Dinesh Divekar
Business Mentor, Consultant And Trainer
Umakanthan53
Labour Law & Hr Consultant
Madhu.T.K
Industrial Relations And Labour Laws
Dmc123
Legal Consultancy
Suresh_k_7
Executive - Operations
+3 Others

Thread Started by #manjun_papanna

Sir, Could you please help me understand with any suggestion for the situation below:

Post demonetization, We have asked all labors at site to submit their account details which stand in their name to make a payment of October on November 10, 2016

However due to shortage of time, we have accommodated payment to be made to labors (80% of labors) provided account number which is not in their names for October Month wages.

We were given declaration by labors that they would provide Account details stands in their name for the November Month payment on-wards.

Till date labors not submitted account details for the payments and asking for cash payment which in excess of Rs.20Laks.

As we can not full-fill labors requirements of cash payment except in emergency cases, labors are on strike since Jan 6, sitting at site and insisting for payment for strike period also as though they are eligibility to "Right to Strike"

Also these labors are forcing/disturbing other labors team (who are willing to work) not to work during the strike called by them.

How can these situation be addressed. Please help. Thanks - Manjunatha
15th January 2017 From India, Bangalore
Forgot to mention that we are in the un-organized sector "Construction Industry". Thanks.
15th January 2017 From India, Bangalore
Dear Manjun,
Yours is a tricky situation. Call the meeting of all workers and convey them that hereafter salaries cannot be paid in cash. This is a government regulation. If workers remain intemperate then you may take help of Labour Commissioner. If some Labour Officer visits the site and convinces them the benefits of payment through bank then it might help you.
Thanks,
Dinesh Divekar
15th January 2017 From India, Bangalore
Thank your sir for the suggestion. I still not clear about "Right to Strike" be invoked by labors for non-payment of wages due to their own issues and asking for payment for the period of Strike Period aswell.
Thanks - Manjunatha
15th January 2017 From India, Bangalore
Dear Manjun Sir,
Along with the discussion with the workers, I would suggest you to get in touch with a bank and ask the bank authority to visit your site and open the account of all the employees together.You can also negotiate with the bank on the total time taken for activating the bank account as the number of account is large.I feel this may give you a permanent solution to your issue and will help in smooth salary release.
16th January 2017 From India, Mumbai
If you take it through labour laws, you cannot say that labours should have bank account. If you insist that all should have bank accounts and it will be through banks that their compensation will be disbursed, they will also say that where is it mentioned that every individual should have bank account. Do you have a service rule which says that employees' wages will be disbursed through bank only? If yes, why didn't you appoint workers who do not have bank account? Therefore, you cannot absolve your liability by saying that the workers do't have bank account. At the same time, if due to any administrative requirements, you have to pay wages through banks, you should take initiative and get it done for them.

Even when we have bank account fully mandated by KYC etc, we are not in a position to withdraw it. When I visited a Bank recently I heard a lady asking the banker very politely, "what is my eligibility????" The banker very proudly "announced" that your eligibility is Rs 24000 per week and that includes withdrawal through ATMs!!. What a pethetic question and what a stupid answer. Eligibility means the amount standing to the credit of my account and not lesser than that. Certainly, I intervened and asked, if I present a cheque and if I my account is short of just 1 rupee, don't you dishonour it stating "INSUFFICIENT FUNDS" and make mockery of it? Since anybody who questions is a man with black money, I did not say anything more. When this is the situation, why do you blame the poor workers??

Madhu.T.K
16th January 2017 From India, Kannur
Making payments by cheques might be in the interest of the workers too as often for cash payments, there are no third party records of their employment, in the hands of the labour but in case of cheque, which could be a proof.
Have you covered all the labour under ESIC & PF? Though this is in their interest, invariably there will be an objection, as their share of contributions get deducted from their take home. There has been a cash crunch across the economy, which we all know, is not everlasting.
16th January 2017 From India, Mumbai
At the outset you should have discussed this with some knowledgable person.
You can't remit worker's wages in someone else's account. What if that someone denies to pay amount to your worker?
You have just mentioned construction site which can be in very remote area. If there is no branch in proximity where you will open accounts & how the workers will be withdraw amount periodically? If you have bank branch nearby follow actions suggested herein.
Check your state rule for modus of payment of wages. If it is by cheque or RTGS and you have branch nearby you have to just patiently inform workers thru displayed notice about need of opening bank account. After a while you may take stringent action. If possible discuss the situation with labour office of your area.
17th January 2017 From India, Mumbai
Dear Mr. Manjunath,

The Payment of Wages (Amendment ) ordinance 2016 states that all wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee. Provided the appropriate Govt 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.

Industrial and other establishments is defined as tramway service, or motor transport service engaged in carrying passengers or goods or both by road by hire or reward

(aa) air transport service other than such service belonging to or exclusively employed in the military,naval or air force of the Union or the Civil Aviation department (of the Govt of India)

(b) dock, wharf or jetty

(c) inland vessel, mechanically propelled

(d) mine, quarry or oilfield

(e) plantation

(f) workshop or other establishment in whch articles are produced, adapted or manufactured, with a view to their use, transport or sale

(g) establishment in which any work relating to the construction development or maintenance of buildings, road, bridges or canals or relating to operations connected with navigation, irrigation or to the supply of water or relating to the generation , transmission or distribution of electricity or any other form of power is being carried on;

You need to verify the Karnataka Rules and if they are contract labour then any notification in this regards has to be examined.

The strike indulged in by the labourers is illegal though it may not be unjustified. So also the act of obstruction of willing workers in unwarranted and illegal. If they are contract labours then you can ask contractor to terminate the errant workmen. As regards payment of wages for strike period, principle of no work no pay will apply. They can approach the machinery for claiming the same. Because demonetization is a reason beyond the control of the employer, therefore despite all the instructions if the accounts were not opened, the employer cannot be blamed for non payment.
17th January 2017 From India, Pune
Should an employer who takes advantage of this situation be praised???? Many employers take this as an opportunity and delays payment of wages. The workers are demanding the wages for the days they have already worked. Here, it is the responsibility of the employer to make arrangements for disbursement of wages. Don't think that workers work for their living but think that they are employed for the benefit of employer also. It is a wrong perception that workers are slaves and they are coming for work just because they do not have any other livelihood. Think that employer makes profit just because these workers have worked. Here comes the significance of Marxian Surplus Value theory of wages.
Do not think that workers' strike are always illegal and lockouts by employers are always legal. That will destroy the dignity of HR
Madhu.T.K
18th January 2017 From India, Kannur
It has definitely caused a great impact on the Indian economy and its citizens. But now the situation is turning to be better.
18th January 2017 From India, Bengaluru
The impact of the negative effects of the demonetization process is highly tricky to every one. Particularly the plight of industries which engage mostly unorganized labour is all the more tricky and can pose dangerous financial repurcussions in future as the compulsion for transperancy in money matters has become inevitable. Apart from piercing unanswerable questions from tax authorities, such employers have a tough situation facing payment of minimum rates of wages and enrollment under the EPFO and ESIC schemes in respect of a large chunk of labour force that was hidden from the eyes of enforcement agencies or actively managed with their connivance so far. If I were not wrong, the sudden strike mentioned in the thread might be an outcome of such a situation. As rightly pointed out by Dinesh it is not fair on the part of the employer to insist on opening of bank accounts all of a sudden. Nor every illegal strike can be unjustified to be deprived of wages as aptly pointed out by Madhu. In stead of pondering over the instantaneous legal remedies, the management should embark upon lateral thinking to find out alternatives to ensure prompt arrangements in place to mitigate the day to day difficulties of unorganized wage-earners.
27th January 2017 From India, Salem
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