The Minimum Wages Act, 1948, Lecture notes of Labour Law

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The Minimum Wages

Act, 1948

ILO – Defines M W

• (^) “ 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. ”

ILO – The Dimensions Of M W

Full Consultation with Social Partners COVERAGE Afford protection to All Workers COMPLIANCE Employers to Comply with MW Regulations LEVEL To Cover the Needs of all Workers & their Families

ILO – The standard

• (^) The ILO Convention No. 26 (1928) provides for fixing of minimum wages in manufacturing and commercial trades or parts of trades where no arrangements exist for the effective regulation of wages by collective agreements or otherwise and where wages are exceptionally low.
• (^) ILO Convention 131 (1970) adopted in 1970 requires that every member of the ILO which ratifies the convention should undertake to establish a system of minimum wages that covers all groups of wage earners whose terms of employment are such that coverage would be appropriate.

The Indian Act on M W

• (^) To provide for a machinery for fixing and revising minimum wages
• (^) A draft Bill was prepared and discussed at the 7th session of the Indian Labour Conference in November 1945. The Minimum Wages Bill was introduced in the Central Legislative Assembly.
• (^) The Minimum Wages Bill having been passed by the Legislature received the assent on March 15, 1948.
• (^) It came on the Statute Book as the Minimum Wages Act, 1948.

The M W Act, 1948

• (^) Applicable to the Sweated Employments
• (^) Intended to achieve the object of doing social justice to workmen

employed in the scheduled employments

• (^) Aims at statutory fixation of minimum wage s to prevent exploitation

of labour.

• (^) Applicable to the Scheduled Employments

The M W Act, 1948

• (^) Scheduled employment - The Schedule (Sec 2(g) and 27)
• (^) Sec 2(g) "scheduled employment" means an employment specified in the Schedule, or any process or branch of work forming part of such employment
• (^) Sec 27 Power of State Government to add to the Schedule The appropriate Government, after giving by notification in the Official Gazette not less than three months' notice of its intention so to do, may, by like notification, add to either Part of the Schedule [ Part 1 40 items, Part II Employment in Agriculture ] any employment in respect of which it is of opinion that minimum rates of wages should be fixed under this Act, and thereupon the Schedule shall in its application to the [State] be deemed to be amended accordingly.

The M W Act, 1948

• (^) To provide for fixation by the Governments of minimum wages for employments covered by the Schedule
• (^) The items in the Schedule are those where sweated labour is more prevalent or where there is a big chance of exploitation of labour
• (^) More categories of employment could be added
• (^) The law provides for addition to the Schedule
• (^) Higher period was allowed for fixation of minimum wages for agricultural labour (Reasons include administrative reasons) Now it is added

The M W Act, 1948

• (^) The law provides for periodical revision of Minimum Wages already

fixed

• (^) Provisions for appointment of Advisory Committees and Advisory

Boards (Boards for co-ordination work of the Advisory Committees)

• (^) The Committees and the Boards will have equal representation of

employers and workmen

• (^) Except on initial fixation of minimum wages, consultation with the

Advisory Committee will be obligatory on all occasions of revision

The M W Act, 1948

• (^) If an employer pays less than the minimum wages fixed by the

Government, a summary procedure has been provided for recovery of

the balance with penalty and subsequent prosecution of the

offending party

‘Pay or Perish’ Principle

Crown Aluminium Works v. Workmen , AIR 1958 SC 30

There is, however, one principle which admits of no exceptions. No industry has a right to exist unless it is able to pay its workmen at least a bare minimum wage. It is quite likely that in under-developed countries, where unemployment prevails on a very large scale, unorganised labour may be available on starvation wages; but the employment of labour on starvation wages cannot be encouraged or favoured in a modern democratic welfare state. If an employer cannot maintain his enterprise without cutting down the wages of his employees below even a bare subsistence or minimum wage, he would have no right to conduct his enterprise on such terms.

Power of the Government

U Uchinoyi v. State of Kerala , AIR 1962 SC 12

The Supreme Court observed:

“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”.

Linge Gowda Detective and Security Chamber (P) Ltd. v. Authority

under Minimum Wages Act , ILR 1998 Kar 1715

• (^) Applicability of the MW Act to private detective agency.
• (^) There appears to be some fallacy in the logic that when a detective service employee works in the Engineering Industry, the management would be required to pay the minimum wages in the Engineering Industry and the same detective if he is posted elsewhere, for example, on private duty, he would not be entitled to minimum wages.
• (^) However, in the absence of a notification it would be difficult to hold that detectives are employees covered by the Act and would be entitled to minimum wages as is paid to the regular workmen of the principal employer.

Bandhua Mukti Morcha v. Union of India , (1984) SCC (L&S) 389

• (^) A piece-rated worker is entitled to receive the minimum wages irrespective of his output.
• (^) “… the workmen must get nothing less than the minimum wage for the job which is being carried out by them and if they are required to carry out additionally any of the functions pertaining to another job or occupation for which a separate minimum wage is prescribed, they must be paid a proportionate part of such minimum wage in addition to the minimum wage payable to them for the work primarily carried out by them.”