The Remaining Provisions of the Code on Wages

Some words this chapter uses

Bar of suits means the civil court is forbidden to entertain the case at all; it is not a defence pleaded at trial.

Contracting out is an agreement by which a person gives up a statutory right. Section 60 makes it void here.

Non obstante clause is the "notwithstanding" formula. Section 61 is the Code's.

Previous publication is the requirement that a draft rule be published for objections before it is made. Section 67(1) imposes it.

Removal of difficulties is a temporary power to make provisions by order to give effect to a new statute. Section 68 has it, with a three-year limit.

Section 57: bar of suits

No court shall entertain any suit for the recovery of minimum wages, any deduction from wages, discrimination in wages and payment of bonus, in so far as the sum so claimed:

(a) forms the subject of claims under section 45;

(b) has formed the subject of a direction under this Code;

(c) has been adjudged in any proceeding under this Code;

(d) could have been recovered under this Code.

Four limbs, and they are not the same width.

(a) covers the pending claim, so a worker cannot run a claim and a suit at once.

(b) covers a sum already directed to be paid under the Code.

(c) covers a sum already adjudged in a proceeding under the Code, which is ordinary res judicata.

(d) covers everything else, and it is the important one: a sum that could have been recovered under the Code, whether or not any claim was ever made. So the bar is not merely against duplication; it makes the Code's machinery exclusive for the four subjects named.

Work out the practical consequence, because that is what an examiner is testing. A worker whose wages were withheld five years ago is out of time under section 45(6), which allows three years subject to condonation for sufficient cause. Can he sue in the civil court instead, where the limitation period would be longer? No. The sum "could have been recovered under this Code", so limb (d) bars the suit. The Code's three-year period is therefore not just the period for the statutory claim, it is in substance the period for the wage itself.

Note also what section 57 does not cover. It names four subjects: minimum wages, deductions from wages, discrimination in wages, and bonus. A claim founded on something else, for instance damages for wrongful dismissal, or a contractual sum that is not "wages" within section 2(y), is not within the bar. And section 57 does not touch the writ jurisdiction of the High Court under Article 226 of the Constitution of India, which is not a "suit".

Sections 58 and 59: good faith, and who must prove payment

Section 58: protection of action taken in good faith. No suit, prosecution or other legal proceeding shall lie against the appropriate Government or any officer of that Government for anything in good faith done or intended to be done under the Code.

The protection is confined to good faith and to acts under the Code. An officer acting maliciously, or outside the Code, is not protected. Note who is protected and who is not: the Government and its officers, which includes the Inspector-cum-Facilitator and the claims authority. Employers are not protected by this section; the employer's escape route is section 63.

Section 59: burden of proof.

Where a claim has been filed on account of non-payment of remuneration or bonus or less payment of wages or bonus or on account of making deductions not authorised by this Code from the wages of an employee, the burden to prove that the said dues have been paid shall be on the employer.

Four kinds of claim are covered: non-payment of remuneration, non-payment of bonus, less payment of wages or bonus, and unauthorised deductions. In each, once the claim is filed, the employer must prove payment.

This is a departure from the general rule that the party who asserts a fact must prove it, and the justification is the one already given: the records are in the employer's possession and section 50 obliges him to keep them. It is also the reason the section 54(2) records offence exists. An employer who does not maintain the register commits an offence and loses the only means by which he could discharge the section 59 burden.

Do not overstate it. Section 59 shifts the burden of proving payment. The employee still has to bring himself within the Code: that he is an employee, that the employer is his employer, and what he was entitled to. What he does not have to prove is the negative fact that he was not paid.

Sections 60 and 61: waiver and overriding effect

Section 60: contracting out.

Any contract or agreement whereby an employee relinquishes the right to any amount or the right to bonus due to him under this Code shall be null and void in so far as it purports to remove or reduce the liability of any person to pay such amount under this Code.

Three things to note. It voids the relinquishment of any amount under the Code and of bonus specifically. It operates "in so far as" the agreement removes or reduces liability, so the rest of a contract of employment survives; only the offending term falls. And it is expressed as null and void, so it needs no avoidance by the employee: it is a nullity from the outset, and a receipt or settlement in that form proves nothing.

Section 61: effect of inconsistent laws and agreements.

The provisions of this Code shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service.

Section 61 is wider than section 60 and does a different job. Section 60 is about the employee's surrender of his own right. Section 61 is about inconsistency, from whatever source, and it names four instruments in addition to any other law: an award, an agreement, a settlement and a contract of service.

The inclusion of an award and a settlement is the significant part. A settlement under the Industrial Relations Code binds the parties, and an award of a Tribunal binds them too; section 61 subordinates both to the Code. So a union cannot bargain away the minimum wage for its members, and a Tribunal cannot award below it.

But read section 61 with the Code's own floors and ceilings. It gives the Code effect over anything inconsistent with it. An award or settlement giving workers more than the Code requires is not inconsistent with it, because the Code sets minima. The exception is where the Code fixes a maximum: section 26(5) expressly caps a productivity-linked bonus agreement at twenty per cent., and there an agreement for more would be inconsistent.

Sections 62 to 66: delegation, the actual offender, and savings

Section 62: delegation of powers. The appropriate Government may by notification direct that any power exercisable by it under the Code shall, for such matters and on such conditions as are specified, be also exercisable: where the appropriate Government is the Central Government, by an officer or authority subordinate to it, or by the State Government or an officer or authority subordinate to the State Government; and where it is a State Government, by an officer or authority subordinate to that State Government.

Note the asymmetry. The Centre may delegate downward and sideways to a State; a State may delegate only downward. And in both cases the power becomes "also exercisable", so the appropriate Government does not divest itself of it.

Section 63: exemption of employer from liability in certain cases. Where an employer is charged with an offence under the Code, he is entitled, on a complaint duly made by him, to have any other person whom he charges as the actual offender brought before the court at the time appointed for hearing the charge. If, after the commission of the offence has been proved, the employer proves to the court's satisfaction:

• (a) that he used due diligence to enforce the execution of this Code; and
• (b) that the other person committed the offence without his knowledge, consent or connivance,

then that other person shall be convicted of the offence and liable to the like punishment as if he were the employer, and the employer shall be discharged from liability for it.

Proviso: in seeking to prove this the employer may be examined on oath, and his evidence and that of his witnesses is subject to cross-examination by or on behalf of the person he charges as the actual offender, and by the prosecution.

Section 63 is the mirror image of section 55. Section 55 pulls people into liability: the person in charge of the business, and any director, manager, secretary or officer whose consent, connivance or neglect is proved. Section 63 lets the employer push liability out to the person who actually did it. The two use the same materials, due diligence and knowledge, from opposite ends.

Three limits keep it honest. The commission of the offence must be proved first, so it is not a way of avoiding trial. The employer must prove both limbs, diligence and absence of knowledge, consent or connivance. And he exposes himself to cross-examination by the man he accuses as well as by the prosecution, which is a real deterrent to naming a subordinate falsely.

Section 64: protection against attachment of assets with Government. Any amount deposited with the appropriate Government by an employer to secure the due performance of a contract with that Government, and any other amount due to the employer from that Government in respect of that contract, shall not be liable to attachment under any decree or order of any court for any debt or liability of the employer other than a debt or liability incurred by him towards any employee employed in connection with that contract.

Read the exception, because it is the point of the section. The security deposit and the contract money are ring-fenced from the employer's general creditors, but not from his own workers on that contract. So where a Government contractor fails, the workers on the job are not left behind a queue of banks and suppliers: the fund is available to them and to no one else.

Section 65: Central directions. The Central Government may, for carrying into execution the provisions of the Code in a State, give directions to the State Government, and the State Government shall abide by such directions. The obligation is mandatory in terms, and it sits alongside section 42(3), under which the Centre may issue directions on matters the Central Advisory Board has advised on.

Section 66: saving. Nothing in the Code shall be deemed to affect the provisions of the Mahatma Gandhi National Rural Employment Guarantee Act 2005 and the Coal Mines Provident Fund and Miscellaneous Provisions Act 1948, or of any scheme made under them.

The MGNREGA saving is the practically important one, because MGNREGA has its own wage rate notified under its own section, and without section 66 there would be an argument that the Code's minimum wage displaced it.

Sections 67 and 68: rules and difficulties

Section 67(1): the appropriate Government may, subject to the condition of previous publication, make rules for carrying out the provisions of the Code. Previous publication means the draft must be published so that objections may be made before the rule is finalised, which is the ordinary safeguard for delegated legislation.

Section 67(2) lists the matters on which the appropriate Government may make rules, running from clause (a) to clause (zc): the manner of calculating wages under section 6(4); the arduousness of work under section 6(6)(b); the norms under section 6(6)(c); the cases in which an employee working less than the requisite hours is not entitled to a full day's wages under section 10; the extent and conditions for certain classes of employees under section 13(2); the longer wage period under section 14; the manner of deducting welfare-fund loans under section 18(2)(f)(ii); and so on through the Code.

Section 67(3) reserves nine matters to the Central Government, and they are the technical ones: the manner of set on or set off for the sixth and seventh accounting years under section 26(7); the manner of calculating gross profit under section 32; the further sums deductible under section 34(c); the manner of utilising amounts set on under section 36(1) and set off under section 36(2); and the manner of holding an enquiry under section 53(1).

That reservation is deliberate. Bonus arithmetic must be uniform across India or a company operating in several States would compute its allocable surplus differently in each. So the accounting rules are Central even though the appropriate Government for most other purposes may be a State.

Section 67(4): laying. Every rule made by the Central Government shall be laid before each House of Parliament, as soon as may be after it is made, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions; and if, before the expiry of the session immediately following, both Houses agree in making a modification or that the rule should not be made, the rule has effect only in the modified form or is of no effect, without prejudice to the validity of anything previously done under it.

Section 67(5): every rule made by a State Government shall, as soon as possible after it is made, be laid before the State Legislature. Note the difference: the State provision requires laying but attaches no modification or annulment procedure.

Section 68: power to remove difficulties. If any difficulty arises in giving effect to the Code, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the Code as appear necessary for removing the difficulty. Proviso: no such order shall be made after the expiry of three years from the commencement of this Code. 68(2): every such order shall be laid before each House of Parliament.

Two safeguards and one open question. The safeguards are that the order must be consistent with the Code, so the power cannot be used to amend it in substance, and that it expires after three years, so it is a transitional power and not a standing one. The open question is what "the commencement of this Code" means when the Code commenced in two instalments, on 18 December 2020 and 21 November 2025. The Code does not say, and nothing has been verified for these notes that resolves it.

A worked example

The facts. Fatima worked for four years for a contractor executing a road contract for the State Government. Her wages were below the notified minimum throughout, and when she raised it she was asked to sign a receipt for the full amount and a letter agreeing to the rate she had actually been paid. She signed both. She left the job in 2024 and comes for advice now.

The two signed documents. Both are worthless against her. Section 60: an agreement by which an employee relinquishes the right to any amount due under the Code is null and void in so far as it purports to remove or reduce the liability to pay. Section 61: the Code has effect notwithstanding anything inconsistent in any contract of service. The receipt is evidence of nothing beyond her signature, and the letter is a nullity.

Where does she go? To the section 45 authority, and there only. Section 57(d) bars a civil suit for a sum that could have been recovered under the Code, and unpaid minimum wages plainly could.

Is she in time? Section 45(6) gives three years from the date the claim arose, with power to entertain a later application on sufficient cause being shown. The wages for the earlier part of the four years are outside three years, so she must show sufficient cause for the delay as to those; and, because of section 57(d), if she cannot, there is no civil suit to fall back on.

Who has to prove what? She must show that she was an employee, who her employer was, and the rate to which she was entitled. Section 59 then puts on the employer the burden of proving that the dues have been paid, and the register, muster roll and wage slips he was bound to keep by section 50 are what he must produce. If he kept none, he has not only lost that burden but committed an offence under section 54(2).

What can she recover? The arrears determined, and under section 45(2) compensation of up to ten times that sum, the authority having regard to the circumstances in which the claim arose.

And if the contractor has no money? He had deposited a security with the State Government for the due performance of the road contract, and further sums are due to him under it. Ordinarily those would be fought over by his creditors. Section 64 says they are not liable to attachment for any debt other than one incurred by the employer towards an employee employed in connection with that contract. Fatima is such an employee, so the fund is available to her claim and shut to the others.

Now suppose the contractor is prosecuted under section 54(1)(a) and says his site supervisor fixed the pay without his knowledge. Section 63 lets him complain and have the supervisor brought before the court; but the offence must first be proved, and he must then prove both that he used due diligence to enforce the execution of the Code and that the supervisor acted without his knowledge, consent or connivance. If he proves both, the supervisor is convicted and punished as if he were the employer and the contractor is discharged. If he tries, he may be examined on oath and cross-examined by the supervisor as well as by the prosecution.

And suppose the Inspector-cum-Facilitator got some of it wrong, and inspected the wrong establishment before finding the right one. Section 58 protects the officer and the Government against a suit or prosecution for anything done in good faith under the Code.

What this does NOT mean

It does not mean a civil suit survives if no claim was made. Section 57(d) bars a suit for a sum that could have been recovered under the Code, whether or not a claim was ever filed.

It does not mean section 57 bars everything. It names minimum wages, deductions, discrimination in wages and bonus, and it is a bar on suits, not on the High Court's writ jurisdiction.

It does not mean the employee proves nothing. Section 59 shifts the burden of proving payment; the employee still establishes the employment and the entitlement.

It does not mean a signed receipt or settlement binds the worker. Section 60 makes the relinquishment null and void to the extent it removes or reduces liability, and section 61 overrides any inconsistent contract of service.

It does not mean an award or settlement can go below the Code. Section 61 names award, agreement, settlement and contract of service. But a settlement giving more than the Code requires is not inconsistent with it, except where the Code fixes a maximum, as section 26(5) does for bonus.

It does not mean an employer may escape by blaming a subordinate. Section 63 requires the offence to be proved first, and the employer to prove due diligence and absence of knowledge, consent or connivance, on oath and under cross-examination.

It does not mean the removal-of-difficulties power is permanent. The proviso to section 68(1) stops it three years from the commencement of the Code, and the order must be not inconsistent with the Code.

It does not mean the Code displaces MGNREGA. Section 66 saves it, and the Coal Mines Provident Fund and Miscellaneous Provisions Act 1948, and schemes under both.

Limits, criticism and amendments

Section 57(d) is the provision most open to criticism, and the criticism is not that exclusivity is wrong but that it is unmatched by access. Making the Code's machinery the only route is right in principle: it is cheaper and faster than a civil suit. But it means the three-year period in section 45(6) is the effective life of the wage, and a worker who is unaware of the authority, or afraid to approach it while still employed, loses the money altogether. The section 45(6) proviso allowing condonation for sufficient cause is the only relief, and it is discretionary.

Section 59 is a genuine and well-designed reversal, and it is one of the strongest provisions in the Code for workers. Its weakness is indirect: it depends on the employer having been made to keep records, and the sanction for not keeping them is a fine of up to ten thousand rupees under section 54(2). For an employer facing a large claim, not keeping records and paying that fine may be the cheaper course, even allowing for the adverse inference.

Sections 60 and 61 are as strong as they can be drafted, and there is little to criticise in them. The practical limit is that they operate only where the worker brings a claim; a void agreement that nobody challenges is as effective as a valid one.

Section 58's good-faith protection is standard, but note the asymmetry it creates with the rest of the Chapter: the officer is protected from suit, while the worker's own remedy against the officer's inaction is nowhere provided. There is no provision entitling a worker to require an inspection.

Section 67 delegates a great deal. Very substantial matters are left to rules, including the manner of calculating gross profit for bonus and, in the Code's substantive Chapters, the wage ceilings under section 26. State rules under section 67(5) are merely laid before the State Legislature, with no procedure for modification or annulment corresponding to section 67(4).

And section 68's sunset raises a real question that the Code does not answer: three years from which commencement, when sections 42(1) to (3) and part of section 69 commenced on 18 December 2020 and the remainder on 21 November 2025. If it is the earlier date, the power has already lapsed; if the later, it runs to 2028.

Quick revision

• Section 57: no suit for the recovery of minimum wages, deductions, discrimination in wages or bonus so far as the sum (a) is the subject of a section 45 claim, (b) has been the subject of a direction, (c) has been adjudged in a proceeding under the Code, or (d) could have been recovered under the Code.
• Section 58: no suit, prosecution or legal proceeding against the appropriate Government or its officers for anything in good faith done or intended to be done.
• Section 59: where a claim is filed for non-payment of remuneration or bonus, less payment of wages or bonus, or unauthorised deductions, the burden to prove the dues have been paid is on the employer.
• Section 60: a contract by which an employee relinquishes the right to any amount or to bonus is null and void so far as it removes or reduces liability.
• Section 61: the Code has effect notwithstanding any inconsistent law, award, agreement, settlement or contract of service.
• Section 62: the appropriate Government may make its powers also exercisable by subordinates, and the Centre may additionally delegate to a State Government or its subordinates.
• Section 63: an employer charged may bring the actual offender before the court; after the offence is proved, if he proves due diligence and that the other acted without his knowledge, consent or connivance, that other is convicted as if he were the employer and the employer is discharged; the employer may be examined on oath and cross-examined by that person and by the prosecution.
• Section 64: an employer's security deposit with the appropriate Government and sums due to him under that Government contract are not attachable for any debt except one owed to an employee employed in connection with that contract.
• Section 65: the Central Government may give directions to a State Government for executing the Code, and the State shall abide by them.
• Section 66: saves the Mahatma Gandhi National Rural Employment Guarantee Act 2005 and the Coal Mines Provident Fund and Miscellaneous Provisions Act 1948 and schemes under them.
• Section 67: rules by the appropriate Government subject to previous publication; section 67(3) reserves the bonus arithmetic and the section 53 enquiry procedure to the Central Government; Central rules laid before each House for thirty days with power to modify or annul; State rules merely laid before the State Legislature.
• Section 68: removal of difficulties by Central Government order not inconsistent with the Code, not after three years from the commencement, and laid before each House.

Test yourself

1. To what extent is a civil suit barred? Section 57 provides that no court shall entertain any suit for the recovery of minimum wages, any deduction from wages, discrimination in wages and payment of bonus, in so far as the sum claimed forms the subject of claims under section 45, has formed the subject of a direction under the Code, has been adjudged in any proceeding under the Code, or could have been recovered under the Code. The fourth limb is the widest: it bars a suit even where no claim was ever brought, so the Code's machinery is exclusive for those four subjects. The practical consequence is that a worker who allows the three-year period in section 45(6) to pass, and cannot show sufficient cause for the delay, has no civil suit to fall back upon. The bar does not extend to claims outside those four subjects, and it is a bar on suits, not on the writ jurisdiction of the High Court.

2. On whom does the burden of proof lie? Section 59 provides that where a claim has been filed on account of non-payment of remuneration or bonus, or less payment of wages or bonus, or on account of making deductions not authorised by the Code from an employee's wages, the burden to prove that the said dues have been paid shall be on the employer. The reversal of the ordinary rule is justified by section 50, which obliges the employer to maintain a register, a muster roll, wage records and wage slips, so that the means of proving payment are in his hands; and non-maintenance or improper maintenance of those records is itself an offence under section 54(2). The section shifts the burden of proving payment only; the employee must still establish the employment relationship and the entitlement he claims.

3. Can an employee agree to accept less than the Code allows? No. Section 60 provides that any contract or agreement by which an employee relinquishes the right to any amount, or the right to bonus, due to him under the Code shall be null and void in so far as it purports to remove or reduce the liability of any person to pay that amount under the Code. Section 61 reinforces it by providing that the Code shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service. Section 60 defeats the individual employee's surrender of his own right; section 61 defeats any inconsistent instrument whatever its source, including a settlement between a union and an employer and an award of a Tribunal.

4. Explain the employer's defence under section 63. Where an employer is charged with an offence under the Code he is entitled, on a complaint duly made by him, to have any other person whom he charges as the actual offender brought before the court at the time appointed for hearing the charge. If, after the commission of the offence has been proved, the employer proves to the satisfaction of the court that he used due diligence to enforce the execution of the Code, and that the other person committed the offence without his knowledge, consent or connivance, then that other person is convicted of the offence and made liable to the like punishment as if he were the employer, and the employer is discharged from liability in respect of it. The proviso allows the employer to be examined on oath, and makes his evidence and that of his witnesses subject to cross-examination both by or on behalf of the person he charges as the actual offender and by the prosecution.

5. What protection does section 64 give, and to whom? Section 64 provides that any amount deposited with the appropriate Government by an employer to secure the due performance of a contract with that Government, and any other amount due to that employer from that Government in respect of that contract, shall not be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the employer other than a debt or liability incurred towards any employee employed in connection with that contract. The protection is therefore for the fund, against the employer's general creditors; the beneficiaries of the exception are the employees engaged on that very contract, whose claims may be satisfied out of it in priority to everyone else.

6. What are the limits on the rule-making and difficulty-removing powers? Under section 67(1) the appropriate Government may make rules only subject to the condition of previous publication, and section 67(3) reserves nine matters, chiefly the bonus computation provisions and the manner of holding an enquiry under section 53(1), to the Central Government, so that the accounting rules are uniform throughout India. Under section 67(4) every Central rule must be laid before each House of Parliament for a total of thirty days, and if both Houses agree on a modification or that the rule should not be made, it has effect only as modified or has no effect, without prejudice to anything previously done under it; under section 67(5) State rules need only be laid before the State Legislature. Under section 68(1) the Central Government may by Gazette order make provisions not inconsistent with the Code to remove a difficulty in giving it effect, but its proviso forbids any such order after the expiry of three years from the commencement of the Code, and section 68(2) requires every such order to be laid before each House of Parliament.