M.COM C.S.
NTT VAISIA
LIBRARY
SNo.b443.
Chapter
7 Data24l222.
Chennai-44
The Payment of
Wages Act, 1936
IVWIHS
CHAPTER CONTENTS
o Extent of the Act
o Other Deductions
o Application of the Act
o Limit on Deductions (Sec. 7 (3)]
Definitions O Maintenance of Registers and Records (Sec. 13A)
DRules tor Payment of Wages (Secs. 3 to 6) D Enforcement of the Act
Responsibility for Payment of Wages (Sec. 3) o Inspectors (Sec. 14)
) Fixation of Wage-periods (Sec. 4) ) Claims Arising out of Deductions from Wages
Time of Payments of Wages (Sec. 5) or Delay in Payment of Wages and Penalty for
Medium of Payment of Wages (Sec. 6) Malicious or Vexatious Claims (Sec. 15)
DDeductions from Wages (Secs. 7 to 13) ) Powers of Authorities Appointed Under
) Deductions which may be made from Wages Sec. 15
(Sec. 7) o Single Application in Respect of Claims
Kinds of Deductions (Sec. 16)
) Deductions for Fines (Secs. 7 (2) (a) and 8] o Appeal (Sec. 17)
DDeductions for Absence from Duty (Secs. 7 ) Penalty for Offences under the Act (Sec. 20)
(2) (b) and 9] O Miscellaneous
) Deductions for Damage or Loss [Secs. 7(2)(c), ) Bar of Suits (Sec. 22)
(m). (n) and (o) and 10] ) Protection of Action Taken in Good Faith
) Deductions for Services (Secs. 7 (2) (d), (e) (Sec. 22A)
and 11] o Contracting Out (Sec. 23)
DDeductions for Recovery of Advances [Secs. o Display by Notice of Abstracts of the Act
7 (2) (0 and 12] (Sec. 25)
Deductions for Recovery of Loans [Secs. 7 (2) o Payment of Undisbursed Wages in Case of
(tfh and 12A] Death of Employed Person (Sec. 25A)
Deductions tor Payments to Co-operative ) Rule-making Power (Sec. 26)
Societies and Insurance Schernes (Secs. 7 Test Questions
(2) () and (k) and 13] Practical Problems
thtry where even living wages are not paid to workers, the need to proteet the wages carned by
tan hardly be over-emphasised. Before the Payment of Wages Act, 1936 was passed, evils of
withholding
wages, delays in pay1ng wages and making unreasonable deductions out of wages were
quite prevalent.
o e rayment of Wages Act. 1936 was passcd to regulate the payment of wages to certain classes
persons employed in industry (D'Costa, A.V, GLP Rly. v. B.C. Patel, A.LR. (1955) S.C. 412). It
, Industrial Law " Social
the prSeovtcsuiAriNt,
164
ofindustrial employees not getting very high salaries and t
benefit
for theto safeguard their interest [Milkhi Ram v. State of Punjab, A.I.R..(1964) Pu:
isofessentially
the Act were enacted
meant
provides against irregularities in payment of wagesBom.
and
26;
unauthorised
deductions theref
Armugham
513]. It also
A.LR.
by the (I956)
employers [Arvind
Mad. 79]. Mills
Further,
Gadgil, A.I.R.
Ltd.it v.ensures payment
(1941)
of wages in a particular form
Ja
v.Jawahar
and at
Mil
regukz
deductions.
intervals without unauthorised
Extent of the Act
was extended to Jammu and Kashmir by
theCae..
extends to the whole of India [Sec. I (2). It
The Act Kashmir) Act, 1970.
Labour Laws (Extension to Jammu and
Application of the Act
in any factory, to persons emplose
The Act applies to the payment of wages to persons employed and to an industrial or oth
(otherwise than in a factory) upon any railway by a railway administration industrial or other establishmet
cstablishment specified in Clauses (a) to (g) of Sec. 2 (in) (which defines
may have been employed eithe
The persons employed upon a railway by a railway administration a railway administratict
directly or through a sub-contractor by a person fulfilling a contract with
the provisions of the At
|See. I(4)). The State Government may after giving 3 months' notice extend establishment or class af
industrial
lo the payment of wages to any class of persons employed in any Clause (h) of
establishments specified by the Central Government or a State Governemnt under
st
Sec. 2 (ii) [Sec. 1 (5)]. In case of industrial establishmnents owned by the Central Government,
notification can be issued with the concurrence of the Central Government [Proviso to Sec. I(5)}
In various States the Act has been extended to shops and establishments also.
The Act does not apply to persons whose wages exceed ? 6,500 per month |Sec. 1 (6)]. This I
was raised from 1,600 to ? 6,500 by the Payment of Wages (Amendment) Act, 2005.
The latest amendment to the Act was made in 2005.
Reference to Sections in this Chapter. Reference to Sections in this Chapter, unless otherwiseindic
is to the Payment of Wages Act, 1923.
DEFINITIONS
Appropriate Government means in relation to railways, air transport services, mines and oil fields ti
Central Government and in relation to all other cases, the State Government [Sec. 2(0)
1. Employed person (Sec. 2(ia)]. Employed person' includes the legal representative ofa d
employed person.
2. Employer [Sec. 2(ib)|. Employer includes the legal representative of a deceascdIemploy
When there is a manager who is entrusted with the directors of th
affairs of a company. the ofLegal.Ari
company cannot be said to be employers
v. B.C. Saha, (1974) 45 F.J.R. 4891. [Superintendent & Remembrancer
Aet, 194N
3. Factory |Sec. 2 (ic)). It
means a lactory as defined in Sec. 2 (m) of the Factories appliedund
includes any place to which the
Sec. 85 () of that Act. provisions of the Factories Act, 194S have been
A Industrial or other establishment (Sec. 2(ii)). It
a) tramway
servicc, or motor means any
ransport service engagcd passengers or
both by road for hire or reward : in carrying
, ment of Wages Act, 1936 165
Pa
air transport service other than such service belonging to or exclusively employed in the
litary, naval or air force of the Union or the Civil Aviation Depart1ment of the Government
of India :
dock, wharf or jetty:
LÀ inland vessel, mechanically propclled:
or oilfield:
e) minc, quarry
) plantation:
workshop or other establishment in which articles are produccd, adapted or manulactured,
with a view to their use, transport or sale
Westablishment in which any work relating to the construction, development or maintenance
of buildings, roads, bridges or canals, or relating to operations connected with navigation,
irigation or suppty of water or relating to the transmission or distribution of electricity or
any other form of power is being carried on ;
) any other establishment or class of establishmentswhich the Central Government or a State
Government may, having regard to the nature thereof, the need for protection of persons
employed therein and other relevant circumstances, specify, by notification in the Official
Gazette.
6, Mine |Sec. 2 (iia)]. It has the meaning assigned to it in Sec. 2 (1) (() of the Mines Act, 1952.
6. Plantation (See. 2(i)). It has the meaning assigned to it in Sec. 2 ) of the Plantation Labour
Act, 1951.
Wages (Sec. 2 (v)]. "Wages' means all remuneration (whether by way of salary, allowances or
otherwise) expressed in terms of money or capable of being so expressed which would, if the
terns of employment, express or implied, were fulfilled, be payable to a person employed in
tespect of his employment or of work done in such employment. Simply stated, "wages' means
all remuneration due to any worker or employee if the terms of contract of employment are
fulflled.
The definition of expression 'wages' is made sufficiently wide by including within the
expression
(a) any remuneration payable under any award or settlement between the partics or order of a
Court :
(n) any remuneration to which the person employed is entitled in respect of overtime work or
holidays or any leave period:
e) 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:
dy Sum to which the person employed is entitled under any scheme framed under any law
for the time being in force.
The expression wages' does not include :
(1
any bonus (whether under a scheme of profit-sharing or otherwise) which does not form part of
ne remuneration payable under the terms of employment or which is not payable under any
ward or settlement between the parties or order ofa Court ;
NTT VAISIA
LIBRARY
SNo.b443.
Chapter
7 Data24l222.
Chennai-44
The Payment of
Wages Act, 1936
IVWIHS
CHAPTER CONTENTS
o Extent of the Act
o Other Deductions
o Application of the Act
o Limit on Deductions (Sec. 7 (3)]
Definitions O Maintenance of Registers and Records (Sec. 13A)
DRules tor Payment of Wages (Secs. 3 to 6) D Enforcement of the Act
Responsibility for Payment of Wages (Sec. 3) o Inspectors (Sec. 14)
) Fixation of Wage-periods (Sec. 4) ) Claims Arising out of Deductions from Wages
Time of Payments of Wages (Sec. 5) or Delay in Payment of Wages and Penalty for
Medium of Payment of Wages (Sec. 6) Malicious or Vexatious Claims (Sec. 15)
DDeductions from Wages (Secs. 7 to 13) ) Powers of Authorities Appointed Under
) Deductions which may be made from Wages Sec. 15
(Sec. 7) o Single Application in Respect of Claims
Kinds of Deductions (Sec. 16)
) Deductions for Fines (Secs. 7 (2) (a) and 8] o Appeal (Sec. 17)
DDeductions for Absence from Duty (Secs. 7 ) Penalty for Offences under the Act (Sec. 20)
(2) (b) and 9] O Miscellaneous
) Deductions for Damage or Loss [Secs. 7(2)(c), ) Bar of Suits (Sec. 22)
(m). (n) and (o) and 10] ) Protection of Action Taken in Good Faith
) Deductions for Services (Secs. 7 (2) (d), (e) (Sec. 22A)
and 11] o Contracting Out (Sec. 23)
DDeductions for Recovery of Advances [Secs. o Display by Notice of Abstracts of the Act
7 (2) (0 and 12] (Sec. 25)
Deductions for Recovery of Loans [Secs. 7 (2) o Payment of Undisbursed Wages in Case of
(tfh and 12A] Death of Employed Person (Sec. 25A)
Deductions tor Payments to Co-operative ) Rule-making Power (Sec. 26)
Societies and Insurance Schernes (Secs. 7 Test Questions
(2) () and (k) and 13] Practical Problems
thtry where even living wages are not paid to workers, the need to proteet the wages carned by
tan hardly be over-emphasised. Before the Payment of Wages Act, 1936 was passed, evils of
withholding
wages, delays in pay1ng wages and making unreasonable deductions out of wages were
quite prevalent.
o e rayment of Wages Act. 1936 was passcd to regulate the payment of wages to certain classes
persons employed in industry (D'Costa, A.V, GLP Rly. v. B.C. Patel, A.LR. (1955) S.C. 412). It
, Industrial Law " Social
the prSeovtcsuiAriNt,
164
ofindustrial employees not getting very high salaries and t
benefit
for theto safeguard their interest [Milkhi Ram v. State of Punjab, A.I.R..(1964) Pu:
isofessentially
the Act were enacted
meant
provides against irregularities in payment of wagesBom.
and
26;
unauthorised
deductions theref
Armugham
513]. It also
A.LR.
by the (I956)
employers [Arvind
Mad. 79]. Mills
Further,
Gadgil, A.I.R.
Ltd.it v.ensures payment
(1941)
of wages in a particular form
Ja
v.Jawahar
and at
Mil
regukz
deductions.
intervals without unauthorised
Extent of the Act
was extended to Jammu and Kashmir by
theCae..
extends to the whole of India [Sec. I (2). It
The Act Kashmir) Act, 1970.
Labour Laws (Extension to Jammu and
Application of the Act
in any factory, to persons emplose
The Act applies to the payment of wages to persons employed and to an industrial or oth
(otherwise than in a factory) upon any railway by a railway administration industrial or other establishmet
cstablishment specified in Clauses (a) to (g) of Sec. 2 (in) (which defines
may have been employed eithe
The persons employed upon a railway by a railway administration a railway administratict
directly or through a sub-contractor by a person fulfilling a contract with
the provisions of the At
|See. I(4)). The State Government may after giving 3 months' notice extend establishment or class af
industrial
lo the payment of wages to any class of persons employed in any Clause (h) of
establishments specified by the Central Government or a State Governemnt under
st
Sec. 2 (ii) [Sec. 1 (5)]. In case of industrial establishmnents owned by the Central Government,
notification can be issued with the concurrence of the Central Government [Proviso to Sec. I(5)}
In various States the Act has been extended to shops and establishments also.
The Act does not apply to persons whose wages exceed ? 6,500 per month |Sec. 1 (6)]. This I
was raised from 1,600 to ? 6,500 by the Payment of Wages (Amendment) Act, 2005.
The latest amendment to the Act was made in 2005.
Reference to Sections in this Chapter. Reference to Sections in this Chapter, unless otherwiseindic
is to the Payment of Wages Act, 1923.
DEFINITIONS
Appropriate Government means in relation to railways, air transport services, mines and oil fields ti
Central Government and in relation to all other cases, the State Government [Sec. 2(0)
1. Employed person (Sec. 2(ia)]. Employed person' includes the legal representative ofa d
employed person.
2. Employer [Sec. 2(ib)|. Employer includes the legal representative of a deceascdIemploy
When there is a manager who is entrusted with the directors of th
affairs of a company. the ofLegal.Ari
company cannot be said to be employers
v. B.C. Saha, (1974) 45 F.J.R. 4891. [Superintendent & Remembrancer
Aet, 194N
3. Factory |Sec. 2 (ic)). It
means a lactory as defined in Sec. 2 (m) of the Factories appliedund
includes any place to which the
Sec. 85 () of that Act. provisions of the Factories Act, 194S have been
A Industrial or other establishment (Sec. 2(ii)). It
a) tramway
servicc, or motor means any
ransport service engagcd passengers or
both by road for hire or reward : in carrying
, ment of Wages Act, 1936 165
Pa
air transport service other than such service belonging to or exclusively employed in the
litary, naval or air force of the Union or the Civil Aviation Depart1ment of the Government
of India :
dock, wharf or jetty:
LÀ inland vessel, mechanically propclled:
or oilfield:
e) minc, quarry
) plantation:
workshop or other establishment in which articles are produccd, adapted or manulactured,
with a view to their use, transport or sale
Westablishment in which any work relating to the construction, development or maintenance
of buildings, roads, bridges or canals, or relating to operations connected with navigation,
irigation or suppty of water or relating to the transmission or distribution of electricity or
any other form of power is being carried on ;
) any other establishment or class of establishmentswhich the Central Government or a State
Government may, having regard to the nature thereof, the need for protection of persons
employed therein and other relevant circumstances, specify, by notification in the Official
Gazette.
6, Mine |Sec. 2 (iia)]. It has the meaning assigned to it in Sec. 2 (1) (() of the Mines Act, 1952.
6. Plantation (See. 2(i)). It has the meaning assigned to it in Sec. 2 ) of the Plantation Labour
Act, 1951.
Wages (Sec. 2 (v)]. "Wages' means all remuneration (whether by way of salary, allowances or
otherwise) expressed in terms of money or capable of being so expressed which would, if the
terns of employment, express or implied, were fulfilled, be payable to a person employed in
tespect of his employment or of work done in such employment. Simply stated, "wages' means
all remuneration due to any worker or employee if the terms of contract of employment are
fulflled.
The definition of expression 'wages' is made sufficiently wide by including within the
expression
(a) any remuneration payable under any award or settlement between the partics or order of a
Court :
(n) any remuneration to which the person employed is entitled in respect of overtime work or
holidays or any leave period:
e) 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:
dy Sum to which the person employed is entitled under any scheme framed under any law
for the time being in force.
The expression wages' does not include :
(1
any bonus (whether under a scheme of profit-sharing or otherwise) which does not form part of
ne remuneration payable under the terms of employment or which is not payable under any
ward or settlement between the parties or order ofa Court ;
