Chapter IX · Code on Wages

Miscellaneous

This chapter holds the general rules that sit behind the rest of the Code. It puts the burden of proving payment of wages and bonus on the employer, voids any agreement to the extent an employee gives up dues under it, lets the Code override conflicting laws and contracts, and bars court suits for wage and bonus sums that are claimed, decided or recoverable under the Code. It also gives governments their rule-making powers and repeals the four old wage laws, while keeping notifications and orders made under them alive, so far as they do not conflict with the Code, until they are repealed.

13 sections ~9 min read Official text, PDF pp. 26–29

HR managersBusiness ownersPayroll and compliance teamsWorkers and unions

Key points

1When a claim is filed for unpaid or short-paid wages or bonus, or for unauthorised deductions, the employer has to prove the dues were paid. §59
2Any agreement in which an employee gives up wages or bonus due under the Code is void to the extent it reduces what must be paid. §60
3The Code overrides anything inconsistent in any other law, award, agreement, settlement or contract of service. §61
4No court can hear a suit for minimum wages, deductions, wage discrimination or bonus to the extent the sum is claimed, directed or decided under the Code, or could have been recovered under it. §57
5An employer charged with an offence can bring the person he says actually committed it before the court; if he proves due diligence and that the offence was committed without his knowledge, consent or connivance, that person is convicted and the employer is discharged. §63
6The Payment of Wages, Minimum Wages, Payment of Bonus and Equal Remuneration Acts are repealed, but notifications, orders and wage amounts under them continue, so far as they do not conflict with the Code, until repealed under the Code or by a Central Government notification. §69

At a glance

4Old wage laws repealedSection 69 3 years from commencementWindow to issue difficulty-removal ordersSection 68 30 days, in one or more sessionsCentral rules laid before ParliamentSection 67

Earlier law:Payment of Wages Act, 1936Minimum Wages Act, 1948Payment of Bonus Act, 1965Equal Remuneration Act, 1976

Bar of suits

In plain words

No court can hear a suit to recover minimum wages, deductions from wages, discrimination in wages or bonus, to the extent the sum claimed is the subject of a claim under section 45, has been the subject of a direction or decision under the Code, or could have been recovered under the Code.

No court shall entertain any suit for the recovery of minimum wages, any deduction from wages, discrimination in wages and payment of bonus, in so far as the sum so claimed—

(a)

forms the subject of claims under section 45;

(b)

has formed the subject of a direction under this Code;

(c)

has been adjudged in any proceeding under this Code;

(d)

could have been recovered under this Code.

Source: The Code on Wages, 2019, official gazette copy, page 26

Protection of action taken in good faith

In plain words

No suit, prosecution or other legal proceeding lies against the appropriate government or its officers for anything done, or meant to be done, in good faith under the Code.

No suit, prosecution or any other legal proceeding shall lie against the appropriate Government or any officer of that Government for anything which is in good faith done or intended to be done under this Code.

Source: The Code on Wages, 2019, official gazette copy, page 26

Burden of proof

In plain words

When a claim is filed for unpaid or short-paid wages or bonus, or for deductions the Code does not allow, the employer must prove the dues were paid.

Where a claim has been filed on account of non-payment of remuneration or bonus or less payment of wages or bonus or on account of making deductions not authorised by this Code from the wages of an employee, the burden to prove that the said dues have been paid shall be on the employer.

Source: The Code on Wages, 2019, official gazette copy, page 26

Contracting out

In plain words

Any contract or agreement in which an employee gives up the right to any amount or bonus due under the Code is void to the extent it removes or reduces the liability to pay.

Any contract or agreement whereby an employee relinquishes the right to any amount or the right to bonus due to him under this Code shall be null and void in so far as it purports to remove or reduce the liability of any person to pay such amount under this Code.

Source: The Code on Wages, 2019, official gazette copy, page 26

Effect of laws agreements, etc., inconsistent with this Code

In plain words

The Code prevails over anything inconsistent with it in any other law, award, agreement, settlement or contract of service.

The provisions of this Code shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service.

Source: The Code on Wages, 2019, official gazette copy, page 26

Delegation of powers

In plain words

The appropriate government can, by notification and on the matters and conditions it specifies, let its powers under the Code also be used by officers or authorities below it; the Central Government can also let them be used by a State Government or its officers.

The appropriate Government may, by notification, direct that any power exercisable by it under this Code shall, in relation to such matters and subject to such conditions, if any, as may be specified in the notification, be also exercisable—

(a)

where the appropriate Government is the Central Government, by such officer or authority subordinate to the Central Government or by the State Government or by such officer or authority subordinate to the State Government, as may be specified in the notification;

(b)

where the appropriate Government is a State Government, by such officer or authority subordinate to the State Government as may be specified in the notification.

Source: The Code on Wages, 2019, official gazette copy, page 26

Exemption of employer from liability in certain cases

In plain words

An employer charged with an offence can, by a complaint, have the person he says actually committed it brought before the court; once the offence is proved, if the employer proves due diligence in enforcing the Code and that the offence happened without his knowledge, consent or connivance, that person is convicted and punished as if he were the employer, and the employer is discharged.

Where an employer is charged with an offence under this Code, he shall be entitled upon complaint duly made by him, to have any other person whom he charges as the actual offender, brought before the court at the time appointed for hearing the charge; and if, after the commission of the offence has been proved, the employer proves to the satisfaction of the court—

(a)

that he has used due diligence to enforce the execution of this Code; and

(b)

that the said other person committed the offence in question without his knowledge, consent or connivance,

that other person shall be convicted of the offence and shall be liable to the like punishment as if he were the employer and the employer shall be discharged from any liability under this Code in respect of such offence:

Proviso

Provided that in seeking to prove, as aforesaid, the employer may be examined on oath, and the evidence of the employer or his witness, if any, shall be subject to cross-examination by or on behalf of the person whom the employer charges as the actual offender and by the prosecution.

Source: The Code on Wages, 2019, official gazette copy, page 26

Protection against attachments of assets of employer with Government

In plain words

Money an employer has deposited with the government as security for a government contract, and other amounts due to him under that contract, cannot be attached by a court for his debts, except debts owed to employees employed in connection with that contract.

Any amount deposited with the appropriate Government by an employer to secure the due performance of a contract with that Government and any other amount due to such employer from that Government in respect of such contract shall not be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the employer other than any debt or liability incurred by the employer towards any employee employed in connection with the contract aforesaid.

Source: The Code on Wages, 2019, official gazette copy, page 27

Power of Central Government to give directions

In plain words

The Central Government can give directions to a State Government for carrying out the Code in that State, and the State must follow them.

The Central Government may, for carrying into execution of the provisions of this Code in the State give directions to the State Government, and the State Government shall abide by such directions.

Source: The Code on Wages, 2019, official gazette copy, page 27

Saving

In plain words

Nothing in the Code affects the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 or the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948, or any scheme made under them.

Nothing contained in this Code shall be deemed to affect the provisions of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 and the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948, or of any scheme made thereunder.

Source: The Code on Wages, 2019, official gazette copy, page 27

Power of appropriate Government to make rules

In plain words

The appropriate government can make rules to carry out the Code after first publishing them in draft, and the Central Government makes the rules on how the floor wage is fixed, how States are consulted on it, and several bonus calculations; Central rules go before Parliament for 30 days and State rules before the State Legislature.

(1)

The appropriate Government may, subject to the condition of previous publication, make rules for carrying out the provisions of this Code.

(2)

In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:––

(a)

the manner of calculating the wages under sub-section (4) of section 6;

(b)

the arduousness of work to be taken into account in addition to minimum rate of wages for certain category of workers under clause (b) of sub-section (6) of section 6;

(c)

the norms under clause (c) of sub-section (6) of section 6;

(d)

the cases and circumstances in which an employee employed for a period of less than the requisite number of hours shall not be entitled to receive wages for a full normal working day, under section 10;

(e)

the extent and conditions, which shall apply in relation to certain classes of employees under sub-section (2) of section 13;

(f)

the longer wage period for fixation of minimum rate of wages as referred to in section 14;

(g)

the manner of deducting loans made from any fund constituted for the welfare of labour under sub-clause (ii) of clause (f) of sub-section (2) of section 18;

(h)

the manner of recovery of excess of amount under sub-section (4) of section 18;

(i)

the authority to provide approval for imposition of fine under sub-section (1) of section 19;

(j)

the manner of exhibition of the acts and omissions to be specified in the notice under sub-section (2) of section 19;

(k)

the procedure for the imposition of fines under sub-section (3) of section 19;

(l)

the form of the register to record all fines and all realisations thereof under sub-section (8) of section 19;

(m)

the procedure for making deductions for absence from duty under sub-section (2) of section 20;

(n)

the procedure for making deductions for damage or loss under sub-section (2) of section 21;

(o)

the form of the register to record all deductions and all realisations thereof under sub-section (3) of section 21;

(p)

conditions for recovery of advance of money given to an employee after the employment began under clause (b) of section 23;

(q)

conditions for recovery of advances of wages to an employee not already earned under clause (c) of section 23;

(r)

deductions for recovery of loans and the rate of interest payable thereon under section 24;

(s)

the manner of regulating the procedure by the Central Advisory Board and the State Advisory Board, including that of the committees and sub-committees constituted by the State Advisory Board, under sub-section (10) of section 42;

(t)

the terms of office of members of the Central Advisory Board, the State Advisory Board, including that of the committees and sub-committees constituted by the State Advisory Board, under sub-section (11) of section 42;

(u)

the authority and manner of depositing with such authority, various undisbursed dues under clause (b) of sub-section (1) of section 44;

(v)

the form of single application in respect of a number of employees under sub-section (5) of section 45;

(w)

the form for making an appeal to the appellate authority under sub-section (1) of section 49;

(x)

the manner of maintenance of a register by the employer under sub-section (1) of section 50;

(y)

the form and manner of issuing wage slips under sub-section (3) of section 50;

(z)

the other powers to be exercised by the Inspector-cum-Facilitator under sub-section (5) of section 51;

(za)

the manner of imposing fine under sub-section (1) of section 56;

(zb)

the manner of composition of offence by a Gazetted Officer specified under sub-section (4) of section 56;

(zc)

any other matter which is required to be, or may be, prescribed under the provisions of this Code.

(3)

The Central Government may, subject to the condition of previous publication, make rules for,—

(a)

the manner of fixing floor wage under sub-section (1) of section 9;

(b)

the manner of consultation with State Government under sub-section (3) of section 9;

(c)

the manner of making set on or set off for the sixth accounting year under clause (i) of sub-section (7) of section 26;

(d)

the manner of making set on or set off for the seventh accounting year under clause (ii) of sub-section (7) of section 26;

(e)

the manner of calculating gross profit under clauses (a) and (b) of section 32;

(f)

such further sums in respect of employer under clause (c) of section 34;

(g)

the manner of utilising the excess of allocable surplus to be carried forward for being set on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year under sub-section (1) of section 36;

(h)

the manner of utilising the minimum amount or the deficiency to be carried forward for being set off in the succeeding accounting year and so on up to and inclusive of the fourth accounting year under sub-section (2) of section 36; and

(i)

the manner of holding an enquiry under sub-section (1) of section 53.

(4)

Every rule made by the Central Government under this section shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions as aforesaid, both Houses agree in making any modification in the rule or both Houses agree that rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or amendment shall be without prejudice to the validity of anything previously done under that rule.

(5)

Every rule made by the State Government under this section shall, as soon as possible after it is made, be laid before the State Legislature.

Source: The Code on Wages, 2019, official gazette copy, page 27

Power to remove difficulties

In plain words

If difficulties arise in applying the Code, the Central Government can remove them by an order in the Official Gazette, but only within three years of the Code coming into force, and each order goes before Parliament.

(1)

If any difficulty arises in giving effect to the provisions of this Code, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Code, as may appear to be necessary for removing the difficulty:

Proviso

Provided that no such order shall be made under this section after the expiry of a period of three years from the commencement of this Code.

(2)

Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.

Source: The Code on Wages, 2019, official gazette copy, page 29

Repeal and savings

In plain words

The Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976 are repealed; notifications, appointments, orders and wage amounts made under them continue as if made under the Code, to the extent not contrary to it, until repealed under the Code or by a Central Government notification. Section 6 of the General Clauses Act, 1897 also applies to the repeal.

(1)

The Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 are hereby repealed.

(2)

Notwithstanding such repeal, anything done or any action taken under the enactments so repealed including any notification, nomination, appointment, order or direction made thereunder or any amount of wages provided in any provision of such enactments for any purpose shall be deemed to have been done or taken or provided for such purpose under the corresponding provisions of this Code and shall be in force to the extent they are not contrary to the provisions of this Code till they are repealed under the corresponding provisions of this Code or by the notification to that effect by the Central Government.

(3)

Without prejudice to the provisions of sub-section (2), the provisions of section 6 of the General Clauses Act, 1897 shall apply to the repeal of such enactments.

Source: The Code on Wages, 2019, official gazette copy, page 29

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