Objectives of the Act

 To provide minimum wages to the workers

working in certain employments (scheduled
employment Schedule 1)

 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)
 Schedule Employments
• Mills
• Stone quarries
• Weaving
• Mines
• Construction or maintenance of roads
• Dairy Farming
• Agriculture
 Case Law
M.P. Miner Industries Association v. Regional Labour
Commissioner, 1960
The Act was intended to apply only to industries in
which the labour was unorganised to achieve the
object of doing social justice to workmen employed
in the scheduled employments by prescribing
minimum rates of wages
 Case Law

• U. Unichoyi v. State of Kerela 1962

The policy of the Act is to prevent employment
of sweated labour on starvation wage in the
interest of general public and so in prescribing
minimum wages rates even the capacity of the
employer need not be considered.
 Constitutionality of the Act
• Bijoy Cotton Mills Ltd. V. State of Ajmer 1955
• Securing living wage to the labourers ensures
physical subsistence as well as maintenance of
health and decency as provided by Directive
Principles of State Policy under Article 43.
Minimum Wages Act is passed to give effect to the
resolutions passed in Geneva Convention which
were embodied in International Labour Code. So
MW Act is not violative of Article 19 (1) (g), it is
reasonable and just in the interest of general public
and protected by terms of Article 19 (6).
 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

• The Committee on Fair Wage was set up in

1948 to provide guidelines for wage
structure
 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 (cost of
living adjustment 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
 Fixing of minimum rate of wages
Section 3

The Appropriate Government:

• Shall fix and review the minimum wages

• Revise the minimum wages after every 5 years

• May refrain from revising after 5 years if there are less than
1000 employees engaged in Scheduled Employment in a State
 Different Minimum Wages May Be
Fixed By The Government For Sec 3(3)

 Different employments (specified in the schedule)

 Different classes (e.g. skilled, unskilled, semi skilled,
etc.) of work in the same employments
 Adults, adolescents and children
 Different localities
 Different wages for time and piece work
 Different Types of Wages
• Living Wage : It includes Salary, pay or remuneration for the

work done

• Essential for providing necessities for life such as food, cloth

and shelter, maintenance of health, education frugal comforts

• Determined by socio economic conditions of a particular

country

• Sum sufficient for the normal and reasonable needs of an

average employee
 Fair Wage
• Productivity of labour
• Level of national income
• Place of industry in the economy of the
country
• Financial position of an industry
 Minimum Wage

• A minimum wage must provide not merely for

the bare sustenance of life but for the
preservation of the efficiency of the worker

• It must provide for education, medical

requirements and amenities
 Minimum Rate of Wages[Section 4]

1. Basic + Special Allowance(Dearness Allowance or cost of

living allowance-varies with the cost of living index

2. Basic with or without cost of living allowance and Cash

value of concessional supply of materials like food, clothes,
etc
 Fixing Minimum Rates of Wages
[Sec. 5]
 Two methods, Appropriate Govt can follow either of the
two

 Publish its proposals in the official gazette asking

comments from the affected parties

Specify a date, not less than two months from the date of
notification
• 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
 Case Laws
• Chandra Bhawan Boarding and Lodging, Bangalore v. State
of Mysore
Power conferred upon the appropriate Government is neither
arbitrary nor unguided. It does not offend Article 14 of the
Constitution

• Arbunda Bhuvan Tea Shop & Others v. State of

Maharashtra
In the matter of fixing wages, the economic capacity of the of the
industry or trade is irrelevant what is important
nature of work to be performed,
the conditions in which work is performed and
cost of living in a place.
 Need based Minimum Wage

• Evolved by 15th Indian Labour Conference July,

1957
• Minimum wage is need based wage and
should ensure the minimum human needs of
an industrial worker
• Following norms recommended
• Standard working class family should be taken to
consist of three consumption units for one earner
• Food requirements calculated on net intake of
2700 calories per day
• Clothing requirements estimated as per
consumption of 18 yards per annum, average
worker’s family of four, total of 72 yards
• Housing requirements- rent charged by
Government in any area for houses
• Fuel, lighting and miscellaneous items- 20% of the
minimum wage
• Children’s education, medical requirements,
minimum recreation including festivities,
ceremonies, marriage, provision of old age- 25%
 Workmen v. Reptakos Brett and Co.Ltd,

1992 SCC 271

Wage structure which answers the above six components is

nothing more than a minimum wage at subsistence level.
The employees are entitled to the minimum wages at all
times and under all circumstances. An employer who
cannot pay the minimum wage has no right to engage
labour and no justification to run the industry
 Appointed by appropriate government
 To co-ordinate the work of committees and sub
committees appointed under Section 5

CENTRAL ADVISORY BOARD [SEC.8]

 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 Section 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 in fixing or revising

minimum rates of wages

 Errors arising from and accidental slip or omission by

Notification in the Official Gazette

 Every such notification shall be placed before the Advisory

Board for information.
 Wages in kind Section 11
• Minimum wages shall be paid in cash
• May be partly paid in kind, if the Government is
of the opinion that it is necessary in the
circumstances
• Issue a notification in the Official Gazatte
• Provision is to made for the supply of the
essential commodities at the concessional rates
 Payment of minimum rate of wages
Section 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
 Somiben Mathurabai v. M/s Lalji Hakku

 The employer’s duty is to pay at the minimum rate to

the employee. Except for that liberty, the contract
between the employee and the employer is left intact.
If, for instance, the contact rate of wages is higher,
the statutory right and obligation do not come into
play. The statutory right of the employee itself is to
receive wages at the rate not lower than the notified
minimum rate.
 Fixation of hours for a Normal Working Day, Section 13
For an Adult Worker working in Factories:

• Fix the number of hours of work which shall constitute a normal working

day

• Provide for a day of rest in every period of seven days

• Payment of work on a day of rest at a rate not less than the overtime rate

• Number of Working Hours should not exceed 48 Hours in a week

 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 Section 14
 Where minimum wage is fixed by the hour, day or month, an employee
works on any day in excess of the number of hours consisting a normal
working day, the employer shall pay him at the overtime rate fixed under
this act
Wages for a worker who works for less than normal
working day Section 15

 Entitled to receive wages on that day as if he had worked for a

full normal working day
 Not entitled if
 Fails to work due to his unwillingness to work and not by omission of
the employer to provide him work
 Wages for two or more classes of
works Section 16
• An employee does two or more classes of
work to each of which a different minimum
wages is applicable
• Employer shall pay to such employee in
respect of wages fixed in respect of such
different classes
 Maintenance of Registers and
Records Section 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
 Inspectors Section 19
• Appointed by the Appropriate Government
• Wide powers
– Examine registers and records
– Enter and inspect the premises
– Examine any employee

• Every Inspector will be a Public Servant as under

Section 21 IPC
 Authority to hear and decide
Claims Section 20
• Any Commissioner for Workmen’s Compensation
• Labour Commissioner
• Judge of a Civil Court
• Jyoti Home Industries v. State of Karnataka
– Authority constituted under this Act could hear all
claims arising out of payment of less than the
minimum rate of wages or in respect of payment of
remuneration for days of rest or for work done on
such days or overtime rate
 Penalties [Sec. 22]

Offence Punishment

•Payment of less than Imprisonment which may

Minimum rate of Wages to extend up to 6 Months or Fine
employee or which may extend up to Rs
•Less than the amount due to 500/- or Both
him
 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 wages to
the employees of the contractor.

• 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.
 Cases (contd.)
• 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'.