THE

PAYMENT OF WAGES ACT, 1936

The Payment of Wages Act, 1936, stands as a fundamental piece of legislation in Pakistan that safeguards the rights and interests of workers in relation to the payment of their wages. It aims to ensure the timely and full payment of wages to employees, promoting economic security and fair labor practices. This act is instrumental in preventing wage exploitation and serves as a cornerstone for workers’ rights within the country.

THE

PAYMENT OF WAGES ACT, 1936

(IV OF 1936)

23rd April, 1936

An Act to regulate the payment of wages to certain classes of persons employed in industry. : —

Preamble. : —  Whereas it is expedient to regulate the payment of wages to certain classes of persons employed in industry; It is hereby enacted as follows. : —  –

1. Short title. Extent, commencement and application. : —  (1) This Act may be called the payment of Wages Act, 1936.
(2) It extends to the whole of Pakistan.
(3) It shall come into force on such date as the Federal Government may by notification in the official Gazette, appoint.
(4) It applies in the first instance to the payment of wages to persons employed in any factory and to persons employed otherwise than in a factory upon any railway by a railway administration or, either directly or through a sub-contractor, by a person fulfilling a contract with a railway administration.
(5) The Provincial Government may after giving three months” notice of its intention of so doing, by notification in the official Gazette, extend the provisions of the Act or any of them to the payment of wages to any class of persons employed in any industrial establishment or any class or group of industrial establishments.
(6) Nothing in this Act shall apply to wages payable in respect of a wage-period, which, over such wage-period, averaged more than [one thousand five hundred] rupees a month.

2. Definition. : —  In this Act, unless there is anything repugnant in the subject or context-
(i) “factory” means a factory as defined in clause (i) of section 2 of the Factories Act, 1934 (XXV of 1934) ;
(ii) “Industrial establishment” means any-
(a) tramway or motor omnibus service;
(b) dock, wharf or jetty ;
(c) inland steam-vessel ;
(d) mine, quarry or oil-field ;
(e) plantation ;
(f) workshop or other establishment in which articles are produced, adapted or manufactured, with a view to their use, transport or sale ;
[(g) establishment of a contractor who, directly or indirectly, employs persons [x x x] to do any skilled or unskilled, manual or clerical labour for hire or reward in connection with the execution of a contract to which he is a party, and includes the premises in which or the site at which, any process connected with such execution is carried on.
Explanation. “Contractor” includes a “sub-contractor, headman or agent.”].
(iii) “plantation” means any estate which is maintained for the purpose of growing cinchona, rubber, coffee or tea, and on which twenty-five or more persons are employed for that purpose ;
(iv) “prescribed” means prescribed by rules made under this Act ;
(v) “railway administration” has the meaning assigned to it in clause (6) of Section 3 of the Railways Act, 1890 (IX of 1890); and
(vi) “wages” means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed or otherwise, to a person employed in respect of his employment or of work done in such employment, and includes any bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment, but does not include-
(a) the value of any house accommodation, supply of light, water, medical attendance or other amenity, or of any service excluded by general or special order of the Provincial Government;
(b) any contribution paid by the employer to any pension fund or provident fund ;
(c) any travelling allowance or the value of travelling concession ;
(d) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(e) any gratuity payable on discharge.

3. Responsibility for payment of wages. : —  Every employer [including a contractor] shall be responsible for the payment to persons employed by him of all wages required to be paid under this Act. : —
Provided that, in the case of persons employed (otherwise than by a contractor)-
(a) in factories, if a person has been named as the manager of the factory under clause (e) of sub-section (1) of Section 9 of the Factories Act. 1934 (XXV of 1934),
(b) in Industrial establishments, if there is a person responsible to the employer for the supervision and control of the industrial establishment,
(c) upon railways (otherwise than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned,
the person so named, the person so responsible to the employer of the person so nominated, as the case may be, shall be responsible for such payment.

4. Fixation of wage periods. : —  (1) Every person responsible for the payment of wages under Section 3 shall fix periods (in this Act referred to as wage periods) in respect of which such wages shall be payable.
(2) No wage-period shall exceed one month.

5. Time of payment of wages. : —  (1) The wages of every person employed upon or in-
(a) any railway, factory or industrial establishment upon or in which less than one thousand persons are employed, shall be paid before the expiry of seventh day,
(b) any other railway, factory or industrial establishment shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable.
(2) Where the employment of any person is terminated by or on behalf of the employer, the wages earned by him shall be paid before the expiry of the second working day from the day on which his employment is terminated.
(3) The Provincial Government may, by general or special order exempt, to such extent and subject to such conditions as may be specified in the order, the person responsible for the payment of wages to persons employed upon any railway (otherwise than in a factory) from the operation of this section in respect of the wages of any such person or class of such persons.
(4) All payments of wages shall be made on a working-day.

6. Wages to be paid in current coin or currency notes. : —  All wages shall be paid in current coin or currency notes or in both.

7. Deductions which may be made from wages. : —  (1) Notwithstanding the provisions of sub-section (2) of Section 47 of the Railways Act, 1890 (IX of 1890), the wages of an employed person shall be paid to him without deductions of any kind except those authorised by or under this Act.
Explanation. : —  Every payment made by the employed person to the employer or his agent shall, for the purposes of this Act, be deemed to be a deduction from wages.
(2) Deductions from the wages of an employed person shall be made only in accordance with the provisions of this .Act, and may be of the following kinds only, namely. : —  –
(a) fines ;
(b) deductions for absence from duty;
(c) deductions for damage to or loss of goods expressly entrusted to the employed person for custody; or For loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default ;
(d) deductions for house accommodation supplied by the employer;
(e) deductions for such amenities and services supplied by the employer as the Provincial Government may, by general or special order, authorize;
Explanation. : —  The word “services” in this sub-clause does not include the supply of tools and raw materials required for the purposes of employment.
(f) deductions for recovery of advances or for adjustment of over-payments of wages;
(g) deductions of income-tax payable by the employed person ;
(h) deductions required to be made by order of a Court or other authority competent to make such order;
(i) deductions for subscriptions to, and for payment of advances from, any provident fund to which the Provident Funds Act, 1925 (XIX of 1925), applies or any recognized provident fund as defined in Clause (37) of Section 2 of the Income Tax Ordinance 1979 (XXXI of 1979)], or any provident fund approved in this behalf by the Provincial Government during the continuance of such approval;
(j) deductions for payments to co-operative societies approved by tin Provincial Government or to a scheme of insurance maintained by the Pakistan Post Office; and
(k) deductions, made with the written authorization of the employed person, in furtherance of any War Savings Scheme, approved by the Provincial Government, for the purchase of Securities of the Government of Pakistan or the Government of the United Kingdom.

8. Fines. : —  (1) No fine shall be imposed on any employed person save in respect of such acts and omissions on his part as the employer, with the previous approval of the Provincial Government or of the prescribed authority may have specified by notice under sub-section (2).
(2) A notice specifying such acts and omissions shall be exhibited in the prescribed manner on the premises in which the employment is carried on or in the case of persons employed upon a railway (otherwise than in a factory), at the prescribed place or places.
(3) No fine shall be imposed on any employed person until he has been given an opportunity of showing cause against the fine, or otherwise than in accordance with such procedure as may be prescribed for the imposition of fines.
(4) The total amount of fine which may be imposed in any one wage-period on any employed person shall not exceed an amount equal to Paisa 3 in the rupee of the wages payable to him in respect of that wage period.
(5) No fine shall be Imposed on an employed person who is under the age of fifteen years.
(6) No fine imposed on an employed person shall be recovered from him by instalments or after the expiry of sixty days from the day on which it was imposed.
(7) Every fine shall be deemed to have been imposed on the day of the act or omission, in respect of which it was imposed,
(8) All fines and all realizations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages under Section 3 in such form as may be prescribed; and all such realizations shall be applied only to such purposes beneficial to the persons employed in the factory or establishment as are approved by the prescribed authority.
Explanation. : —  When the persons employed “upon or in any railway, factory or industrial establishment, are part only of a staff employed under the same management, all such realizations may be credited to a common fund maintained for the staff as a whole, provided that the fund shall be applied only to such purposes as are provided by the prescribed authority.

9. Deductions for absence from duty. : —  (1) Deductions may be made under clause (b) of sub-section (2) of Section 7 only on account of the absence of an employed person from the place or places where, by the terms of his employment he is required to work, such absence being for the whole or any part of the period during which he is so required to work.
(2) The amount of such deduction shall in no case bear to the wages payable to the employed person in respect of the wage-period for which the deduction is made a larger proportion than the period for which he was absent bears to the total period, within such wage-period, during which by the terms of his employment, he was required to work.
Provided that, subject to any rules made in this behalf by the Provincial Government, if ten or more employed persons acting in concert absent themselves without due notice (that is to say, without giving the notice which is required under the terms of their contracts of employment) and without reasonable cause, such deduction from any such person may include such amount not exceeding his wages for eight days as may by any such terms be due to the employer in lieu of due notice.
Explanation. : —  For the purposes of this section, an employed person shall be deemed to be absent from the place where he is required to work, if, although present in such place, he refuses, in pursuance of a stay-in-strike or any other cause which is not reasonable in the circumstances, to carry out his work.

10. Deductions for damages or loss. : —  (1) A deduction under clause (c) of sub-section (2) of Section 7 shall not exceed the amount of the damage or loss caused to the employer by the neglect or default of the employed person and shall not be made until the employed person has been given an opportunity of showing cause against the deduction, or otherwise than in accordance with such procedure as may be prescribed for the making of such deductions.
(2) All such deductions and all realizations thereof shall be recorded it a register to be kept by the person responsible for the payment of wages under Section 3 in such form as may be prescribed.

11. Deductions for services rendered. : —  A deduction under clause (d) or clause (e) of sub-section (2) of Section 7 shall not be made from the wages of an employed person unless the house accommodation, amenity or service has been accepted by him, as a term of employment or otherwise, and such deduction shall not exceed an amount equivalent to the value of the house accommodations, amenity or service supplied and, in the case of a deduction under the said clause (e), shall be subject to such conditions as the Provincial Government may impose.

12. Deductions for recovery of advances. : —  Deductions under clause (f) of sub-section (2) of Section 7 shall be subject to the following conditions, namely-
(a) recovery of “in advance of money given before employment began shall be made from the first payment of wages in respect of a complete wage-period, but no recovery shall be made of such advances given for travelling expenses . : —
(b) recovery of advance of wages not already earned shall be subject to any rules made by the Provincial Government regulating the extent to which such advances may be given and the instalments by which they may be recovered.

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