Section 48 of the Code on Wages, 2019: Audit of Accounts of Employers Not Being Corporations or Companies
Section 48 deals with the audit of accounts of an employer who is not a corporation or a company when a claim, dispute or appeal concerning bonus is pending. It links such audits to the evidentiary framework in Section 47 and provides a mechanism for directing, arranging and recovering the cost of an audit where necessary.
What Section 48 covers
The provision applies to an employer that is not a corporation or a company. Its subject is a pending claim, dispute or appeal relating to bonus payable under the Code. The relevant proceeding may be before the authority, appellate authority, Tribunal or arbitrator referred to through Section 47.
For Section 48, an important cross-reference is Section 141 of the Companies Act, 2013. That provision deals with eligibility, qualifications and disqualifications of company auditors. In general, a person is eligible for appointment as an auditor of a company only if the person is a chartered accountant, subject to the further qualifications and disqualifications stated in Section 141.
Text and explanation of Section 48
Section 48(1). Where a claim, dispute or appeal regarding bonus payable under the Code is pending between a non-corporate employer and employees, and the employer produces accounts audited by an auditor duly qualified under Section 141 of the Companies Act, 2013, the provisions of Section 47 apply, so far as may be, to those audited accounts.
Meaning: Properly audited accounts of a non-corporate employer are brought within the Section 47 framework. Section 47 concerns the treatment of audited balance sheets and profit and loss accounts in bonus proceedings and the circumstances in which clarification or further audit-related directions may be required.
Section 48(2). If the relevant authority, appellate authority, Tribunal or arbitrator finds that the employer's accounts have not been audited by such a qualified auditor and considers an audit necessary for deciding the matter, it may direct the employer to have the accounts audited within the specified or further allowed time by the auditor or auditors it considers fit. The employer must comply with that direction.
Meaning: An audit is not automatically ordered in every bonus dispute. The decision-maker must consider an audit necessary for deciding the question before it. Once a valid direction is made, compliance is mandatory.
Section 48(3). If the employer fails to obtain the audit directed under sub-section (2), the authority, appellate authority, Tribunal or arbitrator may itself get the accounts audited by an auditor or auditors it considers fit, without prejudice to Section 54.
Meaning: Failure by the employer does not prevent scrutiny of the accounts. The adjudicatory body may arrange the audit itself. The reference to Section 54 preserves the operation of the Code's penalty provisions where they are otherwise attracted.
Section 48(4). When accounts are audited under sub-section (2) or sub-section (3), Section 47 applies, so far as may be, to the accounts so audited.
Meaning: Whether the employer arranges the directed audit or the adjudicatory body arranges it after default, the resulting audited accounts are treated under the same Section 47 framework.
Section 48(5). The expenses incidental to an audit arranged under sub-section (3), including the auditor's remuneration, are determined by the authority, appellate authority, Tribunal or arbitrator and are payable by the employer. If unpaid, the amount is recoverable by the authority referred to in Section 45(3) in the manner provided there.
Meaning: Where the decision-maker has to arrange the audit because of the employer's failure to comply with an audit direction, the employer bears the determined audit cost. Section 45(3) provides the statutory recovery mechanism for amounts recoverable under the Code.
Section 48 at a glance
| Sub-section | Rule | Practical effect |
|---|---|---|
| 48(1) | Qualified auditor has already audited the accounts. | Section 47 applies, so far as may be. |
| 48(2) | Accounts are not properly audited and an audit is necessary. | The adjudicatory body may direct the employer to obtain an audit. |
| 48(3) | Employer fails to comply with the audit direction. | The adjudicatory body may arrange the audit itself; Section 54 is preserved. |
| 48(4) | Audit occurs under sub-section (2) or (3). | Section 47 applies to those audited accounts. |
| 48(5) | Audit is arranged under sub-section (3). | Employer pays the determined audit expenses; default may be recovered under Section 45(3). |
Related provisions
Section 47 is central because Section 48 repeatedly applies its rules to audited accounts. Section 49 governs appeals against orders under Section 45(2), while Section 54 contains penalties for offences under the Code.
Official legal resources
For the authoritative statutory text and current notifications, refer to the Code on Wages, 2019 on India Code, the Companies Act, 2013 on India Code, and the Ministry of Labour and Employment.
This page is an explanatory legal-information article. For a pending dispute, the statutory text, applicable rules, notifications and facts of the case should be checked together.