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of <h1>Court clarifies lay-off compensation not 'wages' under Payment of Wages Act</h1> <h3>Anusuya Vithal and Ors. Versus J.H. Mehta and Ors.</h3> The court ruled that compensation for laid-off workers under the Industrial Disputes Act does not qualify as 'wages' under the Payment of Wages Act. The ... - Issues:1. Whether compensation for laid-off workers under the Industrial Disputes Act qualifies as 'wages' under the Payment of Wages Act.Analysis:1. The judgment addresses the question of whether compensation for laid-off workers, as per the Industrial Disputes Act, constitutes 'wages' under the Payment of Wages Act. Lay-off is defined as the employer's failure to provide work to an employee, with specific provisions for compensation. The court notes the distinction between 'wages' and 'compensation' as intended by the legislature, highlighting that the term 'compensation' implies a different purpose than 'wages.'2. The court further examines the definition of 'wages' under the Payment of Wages Act, emphasizing that remuneration must be for services rendered, which is not the case during lay-off periods. The judgment cites previous legal interpretations to support the view that compensation for lay-off is not remuneration for work done but rather a payment to mitigate temporary loss of employment.3. Regarding the requirement that the payment must be 'in respect of employment or work done in such employment,' the court explains that during lay-off, there is no obligation for the employer to provide work or for the employee to work. The compensation is not linked to services rendered but aims to alleviate the hardship of temporary unemployment, thus not meeting the criteria for being considered 'wages.'4. The court concludes that since compensation for lay-off does not fulfill the criteria of remuneration or being in respect of employment or work done, it does not qualify as 'wages' under the Payment of Wages Act. The judgment aligns with a previous case under the Employees' State Insurance Act, reinforcing the view that lay-off compensation is distinct from wages. Consequently, the court rules that the compensation for laid-off workers is not covered under the definition of 'wages' in the Payment of Wages Act, leading to the dismissal of the applications without costs.
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