LABOUR LAW – 2

UNIT – 1
MINIMUM WAGE - A businessman is compelled to pay his employees the minimum
salary regardless of his financial status. The minimum wage is the amount of money
that must be made in order to sustain both the productivity of the employees and their
ability to meet their basic needs. The minimum wage must achieve this by covering the
price of amenities like education and healthcare.
The Minimum Pay Act of 1948 was enacted by the government in response to the
committee’s recommendations and contained minimum wage laws. Although the
phrase “minimum salary” is not defined by this Act, the Central Government and State
Governments are granted the ability to regularly fix minimum pay.
The payment of the minimum wage is necessary wherever this Act is in force. Known
as need-based minimum pay, the concept of establishing minimum wages dates back to
1957 and was created by the Indian Labour Conference.
FAIR WAGE - The ability of the industry to pay is connected to the idea of a fair wage.
- The following is how the Committee defines a fair wage: Over the minimum salary
but below the living wage is considered a fair wage. The lowest limit of a fair income
is obviously the minimum wage; the upper limit should be established by the capacity
of the industry to pay.
Fair wages are payments made to workers for labour that is equally productive, hard,
and demanding. A fair pay is one that is more than the federal minimum wage. It falls
in between the living wage and the minimum wage. The potential of the industry to pay
more in relation to the typical payment for the same work in other professions or crafts
needing the same degree of expertise must thus serve as the upper limit of fair
remuneration, which is undoubtedly the minimum salary. In essence, the state of an
economy and its prospects for the future serve as the foundation for equitable
compensation.
Additionally, a fair wage depends on a number of variables, including minimum wages,
an industry’s ability to pay workers, the level and distribution of the national income,
labour. The ideas of a liveable wage, fair compensation, and minimal wages were
developed by the Fair Wages Committee. As a result, in addition to covering the
expenses of basic requirements like housing and food, the minimum wage must also do
so for luxuries like healthcare, education, and other necessities. The three basic ideas in
this sense are the living wage, fair pay, and minimum wage.
Thus, determining a fair salary is influenced by a number of variables. These include
the industry’s capacity to pay, the going rate of pay, the size and distribution of the
national income, and labour productivity. The majority of for-profit firms currently
follow the principle of just compensation.
LIVING WAGE - In addition to the minimum wage, the Committee on Fair Wages has
proposed the idea of a living wage, which is described as follows.
A living wage is one that should enable the earner to take care of himself and his family,
covering the basic expenses of food, clothing, and shelter as well as some frugal
comforts like paying for his children’s education, shielding them from illness, meeting
the needs of basic social needs, and offering a small amount of insurance against the
more significant misfortunes, like old age.
In order for an employee to have access to certain services and get a living salary, their
fundamental requirements must also be met. As a result, it refers to a pay grade that is
high enough to cover both the necessities of life and the pleasures that are considered
necessary for the advancement of the employee and his family in line with their social
class.
The definition of a liveable wage is as follows: In addition to the essentials of food,
clothing, and shelter, a living wage should enable a male earner to provide for himself
and his family with some degree of frugal comfort, such as the children’s education,
protection from illness, the satisfaction of basic social needs, and measures of insurance
against old age. A living wage is a compensation that takes into consideration the
worker’s unique talents and is sufficient to pay for housing, food, clothes, and other
requirements.
✓ ALL INDIA RESERVE BANK EMPLOYEE ASSOCIATION V. RESERVE
BANK OF INDIA Hidayatullah J. said, “In the same strain.” Though it has been
said that a living wage is “our political aim,” in practice, it has eluded our efforts
like an ever-diminishing horizon and will do so for some time to come. Despite
the fact that some businesses pay higher wages than average, our system of total
remuneration has, at best, fallen short of what is deemed fair.
✓ A fair pay is the average of the minimum wage and the living wage. UNION OF
INDIA V. EXPRESS NEWSPAPER LTD. ‘Fair pay’ was described by Das
Gupta J. as “a salary sufficient to meet the usual requirements of the ordinary
employee seen as a human being in a civilized society, which may generally be
said to correspond to the need-based minimum.

MINIMUM SALARY
This kind of pay aims to cover workers’ most basic needs, such as food, housing, and
healthcare, so they can maintain a respectable level of living. A fair wage: Any payment
paid to employees that is higher than the minimum wage is considered a fair wage. The
need-based minimum wage, although just falling below the lowest limits of fair pay,
represents a rate that is greater than the minimum currently being paid in a number of
industries. It follows that the capacity to pay must be taken into consideration when
determining the need-based minimum.
➢ NEED FOR MINIMUM WAGES - The exploitation of labourers in India
became a norm at one point in history. Be it the Mughal period or the British
rule, the labourers have always suffered economically as well as socially. To
improve the situation of the labourers in the country, the State strives to eliminate
poverty. By fixing the minimum wages for the labourers, the State tries to
achieve the social objective of eradicating poverty of the labourers by
guaranteeing a minimum remuneration for the work done, as well as the
economic objective of motivating the workers to put in maximum efforts for
maximum benefits. These benefits include, but are not limited to, the following:
1. Protecting workers from exploitation – By providing a minimum wage for a
fixed number of hours, the exploitation of the workers shall be reduced to a great
extent.
 2. Ensuring a basic income – Minimum wages are fixed and revised based on
adequate living standards. Thus, fixing minimum wages for the workers shall
ensure a basic income for them.
3. Reducing income inequality – The disparity in income can be reduced by fixing
the minimum wages of the workers.
4. Promoting economic stability – Fixing minimum wages for the workers shall
provide a way to promote economic stability by improving the standard of living.
5. Setting labour standards – By reducing the exploitation of workers, the
standard of work would improve to a great extent.
6. Addressing poverty – Fixing minimum wages of the employees paves the way
for poverty eradication by encouraging more people to undertake work of any
kind

OBJECTIVES OF MINIMUM WAGES ACT, 1948

1. To fix and revise the minimum wages to be paid by the employer to the
employees in certain employments;
2. To fix an adequate minimum wage for all employees in the interest of the public;
3. To fix the daily working hours of an employee according to the employment
type;
4. To prevent exploitation of the workers;
5. To resolve any issues pertaining to the non-payment or less payment of wages;
6. To establish and provide the powers and duties of inspectors;
7. To establish and provide the powers and duties of labour commissioners and
other important labour officers;
8. To provide the powers to make rules to the appropriate government.
APPLICATION OF MINIMUM WAGES ACT, 1948 - The Minimum Wages Act,
1948, is applicable to the whole of India as provided under Section 1 of the Act. The
appropriate government may fix minimum wages for scheduled employment if more
than one thousand employees are employed in the given industry in the whole State, as
provided under Section 1A of the Act. However, it is pertinent to note that this is not a
mandatory condition for the application of the Act. The appropriate government may
fix and revise minimum rates of wages for employment wherein less than one thousand
employees are employed.
IMPORTANT PROVISIONS OF MINIMUM WAGES ACT, 1948
1. APPROPRIATE GOVERNMENT - Since labour law is a subject under the
Concurrent List in the Seventh Schedule to the Indian Constitution, both the
Central Government and the State governments are authorised to legislate on the
subject. Section 2(b) of the Act defines an appropriate government. In relation to
industries such as railways, oilfields, major ports, or any establishment under
central legislation, the Central government is the appropriate government. In
every other industry, the State government is the appropriate government for the
purpose of the Act.
2. COST OF LIVING INDEX NUMBER - Section 2(d) of the Act defines the
cost of living index number as an index number as ascertained by the appropriate
government in the Official Gazette in relation to the employees. Under the Act,
the appropriate government determines the scheduled employment, in respect of
 which it notifies the minimum wages to be paid by the employer to the
employees. The minimum wages are determined on the basis of the cost-of-
living index number. The cost-of-living index number signifies the cost of a
constantly changing standard of living.
3. WAGES - Section 2(h) of the Act provides an inclusive definition of wages,
including all remuneration capable of being expressed in terms of money that the
employer pays to the employee during the course of employment. It also includes
house rent allowance. However, it does not include any accommodation, supply
of light, water, medical attendance, or any other amenity as the appropriate
government may deem fit; any contribution of the employer towards the Pension
Fund or Provident Fund; travel allowance; defrayed special expense; and any
gratuity payable on discharge of the employee.
In WORKMAN REPRESENTED BY SECRETARY V. REPTAKOS BRET &
COMPANY LTD. & ANR. (1992), the Hon’ble Supreme Court took into consideration
the Tripartite Committee of the Indian Labour Conference of 1957. The report of the
Committee stated that the structure of the minimum wage policy has to be nothing more
than at a subsistence level.
In MUNICIPAL CORPORATION OF DELHI V. GANESH RAZAK (1995), the
Supreme Court held that the entitlement to minimum wages under the Act is an existing
right of the workman and does not require any further adjudication than that of the
Labour Court.
4. EMPLOYEE - Section 2(i) of the Act defines an employee as any person who
is engaged to do any skilled or unskilled, manual or clerical work, in respect of
which minimum rates of wages have been fixed. It is an important definition
under the Act as it defines the scope of its application. Not all employer-
employee relations are governed by the Minimum Wages Act. Moreover, not all
kinds of employees would fall under the ambit of claiming the benefits of
minimum wages fixed by the appropriate government.

FIXING MINIMUM RATES OF WAGES - Section 3 of the Act provides for fixing
the rates of the minimum wage by the appropriate government. Sub-section (1) provides
that the appropriate government shall fix the minimum rate of wages payable to the
employees in employment mentioned under Part I or Part II of the Schedule to the
Act (Scheduled Employment) and review the minimum wages for a period of five years.
Sub-section (1A) provides that the appropriate government may refrain from fixing
minimum wages for any Scheduled Employment where the number of employees in the
whole State is less than one thousand until such number remains less than one
thousand. Sub-section (2) provides that the appropriate government may fix:
✓ Minimum time rate;
✓ Minimum piece rate;
✓ A guaranteed time rate; and
✓ An overtime rates.
Sub-section (3) provides the power to the appropriate government to fix different rates
of minimum wages for the following:
✓ Different scheduled employments;
✓ Different classes of work in the same scheduled employment;
 ✓ Adults, adolescents, children and apprentices; and
✓ Different localities
These minimum wages can be fixed either on an hourly basis, by the day, by the month,
or by any other time period as prescribed by the appropriate government.
Section 4 of the Act provides the minimum rates of wages. Minimum rates of wages
shall consist of either:
1. a basic rate of wages and a special allowance at a rate to be adjusted, at such
intervals and in such manner as the appropriate Government may direct, to
accord as nearly as practicable with the variation in the cost-of-living index
number applicable to such workers (hereinafter referred to as the “cost of living
allowance or
2. a basic rate of wages with or without the cost-of-living allowance, and the cash
value of the concessions in respect of supplies of essential commodities at
concessional rates, where so authorised; or
3. an all-inclusive rate allowing for the basic rate, the cost-of-living allowance and
the cash value of the concessions, if any.”
Further, Section 5 of the Act provides that the appropriate government may fix or revise
minimum wages either by appointing committees and sub-committees or by publishing
its proposal for the people likely to be affected by such proposals in the Official
Gazette.
In STANDARD VACUUM REFINING COMPANY V. ITS WORKMEN (1961),
the Apex Court held that the following shall be the guiding principles for the
determination of minimum wages by all wage fixing authorities:
1. A standard working-class family should contain 3 units for every earning
member, in which the earnings of women, children, and adolescents must be
disregarded;
2. Minimum food requirement must be calculated on the basis of net calorie intake;
3. Clothing must be calculated at the rate of 18 yards per person per annum;
4. Fuel, lighting, and other miscellaneous items of expenditure must constitute 20%
of the total minimum wage.
With regards to the question of whether dearness allowance would constitute a part of
the minimum wages, the Bombay High Court in the case of HARILAL JECHAND
DOSHI GHATKOPAR V. MAHARASHTRA GENERAL KAMGAR UNION
(2000) held that the provisions of the Minimum Wages Act, 1948 do not postulate
different criteria for the calculation of minimum wages. If the employer pays a total
wage that is above the minimum wages fixed under the Act, he cannot be held to be in
contravention of the provisions of the Act, as the total wages would comprise of basic
wages and a dearness allowance.

ADVISORY BOARD UNDER MINIMUM WAGES ACT, 1948 - Section 7 of the

Act establishes the Advisory Board. The scope of the Advisory Board appointed by the
appropriate government is the coordination of the committees and sub-committees
established under Section 5 of the Act and advising the appropriate government on
fixing and revising the minimum wages for Scheduled Employment. A Central
Advisory Board (CAB) shall be established under Section 8 of the Act. The Central
Government shall establish CAB and appoint its members. The members shall consist
of an equal number of representatives of both the employers and the employees, along
with independent members nominated by the Central Government. The Chairman of
CAB shall be an independent member. The scope of work of the CAB is to ensure
coordination with the Advisory Board and other matters under the Act.

MODE OF PAYMENT OF WAGES UNDER MINIMUM WAGES ACT, 1948 -

All the wages shall be paid in cash only, as provided under Section 11 of the Act.
However, where it has been a practice to pay the wages in kind, either wholly or partly,
authorisation from the appropriate government is necessary. This includes concessions
on essential commodities as required.
Section 12 of the Act provides the manner in which the employees have to make the
payment of the minimum wages. The provision provides that the employer shall pay the
minimum rates of wages to every employee working under him within the prescribed
time period.
FIXING HOURS FOR A NORMAL WORKING DAY UNDER MINIMUM
WAGES ACT, 1948 - Section 13 of the Act provides that the appropriate government
may fix the working hours in the following manner:
1. Fix the working hours of a normal day, including one or more specified intervals.
2. Provide a day of rest in every period of seven days to all the employees or a class
of employees, and adequate remuneration must be provided to the employees
during the day of rest.
3. Provide payment to the employees on the day of rest, which shall not be less than
the overtime rate.
Section 14 of the Act provides that where an employee works over the specified number
of hours in a normal working day, he shall be entitled to receive such overtime wages
at the rate fixed under the Act for every hour after his normal working hours. In case an
employee works for a smaller number of hours in a normal working day than prescribed,
he shall still receive the minimum wages fixed under the Act. However, this provision
shall apply only if the lower number of hours of work was not caused by the
unwillingness of the employee. The provision has been provided under Section 15 of
the Act.
COMPLIANCE UNDER MINIMUM WAGES ACT, 1948 - Section 18 of the
Act mandates the maintenance of records and registers by every employer under the
Act. The records shall contain the particulars of the employees employed by the
employer, the work performed by them, the wages paid to them, the receipts given by
them, and any other information prescribed by the appropriate government. The
employer also has to keep an exhibit of the factory, workshop, or place where the
scheduled employment is carried out. Such registers and records may be perused by the
inspector appointed by the appropriate government under Section 19 of the Act. The
inspector may:
1. In order to examine the register, a record of wages, etc., the inspectors may enter
the premises or places within the local limits of their authority where the
employees are employed to work and for which minimum rates of pay have been
determined under the Act.
2. Examine any person whom the inspector may have reasons to believe is an
employee.
 3. Require any contractor to provide information relating to the employees.
4. Seize or make copies of the wage registers, etc., which he may have reasons to
believe were committed by the employer.
5. The appropriate government may provide any other powers or duties under the
Act.
➢ CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT 1948 - The
constitutionality of Minimum Wages Act 1948 was challenged in court cases.
The judiciary played a key role in establishing its constitutionality, affirming that
the Act safeguards workers’ interests, ensuring access to essentials like food,
shelter, clothing, education and medical aid. It was emphasised that paying below
the minimum wage amounts to forced labour.
1. Minimum Wages Act is Not violative of Article 19 of the Constitution - The
first challenge to the constitutional validity of the Minimum Wages Act, 1948
arose in the case of Bijay Cotton Mills Ltd. v. The State of Ajmer, 1954. In
this matter, a dispute emerged between a company and its workers concerning
wage improvements. The company contended that the Act’s provisions were
unlawful, asserting that they unreasonably restricted employers. The company
claimed that these provisions hindered the resumption of trade or business unless
minimum wages were paid to workers.
The company also argued that the rights of employees were curtailed, as they couldn’t
work in a trade or industry unless mutually agreed terms existed between them and their
employers. Thus, the company alleged that this Act violated Article 19(1)(g) of the
Indian Constitution, which safeguards trade and business freedom.
However, the Supreme Court of India ruled that the Act’s provisions were not
unreasonable and were allowed under Article 19 of the Indian Constitution. The
Court highlighted that these provisions were enacted for the public’s benefit, in line
with the Directive Principles of State Policy outlined in Article 43 of the Constitution.
Although these provisions might pose challenges for employers in conducting or
initiating businesses, they were established to safeguard the broader public interest. As
such, the Act could not be considered unreasonable or invalidated on these grounds.
Similarly, in the case of Bhikusa Yamasa Kshatriya v. Sangamner Akola Bidi
Kamgar Union, 1958, the Bombay High Court determined that the establishment of
committees and Advisory Boards under the Minimum Wages Act, 1948 did not violate
the legal stipulations of the enacted legislation. Upon thorough scrutiny of the Act, it
was observed that Section 3(3)(iv) of the Act did not conflict with Article 19(1) of the
Indian Constitution, nor did it infringe upon the Constitution’s guarantee of equal
protection under the law. Hence, the Minimum Wages Act is constitutionally valid with
respect to Article 19.
2. Minimum Wages Act is Not violative of Article 14 of the Constitution-
Minimum Wages Act is not violative of Article 14 of the Constitution which
states equality before the law.
India’s Union Labour and Employment Minister, Shri Mallikarjuna Kharage,
highlighted that the variation in minimum wages among different states stems from
diverse socio-economic conditions, commodity prices, paying capacity, productivity
and more. These factors influence the wage rates paid to workers in specific states.
In the case of N.M. Wadia Charitable Hospital v. State of Maharashtra, 1986, the
Bombay High Court ruled that setting distinct minimum wage rates for various localities
is in accordance with the Constitution and the nation’s labour laws. As such,
establishing different minimum wage rates for different regions is not discriminatory
and does not violate the principles of the Constitution. Hence, the Minimum Wages Act
is constitutionally valid with respect to Article 14.
3. Minimum Wages Act is Not Violative of Article 43 - The importance of
providing labourers with wages that cover not only basic survival but also uphold
health and dignity is a matter that’s difficult to challenge. This aligns with a
directive principle of State policy found in Article 43 of our Constitution.
Employers shouldn’t raise concerns if they are required to pay minimum wages to their
labourers, even if these labourers, due to their financial constraints and vulnerability,
might agree to work for lower wages. This perspective was upheld in the case of Bijay
Cotton Mills Ltd v/s The State Of Ajmer.

➢ FIXATION AND REVISION OF MINIMUM WAGES - The fixation and

revision of minimum wages is an important aspect of labour and employment
regulations in many countries. Minimum wage laws are designed to establish a
baseline level of compensation that employers must pay to workers for their
labour. The purpose of these laws is to protect workers from exploitation, ensure
fair compensation, and provide a decent standard of living. The process of fixing
and revising minimum wages typically involves a combination of legislative
action, government agencies, and consultation with stakeholders such as trade
unions, employers' associations, and worker representatives. The specific
procedures and institutions involved can vary from country to country. The bill
was brought in 1946, and by 1948, the bill of Minimum Wages Act was enforced
to save the rights of the workers. The provisions of the Act are intended to
achieve the objective of doing social justice to workers employed in the
scheduled employment by prescribing the minimum rate of wages for them. In
other words, the Act aims to provide a statutory fixation of minimum wages with
a view to preventing the exploitation of labour.
Minimum Rate Of Wages Under The Act - Under section 3 of the Minimum Wages
Act, the minimum rate of wages fixed by the Appropriate Government in respect of the
scheduled employment consists of the following:
The basic wages and house rent allowance may vary with the cost-of-living index.
The basic rate of wages with or without house rent allowance based on the cost-of-living
index number of the employee
All-inclusive rates for the basic rate of wages with the cost-of-living allowances and
cash value of concessional supply of materials
The term minimum wages have not been defined under the provision of the Minimum
Wages Act, 1948 presumably because it would not be possible to lay down a uniform
minimum wage for all industries throughout the country on account of different and
varying conditions prevailing from one industry to another.
Procedure For Fixation And Revision Of Minimum Wages
In India, the fixation of minimum wages is governed by the Minimum Wages Act, of
1948. The Act provides for the fixation and enforcement of minimum wages for various
scheduled employments across different industries and sectors.
Scheduled Employments:
The Act categorizes specific employments into schedules based on the nature of work,
industry, and geographic region. Each schedule includes different occupations or
industries for which minimum wages need to be fixed. The number and nature of
scheduled employment may vary from state to state.
As far as section 5 of the Minimum Wages Act is concerned, there are two modes of
procedures for fixing and revising the minimum wages. One common thing among both
of the procedures is to empower the Government in reaching a favourable result
regarding the fixation of minimum wage.

The two modes of fixing and revising minimum wages can be categorized as
follows:
COMMITTEE METHOD [SECTION 5(1)] - Under the Minimum Wages Act, of
1948 in India, the committee method is a mechanism used for the fixation and revision
of minimum wages for certain scheduled employments. The committee method
involves the establishment of committees that play a crucial role in conducting inquiries,
examining relevant factors, and making recommendations for the fixation and revision
of minimum wages. Here's an overview of the committee method under the Minimum
Wages Act:
1. Minimum Wages Fixation Committee: For certain scheduled employments,
the appropriate government may constitute a Minimum Wages Fixation
Committee. This committee is tasked with conducting inquiries and
recommending the minimum wages to be fixed for the particular employment.
2. Composition of the Committee: The Minimum Wages Fixation Committee
typically consists of representatives from employers, employees, independent
experts, and government officials. The committee may include individuals with
expertise in relevant fields such as labour economics, industrial relations, or
specific industries covered by the scheduled employment.
3. Inquiries and Data Collection: The committee conducts detailed inquiries and
collects relevant data to inform the process of fixing minimum wages. This may
include studying factors such as the cost of living, standard working hours,
prevailing wage rates in similar employments, skill requirements, and the
capacity of employers to pay.
4. Examination of Factors: The committee examines various factors that influence
wage determination, considering both economic and social aspects. These factors
may include living conditions, social needs, productivity levels, regional
variations, and the impact of proposed wage rates on workers and employers.
5. Stakeholder Consultation: The committee may engage in consultations with
stakeholders such as employers' associations, trade unions, worker
representatives, and other interested parties. These consultations provide an
opportunity for stakeholders to present their views, concerns, and suggestions
regarding the fixation and revision of minimum wages.
 6. Recommendations and Reports: Based on the inquiries, data analysis, and
stakeholder consultations, the committee prepares a report containing its
recommendations for the fixation or revision of minimum wages. The report may
outline the proposed wage rates, the rationale behind the recommendations, and
any additional provisions or considerations relevant to the scheduled
employment.
7. Government Decision: The government reviews the recommendations made by
the Minimum Wages Fixation Committee and takes a decision on the fixation or
revision of minimum wages. The government considers the committee's report
along with other relevant factors, such as economic conditions, legal
requirements, and administrative feasibility.
8. Notification and Implementation: Once the government approves the
minimum wages based on the committee's recommendations, it issues a
notification specifying the minimum rates of wages applicable to the scheduled
employment. This notification provides the legal basis for employers to comply
with the prescribed minimum wages, and it includes details such as the effective
date and any other relevant provisions.
NOTIFICATION METHOD [SECTION 5(2)] - Under the Minimum Wages Act, of
1948 in India, the notification method is used for the fixation and implementation of
minimum wages for various scheduled employments. The notification method involves
the issuance of an official notification by the appropriate government specifying the
minimum rates of wages applicable to the scheduled employment. Here's an overview
of the notification method under the Minimum Wages Act:
1. Identification of Scheduled Employments: The Act categorizes specific
employments into schedules based on the nature of work, industry, and
geographic region. Each schedule includes different occupations or industries for
which minimum wages need to be fixed. The number and nature of scheduled
employment may vary from state to state.
2. Consultation and Advisory Boards: Before fixing the minimum wages, the
appropriate government may consult with advisory boards or committees
established under the Act. These boards consist of representatives from
employers, employees, independent experts, and government officials. Their
input may be considered in determining the minimum wages for the scheduled
employments.
3. Determination of Minimum Wages: The appropriate government, either the
central or state government, examines relevant factors such as the cost of living,
prevailing wage rates, standard working hours, skill requirements, and the
capacity of employers to pay. Based on these considerations, the government
determines the minimum rates of wages for each scheduled employment.
4. Preparation of Notification: Once the minimum wages are determined, the
government prepares an official notification. The notification specifies the
minimum rates of wages applicable to each scheduled employment. It includes
details such as the effective date, the period of applicability, wage components
(basic wages, dearness allowance, etc.), and any other relevant provisions.
5. Publication and Legal Effect: The notification containing the minimum wages
is published in the official gazette or other appropriate publications as required
 by law. Once published, the notification carries the force of law, and employers
in the scheduled employments are legally obligated to pay their workers at least
the prescribed minimum wages.
6. Compliance and Enforcement: The government designates labour inspectors
or enforcement officers who are responsible for ensuring compliance with the
minimum wages specified in the notification. These officials conduct
inspections, receive complaints, and take appropriate action against employers
who fail to pay the mandated minimum wages. Non-compliance may result in
penalties or other legal consequences for employers.
7. Periodic Revision and Amendments: The government periodically reviews the
minimum wages and may make necessary revisions or amendments based on
changing economic conditions, cost of living, and other relevant factors. The
revised minimum wages are communicated through subsequent notifications,
which supersede the previous ones.
The notification method provides a legally binding mechanism for the fixation and
implementation of minimum wages. It ensures that employers are aware of their
obligations and workers are entitled to receive the prescribed minimum wages for their
labour. The method allows for transparency and uniformity in wage determination
across scheduled employment while facilitating compliance and enforcement.

PENALTIES - As per section 22 of the Minimum Wages Act, the penalties may be
charged in the case if:
1. The employees pay less than the minimum wages prescribed by the Act
2. The employer does not comply with the provisions given in section 13 of the Act
If there is an act of omission of acts by the employer, then a notice specifying the same
can be exhibited in a prescribed manner on the premises in which the employment is
carried on.
1. Fine: extending up to 500 rupees
2. Imprisonment: 6 months

EXEMPTION FROM LIABILITY IN CERTAIN CASES UNDER THE

MINIMUM WAGES ACT, 1948 - Section 23 of the Act provides that where an
employer has been accused of committing any offence under the Act, and he charges
the offence upon any other person, the employer shall be entitled to be discharged of
such an offence if the following conditions are fulfilled:
1. The employer shall make a complaint against such other person before the
Authority under the Act;
2. The employer shall bring before the Court such other person upon whom he
places the charge of the offence;
3. The employer shall satisfy the Court that due diligence for the execution of the
provisions of the Act was conducted on his behalf;
4. The employer shall satisfy the Court that such an offence was committed by such
other person without his knowledge, consent, or connivance.
5. In such cases, the other person shall be convicted for the offence and the
employer shall be discharged. If the Court deems it necessary, it may examine
the employer under oath.
 ➢ THE CONCEPT OF FLOOR WAGE UNDER THE CODE - The concept of
floor wage has been introduced under the Code on Wages, 2019, which was not
provided under the Minimum Wages Act, 1948. Floor wages can be understood
as the basis on which the appropriate government has to decide the minimum
wages. Floor wages may be differentiated on the basis of location and type of
work. For example, the floor wages of a work in the hills to be performed by an
unskilled labour may be different from a similar work to be performed in a desert.
It is pertinent to note that the rationale behind introducing floor wages is to bring
uniformity to the minimum wages to be paid to employees. It would also help keep the
migration of workers in check.
Floor wages are to be fixed by the Central Government under Section 9 of the Code on
Wages. The Central Government may prescribe the floor wages of a particular area. The
appropriate government is obliged to follow floor wages while fixing minimum wages.
The appropriate government, under no circumstances, can fix the minimum wages
below the level of the floor wages fixed by the Central government. Moreover, the
appropriate government cannot reduce the minimum wages already fixed if it is higher
than the floor wages. The Central Government can seek the advice of the Central
Advisory Board under the Code for the determination of floor wages. Additionally, the
revision of floor wages cannot exceed the time limit under the Code, i.e., five years.
The concept of floor wages was introduced by the Bhootlingam Committee in 1978 in
the name of “National Wage.” Thereafter, in 1991, the National Commission on Rural
Labour Floor suggested the “National level floor minimum wages.” However, the Code
on Wages, 2019 is the first statute to implement this concept.
➢ PROCEDURE FOR HEARING AND DECIDING CLAIMS - The procedure
for hearing and deciding claims in labour law typically involves several steps,
which may vary depending on the jurisdiction and the specific laws governing
labour disputes. However, here is a general outline of the process:
1. Filing a Complaint/Claim: The process usually begins when an employee
(claimant) files a complaint or claim against their employer with the appropriate
labour authority or tribunal. This could be a labour court, an administrative
agency, or an arbitration panel, depending on the jurisdiction.
2. Notification to Respondent: Once the complaint is filed, the labour authority
notifies the respondent (employer) about the claim and provides them with a
copy of the complaint. The respondent is given an opportunity to respond to the
allegations.
3. Preliminary Assessment: The labour authority may conduct a preliminary
assessment of the claim to determine if it falls within its jurisdiction and if there
are any grounds for further investigation. This may involve reviewing the
complaint, gathering additional information, and holding preliminary hearings.
4. Mediation/Conciliation: Many jurisdictions encourage or require parties to
attempt mediation or conciliation before proceeding to a formal hearing. A
neutral third party may facilitate negotiations between the parties to reach a
settlement or resolution without the need for a formal hearing.
5. Formal Hearing: If mediation fails or if the parties choose not to engage in
mediation, the labour authority will schedule a formal hearing to adjudicate the
 claim. During the hearing, both parties will have the opportunity to present
evidence, call witnesses, and make legal arguments.
6. Evidence Presentation: Both the claimant and the respondent will present
evidence to support their respective positions. This may include documents,
witness testimony, and other relevant information.
7. Legal Arguments: After the presentation of evidence, both parties may make
legal arguments to support their positions. This allows each party to explain how
the evidence supports their case and to address any legal issues or precedents
that may apply.
8. Decision: After considering the evidence and legal arguments presented, the
labour authority will issue a decision on the claim. This decision may include
findings of fact, conclusions of law, and an order for any remedies or relief that
may be appropriate.
9. Appeals: In many jurisdictions, parties have the right to appeal the decision of
the labour authority to a higher court or appellate body. The appeals process
typically involves a review of the record from the initial hearing and may include
additional arguments or evidence.
10. Enforcement: If the decision is in Favor of the claimant, the labour authority
may issue orders for the enforcement of any remedies or relief granted. This
could include orders for payment of wages, reinstatement of employment, or
other forms of relief.

UNIT – 2
PAYMENT OF WAGES ACT, 1936 - The Payment of Wages Act, 1936 holds
significant importance in the Indian legal framework as it governs the payment of wages
for specific categories of employed individuals. One of its key objectives is to guarantee
the punctual disbursement of wages without unauthorized deductions. Applicable to
employees in various sectors, including railways, factories, and industrial
establishments, the act outlines the employer’s responsibility for wage payment,
permissible deductions, and the establishment of authorities to adjudicate complaints
related to wage disputes. Furthermore, the legislation incorporates provisions for
penalizing malicious and vexatious claims, and it has undergone multiple amendments
to adapt to evolving labor dynamics. Rooted in the protection of workers’ rights, the act
is designed to ensure the timely and complete payment of wages, ultimately enhancing
the overall welfare of the workforce.
➢ OBJECTIVES OF PAYMENT OF WAGES ACT, 1936 - The Payment of
Wages Act 1936, a legislative enactment by the Parliament of India, serves as a
regulatory framework governing the payment of wages for specific categories of
employed individuals. The primary goals of the act are as follows:
Its primary objectives encompass ensuring the timely and complete payment of wages
to employees and shielding them from unauthorized deductions. Additionally, the act
aims to foster industrial peace and harmony by establishing a fair and transparent
mechanism for wage disbursement. It incorporates penal provisions to hold employers
accountable for non-compliance, emphasizing the importance of adhering to the
stipulations outlined in the act. Through its multifaceted approach, the Payment of
Wages Act, 1936 endeavors to create a balanced and equitable system that prioritizes
the financial well-being of employees while promoting a harmonious industrial
environment.

➢ WAGES UNDER PAYMENT OF WAGES ACT, 1936 - Following Section

2(iv) of the act, the term “wages” is elucidated to encompass all forms of
remuneration quantifiable in monetary terms. It will include any compensation
that would be due to an individual employed, subject to the fulfillment of
conditions stipulated in the contract of employment, whether explicitly stated or
implied. Such conditions may pertain to regular attendance, satisfactory work
performance, conduct, or other behavioral aspects of the employed individual.
The definition further extends to cover additional forms of remuneration, such
as bonuses, of a similar nature that would be payable, along with any sum owed
to the individual due to the termination of their employment. This comprehensive
interpretation ensures that the concept of “wages” encapsulates the entirety of
compensation and benefits that an employee is entitled to under the specified
conditions, emphasizing clarity and inclusivity in its definition.
➢ APPLICATION OF THE PAYMENT OF WAGES ACT, 1936 - The
Payment of Wages Act, 1936 applies to individuals engaged in diverse
employment sectors, including railways, factories, and industrial or other
establishments, with the Central Government overseeing specific industries like
railroads, mining, air transportation, and oil and gas fields. The legislation
outlines the employer’s responsibility for timely and complete wage payments,
specifying wage periods, methods of payment, and allowable deductions.
Additionally, it establishes mechanisms for the resolution of complaints related
to wage delays or deductions through designated authorities, imposing penalties
for unfounded claims. The act, covering the entire nation, aims to ensure
employees receive their wages punctually and fully, emphasizing redressal
avenues for wage-related grievances. Implementation falls under the purview of
the competent government in each state, with the Central Government holding
authority in specified sectors, fostering a comprehensive framework for the
regulation of wage payments across various industries in India.
DIFFERENCE BETWEEN THE PAYMENT OF WAGES ACT, 1936 AND
MINIMUM WAGES ACT, 1948
Payment of Wages Act of
Basis Minimum Wages Act of 1948
1936
The objective behind the
The objective behind the
introduction of this Act was to
introduction of this Act was to
ensure that every worker
Objective of prevent delays in the payment
receives at least a minimum
the act of wages that led to a debt trap
amount of money as wages and
for the informal sector
to avoid the exploitation of the
workers.
informal sector workers.
Application Payment of Wages Act of Minimum Wages Act of 1948 is
and scope of 1936 applies uniformly to the applicable to the whole of India.
the act whole territory of India, However, its scope varies
 including the State of Jammu depending on states and
and Kashmir. regions.
Payment of Wages Act of Minimum Wages Act of 1948
Definition of
1936 defines “wages” under defines “wages” under Section
wages
Section 2 (VI) of the Act. 2 (h) of the Act.
The Act is designed to set up the
minimum wage determining
The Act aims to control how
mechanism in industries where
certain types of people who
there is no plan in place for the
work in the industry are paid
Purpose of the absolute management of wages.
their wages. Its goal is to
act This mechanism is built by
guarantee the regular payment
collective bargaining
of wages free from any
agreements or other means. It
unlawful deductions.
prevents the exploitation of
workers.
The housing allowance is not
Inclusion of Wages include a housing rent
a part of wages under the
housing allowance under the Minimum
Payment of Wages Act of
allowance Wages Act of 1948.
1936.
Regardless of whether it is
referred to as a monetary
The additional payments due
incentive or by another name,
Additional under the conditions of
any additional compensation
remuneration employment to the employee
due under the conditions of
are not considered wages.
employment is not considered
as “wages.”
“Wages” encompasses Compensation for extra hours,
Scope of
compensation for extra hours, holidays, and leave time is
wages
holidays, and leave time. excluded.
Any compensation that is due
It excludes any compensation
Compensation under a court’s orders,
due in accordance with a court’s
by the court judgments, or settlements is
decision, settlement, or decree.
considered wages.
Wages under the Minimum
Other Wages also comprise any
Wages Act of 1948 does not
monetary amount that is payable by the
comprise any amount that is
amounts employer to the employee
payable by the employer to the
payable related to his or her
employee related to his or her
regarding termination of work under any
termination of work under any
employment law, etc.
law, etc.
Scheme- Any amount that the employee
Any amount that the employee
related is eligible to receive under a
is eligible to receive under a
monetary scheme created in accordance
scheme created in accordance
benefit with law is included in wages.
 with a law is not included in the
wages.
➢ RESPONSIBILITY FOR PAYMENT OF WAGES - Responsibilities for
payment of ages are mentioned in Section 3 of the Payment of Wages Act, 1936.
Every employer is liable for the payment of all wages to every one of the workers
that he utilizes or employes for his work. In some other cases, if the employer
names an individual, or on the off chance that there is an individual capable of
the business or is designated, at that point, such an individual is liable for the
payment of wages. In sub-section (1), the business is capable to make the
payment of all wages which the Act expects him to make. Actually, if the
temporary worker or the individual that the employer assigns to make the
payment neglects to do as such, at that point the duty lies with the employer.
Each employer will be answerable for the payment to people utilized by him of
all wages required to be paid.
✓ On account of the industrial facility, the administrator of that manufacturing
plant will be obligated to pay the wages to workers utilized by him.
✓ On account of mechanical or different foundations, the duty of supervision will
be subject to the payment of wages to workers utilized or employed by him.
✓ On account of railroads, an individual named by the rail line organization for
determined territory will be at risk for the payment of wages to the workers.
✓ On account of a contractual worker, an individual assigned by such a temporary
worker who is straightforwardly under his charge will be at risk for the payment
of the wage to the representatives.
✓ On the off chance that he neglects to pay wages to representatives, individuals
who employed the workers will be at risk for the payment of wages.
➢ FIXATION OF WAGE PERIOD - Each individual who is liable for the
payment of wages under section 3 will fix periods in regard to which such wages
will be payable. No wage period will surpass one month. That implies pay can
be paid on day by day, week by week, fortnightly (for at regular intervals) and
month to month as it were. Payment of wage period for payment of wages to
representatives by manager ought not to surpass 30 days, for example, one
month. In any case, compensation can’t be paid quarterly, half-yearly or once in
a year.
➢ TIME OF PAYMENT OF WAGES - Each individual employed upon or in:
Any railway, production line or modern or different foundations upon or in which the
complete number of employed people is short of what one thousand, must get his wages
before the expiry of the seventh day from the most recent day of the pay time frame for
which the wages are payable. Some other railway, industrial or mechanical or different
foundations, must get his wage before the expiry of the tenth day from the most recent
day of the compensation time frame for which the wages are payable.
✓ If the employer ends the work of an individual, at that point he should guarantee
that the fired employee gets his wages before the expiry of the second working
day from the date of the end of employment.
✓ The Appropriate Government can exclude to such a degree and furthermore
subject to such conditions in the request the individual liable for the payment of
wages to utilize or employ people.
 ✓ The business or the individual answerable for paying wages must guarantee that
the wages are paid on a working day.

WAGES TO BE PAID IN CURRENT COINS OR CURRENCY NOTES - The

employer or the individual answerable for making the payment of wages must pay in
money coins or cash notes or in both. Further, he can’t pay in kind. Additionally, the
employer can pay the wages by means of a cheque or a direct deposit to the bank of the
representative subsequent after taking a composed approval from him. Provided that the
appropriate Government may, by notification in the Official Gazette, specify the
industrial or other establishments, the employer of which shall pay to every worker
employed in such industrial or other establishments, the wages only by giving a cheque
or by crediting the payment in his bank account.
➢ DEDUCTION WHICH MAY BE MADE FROM WAGES - At the time of
payment of the salary to personnel, the business enterprises should make
deductions in step with this act simplest. The employer should no longer make
deductions as he likes. Every quantity paid by the employee to his enterprise is
referred to as deductions.
✓ The following are not referred to as the deduction:-
✓ Stoppage of the increment of worker
✓ Stoppage of the promotion of the worker
✓ Stoppage of the inducement lack of overall performance by using employee
✓ The demotion of the worker
✓ Suspension of the worker
The above-stated movements taken via the company have to have top and sufficient
reason.
DEDUCTIONS WHICH ARE ACCEPTABLE ACCORDING TO THIS ACT
1. Fines - Fine ought to be forced by the employer on worker with the endorsement
of the state government or recommended authority. The employer ought to
observe the guidelines referenced underneath for and before forcing of fine on
the worker.
✓ Notice leading body of fines on workers ought to be shown in the work premises
and it ought to contain exercises that ought not to be made by the representative.
✓ Fine ought not to be forced on the worker until he gives the clarification and
causes for the demonstration or omission he made.
✓ The aggregate sum of fine ought not to surpass 3% of his pay.
✓ Fine ought not to be forced on any representative who is younger than 15 years.
✓ Fine ought to be forced for one time just on the pay of the employee for the
demonstration or exclusion he made.
✓ Fines ought not to be recovered in the method for portions or payments from the
representative.
✓ Fine ought to be recuperated or recovered within 60 days from the date on which
fine was forced.
✓ Fine ought to be forced on the day act of exclusion made by the worker or the
employee.
✓ All fines gathered from the worker ought to be credited to basic reserve and use
to help the employees.
 ✓ All fines and all acknowledge thereof will be recorded in a register to be kept by
the individual answerable for the payment of wages under section 3 in such
structure as might be prescribed, and all such acknowledge will be applied
uniquely to such purposes useful to the people employed in the factory or
foundation as are affirmed by the recommended authority.
✓ No fines forced on any employee or worker should be recuperated from him after
the expiry of 90days from the day on which the fines were forced.
2. DEDUCTIONS FOR ABSENCE FROM DUTY - Deductions can be made by
the employer for the nonattendance from duty by the employee for one day or
for any period. The sum deducted for nonappearance from the duty ought not to
surpass a total which bears a similar relationship to the pay payable in regard to
the pay time frame as this time of nonattendance does to such wage-period. (For
example:-: if the compensation of a worker is 6000/ – every month and he was
missing for obligation for one month. Finding from the compensation for
nonattendance of obligation ought not to surpass 6000/-)
Employees present for the work spot and will not work without an appropriate
explanation will be regarded to be missing from duty. On the off chance that at least 10
people together missing for the duty with no notification and without sensible reason,
the employer can make 8 days of wages as a deduction from their pay.
3. DEDUCTIONS FOR DAMAGES OR LOSS - The employer should offer a
chance to the employee to clarify the explanation and cause for the harm
occurred and deductions made by an employer from the worker compensation
ought not to surpass the worth or measure of harm made by the employee.[Sec
10 (2)] All such findings and all acknowledge thereof will be recorded in a
register to be kept by the individual answerable for the payment of wages under
area 3 in such structure as might be endorsed.
4. DEDUCTIONS FOR SERVICES RENDERED - House-convenience
courtesy or administration gave by the employer ought to be acknowledged or
accepted by the worker, than just the employer can make a deduction from the
wage or salary of the employee. Deduction ought not to surpass a sum equal to
the estimation of the house-settlement pleasantry or administration provided.
5. DEDUCTIONS FOR RECOVERY OF ADVANCES - If there should be an
occurrence of the advance paid to the workers by the employer before business
started, such advance ought to be recuperated or recovered by the employer from
the principal payment of the wages/pay to the employee. In any case, the
employer ought not to recuperate or recover the advances given for the voyaging
cost for the worker.
6. DEDUCTIONS FOR RECOVERY OF LOANS - Conclusions for the
recuperation of advances conceded for house-building or different purposes will
be dependent upon any guidelines made by the State Government directing the
degree to which such advances might be allowed and the pace of intrigue payable
subsequently.
7. DEDUCTIONS FOR PAYMENT TO CO-OPERATIVE SOCIETIES AND
INSURANCE SCHEMES - Reasonings for payments to co-operative societies
or deductions for payments to insurance schemes kept up by the Indian Post
Office or with worker acknowledgement deductions made for payment of any
 premium on his extra security strategy to the Life Insurance Corporation will be
dependent upon such conditions as the State Government may force.
➢ MAXIMUM AMOUNT OF DEDUCTIONS: The Payment of Wages Act,
1936, is an important legislation in India that governs the payment of wages to
employees across various industries. It ensures that employees receive timely
and full payment for their work and provides mechanisms for the enforcement
of wage-related rights. However, the act does not specify a maximum amount of
deductions that can be made from an employee's wages. Instead, it outlines
certain permissible deductions and prohibits others. Here's an explanation of the
deductions allowed under the Payment of Wages Act:
A. Permissible Deductions:
▪ Deductions for Fines: Employers can make deductions from an employee's
wages for fines imposed for acts of misconduct. However, such fines must be
proportionate to the gravity of the offense, and the total amount of fines imposed
in any wage period should not exceed an amount equal to three percent of the
wages payable to the employee.
▪ Deductions for Absence from Duty: Employers can deduct wages for the period
an employee is absent from duty without leave or permission.
▪ Deductions for Damage or Loss: Employers can make deductions for damage or
loss of goods expressly entrusted to the employee's custody, provided that the
damage or loss occurred due to the employee's neglect or default.
▪ Deductions for Housing Accommodation: If an employee is provided with
housing accommodation by the employer, deductions for the value of such
accommodation are permissible, subject to certain conditions specified under the
act.
▪ Deductions for Amenities and Services: Employers can make deductions for
amenities and services supplied by the employer for the benefit of the employee,
subject to prescribed limits and conditions.
B. Prohibited Deductions:
▪ Deductions Not Authorized by Law: Employers are prohibited from making
deductions from an employee's wages unless such deductions are expressly
authorized by law or the employee has given prior written consent.
▪ Deductions for Absence During Strike: Employers cannot make deductions for
periods of absence caused by participation in a strike that is not illegal.
▪ Deductions for Damage or Loss Not Attributable to Employee: Employers
cannot make deductions for damage or loss of goods or property if the damage
or loss was not caused by the willful default or negligence of the employee.
C. Limitation on Deductions: Although the act does not specify a maximum limit
on deductions in general, it does prescribe limits for fines imposed for acts of
misconduct, as mentioned earlier (not exceeding three percent of the wages
payable to the employee in any wage period).