DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE
LAW TO FIX MINIMUM WAGES
(CONTRIBUTION OF THE SUPREME COURT)

SUBJECT
LABOUR LAW ll

NAME OF THE FACULTY

BHARAT KUMAR. R

NAME OF THE STUDENT

SAMUEL SANKEERTH. K
2015057
SEM: Vl
ACKNOWLEDGEMENT
I would sincerely like to put forward my heartfelt appreciation to our Labour Law ll lecturer
Mr. Bharat kumar. R for giving me a golden opportunity to take up this study “Law to fix
Minimum Wages (Contribution of the Supreme Court)”. I have tried my best to collect
information about the project in various possible ways to depict clear picture about the given
project topic.
INTRODUCTION
Our country is facing the problem of unemployment and this lead to work on wages which
are even not able to fulfill the basic needs of workers and their family. Thus, the Minimum
Wages Act, 1948 has been enacted to prevent exploitation of workers and to fix minimum
wages in certain employments. The Minimum Wages Act, 1948 came into force on 15th
March, 1948. The Act extends to whole of India.
MINIMUM WAGES ACT, 1948:
OBJECTIVES
 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
APPLICABILITY:
The Minimum Wages Act, 1948 extends to the whole of India.
ELIGIBILITY
• Permanent employees
• Contract employees
• Casual workers
• People on probation get fixed pay instead of minimum wages.
• Trainees get stipend and not minimum wages
DEFINITION OF WAGES (S.2(H))
 Minimum wages: all remuneration capable of being paid in money terms for work
done if terms of contract were fulfilled
 It 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.
But does not include:
(i) The value of:
(i) (a) any house accommodation, supply of light, water, medical;
(b)any other amenity or any service excluded by general or social order of the
appropriate Government;
(ii) contribution by the employer to any Pension Fund or Provides Fund or under any scheme
of social insurance;
(iii) any traveling allowance or the value of any traveling concession;
(iv) any sum paid to the person employed to defray special expenses entailed on him by the
nature of his employment;
(v) any gratuity payable on discharge.
CONCEPT OF MINIMUM WAGE
• A minimum wage is a compensation to be paid by an employer to his workers
irrespective of his ability to pay.
• “The wage must provide not only for the bare sustenance of life, but for the
preservation of the efficiency of the workers. For this purpose, minimum wage must
provide some measures of education, medical requirements and amenities”.
CONCEPT OF MINIMUM WAGE
• A minimum wage is a compensation to be paid by an employer to his workers
irrespective of his ability to pay.
• “The wage must provide not only for the bare sustenance of life, but for the
preservation of the efficiency of the workers. For this purpose, minimum wage must
provide some measures of education, medical requirements and amenities”.

CONCEPT OF LIVING WAGE

• A living wage is one which should enable the earner to provide for himself and his
family not only the bare essentials of food, clothing and shelter but a measure of
frugal comfort including education for his children, protection against ill-health,
requirement of essential social needs and a measure of insurance against the more
important misfortunes, including old-age.
• A living wage represents a standard of living.
• A living wage is fixed considering the general economic conditions of the country.
CONCEPT OF FAIR WAGE
• Fair Wage is the wage which is above the minimum wage but below the living wage.
• The concept of fair wage is essentially linked with the capacity of the industry to pay.
• The fair wage depends on considerations of such factors as:
(i) The productivity of labour,
(ii) The prevailing rates of wages in the same or neighbouring localities,
(iii) The level of the national income and its distribution, and
(iv) The place of the industry in the economy of the country.
FIXATION OF MINIMUM RATES OF WAGES (S. 3(1)(a))
• The ‘appropriate Government’ shall fix the minimum rates of wages, payable to
employees in an employment specified in Part i and Part ii of the Schedule, and in an
employment added to either part by notification under Section 27.
• In case of the employments specified in Part II of the Schedule, the minimum rates of
wages may not be fixed for the entire State. Parts of the State may be left out
altogether.
• In the case of an employment specified in Part I, the minimum rates of wages must be
fixed for the entire State, no parts of the State being omitted.
• The rates to be fixed need not be uniform. Different rates can be fixed for different
zones or localities.
• Shall review and revise at intervals not exceeding 5 years the minimum rates of
wages
MANNER OF FIXATION/REVISION OF MINIMUM WAGES
• According to Section 3(2), the ‘appropriate Government’ may fix minimum rate of
wages for:
(a) time work, known as a Minimum Time Rate;
(b) piece work, known as a Minimum Piece Rate;
(c ) GuaranteedTimeRate and
(d) OverTimeRate
• Time rate system is a method of wage payment to workers based on time spent by
them for the production of output.
• Piece rate system is a method of wage payment to workers based on the quantity of
output they have produced.
• Guaranteed Time Rate: In this system the payment is at the time rates but adjusted
to the cost of living index.
• Over Time Rate: The augmented pay per hour that an hourly worker is legally
entitled to earn when they put in more than 48 hours of work per week.
MINIMUM RATE OF WAGES (S.4)
According to Section 4 of the Act, any minimum rate of wages fixed or revised by the
appropriate Government under Section 3 may consist of:
 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.
PROCEDURE FOR FIXING AND REVISING MINIMUM WAGES (Section
5)
• Committee Method: The appropriate Government may appoint as many committees
and sub-committees as it considers necessary to hold enquiries and advise it in respect
of such fixation or revision as the case may be.
• After considering the advise of the committee or committees, the appropriate
Government shall, by notification in the Official Gazette fix or revise the minimum
rates of wages.
• The wage rates shall come into force from such date as may be specified in the
notification. If no date is specified, wage rates shall come into force on the expiry of
three months from the date of the issue of the notification.
NOTIFICATION METHOD:
The appropriate Government shall by notification, in the Official Gazette publish its
proposals for the information of persons likely to be affected thereby and specify a date not
less than 2 months from the date of notification, on which the proposals will be taken into
consideration.
• The representations received will be considered by the appropriate Government. It
will also consult the Advisory Board and thereafter fix or revise the minimum rates of
wages by notification in the Official Gazette.
• The new wage rates shall come into force from such date as may be specified in the
notification. However, if no date is specified, the notification shall come into force on
expiry of three months from the date of its issue.
PAYMENT OF MINIMUM WAGES IS OBLIGATORY ON EMPLOYER
(S.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.
CLAIMS(S.20):
The appropriate Govt. may appoint an authority to look into the claims in respect of:
• Payment less than the minimum rate of wages.
• Payment of remuneration for days of rest or for work done on such days.
• In respect of wages for the over-time.
PENALTIES
Offence: Payment of less than minimum wages to the employee or infringes any order or
rule.
Punishment: Imprisonment which may extend upto 6 months or fine which may extend upto
Rs. 500/- or Both..
RELEVANT CASE LAWS
State Of Rajasthan & Another vs Hari Ram Nathwani, 1976 AIR 277
Facts
From time to time the Government of Rajasthan fixed or revised the minimum rates of wages
for employees in the Mica Mines throughout the State of Rajasthan under section 5(2) of the
Minimum Wages Act, 1948. The employment in the Mica Mines is a scheduled employment
within the meaning of section 2(g) of the Act. Eventually the minimum rates of wages were
fixed by the Government by a notification dated the 31 July, 1965, the validity of which was
challenged in the Rajasthan High Court by several employers in the Mica Mines.
The government has appointed committee which Is comprising of board members. But the
committee has appointed a Sub-committee which has given recommendations and
suggestions in the report. The workers felt aggrieved by the notification and filed a suit.
Issues
Whether a Government officer could be appointed on Committee or not?
Whether the report of the Advisory Board was vitiated or not?
Whether the notification is valid or not?
Reasoning
Based on the Shamrao and others v. State of Bombay and others. The Advisory Board has no
power to appoint a rival Sub-committee to the one appointed by the Government and take in
such subcommittee persons who are not members of the Board, as was done in this case.
There is, therefore, no doubt that the Advisory Board committed an irregularity in taking into
consideration the report of the sub-committee invalidly appointed by it.
Conclusion
The Advisory Board has no power to appoint a rival sub-committee to the one appointed by
the Government and take in such sub-committee persons who are not members of the Board,
as was done in this case. There is, therefore, no doubt that the Advisory Board committed an
irregularity in taking into consideration the report of the sub-committee invalidly appointed
by it. Does it necessarily follow from this that the impugned notification dated July 31, 1965
based upon the report of the Advisory Board which in its turn had taken into consideration
not only the report of the committee appointed by the Government but also that of the sub-
committee appointed by the Board is bad. On a careful consideration of the matter we give
our answer in the negative. The irregularity, even characterizing it as illegality, committed by
the Advisory Board in taking into consideration the report of the sub-committee was not such
as to nullify its recommendation contained in its report, or, in any event, the final decision of
the Government contained in the impugned notification.
Thus it was held that the sub- committees cannot be formed by the board without the prior
notice from the government.
The notification is invalid.

The Edward Mills Co. Ltd., Beawar vs. The State Of Ajmer And Another ;
1955 SCR (1) 735
Facts
The petitioners, representing certain tile factories, challenged the validity of the
Minimum Wages Act, 1948, as also the notification issued by the Kerala Government
prescribing minimum rates of wages in respect of employment in the tile industry on the
report. A notification was issued fixing minimum rates of wages for the employees in the
textile industry in the State of Ajmer, under the signature of the Secretary to the Chief
Commissioner and stating that these rates should be deemed to be in force from the 1st of
September, 1952. The Commissioner therefore was not competent to give a fresh lease of life
to the committee which was already dead. The preamble to the Minimum Wages Act as well
as its title indicate clearly that the intention of the Legislature was to provide for fixing
minimum wages in certain employments only and that the Legislature did not intend that all
employments should be brought within the purview of the Act.
Issues
1) Whether the preamble to the Minimum Wages Act as well as its title indicate clearly that
the intention of the Legislature was to provide for fixing minimum wages in certain
employments only and that the Legislature did not intend that all employments should be
brought within the purview of the Act?
2) Whether the chief commissioner has the right to extend the time for the committee to
submit the report or not?
Reasoning
This is to be noted that a committee appointed under section 5 of the Act is only an advisory
body and that the Government is not bound to accept any of its recommendations. however'
power has been given to the "appropriate Government" to add to either part of the schedule
any employment in respect to which it is of opinion that minimum wages shall be fixed by
giving notification in a particular manner, and thereupon the schedule shall, in its application
to the State, be deemed to be amended accordingly.
Conclusion
The court held that the legislative policy was apparent on the face of the enactment which
aimed at the statutory fixation of minimum wages with a view to obviate the chance of
exploitation of labor. The intention of the Legislature was not to apply the Act to all
industries but only to those industries where by reason of unorganized labor or want of proper
arrangements for effective regulation of wages or for other causes the wages of labourers in a
particular industry were very low. Procedural irregularities of this character could not vitiate
the final report which fixed the minimum wages. In our opinion, neither of the contentions
raised in support of these appeals can succeed and both the appeals therefore should fail and
stand dismissed with costs.

Appeals dismissed.

Basti Ram v. State of A.P; A.I.R. 1969, (A.P.) 227

Facts
The petitioners in the Writ Petition are Bidi Manufacturers in the Telangana area of the State
of Andhra Pradesh. The minimum wages would be fixed at Rs. 2 and Rs. 1-85 for Urban and
Rural areas in Telangana area the Government was not justified in fixing the minimum rates
of wages finally as Rs. 2-09 and Rs. 1-88 respectively for Urban and Rural areas of
Telangana area. The cost of living indices in towns in Andhra area are nearly double the
indices in towns in the Telangana area same rates have been fixed for rolling big size Zadi
bidis in Urban areas in Andhra region and for rolling bidis in Urban areas in the Telangana
region.
Issues
The notification is void because it purports to divide the State into two zones, 'Andhra Area'
and "Telengana Area'
Whether the notification is valid or not?
Reasoning
In respect of employees employed in an employment specified in Part II of the Schedule,
instead of fixing minimum rates of wages under this clause for the whole state, fix such rates
for a part of any specified class or classes of such employment in the whole State or part. For
any reasons the appropriate Government has not reviewed the minimum rates of wages fixed
by it in respect of any scheduled employment within an interval of five years, nothing
contained in this clause shall be deemed to prevent it from reviewing the minimum rates after
the expiry of the said period of five years and revising them, if necessary, and until they are
so revised the minimum rates in force immediately before the expiry of the said period of five
years shall continue in force.
Conclusion
The Government had no jurisdiction to fix the minimum wages. But the very settlement
relied upon by the petitioner’s states that it is to be in force till minimum rates of wages are
fixed under the Act. The rates to be fixed need not be uniform. Different rates can be fixed
for different zones or localities.
Petition dismissed.

Nathu Ram Shukla v. State of Madhya Pradesh A.I.R. 1960 M.P. 174
Facts
The applicant has under an agreement, contracted to supply to Mohanlal Hargovind 'Biris'.
The terms of the agreement show that Mohanlal Hargovind was to supply raw materials to
the applicant who in his turn was on his own responsibility as to payment of wages, to engage
workers for the purpose of getting 'Biris' prepared out of the said raw materials. The supply of
'Bins' prepared by the workers employed by the applicant was subject to approval of a person
to be deputed for this purpose by Mohanlal Hargovind. Mohanlal Hargovind's munim was
entitled to check the stock of leaves and tobacco with the applicant. The prosecution case is
that the applicant was 'an employer' in Biri making industry at Jubbulpore to which
the Minimum Wages Act is applicable. It is a fact admitted by the accused that he failed to
maintain registers and record as required under Section 18 of the Minimum Wages Act. The
labourers who took the raw materials from him and supplied 'Biris' which they prepared out
of the said raw material at their respective places of residence could not be said to be 'in
employment in any tobacco or Biri making manufactory' within, the meaning of item No. 3 of
the schedule Part I of the Minimum Wages Act.
Issues
Whether the come under minimum wages act or not?
Whether revision petition can be maintainable or not?
Reasoning
If we follow the rule of harmonious construction as discussed above the word 'manufactory'
used in the schedule has for the purposes of the Minimum Wages Act to be construed in such
a manner as to include within its scope processes of Biri making carried on by the employees
at their respective houses. The employer in this case was manufacturing Biris from the raw
materials supplied to him. The fact that the persons engaged by him did not perform the
entire process of manufacturing Biris at a place over which he had control cannot in view of
the express terms of the definition of the word 'employee' be hold to be material for the
purpose of determining the question as to the applicability of the Minimum Wages Act to the
employer.
Conclusion
An out-worker who prepared goods at his residence, and then supplied them to his employer
was held as employee for the purpose of this Act. It is obvious from the said definition that if
an outworker prepares goods at his own residence and then supplies them to the employer, he
has for the purposes of the Minimum Wages Act to be treated as an employee. It would be
ridiculous to suggest that though he is an 'employee' he is still not in employment of the
employer. If such a person has to be treated as an employee, then the person who engages
him in a scheduled employment for reward or wages must comply with the provisions of
Section 18 of the Act.
It is accordingly the review petition has dismissed.
Public Union for Democratic Rights & ors Vs. Union of India & ors 1982 AIR
1473
Facts
The Asian Games take place periodically in different parts of Asia and this time India is
hosting the Asian Games. It is a highly prestigious undertaking and in order to accomplish it
successfully according to international standards, the Government of India had to embark
upon various construction projects which included building of fly-overs, stadia, swimming
pool, hotels and Asian Games village complex. This construction work was framed out by the
Government of India amongst various Authorities. The case of the petitioners was that the
workers were not paid this minimum wage and they were exploited by the contractors and the
jamadars. The Union of India in the affidavit reply filed Under Secretary, Ministry of Labour
asserted that the contractors did pay the minimum wage of Rs. 9.25 per day but frankly
admitted that this minimum wage was paid to the jamadars through whom the workers were
recruited and the jamadars deducted rupee one per day per worker as their commission and
paid only Rs. 8.25 by way of wage to the workers. The result was that in fact the workers did
not get the minimum wage of Rs. 9.25 per day. The petitioners also alleged in the writ
petition that the provisions of the Equal Remuneration Act, 1976 were violated and women
workers were being paid only Rs. 7/- per day and the balance of the amount of the wage was
being misappropriated by the jamadars. It was also pointed out by the petitioners that there
was violation of Article 24 of the Constitution and of the provisions of the Employment of
Children Act, 1938 in as much as children below the age of 14 years were employed by the
contractors in the construction work of the various projects.
Issues
Whether the rights of the workmen were violated or not?
Whether the action can be taken against the erred officers or not?
Reasoning
The workmen would be providing labour or service against receipt of what is lawfully
payable to him just like any other person who is not under the force of any compulsion. We
are therefore of the view that where a person provides labour or service to another for
remuneration which is less than the minimum wage, the labour or service provided by him
clearly falls within the scope and ambit of the words 'forced labour' under Article 23. Such a
person would be entitled to come to the court for enforcement of his fundamental right
under Article 23 by asking the court to direct payment of the minimum wage to him so that
the labour or service provided by him
Conclusion
Court held that whenever any construction work is being carried out either departmentally or
through contractors, the government or any other governmental authority including a public
sector corporation which is carrying out such work must take great care to see that the
provisions of the labour laws are being strictly observed and they should not wait for any
complaint to be received from the workmen in regard to nonobservance of any such provision
before proceeding to take action against the erring officers or contractor, but they should
institute an effective system of periodic inspections coupled with occasional surprise
inspections by the higher officers in order to ensure that there are no violations of the
provisions of labour laws and the workmen are not denied the rights and benefits to which
they are entitled under such provisions and if any such violations are found, immediate action
should be taken against defaulting officers or contractors. That is the least which a
government or a governmental authority or a public sector corporation is expected to do in a
social welfare state
The petition is allowed.

Bandhua Mukti Morcha v. Union of India & Ors ; 1984 AIR 802
Facts
The Petitioner, Bandhua Mukti Morcha, is an organization dedicated to the cause of release
of bonded labourers. The Petitioner conducted a survey of some of the stone quarries in
Faridabad district near the city of Delhi. In the mines of Sh. S.L. Sharma in Faridabad
District, Haryana, a large number of labourers from different part of the country were
working under inhuman and intolerable conditions. A large number of them were bonded
labourers. The petitioner also mentioned the particulars of labourers who were working as
bonded labourers and prayed that a writ be issued for the proper implementation of the
various provisions of the social welfare legislations.
 The whole atmosphere in the alleged stone quarries was full of dust and it was
difficult for anyone to breathe;
 Some of the workmen were not allowed to leave the stone quarries and were
providing forced labour;
  There was no facility of providing clean drinking water;
 The labourers did not have proper houses, instead they were living in jhuggies made
of piled stones and straw;
 No compensation was paid to labourers who were injured in accidents occurring in
the course of their employment;
 There were no facilities for medical treatment or schooling.
Issues
Whether or not the workmen mentioned in the present case are bonded labourers?
Whether or not the workmen in the present case are entitled to benefits under various social
welfare and labour law legislations?
Reasoning
The Supreme Court took the view that where a person or class of persons to whom legal
injury is caused by reason of violation of a fundamental right is unable to approach the court
for judicial redress on account of poverty or disability or socially or economically
disadvantaged position, any member of the public acting bona fide can move the Court under
Article 32 or Article 226 of the Constitution, so that the fundamental rights become
meaningful not only for the rich and the resourceful but also for the masses who are living a
life of destitution, lack of awareness and resources.
Conclusion
A person acting pro bono publico for enforcement of a fundamental right may move the court
even by writing a letter which can be regarded as appropriate proceedings. Thus, whenever
there is a violation of the fundamental rights any person can move the Supreme Court. The
Court will use its discretion and ordinarily not allow a person to exercise Article 32 until and
unless his or her own right is infringed, however, there is no fetter upon the power of the
Supreme Court.

Express News papers Ltd. V Union of India on 8 January, 1958

FACTS
The recent amendment of the Bombay Industrial Relations Act, 1946, empowers the State
Government by notification in the official Gazette to constitute for one or more industries a
wage board for the State and enjoins these wage boards to follow the same procedure as the
Industrial Court in respect of arbitration proceedings before it and appeals from the decisions
of these wage boards lie to the Industrial Courts which has powers of superintendence and
control over these wage boards and it cannot, under the circumstances be urged that these
wage boards perform any legislative functions.

ISSUES
Whether the decisions of the wage boards are open to judicial review or not?
Whether the principle of audi alteram partem applies to the proceedings before the wage
boards or not?
REASONING
in Ram Singh & Ors. v. The State of Delhi (1). It was held by the Full Court in that case that
though personal liberty is sufficiently comprehensive to include the freedoms enumerated
in Art. 19 (1)and its deprivation would result in the extinction of these freedoms, the
Constitution his treated these constitutional liberties as distinct fundamental rights and made
separate provisions in Arts. 19, 21 and 22, is to the limitations and conditions subject to
which alone they could be taken away or abridged. Consequently, even though a law which
restricts the freedom of speech and expression is not directed solely against the, undermining
of security of the State or its overthrow but is concerned generally in the interests of public
order may not fait within the reservation of clause (2) of Art. 19 and may therefore be void,
an order of preventive detention cannot be held to be invalid.
CONCLUSION
In view of the amended definition of the “newspaper establishment” under Section 2(d)
which came into operation retrospectively from the inception of the Act and the Explanation
added to Section 10(4), and in view further of the fact that in clubbing the units of the
establishment together, the Board cannot be said to have acted contrary to the law laid down
by this Court in Express Newspapers case, the classification of the newspaper establishments
on all-India basis for the purpose of fixation of wages is not bad in law. Hence it is not
violative of the petitioners’ rights under Articles 19(1)(a) and 19(1)(g) of the Constitution.
Financial capacity of an all-India newspaper establishment has to be considered on the basis
of the gross revenue and the financial capacity of all the units taken together. Hence, it cannot
be said that the petitioner-companies as all-India newspaper establishments are not viable
whatever the financial incapacity of their individual units. After amendment of Section 2(d)
retrospectively read with the addition of the Explanation to Section 10(4), the old provisions
can no longer be pressed into service to contend against the grouping of the units of the all-
India establishments, into one class.”
It has analyzed different theories enunciated by economists on wage fixation and had gone in
depth studying the I.L.O. Conventions, various Committees Reports and the position
regarding the wage structure prevailing in other countries. By an Act of Parliament, a Wage
Board was constituted to frame a wage structure for all journalists working in the paper
industry. In this case, the Wage Board did not pay any regard to the capacity of the industry
to pay while recommending wage fixation to the Government and therefore, its award was
challenged as being bad and unreasonable. Excerpts from the judgement, delivered by
Bhagwati J are as follows: Broadly speaking wages have been classified into three categories
viz. (1) the living wage (2) the fair wage and (3) the minimum wage.
Therefore the petitions were allowed and the appeals were disposed.

Standard Vacuum Refining Co. v Its Workmen, AIR 1961 SC 895

FACTS
The workmen claimed bonus for the year 1956 equivalent to nine months' total earnings on
the ground that the employers had admitted their capacity to pay and that there was a big gap
between the wage actually received and the living wage. The employers contended that they
were paying the workmen a living wage and they were not entitled to any bonus. The
employers relying mainly on the Report of the Textile Labour Committee, 1940, contended
that if the living wage in 1940, i.e., Rs. 55/- was multiplied by 35 (due to rise in prices) it
gave Rs. 192.50 as the living wage in 1956 and they were paying their workmen at a higher
rate. The workmen relied on the recommendations of the Indian Labour Conference, 1957, to
show that Rs. 209.70 approximated to the standard of the need-based minimum wage and that
the average wage paid by the employers was nothing more than this. The Tribunal held that
the wages paid were fair but that there was still a gap between the actual wage and the living
wage and awarded bonus equivalent to five months' basic wages.
ISSUES
Whether the employers has paid the minimum wages according to the act or not?
Whether the suit is maintainable or not?
REASONING
The Sree Meenakshi Mills Ltd. v. Their Workmen it will the merits of the contention that the
appellant is paying the respondents a living wage. The theory of ” hire and fire ” as well as
the theory of ” supply and demand ” which were allowed free scope under the doctrine of
laissez-faire no longer hold the field. In constructing a wage structure in a given case
industrial adjudication does take into account to some extent considerations of right and
wrong, propriety and impropriety, fairness and unfairness.

CONCLUSION
It is also true that unreasonably high or extravagant claims for bonus cannot be entertained
just because the available surplus would justify such a claim. As has been observed by the
Labour Appellate Tribunal in Burmah-Shell Oil Storage and Distributing Co. of India Ltd.,
Bombay v. Their Workmen care must be taken to see that the bonus which is given is not so
excessive as to create fresh problems in the vicinity that upset emoluments all-round or that it
creates industrial discontent or the possible emergence of a privileged class.
The tribunal has considered all the relevant factors and has come to the conclusion that five
months' bonus would meet the ends of justice. We do not see any reason to interfere with this
award.
Thus the appeal has dismissed.

The Workmen of Reptakus Brett Co. Vs. Reptakos Brett Co Ltd 1992 AIR
504
FACTS
The first application was filed on behalf of the workmen seeking a direction to the
respondents in the petition to provide regular wages and other benefits which were paid to
other employees working with the respondent Company while the latter was filed for
claiming wages payable under Section 17B of the Industrial Disputes Act, 1947.
As the Company has decided to reinstate the workmen instead of paying dues Under Section
17B of the Industrial Disputes Act, the workmen shall be paid wages at par with unskilled
permanent workmen or the statutory minimum wages whichever is higher. If no work is
provided to the workmen by the employer, they shall be paid wages @ Rs. 2,500/-per
month.These wages shall be paid by the employer and accepted by the workmen without
prejudice to their rights and contentions in the petition. The arrears payable to the workmen
on account of nonpayment of wages of Rs. 2500/-per month, when work was not provided to
them, after the order of this Court dated 29.8.2006, shall be paid within a period of four
weeks from today. The Tribunal decided the above issue in favour of the Company and by its
award dated October 14, 1987 abolished the existing slab system of DA and directed that in
future dearness allowance in the Company, The position which emerges is that in the year
1959 the Company on its own introduced slab system of DA. In 1964 in addition, variable
DA to the limited extent was introduced but the said limit was removed in the 1969
settlement. The said DA scheme was reiterated in the 1979 settlement. It is thus obvious that
the slab system of DA introduced by the Company in the year 1959 and its progressive
modifications by various settlements over a period of almost thirty years, has been
consciously accepted by the parties and it has become a basic feature of the wage structure in
the Company. 6 the workmen challenged the restructuring of Dearness Allowance to their
prejudice by the management.
ISSUES
Whether the demand of the Management for re-structuring of the dearness allowance scheme
is justified, if so, to frame a scheme?
Whether the Company is entitled to re-structure the DA scheme by abolishing the slab system
or not?
REASONING
The Statesman Ltd. v. Workmen, [1976] 3 SCR 228 contended that so long as there is "some
basis, some materi- al to validate the award" the "jurisdiction under Article 136 stands
repelled". The Tribunal and the High Court, in this case, has acted in total oblivion of the
legal position as propounded by this court in various judgments referred to by us. Manifest
injustice has been caused to the workmen by the award under appeal. We see no force in the
contention of the learned counsel.
CONCLUSION
The Supreme Court held that the wage structure can be divided into three categories: the
basic minimum wage which provides bare subsistence and is at poverty level a little above is
the basic wage fair wage, living wage as follows., and the court held that was not justified m
abolishing the slab system of DA which was operating in the Company for almost thirty
years. We allow the appeal and set aside the award of the Tribunal and the judgment of the
learned Single Judge in the writ petition and of the Division Bench in the Writ Appeal. The
reference of the Company on the issue of re-structuring of the dearness allowance is declined
and rejected. The Appellant-workmen shall be entitled to their costs through- out which we
assess at Rs. 25,000.
Thus the appeal allowed.
Hindustan Times Ltd. V Their Workmen, AIR 1963 SC 1332
FACTS
62 the employer challenged the wage structure and fixation of Dearness Allowance by the
industrial tribunal on the ground that the principles adopted were improper. It appears that
when the dispute was before the Conciliation Officer, Delhi, for settlement an interim
agreement was arrived at between the parties, which the management agreed to give certain
interim reliefs, ranging between Rs. 6/- to Rs. 10/- per month from the month of November
1957. One of the terms of the agreement was that this payment . the matters in dispute are the
questions of the wage scale, the dearness allowance and the adjustment of existing employees
into the new scales. It appears that from 1946 onwards the Company's workmen have had a
consolidated wage scale, no distinction being made between the basic wage and the dearness
allowance.
ISSUES
Whether all the above demands should be made applicable retrospectively or not?
What directions are necessary in this respect?
REASONING
in French Motor Car Co., Ltd. v. Its Workmen ((1962) 2 L.L.J. 744), what adjustment should
be given is to be decided when fixing wage scales whether for the first time or in place of an
old existing scale has to be decided by industrial adjudication after consideration of all the
circumstances of the case. It may well be true that in the absence of any special
circumstances and adjustment of the nature as allowed in this case by allowing special
increment in the new scale on the basis of service already rendered may not be appropriate.
CONCLUSION
The fixation of wage structure is among the most difficult tasks that industrial adjudication
has to tackle. On the one hand not only the demands of social justice but also the claims of
national economy require that attempts should be made to secure to workmen a fair share of
the national income which they help to produce, on the other hand, care has to be taken that
the attempt at a fair distribution does not tend to dry up the source of the national income
itself. On the one hand, better living conditions for workmen that can only be possible by
giving them a "living wage" will tend to increase the nation's wealth and income on the other
hand, unreasonable inroads on the profits of the capitalists might have a tendency to drive
capital away from fruitful employment and even to affect prejudicially capital formation
itself. Thus the appeals were allowed.
U. Unichoyi and others v. State of Kerala, 1962 AIR 12
FACTS
The Government of Kerala appointed a Committee in exercise of its powers conferred by
clause (a) of sub-section (1) of section5 of the Minimum Wages Act, 1948. to hold enquiries
and advise the Government in fixing minimum rates of wages in respect of employment in
the tile industry and nominated eight persons to constitute the said Committee under section 9
of the Act. The present petition was filed under Art. 32 by the nine petitioners who represent
six tile factories in Kerala. The petitioners allege that the minimum wage rates fixed by the
notification are very much above the level of what may be properly regarded as minimum
wages and it was essential that before the impugned wage rates were prescribed the
employers' capacity to pay should have been considered. Since this essential element had not
been taken into account at all by the Committee as well as by the respondent the notification
is ultra vires and inoperative. According to them the burden imposed by the notification is
beyond the financial capacity of the industry in general and of their individual capacity in
particular, and this is illustrated by the fact that nearly 62 tile factories in Trichur closed soon
after the notification was published.
ISSUES
Whether the notification is valid or not?
Whether the act is constitutionally valid or not?
REASONING
The Act does not lay down any reasonable procedure in the imposition of restrictions by
fixation of minimum wage and so authorizes any procedure to be adopted which may even
violate the principles of natural justice. Bijay Cotton Mills, Ltd. Vs state of Ajmer this time
the crucial sections of the Act, namely, sections. 3, 4 and 5 were attacked, and the challenge
was based on the ground that the restrictions imposed by them upon the freedom of contract
violated the fundamental right guaranteed under Art. 19(1)(g) of the Constitution.
CONCLUSION
The Minimum Wages Act purports to achieve is to prevent exploitation of labour and for that
purpose empowers the appropriate Government to take steps to prescribe minimum rates of
wages in the scheduled industries. In an underdeveloped country which faces the problem of
unemployment on a very large scale, it is not unlikely that labour may offer to work even on
starvation wages. The policy of the Act is to prevent the employment of such sweated labour
in the interest of general public and so in prescribing the minimum rates, the capacity of the
employer need not be considered. What is being prescribed is minimum wage rates which a
welfare State assumes every employer must pay before he employs labour.
Thus the petition has dismissed.

State Of Gujarat & Ors vs Pwd Employees Union & Ors, 9 July, 2013

FACTS
Labour and other Unions made representation to the Government making demands and issues
relating to daily wage workers of different departments of the Government. The State
Government constituted a committee under the Chairmanship, Minister of Road and Building
Department. The Committee was constituted for studying of the the wages of daily wage
workers and work related services and facilities provided to the daily wage workers who are
engaged in the building maintenance and repairing work in different departments of the State
The recommendations of the Committee were accepted and accordingly the State
Government resolved to provide the benefits of the scheme contained in the Resolution 17th
October, 1988. Therefore, what we find is that the Committee has not limited the
recommendation to the daily wage workers working in building maintenance and repairing
work in different departments of the State. The State Government vide its Resolution dated
17th October, 1988 has not limited it to the daily wage workers working in building
maintenance and repairing work. What we find is that the Resolution dated 17th October,
1988 is applicable to all the daily wage workers working in different departments of the State
including Forest and Environment Department performing any nature of job including the
work other than building maintenance and repairing work.
ISSUES
Whether the report should be limited to certain groups or not?
Whether the committee is constitutionally valid or not?
REASONING
The case of A.Uma Rani related to regularization of services of irregular appointees. In the
said case this Court held that when appointments are made in contravention of mandatory
provisions of the Act and statutory rules framed therein and in ignorance of essential
qualifications, the same would be illegal and cannot be regularized by the State. The
Secretary, Forest and Environment Department of the State of Gujarat by his order dated 3rd
May, 2008 held that initially the entry of the daily wagers do not suffer from any illegality or
irregularity but is in consonance with the provisions of Minimum Wages Act. Therefore, the
question of regularization by removing procedural defects does not arise.
CONCLUSION
the appellants should be directed to grant the benefit of the scheme as contained in the
Resolution dated 17th October, 1988 to all the daily wage workers of the Forest and
Environment Department working for more than five years, providing them the benefits as
per hour. The benefit should be granted to the eligible daily wage workers of the Forest and
Environment Department working for more than five years including those who are
performing work other than building maintenance and repairing but they will be entitled for
the consequential benefit w.e.f. 29th October, 2010 or subsequent date from which they are
so eligible within four months from the date of receipt or production of the copy of this order.
The appeals stand disposed of with the aforesaid observation and directions to the appellant-
State and its authorities.

National Thermal Power Corporation Limited vs Bhasin Construction Pvt

Ltd on 7 March, 2013
FACTS
The appellant, National Thermal Power Corporation Limited (NTPC) is a Government
Company registered under the provisions of the Companies Act, 1956. It is engaged in
construction/project for generation, operation, transmission and maintenance of super thermal
power projects in India. in the year 1978, the NTPC had invited tenders for the work of
construction of bridges and fly-overs for merry-go-round (M.G.M.) railway system and
sidings for the Singrauli Super Thermal Power Project. The said construction work was to be
carried out both in the Mirzapur District of Uttar Pradesh and the Sidhi District of Madhya
Pradesh. In the bid offered by the Construction Company, it had quoted the 'fair wages'
payable to the skilled, unskilled or semi-skilled labourers on the date of the settlement of the
contract at Rs.2.70/-. The then existing rates of ‘minimum wages’ payable to the labourers as
per the governing laws in the States of Uttar Pradesh and Madhya Pradesh were Rs.6/- and
Rs.2/- respectively.
ISSUES
1) What were the minimum wages for unskilled labour in Madhya Pradesh during the
relevant period?
2) What has been the effect of the increase in minimum wages on fair wages?
3) Is the Claimant Company entitled is more payment, even if they did not pay more wages to
unskilled workers on account of such escalation in wages?
REASONING
Schedule ‘D’ to these General Conditions of the Contract pertains to the minimum wages
which are contemplated as per ‘Payment of Minimum Wages Act’ as notified by the
appropriate State Government applicable to the concerned project site.
CONCLUSION
The Supreme Court has concluded that the difference shall be calculated between the ‘fair
wages’ paid by the Construction Company before issuance of the notification and the
increased minimum wages after issuance of the notification and if it is calculated in that
manner, what requires to be paid is Rs.1.03/- after making necessary adjustments as provided
under second proviso to Clause 53- A(b). However, the learned Division Bench had
erroneously calculated the amounts payable based on the difference of minimum wages at the
time of submission of tender forms and as increased by the Notification. The aforesaid
amount shall carry interest at the rate of 9% per annum from the passing of the Award, dated
07.05.1986, till the date of actual payment.
Therefore the appeals are partly allowed.