The union cabinet passed an ordinance to facilitate digital transfer of salaries by employers across the country. However, several trade unions associations and parties opposed the move, calling it impractical.
The government, while moving the ordinance to amend Section 6 of the Payment of Wages Act, 1936, clarified that the option of cash payment of wages would continue to exist.
“An additional way of payment has been introduced through this ordinance. The old system of cash would also remain,” a senior official said following a meeting of the Cabinet.
“This is being done to facilitate the employers from making payment of wages using the banking facilities in addition to the existing modes of payment of wages in current coin or currency notes,” he added.
The Labour Ministry, in a statement, clarified that the proposed amendment would not make mandatory the payment of wages only through cheques or account transfers.
“The proposal is an additional facility of crediting the wages in the bank account of the employees or payment through cheque along with the existing provisions of payment in current coin or currency notes,” it said.
Also, the appropriate government (centre or state) will have to come up with the notification to specify the industries or other establishments where the employer shall pay wages through cheques or by credit the wages in the employees’ bank account, it said, adding that that the proposed amendment would also ensure that “minimum wages are paid to the employees and their social security rights are protected”.
“The employers can no longer under-quote the number of employees employed by them in their establishments to avoid becoming a subscriber to the EPFO or ESIC schemes,” it said.
However, most trade unions refused to buy the government’s arguments.
Centre of Indian Trade Unions (CITU) General Secretary Tapan Sen wondered as to why the government was so rushed that it needed to bring an ordinance.
“The government is rushing with the amendment to Wages Act. What is the hurry? The whole banking system is in disarray right now. Couldn’t the decision be put on hold for a while?” Sen told IANS.
He said that said that the employees’ right to decide the mode of his payment should not be withdrawn and said the government action “is not above doubt”.
Indian National Trade Union Congress (INTUC) too opposed the move and threatened to call for a strike.
“We strongly oppose this move. This is not practical,” INTUC President G Sanjeeva Reddy told IANS.
“What would happen in places where banks don’t exist or workers are without bank accounts? The contract workers should be paid their wages in cash,” he said.
Some opposition parties too questioned the practicality of the move.
Janata Dal-United leader K.C. Tyagi said that it was not possible or even practical to go entirely cashless in a country like India, noting even the US is only around 40 per cent digital.
However, the RSS-affiliated Bharatiya Mazdoor Sangh (BMS) welcomed the decision and said that it was demanding it for some time.
“This is a good move. It would end the two register system. Some employers would pay less payment to workers and show it more in their registers. This practice would end with transfer of salary in bank accounts,” said BMS General Secretary Virjesh Upadhyay.