Dear Experts

Pls advice, The labour inspector "Jaipur state-Rajasthan-" has imposed the panality of 45lacs on my organization due to late payment of salary.

We have setup a new plant it is operational from last 11months, now as Deepawali is coming n govt. official. start roaming for their share. One of the labour inspector came to our unit and asked for documents, my HR guy show him the documents available with him which were correct , Indirectly he signaled him for bribe. We ignore it as our documents were ok and on Diwali we will send our guy to all govt depts. in-between one day he visited again and ask for the documents again n checked and found that last month salary & occasionally few months back salary payment was late than 7th of month. We pay our employees through bank transfer, so same is reflected from document......As salary payed was late so he put it in his record & send us notice from labour dept. where he put up claim of RS 45lac, 10times of salary..........

We don't know what to do now, whatever he has done, he done due to non payment of his bribe. salary payed was late, but we did not hold a peny of any employee

Dear Experts, pls advice do we have any wayout to appeal against this panality, or how we should handle this problem

From India, Delhi
As per the norms of factory act and labour act it's compulsory to pay the salary on 7th if the strengths of your organization is below 1000 employees and if it's more than 1000 employees than it's 10th of every month so check your employee no:
From India, Ahmedabad
Kindly avoid mentioning about "claiming bribe " etc in an open forum like this. If you restrict your discussion on legl issues, it will be easier to respond
Late Payment of wages do not contemplate penalty of Rs 45 lacs The amount will go very high like this only if there had been a claim by employees undr Payment of Wages Act and an order passed by the authority a nd there is further delay .Few days of delay will not make the figure high.
Please consult a good Labour advocate in your area and handle this. Do not talk about bribe. If an order has been issued for Rs 45 lacs, then face it legally in the court .

From India, Chennai
I agree with Mr.Sivasankaran. It is not good to talk about the practices and it ignites the issue futher, I suggest somebody from your HR approach him personally and try to resolve the issue, you can also escalate it to his superiors like ACL, DCL, JCL etc.,
As rightly mentioned the penalty is not proportion ate, if every thing goest well with the talks ok otherwise challenge the decision and approach legally.
Regards - kamesh

From India, Hyderabad
Dear Experts
Thanks for response, Actually i want to clear the actual situation, "In realty what happen so that you ppls can advice accordingly"
(Dear T.Sivasankarn Sir, As per your reply----- Late Payment of wages do not contemplate penalty of Rs 45 lacs The amount will go very high like this only if there had been a claim by employees under Payment of Wages Act and an order passed by the authority and there is further delay. Few days of delay will not make the figure high.)
There is no complaint from our labour/employees, Labour inspector did it by himself. I spoke to one labour lawyer , he advised me to settle with labour inspector and labour inspector is not listening anything. I want to understand the legal options only

From India, Delhi
Dear Friend

I ve gone thru your case and found that though u paid wage but it was late for some days in few months.So if there is no application from labour or any union then there is not much to worry as so much fine cant be imposed

Please refere the clause pasted below

Section 15 in The Payment Of Wages Act, 1936

15. Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims.-

(1) The State Government may, by notification in the Official Gazette, appoint 3[ a presiding officer of any Labour Court or Industrial Tribunal, constituted under the Industrial Disputes Act, 1947 (14 of 1947 ) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State or] any Commissioner for Workmen' s Compensation or other officer with experience as a Judge of a Civil Court or as a stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of the wages, 4[ of persons employed or paid in that area, including all matters incidental to such claims: Provided that where the State Government considers it necessary so to do, it may appoint more than one authority for any specified area and may, by general or special order, provide for the distribution or allocation of work to be performed by them under this Act].

(2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person, or any payment of wages has been delayed, such person himself, or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf, or any Inspector under this Act, or any other person acting with the permission of the authority appointed under sub- section (1), may apply to such authority for a direction under sub- section (3):

1. Subs. by Act 38 of 1982, s. 9 (w. e. f. 15- 10- 1982 ). 2. Ins. by Act 53 of 1964, s. 12 (w. e. f. 1- 2- 1965 ). 3. Ins. by s. 13, ibid. (w. e. f. 1- 2- 1965 ). 4. Subs. by s. 13, ibid., for" of persons employed or paid in that area" (w. e. f. 1- 2- 1965 ).

Provided that every such application shall be presented within 1[ twelve months] from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made, as the case may be: Provided further that any application may be admitted after the said period of 1[ twelve months] when the applicant satisfies the authority that he had sufficient cause for not making the application within such period.

(3) When any application under sub- section (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3, or give them an opportunity of being heard, and, after such further inquiry (if any) as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employed person of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and 2[ not exceeding twenty- five rupees in the latter, and even if the amount deducted or the delayed wages are paid before the disposal of the application, direct the payment of such compensation, as the authority may think fit, not exceeding twenty- five rupees]: Provided that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to--

(a) a bona fide error or bona fide dispute as to the amount payable to the employed person, or

(b) the occurrence of an emergency, or the existence of exceptional circumstances, such that the person responsible for the payment of the wages was unable, though exercising reasonable diligence, to make prompt payment, or

(c) the failure of the employed person to apply for or accept payment.

(4) 3[ If the authority hearing an application under this section is satisfied--

(a) that the application was either malicious or vexatious, the authority may direct that a penalty not exceeding fifty

1. Subs. by Act 53 of 1964, s. 13, for" six months" (w. e. f. 1- 2- 1965 ). 2. Subs. by s. 13, ibid., for" not exceeding ten rupees in the latter" (w. e. f. 1- 2- 1965 ). 3. Subs. by s. 13, ibid., for sub- section (4) (w. e. f. 1- 2- 1965 ).

rupees be paid to the employer or other person responsible for the payment of wages by the person presenting the application; or

(b) that in any case in which compensation is directed to be paid under sub- section (3), the applicant ought not to have been compelled to seek redress under this section, the authority may direct that a penalty not exceeding fifty rupees be paid to the State Government by the employer or other person responsible for the payment of wages.

(4A) Where there is any dispute as to the person or persons being the legal representative or representatives of the employer or of the employed person, the decision of the authority on such dispute shall be final.

(4B) Any inquiry under this section shall be deemed to be a judicial proceeding within the meaning of sections 193, 219 and 228 of the Indian Penal Code (45 of 1860 ).]

(5) Any amount directed to be paid under this section may be recovered--

(a) if the authority is a Magistrate, by the authority as if it were a fine imposed by him as Magistrate, and

(b) if the authority is not a Magistrate, by any Magistrate to whom the authority makes application in this behalf, as if it were a fine imposed by such Magistrate.



From India, Mumbai
The Payment of Wages Act is not applicable to wages exceeding RS 18000/-pm.Hence if you have made late payment to employees with wages above Rs 18000/- the inspector cannot do any action .Even in the case of others only the authority under sec 15.after due process given by Mr Shyamlal.
Varghese Mathew

From India, Thiruvananthapuram
Dear MIL,

I have seen your narration. You have not mentioned under which Act the Labour Inspector has issued you notice of late payment. It appears that, Minimum Wage Inspector has given you a notice. So, perhaps Payment of Wages Act may not have any thing to do with your case for the simple reason that normally Factory Inspectors have powers under P W Act. Even so, I have considered provisions of both these acts.

Section 15 of P W Act is for illegal deductions or delay in payment. However, if you look to the provisions, the penalty for delay in payment is only Rs. 25 and not Rs. 45 lacs as mentioned in the notice.

However, if the matter is under MW Act, Section 20 of the Act provides for the claims. Here also the penalty for delay in payment is Rs. 10 only and not Rs. 45 lacs as mentioned in the notice.

Since, you are making the payment through Bank and due to delay in clearance, it is possible that there is a delay in crediting wages. This is a minor and unintentional delay for which there was no necessity for the Inspector to go for the notice.

What my suggestion is that, file a proper reply to the notice along with references to the provisions of Section aplicable to your case. Simply mention that there is no such provision to inflict penalty of 10 times of wages amounting to Rs. 45 Lacs for a minor delay in wages payment. Also state that for such minor, technical, unintentional and genuine reason, such a heavy penalty cannot be imposed.

Please bear in mind that, this a show cause notice only. The Inspector, if not satisfied with your answer, will have to file a case before the authority and shall have to satisfy that the case is of 10 times penalty which I think is absolutely impossible. So there is no reason to worry and if at all he wants to proceed further, let him do so.

I hope this will help you reduce your anxiety.

Adv. K. H. Kulkarni

From India, Kolhapur
If they have issued a notice reply legally. Unless I see the notice issued by the Lbour Inspector, no advice can be given with confidence. based on the facts given by you, my recommendation is to file a reply and face it legally

From India, Chennai
Dear MIL
I totally agree with the views and legal aspects brought forward by Adv. Kulkarni. Such notices are often issued for some bios which is expressed in this form when authorities are not taken care of properly. But I too will suggest that using terms like-bribe, illegal gratification, etc. etc. on this public forum are not ethical and will take you or any body else, anywhere. They will just add to your agony. It is just likely that the authority or the person, about whom things are being written, is also following this thread.
Rest assured that the penalty imposed will not stand before any Appellate Authority. Just give a suitable polite reply to the notice giving the provisions of Sec. 15(3), 15(4)(a), (b) of PW Act or go though the relevant provisions of the Act under which the notice has been issued. You and your Company will not be required to pay the penalty of Rs.45 lacs.
Best wishes
AK Jain
HR Personnel

From India, Jabalpur

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