Page 145 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes Introduction

The Payment of Wages Act, 1936 is a central legislation which has been enacted to regulate the
payment of wages to workers employed in certain specified industries and to ensure a speedy
and effective remedy to them against illegal deductions and/or unjustified delay caused in
paying wages to them. It applies to the persons employed in a factory, industrial or other
establishment or in a railway, whether directly or indirectly, through a sub-contractor. Further,
the Act is applicable to employees drawing wages up to 1600/- a month. The Central
Government is responsible for enforcement of the Act in railways, mines, oilfields and air
transport services, while the State Governments are responsible for it in factories and other
industrial establishments. The purpose of this unit is to enable the students to comprehend basic
expressions. At the end of this unit you should be able to understand various concepts regarding
the payment of wages to workers.
The Payment of Wages Act, 1936 regulates the payment of wages to certain classes of persons
employed in the industry. The scope of this act is limited to the persons drawing the earned
wages for the month, which does not exceed Rupees one thousand six hundred. The department
is enforcing this legislation to the persons employed at the registered factories.
The main object of the Act is to eliminate all malpractices by laying down the time and mode of
payment of wages as well as securing that the workers are paid their wages at regular intervals,
without any unauthorised deductions.

8.1 Definitions

Prior to 1936, there was no law regarding the regulation of payment to workmen. It was as early
as 1925 that a Private Bill called the “Weekly Payment Bill” was for the first time introduced in
the Legislative Assembly. The Bill was, however withdrawn on an assurance from the
Government that the matter was under active consideration of the Government at that time.
This was an attempt to remedy some of the evils like delay in payment of wages, non-payment
of wages, deductions made from wages on account of fines imposed by the employer etc. For the
purpose of this Act:

(a) industrial establishment means any tramway or motor omnibus service; air transport service;
dock, wharf or jetty, inland vessel mechanically propelled; mine, quarry or oilfield; plantation;
workshop or other establishment in which articles are produced, adapted or manufactured with
a view to there use, transport or sale; establishment in which any work relating to the construction,
development or maintenance of buildings, roads, bridges or canals, or relating to operations
connected with navigation, irrigation or the supply of water, or relating to the generation,
transmission and distribution of electricity or any other form of power is being carried on;

(b) wages means all remuneration’s (whether by way of salary, allowance 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, and include:

(i) any remuneration payable under any award or settlement between the parties or order of a
Court;
(ii) any remuneration to which the person employed is entitled in respect of overtime work or
holidays or any leave period;
(iii) any additional remuneration payable under the terms of employment (whether called a
bonus or by any other name);

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