35. Responsibility for payment of wages :- Every employer shall be responsible for the payment by him to employees of all wages and sums, required to be paid under this Act.
36. Fixation of wage period :- (1) Every employer shall fix periods (hereinafter referred to as wage periods) in respect of which such wages shall be payable.
(2) No wage period shall exceed one month.
37. Wages for overtime work :- Where any employee in any establishment is required to work over time he shall be entitled, in respect of such over time work, to wages at twice the ordinary rate of wages:
Provided that, where the normal hours of work in an establishment are ordinarily less than eight hours a day and 48 hours a week, he shall be entitled in respect of work in excess of such normal hours upto eight hours a day and forty eight hours a week to wages at the ordinary rate of wages in respect of work in excess of eight hours a day and forty eight hours a week at twice the ordinary rate wages, in addition to the wages for the normal hours of work.
Explanation :- For the purpose of this section; the expression ordinary rates of wages shall mean such rate of wages as may be calculated in the manner prescribed.
38. Time of payment of wages :- (1) The wages of every employee shall be paid before the expiry of the fifth day after the last day of the wage period in respect of which the wages are payable.
(2) Where the service of any employee is terminated by or on behalf of the employer the wages earned by such employee shall be paid before the expiration of the second working day from the day on which his employment is terminated.
(3) The Government may, by general or special order and for reasons stated therein exempt an employer from the operation of this section in respect of the wages of any employee or class of employees to such extent and subject to such conditions as may be specified in the order.
(4) All payments of wages shall be made on a working day.
39. Wages to be paid in current coin or currency notes :- All wages shall be paid in current coin or currency notes or in both.
40. Deductions which may be made from wages :- (1) The wages of an employee shall be paid to him without deduction of any kind except those authorised by or under this Act.
Explanation :- Every payment made by an employee to the employer shall, for the purpose of this Act, be deemed to be a deduction from wages.
(2) Deductions from the wages of an employee shall be made only in accordance with the provisions of this Act and may be of the following kinds only, namely :
(a) fines and other penalties lawfully imposed;
(b) deductions for absence from duty;
(c) deductions for damages to, or loss of goods expressly entrusted to the employee for custody or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default;
(d) deductions for house accommodation provided by the employer;
(e) deductions for such amenities and services supplied by the employer as the Government may, by general or special order, authorise;
(f) deductions for recovery of advances or for adjustment of over payments of wages;
(g) deductions of income tax or profession tax payable by the employee;
(h) deductions required to be made by order of a Court or other authority competent to make such order;
(i) deductions for subscriptions to, and for repayment of advances from, any provident fund to which the Provident Funds Act, 1925 (Central Act 19 of 1925) applies or any recognised provident fund as defined in Section 2(38) of the Income Tax Act, 1961, (Central Act 43 of 1961), or any provident fund approved in this behalf by the Government during the continuance of such approval;
(j) deductions for payments to co-operative societies approved in this behalf by the Government or any officer authorised by them in this behalf or to a scheme of insurance maintained by the Indian Post Office or the Life Insurance Corporation of India established under Life Insurance Corporation Act, 1956, (Central Act 31 of 1956).
(k) deductions made with the written authorisation of the employee in furtherance of any savings scheme approved by the Government or the purchase of securities of the Central or State Government.
41. Fines :- (1) No fine shall be imposed on any employee save in respect of such acts and omissions on his part as the employer, with previous approval of the Government or of the prescribed authority may have specified by notice under sub section (2).
(2) A notice specifying such acts and omissions shall be exhibited in the prescribed manner on the premises in which the employment is carried on.
(3) No fine shall be imposed on any employee until he has been given an opportunity of showing cause against the fine or otherwise than in accordance with such procedure as may be prescribed for the imposition of fines.
(4) The total amount of fine which may be imposed in any one wage period on any employee shall not exceed an amount equal to three paise in the rupee of the wages payable to him in respect of that wage period.
(5) No fine shall be imposed on any employee who has not completed the age of fifteen years.
(6) No fine imposed on any employee shall be recovered from him after the expiration of sixty days from the day on which it was imposed.
(7) Every fine shall be deemed to have been imposed on the day of the act or omission in respect of which it was imposed.
(8) All fines and all realisations thereof shall be recorded in a register to be kept by the employer in such form as may be prescribed; and all such realisation shall be applied only to such purposes beneficial to the employees in the establishment as are approved by the prescribed authority.
Explanation :- When the employees are only part of a staff employed under the same management, all such realisations may be credited to a common fund maintained for the staff as a whole, provided that the fund shall be applied only to such purposes as are approved by the prescribed authority.
42. Deductions for absence from duty :- (1) Deductions may be made under Clause (b) of sub section (2) of Section 40 only on account of the absence of an employee from the place or places where, by the terms of his employment, he is required to work, such absence being for the whole or any part of the period during which he is so required to work.
(2) The amount of such deduction shall in no case bear to the wages payable to the employee in respect of the wage period for which the deduction is made, a larger proportion than the period for which he was absent bears to the total period, within such wage period during which by the terms of his employment, he was required to work:
Provided that, subject to any rules made in this behalf by the Government, if ten or more employees acting in concert absent themselves without due notice, that is to say, without giving the notice which is required under the terms of their contract of employment and without reasonable cause, such deduction from any such employee may include such amount not exceeding his wages for four days as may by any such terms be due to the employer in lieu of due notice.
Explanation :- For the purpose of this section, an employee shall be deemed to be absent from the place where he is required to work, if, although present in such place 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.
43. Deductions for damage or loss :- (1) A deduction under Clause (c) of sub section (2) of Section 40 shall not exceed in respect of the damage of goods, one half of the amount of such damage and in respect of loss of goods or money, the amount of such loss caused to the employer by negligence or default of the employee and shall not be made until the employee has been given an opportunity of showing cause against the deduction, or otherwise than in accordance with such procedure as may be prescribed for the making of such deductions.
(2) All such deductions and all realisations thereof shall be recorded in a register to be kept by the employer in such form as may be prescribed.
44. Deductions for services rendered :- A deduction under Clause (d) or Clause (e) of sub section (2) of Section 40 shall not be made from the wages of an employee unless the house accommodation, amenity or service has been accepted by him as a term of employment or otherwise, and such deduction shall not exceed an amount equivalent to the value of the house accommodation, amenity or service supplied and in the case of a deduction under the said Clause (e), it shall be subject to such conditions, as the Government may impose.
45. Deductions for recovery of advances :- Deductions under Clause (f) of sub section (2) of Section 40 shall be subject to the following conditions namely :
(a) recovery of an advance of money given before employment began shall be made from the first payment of wages in respect of a complete wage period, but no recovery shall be made of such advance given for travelling expenses;
(b) recovery of advances of wages not already earned shall be subject to any rules made by the Government regulating the extent to which such advances may be given and the instalments by which they may be recovered.
46. Deductions for payments to Co operative Societies and Insurance Schemes, etc.:- Deductions under Clause (j) and Clause (k) of sub section (2) of Section 40 shall be subject to such conditions as the Government may impose.
47. Conditions for terminating the services of an employee, payment of service compensation for termination, retirement, resignation, disablement, etc., and payment of subsistence allowance for the period of suspension :- (1) No employer shall, without a reasonable cause terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee atleast one month s notice in writing or wages in lieu thereof and in respect of an employee who has been in his employment continuously for a period of not less than one year, a service compensation amounting to fifteen days average wages for each year of continuous employment:
Provided that every termination shall be made by the employer in writing and a copy of such termination order shall be furnished to the Inspector having jurisdiction over the area within three days of such termination.
(2) The services of an employee shall not be terminated by the employer when such employee made a complaint to the Inspector regarding the denial of any benefit accruing to him under any labour welfare enactment applicable to the establishment and during the pendency of such complaint before the Inspector. The services of an employee shall not also be terminated for misconduct except for such acts or omission and in such manner as may be prescribed.
(3) Every employee who has put in a continuous service of not less than one year shall be eligible for service compensation amounting to fifteen days average wages for each year of continuous employment, (i) on voluntary cessation of his work after completion of 60 years of age, (ii) on his resignation, or (iii) on physical or mental infirmity duly certified by Registered Medical Practitioner, or (iv) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of one year shall not be necessary where the termination of the employment of an employee is due to death or disablement:
Provided further that in a case of death of an employee service compensation payable to him shall be paid to his nominee or if no nomination has been made to his legal heir.
(4) Where a service compensation is payable under this section to an employee, he shall be entitled to receive his wages from the date of termination or cessation of his services until the date on which the service compensation so payable is actually paid.
(5) The payment of service compensation under this section shall not apply in cases where the employee is entitled to gratuity under the Payment of Gratuity Act, 1972 (Central Act 39 of 1972) and gratuity has been paid accordingly consequent on the termination or cessation of service.
(6) Where an employee is placed under suspension pending enquiry into grave misconduct the employer shall pay a subsistance allowance equivalent to fifty per cent of the last drawn wage for the first six months and at seventy five per cent of the last drawn wage beyond six months during the period of suspension. The total period of suspension shall not however exceed one year in any case. If the misconduct is not established or the total period of suspension exceeds one year, the employee shall be entitled to full wages during suspension period and the period of suspension shall be treated as on duty.
Explanation :- (1) For the purpose of this section :
(a) the term employee shall include part time employee also;
(b) the expression average wages means the daily average of wages for the days an employee actually worked during the thirty days immediately preceding the date of termination or cessation of service;
(c) the expression wages does not include over time wages;
(d) an employee in an establishment shall be deemed to have been in continuous employment for a period of not less than six months if he has worked for not less than one hundred and twenty days in that establishment within a period of six months immediately preceding the date of termination or cessation of the service of that employee.
(e) where the total continuous employment is for a fraction of a year or extends over a fraction of a year in addition to one or more completed years of continuous employment, such fraction, if it is not less than a half year shall be counted as a year of continuous employment in calculating the total number of years for which the service compensation is to be given;
(f) the service compensation of an employee whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of property belonging to the employer, shall be forfeited to the extent of the damage or loss caused;
(g) disablement means such disablement which incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) An employee who has completed the age of sixty years or who is physically or mentally unfit having been so declared by a Registered Medical Practitioner or who wants to retire on medical grounds or to resign his service may give up his employment after giving to his employer notice of atleast fifteen days and where no such notice is given, the service compensation payable to him shall be forfeited to the extent of fifteen days in lieu of the notice.
48. Appointment of authority to hear and decide appeals arising out of termination of services :- (1)(a) The Chief Inspector may, by notification, appoint for any area as may be specified therein, any authority to hear and decide appeals arising out of the termination of service of employees under Section 47:
Provided that the Chief Inspector may on administrative grounds transfer any appeal arising in the territorial jurisdiction of any authority to the file of another authority for disposal, and such authority to whom the appeal is transferred by the Chief Inspector shall dispose of the appeal so transferred.
(b) Any employee whose services have been terminated may, appeal to the authority concerned within such time and in such manner as may be prescribed.
(2) The appellate authority may, after inquiry in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case:
Provided that the authority concerned shall, without delay, hear such appeal and pass such orders within a period of three months from the date of receipt of such appeal:
Provided further that where any such authority considers it necessary or expedient so to do, it may, for reasons to be recorded in writing, extend such period by such further period as it may think fit:
Provided also that no proceedings before such authority shall lapse merely on the grounds that any period specified in this sub section had expired without such proceedings being completed.
(3) Against any decision of the authority under sub section (2), a second appeal shall lie to such authority as may be notified by the Government within thirty days from the date of communication of the decision and the decision of such authority on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that authority:
Provided that the second appeal shall not be entertained unless the employer deposits the entire amount of back wages as ordered by the appellate authority under sub section (2) or the amount of compensation ordered as the case may be:
Provided further that if the second appeal is against the order of reinstatement given by the appellate authority under sub section (2), the employee shall be entitled to wages last drawn by him during the pendency of the proceedings before appellate authority.
(4) Where in any case, an appellate authority by its award directs reinstatement of any employee and the employer challenges such award in any Court of Law, the employer shall be liable to pay such employee during the pendency of such proceedings, full wages last drawn by him, if the employee had not been employed in any establishment during such period and an affidavit by such employee had been filed to that effect in such Court:
Provided that where it is proved to the satisfaction of the Court that such employee has been employed and has been receiving remuneration during any such period or part thereof the Court shall order that no wage shall be payable under this section for such period or part, as the case may be.
(5) Any amount directed to be paid under this section may be recovered :
(a) if the authority appointed under sub section (1) 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.
49. Notice and payment of service compensation to employees in the case of transfer of establishment :- Where the ownership or management of an establishment is transferred, whether by agreement or by operation of law, from the employer in relation to that establishment to a new employer every employee who has been in continuous employment for not less than six months in that establishment immediately before such transfer shall be entitled to the notice and the service compensation in accordance with the provisions of sub section (1) of Section 47:
Provided that nothing in this section shall apply to an employee in any case where there has been a change of employers by reason of the transfer, if
(a) the employment of the employee has been interrupted by such transfer;
(b) the terms and conditions of employment applicable to the employee after such transfer are not in any way less favourable to the employee than those applicable to him immediately before such transfer; and
(c) the new employer is under the terms of such transfer or otherwise, legally liable to pay to the employee in the event of termination of his services, service compensation on the basis that his employment has been continued and has not been interrupted by the transfer.
