Union Loan Deductions: Can We Legally Refuse the Union's Request?

Dear All,

I am working with a manufacturing company as HR. We have a union in my factory for worker staff, and we pay the salary as per government rules and regulations. Now, the union has their own society to provide loans to workers, and the union demands that the company deduct the loan from their salary and make payments to the union welfare society regularly.

Union Loan Deduction Request

Now, my question is, can we refuse this demand from the union as the company does not provide any kind of loan to all staff and workers? Is there any provision in the act? Because we don't want to involve workers in any kind of welfare demanding matter, and why should we do this activity for the union?

Please refer to Section 7 of the Payment of Wages Act for information on deductions that may be made from wages. This would be helpful.

Dear Sir,

I appreciate your reply, but the issue is that this is a worker union's personal society welfare facility. We do not wish to get involved, but if there are any provisions in the act, please provide further details.

Thank you.

Deduction for Payments to Cooperative Societies

Section 7(2)(j) allows deductions for payments to cooperative societies as approved by the Appropriate Government or any officer authorized by it on its behalf. Section 13 specifies that the deductions shall be subject to such conditions as the Appropriate Government may impose. Therefore, you can insist on the union to produce the approval and the conditions thereof before deduction is allowed. It is important to note that with the cooperative society deduction, the total deduction should not exceed 75% of wages, and without the cooperative society deduction, it shall not exceed 50% of salary.

By the way, there seems to be some reluctance to start the deduction, but it is observed that cooperative societies encourage thrift and credit to the employees, helping them to avoid avaricious money lenders. You may consider this aspect while deciding the issue.