RICHTERLICH ACADEMY

( JUNIOR CIVIL JUDGE, APP, TSAPP. CLAT, TSPGLCET, TS LAWCET, UPSC

LAW OPTIONAL)
2nd INTERNALS IMPORTANT QUESTIONS FOR
LABOUR LAW -2
WRITTEN BY ROMANA ( BA.LLB, LLM, PGD)

LIVING WAGE

Living wages are defined as that wages which are consistent to provide certain
facilities as well as some basic necessities to the employee. So, it means that
wage level which is satisfactory to provide for the basic necessities and such
niceties that are advised necessary for the betterment of the employee as well as
his family in accordance with his social status.

Thus, living ages has been defined as follows:

The living wage should enable the male earner to provide himself and his
family not merely the basic essentials of food, clothing and shelter but a
measure of frugal comfort including education for the children, protection
against ill-health, requirement of essential social needs and measures of
insurance against old age.

Minimum Wages

The term Minimum Wage has not been defined in the Minimum Wages Act,
1948. The minimum wage is the lowest wage in the scale below which the
efficiency of a worker is likely to be inspired. The minimum wage includes not
only the bare physical necessities but also a modicum of comfort otherwise
known as conventional necessities. The Minimum wages must, therefore,
provide not merely for the bare subsistence of life but also for the preservation
of the efficiency of the worker. For this purpose, the minimum wage must also
provide for the same measure of education, medical requirements, and
amenities.

FAIR WAGE

Fair wage means which is something more than the minimum wages. It is a
mean between the minimum wage and the living wage. So, the lower limit of
the fair wage must surely be the minimum wage whereas the upper limit is the
fair wage which is capacity of the industry to pay further the comparisons
definitely with the average payment of same work in other occupations or trades
which requires the same amount of ability. Basically, it is economic position and
its future prospects on which fair wage depends.

Whitley Commission’s

Whitley Commission, commonly called as Royal Commission on Labour was

appointed during 1931-33 which examined various issues relating to wage-
levels and reported on minimum wages, standardisation of wages, wage-
incentives and suggested for collection of relevant wage-data to resolve the
wage-determination. It also recommended a Minimum Wage fixation machinery
for industries where workers are not well organised. The Whitley Commission
also invited the attention of the Govt, towards certain unfair deductions made by
the employers from the wages and emphasised the need to prevent them by
recourse to necessary legislation. Thus the Payment of Wages Act, 1936 was
enacted to incorporate the recommendations of the Whitley Commission.

Authorized deductions :

The list is exhaustive and no other deduction from wages is permissible. The act
allows the following deductions –

(a) Fines -
(b) Deductions for absence from duty -

(c) Deductions for damage to or loss of goods -

(d) Deductions for services rendered -

What is the Unauthorised deduction of wages?

he Employment Rights Act 1996 (ERA) protects workers from unauthorised

deductions from pay. The rules on unlawful deduction of wages relate
to underpayment or non-payment of an employee's wage or salary without their
permission or consent.

Deductions which may be made from wages-(1) Not-withstanding the

provisions of sub-section (2) of section 47 of the Indian Railways Act, 1890 (9
of 1890), the wages of an employed person shall be paid to him without
deductions of any kind except those authorised by or under this Act..

Eligibility for Bonus and its payment

Under section 8 of the Act, eligibility for bonus and its payment is discussed.
Every employee shall get the entitlement for being paid by his employer in
every accounting year with Bonus. In the provisions; accordance of the Act.
Providing that he’s worked for minimum thirty working days in that particular
year.[

Under section 10, it states that with the subject to the other provisions of this
Act. Every Employer is liable to provide his employees’ with the bonus. In
respect of any accounting year, a bonus of 8.33 % of the salary or wage an
employee is earning during an accounting year.
Also, providing that where an employee is under the age of fifteen years at the
beginning of an accounting year. Therefore, the provisions of this Section shall
have effect in relation to such employees.

HIGH POWER BONUS COMMISION

If the allocable surplus for any accounting year referred to in Section 10

exceeds the amount of the minimum bonus available to workers under that
Section, the employer is allowed to pay a bonus equal to each employee's salary
or wage received during that accounting year. In determining the allocable
surplus under this Section, the amount set on or set off under the provisions of
Section 15 must be taken into account in accordance with those provisions.

SOCIAL INSURANCE AND SOCIAL SECURITY

The Act provides for payment of compensation to the employees and their
dependents in case of injury and accident {including certain occupational
diseases) arising out of and in the course of employment and resulting in
disablement or death .

Allocable Surplus Bonus

Means 67 % of the available surplus in an accounting year, in relation to an

employer, being a Company, other than a banking company. In any other case,
the allocable surplus means 60% of such available surplus.