Part 5-Unlocked

DON’T COMPROMISE
Industrial Relations
and Labour Law
Part 5
Code on Wages
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Code on wages
The code subsumes:
• The Minimum Wages Act, 1948.
• The Payment of Wages Act, 1936.
• The Payment of Bonus Act, 1965.
• The Equal Remuneration Act, 1976.
Jurisdiction: The state government will be authorized to make decisions
for all the employments other than those wherein the Central Government
make laws
Central government can make laws on matters like
• Establishment carried on by or under the authority of the Central
Government or
• The establishment of railways, major ports, air transport service,
• mines, oil field,
• telecommunication, banking and insurance company or
• a corporation, other authority, central public sector undertaking or
subsidiary companies set up by central public sector undertakings or
autonomous bodies owned or controlled by the Central Government.
Applicability of Code on Wages
The Code on Wages is applicable to all employees in both the organised
and unorganised sector. The provisions of the Code covers all the
employers and employees of all sectors except the members of the Armed
Forces of the Union and apprentices engaged under the Apprentices Act,
1961
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Section 2(z): Definition of worker includes:
• Any person employed in any industry to do any manual, unskilled,
skilled, technical, operational, clerical, or supervisory work for hire or
reward.
• The terms of employment may be expressed or implied.
• Working journalists defined under section 2(f) of the working
journalists and other newspaper employees (conditions of service)
and miscellaneous provisions act, 1955.
• Sales promotion employees defined under section 2(d)of the Sales
promotion employees (conditions of service) act, 1976.
PROHIBITION OF DISCRIMINATION ON GROUND OF GENDER
in wages or similar nature.
Equal Remuneration Act, 1976 prohibited employers from discriminating
in wage payments of workers based on gender. The Code subsumes the
1976 Act and contained specific provisions which prohibited gender
discrimination in matters related to wages.
MINIMUM WAGES
no employer shall pay to any employee wages less than the minimum rate
of wages notified by the appropriate Government.
The appropriate Government shall fix a minimum rate of wages –
(a) for time work; or
(b) for piece work.
In accordance with following wage periods: -
1. By the hour or
2. By the day or
3. By the month.
Appropriate government shall take into account.
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skill of workers- unskilled, skilled, semi-skilled and highly-skilled, or
geographical area
Arduousness of work like temperature or humidity normally difficult to
bear, hazardous occupations or processes or underground work both.
Section 8: the minimum wages shall be revised and reviewed by the
central or state governments at intervals of not more than five years.
Section 9: the central government will fix a national floor rate for wages
by considering the living standard of workers and set different floor wages
based on different geographical areas. Thus the minimum wages fixed by
the State or Central government’s must be higher than this floor wages and
if the minimum wages fixed by the government are much higher than this
they cannot reduce the existing wages.
The central government before fixing the floor wages must obtain the
advice of Central Advisory Board and may also consult with the respective
State governments.
Wages for working overtime:

Centre has reduced normal working hours in a day to eight hours from
nine proposed in the earlier version released last November. Also, one or
more intervals of rest which in total shall not exceed one hour
Section 10: If an employee works for overtime than the normal working
time, he will be entitled to get overtime wages which is twice the rate of
normal wages.
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Deductions that can be made from wages.
1. fines imposed on him; or
2. absence from duty; or
3. damage to or loss of goods which was entrusted to him for custody:
or
4. house accommodation provided by the employer; or
5. for amenities and services provided for the employee.
These deductions should not exceed 50 percent of the employee’s total
wage.
Payment of bonus
Section 26: The code requires employers to pay a bonus to its employees
whose wages are below such monthly amount as may be notified by the
state or central government and who has put in at least thirty days work in
an accounting year. The annual minimum bonus shall be (i) 8.33% of his
wages, or (ii) Rs 100, whichever is higher. In addition to this, the employer
shall also distribute a part of the gross profits amongst the employees, in
proportion to the annual wages of an employee. An employee can receive
a maximum bonus of 20% of his annual wages
Advisory Boards
Section 42: The Central and State governments would constitute advisory
boards. The Central Advisory Board would consist of following persons:
1. representing employers;
2. representing employees, in equal numbers as that of the employers;
3. independent persons not exceeding one third of the total members of
the board;
4. five representatives of the state governments as nominated by the
Central government.
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The State Advisory Board would consist of following persons:
1. representing employers;
2. representing employees which shall be equal in numbers as that of
the employers;
3. independent persons, not exceeding one-third of the total members of
the board or committee or sub-committee.
Also one-third of the total members on both the Central and State Advisory
Boards will be women. The State Advisory Board may constitute one or
more committees or sub-committees to look into issues pertaining to
matters specified in (a) to (d) given in duties below.
Duties of Central and State Advisory Boards are to advice the
respective governments on issues relating to:
a) fixation or revision of minimum wages and other connected matters.
b) providing and increasing employment opportunities for women.
c) the extent to which women may be employed in such establishments
or employments as the Central and the State Government may specify
it by notification and
d) any other matter relating to this Code.
Inspector-cum-Facilitator
Section 51: provides for appointment of Inspector-cum-Facilitator. The
Inspector-cum-Facilitator are public servants appointed by the
government.
Powers of Inspector-cum-facilitator:
1. Make search, seizure or can take copies of register, record of
wages or notices.
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2. Notify the appropriate government about defects or abuses in
an establishment.
Inspections will be carried out on the basis of a web-based inspection
schedule that will be decided by the central or state government.
Penalties for offences
Section 54: deals with the penalties for offences.
Section 53: Deals with the power of officers of appropriate Government to
impose penalty in certain cases.
The penalty for offences varies from one offence to another, maximum
penalty being imprisonment for 3 months along with a fine of up to one
lakh rupees.
The appropriate government may appoint any officer not below the rank of
Under Secretary to Government of India or an officer of equivalent rank in
the State Government to dispose of cases punishable only with fine up to
fifty thousand rupees, so as to reduce the burden on subordinate judiciary;.
Under Section 52, if a complaint is received from an employee or a
registered union under the Code the appropriate government or the officer
appointed on behalf of government or an Inspector-cum-Facilitator may
take cognizance of the case.
Period of Limitation for filing of claims:
Earlier workers could file claims in a time period varying from 6 months to
2 years. Now it has been increased to 3 years.
Burden of Proof on employer: a claim has been filed for non-payment
of remuneration or bonus or less payment of wages or bonus or on account
of making deduction not authorised by the legislation, the burden shall be
on the employer to prove that the said dues have been paid to the
employee.
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Reference of Disputes under the Code
Section 46: Any dispute arising between an employer and his employees
with respect to –
a) fixation of bonus or eligibility for payment of bonus under the
provisions of the Code; or
b) the application of the Code, in respect of bonus, to an establishment in
public sector,
then, such dispute shall be deemed to be an industrial dispute within the
meaning of the Industrial Disputes Act, 1947.
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DON’T COMPROMISE

Wages for working overtime:

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