Amendment of Payment of Wages Act, 1936 via Ordinance Route
The Centre has decided to get an ordinance promulgated with amendment to section 6 of the Payment of wages Act of 1936 to enable industries to pay wages by cheque or by direct credit into bank accounts of workers earning up to Rs. 18,000 a month.
This is one of the legal changes being brought in the aftermath of the demonetisation. The ordinance is yet to be promulgated by the President.
Current Status
The law in its current status states that all payment of wages should be in cash. It also states about a provision of asking employers to obtain written permission of the worker to pay either by cheque, or by crediting the wages to his or her bank account. Thus, to make payments without written permission, the law needs to be tweaked.
However, the move is getting criticised because it will not be able to target the unorganized sector. The economy is characterised by vast proportion of informal or unorganized sector. As per the NSSO survey 2009-10, the total employment in the country was of 46.5 crore comprising around 2.8 crore in the organised and the remaining 43.7 crore workers in the unorganised sector. Out of these workers in the unorganised sector, there are 24.6 crore workers employed in agricultural sector, about 4.4 crore in construction work and remaining in manufacturing and service.
The unorganised sector is characterised by-
- No security of employment.
- No fixed working hours.
- No fixed payment of wages.
- No benefits like paid leave, provident fund, medical benefits, etc.
Therefore, before undertaking any such moves, an effort needs to be made to regulate the unorganised sector first.
Objectives of the amendment
- Ensure transparency in payment of wages.
- Will ensure that minimum wages are paid to the employees.
- Social security rights will be protected.
- It will act as a deterrence to the employers. They will not be able to under-quote the number of employees employed by them in their establishments.
Ordinance Route
Moves such as an ordinance to the payment of wages act, surrogacy bill, GST, etc. get tempered due to disruptions in the parliament. Opposition parties offer shifting goalposts. The leaders offer different versions of their parliamentary tactics. This stalls the working of the parliament. It creates a parliamentary paralysis leading to policy paralysis. When smooth functioning and decorum is not observed in the parliament, no significant move holds significance. Therefore, the need of the hour is to educate the parliamentarians to be responsible representatives of the citizens and perform their duties with due ‘public interest’.
