or other wise statements of any persons

which he may, consider necessary for carrying out the put-poses of

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this Act;

€ seize or take copies of such registers or documents or portions

thereof as he may consider relevant in respect of an offence under this

Act which lie has reason to believe has been committed by an

employer;

(f) exercise such other powers as may be prescribed:

o No person shall be compelled under this section to answer any question or

make any statement tending to incriminate himself.

• Authority to Hear Claims

o Any commissioner for Workmen’s Compensation; or

o Any Regional Labour Commissioner.

o Any Assistant Labour Commissioner.

o Presiding Officer of any Labour Court or Industrial Tribunal.

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CONCLUSION

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 instalments 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.

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.

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BIBLIOGRAPHY

Many books and websites were referred in order to make and complete this project. They

are as follows:-

Books

• Payment of Wages Act, 1936

• Labour and Industrials Laws, V. G. Goswami

Websites

• http://on-lyne.info/legal10.htm

• http://www.slideshare.net/SomaGiri/payment-of-wages-act-1936-9629886

• http://kkhsou.in/main/EVidya2/management/payment_wages.html

• http://www.delhi.gov.in/wps/wcm/connect/doit_labour/Labour/Home/

Acts+Implemented/Details+of+the+Acts+Implemented/

The+Minimum+Wages+Act,+1948/

• http://www.netlawman.co.in/ia/payment-wages-act-1936

• http://www.citehr.com/199973-payment-wages-act-1936-doc-

download.html

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