Parliament passes bill for wage payment via cheques, e-mode

Parliament today passed a bill seeking to enable the Centre and state governments to specify industrial units which will have to pay wages only either through cheques or by transferring into bank accounts.

The Payment of Wages (Amendment) Bill 2017, which was passed by voice vote in Rajya Sabha today, also enables the employers to pay wages to workers through cheque or by transferring into their bank account without their written authorisation.

Lok Sabha had passed the bill yesterday.

Allaying apprehensions of members that it will take away workers' right to get their wages in cash, Labour Minister Bandaru Dattatreya told the House "this will improve the compliance of labour laws. Exploitation of workers is going on. There is cut in payments (of wages in cash)."

"No way are we taking away the rights of workers. This bill is going to strengthen those. We want them to get their wages through transparent manner," he said.

About the urgency of adopting ordinance route to implement the provisions of the bill, the minister said "both the Houses were not functioning at that time (in December when the Ordinance was brought). That is why I have brought this bill in this session."

The minister had introduced the bill in Lok Sabha on December 15, 2016, just before the Winter Session ended. The government had then taken the ordinance route. The bill replaces the Payment of Wages (Amendment) Bill 2016, which was introduced in Lok Sabha on December 15, 2016 and repeals the Payment of Wages (Amendment) Ordinance 2016 promulgated on December 28, 2016.

"As both the Houses of Parliament were not in session and immediate action was required to be taken to ensure that the benefits of the proposed legislation reach the employed person a the earliest, President promulgated the Payment of Wages (Amendment) Ordinance 2016," the bill stated.

The decision to adopt ordinance route to amend the Act was taken by the Union Cabinet on December 21, 2016.

However, some members including Renuka Chowdhury (Cong), D Raja (CPI), P Bhattacharya and Shantaram Naik (both Cong) and Sukhendu Sekhar Roy (TMC) expressed apprehensions that this will take away the right of the workers to get their wages in cash, especially amid the currency crunch due to demonetisation and in the absence of required banking infrastructure in the country, particularly in rural areas.

The minister said Section 20 of the bill "provides for six months imprisonment for violation of the Act. Moreover the inspector can initiate appropriate action under the Factories Act 1948."

Participating in the debate on the bill, Renuka Chowdhury (Cong) said it "lacks empathy. What was the overriding compulsion for this government to bring the ordinance? This is an egoistic attitude of this government todwards people."

"You take away the right of people (to get wages in cash). I know how much time it takes to clear a cheque. It is steam-rolling of our rights. Where are banking facilities for e-money? Banks open for a day in a week in rural areas. This is illegal and makes mockery of the democracy," she said.

She said "this is my right (to get wages in cash). I will choose the way I will be paid my salary. This government has lost its direction. This is arbitrary and unthoughtful legislation.Taking away our right will cost you very heavily."

Echoing similar views, Bhattacharya (Cong) said "this is violation of my personal and constitutional right to get wages in any way." Congress leader Madusudan Mistry raised the issue of the workers in the unorganised sector and asked how the government plans to ensure that they get their payments in time through the Bill.

He said said making cheques or digital payments compulsory may be good for organised sector, but is not practical in the unorganised sector where labourers move from place to place in search of jobs.

He was supported by SP member Sanjay Seth who wanted to know how the government came up with a Bill without consulting various stakeholders.

Seth too raised the issue of workers in the unorganised sector and said that majority of the crores of such workers do not have bank accounts and demanded that the Bill be referred to a select committee.

Dola Sen (TMC) said 80 per cent of women and 50 per cent of workers in the country do not have a bank account. While political parties can receive cash donation up to Rs 2000, a labourer cannot, which was wrong.

Anil Kumar Sahni (JD-U) said labourers in the unorganised sector work on a day to day basis and they eat food at the end of the day bought from the money earned.

"Do you expect them to take the cheque and go to the bank first? What will they eat at night?" T K Rangarajan (CPI-M) also spoke of the unorganised sector and said Bill "smacks of authoritarianism since it takes out the choice of payment from employee's hand".

Vijayasai Reddy of the TRS sought creation of banking infrastructure across the country first, before moving in for compulsory digital or cheque payments.

D Raja (CPI) said while Parliament can make laws, it has to be practical also. He said the government needs to have a comprehensive approach as the current move was irrational.

The bill provides that "appropriate Government may, by notification in the Official Gazette, specify the industrial or other establishment, the employer of which shall pay to every person employed in such industrial or other establishment, the wages only by cheque or by crediting the wages in his bank account".

The amendment enables the Centre as well as state governments to notify industries where employers shall have pay wages either through cheque or crediting that into workers' bank accounts.

The bill also enables employers to pay through cheque or e-mode without the written authorisation of the worker. It provides that non-notified industries will have the option to pay "in current coin or currency notes or by cheque or by crediting wages in the bank account of the employee".

As per the bill, the new procedure will serve the objective of "digital and less-cash economy".

The Act had come into force on April 23, 1936, providing for payment of wages in coin or currency notes, or in both.

The provision for payment of wages by cheque or crediting it into bank account after obtaining the requisite authorisation of employee was inserted in 1975.

At present, the Act covers all those employees in certain categories of establishments whose wage does not exceed Rs 18,000 per month.

The Centre can make rules regarding payment of wages in relation to railways, air transport services, mines, oil fields and its establishments while states take a call on all other cases.

By making state-level amendments to the Act, Andhra Pradesh, Uttarakhand, Punjab, Kerala and Haryana have already made provisions for payment of wages through cheque and electronic transfer.