Does Section 17B Wage Payment Require Employers to Meet Statutory Obligations Like ESI and PF?

Compliance with Section 17B of the Industrial Disputes Act

Dear Experts,

May I request your views on whether the wages payable to the workman/employee under Section 17B of the Industrial Disputes Act would attract compliance with statutory liabilities by the employer, such as contributions to ESI, PF, Bonus, etc.? If not, could you please provide any court ruling on this matter?

I kindly request your views.

Thanks & regards

Dear Sridharan,

For the sake of ready reference, let me provide an extract of the main provision of Sec. 17-B of the ID Act, 1947:

"17-B. Payment of full wages to workman pending proceedings in higher Courts - When, in any case, a Labor Court, Tribunal, or National Tribunal, by its award, directs reinstatement of any workman and the employer prefers any proceedings against such award in a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had been filed to that effect in such Court."

If you analyze the words of the above conditional provision, you will agree that exactly what is ordered to be paid are "full wages last drawn" by the concerned workman who received an award of reinstatement only. Therefore, all the statutory deductions are to be complied with.

Dear Sridharan, I also agree with the opinion of Umakanthanji. This provision 17B is in the ID Act to provide relief to an employee in financial matters against the award passed to reinstate the employee, but the employer wants to challenge the award in a higher court. The employer needs to pay the employee until they receive an award from the higher courts. It is also a fact that most employers do not pay until they receive an award from the higher court. This is not a good practice, but their explanation is that there is ample scope to receive an award in their favor. If paid, then how to get back the paid amount. It is always good to go as per the law and act accordingly.