18. Minimum Wage Legislation – Industrial Relations, Trade Unions, and Labour Legislation, 2nd Edition

Chapter 18

Minimum Wage Legislation

Chapter Objectives

This chapter will enable students to explain:

  1. To understand the factors and forces leading to the enactment of the Minimum Wages Act, 1948, and its objectives and coverage
  2. Explain the procedures for the fixation and revision of the minimum rates of wages and the role of the Advisory Boards
  3. Describe the powers and functions of inspectors and authorities under the Act
  4. Describe the penalties for offences under the Act, and the provisions relating to cognizance and disposal of cases of offence
  5. Present an assessment of the Act and its working

Objectives of Governmental Regulations of Wages

A potent objective of legislation on wages is the regulation and fixation of the quantum of wages. Although prior to the state intervention in the field of wages, it was accepted that free bargaining between individual workmen and their employers would result in fixation of such wage rates which would satisfy both. Many inquiries revealed that widespread exploitation of women and child labour existed in those industries which were generally carried on a small-scale and, in many cases, even in the homes of the employers. In such industries, the workers did not have and do not have, even now, strong organizations to protect them against the excesses of the employers. Strong public opinion, however, gradually forced the state to adopt legislation for the fixation of minimum wages in such industries.

As early as 1896, the State of Victoria (Australia) adopted a legislation to protect workers employed in certain sweated trades requiring special effort and hard work. These included boot-making, baking, shirt-making, clothing, underclothing and furniture manufacture. Great Britain followed suit by enacting the Trade Boards Act in 1909. In United States also, a number of states adopted legislative measures after 1912 for the fixation of minimum rates of wages particularly for women and minors employed in various occupations and trades. A similar protective legislation—the Minimum Wages Act—was adopted in India in 1948.

The purpose of all these minimum wage laws was to prevent the exploitation of labour and payment of unduly low wages in those industries, where workers were least organized and where employment of women workers and children predominated. It was realized that wages in these industries or occupations were so low that workers engaged, therein, could not earn enough to meet even the bare necessities of life though they might be continually employed. The fixation of minimum wages in these industries or occupations and the imposition of legal obligation on the employer to pay the wage rate so fixed have gone a long way towards mitigating the sufferings and hardships of labour in the unorganized industries or employments, where sweatshop conditions were widely prevalent. Such minimum wage laws have also led to a marked amelioration of other working conditions also.

Another objective of laws regulating the quantum of wages is to fix just and fair wages, taking into account the circumstances prevailing in the industries concerned and the economy as a whole so as to avoid industrial disputes. This objective of promoting industrial peace found expression in the enactment of a series of laws in different countries, providing for machineries either generally, for the settlement and prevention of industrial disputes or exclusively for determining wage rates. The compulsory conciliation and adjudication machinery created under various labour laws in New Zealand, Australia and India as well as the tripartite wages councils set up in Great Britain may be cited as examples. In India, after the adoption of the second 5-year plan, there had been a tendency to get wage differences resolved through wage boards constituted by the Government of India on an ad hoc basis.

At times, the state intervenes to regulate the quantum of wages to control inflationary pressure as happened during the Second World War. For example, in the United States, where wages are normally determined on the basis of free collective bargaining between labour and management, the government had to establish a war labour board during the war to watch and control the working of collective bargaining in the field of wages. Similar steps were also taken in Canada.

Occasionally, the state has also regulated wages for maintaining the purchasing power of the wage-earners and thereby speeding up the pace of economic recovery. Thus, during the period of the Great Depression in the United States, the National Industrial Recovery Administration (NIRA) adopted a policy of wage increase on the assumption that such a measure would increase the purchasing power of the nation, and thereby enlarge production and ultimately accelerate the pace of economic recovery.

Finally, the most comprehensive object of state regulation of wages which is finding expression in a large number of countries today even in the capitalist societies, not to speak of the socialist ones, has been the pursuit of a national income distribution policy and using the wage policy as an instrument of planned economic development.

Thus, in summary it may be said that the state regulation of the quantum of wages seeks to achieve the following main objectives:

  1. Prevention of extra hard work and toil and poverty arising from unduly low wages

  2. Fixation of just and fair wages for preventing industrial disputes

  3. Control of inflationary pressures

  4. Raising purchasing power with a view to speeding up the pace of economic recovery

  5. Wage regulation as a part of a national-income distribution policy and programmes of planned economic development.1

The necessity for fixing minimum rates of wages was realized in India as early as the beginning of the present century, but no concrete measures were adopted for long. The question of fixation of minimum rates of wages was also considered by the Royal Commission on Labour, which in its report submitted in 1931 recommended making investigations in respect of the fixation of minimum rates of wages in small industries like bidi making, wool cleaning, mica works, shellac manufactory and tanning.2 It also recommended the establishment of a minimum wage fixing machinery in these industries and the adoption of necessary legislation. The Commission further suggested setting up of a statutory wage board for fixing minimum wages in plantations of Assam.

A few labour enquiry committees like, Cawnpore Labour Enquiry Committee (1937),3 Bombay Textile Labour Enquiry Committee (1937),4 Bihar Labour Enquiry Committee (1938),5 C.P. and Berar Textile Labour Enquiry Committee (1946)6 and U.P. Labour Enquiry Committee (1946)7 set up by the provincial governments, also made thorough investigations in respect of the wage levels of workers engaged in different types of industries. All these committees favoured the fixation of minimum wages in different industries and employments. Later, the Labour Investigation Committee known as Rege Committee, appointed by the Government of India in 1944, also made investigations in respect of wages and earnings in industrial employments and submitted a main report and 35 ad hoc surveys. The report and surveys revealed the existence of low levels of wages for almost all categories of workers employed in different industries. The committee was of the view that ‘a little or nothing has been done by the principal industries in this country to revise in upward direction the basic wages of their operatives except where the employers have been forced either by the government or by labour’.8

The international labour organization also adopted conventions and recommendations relating to minimum wage-fixing machinery. The Minimum Wage Fixing Machinery Convention (No. 26), 1928, provides for the creation of wage-fixing machinery in certain trades. The convention requires consultation with representatives of employers and workers, before such machinery is applied in trade. It imposes an obligation on the ratifying countries to associate both the employers and workers in the operation of the machinery. The minimum wages fixed by the machinery are to be binding on employers and workers. India ratified the convention in 1955, after the enactment of the Minimum Wages Act, 1948. The Minimum Wage Fixing Machinery Recommendation (No. 30), 1928, requires such a machinery to investigate into the conditions relevant to the trades and to consult the affected interests before fixing minimum wages. The ILO, subsequently, adopted the Minimum Wage Fixing Machinery (Agriculture) Convention (No. 99) in 1951, the Minimum Wage Fixing Machinery Recommendation (No. 89) in 1951 and the Minimum Wage Fixing Machinery Convention (No. 131) in 1970.

The question of the fixation of minimum rates of wages was considered by the Standing Labour Committee and the fifth session of the Indian Labour Conference in 1943. The Standing Labour Committee and the sixth and seventh sessions of the Indian Labour Conference considered the matter again in 1944 and 1945 respectively, and recommended statutory fixation of minimum rates of wages and the establishment of wage fixing machinery in certain industries. In the light of these recommendations, the Government of India introduced the Minimum Wages Bill in the Legislative Assembly in 1946, which was passed on 9 February 1948. The Act came into force from the 15th of March of the same year. The Act was amended several times since its enactment in 1948.

OBJECTS AND REASONS OF THE MINIMUM WAGES BILL, 1946
  1. The justification for statutory fixation of minimum wage is obvious. Such provisions which exist in more advanced countries are even necessary in India, where workers’ organizations are yet poorly developed and the workers’ bargaining power is consequently poor.
  2. The bill provides for fixation by Provincial Governments of minimum wages for employments covered by Schedule of the Bill. The items in the schedule are those where sweated labour is more prevalent or where there is a big chance of exploitation of labour. After sometime, when some experience is gained, more categories of employment can be added and the bill providers for addition to the schedule. A higher period is allowed for fixation of minimum wages for agricultural labour as administrative difficulties in this case will be more than in other employments covered by the schedule. The Bill provides for periodical revision of wages fixed.
  3. Provisions have been made for appointment of Advisory Committees and advisory boards, the latter for coordination work of the advisory committees. The committees and the boards will have equal representation of employers and workmen. Except on initial fixation of minimum wages, consultation with advisory committee will be obligatory on all occasions of revision.
  4. In cases where an employer pays less than the minimum wages fixed by the Provincial Government, a summary procedure has been provided for recovery of the balance with penalty and subsequent prosecution of the offending party.
  5. It is not ordinarily proposed to make any exemption in regard to employers of undertakings belonging to the Central Government, except that difficulties might arise when the sphere of duty of such an employer covers more than one province and where the rates of minimum wages fixed by different provinces may be different. For this purpose, a provision has been included that the minimum wages fixed by a Provincial Government will not apply to employees of a federal railway, except with the consent of the Central Government.

Sweating

Sweating generally means to work under unhealthy conditions, for long hours, or at excessive high speed and for low wages. It also involves taking advantage of the weak position of workers who are unskilled and unorganized.

MINIMUM WAGES ACT, 1948

The Minimum Wages Act, 1948, is the first labour legislation in the country dealing with the fixation of minimum rates of wages for workers employed in different sweated employments including agriculture. The main provisions of the Act as amended till date are described below.

Some Important Definitions

Some important definitions under the Act are reproduced in Box 18.1.

Box 18.1

SOME IMPORTANT DEFINITIONS

Child: A person who has not completed his 14th year of age [Sec.2(bb)].

Adolescent: A person who has completed his 14th year of age but has not completed his 18th year [Sec.2(a)].

Adult: A person who has completed his 18th year of age [Sec.2(aa)].

Appropriate Government: (i) In relation to any scheduled employment carried on by or under the authority of the central government or a railway administration, or in relation to a mine, oilfield or major port, or any corporation established by a central Act, the central government, and (ii) in relation to any other scheduled employment, the state government. [Sec.2(b)].

Scheduled employment refers to employment listed in the Schedule of the Act.

Employer: Any person who employs, whether directly or through another person, one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed. The term ‘employer’ includes: (i) manager of a factory, (ii) in relation to employment under the control of government, the person or authority appointed by the government for the supervision and control of employees or the head of the department, (iii) in relation to employment under a local authority, the person appointed by such authority for the supervision and control of employees or the chief executive officer, and (iv) in other cases, any person responsible to the owner for the supervision and control of the employees or for the payment of wages [Sec.2(e)].

Wages: All remuneration, capable of being expressed in terms of money, which would, if the terms of contract of employment, express or implied were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance, but does not include: (i) the value of any house accommodation, supply of light, water, medical attendance, or any other amenity or service excluded by the appropriate government, (ii) any contribution paid by the employer to any pension fund or provident fund or under any scheme of social insurance, (iii) any travelling allowance or the value of any travelling concession, (iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment or (v) any gratuity payable on discharge [Sec.2(h)].

Employee: Any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed; and includes an out-worker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purpose of trade or business of that other person where the process is to be carried out, either in the home of the out-worker or in some other premises not being premises under the control and management of that other person; and also includes an employee declared to be an employee by the appropriate government; but does not include any member of the Armed Forces of the Union [Sec.2 (i)].

Scope

The Act empowers the central and the state governments, as the case may be, to fix minimum rates of wages in respect of workers employed in the following industries or employments listed in the Schedule of the Act, which contains Parts I and II.

Part I

  1. Woollen carpet making or shawl weaving establishment
  2. Rice mill, flour mill or dal mill
  3. Plantation (any estate which is maintained for the purpose of growing cinchona, rubber, tea or coffee)
  4. Tobacco (including bidi making) manufactory
  5. Oil mill
  6. Local authority
  7. Road construction or building operations
  8. Stone breaking or stone crushing
  9. Lac manufactory
  10. Mica works
  11. Public motor transport
  12. Tanneries and leather manufactory

Part II

Employment in agriculture, that is to say, in any form of farming including the cultivation and tillage of the soil, dairy farming, the production, cultivation, growing and harvesting of any agricultural or horticultural commodity, the raising of livestock, bees or poultry, and any practice performed by a farmer or on a farm as incidental to or in conjunction with farm operations (including any forestry or timbering operations and the preparation for market and delivery to storage or to market or to carriage for transportation to market of farm produce).

The Act empowers the central and state governments, to extend the application of the Act to any employments in their respective jurisdictions, where fixation of minimum rates of wages is considered necessary. In pursuance of this power the central government has extended the application of the Act to a number of employments which are 45 at present.

These include: (1) agriculture, (2) construction/maintenance of roads and building operations, (3) maintenance of buildings, (4) construction and maintenance of runways, (5) gypsum mines, (6) barite mines, (7) bauxite mines, (8) manganese mines, (9) china clay mines, (10) kyanite mines, (11) copper mines, (12) clay mines, (13) stone mines, (14) white clay mines, (15) orchire mines, (16) fire clay mines, (17) steatite (soapstone and talc) mines, (18) asbestos mines, (19) chromite mines, (20) quartzite mines, (21) quartz mines, (22) silica mines, (23) magnesite mines, (24) graphite mines, (25) felspar mines, (26) red oxide mines, (27) laterite mines, (28) dolomite mines, (29) iron ore mines, (30) granite mines, (31) wolfram mines, (32) magnetite mines, (33) rock phosphate mines, (34) hematite mines, (35) marble and calcite mines, (36) uranium mines, (37) mica mines, (38) lignite mines, (39) gravel mines, (40) slate mines, (41) laying down of underground electric, wireless, radio, television, telephone, telegraph and overseas communication cables and similar other underground cabling, electric lines, water supply lines and sewerage pipe lines, (42) loading and unloading in railway goods shed, (43) stone breaking and stone crushing, (44) employment in sweeping and cleaning, and (45) employment in watch and ward.

The state governments have also extended the application of the Act to a number of additional industries/employments, the total number of which is presently about 1,600 (see Table 18.1).

 

Table 18.1 Number of Employments and Ranges of Minimum Wages for the Lowest Paid Unskilled Workers fixed by Central and State Governments (1993 and 2009)

 

Source: Government of India, Ministry of Labour, Annual Report, 1993—94, p.36, for figures of 1993 and Annual Report 2008—09, p. 59 for figures of 2009.

Fixation of Minimum Rates of Wages

The Act empowers the appropriate government—central and state governments—in respect of employments in their respective jurisdictions, to fix minimum rates of wages for time-work or for piece-work and also, a minimum rate of remuneration as guaranteed time-rate (to apply in the case of employees employed on piece-work) and minimum rate of wages for overtime work.

Different minimum rates of wages may be fixed for different scheduled employments, different classes of work in the same scheduled employment, adults, adolescents, children and apprentices, and for different localities. The rates may also be fixed by the hour, by the day, or by any prescribed longer wage period.

Any minimum rate of wages fixed or revised by the appropriate government may consist of: (i) a basic wage rate and a cost of living allowance, or (ii) a basic rate with or without the cost of living allowance and the cash equivalent of the concession, in respect of supplies of essential commodities, at concession rates, or (iii) an all-inclusive rate. The cost of living allowance and the cash value of the concession, in respect of supplies of essential commodities at concession rates, have to be computed by the competent authority and intervals for such computation have to be fixed in accordance with the direction of the appropriate government [Secs.3–4].

The appropriate government may, however, refrain from fixing minimum rates of wages in respect of any scheduled employment in which there are, in the whole state less than one thousand employees engaged in such employment, but if after a subsequent inquiry, it finds that the number of employees in that employment has risen to one thousand or more, it is required to fix minimum rates of wages in respect of employees in that employment, as soon as possible [Sec.3(1A)].

Procedures for Fixing Minimum Rates of Wages

The Act provides for two distinct procedures for the fixation of minimum rates of wages. Under the first, the appropriate government may appoint a committee, and sub-committees for different areas (for assisting the committee in its deliberations) to hold enquiries, and to advise on the question of wage-fixation. On receipt of the recommendations of the committee, the appropriate government is required to fix minimum rates of wages in respect of the employment concerned, by making notification in the official gazette. Under the second procedure the appropriate government may by notification in the official gazette, publish its own proposals of minimum rates of wages for information of persons likely to be affected and specify a date, not less than 2 months from the date of notification, on which the proposals will be taken into consideration. The appropriate government, after considering all representations thus received, will fix minimum rates of wages in respect of the employment by making notification in the official gazette. The minimum rates of wages fixed under either of the procedures are to come into force on the expiry of 3 months from the date of notification, unless the notification specifies a particular date [Secs.5, 10].

Composition of Committees and Sub-committees

Each of the committees or sub-committees is to consist of representatives of employers and employees in the scheduled employments in equal number and independent persons not exceeding one-third of the total number of members, all nominated by the central or state government, as the case may be. One of the independent persons will be appointed as the chairman [Sec.9].

Advisory Boards

The central and the state governments are required to appoint advisory boards for coordinating the work of committees and sub-committees and advising the government generally in the matter of fixing and revising minimum rates of wages. The Advisory Board is also to consist of equal number of representatives of the employers and employees, and independent persons not exceeding one-third of the total number of members—all nominated by the central or state government, as the case may be.

Central Advisory Board

The central government is required to appoint a central advisory board for the purpose of advising the central and state governments in the matters of the fixation and revision of minimum rates of wages and other relevant matters under the Act and for coordinating the work of the advisory boards. The central advisory board is to consist of an equal number of representatives of employers and employees, and independent persons not exceeding one-third of the total number of members—all nominated by the central government. One of the independent members will be appointed as the chairman [Secs.8, 9].

Revision of Minimum Rates of Wages

For revision of minimum rates of wages, the same procedures as applicable to the fixation of minimum rates of wages, that is, appointment of committees and sub-committees and notification of proposals in the official gazette apply, but where the procedure of notification of the proposals is adopted, the government is required to consult the advisory board, too. The revised rates of wages are also to come into force on the expiry of 3 months from the date of the issue of the notification, or on such date as specified in the notification.

The minimum rates of wages fixed under the Act are generally to be revised at a maximum interval of 5 years. However, where the government does not revise the rates within the interval of 5 years, it may do so on a later date, and so long as the rates are not revised, the minimum rates in force immediately before the expiry of the period of 5 years, will continue to remain in operation [Secs.3, 5, 7–9].

Minimum Rates of Wages During Pendency of Industrial Disputes

If in respect of an industrial dispute relating to the rates of wages payable to any of the employees employed in a scheduled employment, any proceeding is pending before a Tribunal or National Tribunal under the Industrial Disputes Act, 1947, or before a like authority under any other law, and a notification fixing or revising the minimum rates of wages in respect of those employees has been issued during the pendency of such proceeding, then the rates of wages fixed or revised under the Act will not apply during the pendency of the industrial dispute. Similarly, minimum rates of wages fixed or revised under a notification remain inoperative for the employees concerned, during the period of operation of an award. If the proceeding before the adjudication authority or the award relates to wages payable to all the employees in the scheduled employment, no minimum rates of wages are to be fixed or revised in respect of that employment during the pendency of proceeding before adjudication authority or the period of operation of award [Sec.3 (2A)].

Mode of Payment

The Act provides for the payment of fixed minimum wages in cash. However, where the system of wage payment in kind is prevalent, the appropriate government may authorize the payment of wages partly in kind. It may, also, authorize the provision of supply of essential commodities at concessional rates. The cash value of wages in kind and rates of concessions are to be estimated in a manner prescribed by the appropriate government. Where no minimum piece-rate has been fixed, the employer is required to pay at not less than the minimum time rate fixed for the work. Where an employee is required to do two or more classes of work, he is entitled to the minimum rate of wage fixed for each class of work separately [Secs.11, 16–17].

Payment of Minimum Rates of Wages and Deductions from Wages

The employer is required to pay to every employee engaged in a scheduled employment wages at a rate fixed by the government without any deductions except those authorized. Where the employments are covered under the Payment of Wages Act, 1936, the provisions of that Act will apply in those employments [Sec.12].

Payment of Wages Act, 1936, to Scheduled Employments

The central and state governments are empowered to direct by notification in the official gazette the application of all or any of the provisions of the Payment of Wages Act, 1936, with or without modifications to wages payable to employees in such scheduled employments as specified in the notification. Where the provisions of the Payment of Wages Act are applied, the inspector appointed under the Minimum Wages Act is deemed to be an inspector under the Payment of Wages Act for the enforcement of the provisions of the latter Act within the local limits of his jurisdiction [Sec.25F].

Hours of Work, Overtime and Weekly Rest, and Others

The central and state governments are empowered to fix normal hours of work for a working day, including one or more intervals in respect of the scheduled employments. They may also provide for a weekly rest and remuneration with respect to the day of rest. The remuneration for work on a day of rest is not to be less than at the overtime rate to be determined by the appropriate government. In all industries covered under the Act, where the Factories Act, 1948 applies, overtime rate is to be governed by the Factories Act, that is, double the normal rates of wages. In all other cases, the overtime rate is the rate fixed under this Act or what has been provided for in other laws in operation in the scheduled employments, whichever is higher.

In respect of the following categories of employees, the above provisions relating to fixation of hours of work for a normal working day, intervals, weekly rest and overtime work apply only to the prescribed extent and subject to prescribed conditions as mentioned below:

  1. Employees engaged on urgent work, or in any emergency which could not have been foreseen or prevented
  2. Employees engaged in work in the nature of preparatory or complimentary work which must necessarily be carried on outside the limits laid down for the general working in the employment concerned
  3. Employees whose employment is essentially intermittent
  4. Employees engaged in any work which for technical reasons has to be completed before the duty is over
  5. Employees engaged in a work which could not be carried on, except at times dependent on the irregular actions of the natural forces.

If an employee is required to work for a period less than the prescribed normal working day, he is entitled to receive wages in respect of work done by him on that day for a full normal day in accordance with the conditions laid down by the government. But in any case, where his failure to work is caused by his unwillingness to work and not by the omission of the employer to provide him work, he is not entitled to receive wages for a full working day [Secs.13–16].

Inspectors

The Act provides for the appointment of inspectors by the central and state governments for the purposes of the Act. The powers and functions of inspector as laid down in the Act are described in Box 18.2.

Box 18.2

POWERS AND FUNCTIONS OF INSPECTORS UNDER THE MINIMUM WAGES ACT, 1948

The Inspector may, within the local limits for which he is appointed:

  1. Enter, with assistants if needed, any premises or place where employees are employed or work is given out to out-workers in respect of which minimum rates of wages have been fixed for the purpose of examining any register, record of wages or notices required to be kept or exhibited and require their production for inspection.

  2. Examine any person or employee found in the premises or place for ascertaining whether he is an employee.

  3. Require any person giving out-work and any outworker to give required information with respect to names and addresses of the persons to, for and from whom the work is given out or received, and with respect to the payments to be made for work.

  4. Seize or take copies of relevant register, record of wages or notices or their portions for ascertaining if offences have been committed by an employer.

  5. Exercise other prescribed powers.

Inspectors are deemed to be public servants within the meaning of the Indian Penal Code. Any person, who is required to produce any document or thing or to give any information by an Inspector, is legally bound to do so. [Sec.19]

Miscellaneous Provisions

Claims

The 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 government not below the rank of Labour Commissioner or any other officer with the experience as a Judge of Civil Court or as a stipendiary Magistrate may be appointed an authority under the Act. The authority is empowered 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 the payment of remuneration for days of rest or for work done on weekly or other rest day or of wages at the overtime rate.

An application for a claim may be submitted by the employee himself or any legal practitioner or any official of a registered trade union authorized by the employee to act on his behalf or any inspector or any person acting with the permission of the authority empowered to hear and decide the cases of claims. Every application is to be made within 6 months from the date on which the minimum wages or other amounts are payable but applications made after such a period may also be entertained if he satisfies the authority that he had sufficient cause for not making the application within such period.

A single application may be presented by any number of employees but the maximum compensation which may be awarded is not to exceed ten times the aggregate amount of the excess withheld by the employer. The authority may also deal with any number of separate pending applications, taking them as a single application.

The authority, after hearing the applicant and the employer, may direct the payment of minimum wages withheld by the employer and may, also, order for payment of compensation not exceeding ten times the amount of such excesses withheld by the employer. In other cases, the authority may direct the payment of the amount due to the employee together with a compensation not exceeding 10. In case the authority is satisfied that the application is either malicious or vexatious, it may direct that a penalty not exceeding 50 be paid to the employer by the person presenting the application.

Every such authority is vested with all the powers of a civil court under the Code of Civil Procedure for taking evidence and enforcing the attendance of witnesses and compelling the production of documents. Every such authority is to be deemed to be a civil court for the purposes of the Code of Criminal Procedure 1898 [Secs.20–1].

Payment of Undisbursed Amounts Due to Employees

If any amounts payable by an employer to an employee as the amount of minimum wages or otherwise due to the employee under the Act or any rule or order made under it could not or cannot be paid to him on account of his death before payment or on account of his whereabouts not being known, they are to be deposited with the prescribed authority which is required to deal with the deposited money in the prescribed manner [Sec.22D].

Protection Against Attachment of Assets of the Employer with the Government

Any amount deposited with the government by an employer to secure the due performance of a contract with the government and any other amount due to such employer from that government in respect of such contract, is not liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the employer other than any debt or liability towards any employee employed in connection with the aforesaid contract [Sec.22E].

Exemption of Employer from Liability in Certain Cases

If an employer is charged with an offence under the Act, he may make a complaint that the actual offender is any other person and if he proves to the satisfaction of the court that he used due diligence to enforce the provisions of the Act, and that the other person committed the offence without his ‘knowledge, consent or connivance’, that other person is to be convicted of the offence and liable to like punishment as if he were the employer and the employer has to be absolved of the offence [Sec.23].

Bar of Suits

No court is authorized to entertain any suit for the recovery of wages if the sum so claimed (a) forms the subject of an application of claim under Section 20 which has been presented by or on behalf of the plaintiff, or (b) has formed the subject of a direction under that section in favour of the plaintiff, or (c) has been adjudged in any proceeding under that section not to be due to the plaintiff or (d) could have been recovered by an application under the section [Sec.24].

Exemptions and Exceptions

The central and state governments are empowered to direct that the provisions of the Act will not apply in relation to wages payable to disabled employees. They may also, for special reasons, direct that the provisions of the Act, whether partly or wholly, will not apply to all or any class of employees employed in any scheduled employment or to any locality where a scheduled employment is carried on.

The government may, if it is of opinion that, having regard to the terms and conditions of service applicable to any class of employees in a scheduled employment generally or in a scheduled employment in a local area or to any establishment or a part of any establishment in a scheduled employment, it is not necessary to fix minimum wages in respect of such employees of that class or in respect of employees in such establishment or such part of any establishment as are in receipt of wages exceeding such limit as may be prescribed, direct by notification in the official gazette, that the provisions of the Act will not apply in relation to such employees.

The Act does not apply to wages payable by an employer to a member of his family who is living with him and is dependent on him. An employer’s family includes his or her spouse or child or parent or brother or sister [Sec.26].

Contracting Out

Any contract or agreement whether made before or after the commencement of the Act, in accordance with which, an employee either relinquishes or reduces his right to minimum rate of wages or any privilege or concessions occurring to him under the Act is null and void insofar as it leads to a reduction of minimum rate of wages fixed under the Act [Sec.25].

Registers and Records

Every employer is required to maintain records and registers containing particulars of employees, work performed by them, wages paid to them, receipts given by them and other prescribed particulars. Notices containing prescribed particulars have to be exhibited in the factory, workshop or a place where the employees in scheduled employments are employed. In case of outworkers, the notice has to be exhibited in such factory, workshop or place which may be used for giving out work to them. The government may under rules provide for the issue of wage-books or wage-slips to employees employed in any scheduled employment in respect of which minimum rates of wages have been fixed and prescribe the manner in which entries are to be made and authenticated in such wage-books or wage-slips by the employer or his agent [Sec.18].

Penalties

Penalties for infringements of the provisions of the Act are shown in Box 18.3.

Box 18.3

PENALTIES UNDER THE MINIMUM WAGES ACT, 1948

  1. Payment by the employer to any employees less than the minimum rates fixed or less than the amount due to them under the Act or contravention of any rule or order relating to hours for normal working day [Sec.13] is punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to 500 or with both [Sec.22].

  2. Contravention by the employer of any other provision of the Act or rule or order made under it is punishable with fine which may extend to 500 [Sec.22A].

  3. Where the claim by an employee is malicious or vexatious, he may be punished with a fine not exceeding 50 which is payable to the employer [Sec.20(4)].

Cognizance of Offences

No court is authorized to take cognizance of a complaint against any person for an offence pertaining to payment of less than the minimum rates of wages fixed or less than the amount due to him, unless an application in respect of the facts constituting such an offence has been presented before an authority [Sec.20] and has been granted wholly or partly and the appropriate government or an officer authorized by it has sanctioned the making of the complaint. Similarly, no court is authorized to take cognizance of a complaint pertaining to contravention of any rule or order made in respect of daily hours of work, intervals, weekly rest and overtime or for such offences for which no penalty is specified except on a complaint made by, or with the sanction of, an inspector. In cases of offences pertaining to payment of less than the minimum rates of wages fixed or less than the amount due to him or contravention of rules or orders pertaining to daily hours of work, intervals, weekly rest and overtime, complaint must be made within 1 month of the grant of the required sanction. In cases of offences for which penalty has not been specified, complaint must be made within 6 months of the date on which the offence is alleged to have been committed.

In case of a company, every person, who at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company is deemed to be guilty of the offence and is liable to be proceeded against and punished accordingly. However, such a person is not liable to punishment under the Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. Where an offence under the Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer of the company is deemed to be guilty of that offence and is liable to be proceeded against and punished accordingly [Secs.22B, 22C].

Power of the Government to Add to the Schedule

The appropriate government is empowered to add to either part of the schedule any employment in respect of which it is of the opinion that minimum rates of wages should be fixed under the Act. It is, however, required to notify its intention of doing so in the official gazette at least 3 months before making addition to the schedule [Sec.27].

Power of the Central Government to Give Direction

The central government is empowered to give directions to state governments for carrying into execution of this Act in the states [Sec.28].

Power of the Central and State Governments to Make Rules

The central government is empowered to make rules prescribing the term of office of the members, the procedure to be followed in the conduct of business, the method of voting, the manner of filling up casual vacancies in membership and the quorum necessary for the transaction of business of the Central Advisory Board [Sec.29].

Both the central and state governments are empowered to make rules for carrying out the purposes of the Act subject to the condition of previous publication by notification in the official gazette.

Working

The figures relating to the number of employments for which minimum rates of wages have been fixed by the central and state governments and the ranges of minimum wages for the lowest paid unskilled workers in 1993 and 2009 are shown in Table 18.1.

Table 18.1 shows the states in which minimum rates of wages were in operation in more than 50 employments in 1993 included: Andhra Pradesh, Bihar, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh. In most states the employments covered were less than 40. In 1993, only in the states of Haryana, Punjab, Maharashtra, Mizoram, Madhya Pradesh, Nagaland and Orissa, the minimum wage rate at the minimum of the range was above 25 per day. At the maximum of the range, the wage rate fixed was 40 and more in the states of Andhra Pradesh, Haryana, Kerala, Maharashtra, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal.

In 2009, the minimum wage rate per day fixed at the minimum of the range was above 100 only in the states of Haryana, Himachal Pradesh, Mizoram, Punjab, Rajasthan and Sikkim.

The rate fixed was below 60 per day in the states of Andhra Pradesh, Arunachal Pradesh, Assam, Gujarat, Maharashtra, Tamil Nadu and Tripura. The minimum daily wage rate fixed at the maximum of the range was above 150 only in the states of Andhra Pradesh, Kerala, Maharashtra, Tamil Nadu and Uttarakhand. In majority of the remaining states, it was less than 120.

In the central sphere, the minimum wage rate fixed varied between 19.82 and 37.37 per day in 1993, and between 78 and 186 per day at the maximum of the range in 2009.

The table reveals wide disparities in the minimum rates of wages fixed in different states at both the minimum and maximum of the range. These disparities may be attributed mainly to absence of specific guidelines or norm for minimum wage fixation and also to the prevailing rates of wages in different areas. These disparities have a potent bearing on the movement of labour from one area to another.

The table also shows that during the period of more than 15 years since 1993, the minimum wages fixed under the Act have increased only moderately. If a comparison is made with the minimum rates of wages prevalent in the organized industries, one will be struck by wide disparities. Besides, in view of the sharp increase in prices of essential commodities, the minimum wage rates fixed under the Act can be said to be too meagre. What is astonishing is that in 1993, the minimum daily wage rate fixed was merely 6 in Karnataka, 6.76 in West Bengal and 7 in Tamil Nadu, which were less than the income needed for earmarking the poverty line. During more recent years, a number of state governments have adopted variable dearness allowances (VDA) as a component of minimum wage, which is likely to give some relief to the workers.

The enforcement of the Act, not to speak of its effective enforcement, has been a herculean task from the very beginning. Application of the Act to millions of agricultural labourers and those in allied activities and employees of other employments scattered throughout the country and in isolated and remote areas and a vast bulk of small employers involves formidable difficulties. The result has been widespread violation of the provisions of the Act and inability of the enforcing machinery to check the malpractices and infringements. The number of irregularities rectified by the Central Industrial Relations Machinery alone varied between 1 lakh and 2.5 lakhs during the period 1994–2009.9 The irregularities detected in the states have been all the more high. In 2006–07 the number of irregularities detected was more than 78 thousand in Gujarat and more than 54 thousand in the states of Maharashtra and Bihar.10 In majority of big states like Bihar, the number of irregularities, detected have been very high from the very beginning.11

An Appraisal

The Act is a laudable measure and ‘a landmark in the history of labour legislation because the whole concept underlying the Act was … new and revolutionary’.12 It recognizes the need for protecting the workers in the unorganized and sweated employments, where widespread exploitation of workers have been rampant. It is also based on the philosophy that wages cannot be left to be determined entirely by market forces. However, there have been certain deficiencies in the legislation and also in regard to its implementation, which call for careful rectification.

 

Sweatshop

A factory or shop where labour is employed under unhealthy working conditions, for long hours, at excessive high speed and for small wages. Employment of children and women in such establishments was a common practice. The early textile industry was one in which sweatshops were widely prevalent.

A primary drawback of the enactment is that it lays no criteria which will guide the government and the minimum wage committees in the fixation of minimum wages. The various committees have to find for themselves and develop their own norms, with the result that in the same locality there may be different rates of wages for similar jobs in different employments. The provision of appointment of advisory boards, both at the centre and in the states, is intended to mitigate the confusion resulting from lack of uniform criteria, but the confusion and disparities have not been eliminated. In India, the Fair Wages Committee and the 15th session of Indian Labour Conference have given the concepts of minimum wage, which have been taken into account by the adjudicators, courts and central wage boards in the fixation of wages and also provided a base for wage negotiations in the organized sector. According to the Fair Wages Committee, minimum wage should provide not merely for the bare sustenance of life but also for ‘some measure of education, medical requirements and amenities’ in order to enable the workman to preserve his efficiency.13 The 15th session of the Indian Labour Conference (1957) evolved the concept of ‘need-based minimum wage’ specifying the food, clothing, housing and miscellaneous requirements of workers and their families and accepted it as the guide for all wage-fixing authorities including minimum wage committees under the Act. The Indian Labour Conference has recommended the fixation of minimum wages on (i) the requirements of three consumption units for one earner, (ii) minimum food requirements of 2,700 calories per average Indian adult, (iii) clothing requirements of 72 yards of cloth per annum per family, (iv) rent corresponding to the minimum area provided for under government’s industrial housing scheme and (v) fuel, lighting and other miscellaneous items of expenditure to constitute 20 per cent of the total minimum wages calculated.14 In 1991, the Supreme Court in its judgement in the case Reptakos Brett and Co. V. its Workmen directed that children education, medical requirement, minimum recreation including festivals/ceremonies and provision of old age, marriage etc., should further constitute 25 per cent of the total minimum wage. However, the Act is completely silent over the norms on which minimum wages are to be fixed leaving ample scope of the exercise of arbitrariness by the committees and advisory boards. This omission of the guidelines in the light of which the minimum rates of wages could be fixed is a serious lacuna when the position is compared with similar laws in operation in the United States, Australia, New Zealand and many other countries where the laws themselves have prescribed the principles for the fixation of minimum wages.

Absence of any norm for the fixation of minimum wages under the Act has resulted in wide disparities in the rates as is clearly evident from Table 18.1. Not only this, in quite a few cases, the rates would yield an income which is less than the income required for the determination of poverty line. This is ridiculous especially in view of ambitious programme of the government for alleviating poverty in the country.

The inclusion of agriculture in the Schedule of the Act is a very progressive step, but it is well known that the fixation of minimum wage for workers engaged in agricultural operations in India is beset with numerous pitfalls and difficulties. It is because of these handicaps that most of the state governments have not been wholly successful in fixing and implementing minimum rates of wages for agricultural operations. Even where wages have been fixed, their payment in many cases is far off from reality. These difficulties were also apprehended in the objects and reasons of the bill.

The pitiable conditions of the agricultural workers naturally evoke sympathy, but sympathy for a cause should not make one blind to the reality of the situation. Having such an Act for the fixation of minimum wages for agricultural workers may be a source of satisfaction to the framers of the Act, but it has hardly succeeded in bringing about a notable improvement in the wages of the agricultural workers in a number of areas. Studies have shown that wages and earnings in agriculture are determined more by economic and market forces than by legal ones. That is why many of the western countries which have longer experience of minimum wage fixation in the ‘sweated’ employments have been reluctant to include agriculture within the framework of minimum wage legislation. In the United States, quite a few state minimum wages laws have not included agriculture till today, though the country has a longer experience of fixing minimum wages in other industries. In Great Britain, where the Trade Boards Acts provided for the fixation of minimum wages in the sweated industries since 1909, the inclusion of agriculture was postponed for a long time. It appears that India rushed in where many other countries feared to tread.

It may not be out of place to refer to the difficulties in fixation of minimum wages in agriculture in India. The first difficulty relates to the immense scale, wide area, and enormously large number of workers to be covered. The fixation of minimum wages for millions of workers scattered over 7 lakhs of villages, and the enforcement of the minimum rates of wages so fixed requires vast machinery which cannot be easily set up.

The second difficulty relates to the large number of small-sized farmers, who are illiterate; who never maintain any records and who are in most cases no better than agricultural labourers.

The third difficulty relates to the multilateral relationship between agricultural employer and his employees. The farmer who employs workers is not merely an employer but is often also a moneylender to his workers. In many cases the agricultural employer is a friend, philosopher, guide, and employer, all combined, to his workers. On numerous occasions the agricultural workers receive from their employers many benefits, donations, other financial as well as non-financial assistance which are complementary to the formal wages that the workers receive. In the case of representation from workers an agricultural wage inspector may tighten his grip over the farmer-employer and force him to pay the prescribed rate of wages. But how many workers dare make such representations? However, during more recent years, the situation has materially changed in many parts of the country. Organized and individual protests have become a regular feature frequently resulting in violence and even blood-shed.

Finally, the sanctity which long-standing customs and traditions have bestowed upon the agricultural wage rates is, itself, an impediment in the implementation of the law. They have acquired a sanction which is, perhaps, stronger than the sanction of law. That is why agricultural employers and workers prefer, in many cases, to abide by their customs and traditions, rather than by law.

Agricultural wages received a serious attention in both the old (1975) and revised (1982) 20-Point Programme. Item 6 of the old 20-Point Socio-economic Programmes emphasized the review of laws on minimum agricultural wages with a view to ameliorate the conditions of agricultural workers. Similarly, the revised 20-Point Programme reiterated reviewing and effectively enforcing minimum wages for agricultural labour. A review of the Minimum Wages Act, 1948 had shown that the Act was sufficiently strong enough to provide for adequate legal minimum wages to the agricultural labourers. Therefore, the directives of the 20-Point Programme have been sought to be achieved by a more vigorous implementation of the Act, upward revision and fixation of minimum wages for the agricultural workers and the gearing up of the enforcement machinery.

After the announcement of the 20-Point Programme, minimum wages for agricultural workers have been suitably revised and fixed in almost all the states and union territories. Side by side, effective steps have been taken to strengthen the enforcement machinery so that agricultural workers are actually in receipt of the statutory rates and benefits. District-level implementation committees have also been set up in most states. Besides, in order to ensure public cooperation, state level advisory committees have been constituted in different states.

In many states, the power to register trade unions of agricultural workers under the Trade Unions Act, 1926, has been delegated to deputy labour commissioners or labour superintendents for encouraging unionization among agricultural workers. Special training camps are regularly organized to train trade union workers working among agricultural labourers.

The revision of minimum rates of wages fixed has generally not been regular. The Act requires the government to review the minimum rates of wages at intervals not exceeding 5 years and revise the rates. There have been numerous instances where the rates have remained unrevised even after the expiry of 5 or more years. As the wage rates become obsolete, the workers do not even care to know the minimum fixed under the law. In view of the regularly rising prices of essential commodities, the uncertainty about the periodicity of revision is not desirable. In this regard the first National Commission on Labour recommended, ‘… the provision made in the Minimum Wages Act, 1948 for wage revision should be amended making it obligatory on the appropriate government to revise the minimum wages prescribed under the provisions of the Act at least once in every three years’.15

The Act authorizes the government to refrain from fixing minimum rates of wages in respect of any scheduled employment in which there are, in the whole state, less than 1,000 employees engaged in that employment. There are employments where the number of employees in a state is less than 1,000 but where their exploitation by the employers is more intense. It was in this context that the National Commission on Labour suggested suitable amendment of the Act so that the employment limit for enabling a state government to fix a minimum wage for a particular employment included in the Schedule to the Act was reduced from 1,000 to 500 in the whole state.

The main objective of the Act enacted more than 60 years ago has been prevention of ‘sweating’. With the growth of unionization among hitherto unorganized workers, spread of literacy and education among them, implementation of ambitious programme of rural development, development of small-scale industries and rise of national income, conditions of sweating may have ceased to exist in quite a few employments covered under the schedule. Besides, there are employments in the schedule where wage rates have been fixed through conciliation and adjudication under the Industrial Disputes Act, 1947, and in some cases like the plantations by Central Wage Boards. Under such conditions, there is a case for deleting an employment from the Schedule of the Act when conditions of sweating no longer exist. In this regard, the first National Commission on Labour recommended, ‘… provision should be made in the Act for periodic revision of the Schedules to the Act so that employment(s) which cease to employ sweated labour are deleted from the Schedule and such employment(s) as employ sweated labour are added to the Schedule’.16

In spite of these deficiencies and the difficulties in enforcement, the Act continues to lay down useful minimum standards relating to the rates of wages. In many cases, the workers have been able to secure more than the minimum, and in many others, they have succeeded in getting the minimum with the help of the enforcement machinery. The higher rates fixed in one scheduled employment often give a fillip to demand for such high rates in others, and workers are able to secure them by bargaining or pressure.

RECOMMENDATIONS OF THE SECOND NCL (2002)

The second National Commission on Labour (2002) has recommended significant changes in the minimum wage legislation, and the norms and procedures for the fixation of minimum wage. Some of the more notable recommendations of the Commission are as follows:

  1. Minimum wage payable to any one in employment, in whatever occupation, should be such as would satisfy the needs of the worker and his family (consisting of three consumption units) and arrived at on the need-based formula of the 15th Indian Labour Conference supplemented by the recommendations made in the Judgement of the Supreme Court in the Reptakos Brett & Co. case. However, before fixing the minimum wage the appropriate government should keep in mind the capacity of industry to pay as well as the basic needs of the workers.
  2. There should be a national minimum wage that the central government may notify. This minimum must be revised from time-to-time. It should, in addition, have a component of dearness allowance to be declared 6 monthly linked to the consumer price index and the minimum wage may be revised once in 5 years. This will be wage below which no one, who is employed anywhere, in whatever occupation, can be paid. Each state/union territory should have the authority to fix minimum rate of wages, which shall not be, in any event, less than the national minimum wage announced. The Commission also recommends the abolition of the present system of notifying scheduled employments and of fixing/revising the minimum rates of wages periodically for each scheduled employment.
  3. Where wages are fixed purely on piece-rate basis, the employer should pay at least 75 per cent of the notified time-rate wages to the piece-rated worker if the employer is not able to provide him with work.
  4. There is no need for any wage board, statutory or otherwise, for fixing wage rates for workers in any industry.17

The Commission also worked out an integrated draft law on wages covering such aspects as minimum wage fixation, payment of wages, and bonus.18 The recommendations of the Commission are yet to be implemented.

SUMMARY
  1. The enactment of the Minimum Wages Act, 1948, has been the outcome of a great deal of deliberations at various forum including the Royal Commission on Labour (1929), labour inquiry committees of the provinces (1930s), Labour Inquiry Committee (1946) and more notably the Indian Labour Conference at its various sessions (1943–45). The main objective behind the enactment of law has been prevention of sweating and prohibiting payment of low wages in unorganized sectors of employment, and putting a check on their exploitation.
  2. The Act applies to agricultural and allied activities and a large number of small and unorganized employments specified in the Schedule of the Act and those added by the central and state governments from time-to-time.
  3. The Act provides for two distinct procedures for the fixation and revision of minimum rates of wages. In the first procedure, the central and state governments, in respect of employments under their respective jurisdictions, may appoint tripartite committees and, sub-committees for different areas to assist the committees, to hold enquiries and advise on the question of wage-fixation. On the basis of the recommendations of the committees, the government has to fix minimum rates of wages in respect of the employments concerned by notification in the official gazette.
  4. In the second procedure, the government may, on its own, publish in the official gazette proposals of minimum rates of wages for the information of persons likely to be affected and specify a date, not less than 2 months from the date of notification, on which the proposals will be considered. After considering the representations received, the government has to fix the minimum rates of wages for the concerned employments by making notification in the official gazette. Similar procedures are to be followed for revising minimum rates of wages.
  5. The Act also provides for the appointment of Advisory Boards by the central and state governments for coordinating the work of committees and sub-committees and advising the government generally in matters of fixing and revising minimum rates of wages. The central government is required to appoint a Central Advisory Board for the purpose of advising the central and state governments in matters of fixation and revision of minimum rates of wages and coordinating the work of Advisory Boards.
  6. The Act also contains provisions relating to (i) hours of work, overtime and weekly rest, (ii) payment of wages, (iii) status of wage rates fixed during pendency of disputes under Industrial Disputes Act, 1947, (iv) deductions from wages, and (v) inspection, claims, penalties and cognizance of offences.
  7. The main deficiencies of the Act experienced during the course of its working have been (i) fixation of minimum rates of wages at a low level, resulting mainly from absence of norms of minimum wage fixation under the Act, (ii) wide disparities in the minimum rates of wages fixed in different states even for the same employment, (iii) ineffective inspection and difficulties in enforcement, (iv) widespread violations and irregularities in wage payment, and (v) irregular revisions of minimum rates of wages fixed.
QUESTIONS FOR REVIEW
  1. Explain the factors and forces leading to the enactment of the Minimum Wages Act, 1948, and the scope of its application.
  2. Describe the procedures laid down under the Minimum Wages Act, 1948, for the fixation and revision of the minimum rates of wages. Suggest measures to make these more effective.
  3. Explain the provisions of the Minimum Wages Act, 1948, relating to (i) hours of work, (ii) method of wage payment, (iii) deductions from wages and (iv) contracting out.
  4. Describe the powers and functions of inspectors under the Minimum Wages Act, 1948, and its provisions relating to disposal of claims.
  5. Discuss the recommendations of the second NCL relating to minimum wage and its fixation.
  6. Do you think that the Minimum Wages Act, 1948, has served the objectives it was expected to achieve? Give reasons for your answer.
KEY TERMS

 

Sweatshop

Sweating

Scehduled employment

Employer

Employee

Case Study 1

Can appropriate government fix minimum rates of wages in an employment not listed in the schedule?

The central government had fixed minimum rates of wages for various categories of a mica mine, which was at that time not covered under the schedule of the Minimum Wages Act, 1948. This was challenged before the Patna High Court on the ground that the central government did not have the power to fix minimum rates of wages in a mica mine as it was not included in the schedule. The term ‘mica works’ is in the schedule, for which the appropriate government is the state government. In 1975, the government of Bihar had fixed minimum rates of wages for various categories of employees in the mica of the state. The court observed that mica works include processing after mica is taken out of mines such as cutting, sorting, splitting, fabrication and so on. Mica works may exist in mica mines, but in that case the central government could have fixed minimum rates of wages in respect of mica works employees working in mica mines. The court held that as inclusion of an employment in the Schedule of the Act is a condition precedent for issuing any notification by the appropriate government, the notification issued by the central government fixing minimum rates of wages of various categories of employees working in mica mines in ultra vires and must be quashed (Chatturam Darshamram and Others v. Union of India, 1980 (2) LLJ 465).

Questions

Does ‘mica works’ include mica mine also?

Which government is an appropriate government for fixing minimum rates of wages in mica works forming a part of a mica mine?

Is the state government empowered to add a mine in the Schedule of the Act?

Can the government fix minimum rates of wages in an employment without its inclusion in the schedule?

Case Study 2

Does minimum wage fixed under Minimum Wages Act, 1948, apply where workers are in receipt of higher wages?

The Government of Uttar Pradesh by a notification of the Labour Department in 2000 provided for variable dearness allowance for the employees of engineering units employing between 50–500 and more than 500 workers separately. The payment of VDA was also endorsed by the Authorities under the Minimum Wages Act, 1948. M/S Indure (P) Ltd. challenged the notification and decisions of the Authorities under the Act on the ground that the wages of their workers were higher than those fixed under the Minimum Wages Act, 1948, and as such payment of separate VDA as included in the notification does not apply in their case. The Court held that as wages of workers were more than the minimum rates of wages fixed or revised under the Minimum Wages Act, 1948, no separate VDA as declared by the Authorities under the Minimum Wages Act, 1948, provided for payment would be applicable since the total pay package was more than the pay package under the government order. The employer is not required to pay anything more (M/S The Indure (P) Ltd. V. State of UP and Others. 2007. LLR 1035 (Allahabad High Court)).

Questions

Is an individual employee authorized to enter into an agreement with his employer accepting wages lower than fixed under the Minimum Wages Act, 1948?

Is inclusion of VDA permissible under the minimum rates of wages fixed under the Act?

Is contribution to provident fund included under the definition of ‘wages’ under the Act?

Are the minimum rates of wages fixed under the Minimum Wages Act, 1948, operative during the pendency of a related dispute before a Tribunal under the Industrial Disputes Act, 1947?