Amendment status not verified — confirm the current text below against the official source.
Deductions which may be made from wages.— (1) Notwithstanding the provisions of 1[the Railways Act, 1989 (24 of 1989)] the wages of an employed person shall be paid to him without deductions of any kind except those authorised by or under this Act. 2[Explanation I ].—Every payment made by the employed person to the employer or his agent shall, for the purposes of this Act, be deemed to be a deduction from wages. Explanation II.—Any loss of wages resulting from the imposition, for good and sufficient cause, upon a person employed of any of the following penalties, namely:— (i) the withholding of increment or promotion (including the stoppage of increment at an efficiency bar); (ii) the reduction to a lower post or time scale or to a lower stage in a time scale; or (iii) suspension; shall not be deemed to be a deduction from wages in any case where the rules framed by the employer for the imposition of any such penalty are in conformity with the requirements, if any, which may be specified in this behalf by the State Government by notification in the Official Gazette.] (2) Deductions from the wages of an employed person shall be made only in accordance with the provisions of this Act, and may be of the following kinds only, namely:— (a) fines; (b) deductions for absence from duty; (c) deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default; 3[(d) deductions for house-accommodation supplied by the employer or by by Government or any housing board set up under any law for the time being in force (whether the Government or the board is the 1 Subs. by Act 41 of 2005, sec. 6(a) for “sub-section (2) of section 47 of the Indian Railways Act, 1890 (9 of 1890)” (w.e.f. 9-11-2005). 2 Explanation re-numbered as Explanation I by Act 68 of 1957, sec. 5 (w.e.f. 1-4-1958). 3 Subs. by Act 68 of 1957, sec. 5, for clause (d) (w.e.f. 1.4.1958). 10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965 employer or not) or any other authority engaged in the business of subsidising house-accommodation which may be specified in this behalf by the State Government by notification in the Official Gazette;] (e) deductions for such amenities and services supplied by the employer as the 1[***] State Government 2[or any officer specified by it in this behalf] may, by general or special order, authorise; Explanation.—The word “services” in 3 [this clause] does not include the supply of tools and raw materials required for the purposes of employment; 4 [(f)deductions for recovery of advances of whatever nature (including advances for travelling allowance or conveyance allowance), and the interest due in respect thereof, or for adjustment of over-payments of wages; (ff) deductions for recovery of loans made from any fund constituted for the welfare of labour in accordance with the rules approved by the Stale Government, and the interest due in respect thereof; (fff)deductions for recovery of loans granted for house-building or other purposes approved by the State Government, and the interest due in respect thereof;] (g) deductions of income-tax payable by the employed person; (h) deductions required to be made by order of a Court or other authority competent to make such order; (i) deductions for subscriptions to, and for repayment of advances from any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies or any recognized provident fund as defined 5[in clause (38) of section 2 of the Income-tax Act, 1961 (43 of 1961)] or any provident fund approved in this behalf by 6[the appropriate Government], during the continuance of such approval; 7[***] 1 The words “Governor-General in Council or” omitted by the A.O. 1937. 2 Ins. by Act 53 of 1964, sec. 6 (w.e.f. 1-2-1965). 3 Subs. by Act 56 of 1974, sec. 3 and Sch. II, for “this sub-clause”. 4 Subs. by Act 53 of 1964, sec. 6, for clause (f) (w.e.f. 1-2-1965). 5 Subs. by Act 41 of 2005, sec. 6(b), for “in section 58A of the Indian Income-tax Act, 1922 (11 of 1922)” (w.e.f. 9-11-2005). 6 Subs. by Act 41 of 2005, sec. 3, for “the State Government” (w.e.f. 9-11-2005). 7 The word “and” omitted by Ordinance 3 of 1940, sec. 2. 10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965 (j) deductions for payments to co-operative societies as approved by 6[the appropriate Government] 1[or any officer specified by it in this behalf] or to a scheme of insurance maintained by the Indian Post Office; 2[and] 3[4[(k) deductions, made with the written authorisation of the person employed employed for payment of any premium on his life insurance policy to the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), or for the purchase of securities of the Government of India or of any State Government or for being deposited in any Post Office Savings Bank in furtherance of any savings scheme of any such Government;]] 5 [(kk) deductions made, with the written authorisation of the employed person, for the payment of his contribution to any fund constituted by the employer or a trade union registered under the Trade Unions Act, 1926 (16 of 1926), for the welfare of the employed persons or the members of their families, or both, and approved by 6[the appropriate Government] or any officer specified by it in this behalf, during the continuance of such approval. (kkk) deductions made, with the written authorisation of the employed person, for payment of the fees payable by him for the membership of any trade union registered under the Trade Unions Act, 1926 (16 of 1926);] 7 [(l) deductions, for payment of insurance premia on Fidelity Guarantee Bonds; (m) deductions for recovery of losses sustained by a railway administration on account of acceptance by the employed person of counterfeit or base coins or mutilated or forged currency notes; (n) deductions for recovery of losses sustained by a railway administration on account of the failure of the employed person to invoice, to bill, to collect or to account for the appropriate charges due to that administration, whether in respect of fares, freight, demurrage, wharfage and carnage or 1 Ins. by Act 53 of 1964, sec. 6 (w.e.f. 1-2-1965). 2 Added by Ordinance 3 of 1940, sec. 2. 3 Added by Ordinance 3 of 1940, sec. 2. 4 Subs. by Act 68 of 1957, sec. 5, for clause (k) (w.e.f. 1-4-1958). 5 Ins. by Act 38 of 1982, sec. 7 (w.e.f. 15-10-1982). 6 Subs. by Act 41 of 2005, sec. 3, for “the State Government” (w.e.f. 9-11-2005). 7 Ins. by Act 53 of 1964, sec. 6 (w.e.f. 1-2-1965). 10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965 in respect of sale of food in catering establishments or in respect of sale of commodities ingrain shops or otherwise; (o) deductions for recovery of losses sustained by a railway administration on account of any rebates or refunds incorrectly granted by the employed person where such loss is directly attributable to his neglect or default;] 1[(p) deductions, made with the written authorisation of the employed person, for contribution to the Prime Minister’s National Relief Fund or to such other Fund as the Central Government may, by notification in the Official Gazette, specify;] 2[(q) deductions for contributions to any insurance scheme framed by the Central Government for the benefit of its employees.] 3 [(3)Notwithstanding anything contained in this Act, the total amount of deductions which may be made under sub-section (2) in any wage-period from the wages of any employed person shall not exceed— (i) in cases where such deductions are wholly or partly made for payments to co-operative societies under clause (j) of sub-section (2), seventy- five per cent, of such wages, and (ii) in any other case, fifty per cent, of such wages; Provided that where the total deductions authorised under sub-section (2) exceed seventy- five per cent, or, as the case may be, fifty per cent, of the wages, the excess may be recovered in such manner as may be prescribed. (4) Nothing contained in this section shall be construed as precluding the employer from recovering from the wages of the employed person or otherwise any amount payable by such person under any law for the time being in force other than 4[the Railways Act, 1989 (24 of 1989)]. (i) The requirement of making deposit at the time of filing of appeal does not destroy the remedy of the appeal; Nagar Palika v. Prescribed Authority, (1992) 64 FLR 1005 (All). 1 Ins. by Act 29 of 1976, sec. 4 (w.e.f. 12-11-1976). 2 Ins. by Act 19 of 1977, sec. 2 (w.e.f. 30-6-1977). 3 Ins. by Act 53 of 1964, sec. 7 (w.e.f. 1-2-1965). 4 Subs. by Act 41 of 2005, sec. 6(c), for “the Indian Railways Act, 1890 (9 of 1890)” (w.e.f. 9-11-2005). Case Law 10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965 (ii) If the workman did not work, although the work was offered to him, he is not entitled to wages; Modi Industries v. State of Uttar Pradesh, (1992) 64 FLR 471 (All). (iii) The prescribed Authority has been conferred power to entertain the application even beyond the period of 12 months; Rahat Hussain Khan v. Third Addl. District Judge, (1992) 64 FLR 302 (All). (iv) Compensation up to 10 times cannot be granted in case of back wages awarded by the Industrial Tribunal; Municipal Council v. Khubilal, (1992) 64 FLR 752 (Raj). (v) An employer can deduct the wages under section 7(2)(b) of the Act for absence from duty. Absence from duty by an employee must be on his own volition and it cannot cover his absence when he is forced by circumstances created by the employer from carrying out his duty- In the case in hand as the absence of the employees was not voluntary in as much as they were not allowed to resume their work without signing the guarantee bond no deduction can be made under the Act; French Motor Car Co. Ltd. Workers Union v. French Motor Car Co. Ltd; (1990) LLR 366; (vi) It is well-settled that “go-slow” is a serious misconduct being a covert and a more damaging breach of the contract of employment; Bank of India v. T.S. Kelawala, (1990) LLR 313 (SC). (vii) If the absence from duty is due to coercion and the workman is not a consenting party, then the management has no power to deduct wages; Kothari (Madras) Ltd. v. Second Addl. District judge-cum-Appellate Authority; (1990) 76 FJR 209 (AP). (viii)The workman cannot be denied the wages when he reports himself on duty but the work is not taken from him by the employer; J.D.A. v. Labour Centre, (1990) 60 FLR 81 (Raj). (ix) Appeal is not made to a personal designation but to a court. Revision lies against the appellate order to the High Court; Bharatpur Central Co-op. Bank Ltd. v. Rattan Singh, (1990) II CLR 516 (Raj).