R.P.

ANGAYAYARKANN
CHAPTER - II

STATUTORY LAW ON MINIMUM

ITS WORKING AND
WAGE
EFFICIENCY
3.1. Historical Perspective of Minimum
Wages
The of wages is the history of
history
Man's primal urge to survive and to provide mankind its
means of subsistence is the motive force
himsclf with
himself
behind most econ he
and social change. Wage is an income
received in termsconomic
for the work done. Work is said to be in of cas
of
vain when it cash
incentive. Wage is the reward for labour. lack
money for their living. To fulfill these basic
People work to eo
earn
money. The money they earned in return for needs, they need
should be in such a way, that it is their hard work
sufficient to have three meals
a
day, proper clothing, housing
and other necessities of facility, the medical expenses
life.
War and revolution had
been brought by
The crusades have religious, political
and racial fanaticism.
because of a high ideal, but in been undertaken
the last
the
pressure of man's physical needsresort, how often it is that
body for food and warmth and the demands of his
which events arose The have been the
conditions out of
the regulation of
Kautiliyan period. The labourers were wages can be traced from
enter into
any contract and to settle generally
their wages with
at liberty to
before
undertaking
payment of wages to
any work. In the employers,
absence of a contrac,
of the labourers were decided either on the basis
principles
land or on the recognized in the ancient
basis of work done and time customary laws or u
The
Artharashtra prescribed that one spent.
is to
be paid as wages to the
tenth of the produce
produ
contractual agreement? worker, if there was no
orior

Prior to
1948, very meager
kind and labourers ash or
found it wage was paid in
pa
Labourers were difficult to live a decent life innIndia
lndis
wages. exploited through the decentotlnduly
y low low
However, during the payment mber
attempts were made for pre-1948 period, a nu r of
government intervention
ention in the
vage

54
 MINIMUM WAGE LAW IN INDIA-A STUDY WITH
ENCE TO UNORGANISED SECTOR SPECIAL
IN
PONDICHERRY
rmination process. It is
only after 1948, that the scenario
started changing and
labourers standard of living
improved and
1abourers' were protected from
unnecessary cxploitation.
The history of minimum wages arises with
reference to
the remuneration of workers in those industries
where the level
of wages was substantially less. The need of lcgislation for
wages received an impetus after World War II. In India
the
question of establishing statutory wage
fixing
machinery was
discussed in the third and fourth
meetings the Standing
of
Labour Committee held in May 1943 and
January 1944
respectively. On the recommendations of the 8th Standing
Labour Committee, the first step was taken in 1946 for
minimum wage in India, by fixing
the Central
introducinga minimum wage bill in
LegislativeAssembly on
11hApril, 1946 with a view
to prevent sweated labour in
scheduled employments. Minimumn
wages had to be paid to the
employees and if the employer was
found guilty of non- payment of the
wages, he was
Inspite of hire and fire rule, the labourers had full punished.
wages. Apart from this, measures also existed to curb
right to their
the
disparity in the wages paid to the workers.
The level of wages in India has been
low. If we turn back to the unfortunately very
days of early industrialization, it
reminded immediately of the miserable conditions under
which
bulk of the nation's
toiling masses used to work. Because of the
then prevailing mass unemployment, the workers were exposed
to
deplorably low standard of living. In fact, they were living in
drudgery. This predicament of the workforce attracted the
attention of the society for the need for determination of some
minimum level of wages for the industrial workers. A bill was
inally passed by the Indian Dominion Legislature and received
the assent of Governor General on 15th March 1948 and it
came to be known as the Minimum Wages Act, 1948. It was
passed to give effect to the resolution
passed by the minimum
wage fixing machinery convention held at Geneva in 1928. The
vant resolutions of the convention were embodied in Article
23 to 233 of the International Labour Code. Under this Act,
oOth Central and State Governments are "Appropriate
OVernments" for the fixation of minimum rates of wages tor
employments covered by the schedule to the Act.

55
 DR.P.ANGAYARKANN
The Minimum Wages Act was passed
overcome to
deticiency and to prevent the exploitation of the ignorant, lehe
organised, less privileged members of the socicty by the
employers. The legislature realizcd that the bargaining power of
unorganised labour was weak. It was the duty of the State to
to
ensure that at least minimum wages were paid'

3.2. Scope and Objectives of tho Act

The Act is applicable to the whole of India. The legislature

undoubtedly intended to apply the Act to those industries or
localities, in which by reason of causes such as unorganised
labour or absence of machinery for regulation of wages, the
wages paid to workers were in the light of the general level of
wages and the subsistence level is inadequates
The object of the Act is to protect the less organised
members of the society from the capitalists. The anxiety of the
State tor improving the general economic condition of some of
its less favoured members appears to be in suppression of the
old principle of absolute freedom of contract and the doctrine
of laissez- faire and it recognizes the need of principles of
social welfare and the common good.6 This view has been
upheld in Y.A.Mamarde Vs. Authority under Minimum Wages
Act
The scope of the Act is to prevent exploitation of the
workers and for that purpose, it aims at the fixation of minimum
wages which the employer must pay. This view has been
reiterated in Edward Mills Co Ltd State
vs.
of Ajmer
The Act has been
applied wherever the level of wages
and subsistence level of minimum
wages is inadequate. This
novel point has been decided in
Crown Aluminum Works Ys.
Their Workmen
The Central and State
Governments under
the Act are
empowered to fix minimum rates of wages for
diftere
employments and to add any employment to the schedule after
due notification. °The "minimum wage" thus acquireu
term
besides its meaning as a wage enforceable under the law an
forming the floor to all wage payments, the additional meanins
namely, that it was a minimum living
wage, an attenuated to

56
 MINIMUM WAGE LAW IN INDIA-A STUDY WITH SPECIAL
RENCE TO UNORGANISED SECTOR IN PONDICHERRY
af thefull living wage, differentiated from the latter by a certain
recognized margin."The proVISions of the Act are intended to
achieve the object of doing soCial justice for workers
in scheduled employments by
cmploycd
wages for them.
prescribing minimum ratcs of
The most
has been the
comprchensive object of this
wage legislation pursuit of a national income
distribution policy and using the wage policy as an instrument of
planned economic development. The main of the State
is to the
objective
regulate quantum of wages by means of prevention of
unduly low wages controlling inflationary
pressures and fixing
iust and fair wage for preventing industrial
disputes.
While appreciating the laudable
objective of the Act to
combat the practice of "sweating", it should be made
that it was not necessarily concerned with a explicit
redistribution of
income (which would come through radical
redistribution of
productive assets) or a
redressing of inequitable bargaining
power (which would require organisational
concern was
reform). Its ordinary
to ensure that the workers receive a
for their endeavours, and to ensure to the
just wage
labour, a place of
dignity legitimately due to it in lieu of its contribution to the
progress of national economic prosperity.
Various terms have been interpreted in the Minimum
Wages Act 1948. Among them, the definition of wages and the
employees play a vital role in fixing wages of those workers
who receive less than the minimum wages.
Act defines wages under Section 2 (h). The term
The
wages' means and includes all remuneration and other payments
payable to an employee, which are not expressly excluded by
the provisions of the Act. In Manganese Ore India Lid Vs.
Chandilal Saha and Others, it has been held that only the
Appropriate Government can authorize the payment of minimum
wages partly in kind under Section 11 (3). In the absence ot
notification by the goverament, the supply of essential
COmmodities at concession rates and the cash vaBue of such

COncessions cannottreated as wages in kind and cannot be

be
to be paid in
cducted from the minimum wages, which have
cash under Section 11
(1) of the Act.
2 not only c o v e r
The definition of employee in Section (i)
SOns unskilled, manual or clerical
employed to do skilled or
57
 DR.P.ANGAYAYARKANNI
scheduled employment but
also inclu
vork in any
superannuated,
terminated fromretired,
scrvicedismissed,
or otherwise
removed,
ccascd to bedes,an
ved, discho
dischar

employed.2

3.3. Coverage of Persons under Minimum Wages Act 1948

The Act specifies the employecs covcred under the Act

ct
which includes discharged employee, dismissed employce, picoe
rated workmen, daily-rated workmen, compounder, outworkers
and apprentice.

The Act covers

only those employces, who are employed
to do any skilled, unskilled, manual or clerical work. As
the
teachers of an educational institution are not
employees and
they are not specified to do any skilled, unskilled manual or
clerical work, they never come within the
unless and until the State Government
purview of the Act,
brings them under the
Minimum Wages Act as per Section 20. This view was
in Haryana upheld
Haryana. 13
Unrecognized Schools Association vs. State of

Further, a
claim under Section 20
Act
Wages by a discharged (2) of the Minimum
employee can be made only if the
applicant has been an employee at the time when he
the minimum rates was earming
of wages. The
reiterated in the above view has been
Supreme Court in Attni vs.
Shettappa Laxman Pattan.4 Municipality
However, this view has been
reversed in the
Workers Union'
Wakefield Estate Vs. Neelamalai
Plantation
Again in
the
Kaura, Municipal Committee Rakot Vs.
Punjab High Court Shamlal
who is in actual that
on
upheld only an employee
a case employmentthe date of
under Section 20
the above case of the Act. It has been application can ic
,that the sum to be enumerated
would assume the received an
be
by the employce character of a debt whichbycan ex-employ
or in under the recovereu
ordinary civil court orWorkmen's
under Compensation Act
the
of trial
Disputes Act 1947,as if he
has been is a provision Industr
overruled in workman.
MuruganThe above judgm nt
Radhakrishnan" Transport
Murugan Transpor s.

58
 MINIMUM WAGE LAW IN INDIA-A STUDY WITH SPECIAL
REFERENCE TO UNORGANISED SECTOR IN PONDICHERRY

The High Court held that both past and present employees
could file a cBaim under Section 20 (2) of the Act. As per the
provisions of the Minimum Wages Act 1948, a dismissed
employee is also competent to claim relief under the said Act.
This view has been reiterated in Chacka vs.
Varkey.13The
provision of the Minimum Wages Act includes piece- rated
-

workmen as well as daily rated workmen under Section 17

and 2 (i) of the Minimum Wages Act
respectively.
Within the purview of the Minimum Wages Act, the
outworker is also included for whom any article or material is
given by any person for cleaning or repairing. It also includes
causal workers andpermanent workers. No distinction should
be made between causal
employees and permanent employees.
In Workmen of Orient Paper Mills Ltd vs. Orient
Paper
Mills Ltd9, the Supreme court held that freelancers should
get
the same
wage as that of permanent workers. The freelancer
includes adult, adolescent and children and they will
get the
wages of the category to which they belong.