The Minimum wages Act, 1948

Objectives and need of Governmental regulation of Wages:

In the State of Australia a legislation related to payment of minimum wages was

adopted as early as 1896. The legislation brought the regulation of payment of
minimum wages in the industries of boot-making, baking, textiles manufacturing,
and furniture manufacturing. The Great Britain followed the lead of Australia to
enact the Trade Boards Act in 1909. In USA, a number of states brought legislative
measures into the effect after 1912 for fixing the minimum wages particularly for
women and minors employed in various kinds of industries and occupations. The
provisions of minimum wages were adopted by India in 1948 keeping the
developments of the world in mind.
These legislations were enacted with the purpose to protect the rights of the labour
who were often left at the mercy of the industrialists and were denied fair wage
that would be needed for minimum sustenance of livelihood.

Karl Marx in Das Capital provided a strong critique of capitalist class observing
the predicament of the Industrial revolution in Britain, to quote himself:
“within the capitalist system all methods for raising the social productiveness of labour are brought about
at the cost of the individual labourer; all means for the development of production transform themselves
into means of domination over, and exploitation of, the producers; they mutilate the labourer into a
fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of
charm in his work and turn it into a hated toil; they estrange from him the intellectual potentialities of the
labour process in the same proportion as science is incorporated in it as an independent power; they
distort the conditions under which he works, subject him during the labour process to a despotism the
more hateful for its meanness; they transform his life-time into working-time, and drag his wife and child
beneath the wheels of the Juggernaut of capital. But all methods for the production of surplus-value are at
the same time methods of accumulation; and every extension of accumulation becomes again a means for
the development of those methods. It follows therefore that in proportion as capital accumulates, the lot of
the labourer, be his payment high or low, must grow worse. The law, finally, that always equilibrates the
relative surplus population, or industrial reserve army, to the extent and energy of accumulation, this law
rivets the labourer to capital more firmly than the wedges of Vulcan did Prometheus to the rock. It
establishes an accumulation of misery, corresponding with accumulation of capital. Accumulation of
wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil slavery, ignorance,
brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own
product in the form of capital.”
The purpose of minimum wages legislation is to prevent the exploitation of labour
and payment of unduly low wages in industries, where workers were least
organized and had virtually no collective bargaining power.
The fixing of minimum wages on industry imposes and legal obligation on the
employer to pay the wage rate so fixed have gone a long way towards mitigating
the sufferings and hardships of labour in the unorganized industries and
employments, here sweatshop conditions are widely prevalent.
At times, the state is required to intervene to regulate the quantum of wages to
control inflationary pressure and happened during the WWII. In USA, where
wages are normally determined on the basis of free collective bargaining between
labour and management, the government had to establish a war labour board
during the war to watch and control the working of collective bargaining in the
field of wages. Similar steps were also taken in the northern neighbour i.e. Canada.
Thus to sum up the need of the minimum wages:
1. Prevention forced labour due to unduly low wages, due to low bargaining
power of poor individual.
2. Fixing of just and fair wages for prevention of industrial disputes and
strikes.
3. To control inflationary pressure on the labourers or workers or the
employees.
4. Raising the purchasing power with a view to speed up the pace of consumer
economy.

The ILO also adopted conventions and recommendations relating to minimum

wage fixing machinery. The Minimum Wage Fixing Machinery Convention 1928
provided wage fixing machinery for certain trade to which India has been a
signatory. It imposes the obligation on the ratifying countries to associate both the
employers and workers in the operation of the machinery. The minimum wages
fixed by the machinery are to be binding on employers and workers. India ratified
the convention in 1955, after the enactment of the Minimum Wages Act 1948.
The question of the fixation of minimum rates of wages was considered by the
Standing Labour Committee and the fifth session of the Indian Labour Conference
in 1943.
Objects And Reasons Of the Minimum Wages Bill, 1946

1. The justification for the statutory fixation of minimum wage is obvious.

Such provision are necessary India where workers’ organization are poorly
developed and the workers’ bargaining power is weak.
2. The Bill provides for fixation by the State governments of the minimum
wages for the employments covered by Schedule of the Bill. The items in
the schedule are those where sweated labour is more prevalent or where
there is a big chance of exploitation of labour. After sometime, when some
experience is gained, more categories of employment can be added and the
bill providers for addition to the schedule.
3. Rules and procedures have been made for appointment of Advisory
Committees and advisory boards, the latter for the coordination work of the
advisory committees. The committees and the boards will have equal
representation of the employers and workmen.
4. In case where an employer pays less than the minimum wages field the State
government, a summary procedure has been provided for recovery of the
balance with penalty on the subsequent prosecution of the offending party.
5. It is not ordinarily proposed to make any exception in regard to employers of
undertakings belonging to the Central Government, except that difficulties
might arise when the sphere of duty of such an employer covers more than
one State and where the rates of minimum wages fixed the different states
may be different. For this purpose, a provision has been included that the
minimum wages fixed by a Provincial Government will not apply to
employees of a federal railway, except with the consent of the Central
government.
Scope Of Minimum Wages Act

The act empowers the central and the state governments, as the case may be, to fix
the minimum rates of wages in respect of workers employed in the following
industries or employments listed in the schedule of the Act, which contains Parts I
and II

Definitions:
Child: A person who has not completed his 14th year of age [Sec.2(bb)]
Adolescent: A person who has completed his 14th year of age but has not
completed his 18th year [Sec.2(a)]
Adult: A person who has completed his 18th year of age [Sec.2(aa)]
Appropriate Government:
i. In relation to any scheduled employment carried on by or under the authority
of the central government or a railway administration, or in relation to a
mine, oilfield or major port, or any corporation established by a central Act,
the central government, and
ii. In relation to any other scheduled employment, the state government.
[Sec.2(b)]

Employer [Sec.2 (e)]: Any person who employees, whether directly or through
another person, one or more employees in any scheduled employment in respect of
which minimum rates of wages have been fixed. The term ‘employer’ includes:
i. Manager of factory
ii. In relation to employment under the control of government, the person or
authority appointed by the government for the supervision and control of
employees or the head of the department
iii. In relation to employment under a local authority, the person appointed by
such authority for the supervision and control of employees or the chief
executive officer
iv. In other cases, any person responsible to the owner for the supervision and
control of the employees or for the payment of wages.
Wages[Sec.2(h)]: All remuneration, capable of being expressed in terms of
money, which would, if the terms of contract of employment, express or
implied were fulfilled, be payable to a person employed in respect of his
employment of work done in such employment and includes house rent
allowance, but does not include
i. The value of any house accommodation, supply of light, water, medical
attendance, or any other amenity or service excluded the appropriate
government
ii. Any contribution paid by the employer to any pension fund or provident
fund or under any scheme of social insurance
iii. Any travelling allowance or the value of any travelling concession
iv. Any sum paid to the person employed to defray special expenses entailed
on him by the nature of his employment of
v. Any gratuity payable on discharge.

Employee [Sec.2(i)]: Any person who is employed for hire or reward to do any
work, skilled or unskilled, manual or clerical, in a scheduled employment in
respect of which minimum rates of wages have been fixed; and includes an out-
worker to whom any articles or materials are given out by another person to be
made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or
otherwise processed for sale for the purpose of trade or business of that other
person where the process is to be carried out, in their the home of the out-worker or
in some other premises not being under the control and management of that other
person; and also includes an employee declared to be an employee by the
appropriate government; but does not include any member of the armed forces of
the Union.
Fixation of minimum rates of wages, working hours and
determination of wages and claims:
The act empowers the appropriate government in respect of employments in their
respective jurisdictions, to fix minimum rates of wages for time-work and piece-
work and also, a minimum rate of remuneration as guaranteed time-rate(to apply in
the case of employees employed on piece-work) and minimum rate of wages for
overtime work.
Different minimum rates of wages may be fixed for different scheduled
employments, different classes of work in the same scheduled employment, adults,
adolescents, children and apprentices, and for different localities. The rates may
also be fixed by the hour, but the day, or by any prescribed longer wage period.
Any minimum rate of wages is fixed or revised by the appropriate government may
consist of:
i. A basic rate with or without and a cost of living allowance
ii. A basic rate with or without the cost of living allowance and the cash
equivalent of the concession, in respect of supplies of essential
commodities, at concession rates
iii. An all-inclusive rate

The cost of living allowance and the cash value of the concession, in respect of
supplies of essential commodities at concession rates, have to be computed the
competent authority and intervals for such computation have to be fixed in
accordance with the direction of the appropriate government
The appropriate government may, however, refrain from fixing minimum rates of
wages in respect of any scheduled employment in which there are in the whole
state less than 1000 employees engaged in such employment, but if after an
inquiry, it finds that the number of employees in that employment has risen to
more than 1000, it is required to fix minimum wage [Sahdeo Sahu v State of M.P.
and another 1990]

Procedure for fixing and revision of minimum wages [Sec.5]

The appropriate governments can appoint committees and sub-committees as it
considers necessary to hold enquiries and advise it in respect of such fixation or
revision of wages.
By notification in Official Gazette, the appropriate governments can publish its
proposals for information of persons likely to be affected by not less than two
months from the date of the notification.
On receipt of the recommendations of the committee, the appropriate government
is required to fix minimum rates of wages in respect of employment concerned, by
making notification in the official gazette.
The appropriate government, after considering all representations thus received,
will fix minimum rates of wages in respect of the employment by making
notification in the official gazette.

Composition of the committess and sub-committees [Sec.9]:

Both of the committees and sub-committees are required to consist the employers
and employees in the scheduled employments in equal numbers and independent
persons not exceeding one-third of the total of member s, all nominated by the
central or state government, as the case may be. One of the independent persons
will be appointed as chairman

Revision of Minimum Rates of Wages [Sec. 3, 5, 7, 9]:

The same rate applicable to the fixation of minimum rates of the wages, that is, the
appointment of committees and sub-committees and notification of proposals in
the official gazette apply, but where the procedure of notification of the proposals
is adopted, the government is required to consult the advisory board. The revised
rates of wages are also to come in to force on the expiry of three months from the
date of the issue of the notification, or on such date as specified in the notification.
Inspectors:
The act provides for the appointment of inspectors by the central and state
governments for the purpose of the Act.
Powers and functions of the Inspector [Sec.19]:
1. Enter, with the assistants if needed, any premises or place where employees
are employed or work is given out to out-workers in respect of which
minimum rates of wages have been field for the purpose of examining any
register, record of wages or notices to be kept or exhibited and require their
production for inspection.
2. Examine any person or employee found in the premises or place for
ascertaining whether he is an employee
3. Require any person giving out-work and any outworker to give required
information with respect to names and addresses of the persons to, for and
from whom the work is given out or received, and with respect to the
payments to be made for work.
4. Seize or take copies of relevant register, record of wages or notices or their
positions of ascertaining of offences have been committed.
5. Exercise other prescribe power

Cognizance of offences:
No court is authorized to take cognizance of a complaint against any person for an
offence pertaining to payment of less than the minimum wage fixed or less than the
amount due, unless an application in respect of the facts constituting such an
offence has been presented before and authority [Sec.20] and has been granted
wholly or partly and the appropriate government or an officer authorized by it has
sanctioned the making of the complaint.
No court is authorized to take cognizance of a complaint pertaining to
contravention of any rule or order made in respect of daily hours of work,
intervals, weekly rest and overtime or for such offences for which no penalty is
specified except on a complaint made by, or with the sanction of, an inspector.
In case of offences pertaining to payment of less than the minimum rates of wages
fixed or less than the amount due to him or contravention of rules or orders
pertaining to daily of work, intervals, weekly rest and overtime, complaint must be
made within a month of the grant of the required sanction.

Recommendations of the Second NCL(2002):

The second National Commission on Labour (2002) has recommended significant
changes in the minimum wage legislation, and the norms and procedures of the
fixation of minimum wage. Some of the more notable recommendations are –
1. Minimum wage payable to anyone in employment, in whatever occupation,
should be such as would satisfy the needs of the workers and his family and
arrived at one the need based formula of the 15th Indian Labour conference
supplemented by the recommendation made by the Judgement of Supreme
Court in Reptakos Brett & Co. case.
2. There should be a national minimum wage that the central government may
notify. This minimum must be revised from time to time. It should, in
addition, have a component of dearness allowance to be declared half yearly
linked to the consumer price index and the minimum wage may be revised
once in 5 years. This will be wage below which no one, who is employed
anywhere, in whatever occupation, can be paid. Each state will have the
authority to fix minimum rate of wages which shall not be any event less
than the national minimum wage announced.
3. Where the wages are fixed purely on piece-rate basis, the employer should
pay at least 75% of the notified time-rate wage to the piece-rated worker fi
the employer is not able to provide him with work.
4. There is no need for nay wage board, statutory or otherwise, for fixing wage
rates for workers in any industry.
The recommendations of the NCL(2002) were adopted by the government and a
New Wage Code Bill passed the by the parliament in 2019. The rules are yet to be
notified.