Payment of Wages Act - Sections 7, 7(2), 9, 9(2), 23, 26 and 26(3); Railways Act - Section 47(2); Bombay Payment of Wages Rules, 1937 - Rule 16 and 16(2)
1. In this application the applicant has claimed an amount of Rs. 275 with compensation.
2. It is the case of the applicant that he was working with the opposite parties on a salary of Rs. 200 per month from October 11, 1965. The applicant resigned from the post on and from November 16, 1965. He has, therefore, claimed earned wages for fifteen days for which he worked. It is also stated that an amount of Rs. 175 has been deposited by him by way of security. He has thus claimed an amount of Rs. 275 with compensation.
3. Opposite party 1 in a separate written statement has denied the responsibility for the payment of his wages as there was no relationship of employer and employee existing between them. It is denied that the applicant was ever employed by them.
4. Opposite party 2 has filed separate written statement denying their liability to pay any of the amounts. It is admitted that applicant was employed by opposite party 2, and not by opposite party 1 as per contract with effect from October 11, 1965. As per the terms of the contract of employment the applicant is required to give three calendar months' notice in case he desires to leave the services of the opposite party. But the applicant, in contravention of the said clause and in complete disregard to the terms of contract of employment dated October 8, 1965, submitted his resignation on November 16, 1965 asking opposite party 2 to relieve him with immediate effect after accepting the same. On receipt of the said resignation, the opposite party called the applicant in person and informed him that the resignation was not accepted and advised him to resume the work first thereafter he should tender his resignation as per the terms of appointment letter but the applicant did not pay any heed towards this advice and started remaining absent from work without obtaining any leave nor intimation was given to opposite party 2. On December 19, 1965 opposite party 2 wrote a letter to the applicant calling upon him to report for duty. Hence the opposite party too have denied the claim of Rs. 100. It is admitted that his earned wages from November 1, 1965 to November 15, 1965 amounting to Rs. 83.87 have been adjusted against the amount of Rs. 600 which opposite party 2 has to recover from the applicant being the amount of three calendar months' notice at the rate of Rs. 200 per month. After adjusting this amount opposite party 2 has to still recover Rs. 516.13 for which suitable action should be taken in a civil Court. As regards the refund of Rs. 175 being the amount of deposit of the applicant the opposite party has stated that this amount is not wages as defined under the provisions of the Payment of Wages Act and this Court has no jurisdiction to entertain the same. Without prejudice to this contention if this amount is to be held payable then it is to be adjusted from the amount of Rs. 516.13. All the claims therefore are denied.
Upon these pleadings the following points arise for determination :
(1) who is the employer
(2) (a) Whether the applicant proves that he is entitled to receive the earned wages
(b) whether the opposite party is entitled to adjust the amount of earned wages
(c) Whether the applicant is entitled to refund of the deposit amount
My findings on the above are as under :
(1) Opposite party 2.
(2) (a) Applicant is entitled to Rs. 93.33.
Here are my reasons :
5. The parties have accepted almost all the facts. They have relied upon the documents. The applicant also has been examined. The applicant has stated that he was employed by Chopra Radio Electric Company (opposite party 2) under an appointment letter, Ex. 1. He has further stated that he was required to work with opposite party 1 also. He has admitted to have resigned from the post. He has also admitted to have sent Ex. 2 to opposite party 1. He has also admitted Ex. 3 which is his application for the appointment addressed to opposite party 2. In cross examination he has admitted that he gave two applications. Exhibit 3 is one of them. Opposite party 2 in their written statement have admitted that they are the employers of the applicant and not opposite party 1. The applicant also has admitted that he has been given appointment letter by opposite party 2. The resignation also has been sent to opposite party 2. The applicant's contention that he worked with opposite party 2 for some time is not sufficient to hold that opposite party 1 was his employer. Since opposite party 2 has admitted that they were the employers of the applicant there should not be any difficulty in holding that applicant is employed by opposite party 2 and not by opposite party 1. This applicant has failed to prove that opposite party 1 is his employer. That being the case, opposite party 2 is the employer of the applicant and not opposite party 1. Opposite party 1, is therefore discharged.
6. Exhibit 1 is the appointment letter given to the applicant dated 8 October 1965. A reliance is placed by opposite party 2 on clause 13 of the appointment letter. Ex. 1, which provides that in the event the applicant wishes to terminate his service, he will tender three calendar months' notice to the employer. The applicant has admitted that he was required, under the terms of contract, to give three calendar months' notice before relinquishing his job. The three calendar months' notice has not been given. It is also admitted that applicant has worked from November 1, 1965 to November 15, 1965 and the amount of earned wages has not been paid. According to the applicant this amount for fifteen days comes to Rs. 100 while opposite party 2 has calculated this amount to be Rs. 93.33. On the admission that the earned wages for fifteen days would come to Rs. 93.33, I find, that Rs. 93.33 is due by way of fifteen days' earned wages. The main question that is raised by the opposite party is that under the terms of contract, the applicant was required to give three calendar months' notice before resigning the post, the opposite party is entitled to adjust the earned wages of Rs. 93.33 from the amount of three months' notice wages amounting to Rs. 600. The point for consideration is whether the opposite party is entitled to adjust this amount from the earned wages of the applicant. Now S. 7 of the Payment of Wages Act provides the deductions from the earned wages of the applicant. Section 7 lays down that the wages of an employed person shall be paid to him without deductions of any kind except those authorized by or under this Act. Section 7(2) in Cls. (a) to (k) specifies the heads under which deductions from the wages may be made, namely, fines, deductions for absence from duty, deductions for house accommodation supplied, adjustment for overpayment and advances and provident fund, incometax, etc. No other deductions are permissible under S. 7 which is exhaustive and mandatory. An employer is entitled to make only those deductions from the wages of his employee as are referred to in S. 7 only, the provisions of which are mandatory and override provisions of other Act, for example, Sub-section (2) of S. 47 of the Railways Act. In the instant case the applicant has resigned and ceased to be an employee of the opposite party with effect from 16 November 1965. This position is not denied. The applicant has not resumed work after November 15, 1965 due to resignation. The opposite party has stated in the written statement that applicant was called to continue work and that his resignation was not accepted and that he remained absent and hence the learned representative of the opposite party has placed reliance on rule 16, Sub-clause (2), framed under the Payment of Wages Act, which empowers the employer to deduct the wages from the employee who has not given notice of relinquishment as per the terms of contract of employment. Rule 16 has been framed by the State Government under the rule-making power vested in them under S. 26, Sub-section (3). Sub-section (g), S. 26, of Sub-section (3), provides conditions subject to which deductions may be made under the proviso to Sub-section (2) of S. 9. Sub-section (2) of S. 9 refers to the quantum of the amount to be deducted when the employee remains absent from duty. Section 9 of Sub-section (1) refers in turn to deductions made under Clause (b) of Sub-section (2) of S. 7. Clause 2(d) of S. 7 permits the employer to deduct wages for absence from duty of the employed person. As I have pointed out above, S. 9 provides that the deductions from wages should be proportionate to the period of absence from the work. Proviso to S. 9 authorizes the employer to deduct the amount not exceeding eight days' wages where circumstances mentioned in the section exist. As I have pointed out above, an employee can remain absent when he continues to be in duty. In other words, if the relationship of master and servant exists then the question of deduction for absentee days will arise. In the instant case, as I have already pointed out above, as the applicant has resigned and ceased to be in the employment of the opposite party, there is no question of deduction by way of adjustment from the wages which the applicant has earned before he ceased to be an employee. Section 7 of the Payment of Wages Act refers to wages earned. It says that wages of an employed person shall be paid to him without deductions of any kind. That cannot mean that wages which may be earned, but have not been earned, shall be paid without deduction. The expression 'wages' there must be 'wages earned.' An employer is not bound to pay for work which has not been done, and an employee is not entitled to receive payment which he has not earned. In the instant case the applicant has not worked after November 15, 1965; it is not open to an employer when employed persons leaves service without notice, to deduct any amount from wages which have become due and payable to the employee. Proviso to S. 9(2) of the Payment of Wages Act and rule 16(2) of the Bombay Payment of Wages Rules, 1937, provide for a deduction by the employer for a breach of contract by the employee. This is the only place in the Act where a specific provision has been made for a deduction for breach of contract. It is very pertinent to note that these provisions do not permit any deduction in individual cases, and even the deduction allowed in the case of concerted action is not by way of damages for the breach of the term of contract, but by way of fine or rough and ready penalty. This is evident from the fact that while stipulation for fifteen days' notice is permissible, the deduction allowed is only eight days' wages. The above provision makes it clear that the special authority has no jurisdiction to entertain
7. claims by employers whether as deductions or denials of wages against the employed persons for want of notice of leaving service.
8. In the instant case the applicant alone has left. There is no concerted action on the part of the applicant and hence S. 9(2) read with rule 16(2) will not be attracted to the facts of the instant case. The opposite party has deducted the entire wages for fifteen days which is contravention of S. 9(2). Besides this, the applicant cannot be made to suffer under an alleged agreement. Section 23 of the Payment of Wages Act prevents contracting out of rights of employees. If the agreement is advantageous or beneficial to the employee, then this section does not come in operation. Since employees are in a position thereby they can be dominated by the employer, this section lays down that
'any contract or agreement, whereby an employed person relinquishes any right conferred by this Act, shall be null and void.' [Union of India v. Kundanlal A.I.R. 1959 All. 363
9. Applying the observations of the aforesaid ruling to the facts of the instant case the term in the agreement to give three months' notice will not prevail in view of S. 23 if the Payment of Wages Act, inasmuch as the applicant cannot be allowed to contract out of the provisions of the Act. Section 26 of Payment of Wages Act, empowers of the Government to frame rules in respect of matters mentioned therein only. The rule-making authority has power to frame sub-rules as the language of this section permits. If the rule-making authority frames rules in the excess of the authority or in contravention of or inconsistent with such provisions, then the rules are ultra vires. In the instant case S. 26 does not provide power to make rules in respect of deductions under S. 7 of the Payment of Wages Act for want of notice being given by the employee. Section 26 refers only to the deductions made on account of absence from duty by an employee which are referred to in Ss. 9(2) and 7(2) of the Payment of Wages Act. I have stated above already that S. 9(2) read with rule 16(2) of the Payment of Wages Act, are not attract in the instant case inasmuch as the applicant has not remained absent from duty acting in concert with other employees of the opposite party. That being the clear position of law, this deduction which is not provided in the list of permissible deductions under S. 7 of the Payment of Wages Act, is clearly illegal and there is an illegal deduction and hence this Court has got authority to direct the opposite party to refund the amounts so deducted by way of adjustment. I find, therefor, that the amount of Rs. 93.33 is illegally deducted and shall have to be paid by the opposite party to the applicant. I find therefore this point in favour of the applicant.
10. The next point is whether the applicant can claim refund of the amount of Rs. 175 that has been deposited by him with the opposite party by way of surety. As I have pointed out above, the applicant can claim the amount which falls under the definition of 'wages.' This amount which admittedly is a deposit by the applicant cannot be called wages defined under the Payment of Wages Act. That being the position in law, the applicant is not entitled to claim the refund of Rs. 175. The applicant is only entitled to claim the amount of earned wages as stated above and this Court has no jurisdiction to pass any order regarding the refund of Rs. 175 which is a deposit amount. The claim of Rs. 175 is liable to be rejected.
11. The applicant then has claimed compensation. The opposite party has denied the payment of amount of compensation. The opposite party was bona fide contending that he is entitled to deductions under rule 16(2) of the rules framed under the Payment of Wages Act. I find that there is no mala fide intention on the part of the opposite party in paying this amount. The applicant therefore is not entitled to claim compensation, at the rate of ten times of the claim. The applicant is entitled to nominal costs and compensation.
12. In the result, I direct opposite party 2 to deposit Rs. 96.36 along with court-fee of Rs. 8.50 plus Rs. 10 by way of costs and Rs. 10 by way of compensation in all amounting to Rs. 122.83.