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CMA Intermediate · Business Laws and Ethics · The Code on Wages, 2019

The authority appointed under the Code on Wages, 2019 decides a claim of Rs 40,000 by employees of Vikram Textiles in their favour. Having regard to the circumstances, what is the maximum compensation the authority may order in addition to the claim determined?

The maximum additional compensation is Rs 4,00,000. The authority may order compensation extending up to ten times the claim determined, and ten times Rs 40,000 equals Rs 4,00,000. Lower figures use multiples that the Code does not set as the ceiling.

  1. ARs 4,00,000Correct
  2. BRs 80,000
  3. CRs 1,20,000
  4. DRs 40,000

Explanation

Section 45(2) lets the authority order compensation in addition to the claim, extending up to ten times the claim determined. Ten times Rs 40,000 is Rs 4,00,000. Rs 40,000 would be only equal to the claim, and the other figures use wrong multiples (2 and 3 times).

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