PAYMENT OF WAGES ACT WITH SPECIAL REFERENCE TO ‘The Jodhpur Central Coop. Bank vs Naim Singh AndAnr. On 19 September, 1989 -A CRITICAL STUDY (By - Ayali Natua & Debarjun Dey)
PAYMENT OF WAGES ACT WITH SPECIAL
REFERENCE TO ‘The Jodhpur Central Coop. Bank vs Naim Singh AndAnr. On 19
September, 1989 -A CRITICAL STUDY
Authored By - Ayali Natua
&
Debarjun Dey
Introduction
The Jodhpur Central Coop. Bank vs
Naim Singh andAnr. On 19 September, 1989:
The above case is between The Jodhpur
Central Coop. Bank and Employees of the bank. In this case the employees of
Jodhpur Central Coop. Bank named Naim Singh andAnr have filed a claim
application under Section 15(2) of the Payment of Wages Act, 1936 (hereinafter
referred to as the Act of 1936) and claimed the over-time wages for working on
the days which were declared as holidays under Section 25 of the Negotiable
Instruments Act, 1881. It is alleged that the declared holidays are June 30,
1984, December 31, 1984, June 29, 1985 and December 31, 1985. But the Authority
disallowed the claim of the petitioner with regard to the overtime claimed for
working on June 30, 1984 being barred by time.
Now we shall discuss about the
provisions of The Payment of Wages Act,1936 which are directly linked in this
case:
The Act extends to the whole of India
(Sec. 1 (2). It was extended to Jammu and Kashmir by the Central Labour Laws
(Extension to Jammu and Kashmir) Act, 1970.
The Act applies to the payment of
wages to persons employed in any factory, to persons employed (otherwise than
in a factory) upon any railway by a railway administration and to anindustrial
or other establishment specified in Clauses (a) to (g) of Sec. 2 (II) (which
defines industrial or other establishment). The persons
employed upon a railway by a railway
administration may have been employed either directly or through a
sub-contractor by a person fulfilling a contract with a railway administration
(Sec. 1 (4)].[1] The
State Government may after giving 3 months' notice extend the provisions of the
Act to the payment of wages to any class of persons employed in any industrial
establishment or class of establishments specified by the Central Government or
a State Government under Clause (h) of Sec. 2 (1) [Sec. 1 (5)]. In case of
industrial establishments owned by the Central Government, such notification
can be issued with the concurrence of the Central Government (Proviso to Sec. 1
(5)).
Definitions
Appropriate Government means in
relation to railways, air transport services, mines and oil fields the Central Government
and in relation to all other cases, the State Government (Sec. 2(1)1.[2]
1. Employed person (Sec. 2 (fa)).
Employed person includes the legal representative of a deceased employed
person.
2. Employer [Sec. 2 (ib)). Employer'
includes the legal representative of a deceased employer.
When there is a manager who is
entrusted with the affairs of a company, the directors of the company cannot be
said to be employers [Superintendent & Remembrancer of Legal Affairs v.
B.C. Saha, (1974) 45 F.J.R. 4891.
7. Wages [Sec. 2 (vi)). 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 terms of
employment, express or implied, were fulfilled, be payable to a person employed
in respect 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 fulfilled.
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 parties or order
of aCourt;
(b) any remuneration to which the
person employed is entitled in respect of overtime work or holidays or any
leave period: (c) any additional remuneration[3]
payable under the terms of employment (whether called a bonusor by any other
name);
(d) any sum which by reason of the
termination of employment of the person employed isPayable 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 bemade;
(e) any 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 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 a general
or special 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 travelling allowance or the
value of any travelling concession;
5.Any sum paid to the employed person
to defray special expenses entailed on him by the nature of his employment; and
6.Any gratuity payable on the
termination of employment in cases other than those specified in Clause (d)
above.
The definition of the expression
‘wages’ comprises 3 parts:
The first part declares that ‘wages’
means all remunerations which would, if the terms of the contract of
employment, express or implied, were fulfilled, be payable to a person
employed, in respect of his employment. This clause presents no difficulty
whatsoever for it declares in an unambiguous language that an employee is
entitled to receive wages in accordance with the terms of his contract.
The second part says that the
expression 'wages' shall include any bonus or other remuneration of the nature aforesaid
which would be so payable, 1.e., payable in accordance with the terms of the
contract.
The third part declares that the
expression 'wages' shall include any sum' payable to suchperson by reason of
the termination of his employment. The language of this clause is wide enough
to embrace not only a sum payable to an employee under the terms of a contract
but also a sumpayable to him under the provisions of any law.
Wages to be paid before 7th
or 10th day.
Wages to be paid on a working day.
Deductions Which May Be Made From
Wages (Sec. 7)
Sec. 7 provides that the wages of an
employed person shall be paid to him without deductions of any kind except
those authorised by or under the Payment of Wages Act, 1936 [Sec. 7 (1)].
Kinds Of Deductions
The deductions from wages of an
employed person referred to in Sec. 7 (1) may be of the
Following kinds only, namely;
Deductions for fines [Secs. 7 (2) (a)
and 8]\
Deductions for absence from duty
[Secs. 7 (2) (b)and 9]
Deductions may be made on account of
the absence of an employed person from duty (Sec. 7 (2) (b)) from the place or
places where, by the terms of his employment, he is required to work. The
absence may be for the whole or any part of the period during which he is so
required to work [Sec. 9(1) | But the ratio between the amount of such
deductions and the wages payable shall not exceed the ratio between the period
of absence and total period within such wage-period (Sec. 9 (2)]. It has
however been held in K.S.R.T. Employees’ Assn. v. General Manager, K.S.R.T.,
(1985) Lab. I.C. 552 (Ker.) that in a strike by workers in a public utility
like transport service, if employees absent for a part of the day without
notice, deduction of full day’s wages would not be unjustified or illegal.
If, however, 10 or more employed
persons, acting in concert, absent themselves without due notice and without
reasonable cause, the deduction for absence from duty from any such person may
include such amount not exceeding his wages for 8 days as may be due to the
employer in lieu of notice (Proviso to Sec. 9(2)] In this regard any employed
person shall be deemed to be absent from the place where he is required to work
if he refuses, in pursuance of a stay-in strike or for any other cause which is
not reasonable in the circumstances, to carry out his work (Explanation to Sec.
9)
Deductions for services [Secs.
7(2)(d) (e) and 11]
Deductions for recovery of advances
[Secs. 7 (2) (f) and 12]
Deductions for recovery of loans
[Secs. 7 (2) (fff) and 12-A]
Deductions for payments to co-operative
societies and insurance schemes [Secs. 7 (2) () and (k) and 13]
Limit On Deductions [Sec. 7 (3)]
The total amount of deductions which
may be made under the above heads (Sec. 7 (2)] in a wage-period from the wages
of any employed person shall not exceed 75 per cent of such wages in cases
where such deductions are wholly or partly made for payments to co-operative
societies under Sec. 7 (2) (j). In any other case, they shall not exceed 50 per
cent of such wages [Sec. 7 (3)). Where the total deductions authorized under
Sec. 7 (2) exceed 75 per cent, or as the case may be, 50 per cent of the wages,
the excess may be recovered in such manner as may be prescribed [Proviso to
Sec. 7 (3)
Claims arising out of deductions from
wages or delay in payment (Sec. 15)
The scheme of Payment of Wages Act is
that all claims arising out of deductions from wages or delay in the payment of
wages are to be decided by the Authority appointed by the appropriate
Government under Sec 15 and not by a Civil Court
Sec. 15 empowers the appropriate
Government to appoint some person as the Authority to hear and decide for any
specified area all claims arising out of (a) deductions from the wages, or (b)
delay in payment of the wages of persons employed or paid in that area,
including all matters incidental to such claims. The appointment shall be made
by notification in the Official Gazette. The following may be appointed as the
Authority as aforesaid:
(a) any Commissioner for Workmen's
Compensation, or (b) any officer of the Central Government exercising functions
as,
(i) Regional Labour Commissioner; or
(ii) Assistant Labour Commissioner
with at least two years' experience; or
(c) any officer of the State
Government not below the rank of assistant Labour Commissioner with at least
two years' experience; or
(d) a presiding officer of any Labour
Court or Industrial Tribunal, constituted under the IndustrialDisputes Act,
1947, or under any corresponding law relating to the
investigation and set industrial
disputes in force in the State, or
(e) any other officer with experience
as a Judge of a Civil Court or as a Judicial Magistrate [Sec. 15 (1)
The appropriate Government may, where
it considers necessary so to do, appoint more than an Authority for any
specified area. It may, by general or special order, also provide for
thedistribution or allocation of work to be performed by themunder this Act
[Proviso to Sec. 15 (1)). Powers of Authorities appointed under Sec. 15. Sec.
18 provides that every Authority appointed under Sec. 15 (1) shall have all the
powers of a Civil Court under the Code of Civil Procedure, 1908, for the
purpose of
(a) taking evidence and enforcing the
attendance of witnesses, and (b) compelling the production of documents.
Further, every such Authority shall
be deemed to be a Civil Court for all the purposes of Sec. 195 and of Chapter
XXVI of the Code of Criminal Procedure, 1973. under the Act may be filed by
Who may file application? An
application for claims arising lal the person employed himself, or
(b) any legal practitioner, or
(c) any official of a registered
trade union authorized in writing to act on his behalf, or
(d) any Inspector under the Act, or
(e) any other person acting with the permission of the Authority appointed
under Sec. 15 (1)
(Sec. 15 (2)
Application to be filed within 12
months. Every application for claims under the Act shall be presented within 12
months from the date on which the deduction from the wages was made or from the
date on which the payment of the wages was due to be made [Proviso 1 to Sec. 15
(2)]. An application may also be admitted after 12 months if the applicant
satisfies the Authority that there was a sufficient cause for not making the
application within 12 months [Proviso 2 to Sec. 15 (2)].
Procedure. When any application for
claims under the Act is entertained, the Authority shall hear the applicant and
the employer or other persons responsible for the payment of wages under Sec.
3, or give them an opportunity of being heard. The Authority shall make such
further inquiry as may be necessary. It may direct the refund to be made to the
employed person of the amount deducted or the payment of the delayed wages,
together with such compensation as it may think fit. The compensation shall not
exceed 10 times the amount improperly deducted, and not exceeding Rs. 3,000 but
not less than Rs. 1,500 in case of delayed wages. Even where the deducted or
delayed wages are paid before the disposal of the application, the Authority
may direct the payment of such compensation as it may think fit. This amount of
compensation shall however not exceed Rs. 2,000 [Sec. 15 (3)).No direction if
the Authority is satisfied. No direction for the payment of compensation shall
be made in the case of delayed wages if the Authority is satisfied that the
delay was due to (a) a bona fide error or dispute; or
(b) the occurrence of an emergency or
the existence of exceptional circumstances; or (c) the failure of the employed
person to apply for or accept payment [Proviso to Sec. 15 (3)].
Dispute as to legal representatives.
Where there is any dispute as to the person or persons being the legal
representative or representatives of the employer or of the employed person,
the decision of the Authority on such dispute shall be final [Sec. 15 (4-A).
Inquiry under Sec. 15 is a judicial
proceeding. Any inquiry under Sec. 15 shall be deemed to be a judicial
proceeding within the meaning of Secs. 193, 219 and 228 of the Indian Penal
Code, 1860 [Sec. 15 (4-B)].
Recovery of amount. Any amount
directed to be paid under Sec. 15 may be recovered (a) if the Authority is a
Magistrate, by the Authority as if it were a fine imposed by him as Magistrate,
and
(b) if the Authority is not a
Magistrate, by any Magistrate to whom the Authority
makes application in this behalf, as
if it were a fine imposed by such Magistrate [Sec. 15 (5)].
Single application in respect of
claims (Sec. 16)
A single application may be presented
under Sec. 15 on behalf of or in respect of any number of employed persons
belonging to the same unpaid group. When a single application is made, every
person on whose behalf such application is presented may be awarded maximum
compensation to the extent specified in Sec. 15 (3) [Sec. 16 (2)].
Employed persons are said to belong
to the same unpaid group if they are borne on the same establishment, and
1.If deductions have been made from
their wages in contravention of the Act for the same cause and during the same
wage-period or periods, or
2.If their wages for the same
wage-period or periods have remained unpaid after the day fixed by Sec. 5 [Sec.
16 (1)].
Judgement
The judgement was given by
Justice.Ashok Kumar Mathuras Mr. Parihar, learned Counsel for the petitioner,
has submitted that under Section 25 of the Negotiable Instruments Act certain
public holidays are declared to save the negotiable instruments from expiry and
on those holidays if any negotiable instrument expires, then it will be
negotiable on the next preceding day. The explanation clarified that the public
holiday includes Sundays and any other holidays declared by the Government by
notification in the Official Gazette. Section 25 reads as under:
“25. When day of maturity is holiday-
When the day on which a promissory note or bill of exchange is at maturity is a
public holiday, the instrument shall be deemed to be due on the next preceding
business day.
Explanation: - The expression “public
holiday” includes Sundays and any other day
declared by the Central Government,
by notification in the Official Gazette to be a public holiday”
Learned Counsel submits that this declaration
of public holiday on December 31, 1984 does not mean that the banks were closed
and there were holidays for the employees. In fact, it was declared as a
holiday under Section 25 of the Act which is an enabling provision for saving
the negotiable instruments being expiring and so as to enable them for being
exchanged on next preceding business day. The declaration as holiday under
Section 25 of December 31, 1984 which was Monday and which was day for annual
checking of the accounts would not mean that it was a holiday for the bank
employees. By this the submission of Mr. Parihar appears to be justified. On
December 31, 1984 and other two days which was closing of the bank account,
meaning thereby that on that day there was no commercial transaction and as
such it was not a holiday for the employees and when there was no holiday for
the employees, petitioner cannot claim overtime for working on those days.
“June 30 and December 31 when
declared as such to be holidays for half yearly and yearly closing accounts
shall be deemed to be normal working days for all workmen employees in Bank”.
BIBLIOGRAPHY
1.https://indiankanoon.org/doc/685111/
2.PAYMENT OF WAGES ACT 1936