PAYMENT OF
WAGES ACT, 1936
Act No. IV of 1936
[23rd April, 1956]
An Act to regulate the payment of wages to certain classes of persons employed in
Industry
Preamble.--Whereas
it is expedient to regulate the payment of wages to certain classes of persons employed in
industry;
It is hereby enacted as follows:--
1. Short title, commencement and application..--(1) This Act
may be called the Payment of Wages Act, 1936.
(2) It extends to the whole of Pakistan.
(3) It shall come into force on such date as the Federal
Government may by notification in the Official Gazette, appoint.
(4) It applies in the first instance to the payment of wages to persons employed in any
factory and to persons employed (otherwise than in a factory) upon any railway by a
railway administration or, either directly or through a sub-contractor, by a person
fulfilling a contract with a railway administration.
(5) The Provincial Government may after giving three months' notice
of its intention of so doing, by notification in the Official Gazette,
extend the provisions of the Act or any of them to the payment of wages to any class of
persons employed in any. industrial establishment or any class or group
of industrial establishments.
(6) Nothing in this Act shall apply to wages payable in respect of a wage-period which
over such wage-period, average more than three
thousand rupees a month.
[Notes.---The preamble very briefly sets forth the object which an enactment seeks
to accomplish. The preamble is a part of the statute and is in the nature of a recital of
the facts operative on the mind of the law-giver in proceeding to enact and furnish the
key to its under-standing. (A.I.R. 1948 Cal, 296). But the preamble cannot either restrict
or extend the enacting part where the language and the object and scope of the Act are not
open to doubt. Nothing can justify a departure from the plain meaning of the language of
the Act. It is only when the words are fairly open to more than one sense that the
question arises as to what was the true intention of the legislature. The Court must
endeavour only in case of ambiguity of language to apply the language to what was intended
and not to extend it to what was not intended. Apart from this particular and limited use
of the intention of the formers of the Act, even their declared intention is irrelevant
for construing the Act.
As a general rule, the intention of the legislature is to be ascertained from the language
it has preferred in the Act. The Court's function is not to surmise what the legislature
meant but to ascertain what it has said it meant. Also the Court must not create or
imagine an ambiguity in the aid of the preamble. One important rule of construction is the
rule of literal construction. If there is nothing to modify, alter or qualify the language
of the statute, it must be construed in the ordinary and natural meaning of the word and
sentence. When the meaning attached to the language is plain and unambiguous, there is no
occasion for the Courts to volunteer other interpretations. If this is done, the Court
turns away from its correct status of an administrator of law to that of law-giver. To
add, amend or supply any deficiency in the statute even though apparent one and whether
covered intentionally or by error is no concern of law courts.
The scope for the interpretation of the provisions of a statute arises only when the
language of the law in ambiguous, absurd, repugnant or inconsistent with the rest of the
law and also sufficiently flexible to admit of more than one interpretations. Then those
provisions may be construed which, if less correct grammatically, are more in harmony with
the intention of the legislature. (Maxwell on Interpretation of Statutes, 7th Ed. p, 17.)
The Act applies to all matters referred to therein except that it does not affect any
special law or any specific form of procedure prescribed under any law for the time being
in force. When there is conflict between this Act and a special law, the latter prevails
over the general. (A. I. R. 1941, Cal. 49-60.) In the absence of a certain provision in
allied Act, however, on any particular matter, the provisions of this Act will apply. It
must, however be applied with reference to circumstances peculiar to those matters.
The Act came into force on the 28 March 1937. It does not apply to the wages amounting to
Rs. 1500 or more.
The Act applies to the wages of persons employed in any factory or by a railway
administration or by a contractor to a railway administration. The Act can be extended by
the Provincial Government to any class of persons or establishments after giving three
months' notice. For definition of 'factory' and 'railway administration, see notes under
Section 2.]
2. Definitions.--In this Act, unless there is anything repugnant
in the subject or context:-
(i) "factory" means a factory as defined in clause (j) of section 2 of the
Factories Act, 1934 (XXV of 1934);
(ii) "Industrial establishment" means any--
(a) tramway or motor omnibus service;
(b.) dock, wharf or jetty;
(c) inland steam-vessel;
(d) mine, quarry or oil-field;
(e) plantation;
(f) workshop or other establishment in which articles are produced, adapted or
manufactured, with a view to their use, transport or sale;
(g) establishment of a contractor who, directly or indirectly,
employs persons [ * * * * * ] to do any skilled or unskilled, manual
or clerical labour for hire or reward in connection with the execution of a contract to
which, he is a party, and includes the premises in which, or the site at which, any
process connected with such execution is carried on.
Explanation.--Contractor includes a sub-contractor, headmen or agent.]
(iii) "plantation" means any estate which is maintained for the purpose of
growing cinchona, rubber, coffee or tea, and on which twenty-five or more parsons are
employed for that purpose;
(iv) "prescribed" means prescribed by rules made under this Act;
(v) "railway administration" has the meaning assigned to it in clause (6) of
section 3 of the Railways Act, 1890 (IX of 11190); and
(vi) "wages" means all remuneration, capable of being expressed in terms of
money, which would, if the terms of the contract of employment, express or implied, were
fulfilled,. be payable, whether conditionally upon the regular attendance, good work or
conduct or other behaviour of the person employed or otherwise, to a person employed in
respect of his employment or of work done in such employment and includes any bonus or
other additional remuneration of the nature aforesaid which would be so payable and any
sum payable to such person by reason of the termination of his employment, but does not
include.--
(a) the value of any house accommodation, supply of light, water, medical attendance or
other amenity, or of any service excluded by general or special order of the *** Provincial Government;
(b) any contribution paid by the employer to any pension fund or provident fund;
(c) any travelling allowance or the value of travelling concession;
(d) any sum paid to the person employed to defray special expenses entailed on him by the
nature of his employment; or
(e) any gratuity payable on discharge.
[Notes.-Cl. (i)--Factory.--The definition of ‘factory’ as given in the Factories
Act, 1934 is as below:-
"Factory" means any premises, including the precincts thereof, whereon ten or
more workers are working, or were working on any day of the preceding twelve months, and
in any part of which a manufacturing processes is being carried on or is ordinarily
carried on with or without the aid of power, but does not include a mine subject to the
operation of the Mines Act, 1923 (IV of 1923)".
While the ordinary: use of the expression 'premises' used in the above definition will
include all the buildings of the factory together with the compound on which they stand,
the purpose for which the persons are employed on the permises is not material. A factory
includes machine rooms. sheds, godowns and yards if within the premises or precincts and
mechanical power is used in aid of any manufacturing process, (A.I.R. 1937. Mad. 345). It
should be noted that clerks and other persons employed in the office situated within the
precincts of the factory would be persons employed in the factory and therefore within the
purview of this Act even if the office is situated in a separate room in the same
compound. The words used in section 1 (4) are "persons employed" and the
legislature has been careful not to use words like workers, workmen, employees, etc. which
occur in other Acts. The narrow definition of these expressions given in other Acts is of
no avail in the present context. The Act applies to all persons employed whether they may
be officers or otherwise and whether they do clerical, manual or other kind of work
provided their wages average less than one thousand rupees per month.
Cl. (v) Railway Administration.--This expression has been defined as under in clause (6)
of section 3 of the Railways Act, 1890:-
"Railway Administration" or "Administration" in case of a railway
administered by the Government or a State means the Manager of the Railway and includes
the Government or the State, and, in case of a railway administered by a railway company,
means the railway company.
Cl. (vi)--Wages.--The term "wages" as defined in this section means wages
actually earned and not potential wages. It means remuneration payable on the fulfillment
of the contract.
Field allowance included in basic gross salary according to service certificate cannot be
excluded from term "wages". [(NIRC): Mohammad Bashir vs. Managing Director, Sui
Northern Gas Pipelines Ltd: 1976 LLC 713=1976 PLC 505.]
"Wages" include conveyance allowance and duty allowance being not dependent on
performance of special duty. Travelling allowance is distinct from conveyance allowance.
[H.C. (Kar.): Mir Laik Ali and others vs. Mahboob Khan; 1962 LLC 630=1962 PLC 925.]
"Wages" does not necessarily mean "earned wages" Dismissal of
employee from service held illegal by Court. Employee, in circumstances of case, entitled
to full wages for entire period of suspension. (H.C. (Kar.): North Western Railway vs.
Sher Mohammad: 1967 LLC 372=PLD 1966 (W.P.) Kar. 483=1967 PLC 101.]
The term ‘wages’ denotes "the compensation agreed upon by a master to be
paid to a servant, or any other person hired to do work or business for him." It
conveys that a servant/hired person is entitled to wages for doing work or business for
his master. In other words, it clearly denotes that in order to claim wages, a
servant/hired person is answerable his master for work or business to the latter. [H.C.
(Pesh.) 1980 LLC 153=1980 PLC 568 (i)=PLJ 1980 Pesh. 94. Adamjee Paper and Board Mills,
Nowshera vs. Sher Muhammed Khan 2 others.]
Where terms of employment, express or implied, do not provide for any notice pay at the
time of discharge of employees and their services are dispensed with on a closure of the
business, notice pay, held, not wages as defined. [H.C. (Kar.) Varghese & others vs.
Carnel Coir Works; 1965 LLC 213=1964 II LLJ 368.]
Wages payable under the contract of employment must be ascertained by the authority under
section 15.--The definition of "wages" makes it clear that the authority must
decide as to what remuneration was payable under the contract of employment. To say that
authority has no jurisdiction to entertain an application if the wages stated by the
employee are denied by the employer, will defeat the Act itself and make it absolutely
ineffective. The authority is certainly competent to construe the terms of the contract of
employment in order to determine what wages are to be paid. [Shaukat Ali & other vs.
Pakistan, L.L.C. 1959-60, Kar. (H.C.) 73].
A wrongfully dismissed employee on reinstatement is entitled to wages because terms of
contract are fulfilled.--A railway employee was dismissed on 30th June 1963 which was held
illegal on 9th June 1955 by a Civil Court. The employee was then reinstated but the wages
during this period of unemployment were refused to him. The case (Divisional
Superintendent, N.W.R., Lahore vs. Muhammad Sharif, L.L.C. 1959-60, H.C. 36) went up to
the High Court of West Pakistan in revision which held: "An employee would be
entitled to wages if the terms of the contract of employment are fulfilled. If the
employee was terms of the contract of employment are fulfilled. If the employee was
willing to perform his part of the contract, but was not allowed to do so by the employer,
it cannot be said that the employee had not fulfilled the terms of his contract and was,
therefore, not entitled to any wages for the period during which he was not allowed to
work". It was further held that a suspended employee can also claim wages during the
period of suspension, because in such case, the contract of employment was not suspended
and the employee was prevented from earning the wages which he would have earned had he
been allowed to work.
Notice Pay.--A question arises whether the employee entitled to notice pay can recover the
same under the Payment of Wages Act. The question for determination is whether such an
employee can apply under the Act for recovery o the sum payable on account of want of
proper notice according to the express or implied terms and conditions of employment. He
can do so because according to the definition, wages consist not only of the sums of money
earned by a workman but also of a sum payable by reason of the termination of the
employment. So when the payment of this sum is delayed, the workman has a right to claim
it under section 15 of the Act.
Value of house accommodation.--It seems that house allowance would be a part of
wages but the value of house accommodation provided would not form a part of wages. For
what is exempted from the definition of wages is the value of house accommodation and the
value of house accommodation is different from house allowance. House allowance is a sum
allowed in addition to wages. The value is the worth of accommodation or the price of
utility.
Contribution to Pension or Provident Fund.--The contribution of an employer to a
pension or provident fund is not included in 'wages' but the contribution of an employee
to the provident fund would be 'wages'. For before the deduction of the contribution
payable to the pension or provident fund by the employee it is part of the remuneration
earned by him at the end of wage period and is therefore 'wages' and it would not lose the
character of wages when it is transferred to the fund and an employee would be entitled to
recover the same on the termination of services.]
3. Responsibility for payment of wages.--Every employer including a contractor shall be responsible for the payment to persons
employed by him of all wages required to be paid under this Act.
Provided that, in the case of persons employed (otherwise than by a contractor)--
(a) in factories, if a person has been named as the manager of the factory under clause
(e) of sub-section (1) of section 9 of the Factories Act, 1934 (XXV of 1934),
(b) in industrial establishments, if there is a person responsible to the employer for the
supervision and control of the industrial establishment.
(c) upon railways (otherwise than in factories), if the employer is the railway
administration and the railway administration has nominated a person in this behalf for
the local area concerned,
the person so named, the person so responsible to the employer or the person so nominated,
as the case may be, shall be responsible for such, payment.
[Notes.--This section lays down that when a manager is appointed in a factory, industrial
establishment or railway, he is responsible for payment of wages and section 19 enacts
when the authority under section 15 is unable to recover from such a manager or person
responsible under section 3 any amount directed to be paid, then such amount shall be
recovered from the employer. Bombay High Court held that under section 15 proceedings are
to be instituted against only one person whether he is a manager or the employer but not
against both. If the owner of the factory appoints a manager he alone should be made party
to an application under section 15 (3) for a claim for delayed wages. The liability of the
owner arises only when it is subsequently found that the whole or part of the amount
cannot be recovered from the manager. (A. I. R. 1940, Bum. 87).
If the persons are employed by a contractor, the contractor is responsible for the payment
of wages.]
4. Fixation of wage periods.---(1) Every person responsible for
the payment of wages under section 3 shall fix periods (in this Act referred to as
wage-periods) in respect of which such wages shall be payable.
(2) No wage-period shall exceed one month.
[Notes.--It is the duty of the person responsible for Payment of wages under section 3
to fix the wage period. No wage period is to exceed one month].
5. Time of payment of wages.--(i) The wages of every person
employed upon or in--
(a) any railway, factory or industrial establishment upon or in which less than one
thousand persons are employed, shall be paid before the expiry of seventh day.
(b) any other railway, factory or industrial establishment, shall be paid before the
expiry of the tenth day,
after the last day of the wage-period in respect of which the wages are payable.
(2) Where the employment of any person is terminated by or on behalf of the employer, the
wages earned by him shall be paid before the expiry of the second working day from the day
on which his employment is terminated.
(3) The Provincial Government may, by general or special order
exempt, to such extent and subject to such conditions as may be specified in the order,
the person responsible for the payment of wages to persons employed upon any railway
(otherwise than in a factory) from the operation of this section in respect of the wages
of any such person or class of such persons.
(4) All payments of wages shall be made on a working day.
[Notes.--This section relates to time of payment of wages which are to be paid
within seven days after the last day of the wage period except in establishments employing
1000 or more persons which are permitted to pay within ten days. All payments of wages are
to be made on a working day. The penalty for a breach of the provisions of this section is
provided under section 20(1) of the Act namely, a fine upto five hundred rupees.]
6. Wages to be paid in current coin or currency notes.--All wages
shall be paid in current coin or currency notes or in both.
[Notes.--Wages must be paid in current coin or currency notes or in both. It is clear from
this section that payment by cheque is not permitted.]
7. Deductions which may be made from wages.--(l) Notwithstanding
the provisions of sub-section (2) of section 47 of the Railways Act, 1890 (IX 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.
Explanation.--Every payment made by the employed person to the employer or his agent
shall, for the purposes of this Act, be deemed to be a deduction from wages.
(2) Deductions from the wages of an employed person shall be made only in accordance with
the provisions of this Act, and may be of the following kinds only, namely:--
(a) fines;
(b) deductions for absence from duty;
(c) deductions for damages to or loss of goods expressly entrusted to the employed person
for custody; or for loss of money for which he is required to account, where such damage
or loss is directly attributable to his neglect or default;
(d) deductions for house-accommodation supplied by the employer;
(e) deductions for such amenities and services supplied by the employer as the **** Provincial Government may, by general or special order authorise;
Explanation.--The word 'services' in this sub-clause does not include the supply of tools
and raw materials required for the purposes of employment.
(f) deductions for recovery of advances or for adjustment of overpayments of wages;
(g) deductions of income-tax Payable by the employed person;
(h) deductions required to be made by order of a Court or other authority competent to
make such order;
(i) deductions for subscriptions to, and for re-payment of advances from. any provident
fund to which the Provident Funds Act, 1925 (XIX of 1925). applies or any recognised
provident fund as defined in Clause (37) of section 2 of the Income-Tax
Ordinance, 1979 (XXXI of 1979)., or any provident fund approved in this behalf by the Provincial Government during the continuance of such approval;*****
(j) deductions for payments to co-operative societies approved by the Provincial Government or to a scheme of insurance
maintained by the Pakistan Post Office; and
(k) " deductions, made with the written authorisation of the employed person, in
furtherance of any war Savings scheme, approved by the Provincial Government, for the
purchase of securities of the Government of Pakistan or the
Government of the United Kingdom.
[Notes.--This section provides that only specified deductions from the wages of an
employed person can be made. Deductions for damage-or loss can be made only in respect of
(a) goods entrusted to an employed person for custody; or (b) money for which he is
required to render account. The deductions in respect of damage or loss occurring in the
course of manufacturing process, e.g. in respect of spoiled cloth are not permissible
under this section.
Deductions from salary of an employee for purposes of house-accommodation provided by the
employer is permissible only under clause (d), sub-section (2), s. 7. Reliance on clause
(h) is misplaced for purposes of enhanced deductions. Case cannot be taken out from the
pale of clause (d) if an employees occupation of house accommodation is declared by the
employer as unauthorised, [1975 LLC 4 (S.C. Pak.)= PLJ 1974 SC. 208: Divisional
Superintendent, P. W. R., Karachi vs. Abdul Haq.]
Railway authorities, held, not entitled to deduct half salary of employee refusing to
vacate Railway quarters by way of penalty for unauthorised occupation. Deduction cannot be
more than that provided in Ss. 7(2) (d) & 11. [1976 LLC 491 (H.C. Kar.)= 1975 PLC 310:
Vice, chairman, P. W. Railway vs. Qutubuddin.]
Explanation to sub-section (1).--The explanation to sub-section (1) is meant to provide
against the device that may be resorted to by employers to circumvent the provisions of
this section by nominally giving the full wages without any deductions and then making the
employee pay to the employer a sum equal to the amount of intended unauthorised deduction.
The explanation says that the payment of any sum by the employee to the employer shall be
deemed to be deduction from wages.
Re-employment at lower pay whether a deduction?-If an employer terminates the services of
an employee and offers to re-employ on a lower rate of pay, there is nothing in the
Payment of Wages Act against it and no question of deduction under the Act arises. But
where in a case of reduction of wages there is no suggestion that fresh contract of
service was intended to be enforced on the employee or a fresh contract, of service was
offerred to him, the reduction amounts to a deduction. (Mir Mohammad Haji Umar vs.
Divisional Superintendent, N. W. R., A. I. R., 1941, S. 191.)
In the above cited case an engine driver Mir Mohammad who used to draw a salary of Rs.
68/- p.m. upto September was reduced for three months, one incremental step from Rs. 68/-
p.m. for unsatisfactory working and delinquencies committed before September. It was held
that it was an unauthorised deduction under the Payment of Wages Act.
Reversion, whether a fine.--If an officiating employee is reverted to his permanent
post carrying lower pay, it is no deduction or a fine. The fact that a person is
officiating in a senior post is to be looked at only as a privilege granted as a temporary
measure. When that period of temporary employment is terminated he would naturally revert
to his substantive job. It was held by the Punjab High Court that it is purely for the
employer to determine when and for what period an employee will be asked to serve as a
temporary hand in a job carrying higher pay than that of his substantive appointment. The
employee has no legal claim to be retained in a job higher than his substantive
appointment. (Works Manager, Carriage and Wagon Shops, Moghalpura vs. K. G. Hashmat, A. I.
R. 1946. L. 316). In Kishan Chand vs. Divisional Superintendent, Lahore Division, North
Western Railway (A. I. R. 1948, L 202), it was held that cases of unjustifiable reversion
cannot be decided by the authority appointed under the Act. The High Court held that the
contention that Kishan Chand had been unjustly reverted against the terms on which he had
been promoted were matters outside the scope of the enquiry under the Act. An application
for revision was rejected.
Unearned bonus, non payment of the whole--whether a deduction?--In one case the
mill had a scheme of paying bonus to its employees directly related to their attendance.
It was stipulated that those who do not attend on certain days would forfeit bonus either
in part or in full. Workers claimed full bonus at the end of the wage period irrespective
of the number of days on which they attended the mill. It was held that wages mean those
which are actually earned and not potential wages. Section 7 plainly refers to wages
earned. It says: "wages of an employed person shall be paid to him without deductions
of any kind." This cannot mean that wages which may be earned but had not been earned
shall be paid without deduction. The expression "wages" must mean wages earned.
There is nothing in the Act to prevent bonus being paid if not earned. Bonus does not
become payable to the employees who do not earn it under the terms of the bonus scheme and
an employer is not bound to pay for work which has not been clone and employee is not
entitled to receive pay which he has not earned. (Arvind Mills Limited vs. K. R. Gadgill,
A. I. R. 1941, Bom. 26).]
8. Fines.--(l) No fine shall be imposed on any employed person
save in respect of such acts and omissions on his part as the employer, with the previous
approval of the Provincial Government or of the prescribed authority,
may have specified by notice under sub-section (2).
(2) A notice specifying such acts and omissions shall be exhibited in the prescribed
manner on the premises in which the employment is carried on or in the case of persons
employed upon a railway (otherwise than in a factory), at the prescribed place or places.
(3) No fine shall be imposed on any employed person until he has been given an opportunity
of showing cause against the fine, or otherwise than in accordance with such procedure as
may be prescribed for the imposition of fines.
(4) The total amount of fine which may be imposed in any one wage-period on any employed
person shall not exceed an amount equal to half an anna in the rupee of the wages payable
to him in respect of that wage-period.
(5) No fine shall be imposed on an employed person who is under the age of fifteen years.
(6) No fine imposed on an employed person shall be recovered from him by installments or
after the expiry of sixty days from the day on which it was imposed.
(7) Every fine shall be deemed to have been imposed on the day of the act or omission in
respect of which it was imposed.
(8) All fines and all realisations thereof shall be recorded in a register to be kept by
the person responsible for the payment of wages under section 3 in such form as may be
prescribed; and all such realisations shall be applied only to such purposes beneficial to
the persons employed in the factory or establishment as are approved by the prescribed
authority.
Explanation.--When the persons employed upon of in any railway, factory or
industrial establishment, are part only of a staff employed under the same management, all
such realisations may be credited to a common fund maintained for the staff as a whole,
provided that the fund shall be applied only to such purposes as are provided by the
prescribed authority.
[Notes.--Fines can be imposed on an employed person in respect of acts and
omissions which are specified with the previous approval of the appropriate Government by
notice exhibited in the factory. No fine can be imposed for an act or omission which is
not contained in the notice and any such fine would be an unauthorised deduction.
Secondly, before a fine can be imposed, an opportunity of showing cause against the fine
should be given to the employed person and the procedure prescribed for the imposition of
fine must be followed. Thirdly, the total amount of fine in one wage period must not
exceed an amount equal to half anna in the rupee of wages payable to him in respect of the
wage period. The fine imposed must be recovered in one lump sum. It cannot be recovered in
installments nor can it be recovered after sixty days from the day on which the act or
omission in question was committed. All fines are to be applied only for such purposes
beneficial to the staff as may be approved by the prescribed authority.]
9. Deductions for absence from duty.--(l) Deductions may
be made under clause (b) of sub-section (2) of section 7 only on account of the absence of
an employed person from the place or places where, by the terms of his employment, he is
required to work, such absence being for the whole or any part of the period during which
he is so required to work.
(2) The amount of such deduction shall in no case bear to the wages payable to the
employed person in respect of the wage period for which the deduction is made a larger
proportion than the period for which he was absent bears to the total period, within such
wage period, during which by the terms of his employment, he was required to work:
Provided that, subject to any rules made in this behalf by the Provincial
Government, if ten or more employed persons acting in concert absent themselves
without due notice (that is to say without giving the notice which is required under the
terms of their contracts of employment) and without reasonable cause, such deduction from
any such person may include such amount not exceeding his wages for eight days as may by
any such terms be due to the employer in lieu of due notice.
Explanation.--For the purposes of this section, an employed person
shall be deemed to be absent from the place where he is required to work, if, although
present in such place, he refuses, in pursuance of a stay-in-strike or any other cause
which is not reasonable in the circumstances, to carryout his work.]
[Notes.--Deductions for absence from duty. Deductions from wages on account of absence of
an employed person should be proportionate to the period of absence from work. If a man is
absent for one day out of 8, he can only lose 1/8 of his wages and the employer cannot
make a greater deduction because of the inconvenience occasioned to him by such absence
(Arvind Mills Ltd. vs. K. R. Gadgil, A.I.R. 1941, Bom. 26). Also as per sub-section 2 of
this section, if the duration of his wage period is one month, the total number of working
days being 25, and the employed person is absent from duty for four days, the maximum
deduction allowed is 4/25th of the wages for the month. This is so because the amount of
deduction is to be proportionate tothe period for which a person is required to work which
is 25 days in the present case. This section lays down the maximum amount of deduction. It
may be less if the employer so wills.
Deduction for strike. As an exception to what is said in the above paragraph, the employer
is entitled to make deduction upto 8 days of wages where ten or more employed persons
acting under concert absent themselves without due notice and without reasonable cause. It
may be noted that the legislature has not used the word 'strike' though this proviso
relates to strike so called. The reason seems to be that the word 'strike' is used in
different senses and has no accepted connotation.
Forfeiture of wager in lieu of notice not permissible. In view of the provisions of
section 7 and 9 it appears that a clause in the contract of employment requiring fifteen
days notice before leaving service and stipulating that wages would be forfeited in the
absence of notice would be void. Under section 7 wages are to be paid without
un-authorised deductions and the present section does not authorise deduction by way of
forfeiture except in cases covered by the proviso to sub-section 2 (absence of ten or more
persons acting in concert). The employer however retains his right to sue for failure to
give notice but he is not entitled to forfeit the wages earned. (13 Bom. L. R. 19).]
10. Deductions for damage or loss.- (1) A deduction
under clause (c) of sub-section (2) of section 7 shall not exceed the amount of the damage
or loss caused to the employer by the neglect or default of the employed person and shall
not he made until the employed person has been given an opportunity of showing cause
against the deduction, or otherwise than in accordance with such procedure as may by
prescribed for the making of such deduction.
(2) All such deductions and all realisations thereof shall be recorded in a register to be
kept by the person responsible for the payment of wages under section 3 in such form as
may be prescribed.
[Notes.--Deductions under this head in respect of damage or loss occurring in the course
of a manufacturing process, for example in respect of spoilt cloth, are not permissible,
because such goods are not entrusted to his custody. Deductions can only be made for
damage or loss to goods entrusted to the custody of the employed person or for loss of
money which he is required to account for, due to the neglect or default of the employed
person. It appears that no deduction can be made for loss of damage to tools and
instruments supplied to an employed person for purposes of his employment, because these
cannot be said to be entrusted for custody. The legislature intended to affect employees
like store-keepers, etc. to whom goods are entrusted for custody.]
11. Deductions for services rendered.--A deduction
under clause (d) or clause (e) of sub-section (2) of section 7 shall not be made from the
wages of an employed person unless the house-accommodation, amenity or service has been
accepted by him as a term of employment or otherwise, and such deduction shall not exceed
an amount equivalent to the house-accommodation, amenity or service supplied and, in the
case of a deduction under the said clause (e), shall be subject to such conditions. as ***** the Provincial Government may impose.
[Notes.--Deductions are limited to the value of the service rendered and the services must
have been accepted by the employee.]
12. Deductions for recovery of advances.--Deductions
under clause (f) of sub-section (2) of section 7 shall be subject to the following
conditions, namely--
(a) recovery of an advance of money given before employment began shall be made from the
first payment of wages in respect of a complete wage period, but no recovery shall be made
of such advances given for travelling-expenses;
(b) recovery of advances of wages not already earned shall be subject to any rules made by
the Provincial Government regulating the extent to which such
advances may be given and the installments by which they may be recovered.
13. Deductions for payments to co-operative societies and
insurance schemes.--Deductions under clause (j) and clause (k)
of sub-section (2) of section 7 shall be subject to such conditions as the Provincial Government may impose.
14. Inspectors.--(l) An Inspector of Factories appointed under
sub-section (1) of section 10 of the Factories Act, 1934, (XXV of 1934), shall be an
Inspector for the purposes of this Act in respect of all factories within the local limits
assigned to him.
(2) The Provincial Government may appoint Inspectors
for the purposes of this Act in respect of all persons employed upon a railway
(otherwise than in a factory) to whom this Act applies.
(3) The 2[Provincial Government] may, by notification in the Official
Gazette, appoint such other persons as it thinks fit to be Inspectors for the purposes
of this Act, and may define the local limits within which and the class of factories and
industrial establishments in respect of which they shall exercise their functions.
(4) An Inspector may, at all reasonable hours, enter on any premises, and make such
examination of any register or document relating to the calculation or payment of wages
and take on the spot or otherwise such evidence of any person, and exercise such other
powers of inspection, as he may deem necessary for carrying out the purposes of this Act.
(5) Every Inspector shall be deemed to be a public servant within the meaning of the
Pakistan Penal Code (XLV of 1860).
15. Claims out of deductions from wages or delay in
payment of .wages and penalty for malicious or vexatious claims.--(l) The Provincial Government may, by notification in the
official Gazette appoint any Commissioner for Workmen's
Compensation or other officer with experience as a Judge of a Civil Court or as
stipendiary Magistrate to be the authority to hear and decide for any specified area all
claims arising out of deductions from the wages, or non-payment of dues
relating to provident fund or gratuity payable under any law or delay in the payment
of wages, of persons employed or paid in that area.
(2) Where contrary to the provisions of this Act any deduction has been made from the
wages of an employed person, or any payment of wages or of any dues
relating to provident fund or gratuity payable under any law has been delayed, such
person himself, or any legal practitioner, or any official of a registered trade union
authorised in writing to act on his behalf, or any Inspector under this Act, or of any heirs of an employed person who has died or any other person
acting with the permission of the authority appointed under sub-section (1), may apply to
such authority for direction under sub-section (3):
Provided that every such application shall be presented within three
years from the date on which the deduction from the wages was made or from the date on
which the payment of the wages was due to be made, as the case may be:
Provided further that any application may be admitted after the said period of three years when the applicant satisfies the authority
that he had sufficient cause for not making the application within such period.
(3) When any application under sub-section (2) is entertained, the authority shall hear
the applicant and employer or other person responsible for the payment of wages under
section 3, or give them an opportunity of being heard, and, after such further inquiry (if
any) as may be necessary, may, without prejudice to any other penalty to which such
employer or other person is liable under this Act, direct the refund to the employed
person or, if the applicant is one of the heirs of an employed person the
payment to such applicant, of the amount deducted, or the payment of the delayed
wages, together with the payment of such compensation as the authority may think fit, not
exceeding ten times the amount deducted in the former case and not exceeding ten rupees in
the latter:
Provided that no direction for the payment of compensation shall be made In
the case of delayed wages if the authority is satisfied. that the delay was due to--
(a) bond fide error or bona fide dispute as to the amount payable to the employed person,
or
(b) the occurrence of an emergency, or the existence of exceptional circumstances, such
that the person responsible for the payment of the wages was unable, though exercising
responsible diligence, to make prompt payment, or
(c) the failure of the employed person to apply for or accept payment.
(4) If the authority hearing any application under this section is satisfied that it was
either malicious or vexatious, the authority may direct that a penalty not exceeding fifty
rupees be paid to the employer or other person responsible for the payment of wages by the
person presenting the application.
(5) Any amount directed to be paid under this section maybe recovered--
(a) if the authority is a Magistrate, by the authority as if it were a fine imposed by him
as Magistrate, and
(b) if the authority is not a Magistrate, by the authority as an
arrear of land-revenue, or, in the prescribed manner, by the authority by distress and
sale of the moveable property belonging to the person by whom the amount is to be paid, or
by attachment and sale of the immoveable property belonging to such person.]
[Notes.--This section provides for hearing of claims on account of delay in payment of
wages or deductions from wages by specially constituted Authority. This Authority has been
empowered to order the payment of sums wrongfully with-held plus compensation upto ten
times of that sum in case of deduction and not exceeding rupees ten in cases of delay.
The Authority under section 15 must decide as to what remuneration is payable under the
contract of employment. The definition of "wages" given in the Act makes it
clear that the Authority must decide as to what remuneration was payable under the
contract of employment. To any that the Authority has no jurisdiction to entertain an
application if the wages stated by the employee are denied by the employer will defeat the
Act itself and make it absolutely ineffective. The Authority is competent to construe the
terms of the contract of employment in order to determine what wages are to be paid. If
the employer denies or disputes the fact that servant was employed by him, it will also be
for the Authority to decided that question
The jurisdiction of the Authority is really to determine the terms of the contract in so
far as they relate to the payment of wages and in so far as he has to decide the liability
of the employer to pay wages under the terms of the contract. [Shaukat Ali & others
vs. Pakistan: LLC 1959-60, Kar. (H. C.) 73.]
"Sufficient cause". It is difficult and undesirable to attempt a precise
definition of the words "sufficient cause" in the second proviso to sub-section
(2)of section 15. To do so would be to crystallize into a rigid definition that judicial
power and discretion which the legislature has for the best of all reasons left
undetermined and unfettered. What constitutes "sufficient cause" cannot be laid
down by hard and fast rules. It must be determined by reference to all the circumstances
of each particular case.
Proceedings against the employer or the manager. Sub-section 3 of section 15 clearly
contemplates that the proceedings in the first instance should be against either the
employer or against the manager but not against both. Direction should in the first
instance be made against the manager if he is found to have made the illegal deductions
and the payment should be sought to be recovered from him, and it is only where it cannot
be recovered that it should be recovered from the employer. This follows from a perusal of
the provisions of sections 3 and 19 of the Act. But it does not follow that the
application also in the first instance rather primarily should be made against the manager
and if it is not so made, the application should be held to be untenable so as to give no
jurisdiction to the Authority to act upon it.
Suspension of railway employee subsequent to arrest would not be sufficient to deprive
employee of full pay unless suspension found justified after inquiry. Employee not served
with charge-sheet nor arrested in an offence involving moral turpitude. Discharge ordered
by Court under S. 253. Criminal PC. 1898. Arrears of pay allowed by Authority under Ss.
15/16, Payment of Wage Act. Held, no interference warranted under Art. 199, Constitution
of Pakistan (1973) and order of Authority upheld. [H.C. (Kar.) PLJ 1981 Kar. 392.
Divisional Superintendent Pakistan Railway vs. Sind Labour Court No. IV Hyderabad & 9
others.]
Claim for wages for the period of suspension. In establishments where the Industrial and
Commercial Employment (Standing Orders) Ordinance, 1968 is applicable, Standing Order 15
(5) thereof permits suspension for a period not exceeding four days at a time on half pay
for certain acts and omissions specified therein. Besides, where an employer not covered
by the Ordinance has under bye-laws power to suspend his employee and the employee is
suspended in exercise of the valid power, he is not entitled to pay during the period of
his suspension. The employee can neither insist on working nor claim his may during the
period of suspension. The employer has no power to suspend an employee without wages
unless it is specifically so provided in the contract of employment, unless suspension is
covered by the Industrial and Commercial Employment (Standing Orders) Ordinance 1968, or
expressly provided in the bye-laws of the establishment or in the contract of employment.
Deduction in pay by an employer during suspension of the employee would be unauthorised
deduction. In the absence of a rule permitting the employer to suspend the employee for
some reason or other. it is not within the power of the employer to suspend the employee
and refuse to pay him wages therefor. The absence of such power either means that the
master would have no power to suspend a workman and even if he does so in the sense that
he forbids the employee to work, he will have to pay wages during the so-called period of
suspension. The absence of a term in the contract prohibiting the employer from suspending
the employee would not enable him to suspend the employee. It is the presence of a term in
the contract, or any provision either in the statute or rule or standing order entitling
the employer to suspend the employee, that would be the basis of suspension. [H. C. (Mad.)
Dorai Kannu (P.) vs. Hotel Savoy, Madras: 1966 LLC 317=1966 I LLJ 701.]
Wages for suspension. An employee would be entitled to wages if the terms of the contract
of employment are fulfilled. If the employee was willing to perform his part of the
contract, but was not allowed to do so by the employer it cannot be said that the employee
had not fulfilled the terms of his contract or that he was not entitled to any wages for
the period during which he was not allowed to work. The position of a suspended employee
is almost similar to that of an employee who has been wrongfully dismissed or discharged.
If an employee, during the period of his suspension, can claim wages, there is no reason
why an employee who has been wrongfully dismissed, should not be able to claim wages for
the period during which he was not allowed to perform his duties. [H. C. (Lah.): The
Divisional Superintendent, N.W.R., Lahore vs. Muhammad Sharif: 1960 LLC 36=PLD 1959 (W.
P.) Lah. 518- 1960 PLC 214.]
The Authority has no jurisdiction to decide disputed questions of fundamental facts when
the employer and employee come before him (the Payment of Wages Authority) and rely on
different contracts. It is not within his jurisdiction to decide which of two contracts
hold the field, which of them is subsisting and under which of them employer is liable to
pay wages. It is only when there is no dispute as to the contract that subsists and
regulates the rights and liabilities of the parties that the jurisdiction of the Authority
arises to determine the quantum of wages." [H. C. (Bom.): Aboobakar Dawood and others
vs. Potdar (V.B.) and another: 1963 LLC 469=1969 I LLJ 398:]
The employer contended that the applicant was not retrenched but was retired on reaching
the age of superannuation as per the terms of contract of service. The applicant also
contending that the employer had no right to retire him. The authority in such
circumstances, held, could not decide such disputed questions of fundamental facts, [H C.
(Mys.): Codialabail Press vs. Monappa (K.): 1963 LLC 552==1963 I LLJ 638).
Authority cannot adjudicate question of termination or illegal discharge from service. Can
pass order only about deducted or delayed wages. [(Authority under Payment of Wages Act):
Muhammad Ikram vs. S. Muhammad Din & Sons Ltd., Lahore: 1970 LLC 111=1970 PLC 15]
Wages after termination of service. The claim for wages for the period subsequent to the
termination of service of the workman, held, could not be entertained and decided by the
Payment of Wages Authority on an application under S. 15 of the Act. The Payment of Wages
Authority in such application, held, cannot decide the question as to whether the
dismissal or termination or removal from service of the applicant was valid and justified.
[H. C. (Raj.): Lakhpatrai vs. Om Prakash and another: 1966 LLC 261 = 1965 II LLJ 398.]
Incidental matters. The jurisdiction of the authority under section 15 of Payment of Wages
Act, 1936 is limited by the provisions of that section. In dealing with claims arising
under the section, the authority inevitably would have to consider questions incidental to
the claims. In determining the scope of these incidental matters the limited jurisdiction
is not unduly extended. Care must also be taken to see that the scope of these incidental
questions is not unduly limited so as to affect or impair the limited jurisdiction
conferred on the authority. It would however, be inexpedient to lay down any hard and fast
or general role which would afford a determining test to demarcate the field of incidental
matters which can be legitimately considered by the authority and those which cannot be so
considered. If a contract of employment is admitted and there is a dispute about the
construction of its terms, that would fall within section 15 of the Act. Similarly, the
question as to whether a particular employee is governed by the terms of an award or
whether he falls within the terms of an agreement would be a question which is so
intimately and integrally connected with the problem of wages that it would be
unreasonable to exclude such a question from the jurisdiction of the authority under
section 15 of the Act. [S.C. (Ind.): Shri Ambica Mills Co. Ltd. vs. S.B. Bhatt and
another: 1961 LLC 355=1961 I LLJ 1 = 1961 PLC 1459.]
Withholding of servant allowance. Employees Claiming in their application before the
Payment of Wages Authority for directions in regard to alleged deductions from their wages
on ground that the benefit of servant allowance payable to them was withheld. The
authority finding that by virtue of such withdrawal of the benefit the total emoluments of
the applicants were not adversely affected. Such finding also confirmed by the High Court
in the petition preferred by the aggrieved employees. Correctness of such finding, in the
circumstances, held, could not be challenged in appeal. [S.C. (Ind.): Dinaram Chutiya and
others vs. Kakajan Tea Estate by Divisional Manager: 1963 LLC 432--1963 I LLJ 267.]
Lawyers are neither employees nor work for wages but are representatives or advisers of
persons engaging them and engaged on fees. Payment of Wages Act, 1936 having application
to wages and employees and such attributes being not applicable to lawyers, Authority
under Payment of Wages Act, 1936, held, possessed no jurisdiction to entertain application
for payment of retainership fees or fees for cases handled by a lawyer. [H. C. (Lah.) 1981
PLC 498/PLJ 1981 Lah. 460; Simma Fabrics Ltd., Gujranwala vs. Authority under the Payment
of Wages Act and 3 others.]
Authority, has jurisdiction to decide what was the employee's remuneration. The definition
of "wages" given in the Act itself makes it clear that the authority must decide
as to what was the remuneration which would. if the terms of the contract of employment,
express or implied were fulfilled, be payable. To say that the authority has absolutely no
jurisdiction to entertain an application under the Payment of Wages Act, if the wages
stated by the employee are denied by the employer, will defeat the Act itself and make it
absolutely ineffective. [H. C. (Lah.): Shaukat Ali and others vs. North Western Railway
Lahore: 1960 LLC Pt. II, 73=PLD 1960 (W. P.) Lah. 144=1960 PLC 59.]
Authority to determine only what the wages actually are. The Authority appointed under the
Act can only order the refund of the amount deducted or the payment of the delayed wages.
It has no power to enter into an elaborate enquiry with the objective of determining as to
what the wages ought to be, but it must obviously ascertain what the wages actually are.
Condonation of delay. Time spent in negotiations between employer and workmen with regard
to wage dispute, held, sufficient cause for extending time and authority exercised
discretion according to law m entertaining such delayed application. [H. C. (W. Pak.):
Motabar and 14 others vs. S. M. Rehman & Co., Quetta and another: 1971 LLC 384=1971
PLC 321.]
For two months the concerned worker through the union corresponding with the employer for
the arrears of his salary as per the award. Application under S. 15 of the Payment of
Wages Act preferred by the worker on the employer refusing to pay the arrears. The order
of the authority condoning the delay in preferring the application, in the circumstances,
held, could not be interfered with in a writ petition. [H. C. (Cal.): Judhistir Kodel vs.
Authority under Payment of Wages Act and others: 1964 LLC 152=1963 II LLJ 473].
The Authority refusing to decide the question of limitation as a preliminary issue before
deciding the merits of the application. A writ of mandamus, in circumstances, issued to
the Authority, directing it to decide the question as a preliminary issue. [H. C. (Bom.):
Haji Latif Gani, Nagpur vs. Abdul Rashid Sheikh Mohammad Khan: 1964 LLC 34=1963 II LLJ
257].
Employee applying for payment after getting a decree from Civil Court that the discharge
was illegal when period had already long expired. Sufficient ground for entertaining
application. High Court refused to interfere in revision with entertaining authority's
direction. [H. C. (Lah): The Divisional Superintendent, N.W.R, Lahore vs. Muhammad Sharif:
1960 LLC Pt. II, 36= PLD 1959 (W. P.) Lah. 518= 1960 PLC 214.]
Authority allowing emoluments to legal adviser of limited company as wages. Order of
authority held to be of no legal effect as such emoluments could not be deemed as
"wages", and legal advisers are nobodys' employees working for wages. Held.
Authority under the Payment of Wages Act had no jurisdiction to entertain an application
for payment of retainership fee or for the fees for legal cases handled Constitutional
jurisdiction exercised on principle of equity and liability for emoluments of respondent
ascertained. [H. C. (Lah.) PLJ 1981 Lah. 460: Sima Fabrics Ltd. vs. Authority under
Payment of Wages Act, Gujranwala & 3 others.]
Termination without notice. Where the employees absent themselves from work because they
have gone on strike with the specific object of enforcing the acceptance of their demands,
they cannot be deemed to have abandoned their employment. Further, the management could
not, by imposing a new term of employment, unilaterally convert the absence from duty of
striking employees into abandonment of their employment. The management could not have the
benefit of disciplinary action without holding any enquiry by purporting to treat the
strikers' absence as abandonment of employment. Hence the action of the management in
removing the names of the concerned workmen from the muster-rolls amounted to termination
of their employment without notice. [S. C. (Ind.): Express Newspapers (Private) Ltd. vs.
Michael Mark and others: 1962 LLC 898=1962 PLC 1513=1962 II LLJ 220.]
Where refusal to make payment is attributable to the terms of the contract between the
employer and the employee the person appointed under section 15 of the Payment of Wages
Act, 1936 would have jurisdiction to deal with the matter. The Civil Courts in such cases
would have no jurisdiction. [H. C. (Kar.): Mir Laiq Ali and others vs. Syed Muhammad
Jafri: 1960 LLC 102---PLD 1959 (W. P.) Kar. 704= 1960 PLC 192.]
Claim for additional allowance.--Respondent claiming additional allowance as Member of
Management Committee. Such membership not part of his job as employee of Company. Duty of
Member is to benefit workers and his performance, cannot be termed to be employment of
company and as such he is not entitled to any additional allowance as of right. [H.C.
(Pesh.) 1980 L.L.C. 153--1980 P.L.C. 568(1) =P.L.J. 1980 Pesh. 94. Adamjee Paper and Board
Mills, Nowshera vs. Sher Mohammad Khan and 2 others].
Ex-parte proceedings.--Authority, must hear and determine contents of application even
proceeding ex-parte. Employer having filed reply statement remaining absent on date of
hearing and ex-parte proceedings ordered. Authority without giving any reason allowing
application into to despite some claims not entertainable mentioned therein. Order of
Authority in circumstances, held, not sustainable. Application for setting aside ex-parte
order submitted before passing final order. Authority, in circumstances, held, could have
allowed participation to employer in subsequent proceedings. Appellate authority also
without considering merits dismissing appeal merely on ground of non-appearance of
employer. Appellate order, in circumstances, set aside and matter remanded to Authority by
High Court on writ petition. [H. C. (Kar.) 1980 L. L. C. 177 = 1980 P. L. C. 467. Karachi
Rolling Mills Ltd. vs. Authority Under the Payment of Wages Act, West Division, Karachi
and 2 others.]
No right of appeal when Labour Court and, Authority act correctly.- Labour Court and
Authority, after following proper procedure and hearing both parties, exercising their
respective jurisdictions competently and correctly as conferred by Act. No illegality
found to have been committed. Jurisdiction under Art. 199 of the Constitution cannot be
allowed to be exercised to further right of appeal when no such right permissible under
special laws. (H.C. (Kar.) 1980 L.L.C. 275=1979 P.L.C. 440. National Tyre & Rubber Co.
vs. Sind Labour Court No. III, Karachi and 2 others.]
Order of the Authority is not final and is not a bar to an application under S. 34 of
I.R.O. by a Collective Bargaining Agent. It was contended that the dispute regarding
payment of wages had already been adjudicated by the Authority under the Payment of Wages
Act, and therefore, proceedings under section 34 of the Industrial Relations Ordinance,
1969 were not maintainable, more so as the order of the Authority under the Payment of
Wages Act had acquired finality. This contention is also misconceived as on a plain
reading of section 34 neither is any limitation provided nor does it exclude application
of the provisions in such cases for which another remedy under a different statute may
have been availed of. First of all the earlier application before the Authority under the
Payment of Wages Act had been made by Inspector of Government and not by the workmen or
their elected Bargaining Agent. Secondly, the Industrial Relations Ordinance has conferred
a right on a Collective Bargaining Agent to make an application to the Labour Court.
Thirdly, the Authority under the Payment of Wages Act had among others declined to grant
relief on a misconceived ground that for the purpose of designating an establishment as a
"factory" within the meaning of Payment of Wages Act the same should have
employed at least 50 workmen. There is no reason which may bar remedy by way of
application under section 34 of the Industrial Relations Ordinance. [H. C. (Kar.) 1980 L.
L. C. 225=1980 P. L. C. 316. Iqbal Ahmed vs. Second Labour Court & another.]
Where right to sue is already lost due to limitation.--Claimant lost right accrued due to
lapse of six months though law in force provided three years time for preferring claim on
the date of application. General principle that law of limitation being procedural should
be deemed to be retrospective would not apply where sight to sue was already lost before
enforcement of new statute of limitation. [H. C. (Lah.) 1980 L. L. C. 508 = P.L.J. 1980
Lah. 296. Warcha Salt Mines, Sargodha vs. Presiding Officer, Labour Court No. 3 Lyallpur
and 5 others].
The term "District Court" has not been defined in the Act and hence it is to be
given its ordinary cannotation as indicated in General Clauses Act, 1897 and Civil
Procedure Code, 1908. District Court according to Civil Procedure Code is a Court
subordinate to High Court. An appellate order made by District Court under Payment of
Wages Act, held, amenable to revisional jurisdiction of High Court. Finality attaching to
the order of Authority under S. 15 means that order of authority can be challenged only by
way of appeal to District Court and not otherwise. No limitation is however placed in
respect of appellate order made by District Court as ordinarily constituted in which
capacity such District Court is subordinate to High Court and hence revisional
jurisdiction of the High Court can be invoked under section 115 of Civil Procedure Code,
1908. Also, held, that since the appellant had himself agreed to be bound by award made
earlier in favour of workmen, he was estopped from repudiating his liability at a late
stage later under section 115 of Evidence Act, 1872. [PLD 1981 SC. 282 =PLJ 1981 S.C 664:
S. M. Rahman & Co. vs. Motabar & others].
16. Single application in respect of claims from an unpaid
group.--(1) Employed persons are said to belong to the same unpaid group if they
are borne on the same establishment and if their wages for the same wage-period or periods
have remained unpaid after the day fixed by section 5.
(2) A single application may be presented under section 15 on behalf or in respect of any
number of employed persons belonging to the same unpaid group and in such case the maximum
compensation that may be awarded under sub-section (3) of section 15 shall be ten rupees
per head.
(3) The Authority may deal with any number of separate pending applications, presented
under section 15 in respect of persons belonging to the same unpaid group, as a single
application presented under sub-section (2) of this section, and the provisions of that
sub-section shall apply accordingly.
17. Appeal.--(l) An appeal against a direction made
under sub-section (3) or sub-section (4) of section 15 may be
preferred within thirty days of the date on which the direction was made
*** before the Labour court constituted under the Industrial
Relations Ordinance, 1969 (XXIII of 1969) within whose jurisdiction the cause of
action to which the appeal relates arose.
(a) by the employer or other person responsible for the payment of wages under section 3,
if the total sum directed to be paid by way of wages and
compensation exceeds three hundred rupees: [****]
Provided that no appeal under this clause shall lie unless the
memorandum of appeal is accompanied by a certificate of the authority to the effect that
the appellant has deposited with the authority the amount payable under the direction
appealed against, or
(b) by an employed person or, if he has died, by any of his heirs, if
the total amount of wages claimed to have been withheld from the employed person or from
the unpaid group to which he belonged exceeds fifty rupees, or
(c) by any person directed to pay a penalty under sub-section (4) of
section 15;
(1.A) All appeals pending before any District Court under this
section immediately before the commencement of the Labour Laws (Amendment) Act, 1974,
shall on such commencement, stand transferred to, and be disposed of by, the Labour Court
within whose jurisdiction the cause of action to which the appeal relates arose.]
(2) Save as provided in sub-section (1), any direction made under sub-section (3) or sub-section (4) of section 15 shall be final.
[Notes.--Appeal by the employer. If the amount directed to be paid under
section 15 exceeds Rs. 300 theta is a right of appeal given to the employer. The pecuniary
limit of the total amount awarded in a single application is the guiding factor. Order
refusing to make direction is appealable. Refusal to make direction by a competent
authority under s. 15 also amounts to a direction, that is, direction includes a refusal
to make a direction. Appeal lies against an order whereby claim of employee has been
rejected in toto. Authority can issue direction to pay wages, deducted or delayed, with or
without compensation The power to refuse to issue directions is implicit in the power to
issue such directions. It is, therefore, open to an Authority to refuse to execise the
power given to it and this refusal to issue a direction amounts to a direction not to pay.
The word "direction" used in sub-section (1)of section 17 of the Payment of
Wages Act, 1936 is comprehensive enough to include the rejection of the claim of an
employee in toto and an appeal under section 17 (1) (b) of the Act lies against an order
whereby the claim of the employee has been rejected in tote. [H. C. (Lah.); Abdul Rashid
and others vs. S. Abdur Rahim; 1960 LLC Pt. II, 46=PLD (W.P.) Lah. 806=1960 PLC 219.]
Labour Court acting as appellate authority is not bound by rules of procedure prescribed
by Industrial Relations Ordinance but by procedure provided by Payment of Wages
(Procedure) Rules, 1937. Appeal before Labour Court does not constitute a base or
proceedings under Industrial Relations Ordinance. Labour Appellate Tribunal in exercise of
powers under S. 38 of the Ordinance cannot revise decision of Labour Court acting as
Appellate Authority under the Payment of Wages Act. [H.C, (Lah.) 1981 PLC 307 =PLJ 1981
Lah 355. Pakistan through Chairman, Pakistan Railway Board, Lahore vs. Maqsood Ali &
82 others.]
Limitation. Respondent filing appeal under S. 17 (1) before Labour Court after 49 days of
Commissioner, Workmen’s Compensation's Order. Section 17(1), provides period of 30
days for filing such an appeal. Respondent failing to apply for condonation of delay and
appellate Court not adverting to this aspect of case at all. Appellate Court not competent
to entertain appeal beyond period of limitation, impugned order, held, illegal. [H.C.
(Lah); 1981 PLC 559; S. Abid Hussain vs. Financial Adviser & Chief Accounts Officer,
Pakistan Railways and another.]
Failure to file appeal against interim orders does not preclude appeal against whole case
including all interim orders made in a case. [H. C: (Lah.): Divisional Superintendent,
P.W.R.. Lahore vs. Muhammad Naseerud-din: 1973 LLC 1--1972 PLC 403 (Lahore.)].
Condition of deposit must be fulfilled on appeal. Appeal under S. 17 (1) (a) or the Act is
adequate remedy not-withstanding condition of deposit of amount payable under direction of
Authority appealed against. Petition invoking jurisdiction of High Court under Art. 199
filed without availing of such remedy is not maintainable. [H. C. (Kar.); PLD 1981 Kar.
534=PLJ 1981 Kar. 394; Ghafoor Textile Mills Ltd., Karachi vs. Fazal Imam and another.]
Words "if the total sum directed to be paid by way of wages and compensation",
Word "and", disjunctive in sense of "or". Total sum ordered to be paid
may be composed of wages alone, compensation alone, or wages and compensation. (H.C.
(W.P.): Muhammad Hussain vs. The Additional District Judge; 1966 LLC 465=PLD 1966 (W.P.)
Lah. 128=1966 PLC 214.]
Exceeds "three hundred rupees". There is nothing in section 17 to suggest that
before the order can be appealable, both wages and compensation should be ordered to be
paid. All that is necessary is that the total sum ordered to be paid should exceed Rs.
300. It may he composed of wages alone or of compensation alone or of wages and
compensation both.
Revision. Section 17 provides for an appeal against the direction of the Authority under
S. 15. It was amended on 1974 to provide that instead of the District Court an appeal will
lie to the Labour Court. Before the amendment the District Court being a Court subordinate
to the High Court was subject to the revisional jurisdiction of the High Court under
section 115 of the Civil Procedure Code 1908 in cases where no appeal lay to the High
Court. The Labour Court is not subordinate to the High Court and as such the High Court
has no revisional jurisdiction over the orders of Labour Court under section 115 of the
Civil Procedure Code, 1908. Incidentally another question arises: whether the Labour
Appellate Tribunal under section 38 (3 a) of the Industrial Relations Ordinance, 1969 has
revisional jurisdiction over appellate orders of the Labour Court passed under section 17.
This was answered in the negative by Rustam S. Sidhwa, J. in these words: "The Labour
Court acting as the Appellate Authority under Section 17 of the Payment of Wages Act,
1936, clearly acts by virtue of powers conferred under section 17 of the Act and not under
any power conferred by any provision of the Ordinance. In acting as the appellate
authority, the Labour Court is not bound by the rules of procedure provided by the
Industrial Relations Ordinance, 1969 but by that provided by the Payment of Wages
(Procedure) Rules, 1937. In these circumstances, it cannot be said that the appeal before
the Labour Court constitutes a case or proceedings under the Industrial Relations
Ordinance. 1969, so as to bring the case within the revisional jurisdiction of the Labour
Appellate Tribunal. The words "case or proceedings under this Ordinance"
appearing in sub-section (3-a) of section 38 of the Ordinance, are specially intended to
cover only those cases, the remedy whereof is provided by the Ordinance or where the
remedy is not so provided. special law empowers the Labour Court to hear and adjudicate
the dispute or decide the appeal and the Labour Court has to apply its own procedure. The
maxim expressio unius est exclusio alterius fully applies to the instant case. The words
"under this Ordinance" have been specifically added to make sure that the
finality which by otherwise is applicable to original or appellate decisions given by
labour tribunals or Courts acting under other special acts dealing with labour matters, is
not disturbed." [H. C. (Lah.) 1981 PLC 307=PLJ 1981 Lah. 355: Pakistan through
Chairman Railway Board, Lahore vs. Maqsood Ali & 82 others] Contrary view was taken by
the Karachi High Court in National Cement Industries Ltd. vs. Sind Labour Appellate
Tribunal and others (1981 PLC 561)wherein it was held that adjudication and determination
by Labour Court of any matter under a special law, transferred to it under statutory
provision, constitutes proceedings under the Industrial Relations Ordinance, 1969 and
hence amenable to revisional jurisdiction of the Labour Appellate Tribunal. Therefore
order passed by Labour Court under S 17 of Payment of Wages Act, 1936 is subject to
revision by the Labour Appellate Tribunal under section 38 (3a) of Industrial Relations
Ordinance, 1969.
In view of these conflicting judgments by two High Courts the final interpretation of the
law is left to the Supreme Court, if and when this matters comes before it for a decision.
The author is in agreement with .the view expressed by the Lahore High Court that the
Labour Appellate Tribunal has no revisional jurisdiction over the decision of Labour Court
acting as Appellate Authority under the Payment of Wages Act The most important point to
consider is that under S. 38 (3-a) the revisional jurisdiction of the Labour Appellate
Tribunal is limited to a "case or proceedings under this Ordinance in which a Labour
Court within its jurisdiction has passed an order." The powers derived by Labour
Court acting as Appellate Authority flow from S. 17 of the Payment of Wages Act and rules
of procedure freamed thereunder and not from the Ordinance or its rules. Therefore
decision on appeal before the Labour Court under S. 17 of the Payment of Wages Act does
not constitute under S. 38 (3-a) of the Ordinance a "case or proceedings under this
Ordinance" and as such is not amenable to the revisional jurisdiction of the Labour
Appellate Tribunal under that section.
In the context of old law before the 1974 amendment the Supreme Court of Pakistan had held
that finality attaching to order of Authority under S. 15 means that order of Authority
can be challenged only by way of appeal to District. Court and not otherwise. No
limitation however is placed in respect of appellate order made by District Court as
ordinarily constituted in which capacity such District Court is subordinate to High Court.
Appellate Order made by District Court under S. 17. held, amenable to revisional
jurisdiction of High Court. [S. C. (Pak.) PLD 1981 SC 282=PLJ 1981 SC 664: S. M. Rahman
& Co. vs. Motabar & others.] In view of the amendment in law this decision of the
Supreme Court of Pakistan is no longer applicable.
As regards the revisional jurisdiction of the High Court over the orders of the Authority
under section 15, there has been a difference of opinion amongst the different High Courts
in the Indo-Pakistan sub-continent and there in no finally accepted interpretation. The
High Courts of Lahore & Karachi held that the Authority is a Court subordinate to High
Court for the purpose of High Court’s revisional jurisdiction under section 115 of
the Civil Procedure Code, 1908. [H.C. (Lah.): Abdur Rashid and others vs. S. Abdul Rahim:
1960 LLC Pt. II; 46=1960 PLC 219=PLD 1959 (W.P.) Lah. 806). Also (H.C. (Kar.): North
Western Railway vs. Sher Mohammad: 1967 LLC 372=1967 PLC 101=PLD 1966 (W.P.) Kar. 483.]
However in PLD 1981 SC 282 the Supreme Court of Pakistan observed that finality attaching
to the order of Authority under S. 15 means that the order of Authority can be challenged
only by way of appeal to the District Court and not otherwise. This matter was not at
issue between the parties and hence as such the Supreme Court has not given any definite
finding on this issue, but the use of the words "only" and "not
otherwise" leads to the conclusion that the view of the Supreme Court is that no
revision under S. 115 of Civil Procedure Code lies to High Court from the orders of the
Authority because it is not a Court subordinate to the High Court.
18. Powers of authorities appointed under section 15.--Every
authority appointed under sub-section (1) of section 15 shall have all the powers of a
Civil Court under the Code of Civil Procedure, 1908 (V of 1908), for the purpose of taking
evidence and of enforcing the attendance of witnesses and compelling the production of
documents, and every such authority shall be deemed to be a Civil Court for all the
purposes of section 195 and of Chapter XXXV of the Code of Criminal Procedure, 1898 (V of
1898).
[Notes.--The authority under sub-section (1) of section 15 (for hearing and deciding claim
arising out of deductions or delay in wages) is not a full fledged Civil Court under the
Code of Civil Procedure but is so only for the purpose of taking evidence, enforcing the
attendance of witnesses and compelling the production of documents in accordance with the
relevant provisions of Code. It is also a Civil Court for the purposes of section 195
(concerning procedure for prosecution for contempt of lawful authority of civil servants)
and chapter XXXV (concerning procedure regarding proceedings in case of certain offences
affecting the administration of justice) of the Code of Criminal Procedure, 1898.].
19. Power to recover from employer in certain cases.--When
the authority referred to in section 17 is unable to recover from any person (other than
employer) responsible under section 3 for the payment of wages any amount directed by such
authority under section 15 or section 17 to be paid by such person, the authority shall
recover the amount from the employer of the employed person concerned.
[Notes.--The liability of the employer under this section arises only if it is Found that
the whole or part of the amount cannot be recovered from manager or other person
responsible for the payment of wages. The legislature contemplated that before fixing the
employer with any liability it must be first found that the whole or part of the amount
awarded under sub-section (3) of section 15 cannot be recovered from the manager or the
other person responsible for the paymaster wages. Where it is not clear that the money
cannot be recovered from the manager, an order cannot be passed against the employee
before that is ascertained. (A.I.R. 1940, Bom. 87.) Where an order is passed against an
employer under this section, he has no right of appeal against such an order. He is thus
saddled with a liability without any right of appeal. [A. I. R. 1940, Bom. 741). It may
look harsh, but that is the law as it stands.]
20. Penalty for offences under the Act.--(1) Whoever
being responsible for the payment of wages Is an employed person contravenes any of the
provisions of any of the following sections, namely, section 5 and section 7 to 13, both
inclusive, shall be punishable with fine which may extend to five hundred rupees.
(2) Whoever contravenes the provisions of section 4, section 6 or section 25 shall be
punishable with fine which may extend to two hundred rupees.
21. Procedure in trial of offences.--(1) No court shall
take cognizance of a complaint against any person for an offence under sub-section (1) of
section 20 unless an application in respect of the facts constituting the offence has been
presented under section 15 and has been granted wholly or in part and the authority
empowered under the latter section or the appellate Court granting such application has
sanctioned the making of the complaint.
(2) Before sanctioning the making of complaint against any person for an offence under
sub-section (l) of section 20, the authority empowered under section 15 or the appellate
Court, as the case may be, shall give such person an opportunity of showing cause against
the granting of such sanction, and the sanction shall not be granted if such person
satisfies the authority or Court that his default was due to-
(a) A bona fide error or bona fide dispute as to the amount payable to the employed
person, or
(b) the occurrence of an emergency, or the existence of exceptional circumstances, such
that the person responsible for the payment of the wages was unable, though exercising
reasonable diligence, to make prompt payment, or
(c) the failure of the employed person to apply for or accept payment.
(3) No Court shall take cognizance of contravention of section 4 or of section 6 or of a
contravention of any rule made under section 26 except on a complaint made by or with the
sanction of an Inspector under this Act.
(4) In imposing any fine for an offence under sub-section (1) of section 20 the Court
shall take into consideration the amount of any compensation already awarded against the
accused in any proceedings taken under section 15.
[Notes.--Sections 20 and 21 provide for prosecutions on account of infringements of the
provisions of this Act but such prosecutions cannot be instituted unless a claim under
section 15 has been granted wholly or in part and the Authority empowered under that
section or the appellate Court granting such claim sanctions the making of the complaint.
Sub-section (2) of section 21 lays down the circumstances in which the sanction should not
be granted.]
22. Bar of suits.--No Court shall entertain any suit
for the recovery of wages or of any deduction from wages in so far as the sum so claimed--
(a) forms the subject of an application under section 15 which has been presented by the
plaintiff and which is pending before the Authority appointed under that section or of an
appeal under section 17; or
(b) has formed the subject of a direction under section 15 in favour of the plaintiff; or
(c) has been adjudged, in any proceeding under section 15, not to be owed to the
plaintiff; or
(d) could have been recovered by an application under section 15.
[Notes.--A Civil Court is not empowered under Section 22 of the Act read with section 15
to try a suit in which plaintiff claims a sum of money alleged to be due in lieu of notice
after dismissal from employment, which claim is entirely denied under section 15 of the
Act. It is to be tried by the Authority Under section 15. However the Lahore High Court
held that a bona-fide dispute as to the amount payable cannot be tried by the Authority
under section 15 because as per proviso to sub-section (3) thereof, direction cannot be
made when the delay is due to bona-fide dispute as to the amount payable to the employed
person. (Simpalax Manufacturing Company Limited vs. Allaudin, A.I.R. 1945, Lah. 195.) The
author begs to differ with this interpretation because the proviso to sub-section (3) of
section 15 only says that no direction for compensation is to be made in case of bona-fide
dispute. It does not say that no direction for payment of delayed or deducted wages is to
be made in case of bona-fide dispute. This interpretation finds support from a judgment of
the Nagpur High Court which held that in case of a bona fide dispute the sums claimed by
the applicant can be recovered by an application to the Authority. The Court ruled that
section 22 (b) of the Act excludes jurisdiction of Civil Courts to entertain a claim which
could have been recovered by an applicant under section 15. This exclusion is absolute and
does not depend on the choice of the claimant. The jurisdiction of the Civil Court is not
revived by his omission to make an application under the Act within the time allowed by
law. Jurisdiction cannot be conferred even by consent of parties. (Bhagwat Rai vs. Union
of India, A.I.R 1953, Nag. 136.)
Civil Courts have no jurisdiction to entertain cases of refusal to make payment because
such cases are covered by section 15--It is not every refusal to make payment that gives
jurisdiction to Civil Court. Where payment of wages has been refused on the ground which
is extraneous to the terms of the contract it is refusal to make payment of wages and not
delay in payment of wages. Where refusal to make payment is attributable to the terms of
the contract between the parties, the authority appointed under section 15 would have
jurisdiction to deal with the matter and the Civil Courts in such cases would have no
jurisdiction. (Mir Laiq Ali vs. Syed Muhammad Jafri, L.L.C. 1959, H.C. (Kar.) 102.)
Where refusal to make payment is attributable to the terms of the contract between the
employer and the employee the person appointed under section 15 of the Payment of Wages
Act, 1936 would have jurisdiction to deal with the matter. The Civil Courts in such cases
would have no jurisdiction. [H. C. (Kar.) Mir Laiq Ali and others vs. Syed Muhammad Jafri:
1960 LLC 102=PLD 1959 (W. P.) Kar. 704=1960 PLC 192.]
Intrinsic or basic or inherent want of jurisdiction could not be cured by acquiescence.
The wording or S. 22 of the Payment of Wages Act makes it an absolute want of
jurisdiction. Hence the employer petitioner in the instant case was permitted to raise the
plea based on S. 22 of the Payment of Wages Act as a bar to the respondent’s suit in
the Civil Court at the revision stage even though the said plea was not raised in the
Courts below. [H.C. (Mad.): Jiwajirao Sugar Company Ltd, Daloda vs. Benarji (JM): 1963 LLC
541=1963 PLC 77=1963 I LLJ 611.].
Section 22 only prevents a suit for wages. It does not exclude any other proceeding
directed by law to enforce payments. The authority contemplated by section 13 of the
Payment of Wages Act is not the one which can affect the jurisdiction of the Industrial
Court set up under the Industrial Disputes Ordinance. The jurisdiction of the Industrial
Court under that Ordinance is not excluded by the provisions of the Payment of Wages Act.]
23. Contracting out.--Any contract or agreement,
whether made before or after the commencement of this Act, whereby an employed person
relinquishes any right conferred by this Act shall be null and void in so far as it
purports to deprive him of such right.
25. Display by notice of abstracts of the Act.--The
person responsible for the payment of wages to persons employed in a factory shall cause
to be displayed in such factory a notice containing such abstracts of this Act and of the
rules made thereunder in English and in the language of the majority of the persons
employed in the factory, as may be prescribed.
26. Rule-making power.--(I) The Provincial
Government may make rules to regulate the procedure to be followed by the authorities
and Courts referred to in sections 15 and 17.
(2) The Provincial Government may, ****** by
notification in the official Gazette, make rules for the purpose of
carrying into effect the provisions of this Act.
(3) In particular and without prejudice to the generality of the foregoing power, rules
made under sub-section (2) may--
(a) require the maintenance of such records, registers, returns and notices as are
necessary for the enforcement of the Act and prescribe the forms thereof;
(b) require the display in a conspicuous place on premises where employment is carried on
of notices specifying rates of wages payable to persons employed on such premises;
(c) provide for the regular inspection of the weights, measures and weighing machines used
by employers in checking or ascertaining the wages of persons employed by them;
(d) prescribe the manner of giving notice of the days on which wages will be paid;
(e) prescribe the authority competent to approve under sub-section (l) of section 8 acts
and omissions in respect of which fines may be imposed;
(f) prescribe the procedure for the imposition of lines under section 8 and for the making
of the deductions referred to in section 10;
(g) prescribe the conditions subject to which deductions may be made under the proviso to
sub-section (2) of section 9;
(h) prescribe the authority competent to approve the purposes on which the proceeds of
lines shall be expended;
(i) prescribe the extent to which advances may be made and the installments by which they
may be recovered with reference to clause (b) of section 12;
(j) regulate the scales of costs which may be allowed in proceedings under this Act;
(k) prescribe the amount of court-fees payable in respect of any proceedings under this
Act, and
(l) prescribe the abstracts to be contained in the notices required by section 25.
(4) In making any rule under this section the Provincial Government
may provide that a contravention of the rule shall be punishable with fine which may
extend to two hundred rupees.
(5) All rules made under this Section shall be subject to the condition of previous
publication and the date to be specified under clause (3) of section 23 of the General
Clauses Act, 1897 (X of 1897), shall not be less than three months from the date on which
e draft of the proposed rules was published.
