CONSTITUTIONAL

VALIDITY OF THE
MINIMUM WAGES
ACT,1948

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 Table of Contents

1. Introduction to The Minimum Wages Act,1948…………………………………….….4-5

2. Grounds for Challenging the Constitutional Validity of The Act…………………….….6
3. Landmark Judgements……………………………………………………………………7
4. Determination of the Constitutional Validity……………………………………..…..8-12
5. Conclusion…………………………………………………………………………….…13
6. Biblography…………………….……………………………………………………..…14

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INTRODUCTION TO MINIMUM WAGES ACT, 1948
The concept of Minimum Wages was first evolved by International Labor Organization in 1928
with reference to remuneration of workers in those industries where the, level of wages was
substantially low and the labour was vulnerable to exploitation, being not well organised and
having less effective bargaining power.

The need for a legislation for fixation of minimum wages in India was felt after World War – II
when a draft bill was considered by the Indian Labour Conference in 1945.
On the recommendation of the 8th Standing Labour Committee, the Minimum Wages Bill was
introduced in the Central Legislative assembly on 11 April, 1946 to provide for fixation of
minimum wages in certain employments. The Minimum Wages Bill was passed by the
Legislature and came into force on 15th March, 1948 giving both central and state government
right to fixation of wages. It is an important act concerning labor laws in the country. The Act is
legally not binding but statutory.

1. Wage Boards are set up to review the industry’s capacity to pay and fix minimum wages
such that they at least cover a family of four’s requirements of calories, shelter, clothing,
education, medical assistance, and entertainment.
2. The Act applied to certain employments (listed in the Schedule). The appropriate
government may add any employment to the list if there are 1000 workers are working in
that state.
3. Minimum wage means all remuneration in terms of money includes House Rent
Allowance.
4. These are the kinds of fixing of Minimum wages : (a) a minimum time rate, (b) a
minimum piece rate, (c) a guaranteed time rate, (d) a time rate or a piece rate applicable
to overtime rate.
5. Classes of fixing minimum rates of wages : (a) different scheduled employments; (b)
different classes of work in the same scheduled employment; (c) adults, adolescents,
children and apprentices; and (d) different localities.
6. Period to revise minimum wages by appropriate government is five years.
7. The appropriate Government shall declare special allowance after each six months (i.e.
1st April and 1st October of every year).
8. In case of not paying minimum wage a claim can be made under section 20 before the
labour authority who can make of order of payment of 10 times of difference amount.
9. Not paying Minimum wages is an offence punishable up to six months’ imprisonment or
with fine up to Rs. 500 or with both.

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 On the following basis the constitutional validity of The Minimum Wages Act was
Challenged.
 The Act was unreasonable
The Act was said to be unreasonable as it somewhere interfered with the
provisions of Article 19(1)(g) of The Constitution which guranteees freedom to
trade and business.
It was also said that this Act would create problems for individual employees.

 The Act Violates article 14 of The Constitution

It was said that the provisions of this Act also violates Article 14 of The
Constitution which provides for equality before the law.

 Notification fixing different rates of minimum wages for different localities is

discriminatory.
where the fixation of rates of wages and their revision were manifestly preceded
by a detailed survey and enquiry and the rates were brought into force after a full
consideration of the representations which were made by a section of the
employers concerned, it would be difficult in the circumstances to hold that
notification which fixed different rates of minimum wages for different localities
was not based on intelligent differentia having a rational nexus with the object of
the Act, and thereby violated article 141.

 Sanctity of The Minimum Wages Act

It was said that as the above Act violates Article 14 and 19(1)(g) of The
constitution , they cannot be termed to be proper.

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LANDMARK JUDGEMENT

In the case of “BIJAY COTTON MILLS LTD vs THE STATE OF AJMER2

The Constitutional validity of this Act was challenged on the ground that it violates the guarantee

of freedom of trade or business etc., envisaged by Article 19(1)(g) of the Indian Constitution.

whether they offend fundamental rights guaranteed under Art. 19(1)(g) - 19(6)-Minimum Wages
Act, 1948, sections. 3,4 and 5-Appropriate government-Fixing minimum rate of wages.?

It was held that , the restrictions imposed upon the freedom of contract by the fixation of

minimum rates of wages though they interfere to some extent with the freedom of trade or

business guaranteed under Art. 19(1)(g) of the Constitution are not unreasonable and being

imposed in the interest of general public and with a view to carry out one of the Directive

Principles of State Policy as embodied in Art. 43 which talks about living wages in the

Constitution are protected by the terms of clause (6) of Art. 19. It can thus be said that the

provisions of the Act are bound to affect harshly and even oppressively a particular class of

employers, who for purely economic reasons are unable to pay the minimum rate of wages fixed
by the authorities , but have absolutely dishonest intention of exploiting their workers.

The fact that employer might find it difficult to carry on business on settled principle cannot be a

sufficient reason for striking down the law itself as unreasonable. The poverty of labourers is

also a factor to be taken into consideration while determining the question whether a particular
provision is in the interest of the general public.

Thus by following case and judgements explained below constitutional validity of the act would
be determined.

(A): The act is not unreasonable:

 One of the directive principles of the state policy embodied in Article 43 of the

constitution talks about securing living wages to labourers which not only ensure

bare physical subsistence but also health and decency is important for public

interest.

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1955 AIR 33

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  Its although true that individual employers might find it difficult to carry on the

business on the basis of minimum wages fixed under the Act but this must be not
be the entire premise and reason to strike down the law itself as unreasonable.

In the case of Gulmuhommad Tarasaheb a bidi factory by its proprietors Shamrao vs State

of Bombay3 it was held that “ The restrictions, though they interfere to some extent with the

freedom of trade or business guaranteed under Article 19(1)(g) of the constitution, are reasonable

and , being imposed on the general interest of the general public, are protected by the terms of
the clause (6) of the article 19.”

Another important judgement that favours and supports the constitutional Validity of the

Minimum Wages Act,1948 is , “ V. Unichonoy /VS/ State of Kerala4. This case raised the same

questions which were raised in the case of Gulmuhommad Tarasaheb vs State of Bombay,

which were, That , can a state be prevented from making any law, in the interest of general

public, where it creates restrictions and interferes to some extent with the freedom of trade or

business guaranteed under Article 19(1)(g) , of the Constitution of India, and it was held that , “

Fixation of minimum wages is for preservation of public order , and if no minimum wage is

fixed then it shall lead to arbitrariness by the employers and that shall lead to clashes of
interest between employer and labour which shall cause friction in society”.

The case of ‘Uchinoy vs. State of Kerala5 , further quotes the following , “ As regards to the

procedure for fixing of the minimum wages, the ‘appropriate government’ has undoubtedly been

given very large powers , but it has to take into consideration, before fixing wages, the advice of

the committee if one is appointed on the representations on proposals made by persons who are

likely to be affected thereby. The various provisions constitute an adequate safeguard against any

hasty or capricious decision by the ‘appropriate government’. In suitable cases, the ‘appropriate

government’ has also been given the power of granting exemptions from the operations of the

provisions of the Act. There is no provision undoubtedly, for a further review of the decision of

the appropriate government, but that itself would not make the provisions of the act
unreasonable”.

(B) The Act does not violate Article 14 of the Indian Constitution.

“On a careful examination of the various of the Act and the machinery setup by this Act, Section

3(3)(iv) neither contravenes Article 19(1) of the constitution nor does it infringes the equal

3
AIR1962 Bom 97
4
1962, SC12
5
1962 SC12

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protection clause of the constitution. The Courts have also held that the constitution of the

committees and the Advisory Board did not contravene the statutory provisions in that behalf
prescribed by the legislature”6.

Further, in “C.B. Boarding & Lodging, Re7, it added to the above mentioned case that, “nor the
reason that two different procedures are provided for collecting information.”

(C) Notification fixing different rates of minimum wages for different localities is not
discriminatory.

 It was said that where the fixation of rates of wages and their revision were manifestly

preceded by a detailed survey and enquiry and the rates were brought into force after a

full consideration of the representations which were made by a section of the employers

concerned, it would be difficult in the circumstances to hold that notification which fixed

different rates of minimum wages for different localities was not based on intelligent

differentia having a rational nexus with the object of the Act, and thereby violated article

14.8

 Further, when the Government issued notification improving upon the existing minimum

wages as revised minimum wages disregarding the contrary report of the committee

appointed under Section 5-1(a) ; such notification was bad under the law and was to be

made inoperative.9

 As pointed out by one of the India’s Union Labour and Employment Minister Shri

Mallikarjuna Kharage ; “The variation of minimum wages between the states is due to

differences in socio-economic and agro-climatic conditions, prices of essential

commodities, paying capacity, productivity and local conditions influencing the wage

rate. The regional disparity in minimum wages is also attributed to the fact that both

the Central and the State Governments are the appropriate Governments to fix, revise

and enforce minimum wages in Scheduled employments in their respective

jurisdictions under the Act”.10

6
Bhikusa Yamasa Kshatriya vs Sangammar Akola Bidi Kamgar Union, AIR 1963 SC306
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AIR 1970
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https://www.linkedin.com/pulse/constitutional-validity-minimum-wages-act1948-aniruddh-shastree
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ibid
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http://www.legalservicesindia.com/article/article/the-constitutional-validity-of-the-minimum-wages-act-1948-
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  Notwithstanding anything said in the above mentioned statements,it was held in the case

of N.M.Wadia Charitable Hospital vs. State of Maharashtra11,that – “ Fixing

different minimum wages for different localities is permitted under the constitution and

under labor laws , hence the question that any provision of the Minimum Wages Act is in

any way against the provision of constitution is wrong.”

 Now, the constitution of India accepts the responsibility of the State to create an

economic order, in which every citizen finds employment and receives a “fair wage”.

This made it necessary to quantify or lay down clear criteria to identify fair wage.

Therefore, a Central Advisory Council, in its first session in November 1948, appointed a

tripartite Committee on Fair Wages. The committee consisted of representatives of

employers, employees, and the Government. Their task was to enquire into and report on
the subject of fair wages to the labour12.

(D) Sanctity of The Minimum Wage Act

 It is clear ruling of the Supreme Court that non payment of

minimum wages amounts to ‘forced labor’ prohibited
under Article 23 of The Constitution. The Supreme Court
holds that ‘forced labour’ may arise in several ways,
including “compulsion arising from hunger and poverty,
want and destitution.
 In Sanjit Roy Vs. State of Rajasthan13 , the Supreme
Court has held that ‘The Exemption Act in so far as it
excluded the applicability of the Minimum Wages Act,
1948 to the workmen employed in famine relief work is
“clearly violative” of Article 23. Thus, even public works
ostensibly initiated by the government for the sole
purpose of providing employment are subject to the
Minimum Wage Act’.
 Drawing on the Supreme Court rulings, Andhra High
Court set aside the Government of India notification
mandating that prevailing state minimum wage be paid.
This has been underscored in the legal opinion provided
by Additional Solicitor General, Ms. Indira Jaising, to the

11
AIR 1993
12
https://www.linkedin.com/pulse/constitutional-validity-minimum-wages-act1948-aniruddh-shastree
13
AIR 1983

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 Central Employment Guarantee Council (CEGC) Working
Group on Wages where she made it clear that using
Section 6(1) to allow a payment of less than minimum
wage in MNREGA works will amount to forced labour.
 The Act and the judgements are in favour of equality
provided under Article 14 of the Constitution and a
judgement in the case namely, “Engineering Workers
Union vs. Union of India14.”, pronounces the
judgement that , “The provision under Section 3(2)(A),
that minimum rate of wages in scheduled employment
fixed or revised, shall not apply to the employees during
the period of adjudication, violated equality clause of
Article 14 and hence that section is void”.
 In the view of the Directive Principles of State Policy as
contained in the Article 43 of the Indian Constitution, it is
beyond doubt that securing of living wages to labourers
which ensures not only bare physical subsistence but also
the maintenance of health and decency, it is conducive to
the general interest of the public.
 The Minimum wages Act was passed to fulfill the
aspiration as contained in the following resolution:-“ If the
laborers’ are to be secured the enjoyment of minimum wages and they
are to be protected against exploitation by their employers, it is absolutely necessary

that restraints should be imposed upon the freedom of contract and such restrictions

cannot be said to be unreasonable. On the other hand, the cannot be heard to complain

if they are compelled to pay any minimum wages to their labourers even though the

labourers , on account of their poverty and helplessness, are willing to work even at
lesser wages”.

CONCLUSION
The Minimum Wages Act, 1948 was set up with the aim of providing atleast minimum wages to
the workers. This Act was formed to provide social justice and living wages. Even in the
preamble of The Minimum Wages Act, 1948 it is said that – “To provide for fixing minimum
rates of wages in certain employments.” A minimum wage is the lowest hourly, daily or monthly

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AIR 1994

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wage that employers may legally pay to employees or workers. Equivalently, it is the lowest
wage at which workers may sell their labor. Although to some extent it can be said that the
aforesaid Act contravenes with the fundamental rights provided by the Indian Constitution but
even the fundamental rights given to the people of India imposes some restrictions with respect
to public interest, health, morality and public order. Now, the fundamental rights which are said
to be in contravention with the aforesaid Act imposes restrictions of public interest.

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BIBLIOGRAPHY
Books Referred
1. S.N. Misra ,Labour and Industrial Laws, (Allahabad: Central Law Publications) 2009.
2.Dr. Avtar Singh ., Introduction to Labour and Industrial Law, (Nagpur: Lexisnexis
Butterworths Wadhwa) 2008.

Websites Referred:
• www.scribd.com
• www.legalsutra.com
• www.indiankanoon.com
• www.legalservices.com

Legal Databases referred:

• Supreme Court Cases (SCC)
• AIR (HC & SC)

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