The minimum wages act, 1948 (2)

Team members
Names Particulars

Shweta Pagedar (Roll No. 27) Objectives of Act
Historical Backdrop
Broad Features
Who all are eligible
Sec. 1, 2, 3, 4
Segregation
Jaymeen Bhalgamadia (Roll No. 02) Sec. 5, 7-14, 17, 18, 20, 22, 25, 27-29,
Lalit Bourasi (Roll No. 05) State Amendments, Recent Cases

 To provide minimum wages to the workers
working in organized sector
 To stop exploitation of the workers
 To empower the government to take steps
for fixing minimum wages and to revising it
in a timely manner
 To apply this law on most of the sections in
organized sector (scheduled employment)

Historical Backdrop
 The initiative by Shri K.G.R.Choudhary in
1920: set up boards for determination of wages
 The International Labour Conference adopted
convention 26 and 30 in 1928 relating to wage
fixing machinery in trades or parts of trades
 A Minimum Wages Bill was introduced in the
Central Legislative Assembly on 11.4.46 and
came into force with effect from 15.3.48
 The Committee on Fair Wage was set up in
1948 to provide guidelines for wage structure

Broad Features of the Act
 [Sec 3]: The Act lays down the principles for
fixation of
 A minimum time rate of wages
 A minimum piece rate
 A guaranteed time rate
 An overtime rate for different occupations,
localities or classes of work and for adults,
adolescents, children and apprentices

 [Sec 4]: The minimum wages may consist of
 A basic rate of wages and a cost of living of
allowances
 A basic rate of wages with or without the cost
of living allowance and the cash value of the
concessions in respect of essential commodities
supplied at concessional rates

Short Title and Extent
[Sec. 1]
 This Act, the Minimum Wages Act, 1948
extends to the whole of India
 This Act may be called the Minimum Wages
Act, 1948

Who all are eligible?
 Permanent employees
 Contract employees
 Casual workers
 People on probation get fixed pay
instead of minimum wages.
 Trainees get stipend and not
minimum wages

What is appropriate
government? [Sec 2(b)]
In relation to scheduled
employment carried on by
Central Government or
railways or est. under Central
Act, the Central Government
In all other cases – the State
Government
8

Wages [Sec. 2(h)]
 Minimum wages: all remuneration capable of
being paid in money terms for work done if
terms of contract were fulfilled
 consist of Basic + Dearness Allowance +
House Rent Allowance
 Every 5 years, basic rates of every industry are
decided by Minimum Wages Committee
 Dearness Allowance changes every six months
and is decided by Government

Other Definitions
Section No. Term

2 (bb) Child
2 (a) Adolescent
2 (aa) Adult
2 (c) Competent authority
2 (d) Cost of Living Index Number
2 (e) Employer
2 (g) Scheduled Employment
2 (i) Employee

Fixing of minimum rate of
wages [Sec. 3]
The Appropriate Government:

 Shall fix minimum rates of wages for an
employment specified in Part I or Part II of
Schedule & added by notification in official
gazette

 May fix rates for a part of the state or for any
specific class or classes instead of fixing minimum
rate of wages for whole state

 Shall review and revise at intervals not exceeding
5 years the minimum rates of wages

Different Minimum Wages
May Be Fixed By The
Government For:
 Different employments (specified in the
schedule)
 Different classes (e.g. skilled, unskilled,
semis skilled, etc.) of work in the same
employments
 Adults, adolescents, children and
apprentices
 Different localities

Minimum rates of wages may be fixed by any one or more
of the following wage periods, namely:
 By the hour
 By the day
 By the month
 By such other larger wage period
as may be prescribed; and where such rates are fixed by
the day or by the month, the manner of calculating wages
for a month or for a day, as the case may be, may be
indicated

Different Minimum Wages May Be
Fixed By The Government May
consist of [Sec. 4]
1. Basic + Special Allowance (Which varies with
the cost of living index)

2. Basic + Cash value of concessional supply of
materials like food, clothes, etc

3. An all inclusive rate which includes Basic +
Cost of living Allowance + Cash value of
concessional supply of materials

Fixing Minimum Rates of
Wages [Sec. 5]
 Publish its proposals in the official gazette asking
comments from the affected parties
 Constitute committees/sub committees for the
purpose.
 The committees/sub-committees and advisory
boards constituted by the Government consist of
equal number of members of :
 Employers
 Employees, and
 Independent persons

Fixation of minimum wages
Recommendation of Advisory Board for different class
[unskilled, skilled, Clerk, Supervisor]

Publish recommendations in National Publications [for public
comments/representations from Trade Unions etc.]

Hearing of the Representatives etc

Notification of Minimum wages

 Appointed by appropriate government
 To co-ordinate the work of committees and
sub committees appointed under Section 5

 To advise the Central and State
Governments in fixation and revision of
minimum rates of wages
 To co-ordinate the work of the Advisory
Boards

Composition of
Committees, etc.
[Sec. 9]
 Each of the committee, sub-committee and the
Advisory Board shall consist of:
a. persons to be nominated by the appropriate
Government
b. representing the employers and employees in
the scheduled employments who shall be equal
in number and
c. independent persons not exceeding one-third
of its total number of members: one of such
independent persons shall be appointed the
Chairman by the appropriate Government.

Correction of Errors
[Sec. 10]
 By appropriate Government at any time
 By notification in the Official Gazette
 Correct clerical or arithmetical mistakes
or errors arising from and accidental slip
or omission.
 Every such notification shall be placed
before the Advisory Board for information.

Wages in Kind [Sec. 11]
 Minimum wages shall be paid in cash.

 The appropriate govt. may authorize, where
there has been a custom of payment in this
manner, payment of minimum wages either
wholly or partly in kind

 The appropriate govt. may authorize supply of
essential commodities at concessional rates

Payment of minimum rate
of wages [Sec. 12]
 The Minimum Wages has to be paid
without any deductions other than
Statutory Deductions.
 Payment of wages less than minimum
wages on the ground of less performance or
output is illegal

Normal working hours
[Sec. 13]
For an Adult Worker working in Factories:

 Number of Working Hours should not
exceed 48 Hours in a week with a weekly
Holiday

 The Daily Hours should not exceed more
than 9 Hours with 1 Hour Rest Interval

 Provision of Compensatory Holiday/
Overtime Wages if working on holiday

Overtime wages [Sec. 14]
 If the person has worked for more than 48 hours in a week
then, the excess hours worked will be treated as Overtime

 Overtime wage rate will be twice of the normal wage rate

Wages for a person who has worked less
than normal working hours [Sec. 15]

 Employer could not provide the activities of the job then,
the employee is entitled to receive full salary

 Employee has not worked due to his unwillingness then,
the employee is not entitled to receive full salary

Records to be maintained
[sec. 18]
 The Registers should contain the following
particulars-

 (i) particulars of employed persons
 (ii) the work performed by them
 (iii) the wages paid to them
 (iv) the receipts given by them

Claims [Sec. 20]
 A Labour Commissioner or any other
appointed authority is authorized to hear
claims regarding non-payment of minimum
wages

 Any aggrieved person may apply to the
authority for settling his claims within 6
months

Penalties [Sec. 22]

Offence Punishment

Payment of less than Imprisonment which may
Minimum Wages to extend up to 6 Months or
employee Fine which may extend
up to Rs 500/- or Both

Contracting out [Sec. 25]
 Any contract or agreement, whether made
before or after the commencement of this Act,
whereby an employee either relinquishes or
reduces his right to a minimum rate of
wages or any privilege or concession accruing
to him under this Act shall be null and void so
far as it purports to reduce the minimum rate
of wages fixed under this Act.

Power of State Government to add
schedule [Sec. 27]
The State Government has to notify in the
Official Gazette not less than three
months of its intention to do so

Power of Central Government to
give directions [Sec. 28]
The Central Government may give directions
to a State Government as to the carrying
into execution of this Act in the State.

Power of the Central
Government to make rules
[Sec. 29]
 Procedure to be followed in conduct of
business
 Method of voting
 Manner of filling of casual vacancies in
membership
 Quorum necessary for the transaction of
business of the Central Advisory Board.

State Amendments - Gujarat
 Section 3(2)

 Prevent the State Government from fixing the
minimum rates of wages in respect of such
employment even after the expiry of the said
period of one year.

 "21A Liability for payment of Court-fees.-

 section 20 the applicant shall not be liable to
pay any court-fees

 presented by an Inspector- he shall not be
liable to pay the process fees also.

 sub-section (1), under section 12 to pay the
amount to the State Government.

 prejudice to any other mode of recovery, be
recoverable as an arrear of land revenue."

Recent State amendments
 Based on the recommendations of the Minimum Wages
Advisory Board (MWAB) in its meeting held on
22.01.2008 and 26.06.2008:

 “Employment of Watch and Ward” The rates has been
prescribed by the central.

 Construction and Loading and Unloading”

 Non-Coal Mines- in the Central sphere

 Ajay Bansal vs. State, 2007 LLR 1040 (Del He)

 Violation of Section 22-A of the Minimum Wages Act

 Assistant Labour Commissioner filed a case for not
paying the minimum wages to the employees

 Defendant argued that the establishment namely,
petrol pump is not covered by the provisions of the Act

 H.C. held that Petrol Pump covers under the
establishment and the employees will be entitled' to
minimum wages.

 Andhra Pradesh Vyavasaya Vruthidarula Union (APVVU)
had filed a Public Interest Litigation (PIL) with the High
Court of AP challenging the central government NRGEA
wages notification which is the clear violation of
Minimum Wages Act of AP,

 Advocate Bala Gopal argued the case.

 As per the Minimum Wages Act 1948, the wages has to
be revised once in every 3 years

 The government of AP has revised the minimum wages
in year 2002. The next revision should have been in the
year 2005.

 On 3rd July, 2009, the High Court passed the
Judgment in favor to pay minimum wages as per the
Minimum Wages revised by AP government.

Recent Cases:
 Executive Engineer, Rural Works Division, Mayurbhanj
vs. Addl. District Magistrate, Mayurbhanj, 2005 LLR
121 (Ori HC), it was held that, under the Minimum
Wages Act, it is the liability of principal employer to pay
difference of wages to the employees of the contractor.

 President Cinema Workers Union Affiliated to Bharatiya
Mazdoor Sangh vs. The Secretary Social Welfare and
Labor Department, 2005 LLR 648 (Karn He), it was held
that inaction on the part of the Government in not
revising minimum wages for 13 years will not be
justified hence revision be made within 6 months.

Cases (contd.)
 Delhi Council for Child Welfare v. Sheela Devi,
2006 LLR 1181 (Del He), it was held that A
Society is liable to pay minimum wages to its
employees.
 Birla Institute of Technology vs. State of Bihar,
2007 LLR (SN) 330, it was held that Birla
Institute of Technology will be liable to pay the
wages as per The Minimum Wages Act, 1948.
 Agricultural Produce Market Committee vs.
Weighmen's Association, Tiptur, 2007 LLR (SN)
333 (Kam He). It was held that in the absence
of relationship of master and servant, the weigh
men will not be entitled to minimum wages.

Cases (contd.)
 Sonu vs. Municipal Corporation of Delhi, 2005 LLR
778 (Del He), it was held that Minimum wages to
the safai karamcharis cannot be denied on the
ground that they work on part-time basis.

 Lingegowd Detective & Security Chamber Pvt. Ltd.
vs. Mysore KirloskJIr Ltd., (2006) ( (SC), it was held
that private security guards through contractor will
not be entitled to minimum wages in the absence of
'scheduled employment'.

To sum up…..
• Effective implementation of the Minimum Wages
Act,1948, which primarily falls in the State sphere,
is assiduously pursued by Ministry of Labour and
Employment through:
• discussion,
• writing letters,
• personal interaction and visits to states.
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 wages.

List of some important forms…
Form No. Rule Description

III 21 (4a) Annual Return

V 26 (5) Muster Roll

X 26 (1) Register of Wages

XI 26 (2) Wage slip

Sources:
 http://labourandemployment.gov.in/ilc_a/law/mwa
_a/mwaNSections.htm#mwa_1
 http://labour.nic.in/wagecell/mwact.pdf
 http://labourandemployment.gov.in/labcom/e-
citizen/miniwage_form.htm
 The Minimum Wages Act, 1948(Act number XI of
1948), S.B.D Publications, 2nd edition, 2009-10.
 Industrial and Labour Laws, S P. Jain, 2008 edition,
Dhanpat Rai & Co. (P) Ltd.
 Dynamics Of Industrial Relations, Dr.Satish
Mamoria, Late Dr.C.B.Mamoria, S V.
Gankar, Himalaya publications, 13th edition, 2011.

Resource Persons:
 Mr. Sudhir Shah, B.Sc. L.L.B, Advocate
 Mangesh Thite, Sr. Executive, IR (FAG
Bearings, India Ltd.)
 Dharmesh Parikh, Deputy General Manager,
IR, (FAG Bearings, India Ltd.)

The minimum wages act, 1948 (2)

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