UNIT VI: CODE ON WAGES, 2019

I. INTRODUCTION.....................................................................................................................2
II. DIFFERENCE BETWEEN CODE ON WAGES, 2019 AND MINIMUM WAGE ACT.........2
III. APPLICABILITY OF CODE ON WAGES, 2019................................................................2
IV. MINIMUM WAGES- AN ABSOLUTE OBLIGATION......................................................2
A. Difference between forced labour and bonded labour............................................................3
B. Cases on the proposition: minimum wages have to be paid mandatorily, Minimum wages do
not violate Article 19 (IMPORTANT FOR EXAM).....................................................................3
C. Section 5 of the Code on Wages, 2019: Payment of minimum wages...................................5
V. WHEN CAN AN EMPLOYER NOT PAY MINIMUM WAGES?...........................................5
VI. FIXATION OF MINIMUM WAGES....................................................................................6
A. What are the factors that are relevant to decide the minimum wage?....................................6
B. Aykroyd Model ....................................................................................................................6
C. Consumer Price Index (CPI)..................................................................................................8
VII. REVISION OF MINIMUM WAGES....................................................................................9
VIII. PROCEDURE TO FIX OR REVISE MINIMUM WAGES..................................................9
IX. FLOOR WAGE...................................................................................................................10
X. MEANING OF “WAGES”......................................................................................................11
XI. TIME-BASED AND PIECE-BASED WAGES...................................................................12
XII. MINIMUM WAGE, FAIR WAGE, LIVING WAGE.........................................................12
XIII. DIFFERENCE BETWEEN SALARY, WAGES, REMUNERAION, HONORARIUM.....13
XIV. WAGE PERIOD..................................................................................................................13
XV. HOW SHOULD WAGES BE PAID?/ WITNESS DURING PAYMENT?.........................14
XVI. WHOSE LIABILITY IS IT TO PAY WAGES?..................................................................14
XVII. WHAT HAPPENS IF EMPLOYEE IS DEAD?..................................................................15
XVIII. CLAIMS:.........................................................................................................................15
XIX. MISCELLANEOUS PROVISIONS....................................................................................16
XX. MISCELLANEOUS CASE LAW PROPOSITIONS..........................................................18
A. INTRODUCTION

Two major components of wage law:

 Payment of Wages Act, 1936: Covers what kind of payment (cash/kind), what is wage period,
penalties if wage is not paid, time period within which if not paid
 Minimum Wages Act, 1948: Minimum rate of wages required to be paid.

Both of these now codified under the Code on Wages, 2019.

B. DIFFERENCE BETWEEN CODE ON WAGES, 2019 AND MINIMUM WAGE ACT

The differences are given on grounds of the 4 main objectives of the Code on Wages, 2019.

Sr Objects of the Code on Minimum Wage Act Code on Wages, 2019

No. Wages, 2019
1. To provide for fixation of More precise. Specifically Less precise. (No such
minimum wages delineated factors to be taken into list given. Appropriate
consideration by the Appropriate Government will
government for fixing minimum decide. Blanket
wages. discretion given to
Appropriate
Government).
2. To provide for periodical Periodical revision of wages every If the Appropriate
revision of minimum wages 5 years. Government is of the
fixed, opinion that the
condition of the
workers require
revision in wages
before 5 years, then it
can do so.
3. To provide for summary Rigid and delayed procedure for Summary procedure for
procedure for recovery of recovery of the balance of unpaid recovery of the balance
the balance. wages. of unpaid wages.
4. To provide for the The committees were appointed Now the committees
appointment of the on an ad-hoc basis are permanent.
Advisory Committee and
Advisory Boards, having
equal representatives of
employers and workers.

C. APPLICABILITY OF CODE ON WAGES, 2019

Code on Wages is applicable to all “employees”, not “workmen”. You may or may not be workmen.
Even if you are a supervisor, manager, you can still claim rights under this Code.

D. MINIMUM WAGES- AN ABSOLUTE OBLIGATION

 If minimum wages not paid, it is an offence under wage law as well as a violation of Article 24 of the
Constitution of India, 1950 which prohibits forced labour. Thus, labour without minimum wages
being paid = Forced labour. Waiver of Fundamental Rights not possible unless parliament makes a
law to that effect.

Commercial hardship/Losses in business is NOT an acceptable excuse for non-payment of minimum

wages. (So COVID excuse- Nope! Not allowed)

In such an event, the employer has to shut down his establishment. No one can be employed below
minimum wages. Consent of employee cannot be a defence.

E. Difference between forced labour and bonded labour

Forced labour:
Requiring a person to work against his will is forced labour. Even if proper wages are
paid/double wages are paid, forced labour can happen. Payment of wages is not a criteria to
determine whether or not there is forced labour.

Example: Factory worker being compelled to work overtime. Employer agrees to pay double
rate of wages for overtime work. But since it is against the worker’s will, it is forced labour.

Bonded labour:

Existence of some kind of debt is a pre-requisite. (Only when there is a debt, there can be a
bond and thus, bonded labour)

The debt need not be a legally enforceable debt.

There may/may not be payment of wages. Not a criteria under this either.

Example: Slavery may be forced labour or bonded labour. For example: You purchase a
slave. No debt. Then forced labour. But you make someone your slave because he owes you
money (debt)- bonded labour.

F. Cases on the proposition: minimum wages have to be paid mandatorily, Minimum

wages do not violate Article 19 (IMPORTANT FOR EXAM)

i. Workmen of Raptakos Brett and Co Ltd v. Management

Issue to be decided: Whether minimum wage law is a violation of Article 19(1)(g), 14, 21 of
Constitution?

Contentions: It is arbitrary. Unreasonable because you cannot enter into agreement for lesser
than minimum wages which is entered into with consent. The government should not interfere
in private agreements between employer and employee.

Contentions: State has a duty to ensure public interest (DPSP). So they can interfere. The
agreement will be against public policy because it will be forced labour. India is a country
where people are ready to serve for starving wages. Thus, minimum wages necessary.

Supreme Court: Wages must be determined by collective bargaining. (So the employee also
has a voice). Collective bargaining: Substantial number of workmen / the backing of trade
union required to negotiate wages. Thus, individual cannot change that wage.
 (Just in case Sir asks your opinion on whether minimum wages serves social justice. Answer
is NO. Because they are way too less and really don’t help with sustenance)

ii. Bakshish Singh v. Darshan Engineering Works

Supreme Court: If you cant pay minimum wages, close your establishment.

iii. Sangam Press v. Workmen

Supreme Court: Financial hardship/capacity of employer is not relevant.

For wages, financial capacity of employer may be relevant to fix fair wages. BUT not for
minimum wages.
Minimum wage is the absolute wage required to be paid.

iv. Wool Combers of India v Workers Union

Supreme Court: Minimum wages is an ABSOLUTE obligation. Even during winding up, it has to be
paid.
 v. U. Unichoyi v. State of Kerala

Can minimum wages be considered to be in violation of Article 19(1)(g)?

NO. Minimum wages is necessary in fact to fulfil the commitments made by the Constitution.
Exceptions carved out to payment of minimum wages will be in contravention with the Constitution.
Moreover, Section 19(6) carves out exceptions to the right to business. So even if the business has to
close down because it cannot pay minimum wages, minimum wages cannot be considered to be
violative of Article 19(1)(g).

G. Section 5 of the Code on Wages, 2019: Payment of minimum wages

“5. No employer shall pay to any employee wages less than the minimum rate of wages notified by the
appropriate Government.”
If not paid, then forced labour.

vi. Bandhua Mukti Morcha v. Union of India

Supreme Court:

This ratio is not applicable for piece-rated wages. (Because piece-rated wages are given on the basis
of production itself).

vii. Kanta Devi Electric Consumption and Equipment Co Ltd v. Authority Under Minimum Wage
Act

Supreme Court:

Does not matter if you are skilled/unskilled, minimum wages have to be given. If new categories
allowed, then it will open a pandoras box.

H. WHEN CAN AN EMPLOYER NOT PAY MINIMUM WAGES?

When Establishment has been exempted from applicability of Minimum Wages Act. Ex: Veena
refinery in MP.

Minimum Wages and Payment of Wages Act applies only to:

  Approx 45 Scheduled employments in Central list
 Approx 1200 Scheduled employments in State list

So all unscheduled employments exempted.

Both acts are primarily designed for the purposes of industrial establishments. So establishments
whose working conditions are already taken care of by other legislations are not scheduled under the 2
Acts. Ex: PSU has its own regulations. Then the 2 Acts do not apply. (If there are any statutory
rules/legislation/regulations for an organisation that takes care of wages, then these 2 Acts not
applicable). For ex: Central Civil Service Rules- Central Government- So these 2 Acts don’t apply.
(These rules are also based on the Pay Commission).

viii. Himanshu Kumar Vidyarthi v. State of Bihar: (He said this is not an imp case)

Supreme Court: Industrial laws do not apply to the employees whose service conditions are governed
by statutory rules.

I. FIXATION OF MINIMUM WAGES

A. What are the factors that are relevant to decide the minimum wage?

i. Locality- Relevant because of transport allowance

ii. Skilled/Unskilled/Semi-skilled labour
iii. Nature of work
iv. Number of hours required to be dedicated
v. Total workforce required to be obtained for that work
vi. Hazardous work-probability of disease/injury?
vii. Physical force required to be applied
viii. Working conditions
ix. Rest break requirements

No straighjacket formula/fixed criteria. Different criteria relevant for different kind of work. So the
criteria changes for different kinds of work.

B. Aykroyd Model

In India, minimum wages are determined on the basis of the Aykroyd Model. Professor
Aykroyd was a professor of economics. He developed this model to determine minimum
wages. In 1957, this model was accepted by the Indian Labour Conference. It was kind of a
tripartite consultation organised to ease the disputes between the employer and employee.
Government, Employer, Employee- Kind of Tripartite consultation. Purpose of the
conference: All industrial disputes must be settled. Government acted as facilitator to develop
a consensus between employer and employee. No agreement. But principles adopted at this
conference with respect to various subjects like wages, provident fund, etc. It is NOT a
binding agreement. Whatever happened in that conference were only principles/guidelines.

Note the Aykroyd model given in the image below:

 These 1957 principles are taken into consideration by the appropriate government to determine
minimum wages. Private establishments also bound by the minimum wages.

When minimum wages are being determined, a family of four is taken into consideration.
Minimum wage takes into account male earner only. Female is not considered to be head of
the family/earner.

(a) 2700 calories x 4

(2700 calories considered for children as well)

(b) 72 yards per annum for the family

(c) Industrial Housing scheme: Schemes that provide housing accommodation for particular
kinds of workmen in industrial occupation. Rent being charged to them will be considered
to be the minimum rent.
(d) 20% of (a +b + c+ d) = d. See an example of the calculation below.

So (d) basically comes down to 25% of (a + b +c).

ix. Raptakos Brett and Co v Its Workmen:

 In the Raptakos case, they agree with the 25% of (a + b + c) formula. In the case given in the
screenshot above, the phrase “total minimum wages” refers to a + b + c only. NOT (a + b + c
+ d).

C. Consumer Price Index (CPI)

It reflects the cost of calories, clothing, electricity. As the CPI increases, dearness allowance
increases. Dearness allowance: Allowance given to employee to sustain expenditures. Revision of
wages depends on CPI.

Section 6 of the Code on Wages, 2019: Fixation of minimum wages

”6. (1) Subject to the provisions of section 9, the appropriate Government shall fix the minimum rate
of wages payable to employees in accordance with the provisions of section 8.

(2) For the purposes of sub-section (1), the appropriate Government shall fix a minimum rate of
wages–(a) for time work; or

(b) for piece work.

(3) Where employees are employed on piece work, for the purpose of sub-section (1), the appropriate
Government shall fix a minimum rate of wages for securing such employees a minimum rate of wages
on a time work basis.

(4) The minimum rate of wages on time work basis may be fixed in accordance with any one or more
of the following wage periods, namely:––

(i) by the hour; or

(ii) by the day; or

(iii) by the month.

(5) Where the rates of wages are fixed by the hour or by the day or by the month, the manner of
calculating the wages shall be such, as may be prescribed.

(6) For the purpose of fixation of minimum rate of wages under this section, the appropriate
Government,—

(a) shall primarily take into account the skill of workers required for working under the categories of
unskilled, skilled, semi-skilled and highly-skilled or geographical area or both; and

(b) may, in addition to such minimum rate of wages for certain category of workers, take into account
their arduousness of work like temperature or humidity normally difficult to bear, hazardous
occupations or processes or underground work as may be prescribed by that Government; and

(c) the norms of such fixation of minimum rate of wages shall be such as may be prescribed.

(7) The number of minimum rates of wages referred to in sub-section (6) may, as far as possible, be
kept at minimum by the appropriate Government.”

x. Jaydip Industries v. Workmen

Industrial Tribunal can award higher wages than the minimum wages fixed by the government if the
circumstances call for it. NOTE: If you are asked, can the Industrial Tribunal prescribe minimum
wages? The answer is NO. The Industrial Tribunal is awarding these wages as “fair wages”, and not
 “minimum wages”. The recourse to Industrial Tribunal for fair wages is however, not ordinary and
must be exercised in exceptional circumstances. This case was exceptional.

D. REVISION OF MINIMUM WAGES

After 5 years, revision of wages for governmental, or even non-governmental employees is

MANDATORY. However, this does not apply when organisation has provisions regarding annual
increment or performance linked bonus. So, 5 year revisions compulsory for those workers who work
under the same wages for 5 years.

Meaning of revision: Circumstances of work like working conditions remain the same, only wages
change. If circumstances of employment like nature of work/wage period changes, then it is not
revision. It is a fixed determination/fixation. Revision can lead to increase or decrease wages.

E. PROCEDURE TO FIX OR REVISE MINIMUM WAGES

There are 2 methods to decide minimum wages:

1. Committee Method: Appropriate gov constitutes committee. Committee decides minimum

wage by looking at all relevant factors.

Committee method generally used when the number of workers in that employment are very
less. For ex: Some Textile machines required to be used by engineers. 50-60 workers using
that machine in a state. Then Committee method.

2. Proposal Method: Appropriate gov publishes proposal of wages and objections are called for
from stakeholders.

Large number of workers affected. Different geographical territories have to be taken into
consideration. In such cases, proposal method. Then for different geographical territories,
different rates given within the State as well. This is a time-taking process.

Section 8 of the Code on Wages, 2019

 8. (1) In fixing minimum rates of wages for the first time or in revising minimum rates of wages under
this Code, the appropriate Government shall either—

(a) appoint as many committees as it considers necessary to hold enquiries and recommend in respect
of such fixation or revision, as the case may be; or

(b) by notification publish its proposals for the information of persons likely to be affected thereby
and specify a date not less than two months from the date of the notification on which the proposals
shall be taken into consideration.

(2) Every committee appointed by the appropriate Government under clause (a) of sub-section (1)
shall consist of persons––

(a) representing employers;

(b) representing employees which shall be equal in number of the members specified in clause (a);
and

(c) independent persons, not exceeding one-third of the total members of the committee.

(3) After considering the recommendation of the committee appointed under clause (a) of sub-section
(1) or, as the case may be, all representations received by it before the date specified in the
notification under clause (b) of that sub-section, the appropriate Government shall by notification fix,
or as the case may be, revise the minimum rates of wages and unless such notification otherwise
provides, it shall come into force on the expiry of three months from the date of its issue:

Provided that where the appropriate Government proposes to revise the minimum rates of wages in
the manner specified in clause (b) of sub-section (1), it shall also consult concerned Advisory Board
constituted under section 42.

(4) The appropriate Government shall review or revise minimum rates of wages ordinarily at an
interval not exceeding five years.

F. FLOOR WAGE

Section 9:

Brand new provision. Was not there in the Minimum Wages Act.

9. (1) The Central Government shall fix floor wage taking into account minimum living standards of
a worker in such manner as may be prescribed:

Provided that different floor wage may be fixed for different geographical areas.

(2) The minimum rates of wages fixed by the appropriate Government under section 6 shall not be
less than the floor wage and if the minimum rates of wages fixed by the appropriate Government
earlier is more than the floor wage, then, the appropriate Government shall not reduce such minimum
rates of wages fixed by it earlier.
 (3) The Central Government may, before fixing the floor wage under sub-section (1), obtain the
advice of the Central Advisory Board constituted under sub-section (1) of section 42 and consult State
Governments in such manner as may be prescribed.

G. MEANING OF “WAGES”

Section 2(y) of the Code on Wages, 201: Definition of Wages

"wages means all remuneration whether by way of salaries, allowances 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 includes—

(i) basic pay;

(ii) dearness allowance; and

(iii) retaining allowance, if any,

but does not include––

(a) any bonus payable under any law for the time being in force, which does not form part of the
remuneration payable under the terms of employment;

[Bonus is not a right of the employee]

(b) 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 appropriate Government;

(c) any contribution paid by the employer to any pension or provident fund, and the interest which
may have accrued thereon;

[Equal contribution has to be made by employer and employee towards pension, provident fund. This
clause only excludes contribution made by the employer. Therefore, employee’s contribution is
covered within the ambit of wages]

(d) any conveyance allowance or the value of any travelling concession;

[Travelling allowance is not wages because it is a kind of reimbursement based on actual expenses
incurred by the employee]

(e) any sum paid to the employed person to defray special expenses entailed on him by the nature of
his employment;

[This is also a reimbursement for actual expenses incurred]

(f) house rent allowance;

(g) remuneration payable under any award or settlement between the parties or order of a court or
Tribunal;

(h) any overtime allowance;

 [Wages is something that is paid ordinarily. Overtime allowance only if work is done overtime. Given
at twice the rate of wages]

(i) any commission payable to the employee;

(j) any gratuity payable on the termination of employment;

[Until you have served for 5 years, you are not entitled to gratuity. Also gratuity is given after
termination. So employer-employee relationship does not exist anymore. Thus, not wages]

(k) any retrenchment compensation or other retirement benefit payable to the employee or any ex
gratia payment made to him on the termination of employment:

Provided that, for calculating the wages under this clause, if payments made by the employer to the
employee under clauses (a) to (i) exceeds one-half, or such other per cent. as may be notified by the
Central Government, of the all remuneration calculated under this clause, the amount which exceeds
such”

Festival gifts is not a part of the wages. If it is a “gift”. Then no wages. Facilities provided by the
employer ex: Canteen facility. Not a part of wages UNLESS prescribed so earlier.

H. TIME-BASED AND PIECE-BASED WAGES

1. Time-based wages: Given as per the time you spend in the employment. Time based wages
are given irrespective of how much production is made in that time.

2. Production based wages/Piece-rate wages: Given as per the quantum of production produced
by the employee. Quality of the production also relevant.
For ex: 1 kgm of raw material produced/ 2 beedhi rolls made—then wages; Dibrugarh
Assam-oil extraction facility of ONGC. Per barrel wages.
Even for such wages, there is a minimum wage (so basically the minimum wage + wage determined
as per the production will be given) This minimum wage is generally lesser than the minimum wage
of time-period based wages. In case of production based wages/piece rated wages, generally no
compulsion that you have to be in the factory premises. That is an advantage for piece-rated.
I. MINIMUM WAGE, FAIR WAGE, LIVING WAGE

Fair wage: Those wages paid by employer to employee, above minimum wages, as agreed between
the employer and the employee. Includes provisions for children’s education, recreational facilities,
etc

Living wage: Even higher than fair wage. Comfort allowance, Pension, gratuity, etc. Major part of
living wage is what comes after retirement.
 In India, there is no statutory formula or case law through which we can distinguish between fair
wage and living wage. In developed countries like US, UK, European Union, Germany, Scandinavian
countries, there is no concept of minimum wage. They only have fair wages and living wages.

In India, there is no statutory provision for fair wage or living wage. We only have a provision for
minimum wages which are revised every 5 years. However, there are some parts of living wage which
have been made available to employees. Ex: Pension, gratuity, social security measures. (New
Pension scheme is not included in living wage. Because now the employee has to contribute towards
it. The moment there is some contribution from the employee, it is NOT a part of wage)

How to distinguish between the 3:

Social security facilities—Living wage

Child education and recreational facilities--Fair wage

Everything lesser than that—Minimum wage

J. DIFFERENCE BETWEEN SALARY, WAGES, REMUNERAION, HONORARIUM

 Wages is a broader term than Salary.

 Wages is a broader term than Renumeration.

Salary: Periodical payment after completion of wage period.

Wages: Includes salary, but excludes HRA (which is a part of salary). Wage is a broader term than
salary.

Meaning of remuneration: Amount that you can claim as a matter of right and regularly. Not required
to be continuous/periodical. For ex: Payment made to Casual employee will be renumeration and not
salary

Difference between Renumeration and Honorarium: Renumeration: there is engagement between the
employer and employee. Employer controls the employee. Employee agrees with this control.
Honorarium: no engagement.

K. WAGE PERIOD

Wages can be drawn daily, hourly, weekly, fortnightly or monthly. These are called as wage period.
Period of time after which employee/workmen is entitled to draw wages= Wage period
Salary always has to come within 7 days of a month because 7 days is considered to be the maximum
period within which wages must be paid where the wage period is monthly. Where wage period is
 hourly- it has to be paid on the same day. Daily- next day. Weekly-after 2 days Fortnightly-after 3
days. But bank employees get salary before. But no other employee can draw salary before wage
period.

In every kind of wage period, there is a minimum period for which the worker has to work to draw
any kind of compensation. Ex: Daily wage period. Then suppose minimum period to be entitled to
draw wages: 2 hours. So proportionately for 2 hours work, he will get wages if he leaves after those 2
hours. If he works for lesser than 2 hours, then no wages at all. If he works full day, only then full
compensation.

Section 16 of the Code on Wages, 2019- Fixation of wage period

16. The employer shall fix the wage period for employees either as daily or weekly or fortnightly or
monthly subject to the condition that no wage period in respect of any employee shall be more than a
month:

Provided that different wage periods may be fixed for different establishments.

Section 17 of the Code on Wages, 2019

17. (1) The employer shall pay or cause to be paid wages to the employees, engaged on—

(i) daily basis, at the end of the shift;

(ii) weekly basis, on the last working day of the week, that is to say, before the weekly holiday;

(iii) fortnightly basis, before the end of the second day after the end of the fortnight;

(iv) monthly basis, before the expiry of the seventh day of the succeeding month.

(2) Where an employee has been—

(i) removed or dismissed from service; or

(ii) retrenched or has resigned from service, or became unemployed due to closure of the
establishment, the wages payable to him shall be paid within two working days of his removal,
dismissal, retrenchment or, as the case may be, his resignation.

(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), the appropriate
Government may, provide any other time limit for payment of wages where it considers reasonable
having regard to the circumstances under which the wages are to be paid.

(4) Nothing contained in sub-section (1) or sub-section (2) shall affect any time limit for payment of
wages provided in any other law for the time being in force.

L. HOW SHOULD WAGES BE PAID?/ WITNESS DURING PAYMENT?

Fixed percentage of wages will be paid in cash and the other in kind. BUT this is possible only if the
employee agrees to this. Payment of wages can be claimed as a matter of right by the employee. But
the payment of wages in kind CANNOT be claimed as a matter of right by the employee.

Direct Benefit Transfer: Funds can be transferred electronically for wages. No limit is prescribed
though for how much to give electronically. Cash payment is also permitted. But Pay slips have to be
 issued in duplicate and an employee has to sign it. That pay slip will be the proof that wages have
been paid. Pay Slips- Date, wage period, included in the pay slip.

Section 15 of the Code on Wages, 2019- Brand New provision

15. All wages shall be paid in current coin or currency notes or by cheque or by crediting the wages
in the bank account of the employee or by the electronic mode:

Provided that the appropriate Government may, by notification, specify the industrial or other
establishment, the employer of which shall pay to every person employed in such industrial or other
establishment, the wages only by cheque or by crediting the wages in his bank account

When wages are being paid, do we need witnesses? If contractor is paying the wages, witness is
required. But if the principal employer is paying, no witness.

M. WHOSE LIABILITY IS IT TO PAY WAGES?

Section 43: Responsibility for payment of various dues.

“43. Every employer shall pay all amounts required to be paid under this Code to every employee
employed by him:

Provided that where such employer fails to make such payment in accordance with this Code, then,
the company or firm or association or any other person who is the proprietor of the establishment, in
which the employee is employed, shall be responsible for such payment.

Explanation.––For the purposes of this section the expression "firm" shall have the same meaning as
assigned to it in the Indian Partnership Act, 1932.”

Note: When 100% employees are contract labourers, then it is outsourcing and Contract Labour Act
will not apply. When contracted activity is being carried out outside the premises of the principal
employer, then again Contract Labour Act will not apply.

Section 43 is dealing with a situation where the contract labour are working within the premises of the
principal employer. So, contractor has to pay. If contractor does not, principal employer has to. If
principal employer does not, then proprietor has to pay. In most cases, principal employer and
proprietor is the same person. (Refer to Section 20, 21 of Contract Labour Act)

N. WHAT HAPPENS IF EMPLOYEE IS DEAD?

Section 44: Payment of various undisbursed dues in case of death of employee.

“44. (1) Subject to the other provisions of this Code, all amounts payable to an employee under this
Code shall, if such amounts could not or cannot be paid on account of his death before payment or on
account of his whereabouts not being known,—

(a) be paid to the person nominated by him in this behalf in accordance with the rules made under
this Code; or

(b) where no such nomination has been made or where for any reasons such amounts cannot be paid
to the person so nominated, be deposited with the such authority, as may be prescribed, who shall
deal with the amounts so deposited in the manner as may be prescribed.
 (2) Where in accordance with the provisions of sub-section (1), all amounts payable to an employee
under this Code—

(a) are paid by the employer to the person nominated by the employee; or

(b) are deposited by the employer with the authority referred to in clause (b) of sub-section (1),

then, the employer shall be discharged of his liability to pay those amounts”

O. CLAIMS:

Individual complaints will be heard by the Inspectors appointed under the 2 Acts. NOT before
Industrial tribunal /Labour court. Industrial tribunal/Labour court may acquire jurisdiction when there
is some kind of collective dispute (dispute about hike in wages, revision of wages)

Section 45: Claims under Code and procedure thereof.

‘45. (1) The appropriate Government may, by notification, appoint one or more authorities, not below
the rank of a Gazetted Officer, to hear and determine the claims which arises under the provisions of
this Code.

(2) The authority appointed under sub-section (1), while deciding the claim under that sub-section,
may order, having regard to the circumstances under which the claim arises, the payment of
compensation in addition to the claim determined, which may extend to ten times of the claim
determined and endeavour shall be made by the authority to decide the claim within a period of three
months.

(3) If an employer fails to pay the claim determined and compensation ordered to be paid under sub-
section (2), the authority shall issue a certificate of recovery to the Collector or District Magistrate of
the district where the establishment is located who shall recover the same as arrears of land revenue
and remit the same to the authority for payment to the concerned employee.

(4) Any application before the authority for claim referred to in sub-section (1) may be filed by,––

(a) the employee concerned; or

(b) any Trade Union registered under the Trade Unions Act, 1926 of which the employee is a
member; or

(c) the Inspector-cum-Facilitator.

(5) Subject to such rules as may be made, a single application may be filed under this section on
behalf or in respect of any number of employees employed in an establishment.

(6) The application under sub-section (4) may be filed within a period of three years from the date on
which claims referred to in sub-section (1) arises:

Provided that the authority referred to in sub-section (1) may, entertain the application after three
years on sufficient cause being shown by the applicant for such delay.

(7) The authority appointed under sub-section (1) and the appellate authority appointed under sub-
section (1) of section 49, shall have all the powers of a civil court under the Code of Civil Procedure,
1908, for the purpose of taking evidence and of enforcing the attendance of witnesses and compelling
the production of documents, and every such authority or appellate authority shall be deemed to be a
 civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure,
1973.”

P. MISCELLANEOUS PROVISIONS

Section 10

10. If an employee whose minimum rate of wages has been fixed under this Code by the day works on
any day on which he was employed for a period of less than the requisite number of hours
constituting a normal working day, he shall, save as otherwise hereinafter provided, be entitled to
receive wages in respect of work done on that day, as if he had worked for a full normal working day:

Provided that he shall not be entitled to receive wages for a full normal working day,—

(i) in any case where his failure to work is caused by his unwillingness to work and not by the
omission of the employer to provide him with work; and (ii) in such other cases and circumstances, as
may be prescribed.

Section 11

11. Where an employee does two or more classes of work to each of which a different minimum rate
of wages is applicable, the employer shall pay to such employee in respect of the time respectively
occupied in each such class of work, wages at not less than the minimum rate in force in respect of
each such class.

Section 13

13. (1) Where the minimum rates of wages have been fixed under this Code, the appropriate
Government may —

(a) fix the number of hours of work which shall constitute a normal working day inclusive of one or
more specified intervals;

(b) provide for a day of rest in every period of seven days which shall be allowed to all employees or
to any specified class of employees and for the payment of remuneration in respect of such days of
rest;

(c) provide for payment for work on a day of rest at a rate not less than the overtime rate.

(2) The provisions of sub-section (1) shall, in relation to the following classes of employees apply,
only to such extent and subject to such conditions as may be prescribed, namely:—

(a) employees engaged in any emergency which could not have been foreseen or prevented;

(b) employees engaged in work of the nature of preparatory or complementary work which must
necessarily be carried on outside the limits laid down for the general working in the employment
concerned;

(c) employees whose employment is essentially intermittent;

(d) employees engaged in any work which for technical reasons has to be completed before the duty is
over; and
 (e) employees engaged in a work which could not be carried on except at times dependent on the
irregular action of natural forces.

(3) For the purposes of clause (c) of sub-section (2), employment of an employee is essentially
intermittent when it is declared to be so by the appropriate Government on the ground that the daily
hours of duty of the employee, or if there be no daily hours of duty as such for the employee, the hours
of duty normally include periods of inaction during which the employee may be on duty but is not
called upon to display either physical activity or sustained attention.

Section 14

14. Where an employee whose minimum rate of wages has been fixed under this Code by the hour, by
the day or by such a longer wage-period as may be prescribed, works on any day in excess of the
number of hours constituting a normal working day, the employer shall pay him for every hour or for
part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal
rate of wages.

Section 18: Just know that this provision provides for deductions which may be made from wages. Sir
said it is not important at all. So didn’t copy paste the section here.

Section 19: Provides for list of fines. Againt, not an important provision.

Misconduct: Activity which is not authorised by the employer, beyond the course of employment, that
causes loss to the employer, destruction of property.

Section 20-44: Not important.

Q. MISCELLANEOUS CASE LAW PROPOSITIONS

The following are some propositions that have been settled through High Court cases. Sir did not
provide for the case laws of these propositions. The propositions are provided in the slide below. The
information given by Sir on these propositions is provided below the slide.
1. It is also permissible that different rates are fixed for different activities.
2. Under the Minimum Wages Act, there was a Central Advisory Board and a State
Advisory Board. Similar in this Code as well. These advices are consultative in nature.
Government does not have to mandatorily consider it. Government’s decision
independent.
3. The District Collector passes an order to decide the wages for the daily wage earner in
that District. It is called as DCR (District Collector Rate). The minimum wages fixed by
the Code will supersede the wages fixed by the District Collector.
4. Consumer Price Index (CPI) is considered under the Code. Till now, under the Minimum
Wages Act, the cost of living index is considered. Cost of living index: Cost of bare
necessities. Now, CPI considered. Some amenities for comfort also taken into
consideration. Thus, the Code is a move towards fair wages. CPI- Price of petrol, air
conditioner also taken into consideration.
5. Under the Code and the Minimum Wages Act, Appropriate government can interfere wrt
minimum wages, but not for other things. Limited power to interfere. Even if employee
has been okay with the wages being paid, employer will be forced to change to minimum
wages.
6. Cost of living index/CPI does not have to be strictly complied with. The dearness
allowance has to change proportionately as per the Cost of living index/CPI. Not strictly.