In this article, Naba Khan of Aligarh Muslim University discusses the interplay between the Payment Of Wages Act, Delhi Shops And Establishments Act And Factories Act.

Introduction

The Industrial Laws deal with the labour and employment in India. These laws deal with the issues in the complex relations between the workers, employers and government, determining the employment period, time and conditions for payment, conditions of the workers, etc.

The Indian labour law divides the industries into two broad categories as factories and the shops and commercial establishments.

The Factories Act, 1948

All the factories that employ 10 or more workmen or were working on any day of the preceding twelve months, and carry out manufacturing activities with the aid of power are dealt by the provisions of the Factories Act. Adding to it, in the case where the factories employ 20 or more workers, or were working on any day of the preceding 12 months, and in any part of which a manufacturing process is being carried on without the aid of power, are also governed with the provisions of the Factories Act.

The Act is enforced by the State Government through their ‘Factory Inspectorates’.

It emphasizes the welfare, health and safety of workers. The said Act also provides specific safeguards against use and handling of hazardous substance by occupiers of factories and laying down of emergency standards and measures.

Shops and Commercial Establishments

‘Shops and Commercial Establishments Act’ regulate the shops and establishments in their respective state as it is a state statute. This Act generally provides for opening and closing hour, leave, weekly off, time and mode of payment of wages, issuance of appointment letter etc. As all the States have their own Shops and Establishments Act, herein we have dealt with the Delhi Shops and Establishments Act.

The Delhi Shops And Establishments Act, to the whole of Union Territory of Delhi including the Municipal Areas, Notified Areas and Cantonment limits of Delhi, Shahadra, Civil Lines, Mehrauli, Red Fort and Delhi Cantonment but Government may, by notification in the Official Gazette, as per Section 1(4).

Payment of Wages Act

It applies to the payment of wages of the workmen in any factory or in any railway administration or workmen employed in an industry or any other establishment as specified in of Section 1(4) of the Act.

Interplay

Time and Payment of Wages

Section 19 of the Delhi Shops and Establishments Act and Section 5 of The Payment of Wages Act enumerate laws related to the time and condition for the payment of wages.

Section 19 lays down that the employer shall pay the wages of the employee before the expiry of 7th working day of the wage period such wage period shall not be more than a month. On the same note Section 5 of the PWA lays down that employer shall pay the wages of the workers employed in an industry or factory before the 7th working day and before the expiry of 10th working day in case such establishment employees more than a thousand workers.

Payment of wages for leaves and holidays

As per Section 79 of The Factories Act Workers are given the leaves with wages, an adult at the rate of one day for every 20 days of work and a child one day for every 15 days of work, provided that they have worked for at least for 240 days in a calendar year. In calculating leave under The Factories Act fraction of leave of half a day or more shall be treated as one full day’s leave and fraction of less than half a day shall be omitted.

Further, the worker shall be entitled to wages at a rate equal to the daily average of his total full time earnings for the day on which he actually worked during the months immediately preceding his leave, excluding the overtime and bonus but including the dearness allowance. Where worker has not worked on any day in the preceding month of the leave, he will be paid at the rate which is equivalent to daily average of his total full time earning of the days he worked.

However, in case of a worker working in a shop or any establishment, according to Section 23 of the Delhi Shops and Establishments Act, every employee shall be paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime but inclusive of dearness allowance.

Deductions from Wages

Section 7 to Section 13 of The Payment of Wages Act talks about:

List of deductions for which rules are provided in the act

I.	For imposing fines on the employees.
II.	For deducting wages for absence from duty
III.	For deducting wages for payments to cooperative societies and insurance schemes
IV.	For deducting wages for damage or loss
V.	Fo deducting wages for house accommodation and services rendered
VI.	For deducting wages for recovery of loans
VII.	For deducting for recovery of advances

Adding to it, under the Delhi Shops and Establishments Act, the deductions mentioned in the list above (under The Payment of Wages Act) have been added including some further provisions related to the deduction:

• Deductions of income-tax payable by the employed person;
• Deductions required to be made by order of a Court or other competent authority;
• Deductions for subscription to, and for repayment of advances from, any provident fund to which the Provident Fund Act, 1952 applies or any recognized provident fund as defined in section 2(38) of Income Tax Act, 1961 or any provident fund approved in this behalf by the Government during the continuance of such approval;
• Deductions for payment to co-operative societies or to a scheme of insurance approved by the Government.

The Delhi Shops and Establishments Act, 1954 and The Factories Act, 1948

Restriction on double employment

Section 19 of the Delhi Shops and Establishments Act and Section 60 of the Payment of Wages Act deals with the same aspect for the restrictions on double employment of the employees:

“No person shall work about the business of an establishment or two or more establishments or an establishment and a factory in excess of the period during which he may be lawfully employed.”

Spread over

Section 11 of the Delhi Shops and Establishments Act lays about spread over. Any adult person shall not spread over for more than ten and a half hours in any commercial establishment or for more than twelve hours in any shop.

According to Section 56 of the Factories Act, the periods of work of an adult worker in a factory shall be so arranged that inclusive of his intervals for rest, they shall not spread over more than ten and a half hours in any day.

Employment of young person-hours of work

Section 13 of the Delhi Shops and Establishments Act, provides that no young person shall be allowed to work in any establishment for more than six hours a day.

According to Section 71 of the Factories Act, no child shall be employed or permitted to work, in any factory for more than four and a half hours in a day and during the night.

Prohibition of employment of children

Section 12 of the Delhi Shops and Establishments Act and Section 67 the Factories Act states that no child shall be required or allowed to work whether as an employee or otherwise in any establishment.

However, the definition of the Factories Act “child” means a person who has not completed his fifteenth year of age while the term “child” under the Delhi Shops and Establishments Act, means a person who has not completed his twelfth year of age;

Working hours for adults

Section 8 of the Delhi Shops and Commercial Establishment Act and Section 54 of the Factory Act states the same working hour of adults:

“No adult shall be employed or allowed to work about the business of an establishment for more than nine hours on any day or 48 hours in any week and the occupier shall fix the daily periods of work accordingly.”

Further, in the case of Section 15 of the Delhi Shops and Commercial Establishment Act, opening and closing hours of shops and commercial establishment states that:

“No shop or commercial establishment on any day, be opened earlier than such hour or closed later than such hour, as may be fixed by the Government by general or special order made in that behalf.”

Conclusion

The Factories Act and The Shops and Establishments Act both the Acts deal with the regulation of conditions of service of workers engaged. While the Factories Act is applicable to establishments wherein a manufacturing activity is carried out the Shops and Commercial Establishments Act is applicable to establishments which do not fall under the definition of factory, mine or plantations. The Factories Act is a central Act whereas the Shops and Commercial Establishments Act is a state Act and therefore, there are separate Shops Act for separate states.

However, the provisions of The Payment of Wages Act are duly applied to the contract labour employed by any factory or establishment in addition to the provisions of the other two respective Acts, provided that the employment in which they are engaged is otherwise covered by the Payment of Wages Act.