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INTRODUCTION

The purpose of seeking employment is to sell labour to earn wages so as to attain a ‘decent’
or ‘dignified’ standard of living. The wage or income that a worker obtains from his /her
work is therefore, what enables him /her to achieve a fair standard of living. One seeks a fair
wage both to fulfil one’s basic needs and to feel reassured that one receives a fair portion of
the wealth in return for one’s work Society and the appropriate Government has a duty to
ensure a fair wage to every worker, to ward off starvation and poverty, to promote the growth
of human resources, and to ensure social justice without which likely threats to law and order
may undermine economic progress.

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 a fair wage. Therefore, a Central Advisory
Council in its first session (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 labour.

Title, extent and application: The Act entitled the Minimum Wages Act was passed in
1948. To ensure welfare of the Labourers and to prevent exploitation of labour force in a
competitive Market, the Minimum Wages Bill was introduced in the Central Assembly in
April 1946. It was passed into law and came into force In March 1948. The Minimum Wages
Act, 1948 is a great landmark in the history of labour legislation in India. The Act extends to
the Whole of India including the States of Manipur, Tripura, Union Territories Dadra, Nagar,
Haveli and the State of Jammu and Kashmir.

The main object of the Act

The main objective of this Act, is fixing a minimum rate of wages in number of industries
where the labours are not organized and sweated labours are most dominant. The Act aims at
preventing the exploitation of workers or labours in some industries, for which, the
appropriate Government is empowered to take steps to prescribe minimum rates of wages in
certain employment.
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The Minimum Wages Fixing Machinery convention was held at Geneva in the year 1928 by
ILO 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.

This Act may be called the Minimum Wages Act 1948.The Act enables the Central and State
Government to fix minimum rates of wages payable to employees in selected number of
’sweated’ industries. The Act extends to the whole of India1.

Scheme of the Act.

The Minimum Wages Act, 1948 contains 31 Sections divided into three chapters and one
schedule comprising of two parts. Chapter I containing two Sections deniw’ with preliminary
concepts. Section 1 speaks about title, extent and application of the Act. Section 2 dealing
with interpretation provides for various definitions viz., (a) Adolescent, (b) Appropriate
Govemment, (c) Competent Authority, (d) Cost of living index number, (e) Employer, (f)
Prescribed, (g) Scheduled employment, (h) Wages, (i) Employee etc. Chapter II containing
Sections 3 to 21 lays down the provisions relating to fixation of minimum rates of wages,
working hours and determination of wages and claims etc. Chapter III containing Sections 22
to 31 deals with miscellaneous provisions. In addition, the Schedule of the Act comprises of
two parts' as detailed below

. Part1

(1) Employment in any woolen carpet making or shawl weaving establishment.

(2) Employment in any rice mill, flour mill or dal mill. (3) Employment in any tobacco
(including bidi making) manufactory. '

(4) Employment in any plantation, that is to say, any eState which is maintained for the
purpose of growing cinchona, rubber, tea or coffee.

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(5) Employment in any oil mill. (6) Employment under any local authority.

(7) Employment on the construction or maintenance of roads or in building operations.

(8) Employment in stone breaking or stone crushing. It covers the breaking or the crushing of
stones incidental to the mining Operation, but the stone breaking or stone crushing operations
which are carried on in mines are not included (Madhya ‘72 LECTURES ON LABOUR&
INDUSTRIALLAWS Pradesh Mineral Industry Association, Nagpur vs. The, Regional
Labour Commissioner: AIR 1960, SC 1068). The minimum wages fixed for the employment
of stone breaking and stone crushing will not apply to the operation of quarrying ‘Shahabad
State’ (Labor Inspector; Hyderabad vs. C.S.0. Co., AIR 1972, SC 1177).

(9) Employment in any lac manufactory.

(10) Employment in any mica works.
(11) Employment in Public Motor Transport.
(12) Employment in tanneries and leather manufactory. ‘

Part II

Employment in agriculture, that is to say, any form of farming including the cultivation and
tillage of the soil, dairy farming, the production, cultivation growing and harvesting of any
agriculture or horticulture commodity, the raising of live-stock, bees or poultry, and any
practice performed by a farmer or on a farm as incidental to or in conjunction with farm
operation (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 Constitutional Validity of the Minimum Wages Act, 1948

India introduced the Minimum Wages Act in 1948, giving both the Central government and
State government jurisdiction in fixing wages. The act is legally non-binding, but statutory.
Payment of wages below the minimum wage rate amounts to forced labour. Wage Boards are
set up to review the industry’s capacity to pay and fix minimum wages such that they at least
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cover a family of four’s requirements of calories, shelter, clothing, education, medical

assistance, and entertainment. Under the law, wage rates in scheduled employments differ
across states, sectors, skills, regions and occupations owing to difference in costs of living,
regional industries' capacity to pay, consumption patterns, etc. Hence, there is no single
uniform minimum wage rate across the country and the structure has become overly complex.
It can scarcely be disputed that securing of living wages to labourers which ensure not only
bare physical subsistence but also the maintenance of health and decency is conducive to the
general interest of the public. This is one of the directive principles of the state policy
embodied in Article 43 of the constitution.

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.

“ 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.” This quote is a part of judgment in the case “ Gulmuhommad Tarasaheb , a bidi
factory by its proprietors Shamrao vs State of Bombay, AIR 1962 Bom 97: AIR1955,
Sc33:1963, Ker 115: 1964 Tri 32.

An another important judgment that favours and supports the constitutional Validity of the
Minimum Wages Act,1948 is , “ V. Unichonoy vs State of Kerala,1962, SC12 2. This case
raised the same questions which were raised in the case of Gulmuhommad Tarasaheb vs State
of Bombay, AIR 1962 Bom 97”., 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”.

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The article 14 of the Indian Constitution which relates to equality before the law, it must be
noted that minimum wages are not fixed equally across the whole nation but they vary from
occupation to occupation and industry to industry and from place to place.

The case of Uchinoy vs State of Kerala ,1962 SC12, 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 doesn't 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 contravene Article 19(1) of the constitution nor does it infringe the
equal 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”,- this was held in the case of ‘Bhikusa Yamasa Kshatriya
vs Sangammar Akola Bidi Kamgar Union”, AIR 1963 SC306. Further , as decided in the case
“C.B. Boarding & Lodging, Re(1970) II LLJ 403: AIR 1970: SC 2042 : 38 FIR I .” , 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.

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
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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. 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.”.

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”.

Referring the case of “N.M.Wadia Charitable Hospital vs State of Maharashtra , 1993”, it was
decided by the Court that – “ Fixing different minimum wages for different localities is
permitted under the constitution and under labour laws , hence the question that any provisio
of the Minimum Wages Act is in any way against the provisio of constitution is wrong.

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
labour.

(D) Sanctity of The Minimum Wage Act

Supreme Court in three separate rulings, has held that non payment of minimum wages is
tantamount to ‘forced labour’ 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 Rajasthan (1983),
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the Supreme Court 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 (GoI) 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 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 MGNREGA works will amount to forced labour. 15 eminent jurists and lawyers of
India too have asked Government of India to immediately revoke its unconstitutional
notification and ensure that minimum wages are paid to all workers in India.

The Act and the judgments 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
India(1994) I .LLJSup.942Bom.”, pronounces the judgment 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 labourers 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”.
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In the case of “PETITIONER: BIJAY COTTON MILLS LTD./Vs./

RESPONDENT: THE STATE OF AJMER.DATE OF JUDGMENT:

14/October /1954”,
The Constitutional validity of this Act was attacked 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, (Constitution of India, Article. 19(1)(g), 19(6)-Minimum Wages Act (XI of
1948), sections. 3,4 and 5-Appropriate

Government-Fixing minimum rate of wages-Whether offends fundamental rights guaranteed

under Art. 19(1)(g).)

, 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 of the Constitution are protected by the
terms of el. (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.

Salient features of the Minimum Wages Act, 1948

1. The Act applied to certain employments (listed in the Schedule). Both the governments
(Central and State) have to declare minimum wages for their sphere. The appropriate
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government may add any employment to the list if there are 1000 workers are working in that
state.
2. Minimum wage means all remuneration in cash includes HRA (declared minimum wage +
special allowance).
3. 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.
4. 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 (zone wise).
5. Norms to be consider for fixing minimum wage :
Standard family of four members – three consumption units (2 adults + 2 children) for one
earner.
Minimum food requirement should be calculated on the basis of a net intake of calories.
Clothing a total of 72 yards;
The rent corresponding to the minimum area (one room)
Other routine expenditure 20% of the total minimum wage.
Social expenditure – further constitute 25% of the total minimum wage.
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.
10. Contracting out : Any contract or agreement whereby an employee either relinquishes or
reduces his right to a minimum rate of wages or any privilege or concession accruing to him
under this Act shall be null and void.
11. Regional Labour Commissioner (C) is the authority declared by Central Government to
decide claims (less than minimum wages) made under section 20 of the Act. Assistant
Commissioner of Labour is authority in Gujarat.3

THE CONCEPT OF WAGES

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Defined three different levels of wages viz;

(i) Living wage
(ii) Fair wage
(iii)Minimum Wage
Living Wage

The living wage, according to the Committee, represented the highest level of the wage
which should enable the worker to provide for himself and his family not merely the basic
essentials of food, clothing and shelter but a measure of comfort including
education for children, protection against ill health, requirements of essential social needs and
a measure of insurance against more important misfortunes including old age. But the
Committee felt that when such a wage is to be determined, the considerations of national
income and the capacity to pay of the industry concerned has to be taken into account and the
Committee was of the opinion that living wage had to be the ultimate goal or the target.

Fair Wage

The Fair Wages Committee in this connection observed: “the objective is not merely to
determine wages which are fair in the abstract, but to see that employment at existing levels
is not only maintained, but if possible increased. From this point of view, it will be clear that
the levels of the wages should enable the industry to maintain production with efficiency. The
capacity of industry to pay should, therefore, be assessed by the Wage Boards in the light of
this very important consideration.”
The Fair Wages Committee also recommended that the fair wage should be related with the
productivity of labour. In this connection, it may be said that in India since the existing level
of wages is unable to maintain the workers on subsistence plus standard, it is essential that
the workers must be first assured a living wage and only after this minimum has been done,
the wages should be related to the productivity. The Committee further recommended that the
fair wage should be related with the prevailing rates of the wages, though in view of unduly
low wages prevailing even in organized industries in the country, it laid down that the wage
fixing machinery should, therefore, make due allowance for any depression of wages caused
by unequal bargaining.
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With regard to the machinery to be adopted for the fixation of fair wages, the Committee
favoured the setting up of Wage Boards. It recommended that there should be a State Board
for each State, composed of independent members and representatives of employers and
employees in equal numbers. In addition to the State Board, there should be a Regional Board
for each of the industry taken up for wage regulation. Finally, there should be a Central
Appellate Board to which appeals may be preferred on the decision of the Wage Boards. On
the recommendations of the Committee on Fair Wages, a bill was introduced in the
Parliament in August 1950, known as Fair Wages Bill. It aimed at fixing fair wages for
workers employed in the first instance, in factories and mines. It contained various other
useful provisions also. But the bill now stands lapsed.
The Fair Wages Committee appointed by the Government of India, as sat minimum wage is
less than the living wage. With regard to the fair wage, the Committee recommended that it
should be above the minimum wage and below the living wage.

Minimum Wage

The Committee was of the view that a minimum wage must provide for not merely the bare
sustenance of life, but for the preservation of the efficiency of the worker. For this purpose,
the minimum wage must also provide for some measure of education, medical requirements
and amenities.
The statutory Minimum Wage is the wage determined according to the procedure prescribed
by the relevant provisions of the Minimum Wages Act, 1948.
The question of establishing statutory wage fixing machinery in India was, therefore,
discussed at the third and fourth meetings of the Standing Labour Committee held in 1943
and 1944 respectively and at successive sessions of the Tripartite Labour Conference in
1943, 1944 and 1945. The last of these approved the enactment of minimum wages
legislation in principle. On April 11, 1946, a Minimum Wages Bill was introduced in
Parliament but the passage of the Bill was considerably delayed by the constitutional changes
in India. It was, however, passed into an Act in March, 1948.
The Act applies to the employments (Annexure I) that are included in Parts I and II of the
Schedule Appended to the Act. The authority to include an employment in the schedule and
to take steps for getting the minimum rates of wages fixed or revised vests with the
Government – Central or State, according to the nature of employment. Once the minimum
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rates of wages are fixed according to the procedure prescribed by law, it is the obligation of
the employer to pay the said wages irrespective of the capacity to pay.

ATHORITIES UNDER ACT

For successful implementation and strict compliance of the provisions of the Act, the
following authorities are appointed

(i) Advisory Board (Sec.7);

(ii) (ii) Central Advisory Board (See. 8); and
(iii) (iii) Inspectors (Sec. 19).

(i) Advisory. Board (Sec.7): The appropriate Government shall. According to Section 7
appoint an Advisory Board for the purpose of

(a) co-ordinating the work of committees and sub-committees, appointed under Section 5;
and

(b) Advising the appropriate Government in the matter of fixing and revising minimum.
Rates of wages. .

Besides the Advisory Board may devise the procedure to be adopted for discharging its
functions under section 5 of the Act.4

(ii) Central Advisory Board (See. 8): Section 8 makes it obligatory upon the Central
Government to appoint a Central Advisory guard for the following purposes:

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(a) Advising the Central and State Governments in the matters of the fixation and revision of
minimum rates of wages and other matters under the Act ; and

(b) For coordinating the work of the Advisory Boards.

Section 8 (2) provides that the Central Advisory Board shall consist (if-

(i) Persons to be nominated by the Central Government representing employers and

employees in the Scheduled employment who shall be equal in number; and

ii) Independent persons not exceeding one-third of its total number of members.

The Chairman of the Central ‘Board shall be one of the independent persons and shall be
appointed by the Central Government.

(iii) Inspectors (Sec. 19): An appropriate Government has been empowered to appoint
Inspectors for the purposes of this Act. They are required to exercise the functions assigned to
them within such local limits as prescribed by the Government.

The powers of the inspectors are as follows

(a) to enter any premises of place where employees are employed or work is given out to out-
workers in any Scheduled employment in respect of which minimum rates of wages have
been fixed, for the purpose of examining and production of any register, record of wages,
notice required to be kept or exhibited under the Act or rules framed thereunder;

(b) Examine any person whom he believes to be an employee employed or to whom work is
given out;

(c) Require any person given work including out workers to give, information regarding the
particulars of the employee and the payments to be ‘made for the work done;
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(d) seize or take copies of register, record of wages or notice as he considers necessary and
relevant in respect of an offence under this Act which he has reason to believe has been
committed by an employer; and

(e) Exercise such other powers as may be prescribed. Every Inspector appointed by an
appropriate Government enjoys the status of Public Servant within the meaning of the Indian
Penal Code and any person required by him to produce any documents is legally bound to do
so within the meaning of Sections 175 and 176 of the Indian Penal Code.

CASE LAWS

 Shamrao vs State of Bombay, AIR 1962 Bom 97: AIR1955, Sc33:1963, Ker 115: 1964 Tri
32.
It can scarcely be disputed that securing of living wages to laborers which ensure not only
bare physical subsistence but also the maintenance of health and decency is conducive to the
general interest of the public. This is one of the directive principles of the state policy
embodied in Article 43 of the constitution.

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.

“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.” This quote is a part of judgment in the case “Gulmuhommad Tarasaheb, a bidi
factory by its proprietors.

CONCLUSION
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The main object of the Act is to promote the economic conditions of the working class in
industries and to prevent exploitation of the sweated and unorganised workers working in the
competitive markets. The preamble .of the Act States the object of the Act, “whereas, it is
expedient to provide for fixing minimum rates of wages in certain employments.

The Act provides for fixation by the Central Government of minimum wages for
employments detailed in the Schedule of the Act and carried on by or under the authority of
Central Government, by a railway administrative or in relation to a mine, oilfield or major
port, or any corporation established by a Central Act, and by the State Government for other
employments covered by the Schedule of the Act.