UNIT - I

Globalization means connecting countries and their economies so they can trade goods,
services, information, and technology more easily. It allows businesses, people, and ideas to
move freely across borders, making the world more interconnected.

SIMPLE EXAMPLES:
1. International Products: When you buy an iPhone in India, it’s a result of globalization.
The phone is designed in the U.S., parts are made in different countries, and it’s
assembled in China before being sold worldwide.

2. Cultural Exchange: When people watch movies from Hollywood or Bollywood

around the world, it's part of globalization. Cultures and entertainment are shared
across countries.

3. Fast Food Chains: McDonald's, originally from the U.S., now has restaurants all over
the world, offering local variations like the "McAloo Tikki" in India.

In short, globalization makes it easier for countries to share resources, knowledge, and goods,
creating a more connected world.
Globalization is essentially the process of integrating a country's economy with the global
economy.
This means the free movement of information, ideas, technology, goods and services, capital,
and even people between countries. It connects different markets, boosting trade,
investments, and cultural exchanges.

GLOBALIZATION IN INDIA:
India started embracing globalization in the 1990s through reforms in various sectors of the
economy. Some key changes included:
1. OPENING MARKETS TO FOREIGN GOODS: India reduced import taxes (customs
duties) on many products to just 10%. Import licenses were also mostly removed, making it
easier for foreign products to enter India. This aligned with international trade agreements
like the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade
(GATT).

2. ENCOURAGING FOREIGN INVESTMENT: India allowed foreign companies and

individuals to invest in certain industries with 100% ownership. Non-Resident Indians (NRIs)
and Overseas Corporate Bodies (OCBs) were also given the opportunity to invest fully in
important industries. This opened the door for multinational corporations (MNCs) to establish
themselves in India, providing competition to Indian businesses.

3. Trade agreements with the WTO: India signed several agreements with the WTO and the
Agreement on Agriculture, which helped liberalize trade further.

IMPACT OF GLOBALIZATION:
ADVANTAGES:

I. POVERTY REDUCTION: Increased investments and trade led to more jobs, reducing
poverty in many developing countries.
II. FASTER INDUSTRIALIZATION: Free movement of capital and technology helped
speed up the industrial development of developing countries.
III. HIGHER QUALITY PRODUCTS: Competition from foreign companies led to
better-quality products, benefiting consumers.
IV. FOREIGN EXPERTISE: MNCs brought in foreign capital, technology, skills, and
knowledge, which contributed to India's development.

DISADVANTAGES:

I. LOCAL BUSINESSES STRUGGLE: Many domestic companies found it hard to

compete with more efficient and better-funded MNCs. This led to some companies
shutting down and jobs being lost.
II. REDUCED FOCUS ON LOCAL TECHNOLOGY: Increased reliance on foreign
technology meant that less attention was given to developing local research and
technology.
III. ECONOMIC RISKS: Globalization exposed countries to international risks like
fluctuating prices, and over-reliance on specific exports.
IV. CULTURAL EROSION: The blending of cultures led to a loss of traditional values,
with people adopting Western lifestyles that may not fit well with local traditions.
V. URBAN PRESSURE: Increased migration to cities for better jobs led to
overcrowding and strain on city infrastructure and services.
EXAMPLE: When India opened up to globalization, we started seeing international brands
like Coca-Cola and Samsung flood the Indian market. While consumers benefited from more
choices and better products, many local brands found it difficult to survive against these big
players. Additionally, the inflow of foreign capital helped boost industries like IT and
manufacturing, but it also led to a growing dependence on foreign technology.

PRIVATIZATION
Privatization means transferring ownership or control of businesses, industries, or services
from the government to private individuals or companies. The goal is to improve efficiency,
productivity, and competition by allowing private players to manage businesses, which are
often more profit-driven than government-controlled entities.

Example Of Privatization:
1. Air India: In India, the government sold its majority stake in Air India to the Tata Group in
2021. This privatization aimed to reduce government debt and improve the airline’s
performance through private management.

LIBERALIZATION

Liberalization refers to the process of reducing or removing government controls and

restrictions on businesses and the economy.
It encourages free trade, market expansion, and less government interference, allowing
businesses to operate with more freedom.
This often includes cutting down tariffs, reducing import/export restrictions, and relaxing
regulations to promote investment and competition.

EXAMPLE OF LIBERALIZATION
1. Indian Economic Reforms (1991): In 1991, India introduced economic reforms that
liberalized the economy. Before that, businesses needed heavy licensing and permits for
almost everything (called the License Raj). Liberalization reduced these restrictions, allowing
industries to grow faster and foreign companies to invest in India.
2. Foreign Direct Investment (FDI): India opened up several sectors (like retail,
manufacturing, and telecom) to foreign direct investment. This means foreign companies like
IKEA and Walmart were allowed to set up stores or factories in India, bringing more
investment and creating jobs.

Privatization: Transferring government- Liberalization: Reducing government

owned companies or services to private restrictions to allow businesses to
control. operate more freely.
 IMPACT OF GLOBALIZATION ON THE ORGANIZED AND UNORGANIZED
SECTORS OF WORKERS

Globalization has had different effects on workers in the organized and unorganized sectors,
particularly in terms of job security, wages, and working conditions.
These changes are closely tied to labour laws, which regulate employment conditions and
workers' rights.

ORGANIZED SECTOR WORKERS

The organized sector includes companies and industries that are officially registered, comply
with government regulations, and provide workers with legal protections like minimum
wages, job security, health benefits, and social security.

IMPACT OF GLOBALIZATION:

1. INCREASED COMPETITION: Globalization led to an influx (inflow) of

multinational corporations (MNCs) that operate with higher efficiency, which
increased competition in the organized sector.
Workers in large industries like manufacturing and IT often gained better-paying jobs because
of foreign investment.

2. BETTER OPPORTUNITIES: Globalization expanded industries like information

technology (IT) and service sectors (like banking), leading to more job opportunities
with higher wages, better training, and improved working conditions.
 3. LABOR LAWS: Workers in the organized sector benefit from labour laws like the
Industrial Disputes Act and Factories Act, which ensure job security, grievance
redressal mechanisms, and safe working environments.

EXAMPLE: The IT industry in India grew rapidly with globalization, providing

skilled workers with high-paying jobs in companies like TCS, Infosys, and Wipro,
where employees have legal protections, regular salaries, and benefits.

UNORGANIZED SECTOR WORKERS:

The unorganized sector consists of workers who are not covered by formal labour laws or
social security benefits. This sector includes daily wage labourers, agricultural workers,
domestic help, and workers in small, informal businesses.

IMPACT OF GLOBALIZATION:

1. JOB INSECURITY: Many industries in the unorganized sector struggle to compete

with larger, global corporations. As a result, informal workers often face job
insecurity, poor wages, and no legal protections.
Globalization can lead to the decline of small, local businesses, causing layoffs in the
unorganized sector.

2. LOW WAGES AND EXPLOITATION: Workers in this sector are more vulnerable to
exploitation, as they do not have the protections of labour laws like minimum wage
laws or working hour regulations.

3. LACK OF BENEFITS: Unorganized workers often lack health insurance, pension

plans, or safety standards. Labor laws such as the Minimum Wages Act or the
Employee Provident Fund Act often don’t apply to them, leaving them without social
security benefits.

EXAMPLE: A daily wage worker in a construction site has little job security and no formal
contract. Even if they lose their job due to the construction company outsourcing the project
to a cheaper foreign firm, they do not have legal protection like workers in the organized
sector.

DIFFERENCES BETWEEN ORGANIZED AND UNORGANIZED WORKERS

Definition: Organized Workers: Workers Unorganized Workers:
 employed in formal, Workers employed in
registered sectors with legal informal, unregistered
protections and benefits. sectors with no or minimal
Examples: Factory workers legal protections. Examples:
in large industries, Street vendors, agricultural
employees in banks or IT labourers, domestic workers.
companies.

Job Security: Organized Workers: Have Unorganized Workers: Often

stable jobs with contracts, work on a temporary or
fixed working hours, and job daily wage basis, with little
security. They are protected to no job security. They can
by labour laws that ensure be laid off easily without
they can’t be fired without notice.
due process.

Wages and Benefits: Organized Workers: Earn Unorganized Workers: Are

regular salaries, and receive often paid lower wages with
benefits like health no additional benefits like
insurance, pensions, paid insurance, pensions, or sick
leave, and overtime pay. leave.

Legal Protections: Organized Workers: Unorganized Workers: Have

Covered under various very limited or no access to
labour laws (like the legal protections. Laws like
Industrial Disputes Act, the Unorganized Workers'
Employee State Insurance Social Security Act, 2008
(ESI), Minimum Wages Act) exist, but enforcement is
that protect their rights, such weak and not widespread.
as wages, work conditions,
and social security.

EXAMPLES:

ORGANIZED WORKER EXAMPLE: An employee working at a large car manufacturing

company like Maruti Suzuki has a formal contract, earns a fixed salary, and gets health
benefits. Their job is secure, and if they are dismissed, they have the legal right to challenge it
in a court of law.

UNORGANIZED WORKER EXAMPLE: A vegetable vendor on the streets is an

unorganized worker. They have no fixed salary, no benefits, and no job security. They rely on
daily sales, and if their business fails, there’s no social security to help them.
 SEZ’S INSTIGATE A STRUCTURAL CHANGE OF THE ECONOMY EVALUATE
THE STATEMENTS?
A Special Economic Zone (SEZ) is a designated area within a country that has different
economic regulations than the rest of the country.
The goal of SEZs is to promote economic growth by offering companies certain benefits such
as tax breaks, simpler regulations, and easier access to infrastructure. SEZs are often created
to attract foreign investment, boost exports, and generate employment.

SIMPLE EXAMPLES OF SEZS:

1. China's SEZs: The city of Shenzhen in China is one of the most famous SEZs. It was
transformed from a small fishing village into a global manufacturing and technology hub,
attracting foreign companies like Apple, Huawei, and Foxconn. SEZ benefits like low taxes,
relaxed labour laws, and better infrastructure helped Shenzhen grow rapidly.

2. India's SEZs: In India, places like Navi Mumbai SEZ and Chennai SEZ have attracted
companies in industries such as IT, manufacturing.
Companies that set up operations in these zones receive tax incentives and are allowed to
export goods more easily.
 SEZS INSTIGATING STRUCTURAL CHANGES IN THE ECONOMY

HOW SEZS INSTIGATE STRUCTURAL CHANGE:

1. SHIFT FROM AGRICULTURE TO INDUSTRY: In many developing countries, SEZs

help shift the economy from being heavily dependent on agriculture to more industrial
activities like manufacturing. For example, SEZs in India have helped the economy move
toward industries such as IT, electronics, and automotive manufacturing, reducing reliance on
traditional farming.

EXAMPLE: Before the SEZs were set up in Shenzhen (China), most people in the region
were involved in agriculture. After the creation of SEZs, millions of jobs were created in
industries like electronics and technology, significantly changing the economic structure from
agriculture to industry.

2. ATTRACTING FOREIGN INVESTMENT: SEZs attract foreign companies that bring in

capital, technology, and expertise.
This creates jobs, builds infrastructure, and improves the overall productivity of the economy.
The presence of global companies can lead to the growth of local suppliers and supporting
industries.
EXAMPLE: In India, SEZs like the one in Hyderabad have attracted IT companies like
Microsoft and Google, which has helped build India’s reputation as a global IT hub. This shift
not only created high-paying jobs but also fostered the growth of local businesses that supply
services and goods to these companies.

3. BOOSTING EXPORTS: SEZs are usually focused on increasing exports. By offering

relaxed trade regulations and tax exemptions, these zones encourage companies to produce
goods and services for international markets. This helps the country earn foreign exchange
and strengthen its position in global trade.
EXAMPLE: Many SEZs in India, like the Mundra SEZ in Gujarat, have boosted exports of
goods such as textiles, pharmaceuticals, and automobiles, contributing to the country’s
overall economic growth.
4. CREATING EMPLOYMENT: SEZs generate employment by attracting industries that
need large numbers of workers.
This leads to job creation in sectors like manufacturing, IT, and services. The increase in jobs
leads to higher incomes and improved living standards.
EXAMPLE: The Sri City SEZ in Andhra Pradesh has created thousands of jobs in electronics
manufacturing and logistics, helping people move from informal or agricultural jobs to more
stable employment.

5. TECHNOLOGICAL UPGRADATION AND SKILL DEVELOPMENT: SEZs often lead

to the introduction of new technologies and improved production processes. Companies in
SEZs tend to use modern technologies that can lead to the upskilling of the workforce,
fostering innovation and efficiency.

Example: In SEZs in places like Bengaluru, India, many workers in the IT sector have gained
technical skills and experience due to their work with global technology firms.

CONCLUSION

SEZs can bring about significant structural changes in an economy by encouraging

industrialization, attracting foreign investment, boosting exports, and creating jobs.
However, their success depends on good planning, effective policy implementation, and
ensuring that the benefits reach a broad section of the population.
CONSTITUTIONAL MANDATE OF WELFARE STATE AND EFFECTIVENESS OF
SOCIAL SECURITY AND SOCIAL WELFARE LEGISLATION IN INDIA UNDER
NEW ECONOMY POLICY?

The Indian Constitution envisions India as a welfare state, meaning it aims to promote the
well-being of all its citizens, particularly the weaker sections of society.
The Constitution contains several provisions that focus on social justice, workers’ rights, and
ensuring a decent standard of living for all.
In the context of labour laws, these constitutional provisions support the protection of
workers from exploitation, guarantee their right to fair wages, decent working conditions, and
access to social security.

ARTICLES RELATED TO WORKERS' WELFARE:

1. Article 23: Prohibits forced labour and human trafficking.

Simple Meaning: No one can be forced to work against their will, and exploiting people
through bonded labour is illegal.
Example: If a worker is forced to work in a factory without pay under the threat of harm, it
would violate Article 23. The law protects such workers by making forced labour a
punishable offense.

2. Article 24: Prohibits the employment of children below 14 years in hazardous jobs.
Simple Meaning: Children under 14 cannot be employed in dangerous or risky jobs like
mining or factory work.
Example: A child working in a factory dealing with dangerous chemicals would be a
violation of Article 24, and the employer could face legal action.

3. Article 39: Provides certain directives to the state for securing workers' welfare.
39(a): The state must ensure that all citizens have the right to an adequate means of
livelihood.
39(e): Protect workers from being forced into jobs that are not suited to their age or strength,
and prevent exploitation.
39(f): Protect children from abuse and exploitation.

4. Article 41: Right to work, education, and public assistance in cases of unemployment, old
age, sickness, and disability.
Simple Meaning: The state should work to provide employment opportunities and social
security (like pensions or disability benefits) to those in need.
Example: Government schemes like the Pradhan Mantri Shram Yogi Maandhan pension
scheme provide social security for unorganized workers, ensuring financial assistance during
old age.

5. Article 42: Provides for just and humane working conditions and maternity relief.
Simple Meaning: Workers are entitled to safe working conditions, fair hours, and maternity
benefits for women.
Example: The Maternity Benefit Act, 1961 provides women with paid maternity leave,
ensuring they can take time off work to care for their newborns without losing their income.

6. Article 43: Ensures a living wage and decent working conditions for all workers.
Simple Meaning: Workers should be paid enough to live a decent life, not just the bare
minimum for survival.
Example: The Minimum Wages Act, 1948 requires employers to pay workers a minimum
wage, ensuring they can meet basic needs like food, housing, and education for their families.

EFFECTIVENESS OF SOCIAL SECURITY AND WELFARE LEGISLATION IN

THE NEW ECONOMIC POLICY

India’s New Economic Policy (1991), marked by liberalization, privatization, and

globalization, has created both opportunities and challenges for workers.
While economic reforms have led to increased growth and job creation, the protection of
labour rights has become more critical, especially in the unorganized sector.

EFFECTIVENESS OF SOCIAL SECURITY AND WELFARE LEGISLATION:

1. SOCIAL SECURITY MEASURES:

Employee Provident Fund (EPF): A government-managed fund where both employees and
employers contribute, providing a retirement corpus for organized sector workers.
This aligns with Articles 41 and 43, ensuring financial security during old age.
However, many unorganized workers (such as construction labourers, domestic workers) are
still outside the scope of formal social security benefits.

2. UNORGANIZED WORKERS’ SOCIAL SECURITY:

The Unorganized Workers' Social Security Act, 2008 was introduced to provide welfare
schemes like life and disability cover, health and maternity benefits, and old age protection
for unorganized sector workers.
Example: A street vendor or rickshaw puller can benefit from government health insurance
schemes under this Act.

3. MATERNITY BENEFIT ACT, 1961 (AMENDED 2017):

Extends paid maternity leave to 26 weeks for women, ensuring their job security during
pregnancy, aligning with Article 42.

Example: A woman working in an IT company who is pregnant can take maternity leave and
still be guaranteed her job when she returns.

4. MINIMUM WAGES ACT, 1948:

The government sets minimum wages to protect workers from exploitation. This reflects
Article 43’s mandate for ensuring fair wages and decent working conditions.
Example: A daily wage labourer in the construction industry must be paid at least the legally
prescribed minimum wage, protecting them from being underpaid.
 CHALLENGES IN THE NEW ECONOMIC POLICY ERA

1. UNORGANIZED SECTOR: The majority of India’s workforce is in the

unorganized sector, where labour laws are not strictly enforced. Despite policies for
social security, many workers still lack access to basic rights such as fair wages, social
security, and safe working conditions.

2. LIBERALIZATION AND JOB SECURITY: With privatization, many companies

outsource labour, leading to job insecurity and the rise of contract workers who do not
enjoy the same rights as permanent employees.

3. NEED FOR EFFECTIVE IMPLEMENTATION: While laws exist, their

effectiveness depends on strict enforcement. Many workers, particularly in the
informal sector, are not fully aware of their rights or lack access to legal recourse
when these rights are violated.

CONCLUSION
India’s constitutional mandate under Articles 23, 24, 39, 41, 42, 43, and 43A reflects a strong
commitment to protecting workers and promoting social welfare.
While the New Economic Policy has helped expand the economy, its success in ensuring
effective social security and labour welfare depends on how well these laws are implemented,
especially for the unorganized sector, where most of India’s workforce is employed.
 SEZ’S IMPACT ON THE ECONOMY AND THE BENEFIT OF DEMARCATING
SEZ?
A Special Economic Zone (SEZ) is a specially designated area within a country where
businesses can operate under different economic rules than the rest of the country.
These rules are designed to attract investment, increase exports, and boost economic activity.
SEZs offer benefits like tax exemptions, simpler regulations, and better infrastructure to
encourage companies to set up businesses in these areas.

IMPACT OF SEZS ON THE ECONOMY

SEZs have a significant impact on a country’s economy, particularly in terms of:

1. BOOSTING EXPORTS: SEZs focus on producing goods and services for export.
By making it easier and cheaper for companies to operate in these zones, countries can
increase their exports, which helps bring in foreign currency and strengthen the economy.
Example: In China, SEZs like Shenzhen transformed the region into a global export hub,
contributing to China's economic rise by boosting exports of electronics, textiles, and more.

2. ATTRACTING FOREIGN INVESTMENT: SEZs offer incentives such as tax

breaks, duty-free imports, and simplified regulations to attract foreign companies to
invest.
This brings in much-needed foreign capital, modern technology, and global expertise.
Example: In India, SEZs in cities like Bengaluru and Chennai have attracted major
multinational companies like IBM, Dell, and Hyundai, contributing to the growth of the IT
and automotive sectors.
3. CREATING JOBS: SEZs create employment opportunities that need large workforces.
This leads to the creation of both skilled and unskilled jobs, improving the livelihoods of
people living nearby.
Example: SEZs in places like Noida and Gurugram have provided thousands of jobs in the IT
and manufacturing sectors, helping local economies grow.

4. IMPROVING INFRASTRUCTURE: SEZs often come with better infrastructure,

including roads, electricity, and ports, as governments focus on creating an attractive
environment for businesses. This benefits not only businesses but also the local population.
Example: The Mundra SEZ in Gujarat has become a major port and logistics hub, improving
trade routes and creating better infrastructure for businesses and local communities.

5. PROMOTING INDUSTRIALIZATION: SEZs help countries shift from agriculture-

based economies to more industrial and service-oriented economies. This structural shift
helps improve productivity and boosts economic growth.
Example: India’s SEZs in cities like Hyderabad have promoted industries like
pharmaceuticals and IT, reducing the dependence on agriculture and helping the country
transition into a more industrialized economy.

BENEFITS OF DEMARCATING SEZS FOR BUSINESSES

1. TAX BENEFITS: One of the biggest advantages for businesses in SEZs is the tax
exemptions they receive. Companies in SEZs typically enjoy:
Reduced customs duties on imports and exports.
Income tax exemptions for a set number of years.
Lower corporate taxes.
Example: A company manufacturing electronic components in an SEZ may not have to pay
customs duties on imported materials, making production cheaper and more profitable.

2. SIMPLIFIED REGULATIONS: SEZs often have simplified business regulations to

make it easier for companies to set up and operate. This includes faster approval processes for
setting up factories.
Example: In many SEZs, companies can start operations more quickly because they don’t
need to navigate complex government approvals, making it easier for businesses to grow.

3. ACCESS TO HIGH-QUALITY INFRASTRUCTURE: SEZs are designed to have

world-class infrastructure, including uninterrupted power supply, good road and port
connectivity, and easy access to raw materials and markets.
Example: The Dholera SEZ in Gujarat is being developed with top-tier infrastructure,
attracting companies in sectors like manufacturing and renewable energy.

3. BOOSTING COMPETITIVENESS: By lowering costs (through tax breaks and

fewer regulations) and improving infrastructure, SEZs help companies become more
competitive in the global market.
This allows businesses to produce goods more efficiently and sell them at competitive
prices.

5. EMPLOYMENT GENERATION AND SKILL DEVELOPMENT: Businesses in SEZs

help generate jobs and also focus on skill development. This benefits both the company,
which gets a skilled workforce, and the workers, who gain experience and knowledge.
Example: In Bengaluru’s IT SEZs, companies like Infosys and Wipro provide training to
employees, helping them improve their skills and career prospects while also benefiting from
a talented workforce.

CONCLUSION
SEZs are powerful tools for driving economic growth, attracting foreign investment, and
creating jobs. By offering benefits like tax breaks, easier regulations, and better
infrastructure, SEZs make it easier for businesses to operate and grow.
This, in turn, boosts exports, industrialization, and economic development. However, the
success of SEZs depends on effective planning, good infrastructure, and ensuring that both
businesses and local populations benefit from their development.

ANALYSE WHY SOCIAL WELFARE LEGISLATIONS WERE ENACTED?

Social welfare legislations were enacted in labour law to protect workers from exploitation,
ensure fair treatment, and promote social justice. These laws emerged in response to the
industrial revolution, where workers were subjected to poor working conditions, low wages,
and no social security. Over time, the need for social welfare laws became essential for
creating a balance between the rights of workers and the interests of employers.

1. PROTECTION FROM EXPLOITATION:

One of the primary reasons for enacting social welfare laws was to protect workers from
exploitation by employers.
In the absence of regulations, employers could impose long working hours, unsafe
conditions, and inadequate wages. Social welfare laws introduced regulations that limited
exploitation and set minimum standards for employment.
Example: The Factories Act, 1948 was enacted to regulate working hours, ensure safety in
the workplace, and prevent child labor. This act ensured that workers weren’t forced to work
in unsafe environments or for excessive hours.

2. ENSURING FAIR WAGES AND WORKING CONDITIONS:

In many cases, workers, especially in the unorganized sector, lacked bargaining power to
demand fair wages. Social welfare laws ensure that workers receive at least a minimum wage
and have reasonable working conditions.
Example: The Minimum Wages Act, 1948, was enacted to ensure that workers are paid
wages that are adequate to sustain themselves and their families. This law protects workers
from being underpaid by setting a minimum wage based on the type of work and region.

3. PROVIDING SOCIAL SECURITY:

Workers often face economic insecurity due to illness, unemployment, or old age. Social
welfare legislations were enacted to provide a safety net for workers through social security
measures like pensions, insurance, and maternity benefits. These laws ensure that workers
have financial support during difficult times.

Example: The Employees' Provident Fund (EPF) Act, 1952 allows workers to save a portion
of their wages, along with a contribution from their employer, which they can use after
retirement. This law promotes financial security for workers post-employment.

4. PROMOTING EQUALITY AND SOCIAL JUSTICE:

Social welfare laws aim to reduce inequalities in the workplace by providing special
protections to vulnerable groups, such as women, children, and disadvantaged communities.
These laws promote social justice by ensuring that every worker is treated fairly, regardless
of their background.
Example: The Maternity Benefit Act, 1961, grants paid leave to pregnant women, ensuring
job security during their maternity period. It also prohibits employers from terminating the
employment of women during maternity leave, promoting gender equality.

5. BALANCING EMPLOYER-EMPLOYEE RELATIONS:

Labour welfare laws help maintain a balance of power between employers and employees.
There would be a risk of employers having excessive control over workers, leading to unfair
treatment and exploitation. These laws also facilitate dispute resolution mechanisms to ensure
that conflicts between employers and employees are handled fairly.
Example: The Industrial Disputes Act, 1947, provides a legal framework for settling disputes
between employers and workers. It ensures that workers have a platform to voice grievances
related to wages, working conditions, or unfair dismissals.

6. IMPROVING PRODUCTIVITY AND EFFICIENCY:

By ensuring fair treatment and a better working environment, social welfare laws contribute
to a more motivated and efficient workforce. When workers feel secure and well-treated, they
are more likely to be productive and contribute to the overall growth of the economy.
Example: Laws mandating regular working hours and safe working conditions improve
worker morale and reduce absenteeism, leading to higher productivity. The Workmen's
Compensation Act, 1923, ensures that workers who suffer injuries during their employment
are compensated, which encourages employers to maintain a safe workplace.

CONCLUSION
Social welfare legislation in labour law is essential for ensuring workers' rights, promoting
fair employment practices, and creating a just and equitable society.
These laws not only protect workers from exploitation and ensure fair treatment, but they also
contribute to the stability of the economy by promoting productivity, job security, and
economic equality. In a rapidly changing economy, continuous updates to these laws are
crucial to address new challenges faced by workers in both the formal and informal sectors.

IMPACT OF GLOBALIZATION ON JUDICIAL DECISIONS REGARDING

LABOUR AND CAPITAL
Globalization has significantly influenced how courts interpret and decide cases related to
labour and capital. Here’s a simple explanation of how globalization impacts judicial
decisions, along with examples.

1. INCREASED FOCUS ON INTERNATIONAL STANDARDS

Globalization has led to the adoption of international labour standards and practices,
influencing judicial decisions in various countries.
Courts are increasingly considering global standards set by organizations like the
International Labour Organization (ILO) when making decisions.
Example: In cases involving minimum wage and working conditions, courts might refer to
ILO conventions to ensure that local laws align with international norms. For instance, if a
country is a member of the ILO, its courts may be more inclined to rule in favour of workers
if local labour laws do not meet international standards.

2. RECOGNITION OF WORKERS’ RIGHTS

With globalization, there has been a growing recognition of workers' rights across borders.
Judicial decisions are more likely to uphold workers' rights in the face of capital interests,
reflecting a balance between labour rights and business interests.
Example: In India, the Supreme Court ruled that the right to livelihood is a fundamental right,
thus protecting workers from arbitrary dismissals.

3. IMPACT ON EMPLOYMENT CONTRACTS AND LABOR RELATIONS

Globalization has changed the nature of employment contracts and labor relations. Courts are
now more aware of global labour market trends.

Example: In cases of layoffs due to economic downturns caused by global competition,

courts may evaluate whether companies have adhered to due process in terminating
employees. For instance, if a multinational company lays off workers citing global economic
challenges, the court might assess whether the layoffs were justified and followed legal
procedures.

4. IMPACT ON LABOUR MOBILITY AND MIGRATION

Globalization has facilitated the movement of labour across borders, leading to legal
questions regarding the rights of migrant workers.
Courts are now considering international human rights standards when making decisions
about the treatment of migrant labour.
Example: In many countries, courts have ruled to protect migrant workers from exploitation
by employers, ensuring that they have the same rights as local workers. For example, in the
United States, courts have upheld the rights of undocumented workers to seek legal recourse
for wage theft, recognizing their contributions to the economy.

5. JUDICIAL ACTIVISM AND LABOR RIGHTS

Globalization has led to more judicial activism, where courts proactively protect labour rights
against capital interests.
Judges are increasingly interpreting laws in ways that favour workers, reflecting a growing
recognition of the importance of fair labour practices.
Example: In South Africa, the Constitutional Court has taken a strong stance in favour of
workers' rights, ruling that employers cannot arbitrarily dismiss workers without just cause,
thus ensuring that labour laws protect employees even in a competitive global market.

CASE LAW
Neeru Yadav v. Manohar Singh & Others (2014) – In this Indian case, the Supreme Court
highlighted the importance of international labour standards, especially those established by
the ILO, when addressing issues of unfair labour practices and workers’ rights. The case
showed how global labour norms can influence national decisions.
CONCLUSION

Globalization has significantly influenced judicial decisions in labour law. Courts are now
more likely to consider international treaties and global labour practices when ruling on cases
involving workers' rights, wages, and conditions.
This ensures that labour laws align with the global movement towards fair and equal
treatment of workers. However, globalization also creates new challenges for courts, such as
handling cross-border disputes and balancing the interests of multinational corporations with
local workers' rights.
 UNIT – II
CONCEPT OF WAGES

In labour law, wages refer to the compensation or earnings that an employee receives from an
employer in exchange for their work or services.
Wages may be paid hourly, daily, weekly, or monthly and include salaries, allowances,
commissions, and bonuses. They are crucial for workers’ livelihood and the economy.

1. WAGES FUND THEORY

Explanation: This theory propounded by adam smith.

According to him he says beyond the employer ability cannot stretch the wages. How much
wage fund is there with employer on the basis wage give and the employer cannot stretch
over the wage fund to employees.
Trade union cannot raise the wage of the working class as a whole and even if they do it can
only be at the expense of another expenditure. Since wage fund is fixed the trade unions do
not have a control over the wage rate.
Example: If a company’s capital is limited, it can only hire a few workers and pay them a
certain amount, even if more workers are willing to work.
In labour law, this can relate to restrictions on minimum wage, ensuring workers get paid
fairly despite the size of the employer's capital.
2. SUBSISTENCE THEORY
Explanation: Also known as the "Iron Law of Wages," this theory, developed by economists
like David Ricardo and Thomas Malthus.
Workers if paid less than subsistence wages would lead to starvation, diseases and inability to
procure basic amenities. As a result inability to procure basic amenities.
As a result the no of workers will decline and vice versa.

3. THE SURPLUS VALUE THEORY OF WAGES

Explanation: This theory, from Karl Marx, The value created by workers is higher than the
wages they receive; the extra value (or surplus) goes to the capitalist (employer) as profit.
Wages are thus kept low to maximize profit.
Example: If a worker produces goods worth $100 but only receives $50 in wages, the
employer retains the $50 as surplus value. Labour laws may regulate this through collective
bargaining rights and fair wage policies to reduce worker exploitation.

4. RESIDUAL CLAIMANT THEORY

Explanation: According to economist Francis Walker.
Who is residential claimant = WORKERS
At the end of day, what is left in wage fund should be benefited to worker class.
Example: In a business, after paying for machinery, rent, and managerial costs, the remaining
profits go to workers. Labour laws ensure workers receive fair wages through profit-sharing
schemes or employee stock ownership.

5. MARGINAL PRODUCTIVITY THEORY

Explanation: This theory, associated with economists like John Bates Clark.
A highly skilled worker in a factory who can produce twice as much as another worker may
earn a higher wage. Labour law may apply this concept when advocating for performance-
based pay or merit-based promotions.
The more productive the worker, the higher their wage.

6. THE BARGAINING THEORY OF WAGES

Explanation: This theory, from John Davidson and later developed by John Hicks, suggests
that wages are determined through the process of bargaining between employers and workers
(or their unions).
The outcome of this negotiation depends on the relative power of both parties.

Example: In a unionized workplace, the union negotiates wages on behalf of the workers,
which may result in higher wages than what employers originally offer. Labour laws facilitate
this through the right to collective bargaining and protection against unfair dismissal during
negotiations.

7. BEHAVIORAL THEORY OF WAGES

Explanation: This theory considers psychological and social factors in determining wages,
suggesting that wages aren't always based purely on economic factors like productivity or
supply and demand.
Employer preferences, company culture, and worker expectations also play a role.
Example: An employee might receive a higher wage not only because of productivity but also
due to their loyalty to the company, leadership skills, or work ethic.
 THE MINIMUM WAGES ACT, 1949
OBJECT: The Minimum wages Act was passed for the welfare of labourers. This act has
been enacted to secure the welfare of the workers in a competitive Market by providing for a
minimum limit of wages in certain employments.

• The object of this act is to prevent exploitation of the workers & for this purpose, it aims at
fixation of Minimum wages which employer must pay.
Minimum wages act not only provide the bare subsistence of his life but also must provide
for some measure of educational, medical requirements & amenities.

CONSTITUTIONAL VALIDITY OF ACT

The Constitutional validity of the minimum wages act, 1948 has been upheld in various legal
cases and judicial reviews in India.
The legislation was enacted to ensure the workers receive faith wages, particularly those in
industries where wage regulation was essential the prevent exploitation.

1) ARTICLE 14: (RIGHT TO EQUALITY)

The Act does not violate the principal of equality, as it applies equally to all workers in
specific industries as determined by the govt.

2) ARTICLE 19(1)(G) (RIGHT TO PRACTICE ANY PROFESSION)

Some challenges have been made under article arguing that the act interferes with the right
of employees to conduct their business.
However, courts have held that the restriction imposed by the act are reasonable and are in
the interest of general public, thus falling U/A 19(6) which permits reasonable restriction on
the freedom to practice any profession.

3) ARTICLE 23(PROHIBITION OF FORCED LABOUR)

The act alliance with the constitutional mandate U/A 23, which prohibits forced labours
Minimum wages act prevent the exploitation of workers
Article 23 prohibit the forced labour work for unreasonably low wages.
CASE BIJAY COTTON MILLS LTD VS STATE OF AJMEER
Irrespective of industry running in loss or profit it's mandate to pay minimum wages.
DPSP (38 &43) that aim to promote social & economic justice.
The court further emphasized that the fixation of minimum wages does not amount to
deprivation of property of the employer & that reasonable wages are essential to ensure
workers can lead a life of dignity.
while the act places obligations on employers to pay minimum wages, employers must ensure
that the wages meet the minimum standards Set by the law.

SCOPE - TO PREVENT EXPLOITATION OF EMPLOYMENT

The Appropriate Govt can include or add any rule at any time to this act.
This act generally apply where more than 1000 person workers are there in Company.
For ex: In a industry 500 members working so it can’t be applicable to this act.

SECTION 1: The minimum wages act extends to the whole of india. It applies to the
employment which are enumerated in the schedule of the act.
CASE: REGIONAL LABOUR COMMISSIONER, BANGLORE AND OTHER VS T.K.
VARKEY AND COMPANY
FACTS
T K Varkey and Company (the respondent) was engaged in construction work for the central
Public works department (CPWD).
The Regional labour Commissioners (the appellant) contended that T k. Varkey & Company
had not complied with the provisions of minimum wages act regarding payment of minimum
wages to their workers.
INSPECTION & NOTICES
During inspections conducted ley labour officials, it was found that the workers employed by
T K Varkey company were paid less than the minimum wages act.
The Reginal labour commissioner notices to company, demanding the payment of wages as
per the statutory Minimum wage rate.
T.K.V company contended that the workers were not covered under the scheduled
employments listed under minimum wages act.
They argued that construction work carried out for the CPWD should not be considered part
of Schedule employments. therefore Minimum wage were not applicable to them.
ISSUE
 1) whether the workers employed by varkey & Company in construction work for the
CPWD were covered under the provisions of the minimum wager act, & if the
company was liable to pay the minimum wages as prescribed.

JUDGEMENT
The SC held that the construction work under taken by T.K. Varkey & Company for the
CPWD felt within the scope of scheduled employments as notified under the Act.
Thus the company obligated to pay its worker as per prescribed minimum wages.
The purpose of the act is to ensure that worker receive at least the minimum prescribed
wages, which cannot be compromised.
In this case, the construction work undertaken for a public authority (CPWD) was considered
part of scheduled employment related to construction.
This case set a precedent in ensuring strict Compliance with MWA across various industries.
including public construction projects.
CASE: AHMEDABAD PANJRAPOLE SANSHA VS MISCELLANEOUS MAZDOOR
SABHA AND ORGANISATON.
FACTS: APS is an organization primarily engaged in charitable activities, taking care of
abandoned.
The organisation employed several workers to take care of these animals. These workers
were paid wages.
The miscellaneous mazdoor sabha (a worker’s union) argued that the wages paid to the
employees of the Sanstha were below the minimum wages prescribed under the minimum
wages act 1948.
The sanstha argued that since its primary activity was charitable, it was not an industrial or
commercial enterprise and hence was not covered under the purview of minimum wages act.
ISSUES
1. Whether the minimum wages act, 1948 apply to an organization engaged in charitable
activities?
2. Whether APS an industry under the act and related to labour laws?
JUDGEMENT
The court decided in favour of miscellaneous mazdoor sabha worker union and held that the
minimum wages act applies to the AP Sanstha.
The sanstha was engaged in charitable work does not exclude from labour law. Sanstha
obligated to pay minimum wages.
The court ruled that even though the organisation is charitable in nature, it still constitutes an
industry under the broader interpretation of the industrial dispute act.
Held the activities of sanstha its commercial establishment attracting minimum wages act.
Its is landmark ruling ensuring that workers in charitable and non profit organizations are still
entitled to their legal rights under labour laws.

CASE: ANSU POKKUVARARTHU MADURAI THOZHILAIAR VS T.N.S.T LTD.

Temprory workers also allowed for minimum wages.
Fixing minimum wages fixed only by appropriate govt and govt can examine but not have
power to fix wages.

CASE: UNICHAY VS STATE OF KERALA

Maintenance of the workers and his family ensures efficiency of workers in their works.
IMP – Minimum wages is not defined in the at probably because it would not be possible to
lay down a uniform minimum wages for all industries throughout the country on account of
different & varying conditions prevaling from industry to industry & from one part of the
country to another.

CASE-WORKMEN OF REPTAKOS BREIT AND CO LTD VIS MANAGEMENT OF

REPTAKOS BRETT AND CO.LTD

The workers claiming that the wages paid to them were inadequate to meet their basic needs.
The core issue was whether the wages being paid by the company complied with the
minimum wages act.

ISSUE: whether "minimum wages" should be merely a subsistence wage or should include
other factors such as fair living standards.

JUDGEMENT
The court held that minimum wage should not be limited to mere subsistence or starvation
wages, It should include provisions for basic human needs such as food, clothing, shelter,
education, medical care.
The count evolved contain guidlines to be taken into consideration while determining the
minimum wags
 1. A standard working-class family
(with the average size of 3 consumption units)
2. Food requirement of 2.700 calories per adult.
3. clothing for the family to extend to 72 yards. Per year.
4. Rent for housing
5. Fuel, lighting and others expenses should constitute 20% of he total minimum wage.
The court further added the education for children, Medical requirements, & provisions for
old age should be consider while fixing Minimum wages.
The Judgement played a key role in under standing of minimum wages, aligning with
broader, Objective of providing a decent standard of Living

MINIMUM WAGE: The wage that ensures a worker can meet their basic need such as food,
Clothing & shelters
FAIR WAGE: The wage that is above the minimum wages & determined by considering the
industry's capacity to pay a worker’s productivity.
It ensures better living standards education, health care etc.
Living wage should enable the male earner to provide for himself and his family not merely
the bare essentials of food, clothing and shelter but a measures of comfort including
education for children, protection against ill-health.
SECTION 3: FIXATION OF MINIMUM RATE OF WAGES.
Section 3 lays down that the appropriate govt shall be empowered to fix the minimum rates of
wages in the manner prescribed under this act.
Appropriate govt have authority to fix wages, fixing of wages it may be changes on basis of
classes.
Appropriate govt shall review fix and revise the minimum wages.
MINIMUM WAGES FIXED BY ONE OR MORE OF THE FOLLOWING WAGE
PERIODS NAMELY
1. By the hour
2. By the day
3. By the month
4. By such other longer wage period as may be prescribed.
THE WAGES CAN BE FIXED BASED ON VARIOUS FACTOR SUCH AS
1. Time rate (wages for a specific period like hourly, daily or monthly)
2. Piece rate (wages per unit of output)
3. Guaranteed time rates or overtime rates.
APPROPRITATE GOVT WILL REVISE THE MINIMUM WAGES AT LEAST EVERY 5
YEARS.

CASE: HASSAN JAN VS STATE OF BIHAR

The primary issue generally revolves around an employer’s non-compliance with the
minimum wage rules, fail to pay minimum wages to employees.
ISSUE: whether fixing wages infringes upon their rights to business of employers under
article 19(1) (g) of the constitution?
JUDGEMENT
Court uphold the minimum wages act as constitutionally valid, based on the principle of
social justice and direct employers to pay the prescribed wages along impose fine and
penalties on employers for non-compliance of minimum wages.
This act is considered as welfare legislation aimed at preventing exploitation of labour.

CASE: SAHDEO SAHU VS STATE OF UP

Sahdeo the petitioner being paid wages below the minimum wages as mandated by the state
govt and facing issues related to wage discrimination or unpaid wages.
Minimum wages ensures that employer pay their worker at least the minimum wages fixed by
appropriate govt and non payment of minimum wages below prescribed rate is an offense
under the act.
Section 3 empower the state govt to fix minimum wages for employees
Section 20 outlines the process for claims by employees who are not paid the minimum
wages, including the right to approach an authority for redressal.
JUDGEMENT
In this case the petitioner likely sought redressal for non payment of minimum wages and the
court would have ruled in favour of enforcing the minimum wages act protecting the
employee’s right to fair wages.

SECTION 4: MINIMUM RATES OF WAGES

Section 4 of the Minimum Wages Act deals with how the minimum wage is determined by
the government. Here's a simple explanation of the key points:

HOW ARE WAGES FIXED?

When the government fixes the minimum wages, they consider various factors such as:

1. Cost of living: They look at how much it costs for a person to afford basic needs
(food, shelter, clothing).
2. Standard of living: They also ensure that the wages allow workers to live with dignity,
covering education, health, and other basic needs.
3. Type of work: The wages vary depending on the nature of work, whether it's skilled,
semi-skilled, or unskilled labor.
4. Industry: Wages may be different across different industries based on the economic
condition of that industry.

WHAT ARE IRRELEVANT CONSIDERATIONS?

Some things should not be considered when fixing minimum wages:

1. Employer's ability to pay: The government doesn't decide wages based on how much
an employer can afford to pay. The employer's financial situation isn't a valid reason
to pay workers less than the minimum wage.

2. Profitability of the business: Even if the business is not making much profit, it cannot
be used as an excuse to lower the minimum wages.

EXAMPLE
1. Valid Consideration: A government might look at the increase in food prices and decide to
raise the minimum wage because workers need more money to afford basic necessities.
2. Irrelevant Consideration: A small business owner cannot argue that they are not making
enough profit and thus should be allowed to pay workers less than the set minimum wage.
The key point is that the minimum wage is meant to protect workers and ensure they earn
enough to cover basic needs, regardless of the employer’s financial situation.

CASE: KARNATAKA FILM CHAMBER OF COMMERCE VS STATE OF KARNATAKA

KFC Representing employers in the film industry challenged the notification issued by state
of Karnataka under the minimum wages act.
The state of Karnataka has issued a notification revising and fixing the minimum wages for
workers in the cinema industry. The KFCC argued that the notification was unreasonable and
arbitrary.
The petitioner also contended that notification did not consider the special circumstances of
the cinema industry.
ISSUES: whether the notification issued by state of Karnataka fixing wages for the cinema
industry was arbitrary or unreasonable?
JUDGEMENT
The court reasoned that wage fixation is a socio-economic measure aimed at ensuring that
workers receive fair remuneration, and the court can’t interfere with it unless there is a clear
violation of procedure or abuse of power.
The court found that the procedure followed was legal and that there was no evidence of
arbitrariness or unreasonableness in the wage fixation.
BASIC WAGES+ SPECIAL ALLOWANCE/ DA (WHICH VARIES WITH THE COST OF
LIVING INDEX)
BASIC WAGES+ CASH VALUE OF MATERIALS LIKE FOOD CLOTHING ETC
COMPREHENSIVE WAGE RATE (INCLUSICE OF ALL WAGES)

SECTION 5: PROCEDURE OF FIXING AND REVISING OF WAGES

In fixing minimum rates of wages in respect to any scheduled employment for the first time/
revising minimum rates of wages appropriate govt follow the methods
This method is called the committee method
1. AG can appoint as many appropriate committee and sub committees as necessary to
hold inquiry and advice it in respect of revision or fixation as the case may be.
2. After considering the advice of the committees. AG shall by notification in official
gazette fix or revise minimum rates of wages.
 3. The minimum rate of wages shall come into force from a such date as specified in the
notification.
CASE: MANGALORE GANESH BEEDI AND ALLIED BUDI FACTORIES WORKER
ASSOCIATION VS STATE OF KARNATAKA
The govt of Karnataka issued a notification revising he minimum wages for workman in
beedi manufacturing industries and the notification challenged by the management of beedi
manufacturing industries.
It was contended before judge that the govt did not take into account the capacity of the
management to pay minimum wage, the cost of raw materials required for the manufacture of
beedies.
The judgement emphasized the social welfare objective of the legislation aiming to protect
worker from exploitation by ensuring they receive a fair wage for their labour.
The petition was dismissed the wage fixation was upheld as constitutionally valid and
justifiable under the law.
Fixation of wage not arbitrary and not violating article 19(1)(G) is not absolute and is
subjected to reasonable.
SECTION 7: ADVISORY BOARD
The AG shall according to section 7 appoint an advisory board for purpose co-ordinating the
work of committees and sub committees appointed under section 5 and advising the AG in
the matter of fixing and revising minimum rate of wage.
SECTION 8: CENTRAL ADVISORY BOARD
For the purpose of advising the central and state govt in the matters of fixation and revision
of minimum rates of wages and other matters under this act and for co-ordinating the work of
the advisory boards, the central govt shall appoint a central advisory board.
The central board consist of persons by the central govt representing employers and
employees in the scheduled employments, who shall be equal in number.
SECTION 10: CORRECTION OF ERRORS
The AG by notification in the official gazette mistake in any order fixing or revising
minimum wages under this act or errors arising there accidentally.
As soon as may be after it is issued, be placed before the advisory board for information.
SECTION 11: of the Minimum Wages Act primarily states that wages should be paid in
cash. However, there are certain situations where wages can be paid in kind (goods or
services instead of cash). Here's a simpler explanation:

1. Wages should be in cash: Normally, workers should be paid money for their work.
2. Exceptions for wages in kind: If it has been a tradition in a certain industry or region to pay
workers partly or fully with goods (like food, housing, etc.) instead of cash, the government
can allow this. But, this can only happen if the government thinks it's necessary for the
specific situation. The government will announce this decision through an official
notification.

EXAMPLE:
If a worker earns ₹10,000 in wages, but the employer provides food and accommodation
worth ₹3,000, then the worker should receive ₹7,000 in cash and the rest can be given as
goods (worth ₹3,000). However, this is only allowed if the government has approved it.
Similarly, if the government allows the employer to provide rice at a discounted price as part
of the worker's benefits, the value of the rice given must be considered when calculating the
worker's total wage.

SECTION 13
Section 13(1) of the Minimum Wages Act gives the government certain powers to regulate
working hours, rest days, and pay for overtime in any type of employment where minimum
wages have been fixed. Here’s what it means:

1. Fixing normal working hours: The government can decide the number of hours that make
up a normal working day for employees. This includes break times or rest periods during the
day.
2. Weekly rest day: The government can require that employees get at least one day off every
seven days (a weekly rest day). Workers should also be paid for this rest day.
3. Overtime pay: If an employee has to work on their rest day, they must be paid at a rate that
is at least the overtime rate, meaning more than their usual pay rate.

EXAMPLE:
A factory worker may have a normal working day of 8 hours, including a lunch break. They
get Sunday off every week. If they work on Sunday, they should be paid overtime, which
could be double their regular pay for that day.
SECTION 13(2) states that certain types of workers are treated differently under these rules.
For these workers, the rules about working hours, rest days, and overtime will only apply
under specific conditions. These exceptions include:

1. Urgent or emergency work: Workers involved in urgent tasks or emergency situations

(like handling a sudden breakdown in a factory) may not always get the standard working
hours or rest day.
2. Preparatory or follow-up work: Workers doing preparatory or complementary tasks that
must be done outside regular working hours (like cleaning machines before the factory
opens) may have different working time rules.
3. Intermittent work: For jobs where workers have long periods of inactivity (like security
guards who may not have continuous duties but need to stay on the premises), different rules
for working hours and rest days can apply.
4. Technical or time-sensitive work: If a task must be completed before the end of a shift
(for technical reasons, like finishing a batch of products), the employee might not get their
rest day or fixed working hours.
5. Work based on natural forces: Jobs that depend on nature (like fishing or farming) may
have to be done at irregular times, so the usual working hour rules won’t apply.

EXAMPLE:
A security guard may have a 12-hour shift, but much of that time might be spent just waiting
or monitoring without any active work. In such cases, the government may allow the
employer to have different rules for their working hours or rest days because their work is
intermittent.

SECTION 14
Section 14 of the Minimum Wages Act deals with overtime wages for workers. It ensures that
workers are fairly compensated when they work beyond their regular hours.

1. Overtime Work: If a worker works more than the fixed number of hours in a normal
working day or week (as decided under the Minimum Wages Act), they are entitled to
overtime pay.
2. Overtime Rate: The rate for overtime work must be at least twice the regular rate of pay.
This means, if a worker’s regular hourly wage is ₹100, they must be paid at least ₹200 per
hour for overtime.
3. Working Beyond Normal Hours: The law makes it clear that whenever a worker is asked to
work beyond the hours normally allowed (like working extra hours on the same day or extra
days in a week), they must be compensated with overtime pay.
EXAMPLE:
Suppose a factory worker is paid ₹500 per day for 8 hours of work. If they work 10 hours in
one day, they have worked 2 hours of overtime. For these 2 hours, the employer should pay at
least ₹125 per hour (double the regular ₹62.5 hourly rate), making the overtime pay ₹250 for
those 2 extra hours.

Section 14 ensures that when workers work longer than their normal hours, they must be
compensated with overtime pay at double the regular rate. This law prevents exploitation and
ensures that employees are fairly paid for their extra effort.

SECTION 15: of the Minimum Wages Act ensures that workers who are work for fewer
hours than the normal working still receive wages for a full day of work, even if they work
fewer hours than the normal working day. However, there are exceptions to this rule.

1. FULL-DAY WAGES FOR LESS WORK: If an employee is supposed to work a full day
(for example, 8 hours) but ends up working fewer hours because of the employer's choice or
circumstances beyond their control, they are still entitled to be paid for the entire day.

2. EXCEPTIONS:
Unwillingness to work: If the worker doesn’t complete a full day of work because they
refused to work or didn’t want to work (without a valid reason), then they won’t be paid for
the full day. In this case, it's the worker's own choice not to work the full hours, so the
employer is not responsible.

EXAMPLE:
Full pay scenario: A factory worker is hired to work 8 hours a day and is paid ₹500 for a full
day. On a particular day, the employer tells the worker that there’s only 4 hours of work
available. Even though the worker only works for 4 hours, they must still be paid ₹500 for
the full 8 hours because the employer did not provide enough work.
Exception scenario: If the worker refuses to work for more than 4 hours even though there is
more work available, they will only be paid for 4 hours, not for the full day, because the
reduced hours were the worker's choice.

SUMMARY:
Section 15 protects workers by ensuring they receive a full day's wage even if they work
fewer hours due to the employer’s lack of work. However, if the worker chooses not to work
the full hours without a valid reason, they will not get paid for the whole day.

SECTION 17: of the Minimum Wages Act ensures that workers who are paid based on the
amount of work they complete (i.e., piece-rate workers) are also entitled to the minimum
wage. Here's a simpler explanation:

1. Piece-rate workers: These are workers who are paid based on the number of units or
pieces they produce, rather than by the hour or day.
2. Minimum wage for piece-rate workers: Even if a worker is paid per piece of work, the
law says that their total wage cannot be less than the minimum time-rate wage (the wage for a
regular day or hour of work).
3. Guarantee of minimum wage: The employer must ensure that, even if the worker is paid
for each piece produced, the total wage for the time worked should not be less than the
minimum wage for that period. This protects piece-rate workers from being underpaid.

Example:
Suppose a worker in a factory is paid ₹10 for each item they produce, they can produce 30
items. This means they would earn ₹300 for the day.
However, the minimum wage for a day's work in that region is ₹400. In this case, even
though the worker has earned ₹300 based on the piece rate, the employer must pay them at
least ₹400 to meet the minimum wage requirement. The worker is protected from being paid
less than the minimum wage, even if their work is based on production.

SECTION 18: MANITENANCE OF REGISTERS AND RECORDS

Section 18 requires that every employer shall maintain such registers and records giving such
particulars of employees employed by him, the work performed by them, the wages paid to
them, the receipts given by them and such other particulars and in such form as may be
prescribed.

SECTION 19: INSPECTORS

Section 19 of the act authorises the appropriate govt to appoint by notification in the official
gazette such person as it thinks fit to be inspectors for the purposes of this act. The
appropriate govt shall also define the local limits within which the inspectors shall exercise
their functions.
POWER OF INSPECTORS
Section 19(2) of the Minimum Wages Act gives Inspectors specific powers to ensure that
employers are following the law, particularly regarding payment of minimum wages. These
powers allow them to check workplaces, examine records, and gather information to protect
workers' rights. Here's a breakdown of the inspector's powers in simple terms:

POWERS OF THE INSPECTOR:

1. Entry and Inspection of Premises
If a garment factory is suspected of not paying workers the minimum wage, the inspector can
visit the factory during work hours, ask for the wage records, and check if the workers are
being paid properly.
2. Questioning People on the Premises
If the inspector visits a construction site, they can talk to the workers to ask how much they
are getting paid and if it matches the minimum wage requirements.
3. Gathering Information from Out-workers
What it means: If the employer gives work to people who complete it outside the main
workplace (like home-based workers), the Inspector can ask for the names and addresses of
these workers. They can also ask for information about how much these workers are paid.
4. Seizing or Copying Documents
What it means: If the Inspector believes that the employer is breaking the law (for example,
not paying the minimum wage), they can seize or make copies of important documents like
wage registers or records. These documents can be used as evidence if the employer is
committing an offense under the Minimum Wages Act.

SECTION 20: of the Minimum Wages Act empowers the government to appoint an authority
to hear and resolve complaints related to the non-payment or underpayment of minimum
wages.

A. Appointment of Authority: The government can appoint an authority (like a specific

officer or a labour court) to handle cases where workers have not been paid their
 minimum wages or have been paid less than the required amount. This authority can
be assigned for any specific area by an official notification.

2. Types of Claims the Authority Can Hear:

A. Non-payment or underpayment of minimum wages: If a worker is paid less than the
minimum wage set by law, they can make a claim to this authority.
B. Payment for rest days: If a worker doesn’t get paid for the mandatory rest days they
are entitled to under the Act (as per Section 13), they can file a claim.
C. Payment for working on rest days: If a worker works on a rest day but isn’t paid the
extra wages (as per Section 13), they can make a claim.
D. Overtime wages: If a worker is not paid the overtime rate (as per Section 14), they can
also file a claim.

EXAMPLE:
If a factory worker is supposed to be paid ₹500 per day but only receives ₹400, they can go
to the authority set by the government to claim the difference.
If a worker works on their weekly rest day but doesn’t get paid extra for it, they can also file a
claim for the additional wages.

SECTION 20(2) APPLICATION BY WHOM?

The employer himself
Any member of registered trade union authorised by the employee in writing
Legal practitioner
An inspector
Section 20(4) lays down that if the authority hearing any application under this section is
satisfied that it was wither malicious it may direct that a penalty not exceeding 50,000 rupees
be paid to the employer by the person presenting the application.

SECTION 22: of the Minimum Wages Act outlines penalties for employers who do not
follow the law, especially regarding payment of minimum wages.

1. Penalties for Underpayment:

If an employer pays less than the minimum wage set for an employee or does not pay what is
owed under the Act, they can be punished with:
Imprisonment for up to six months,
A fine of up to ₹500,
Or both imprisonment and a fine.

2. Penalties for Breaking Work Rules (Section 13):

If an employer breaks any rules related to working hours, rest days, or overtime payments (as
per Section 13), they can also face the same punishment of imprisonment, fine, or both.

EXAMPLE: Underpayment: If a factory worker is supposed to be paid ₹400 per day as per
the minimum wage law, but the employer only pays ₹300, the employer can be punished with
up to 6 months in jail, a fine of ₹500, or both.
Breaking work rules: If the employer does not give the worker a rest day as required or does
not pay for overtime, they can also face the same punishment.
Compensation Consideration: Suppose the worker filed a complaint under Section 20, and the
employer was ordered to pay ₹1000 as compensation for unpaid wages. When deciding the
fine for underpaying the worker, the court might reduce the fine because the employer has
already paid compensation.

SECTION 22 A: for all others offences penalty shall extend up to RS 500.

SECTION 22 B: Sets rules for filing complaints against employers for violations of minimum
wages laws, it requires prior approval from the govt or an inspector and imposes strict time
limits on when complaints can be filed to ensure timely action.
Complaint to be made within 6months from the date when offence was alleged to be
committed.
SECTION 22 D: payment of undisbursed amount due to the employee money shall be
deposited with the prescribed authority.
SECTION 22 E: protection against attachment of assets of employer with government.

SECTION 23 : EXEMPTION OF EMPLOYER FROM LIABILITY IN CERTAIN

CASES
Section 23 of the Minimum Wages Act outlines the circumstances under which an employer
can be exempted from liability if they are charged with an offense related to minimum wage
violations. Here’s a simple explanation:

1. Employer's Right to File a Complaint:

If an employer is charged with an offense under the Minimum Wages Act, they have the right
to file a complaint against the actual offender (usually someone like a manager or supervisor
who may have directly caused the violation).

2. Notice to the Actual Offender:

When the employer files this complaint, the actual offender will be notified and required to
appear in court at a designated time. Both the employer and the actual offender will face trial
together.

3. Burden of Proof:
The trial begins based on the original complaint against the employer, and it is the employer's
responsibility to bring the charges against the actual offender.

4. Proving the Offense:

If it is proven that the offense (like underpaying employees) was committed, the employer
can still avoid liability if they can prove:
Diligence: They took reasonable steps to ensure the minimum wage laws were followed.
Lack of Knowledge: The offense was committed by the actual offender without the
employer's knowledge, consent, or involvement.

5. Consequences:
If the employer successfully proves either of the above points, the actual offender will be
convicted, and the employer will not face any penalties.
 THE PAYMENT OF WAGES OF ACT, 1936.
The Payment of Wages Act, 1936 is an Indian law that regulates the payment of wages to
employees.
Its main goal is to ensure that workers get paid on time and without illegal deductions. The
act sets rules about how and when wages should be paid, and it applies to certain industries
and workers earning below a specified wage threshold.

1. Timely Payment: Employers must pay wages regularly (monthly, weekly, or bi-weekly),
and delays beyond the prescribed period are not allowed.
Example: A factory worker should receive their wages by the 7th day of the month if there
are less than 1,000 workers, and by the 10th if there are more than 1,000 workers.

2. No Unjust Deductions: The act specifies that employers cannot deduct wages arbitrarily.
Only legally permitted deductions, like taxes, provident fund, or fines for misconduct, are
allowed.
Example: If an employee damages company property, the employer can deduct a portion of
wages as a fine, but only according to the rules in the act.

3. Mode of Payment: Wages must be paid in cash or via bank transfer, not in goods or kind
(unless the worker has agreed otherwise).

EXAMPLE:
If a construction worker’s wage is ₹15,000 per month, and the employer fails to pay by the
7th of the following month, the worker can take legal action under the Payment of Wages Act
to claim their dues.
OBJECTIVE TO THE PAYMENT OF THE WAGES ACT
This act protects workers from exploitation and ensures that they receive fair and timely
compensation for their labour.
The object (or purpose) of the Payment of Wages Act, 1936 is to ensure that employees
receive their wages on time without any unauthorized deductions.
It safeguards workers, particularly those in lower wage brackets, by setting rules for when
and how wages should be paid and what deductions can legally be made by employers.

MAIN OBJECTIVES:
1. Prevent Delays in Wage Payment: The act ensures that workers are paid regularly and
without unnecessary delays.
Example: A worker in a factory must receive their wages by the 7th or 10th of the following
month, depending on the size of the workforce. This prevents employers from withholding
wages for extended periods.

2. Prevent Unlawful Deductions: It restricts employers from making unfair or arbitrary

deductions from workers' wages. Deductions can only be made for specific reasons like taxes,
provident fund contributions, fines for misconduct, or advance payments.
Example: If a company deducts money for lateness, the deduction should be in line with the
law and not exceed a certain percentage of the worker’s wages.

3. Improve Worker Security: By setting clear rules on payment methods (cash or bank
transfer) and timing, the act gives workers more financial security and stability.
The act aims to protect vulnerable workers from exploitation by ensuring fair treatment
regarding wage payments.

The Royal Commission on Labour in India made important suggestions for protecting
workers, particularly regarding wage deductions and fines.
The current Payment of Wages Act is largely based on these suggestions. Here's a simplified
breakdown of their recommendations:

1. No fines for children: Children should not be fined at all.

2. Limit on fines: Any fine imposed on a worker should not be more than half an anna (a
small fraction of a rupee) earned by the worker in a month.
3. Using fine money: The money collected from fines should be used for something that
benefits all the workers, and this use should be approved by a recognized authority.
4. Clear notice for fines: A notice should be posted listing the specific acts or mistakes for
which fines can be given.
5. Limit on deductions for damaged goods: If a worker damages goods, the amount deducted
from their wages should not be more than the wholesale price of the damaged goods.
6. Allowable deductions: Deductions from wages can be made for providing housing or tools
and raw materials needed for work.
7. Illegal fines and deductions: Any fines or deductions that are not allowed by law should be
treated as a criminal offense.

In short, these recommendations aim to protect workers by limiting fines and wage
deductions, making sure fines are used to benefit workers, and ensuring that any illegal
deductions or fines are penalized.

SECTION 1: APPLICATION OF THE PAYMENT OF WAGES ACT, 1936

The Payment of Wages Act applies to the entire country of India and came into effect on 28th
March, 1937. Initially, the act governs the payment of wages to the following groups of
workers:

1. Factory Workers: People who are employed in any type of factory.

2. Railway Workers (Non-factory): People employed by a railway administration, whether
they work directly for the railway or for a subcontractor fulfilling a railway contract.
3. Workers in Certain Other Establishments: People employed in industrial or other specific
establishments that are listed in detail under section 2 (ii) sub clause (a) to (g) of the act,
covering workplaces such as mines, plantations, workshops, or any establishment defined by
law.

SECTION 2 (II) SUB CLAUSE (A) TO (G) OF THE ACT

An "industrial or other establishment" as defined in the Payment of Wages Act includes the
following:

1. Tramway or Motor Transport Services: This includes services that use trams or motor
vehicles to transport passengers, goods, or both on roads for payment.
2. Air Transport Services: This includes air transport services, except those used by the
military, naval, or air force, or the Civil Aviation Department of the Indian government.
3. Docks, Wharfs, or Jetties: Places where ships load or unload goods, or where ships are
docked.
4. Mechanically Propelled Inland Vessels: Ships or boats that operate on rivers or other
inland waters using mechanical power.
5. Mines, Quarries, or Oil Fields: Locations where minerals, rocks, or oil are extracted from
the earth.
6. Plantations: Large areas of land used for growing crops like tea, coffee, or rubber.

7. Workshops or Manufacturing Establishments: Places where goods are produced,

modified, or made, typically for sale or transportation.
8. Construction or Maintenance Work: Establishments involved in building or maintaining
structures like buildings, roads, bridges, or canals. This also includes operations related to
navigation, irrigation, water supply, and electricity generation, transmission, and distribution.

IN SIMPLER TERMS, THIS DEFINITION COVERS A WIDE RANGE OF

WORKPLACES, FROM TRANSPORT SERVICES AND MINES TO WORKSHOPS AND
CONSTRUCTION SITES.

SECTION 3
The Payment of Wages Act, 1936 requires employers to fix a specific wage period for paying
their workers. This means that wages must be paid regularly at intervals.
The wage period could be daily, weekly, fortnightly, or monthly, but it cannot exceed one
month. The employer must decide and inform the workers about the wage period.

1. Maximum Wage Period: The wage period cannot be longer than one month, meaning
wages must be paid at least once a month.
2. Consistency: The employer must stick to the fixed wage period, ensuring that workers
receive their wages regularly.
In case of the factory, manager of that factory shall be liable to pay the wages to employees
employed by him.
In case of industrial or tother establishments, persons responsibility of supervision shall be
liable for the payment of the wage to employees employed by him.

EXAMPLE
If a factory worker is on a monthly wage period, their employer must ensure the worker is
paid by the end of the month or earlier, as per the wage cycle.
This ensures that there are no long delays between the worker’s work and their payment.

FIXATION OF WAGE-PERIODS SECTION 4

Wage period for payment of wages to employees by employer should not exceed 30 days.
This means wage can be paid on daily weekly fortnightly f(or every 15 days) and monthly
once.
TIME OF PAYMENT OF WAGES SECTION 5
In railway factory or industrial or other establishment, if there are less than 1000 employees,
should be paid before the expiry of the 7th day after the last day of the wage period.
In other railway factory or industrial or other establishment if there are more than 1000
employees, should be paid before the expiry of the 10th day after the last day of the wage
period.
SECTION 5(2): If the employee is terminated or removed for the employment by the
employer
The wage of that employee should be paid within 2 days from the day on which he was
removed or terminated.
SECTION 6: THE PAYMENT OF WAGES AMENDMENT ACT 2017
All wages shall be paid in current coin or currency notes or by cheque or by crediting the
wages in the bank account of the employees.
SECTION 7
Section 7 of the Payment of Wages Act, 1936 outlines the types of deductions that can be
legally made from an employee's wages. Deductions are amounts that can be subtracted from
a worker's salary under certain conditions, but these must follow legal guidelines.

What is a Deduction?
A deduction is any amount that is reduced from an employee's wages before they receive
their pay. These deductions could be for various reasons like fines, absence from work, or
contributions to social security funds. However, not all deductions are allowed; they must
follow the rules set by the law.

PERMISSIBLE DEDUCTIONS
Only specific deductions are allowed under Section 7, and they must be for legitimate
reasons.

1. Fines: Penalties for breaking company rules, provided the rules are clearly posted.
2. Absence from Duty: If a worker does not show up for work, a deduction can be made for
the time they were absent.
3. Damage or Loss: If an employee causes damage or loss to company property due to
negligence, a deduction can be made.
4. House Accommodation: Deduction for providing housing if agreed upon by the employee.
5. Advances or Loans: Repayment of any loans or advances the employee has taken from the
employer.
6. Income Tax: Deduction for income tax or other statutory taxes.

DEDUCTION FOR ABSENCE FROM DUTY

If an employee is absent from duty without permission or valid reason, the employer is
allowed to deduct wages for the period of absence. This deduction should only be
proportional to the time missed.

CASE: BANK OF INDIA, BOMBAY AND ANOTHER V. T.S. KELAWALA, BOMBAY

AND OTHERS
Facts: In this case, the employees of the Bank of India participated in a strike 4 HOURS in
every day, and the bank deducted wages for the full days wages from the employees who
participated in the strike. The employees challenged this deduction, claiming that it was not
legally permissible.

Issue: The main issue was whether the bank could deduct wages for the days the employees
were absent from duty due to participation in the strike.

Judgment: The Supreme Court of India ruled in favour of the bank. The court held that the
deduction of wages for absence from duty (including participation in a strike) is lawful under
Section 7 of the Payment of Wages Act. Since the employees did not perform their duties on
the strike days, the employer had the right to deduct wages for those days.

In simple terms, the court decided that if employees do not work (whether because of a strike
or any other unapproved absence), the employer can legally deduct their wages for those
absent days. The judgment confirmed that deductions for absence are allowed as long as they
are proportionate to the time missed.
This case highlights that employees cannot claim wages for days they were not working, and
deductions for absence are a fair practice under the Payment of Wages Act.
SECTION 7 (3) : The total amount of deductions from wages of employees should not
exceed 50% but only in case of payments to co-operative societies, deduction from wages of
employee can be made up to 75%.

SECTION 8: FINES UNDER THE PAYMENT OF WAGES ACT, 1936

Overview: Section 8 outlines the rules and requirements for imposing fines on employees. It
states that fines can only be deducted from wages under specific conditions.

1. Approval for Imposition of Fines:

Fines can only be imposed for certain acts or omissions specified by the employer, but only
with prior approval from the State Government or an authorized body.
Example: If a factory worker consistently arrives late, the employer can impose a fine for this
behavior, but first, they must get approval from the government or a designated authority.

2. Notice Requirement:
Employers must post a notice in the workplace that clearly lists the acts and omissions for
which fines can be imposed. This notice must be displayed in a visible area.

3. Opportunity to Show Cause:

Before a fine is imposed, the employee must be given a chance to explain their side of the
story or defend themselves against the proposed fine. This ensures fairness in the process.
Example: If an employee is fined for missing a shift, they should be allowed to explain why
they were absent before the fine is deducted from their wages.

4. Limit on Fine Amount:

The total fines imposed on an employee in any pay period cannot exceed 3% of their wages
for that period.
Example: If a worker earns ₹10,000 in a month, the maximum fine that can be imposed for
that month would be ₹300.
SUMMARY:
In simple terms, Section 8 of the Payment of Wages Act sets strict rules for how and when
employers can impose fines on workers.
Employers must have government approval, post clear notices about fines, give employees a
chance to explain themselves, and follow limits on how much can be deducted. Young
workers are protected from fines, and fines must be imposed fairly and within set time limits.

DEDUCTION FOR ABSENCE FROM DUTY SECTION 9

Deduction can be made by the employer for the absence of duty by the employee for one day
or for any period.
Example: if the salary of an employee is 6000rs per month and he was absent for duty for one
month. Deduction from the salary for absence of duty should not exceed 6000rs.
Employee present for the work place and refuses to work without proper reason shall be
deemed to be absent from duty.
If 10 or more persons together absent for the duty without any notice and without reasonable
cause, employer can make 8 day of wages as deduction from their wages.
 KOTHARI (MADRAS) LTD. V. SECOND A.J. CUM APPELLATE AUTHORITY &
OTHERS
the key issue was whether the company could legally deduct wages from employees who
were unable to attend work due to an Andhra Bandh (a shutdown or strike).
1. Background: During the Andhra Bandh, many employees were prevented from going to
work because of the actions of the bandh organizers. They could not attend their jobs, not
because they chose not to, but because external circumstances prevented them.
2. Tribunal’s Role: The tribunal (a type of court that handles labor disputes) was tasked with
determining whether the employees were indeed responsible for their absence. If the tribunal
found that the employees could not attend work due to the bandh, the company could not
deduct their wages.

3. Judgment: The tribunal ruled that since the employees were prevented from attending duty
by the organizers of the bandh, the management (company) was not entitled to deduct their
wages. The tribunal emphasized that it had the authority to investigate the reasons for the
absence and make a determination based on the facts.

EXAMPLE FOR CLARITY:

Imagine an employee named Raj, who works at Kothari (Madras) Ltd. On the day of the
Andhra Bandh, Raj wanted to go to work, but there were protests and roadblocks organized
by the bandh leaders, making it impossible for him to get to the office.
If the company tried to deduct Raj's wages for that day, the tribunal would look into the
situation. Since Raj was not responsible for his absence (he was prevented by the bandh), the
tribunal would rule that the company cannot deduct his wages.

CONCLUSION:
In summary, the court affirmed that employees should not lose wages for absences caused by
situations beyond their control, like strikes or bandhs. The tribunal has the power to review
the circumstances and protect the rights of the employees in such cases.

SECTION 10: DEDUCTION FOR DAMAGES OR LOSS

Employer should give an opportunity to the employee to explain the reason and cause for the
damage or loss happened and deductions made by employer from the employee wage should
not exceed the value or amount of damage or loss made by the employee.
10(2) all such deduction and all realizations thereof shall be recorded in a register to be kept
by the person responsible for the payment of wages under section 3 in form as may be
prescribed.
SECTION 11: house accommodation amenity or service provided by the employer should be
accepted by the employee, than only the employer can make deduction from the wage of the
employee.
Deduction should not exceed an amount equivalent to the value of the house accommodation
amenity or service supplied.
SECTION 12: DEDUCTIONS FOR RECOVERY OF ADVANCES

This section explains how deductions can be made from an employee’s wages to recover
money the employer has lent to them in advance.

1. Recovery of Advance Given Before Employment:

If the employer gave the employee money before the employee started working, it can be
deducted from the first full wage payment.
Example: If an employee received an advance payment to help with personal expenses before
starting the job, that amount will be deducted from their first full pay check.

2. Recovery of Advance Given After Employment Started:

If the advance is given after the employee started working, the government can set rules for
how and when the employer can recover that money.
Example: An employer gives an employee an advance mid-way through their employment.
The rules for recovering that money will depend on what the government says.

SECTION 12-A: DEDUCTIONS FOR RECOVERY OF LOANS

If an employee takes out a loan from the employer (not just an advance), the deduction of
loan repayments will also follow the rules made by the state government.
Example: If an employee borrows money from the company to buy a house, the state
government will set rules on how much can be deducted from their salary to repay the loan
and the interest charged.
 SECTION 13: DEDUCTIONS FOR PAYMENTS TO CO-OPERATIVE SOCIETIES
AND INSURANCE SCHEMES
If an employee is part of a co-operative society at work, or contributes to an insurance plan,
the employer can deduct the relevant amount from the employee’s wages, but they must do it
according to government regulations.

SECTION 14: INSPECTORS

The state govt may appoint an inspector for purpose of this act, every inspector shall be
deemed to be a public servant within the meaning of the Indian penal code,
A. The inspector of this act is having powers mentioned below
B. Inspector can make enquiry and examination whether the employers are properly
obeying the rules mentioned under this act.
C. Inspector with such assistance, if he thinks fit enter inspect and search any premises
of any railway, factory or industrial or other establishment at any reasonable time for
the purpose of carrying out the objects of this act.
D. Inspector can supervise the payment of wages to persons employed upon any railway
or in any factory or industrial or other establishment.
FACILITIES TO BE AFFORDED TO INSPECTORS SECTION 14A
This section provides that every employer shall afford an inspector all reasonable facilities for
making an entry, inspection, supervision or inquiry under this act.

SINGLE APPLICATION IN RESPECT OF CLAIMS FROM UNPAID GROUP SECTION

16
There is no necessity of many applications if there are many employees whose wages has not
been paid. Such all employees can make one application to the authority for payment of
wages according to this act.

SECTION 20: PENALTY FOR OFFENCES UNDER THE ACT

REASON FOR PENALTY
I. Delay in payment of wages
II. Unreasonable deductions
III. Excess deduction for absence of duty
IV. Excess deduction for damage or loss to employer
V. Excess deduction for house accommodation amenity or service.
PUNISHABLE WITH FINE SHALL NOT BE LESS THAN 1000/- RUPEES BUT
WHICH MAY EXTEND TO 7500/- RUPEES.
 I. If wage period exceed one month
II. Failure in payments of wages on a working day.
III. Wages not paid in form of current coin or currency notes or in both
IV. Failure to maintain record for collected fines from employee
V. Improper usage of fine collected from employees
VI. Failure of employee to display notice containing such abstracts of this act and of the
rules made.

PUNISHABLE WITH FINE WHICH MAY EXTEND 3000/- RUPEES

I. Whoever obstructs an inspector in the discharge of his duties under this act
II. Whoever willfully refuses to produce on the demand of an inspector any register or
other document
III. Whoever refuses or willfully neglects to afford an inspector any reasonable facility for
making any entry, inspection, examination, supervision, or inquiry authorized by or
under this act.

PUNISHABLE WITH FINE WHICH SHALL NOT BE LESS THAN 1000/ RUPEES
BUT WHICH MAY EXTEND TO 7500 RS.
I. Whoever repeats the same offence committed before;
Imprisonment for a term which shall not be less than one month but which may
extend to 6 months and fine which shall not be less than 3750rs but which may extend
20500/rupees.