The Hindu Business Line : Contract workers likely to get payment by cheque soon

New Delhi, Oct. 28 In a move to ensure that contractors pay their workers in cheques through banks instead of the present system of paying in cash, the Ministry of Labour is planning to amend three Acts where cash payment is a mandatory provision.

They are the Contract Labour (Regulation & Abolition) Act, 1970, Minimum Wages Act, 1948 and the Payment of Wages Act, 1986.

Provisions in these three Acts are such that even if a contractor wants to pay his workers in cheque, he cannot do it under the law, officials in the Ministry of Labour said.

The Rule 69 of the Contract Labour (Regulation & Abolition) Act states that “All wages shall be paid in current coin or currency or in both.”

Similarly, Section 11(1) of Minimum Wages Act says “Minimum wages payable under this Act shall be payable in cash.”

Simultaneously, the Payment of Wages Act also reiterates the same thing by saying that “All wages shall be paid in current coin or currency notes or in both.”

According to Labour Ministry officials, introduction of cheque payment is necessary to protect the labourers from the exploitation of the contractors.

“Contract workers do not have bargaining powers and are exploited by paying them less than the minimum wage and coercing them to sign on higher amounts. Payment of wages to workers through cheques will drastically reduce their chances of exploitation,” the official pointed out.

The Ministry is, however, yet to decide on the modalities for popularising cheque payment among the unorganised contract workers. One major stumbling block is that a very large number of these workers are illiterate and their ability to operate bank accounts is doubtful.

The second major difficulty arises out of the migratory nature of a very large number of these workers which makes it impossible to attach them with any particular branch of a bank.

“The Ministry is working on removing the hurdles first by amending these three Acts. To finalise the details of the modalities for going about it, internal discussions have been held and consultation with the State Governments would start in the next stage,” officials said.

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