CONSTITUTIONALITY OF MINIMUM WAGES ACT1948 Guided By: Prof. Nuzhat Parween SUBMITTED BY: MD. ABID HUSSAIN ANSARI B.A. LL.B. (HONS.) 6TH SEMESTER 1|Page Acknowledgement Firstly, I would like to express my profound sense of gratitude towards the almighty “ALLAH” for providing me with the authentic circumstances which were mandatory for the completion of my project. Secondly, I am highly indebted to Prof. Dr. Nuzhat Parween at Faculty of Law, Jamia Millia Islamia University, New Delhi for providing me with constant encouragement and guidance throughout the preparation of this project. Thirdly, I thank the Law library staff who liaised with us in searching material relating to the project. My cardinal thanks are also for my parents, friends and all teachers of law department in our college who have always been the source of my inspiration and motivation without which I would have never been able to unabridged my project. My father, a lawyer with large access to books of value has been of great help to me. Without the contribution of the above said people I could have never completed this project. Mohd. Abid Hussain Ansari B.A.LL.B (Hons) 6th Semester 3rd Year 2|Page Table of Contents 1. Introduction and Evolution of Labour Law…………………………………………..7 2. Implementation of Labour laws……………………………………………………..19 3. Introduction to Minimum Wages Act 1948…………………………………………20 4. Background………………………………………………………………………….22 5. Historical Backdrop…………………………………………………………………22 6. Object and Scope of the Legislation………………………………………………...23 7. Criteria for notification of scheduled employment………………………………….24 8. Methods for fixation or revision of minimum wages Fixation……………………...24 9. Advisory Board……………………………………………………………………...26 10. Variable Dearness Allowance (VDA)………………………………………………26 11. Steps taken to reduce disparities: Five Regional Committees………………………33 12. National Floor Level Minimum Wage……………………………………………...34 13. Minimum Wage……………………………………………………………………..35 14. Minimum Wage and the MGNREGA………………………………………………39 15. Sanctity of the Minimum Wage Act………………………………………………...40 16. Recent Initiatives……………………………………………………………………51 17. Amendment in the Minimum Wages Act, 1948…………………………………….52 18. Conclusion…………………………………………………………………………..52 19. Bibliography………………………………………………………………………...53 3|Page List of Cases 1. Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors. 2. Unichoyi v. State of Kerala 3. Bijoy Cotton Mills v. State of Ajmer 4. B.Y. Kashatriya v. S.A.T. Bidi Kamgar Union 5. State of Rajasthan v. Hari Ram Nathwani 6. Reptakos Brett and Co. v. Its workmen 7. Sanjit Roy v. State of Rajasthan 8. Edward Mills v. State of Ajmer 9. Workmen Represented by Secretary v. Management of Reptakos Brett and Co. Ltd. and Anr 10.Burmah-Shell Oil Storage and Distributing Co. of India, Ltd., Bombay v. Their Workmen 11.Standard Vacuum Oil Company v. Their Employees 12.Linge Gowda Detective and Security Chamber (P) Ltd. v. Authority 13.A. V. Parkash v. Senior Labour Inspector 14.Bandhua Mukti Morcha v. Union of India 15.Patel Ishwerbhai Pramod Bhai v. Taluka Development Officer 16.Chacko v. Varkey 17.Benode Bihari Shah v. State of W.B. 18.Madhya Pradesh Bidi Udyog Sangh, Sagar v. State of Madhya Pradesh 19.Athni Municipality v. Shiettappa Laxman Pattan 20.Shiv Prasad Ghosh v. District Judge 21.President, Cinema Workers‟ Union affiliated to Bhartiya Mazdoor Sangh v. Secretary, Social Welfare and Labour Department 22.Govind Bhawan Karyalaya v. State of U.P. 23.Woolcombers of India v. Workers Union 24.Hydro (Engineers) Put. Ltd. v. The Workmen 4|Page 25.Bidi, Bidi Leaves and Tobacco Merchants Association v. State of Bombay 26.Abraham v. Industrial Tribunal 27.Bhikusa Yamasakshatriya v. Sanagmanes Akola Paluka Bidi Kamgar Union 28.Karnataka Film Chamber of Commerce, Bangalore v. State of Karnataka 29.Krishna Flour Mills v. Commissioner of Labour 30.T.G. Lakshmaiah Setty & Sons, Adoni v. State of Andhra Pradesh 31.Bijay Unchana Paul v. State of Assam 32.Chakradharpur Bidi and Tobacco Merchants Association v. State of Bihar 33.Government of India v. Barium Chemicals Ltd. 34.Ramkrishna Ramnath v. State of Maharashtra 35.Militant Security Bureau Put. Ltd. v. B.R. Hehar 36.Union for Democratic Rights v. Union of India 37.Municipal Council, Hatta v. Bhagat Singh 38.V. V. Surya Rau v. Surendra Ramkrishna Tendulkar 39.Executive Engineer, Rural Works Division, Mayurbhanj v. Addl. District Magistrate, Mayurbhanj 40.Sri Gandhian Bus Service Chingleput v. Labour Court 41.Awadh Lal Sah v. State of Bihar 42.B. Ramdas v. The Authority under Minimum Wages Act, Guntur Region, Guntur 43.Delhi Administration v. Presiding Officer 44.A.V. Prakash v. Senior Labour Inspector 45.Bakshsish Singh v. Darshan Engineering Works 46.Premier Tobacco Packers (P) Ltd. v. Assistance Labour Officer 47.Yadav Stores, Nagpur v. Presiding Officer, Labour Court – III 48.Harish C. Brahmbhatt v. Oil and Natural Gas Commission 49.Jaswant Rai Beri and Ors. v. State Of Punjab and Anr 5|Page Kishan Lal & Sons v. State of Rajasthan 55. The Pemmbavoor Municipal Council 53.Nathu Ram Shukla v.Crown Aluminium Works v.Loknath Nathu Lal v. Govt.The Management v.Elisamma v. State of Madhya Pradesh 58.West Coast Employers' Federation v.50. The Plantation Officer 56. State Of Kerala and Ors 52. of Delhi & Ors 54. Nct. The Corporation of Madras 57. State ofMadhya Pradesh 6|Page . Their Workmen 51.Sanjit Roy v.The Perumbavoor Merchant's Association v. of. There are two broad categories of labour law. Then the Factories Act. While the impact of this measure was clearly welfarist the real motivation was undoubtedly protectionist! To date. In the beginning it was difficult to get enough regular Indian workers to run British establishments and hence laws for indenturing workers became necessary. unfair dismissals. India has ratified four – Forced Labour 1930. union members and employers in the workplace. administrative rulings. labour-management relations. collective labour law relates to the tripartite relationship between employee. collective bargaining and unfair labour practices. Of the ILO‟s eight fundamental conventions. Equal Remuneration 1951. 7|Page . Second. Workplace health and safety. individual labour law concerns employees' rights at work and through the contract for work. and the restriction of women in night employment. the abolition of child labour. Considerations of British political economy were naturally paramount in shaping some of these early laws. In other words. Thus we received the first stipulation of eight hours of work. and precedents which address the legal rights of. and restrictions on. It is well known that Indian textile goods offered stiff competition to British textiles in the export market and hence in order to make India labour costlier the Factories Act was first introduced in 1883 because of the pressure brought on the British parliament by the textile magnates of Manchester and Lancashire.Introduction & Evolution of Labour Law The history of labour legislation in India is naturally interwoven with the history of British colonialism. including general holidays. and the introduction of overtime wages for work beyond eight hours. labour law covers: Industrial relations – certification of unions. This was obviously labour legislation in order to protect the interests of British employers. employers and employees. Abolition of Forced Labour 1957. First. Labour law also known as employment law is the body of laws. it mediates many aspects of the relationship between trade unions. Labour law defines the rights and obligations as workers. employer and union. and Discrimination (employment and occupation) 1958. annual leave. Employment standards. working people and their organizations. India has ratified 39 International Labour Organisation (ILO) conventions of which 37 are in force. layoff procedures and severance pay. Generally. As such. working hours. minimum wage. across five main periods. B. Mishra. Caste. 2The 1 A different scenario in terms of periodization in the evolution of Indian labour policy is presented by Shyam Sundar: K. Religion and Occupational Structure in Traditional Activities: A Preliminary View from North India‟ in J.” No write up on the subject. or industrial occupation or avocation of workmen.1978 and 7.4. Rajappa and Ors. Labour organisation and the production process remained.2. The definition of Industry as provided in Section 2(j) of the Industrial Disputes Act. J. Industrial Disputes Act. Gooptu. I would like to propose the evolution of labour law in India. G. 2 These continue to be highly significant factors in the organisation and regulation of labour. Section 2(j) of the Act of 1947 provides for definition of Industry. above n. decided on 21.1978. undertaking.). there was little attention paid to the legal organisation of work by the authorities. service. Triparthi. trade. „Ethnicity. 8|Page . Oxford University Press. Also S. G. Sundar. Walter de Gruyter. M. „State in Industrial Relations System in India: From Corporatist to Neo-Liberal?‟ (2005) 48 Indian Journal of Labour Economics 917. 13-18. „Does Caste Matter for Wages in the Indian Labour Market?‟ Social Development Unit. Dutta. Bangalore Water Supply and Sewerage Board v. Harriss-White and N. 2010. 1947 reads as under.The labour movement has been instrumental in the enacting of laws protecting labour rights in the 19th and 20th centuries. M. land and cultural regulation. Thorat and K. R. referred earlier pronouncements and decided the scope of definition of Industry under the Industrial Disputes Act. is possible without referring to the land mark judgment of the Hon‟ble Supreme Court. Newman (eds. Scoville (ed. 1947 came into effect immediately after independence and the object of the Act was to provide for effective machinery for investigation and settlement of industrial disputes. New Delhi. B.. A. employment. and the regulatory policy associated with it.V. World Bank. 1947. at pp. a matter of family. handicraft. Berlin. S. „The Indian Industrial Relations System: Struggling to Address the Dynamics of a Globalizing Economy‟ (2009) 51 Journal of Industrial Relations 395. Hill. Status Influences in Third World Labor Markets.1 Early 1920s In the very early stages of British colonial control. 1991. Blocked by Caste: Economic Discrimination in Modern India. Das and P. Scoville. 2007. in the backdrop of labour laws in India. In this landmark judgment 7 judge bench of the Hon‟ble Supreme Court considered pros and cons of the definition of Industry. S. apart from a few exceptions. manufacture or calling of employers and includes any calling. “Industry” means any business. Labour rights have been integral to the social and economic development since the industrial revolution.7.‟ Mapping India‟s World of Unorganized Labour‟ (2001) 37 Socialist Register 89. and E.). Toha and S. and the emergence of Communist influence in the labour movement following the successful Bolshevik revolution in Russia in 1917. The Factories Act of 1891 applied to premises with 50 or more employees. health and safety and so on. K. and concerning hours of work. 6 The Factories Act of 1881. the Textile Factory Committee 1906 and the Factory Labour Commission of 1907. Robb (ed.7 Post .8 3 M. „Labour Legislation in India‟ (1930) 22 International Labour Review 599. Much of the legislation of this period was a continuation of the „factory‟-style regulation of the pre-war period.6 Regulation in the plantation sector was focussed principally upon matters relating to labour supply and the problems of the indentured labour system. including the military. New Delhi.earliest British regulations related to workers in the government service. 68-74. R. in factories and mines. Several factors had combined to alter the industrial and political landscape. and Law. Das. 6. mainly in relation to the employment of women and children. 8. much of it responding to the ratification of various relevant ILO conventions by the colonial Indian government. and „forced labour‟ for the performance of public works.3 However. 4 These include the Factories Acts of 1881. only applied to premises using electrical power with 100 or more employees. ch. Robb. R.World War One and the 1920s As mentioned earlier. it is very clear from the 1880s onwards there was a succession of legislative interventions by the colonial government. Oxford University Press. and was of limited impact insofar as it applied only selectively. and the Assam Labour and Immigration (Amendment) Act of 1915. „Work Construed: Ideological Origins of Labour Law in British India to 1918‟ in P. Dalit Movements and the Meaning of Labour in India. above n. Oxford University Press. the Government of India Factory Commission of 1890.). Peasants. Political Economy. Typical protective legislation of the period includes the Factories Act 1922. the legislation made only very slight inroads into working practices in these industries. at pp. 4 Much of this legislation was the result of various government-initiated enquiries. for example. female and child protections. 1993. 2007. See also P. Anderson. dealing with hours of work. and the Workmen‟s Compensation Act 1923. the Bombay Factory Commission of 1884.5 However. there is some disagreement about the importance of this period. Legislation in the mining industry commenced with the Indian Mines Act 1901. the rapid development of trade unions (most importantly the formation of the All India Trade Union Congress in 1920). 5 These included the Labour Commission set up by the Governor of Bombay in 1875. 9|Page . 1891 and 1911: DeSousa. Delhi. the Mines Act 1922. rest periods. At the same time the newly created ILO began to have an influence on labour policy in India. including the emergence of a strong nationalist movement. 8 The Workmen‟s Compensation Act was renamed the Employee‟s Compensation Act in 2010. 7 Early legislation addressing problems in the plantation sector includes the Assam Labour and Emigration Act of 1901. 9 Mass dismissals were accompanied by a renewed wave of strikes. and the legislation provided no support for a collective bargaining system as such. OUP. there was also in this period continued agitation for Indian independence in which the All India Trade Union Congress was playing a major role. and extended some protections against civil and criminal liability in the course of industrial disputes. 10 | P a g e . Against this background. in the case of such bargaining. nor. Working Class Movements in India. and provided for the compulsory reference of industrial disputes to a conciliation board or a court of enquiry. New Delhi. The Trade Disputes Act 1929 placed severe limitations upon the right to strike. however. the British government established the Royal Commission on Labour in India on the 4th July 1929. Both pieces of legislation were strongly criticised by sections of the trade union movement. 9 The British colonial government favoured the less nationalistic Indian Federation of Labour: see S. 1885-1975.. was there any legal obligation to bargain in good faith. The outcomes of the reference.. gave unions a legal status. The Commission was effectively boycotted by the Indian labour movement.However. The 1930s In the context of world economic depression and the associated rise in unemployment.27 The regulatory framework set down in these two provisions continues formally to underpin the collective labour law system of present day India. The Act was limited in certain respects (for example unregistered unions were excluded from the Act‟s protections). even if this body of legislation is correctly characterised as „unimportant‟ two further enactments in this period point to what has been described as the emergence of a more modern approach to the regulation of industrial relations: the Trade Unions Act 1926 and the Trade Disputes Act 1929. the All India Trade Union Congress pointing to the British Imperialist government‟s „open and brutal attack upon the trade union movement by means of repressive legislation. 1994. including the All India Trade Union Congress. Sen. The Trade Unions Act 1926 provided for the registration of trade unions (though registration was not made compulsory). K. insofar as there was no obligation upon employers to bargain with unions (even registered unions) in the course of an industrial dispute. were not binding upon the parties. especially as the economic depression took hold through 1928 and 1929.‟ and its lack of „bona fides‟ in establishing the Commission. 11 11 | P a g e . were the developments which followed from the Government of India Act 1935. However. and without reasonable cause. Chatterjee. First. and compensation of one sort or another. As a matter of constitutional law. This legal division of power was also continued in the Constitution of India which came into effect in 1950. 1931 The Royal Commission on Labour had „recommended that legislative authority should remain with the central Government. 19 arose from the Royal Commission‟s recommendations. many of the outcomes of the Report of the Royal Commission made their way into a string of new labour legislation between 1933 and 1939. Even prior to the 1935 Act. A further example was the Trade Disputes (Amendment) Act 1938. emphasising lack of uniformity and other problems. London. and potentially more important. Virtually all of this new law was in the nature of protective factory and mines regulation to do with wages. B. Pai. Not all of this. there has been ongoing debate over the years concerning the problems of co-ordination and uniformity of labour laws due to the overlap of powers: see Sir A. Cmnd. 2001. 3883. which authorised provincial governments to appoint conciliation officers to assist in the settlement of disputes. New Delhi. following the securing of Indian independence from Britain in 1947. Under such legal arrangements Central and State governments have continued to legislate for labour relations. Labour Law in India. Das. still a period of continued job cuts. HMSO. Menon estimates that of 24 pieces of labour legislation introduced by central and provincial governments between 1932 and 1937. though the states could also be given jurisdiction provided that no legislation was undertaken by the states without the previous concurrence of the central government and that such legislation did not impair or infringe the central Government‟s legislation‟: Menon. and. Secondly. One exception was the Payment of Wages Act 1936. Butterworth. „Federalism and Labour Legislation in India‟ (1944) 49 International Labour Review 415. and ongoing industrial unrest and strike action. which empowered the employer to deduct wages of employees absent from work in concert. much of it an important contribution to the development of better working conditions in workplaces. however. emphasising the capacity in these shared arrangements for flexibility in labour market regulation.or „union‟-friendly policies would emerge at the provincial government level. several provincial governments had begun to experiment with labour law. and hence the Royal Commission was merely recommending the continuance of existing arrangements: Menon. hours of work. and this in turn gave rise to further concentrated periods of extensive strike action. But during the 1930s. One important instance was the introduction of the Trade Disputes (Conciliation) Act 1934 by the provincial government of 10 Report of the Royal Commission on Labour in India. was particularly directed to creating a more favourable environment for combined labour activity.The Commission handed down its Report10 in 1931. wage reductions. two major factors began to put some further shape on Indian labour law. The heightened profile given to provincial autonomy11 made possible under these new constitutional arrangements gave rise to popular expectation that more „labour‟. legislative power over labour and employment relations had been largely shared concurrently by both Central and State governments since 1919. C. and G. similar to earlier periods. above n. and Rule 56-A. including industrial action on the part of employers in some cases. at p. Kooiman. Much of this restrictive legislation in the Bombay province was continued after the war ended in the form of the Bombay Industrial Relations Act 1946. The introduction of the Industrial Disputes Act 1938 by the Bombay provincial government. however. more adventurous legislation followed after the election of more popular provincial governments in the wake of the Government of India Act 1935. prejudicial and harmful to the interest of the workers and “calculated to create slave unions”‟.13 However. and the Defence of India Rules (Rule 81-A. Cochin and other Indian States during the 1930s: Das. for example. Again it is necessary to note. 14. and the State in India‟ (1955) 63 Journal of Political Economy 293. D. In general it appears that the expectations created in the popular election of provincial governments remained largely unfulfilled. „Labor Discipline. Morris. The All India Trade Union Congress described the 1938 Bombay Bill as „uncalled for. that these were largely limited measures which were not greeted with general approval by the Indian trade union movement. World War Two and The Pre--‐Independence Period Regulation in the World War Two period appears against the background of considerable industrial unrest and strike action against the conditions and effects of the war itself. introduced in 1943). granting power to the Bombay government to refer industrial disputes to compulsory arbitration by an Industrial Court. and banning all strikes and lockouts prior to arbitration. M. This legislation included passage in 1941 of s. 1934-37‟ (1981) 16 Economic and Political Weekly 1807. and other forms of industrial action. introduced in 1942.12 Whilst novel insofar as it was designed to effect changes to collective labour relations (by providing for the appointment of a Labour Officer to represent the interests and grievances of workers in the cotton mills). 12 Similar style legislation on industrial disputes. 12 | P a g e . in the course of industrial disputes. reactionary. 13 D. „Labour Legislation and Working Class Movement: Case of Bombay Labour Office. strikes and so on was also introduced in Indore. Each of these sets of provisions laid down severe restrictions against strikes.Bombay. Other relevant legislation included the Central government‟s Essential Services Act 1941. 49A of the Bombay Industrial Disputes Act. 816-817. the 1934 Act seems to have been aimed mainly at heading off communist influence among the labour movement following many years of decline in the Bombay-based textile industries and a major strike earlier in that year. These circumstances brought into being several pieces of legislation (at Central and State level) designed to secure labour co-operation in support of the war effort. Trade Unions. among other things made some move in towards the imposition of a legal obligation on the part of employers to recognise trade unions. then. Alphen aan den Rijn. What collective bargaining there was.K. 179. Roy. To greater or lesser extent. Similarly the Trade Unions Act 1926 also contained important limitations on its coverage. 16 T. The overall impact of this was. and much industrial action is correspondingly unlawful in practice: C. and earlier provisions such as the Bombay Act of 1934. exercised strong controls over the circumstances in which disputes might be referred to adjudication. as is noted in subsequent sections of this project work. and so on. its successor the Trade Disputes Act 1947.15 Whereas the term „industry‟ has now been interpreted quite broadly. „India‟ in R. evolved almost entirely in the formal (or organised) sectors of the economy. „Managerial Employees and Labour Legislation‟ (1992) 28 Indian Journal of Industrial Relations 1. one of limitation and exclusion. Kluwer Law International. the Trade Disputes Act 1929. The Industrial Disputes Act 1947. developed without state support and. Netherlands.General and political strikes were also targeted. and to settle them in appropriate cases. Although India has never ratified the key ILO Conventions pertaining to Freedom of Association and Collective Bargaining. Rethinking Economic Change in India. and domestic and agricultural workers are still excluded. Supplement 262. While strikes and lockouts were strictly controlled. 2005. and which unions might be permitted to notify such disputes. at paras. 15 B. December 2002. at both Central and State levels.or American-style model. and. many forms of industrial action are unlawful. applied (and applies) generally to „workmen‟ in „industries‟. Routledge. London. for example. the state. the industries to which the legislation applied. 16 These are 14 In India. it has been pointed out that as a member of the organisation it has a general responsibility to support these rights from 13 | P a g e . Blanpain (ed. at p. including workers in government departments and services. have remained a core part of the legislation governing industrial disputes and bargaining since that time. Sharma. or in managerial and administrative capacities. 626-652. Certainly there was little or nothing in these various provisions which facilitated the development of collective bargaining in a British.) International Encyclopaedia for Labour Law and Industrial Relations. But generally the terms of this legislation were historically directed more towards the control of labour than towards the settlement issue. many types of employment. It has been said of the system set up under the Industrial Disputes Act 1947 that „the freedom of industrial action on the part of workers [is] more illusory than real‟ and that the „provisions of the law [operate] to restrict the options available to the side represented by the workers‟. were essentially designed to enable government agencies to investigate industrial disputes over relevant terms and conditions of employment. „Workmen‟ excluded various categories of workers engaged in particular occupations. not surprisingly. Johri.14 The provisions of Rule 81-A in particular were continued after the war as part of the Industrial Disputes Act 1947. R. Other major statutes of this period included the Factories Act 1948 and the Minimum Wage Act 1948. 1947‟ (2006) 22 International Journal of Comparative Labour Law and Industrial Relations 529. 17 K. Reforming the Labour Market. Most scholars have noted that the path taken in the evolution of labour law in India in the post-1945 period basically followed the pattern established earlier in the restrictive policies of the colonial government and in particular the legislation of the war years. One example is the Industrial Employment (Standing Orders) Act 1946 which required employers to provide their employees with clear terms and conditions of employment according to the items set down in a Schedule to the Act and certified by the relevant authority. This is a common theme in Indian labour law.18 Post-Independence. pp. Gopalakrishnan and L. reflecting a five-year plan of development „dealing with all phases of the worker‟s life. Johri. in respect of some provisions. One such provision was the Bombay Industrial Relations Act 1946 which. 42-55.largely confined to the public and large corporate sectors and constitute about 3 per cent or less of the workforce in each case. „Issues in Labour Law Reform‟ in B. the Indian Trade Unions (Madhya Pradesh Amendment) Act 1960. R. 14 | P a g e . at paras. Impact of Labour Regulations on Industrial Development and Employment: A Study of Maharashtra. and. Institute for Studies in Industrial Development.17 At the same time. Kaushik (eds. 551554. 66-68. as we have noted also in the case of the Industrial Disputes Act 1947. at pp. with obvious implications for the legitimacy of the labour law system as a whole. Only in a few States were there exceptions made to the overall discretionary power of government to refer or not to refer disputes for adjudication. and the promotion of labour‟s interests. an ethical standpoint: see R. 2005.). Debroy and P. Trade Union Rights and the Indian Industrial Disputes Act. D. however. Much of this body of regulation. at pp. and extended to some of those unions the right to represent workers in particular industries and areas. Academic Foundation. was (and remains) limited in its application because it was applied only selectively to certain kinds of business establishments. distinguished several types of unions. and in only a few States did laws emerge which created some sort of obligation upon employers to recognise trade unions. Debroy. Tortell. there was a continued strengthening of the protective regulation applying to individual worker‟s rights during this period. There are similar laws in other Indian States: for example. of housing. 1948 Onwards In the immediate post-war period it was agreed that the Indian Central government would be primarily responsible for labour legislation. 542-543. 2008. „Access to Justice. New Delhi. 18 B. New Delhi. only to businesses of a certain size as determined by the number of employees. Shyam Sundar. building upon the earlier (and much criticised) attempts in the Bombay Industrial Disputes Act 1938. welfare. injury and death. In support of the state planned and organised economy. 39. 15. Oregon. „just and humane conditions of work‟. Fenwick and T. particularly its commitment to economic. and fair wages‟. Sivananthiran and C. political and social justice in the Preamble. Venkata Ratnam (ed. maternity. Ghose. one of the most important pieces of legislation in India's social security system. P. Oxford and Portland.).). and the Minimum Wages Act 1948. Novitz (eds. Prevention and Settlement of Disputes in India. New Delhi. New Delhi. Many of these social values were articulated in the Constitution of India 1950. Thakur. and the Employees' Provident Fund and Miscellaneous Provisions Act 1952. For further information: R. 2008. Institute for Studies in Industrial Development. we have noted the introduction of a raft of protective legislation in the form of the Factories Act 1948. including the „right to work‟.A Study of Industrial Adjudication‟ in A. Hart Publishing. and its general egalitarian conception of national development.20 Consequently the development of labour law in India continued to follow the dual pattern already identified. When it came to the regulation of collective labour relations in particular. 21 19 The Indian Constitution 1950 contains specific goals relating to labour. 83. however. 14.8.). New Delhi. better working conditions.S. providing for an insurance system for employees in cases of sickness. Indian Industrial Relations Association/Global Business Press. the major influence on the formation of postindependence labour and economic policy was the priority given to government-directed „nation building‟ . which sought to regulate conditions of work and provide welfare measures for India‟s high employment industries in tea and rubber plantations. Gopalakrishnan. 21 In the early period of political independence the Indian government established strong controls over the nation‟s economy in an avowedly „socialistic‟ stance. S. the Employees‟ State Insurance Act 1948. at p. „Enforcing Labour Rights Through Human Rights Norms: The Approach of the Supreme Court of India‟ in C. 2003. Industrial Relations in Indian States. the Plantations Labour Act 1951. It follows from what we have said earlier. which among other things sought to „decasualize‟ dock labour. Human Rights at Work: Perspectives on Law and Regulation. Labour Policy and Legal Framework in India: A Review. S. work. Important also to note are the Dock Workers (Regulation of Employment) Act 1948. that this period did not mark out a completely new approach to the issue of labour regulation in India. „Alternate Dispute Settlement Mechanisms in India . 1996. the restrictive policies of government control which had characterised the colonial and immediate post-war period continued to hold sway. Such an outlook has retained currency even in more recent times: C. In 1956 the industries brought under the control of the Indian government were 15 | P a g e . 2010 20 C. a „living wage‟ and a „decent standard of life‟ in addition to the right to form trade Unions: Constitution of India 1949 ss.19 Consistent with this socio/political outlook. 43 and 43A in particular. This included the establishment of state monopolies or controls over industries considered vital to the development of the economy. This policy was formulated as part of the 1948 Industrial Policy Resolution and articulated in various Five Year plans introduced sequentially from the late 1940s onwards. 41. 19. at p.in which the need for trade union co-operation in securing industrial peace and labour support for industrialisation and economic development (economic nationalism) was paramount. ILO. Venkata Ratnam (eds. As various authorities have noted. Probably the best example of this legislation is the Maharashtra Recognition of Unions and Prevention of Unfair Labour Practices Act 1971. Cambridge Massachusetts. A. 24-25. 23 Industrial Disputes (Amendment) Act 1982: The proscribed „unfair labour practices‟ are listed in the Fifth Schedule to the Industrial Disputes Act 1947. although that legislation was limited in its application to nine industries only. Labour Policy and Industrial Relations in India. arms and defence equipment. and strikes and lockouts to a degree legalised and regulated. 62 at pp. among others. New Delhi. at ch. and included. and the emphasis given to the maintenance of „industrial peace‟ effectively circumscribed the possibility that collective bargaining might develop as the primary form of industrial relations in India: in effect „collective bargaining was held to be incompatible with economic planning‟. 1926). Ram Prasad and Sons. Mohan. Originally similar provisions had been proposed as part of amendments to the Trade Unions Act in 1947. The government‟s policy also included various supports for the development of private industry including tariff protection. some States did move to provide unions with a right to recognition. and some subsequent legislation made the refusal to bargain on the part of an employer an „unfair labour practice‟. In 1982 the Indian Central government amended the Industrial Disputes Act of 1947 introducing the concept of the „unfair labour practice‟ into national labour law. Jalan (ed. 1958.the Indian government continued its strong interventionist role in industrial relations. The laws regulating trade unions and industrial disputes remained largely fixed on the model set by the legislation introduced over the period from 1926 to 1947. iron and steel. 22 As noted earlier. although in an important amendment to the Trade Union Act in 2001 it was provided that trade unions were required to have at least 100 members or to represent at least 10% of the workforce in order to secure registration under the Act. transport. Labor Problems in the Industrialization of India. S. The Indian Economy: Problems and Prospects. more or less making the duty to bargain legally obligatory. collective bargaining (at least nominally) „recognised‟. However. C. s. Agra. Harvard University Press. thereby making the formation and legalisation of unions far more onerous than had previously been the case. 1968. mining. electrical power. 22 Trade Unions (Amendment) Act 2001 (Act 31 of 2001). the level of state intervention in the actual industrial relations process. which supplemented the Industrial Relations Act 1946 of Bombay. Mathur. 5 (which inserted s. Myers. Penguin. 9A into the Trade Unions Act.23 This legislation outlawed various practices by employers unions and workers designed to disrupt the legitimate processes of dispute settlement under the Act. at ch. 16 | P a g e . R. The refusal by an employer to bargain collectively in good faith with the recognized trade union was listed as an unfair practice. and this in turn had certain implications for the Indian industrial relations system. above n. Overall the law on bargaining has changed little since these formative days.). Whilst on its face this provision might seem to have amounted to a major expanded considerably. While trade union organisation was legally sanctioned. „Industrial Policy and Controls‟ in B. and telecommunications. 8. 2004. these proposals came to naught in effect: Advani. 2. and make appropriate orders. including reinstatement and compensation. These regulations. leave and holidays. including the allimportant Chapters VA and VB of the Act required. and corporate. sectors of the economy. a 1965 amendment to the Industrial Disputes Act created a right in an individual employee to notify an „industrial dispute‟ over his or her discharge. perhaps principally because it has had little impact in practice. What collective bargaining there is in India and it does exist at all levels and across many industries. and. where the dismissal was found to be unfair. As far as individual dismissals are concerned. empowered the Industrial Tribunals and the Labour Court to investigate the dismissal of employees. The first concerns the continued regulation for protective labour standards which took place at both Central and State levels. has evolved in a de facto sense. the ongoing regulation for minimum wages. As a consequence of these legal 17 | P a g e . retrenchment or other form of termination. A subsequent amendment. housing and so on. as noted earlier. has been largely limited to the public. or dismissal from. social security and insurance. inter alia. that is. The second area of development concerns employment security. 1976 and 1982 the Central government began gradually to introduce important new regulations pertaining to retrenchments. Here we can identify two main categories of intervention. Nor did the legislation place limitations upon the power of the employer to retrench or lay off redundant workers. whether or not that person was represented by a trade union. maternity benefits. However. in respect of the relations between the employer and the individual worker. pursuant to amendments to the Industrial Disputes Act in 1953. In the mid-1990s the proportion of Indian workers covered by collective bargaining agreements was estimated to be lower than five per cent. health and safety. occupied much of the regulatory space which was taken up in the contents of collective agreements in industrialised Western countries. Originally the termination of. and plant and industry closures. Indian labour law continued to develop in a second dimension.breakthrough in collective bargaining law in India. in 1971. minimum notice periods and further relief in the form of compensation. and. employment was not an appropriate subject of an individual „industrial dispute‟ pursuant to the Industrial Disputes Act 1947. other than a requirement that appropriate notice be given. permission by the appropriate authorities for mass redundancies and firm closures. as Sundar has pointed out. On the other hand. and there was thus little limitation on the employer‟s right to fire an employee as it saw fit. equal pay. dismissal. it does not appear to be regarded as particularly important by Indian labour law scholars. lay-offs. We have already noted the continuation of this pattern in the post-World War Two period. the Labour Court and other tribunals developed a general broad discretion to review the dismissal of workers and to award relief according to notions of substantive and procedural injustice. or industry closure in factories. then. clearly a period of important consolidation in employment protection. What this says about the overall protective strength of Indian labour law is problematical. the Industrial Disputes (Amendment) Act of 1982. 8 were numerically assessed to have been of advantage to labour and thus of disadvantage to management. but also several of the State governments. the post-Independence period was. played an important role in this development. In his study of the impact of Indian labour regulation on unemployment. 24 The Industrial Relations Act 1947. amendments to the Act substantially increased (from one month to three months) the amount of notice required to be given to certain categories of employees who had been in continuous service for at least one year. But what it does confirm is that in the long sweep of post-war evolution in Indian labour law. and prohibited the dismissal of workers by way retrenchment. development of collective labour influence.24 Overall. Further. In 1976. also to be unfair. Aside from further strengthening the law on dismissal. 7 pertained to the individual employment rights (employment status and security) of workers. Other legislation introduced in the 1970s and into the 1980s consolidated this evolving protective framework of laws for employees engaged in the regulated (formal) sectors of the economy. and we address this issue in the following section of the paper. Of those 9 changed variables. Indian governments were concerned principally with the construction and maintenance of a „floor of rights‟ for certain classes of labour.changes. at least at the level of the individual worker in the regulated sector. Sarkar notes that in the period from 1970 to 2006 there were changes in only nine of 40 variables used in one quantitative study of Indian labour law. if not the political. mines and plantations employing 300 or more persons (later reduced to 100 or more in 1982) without permission of the appropriate government. in addition to declaring certain collective behaviours by both employers and unions to be „unfair labour practices‟ declared certain hiring practices. major legislation was introduced by the Central government in 1970 which strictly limited and regulated the use of contract and agency labour. and at the same time restricting the industrial. Not only the Central government. lay-off. such as the continuing employment of workers on casual or temporary contracts with „the object of depriving them of the status and privileges of permanent workmen‟. Of those 8. Fifth Schedule 18 | P a g e . All labour laws provide for an inspectorate to supervise implementation and also have penalties ranging from imprisonment to fines. This generalisation is particularly true of the informal sector. In the areas of wage policy. Consequently these powers are used by corrupt officials only for collecting money from employers. and programmes of the government. and to provide greater welfare for the working class. vocational training. On the contrary experience has proved that the implementation of such laws is directly proportional to the extent of unionisation. employment service. the Ministry appointed the First National Labour Commission (NLC) to review the changes in the conditions of labour since independence and also to review and assess the working of the existing legal provisions. Cases of non-implementation need to be specifically identified and complaints filed before magistrates after obtaining permission to file the complaint from one authority or the other. The NLC submitted its report in 1969. the Second NLC was constituted in 1999. processes. In 1966. and worker‟s education. This does not however mean that no labour laws are implemented.Implementation of Labour laws The Ministry of Labour has the responsibility to protect and safeguard the interests of workers in general and those constituting the deprived and the marginal classes of society in particular with regard to the creation of a healthy work environment for higher production and productivity. The Ministry seeks to achieve this objective through enacting and implementing labour laws regulating the terms and conditions of service and employment of workers. very rarely is any violator found guilty. In order to ensure consistency between labour laws and changes in economic policy. minimum wages. The important recommendations of NLC have been implemented through amendments of various labour laws. 19 | P a g e . the recommendations made by the NLC have been largely taken into account in modifying policies. Very few cases are filed. and almost never will an employer be sent to prison. or any corporation established by a Central Act. Also. both central and State Governments are responsible. the State Government is the appropriate Government. The Act provides for fixation and revision of minimum wages of the workers engaged in the scheduled employments. local conditions. However.Introduction to Minimum Wages Act 1948 The Minimum Wages Act was enacted primarily to safeguard the interests of the workers engaged in the unorganized sector. which are notified and included in the schedule of the Act by the appropriate Governments. The objective of this study lesson is to thoroughly acclimatize the students with the law relating to minimum wages. The employments are those which are included in the schedule and are referred to as ‘Scheduled Employments’. The Minimum Wages Act. International Labour Conference of International Labour Organisation. The concept of minimum wages first evolved with reference to remuneration of workers in those industries where the level of wages was substantially low as compared to the wages for similar types of labours in other industries. at Geneva adopted a draft convention on Minimum Wage requiring the member countries to create and maintain a machinery whereby minimum rates of wages can be fixed for workers employed in industries in which no arrangements exits for the effective regulation of wages and where wages are exceptionally low. productivity. there is large scale variation of minimum wages both within the country and internationally owing to differences in prices of essential commodities. the appropriate Governments review/revise the minimum wages in the scheduled employments under their respective jurisdictions at an interval not exceeding five years. any Scheduled employment carried on by or under the authority of the Central Government or a railway administration. The Act is applicable only for those employments. In case of Central sphere. at the Preparatory Asian Regional Labour Conference of International Labour 20 | P a g e . the Central Government is the appropriate Government while in relation to any other Scheduled employment. or in relation to a mine. is an Act to provide for fixing minimum rates of wages in certain employments. 1948. differences in exchange rates etc. As far back as 1928. According to the Act. in respect of scheduled employments within their jurisdictions to fix and revise the minimum wages and enforce payment of minimum wages. oil-field or major port. items of the commodity basket. paying capacity. Under the Act. for workers. where they are still low. Thereupon the Minimum Wages bill was introduced in the Central Legislative Assembly. The spirit of the minimum wages act of India is relied in the soul on of the article 43 of Indian constitution. Minimum Wages Act. Living Wages and fair wages are possible after getting awareness and collective bargaining by trade unionism. industrial or otherwise. The minimum wages act up hails the ARTICLE 43 of the Indian constitution. agricultural. Preamble says: To provide for fixing minimum rates of wages in certain employments. trade or businesses‟. 1950 and Minimum Wages (Central Advisory Board) Rules. The State shall endeavor to secure. 1948 21 | P a g e . on account of the necessity of protecting the interest of demonbilised personnel seeking employment in the industries. which SADLY is enshrined in part IV of the constitution and hence is non-enforceable by law. 1948 is Act XI of 1948. 1960. or to carry on any occupation. Another constitutional provision that the minimum wages act is said to defy is the ARTICLE 19(1g) which says that „to practice any profession. it was approved and occupation in Asian Countries.Organisation held at New Delhi in 1947 and then at the third session of the Asian Regional Labour Conference. 1945. which states that. It has 31 Sections and 1 Schedule. Individual states brought their own rules. work. to all workers. 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. Thus. the State shall endeavor to promote cottage industries on an individual or cooperative basis in rural areas. The Sections are not arranged in Chapters. 25 The Minimum Wages Act. such as the Andhra Pradesh Minimum Wages Rules. etc. „Living wage‟. The Minimum Wages (Central) Rules. the need of legislation for fixation of minimum wages in India received an impetus after World War II. by suitable legislation or economic organisation or in any other way. 1949 are enacted by following the Act.25 The Act was enacted so as to provide 'social justice' and 'living wages' as pointed out in Article 43 of the Constitution (Directive Principles of State Policy). To provide for machinery for fixing and revision of minimum wages a draft bill was prepared and discussed at the 7th Session of the Indian Labour Conference in November. Article 39 states that the State shall. K. That there is equal pay for equal work for both men and women. Its recommendations set out the key concepts of the 'living wage'. Background: A tripartite Committee Viz. by suitable legislation or economic organization or in any other way. social conditions and employment. "The Committee on Fair Wage" was set up in 1948 to provide guidelines for wage structures in the country. conditions of work ensuring a decent standard of life and full enjoyment of leisure. men and women equally shall have the right to an adequate livelihood and b. 30 relating to wage fixing machinery in trades or parts of trades. a living wage. A draft bill was considered by the Indian Labour Conference in 1945. a Labour Investigation Committee was appointed in 1943 to investigate into the question of wages and other matters like housing. The International Labour Conference adopted in 1928 Convention No. work. G. in particular. Historical Backdrop: The initiative started with the resolution placed by one Shri. agricultural. The report of this Committee was a major landmark in the history of formulation of wage policy in India. R. and social and cultural opportunities. Article 43 states that the State shall endeavour. that the citizen.It is questioned by certain jurists that the provisions of the minimum wages act that ask for providing a fixed minimum wage by the employers to the labours is a „BAR‟ to their fundamental right guaranteed under 19(1g). "minimum wages" and "fair wage" besides setting out guidelines for wage fixation.. On the recommendation of the Standing Labour Committee and Indian Labour Conference. 26 and Recommendation No. Choudhary in 1920 for setting up Boards for determination of minimum wages in each industry. 22 | P a g e . direct its policy towards securing a. industrial or otherwise. to give all workers. But this question has been raised again and again in the honorable courts which have dissented from this opinion and upheld the validity of minimum wages act. It was passed in 1946 and came into force with effect from 15.46 to provide for fixation of minimum wages in certain employments. A Minimum Wages Bill was introduced in the Central Legislative Assembly on 11. it is not unlikely that labour may offer to work even on starvation wages. the capacity of the employer need not to be considered. Part I has non-agricultural employments whereas Part-II relates to employment in agriculture. The 8th meeting of the Standing Labour Committee recommended in 1946 to enact a separate legislation for the unorganized sector including working hours. What is being prescribed is minimum wage rates which a welfare State assumes every employer must pay before he employs labour”. fix/revise minimum wages The Act contains list of all these employments for which minimum wages are to be fixed by the appropriate Governments. Central and State Governments are appropriate Governments to i. 1962 SC 12) 23 | P a g e . notify scheduled employment ii. 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 National Commission on Labour has described the passing of the Act as landmark in the history of labour legislation in the country.R. 26 (A. minimum wages and paid holidays.4. There are two parts of the Schedule. 1948. 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. 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.3.1948. In an underdeveloped country which faces the problem of unemployment on a very large scale. Under the Act.I. State of Kerala26. OBJECT AND SCOPE OF THE LEGISLATION The Minimum Wages Act was passed in 1948 and it came into force on 15th March. P.R.According to its preamble the Minimum Wages Act. and in an employment added to either part by notification under Section 27. The rates to be fixed need not be uniform. In the case of an employment specified in Part I. payable to employees in an employment specified in Part I and Part ii of the Schedule. review and revise the minimum wages of the workers employed in the scheduled employments under their respective jurisdictions. Different rates can be fixed for different zones or localities. (A.27 27 Basti Ram v. no parts of the State being omitted. The appropriate Governments have also been empowered to notify any employment in the schedule where the number of employees is 1000 or more and fix the rates of minimum wages in respect of the employees employed therein.) 227 24 | P a g e . State of A. The Act extends to whole of India. 1948. A. The Minimum Wages Act does not provide for any discrimination between male and female workers or different minimum wages for them. There are 45 scheduled employments in the Central Sphere while in the State Sphere the number of such employments is as many as 1596. In case of the employments specified in Part II of the Schedule.I. the minimum rates of wages must be fixed for the entire State. both Central and State Governments are appropriate Governments to fix. Parts of the State may be left out altogether.P. All the provisions of the Act equally apply to both male and female workers. The employments are those which are included in the schedule and are referred to as „Scheduled Employments‟. Criteria for notification of scheduled employment Under the provisions of the Minimum Wages Act. the minimum rates of wages may not be fixed for the entire State. Methods for fixation or revision of minimum wages Fixation Section 3 empowers appropriate Government to fix the minimum rates of wages in the scheduled employments. 1948. 1969. Section 3 lays down that the „appropriate Government‟ shall fix the minimum rates of wages. is an Act to provide for fixing minimum rates of wages in certain employments. are protected by the terms of Clause (6) of Article 9. by notification in the Official Gazette. 28 1955 S. After considering advice of the Committees/Sub-committees and all the representations received by the specified date in Notification method. are not unreasonable and being imposed and in the interest of general public and with a view to carrying out one of the Directive Principles of the State Policy as embodied in Article 43 of the Constitution. committees and sub-committees are set up by the appropriate Governments to hold enquiries and make recommendations with regard to fixation and revision of minimum wages. Notification method In this method.The constitutional validity of Section 3 was challenged in Bijoy Cotton Mills v. Revision: Revise the Minimum rates at an appropriate interval not exceeding five years.28 The Supreme Court held that the restrictions imposed upon the freedom of contract by the fixation of minimum rate of wages.C. two methods have been provided for fixation/revision of minimum wages. as the case may be. the appropriate Government shall. fix/revise the minimum wage in respect of the concerned scheduled employment and it shall come into force on expiry of three months from the date of its issue. Procedure for Fixation/Revision: In Section 5 of the Minimum Wages Act. They are Committee method and Notification method. State of Ajmer. though they interfere to some extent with freedom of trade or business guarantee under Article 19(1) (g) of the Constitution. Government proposals are published in the Official Gazette for information of the 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. Committee Method Under this method. 1948. 3 25 | P a g e . Hari Ram Nathwani. According to Section 9 of the Act. the Central Government has made provision of Variable Dearness Allowance (VDA) linked to Consumer Price Index Number for Industrial Workers (CPI – IW). Accordingly. (1963) S. while being very progressive has led to specific problems. Bidi Kamgar Union. 806 (1975) SCC 356 31 While fixing or revising Minimum Wages. 26 of them have made VDA as a component of minimum wages.R.29 It is not necessary that the Board shall consist of representatives of any particular industry or of each and every scheduled employment. Minimum wages are expected to cover the essential current costs of accommodation.T. S.ADVISORY BOARD The advisory board is constituted under Section 7 of the Act by the appropriate Government for the purpose of co-coordinating 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.D.30 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. 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. As regards States Governments/Union Territory Administrations. VDA is revised periodically twice a year effective from 1st April and 1st October in the Central Sphere. Variable Dearness Allowance (VDA)31 In order to protect the minimum wages against inflation. one of such independent persons shall be appointed as the Chairman by the appropriate Government. Both Central and State Governments are revising the minimum wages in respect of these scheduled employments from time to time with 100% neutralization. In B. in addition to basic wages so as to neutralise the cost of living. Dearness Allowance (D.A.A). In the case of State of Rajasthan v. 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. Kashatriya v. and independent persons not exceeding 1/3rd of its total number of members. Doubts have been raised on the existence of a clear and coherent wage policy in India particularly in unorganized sector.A) linked to cost of living index called Variable Dearness Allowance (V. This is mainly due to its poor norms 29 A. The Minimum Wage Act.I. 30 26 | P a g e .C. food and clothing of a small family.Y. How far the amendment has been implemented in states is unknown. skilled and highly-skilled. Norms for fixing minim wages The Act does not set out a minimum wage in rupee terms. However. real wages of workers keep eroding due to inflation. Further to overcome these inadequacies. The MWA also has a clause which states that if wages are not revised. West Bengal.of fixation.unskilled. in many states while fixing the minimum wages. states like Rajasthan. this rarely happens. Another inadequacy is that though the MWA requires wages to be revised every five years. For instance. they are not linked to the payment of dearness allowance. 32 "Living wage" is the level of income sufficient to allow workers to support their families. the guidelines laid down for the minimum wage by the 15th Indian Labour Conference (ILC) and the Supreme Court suggest that a minimum wage for 8 hours of work should be high enough to cover all the basic needs of the worker. It should also ensure enhancement of wages every six months on the basis of the Consumer Price Index. etc.. Different wages are fixed for the same work in different sectors. the existing wages should continue. yards of cloth per family and so on. Certain norms have been laid out including that of calorie requirements. 27 | P a g e . Additionally. do not have provision for VDA). The Act also stipulates that minimum wage rates are to be revised keeping in mind inflation. his/her spouse and two children. To overcome these deficiencies. Such an arrangement has only led to greater laziness and unaccountability on the part of state labour departments. recommended that the MWA should be amended to compel timely revision of wages and it should be linked to VDA. have rationalized all the different occupation categories into just four categories . As a result. a watchman in the shop or commercial establishment may be fixed higher or lower wages than a watchman in the plastic industry or in a construction or maintenance of roads or building operations. but just stipulates that the wage be a living wage32 which is to be decided by labour department in each state. semiskilled. Orissa etc. the National Commission on Rural Labour in 1990. (For example. though a watchman‟s job will be the same wherever he may work. Some of the issues and concerns faced in India regarding minimum wages are summarized below: i. enforcement. Andhra Pradesh. implementation and coverage in various parts of the country. leaving some workers to live below poverty line. several states like Himachal Pradesh. pushing them below the poverty line. should further constitute 25% of the total minimum wage. including the Indian Labour Ministry website.As per this system. 40 in 1998 and Rs. for each occupation. d) rent corresponding to the minimum area provided under the government's Industrial Housing Scheme and e) fuel. g) Children education. The fixation of minimum wage in India depends upon various factors like socioeconomic and agro-climatic conditions. which gives the minimum rate of wage (that is wages for unskilled workers).in/wagecell/welcome. Coverage 33 http://labour. The norms for fixing minimum wage rate are a) three consumption units per earner. b) minimum food requirement of 2700 calories per average Indian adult.nic. The wage rate is applicable to all employments which are currently not covered under the Minimum Wage Act. 45 in 1999. lighting and other miscellaneous items of expenditure to constitute 20 per cent of the total minimum wage f) Fuel. lighting and other miscellaneous items of expenditure to constitute 20% of the total Minimum Wages. medical requirement. ii. In the absence of any criteria stipulated for fixing the minimum wage in the Minimum Wages Act. It is for this reason that the minimum wages vary across the country. c) cloth requirement of 72 yards per annum per family. Though the system gives clear and detailed information of minimum wages. marriage etc. rather than the timeconsuming system of notifying wages individually for various industries.html The national minimum floor level wage represents the lowest level of wage for any employment in the country. the national minimum floor level wage34 was increased to Rs 80 per day for all scheduled employments from Rs 66 in 2004 to Rs. only one notification is applicable to all industries. prices of essential commodities. minimum recreation including festivals/ceremonies and provision for old age. the Indian Labour Conference in 1957 had said that the following norms should be taken into account while fixing the minimum wage. it has not been adopted by all states. Rs. 35 in 1996.33 In September 2007. The State Government has to ensure that the minimum wage fixed under MWA is not lower than the national minimum wage rate. 34 28 | P a g e . paying capacity and the local factors influencing the wage rate. Thus. the employment or industrial activity has to be included in the schedule of Employments. minimum wage levels have been revised only at long intervals (where the actual prescribed limit is within 5 years). often exemptions from the payment of minimum wages have been granted to industries. This is particularly true in remote areas and in areas where workers are not 35 March 11. The Act empowers the appropriate government (Central. In addition. enterprise. Surveys have shown that almost 80 per cent of the workers in unorganized sector earn less than 20 rupees a day or less than half the government-stipulated rural minimum wage of 49 rupees a day and urban wage of 67 rupees35. 2008. State or Local) to fix a minimum wage for workers in unorganised sectors. Poor implementation of MWA does not affect organised workers as much as it does to workers in unorganized sectors. The criterion for inclusion in the list of scheduled employment is that there should be at least 1000 workers engaged in that activity in the state. Implementation The main problem of minimum wage legislation in India is its poor implementation. iv. However. Unorganised workers are employed with millions of employers (generally small trade. The issue arises mainly due to lack of awareness amongst the workers about minimum wage provisions and their entitlement under the labour laws. Business Standard. many activities are excluded from the list. At times. Currently the number of scheduled employments in the Central government is 45 whereas in the state sphere the number is 1232. many workers for the fear of losing their jobs do not report about payments lower than the minimum wage rate. Rising labour concerns for Indian government. 29 | P a g e . Also. these workers are even forced by their employers to certify payments below minimum wages. Enforcement Poor enforcement of the Act is another issue prevalent in most of the states in India. sole proprietor or household) who are scattered and hence becomes difficult to cover them under law. Such a failure in implementation of MWA is not only due to loopholes in policy design but is also an outcome of lapses in the administration. iii.In order to have minimum wage fixed. This diversity in locations and nature of work has left them vulnerable to exploitation in the absence of a broad legal standard. This criterion for inclusion has left a very large number of workers in the unorganised sector outside the purview of the Minimum Wage Act. education and shelter. The Minimum Wages should be revised at regular periodicity and should be linked with rise in the cost of living" 30 | P a g e . it would be difficult to maintain uniformity in wages. Because fixation of wages depends on a number of criteria like local conditions. Though it is desirable to have a National Wage Policy it is difficult to conceive a concept of the same. the compliance in the State Sphere is ensured through the State Enforcement Machinery. and their substantial contribution to the national economy. v. They conduct regular inspections and in the event of detection of any case of non-payment or under-payment of minimum wages. relate to the elements like need based minimum wage. allowances for hazards of occupation. The enforcement of the Minimum Wages Act. 1948 is secured at two levels. they advise the employers to make payment of the shortfall of wages. wage differentials for skills. The rates of minimum wages so fixed in few states. leave aside the needs of health. While in the Central Sphere. protection of the real wages through compensation for rise in the cost of living. In specific terms. etc. It is therefore imperative that urgent steps are taken to improve their condition.unionized or otherwise organised. Infrequent revisions and inadequate cost of living adjustments have been a marked feature of minimum wages in India. held in November. cost of living and paying capacity also varies from State to State and from industry to industry. 1985 expressed the following views:"Till such time a national wage is feasible. incentives for increases in productivity. the issues and problems of the wage policy in both organised and unorganised sector. they are amongst the poorest sections of India‟s population. is not enough even for two times meal in a day. In case of non-compliance. Need for meaningful minimum wage policy In spite of vast number of workers in unorganized sector. As a result their wages have long since failed to keep pace with rising costs and continue to diminish in real value over time. The National Wage Policy has been discussed on many occasions in different fora. penal provisions prescribed in the Act are taken recourse to. the enforcement is secured through the Inspecting officers of the Chief Labour Commissioner (Central) commonly designated as Industrial Relations Machinery (CIRM). it would be desirable to have regional minimum wages in regard to which the Central Government may lay down the guidelines. The Indian Labour Conference. The main objective to be considered while fixing or revising the minimum wage rate should be two fold – 1. It entitles adult citizens in rural areas to seek work up to 100 days per household per year. under the Sixth CPC. consultation with neighbouring States while fixing/revising minimum wages etc. the Government issued guidelines for setting up of Regional Minimum Wages Advisory Committees. In long run such a step would help in abolishing labour exploitation and poverty. The National Rural Employment Guarantee (NREG) Act 2005 is meant for the working poor in villages to take care of the problem of underemployment and thus to enhance their income that would make them less poor or cross the officially determined poverty line. Economic objective: The rate of minimum wage should be fixed at such a level which would motivate workers and enable them to enjoy the benefits of economic growth. Two major and recent initiatives for providing social security to the workers in the informal sector have been passed in the parliament. The first four scales of pay suggested by the Fifth CPC for the Group D Employees of the government have now been removed. With the implementation of National Rural Employment Guarantee Scheme. b) the Social Security for Unorganised (Informal) Sector Workers.36 For example. hopes are raised for meeting basic needs of workers in unorganised sector. Social objective: that is. These Committees renamed subsequently as Regional Labour Ministers Conference. 36 http://www. 2. setting up of inter-state Coordination Council. by earning minimum wages at least. the Sixth Central Pay Commission (CPC) has fixed the minimum wage of Central Government employees at Rs 5740. and thereby contribute to the economy. enable him/her to have a basic standard of living. The existing employees in these grades are to be moved to Group C cadres through a process of training thereby indicating that the unskilled functions in the governmental sector would be contracted or outsourced.amrc. made a number of recommendations which include reduction in disparities in minimum wages in different states of a region. by providing sufficient purchasing power to the worker.Accordingly.org. a) the National Rural Employment Guarantee (NREG) Act 2005 and.hk 31 | P a g e . Ignorance and illiteracy are the main reasons for exploitation of workers in unorganized sectors. lack of organisation on the part of workers. The minimum wage data collected from labour department in each state is uploaded on the website in a detailed format enabling inter-state comparison easy. Trade unions and NGOs can help by making the workers aware of the legal provisions of the minimum wage rate and the benefits to which they are entitled. Only limited official data is available from national labour ministry website which may or may not be updated on regularly basis. ragpickers. Minimum Wage Checker on Paycheck website provides the information on minimum wages in each Indian state. agarbatti rollers. 32 | P a g e . trade unions. Minimum Wage legislation in India requires the active support of workers. Implementation of government policies and legislations is the main problem in the unorganized sector. life and disability and old age security in the form of state pension for those belonging to poor households and a provident fund for others. chemical and screen-printing industry. The information available does not permit extensive comparison on wages in formal and informal sector due to different formats of reporting or recording of wage rate in each state. and labour associations. SEWA is the 7th largest trade union organisation in India working towards organizing women workers (mainly in informal sector) for full employment. Involvement of such organisations gives a voice to workers in unorganised sectors in collective bargaining. accounting for their vulnerable situation. Also. low productivity in unorganised sectors. income security. For example. It would also require sincerity on part of the labour departments in each state to determine minimum wage rate on the basis of ethical and humanitarian concerns in order to ensure basic subsistence to workers in unorganized sectors. Hence. Also. which means employment whereby workers obtain work security. employers and government in the ratio of 1:1:1. food security and social security (at least health care. child care and shelter). The scheme is based on contributions from workers. Self Employed Women Association (SEWA) in Ahmedabad. street vendors. SEWA has been organising workers in the dyeing. involvement of non-government organizations and trade unions can play an important role in better enforcement of minimum wages act. minimum wage data is not readily available. affects their bargaining capacity. etc for many years now. Social Security scheme covers health (hospitalisation for self and family) and maternity.On the other hand. limitation of avenues for gainful employment. Karnataka. Himachal Pradesh. Mizoram. productivity and local conditions influencing the wage rate. Jharkhand. and increasing the involvement of various workers' organisations in the implementation of the Minimum Wages Act. Uttar 33 | P a g e . Chhattisgarh and Andaman & Nicobar Islands North Eastern Region (8) Arunachal Pradesh. Haryana. Bihar. Tamil Nadu. linking the rates with the Consumer Price Index Numbers (CPI). instead of abolishing the poverty. prices of essential commodities. Nagaland. which are as under: Region Eastern Region [6] States/UTs covered West Bengal. Assam. revise and enforce minimum wages in scheduled employments in their respective jurisdictions under the Act. Meghalaya. the Union Government has requested the States to form regional Committees. are some of the steps advocated to improve the situation. This is due to differences in socio-economic and agro-climatic conditions. is in fact increasing it. paying capacity. The regional disparity in minimum wages is also attributed to the fact that both the Central and State Governments are the appropriate Government to fix. Orissa. Initiatives like strengthening the enforcement machinery. Tripura and Sikkim Southern Region (6) Andhra Pradesh. Rajasthan. simplifying the procedure relating to coverage and revisions of minimum wage rate. Steps taken to reduce disparities: Five Regional Committees There is disparity in rates of minimum wages in various regions of the country. Pondicherry and Lakshadweep Northern Region (9) Punjab. To bring uniformity in the minimum wages of scheduled employments. Manipur. The prevailing system of minimum wages. Jammu & Kashmir.The need of the hour is not only to increase the basic rates of minimum wages but the basic approach towards the whole issue also needs to be changed. At present there are five Regional Minimum Wages Advisory Committees in the country. Kerala. 2002.09.80/. the State Governments are persuaded to fix minimum wages such that in none of the scheduled employments. is a non-statutory measure to ensure upward revision of minimum wages in different in States/UT‟s.12.09. 34 | P a g e . Keeping in view the recommendation of NCRL and subsequent rises in price indices.2003. Keeping in view the rise in Consumer Price Index the Central Government raised the National Floor Level Minimum wage to Rs.66/. This method has helped in reducing disparity among different rates of minimum wages to some extent.w.f.2004. Uttarakhand.per day with effect from 01.to Rs. Gujarat. Goa.e.per day with effect from 1. Based on the norms suggested by the Working Group and its acceptance by the Central Advisory Board subsequently in its meeting held on 19.40/. 50/per day w. a concept of National Floor Level Minimum Wage was mooted on the basis of the recommendations of the National Commission on Rural Labour (NCRL) in 1991. the minimum wage is less than National Floor Level Minimum Wage.35/.12.66/. 01. the National Floor Level Minimum Wage was revised upwards to Rs.e. Thus. Delhi and Chandigarh Western Region (6) Maharashtra. Dadra & Nagar Haveli and Daman & Diu National Floor Level Minimum Wage In order to have a uniform wage structure and to reduce the disparity in minimum wages across the country. the National Floor Level Minimum Wage was fixed at Rs. On the basis of increase in the Consumer Price Index. Further to Rs. Madhya Pradesh.Pradesh.per day in 1996.1999 and Rs.2007. It is. however.45/.per day in 1998. 01. the Central Government further revised the National Floor Level Minimum Wages from Rs.f. clarified that the National Floor Level Minimum Wage.02. in/Report_Bill_July_2007. 422. Wages in the organised sector are determined through negotiations and settlements between employer and employees. On the other hand. "The State shall endeavour to secure by suitable legislation or economic organisation or in any other way to all workers. Labour laws for most workers in the informal sector are enforced by the state governments. All labour laws enacted by the central government directly or indirectly influence wage level and structure of wages in the informal sector.html Informal sector in India is broadly characterized as consisting of units engaged in the production of goods and services with the primary objectives of generating employment and incomes to the persons concern. 37 http://planningcommission. the policy on wage determination had been to fix minimum wages in sweating employments and to promote fair wage agreements in the more organised industries.nic. The workers in informal sector are engaged in economic activities which are not officially regulated and which operate outside the incentive system offered by the state and its institutions.39 The term 'Labour' is included in the 'concurrent list' of the Constitution which provides for labour legislation both by the central and the state governments.Minimum Wage The Indian economy is characterised by a dualism. The Constitution of India envisages a just and humane society and accordingly gives place to the concept of living wage in the chapter on Directive Principles of State Policy..in/plans/planrel/fiveyr/6th/6planch24. In India. i. the existence of comparatively well organised sector along with the decentralised sector with a large population which is selfemployed37.gov. The Minimum wage legislation is the main labour legislation for the workers in unorganized sector. agricultural. 39 http://nceus.htm 38 35 | P a g e . work.6 (94%) million workers out of the total workforce of 457. According to reports.e. where labour is vulnerable to exploitation due to illiteracy and does not have effective bargaining power. in unorganised sector. the intervention of the government becomes necessary. These workers contribute to more than 60 per cent to India‟s GDP growth. The Minimum Wages Act. 1948 is based on Article 43 of the Constitution of India which states that.5 million belong to the unorganised/informal sector38 in India. a living wage (emphasis added) conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities". industrial or otherwise. while that for contractors and casual workers in establishments is regulated by the central government. guaranteed time rate and d. Once a minimum wage is fixed according to the provisions of the Act. iii.1) states “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…”. The minimum wage rate may be fixed at a. Overtime rate. c. piece rate. or d) Any other period as may be prescribed by the notified authority. Also. The Act requires the appropriate government to fix minimum rates of wages in respect of employment specified in the schedule and review and revise the minimum rates of wages at intervals not exceeding five years. Male and female. ii. The Minimum Wage Act. time rate. adolescent and children. b) day. The Act provides that different minimum wage rate may be fixed for i. 36 | P a g e . such minimum wage may be fixed by a) an hour. different scheduled employments. iv. it is not open to the employer to plead his inability to pay the said wages to his employees. 1948 provides for fixation and enforcement of minimum wages in respect of schedule employments to prevent sweating or exploitation of labour through payment of low wages. c) month. 1948 (Section 12. b. The objective of the Act is to ensure a minimum subsistence wage for workers. different works in the same employment. different locations or v. adult.The Minimum Wage Act. or 3. medical requirement. These norms were further enhanced by the Supreme Court in its judgment in the case of Reptakos Brett and Co. 3 consumption units for one earner. or 2. marriage etc 40 (1991) 37 | P a g e . 2. should further constitute 25% of the total minimum wage. a basic rate of wages with or without the cost of living allowance. and the cash value of the concessions in respect of supplies of essential commodities at concessional rates." ii. medical requirement. lighting and other miscellaneous items of expenditure to constitute 20% of the total Minimum Wages Other parameters i. if any The 15th Indian Labour Conference (1957) defined the following norms to calculate minimum wage: 1. Fuel. Rent corresponding to the minimum area provided for under Government‟s Industrial Housing Scheme. an all-inclusive rate allowing for the basic rate. minimum recreation including festivals/ceremonies and provision for old age. the cost of living allowance and the cash value of the concessions. minimum recreation including festivals/ceremonies and provision for old age. "Children education. marriage etc. Local conditions and other factors influencing the wage rate. a basic rate of wages and a special allowance at a rate to be adjusted at intervals with the variation in the cost of living index number applicable to such workers. where so authorised. Clothing requirements of 72 yards per annum per family 4. the minimum rates of wages fixed or revised by the appropriate authority (Central or State Government) for the scheduled employments shall take into account the following: 1.As per Section 4(1). 5. v. Minimum food requirements of 2700 calories per average Indian adult. Its workmen40 by an additional 25% of the total minimum wage for education. 3. but presumably include a large number of workers in “schedules” that are not-covered by the minimum wage legislation.6 million earners) and another one-fourth of all salaried workers (or 14. lighting. is Rs 260 in rural areas and Rs 347 in urban areas (not including rent). “Extending the Coverage of Minimum Wages in India”. Further these guidelines do not account for transportation costs. education. 66 per day in 2004-05. on the Functioning of the System of Wage Boards (cited in the Report of NCL. “Wage Boards after the Second Pay Commission (1957-59) have not found it possible to fix the need-based minimum wages recommended by the Indian Labour Conference (1957). As per calculations done by NTUI. as per norms fixed in the 15th ILC. especially in light of current neoliberal policies. As per simulations from household data in the ILO report. The Report of the Committee. medical treatment are estimated to be only 45% of food expense assumes that these are heavily subsidized by the State – an obviously incorrect assumption.However in complete disregard of the above.” 38 | P a g e . “the level of minimum wage should not be below the poverty line”. The Second National Commission on Labour Report notes. the daily minimum wage today. This includes more than half of all casual workers (58. and further diluted by The Report of the Committee of Secretaries of States (1981) which reduced per day caloric requirements to 2400 calories in rural areas and 2100 calories in urban areas However even these low statutory wages are not being paid. female workers and those residing in rural areas are more likely to earn below minimum wages”. The report adds. which are significant and increasing given current migration patterns. Unsurprisingly. the daily minimum wage today in most states hovers around Rs 100. Subsequently the Sub-committee „D‟ of the Standing Committee of Labour Ministers (1981) diluted the norms prescribed in the 15th ILC recommending. Fixing a minimum wage below the norms prescribed by the 15th ILC is not an oversight but a calculated exercise. 1969) found it infeasible because the need-based minimum would be beyond the capacity of the industry to pay and might result in the transference of the burden to the consumer”.5 million workers). The fact that essentials like fuel. with Nagaland even lower at Rs 80 and Delhi highest at Rs 203. at least up 73 million workers (out of 173 million waged workers) received “wages below the national minimum wage floor of Rs. “These high proportions may result from a variety of reasons. set up by the first National Commission on Labour. As highlighted above. However the gains from the MGNREGA are not just being squandered away.g. Only 26 states/UTs incorporate VDA as a component of minimum wage.Minimum wage inadequate for minimum needs and the widespread prevalence of payment below minimum wage is an outcome of both lacunae in the legislation and poor enforcement. This year‟s Labour Ministry‟s report notes that 66% workers are employed in enterprises having less than 10 workers and 44% are employed in seasonal or ad-hoc enterprises. Indexation was recommended only in the Labour Ministers‟ Conference (1988) and the variable dearness allowance (VDA) linked to CPI. The Mahatma Gandhi National Rural Employment Guarantee Act entitles each rural family up to 100 days of unskilled work at minimum wage. The Act also doesn‟t mandate inflation indexation. which delinked MGNREGA wages from the Minimum Wage Act freezing MGNREGA wages at the prevailing state minimum wage or up to Rs 100 per day. This has obvious policy implications such as the need for market level intervention through employment guarantee programs. the Act covers only those employments listed in the two schedules. which too is optional. they are in fact being reversed. 2009. Finally enforcement is strictly top-down through labour inspectors with no mechanism for bottoms-up reporting to enforce compliance. the MGNREGA also helped reduce deflationary pressure on wage rates in urban areas due to surplus labour. Further. Further. thus leaving a whole raft of employments not notified (e. the Minimum Wage Act does not define the method of calculation of minimum wage.. the MGNREGA has been remarkably effective in actualizing minimum wages for the unorganized worker. Given the dispersed and casual nature of employment. 39 | P a g e . the Government of India issued a notification under Section 6(1) of the MGNREGA. domestic workers) outside the protection of the legislation. respective governments are only advised to revise wage rates after a period not exceeding five years. The introduction of the Act increased worker bargaining power even on non-NREGA works thus raising extremely depressed wage rates to prevailing minimum wage rates across the country. it is obvious that top-down enforcement (even if sincere) is very difficult. In January. By reducing distress migration. Minimum Wage and the MGNREGA While enforcing compliance with the Minimum Wage Act is difficult. and aggregated delivery of social security benefits. thus allowing arbitrary fixation by Central and state governments. Thus experience with NREGA demonstrates the value of employment guarantee programs in the implementation of minimum wages. followed by a letter from the Chairperson. NAC and UPA. Ms.Today. warning that using Section 6(1) to allow payment of less than prevailing state minimum wage will not stand legal scrutiny. State of Rajasthan41. want and destitution”. both the Government and the Government of Andhra Pradesh continue to be in contempt of the Andhra Pradesh High Court (July 2009) citing fiscal concerns. In fact in his response to the Chairperson. Andhra High Court set aside the Government of India notification mandating that prevailing state minimum wage be paid. the Labour Ministry too has reiterated its “fundamental objection” to Section 6(1). 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. including “compulsion arises from hunger and poverty. NAC 41 (1983) 40 | P a g e . MGNREGA wages in at least 19 states are less than the prevailing state minimum wage. Indira Jaising. to the Prime Minister calling his attention to find urgent resolution of this matter. Thus even public works ostensibly initiated by the government for the sole purpose of providing employment are subject to the Minimum Wage Act. Andhra Pradesh and Kerala) have written to the Prime Minister requesting the Ministry of Rural Development’s (MoRD) compliance with the Minimum Wage Act. thus hitting the worker not just in real economic terms. 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. Finally. Sanctity of the Minimum Wage Act Supreme Court in three separate rulings has held that nonpayment of minimum wages is tantamount to „forced labour‟ prohibited under Article 23 of the Constitution. 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 Supreme Court holds that „forced labour‟ may arise in several ways. This has been underscored in the legal opinion provided by Additional Solicitor General. In Sanjit Roy v. but de facto capping market wages to below minimum wage. However despite this overwhelming legal and political consensus. Three Chief Ministers (Rajasthan. Drawing on the Supreme Court rulings. The State Governments have been requested from time to time to keep the above norms and pronouncement in view while fixing/revising the minimum wages. provision for old age. In that connection it referred to the Report of the Fair Wages Committee. power was delegated to the administrative authority to add any industry within the ambit of the Minimum Wages Act. In dealing with the said contention the Appellate Tribunal observed that "the measurement of the living wage standard in terms of money has not been prescribed by law of the country. should be constitute 25% of the minimum wage and used as a guide in fixation of minimum wages.L. In Standard Vacuum Oil Company v. Bombay v. Their Employees45. and Anr43.J. medical requirement. Their Workmen44. as far as we are aware. it was neither possible nor necessary to fix the amount with exactitude which should form the minimum living wage after an exhaustive enquiry for considering the 42 1955 AIR 25. In its opinion. nor. and observed that the level of national income in India is so low that the country is unable to afford to prescribe by law a minimum wage which would correspond to the concept of a living wage. the Labour Appellate Tribunal had occasion to consider the content of the living wage. 1991 SCR Supl. The court held that there is no excessive delegation as the purpose of the Act. (2) 129 44 [1953] 2 L. Management of Reptakos Brett and Co. State of Ajmer42. observed the Appellate Tribunal.J. 246 45 [1954] 1 L. but the destination is not yet within sight. In case of Workmen Represented by Secretary v.L. 1948. the gradual emergence of a welfare State will naturally help but even here progress is necessarily slow. Ltd. the PM has asserted that the wage rate under NREGA is independent of the provisions of the Minimum Wages Act. the court held that the children‟s education. In Burmah-Shell Oil Storage and Distributing Co.. 1955 SCR (1) 735 1992 AIR 504. legal and political opinion In the case of Edward Mills v. minimum recreation including festivals/ceremonies. provided sufficient policy guideline for executive to act. of India. a statement that runs counter of the established Constitutional. has been determined anywhere in any scientific basis ". The rudder is set in the direction of a living wage". which was to avoid exploitation of labour due to unequal bargaining power. the Labour Appellate Tribunal was called upon to consider the plea that the companies were paying a living wage to their employees. Ltd. 484J 43 41 | P a g e .regarding violation of minimum wages in NREGA. marriage etc. wherein. Senior Labour Inspector47. An ex-employee is competent to claim relief under the Minimum Wages Act. because. Where certain tubewell operators were working in the District and Taluka Panchayats they would be in the Scheduled employment as contemplated by section 2(g).question of bonus. they are not entitled to such minimum wages. In Patel Ishwerbhai Pramod Bhai v. The definition of “employer” is a restrictive definition and only a person who employs one or more employees in any scheduled employment would be the employer within the meaning of the Act and no doubt it includes the employees as detailed in the various sub-clauses of section 2(e). In Chacko v. Varkey50. A detective agency is not covered under the provisions of this Act. In the case of Linge Gowda Detective and Security Chamber (P) Ltd. employment under any local authority being item 6 in the Schedule to the Act. On these considerations the plea raised by the companies was rejected. Parkash v. That is why it thought that it would be sufficient for the purpose if an approximate idea can be formed by taking into account the approximate expenditure on the necessary items of requirements of the living wage standard. according to the principle laid down the whole gap between the existing wages and the living wage need not be filled up. the employer is liable to pay the minimum wages but when the same employees engaged by the detective agency are on private duty. it was held that a piece-rated worker is also entitled to receive the minimum wages irrespective of his output. would be entitled to minimum wages under the Act. 46 1998 LTR 77 1994 LLR 304 (Karn) 48 (1984) SCC (L&S) 389 49 1983 Lab 1C 321: (1983) 1 SCC 403: 1983 (62) FJR 189: (1983) 1 LLJ 237 50 1961 (3) FLR 508: 1961-62 (21) FJR 493 47 42 | P a g e . either against the contractor or the principal employer. Authority46. Union of India48. There is no logic that when the employees as engaged through the detective agency worked in an engineering industry. In A. Taluka Development Officer49. no relief could be granted. In Bandhua Mukti Morcha v. It would thus be seen that the oil companies have been persistently making the claim before the industrial tribunals that they need not be called upon to pay bonus to their employees on the ground that they are paying them a living wage. and as such. v. V. Hence. cannot take shelter under proviso to sec. Definitely.3 (27) FLR 38 52 43 | P a g e . a discharged employee must also be held to be an employee within the meaning of the Act. any person responsible to the owner for the supervision and control of the employees or for the payment of wages to them is also an employer. Social Welfare and Labour Department55. Under the definition of the word “employer” in section 2(e) (iv) of the Act. Any payment which partakes the nature of lay-off compensation cannot fall within the term “wages” as defined in section 2(h). In Hydro (Engineers) Put. District Judge54.C. namely 48 hours a week. State of W. The minimum wages must be paid by the employer notwithstanding the want of financial capacity. In order to make the wages realistic they must be commensurate with the price rise in essential commodities. and accordingly such notification is not bad or invalid. Having regard to the context and object of the Act.56. Sagar v. State of Madhya Pradesh52. Where a notification by itself does not intend to make any classification of workmen except classification for fixing minimum rates of wages for adult employees. In President. In Madhya Pradesh Bidi Udyog Sangh. The Govt. it was held that such classification is permissible in law. Minimum wages are to be fixed on basis of standard normal working hours.B. cannot indefinitely postpone the issuance of revised notification fixing minimum wages. Workers Union57. State of U. In Govind Bhawan Karyalaya v. the period of 13 years cannot be said to be reasonable period. Cinema Workers’ Union affiliated to Bhartiya Mazdoor Sangh v. The apology that the 51 1976 Lab I. The Workmen58.51 it was held that there is correlation between minimum rates of wages and hours of work.P.) 384 55 2005 LLR 648 56 1998 LLR 287 57 AIR 1973 SC 2758: 197.In Benode Bihari Shah v. v. 523 (Cal) 1981 Lab 1C 363: 1981 Lab LN 434: (1981) LLJ 756 53 (1965) II LLJ 307 54 1963 (6) FJR 447: (1963) II LLR. In Shiv Prasad Ghosh v. Secretary. In Woolcombers of India v. The Govt. Ltd.. Shiettappa Laxman Pattan53. 3(1) (b) of the Act for postponing to issue the revised notification after five years. In Athni Municipality v. Cost of living index is not a strict basis for fixing the rates of minimum wages and if not strictly adhered to. Bidi Leaves and Tobacco Merchants Association v. Section 4 is a definite indication that basic wage is an integral part of the minimum wage. The State issued a notification to pay separate allowance in addition to the basic wages. State of Bombay59. it does not constitute a breach of statutory duty. Sanagmanes Akola Paluka Bidi Kamgar Union62. Commissioner of Labour64. The Act does not confer any power on the government to insist that an employer employing workers on time rate should pay them at piece-rates. State of Karnataka63.employer may be constrained to shut his business if minimum wages are to be paid is simply untenable. Neither the government has any power to issue any notification on the basis of section 3 to make such metamorphosis of payment. thereby enabling the appropriate Government to alter the existing legal condition between the employer and employee which is not commensurate with the provisions of the Act. Employer‟s capacity to pay is no bearing in fixing the minimum wages of the employees. Industrial Tribunal61. In Krishna Flour Mills v. Such consideration is antilogs to the principles enshrined within the Constitution of India. In Abraham v. In Bidi. In Unichoyi (U) v. The language of section 4 does not lend itself to such an interpretation. In Bhikusa Yamasakshatriya v. State of Kerala60. It is not correct to say that a minimum wage under section 4(1) necessarily should consist of basic wage and dearness allowance. which was not challenged as to its validity 58 1969 (18) FLR 189: (1969) 1 LLJ 713 1962 (4) FLR 71: (1961) II LLJ 663 60 Ibid 23 61 (1961) II LLJ 556 62 AIR 1960 Bom 299: (1959) II LLJ 578 63 1986 Lab 1C 1890: LLR 1986 Kant 2183 64 1997 (77) FLR 241 59 44 | P a g e . Bangalore v. Section 3 empowers the appropriate Government to fix the minimum rates of wages. On the plain terms of section 4(1) it is clear that the payment of dearness allowance would arise only if the basic wage fixed for a category of workmen fell short of the minimum wage which the State Government has to fix taking into consideration the needs of the workers‟ family consisting of three consumption units. In Karnataka Film Chamber of Commerce. Thus. It is necessary that the appropriate Government in issuing notifications for prescribing the rates of minimum wages under the Minimum Wages Act. Therefore. State of Andhra Pradesh65. In Bijay Unchana Paul v.68. if the employees had exercised their privilege to represent and ask for higher wages and if eventually the State authorities had adopted higher rates of minimum wages that cannot be found fault with. the provisions of the Act do not prescribe that a government servant cannot be a member of the Advisory Board or that if he is a member he cannot be considered to be an “independent person” within the meaning of section 9. The objection to draft proposals can be made both by employers and employees as well.G. State of Maharashtra69. punctiliously follows the letter of law and strictly complies with all the procedures laid down in the Act. even if they are paying higher rate of wages. 1948. Merely because one member of the Board was extra. the term contemplates neither the category of employers nor the employees. 65 1981 Lab 1C 690 1969 (19) FLR 11 67 1997 (77) FLR 339 68 1985 Lab 1C 1634: AIR 1985 SC 1351: 1985 (67) FJR 157: 1985 (51) FLR 256 69 1963 (7) FLR 373: (1963) II LLJ 458 66 45 | P a g e .by the appellants. State of Bihar67. The Advisory body has no functioning of quasi-judicial nature and their recommendation/decision is not binding on the State Government but the same remains only a recommendation and nothing more than that. Also there is no reason to think that Government employees are excluded In Ramkrishna Ramnath v. In Government of India v. Lakshmaiah Setty & Sons. What is contemplated by the Act to be notified under section 5(i) (b) is no doubt draft proposals. In Chakradharpur Bidi and Tobacco Merchants Association v. the recommendation of the Advisory Board would not be vitiated. In T. Barium Chemicals Ltd. Adoni v. as per the notification. The term “independent persons” is used in contradiction to the words “persons representing employers and employees in the scheduled employment”. they have to pay the „wages‟ now being paid and in addition to that the minimum rate of “cost of living allowance” is to be paid by them separately. Therefore. The variety of expression of the term “independent persons” in section 9 is that it has the condition of being auto-cephalous. Held. State of Assam66. they approached. the employees engaged through the contractor shall be entitled to the wages as fixed under the Act. In Municipal Council. once a contractor‟s establishment is covered under the Minimum Wages Act. In V. In Sri Gandhian Bus Service Chingleput v. is bound by the provisions of this Act. B. Where a person provides labour or service to another for remuneration which is less than the minimum wages. etc. Labour Court75. In Awadh Lal Sah v. Union of India71. Claimant submitted that they were pursuing their grievance before Labour Officer. Held that delay had been rightly condoned. Ltd. Hehar70. State of Bihar76. 1963. Every employer. such labour is “forced labour” within the meaning of article 23 of the Constitution and thereby entitles the person to invoke article 32 or article 226 of the Constitution of India. Addl. the authority. Section 14 provides for payment of overtime only to those employees who are getting minimum rate of wages under the Act.. there is no exemption to this mandatory obligation of the employer including any contractor. the delay has to be explained and sufficient cause shown just opposite under section 5 of the Limitation Act. Mayurbhanj v. Surendra Ramkrishna Tendulkar73. Where a period of limitation is prescribed by section 20 of [he Act.. District Magistrate. Rural Works Division. Hatta v. power of the authority is coupled with the privilege to condone delay. Mayurbhanj74.In Militant Security Bureau Put. There was delay in filing application beyond limitation period. In Executive Engineer.Only when they failed. It does not apply to those getting better wages under other Statutory Rules. Bhagat Singh72.R. V. In Union for Democratic Rights v. Surya Rau v. including a contractor who engages labourers for others who owns the establishment/factory. v. The minimum wages becoming payable can be claimed by an application presented within six months from the date on which it became 70 (1991) 2 CLK 245 (Bom) 1982 Lab 1C It46: 1982 (45) FLR 140:1983 (62) FJR 1 72 1998 LLR 298 73 1997 (77) FLR 280 74 2005 LLR 121 75 (1964) I LLJ 709 76 1984 Lab 1C 169 (Pat HC) 71 46 | P a g e . to comply with the requirement of maintaining Registers etc. Claim of arrears of differential wages made by employee. 80 it was held that there is one principle which admits of no exception. the applicant has to satisfy the authority that he had sufficient cause for not making the application within such period. In Delhi Administration v. it was held by the court that it is a criminal offence not to pay the minimum wages fixed under the provisions of the act. he would have no right to conduct his enterprise on such terms. 77 1987 Lab 1C 1493: 1987-2 APLJ (HC) 137 2004 (100) FLR 334 79 1994 LLR 304 (Karn) 80 1994 LLR IC 690 81 1988 Lab IC 283 (AP. The Authority under Minimum Wages Act. No industry has right to exit unless it is able to pay its workmen at least a bare minimum wage. If an employer even a bare subsistence or minimum wage. In A. State of Ajmer82. Guntur77. In case of Bakshsish Singh v. Guntur Region. Presiding Officer78. The appropriate Government is enabled to fix the minimum rates of wages payable to the employees employed in an employment specified in Part 1 or Part II of the Schedule or an employment added to either part by notification under section 27. more so when the enterprise is run by Govt. v. Prakash v. v. In B.V. Assistance Labour Officer81. Darshan Engineering Works.HC): 1988-I LLN 743 82 Ibid 25 78 47 | P a g e . while making the enquiry into the claim petition under section 20 of the Act.payable and if presented after the expiry of the period of limitation. The detective and security service cannot in any way be linked to any of the scheduled employment detailed in Parts I and II. the authority acts in quasi-judicial capacity and ipso-facto should ensure that no prejudice is caused to the employer by failure to follow the rules of natural justice. Ramdas v. In case of Premier Tobacco Packers (P) Ltd. In case of Bijay Cotton Mills Ltd. The disabled employee whose quality and quantity of work are not questioned should not be denied dignity of labour by paying them less than the minimum wages merely because they are disabled. Senior Labour Inspector79. it was held that an order imposing a monetary liability caused by violation of provisions of the statute cannot be upheld except in the presence of strict proof. This matter. but the employment of labour on starvation wages cannot be encouraged or favoured in a modern democratic welfare State. Presiding Officer. the petitioners have been continued in service by virtue of the interim order of this Court as well as they were paid Rs. the interim reliefs granted earlier are required to be continued for the purpose of enabling the petitioners to take appropriate recourse to law. one principle which admits of no exceptions. It is quite likely that in under-developed countries where unemployment prevails on a very large scale. then Section 5(2) contravenes Article 19(1)(g) of the Constitution. it is not a case in which the interim relief is required to be extended any more. 17 of 1957 would not be superseded by the notification. State Of Punjab And Anr. it was held that in a comprise or a settlement between the employer and the employee resulting in the employee relinquish or reducing his claim with regard to wages under the Minimum Wages Act shall be null and void. it is only necessary to say. However. D. No. in my view. Brahmbhatt v.per day since the order of the learned single Judge in Civil Application No. v. 2004.In case of Yadav Stores. In case of Jaswant Rai Beri and Ors. the award I. under the circumstances.150/. has been authoritatively decided by the Supreme Court in Bijay Cotton Mills Ltd. although it purports to supersede the wage rates fixed under all the awards. the interim reliefs. State of Ajmer85. considering the fact that the matter is pending before this Court since 1986 and since 1986. 83 on 23 December. unorganised labour may be available on starvation wages.84. Oil and Natural Gas Commission83. Labour Court – III. No. Nagpur v. In Crown Aluminium Works v. In the facts and circumstances of the case. 2003 AIR 1958 P H 425 85 Ibid 47 86 AIR 1958 SC 30 (C) 87 (1967) ILLJ 756 Ker 84 48 | P a g e . No industry has a right to exist unless it is able to pay its workmen at least a bare minimum wage. State Of Kerala and Ors87. v. that the award in I. however. if it is open to the Government to depart from the advice tendered by the Advisory Committee. D. however. as his right under the Act is a definite claim. wherein it has been held that the Government's power to fix minimum wages is not in contravention of Article 19(1) (g) of the Constitution and that it is protected by Article 19(6). are ordered to be continued up to 16th January. In Harish C. In West Coast Employers' Federation v. which are granted earlier. Their Workmen86. 7111 of 2000. has observed that there is. the decision in The Perumbavoor Merchant's Association v. 2011 89 49 | P a g e . 3 at the rate.2012. whichever is higher. 48/2005 in WRIT PETITION (CIVIL) NO. In Kishan Lal & Sons v. State of Rajasthan90. of Delhi & Ors89. it offends Article 23 of the Constitution and is ultra vires. 2012 92 W. No costs. Nct.No.3560 of 2002.2000. The Pemmbavoor Municipal Council88. the argument that under Section 3 (2A) the direction in Ext. Month by month wages in terms of the order passed today shall be paid to the workman at the same address on or before the 7th of each english calender month. Govt. Petitioners 1 to 3 cannot ventilate the individual grievances of their members. P-1 Notification that the rates of wages fixed in all awards will be superseded is bad does not arise for consideration. Inasmuch the Appellants/Workers have not been provided with the work from 4. the authority had found that 'B' and 'C' divisions are one and the same plantation and covered by the provisions of the Plantations Labour Act and that the workers have received minimum wages notified for the plantation labours.5715 of 2009. between the last drawn wages and the minimum wages which are notified by the authorities from time to time. it has been observed that in so far as the Rajasthan Famine Relief Works Employees (Exemption from Labour Laws) Act exempts and excludes the applicability of the Minimum Wages Act in relation to workmen employed in famine relief work and permits payment less than the Minimum Wages. on 11 May.2.01. on 30 January. 30. The arrears of the wages at this rate shall be paid to the respondent/workman at the address disclosed in his affidavit filed in support of the application within a period of four weeks from today. Consequently connected miscellaneous petition stands closed.A. The Corporation of Madras92. In Elisamma v. this court is not inclined to interfere with the impugned order. of. In The Management v.17 of 1957 applies only to some of the tile factories in the Feroka area and that no employer from that area has come to this Court to challenge the notification. 2211/1998 90 AIR 1983 SC 328 91 W. The Plantation Officer91. Hence the writ petition will stand dismissed. In Sanjit Roy v.P. The petitioner is accordingly directed to make payment of wages to the respondent no.No. So. and the 4th petitioner has no tile factory in the Feroke area. the refusal of work by the 1st Respondent/ 88 1966 Ker LJ 587 CM No. Similarly. It was held in Nathu Ram Shukla v. in case of Loknath Nathu Lal v. is allowed by this Court to prevent an aberration of justice and to promote substantial cause of justice. State ofMadhya Pradesh94 that if minimum wages have not been fixed for any branch of work of any scheduled employment. in seeking a Writ of Mandamus to continue to employ them as Sanitary Workers according to law.R.No.P. 629) A. 1960 M.P.I. The definitions of “employees” and “employer” are quite wide. Consequently. the Writ Appeal filed by the Appellants/Workers is allowed by this Court in the interest of justice.2002 passed under the caption 'Being Spoken to'. 174 95 A.No.R. W. 181 94 50 | P a g e . by setting aside the order of the Learned Single Judge passed in W.3.3206 of 2000 dated 28. the person employing workers in such branch is not an employer with the meaning of the Act. Further.Corporation of Madras to the Appellants/Petitioners is not a valid one in the eye of law and accordingly.2002 as well as the subsequent order dated 5. and then supplied them to his employer was held as employee for the purpose of this Act.3206 of 2000 filed by the Appellants/ Petitioners. There shall be no order as to costs. Person who engages workers through another like a contractor would also be an employer93.P. an out-worker who prepared goods at his residence. State of Madhya Pradesh95. 1960 M. the 1st Respondent/Corporation of Madras is directed to provide employment to the Appellants/Workers within a period of eight weeks from the date of receipt of copy of this Judgment.7. 93 (1998 LLJ I Bom.P.I. 170/. Rs. „B‟ and „A‟ respectively and the Final Notifications in respect of revision of minimum rates of wages for workers engaged in the scheduled employments of “Construction” and “Loading and Unloading” in the Central sphere at Rs.per day for Area „C‟.120/-.120/-.‟B‟ and „A‟ respectively and for workers engaged in “Non-Coal Mines” in the Central sphere at Rs. without arms at Rs.240/. 51 | P a g e .and Rs.Recent Initiatives Based on the recommendations of the Minimum Wages Advisory Board (MWAB) in its meeting held on 22.180/.and Rs.220/.per day for unskilled workers to Rs.150/.per day for highly skilled workers in Area „C‟.per day and for “Employment of Watch and Ward” a.200/.per day and b.200/-.2008. Rs.180/.140/-. the Ministry of Labour & Employment has issued the Final Notification in the Gazette of India (Extra Ordinary) fixing the minimum rates of wages for workers employed in the scheduled employments “Employment of Sweeping and Cleaning” in the Central sphere at Rs.120/per day for unskilled Workers (Above Ground) to Rs.06.120/-.and Rs. Rs.240/.01.2008 and 26. 150/.and Rs. Rs.and Rs. with arms at Rs.180/.per day for highly skilled workers (Below Ground).150/. Rs. per day as at present. DA and HRA.80/. writing letters. 1948. including the North-Eastern States. Standardization of minimum wages under NFLMW should also reduce procedural complications in implementation of the law and enhance compliance. 1948 There should be one single statutory National Floor Level Minimum Wage (NFLMW) for the entire nation below which wages in any employment cannot be paid. ¾ Section 20 to be amended to provide for the recovery of the amount determined by the Authority. The State Governments are regularly asked to fix and revise minimum wages in scheduled employments to be at least at par with National Floor Level Minimum Wage of Rs. One of the following solutions can be considered: ¾ Wage in Minimum Wages Act to be defined as basic and DA only. A single wage rate by its very simplicity will be easy to understand and implement. which primarily falls in the State sphere. ¾ The Minimum Wages Act should also provide for Payment of Wages by remittance in bank account of the employee. Some employers split the consolidated wages announced by the Government into these heads so that they do not have to pay PF etc on the full Minimum Wage announced by the Government. as arrears of land revenue as is done in Payment of Gratuity Act so that the Authority does not have to file an application before the Court.Amendment in the Minimum Wages Act. The Minimum Wages Act defines wages to include basic. They also then do not pay Gratuity on the HRA component. ¾ Section 22 B (a) – Filing of claim application and its being upheld should not be a condition precedent to the initiation of prosecution proceedings. personal interaction and visits to States. is assiduously pursued by us through discussion. What they actually do is in keeping with their respective paying capacity. 52 | P a g e . including that of the revision of minimum wages at national floor level minimum wage or higher. effective implementation of the Minimum Wages Act. Conclusion To sum up. A study of Industrial Law.gov.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd= 7&cad=rja&uact=8&ved=0CFAQFjAG&url=http%3A%2F%2Fwww.co.co.bmk 53 | P a g e . https://www.in%2Fpdf%2Fnotifications%2Fnc08_minimum_wages_act_19 48.pdf 7.sli deshare.in/upload/uploadfiles/files/Divisions/wage_cell/4fd9beba b42a0mwact.63808443. http://karunadu.pdf 5.d.Avtar Singh (2nd edition) Lexis Nexis Publication 3.bmk 6.S.google.net%2Ftanujpoddar%2Fminimum-wages-act-19485843728&ei=PKU5U8W5BMn9rAfc4DoAQ&usg=AFQjCNGwRxgr__5yzbXfh9qPuwEYsBtd0w&bvm=bv.d.nic.6 3808443. An introduction to labour and industrial law.Bibliography 1.gov. http://labour.pdf&ei=ZaU5U_rEFMGKrQf3sIDAAQ&usg=AFQjCNFQ3UQy8bkF THU3VvC9LyL6hUXTCw&bvm=bv. Kothari (5th edition) lexis nexis publication 4.M. Labour and Industrial Laws.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd= 12&cad=rja&uact=8&ved=0CC8QFjABOAo&url=http%3A%2F%2Fpbl abour. 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