Section 59 Burden of Proof and Section 60 Contracting Out - Code on Wages, 2019

Sections 59 and 60 of the Code on Wages, 2019 contain important protections relating to wage and bonus claims. Section 59 places the burden on the employer to prove payment of specified dues when an employee makes a claim, while Section 60 prevents an employee's statutory entitlement under the Code from being defeated through a contract or agreement that seeks to waive or reduce that entitlement.

Section 59 of the Code on Wages, 2019 - Burden of Proof

Meaning of Section 59

Section 59 creates a specific rule concerning the burden of proof in claims relating to payment of remuneration, wages and bonus. When a claim covered by the section is filed, the employer has the burden of proving that the dues in question have been paid.

The provision is important because records relating to payment of wages, deductions and bonus are ordinarily maintained by the employer. Once a qualifying claim is made, Section 59 expressly places the burden of proving payment of the relevant dues on the employer.

Claims covered by Section 59

Section 59 applies where the claim concerns any of the following:

• non-payment of remuneration;
• non-payment of bonus;
• payment of wages at an amount lower than what is due;
• payment of bonus at an amount lower than what is due; or
• deductions from an employee's wages that are not authorised by the Code.

In such a proceeding, the statutory burden to establish that the claimed dues were paid rests on the employer.

Practical effect of the burden of proof

An employer responding to a claim under the Code may therefore need to rely on appropriate wage and payment records to establish that the amount legally due to the employee was paid. The precise evidence required will depend on the nature of the claim, the applicable provisions of the Code and the facts of the case.

Section 60 of the Code on Wages, 2019 - Contracting Out

Meaning of contracting out under Section 60

"Contracting out" in this context refers to an arrangement under which an employee agrees to give up a monetary or bonus entitlement that is due under the Code. Section 60 prevents a contract or agreement from being used to remove or reduce a person's statutory liability to pay such an amount.

Accordingly, where an agreement purports to make an employee relinquish an amount or bonus that is legally due under the Code, the agreement is null and void to the extent that it seeks to remove or reduce the liability to make that payment.

What does "null and void" mean under Section 60?

The statutory language does not necessarily declare every part of an employment contract void. Section 60 operates "in so far as" the contract or agreement purports to remove or reduce liability for an amount or bonus due under the Code. The offending waiver or reduction therefore cannot override the statutory entitlement.

Relationship between Sections 59 and 60

Why Sections 59 and 60 are important

The two provisions operate in different but related areas. Section 59 addresses proof of payment when a specified wage or bonus claim is made. Section 60 addresses agreements that attempt to waive or reduce rights to amounts or bonus due under the Code.

Together, they reinforce the statutory nature of wage and bonus entitlements. An employer cannot rely merely on the employee's assertion of non-payment being difficult to prove where Section 59 applies, and a statutory amount due under the Code cannot be defeated merely because an agreement purports to make the employee relinquish that right where Section 60 applies.

Related provisions

Section 59 and Section 60 form part of Chapter IX, "Miscellaneous", of the Code on Wages, 2019. They should be read with the other applicable provisions of the Code, including the claims mechanism and the provisions dealing with the effect of inconsistent laws, agreements, settlements and contracts.

The next provision, Section 61 of the Code on Wages, 2019, deals with the effect of laws, agreements and other instruments that are inconsistent with the Code.

Official legal resources

For the authoritative statutory text, readers may refer to the Code on Wages, 2019 on India Code and the Code on Wages, 2019 published by the Ministry of Labour and Employment.