Deductions under The Payment of Wages Act 1936,
Q. (a) Define
deductions and enumerate deductions which can be lawfully made from the wages
under the Payment of Wages Act, 1936.
(b) What deductions
can be made by the employer from the wages under the Payment of Wages Act,
1936.
What is deduction:- The provision of Section 7 is mandatory in
nature which states that the wages of an employed person shall be made to him
without any deductions of any kind except those are authorized by or under this
Act. Every payment made by the employed person to the employer or his agent
shall be deemed to be deduction for the purpose of the Act. But any loss of
wages resulting from the following impositions shall not be deemed to be
deductions, namely:
Deduction which may be
made from wages
At the time of payment
of the salary to personnel, the business enterprises should make deductions in
step with this act simplest. The employer should no longer make deductions as
he likes. Every quantity paid by the employee to his enterprise is referred to
as deductions.
The following are not
referred to as the deduction:-
·
The withholding of increment
or promotion (including Stoppage of the increment of worker at efficiency bar)
·
The demotion of the
worker or reduction to a
(a) Lower post or
(b) Time scale or
(c) Lower stage in scale
·
Suspension of the
worker.
Provided that the rule
framed by the employer for imposing such penalty are in conformity with the
rules framed by the State Government in
this behalf. Thus any loss of wages resulting from the aforesaid penalties
shall not be deemed to be deduction from wages.
Authorized deduction:-
According to Section 7
(2) the following deductions may be made from the wages of an employed person
but the same shall be made in accordance with the provisions of the Act.
Deductions which are
acceptable according to this act
(1)
Fines- Section 8
Section 7 (2) (a)
authorize deduction but subject to provision made under Section 8 that any Fine
can be imposed only for the acts and omissions which have been approved by the
State Government. The Chief Inspector of Factories has been recognized as an
authority to approve the list of the acts and omissions for which fine can be
imposed. The employer ought to observe the guidelines referenced underneath for
and before forcing of fine on the worker.
·
Section 8(1) Employer cannot
deduct fine without framing rule and approval by appropriate Government in
conformity with the rule provided under Section 7.
·
Section 8 (2) Show
cause Notice- no fine can be imposed unless the person concerned is given an
opportunity of showing cause why a fine should not be imposed. And under
sub-clause (3) a reasonable opportunity for justification is given to the
worker.
·
Section 8 (4) The
aggregate sum of fine ought not to surpass 3% of his pay.
·
Section 8 (5) Fine
ought not to be imposed on any worker who is younger than 15 years.
·
Section 8 (6) Fine
ought to be recuperated or recovered within 90 days from the date on
which fine was imposed.
·
Section 8 (7) Fine
shall be deemed to have been imposed on the day act of exclusion made by the
worker or the employee.
·
Section 8 (8) All
fines gathered from the worker ought to be credited to basic reserve and use to
help the employees.
·
Section 8 (8) All
fines and all acknowledge thereof will be recorded in a register to be kept by
the individual answerable for the payment of wages under section 3 in such
structure as might be prescribed, and all such acknowledge will be applied uniquely
to such purposes useful to the people employed in the factory or foundation as
are affirmed by the recommended authority.
(2) Deductions for absence from duty Section 7
(2)(b) read with Section 9.
Section 9 lays down
that the Deductions can be made by the employer on account of the absence of
employed person from the place or places, by the terms of his employment, where
he is required to work. Such absence may be for the whole or any part of period
during which he is so required to work. Such absence may be for the whole or
any part of the period during which he
is required to work. In the case of Surendera Nath v Divisional Officer
(Railways), 1988(1)LLJ 227, the railways employees took leave en-mass to protest against the Railway
administration, but such leave was not granted and the administration made
deductions from their wages. It was held by the court that the deduction was
lawful under such circumstances. But where the employee is prevented from
reaching the workplace due to “Bundh” the employer can not deduct his wages. If
the employees remain absent in the concerted manner, then deduction can be
made, not exceeding 8 days wages as notice was not given. Stay in or pen down
strike is an instances of absence – although, they are present. In case of
Management of Jawahar Mills Ltd.v Industrial Tribunal, A.I.R. 1965Mad. 92 It
was held that where the worker took part in an illegal strike in an illegal
strike in a public utility service under Section 22 of the Industrial Dispute ,
1947 it was held that there was no ‘reasonable cause’ for such strike.
(3)
Deductions for damages
or loss
Section 7 (2)(c) read
with Section provide that deduction for
damages and loss can be made by the employer subject to following
condition;-
(a)
Show cause notice to
employee.
(b)
employee should offer
an opportunity to the employee to clarify the explanation and cause for the
harm occurred and deductions made by an employer from the worker, compensation
ought not to surpass the worth or measure of harm made by the employee.
(c)
[Sec 10 (2)] All such
findings and all acknowledge thereof will be recorded in a register to be kept
by the person responsible for the payment of wages under Section 3 in
prescribed manner.
(4) Deductions for services rendered
(a)
Section 7 (2) (d)House-convenience
courtesy or administration gave by the employer ought to be acknowledged or
accepted by the worker, than just the employer can make a deduction from the
wage or salary of the employee. Deduction ought not to surpass a sum equal to
the estimation of the house-settlement pleasantry or administration provided.
(b)
Section 7 (2) (e) Deduction
for amenities and services,
(5)
Section 7 (2) (f) Deductions for recovery of advances.
(6) Section 7 (2) (ff) Deductions for recovery of loans
(7) Section 7 (2) (j)Deductions for payment to co-operative
societies and insurance schemes,
(8) Section 7 (2) (g)Deduction for Income Tax,
(9) Deduction for subscription,
(10)
Section 7 (2) (kk) Deduction for membership of Trade Union,
(11)
Section 7 (2) (l) Deduction for payment of Insurance premium,
(12)
Section 7 (2) (p) Deduction for Relief Funds,
(13)
Section 7 (2) (h) Deduction by order of the court,
Extent of deduction:-The total deduction in any wage period shall
not exceed the following limit:-
(a) In cases where such deductions are wholly or
partly made for payments to cooperative societies shall not exceed 75% of such
wages
(b) In case other than above, the deduction shall
not exceed 50% of such wages.
If excess, is deducted, that will be received in suvh manner
as may be prescribed under the rules.
Duties of employer regarding
maintenance of register:-
Maintenance of registers and records [Section
13A]
The employer is
required to maintain separate registers for
fines, deductions for damage and losses caused through neglect or
default and advances made to the employed person, In addition the employer has
to maintain register of wages which shall contain the following particulars:
(a)
Particulars of person
employed,
(b)
The work performed by
the person employed,
(c)
The wages paid to the
person employed,
(d)
The deduction made
from the wages of the person employed,
(e)
Receipt given by the
person employed,
(f)
Such other particulars
as the rules may prescribe.
Each register and
record required to be kept up and safeguarded for a time of three years after
the date of the last entry made in that and make available to the Inspector for
inspection when required.
References:-
https://blog.ipleaders.in/payment-wages/
https://www.kaanoon.com/indian-law/payment-of-wages-act/
https://pt.slideshare.net/jayashreekhandare/the-payment-of-wages-act-1936-55818918
https://paycheck.in/labour-law-india/work-and-wages/payment-of-wages-act
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