Minimum wages Act, 1948

Historical backdrop
 The International Labour Conference
held at Geneva in 1928…. emphasised
“The need of Statutory minimum wage to
protect the workers against exploitation
by the employers” – Adopted convention
26 and 30
 The Indian Labour Conference paves way
to Minimum Wages Act which was passed
in the year April, 1946 and came into
force in March, 1948.
Object of the Act
 To prevent exploitation of the workers
 It empowers the appropriate
Government to fix and revise minimum
rates of wages in certain employments
 The Act gives statutory recognition to the
well accepted principle that an employee
must get at least a bare minimum wages
for his work
In Airfreight Ltd V. State of Karnataka (1996)
6 SCC 567
What the Act purports to achieve is to
prevent exploitation of labour and for
that purpose authorises the appropriate
Govt. to take steps to prescribe the
minimum rate of wages in the Scheduled
industries with dual object of providing
sustenance and maintenance of the
worker and his family and preserving his
efficiency as a worker.
Haryana Un-recognised Schools’ Assn.
V. State of Haryana (1996) 4 SCC 225
 The object of the Act is to prevent
exploitation of the workers
 While Construing the Provisions of a
statute like Minimum Wages Act a
beneficial Interpretation has to be
preferred which advances the object of
the Act.
Short title and extent (Sec.1)

 This may be called the Minimum

Wages Act,1948
 It extends to whole of India
 Interpretation
Section 2
 Who has completed 14 yrs but has not
(a) Adolescent completed 18 yrs
(b) Adult  Who has completed 18 yrs
(bb) Child  Who has not completed his14th year of
( c )competent age
Authority  Authority appointed by App .Govt. By
notification in its official Gazette to
ascertain from time to time the cost of
living index number (CLIN)* applicable to
the employees employed in the scheduled
employments in such notification.
* Cost of Living index number – in relation to employees in
any scheduled employment in respect of which minimum
rates of wages have been fixed -means the index number
ascertained and fixed by the competent authority.
EMPLOYER
 In Re, Polisethi Lakshmayya (1952)1 LLJ 556
When the work is given to the contractors
who in their turn engage workmen to such
work , here the contractors would be the
employers
 In Surya Rau V.V.,E.D. Nocoil V.
S.R.Tendulkar(1998) 1 LLJ 629
The person who engages workers through a
contractor would also be employer under
the Minimum Wages Act.
Employee
 EX-EMPLOYEE

 The question as to whether the word

“employee” includes an ex-employee,
 Murugan Transports V. P.Rathakrishnan
(1961) 1 LLJ 283
 has been answered in the affirmative in the
above case
OUT-WORKER

• Whether the word “employee” includes

Out- worker …If an out worker prepares
goods at his residence and then supplies
them to the employer.
In Loknath Nathu lal v. State of M.P.,
AIR 1960 MP 181

 If an out worker prepares goods at his

residence and then supplies them to the
employer, he has, for the purpose of the
Minimum Wages Act, to be treated as an
employee
Teachers
 Whether the teachers of an educational institution will
come under the purview of the term “ employee” under
this Act.

Miss A.Sundarambal V. Govt. of Goa, Daman and Diu

(1988) 4 scc 42( AIR 1988 SC1700 para 10)
“we are of the view that the teachers employed by educational
institutions whether the said institutions are imparting primary,
secondary, graduate to post graduate education cannot be called as
workmen within the meaning of Sec.2(s) of the ID Act. Imparting of
education is the main function of the teacher it cannot be
construed as skilled or unskilled manual worker or clerical worker.
Imparting the education in the nature of a mission or a noble
vocation . A teacher educated children, he moulds their character,
builds up their personality and makes them fit to become
responsible citizens. Children grow under care of teachers. The
clerical work, if any they may do, is only incidental to their principal
work of teaching”.
Not an employee
 Haryana Un-recognised
Schools’ Assn. V. State of
Haryana (1996) 4 SCC 225
 Since the teachers of an
educational institution are
not employed to do any
skilled or unskilled or
manual or clerical work
and therefore could not be
held to be employee under
sec.2(i) of the Act.
 Chacha NehruVidyapith V.
Authority under Minimum
Wages Act(2001) LLJ 1439
 The definition of employee
does not exclude
employees other than
teachers doing unskilled ,
semiskilled work from the
purview of the Act and
that they are entitled to
get Minimum wages fixed
under the Act
Fixation and Revision of Minimum Wages (sec.3)

 The minimum rates of wages will be fixed and

revised, for every five years, by the appropriate
govt.
 Appropriate govt. can include any employment, to
the Schedule (part-I or part-II), by notification
u/s.27, where in 1000 or more employees are
found working.
 Minimum wages may be fixed for the whole of
the State or part of the State.
 The App. Govt. may refrain from fixing minimum
wages in respect of any scheduled employment in
the whole State where less than one thousand
employees engaged in such employment.
Scheduled Employments
 Scheduled Employment means employment
specified in the Schedule to the Act or any
process or branch of work forming part of
such employment[ sec.2(g)]

 Part I – 12 Entries ,covering more than 52

type of employments

 part II – Contains employment in Agriculture

 Examples Scheduled
employments

Part I Part II

Construction
Carpet Stone braking Public motor Employment
roads
making, stone crushing transport in Agriculture
buildings

Farming,
Rice mill flour Any mica Gypsum
Copper mines Cultivation ,
mill works mines
harvesting

Laundries Fireworks Dairy farming ,

Leather
Estate works washing bees or
manufactory
Cloths poultry
 • The App Govt. may fix u/s.3 for
• time rate, piece rate, guaranteed time rate,
1 over time rate.

• Different minimum rates of wages

may be fixed for
• Different Scheduled employments,
different class of employment in the
same Scheduled employment
2 • Adults, Adolescents, Children and
Apprentices,

• Wage periods like

• daily, hourly, monthly
3
In Airfreight Ltd V. State of
Karnataka (1996) 6 SCC 567
 The Apex Court held that the capacity of
the employer to pay, is not a relevant
consideration in fixing of minimum wage.
 Identifying the employers paying more
than minimum wages and excluding them
from the operation prescribing the
minimum rates of wages, held, was not a
condition precedent for issuing such a
notification.
Minimum rate of Wages(sec.4)
 Basic + Special Allowance* (which varies with the
cost of Living index)
 Basic + Cash Value of concessional Supply of
essential commodities .
 An all inclusive rate which includes Basic + cost of
living Allowance + Cash value of concessions if any.

*Dearness Allowance – where there is a hike in cost of

living , DA is intended to neutralise a portion of the
same.

A.P. Hotels Assn. V. State of A.P (2002 ) 4 LLN 642 AP

“D.A is part and parcel of cost of necessities of Life”
“What is today a fair wage may
become the minimum wage
tomorrow”
 There is no clear guidelines to calculate
minimum wages for a particular employment
–neither the provisions of the Minimum
Wages Act nor the judicial pronouncements
 The concept of minimum wage is flexible
and dynamic one, it changes with the space
and time.
 Fixing of minimum wage depends upon
prevailing economic conditions, cost of living
in a place, nature and condition of the work
to be performed.
Procedure for fixation and revision of
minimum rates of wages(sec.5)
The App. Govt. can follow either of the
two methods
• Constitute committees, sub
committees & Advisory Board
• Hold enquiries and advise in respect
Committees of fixation or revision.

• Notification in the Official Gazette

• Seeking comments from the
beneficiaries regarding the proposal
Publication within a specified date not less than
2 months.
Advisory Board Sec.7 Central Advisory Board Sec.8

 Appointed by the  To advise the central and

Appropriate Government State Govt. in fixation and
 To Co-ordinate the work revision of minimum rates
of the committees and sub of wages
committees appointed u/s.5  To co-ordinate the work of
the Advisory Boards
Composition of committees,
etc.(Sec.9)
 Each of the committee, sub committee and
the Advisory Board shall consist of
 Persons to be nominated by the app. Govt.
 Representing the employers and employees
in the scheduled employments who shall be
equal in number and
 Independent persons not exceeding 1/3 of
its total number; one of such independent
persons shall be appointed the chairman by
the appropriate Govt.
Constituted by the Govt.
Consist of equal number of members of
employers, employees and independent
persons
Subcommittees

Committees

Advisory Boards
State of Rajasthan v. Hari Ram
Nathawani, (1975) 2 SCC 517
 No procedure is prescribed in the Act for
the Advisory Board to function
 It can devise its own procedure
Notification should not be interfered with
u/A. 226 of the constitution

Name of the case Grounds

Chotanagpur Small Scale Industries Mathematical error while calculating
Assn. V. State of Bihar (2002 ) the rate of minimum wage.

Ministry of Labour and rehabilitation V. Irregularities in the constitution of the

Tiffin’s Barytes Asbestos and paints committee or the procedure adopted
Ltd., (1985)3 SCC 594 by it.

Bihar mica Exports Assn.V. State of The Advisory committee had not
Bihar (2002) 3 LLJ (Jhark) (DB) heard the appellant as required to be
heard at the time of fixing the
minimum wage
Edward Mills Co. Ltd V. State of Ajmer

 Fixation of minimum wages is an

Administrative act . In case fixation is ultra
vires the powers of the Government
under the Act.
 And are made in defence of mandatory
provisions or without jurisdiction
 It can be declared as ultra vires by the
court by invoking Art.226 and Art.227
Payment of minimum wages in Kind
(sec.11)
 Minimum wages shall be paid in Cash.
 The app. Govt. may authorise , where
there has been a custom of payment in
this manner, payment of minimum wages
either wholly or partly in Kind.
 The app. Govt. may authorize supply of
essential commodities at concessional
rates.
Payment of minimum rate of wages
(sec.12)
 The object of this section is to put a
statutory obligation on the employer to
follow the minimum rates of wages fixed by
AG
The minimum wages has to be paid without
any deductions other than ‘statutory
Deductions.
 Payment of wages less than minimum wages
on the ground of less performance or
output, is illegal. [ Bandhua mukti Morcha V.
U.O.I (1984) 3 SCC 525]
What happens when the
contract rate of wages is higher
than the one which is fixed by
the AG as minimum..?
Object of Section.12
 As long as the minimum is paid, the
contractual wage structure is left intact
and the component parts of the wages
can still be regulated by the contract
between the employer and the employee.
 i.e. that is the contract between the
employee and the employer is left intact.
 The statutory right and obligation will
not come into play.
Fixing hours of work (sec.13) read
with Sec.55 of factories Act.
 Number of working hours should not
exceed 48 hours in a week with a
weekly Holiday.
 The Daily hours should not exceed
more than 9 hours with 1 hour
interval.
 Provision of compensatory holiday /
overtime wages if working on holiday.
 Provision of compensatory holiday/
overtime wages if working on holiday
Over time wages (sec.14)
 If the employee has worked for more
than 48 hours in a week then the excess
hours worked will be treated as Over
time.
 Overtime wage will be twice of the
normal wage rate.
Wages of worker who works for
less than normal working
day(Sec.15)
 The employer could not provide any
work then, the employee is entitled to
receive full salary.
 Employee has not worked due to his
unwillingness then, the employee is not
entitled to receive full salary.
Inspectors (sec. 19)
 Appointed by the App . Govt. by
notification in Official Gazette
 Delimited with territorial jurisdiction to
exercise their functions –
 Enter
 Examine
 Require
 Seize or take copies
 Other works as may be prescribed
Claims (sec. 20)
 Labour commissioner or any other
appointed authority is authorized to hear
claims regarding non- payment of
minimum wages
 Any aggrieved person may apply to the
authority for settling the claims within 6
months
whether time barred applications are
admitted ?
H. G. Henson V. M. Sultan, Deputy
Commissioner, Lakhimpur.

Time barred application should not be

admitted without hearing the employer
because he acquires a valuable right.

The authority under Sec.20 has a discretion to

condone the delay in presenting the
application provided sufficient cause for the
entire delay is shown to its satisfaction.
Penalties (Sec.22)
Offence Punishment

Payment of less than Imprisonment which may extend

minimum wages to up to 6 months or
Fine which may extend up to Rs.
employee 500 or both
Case Law Reference
1. Ajay Bansal V. State, 2007 LLR 1040
( Del. H.C)
“Petrol pump employees will be entitled to
minimum wages”

2. UP Basic Shiksha Parishad Allahabad

V. Prescribed Authority, under PWA,
Jhansi, 2006 LLR 869 (SN) All HC
“A Teacher not being a workman, will neither
be covered under Payment of Wages Act nor
Minimum Wages Act”
“No Work No pay”- will apply
 Lt. Governor, Government of National Capital
Territory of Delhi V. Delhi Flood control
Mazdoor Union, 2006 LLR 1113 ( Del.HC)
- when workers have resorted to
illegal Strike
 MP Electricity Board Diploma Engineers’
Association V. MP EB,2007 LLR89 (MP HC)
- when employees absented from
work and resorted to Strike
“No Work No pay”- will apply
 Sikand and company V. State of H.P., 2008
LLR 58 (HP HC).
- when the workman did not
resume duty despite offers.
 Chaman Lal V. Presiding Officer, Labour
Court, Patiala,2011 LLR 577 (P & H HC).
– to workman who failed to join
duty after revocation of suspension.
“No Work No pay”-
will not apply
 Panipat Co-operative Sugar Mills Ltd. V. Presiding Officer,
Labour Court, Ambala, 2011 LLR 918 (P & H HC).

-If reinstated workman was not

allowed to join

 UP Cooperative Bank Ltd. V. P.O., Labour Court, 2011 LLR

1247 (All HC).

-when the employee is willing to work.

“No Work No pay”- is not Rigid

 Sharfraj Khan V. Union of India, 2013

LLR 176 (Gau HC).