Section 61: Exemption of employer from liability in certain cases

The Code on Wages, 2019 (Act No. 29 of 2019) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter IX: Miscellaneous
Competent Labour Forum
Act No. 29 of 2019

Legal Commentary & Landmark Judgments: Section 61

Section 61 of the Code on Wages, 2019 embodies a classic non-obstante clause that establishes the supremacy of the Code over all inconsistent enactments, awards, agreements, and contracts of service, while preserving and safeguarding through its protective proviso any rights or benefits enjoyed by employees that are more favorable than those provided under the Code.

  • Overriding Non-Obstante Effect: The provisions of the Code take precedence over anything inconsistent contained in any other law for the time being in force, or in any award, agreement, settlement, or contract of service. Inconsistent provisions in existing state laws or older contracts are superseded.
  • The Benevolent Proviso: Preservation of More Favorable Benefits: Crucially, the proviso establishes that if an existing award, agreement, contract of service, or custom confers benefits upon an employee that are more favorable than those mandated by the Code, the employee continues to enjoy those superior benefits. The Code sets a statutory floor, not a ceiling.
  • Harmonization with Collective Bargaining and Customary Rights: The section strikes a balance between setting a national floor for wages and preserving established higher wage scales, customary bonuses, and negotiated union agreements won through collective bargaining.
Key Landmark Precedents:
  • L.I.C. of India v. D.J. Bahadur (1981) 1 SCC 315: The Supreme Court held that beneficial industrial settlements and awards continue in force and cannot be unilaterally dismantled by subsequent general statutes unless the legislative intent to abrogate superior benefits is express and unequivocal.
  • Workmen of Metro Theatre Ltd. v. Metro Theatre Ltd. (1981) 3 SCC 596: The Supreme Court affirmed that statutory minimum wage standards operate as a baseline; agreements providing higher remuneration and welfare packages remain fully enforceable.
  • Excel Wear v. Union of India (1978) 4 SCC 224: The Supreme Court emphasized that while labor welfare legislation aims to protect workers, it must be interpreted harmoniously with established contractual and constitutional principles.
Courtroom Practice & Strategic Litigation Guidance:

Employers undergoing post-merger integration or restructuring contracts to align with the new Labor Codes cannot use Section 61 as a justification to reduce higher existing wages, higher bonus percentages, or superior overtime rates. Any downward revision of more favorable contractual benefits violates the proviso to Section 61 and constitutes an illegal change in conditions of service.