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ourt i 9
The Minimum Wages Act, 1948

Rking the inspiration from the resolution of I.L.., the Minimumn Wages
Act, 1948 (Act No. XIof 1948) was passed for the welfáre of labourers. The
Act has been enacted to secure the welfare of the workers (especially the
sweated and unorganized workers) in a competitive market by providing for
aminimum limit of wages. Like other branches of labour legislation, the
security of industrial peace and efficiency may be obtained by using this
Act It is enacted as an element of public policy and moral justice.
Objectives of the Act
Article 43 of the Constitution (Directive Principles of State Policy) aims to
provide living wage' to all the workers throughout the country. Gazette of
Indka 1946at Page 224 explains the objectives of the Minimum Wages Act,
1948 as follows: "The justification for statutory fixation of minimum wages
is obvious. Such provisions which exist in more advanced countrie_ are even
more necessary in India, where workers' organizations are yet poorly
developed and the workers' bargaining power is consequently poor.
The Preamble of the Act states the object of the Act: *Whereas it is
expedient to proVide for iXing minimum rates of wages in certain
emptoyments." The legislature undoubtedly intended to apply the Act to
those industries or localities in whch, by reason of causes such as unorganized
labour or absence of machinery for regulation of wages by collective
bargaining. the wages paid to workers were in the light of the geperal level
of wages and subsistence level inadequate [Ms. Bhikua Yamasa Kshatriya
vSangamner Akola Taluka Bidi Kamgar Union AIR 1963 SC 806).
The capacity of the employer need not be considered as the State assumes
that every employer must pay the minimum wages for the employee's labour
(Crown Aluminium Works vTheir Workmen AlR 1958 SC 30], even though
the labourers on account of their poverty and
helplessness are willing to
Work on lesser wages. The restrictions on employer,
to some extent with the freedom of trade or though they interfered
business guaranteed under Art.
[177]
 of Cotton various
live[People': It Schedule
of appropriate governments
not power of andclasses it of cases numbertheemplovment
interest of
India. Açt. maintainauthorities
lessrest Wages expres
to rate althouch
pavment
is rate: apprentices.
employment. and this
[Bijay in right 1473]. 1]. it delegates
time or particular at of
Constitution theholiday wages
days Minimum
the employed [Sec.country, time
localities under to being
their SC thein
thethe
whole the and
in Constitution minimum cash, fix Scheduled required forwages.
appropriate
imposed 1982 of employment guaranteed
and authorize to fixed of
Inspectors
of enumerated theAct to
are discretion in weekly remuneration
paymnent of
labour in kind Government the capable
workerstheAIR employment
occupations, beenaremanner. overtime
1948
extends
to in The children
paid of
of variations (a) in any a 2(h)
andthe level. to
be partly for haveAct of of
Labour 33]. the21 India
IILaw- theother the of: a
(C) Government to prescribed
appointment remunerat
reasonable
of the to Art. and fixation adolescents,
shall regardthis
provide outor of Sec.
19(6)SC to denial of in
which
may,any
national
from rate;different or
appropriatewages
arising or
wages, in
Union
1955wagesofviolative other Government
wages wholly by days
to piece in minimum given
Art. a Act,emptoyments
cases
extended on varying the to wages covered
the
are AJR was and appropriate for claims
of such of
by minimumv Act foradults, day, in "wages"way
Wages wages for minimum that either the rate
Constitution,
protected
Ajmer Delhi andRights certain geographicaltoo rate, / overtime
empowers
provides
records
establishments on
the Central requires which decide bymoney.
dignity be minimum provides for overtime wages, work minimum
done Act be
New Democratic theinGovernment, that
of Minimum
applies
to the of should
of of and a and of and also
public the26-30, b) l14 of of respect
[Sec, and work thedefinitionin
in human Features
StateNon-payment Act workAct empowers
minimum hours
Act payment Act
registers
terms
of
the projects Act the fix to wages;
an hearthe under Wages
v
of general The Secs.The (d) The The The The thanof
Ltd basicfor the of to legislate of of in t¡ or the
19(1Xg) Salient viewpossible Wages
t
178 Mills Asiad Union
with under2 3) 4) 6) (6Y per Y
the In to As Act:
 ( 3hatI
179 implied, excludedanyPension/
light, to by discharge.by categories:
is minimum highest anyminimum
wages Fairminimumthe ånions
which the thiem 2003
Industrial
or
employment of
paidhim adopted and with wages. by demand rescue
of Government.
value sumon subsistence
for
minimum
with acquired
no txat industry
or supply
amenity/servicetowards entailed structure
the wages of have to
by 2000
express on three the level/stands living adopted
any payable not
allowance/
accommodation, and and concept
). who' comÃs an
his below are could
1948 employment, employer expenses intoSe
insurance; Çonsiderations bare wage wage
The The are
beiu in
wage-st
criteria/pro
of appropriate wage wageworkers,State
respect gratuity divided 'p0or". etc.)the(see
house. bargaining,
Act, providesliving acomfort Act.
other travelling of fair However, fair
'needs' The fatof [L.C.
in allowance. special
of social levels jewellery, Wages
and
wage, and andThe
Wagesof employed
employment. anythe contribution
house any be
which
the
at
wages. the2000
terms employment; can between these cloth
'middle' bargaining.
wage
aforesaid collective oy
or of includeof defray Industry:
structure
comes living position. Minimum or determi
considerati
Minimum
the rent anyattendance,
order scheme wage'
Authorities!
Adjudicatory demarcatefood,
TV.
living genuinedi'h'ou,
person include
(if suchhouse to
not concession; stands which understand 'rich',(car, [C.L
special employed Minimum
line-level.
povety
at the of
payable Fund/any wage viz. middle thecollective
andthe in
a in does his in wage' wants
needs, beyond capacity Authori
not wage'
The to doneincludesmedical or of Structure the wageto metaphoric
standard that ijustunderco relevant
be fulfilled) does general also person
travelling nature
Provident and
wage,Living possible
can the noted nó their hy,
shouldwork basic
speaking 'Fair thehis represent
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WagesWageswater, Wages One satisfyfulill have fhnli
thethe the the the be with for Discuss
It are of by not
a
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Traming
has may whoemployers
(3) (4) (5) Wage Broadly is in can wagés workers
(2 B fb o It wageshould wages It and
one 1.
 180 Labour Law- I|

(A) Minimum Wages?

Th minimum wage is the starting point of wage policy. It is not defined in
the Act presumably because it would not be possible to lay down a uniform
minimum wages for all industries throughout the country on account of
different and varying conditions prevailing from industry to industry and
from one part of the country to another [Hydro (Engineers) Pvt. Ltd. v The
Workmen AIR 1969 SC 182]3
The minimum wage is sufficient to meet a
worker's bare necessities
However, it does not mean a wage that enables the workr to cover his bare
physical need and keep himself just above starvation. A
must provide not merely for the bare subsistence of life but minimum wage
of the efficiency of the worker, and, so it for the preservation
of education, medical requirements and must also provide for some measure
That means minimum wage is not justamenities (Committee on Fair Wages].
**The Act contemplates that minimumsubsistence
wage.
scheduled industries with the dual objectwageof rates should be fixed in the
maintenance of the worker and his
family and
providing subsistence and
a worker Unicha v State of Kerala AIR 1962preserving his effiCiency as
capacity of the employer to pay is irrelevant in SC 12]. However, as the
addition shall be made to the fixing minimum wage, no
would take the minimum wage near the components of the minimum
lower level of the fairwage,wage.
which
caskn Workmen of Reptakos Brett &
340(SC)., the Supreme Court has Co. Ltd. v Management (1992) I LLJ
that a worker's wage has the taken a progressive approach, by
laws and is not just apart of the of collective bargain under theholding
force
labour
employee. It opined that each contract between the employer and the
the anvil of social category of wage structure has to be
justice, which is the live-fibre of our tested at
following ive
Indjan Labour norms have been accepted by the society today. The
Coníference (held in New Delhi Tripartite Committee of the
Supreme Court in Standard Vacuum in 1957) and approved by the
follows: Refining Co. case. The norms are as

2.
What do you
fair wage? understand by minimum wage? How would you
Explain clearly the concepts of distinguish it from
[C.L.C.-2000)
minimum wage, fair wage and Iiving
[L.C.II- 2002]
The contents of the (L.C.II- 2000-2005) [L.C.- wage.
expression
expand and vary in every 2001/2002/2005/2006]
living wage, fair wage' and
and would keep expanding
on changing with theeconomy. These expressions minimum
are not
wage'
economy." Comment. circumstances and growth of industrystatic
and
 Furthermore
toto
at
least minimum the thesense
comparable
trades countr be shelter.
workmen be mustsame
of earning also wagebe thewagethe a canwage
of
below
minimum
wage.wage,of position in
are in in must class must shall bestwherevertowards capaçity adopte
fairworkmen wagethe "The higher short industry
minimumliving
scalesto
neutralize wider
the the floor minimum
food,
wages the the which at family, could
at economic
the is to fairand Nothing the
wage.wage rate thethroughout for in related observed: a step an theabove a the princip
and "The
with A
thatsuch towards case
wagesimilar
in appropriate
capacity wage employer, adjudicators conditions
Theor thecalled
recent
years,
the
minimum wage fair family goal. his a
andestablished, settled:
them
so
as tasks
in observed: for is observed: limit
settled be present deci
if A work thusminimum point wage wage. be the
living(i) for is the needs had approximating
obviously
rate standard is
earning lowest
competitive broadly are
I|Law-
Labour commodities." wages': current similar childrenwage is
the Congressstarting livingisis the with
of
to broadly
means
for which and fair
wage Court of (1947-48) wage
wage on What
the
concept fix the between fair
position
is
arbitrators, A the
answ
payment fair wage wage." full must may only
between fairrateA for a of wage wage, his Union the wage. fair
fair
level,
wages"?
ofin necessary Apexprovide A and a of whatnot your
prices of the(ii)rate education as higher living
under
paying AA wage
essential his belongs,
lies financial
living worker fair Wages ... process
Suppo
degrees wage,
fairby depend "Fair
'average toneighbourhood.
trades.
predominant
the Trade ireducible
stands equal agreements, if paid
alien to exceeding
case,
It
workload.
consideration." paythe a wage set
become highand he the the minimum Fair of thethe
be spiralling in twois of the National to of
be capable be equally
will by wages
which which and of
to rise it generality
Metals care
sufficiently to of to realization
industry on fair
the
shall
through
limit
mean
said may applies
if the rate efficiencycollectivedeemedCommittee This
(B)
Fair
Wages medical to event,
the according be is fair
be it
of price wage, sense,
and to Kamani establishment
Indian the can be upworkerlower
goes limitpay.
you
determin
light Pigou trade equal a and into an to set do
realistic the any like
therefore, the
fair narrower at
clothing, The
of beprogressive wage
shown no
standards the to What
182 the patly wage,
Prof. same is in In i.e. not capacity in paidthetaken by capacity
treated,shtould The and upper
industry
The it and fair paid time fixed Iiving which While
wage
in be if but be be the
be
4.
 The Minimum Wages Act, 1948 183

of the industry but, on its future prospects. Between these two limits the
e actuaf wages will dependon a consideration of thefollowing factors, viz.
iY the productivity of labour;
st A the prevailing rates of wages in the same or similar occupations in
the same or neighbouring localities;
(ii) the level of the national income and its distribution; and
i) the place of the industry in the economy of the country.
principle
Thus, in case of fair wage, unlike the minimum wage, besides theindustries
of "industry-cum-region" (wages scale prevailing inthethe comparable
financial burden must
in the region), the company's capacity to bear observations made in the
receive due consideration. But mere hopeful
director 's annual report cannot be basis for awarding increased wages becu_e
such observations are sometimes made to inspire hope and confidence in
shareholders and they cannot be a substitute for actual audited figures [Sangam
Press v Workmen AIR 197S SC 203S]. When a dearness allowance is fixed
as apart of the fair wage it will have to depend upon the paying capacity
of the employer.
On the question of how fair wages should be determined, the Apex Court
observed that in determining the paying capacity of the industry the tribunal
and allowances
must ascertain the income and also the permitted deductions on account
in order to be able to come to a realistic figure. The expenses
the establishment, rent,
of the purchase of raw material, maintenance of are
públic charges, and the marketing expenses besides other such expenses
deductible and what not, varies
to' be deducted. However, what expenses are should be allowed for payment of
form industry to industry. No deductiondepreciation or for making provision
income tax or for allowances made for
reserve. Expenses on account of wage bill including dearness allowance,
for properly determining the paying
bonus, gratuity, etc. are deductible. After
industry the tribunal will have to proceed, to fix fair wages
capacity of the wages and dearness allowance.
which would include the fitment, scale of
tribunal will then have to determine as to from which date the
The
effect of the wages so fixed is to be deemed operational [S.A.EL.
retrospective AIR 1978 SC 1113].
Works v State Industrial Court, Nagpur
fair' rates of wages the courts or tribunals take into
While fixing and where the Government has
consideration the minimum rates of wages
minimum rates of wages then the courts or tribunals ascertain
nÍt fixed the minimum rates of wages. In fact minimum
for thenselves what would be the courts/tribunals.
wages are fixed by the Government and not by the
rates of are the minimum rates of wages for
the
The latter merely ascertain what

how far the 'capacity of the industry to pay' is relevant in determining

5. Discuss (C.L.C.- 2003]
the wage structure in the 'organized' sector?
 184 Labour Law- I|

purpose of deciding fair wages' (Transport Corpn. of India v State of

Maharashtra (1993) IILLJ 365 (Bom.)].
(C) Living Wages
Living wage' is one appropriate for the normal needs of the
employee, regarded as a human being living in a civilized corHmunity,
must provide not merely for the absolute essentials such
averageit
as
clothing. but for a condition of frugal comfort estimated byfood, shelter and
curTent human
standards. It must be sufficient to insure the workmen food, shelter,
frugal comfort, provision for evil days, etc. as well as regard for clothing.
skill of an artisan if he is one. Marriage is the special
which does not allow of the usual fate of adult man. A wage
matrimonial
about five persons in a home would not be condition and the maintenance of
Higgins, Australian Common Weatth Court of treated as a living wage Justice
Thus, in short, a 'living wage' means a Conciliation, Harvester Case].
reasonable needs of the average employeesum sufficient for the normal and
living
under consideration is done. in a locality where work
The Bombay Textile Labour
British Government in 1937, gave Inquiry Committee, appointed by the then
*What we have to attempt is not ana report on wages in India. It
concept. Any definition of a exact measurement of a well wrote:
rather than logical. Any standard of living is defined
completely objective and
necessarily
minimum after all, is arbitrary and descriptive
the iving wage
the standard, absolute relative.
and it has meaning cantobe attached to a term like
No
Incircumstances
of the
particular necessarily
time and
be judged in the
light of
different
living wage, but countries, country."
estimates have been made of the
the estimates
investigator. Estimates may be classified
vary according to the
point amount of a
of
into at least three view of the
the amount
(i) the amount necessary for mere subsistence; groups, viz.
(iiy the amount necessary for health and decency; and
necessary to provide a standard of
Wage-Fixing Machinery, I.L.O.).
Article 43 of the comfort [The Minimum
Constitution
wage': «The State shall
economic organization endeavour
of India
stresses the
industrial or or in any to importance
secure,
other way, to all by suitable of 'living
otherwise,
decent standard of life andwork, aliving wage,of legislation
workers, or
opportunities
framers of the
"
Besides enjoyment conditions
full
the agricultural,
ensuring
leisure of work
and social and a
life to the Constthroughout
itution normal
of India wages payable to the cultural
workers wanted to
the country. provide adecent worker, the
6.
Write a short note on: standard of
Distinguish between livingLiving
wages.
 The Minimum Wages Act, 1948 185

The Supreme Court in Kamani Metals case observed: "The living wage
is not only sufficient to provide a standard family with food, shelter, clothing.
medical care and education of children, but also fair measure of frugal
comfort with an ability to provide for old age and evil days. Thus, living
wage is the goal to which all the wage-related laws and policy measures
lead." A somewhat similar definition of the living wage was given by the
Fair Wage Committee in its report published by Govermment of India, Ministry
of Labour in 1949.
Igmay be noted that in determining the living wage, like in case of fair
wage, the paying capacity of the industry has to be given due consideration.
tEADING CASE: CROWNALUMINIUM WORKSVTHEIRWORKMEN
AIR 1958 SC 30)
Facts and Issue - In this case, the appellant company's pay structure
consisted of the following items, viz. (i)) basic wage (ii) dearness
allowance (ii) special or extra bonus consisting of two hours'
coñcession (iv) facility bonus or special allowance and (V) food
concession, On March 28, 1952 a notice was given by the appellant
to its workmen indicating that the factory hours have been reduced
and the facility bonus and earness attowance have atso been reduced
because some economy measures had become necessary owing to
the financial set-back of the appellant. The workmen resisted these
adjudication.
proposals. The matter reached industrial tribunal for
The Tribunal did_not see any prospect of improvement in the
concession,
appellant's financial position and held that the two hours' of bounty
facility bonus and the food concession were in the naturewithdrawn
gratuitously paid by the appellant and as such could beopined that
Appellate Tribunal, however,
ewby it at its pleasure. Theretrenchment
ás aresult of substantial effected by the appellant the
improved.
have
financial position of the relevant unit of the appellant by the workmen
Further, the so-called concessions have been enjoyed
as a part of their basic wages
for a pretty long time as of right andthey have become a term of the
and dearness allowanceand as such
conditions of their service.
wo The issues were:
given industry be
YCan the wage structure fixed in a workmen?
hever revised to the prejudice of the
payments
iWhat is the true nature of the concessional
made bythe appellant to its workmen?

determination with the help of the case - Crown

7. Discuss the principles of wage
WWorkmen. [L.C.- 2002/2006]
Aluminium Worksv Their
186 Labour Law- Il

Observations and Decision -The Supreme Court observed that the

old principle of the absolute freedom of contract and the doctrine
of laisse fuire have yielded place to new principles of social welfare
and common good. Although social and economic justice is the
ultimate good of indnstrial adjudication, its immediate objective in
an industrial dispute as to the wage structure is to settle the dispute
by constituting such a wages structure as would do justice fo the
interests of both labour and capital, would establish harmony between
them and lead to their genuine and
the task of production. It is obvious thatwhole-hearted cooperation in
and tabour would lead to more production cooperation between capital
and that naturally helps
nat/onal economy and progress.
In achieving this immediate
objective, industrial
takes into account several principles adiudication
such as, for
principle of comparable wages, productivity of the tradeinstance, or
the
cost of living and ability of the
industry to pay.
industry.
these and other relevant The application of
principles leads_to
different categories of wage structures viz. the constitution of
and minimum wage. These
terms
living
or their variants,wage, tair wage
decency level, the subsistence level and the the comfort or
level cannot and do not
even in different mean the same thing poverty or the floor
in at countries nor
It is very
industries in the same country.
difficult to define or even to
content of these
natYonal economy different
describe accurately the
concepts.In
the contents the case of an
expanding
expand and vary. What may beof these expressions are also apt to
in oDe country
may 'be living wages fair wages in a
cÐuntry. in the same particular industr
Similarly,
today may cease to be tairmay be fair wagesinindustry
what
a
in another
in future, and may border on given industry
Industrial
relevant principles adjudication has the minimum wage
wage structurenaturally
dispute so as to do ofjustice and
to apply
carefully the
to both labour decide every industrial
The Supreme and capital.
Courtsaid
which fates the problem of that in a
developing country like India
labour may offer to work unemployment on a very
employment of labður on even on large scale the
starvation
favoured in a modern starvation wages cannot beWages, but the
cannot
his maintain his enterprisedemocratic welfare State. Ifencouraged
an
or
employee
would have nobelow even a barewithout cutting down the employer
right to conduct subsistence or wages ot
enterprise has a his minimum wage, he
bare right to exist unless enterprise
at least a
it is able toon such terms. NO
it
nminfirst
As regards the imumn wage. pay its
workman
would not be correct question the
to say that inSupreme Court
no observed that
circumstances the wage
 The Minimum Wages Act. 1948
187

structure be revised to the prejudice of prejudice workman. But no wage

of workman if
stfucture can or should be revised to the
structure in questlon falls in the category of the bare subsistence
the existing wage structure falls in a
or the nminimum wage. If the
the employer would be entitled to claim its
higher category than of the workmen provided a case for
revision even to the prejudice
made out on the merits to the satisfaction of the
such revision is
Tribunal.
Tribunal must keep in mind some important practical
The wage structure is likely
considerations. Substantial reduction in the resulc in disharmony
workmen and may
to lead to discontent amonghis employees; and that would never be
between the employer and whole. On the other hand, in
industry as a
for the benefit of the of possible discontent amongst
value or importance
assessing the
from the reduction of wages, the Tribunals .will
workmen resulting industry is burdened with
consider the fact that if any
also have to financial capacity, its very existence
beyond its
awage structure that would ultimately lead to unemployment.
may be in jeopardy and
it has to be considered by the Tribunal
In the present case, revision) whether the employer's financial
(while considering such sufficiently met by retrenchment of workers
difficulties could not be may also be considered whether
employer. It
already done by the of atemporary nature or of a permanent
are
the financialdifficulties
character. taken by the Appellate
held that the view
The Apex Court payments in question were not matters of
Tribunal was correct. The part of the basic wage structure and
bounty and actually they form
to the workmen.]
Co}dearness allowance payable the court held that the management
Brett & Co. case, workmen in acase
InWorkmenofReptakos to the prejudice of the
structure
canld revise the Wage unable to bear the burden of the existing wage.
where due to stringency it is the level
employment where the wage structure is at on the
Bu inan industry or such revision at all, is permissible not evenwhich is
of minimum wage, no It is therefore, for the tnanagement,
ground of financiat
stringency.
the disadvantage of the workmen to
scheme to
seeking restructurtng of D.A.
ofthe tribunal that the wage structure in the industry
próvetothe satisfaction management is financially not in a position
level and
is wll above minimumthe existing wage structure.
to bear the burden of
 188 Labour Law- I|

Industry-cum-Region Formula
vage
Except while fixing minimum wages, the wage fixing authority would
ordinarily take into consideration the industry and region both, as the wage
may differ depending upon the kind, size and capacity to pay of the
besides the region it operates in and its workers reside, for the cost of
varies from region to region. However, minimum wages may also be different
industlivingry
in diferent regions depending upon the cost of living.
In Chandra Bhawan Boarding & Lodging,
AIR 1970 SC 2042, the Supreme Court ruled Bangalore v State of Mysore
that different rates of
for different industries or in different wagesa
State into different zones is very much inlocalities, determined by dividing
Minimum wages Act. conformity with the scheme of the
In J.P. ndustries v Workmen (AIR 1972 SC 605), it was held
industrial tribunal adjudicating upon a dispute that an
by the minimum wages related to wages is not bound
the prescribed by the government under
pendency of the proceedings. The capacity of the Sec. 3 during
irrelevant when an industrial tribunal fixes
minimum wagesindustry
to pay is
form fair/living wages. as
distinguished
EADING CASE: GREAVES
AIR COTTON&CO.LTD.
Facts and Issue - ln this case,1964 SC 689) vWORKMEN
appellant companies and their there were disputes between the four
wages and workmen with respect to_inter alia
to the` samedearness allowance. The four
other three. The companies
industry but the Greaves Cotton & Co.
do not belong
Tribunal after comparing with controls the
wages and dearmess
8.
Write a short note on:
Explain
fixation.'Industry-cum-reIginduston' rformula
"In applying the y-cum-randegion formula. (L.C.- 2002-2006]
'Region-cum-industry' formula for wage
should
of
'Industry-cum-region'
lay stress on
the
concernsof the sameindustry
number in formula
of for fixing
(C.L.C.- 2001/2004
part the formula if wage scales the tribunal
region carrying on the there are alarge number
part of the industries of same kind in a same industry. But where the
An
a ctur
Hndustry-cum-region'
industrial dispute,
manuf ing concernin
formula,
g
particular
which region is small, it is the region
assumes importance. Elucidate.
manuf a ctu rin g computers and its wage structure, arose [C.L.C.- 2006]
clerical staff aftercomputers in that Union. TheThe Company was the onlya company
between
calculattheor manufactumaki ng region.with Tribunal revised the Çoncern
Court, compariofsonthe wage scales of the wages of the
Union ring company
 The Minimum Wages Act, 1948
189
allowance prevalent in comparable concerns revised them for
and.subordinate stafi, putting emphasis on the region aspectclerical
of the
industry-cum-region formula.
The issue was whether the Tribunal has not properly applied the
induatry-cum-region fomula, which is the basis for fixation of wages.
etc.9
Obsenvations and Decision - The Supreme Court observed that the
hasis of fixation of wages and dearness allowance is industry-cum
region fommula. In the course of its judgment the Supreme Court
referred two cases namely, Workmen of Hindustan Motors v
Hindustan Motors (1962) |I LLJ352 (SC), and, French Motor Car
Compam case (1962) II LLJ 744 (SC),
In Hindustan Motors case, the Supreme Court observed that it
is ordinarily desirable to have as much uniformity as possible in the
wage scales of different concerns of the same industry working in
the same region, as this puts similar industries more or less on an
equat footing in their production struggle.
In French Motor Car Company case, the Supreme Court,
however, held that so far as_the clerical and subordinate staff are
concerned it may be possible to consider even those concerns which
ar engaged in different lines of business for thekindswork of clerical
and subordinate staff is more or less the same in all of concerns.
of
It was further emphasized in that case that where the number
comparabte concerns is small in aparticular region and thus the
competition aspect is not of the same importance, the region part
of the industry-cum-region formula assumes greater importance
especially with respect to clerical and subordinate staff.
From the above two cases, the following principle emerge: ln
applying the industry-cum-region formula for fixing wage scales,
the tribunat should lay stress on the industry part of the forimula if
thefe are a larger number of concerns in the same region carrying
production cost
oD the same industry; in such a case in order that
competition, wages
may not be unequal and there may be equalcomparable industries,
should generally be fixed on the basis of the the number of
namely, industries of the same kind. But where SImall, it is the
indu_tries of the sane kind in aparticular region iswhich assumes
region part of the_industry-cum-region fomula and subordinate staf.,
importance particularly in the case of clericalCompay case there is
for ás pointed out in the French Motor Car different
not much difference in the work of this class of cnployees in
induatries.*
The court held that the Tribunal was not wrong in putting
emplasis on the region part of the industry-cum-region formuta in
 I|
190 La bour Law-
subordinate staff was
so far as clerical and
in
the present case reasons. irstly, although the four
twocngaged
thenot
appellant because ofweerc
concernedcompanies in the same kind offbusiness,
of the other three and it
one of them was the controlling companyclericaland subordinate stafr
was usual to keep the same scales for
not a large number
in all of them. Secondh. as perhaps there wasbusiness in the same
0f comparable concerns engaged in the same Tribunal
region and the first company being the main company the, stand
Was, right in taking for comparison such companies as would
comparison with the main company in the present case (namely
Greaves Cotton & Co. Lid.).
Further, the Tribunal's decision cannot be assailed on the ground
that the totál wage packet fixed is the highest in the region.
Considering that wage scales fixed are less than the highest in the
comparabte concerns thoughmore than the lowest, it cannot be said
th¡t the total wage packet in the case of the appellants would be
necessarily higher than in the case of the other comparable concerns.
However, as the Tribunal fixed the wage scales of the "façtory
workmen" without comparing the wages prevalent for these
categories in comparable concerns, its decision was incorrect.
The court further held that the tribunal was right in fixing same
amqnt of dearness allowance between employees of different kinds
(viz. clerical staff, factory workmen, etc.)
felt that dearness allowance which is getting same wages as it
meant to neutralize the rise in
cost of living, should be paid to ifferent
scàte, for the need of neutralization was workmen on the same
of employees. It does not matter that uniformly felt by all kinds
there are different scales of the pattern in the region is that
and other staff including dearness allowance for clerical staff
factory
when employees getting same wagesworkmen. Time has now come
allowance irespective of whether theyshould are
get the same dearness
members of subordinate staff or factory working as clerks, or
high prices is the same on these workmen, The pressure of
various kinds of employees.]
Fixation or Revision of Minimum
Section 3 and the Schedule of the Wages
of minimum rates Minimum
Sec. 4 explains Wages Act explain about 'FiNing
Sec. 5 lays down ofwages". about Minimum rate of wages
Secs. 7to9 providethetheProcedure for fixing and revising
'Machinery for fixing and revising minimum wages
Fixing of Minimum Rates of minimum wages
Sec. 3 lays down that the Wages
raes of appropriate governnent shall fix the
in Part wages payable to employees employed
1(woollen carpel-nnaking in an minunun
employmentmill;specied
shawl-weaving; rice/flourfdal tobacco
 TheMinimum Wages Act, 1948 191
bjdillac manufactory; plantation like tea, rubber, coffee,
under any local authority; oilmill, employment
roads/building operations;
works; public motor transpÍrt; tanneries and leather stone-breaking: mica
(employment in agriculture i.e. any form of farming, manufactory) or Part II
and harvesting of any
agricultural/horticultural dairy-farming,
commodity, growing
bees or poultry, forestry operations, etc,). raising of livestock,
Besides these specified
establishments/employments,
government i.e. State or Central the appropriate
Government may add any other employments
under the purview of the Act (Sec. 27).
The provisions relating to fixation of minimum rates of
are a_ follows: wages (Sec. 3)
() The appropriate government may, in respect of
employments
specified in Part Il of the Schedute, instead of fixing minimum
ratës of wages for the whole State, fix such rates for a part of the
State or for any speciied classes of such employment in the whofe
State or part thereof [Sec. 3(1(a)].
(2) The appropriate government shall/ review at such intervals, it may
think fit (not exceeding five years), the minimum rates so fixed ¡nd
révise threm, if necessary TSec. 3(1(6)]. Where for any reason the
Government has not reviewed the rates within five years, it is not
prevented form reviewing the minimum rates after the expiry of
five years and revising them.
(5) The appropriate government may refrain from fixing minimum rates
of wages in respect of anyyscheduled employment in which there
are in the whole State less than 1,000 employees. If it finds at any
tíme that the number of employees has increased from l,000, then
it shall fix minimum rates {Sec. 3(1A)).
However, the government is not prevented form fixing the minimum rates
evenif the employees are less than 1,000. Also, it can withdrawthe minimum
rates earlier fixed if the strength falls below 1,000 [Sahdeo Sahu v State of
M.P. (1990) II LLJ 402 (M.P.)].
(4) The appropriate government shall fix (a)'a minimnum rate of wages
for time work(Mininum timerate') (b) aminimum rate of wages
for piece work Minimum piece Tate') (c) a minimum ratè of
remuneration in case of employees employed on piece work - a
Iminimum rate on a time work basis (Guaranteed time rate') (d) a
finimum rate in respect of overtime work done by employees
(Overtime rate') (Sec. 3(2).
Sec. 3(2Xc is intendedfo meet a situation where operation of minimum
pfece rare fixed by the Government imay result in worker earning less than
minimum wage [Hydro (Engineers) case]. Also, it ensures 'guaranteed
remineratioD" for the day on whiçh the employer is unable to give work
Lohi Home Industries v State (1983) ILLJ 201 (Karnt.).
192 Labour Law- Il

"(5) In fixing/revising minimum rates, the appropriate government ma.

fix the diferent minimum rates of wages for- (i) different
enployments (i) different classes of work in the same
employment (i) adults, adolescents, children and apprentices
scheduleedd
schedul
different localities [Sec. 3(3 Xa)]. (iv)
(6) In fixing/revising minimum rates, the appropriate govemment ma,
fix minimum rates of wages by one or more of the
following
periods, riamely by the hour, by the day, by the month, or bywage- suck
other tonger wage-period as may be prescribed [Sec. 3(3Mb)l.
(7) Where any wage-periods havc been fixed under Sec.
Payment of wages Act, 1936, the minimum wages shall be4of fixed
thein
accordance therewith.
(8) The minimum rates of wages shall not
whih thà proceeding is pending (an industrial appiy during the period in
th¿ rates of wages pending under the dispute relating to
the award made therein is in IndustriaB Disputes Act) and
operation
fixing or revising minimum rates is issuedor where a notification
such proeeeding-or the operation of the uring the pendencv of
An industrial tribunal award.
employees in a scheduled adjudicating dispute relating te wages payable to the
a
minimum wages by the Government employment is not bound by the fixation of
proceedings (J.P. Industries v Workmen under Sec. 3 during the
AIR 1972 SC 605].pendency of the
Minimum Rate of Wages
Sec. 4 lays down that
appropriate governmentany minimum
under Sec.
rate of wages
3 may consist of: fixed/revised by the
() a basic rate of
at such wages and aspecial
intervals
m¡y direct, and in allowance at a rate to be adjusted
to acörd assuch manner as the
the cost of living
index nearly
as appropriate
practicable goveimmentin
with the variation
of living
allowance"); or number applicable such workers ("Cost
to
(i) a basic rate of
.and the cash value wages with or without the
of the cost of living
essential commodities at concessions in respect of allowance.
in) in all
inclusive concession supplies orof
rate allowing for the rates, where so authorized;
) al lowance and the cash value of the basic rate, the cost of
the cost of
In respect ofliving allowance and the concessions, if ahy [Sec. living
shall be suppliesby of essential cash value atof the 4()}
In compuled
accordance with suchthe conpetentcommodi ties concessions
concession rates
the
appropriate governmentdirections authority
as may be at such intervals and
(Sec. 4(2)]). specified or given by
 The Minimum Wages Act, 1948 193
may The 'special allowance' ('cost of living allowance') mentioned in Sec. 4(1)
aled is a variable amount foming þart of the wages, being linked with the cost
led
iv) of living index number. Itdoes nottake within its ambit the trip allowance"
[Mahendra Chandrav State AIR 1971 Tri. 32].
ay A minimum wage 1nder Sec. 4(1) does not neccssarily consist of basic
ge wages and Dearmess Allowance' (intended to neutralise the cost of liing).
ch
The question of payment of dearness allowance would arise only if basic
wages fixed falls short of the minimum wage which the State Government
has tofix taking into consideration the needs of the workers family consisting
e of three (now five) consumption units [Karnataka Film Chamber of
Commerce v State (1987) ILLJ 182 (Karnt.)].
Procedurre for Fixing and Revising Minimum wages
Section 5 gives a detailed procedure for fixing or revising minimum wages
in respect of any scheduled employment. These provisions should be read
along with Secs. 3 and 4 (discussed above).
) In fixing or revising minimum wages, the appropriate government
shall appoint as many Commitees and Sub-committees as it considers
neçessary to hold enquiries and advise, it (Sec. 5(1)].
(ü) Sec. S(2)provides for another mode of fixing or revising minimum
wages. It imposes statutory obligation on the appropriate government
to issue notification in the Official Gazette, publishing the proposals
for the information of person likely to be affected thereby and
specify, a date not less than two months from the date of notification,
on which the proposals will be taken into consideration.
In case of revision of wages under Sec.S(2), the appropriate government
shall consult the Advisory Board also. If the Board approves the notification
without discussing the objections raised, the Board's action would be arbitrary
for being a case of non-application of mind and would, thus, liable to be
sthuck down [H.B. Verma vUnion of India (1993) I LLJ 39 (Del.)].
After considering the advice of the Committees appointed, and all
representations received by it before the date specified in the Gazette
notifiçation, the appropriate government may by notification in the official
gaztte, fix or reviae the minimum rates of wages. If a date is specified in
the notification, the minimum rates shall come intoforce form such date; if
date is specified, then form the expiry of three months form the date of
issue of the notification.

9. Describe the procedure and the consIderattons tor fixing wages in an organized
Sector. (L.C.- 2003)
Describe the procedure for fixation and revisIon of minimum wages under the
 194 Labour Law- I|

Thus, the principles of natural justice viz. notice and audi

shall be strictly adhered to while fixing or revising the minimum alteramrates
government. The power copferred upon the government under
Sec. pabrytemthe
neither arbitrary nor unguided. Therefore, sub-sec. () does not
14 of the Constitution jChandra Bhawan Boarding &
5(\)
offend
Lodging Ar.
vSate of Msore AlR 1970 SC 2042].
As noted earlier, in the matter of fixing minimum wages,
capacity of the trade or industry, is irrelevant, for, what
Bangalore
the economic
wage required by the employees to survive (Arbunda Bhvo alone is
v State of Maharashtra(1992) ILLJ 807 (Bom.)]. The Bhuvan germane
Teaa is.
wages depends on the prevailing economic conditiohs, fixation of Shop
aplace, the nature of the work to be
the work is to be
performed.
performed
The power of the
and the
the cost of
conditions living
in
minimum
in
minimum rates of wages or to revise them does government prescribe
not to which
other térms of contract [Bidi Leaves & include power
v State of Bombay
AIR 1962 SC 486]. Tobacco Merchants Asscn., to vary
The, Gondia
or to»thestatutory
living minimum wage does not measure up
wage.
issued under the Therefore, court cannot interfere
the either tothe fair waoe
Thus, the Minimum Wages Act unless the with notification
notification
with in exercise of writfixing minimum wages grounds are substantial
cannot be lightly interfered
some
irregulaCommittee jurisdiction
ritiesin constitution
the by the High
of the Courts on the ground of
adopted by it.
wages are fixed only by acts only a_ a committee or the
already the recommendatory body, and prOcedure
minimal
with ünder notification government.
a
Art. 226 of the fixing
In a
country where minimumare
Directive Constitutiominimum
grounds. Action taken pursuant to of Indiawages
n except should
on the
wages
not be interfered
most
Principles of State social welfare
technicalities (Ministry Labour&
& Paints Ld. of legislation substantial
Policy cannot be to further the
struck's down on mere
In Andhra (1985) II LLJ Rehabilitation
412
LLJ 623 (A.P.),Pradesh Hotels Asscn. v (SC)]. v Tiffin Barytes
Asbestos
wages is the High Court Govt. of Andhra
is not an that the Pradeshof (2002) 1ll
subject to judicial act and theobserved
administrative quantum fixation minimum
Minimum Wages review,
fixing minimum Act, 1948. The High
fixed on
unless the fixation was humanitarian ground
and wages could not Court while ultraa vires, the
benefire-appreci
cial ate
piece of socialand every assume
each
factor. the role of an
The
reviewing
appellate
notification
consideration which legislatishould
national income was that on
workmen and Mi n im um
in fixing the wagesWages under
authority
Act Was a
they help to receive their proper it the
produce. share of the
 The Minimum Wngos Act, 1948 195

Clais and Bar of Suits

Section 1?ot the Act nakes it obligatory on the employer to pay to every
employee engaged in a scheduled enmployment wages at a rate not less than
the minimum rate of wages tixed by the notification Sec. 20(1) empowers
the appropriate government to appoint an authorityto hear and decide for
any specitied area the tollowing claims: (i) any claims arising out of payment
of less than the minimum rates of wages; or (i) any claim in respect of the
payment of remuneration for days of rest or for work done on such days, or
(ii) any claim of wages at overtime rites.
It is important to note that Sec. 20(1) does not cover allclaims in respect
of minimunm wages; it covers only cases where there is a dispute as to the
rate at which the minimum wages are payable. Where the dispute is as to
the quantum of wages to which aworkman is entitled, Sec. 20(0) is not
attracted [Anand Oil Industries v Labour Cour, Hyderabad AlR 1979 A.P.
182]. The Minimum Wages Act is not an Act for enforcement of payment
of wages for which provision has been made in the Payment of Wages Act,
1936.
The Minimum Wages Act cuts across the contract between the employer
and the employee. Any employee who feels aggrieved by the refusal of the
employer to pay the minimum wages fixed under the Act has the right to
make a complaint either by himself or through the prescribed agents to the
Authority mentiohed in the Act (Sec. 20(2)].
Under Sec. 20(3), the Authority has to hear the applicant andthe employer
or give them an opportunity of being heard. The Authority could straightaway
give a direction as regards the alleged non-payment of the minimum rates
of wages and such compensation as it thinks fit not exceeding ten times the
amount of excess of the minimum wages over that which was paid. Though
Sec. 20(3) provides for further inquiry but this has to be at the discretion of
under
the Authority. In view of Sec. 20(6), the discretion of the Authoritypowers
this section shall be final. Sec. 20(7) clothes the Authority with the
of a civil court.
Sec. 24 bars the jurisdiction of any court to entertain any suit for the
subject of an
recovery of wages in so far as the sum so claimed forms the
application under Sec. 20.
 196 Labour Law- I!

LEADNG CASE: PABBOJAN TEA COMPANY LTD. L v DEPUTY

LAKHIMPUR°(AIR 1968 SC 271) CoMMISSIONER
Facts and Issue - In this case, by a notification, the
of Assam fixed the minimum wages consisting of basic
dearness allowance payable to
Government
the employees employedwages and
in Tea
plantations in the State. The notification was tO apply to "ordinary
unskilled labour". Later, the Government of Assam published the
Minimum Wages Rules which fixed the number of hours in the case
of an adult for a normal working day to nine
maximum of 48 hours in a week. On June 2, hours, subject to a
Commissioner of Lakhimpur served a notice onone1953, the Deputy
of the appellants
Tea estate to the effect that the
been paid to a number of employees minimum wages prescribed had not
in accordance with the
prescribed rate. The dispute concerned the "Lettera
normal workers) whÍ by reason of their old Challans" (sub
physical defects, etc. were incapable of age, infirmity· and
working day's work. performing a full normal
The issue was whether a
the same Lettera
rate of wages as ordinaryChallan worker was entitled to
working days. In other words, whetherlabour working full normal
minimum wages without performing a they were entitled to full
working the
was regardingprescribed
normal day's task or
number of working hours. A furtherwithout
the issue
decision of the maintainability of a civil suit against the final'
Authority under the Minimum Wages Act
bars the civil suits).
(the Act
Observations
held as follows:and Decision - The Supreme Court
(1) An
observed and
any employee' under the Minimum Wages
person who was employed for Act meant
do any hire or
work skilled, or reward to
in a
scheduled unskilled manual clerical,
or
employment. Secs. 3-5 contains
provisions relating to the fixation
minimum wages (in regard to anyand revision of
employment) scheduled
Sec. 13 of theby the appropriate government. Under
Act, it was open to the
10. The appropriate
under Lettera
the Challan" workers were held to be
under the Minimum Wages Act, 1948. What isnot entited to get minimum wages
Minimum Wages the of
 The Minimum Wages Act, 1948 197

government to fix the number of hours of work which

were to constitute a normal working day in regard to
any scheduled employment.
(2) The proviso to Sec. 15 lays dovwn that a worker shal
not be entitled to receive full wages for a full normal
working day 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.
(3) Sec. 20(1) empowers the appropriate government to
appoint an Authority to hear and decide for any
specified area any claims arising out of payment of
less than the minimum rates of wages, etc. Any
employee who feels aggrieved by the refusal of the
employer to pay the minimum wages fixed under the
Act has the right to make a complaint to the Authority
mentioned in the Act [Sec. 20(2)].
(4) Under Sec. 20(3), the Authority has to hear the
applicant and the employer or give them an opportunity
of being heard. The Authority could straightaway give
adirection as regards the alleged non-payment of the
minimum rates of wages and such compensation as it
thinks fit not exceeding. ten times the amount of excess
of the minimum wages over that which was paid.
Though Sec. 20(3) provides for further inquiry but
this has to be at the discretion of the Authority. In
view of Sec. 20(6), the discretion of the Authority
under this section shall be final. There is no provision
for appeal or revision against the direction of the
Authority. Sec. 20(7) clothes the Authority with the
powers of a civil court.
(5) Sec. 24 bars the jurisdiction of any court to entertain
any suit for the recovery of wages in so far as the sum
so claimed forms the subject of an application under
Sec. 20.
(6) However, the exclusion of the jurisdictionof the civil
courts is not be readily inferred. Even if jurisdiction
was excluded, the civil courts would still have
jurisdiction to examine into cases where the provisions
of the Act had not been complied with or the statutory
tribunal had not acted in conformity with the
fundamental principles of judicial procedure.
(7) Though the decision of the Authority cannot be
questioned under any provision of the Minimum Wages
198 Labour Law- Il

Act, it does not exclude the jurisdiction of the

court when the challenge is as to the civil
the Act to acertain class of workers. applicability of
(8) The obvious intention behind Sec. 24 was thaat a
employee was not to be driven to file a suit po0r
payment of the deficit of his wages but that he for the
avail himself of the machinery provided by the Act
get quick relief. It does not in terms bar
woulted
from instituting a suit when his claim isthethat employer
called upon to pay wages and he has
who are not governed by thecompensation persons
to
Minimunm Wages Act. notification under the
(9) Where it is alleged that the
is not applicable to a notification under the Act
duty of the Authority certain class of
to give aproperworkers tois the
it
parties allowing them to tender such hearing the
think proper
before making an evidence as they
order, but that was not
done in the present case.
(10) The
only tonotification
in the present
"ordinary case was applicable
prepared unskilled
to work and labour i.e. unskilled labour
under Rule 24 of the working in the ordinary way. If
period of work is fixedRules
at
framed under this Act the
who cannot work for nine hours a day, a
fall within the more than half of it, labourer
(11) The Lettera category of"ordinary unskilled does not
work for more Challan workers who are labour
infirmity or lack than half a day unwilling to
not entitled to of physical strength,(because
receive what ordinary etc.)
of their
are, thus,
working
Is to nine hours a day get.
The unskilled labourers
by ensure some sort of objeot of the Act
providing
at least be
industrial
that labour cannot be peace and harmony
providedrates.withIt wages exploited
certain minimum which areand mustat
fixed
principle
who if the
courts were
would be
against sucn a
cannot
receive work for more
to uphold that persons
that is awhat others working athan half a day should
matter, which the full day get. However,
may consider].
appropriate government