Existing Method of Payment of Wages of Employees
The government of India amended Section 6 of the Payment of Wages,1936, a major Indian labour law on 28-12-2016 to the effect that payment of wages of employees shall be made either in currency notes or by cheque or by credit in their bank accounts. The amended law empowers the State governments to notify selective industry/industries in which the employers shall pay the wages of their employees by cheque or credit in their bank account. The Karnataka State government has not specified any industry so far in pursuance of the amended law.
The amended law goes against the twin policies of the government of India in regard to the paperless money transactions among citizens and between the citizen and the bank or other financial institution and mandatory opening of bank accounts by all Indian citizens.
The Central/State government should not have been empowered to specify any industry under the amended law. The present statutory position may involve undue delay in the issuance of the notification of the specific industries.
The amended law should have made the payment of the employees’ wages by their employers mandatorily ONLY in their bank accounts in pursuance of the Indian government’s twin policies of paperless money transaction of Indians and the compulsory opening of the bank account by Indians. Properly, the amended law should not have empowered the government, at least without any time limit, to notify specific industries in which employees’ wages shall be paid by cheque or in their bank accounts. Discretion in the exercise of power usually results in a delay in exercise of power or no exercise of that power. The amended law is an eye-wash and has no teeth.
Required New Amendment
The defective amended law needs to be amended again by substituting the existing amendment by the following suggested amendment to Section 6 of the Act:
‘Section 6. All wages shall be paid by credit in the bank account of the employee.’
This new amendment will serve the desired purpose and also resolve the conflict between the existing Section 6 and the above twin policies of the Indian government.
It is high time that the trade unions, labour leaders, intellectuals, knowledgeable employees and news media bestir themselves to the gravity of the issue and initiate a movement for the desired fresh amendment of Section 6 of the Payment of Wages Act,1936.
Will they rise to the occasion?