The Minimum Wages Act, 1948, was enacted to protect workers from
exploitation by ensuring they receive wages sufficient to meet their basic
needs. It applies to scheduled employments across various industries,
primarily focusing on unorganized sectors where workers are most
vulnerable.
1. Concept of Labour Welfare
Labour welfare refers to initiatives aimed at improving workers' living and
working conditions, ensuring their overall well-being, and enhancing their
productivity.
Classification of Labour Welfare
1. Statutory Welfare:
These are mandated by law and must be implemented by employers.
Examples include:
o Provision of clean drinking water (Factories Act, 1948).
o Canteens, restrooms, and medical facilities.
2. Non-Statutory Welfare:
Voluntary measures taken by employers to improve workers' welfare,
such as:
o Scholarship programs for workers' children.
o Recreational activities like sports and cultural events.
o Subsidized housing or transport.
Importance of Labour Welfare
Enhances productivity and reduces absenteeism.
Builds goodwill and strengthens employer-employee relations.
Promotes social justice and reduces income inequality.
Encourages industrial peace and minimizes disputes.
Labour Welfare Activities
These include:
Provision of safety measures, adequate ventilation, and lighting in
workplaces.
Insurance and provident fund schemes.
Health camps and nutritional programs.
Training and skill development initiatives.
2. Concepts of Wages
The Act recognizes four primary concepts of wages:
(i) Minimum Wage
This is the legally mandated wage that ensures the sustenance of
workers and their families.
It includes the cost of food, clothing, shelter, and other basic needs.
It is the lowest level of wage below which workers cannot be hired.
(ii) Fair Wage
Higher than the minimum wage but lower than the living wage.
Takes into account the employer’s financial capacity and prevailing
economic conditions.
Ensures equitable distribution of profits while maintaining
competitiveness.
(iii) Living Wage
This is an ideal wage that ensures not just survival but also a decent
standard of living.
Includes provisions for health care, education, leisure, and social
security.
Reflects aspirations for socio-economic progress.
(iv) Need-Based Minimum Wage
Introduced by the 15th Indian Labour Conference (1957).
Considers essential needs like adequate calorie intake (2,700 calories
per adult), housing, clothing, education, and medical expenses.
3. Constitutional Validity of the Minimum Wages Act, 1948
The Act has been challenged but consistently upheld as constitutional due to
its alignment with:
Article 14 (Equality before Law): Equal treatment of workers in
similar circumstances.
Article 19(1)(g) (Right to Practice Any Profession): Balanced by
reasonable restrictions for workers' welfare.
Article 21 (Right to Life and Personal Liberty): Ensures dignified
living for workers.
Directive Principles of State Policy:
o Article 39: Ensures equal pay for equal work.
o Article 43: Advocates living wages for all workers.
4. Procedure for Fixation and Revision of Minimum Wages
The Act empowers the Central Government and State Governments to
fix minimum wages for scheduled employments.
Fixation of Minimum Wages
Governments classify industries and jobs into categories like skilled,
semi-skilled, and unskilled.
Wages are determined based on:
o Cost of living index.
o Nature of work.
o Prevailing wages in the region.
Revision of Minimum Wages
Wages must be reviewed and revised at least every five years.
Governments may consider economic factors, inflation, and feedback
from stakeholders during revisions.
5. Fixation of Minimum Rates of Wages
Time Rate:
Workers are paid a fixed amount based on the hours or days worked.
Example: A daily wage of ₹500 for 8 hours of work.
Piece Rate:
Payment is determined by the amount of work done or output
produced.
Example: ₹50 per unit produced in a factory.
Special Categories:
Overtime Rates: Higher rates for work beyond prescribed hours.
Variable Dearness Allowance (VDA): Linked to changes in the
Consumer Price Index (CPI).
6. Procedure for Hearing and Deciding Claims
The Act outlines a mechanism for addressing claims related to non-payment
or underpayment of wages:
Filing a Claim
Workers or their representatives (e.g., trade unions) can file
complaints.
Claims must be submitted within a prescribed time limit (usually 6
months).
Hearing and Decision
The government appoints authorities like Labour Commissioners or
Magistrates to hear cases.
The authority conducts hearings, evaluates evidence, and passes
judgments.
In cases of default, employers may face penalties or imprisonment.
Appeals
Appeals against the decision can be filed in higher courts within the
stipulated timeframe.
Importance of the Minimum Wages Act, 1948
1. Protects workers in unorganized sectors from exploitation.
2. Reduces income inequality and promotes social justice.
3. Ensures economic stability by increasing workers' purchasing power.
4. Contributes to industrial peace and productivity.
