A cluster of provisions in the Employment Act (Chapter 373) exists to stop wages being recycled back to the employer. They carry the highest penalties in the Act.
Section 92 — your wages are yours
(1) An employer must not limit or attempt to limit the right of an employee to dispose of his wages in any manner he deems fit.
(2) An employer lawfully entitled to do so may establish a shop for the sale of provisions generally to his employees, but an employee must not be compelled by any contract, award or oral or written order to make any purchase from that shop.
Penalty: a fine not exceeding K500.00.
Three features:
- “Or attempt to limit” — pressure short of compulsion is caught.
- “In any manner he deems fit” — the employer has no legitimate interest in how the money is spent.
- “By any contract, award or oral or written order” — even a registered award cannot compel purchases from the employer’s shop. That is a strong statement, given that awards otherwise sit alongside the Act throughout.
Paying in goods, in store credit, in tokens, or on condition that some part of the wage is spent at the employer’s store is the “truck system”. Section 92 forbids it, and section 81(1)(a) reinforces the point by requiring payment in Papua New Guinea currency.
Section 134 — undue influence to buy
An employer, or a member of the staff or family of an employer, who uses undue influence to induce an employee or accompanying dependants to purchase goods from any person is guilty of an offence. Penalty: a fine not exceeding K300.00.
Note how wide this is:
- It extends to the employer’s staff and family — a supervisor or a manager’s relative running a side business.
- It covers purchases from any person, not only from the employer — so steering workers to a related trade store or a favoured seller is caught.
- It protects accompanying dependants as well as the employee.
Section 95 — not in a shop, canteen or bar
An employer who pays wages to an employee whilst the employee is in any shop, store, canteen or place where intoxicating liquor is sold is guilty of an offence — unless the employee is employed to work in that place. Penalty: a fine not exceeding K300.00.
Read with section 80 — wages shall be paid on work days, during working hours, at or near the place of employment — the Act keeps the pay-out away from the point of sale.
Section 94 — no fines of any kind
An employer who imposes a fine of any kind on an employee is guilty of an offence. Penalty: a fine not exceeding K500.00.
“Of any kind” is comprehensive. Charges for lateness, for breakages, for damage to a vehicle, for a lost uniform or key, for poor performance, or as a “disciplinary penalty” all fall within it. The only money that may lawfully come out of a wage is a section 88 deduction or one required by law — and section 88(1)(d) is confined to a shortage of money caused by the employee’s negligence where the contract specifically provides for employment in connection with the receipt, payment and custody of money.
Section 91 — no discount, interest or similar charge
An employer shall not deduct by way of discount, interest or similar charge in consideration (a) for any advance of wages; (b) as a reward for providing employment; or (c) for retaining the employee in employment.
Paragraphs (b) and (c) are directed at charging a worker for the job itself — a practice the Act attacks from several directions. Section 116 prohibits an employment agent charging a fee to a worker; section 118 restricts soliciting; and section 133 makes fraud, misrepresentation, intimidation, coercion or undue influence for employment purposes an offence carrying a fine up to K500.00.
The provisions at a glance
| Section | Prohibition | Maximum fine |
|---|---|---|
| 81(1)(a) | Payment other than in PNG currency | General penalty, s 141 |
| 91 | Discount, interest or similar charge | s 96 — K500.00 |
| 92 | Limiting how wages are spent; compelled purchases | K500.00 |
| 94 | Fines of any kind | K500.00 |
| 95 | Paying wages in a shop, canteen or bar | K300.00 |
| 116 | An employment agent charging a worker a fee | See Part VII |
| 133 | Fraud, coercion or undue influence for employment purposes | K500.00 |
| 134 | Undue influence to induce purchases | K300.00 |
What an employer may do
- Run a store, if lawfully entitled to — provided nobody is compelled to buy from it (s 92(2)).
- Deduct for rations, clothing and housing rent — but only under section 88(1)(b) and (f), with prior written consent, and within the 50% cap.
- Deduct fund contributions under section 88(1)(a) — and it must pay them over as soon as practicable under section 89.
- Recover an advance — up to 25% of net wages per period, without interest.
- Deduct what a law requires — tax, a court order — under section 88(3), without consent.
If your wages are being controlled
- Write down what happened — who said what, when, and to whom.
- Keep the pay statements and any store dockets or credit records.
- Ask in writing for the reason for any deduction. Refusing information reasonably required is an offence under section 138, as is penalising you for asking.
- Report it to a labour officer — sections 92, 94, 95 and 134 are all offences and section 145 lets the Secretary prosecute.
- Consider section 36(2) — conduct inconsistent with the employer’s obligations, or ill-treatment, allows you to leave without notice.
- Get advice — the Public Solicitor, or a firm from the law firms directory.
Sources
- Employment Act (Chapter 373) — ss 36, 80, 81, 87–96, 116, 118, 133, 134, 138, 141, 145
- Industrial Relations Act — PacLII 1986 Revised Edition
- Mamugoba v New Britain Palm Oil Ltd [2024] PGNC 419; N11082
Before relying on anything here, read the current text of the Employment Act (Chapter 373) and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.