Minimum wages act, 1948 is a welfare legislation. It provides wages requires for livelihood. The main object of the Act is to prevent exploitation of workers and to determine minimum wages. (Edward Mills Co. Ltd. v/s State of Ajmer,1954). If it is not applied in any industry or establishment, then it shall mean that there is any other law to determine minimum wages in force.
Sec.2- Interpretation (Definition)
a) Adolescent- completed his fourteenth-year age.
aa) Adult- completed his eighteenth-year age.
b) Appropriate Government-
1. In relation to any scheduled employment, the state government.
2. In relation to any scheduled employment, the central government.
bb) Child- not completed his fourteenth-year age.
c) Competent authority- appointed by the appropriate government to ascertain time to the time cost of living index number to employed in scheduled employments.
d) Cost of living index number: the minimum rate of wages has fixed means the index number ascertained and declared by the competent authority.
e) Employer- a person who employs:
- In a factory.
- In any scheduled employment control of the government.
- In any scheduled employment under local authority.
- In any other cases.
f) Prescribed- by rules made under this act.
g) Scheduled Employment- means employment specified in the schedule or any process or branch of work forming part of such employment.
h) Wages- all remuneration, capable of being expressed in term of money, be payable to a person employed in respect of his employment or of work done. Wages do not include:
- A value of any- house, supply of light, water, medical and any service excluded by general or special order of appropriate government.
- Travelling allowance.
- Gratuity is payable on discharge.
Employee– a person who is employed for hire or reward to any work.
Section 3 to 9 of the minimum wages act, 1948 mentions the procedure for the determination of minimum wages. Section 3(i) of the act provides that the appropriate government shall be empowered to fix the minimum wages in the manner prescribed under this act. It shall fix the minimum rates of wages payable to employees employed in an employment specified in part 1 or part 2 of the schedule. But the appropriate government may, in respect of employees employed in an employment specified in part 2 of the schedule, instead of fixing minimum wages under this clause for the whole state, fix such rates for a part of the state or part thereof, thus the jurisdiction to determine the minimum wages is with the appropriate government.
Section 3(1)(A) provides that the appropriate government may refrain from fixing minimum rates of wages in respect of any scheduled employment in which there are in the whole state less than 1000 employees engaged in such employment. But if at any time the number of employees has risen to one thousand or more, then it shall determine the minimum rates of wages.
Subsection (2) provides that the government may fix:
- A minimum rate of wages for time work ( i.e., ‘a minimum time rate.’)
- A minimum rate of wages for piece work (i.e., ’a minimum piece rate.’)
- A minimum of remuneration to apply in case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis which is known as “a guaranteed time rate.”
- A minimum rate to apply in substitution for the minimum rate which would otherwise be applicable, in respect of overtime work done by employees which are known as “overtime.”
HYDRO ENGINEERS PVT.LTD.V/S WORKMEN (A.I.R 1969 S.C.182) – The supreme court held that the main purpose of section3(2)(c) is to face such circumstances where the operation of minimum piece rate fixed by the government may result in worker earning less than minimum wages.
In fixing or revising minimum rates of wages under section 3, different minimum rates of wages may be fixed for the following:
I. Different scheduled employments
II. Different classes of work in the same scheduled employment
III. Adults, adolescents, children and apprentices:
IV. Different localities
Similarly, minimum rates of wages may be fixed by one or more of the following wages periods namely
a. By the hour;
b. By the day;
c. By the month,
d. By such other longer wages period as may be prescribed.
HASAN JAN V/S STATE OF BIHAR (1980 – L.L.J.358 PATNA) – Patna high court said that a wages period of more than one month may be enforced only after the rules to that effect are made and published in the gazette. Fixing of different rates of minimum wages for different industries or in different locations by dividing several zones will be conformity with section 3 or the scheme of the act. (CHANDRA BHAWAN BOARDING AND LODGING BANGLORE V/S STATE OF MYSORE, A.I.R 1970 S.C. 2042.)
In the case of SIKANDARABAD CLUB VS STATE OF ANDHRA PRADESH[(1997)1 L.L.J 434 ANDHRA PRADESH] It has been held that section 3 of the Act empowers the state government that while determining the minimum wages the state government may determine the different rates of minimum wages for different scheduled employment or for different classes of work in an employment or for employment situated at different localities.
Fixation and Revision of Minimum Wages:
Sec.3 Fixation of the minimum rate of Wages:
- Provides that the appropriate government may refrain from fixing minimum rates of wages in respect of scheduled employment.
Case: Hydro Engineers Pvt. Ltd. v/s Workmen
- Provides that the government may fix:
- A minimum rate of wages for time work (a minimum time rate).
- A minimum rate of wages for piece work (a minimum piece rate).
- A minimum of remuneration to apply.
In fixing or revising the minimum rate of wages under sec.3:
- The different minimum rate of wages may be fixed:
- Different scheduled employment.
- Different classes of work.
- Adult, adolescent, children.
- Different localities.
- The minimum rate of wages may be fixed by one or more wages periods:
- By the hour.
- By the day.
Sec.4 Minimum Rates of wages- fixed or revised by the appropriate government:-
- A basic rate of wages and special allowance at a rate to be adjusted.Case: U. Unichay v/s State of Kerala
- The basic rate of wages with or without the cost living allowance.
- An all-inclusive rate allowing for the basic rate, the cost of living.
Minimum rates of wages
According to section 4, any minimum rates of wages fixed or revised by the appropriate government in respect of scheduled employment under section 3 may consist of:
- A basic rate of wages and a special allowance at a rate to be adjusted at such intervals and in such manner as the appropriate government may direct, which may be called subsistence allowance.
- A basic rate of wage [with or without the cost of living allowance] and the cash value of the concession in respect of the supply of essential commodities at concession rates.
- An all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash of the concession, if any.
U. UNICHAY V/S STATE OF KERALA (A.I.R1962) HYDRO ENGINEERS PVT.LTD. V/S WORKMEN (A.I.R1969 S.C. 182) AND CHANDRA BHAWAN BOARDING AND LODGING, BANGLORE V/S STATE OF MYSORE (A.I.R1970 S.C. 2042) – It was said that the minimum rate of wages means the essential commodity required to live like food, residence, clothes, etc. Are not only, but also education, medicine and other necessary facilities.
Sec.5 Procedure for fixing and revising minimum wages:
The appropriate government shall either:
- Appoint as many committees and sub-committees in respect of fixation or revision.
- By notification in the official gazette, publish its proposal for the persons and specify a date not less than two months from the date of notification, than the proposal will be taken into consideration.
Section 5 of the Act lays down that in fixing minimum rate of wages in respect of any scheduled employment for the first time under this act or in revising minimum rates of wages so fixed, the appropriate government shall either:
- Appoint as many committees and sub-committees as it considers necessary to hold enquires and advise it in respect of such fixation or revision, as the case may be or,
- By notification in the official gazette, publish its proposals for the information of person likely to be affected thereby and specify a date not less than two months from the date of the notification on which the proposal will be taken into consideration.
After considering the advice of the committee appointed and all representation received, the appropriate government may by notification in the official gazette, fix or revise the minimum rates of wages and no notification in the official gazette, such rates shall come in force after the expiry of 3 months.
Sec.7 Advisory Board:
- Co-ordinating the work of committees and sub-committees.
- Advising the appropriate government in the matter of fixing and revising the minimum rate of wages.
Case: Gulam Ahmed v/s State of Bombay
The board may also advise with regard to procedure.
Creation of Advisory Board-
As per powers conferred under section 7, the appropriate government shall appoint an advisory board for the purpose of-
- Coordinating the work of committees and sub-committees appointed under sec.5 and,
- Advising the appropriate government in the matter of fixing and revising the minimum rate of wages.
Sec.8 Central Advisory Board:
- Advising the central and state government in the matter of fixation and revision of wages.
- For coordinating the work of Advisory Boards.
Sec. 8 makes its obligation upon the central government to appoint a central advisory board for the following purposes-
- Advising the central and state government in the matters of the fixation and revision of minimum rates of wages and other matters under the act, and
- For coordinating the work of advisory boards.
- The central advisory board shall consist of
- Persons to be nominated by the central government representing employers and employees in the scheduled employment who shall be equal in number, and
- Independent persons not exceeding one-third of its total number of members.
- The chairman of the central board shall be one of the independent people and shall be appointed by the central government.
Sec.9 Compensation of Committees etc.:
- Provides that such of the committee, sub-committee and advisory board shall consist of person to be nominated by the appropriate government.
- Independent person not exceeding one-third of the total number of members.
- Appropriate government appoint one of such independent persons to be a chairman.
Sec.10 Correction of errors:
The appropriate government may correct, the clerical or arithmetical mistake in any order fixing or revising minimum rates of wages under this act.
Sec.11 Wages in kind:
This minimum wage payable under this act shall be paid in cash.
Sec.12 Payment of minimum rate of wages:
Lay down that where in respect of any scheduled employment notification under section 5 is in force.
Composition of committees:
- Section 5 states for the constitution of committees and sub-committees for enquiries and advising in respect of the determination of minimum wages and its revision.
- Section 9 provided that such as the committee, sub-committees and the advisory board shall consist of persons to be nominated by the appropriate government.
The expression ‘independent person’ means a person, different than those who are employed and employees in relation to scheduled employment. A government official has no bar to such nomination. (State of Rajasthan v/s Hari Ram, A.I.R 1976 S.C. 277).