Minimum wages act, 1948

MINIMUM WAGES ACT, 1948
By
Dr. Sridevi Krishna
Asst. Professor
VVLC

INTRODUCTION
 Minimum wage which contemplates irreducible
level of wage ,enables a workman to provide three
basic necessaries of life like food, shelter and
clothing.
 Minimum wage differs from state to state and even
from place to place within a state.
 National Minimum wage which is suitable to all
cannot be fixed.
 The national commission on labour considered the
recommendation of second pay commission and
formulated by the 15th Indian labour conference
relating to the fixation of a need based minimum
wage.

ORIGIN
 The industrial policy resolution 1948 had declared
its intentions to provide for statutory minimum
wages in the sweated industry where the
bargaining power of the industrial workers or their
trade union is very poor and they are not well-
organized.
 The act provides for a full fledged machinery to
determine the minimum rates of wages in the
industries mentioned in schedule.
 It gives effect to the obligations created by the
convention no 26 of the ILO adopted in the year
1928 and recommendation no 30 relating to wage
fixing machinery.

ART 43 OF THE CONSTITUTION
 The State shall endeavor to secure, by suitable
legislation or economic organization or in any other way,
to all workers, agricultural, industrial or otherwise, work,
a living wage, conditions of work ensuring a decent
standard of life and full enjoyment of leisure and social
and cultural opportunities and, in particular, the State
shall endeavour to promote cottage industries on an
individual or co operative basis in rural areas
 although the wage fixed under the act cannot be
regarded as living wage but the statutory rates of
minimum wages fixed under the Act are undoubtedly a
measure towards the achievement of the goal of living
wage as enshrined under the article.

DEFINITION
 Section 2(c) "competent authority" means the
authority appointed by the appropriate Government
by notification in its Official Gazette to ascertain
from time to time the cost of living index number
applicable to the employees employed in
SCHEDULEd employments specified in such
notification;

2(E) "EMPLOYER"
 means any person who employs, whether directly or through another
person, or whether on behalf of himself or any other person, one or more
employees in any scheduled employment in respect of which minimum
rates of wages have been fixed under this Act
 (i) in a factory where there is carried on any scheduled employment in
respect of which minimum rates of wages have been fixed under this Act,
any person named under 8 [clause (f) of sub-section (1) of section 7 of
the Factories Act, 1948 (63 of 1948)], as manager of the factory;
 (ii) in any scheduled employment under the control of any Government in
India in respect of which minimum rates of wages have been fixed under
this Act, the person or authority appointed by such Government for the
supervision and control of employees or where no person or authority is
so appointed, the head of the department;
 (iii) in any scheduled employment under any local authority in respect of
which minimum rates of wages have been fixed under this Act, the
person appointed by such authority for the supervision and control of
employees or where no person is so appointed, the chief executive
officer of the local authority;
 (iv) in any other case where there is carried on any scheduled
employment in respect of which minimum rates of wages have been
fixed under this Act, any person responsible to the owner for the
supervision and control of the employees or for the payment of wages;

2(H) ‘‘WAGES
 means all remuneration, capable of being expressed in terms
of money, which would, if the terms of the contract of
employment, express or implied, were fulfilled, be payable to
a person employed in respect of his employment or of work
done in such employment 9 [and includes house rent
allowance], but does not include—
 (i) the value of
 (ii) any contribution paid by the employer to any Pension Fund
or Provident Fund or under any scheme of social insurance;
 (iii) any travelling allowance or the value of any travelling
concession;
 (iv) any sum paid to the person employed to defray special
expenses entailed on him by the nature of his employment; or
 (v) any gratuity payable on discharge;
 (a) any house accommodation, supply of light, water, medical
attendance, or
 (b) any other amenity or any service excluded by general or
special order of the appropriate Government;

SECTION 3- FIXING OF MINIMUM RATES OF
WAGES
 This section is called as enabling clause which enables
AG and confers powers on it to fix minimum rates of
wages in the schedule employment.
 The AG may fix the minimum rates of wages payable to
employees employed in an employment specified in part
I and II of the schedule and in respect of employment
added as under section 27.
 Provided-In Part II – instead of fixing minimum rates of
wages for the whole state, fix rates for a part of the state
or for any specified class or classes of such
employment.
 review at such intervals, as it may think fit, such
intervals not exceeding five years, the minimum rates of
wages so fixed and revise the minimum rates, if
necessary:

1(A)
 the appropriate Government may refrain from fixing
minimum rates of wages in respect of any
scheduled employment in which there are in the
whole State less than one thousand employees
engaged in such employment, but if at any time, the
appropriate Government comes to a finding after
such inquiry, as it may make or cause to be made
in this behalf, that the number of employees in any
scheduled employment in respect of which it has
refrained from fixing minimum rates of wages has
risen to one thousand or more, it shall fix minimum
rates of wages payable to employees in such
employment

(2)
 The appropriate Government may fix—
 (a) a minimum rate of wages for time work (hereinafter
referred to as "a minimum time rate");
 (b) a minimum rate of wages for piece work (hereinafter
referred to as "a minimum piece rate");
 (c) 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 (hereinafter referred to as "a
guaranteed time rate");
 (d) a 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 employees (hereinafter referred to as
"overtime rate").

2A
 AG is prevented from fixing and revising any
minimum wages if any industrial dispute is pending
before LC/IT/NT relating to rates of wages payable
to the employees employed in the schedule
employment or where any award is in operation
relating to wages.
 If AG has issued any notification then such rates
would not be applicable to employees who are
governed by the award
 AG shall not fix or revise the minimum rates of
wages during such period of pendency or operation
of the award.

(3)DIFFERENT WAGES FOR DIFFERENT
EMPLOYMENTS, EMPLOYEES AND DURATION
 In fixing or revising minimum rates of wages under this
section,—
 (a) different minimum rates of wages may be fixed for
 —(i) different scheduled employments;
 (ii) different classes of work in the same scheduled
employment;
 (iii) adults, adolescents, children and apprentices;
 (iv) different localities;
 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 larger wage-period as may be
prescribed

SECTION 4 MINIMUM RATE OF WAGES
 Various components of minimum rates of wages are
specified in this section. It consists of –
 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
 2) a basic rate of wages with or without the cost of living
allowance and the cash value of any concessions
 3) an all-inclusive rate allowing for the basic rate, the
cost of living allowance and the cash value of any
concessions
 Further cost of living allowance and cash value of any
concessions in respect of supplies of essential
commodities shall be computed at such concession rate
as may be specified by the AG in this regard

SECTION 5 PROCEDURE FOR FIXING AND
REVISING MINIMUM WAGES.
 Here there are two methods
 A) The AG may appoint as many committees and sub-
committees as it considers it necessary. These
committees will hold enquires and advise the govt. in
respect of such fixation or revision. Or
 B) The AG by notification publish its proposals for the
information of persons likely to be affected thereby and
invite proposals before a specified date. However not
less than two months from the date of the notification,
on which the proposals will be taken into consideration.
 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

 After considering the advise of committees or sub
committees appointed or by taking into
consideration the proposals of the persons likely to
be affected by such fixation, the AG shall fix the
minimum rate of wages.
 Such notification relating to finally determined
minimum rates of wages shall come into force on
the expiry of 3 months from the date of its issue.

CONSTITUTIONAL VALIDITY
 Bijoy Cotton Mills v State Of Ajmir
 The crucial sections were challenged as unconstitutional
on the ground that power of the AG is arbitrary in fixing
the minimum rates of wages and is also interference in
their freedom of trade or business guaranteed under Art
19(1) (g).
 SC observed- Minimum wages Act was passed to give
effect to minimum wages fixing machinery convention
held at Geneva. If labourers are to be secured in the
enjoyment of minimum wages and they are to be
protected against exploitation by their employers, it is
absolutely necessary that restraint should be imposed
upon their freedom of contract and such restriction
cannot be said to be unreasonable. It is imposed in the
interest of general public

U UNICHOY V STATE OF KERALA
 The act was challenged on the ground that the
State govt, power in fixing minimum rates of wages
is arbitrary.
 SC- held that there was no arbitrariness even when
the govt. is fixing minimum wages by notification in
the Official gazette as the govt. is obliged to consult
advisory board which consists of the
representatives of the employers and employees.
Since govt. is bound to consult the advisory board
there is no arbitrariness. There is no provision for
review of the decision of the govt, but that by itself
cannot be taken to hold the act as unreasonable

CROWN ALUMINUM WORKS LTD V THEIR
WORKMEN
 Whether the employer’s capacity to pay minimum
wages is a relevant factor while requiring him to pay
minimum wages.
 The court said that the capacity of the employer to
pay minimum wages is not relevant as the
employer does not have the capacity to pay
minimum wages has no right to employ the
workers.

HYDRO (ENGINEER) PRIVATE LTD V THEIR
WORKMEN
 The fact that employer might find it difficult to carry on
business on the basis of minimum wages is an irrelevant
consideration. The minimum rates of wages must
ensure not only the mere physical subsistence of the
worker which would keep him just above starvation but it
must provide him to retain and preserve his efficiency as
a workmen.
 Capacity of the industry as a whole and its employer’s
financial capacity as a whole is no doubt a relevant
factor only at the time of fixing minimum rates of wages
by the competent authorities exercising under the act,
but once this exercise is done and minimum rates of
wages are fixed, thereafter the capacity of the employer
to pay minimum wages becomes irrelevant.
 Thus the capacity to pay is relevant before fixing and the
same is irrelevant immediately after fixing the minimum
wages.

KAMINI METALS AND ALLOYS LTD V ITS
WORKMEN
 SC said minimum wages have to be paid
irrespective of the extent of profits, the financial
conditions of the establishment or the availability of
the workers on lower wages. Thus minimum wages
are fixed at an irreducible level and wages cannot b
e allowed to sink as it would result in the starvation
of the workmen. For this reason no worker is
supposed to offer his services for a wage lower
than the minimum rates of wages fixed by the
appropriate govt. under the Act. If he so does he
should be considered a forced labour.

7 ADVISORY BOARD
 For the purpose of co-ordinating the work
of committees and sub-committees appointed
under section 5 and advising the appropriate
Government generally in the matter of fixing and
revising minimum rates of wages, the appropriate
Government shall appoint an Advisory Board.

8 CENTRAL ADVISORY BOARD.
 For the purpose of advising the Central and State
Governments in the matters of the fixation and
revision of minimum rates of wages and other
matters under this Act and for co-ordinating the
work of the Advisory Board, the Central
Government shall appoint a Central Advisory
Board.
 The Central Advisory Board shall consist of persons
to be nominated by the Central Government
representing employers and employees in
SCHEDULE employments, who shall be equal in
number, and independent persons not exceeding
one-third of its total number of members; one of
such independent persons shall be appointed the
Chairman of the Board by the Central Government.

STATE OF AP V NARAYANA VELURE BEEDI
MANUFACTURING
 SC held that the advise of the committees or advisory
board is not binding on the Govt. either in fixing or
revising the minimum wages. However in the present
democratic set up, it is expected that govt. would take
the advise seriously into consideration while fixing or
revising rates of minimum wages.

9 COMPOSITION OF COMMITTEES, ETC
 Each of the committees, sub-committees and the
Advisory Board shall consist of persons to be nominated
by the appropriate Government representing employers
and employees in SCHEDULE employments, who shall
be equal in number, and independent persons not
exceeding one-third of its total number of members; one
of such independent persons shall be appointed the
Chairman by the appropriate Government

10 CORRECTION OF ERRORS
 The appropriate Government may, at any time, by
notification in the Official Gazette, correct clerical or
arithmetical mistakes in any order fixing or revising
minimum rates of wages under this Act, or errors
arising therein from any accidental slip or omission.
 (2) Every such notification shall, as soon as may be
after it is issued, be placed before the Advisory
Board for information.

11 WAGES IN KIND.
 (1) Minimum wages payable under this Act shall be paid in
cash.
 (2) Where it has been the custom to pay wages wholly or
partly in kind, the appropriate Government being of the opinion
that it is necessary in the circumstances of the case may, by
notification in the Official Gazette, authorize the payment of
minimum wages either wholly or partly in kind.
 (3) If the appropriate Government is of the opinion that
provision should be made for the supply of essential
commodities at concessional rates, the appropriate
Government may, by notification in the Official Gazette,
authorize the provision of such supplies at concessional rates.
 (4) The cash value of wages in kind and of concessions in
respect of supplies of essential commodities at concessional
rates authorized under sub-sections (2) and (3) shall be
estimated in the prescribed manner.

12 PAYMENT OF MINIMUM RATES OF WAGES.
 (1) Where in respect of any scheduled employment a
notification under section 5 is in force, the employer shall
pay to every employee engaged in a scheduled
employment under him wages at a rate not less than the
minimum rate of wages fixed by such notification for that
class of employees in that employment without any
deductions except as may be authorized within such time
and subject to such conditions as may be prescribed.
 Nothing contained in this section shall affect the
provisions of the Payment of Wages Act, 1936.

13 FIXING HOURS FOR NORMAL WORKING DAY,
ETC.
 In regard to any scheduled employment minimum rates of wages in respect of
which have been fixed under this Act, the appropriate Government may
 —(a) fix the number of hours of work which shall constitute a normal working day,
inclusive of one or more specified intervals;
 (b) provide for a day of rest in every period of seven days which shall be allowed
to all employees or to any specified class of employees and for the payment of
remuneration in respect of such days of rest;
 (c) provide for payment for work on a day of rest at a rate not less than the
overtime rate.
 (2) The provisions of sub-section (1) shall, in relation to the following classes of
employees, apply only to such extent and subject to such conditions as may be
prescribed:
 —(a) employees engaged on urgent work, or in any emergency which could not
have been foreseen or prevented;
 (b) employees engaged in work in the nature of preparatory or complementary
work which must necessarily be carried on outside the limits laid down for the
general working in the employment concerned;
 (c) employees whose employment is essentially intermittent;
 (d) employees engaged in any work which for technical reasons has to be
completed before the duty is over;
 (e) employees engaged in a work which could not be carried on except at times
dependant on the irregular action of natural forces.

14 OVERTIME.
 Where an employee, whose minimum rate of wages is
fixed under this Act by the hour, by the day or by such a
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 for part of an hour so worked in excess at the
overtime rate fixed under this Act or under any law of the
appropriate Government for the time being in force,
whichever is higher.
 (2) Nothing in this Act shall prejudice the operation of the
provisions of 1 [section 59 of the Factories Act, 1948 (63
of 1948)] in any case where those provisions are
applicable.

15 WAGES OF WORKER WHO WORKS FOR
LESS THAN NORMAL WORKING DAY.
 If an employee whose minimum rate of wages has been
fixed under this Act by the day works on any day on
which he was employed for a period of less than the
requisite number of hours constituting a normal working
day, he shall, save as otherwise hereinafter provided, be
entitled to receive wages in respect of work done by him
on that day as if he had worked for a full normal working
day: Provided, however, that he shall not be entitled to
receive wages for a full normal working day
 —(i) in any case where his failure to work is caused by his
unwillingness to work and not by the omission of the
employer to provide him with work, and
 (ii) in such other cases and circumstances as may be
prescribed.

16 WAGES FOR TWO OR MORE CLASSES OF
WORK.
 Where an employee does two or more classes of
work to each of which a different minimum rate of
wages is applicable, the employer shall pay to such
employee in respect of the time respectively
occupied in each such class of work, wages at not
less than the minimum rate in force in respect of
each such class.

17 MINIMUM TIME RATE WAGES FOR PIECE
WORK.
 Where an employee is employed on piece work for
which minimum time rate and not a minimum piece
rate has been fixed under this Act, the employer
shall pay to such employee wages at not less than
the minimum time rate.

18 MAINTENANCE OF REGISTERS AND RECORDS.
 (1) Every employer shall maintain such registers and records
giving such particulars of employees employed by him, the
work performed by them, the wages paid to them, the receipts
given by them and such other particulars and in such form as
may be prescribed.
 (2) Every employer shall keep exhibited, in such manner as
may be prescribed, in the factory, workshop or place where the
employees in SCHEDULE employment may be employed, or
in the case of out-workers, in such factory, workshop or place
as may be used for giving out-work to them, notices in the
prescribed form containing prescribed particulars.
 (3) The appropriate Government may, by rules made under
this Act, provide for the issue of wage books or wage slips to
employees employed in any scheduled employment in respect
of which minimum rates of wages have been fixed and
prescribe the manner in which entries shall be made and
authenticated in such wage books or wage slips by the
employer or his agent. State Amendments

19 INSPECTORS.
 (1) The appropriate Government may, by notification in the Official Gazette,
appoint such persons as it thinks fit to be Inspectors for the purposes of this Act
and define the local limits within which they shall exercise their functions.
 (a) enter, at all reasonable hours, with such assistants (if any), being persons in
the service of the Government or any local or other public authority, as he thinks
fit, any premises or place where employees are employed or work is given out
to out-workers in any scheduled employment in respect of which minimum rates
of wages have been fixed under this Act, for the purpose of examining any
register, record of wages or notices required to be kept or exhibited by or under
this Act or rules made thereunder, and require the production thereof for
inspection;
 (b) examine any person whom he finds in any such premises or place and who,
he has reasonable cause to believe, is an employee employed therein or an
employee to whom work is given out therein;
 (c) require any person giving out-work and any out-workers, to give any
information, which is in his power to give, with respect to the names and
addresses of the persons to, for and from whom the work is given out or
received, and with respect to the payments to be made for the work;
 (d) seize or take copies of such register, record of wages or notices or portions
thereof as he may consider relevant in respect of an offence under this Act
which he has reason to believe has been committed by an employer; and]
 (e) exercise such other powers as may be prescribed.

20 CLAIMS.
 (1)The appropriate Government may, by notification in 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, or
 any officer of the State Government not below the rank of
Labour Commissioner or
 any other officer with experience as a Judge of a Civil Court or
 as a stipendiary Magistrate
 to be the authority to hear and decide for any specified area all
claims arising out of payment of less than the minimum rates of
wages.
 The authorities can hear and decide matters in respect of the
payment of remuneration for days of rest or for work done on
such days under clause (b) or clause (c) of sub-section (1) of
section 13 or of wages at the overtime rate under section 14 to
employees employed or paid in that area.

WHO CAN APPLY?
 the employee himself, or
 any legal practitioner or
 any official of a registered trade union authorized in writing to
act on his behalf, or
 any Inspector, or
 any person acting with the permission of the Authority
appointed under sub-section (1), may apply to such Authority
for a direction under sub-section
 (3): Provided that every such application shall be presented
within six months from the date on which the minimum
wages or other amount became payable: Provided further
that any application may be admitted after the said period of
six months when the applicant satisfies the Authority that he
had sufficient cause for not making the application within
such period.

REMEDY AND DISPOSAL
 When any application under sub-section (2) is entertained, the
Authority shall hear the applicant and the employer, or give
them an opportunity of being heard, and after such further
inquiry, if any, as it may consider necessary, may, without
prejudice to any other penalty to which the employer may be
liable under this Act, direct—(i) in the case of a claim arising out
of payment of less than the minimum rates of wages, the
payment to the employee of the amount by which the
minimum wages payable to him exceed the amount actually
paid, together with the payment of such compensation as the
authority may think fit, not exceeding ten times the amount of
such excess;
 (ii) in any other case, the payment of the amount due to the
employee, together with the payment of such compensation as
the Authority may think fit, not exceeding ten rupees, and the
Authority may direct payment of such compensation in cases
where the excess or the amount due is paid by the employer
to the employee before the disposal of the application

PENALTY FOR VEXATIOUS CLAIM
 (4) If the authority hearing any application under
this section is satisfied that it was either malicious
or vexatious, it may direct that a penalty not
exceeding fifty rupees be paid to the employer by
the person presenting the application.

RECOVERY OF AMOUNT DUE
 (5) Any amount directed to be paid under this
section may be recovered—
 (a) if the Authority is a Magistrate, by the Authority
as if it were a fine imposed by the Authority as a
Magistrate, or
 (b) if the Authority is not a Magistrate, by any
Magistrate to whom the Authority makes application
in this behalf, as if it were a fine imposed by such
Magistrate.
 (6) Every direction of the Authority under this
section shall be final.

POWERS OF THE AUTHORITY
 (7) Every Authority appointed under sub-section (1)
shall have all the powers of a Civil Court under the
Code of Civil Procedure, 1908 (5 of 1908), for the
purpose of taking evidence and of enforcing the
attendance of witnesses and compelling the
production of documents, and every such Authority
shall be deemed to be a Civil Court for all the
purposes of section 195 and Chapter XXXV of the
Code of Criminal Procedure, 1898 (5 of 1898).
State Amendments

21 SINGLE APPLICATION IN RESPECT OF A
NUMBER OF EMPLOYEES.
 a single application may be presented under section 20
on behalf or in respect of any number of employees
employed in SCHEDULE employment in respect of
which minimum rates of wages have been fixed and in
such cases the maximum compensation which may be
awarded under sub-section (3) of section 20 shall not
exceed ten times the aggregate amount of such
excess 35 [or ten rupees per head, as the case may be].
 (2) The Authority may deal with any number of separate
pending applications presented under section 20 in
respect of employees in SCHEDULE employments in
respect of which minimum rates of wages have been
fixed, as a single application presented under sub-
section (1) of this section and the provisions of that sub-
section shall apply accordingly. State Amendments
Section 21A

22 PENALTIES FOR CERTAIN OFFENCES
 (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
 (b) 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: Provided that in 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

22A GENERAL PROVISION FOR PUNISHMENT
OF OTHER OFFENCES
 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.

Minimum wages act, 1948

More Related Content

What's hot (20)

Similar to Minimum wages act, 1948 (20)

More from vidyavardhaka law college, mysuru (20)

Recently uploaded (20)

Minimum wages act, 1948