UNIT 3 – WORKMEN’S COMPENSATION ACT & MINIMUM WAGES ACT

EMPLOYEE’S COMPENSATION ACT (WORKMEN’S COMPENSATION ACT)

A beginning of social security in India was made with the passing of the Workmen's
Compensation Act in 1923. Prior to 1923, it was almost impossible for an injured workman
to recover damages or compensation for any injury sustained by him in the 'ordinary course
of his employment. Of course, there were rare occasions when the employer was liable under
the common law for his own personal negligence. The dependants of a deceased workman
could, in rare cases, claim damages under the Fatal Accidents Act, 1855; if the accident was
due to a wrongful act, neglect or fault of the person who caused the death. In 1921, the
government formulated some proposals for the grant of compensation and circulated them for
opinion. The proposals received general support. As a result, the Workmen's Compensation
Act was passed in March 1923 and was put into force on July 1, 1924. Subsequently, there
were a number of amendments to the Act. The Act contains 36 sections and four Schedules.

The main objective of the Workmen's Compensation Act is to provide compensation to

employees, or their dependents, in case of injury, illness, or death caused due to employment,
and to provide a system of speedy settlement of disputes.

Thus, the Chief object of the Act is to impose an obligation upon employers to pay
compensation to workers for accidents arising out of and in the course of employment. The
scheme of the Act is not to compensate the workman in lieu of wages, but to pay
compensation for the injury sustained to him.

Features of Workmen's Compensation Act 1923

Employers are under the obligation to provide financial compensation as per the Workmen
Compensation Act 1923 in the following circumstances:

1. The Act provides social security to the workers. The compensation to be paid to the
workers is not for the negligence on the part of the employer; but it is rather in the
nature of insurance of the workers against certain risks of accidents.
2. The definition of workman given in Sec. 2 (1) (n) does not cover persons employed in
administrative or clerical capacity drawing more than Rs. 3,500 p.m. (except railway
servants), but persons employed through sub-contractors by a person fulfilling a
contract with the railway are also entitled to benefit under the Act.
3. The compensation under this act is payable if the injury has been caused by accident
arising out of or in the course of employment. The workman loses the right of
compensation if such accident can be attributed to workman, having been at the time
of accident, under the influence of alcohol or drugs or if it is caused by his wilful
disobedience or rules or orders or disregard or safety measures.
4. The term ‘wages’ as defined in the Act includes overtime pay and the value of
concessions or benefits in the form of food, clothing, accommodation etc.
 5. The amount of compensation payable to a workman or his dependents depends on the
nature and extent of disablement (or death) and his average monthly wages.
6. Minimum rates of compensation for permanent total disablement and death have been
fixed at Rs. 1.40 Lakh and Rs. 1.20 Lakh respectively. Maximum amount for death
and permanent total disablement can go up to Rs. 4.56 lakh and Rs. 5.48 lakh
respectively depending on age and wages of workmen.
7. In order to protect the interest of dependents in case of fatal accidents, it is provided
in the Act that:
i) All cases of fatal accidents are to be brought to the notice of Commissioner of
Labour.
ii) In case of admission of liability by the employer, the amount of compensation is
to be deposited with the Commissioner within 30 days.
iii) If the employer denies his liability, the Commissioner must decide whether or not
there is a ground for claim. Th Commissioner may inform the dependents and it is
open to them to prefer a claim, if they feel so.

Scope & Coverage

The Act extends to the whole of India and applies to any person –

 who is employed, otherwise than in a clerical capacity, in the railways, factories,

mines, plantations, mechanically propelled vehicles, loading and unloading work on a
ship, construction, maintenance and repairs of roads, bridges, etc., electricity
generation, cinemas, catching or training of wild elephants, circus, and other
hazardous occupations and employments specified in Schedule II to the Act.
 Under sub'-section (3) of section 2 of the Act, the state governments are empowered
to extend the scope of the Act to any class of persons whose occupations are
considered hazardous after giving three months’ notice in the Official Gazette. The
Act, however, does not apply to members serving in the Armed Forces of the Indian
Union, and employees covered under the provisions of the Employees' State
Insurance Act, 1948 as disablement and dependants' benefit are available under this
Act.

Definitions (Study from the Class Work) ***

Workman in order to be a "workman" within the meaning of section 2(1)(n) of the

Workmen's Compensation Act, a person should first be employed; second, his employment
should not be of a casual nature; third, he should be employed for the purposes of the
employer's trade or business; and, lastly, the capacity in which he works should be one set out
in the list in Schedule II of the Act. This definition has been amended very recently.
Dependants For the purposes of the Act dependants have been grouped into two classes: i)
Those who are considered dependants without any proof; and ii) Those who must prove that
they are dependants. The first group includes a widow, a minor legitimate son, an unmarried
legitimate daughter or a widowed mother. The following are included in the second group if
they were wholly or partially dependant on the earnings of the workers at the time of his or
her death; a widower, a parent other than a widowed mother, a minor illegitimate son, an
unmarried illegitimate daughter or a daughter legitimate or illegitimate if married and minor,
or if widowed, and a married brother or unmarried sister or widowed sister, if a minor, a
widowed daughter-in-law, a minor child of a predeceased son, A minor child of a
predeceased daughter where no parent of the child is alive, or a paternal grandparent, if no
parent of the workman is alive.

ENUMERATION & MODE OF PAYMENT OF COMPENSATION

When is the employer not liable to pay compensation?

As per the Act, employers are not liable to financially compensate their employees under the
following circumstances:

 Employee suffers from an injury or accident by disregarding the safety norms.

 Injury resulting in partial or total disablement for less than three days.
 For accidents or injuries under the influence of alcohol or drugs.

Coverage receivable under the Workmen Compensation Act 1923

The type and extent of financial coverage as well as its applicable terms and conditions fully
depend on the insurance company that is affiliated with the employer. Here are some basic
things which all insurers cover

 Bodily or other injuries during an accident while on duty

 Temporary disablement
 Permanent disablement (complete or partial)
 Death due to an accident at work
 Injury, disease or death resulting from working conditions
 All legal or any other expenses incurred by an employee in the above circumstances

Amount of compensation

According to Section 4 of the Workmen's Compensation Act 1923, the amount of

compensation workers are liable to receive is as follows:

 Temporary Disabilities

For temporary disabilities, the Workmen's Compensation Act 1923 provides financial
compensation of up to 25% of the concerned employee’s monthly wages.

 Permanent Total Disabilities

In an unfortunate event when an employee suffers from permanent disablement, that

individual has the right to receive 60% of his/her monthly wage or Rs.1, 20,000, whichever is
higher.

 Permanent Partial Disabilities

Injuries that fall under permanent partial disabilities are stated in Part II Schedule I of the
Act. The payable corpus is a certain percentage of earnings loss by the employee due to
his/her injury.

 Death

When an employee dies due to an accident at his/her workplace, their family is liable to
receive 50% of the deceased’s monthly wages or Rs.1, 20,000, whichever is higher.

OTHER PROVISIONS OF THE ACT

 Claims and Appeals

- In case the compensation is not paid by the employer, the workman concerned or his
dependants may claim the same by filing an application before the Commissioner for
Workmen's Compensation.
- The claim shall be filed within a period of two years of the occurrence of the accident
or death.
- The application which is filed after the period of limitation can be entertained if
sufficient cause exists.
- An appeal will lie to the High Court against certain orders of the Commissioner if a
substantial question of law is involved.
- An appeal by an employer against an award of compensation is incompetent unless
the memorandum of appeal is accompanied by a certificate that the employer has
deposited the amount of such compensation. Unless such a certificate accompanies
the memorandum of appeal, the appeal cannot be regarded as having been validly
instituted. The period of limitation for an appeal under Section 30 is sixty days
(Sections 10 and 30).

 Authority
- It is provided that all cases of fatal accidents should be brought to the notice of the
Commissioner for Workmen's Compensation; and if the employer admits the liability,
the amount of compensation payable should be deposited with him.
- Where the employer disclaims his liability for compensation to the extent claimed, he
has to make provisional payment based on the extent of liability which he accepts;
and such payment must be deposited with the Commissioner or paid to the workman.
In such cases, the Commissioner may, after such enquiry as he thinks fit, inform the
dependants that it is open to them to prefer a claim and may give such other
information as he thinks fit.
- Advances by the employers against compensation are permitted only to the extent of
an amount equal to 3 months' wages. He is also empowered to deduct an amount not
exceeding Rs. 50 from the amount of compensation iii order to indemnify the person
who incurred funeral expenses.
- The employer is required to file annual, returns giving details of the compensation in
order to indemnify tie person who incurred funeral expenses. The employer is
required to file annual returns giving details of the compensation paid, the number of
 injuries and other particulars (See' Lions 4A, 8 and 16). The amount deposited with
the Commissioner for Workmen's Compensation is payable to the dependants of -the
workman. The amount of compensation is to be apportioned among the dependants of
the deceased workman or any of them in such proportion as the Commissioner thinks
fit (Sections 2 and 8).
- If an employer is in default, in paying the compensation within one month from the
date it fell due, the Commissioner may direct the recovery of not only the amount of
the arrears but also a simple interest at the rate of six per cent per annum on the
amount due. If, in the opinion of the Commissioner, there is no justification for the
delay, an additional sum, not exceeding 50 per cent of such amount, may be recovered
from the employer by way of penalty (Section 4-A).

 Contracting out
- A contract or agreement, whereby the workman relinquishes his right to compensation
from the employer for the personal injury arising out of and in the course of
employment, is null and void to the extent to which such contract or agreement
purports to remove or reduces, the liability for, the payment of compensation. The
compensation payable to the workman or to his dependants cannot be assigned,
attached or charged (Section 9 and 17).

 Updates in the Workmen Compensation Act 1923

Since its inception in 1923, there have been two major changes in the Workmen
Compensation Act. They are as follows:

- In 2010, this law’s name was changed to Employee’s Compensation Act.

- On January 3, 2020, the Ministry of Labour and Employment raised the amount on
which compensation was calculated as per the Act from Rs. 8,000 to Rs. 15,000.

 Administration

The Act is administered by state governments which are required to appoint Commissioners
for Workmen's Compensation. The functions of the Commissioner include: i) Settlement of
disputed claims; ii) Disposal of cases of injuries involving death; and iii) Revision of
periodical payments (Section 20). The Commissioner may recover as an arrear of land
revenue any amount payable by any person under this Act, whether under an agreement for
the payment of compensation or otherwise (Section 31): The Act made provision for the
framing of the rules by the State and Central Government and also their publication (Section
32-36).

MINIMUM WAGES ACT, 1948

Labour laws in India consist of significant legislations such as the Industrial Dispute Act,
1947, Payment of Bonus Act, 1965, Workmen Compensation Act, 1923, Minimum Wages
Act, 1948, etc. In the Indian Constitution, labour laws fall under the Concurrent List, which
gives power to both Central and state governments to legislate and make rules on the matter.
These legislations play significant roles in protecting the rights and interests of the workers,
providing employment opportunities to the workers, protecting employees from exploitation,
creating a healthy work environment, etc.

The system of paying minimum wages to the employees has been globally accepted as a
system to combat poverty and stabilise the economy. The Minimum Wages Act, 1948 was
brought into force by the Parliament of India in order to provide due remuneration to the
workers and to prevent unfair exploitation of the workers by the employers. The Act lays
down the minimum rates of wages and fixing of minimum wage rates for both skilled and
unskilled labour and aims to provide a decent standard of living for them. The Act grants
power to both the Central and state governments to regulate review and revise the rate of
minimum wages paid to the employees employed in the scheduled employment under their
respective jurisdiction. The Act does not discriminate between men and women; it pays all
the employees equally for doing the same work.

The International Labour Organisation (ILO) has defined the term minimum wage as the lowest
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. Around 90 member states of the ILO follow the provision of minimum
wage.

The purpose of minimum wage is to protect the workers from unduly low pay. It enables
them to earn adequate wages for the work done by them and to maintain a minimum living
standard. It also acts as a tool to eradicate poverty and to remove discrimination between men
and women. This system has been designed and developed in a way to supplement and
reinforce other social and employment policies, including collective bargaining, which is
used to set terms of employment and working conditions.

In India payment of minimum wages is regulated and administered by the Minimum Wages
Act, 1948. Since, India offers one of the most competitive labour costs in Asia, with the
national-level minimum wage at around INR 176 which amounts to INR 4576 in a month.
However, it is the national-level wage which will vary considering the geographical location
and other relevant factors. In India, a complex method of setting a minimum wage is used
which defines nearly 2,000 different types of jobs for unskilled workers and over 400
categories of employment which provides a minimum daily wage for each type of job.

Types of wages

In 1948 a tripartite committee, known as the ‘Committee on Fair Wages’ was established.
The committee’s report was the benchmark for the formulation of wage policy in India. The
committee not only set guidelines for wage rates in the country but also laid down three kinds
of wages namely:
 1. Minimum wage: This is the type of wage provided for bare subsistence so that the
workers can maintain a decent standard of living such as providing for education,
medical requirements and an adequate level of comfort.

2. Fair wage: Any wage paid to the employees that are more than the minimum wage is
known as a fair wage. It is the wage that seeks to maintain a level of employment in
the industry and also looks after the industry’s capacity to pay sufficient remuneration
to the employees.

3. Living wage: A living wage not only meets the minimum requirement of the
employees provided by the employers but also allows individuals or families to afford
adequate shelter, food, and other necessities. It also includes health, sanity, education,
dignity, comfort, and provide for any contingency.

Need for Minimum Wages Act, 1948

The Minimum Wages Act, 1948 was enacted by the Indian Legislature to deal with matters
relating to providing the minimum wage to the workers so that they can afford their basic
needs and maintain a decent standard of livelihood. The Act further ensures a secure and
adequate living wage for all labourers and it also guarantees that an employee earns enough
to provide for his family. The Act authorises both Central and state governments in fixing the
rate of minimum wage. The Minimum Wages Act, 1948 has also laid down a provision for
revision of minimum wages in order to cope with the changing prices of basic commodities.

The Act seeks to provide better protection of the rights of the employees by establishing
advisory boards to resolve any dispute between the employer and employee regarding the
payment of minimum wage to the employees. The Act further appoints a Commissioner for
Workmen’s Compensation or any other officer of the Central Government exercising
functions as a Labour Commissioner for any region, with an experience as a judge in order to
hear and decide cases concerning non-payment or payment of less than the minimum wages
to the employees. The Act also states provisions for penalising any employer who fails to
provide the minimum wage to the employer and contravenes any rule or order made under
the Act.

Thereby, it can be said that the enactment of this Act was extremely crucial since it aims to
expand the concept of social justice to the workers of scheduled employment and also
provide them with the rates of minimum wages fixed by the statute. It also protects the rights
and interests of the workers and prevents the workers from being wrongfully exploited by
their employers.

Definitions – (Classwork/Library) ***

Objectives of Minimum Wages Act

The significance of the Minimum Wages Act, 1948 is mentioned below:

1. To fix the minimum rates of wages that is to be provided to the employees and revise
such rates of wages every five years.

2. To secure an adequate living wage for all the labourers in the interest of the public.

3. To fix the daily working hours of the employees.

4. To prevent exploitation of the workers by the employers.

5. To ensure that the labourers can maintain a decent standard of living.

6. To provide basic physical needs good health and a level of comfort to the employees.

7. To penalise the employers when they fail to provide minimum wages to the workers.

8. To establish advisory boards to regulate and administer the provisions of the Act.

9. To lay down the powers and duties of the inspectors for the purposes of this Act.

10. To prevent any employer from wrongfully infringing the right of any employees.

11. To establish appropriate authorities where the employees can seek redressal when the
employer has failed to pay the daily wage.

12. To authorise the Central and state governments to make rules and regulations for the
purposes of this Act.

Application of Minimum Wages Act

The Minimum Wages Act, 1948 is applicable to the whole of India as laid down in Section
1 of the Act. It applies to any employment if it employs 1000 employees in the respective
state. However, it does not apply to any employees in any undertaking owned by the Central
Government or of the federal railway, except with the consent of the Central Government.

Fixation and Revision of Minimum rates

The Minimum Wages Act, 1948, for the most part, indicates the lowest pay permitted by law
rates on an everyday basis and stretches out to the whole nation. It is overhauled every five
years, but there is an arrangement to increment the dearness allowance every two years. ILC
first suggested the standards for fixing and amending minimum wages.

Update of the lowest pay permitted by law rates depends on a ‘typical cost for many everyday
items list’, and wages can be fixed for a whole state, some portion of the state, class or
classes, and occupations relating to these classifications. The obsession with wages depends
on the standards referenced and a compensation board (different for various industries).

Under the Minimum Wages Act, State and Central Governments can fix and re-examine the
least wages:
  The demonstration determines that the “suitable” government ought to improve the
wages; for example, if the wages to be fixed are according to any power of the Central
Government or Railway organisation, then the Central government fixes it
 Assuming that the compensation rate is to be fixed or amended for planned work, the
separate state legislatures set it
 The Centre fixes the National floor level Minimum Wage that is lower than most
states’ individual least wages
 The vagueness and cross-over in the locale of government levels have caused
discussions and contentions
 One of such discussions spins around fixing wage paces of MGNREGA plot and a
business ensure drive by the Central Government

Section 5 of the Minimum Wages Act contains the procedure for fixing and revising
minimum wages.

Section 5: Procedure for fixing and revising minimum wages.–

(1) In fixing minimum rates of wages in respect of any scheduled employment for the first
time under this Act or in revising minimum rates of wages so fixed, the appropriate
Government shall either–

(a) 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, or

(b) 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 two months from the date of the
notification, on which the proposals will be taken into consideration.

(2) After considering the advice of the committee or committees appointed under clause (a)
of sub-section (1) or as the case may be, all representations received by it before the date
specified in the notification under clause (b) of that sub-section, the appropriate Government
shall, by notification in the Official Gazette, fix, or, as the case may be, revise the minimum
rates of wages in respect of each scheduled employment and unless such notification
otherwise provides, it shall come into force on the expiry of three months from the date of its
issue:

Provided that where the appropriate Government proposes to revise the minimum rates of
wages by the mode specified in clause (b) of sub-section (1), the appropriate Government
shall consult the Advisory Board also.

Enforcement of the Act

Inspectors (Sec. 19): By notification in the Official Gazette the appropriate Government may
appoint inspectors, and define the local limits within which they shall exercise their
functions. The Inspectors have to see that the provisions of the Act are complied with. For
this Inspectors are empowered to:
 i) enter at all reasonable hours, with such assistance they may think fit, any premises or
place where employees are employed in respect of which minimum rates of wages
have been fixed, for the purpose of examining any register, record of wages, or notice
required to be kept or exhibited by or under this Act, or rules made thereunder, and
require the production thereof for inspection;

ii) examine any person whom he finds in any such premises or place and who, he has
reasonable cause to believe, is an employee;

iii) require any person giving outwork or any outworker to give any information, which is
in his power to give, with respect to other persons, and for whom the work is given or
received, and with respect to the payment to be made for the work;

iv) seize or take copies of such register, record of wages or notices as he may consider
relevant in respect of any offence under this Act which he has reason to believe has been
committed by an employer; and

v) exercise such other powers as may be prescribed (Sec. 19 (2)). Any person required to
produce any document or thing or to give any information by an Inspector under Sec. 19
(2) shall be deemed to be legally bound to do so within the meaning of Sec. 175 of the
Indian Penal Code (Sec. 19 (4)). Every Inspector shall be deemed to be a public servant
within the meaning of the India in Penal Code, 1860 (Sec. 19 (3)).

Offences and penalties (Sec. 22 and 22-A): Any employer who:

a) pays to any employee less than the minimum rates of wages fixed for that employees'
class of Work, or less than the amount due to him under the provision of the Act, or
b) contravenes any rule or order made under Sec. 13, shall be punishable with
imprisonment which may extend to six months or with fine which may extend to Rs.
500, or with both. In imposing any such fine the court shall take into consideration the
amount of any compensation already awarded against the accused in any proceedings
taken under Sec. 20.

An employer, who contravenes any provision of the Act or any rule and order made
thereunder, if no other penalty is provided for the contravention by the Act, be punishable
with fine which may extend to five hundred rupees.

In imposing any such fine the court shall take into consideration the amount of any
compensation already awarded against the accused in any proceedings taken under Sec. 20.

Cognizance of offences (Sec. 22 B): No court shall take cognizance of a complaint against
any person for an offence:

a) involving payment of less than the minimum wages unless an application in respect of
the facts constituting such offence has been duly presented under Sec. 20 and granted
and the appropriate Government or an officer authorised by it in this behalf has
sanctioned the making of the complaint;
 b) involving contravention of any rule or order made under Sec. 13, or Sec. 22. A except
on a complaint made by, or with the sanction of, an Inspector.

Further, no court shall take cognizance of an offence:

i) under Sec. 22 unless complaint thereof-is made within one month of the grant of sanction.

ii) Unless complaint thereof is made within six months of the date on which the offence is
alleged to have been committed.

Offence by companies (Sec. 22C): If the person committing any offence under the Act is a
company, every person who, at the time the offence was committed, was in charge of, and
was responsible to, the company for the conduct of the business of the company as well as the
company shall be deemed to be guilty of the offence and shall be liable to be proceeded
against and punished accordingly. Such person shall not be liable to any punishment provided
in the Act if he proves that the offence was committed without his knowledge, or that he
exercised all due diligence to prevent the commission of such offence.

ESSENTIAL PROVISIONS UNDER MINIMUM WAGES ACT

The significant provisions of the Minimum Wages Act, 1948 are mentioned below.

 Minimum rates of wages

Under Section 3 of the Act, the minimum wages payable to the employees are to be fixed by
the appropriate government. However, this Section also mentions that the rate of wages shall
be revised every five years. The appropriate government may fix:

1. The minimum rate of wages for time work,

2. The minimum rate of wage for piece work,

3. a minimum rate of remuneration to apply in the case of employees employed on piece

work for the purpose of securing to such employees a minimum rate of wages on a
time work basis,

4. a minimum rate of wage to substitute the for the minimum rate which would
otherwise be applicable, in respect of overtime work done by employees.

In fixing or revising minimum wages under Section 3 of the Act:

1. Different minimum rates of wages may be fixed for; different classes of work,
different scheduled employment, different localities, different age groups, etc.

2. Minimum wages may be fixed by the wage period such as; by the hour, by the day,
etc.

Section 4 of the Minimum Wages Act, 1948 states that the minimum wages fixed by the
appropriate government must consist of:
 1. A basic rate of wages and a special allowance must be adjusted at necessary intervals
by the appropriate government to match the cost of living of the employees.

2. The cost of living allowance and the cash value of the concessions in respect of
supplies of essential commodities must be computed by a competent authority and at
such intervals specified by the appropriate government.

Section 5 states that in order to fix or revise the minimum wage of the employees the
appropriate government may establish as many committees and subcommittees necessary to
hold enquiries in matters regarding fixing and revision of minimum wage. Further, the
appropriate government by notification to the Official Gazette publish its proposal for the
information of the individuals who are likely to be affected by such information and thereby
specify the date which must not be less than two months from the date of notification of the
proposals that will be taken into consideration.

Advisory board

Under Section 7 the appropriate government must appoint advisory boards for coordinating
the work of the committees and subcommittees mentioned in Section 5 and also for advising
the appropriate government generally in the matter of fixing and revising minimum rates of
wages.

Central Advisory Board

In the matters of fixation and revision of minimum rates of wages of the employees, the
Central Government shall appoint a Central Advisory Board. The Central Advisory Board
shall consist of:

1. Members to be nominated by the Central Government representing employers and

employees in the scheduled employment, who shall be equal in number, and

2. Independent persons not exceeding one-third of its total number of members. One
such member shall be appointed as the Chairperson by the Central Advisory Board.

Committees

Section 9 of the Act states that the members of committees, sub-committees, and Advisory
Boards shall be appointed by the appropriate government. Individuals who are appointed to
these committees shall be representatives of employers and employees in scheduled
employments and shall be equal in number. The appropriate government shall appoint such
an independent person to be the Chairman of the committee.

Wages in kind under the Act

Section 11 of the Minimum wages Act, 1948 mentions how the wages will be payable to the
employees.

1. Minimum wages under this Act shall be paid in cash.

 2. The appropriate government under necessary circumstances by notification to the
Official Gazette authorise the payment of the minimum wages either wholly or partly
in kind.

3. The appropriate government by notification to the Official Gazette authorised a

provision for the supply of essential commodities at concession rates.

4. The cash value of wages and the concession rates shall be authorised in the prescribed
manner stated under the Act.

The payment of wages to the employees under this Act should be done in accordance
with Section 12 of the Act, which states that the employer shall pay the minimum rate of
wages fixed to every employee working under him within such time and manner prescribed
under the Act.

Fixing hours for a normal working day

Section 13 specifies that the appropriate government may:

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 rest which shall not be less than the
overtime rate.

When an employee works more than the specified number of hours constituting a normal
working day, the employer shall be liable to pay him for every hour or part of the hour at the
overtime rate fixed under this Act or under any law of the appropriate government for the
time being in force.

Furthermore, under Section 15 if an employee has worked less than the required number of
hours constituting a normal working day they shall be entitled to receive wages in accordance
with work done by him on that day as if he has worked a full day. However, he might not
receive the wages of a full day under certain circumstances.

Maintenance of registers and records

Under Section 18 of the Minimum Wages Act, 1948 every employer will be liable to
maintain registers and records relating to the number of employees employed under him, the
work done by them, the wages paid to them, the work performed by them, maintain the
receipts given by the employers and any other relevant information.

Inspectors
In this Act, the appropriate government by notification to the official gazette shall appoint
inspectors in a manner prescribed under the Act. The inspectors shall be liable to exercise
their functions within the local limits of their jurisdiction.

1. The inspectors shall enter the premises or places within the local limits of their
jurisdiction where the employees are employed to work in respect of which minimum
rates of wages have been fixed under this Act, for the purpose of examining the
register, record of wages, etc.

2. To examine any person on the premises or places who is an employee.

3. Seize or take copies of registers, records of wages, or other required documents under
this act which he may consider relevant in case of commission of any offence.

4. The inspector will be required to exercise any other power as may be prescribed under
the Act.

Every inspector under this Act will be deemed to be a public servant within the meaning of
the Indian Penal Code,1860.

Claims

The appropriate government may by notification to the Official Gazette appoint any
Commissioner for Workmen’s Compensation or any officer of the Central Government
exercising functions as a Labour Commissioner for any region, with an experience as a judge
to hear and decide cases in a particular region about matters relating to non-payment or
payment of less than the minimum wages to the employees.

When an application under Section 20 of the Minimum Wages Act, 1948 is made to the
authority, the authority shall give adequate opportunities of being heard to both the applicant
and the employer. Under this Section, every direction of the authority shall be binding and
final. The authority appointed under the Act shall have the powers of a civil court under
the Code of Civil Procedure, 1908 for the purposes of taking evidence, enforcing the
attendance of witnesses, production of documents, etc.

Procedure before the authority

The procedure before the authority in the matters relating to non-payment or payment of less
than the minimum wages to the employees shall take place in the following manner as
prescribed under the Act.

 The prescribed authority shall give adequate opportunities of being heard to the
employer, applicant or any other person relevant to the case.

 In case of non-payment of wages, or delay in the payment of wages the authority shall
direct the refund of such amount to the applicant of the amount unpaid, or delayed
along with the compensation for the damages suffered by the employee.
  No compensation will be awarded to the employee if the authority is satisfied that the
delay in payment of wages of the employee was a bona fide error. The authorised
person was unable to make the payment even though they exercised due diligence.

Penalties for offences

Section 22 of the Minimum Wages Act, 1948 an employer who fails to provide minimum
rates of wages to the employees or contravenes any rule or order made under Section 13 of
the Act shall be punished with imprisonment for a term which may extend to six months or
fine not less than five hundred rupees or both.

Exemptions of the employers in certain cases

When an employer is accused under this Act and brought before the court he will be
exempted from such offence under the following circumstances:

1. The employer has used due diligence in the execution of all the provisions of the Act.

2. The other person has committed the offence without his knowledge, connivance or
consent. Then in that case the other will be held liable as if he were the employer and
the employer will be discharged.

The power of the Central Government to make rules

Section 29 of the Minimum Wages Act, 1948 authorises the Central Government to make
rules by notification to the Official Gazette in matters relating to the term of office of the
members, the manner of voting, and the mode of conducting business by the Central
Advisory Board, and other relevant matters.

The rules made by the Central Government must be laid before the Parliament while it is in
session for a total period of thirty days which may consist of one session or two successive
sessions.

Furthermore, Section 30 of the Act also authorises the state government to make rules by
notification to the Official Gazette for carrying out the purposes of this Act.

Constitutional validity of Minimum Wages Act

The constitutional validity of this Act was challenged before the court in various cases.
However, the judiciary played a critical role in determining that the Act was constitutionally
valid and it protects the interests of the workers so that they have access to food, shelter,
clothing, education, medical assistance, etc. The judiciary also stated that failure to pay below
the minimum wage rate amounts to forced labour.

Conclusion

The Minimum Wages Act, 1948 was enacted to safeguard the rights and interests of the
workers working in some scheduled class of employment which is laid down under the Act.
The Act seeks to provide equal employment opportunities and adequate remuneration for
maintaining a decent standard of livelihood for the workers. The provisions under the Act
such as revision of wages at an interval of every five years and fixing working hours in a
normal working day portray how the Act prevents undue exploitation of the workers. The Act
further establishes advisory boards and committees that the workers can approach to seek
redressal regarding cases concerning non-payment of wages or delay in the payment of wages
by their employers. The Act also grants adequate powers to the inspectors to look after the
welfare of the workers. Therefore, this Act plays a crucial role in providing the basic needs of
the workers of a scheduled category of employment, to grant adequate wages to the workers
to survive with their livelihood and also to promote the Directive Principles of State Policy
laid down under Article 43 of the Constitution of India.