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6.0 Conclusions……………………………………………………………………….…..21
7.0 Bibliography…………………………………………………………….…………….22
INSITITUTE OF BUSINESS AND
TECHNOLOGY
BIZTEK
Submitted To:
Submitted By:
Dear Reader,
We would like to thank ALLAH Almighty, for finally making our efforts
worthwhile. We also like to thank Sir Mansoor Ali Course instructor, Business
Law, biztek, Karachi for her amiable support and guidance in completing this
report. It is due to him that, we had the opportunity of learning how to carry out
and conduct a report. This report about Payment of Wages Act, this will help
us in enhancing research and creative skills in the practical scenario.
Sincerely,
Fahad Abbas
Noor-us-Saba
Madiha Munawwar
Ayesha Munawwar
M.Umair Siddiqui
LETTER OF TRANSMITTAL
This report follows the guidelines given in the course outline provided by
biztek it has been reviewed and duly approved our course instructor.
Your feedback is vital for the credibility and worthiness of this report. Please
do not hesitate to contact us for any additional information or
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Thank You
Yours Truly
Fahad Abbas
Noor-us-Saba
Madiha Munawwar
Ayesha Munawwar
M.Umair Siddiqui
Teacher Comments
1.0.1 Application of the Act. Sec 1
Payment of wages is contained in payment of wages act 1936. It consists of 26 section and
5 appendices. Provincial government is authorized to apply this act. This act will not apply
in case of workmen who get monthly wages exceeding Rs.3000
It applies in the first instance to the payment of wages to persons employed in any factory,
to persons employed (otherwise than in a factory) upon any railway by a railway
administration or, either directly or through a subcontractor, by a person fulfilling a
contract with a railway administration, and to persons employed in an industrial or other
establishment specified.
Factory is a place where ten workers or more than ten worker work to gather for the
purpose achieving goals and objective.
Wages includes any privilege or benefit which is capable of being estimated in money or
expressed in term of money.
(4) It applies in the first instance to the payment of wages to persons employed in any
factory to persons employed (otherwise than in a factory) upon any railway by a railway
administration or either directly or through a sub-contractor by a person fulfilling a
contract with a railway administration and to persons employed in an industrial or other
establishment specified in sub-clauses (a) to (g) of clause (ii) of section 2.
(5) The State Government may after giving three months' notice of its intention of so
doing by notification in the Official Gazette extend the provisions of this Act or any of
them to the payment of wages to any class of persons employed in any establishment of
class of establishments specified by the Central Government or a State Government
under sub-clause (h) of clause (ii) of section 2 :
Provided that in relation to any such establishment owned by the Central Government
no such notification shall be issued except with the concurrence of that government.
(6) Nothing in this Act shall apply to wages payable in respect of a wage-period which
over such wage-period average one thousand six hundred rupees a month or more.
A) In factories, if a person has been named as the manager of the factory under the
factories act 1934.
Section 3
Every employer shall be responsible for the payment to persons employed by him
of all wages required to be paid under this Act: Provided that, in the case of persons
employed (otherwise than by a contractor)-
Every employer shall be responsible for the payment to persons employed by him of all
wages required to be paid under this Act:
(a) In factories if a person has been named as the manager of the factory under clause (f)
of sub-section (1) of section 7 of the Factories Act 1948 (63 of 1948) ;
(c) Upon railways (otherwise than in factories) if the employer is the railway
administration and the railway administration has nominated a person in this behalf for the
local area concerned.
The person so named the person so responsible to the employer or the person so nominated
as the case may be shall also be responsible for such payment.
SECTION 4
Payment of wages shall fix.
No wage period shall exceed one month.
Every person responsible for the payment of wages under section 3 shall fix
periods (in this Act referred to as wage periods) in respect of which such
wages shall be payable.
SECTION 5, 6
Wages shall be paid before the expiry of the seventh day of the next month, and in all other
establishment before expiry of tenth day.
(a) Any railway, factory or industrial or other establishment upon or in which less than one
thousand persons are employed, shall be paid before the expiry of the seventh day,
(b)Any other railway, factory or industrial or other establishment, shall be paid before the
expiry of the tenth day, after the last day of the wage period in respect of which the
wages are payable:
(c) In the case of persons employed on a dock, wharf or jetty or in a mine, the balance of
wages found due on completion of the final tonnage account of the ship or wagons
loaded or unloaded, as the case may be, shall be paid before the expiry of the seventh
day from the day of such completion.
(2) Where the employment of any person is terminated by or on behalf of the employer, the
wages earned by him shall be paid before the expiry of the second working day from the
day on which his employment is terminated
3) The State Government may, by general or special order, exempt, to such extent and
subject to such conditions as may be specified in the order, the person responsible for
the payment of wages to persons employed upon any, railway (otherwise than in a
factory) or to persons employed as daily rated workers. in the Public Works Department
of the Central Government or the State Government from the operation of this section in
respect of the wages of any such persons or class of such persons:
Provided that in the case of persons employed as daily rated workers as aforesaid, no such
order shall be made except in consultation with the Central Government
Provided that the employer may, after obtaining the written authorization of the employed
person, pay him the wages either by cheque or by crediting the wages in his bank account
SECTION 7 To 13
Every payment made by the employed person to the employer or his agent shall, for
the purposes of this Act, be deemed to be a deduction from wages.
Any loss of wages resulting from the imposition, for good and sufficient cause, upon
a person employed of any of the following penalties, namely:-
(ii) The reduction to a lower post or time scale or to a lower stage in a time scale; or
(iii) Suspension: shall not be deemed to be a deduction from wages in any case
where the rules framed by the employer for the imposition of any such penalty are in
conformity with the requirements, if any, which may be specified in this behalf of the
State Government by notification in the Official Gazette.
2) Deductions from the wages of an employed person shall be made only in accordance
with the provisions of this Act, and may be of the following kinds only, namely:-
(c) Deductions for damage to or loss of goods expressly entrusted to the employed
person or custody; or for loss of money for which he is required to account,
where such damage or loss is directly attributable to his neglect or default;
Physically present within the premises of his duty but not attending to his job deductions
due to absence from duty shall be proportional to the period of absence from work.
A deduction shall not exceed the amount of the damage or loss caused to the employer due
to the fault of the worker.
The deduction for house accommodation, amenities and services supplied can be made
only when the employer had accepted these benefits of his free will as a term of his
employment.
Section 18
Register of fines Annual returns 3)Register for overtime 4)Register of wages
5)Representation of Registers
(1) Every employer shall maintain such registers and records giving such particulars of
persons employed. by him, the work performed by them, the wages paid to them, the
deductions made from their wages, the receipts given by them and such other particulars
and in such form as may be prescribed.
(2) Every register and record required to be maintained under this section shall, for the
purposes of this Act, be preserved for a period of three years after the date of the last entry
made therein.
1) An Inspector of Factories appointed under Factories Act, 1948 shall be an Inspector for
the purposes of this Act in respect of all factories within the local limits assigned to him.
(2) The [State Government] may appoint Inspectors for the purposes of this Act in respect
of all persons employed upon a railway (otherwise than in a factory) to whom this Act
applies.
(3) The State Government may, by notification in the Official Gazette appoint such other
persons as it thinks fit to be Inspectors for the purposes of this Act, and 'may define the
local limits within which and the class of factories and industrial or other establishments in
respect of which they shall exercise their functions.
(b) With such assistance, if any, as 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;
(c) Supervise the payment of wages to persons employed upon any railway or in any
factory or industrial or other establishment;
(d) Require by a written order the production at, such place, as may be prescribed, of any
register or record maintained in pursuance of this Act and take on the spot or other wise
statements of any persons which he may, consider necessary for carrying out the put-poses
of this Act;
(e) Seize or take copies of such registers or documents or portions thereof as he may
consider relevant in respect of an offence under this Act which lie has reason to believe has
been committed by an employer;
(f) Exercise such other powers as may be prescribed: No person shall be compelled under
this section to answer any question or make any statement tending to incriminate himself.
Provided that where the State Government considers it necessary so to do, it ,may
appoint more than one authority for any specified area and may, by general or special
order, provide for the distribution or allocation of work to be performed by them
under this Act.
3) When any application is entertained, the authority shall hear the applicant and the
employer or other person responsible for the payment of wages, or give them an
opportunity of being heard, and, after such further inquiry (if any) as may be necessary,
may, without prejudice to any other penalty to which such employer or other person is
liable under this Act, direct the refund to the employed person of the amount deducted,
or the payment of the delayed wages, together with the payment of such compensation
as the authority may think fit, not exceeding ten times the amount deducted in the
former case and not exceeding twenty-five rupees in the latter, and even if the amount
deducted or the delayed wages are paid before the disposal of the application, direct the
payment of such compensation, as the authority may think fit, not exceeding twenty-
five rupees:
No direction for the payment of compensation shall be made in the case of delayed
wages if the authority is satisfied that the delay was due to
A bonafide error or bona fide dispute as to the amount payable to the employed
person, or
(a) That the application was either malicious or vexatious, the authority may direct that a
penalty not exceeding fifty rupees be paid to the employer or other person responsible for
the payment of wages by the person presenting the application; or
(b) That in any case in which compensation is directed to be paid, the applicant ought not
to have been compelled to seek redress under this section, the authority may direct that a
penalty not exceeding fifty rupees be paid to the State Government by the employer or
other person responsible for the payment of wages.
(5) Any amount directed to be paid under this section may be recovered
If the authority is not a Magistrate, by any Magistrate to whom the authority makes
application in this behalf, as if it were a fine imposed by such Magistrate.
(3) Whoever being required under this Act to maintain any records or registers or to furnish
any information or return
(a) Fails to maintain such register or record; or
(b) Willfully ref uses or without lawful excuse neglects to furnish such information or
return; or
(c) Willfully furnishes or causes to be furnished any information or return which he knows
to be false; or
(d) refuses to answer or willfully gives a false answer to any question necessary for
obtaining any information required to be furnished under this Act;
Shall, for each such offence, be punishable with fine which shall not be less than two
hundred rupees but which may extend to one thousand rupees.
(4) Whoever
(a) Willfully obstructs an Inspector in the discharge of his duties under this Act; or
(b) Refuses or wilfully neglects to afford an Inspector any reasonable facility for making
any entry, inspection, examination, supervision, or inquiry authorised by or under this Act
in relation to any railway, factory or [industrial or other establishment]; or
c) Willfully refuses to produce on the demand of an Inspector any register or other
document kept in pursuance of this Act; or
(d) prevents or attempts to prevent or does anything which he has any reason to believe is
likely to prevent any person from appearing before or being examined by an Inspector
acting in pursuance of his duties under this Act. Shall be punishable with fine which shall
not be less than two hundred rupees but which may extend to one thousand rupees].
(5) If any person who has been convicted of any offence punishable under this Act is again
guilty of an offence involving contravention of the same provision, he shall be punishable
on a subsequent conviction with imprisonment for a term which shall not be less than one
month but which may extend to six months and with fine which shall not be less than five
hundred rupees but which may extend to three thousand rupees
No cognizance shall be taken of any conviction made more than two years before the date
on which the commission of the of fence which is being punished came to the knowledge
of' the Inspector.
(6) If any person fails or willfully neglects to pay the wages of any employed person by the
date fixed by the authority in this behalf, he shall, without prejudice to anv other action that
may be taken against him, be punishable with an additional f inc which may extend to one
hundred rupees for each day for which such failure or neglect continues.
(1) Employed persons are said to belong to the same unpaid group if they are borne on the
same establishment and if deductions have been made from their wages in contravention of
this Act for the same cause and during the same wage-period or periods or if their wages
for the same wage-period or periods have remained unpaid after the day fixed by section
5.
(2) A single application may be presented under section 15 on behalf or in respect of any
number of employed persons belonging to the same unpaid group and in such case every
person on whose behalf such application is presented may be awarded maximum
compensation to the extent specified in sub-section (3) of section 15.
(3) The authority may deal with any number of separate pending applications presented
under section 15 in respect of persons belonging to the same unpaid group as a single
application presented under sub-section (2) of this section and the provisions of that sub-
section shall apply accordingly.
(1) Subject to the other provisions of the Act all amounts payable to an employed person as
wages shall if such amounts could not or cannot be paid on account of his death before
payment or on account of his whereabouts not being known -
(a) be paid to the person nominated by him in this behalf in accordance with the rules made
under this Act; or
(b) where no such nomination has been made or where for any reasons such amounts
cannot be paid to the person so nominated be deposited with the prescribed authority who
shall deal with the amounts so deposited in such manner as may be prescribed.
(2) Where in accordance with the provisions of sub-section (1) all amounts payable to an
employed person as wages -
(a) are paid by the employer to the person nominated by the employer person; or
(b) are deposited by the employer with the prescribed authority, the employer shall be
discharged of his liability to pay those wages.
No suit prosecution or other legal proceeding shall lie against the government or any
officer of the government for anything which is in good faith done or intended to be done
under this Act.
Where the factory is a seasonal one, an adult worker shall work no more than fifty hours in
any week and no more than ten hours in any day. A seasonal factory, per section 4 of the
Factories Act is that which is exclusively engaged in one or more of the following
manufacturing processes, namely, cotton ginning, cotton or cotton jute pressing, the
manufacture of coffee, indigo, rubber, sugar or tea. However, if such adult worker in a
factory is engaged in work, which for technical reasons must be continuous throughout the
day, the adult worker may work no more than fifty-six hours in any week.
Over Time
Section 14
To be fixed by the hour, by the day or by such a longer wage-period works on any
day in excess of the number of hours constituting a normal working day.
Payment for every hour or for part of an hour so worked in excess at the overtime
rate double of the ordinary rate of wages.
While article 37 of the Constitution makes reference to maternity benefits for women in
employment, there are two central enactments, one federal and the other provincial
providing maternity benefits to women employed in certain occupations. The Maternity
Benefit Ordinance, 1958 stipulates that upon the completion of four months employment or
qualifying period, a worker may have up to six weeks prenatal and postnatal leave during
which she is paid a salary drawn on the basis of her last pay.
In addition to the leave entitlements, workers enjoy festival holidays as declared by the
Federal Government. The Provincial Government under section 49 of the Factories Act,
1934, states all festival holidays, approximately 13 or as further declared, in the Official
Gazette. Additionally, every worker is entitled to enjoy all such holidays with pay on all
days declared and notified by the Provincial Government. If however, a worker is required
to work on any festival holiday, one day's additional compensatory holiday with full pay
and a substitute holiday shall be awarded.
Under agreements made with the Collective Bargaining Agent, employees who proceed on
pilgrimage i.e., Hajj, Umra, Ziarat, are granted special leave up to 60 days.
The Factories Act, 1934 allows for the employment of children between the ages of 14 and
18 years provided that each adolescent obtains a certificate of fitness from a certifying
surgeon. A certifying surgeon, per section 52 of the Act, shall on the application of any
child or adolescent who wishes to work in a factory, or, of the parent or guardian of such
person, or of the factory in which such person wishes to work, examine such person and
ascertain his or her fitness for such work.
The Act further restricts the employment of a child in a factory to five hours in a day. The
hours of work of a child should thus be arranged in such a way that they are not spread
over more than seven-and-a-half hours in any day. In addition, no child or adolescent is
allowed to work in a factory between 7 p.m. and 6 a.m. The Provincial Government may,
by notification in the Official Gazette in respect of any class or classes of factories and for
the whole year or any part of it, vary these limits to any span of thirteen hours between 5
a.m. and 7.30 p.m. Moreover, no child is permitted to work in any factory on any day on in
which he or she has already been working in another factory.
Where an employee is employed on piece work for which minimum time rate and
not a minimum piece rate has been fixed under this Act the employer shall pay to
such employee wages at not less than the minimum time rate.