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CS Professional · Labour Laws and Practice · Law of Wages

Sunrise Logistics deducts Rs 1,200 every month from the wages of driver Imran towards a company-provided canteen service. Imran never agreed to the canteen as part of his terms of employment, and the appropriate Government has authorised such deductions for canteens. Which statement is correct?

Government authorisation is not enough. Under Section 22, a deduction for amenities or services is allowed only if the employee accepted the service as a term of employment or otherwise, and it cannot exceed the value of the service supplied. Imran never accepted the canteen, so the deduction is invalid.

  1. AThe deduction is valid because the Government has authorised deductions for such services
  2. BThe deduction is valid only if it is below the 50 per cent limit
  3. CThe deduction is not valid unless the service was accepted by Imran as a term of employment or otherwise, and it must not exceed the value of the serviceCorrect
  4. DThe deduction is valid if it equals double the value of the service

Explanation

Section 22 bars a deduction under Section 18(2)(e) unless the amenity or service has been accepted by the employee as a term of employment or otherwise. The deduction also cannot exceed the value of the service. Government authorisation alone is not enough, and the 50 per cent cap is a separate test.

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