Page 100 - DCOM207_LABOUR_LAWS

Unit 6: Payment of Wages Act, 1936

or which is not payable under any award or settlement between the parties or Notes
order of a Court;
 z 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;
 z any contribution paid by the employer to any pension or provident fund, and
the interest which may have accrued thereon;

 z any travelling allowance or the value of any travelling concession;
 z any sum paid to the employed person to defray special expenses entailed on
him by the nature of his employment; or

 z any gratuity payable on the determination of employment in cases other than
those specified in sub-clause (d).



Caselet Bank of India v. T.S. Kelawala and Ors
n the case of Bank of India v. T.S. Kelawala and Ors., the question which came for
consideration was that whether an employer has a right to deduct wages unilaterally
Iand without holding an enquiry for the period the employees go on strike or resort to
go-slow. The appellant in this case is a nationalized bank. The demands for wage-revision
made by the employees of all the banks were pending at the relevant time, and in support
of the said demands the All India Bank Employees’ Association had given a call for a
countrywide strike.
The appellant-Bank issued a circular to all its managers and agents to deduct wages of the
employees who would participate in the strike for the days they go on strike. The Bank
issued an Administrative Circular warning the employee that they would be committing
a breach of their contract of service if they participated in the strike and that they would
not be entitled to draw the salary for the full day if they did so, and consequently, they
need not report for work for the rest of the working hours on that day. The court held that,
Section 7 (2) read with Section 9 of the Payment of Wages Act provides the circumstances
under which and the extent to which deduction can be made. It is only when the employer
has right to make deduction, resort should be had to the act to ascertain the extent to
which the deduction can be made. No deduction exceeding the limit provided by the act
is permissible even if the contract so provides. There cannot be contract contrary to or in
terms wider than the input of sections 7 and 9 of the act. Therefore wage deduction cannot
be made under section 7(2) of the Payment of Wages Act if there is no such power to the
employer under the terms of contract.

Source: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1593043
Self Assessment

State whether the following statements are true or false:
1. The State Government is responsible for enforcement of the Act in railways and air transport
services, while the Central Governments are responsible for it in factories.
2. Prior to 1936, there was no law regarding the regulation of payment to workmen.

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