Advance salary payment in old notes may invite action

Dattatreya writes to Jaitley on informal sector, promises amendment to Act

December 02, 2016 10:47 pm | Updated 11:06 pm IST - NEW DELHI:

BANGALORE, KARNATAKA, 30/04/2014: The International Labour Day will be celebrated on May 01, 2014 while labourers in the unorganised sector engage themselves in the daily grind to earn their livelihood in Bangalore on April 30, 2014.
Photo: V. Sreenivasa Murthy

BANGALORE, KARNATAKA, 30/04/2014: The International Labour Day will be celebrated on May 01, 2014 while labourers in the unorganised sector engage themselves in the daily grind to earn their livelihood in Bangalore on April 30, 2014. Photo: V. Sreenivasa Murthy

The Centre could take action against employers and contractors who have paid salaries to labourers in old Rs.500 and Rs.1,000 demonetised notes for several months in advance, with Union Labour and Employment Minister Bandaru Dattatreya flagging the issue in a missive to Finance Minister Arun Jaitley.

“Contractors by and large are making payments to labourers in Rs.500 and Rs.1,000 demonetised notes by way of advance wages. Measures are required to be taken to avoid any harassment of these workers now and in future,” Mr. Dattatreya said in his letter sent to the finance minister last week.

Unorganised sector

In his letter, the Minister also said that his ministry was gathering inputs from its field offices “about the hardships faced by workers in the unorganised sector” after demonetisation.

The labour minister told The Hindu that although organised sector workers did not face salary problems, unorganised sectors were not paying proper wages to workers. He said the Centre would soon amend the Payment of Wages Act to make it compulsory to pay employees through cheques and bank accounts.

“We have issued an advisory to states and our field offices to encourage payment of wages through bank accounts. After some time, when cash flow is adequate, we will make payment of wages through the banking system compulsory so that workers get proper income,” Mr. Dattatreya said.

The labour minister has written a letter to state chief ministers to inform them about the Andhra Pradesh government’s recent amendment to the Payment of Wages Act, 1936 enabling it to notify industrial establishments where payment of wages would be made only by cheque or bank account transfers. “You may also like to bring in similar amendments in your State. We are also in the process of bringing amendments to the said Act,” he said in his letter.

Mr. Dattatreya also met commerce minister Nirmala Sitharaman to apprise her about the issues faced by plantation workers due to demonetisation. “Plantation workers are based in hilly areas where there is no banking facility within 30 km radius,” he said, adding that the commerce minister had issued instructions to concerned officers to facilitate opening bank accounts for such workers. “The unorganised sector has suffered badly with this move as construction and garment workers are losing jobs,” Centre of Indian Trade Unions (CITU) Vice President A.K. Padmanabhan said.

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