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THE PAYMENT OF WAGES

ACT-1936

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PREPARED BY:

NEERAJ JAISWAR [ROLL NO-18]

ADIL JUNANI [ROLL NO-19]

PANKAJ MISHRA [ROLL NO-39]

CHIRAG RAJAWAT [ROLL NO-49]

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Contents of the act

Chapter 1 Introduction, Objects,

(sections 1 & 2) Applications

Definitions

Chapter 2 Payment and Deductions

(section 3 to 13) of Wages

Chapter 3 Authorities Under the Act

(sections 14 to 19)

Chapter 4 Miscellaneous

(sections 20 to 26)

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Wages [sec 2(vi) ]

WAGES means all remunerations capable of beingexpressed in terms of money, which would if the terms of thecontract of employment, expressed of implied, were full filled, bepayable to person employed irrespective of his employment or ofwork done in such employment and includes house rentallowances.

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Fixation of wage-periods [ sec-4 ]

Fixation of wages-periods :-

(a) Every person responsible for thepayment of wages under section 3 shall fix periods (in this Actreferred to as wage-periods) in respect of which such wages shall bepayable

(b) No wage-period shall exceed one

month.

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Time of payment of wages [ sec-5 ]

Time of payment of wages :-

The wages of every person

employed upon or in ---

(a)any railway, factory or [industrial orother establishment] upon or in which less than one thousandpersons are employed, shall be paid before the expiry of the seventhday.

(b)any other railway, factory or[industrial or other establishment], shall be paid before the expiry ofthe tenth day, after the last day of the wage-period in respect ofwhich the wages are payable.

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Method of Payment [ sec-6]

(a)Wages to be paid in current coin or currencynotes. All wages shall be paid in current coin or currency notes or inboth.

(b) Wages shall include any bonus of thedescription given in sub clause (1) of clause (vi) of section 2.

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Deductions [ sec 7 to 13]

7(1)says that every payment made by theemployed person to the employer or his agent shall, for the purposesof this Act, be deemed to be deduction from wages.

It also lays down that any loss of wages

resulting from any imposition, upon a person, shall not be deemedto be a deduction from wages.

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Deduction for absence from

duty.(1)Deductions may be made under

section 7 only on account of the absence of an employed person fromthe place or places where, by the terms of his employment, he isrequired to work, such absence being for the whole or any part of the

period during which he is so required to work.

(2) The amount of such deduction shall inno case bear to the wages payable to the employed person in respectof the wage-period for which the deduction is made a larger

proportion than the period for which he was absent bears to the totalperiod, within such wage period, during which by the terms of hisemployment, he was required to work: Deductions for absence fromduty.

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Deductions for damage of loss.

A deduction under section 7 shall notexceed the amount of the damage or loss caused to the employer

by the neglect or default of the employed person.

A deduction shall not be made under (2) ofsection 7 until the employed person has been given anopportunity of showing cause against the deduction, or otherwisethan in accordance with such procedure as may be prescribed forthe making of such deductions.

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Deductions for services rendered.

A deduction of section 7 shall not bemade from the wages of an employed person, unless the house-

accommodation amenity or service has been accepted by him, asa term of employment or otherwise, and such deduction shall notexceed an amount equivalent to the value of the house-accommodation amenity or service supplied .

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Deductions for recovery of loans.

Deductions for recovery of loansgranted under section 7 shall be subject to any rules made by theState Government regulating the extent to which such loans maybe granted and the rate of interest payable thereon.

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Deductions for payments to co-operative societies and insuranceschemes.

Deductions under section 7 shall besubject to such conditions as the State Government may impose.Deductions for payments to co-operative societies and insuranceschemes.

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Cont.

All such deductions and all realizations

thereof shall be recorded in a register to be kept by the personresponsible for the payment of wages under section 3 in suchform as may be prescribed.

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Case Law Studies.

Gopalan V/s Augmati Chit Fund

HELD:- Statutory bonus of 8 1/3 %is payable whether

there are profits to the accounting year or not. After

coming into force of the Payment of Bonus Act, bonus

has become an implied term of employment not

dependent upon the profits and therefore comes

under the category of remuneration. Viewed in this

light the wages as a general term would include.

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Arvind Mills LTD. V/s K.R. Gadgil (AIR 1941 Bom. 26)

HELD:-the general purpose of the Act is to provide that

employed persons shall be paid wages in a particular form and

at regular intervals without any unauthorized deductions". The

use of expression "Certain classes of persons" in the preamble

applies to persons drawing on an average wages less than

rupees one thousand six hundred per a month .

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