Management‌‌Development‌‌Institute,‌‌Gurgaon‌ 

‌
Name‌‌of‌‌Programme:-‌‌PGDM-HRM‌‌2020-22‌  ‌
Mid‌‌term‌‌Examination,‌‌Term-IV‌  ‌
Name‌‌of‌‌the‌‌Course:‌‌EL2‌  ‌
Name‌‌of‌‌the‌‌course‌‌Faculty:‌‌-‌‌Mr.‌‌Hari‌‌Parmeshwar‌  ‌
   ‌ ‌
 ‌
 ‌
‌ ame‌‌:-‌‌Kshitij‌‌Bansal‌ 
N ‌ Roll‌‌Number:-‌‌20PGHR45‌  ‌
 ‌
 ‌
Q1)‌  ‌
Ans.‌‌   ‌
● “A‌‌proposal‌‌may‌‌be‌‌revoked‌‌at‌‌any‌‌time‌‌before‌‌its‌‌acceptance‌‌is‌‌fully‌‌ 
communicated‌‌to‌‌the‌‌proposer,‌‌but‌‌not‌‌thereafter.”‌  ‌
● The‌‌offer‌‌can‌‌be‌‌revoked‌‌because‌‌Shweta‌‌informed‌‌Shamim‌‌of‌‌the‌‌revoked‌‌ 
status‌‌before‌‌Shamim‌‌accepted‌‌it.‌  ‌
● Shamim‌‌turned‌‌down‌‌the‌‌INR‌‌6.5‌‌lakh‌‌offer‌‌but‌‌did‌‌not‌‌inform‌‌Shweta‌‌of‌‌ 
his‌‌acceptance‌‌of‌‌the‌‌INR‌‌7‌‌lakh‌‌offer.‌‌As‌‌a‌‌result,‌‌he‌‌can’t‌‌sue‌‌her.‌  ‌
 ‌
Q6)‌‌You‌‌come‌‌across‌‌this‌‌incorrect‌‌version‌‌of‌‌the‌‌Fourth‌‌Schedule‌‌of‌‌the‌‌ 
Payment‌‌of‌‌Bonus‌‌Act‌‌which‌‌explains‌‌the‌‌set‌‌on‌‌and‌‌set‌‌off‌‌concepts‌.‌‌Write‌‌ 
down‌‌the‌‌correct‌‌Fourth‌‌Schedule‌‌in‌‌the‌‌answer‌‌sheet‌‌format‌‌which‌‌follows‌‌the‌‌ 
version‌‌based‌‌on‌‌concepts‌‌understood‌‌in‌‌the‌‌Payment‌‌of‌‌Bonus‌‌Act‌‌1965.‌‌You‌‌ 
must‌‌explain‌‌the‌‌change‌‌in‌‌the‌‌column‌‌(6)‌‌provided‌‌for.‌‌(5‌‌marks)‌  ‌
 ‌
 Set‌‌on‌‌or‌‌ 
Year‌  ‌ Amount‌‌equal‌‌  Amount‌‌  Total‌‌set‌‌on‌‌or‌‌  Explanation‌‌for‌‌change‌‌(if‌‌ 
set‌  ‌
to‌‌sixty‌‌per‌‌cent,‌‌  payable‌‌as‌‌  set‌‌off‌‌Carried‌‌  any).‌ 
‌off‌‌of‌‌the‌‌ 
or‌‌sixty‌‌seven‌‌  bonus‌  ‌ forward‌  ‌
year‌‌carried‌‌ 
per‌‌cent,‌‌as‌‌the‌‌ 
forward‌  ‌
case‌‌may‌‌be,‌‌or‌‌ 
available‌‌surplus‌ 
allocable‌‌as‌‌ 
bonus‌  ‌

(1)‌  ‌ (2)‌  ‌ (3)‌  ‌ (4)‌  ‌ (5)‌  ‌ (6)‌  ‌

‌1 ‌ ‌ ‌1,04,167‌  ‌ ‌1,04,167‌  ‌ ‌Nil‌  ‌ ‌Nil‌  ‌ The‌‌total‌‌amount‌‌of‌‌bonus‌‌ 

equal‌‌to‌‌8.33‌‌percent‌‌of‌‌ 
the‌‌annual‌‌salary‌‌or‌‌wage‌‌ 
payable‌‌to‌‌all‌‌employees‌‌is‌‌ 
assumed‌‌to‌‌be‌‌Rs.‌‌ 
1,04,167,‌‌according‌‌to‌‌the‌‌ 
Schedule.‌  ‌

Because‌‌the‌‌allocable‌‌ 
surplus‌‌equals‌‌8.33‌‌percent‌‌ 
of‌‌annual‌‌wages,‌‌the‌‌entire‌‌ 
surplus‌‌is‌‌paid‌‌out‌‌as‌‌a ‌‌
bonus.‌  ‌

‌2 ‌ ‌ ‌6,35,000‌  ‌ ‌2,50,000‌  ‌ ‌250000‌‌(set‌‌  ‌250000‌‌set‌‌  Allocable‌‌surplus‌‌>‌‌8.33%‌‌ 

on)‌  ‌ on‌‌(2)‌  ‌ of‌‌annual‌‌wages.‌  ‌

‌ aximum‌‌bonus‌‌=‌‌20%‌‌of‌‌ 
M
annual‌‌wages‌‌=‌‌2,50,000‌‌is‌‌ 
payable‌‌as‌‌bonus‌‌and‌‌ 
another‌‌20%‌‌=‌‌2,50,000‌‌is‌‌ 
set‌‌on‌‌for‌‌the‌‌next‌‌year‌‌   ‌
‌3 ‌ ‌ ‌2,20,000‌  ‌ ‌2,50,000‌  ‌ ‌Nil‌  ‌ ‌Set‌‌on‌‌  Allocable‌‌surplus‌‌plus‌‌ 
220000‌‌(2)‌  ‌ set-aside‌‌from‌‌the‌‌previous‌‌ 
year‌‌equals‌‌more‌‌than‌‌20%‌‌ 
of‌‌annual‌‌wages.‌  ‌

As‌‌a‌‌result,‌‌a‌‌maximum‌‌ 
amount‌‌(=2,50,000)‌‌is‌‌paid‌‌ 
as‌‌a‌‌bonus,‌‌which‌‌includes‌‌ 
this‌‌year's‌‌allocable‌‌surplus‌‌ 
of‌‌2,20,000‌‌plus‌‌30,000‌‌ 
from‌‌last‌‌year's‌‌set‌‌bonus.‌  ‌

As‌‌a‌‌result,‌‌the‌‌remaining‌‌ 
set‌‌is‌‌2,20,000.‌  ‌

‌4 ‌ ‌ ‌3,75,000‌  ‌ ‌2,50,000‌  ‌ ‌Set‌‌on‌‌  ‌Set‌‌on‌‌  Allocable‌‌surplus>‌‌max‌‌ 

125000‌  ‌ 2,20,000‌‌(2)‌  ‌ bonus(20%).‌‌   ‌

Set‌‌on‌‌125000‌‌  So‌‌20%‌‌=‌‌2,50,000‌‌paid‌‌as‌‌ 
(4)‌  ‌ bonus‌‌and‌‌remaining‌‌ 
1,25,000‌‌is‌‌set‌‌on‌‌for‌‌the‌‌ 
next‌‌year‌  ‌

‌5 ‌ ‌ ‌1,40,000‌  ‌ ‌2,50,000‌  ‌ ‌Nil‌  ‌ S‌ et‌‌on‌‌  Allocable‌‌surplus‌‌+‌‌set‌‌on‌‌ 

1,10,000‌‌(2)‌‌   ‌ from‌‌previous‌‌year‌‌2‌‌>‌‌20%‌‌ 
of‌‌annual‌‌wages.‌‌   ‌
Set‌‌on‌‌125000‌‌ 
(4)‌‌   ‌ So‌‌a‌‌maximum‌‌amount‌‌ 
(=2,50,000)‌‌is‌‌paid‌‌as‌‌ 
bonus‌‌which‌‌includes‌‌ 
1,40,000‌‌allocable‌‌surplus‌‌ 
of‌‌this‌‌year‌‌+‌‌1,10,000‌‌from‌‌ 
set‌‌on‌‌of‌‌last‌‌year.‌‌   ‌

Thus‌‌the‌‌set‌‌on‌‌from‌‌year‌‌2 ‌‌
remaining‌‌now‌‌is‌‌1,10,000.‌‌  
 Among‌‌year‌‌2‌‌and‌‌4,‌‌the‌‌ 
set‌‌on‌‌from‌‌year‌‌2‌‌will‌‌be‌‌ 
allocated‌‌first‌  ‌

‌6 ‌ ‌ ‌3,10,000‌  ‌ ‌2,50,000‌  ‌ S‌ et‌‌on‌‌  Set‌‌on‌‌NIL‌‌(2)‌‌  ‌The‌‌Set‌‌on‌‌from‌‌year‌‌2 ‌‌

60,000‌  ‌ Set‌‌on‌‌  lapses‌‌in‌‌the‌‌4th‌‌year‌‌ 
1,25,000‌‌(4)‌‌   ‌ allocable‌‌bonus‌‌>‌‌20%‌‌of‌‌ 
annual‌‌wages.‌‌   ‌
Set‌‌on‌‌60,000‌‌ 
(6)‌‌   ‌ Thus‌‌Rs‌‌250000‌‌is‌‌allocated‌‌ 
as‌‌bonus‌‌and‌‌surplus‌‌= ‌‌
60,000‌‌is‌‌set‌‌on‌‌   ‌

‌7 ‌ ‌ ‌1,00,000‌  ‌ ‌2,50,000‌  ‌ ‌Nil‌  ‌ ‌Set‌‌on‌‌35,000‌‌  Max‌‌bonus‌‌=‌‌250000‌‌is‌‌ 

(6)‌  ‌ paid‌‌which‌‌consists‌‌of‌‌ 
100000‌‌of‌‌this‌‌year‌‌surplus‌‌ 
+‌‌125000‌‌of‌‌4th‌‌year‌‌set‌‌on‌‌ 
+‌‌25000‌‌of‌‌6th‌‌year‌‌set‌‌on.‌‌  
 Set‌‌on‌‌carried‌‌forward‌‌= ‌‌
35000‌‌from‌‌year‌‌6 ‌ ‌

‌8 ‌ ‌ ‌Nil‌‌(due‌‌to‌‌loss)‌  ‌1,04,167‌  ‌ S‌ et‌‌off‌‌  ‌Set‌‌off‌‌69167‌‌  Min‌‌bonus‌‌=‌‌8.33%‌‌of‌‌ 

69167‌  ‌ (8)‌‌   ‌ annual‌‌wages‌‌has‌‌to‌‌be‌‌ 
paid‌‌as‌‌per‌‌payment‌‌of‌‌ 
bonus‌‌act.‌‌   ‌

104167‌‌is‌‌allocated‌‌as‌‌ 
bonus‌‌which‌‌includes‌‌ 
35000‌‌set‌‌on‌‌from‌‌previous‌‌ 
year.‌‌   ‌

Rs‌‌69167‌‌is‌‌set‌‌off‌  ‌

‌9 ‌ ‌ ‌10,000‌  ‌ ‌1,04,167‌  ‌ S‌ et‌‌off‌‌  ‌Set‌‌off‌‌69167‌‌  Min‌‌bonus‌‌=‌‌8.33%‌‌of‌‌ 

94167‌  ‌ (8)‌‌   ‌ annual‌‌wages‌‌has‌‌to‌‌be‌‌ 
paid‌‌as‌‌per‌‌payment‌‌of‌‌ 
Set‌‌off‌‌94167‌‌  bonus‌‌act.‌‌   ‌
(9)‌  ‌
104167‌‌is‌‌allocated‌‌as‌‌ 
bonus.‌‌Money‌‌in‌‌excess‌‌to‌‌ 
10,000‌‌is‌‌set‌‌off‌‌=‌‌94167‌  ‌

‌10‌  ‌ ‌2,15,000‌  ‌ ‌104167‌  ‌ ‌Nil‌  ‌ ‌Set‌‌off‌‌52501‌‌  Min‌‌bonus‌‌=‌‌104167‌‌is‌‌ 

(9)‌‌   ‌ paid.‌‌   ‌

Out‌‌of‌‌remaining‌‌11083,‌‌ 
set‌‌off‌‌from‌‌year‌‌8‌‌is‌‌ 
adjusted.‌‌Amount‌‌now‌‌is‌‌ 
41666.‌  ‌

From‌‌here,‌‌set‌‌off‌‌for‌‌year‌‌ 
9‌‌is‌‌adjusted‌‌and‌‌Rs‌‌52501‌‌ 
is‌‌the‌‌set‌‌off‌‌to‌‌be‌‌carried‌‌   ‌

 ‌
 ‌
 ‌
 ‌
 ‌
Q4)‌‌A‌‌contract‌‌lays‌‌down‌‌the‌‌terms‌‌of‌‌engagement‌‌between‌‌an‌‌employee‌‌and‌‌ 
the‌‌employer.‌‌This‌ ‌includes‌‌the‌‌right‌‌of‌‌the‌‌employee‌‌to‌‌resign‌‌and‌‌the‌‌right‌‌of‌‌ 
the‌‌employer‌‌to‌‌terminate‌‌by‌‌giving‌‌appropriate‌‌notice.‌  ‌
However‌‌in‌‌the‌‌case‌‌of‌‌workmen‌‌this‌‌becomes‌‌very‌‌difficult‌‌because‌‌the‌‌laws‌‌of‌‌ 
the‌‌land‌‌are‌‌favouring‌‌the‌‌workers‌‌?‌‌In‌‌other‌‌words‌‌the‌‌freedom‌‌to‌‌contract‌‌is‌‌ 
superseded‌‌by‌‌the‌‌provisions‌‌of‌‌law.‌  ‌
What‌‌are‌‌these‌‌provisions‌‌in‌‌law‌‌?‌ ‌(5‌‌marks)‌  ‌
 ‌

Ans.‌  ‌
1. TRADE‌‌UNIONS‌‌ACT:‌   ‌ ‌
● A‌‌breach‌‌of‌‌contact‌‌occurs‌‌when‌‌workers‌‌led‌‌by‌‌their‌r‌ egistered‌‌union‌‌go‌‌ 
on‌‌strike.‌  ‌
● According‌‌to‌‌the‌‌I‌ ndian‌‌C
‌ ontract‌‌Act,‌‌1872‌,‌‌the‌‌company‌‌can‌‌sue‌‌the‌‌ 
workers‌‌for‌‌damages‌‌in‌‌a‌‌civil‌‌suit.‌  ‌
● The‌‌Trade‌‌Union‌‌Act,‌‌on‌‌the‌‌other‌‌hand,‌‌grants‌‌immunity‌‌from‌‌civil‌‌suits‌‌ 
arising‌‌from‌‌contract‌‌breaches.‌  ‌
 ‌
2. INDUSTRIAL‌‌DISPUTES‌‌ACT‌‌‌:  ‌‌ ‌
● A‌‌worker‌‌can‌‌be‌‌terminated‌‌as‌‌per‌‌his‌‌contract‌‌of‌‌employment‌‌just‌‌as‌‌the‌‌ 
worker‌‌can‌‌resign.‌  ‌
● However,‌‌under‌‌‌Section‌‌2‌‌A‌‌of‌‌the‌‌ID‌‌Act‌,‌‌a‌‌terminated‌‌worker‌c‌ an‌‌raise‌‌a ‌‌
dispute‌‌with‌‌a‌‌Labour‌‌Court‌‌or‌‌Tribunal,‌‌and‌‌under‌‌Section‌‌11‌‌A‌‌of‌‌the‌‌ID‌‌ 
Act,‌‌a‌ ‌‌Labour‌‌Court‌‌or‌‌Industrial‌‌Tribunal‌‌can‌‌order‌‌reinstatement‌‌of‌‌the‌‌ 
 worker‌‌with‌‌back‌‌wages‌‌if‌‌the‌‌reasons‌‌or‌‌process‌‌leading‌‌to‌‌the‌‌termination‌‌ 
are‌‌not‌‌satisfactory.‌  ‌
● So‌‌the‌‌freedom‌‌to‌‌contract‌‌is‌‌superseded‌‌by‌‌legislative‌‌restraints‌. ‌ ‌
 ‌
3. INDUSTRIAL‌‌EMPLOYMENT‌‌STANDING‌‌ORDERS‌‌ACT‌‌: ‌ ‌
● Certified‌‌Standing‌‌Orders‌‌binds‌‌current‌‌and‌‌future‌‌employees‌‌by‌‌ 
superseding‌‌the‌‌terms‌‌and‌‌conditions‌‌of‌‌an‌‌employment‌‌contract.‌  ‌
● The‌‌Standing‌‌Orders‌‌has‌‌statutory‌‌sanction‌‌by‌‌virtue‌‌of‌‌the‌‌certification‌. ‌ ‌
 ‌
4. Lay‌‌off‌‌and‌‌retrenchment‌‌provisions‌‌‌prevent‌‌the‌‌employer‌‌from‌‌easy‌‌ 
downsizing‌‌as‌‌permission‌‌is‌‌required‌‌from‌‌government‌(‌ ‌‌beyond‌‌100‌‌ 
employees)‌.‌‌Hence,‌‌freedom‌‌to‌‌contract‌‌is‌‌restrained‌‌by‌‌public‌‌policy.‌  ‌
● Retrenchment‌‌i‌s‌‌defined‌‌as‌‌the‌‌termination‌‌of‌‌a‌‌worker's‌ 
employment‌‌by‌‌his‌‌or‌‌her‌‌employer‌‌for‌‌any‌‌reason‌‌other‌‌than‌‌ 
disciplinary‌‌action‌b
‌ ut‌‌does‌‌not‌‌include‌‌retirement,‌‌voluntary‌‌ 
retirement‌‌and‌‌termination‌‌on‌‌the‌‌grounds‌‌of‌‌ill‌‌health.‌  ‌
 ‌
Q2‌‌A)‌  ‌
● The‌‌Indian‌‌Contract‌‌Act‌‌‌states‌‌that‌‌there‌m
‌ ust‌‌be‌‌an‌‌offer‌‌and‌‌an‌‌ 
acceptance.‌‌‌But‌‌Sumi‌‌did‌‌not‌‌specifically‌‌accept‌‌the‌‌offer.‌  ‌
● Moreover,‌‌the‌‌term‌‌in‌‌the‌‌offer‌‌which‌‌read‌“‌ If‌‌we‌‌do‌‌not‌‌hear‌‌from‌‌ 
you‌‌within‌‌a‌‌month,‌‌we‌‌would‌‌understand‌‌that‌‌you‌‌have‌‌accepted‌‌the‌‌ 
offer.‌‌We‌‌would‌‌go‌‌ahead‌‌to‌‌charge‌‌Rs.‌‌15000‌‌in‌‌the‌‌next‌‌month’s‌‌ 
statement‌‌and‌‌deliver‌‌you‌‌the‌‌APPLE‌‌phone.‌ ‌After‌‌all,‌‌who‌‌would‌‌ 
miss‌‌on‌‌such‌‌a‌‌fabulous‌‌offer!”‌‌i‌s‌‌not‌‌valid‌s‌ ince‌‌the‌‌Indian‌‌Contract‌‌ 
 Act‌‌states‌‌that‌a‌ n‌‌offer‌‌must‌‌not‌‌contain‌‌a‌‌clause‌‌that‌‌does‌‌away‌‌ 
with‌‌acceptance‌. ‌ ‌
● Hence,‌‌there‌‌is‌‌no‌‌obligation‌‌on‌‌Sumi‌‌and‌‌she‌‌can‌‌claim‌‌her‌‌money‌‌ 
back.‌  ‌
 ‌

Q2‌‌B)‌  ‌
● Even‌‌though‌‌Saurav‌‌claims‌‌that‌‌there‌‌was‌‌no‌‌contract‌‌for‌‌selling‌‌the‌‌ 
treadmill,‌i‌t‌‌still‌‌involved‌‌transaction‌‌money‌‌amounting‌‌to‌‌Rs.‌‌5000‌‌which‌‌ 
suggests‌‌a‌l‌egal‌‌intent‌‌‌and‌‌not‌‌social.‌‌   ‌
● Here‌‌the‌c‌ ondition‌‌of‌‌3Cs‌‌are‌‌fulfilled‌‌‌and‌‌hence‌‌it‌‌has‌‌a‌‌legal‌‌binding.‌‌ 
Saurav‌‌can’t‌‌claim‌‌the‌‌treadmill‌‌back.‌‌   ‌
 ‌

Q3)‌‌How‌‌would‌‌you‌‌ensure‌‌that‌‌(5‌‌marks)‌  ‌

a)‌‌secrets‌‌and‌‌confidential‌‌information‌‌are‌‌not‌‌leaked‌‌to‌‌competitors‌‌by‌‌your‌‌ 
employees‌‌? ‌ ‌

b)‌‌that‌‌employees‌‌do‌‌not‌‌join‌‌competitors‌‌after‌‌leaving‌‌the‌‌company?‌  ‌

c)‌‌that‌‌employees‌‌do‌‌not‌‌deal‌‌with‌‌the‌‌clients‌‌of‌‌the‌‌company‌‌? ‌ ‌

What‌‌are‌‌the‌‌issues‌‌that‌‌you‌‌will‌‌consider‌‌while‌‌deciding‌‌on‌‌the‌‌above‌‌? ‌ ‌

Ans.‌  ‌
a) I‌‌will‌‌ensure‌‌that‌‌secrets‌‌and‌‌confidential‌‌information‌‌are‌‌not‌‌leaked‌‌to‌‌the‌‌ 
competitors‌‌by‌‌the‌‌employees‌‌through‌‌addition‌‌of‌‌Non-Disclosure‌‌of‌‌ 
Confidential‌‌Information‌‌and‌‌Trade‌‌Secrets‌‌‌clause‌‌‌(Restrictive‌‌Convenant‌‌ 
Clause)‌‌in‌‌the‌E‌ mployment‌‌Contract‌‌w
‌ hich‌‌will‌‌state‌‌the‌‌following:‌  ‌
 ● Except‌‌and‌‌to‌‌the‌‌extent‌‌that‌‌disclosure‌‌is‌‌required‌‌by‌‌law,‌‌the‌‌ 
employee‌‌is‌‌required‌‌to‌‌take‌‌reasonable‌‌steps‌‌to‌‌keep‌‌all‌‌sensitive‌‌ 
information‌‌confidential.‌  ‌
● The‌‌employee‌‌also‌‌undertakes‌‌that‌‌he‌‌or‌‌she‌‌will‌‌not‌‌discuss‌‌or‌‌ 
divulge‌‌any‌‌of‌‌the‌‌company's‌‌confidential‌‌information‌‌to‌‌anybody‌‌ 
or‌‌any‌‌business‌‌that‌‌is‌‌not‌‌affiliated‌‌with‌‌the‌‌company.‌  ‌
 ‌
b) To‌‌ensure‌‌that‌‌employees‌‌do‌‌not‌‌join‌‌competitors‌‌after‌‌leaving‌‌the‌‌ 
company‌‌I’ll‌‌add‌‌the‌N
‌ on-Poaching‌‌Agreements‌‌or‌‌Non-Compete‌‌ 
Agreement‌w
‌ ith‌‌competitors,‌‌in‌‌which‌‌they‌‌agree:‌  ‌
● Not‌‌to‌‌encourage‌‌or‌‌entice‌‌the‌‌other‌‌party's‌‌staff.‌‌   ‌
● As‌‌a‌‌result,‌‌the‌‌agreement‌‌may‌‌impose‌‌a‌‌restriction‌‌on‌‌competing‌‌ 
parties‌‌from‌‌recruiting‌‌each‌‌other's‌‌personnel.‌  ‌
 ‌
c) To‌‌ensure‌‌that‌‌employees‌‌do‌‌not‌‌deal‌‌with‌‌the‌‌clients‌‌of‌‌the‌‌company,‌‌I’ll‌‌ 
add‌‌the‌N
‌ on-Solicitation‌‌of‌‌Employees‌‌and‌‌Customers‌‌Clause‌(‌ Restrictive‌‌ 
Convenant‌‌Clause)‌‌in‌‌the‌E‌ mployment‌‌Contract‌‌‌which‌‌will‌‌state‌‌that:‌  ‌
● During‌‌and‌‌after‌‌employment,‌‌an‌‌employee‌‌commits‌‌not‌‌to‌‌solicit‌‌ 
the‌‌company's‌‌employees‌‌or‌‌clients‌‌for‌‌personal‌‌gain.‌  ‌
 ‌
The‌‌issues‌‌that‌‌I’ll‌‌consider‌‌while‌‌deciding‌‌on‌‌the‌‌above‌‌are:‌  ‌
● Restrictive‌‌Convenant‌‌Clauses‌‌are‌‌frequently‌‌disputed‌‌concerns‌‌because‌‌ 
such‌‌provisions‌‌appear‌‌to‌‌conflict‌‌with‌S‌ ection‌‌27‌‌of‌‌the‌‌Indian‌‌Contract‌‌ 
Act,‌‌1872‌‌(ICA)‌,‌‌which‌‌states‌'‌Every‌‌agreement‌‌by‌‌which‌‌anyone‌‌is‌‌ 
 restrained‌‌from‌‌exercising‌‌a‌‌lawful‌‌profession,‌‌trade‌‌or‌‌business‌‌of‌‌any‌‌ 
kind,‌‌is‌‌to‌‌that‌‌extent‌‌void.’‌  ‌
● Furthermore,‌‌they‌‌are,‌‌at‌‌first‌‌glance,‌‌contrary‌‌to‌‌the‌‌rights‌‌guaranteed‌‌by‌‌ 
Article‌‌19‌‌(1)‌‌(g)‌‌‌of‌‌the‌‌Indian‌‌Constitution.‌‌i.e.‌‌t‌ he‌‌'right‌‌to‌‌practice‌‌any‌‌ 
profession,‌‌trade‌‌or‌‌business‌‌as‌‌subject‌‌to‌‌certain‌‌restrictions’.‌  ‌
● While‌‌the‌‌Constitution‌‌does‌‌contain‌‌restrictions‌‌to‌‌Art‌‌19‌‌(1)‌‌(g),‌‌they‌‌are‌‌ 
not‌‌particularly‌‌applicable‌‌to‌‌employer-employee‌‌relationships.‌  ‌
● This‌‌has‌‌not‌‌been‌‌fully‌‌tested‌‌in‌‌the‌‌courts‌‌and‌t‌ he‌‌legal‌‌framework‌‌ 
addressing‌‌such‌‌conflicts‌‌is‌‌still‌‌at‌‌a‌‌nascent‌‌stage‌‌in‌‌India.‌  ‌
 ‌
Q5)‌‌"The‌‌Code‌‌on‌‌Wages‌‌2019‌‌is‌‌"similar"‌‌to‌‌the‌‌existing‌‌laws‌‌in‌‌many‌‌ways‌‌ 
while‌‌simultaneously‌‌being‌ ‌"different‌‌"‌‌.‌‌What‌‌are‌‌the‌‌points‌‌of‌‌difference‌‌and‌‌ 
convergence‌‌?‌‌(‌‌8‌‌marks)‌  ‌
Ans.‌  ‌
Principle‌‌differences‌‌and‌‌point‌‌of‌‌convergence‌‌between‌‌Code‌‌of‌‌wages‌‌and‌‌ 
existing‌‌provisions‌‌are‌‌as‌‌follows:‌‌   ‌

1. E‌ qual‌‌Remuneration:‌  ‌
● The‌‌earlier‌‌provisions‌‌specified‌‌no‌‌discrimination‌‌in‌‌remuneration‌‌on‌‌ 
the‌‌basis‌‌of‌‌‘man’‌‌and‌‌‘woman’.‌  ‌
● The‌‌Wage‌‌Code‌‌has‌‌broadened‌‌the‌‌scope‌‌by‌‌stating‌‌that‌‌no‌‌ 
discrimination‌‌on‌‌the‌‌basis‌‌of‌‌an‌‌employee's‌‌"gender"‌‌is‌‌permitted.‌‌   ‌

 ‌

2. R
‌ esponsibility‌‌for‌‌Payment‌‌of‌‌Wages:‌  ‌
 ● Existing‌‌provisions‌‌(Payment‌‌of‌‌Wages‌‌Act)‌‌hold‌‌the‌‌employer‌‌ 
responsible‌‌for‌‌all‌‌wages‌‌paid‌‌to‌‌his‌‌employees;‌‌the‌‌factory‌‌manager‌‌ 
under‌‌the‌‌Factories‌‌Act‌‌1948;‌‌the‌‌person‌‌responsible‌‌to‌‌the‌‌employer‌‌ 
for‌‌supervisions‌‌in‌‌the‌‌case‌‌of‌‌an‌‌industrial‌‌establishment;‌‌and‌‌the‌‌ 
person‌‌designated‌‌by‌‌the‌‌employer‌‌to‌‌comply‌‌with‌‌the‌‌Payment‌‌of‌‌ 
Wages‌‌Act.‌  ‌
● In‌‌the‌‌event‌‌that‌‌a‌‌contractor‌‌fails‌‌to‌‌pay‌‌contract‌‌labour,‌‌it‌‌is‌‌also‌‌the‌‌ 
employer's‌‌responsibility‌‌to‌‌make‌‌all‌‌wages‌‌payments.‌  ‌
● According‌‌to‌‌the‌‌Code‌‌of‌‌Wages‌‌2019‌,‌‌the‌‌principal‌‌employer‌‌is‌‌not‌‌ 
responsible‌‌for‌‌paying‌‌contract‌‌labour‌‌wages;‌‌instead,‌‌the‌‌principal‌‌ 
employer‌‌is‌‌only‌‌responsible‌‌for‌‌making‌‌timely‌‌payments‌‌to‌‌the‌‌ 
contractor.‌  ‌
● The‌‌contractor‌‌will‌‌be‌‌fully‌‌responsible‌‌to‌‌pay‌‌the‌‌wages.‌ 

 ‌

3. Definition‌‌of‌‌Wages‌‌: ‌ ‌
● At‌‌the‌‌present,‌‌the‌‌provisions‌‌of‌‌both‌‌the‌‌Minimum‌‌Wages‌‌Act‌‌and‌‌ 
the‌‌Payment‌‌of‌‌Wages‌‌Act‌‌only‌‌apply‌‌to‌‌workers‌‌earning‌‌less‌‌than‌‌a ‌‌
certain‌‌wage‌‌ceiling‌‌in‌‌Scheduled‌‌Employments.‌‌   ‌
● The‌‌Code‌‌envisions‌‌the‌‌provisions‌‌of‌‌timely‌‌payment‌‌of‌‌wages‌‌and‌‌ 
minimum‌‌wages‌‌being‌‌applied‌‌uniformly‌‌to‌‌all‌‌employees,‌‌regardless‌‌ 
of‌‌wage‌‌ceiling‌‌or‌‌sector.‌ 
● There‌‌are‌‌‌12‌‌different‌‌wage‌‌definitions‌‌‌in‌‌various‌‌labour‌‌laws,‌‌ 
resulting‌‌in‌‌litigation‌‌as‌‌well‌‌as‌‌implementation‌‌difficulties.‌‌The‌‌ 
 definition‌‌has‌‌been‌‌simplified‌‌in‌‌the‌‌Code,‌‌which‌‌should‌‌result‌‌in‌‌ 
fewer‌‌lawsuits‌‌and‌‌lower‌‌compliance‌‌costs‌‌for‌‌employers.‌  ‌
● According‌‌to‌‌the‌‌Code,‌‌the‌‌minimum‌‌living‌‌wage‌‌will‌‌be‌‌calculated‌‌ 
based‌‌on‌‌minimum‌‌living‌‌conditions,‌‌which‌‌will‌‌benefit‌‌ 
approximately‌‌50‌‌crore‌‌workers‌‌across‌‌the‌‌country.‌  ‌

 ‌

4. Timely‌‌Payment‌‌of‌‌wages‌  ‌
● Wages‌‌must‌‌be‌‌paid‌‌before‌‌the‌‌end‌‌of‌‌the‌‌7th‌‌day‌‌after‌‌the‌‌last‌‌day‌‌ 
of‌‌the‌‌wage‌‌period‌‌in‌‌establishments‌‌with‌‌less‌‌than‌‌1000‌‌employees,‌‌ 
and‌‌before‌‌the‌‌end‌‌of‌‌the‌‌10th‌‌day‌‌in‌‌all‌‌other‌‌establishments,‌‌ 
according‌‌to‌‌the‌‌Payment‌‌of‌‌Wages‌‌Act.‌  ‌
● Under‌‌the‌‌Code‌‌of‌‌Wages,‌‌different‌‌time‌‌periods‌‌have‌‌been‌‌defined‌‌ 
based‌‌on‌‌employees‌‌engaged‌‌in‌d
‌ aily/weekly/fornightly/monthly‌‌ 
shifts‌a‌ nd‌‌does‌‌not‌‌depend‌‌on‌‌the‌‌employee‌‌strength.‌  ‌

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5. Payment‌‌of‌‌Bonus‌‌Act‌‌   ‌
● The‌‌allocable‌‌bonus‌‌for‌‌payment‌‌of‌‌bonus‌‌act‌‌was‌‌67%‌‌for‌‌foreign‌‌ 
companies‌‌and‌‌60%‌‌for‌‌other‌‌companies.‌‌   ‌
● Under‌‌code‌‌of‌‌wages‌‌it‌‌has‌‌been‌‌changed‌‌to‌‌60%‌‌for‌‌banking‌‌ 
companies‌‌and‌‌67%‌‌for‌‌others‌‌   ‌
● Under‌‌code‌‌of‌‌wages‌‌conviction‌‌of‌‌sexual‌‌harassment‌‌shall‌‌lead‌‌to‌ 
disqualification‌‌from‌‌receiving‌‌bonus‌‌   ‌
 ● The‌‌eligibility‌‌limit‌‌has‌‌been‌‌changed‌‌from‌‌salary‌‌exceeding‌‌Rs‌‌7000‌‌a ‌‌
minimum‌‌wage‌‌under‌‌payment‌‌of‌‌bonus‌‌to‌‌exceeding‌‌amount‌‌as‌‌ 
determined‌‌by‌‌the‌‌notification‌‌of‌‌the‌‌appropriate‌‌government‌‌under‌‌ 
the‌‌code‌‌of‌‌wages.‌  ‌

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