Industrial Relations Session 26 Sep 19

8/11/2019 Industrial Relations Session 26 Sep 19

1/59

Payment of Wages Act 1936

Minimum Wages Act, 1948

Payment of Bonus Act 1965


2/59

Incriminate

To cause to appear guilty of a crime or wrong

act; to imply guilt

Police found incriminating evidence in the

Arushi murder case.

Unions gave a statement incriminating the

payroll officer.


3/59

Payment of Wages Act 1936

Objects:

Safeguard wages of workers

Ensure wages are paid at regular intervals in a

particular form, without unauthorised

deduction

State Govt has the power to extend thecoverage of the Act to establishments who are

not covered, by giving 3 months notice


4/59

All India


5/59

Definitions

Employer, Employee, Factory

Industrial or Other Establishment

Wages: All remuneration, incl salary,

allowances, expressed in terms of money,

express or implied


6/59

Person named as manager in a factory

Person responsible to the employer for the

supervision and control of the establishment


7/59

Sec 4: Fixation of wage period: should not exceedone monthSec 5: Time for wage payment: If


8/59

In the case of termination, wages earned

should be paid by the expiry of the second

working day from the day of termination

All payments must be made on a working day


9/59

As per Payment of Wages Act (Amended),

1976, wages may be paid by cheque or

credit into bank account


10/59

Authorised deductions: A) withholding of increment or promotion ,

stoppage of increment at an efficiency bar

B) Demotion to a lower post C) Suspension


11/59

Fines

For acts of commission or omission which arespecified in an approved list

List must be exhibited at work place

Opportunity must be given to show cause

No fine for person


12/59

Absence from duty:Includes refusal to carry out work

For damage or loss:Loss of goods entrusted to the employee

where it is attributable to his neglect


13/59

Recovery of advances/over-payment ofwages/Loans

For payment of income tax


14/59

Orders of the court Provident fund

Payments to Co-operative societies /Insurance schemes

For housing supplied by employer

To make up loss for fake currency accepted

To make up losses for failure to invoice or

collect


15/59

Incorrect rebates or refunds given

Written permission of the employee for

contributions to National Defence fund etc.

Authorisations by the employee for his

contributions to insurance, pension, post

office schemes


16/59

For loss or damage to goods in the custodyof the employee, or refunds/rebates givenwhere the loss is not directly attributable tohis neglect

For tools or raw materials supplied for hiswork

For premium etc. without authorisation

Deduction in excess of 50% of wages


17/59

Employer must maintain: List of persons employed

Work performance by them

Wages paid to them Deductions made from their wages

Receipts given by them


18/59

Sec 14: Authorities under the Act

Inspector of Factories appointed under Sec 8(1) ofthe Factories Act, 1948 is an inspector , under this

Act, of all factories within the local limits assigned tohim


19/59

Examine and Enquire as he deems fit

Enter, inspect and search premises

Supervise payment of wages

Require production of registers and records Take statements; seize records

Cannot compel anyone to make statements

which may incriminate himself


20/59

Appointed by the State Govt.

Presiding officer of any labour court or

industrial tribunal or corresponding law

Any commissioner of workmen'scompensation

Judge of a Civil court


21/59

To ensure wages are paid on time

Not to make unauthorised deductions

Maintain register with full details

Display an abstract of the Act and the Rulesmade there from at a prominent location

Maintain registers for 3 years after last entry


22/59

Deduct wages of up to 8 days if a worker,with 10 others, strikes or absents himself

Appeal against the direction made by a courtfor payment of wages and compensation ifthe amount exceeds Rs 300


23/59

Receive wages in the prescribed period in

cash

Refuse to agree to any deductions and fines

other than those under the Act Approach authority under the Act regarding

unpaid/delayed wages, unauthorised

deductions, fines.


24/59

Sec 20: Penalties

Employer: Punishable with fine and imprisonmentup to 6 months

Some offences include: Failing to maintain registers

Refusal to furnish records

Willfully obstructing an Inspector

Not paying wages as stipulated, on time


25/59

MINIMUM WAGES ACT,1948


26/59

NOTE: MINIMUM WAGES ACT IS NOT

INCLUDED IN THE SYLLABUS FOR INDUSTRIAL

RELATIONS SL HR 605.

IT IS INCLUDED HERE FOR BETTERAWARENESS.


27/59

Bare physical necessities


28/59


29/59

Mean between living wage and minimum

wage

Related to workload and earning capacity

Step lower than living wageDepends on productivity of labour, prevailing

rates of wages in similar occupations in the

neighbourhood, level of national income,

place of the industry in the economy


30/59

Bare physical necessities and a little comfort

Below this the workers efficiency would be

impaired

Capacity of employer to pay is irrelevant


31/59

All India

Central Govt is empowered to fix minimum

wages detailed in Schedule 1

Ref. Page 680, Mamoria for Schedule 1 State Govt to fix for other employments


32/59

Child, Adolescent, Adult Appropriate Govt

Employer

Employee Wages: all remuneration expressed in terms

of money , express or implied, but does notinclude: money value of house supplied, light,

water, medical, contribution to PF andPension fund, travelling allowance, gratuityetc.

S 3 R i i f Mi i


33/59

Sec 3: Revision of Minimum

Wages

State Govt can fix, revise and review at

intervals not exceeding 5 years

Minimum wage may be fixed for :

Minimum time rate

Minimum wage rate

Guaranteed time rate


34/59


35/59

SEC4:STATUTORYMINIMUMWAGE

Basic rate of wages

and

Special allowance adjusted at intervals based on

variation in cost of living index number applicable to

workers

Or cash value of allowance in respect of essential

commodities at concessional rate

Or All Inclusive rate


36/59

Committees and sub committees to be

appointed

Proposal to be published by notification in

the official gazette to assess reaction frompeople likely to be affected

Hear representations within two months

Take decision, publish revised wages in

official gazette Revised wages come into effect within three

months of notification


37/59

Sec 7: Advisory Board

Sec 8: Central Advisory Board to advise StateGovt

Sec 9: Composition of Committees: no specificdirectives about method to be followed

Sec 12: Payment of minimum rate of wages

Sec 13: Fixing hours of work: 9 hours for adults

Sec 14: Entitlement to overtime for extra hours

Sec 15: Full pay for day less hours of work in a

day unless due to unwillingness to work orinadequate work given by employer


38/59

Sec 18: Maintenance of registers and records:

payments, overtime paid, deductions, rate of

wages, receipts

Sec 19: Authorities under the Act: Inspectorappointed by the state govt.

Powers of Inspector: Enter all premises, examine

records, examine any person on premises, require

information to be given, seize documents


39/59

Sec 20: Claims

Authorities to look into claims appointed by State

Govt

Who can claim:

Employee

Legal practitioner on his behalf

Inspector

Any person action with permission of the authority

On receipt of application, parties are heard, enquiry

is held, decision is given

S 22 P lti E l b i h d ith


40/59

Sec 22: Penalties: Employer can be punished with

imprisonment up to 6 months and fined

Sec 22B: Cognizance of Offences : No court can take

cognizance of an offence unless an application has beenmade and the authority has sanctioned the making of the

complaint.


41/59

PAYMENT OF BONUS ACT 1965


42/59

http://hrylabour.gov.in/docs/labourActpdfdo

cs/Payment_of_Bonus_Act.pdf


43/59

All India

All establishments employing > 20 persons on

any day during the accounting year

Not applicable to public enterprises exceptthose operating in competition with pvt

undertakings

Applicable to banks

List of undertakings to certain classes ofemployees to which the Act does not apply:

Ref. Page 689, Mamoria


44/59

State Govt may exempt for a specific period

by notification in the official gazette


45/59

Accounting year: the year ending on the day

on which accounts books of the corporation

are closed and balanced

Available Surplus: Gross profits as per Sec 4,less sums deducted as per Sec 6

Allocable surplus: As per Sec 2(4) , a part of

available surplus


46/59

Computation of available surplus.

The available surplus in respect of any

accounting year shall be the gross profits for

thatyear after deducting there from the sums

referred to in section 6

[Provided that the available surplus in respect

of the accounting year commencing on anyday in the year 1968 and in respect of every

subsequent accounting year shall be the

aggregate of


47/59

(a) the gross profits for that accounting year

after deducting there from the sums referred to

in section 6; and

(b) an amount equal to the difference between

(i) the direct tax, calculated in accordance with

the provisions of section 7, in respect of an

amount equal to the gross profits of the

employer for the immediately preceding

accounting year; and

(ii) the direct tax, calculated in accordance with


48/59

the provisions of section 7, in respect of an

amount equal to the gross profits of the

employer for such preceding accounting year

after deducting there from the amount of

bonus which the employer has paid or is

liable to pay to his employees in accordance

with the provisions of the Act for that year.]

Certain sums deductible from gross profits


49/59

Payment needs to be 67% of the allocable

surplus based on agreement in accordance

with Sec 194 of IT Act for companies other

than banking companies

For others, it is 60% of allocable surplus


50/59

All remuneration excluding overtime,

capable of being expressed in monetary

terms, including DA but does not include:

AllowancesCommission/Travelling commission

Value of house accommodation, HRA

Other bonus e.g. production, attendance

Contribution to pension

Gratuity, retirement benefit etc.


51/59

Computation of gross profits and allocable

profits: As specified in the schedule


52/59

Every employee who has worked for at least

30 days in the year

No entitlement if employee has committed

fraud, indulged in violence, theft,

misappropriation or sabotage in the

establishment


53/59

Employees can claim bonus under the Act

only from the sixth accounting year following

the year in which the employer sells goods

or profit is derived, whichever is earlier


54/59

Minimum bonus: 8.33% of wages and salary

Maximum bonus: If allocable surplus exceeds

the minimum bonus payable, the employerhas to pay maximum bonus of 20%


55/59

Set on and set off of allocable surplus

Where for any accounting year, the allocable surplusexceeds the amount of maximum bonus payable tothe employees in the establishment under section 11:

the excess shall be carried forward for being set onin the succeeding accounting year and so on up toand inclusive of the fourth accounting year to beutilised for the purpose of payment of bonus in the

manner illustrated in the Fourth Schedule.


56/59

To be paid within 8 months from the close of

the accounting year


57/59

DEDUCTIONSFROMBONUS

Amount of loss can be deducted if employee has

caused financial loss to employer or has been

found guilty of misconduct


58/59

Penalty for offences: Person who

contravenes the provisions of this act is

punishable with imprisonment for 6 months

and a fine

Maintenance of Records: Registers in the

prescribed form are to be maintained

showing computation of allocable surplus,disbursement details.


59/59

Read Chapter 25, Mamoria

Documents

Industrial Relations Session 26 Sep 19