E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

MINIMUM WAGES ACT 1948

INTRODUCTION

According to ILO, Minimum wages have been defined as “the minimum amount of
remuneration that an employer is required to pay wage earners for the work performed during
a given period, which cannot be reduced by collective agreement or an individual contract
Minimum wage systems should not be seen or used in isolation, but should be designed in a
way to supplement and reinforce other social and employment policies. Several types of
measures can be used to tackle income and labour market inequality, including pro-
employment policies, social transfers, and creating an enabling environment for sustainable
enterprises. 
The Minimum Wages Act was passed in 1948 and it came into force on 15th March, 1948.
The National Commission on Labour has described the passing of the Act as landmark in the
history of labour legislation in the country. The philosophy of the Minimum Wages Act and
its significance in the context of conditions in India, has been explained by the Supreme
Court in Unichoyi v. State of Kerala (A.I.R. 1962 SC 12), as follows:
“What the Minimum Wages Act purports to achieve is to prevent exploitation of labour and
for that purpose empowers the appropriate Government to take steps to prescribe minimum
rates of wages in the scheduled industries. In an underdeveloped country which faces the
problem of unemployment on a very large scale, it is not unlikely that labour may offer to
work even on starvation wages. The policy of the Act is to prevent the employment of such
sweated labour in the interest of general public and so in prescribing the minimum rates, the
capacity of the employer need not to be considered. What is being prescribed is minimum
wage rates which a welfare State assumes every employer must pay before he employs
labour”.
According to its preamble the Minimum Wages Act, 1948, is an Act to provide for fixing
minimum rates of wages in certain employments. The employments are those which are
included in the schedule and are referred to as ‘Scheduled Employments’. The Act extends to
whole of India.

Thus, It came to bring equality and justice to the blue-collar people.  Pay fixing experts were
guided by the standards recommended by the Fair Wage Committee in the settlement of issues
identifying with wage problems in organized industries.

Scope and Objective of the Minimum Wages Act

    To safeguard that the employee has a basic physical necessity, proper health, and
comfort.

     Ensure that the labour gets fair wages.

    To ensure that the labour lives a decent life and have a respectable name in society.

Some of the most important methods of wages payment are as follows:

1. Minimum Wage
E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

2. Living Wage

3. Fair Wage

4. Need-Based Minimum Wage. 

Before we discuss the methods of wage payment, let us first know what wages means. In the
widest sense, wages means any economic compensation paid to the employer under some
contract to his woks for the services rendered by them. 

Based on the needs of the workers, capacity of the employer to pay and the general economic
conditions prevailing in a country, the committee on Fair Wages (1948) and the 15th session
of the Indian Labour Conference (1957) propounded certain wage concepts such as minimum
wage, fair wage, living wage and need based minimum wage. While the first three types
(concepts) of wages were defined by the Committee on Fair Wages, the last one was defined
by the 15th session of the Indian Labour Conference. 

These definitions are considered here one by one:

1. Minimum Wage:
A minimum wage is a compensation to be paid by an employer to his workers irrespective of
his ability to pay. The Committee on Fair Wage’ has defined minimum wage as “the wage
must provide not only for the bare sustenance of life, but for the preservation of the efficiency
of the workers. For this purpose, minimum wage must provide some measures of education,
medical requirements and amenities”. 

2. Living Wage: 
A living wage is one which should enable the earner to provide for himself and his family not
only the bare essentials of food, clothing and shelter but a measure of frugal comfort
including education for his children, protection against ill-health, requirement of essential
social’ needs and a measure of insurance against the more important misfortunes, including
old-age. Thus, a living wage represents a standard of living. A living wage is fixed
considering the general economic conditions of the country. 

3. Fair Wage: 
Fair wage, according to the committee on Fair Wage, is the wage which is above the
minimum wage but below the living wage. The lower limit of the fair wage is obviously the
minimum wage; the upper limit is set by the capacity of the industry to pay. The concept of
fair wage is essentially linked with the capacity of the industry to pay. 

The fair wage depends on considerations of such factors as: 

(i) The productivity of labour, 

(ii) The prevailing rates of wages in the same or neighbouring localities, 

(iii) The level of the national income and its distribution, and
E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

iv) The place of the industry in the economy of the country. 

4. Need-Based Minimum Wage: 

The Indian Labour Conference in its 15th session held in July 1957 suggested that minimum
wage should be need based and should ensure the minimum human needs of the industrial
worker, irrespective of any other consideration. 

The need-based minimum wage is calculated on the following bases: 

(i) The standard working class family should be taken to consist of 3 consumption units for
the earner; the earnings of women, children and adolescents should be disregarded. 

(ii) The minimum food requirements should be calculated on the basis of the net intake of 2
700 calories, as recommended by Dr. Akroyd, for an average Indian adult of moderate
activity. 

(iii) The clothing requirements should be estimated at a per capita consumption of 18 yards
per annum which would mean an average worker’s family of 4, a total of 72 yards. 

(iv) In respect of housing, the norms should be the minimum rent charged by the Government
in any area for houses provided under the Subsidized Housing Scheme for low income
groups. 

(v) Fuel, lighting and other miscellaneous items of expenditure should constitute 20 per cent
of the total minimum wage. 

However, the Minimum Wages Act, 1948 did not define minimum wage. While employers
go by the definition given by the Committee on Fair Wages, 1948, expectedly Trade Unions
like to consider the need based minimum wage concept.

Concept of minimum Wage as per Act

According to  [Section 2(h)] Wages
“Wages” means all remunerations capable of being expressed in terms of money, which
would, if the terms of the contract of employment, express of implied, were fulfilled, be
payable to a person employed in respect of his employment or of work done in such
employment and includes house rent allowance but does not include:

(i) the value of:

(a) any house accommodation, supply of light, water medical;

(b) any other amenity or any service excluded by general or social order of the appropriate
Government;

(ii) contribution by the employer to any Pension Fund or Provides Fund or under any scheme
of social insurance;

(iii) any traveling allowance or the value of any traveling concession;

E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

(iv) any sum paid to the person employed to defray special expenses entailed on him by the
nature of his employment;

(v) any gratuity payable on discharge.

The Fair Wage committee explained the core of minimum wages, but they didn’t say how to
evaluate the minimum wage. The  15th session of the Indian Labour Conference explained the
necessary physical requirements and health maintenance of the labours.

FIXATION OF MINIMUM RATES OF WAGES [Section 3(1)(a)]

According to section 3 of the Minimum Wages Act 1948 “The Appropriate Government” will
fix minimum wages. Appropriate Government can include local, State and Central Government.
This section sets the rate according to hours, days, months or any other wage period may be
prescribed.

The rates to be fixed need not be uniform. Diverse rates can be fixed for various zones or areas.
If the wages are fixed according to section 4 of the Payment of the Wages Act, 1936, the fixing
will be done according to the Act.

Minimum Wages are fixed according to the following criteria

1. Time Rate – The minimum rate is fixed according to the duration of the work done by
the labour.

2.  Piece Rate – Here the minimum wage is fixed by the total number of pieces
manufactured in the factory.

3.  Overtime Rate –  Here the minimum rate is fixed by the overtime done by the labor
regardless of the time or piece rate.

Notwithstanding the provisions of Section 3(1)(a), the “appropriate Government” may not fix
minimum rates of wages in respect of any scheduled employment in which less than 1000
employees in the whole State are engaged. But when it comes to its knowledge after a finding
that this number has increased to 1,000 or more in such employment, it shall fix minimum
wage rate.

REVISION OF MINIMUM WAGES

According to Section 3(1)(b), the ‘appropriate Government’ may review at such intervals as it
may thing fit, such intervals not exceeding five years, and revise the minimum rate of wages,
if necessary. This means that minimum wages can be revised earlier than five years also.

MANNER OF FIXATION/REVISION OF MINIMUM WAGES

According to Section 3(2), the ‘appropriate Government’ may fix minimum rate of wages for:

(a) time work, known as a Minimum Time Rate;

(b) piece work, known as a Minimum Piece Rate;

E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

(c) a “Guaranteed Time Rate” for those employed in piece work for the purpose of securing
to such employees a minimum rate of wages on a time work basis; (This is intended to meet a
situation where operation of minimum piece rates fixed by the appropriate Government may
result in a worker earning less than the minimum wage), and

(d) a “Over Time Rate” i.e. minimum rate whether a time rate or a piece rate to apply in
substitution for the minimum rate which would otherwise be applicable in respect of overtime
work done by employee.

Section 3(3) provides that different minimum rates of wages may be fixed for –

(i) different scheduled employments;

(ii) different classes of work in the same scheduled employments;

(iii) adults, adolescents, children and apprentices;

(iv) different localities

Further, minimum rates of wages may be fixed by any one or more of the following wage
periods, namely:

(i) by the hour,

(ii) by the day,

(iii) by the month, or

(iv) by such other large wage periods as may be prescribed;

and where such rates are fixed by the day or by the month, the manner of calculating wages
for month or for a day as the case may be, may be indicated.

However, where wage period has been fixed in accordance with the Payment of Wages Act,
1986 vide Section 4 thereof, minimum wages shall be fixed in accordance therewith [Section
3(3)].

MINIMUM RATE OF WAGES (Section 4)

According to Section 4 of the Act, any minimum rate of wages fixed or revised by the
appropriate Government under Section 3 may consist of –

(i) 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 worker (hereinafter
referred to as the cost of living allowance); or

(ii) a basic rate of wages or without the cost of living allowance and the cash value of the
concession in respect of supplies of essential commodities at concessional rates where so
authorized; or

(iii) an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash
value of the concessions, if any.
E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

The cost of living allowance and the cash value of the concessions in respect of supplies
essential commodities at concessional rates shall be computed by the competent authority at
such intervals and in accordance with such directions specified or given by the appropriate
Government.

PROCEDURE FOR FIXING AND REVISING MINIMUM WAGES (Section 5)

In fixing minimum rates of wages in respect of any scheduled employment for the first time
or in revising minimum rates of wages, the appropriate Government can follow either of the
two methods described below.

First Method  [Section 5(1)(a)]

This method is known as the ‘Committee Method’. The appropriate Government may appoint
as many committees and sub-committees as it considers necessary to hold enquiries and
advise it in respect of such fixation or revision as the case may be. After considering the
advise of the committee or committees, the appropriate Government shall, by notification in
the Official Gazette fix or revise the minimum rates of wages.

The wage rates shall come into force from such date as may be specified in the notification. If
no date is specified, wage rates shall come into force on the expiry of three months from the
date of the issue of the notification.

Note: It was held in Edward Mills Co. v. State of Ajmer  (1955) A.I.R. SC, that Committee
appointed under
Section 5 is only an advisory body and that Government is not bound to accept its
recommendations. As regards composition of the Committee, Section 9 of the Act lays down
that it shall consist of persons to be nominated by the appropriate Government representing
employers and employee in the scheduled employment, who shall be equal in number and
independent persons not exceeding 1/3rd of its total number of members. One of such
independent persons shall be appointed as the Chairman of the Committee by the appropriate
Government.

Second Method  [Section 5(1)(b)]

The method is known as the ‘Notification Method’. When fixing minimum wages under
Section 5(1)(b), the appropriate Government shall by notification, in the Official Gazette
publish its proposals for the information of persons likely to be affected thereby and specify a
date not less than 2 months from the date of notification, on which the proposals will be taken
into consideration.

The representations received will be considered by the appropriate Government. It will also
consult the Advisory Board constituted under Section 7 and thereafter fix or revise the
minimum rates of wages by notification in the Official Gazette. The new wage rates shall
come into force from such date as may be specified in the notification.

However, if no date is specified, the notification shall come into force on expiry of three
months from the date of its issue. Minimum wage rates can be revised with retrospective
effect. [1996 II LLJ 267 Kar.].

WAGE COMMITTEE    

A wage committee shall be formed by the appropriate government, which shall consist of
members from both the employer and employee side. Therefore, an independent person with
having no interest in the employment scheme shall be appointed as the chairman of the wage
E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

committee. The appointment process in the Minimum Wages Act is made in this way so that
there is no scope of discrimination to the labours.  

ADVISORY BOARD

The advisory board is constituted under Section 7 of the Act by the appropriate Government
for the purpose of co-ordinating the work of committees and sub-committees appointed under
Section 5 of the Act and advising the appropriate Government generally in the matter of
fixing and revising of minimum rates of wages. According to Section 9 of the Act, the
advisory board shall consist of persons to be nominated by the appropriate Government
representing employers and employees in the scheduled employment who shall be equal in
number, and independent persons not exceeding 1/3rd of its total number of members, one of
such independent persons shall be appointed as the Chairman by the appropriate Government.

It is not necessary that the Board shall consist of representatives of any particular industry or
of each and every scheduled employment; B.Y. Kashatriya v. S.A.T. Bidi Kamgar
Union  A.I.R. (1963) S.C. 806. An independent person in the context of Section 9 means a
person who is neither an employer nor an employee in the employment for which the
minimum wages are to be fixed. In the case of State of Rajasthan v. Hari Ram Nathwani,
(1975) SCC 356, it was held that the mere fact that a person happens to be a Government
servant will not divert him of the character of the independent person.

CENTRAL ADVISORY BOARD

Section 8 of the Act provides that the Central Government shall appoint a Central Advisory
Board for the purpose of advising the Central Government and State Governments in the
matters of fixation and revision of minimum rates of wages and other matters under the
Minimum Wages Act and for coordinating work of the advisory boards. The Central
Advisory Board shall consist of persons to be nominated by the Central Government
representing employers and employees in the scheduled employment who shall be equal in
number and independent persons not exceeding 1/3rd of its total number of members, one of
such independent persons shall be appointed as the Chairman of the Board by Central
Government.

Section 9 of the Act, talks about the appointment of committees and subcommittees. The
included members are:

1.    A person appointed by the Appropriate Government.

2.    Employers and employees, who belong to the scheduled employment and they shall
be equal in number.

3.    Independent persons and they shall not exceed one-third of the total number of
members. An independent person will be appointed as chairman of the committee.
E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

MINIMUM WAGE – WHETHER TO BE PAID IN CASH OR KIND

Section 11 of the Act provides that minimum wages payable under the Act shall be paid in
cash. But where it has been the custom to pay wages wholly or partly in kind, the appropriate
Government, on being satisfied, may approve and authorize such payments. Such
Government can also authorize for supply of essential commodities at concessional rates.
Where payment is to be made in kind, the cash value of the wages in kind or in the shape of
essential commodities on concessions shall be estimated in the prescribed manner.

PAYMENT OF MINIMUM WAGES IS OBLIGATORY ON EMPLOYER (Section 12)

Payment of less than the minimum rates of wages notified by the appropriate Government is
an offence. Section 12 clearly lays down that the employer shall pay to every employee
engaged in a scheduled employment under him such wages at a rate not less than the
minimum rate of wages fixed by the appropriate Government under Section 5 for that class of
employment without deduction except as may be authorized, within such time and subject to
such conditions, as may be prescribed.

FIXING HOURS FOR A NORMAL WORKING DAY (Section 13)

Fixing of minimum rates of wages without reference to working hours may not achieve the
purpose for which wages are fixed.

There is correlation between minimum rates of wages and hours of work. Minimum wages
are to be fixed on basis of standard normal working hours, namely 48 hours a week; Benode
Bihari Shah v. State of W.B. 1976 Lab I.C. 523 (Cal).

PAYMENT OF OVERTIME (Section 14)

Section 14 provides that when an employee, whose minimum rate of wages is fixed under
this Act by the hours, the day or by such longer wage period as may be prescribed, works on
any day in excess of the number of hours constituting a normal working day, the employer
shall pay him for every hour or part of an hour so worked in excess at the overtime rate fixed
under this Act or under any other law of the appropriate Government for the time being in
force whichever is higher. Payment for overtime work can be claimed only by the employees
who are getting minimum rate of wages under the Act and not by those getting better wages.
(1998 LLJ I SC 815).

WAGES OF A WORKER WHO WORKS LESS THAN NORMAL WORKING DAY

(Section 15)
Where the rate of wages has been fixed under the Act by the day for an employee and if he
works on any day on which he employed for a period less than the requisite number of hours
constituting a normal working day, he shall be entitled to receive wages for that day as if he
had worked for a full working day.

Provided that he shall not receive wages for full normal working day –

(i) if his failure to work is caused by his unwillingness to work and not by omission of the
employer to provide him with work, and

(ii) such other cases and circumstances as may be prescribed.

MINIMUM TIME – RATE WAGES FOR PIECE WORK (Section 17)

Where an employee is engaged in work on piece work for which minimum time rate and not
a minimum piece rate has been fixed, wages shall be paid in terms of Section 17 of the Act at
minimum time rate.
E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

MAINTENANCE OF REGISTERS AND RECORDS (Section 18)

Apart from the payment of the minimum wages, the employer is required under Section 18 to
maintain registers  and records giving such particulars of employees under his employment,
the work performed by them, the receipts given by them and such other particulars as may be
prescribed. Every employee is required also to exhibit notices, in the prescribed form
containing particulars in the place of work. He is also required to maintain  wage books or
wage-slips as may be prescribed by the appropriate Government and the entries made therein
will have to be authenticated by the employer or his agent in the manner prescribed by the
appropriate Government.

AUTHORITY AND CLAIMS (Section 20-21)

Under Section 20(1) of the Act, the appropriate Government, may appoint any of the
following as an authority to hear and decide for any specified area any claims arising out of
payment of less than the minimum rate of wages or in respect of the payment of remuneration
for the days of rest or of wages at the rate of overtime work:

(a) any Commissioner for Workmen’s Compensation; or

(b) any officer of the Central Government exercising functions as Labour Commissioner for
any region; or

(c) any officer of the State Government not below the rank of Labour Commissioner; or

(d) any other officer with experience as a Judge of a Civil Court or as the Stipendiary
Magistrate.

The authority so appointed shall have jurisdiction to hear and decide claim arising out of
payment of less than the minimum rates of wages or in respect of the payment remuneration
for days of rest or for work done on such days or for payment of overtime.

The provisions of Section 20(1) are attracted only if there exists a disputed between the
employer and the employee as to the rates of wages. Where no such dispute exists between
the employer and employees and the only question is whether a particular payment at the
agreed rate in respect of minimum wages, overtime or work on off days is due to an
employee or not, the appropriate remedy is provided by the Payment of Wages Act, 1936.

OFFENCES AND PENALTIES

Section 22 of the Act provides that any employer who (a) pays to any employee less than the
minimum rates of wages fixed for that employee’s class of work or less than the amount due
to him under the provisions of this Act or contravenes any rule or order made under Section
13, shall be punishable with imprisonment for a term which may extend to six months or with
fine which may extend to five hundred rupees or with both.

While imposing any fine for an offence under this section the court shall take into
consideration the amount of any compensation already awarded against the accused in any
proceedings taken under section 20.

It is further stipulated under Section 22A of the Act that any employer who contravenes any
provision of this Act or of any rule or order made thereunder shall if no other penalty is
provided for such contravention by this Act be punishable with fine which may extend to five
hundred rupees.
E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

Consequences of Non – Compliance

Non- compliance of the Minimum wages act, i.e not paying minimum wages is a culpable
offense.  Hence, violation of fixing hours also attracts the penal provision.

Imprisonment up to 5 years and a fine up to 10,000 is the maximum punishment that can be
awarded. Section 22 of the Act defines the sanctions.

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
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. 

(A) The act is not unreasonable:

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 Valitity of the
Minimum Wages Act,1948 is , “ V. Unichonoy vs State of Kerala,1962, SC12. 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
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

E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

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),
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
E-LECTURE LABOUR LAW CENTRAL UNIVERSITY OF KASHMIR

poverty and helplessness, are willing to work even at lesser wages”.

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.