Deriving the Meaning Of 'Wage': A Comparative Analysis of The Payment of Wages Act, 1936 And the Code on Wages, 2019

BACKGROUND

1. The Centre approved Code on Wages, 2019 which aims to provide a single uniform definition of wages as applicable to minimum wages, payment of wages and payment of bonus with an intent to minimise disputes and litigations correspondingly reducing compliance cost for employers.

2. The Code on Wages, 2019 received legislative approval and, subsequently, the President of India's assent on 8th August, 2019.

3. Earlier, the Payment of Wages Act, 1936 only applies to the payment of wages to persons employed in factories and to persons employed in any industrial or other establishment.

4. But this Code expanded the definition of 'employer' as well as 'employee' after putting together separate prior legislations under a single umbrella, resulting in a wide-ranging applicability of the regulations which is now applicable to workers in both organised and unorganised sectors.

OBJECTIVES OF CODE

1. It aims to combine and unite four authoritative labour laws named- the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976.

2. The Code on Wages, 2019pursues to amend and consolidate the laws concerning to wages and bonus and stuffs connected with it.

3. The Code has widened the opportunity by extending its applicability to all the establishments. Section 2(y) of the Code defines Wages as all remuneration whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment.

4. The Code also offers for the universal applicability of the provisions for prompt payment of wages and minimum wages to all workers regardless of the wage ceiling and sector, unlike the Payment of Wages Act, which is applicable to employees receiving wages below the statutory limit, and the Minimum Wages Act, which is applicable to employees engaged in scheduled establishments.

5. The intentions behind the starter of a uniform definition of wages are honestly positive, their influence remains to be seen.

MEANING AND ISSUE OF NEW DEFINITION

1. The inclusionary part of the new definition has only three items, which is two less than that provided under the Payment of Wages Act, 1936.

2. Moreover, the list of exclusions under the Code is much longer than that of the Payment of Wages Act, 1936.

3. It would also make the whole payroll system difficult and ultimately the possibly end results would remain somewhat similar leading to a great deal of misunderstanding.

4. The Code excludes 'remuneration payable under any award or settlement between the parties' from the definition of wages without providing any elucidation.

5. What is even more astonishing in this regard is the fact that some of the inclusionary clauses under Payment of Wages Act, 1936 has now come to be a part of the list of exclusions.

6. The first and only important thing required for achieving the desired results is to adequately enforce the requirements of the Code in a very standardised way which can be done only by refining the standard of regulatory authorities.

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