Sections 80 and 81 of the Employment Act (Chapter 373) govern the mechanics of payment. Sections 92 and 95 stop the two abuses those mechanics were designed to prevent.
Section 80 — where and when
Wages shall be paid on work days, during working hours, at or near the place of employment.
Three requirements, each of them practical. A worker should not have to give up a rest day, travel in their own time, or go to a distant office to collect pay.
Section 81 — currency, and payment to the employee
Wages paid to an employee (a) shall be in Papua New Guinea currency; and (b) shall, subject to subsection (2), be paid directly to the employee.
Payment in goods, credit at a store, or foreign currency does not satisfy section 81(1)(a). Payment to a supervisor, a relative, a village leader or a labour contractor for onward distribution does not satisfy paragraph (b).
Where an employee who is absent authorises in writing a person to receive his wages on his behalf, the employer may pay that authorised person.
Note the conditions: the employee must be absent, and the authority must be in writing. Keep the authority on file — it is the employer’s only protection against having to pay twice.
Section 81(3) — bank accounts, cheques and postal orders
(a) the employee makes a written request to the employer; or
(b) a registered award applicable to the employee so provides.
Where one of those applies, payment may be made (c) into an account at a bank or savings society standing in the name of the employee, or the employee jointly with one or more other persons; (d) by postal order; or (e) by cheque.
An employer cannot simply announce that pay will now go into accounts. It needs either a written request from each employee or a registered award that provides for it.
And the account must stand in the employee’s name (alone or jointly). Paying into an account controlled by a supervisor, a labour contractor or a group leader does not comply, whatever the arrangement is called.
Section 92 — you decide how to spend it
(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.
This is the Act’s prohibition on the truck system — tying wages to purchases from the employer. Note that subsection (1) catches an attempt to limit the right, and that subsection (2) makes even a contract or award ineffective to compel purchases from the employer’s shop.
It runs together with section 134: an employer, or a member of the employer’s staff or family, who uses undue influence to induce an employee or accompanying dependants to purchase goods from any person is guilty of an offence (fine up to K300.00). And with section 91, which prohibits deductions by way of discount, interest or similar charge for an advance, or as a reward for providing or retaining employment.
Section 95 — not in a shop, canteen or bar
An employer who pays any 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.
The point is obvious once stated: paying wages where they can immediately be spent on the employer’s own goods or on alcohol invites exactly the outcome the section is designed to prevent. Read with section 80, wages belong at the place of employment, on a work day, in working hours.
What must accompany payment
| Section | Requirement |
|---|---|
| 82 | A written statement or endorsed pay envelope at each payment |
| 83 | A wages record of what was paid to each employee and every deduction with its reason |
| 78 | The maximum interval between payments |
| 88 | Only authorised deductions, with prior written consent, capped at 50% |
| 96 | Offence to fail to pay, or to make unauthorised deductions — up to K500.00 |
Section 75 — employment agents
An employer may, by instrument, authorise an employment agent to perform any or all of its functions under Part V. The obligations remain the employer’s: section 75 permits delegation of the task, not of the liability, and section 150(3) makes the same point generally — appointing someone to perform the employer’s functions does not relieve the employer of its duties, civil or criminal.
Checklist
- Paid in kina, directly to you.
- On a work day, in working hours, at or near the workplace.
- Bank payment only if you asked in writing or an award provides for it — and into an account in your name.
- Never in a shop, canteen or bar unless you work there.
- No compulsion to buy from the employer’s store — not by contract, award or order.
- A written statement with every payment.
- If someone else collects your pay, make sure the written authority under section 81(2) exists and that you were in fact absent.
- Report breaches to a labour officer — sections 92, 95 and 96 all carry penalties, and section 145 lets the Secretary prosecute and appear for you.
Sources
- Employment Act (Chapter 373) — ss 75, 78, 80–83, 88, 91, 92, 95, 96, 134, 145, 150
- Industrial Relations Act — PacLII 1986 Revised Edition
- Bar v Kora [2008] PGNC 17; N3290
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.