Commercial Law Notes

Payment of Wages Act

Chapter Objectives

After studying this chapter you should be able to understand,

1. Objectives of the Act
2. Salient Features
3. Application and Scope
4. Definitions
5. Payment of Wages
6. Permissible Deductions
7. Wrongful Deductions

Objectives of the Act

This is a very important act for the rights of the workers because without such an act;

1. The employer would have no sympathy with the employee and would have been in a better position
2. The employer would have chosen the payment period that suits him best, creating financial difficulties for the employee
3. The employer had free choice to deduct any amount from the wages of his employees

Salient Features

1.It applies to payment of wages (a) to persons employed in any factory, and (b) to persons employed in railways
2. It applies to persons, employed as above (a) either directly or (iii) through contractors
3. Provincial government is also authorized to make it applicable to any class of persons employed in an industrial establishment
4. Provincial government can enforce it only after giving 3 moths notice of its intention to do so.
5. Provisions of the Act have been extended to payment of wages to persons employed in any coalmine, oilfield, tramway, motor omnibus services, workshops, salt-mines, road transport services.


Industrial Establishment: Mean any;

a) Motor omnibus service
b) Inland steam vessel
c) Plantation
d) Establishment of a contractor
e) Dock, wharf or jetty
f) Mine, quarry or oil field
g) Workshop


Means all remuneration capable of being expressed in term of money which would be payable to employee in respect of his employment or of work done in such employment, it includes;

1. Any bonus,
2. Any additional remuneration
3. Any sum payable by reason of the termination of employment

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