Minimum Wages Act, 1948: Important Provisions

By | September 3, 2020
Minimum Wages

The Minimum Wages Act plays a major role in the Indian economy, where there are mostly manual labour’s who are exploited by employers in various industries. In order to curb such situations and to provide minimum wages to skilled and unskilled workers is one of the principles of the state.

The provisions of the Act are intended to achieve the object of doing social justice to workmen employed in the scheduled employments by prescribing minimum rates of wages for them. The main aim of the act is to provide minimum wage and to stop the exploitation of the workers. The Act consists of 31 sections and the schedule.

Important provisions under the Act

1. Fixing of the minimum rate of wages: Section 3

  • The appropriate government shall fix the minimum rate of wages for employees in employment specified in part I or part II of schedule or added by notification in the official gazette. The appropriate government instead of fixing minimum wages to the whole state of India may fix rates for part or specific class or classes of the state. The minimum rates of wages shall be reviewed and revised at regular intervals but not exceeding five years.
  • The government may fix the minimum rate of wages for time work, piece work, overtime work and guaranteed time rate.
  • The different minimum rates of wages may be fixed for different employments specified in the schedule, different classes of work in the same employment, adults, adolescents, children and apprentices and localities.

The 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, or
  • by such other larger wage-period as may be prescribed

where such rates are fixed by the day or by the month, the manner of calculating wages for a month or a day, as the case may be, may be indicated.

In the case, The Workmen v. Management of Raptakos Brett & Co. Ltd[1] The Court held that while fixing wages the government should consider the children’s education allowances, provision for old age, marriage, minimum recreation, medical requirements etc, and to provide 25% of additional wage from the total minimum wage.

2. Minimum rate of wages: Section 4

Any minimum rate of wages fixed or revised by the appropriate Government in respect of scheduled employments under section 3 may consist of:

  • A basic rate of wages and special allowances with the variation in the cost of living allowance applicable to such workers
  • 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 concession rates.
  • An all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions.

The cost of living allowance and the cash value of the concessions in respect of essential commodities shall be computed by the competent authority.

In the case, Karnataka Film Chamber of Commerce, Bangalore v. State of Karnataka[2] The court stated that it does not mean that it should necessarily consist of basic wage with dearness allowances, the state government has to fix it taking into consideration the needs of workmen and his family consisting of three consumption units.

3. Procedure for fixing and revising minimum wages: Section 5

In fixing minimum rates of wages in respect of any scheduled employment for the first time or in revising minimum rates of wages so fixed, the appropriate Government shall either—

  1. appoint as many committees and subcommittees as it considers necessary to hold enquiries, or
  2. by notification in the Official Gazette, publish its proposals for the information of persons likely to be affected thereby, which will be taken into consideration.

After considering the advice of the committee and the representatives the appropriate government shall by official gazette fix or revise the minimum wages to the scheduled employment.

4. Advisory Board: Section 7

  • The appropriate Government shall appoint an Advisory Board.
  • To coordinate the work of committees and subcommittees appointed under section 5
  • To advise the appropriate Government in the matter of fixing and revising minimum rate of wages.

5. Central Advisory Board: Section 8

  • The Central Government shall appoint a Central Advisory Board.
  • To advise the Central and State Governments in the matters of the fixation and revision of minimum rates of wages and coordinating the works with the advisory board.
  • It consists of an equal number of members of employers, employees and independent persons not exceeding one-third of its total number of members and one of the independent persons will be appointed by the chairman of the board.

6. Composition of Committees: Section 9

Each of the committees, sub-committees and the Advisory Board shall consist of persons to be nominated by the appropriate Government representing employers and employees in the scheduled employments, who shall be equal in number, and 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.

7. Correction of Errors: Section 10

The appropriate Government may, at any time, by notification in the Official Gazette, correct clerical or arithmetical mistakes or errors arising from any accidental slip or omission in any order fixing or revising minimum rates of wages. Every notification shall be placed before the Advisory Board for information after such alterations.

8. Wages in Kind: Section 11

  • Minimum wages payable under this Act shall be paid in cash
  • The appropriate government will authorise the payment of minimum wages either wholly or partly in kind.
  • Appropriate Government by notification in the Official Gazette, authorise the provision of supplies of essential commodities at concessional rates.

9. Payment of the minimum rate of wages: Section 12

The employer shall pay to every employee the wages at a rate not less than the minimum rate of wages fixed by such notification without any deductions except as may be authorised and prescribed by the law.

10. Normal working hours: Section 13

  • The appropriate government may fix the number of hours of work which shall constitute a normal working day, inclusive of one or more specified intervals;
  • provide for a day of rest in every period of seven days for the payment of remuneration

Exceptions:

  1. employees engaged in urgent work, or in any emergency which could not be prevented.
  2. employees engaged in work like preparatory or complementary work.
  3. employees whose employment is essentially intermittent.
  4. employees engaged in any work which for technical reasons has to be completed before the duty is over
  5. employees engaged in a work which could not be carried on except at times dependant on the irregular action of natural forces.

11. Overtime wages: Section 14

Works on any day above the number of hours constituting a normal working day, the employer shall pay him for every hour or part of an hour so worked in excess at the overtime rate fixed under this Act.

12. Wages for the worker who works for less than the normal working day: Section 15

If an employee works less than the requisite number of hours, he shall be entitled to receive wages in respect of work done by him on that day as if he had worked for a full normal working day. However, that he shall not be entitled to receive wages for a full normal working day if, where his failure to work is caused by his unwillingness to work and not by the omission of the employer to provide him with work and in such other cases and circumstances as may be prescribed.

13. Maintenance of registers and records: Section 18

Every employer shall maintain such registers and records giving such particulars of employees employed by him, the work performed by them, the wages paid to them, the receipts given by them.

14. Inspectors: Section 19

The appropriate Government may, by notification in the Official Gazette, appoint such persons as it thinks fit to be Inspectors for this Act and define the local limits within which they shall exercise their functions.

15. Claims: Section 20

  • The appropriate Government may appoint any Commissioner for Workmen’s Compensation or any Officer of the Central Government exercising functions as a Labour Commissioner, or any officer of the State Government not below the rank of Labour Commissioner or other officer with experience as a Judge of a Civil Court or as a stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of payment of less than the minimum rates of wages or in respect of the payment of remuneration for days of rest.
  • Any aggrieved person may apply to the authority for settling his claims within six months.

16. Penalties: Section 22

Any employer who makes payment to any employee less than the minimum rates of wages fixed for that

employee’s class of work or less than the amount due to him under the provisions of this Act shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.

17. Contracting out: Section 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 in so far as it purports to reduce the minimum rate of wages fixed under this Act.

18. Power of State Government to add to Schedule: Section 27

The State government has to notify in the official gazette not less than 3 months of its intention to do so.

 19. Power of the Central Government to give directions: Section 28

The Central Government may give directions to a State Government as to the carrying into execution of this Act in the State.

20. Power of the Central Government to make rules: Section 29

  • To make rules prescribing the term of office of the members
  • The procedure to be followed in the conduct of business, the method of voting,
  • The manner of filling up casual vacancies in membership
  • The quorum is necessary to the transaction of business of the Central Advisory-Board.

21. Power of appropriate Government to make rules: Section 30

  • To Prescribe the term of office of the members, the procedure to be followed in the conduct of business, the method of voting, the manner of filling up casual vacancies in membership and the quorum necessary for the transaction of business of the committees, sub-committees and the Advisory Board
  • To Prescribe the method of summoning witnesses, production of documents relevant to the subject-matter of the enquiry before the committees, sub-committees and the Advisory Board.
  • To Prescribe the mode of computation of the cash value of wages in kind and of concessions in respect of supplies of essential commodities at concessional rates
  • To Prescribe the time and conditions of payment and the deductions permissible from wages
  • To Provide for a day of rest in every period seven days and the payment of remuneration in respect of such day
  • To Prescribe the number of hours of work which shall constitute a normal working day
  • To Prescribe the form of registers and records to be maintained and the particulars to be entered in such registers and records
  • To Provide for the issue of wage books and wage slips and prescribe the manner of making and authenticating entries in wage books and wage slips
  • To Prescribe the powers of Inspectors for purposes of this Act

Case laws

In the case, Sonu v. Municipal corporation of Delhi[3] The Delhi High Court held that the payment of minimum wages cannot be denied to Safai Karamchari workers on the ground that they are working as part-time workers.

In the case, Ramkrishna Ramnath v. State of Maharashtra[4] The Bombay High Court held that under the expression of “Independent person” under section 9, it has a condition of being autocephalous and that doesn’t mean a government servant cannot be considered as an independent person for the advisory board.

In the case, Municipal Council, Hatta v. Bhagat Singh[5] The Supreme Court of India stated that under section 14 the payment for overtime is provided only to the workers who get minimum wage under the Act, it doesn’t apply to the persons getting better wages under other statutory rules.


References:

Minimum Wages Act, 1948 Available Here

[1] 1992 LLR 1 (SC)

[2] 1986 Lab 1C 1890: LLR 1986 Kant 2183.

[3] 120 (2005) DLT 400

[4] AIR 1964 Bom 51

[5] AIR 1998 SC 1201


  1. Labour Law; Notes, Cases & Study Material
Author: M. Preetha

Student: Saveetha School of Law

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