File Copyright Online - File mutual Divorce in Delhi - Online Legal Advice - Lawyers in India

What does the term wage in Code of wages Act, 2019 mean?

The legislative intent of enacting the Code of Wages, 2019 is clear from its preamble which states that its object is:
to amend and consolidate the laws relating to wages and bonus and matters connected therewith or incidental thereto.

Section 69 of the Act repeals (1) The Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The various provisions of the Act indicate that it has consolidated the provisions of above enactments repealed.

Section 2 (k) defines an employee doing any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied, and also includes a person declared to be an employee by the appropriate Government, but does not include any member of the Armed Forces. Thus the scope of employment vis-a-vis wages has to be analysed with reference to other labour legislations operating in the same field.

A single definition for Wages has been given to all establishments. If the payment by employer is made in terms of basic pay, dearness allowance and retaining allowance, then it will be considered as Wages. But bonus, house rent allowance, amenities allowance, travelling concessions, pension or provident fund contribution, overtime allowance, gratuity or commission are not included within the term wages.

Let us go through the definition of �wages� in section 2 (y) the Code:
2 (y) "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:
  1. Basic pay;
  2. Dearness allowance; and
  3. Retaining allowance, if any, but does not include:
    1. 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
    2. 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;
    3. Any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;
    4. Any conveyance allowance or the value of any travelling concession;
    5. any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment;
    6. house rent allowance;
    7. Remuneration payable under any award or settlement between the parties or order of a court or Tribunal;
    8. Any overtime allowance;
    9. Any commission payable to the employee;
    10. Any gratuity payable on the termination of employment;
    11. 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 one-half, or the per cent.

So notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause:
Provided further that for the purpose of equal wages to all genders and for the purpose of payment of wages, the emoluments specified in clauses (d), (f), (g) and (h) shall be taken for computation of wage.

Explanation:
Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed fifteen per cent. of the total wages payable to him, shall be deemed to form part of the wages of such employee;

The definition given in the Industrial Disputes Act, 1947 under section 2 [rr] may be compared with the above definition of wages in the Code of Wages, 2019:
2(rr) "wages" means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment, and includes:
  1. Such allowances (including dearness allowance) as the workman is for the time being entitled to;
  2. The value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any confessional supply of food grains or other articles;
  3. Any traveling concession;

47[(iv) Any commission payable on the promotion of sales or business or both;] but does not include:
  1. Any bonus;
  2. Any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force;
  3. Any gratuity payable on the termination of his service;

Thus on a combined reading of the respective definition in the above two statutes, the following points may arise for a holistic debate on the above subject:
  1. Going by the definition of the wages in the Industrial Disputes Act, a workman is eligible to get the benefits under clauses (ii) to (iv) of s. 2 (rr); whereas, under the Code of Wages he is not eligible to claim such allowances or perquisites as part of his wages.
     
  2. Of course, the 1st proviso to s. 2 (y) of the Code of Wages would clarify that for calculating the wages under this clause, if payments made by the employer to the employee towards such allowances and perquisites 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 one-half, or the per cent. So notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause.
     
  3. Thus by a notification the Central Government can bring within the fold of wages such allowances or other payments. How far this is possible may be a vexing problem, while the government proceeds to implement the above power conferred. Power of notification is not �Rule making power�. By notification, at the best some specified employments can be brought within the ambit of the power so conferred. Had it been a power to make applicable to all types of employment, the statute would have signified it. Therefore the Central Government has to advert to a �reasonable classification�. But, such power can only be exercised by way of �delegated legislation� by making appropriate Rules and not through a notification. Rajnarain Singh vs The Chairman, Patna Administration Committee and another, AIR 1954 SC 569 and in a plethora of cases, the apex court held that the rule making power cannot traverse the authority conferred by the legislation, in order to modify the provisions of the same.
     
  4. Even for exercising the power of notification, the Code has not delegated or defined the extent of the power purported to be conferred on the Central Government to classify establishments and to enlarge the scope wages vis-a-vis the nature of the employment, the pattern of remuneration owing to geographical variations or for other reasons.

I hope that for removing the above snags in the Code of Wages, 2019 effective steps would be suitably taken by a remedial legislation and thereby the above statute will properly achieve its full object and purport.

Award Winning Article Is Written By: Mr.Ashish Dash - 1st year law student at Institute of law, Nirma University, Ahmedabad
Awarded certificate of Excellence
Authentication No: AP22040TofzPYK-25-0421

Law Article in India

Ask A Lawyers

You May Like

Legal Question & Answers



Lawyers in India - Search By City

Copyright Filing
Online Copyright Registration


LawArticles

Section 482 CrPc - Quashing Of FIR: Guid...

Titile

The Inherent power under Section 482 in The Code Of Criminal Procedure, 1973 (37th Chapter of th...

Whether Caveat Application is legally pe...

Titile

Whether in a criminal proceeding a Caveat Application is legally permissible to be filed as pro...

How To File For Mutual Divorce In Delhi

Titile

How To File For Mutual Divorce In Delhi Mutual Consent Divorce is the Simplest Way to Obtain a D...

Copyright: An important element of Intel...

Titile

The Intellectual Property Rights (IPR) has its own economic value when it puts into any market ...

The Factories Act,1948

Titile

There has been rise of large scale factory/ industry in India in the later half of nineteenth ce...

Law of Writs In Indian Constitution

Titile

Origin of Writ In common law, Writ is a formal written order issued by a body with administrati...

Lawyers Registration
Lawyers Membership - Get Clients Online


File caveat In Supreme Court Instantly