Sir, the Payment of Wages Act, to which the
present Bill proposes to make certain amendments, was passed in
the year 1936. This Bill, at the time when it was passed, was
recognised as an experimental measure for the simple reason that when
the Bill was drafted, we did not have before us any model piece
of legislation on which we could have modelled the measure which is
embodied in this Act. We have had now an experience of practically
six years of this measure, and in the course of the
working, it has been discovered that the Bill suffers from many
defects. If I may tell the House, it has been pointed out that there
are practically 30 or120
40 amendments which it is necessary to make to improve the
Payment of Wages Act.
The Government of India realises140 that at present it has not got the time
to devote to all the amendments to the measure which different
parties160 have suggested
and consequently they do not propose to engage themselves upon improving the
Act and to remove all the defects that have been suggested. What the
Government of India proposes to do through the present amending Bill is to take
certain defects which are of such administrative importance that unless and
until those defects are removed, it will be difficult to administer
the measure with the intention which lay behind the Act when it was passed.
Sir, clause240
2 of the Bill seeks to make certain
amendments in the definition of the word “wages”. I do not wish to waste
the valuable time of the House by repeating the defects which different
parties to the Bill have suggested280
that they have found in the present definition of the word
‘wages’ as it stands. But I might mention some important ones. It
has been said in a judicial decision given by the Bombay High Court that
the present definition320
of “wages” is so drafted that it is possible for a workman not only to
claim wages which he has earned but also wages which might be called
potential wages. Certainly, that was not the intention of the original
measure. 360
Another defect which has been suggested with
regard to this definition is that it allows a workman employed on the out-turn
basis to claim wages irrespective of his out-turn. It has been suggested
that there is a confusion in the definition which does not quite
distinguish the case of a workman employed on a time basis and a workman420 employed on out-turn basis. It has
also been suggested in certain quarters that some of the words which now
occur in the definition are superfluous, that they need not be there
and that their presence only causes confusion. I might refer to
the words “any bonus or additional remuneration of the nature aforesaid
which would be so payable”. It has been480
suggested to us that these words may not have any meaning other
than the one which is already included in the previous part of
this definition. It has also been suggested that while the
definition of “wages” was adequate before the system of dearness allowance
brought about by the war came into existence, the definition today is
inadequate because it is open for an employer to argue that the dearness
allowance is not part of wages. Now, the definition560 that we have suggested in the amending
Bill seeks to remove all these difficulties. It seems to make the
definition simple. I ought to tell the House that I am myself not very
confident that the draft, as it stands in600
the amending Bill, carries out the intention which lies behind this original
Act. I do not regard the definition which we have proposed as sacrosanct,
and if the members of the Select Committee are able to suggest a better
one, 640 I will certainly
raise no objection to the further amendment of the definition as it now stands
in the amending Bill.
Coming to clause 3, it is a clause which makes two
amendments to the present section 5. As the Honourable Members will
remember, section 5 is a section which prescribes the period during which
wages must be paid. 700 For the purpose of prescribing the
period for the payment of wages, the section divides factories into
two categories. 720 In one
category are placed factories which employ workmen whose number is less than
1,000. In the second category are placed factories which employ more
than 1,000 employees. After making this division, the section provides that in
the factories which come into the first category, payment must be made
within seven days, while in the case of the latter, the limit of the
period is prescribed to be 10 days. In actual practice, it has been found
difficult to observe the terms800
of this section, and the reason for that is very simple. The
division of the factories is based upon the number of employees. As the
House will realise, the number of workmen is never a constant figure; it840 always changes. For instance, if
the number of employees goes down by one, the category automatically shifts
from category No. 1 to category No. 2. Similarly, if the number of
employees is increased by one, category No. 2 goes into category No. 1. It
is believed that this discriminating principle is neither just nor
administratively feasible. Consequently, what the amendment seeks to do is to
abolish this distinction whereby the factories have been divided
into two categories, and adopt the general principle that in all factories,
irrespective of the number of employees that are working there, there
shall be a uniform rule, namely, that the payment must be made within ten
days.
The second amendment which clause 3 seeks to make is960 also very necessary. In section
5, provision is made for the payment of an employee who is discharged980 from service. The section as it stands
today provides that the payment to a discharged employee should be on the
second working day. Now, Sir, if the Payment of Wages Act was only
applicable to perennial factories which are working throughout the day, there
can be no difficulty arising from the section as it stands now. But in
the case of seasonal factories, the difficulty that would arise is
absolutely genuine because, supposing an employee was discharged on the last
working day of the factory and the factory being a seasonal factory was
closed down thereafter, then the second working day1080 would come after a long interval which it
would be difficult for anybody to imagine or to stipulate. Consequently,
the payment of wages to a discharged employee working in a seasonal factory
would be indefinitely postponed if the provision as it1120 now stands was not amended in the way
suggested in the Bill. What we have therefore done by the amending Bill
is to take away the word ‘working’ and substitute for the word ‘second’
the word ‘third’, so that where the factory is a seasonal factory or
where the factory is a perennial factory, every discharged workman will be paid
on the seventh day and would not have to wait as he would have to
in case the factory1200
was seasonal factory and the Act stood as it is now.
Now, I come to clause 4 of the Bill. As Honourable
Members will see, clause 4 proposes to make certain amendments in section 7 of
this Act. Section 7 is a section which lays down what deductions can
be made from the wages of a workman. Honourable Members will1260 see presently that the section as it
stands now does not cover all legitimate cases of deductions. I will
draw the attention1280 of
Honourable Members to what are the omissions in the present Act. For
instance, the Act as it stands now, or the section of the Act, does not
cover the case of an employee who has left his employment, taken his provident
fund and his gratuity and has lost the privileges which he would otherwise
get if he had continued to be in service. It may be that for certain
reasons, he had to resort to the expedience of obtaining a discharge
from service in order to get his provident fund and his gratuity to meet
certain economic demands that may be very pressing upon him. After
that, he is re-employed and obviously he is anxious to get1400 back all the privileges which he
enjoyed before his discharge and his privileges depend upon whether or not he
is prepared to return the provident fund which he had obtained and the
gratuity which he got. The workman is willing and prepared1440 for such deductions being made,
but the law does not permit this.
I think it will be agreed that
such deduction should be allowed because it is in the
interest of the employee himself. But as I said, such a provision does
not find a place in the Act, as it now stands. Then, Sir, there are certain
deductions which may be beneficial to the employee and the
employee may be willing that the deductions may be made in order to
cover such beneficial purposes. Again, there is no provision for
allowing the workman voluntarily to agree to make deductions which he
thinks are beneficial to himself. The law is made by the amendment in order to arrive
at the conclusion that the purposes are really beneficial. There
are other omissions in section 7 as it stands and those omissions relate to
cases of workmen who are employed in what are called incremental scales.
This is a new thing1600 in
the Bill and I wish to explain to the House not only what the
provisions are but the circumstances which have led us to
bring forward this amendment. 1630
