One of the earliest labour legislations in India, the Minimum Wages Act was
enacted in 1948 immediately after India attained Independence. But even today a
large section of the workforce remains outside the purview of the Minimum Wages
Act.
The Minimum Wage Act,1948 derives its principle from Article 43 enshrined in the
Directive Principles of the Constitution of India which mandates that "The state
shall endeavour to secure, by suitable legislation or economic organisation or
in any other way, to all workers, agricultural, industrial or otherwise, work, a
living wage, conditions of work ensuring a decent standard of life, and full
enjoyment of leisure and social and cultural opportunities in particular" to
ensure a fair deal to the labour class.
Further, Article 39 of the Constitution
of India also reinforces that the State shall, in particular, direct its policy
towards securing (a) that the citizen, men and women equally shall have the
right to an adequate livelihood and (b) that there is equal pay for equal work
for both men and women.
As of today minimum wages varies across different industries in the same State
and across States for the same industry. This raises the question of how have
the introduction of National Floor level Minimum Wages influenced the trend of
minimum wage fixation in general as well as the actual wages. This Paper first
tries to analyse the evolution of the minimum wages policy in India,
introduction of NFLMW, the trend in actual wage levels of the lowest paid viz;
the agricultural and rural workers and influence of statutory minimum wages in
poverty reduction, gender pay gap and the influence of Mahatma Gandhi National
Rural Employment Guarantee Act.
Introduction
The economic policies and labour laws complement each other in India. To ensure
the social justice and economic well-being of the workers, the Parliament
enacted the Minimum Wages Act, 1948. Enacted to address the growing concerns of
worker exploitation and inequality, the Act has far-reaching implications for
both employees and employers. The primary objective of the Minimum Wages Act,
1948 is to safeguard the interests of the workers by providing a mechanism for
ensuring a bare minimum level of remuneration.
From agriculture and manufacturing to the service industry, the Act plays a
pivotal role in establishing equitable compensation structures. Additionally,
there are various challenges in implementing and adhering to the stipulated
minimum wages, considering the dynamic nature of economic landscapes and the
diverse needs of an expanding workforce.
The Act categorises the workers into skilled, semi-skilled and unskilled
labourers and provides the mechanism for fixing separate minimum wages for each
class of labour. In this article, an attempt has been made to analyse the
important provisions of the Act, along with the important judicial
pronouncements by various Courts of the country. Further, the provisions of the
Act have been compared with the provisions of the Code on Wages, 2019, in order
to ascertain what changes would be implemented through the new legislation.
Need for minimum wages
The exploitation of labourers in India became a norm at one point in history. Be
it the Mughal period or the British rule, the labourers have always suffered
economically as well as socially. To improve the situation of the labourers in
the country, the State strives to eliminate poverty. By fixing the minimum wages
for the labourers, the State tries to achieve the social objective of
eradicating poverty of the labourers by guaranteeing a minimum remuneration for
the work done, as well as the economic objective of motivating the workers to
put in maximum efforts for maximum benefits.
These benefits include, but are not
limited to, the following:
- Protecting workers from exploitation: By providing a minimum wage for a fixed number of hours, the exploitation of the workers shall be reduced to a great extent.
- Ensuring a basic income: Minimum wages are fixed and revised based on adequate living standards. Thus, fixing minimum wages for the workers shall ensure a basic income for them.
- Reducing income inequality: The disparity in income can be reduced by fixing the minimum wages of the workers.
- Promoting economic stability: Fixing minimum wages for the workers shall provide a way to promote economic stability by improving the standard of living.
- Setting labour standards: By reducing the exploitation of workers, the standard of work would improve to a great extent.
- Addressing poverty: Fixing minimum wages of the employees paves the way for poverty eradication by encouraging more people to undertake work of any kind.
History of minimum wages
With the onset of the Industrial Revolution, the gap between the rich and the
poor became wider. The poor were forced to work in factories and establishments
to sustain themselves. This was the period when the need to have a law to
protect the workers was felt. The Industrial Revolution in India arrived as late
as 1854 when India was still a colony of the British. The first discussion in
India regarding minimum wages followed its international counterpart, i.e., the
Draft Convention adopted at the International Labour Conference, 1928, in the
form of the Royal Commission on Labour.
The Commission pointed out the need to
adopt a structured wage system for the labourers. The question of wage-fixing
machinery was again raised at the third and fourth meetings of the Standing
Labour Committee held in 1943 and 1944 respectively. Lastly, the Minimum Wages
Bill was introduced in 1946 and enacted in 1948.
Objectives of Minimum Wages Act, 1948
The main objectives of the Minimum Wages Act, 1948 are as follows:
- To fix and revise the minimum wages to be paid by the employer to the employees in certain employments;
- To fix an adequate minimum wage for all employees in the interest of the public;
- To fix the daily working hours of an employee according to the employment type;
- To prevent exploitation of the workers;
- To resolve any issues pertaining to the non-payment or less payment of wages;
- To establish and provide the powers and duties of inspectors;
- To establish and provide the powers and duties of labour commissioners and other important labour officers;
- To provide the powers to make rules to the appropriate government.
Application of Minimum Wages Act, 1948
The Minimum Wages Act, 1948, is applicable to the whole of India as provided
under Section 1 of the Act. The appropriate government may fix minimum wages for
scheduled employment if more than one thousand employees are employed in the
given industry in the whole State, as provided under Section 1A of the Act.
However, it is pertinent to note that this is not a mandatory condition for the
application of the Act. The appropriate government may fix and revise minimum
rates of wages for employment wherein less than one thousand employees are
employed.
Important provisions of Minimum Wages Act, 1948
Important definitions
Appropriate Government
Since labour law is a subject under the Concurrent List in the Seventh Schedule
to the Indian Constitution, both the Central Government and the State
governments are authorised to legislate on the subject. Section 2(b) of the Act
defines an appropriate government. In relation to industries such as railways,
oilfields, major ports, or any establishment under central legislation, the
Central government is the appropriate government. In every other industry, the
State government is the appropriate government for the purpose of the Act.
Cost of Living Index Number
Section 2(d) of the Act defines the cost of living index number as an index
number as ascertained by the appropriate government in the Official Gazette in
relation to the employees. Under the Act, the appropriate government determines
the scheduled employment, in respect of which it notifies the minimum wages to
be paid by the employer to the employees. The minimum wages are determined on
the basis of the cost of living index number. The cost of living index number
signifies the cost of a constantly changing standard of living.
Wages
Section 2(h) of the Act provides an inclusive definition of wages, including all
remuneration capable of being expressed in terms of money that the employer pays
to the employee during the course of employment. It also includes house rent
allowance. However, it does not include any accommodation, supply of light,
water, medical attendance, or any other amenity as the appropriate government
may deem fit; any contribution of the employer towards the Pension Fund or
Provident Fund; travel allowance; defrayed special expense; and any gratuity
payable on discharge of the employee.
In
Workman represented by Secretary v. Reptakos Bret & Company Ltd. & Anr.
(1992), the Hon'ble Supreme Court took into consideration the Tripartite
Committee of the Indian Labour Conference of 1957. The report of the Committee
stated that the structure of the minimum wage policy has to be nothing more than
at a subsistence level.
In
Municipal Corporation of Delhi v. Ganesh Razak (1995), the Supreme Court held
that the entitlement to minimum wages under the Act is an existing right of the
workman and does not require any further adjudication than that of the Labour
Court.
Employee
Section 2(i) of the Act defines an employee as any person who is engaged to do
any skilled or unskilled, manual or clerical work, in respect of which minimum
rates of wages have been fixed. It is an important definition under the Act as
it defines the scope of its application. Not all employer-employee relations are
governed by the Minimum Wages Act. Moreover, not all kinds of employees would
fall under the ambit of claiming the benefits of minimum wages fixed by the
appropriate government.
Fixing Minimum Rates of Wages
Section 3 of the Act provides for fixing the rates of the minimum wage by the
appropriate government. Sub-section (1) provides that the appropriate government
shall fix the minimum rate of wages payable to the employees in employment
mentioned under Part I or Part II of the Schedule to the Act (Scheduled
Employment) and review the minimum wages for a period of five years. Sub-section
(1A) provides that the appropriate government may refrain from fixing minimum
wages for any Scheduled Employment where the number of employees in the whole
State is less than one thousand until such number remains less than one
thousand.
Sub-section (2) provides that the appropriate government may fix:
- Minimum time rate;
- Minimum piece rate;
- A guaranteed time rate;
- An overtime rate.
Sub-section (3) provides the power to the appropriate government to fix different rates of minimum wages for the following:
- Different scheduled employments;
- Different classes of work in the same scheduled employment;
- Adults, adolescents, children and apprentices;
- Different localities.
These minimum wages can be fixed either on an hourly basis, by the day, by the
month, or by any other time period as prescribed by the appropriate government.
Section 4 of the Act provides the minimum rates of wages
Minimum rates of wages
shall consist of either:
- a basic rate of wages and a special allowance at a rate to be adjusted, at
such intervals and in such manner as the appropriate Government may direct,
to accord as nearly as practicable with the variation in the cost of living
index number applicable to such workers (hereinafter referred to as the cost
of living allowance); or
- a basic rate of wages with or without the cost of living allowance, and
the cash value of the concessions in respect of supplies of essential
commodities at concessional rates, where so authorised; or
- an all-inclusive rate allowing for the basic rate, the cost of living
allowance and the cash value of the concessions, if any.
Further, Section 5 of the Act provides that the appropriate government may fix
or revise minimum wages either by appointing committees and sub-committees or by
publishing its proposal for the people likely to be affected by such proposals
in the Official Gazette.
In
Standard Vacuum Refining Company v. Its Workmen (1961), the Apex Court held
that the following shall be the guiding principles for the determination of
minimum wages by all wage fixing authorities:
- A standard working-class family should contain 3 units for every earning member, in which the earnings of women, children, and adolescents must be disregarded;
- Minimum food requirement must be calculated on the basis of net calorie intake;
- Clothing must be calculated at the rate of 18 yards per person per annum;
- With respect to housing, the rent corresponding to the minimum area provided for under the Government's Industrial Housing Scheme should be taken into consideration;
- Fuel, lighting, and other miscellaneous items of expenditure must constitute 20% of the total minimum wage.
Later, in
Reptakos Brett & Company's case, the Court added another factor for
fixing minimum wages in addition to the above five. It was held that the
education of the children, medical requirements, minimum recreation, including
festivals, etc., and provision for old age, etc. should further constitute 25%
of the total minimum wage.
With regards to the question of whether dearness allowance would constitute a
part of the minimum wages, the Bombay High Court in the case of Harilal Jechand
Doshi Ghatkopar v. Maharashtra General Kamgar Union (2000) held that the
provisions of the Minimum Wages Act, 1948 do not postulate different criteria
for the calculation of minimum wages. If the employer pays a total wage that is
above the minimum wages fixed under the Act, he cannot be held to be in
contravention of the provisions of the Act, as the total wages would comprise of
basic wages and a dearness allowance.
A similar view has been taken by the Hon'ble Supreme Court in the case of
Airfreight Ltd. v. State of Karnataka & Ors. (1999). The Court held that in
cases where the minimum wages are linked with the cost of living index, the
amount paid on the basis of dearness allowance is not to be taken as an
independent component but rather has to be considered a part and parcel of the
minimum wages.
Advisory board under Minimum Wages Act, 1948
Section 7 of the Act establishes the Advisory Board. The scope of the Advisory
Board appointed by the appropriate government is the coordination of the
committees and sub-committees established under Section 5 of the Act and
advising the appropriate government on fixing and revising the minimum wages for
Scheduled Employment. A Central Advisory Board (CAB) shall be established under
Section 8 of the Act. The Central Government shall establish CAB and appoint its
members.
The members shall consist of an equal number of representatives of both
the employers and the employees, along with independent members nominated by the
Central Government. The Chairman of CAB shall be an independent member. The
scope of work of the CAB is to ensure coordination with the Advisory Board and
other matters under the Act.
Mode of payment of wages under Minimum Wages Act, 1948
All the wages shall be paid in cash only, as provided under Section 11 of the
Act. However, where it has been a practice to pay the wages in kind, either
wholly or partly, authorisation from the appropriate government is necessary.
This includes concessions on essential commodities as required.
Section 12 of the Act provides the manner in which the employees have to make
the payment of the minimum wages. The provision provides that the employer shall
pay the minimum rates of wages to every employee working under him within the
prescribed time period.
Fixing hours for a normal working day under Minimum Wages Act, 1948
Section 13 of the Act provides that the appropriate government may fix the
working hours in the following manner:
- Fix the working hours of a normal day, including one or more specified intervals.
- Provide a day of rest in every period of seven days to all the employees or a class of employees, and adequate remuneration must be provided to the employees during the day of rest.
- Provide payment to the employees on the day of rest, which shall not be less than the overtime rate.
Section 14 of the Act provides that where an employee works over the specified
number of hours in a normal working day, he shall be entitled to receive such
overtime wages at the rate fixed under the Act for every hour after his normal
working hours.
In case an employee works for less number of hours in a normal working day than
prescribed, he shall still receive the minimum wages fixed under the Act.
However, this provision shall apply only if the lower number of hours of work
was not caused by the unwillingness of the employee. The provision has been
provided under Section 15 of the Act.
Compliance under Minimum Wages Act, 1948
Section 18 of the Act mandates the maintenance of records and registers by every
employer under the Act. The records shall contain the particulars of the
employees employed by the employer, the work performed by them, the wages paid
to them, the receipts given by them, and any other information prescribed by the
appropriate government. The employer also has to keep an exhibit of the factory,
workshop, or place where the scheduled employment is carried out. Such registers
and records may be perused by the inspector appointed by the appropriate
government under Section 19 of the Act. The inspector may:
- In order to examine the register, a record of wages, etc., the inspectors may enter the premises or places within the local limits of their authority where the employees are employed to work and for which minimum rates of pay have been determined under the Act.
- Examine any person whom the inspector may have reasons to believe is an employee.
- Require any contractor to provide information relating to the employees.
- Seize or make copies of the wage registers, etc., which he may have reasons to believe were committed by the employer.
- The appropriate government may provide any other powers or duties under the Act.
Every inspector under the Act shall be deemed to be a public servant as
prescribed under the Indian Penal Code, 1860.
Claims under Minimum Wages Act, 1948
The appropriate government may, by notification to the Official Gazette, appoint
any Commissioner for Workmen's Compensation or any officer of the Central
Government exercising functions as a Labour Commissioner for any region, or any
officer of the State not below the rank of Labour Commissioner, or any other
officer with experience as a judge of a Civil Court or as stipendiary Judicial
Magistrate to be the Authority to hear and decide for any specified area all
claims arising out of payment of less than the minimum rates of wages or in
respect of wages not paid within the prescribed time limit. A Block Development
Officer, Tahsildar, Additional Tahsildar, or Naib Tahsildar can also be
appointed as an Authority by the State Government by notification in the
Official Gazette.
For the procedure under an application under Section 20 of the Act is made to
the Authority, both the employers and the employees shall be granted an equal
opportunity of being heard. Under this Section, every direction of the Authority
shall be binding and final. The Authority appointed under the Act shall have the
powers of a Civil Court under the Code of Civil Procedure, 1908 for the purposes
of taking evidence, enforcing the attendance of witnesses, production of
documents, etc.
Procedure before the Authority
The following is the procedure to be followed before the Authority under the Act
in cases relating to non-payment or payment of less than minimum wages fixed
under the Act, as prescribed under Section 20:
- Both the employers and the employees shall be granted an equal opportunity to present their case.
- The Authority shall direct the refund of such amount of wages as has not been paid by the employer to the worker or has delayed in paying the wages, along with compensation to the extent of damages suffered by the worker.
- However, if the employer proves that the delay in payment of wages was due to a bona fide error, the Authority shall not direct any payment of compensation. An example of a bona fide error could be that the person authorised to make the payment of wages did not pay such wages even after due diligence of the employer.
Penalty under Minimum Wages Act, 1948
For a malicious or vexatious application of a claim under the Act, a penalty of
not more than fifty rupees may be levied on the applicant to be paid to the
employer, as has been provided under Section 20(4) of the Act. Sub-section (5)
of Section 20 of the Act provides the mechanism for recovery of the penalty. If
the Authority is a Magistrate, the penalty may be recovered by the Authority as
if it were a fine imposed by the Magistrate. If the Authority is not a
Magistrate, the Authority has to make an application to the Magistrate and the
penalty shall be recovered by the Magistrate as a fine imposed by such
Magistrate.
For employers who have paid less than the minimum wage under the Act, or who are
in contravention of an order passed under Section 13 of the Act, the punishment
may extend to a term of not more than six months or a fine of not more than five
hundred rupees may be imposed, subject to the amount of compensation awarded to
the Applicant under Section 20 of the Act.
Exemption from liability in certain cases under the Minimum Wages Act, 1948
Section 23 of the Act provides that where an employer has been accused of
committing any offence under the Act, and he charges the offence upon any other
person, the employer shall be entitled to be discharged of such an offence if
the following conditions are fulfilled:
- The employer shall make a complaint against such other person before the Authority under the Act;
- The employer shall bring before the Court such other person upon whom he places the charge of the offence;
- The employer shall satisfy the Court that due diligence for the execution of the provisions of the Act was conducted on his behalf;
- The employer shall satisfy the Court that such an offence was committed by such other person without his knowledge, consent, or connivance.
In such cases, the other person shall be convicted for the offence and the
employer shall be discharged. If the Court deems it necessary, it may examine
the employer under oath.
Power to make rules under Minimum Wages Act, 1948
Section 30 of the Act provides that the Appropriate Government may, by
notification in the Official Gazette, make rules for the following purposes:
- Term of office of members of the committees, sub-committees, and the Advisory Board;
- Method of summoning the witnesses, production of documents relevant for enquiries before the committees, sub-committees, and Advisory Board;
- Mode of computation of cash value of wages in kind;
- Time and conditions of payment of, and deductions permissible from wages;
- Adequate publicity of minimum wages fixed under the Act;
- Provide a day of rest in every period of seven days and for the payment of remuneration in respect of such a day;
- Prescribe the number of hours constituting a working day or week, as may be applicable;
- Prescribe the manner in which the wages of an employee employed for less number of hours/days is to be computed;
- The form of registers and records to be maintained, along with the particulars to be entered in such registers and records;
- Provide for the issue of wage books for wage slips and attendance cards;
- Powers of the Inspectors under the Act;
- Regulate the costs of proceedings under the Act;
- Prescribe the court fee for the cases under the Act;
- Provide for any other matter that is to be or may be prescribed.
Constitutionality of Minimum Wages Act, 1948
The constitutionality of the Act has been challenged on the grounds of violation
of Article 14 and Article 19 of the Constitution in the following cases:
Bijay Cotton Mills Ltd. v. State of Ajmer (1954)
In this case, there was an industrial dispute between the employers and
employees of the mill regarding the enhancement of wages. The dispute was taken
to the Industrial Tribunal, which dismissed the petition of the employees,
stating that the financial capacity of the mill precludes the enhancement of
wages for the workers. An appeal was preferred before the Appellate Tribunal.
Meanwhile, the Government of Ajmer implemented the provisions of the Act and
prescribed the minimum wages for industries in Ajmer. The Appellate Tribunal
remanded the case and the final award of the Industrial Tribunal was passed,
wherein the basis on which the minimum wages were fixed was rejected by the
Tribunal. The minimum wages fixed by the Commissioner were challenged by various
industries on the ground that the Act itself was violative of Article 19(1)(g)
of the Constitution, as the employers were unable to carry out their businesses
due to the condition of paying the minimum wages.
The Hon'ble Supreme Court of India, rejecting the contention of the employers,
held that the Minimum Wages Act, 1948, is not violative of the right to freedom
of trade, as it has been implemented as a part of the Directive Principles of
State Policy, specifically under Article 43 of the Constitution. While it may be
difficult for certain employers to start their business while complying with the
payment of minimum wages, the provisions of the Act have been adopted keeping
the larger interests of people in mind. Thus, the Act was held to be
constitutional.
Bhikusa Yamasa Kshatriya v. Sangamner Akola Taluka Bidi Kamgar Union (1958)
In this case, the validity of the Minimum Wages Act, 1948, was again challenged
before the Hon'ble Bombay High Court. There were various claims under Section 20
of the Act on the applicability of minimum rates of wages in certain districts
of the State of Bombay. Inter alia other contentions, the employers challenged
the validity of the Act on the grounds that it was violative of Article 14 and
Article 19(1)(g) of the Constitution and that the State of Bombay did not follow
the requisite procedure for determining the minimum rates of wages.
Rejecting the contentions of the employers, the Court held that the petitioners
failed to establish that the requisite procedure was not followed by the State
of Bombay while determining and revising the minimum wages and that the
provisions of the Act were violative of Article 14 or Article 19(1)(g) of the
Constitution.
N.M. Wadia Charitable Hospital & Ors. v. State of Maharashtra & Ors. (1986)
In this case, the State of Maharashtra appointed a committee to advise on the
matter of the revision of the minimum wages payable to hospital employees.
However, the government did not adopt the rates of wages recommended by the
committee in its report but rather adopted a higher rate of minimum wages. The
notification was challenged by the petitioners on the ground that there was no
application of mind by the government.
It was held by the Court that fixing different rates of minimum wages for
different localities was permissible under the Act and did not violate any
provisions of the Constitution.
Code on Wages, 2019
In order to codify the existing labour laws and bring them in conformity with
contemporary times, the Central Government in 2019-20 consolidated 29 statutes
into four Codes, namely, the Code on Wages, 2019; the Occupational Safety,
Health and Working Conditions Code, 2020; the Code on Social Security, 2020; and
the Industrial Relations Code, 2020. Although these codes are yet to be
enforced, they hold importance in contemporary times.
The Code on Wages, 2019 consolidates four major statutes, namely, the Payment of
Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965;
and the Equal Remuneration Act, 1976. While a microscopic view of the
differences between the two statutes (the Minimum Wages Act, 1948 and the Code
on Wages, 2019) would be a redundant task as the Code has not been enforced yet,
a preliminary comparison has been provided as follows:
- The definition of cost of living index number has been omitted from the Code and no alternative has been provided.
- The definition of appropriate government has been changed to include certain important industries such as air transport services, telecommunications, banking and insurance companies established by the Central Government, and the Central Government shall be the appropriate government for such industries.
- The definition of employer now includes contractors and the legal representative of a deceased employer.
- The scope of wages has been defined with more clarity as to what would constitute a wage and what would not constitute a wage. For instance, dearness allowance and retaining allowance would now be included as wages under the Code on Wages, 2019.
- The categorization of employment has been changed significantly. Under the Minimum Wages Act, 1948, the categorization was based upon agricultural and non-agricultural work. However, under the Code on Wages, the categorization has been done on the basis of skill level, and employment has been divided into highly skilled, semi-skilled, and unskilled. This aids in a more systematic division of labour for the purposes of fixing minimum wages.
- The concept of floor wage has been introduced by the Code. Floor wage shall be the basis of the determination and fixing of minimum wages under the Code.
- The time frame for revising minimum wages has been reduced from five years to three years. Moreover, the appropriate government cannot exceed the limit of three years in any case.
- The Code also takes into consideration the geographical aspect, such as the fixation of minimum wages for workers employed in hills, plains, deserts, etc. Consequently, the minimum wages may be fixed according to time work, piece work, or periods of hours by day or month. Another aspect that shall be taken into consideration is the arduous nature of the job like underground work, hazardous work conditions, etc.
The concept of Floor Wage under the Code
The concept of floor wage has been introduced under the Code on Wages, 2019,
which was not provided under the Minimum Wages Act, 1948. Floor wages can be
understood as the basis on which the appropriate government has to decide the
minimum wages. Floor wages may be differentiated on the basis of location and
type of work. For example, the floor wages of a work in the hills to be
performed by an unskilled labour may be different from a similar work to be
performed in a desert.
It is pertinent to note that the rationale behind introducing floor wages is to
bring uniformity to the minimum wages to be paid to employees. It would also
help keep the migration of workers in check.
Floor wages are to be fixed by the Central Government under Section 9 of the
Code on Wages. The Central Government may prescribe the floor wages of a
particular area. The appropriate government is obliged to follow floor wages
while fixing minimum wages. The appropriate government, under no circumstances,
can fix the minimum wages below the level of the floor wages fixed by the
Central government. Moreover, the appropriate government cannot reduce the
minimum wages already fixed if it is higher than the floor wages.
The Central Government can seek the advice of the Central Advisory Board under
the Code for the determination of floor wages. Additionally, the revision of
floor wages cannot exceed the time limit under the Code, i.e., five years.
The concept of floor wages was introduced by the Bhootlingam Committee in 1978
in the name of "National Wage." Thereafter, in 1991, the National Commission on
Rural Labour Floor suggested the "National level floor minimum wages." However,
the Code on Wages, 2019 is the first statute to implement this concept.
Recent judicial pronouncements
Mohd Imran Ahmad v. Government of NCT of Delhi & Anr. (2023)
In this case, the petitioner filed a Public Interest Litigation (PIL) against
the Government of NCT of Delhi under Article 226 of the Constitution, praying
for the issue of a writ of mandamus. The Government of Delhi maintains a job
portal where several vacancies are posted. It was the case of the petitioner
that the jobs posted under the portal were not in compliance with the provisions
of the Minimum Wages Act, 1948, as well as notifications fixing minimum wages
notified by the Government of Delhi. The portal allowed employers to post
advertisements regarding vacancies.
The Court directed the Government of the NCT of Delhi to not allow any
advertisements that are not in compliance with the provisions of the Minimum
Wages Act, 1948.
Assistant Provident Fund Commissioner v. M/s G4s Security Solutions (India)
Ltd. & Anr. (2023)
In this case, the Assistant Provident Fund Commissioner preferred an appeal
against the order passed by the Hon'ble Punjab and Haryana High Court which
stated that the basic wages under the Employee Provident Fund Act, 1952, are not
required to comply with the minimum wages fixed under the Minimum Wages Act,
1948. The appellant contended that for the purpose of determining the liability
of the employer towards the employee's provident fund, the employers have
deliberately reduced the basic wages below the minimum wage so as to evade
liability.
However, the Hon'ble Supreme Court rejected this contention and upheld the order
of the Hon'ble High Court, stating that there is no need to equate the basic
wages under the EPF Act with the minimum wages under Section 4 of the Minimum
Wages Act, 1948.
Karnataka General Labour Union v. Union of India & Ors. (2023)
In this case, the Labour Union was seeking relief against the retrenchment of
contractual employees as well as non-payment of wages. Several cases were filed
under the Minimum Wages Act, 1948, to obtain relief through conciliation. In the
conciliation proceedings, the conciliator directed the respondent to maintain
the status quo. As the respondent refused to do so, the conciliation proceedings
failed. The case was presented before the Hon'ble Karnataka High Court.
The Labour Union contended that the respondents were bound by the undertaking
given to the conciliator, and violation of the same must not be tolerated. On
the other hand, the respondents claimed that the Labour Union misrepresented
themselves as permanent employees of the respondents, and hence the case must be
dismissed.
While remanding the case to conciliation proceedings, the Court highlighted the
importance of conciliation proceedings in industrial disputes. The Court also
directed the conciliator to settle the issue regarding the payment of minimum
wages to the workers.
Hindustan Sanitaryware and Industries Ltd. & Ors. v. The State of Haryana
(2019)
In this case, the Haryana Government issued a notice fixing the minimum wages
under Section 5 of the Minimum Wages Act, 1948. In the said notification, a
criterion for considering unskilled labour as semi-skilled and semi-skilled
labour as skilled on the basis of experience level was prescribed.
The said notification was challenged before the Hon'ble Punjab & Haryana High
Court. The High Court upheld the validity of the notification. A Special Leave
Petition was preferred by Hindustan Sanitaryware and Industries Ltd. before the
Hon'ble Supreme Court. The Supreme Court, while overturning the decision of the
High Court, held that such classification of workers based on their experience
level would be in contravention of the contract between the workers and the
employers, which is beyond the jurisdiction of the government.
Conclusion
The Minimum Wages Act, 1948, is a pivotal piece of legislation under the labour
laws of India. It provides a guarantee of minimum remuneration for the work done
by the employee. Both the Central Government and the State Governments are
appropriate governments under the Act, as labour law is a subject under the
Concurrent List. Accordingly, both governments can fix and revise minimum wages
according to the requirements of the employees falling thereunder. Moreover, the
State Governments can also make amendments to the Act for application in their
respective States.
Apart from providing provisions for minimum wages, the Act also contains
provisions relating to the fixation of work hours, providing a day off after six
days of work, provision for minimum wages for overtime, etc. This ensures that
not only the economic interests but also the social interests of the labourers
are protected.
The Parliament has enacted the Code on Wages, 2019, which shall repeal and
replace the Minimum Wages Act, 1948, to consolidate all the laws related to
wages into one code. However, the Code has not been enforced yet. The Code will
bring along certain important changes, as has been discussed in the article. The
implementation of the Code is expected to overcome the lacunae and
inconsistencies in all the labour legislations relating to wages.
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