LABOUR LAW PROJECT

TOPIC MINIMUM WAGES ACTCONSTITUTIONAL VALIDITY AND NEW ASPECT

1.) The minimum wages act up hails the ARTICLE 43 of the Indian
constitution, which states that,
Living wage, etc, for workers The State shall endeavor to secure, by suitable
legislation or economic organization or in any other way, to all workers, agricultural,
industrial or otherwise, work, a living wage, conditions of work ensuring a decent
standard of life and full enjoyment of leisure and social and cultural opportunities
and, in particular, the State shall endeavor to promote cottage industries on an
individual or cooperative basis in rural areas

The spirit of the minimum wages act of India is relied in the soul on of the
article 431 of Indian constitution, which SADLY is enshrined in part IV of the
constitution and hence is non-enforceable by law.
2.) Another constitutional provision that the minimum wages act is said to
defy is the ARTICLE 19(1g) which says that
To practice any profession or to carry on any occupation, trade or
businesses

It is questioned by certain jurists that the provisions of the minimum wages

act that ask for providing a fixed minimum wage by the employers to the
labours is a BAR to their fundamental right guaranteed under 19(1g).

1 Article 43 of Constitution of India deals with the topic of Living wage, etc., for workers

But this question has been raised again and again in the honorable courts
which have dissented from this opinion and upheld the validity of minimum
wages act.
In GUL MUHAMMAD TARA SAHEB VS STATE OF BOMBAY2,
Where the honorable court pointed out that the provision of 19(1g) is subject
to restriction enshrined in 19(6) of the Indian constitution.
Article 19(6) states that,
Nothing in sub clause (g) of the said clause shall affect the operation of any
existing law in so far as it imposes, or prevent the State from making any
law imposing, in the interests of the general public, reasonable
restrictions on the exercise of the right conferred by the said sub clause.

Here in 19(6) the words, the interest of general public creates a

restriction on the exercise of this right with respect to public order
i.e to preserve public order, the right can be curtailed.
The same question was raised in V.UNICHOV VS STATE OF KERALA 1962,
And the court upheld the view of GUL MOHAMMAD case.

It was held in this case that the fixation of minimum wages is for the
preservation of public order. As if no minimum wage is fixed, it shall
lead to arbitrariness by the employer and lead TO CLASHES OF
INTEREST BETWEEN EMPLOYER AND LABOUR, which shall cause
FRICTION IN SOCIETY.

2
1962

3.) The ARTICLE 14 of the Indian constitution, which relates to equality.

Now, it must be noted that minimum wages are not fixed in the nation.
They vary from places to places and region to region. This provision of
the minimum wages act is condemned by certain jurist as to say to
violate RIGHT TO EQUALITY.
But this view is also put down by the courts throughout the nation.

In BHIKUSHA vs SANGAMARA 1963

It was held by the court that person would be liable to different
minimum wages if they are working in different locality.

In C B BOARDING AND LODGING vs STATE 1970,

It was held that persons working in different industry, even though
they work in the same locality would be granted different wages.
Hence the question of the difference of wages throughout nation is totally
disregarded by the courts.

In N.M.WADIA CHARITABLE HOSPITAL vs STATE OF MAHARASTRA

1993,
It was held by the court that fixing different minimum wages for
different locality is permitted under the constitution and under
labour laws.
Hence the question that any provision of the minimum wages act is in any
way against the provisions of constitution is wrong.
The minimum wages act is valid in all sense and completely.

The variation of minimum wages3 between the States is due to differences in

socio-economic and agro-climatic conditions, prices of essential
commodities, paying capacity, productivity and local conditions influencing
the wage rate. The regional disparity in minimum wages is also attributed to
the fact that both the Central and State Governments are the appropriate
Government to fix, revise and enforce minimum wages in scheduled
employments in their respective jurisdictions under the Act.
THE MINIMUM WAGES ACT, 1948.
India introduced the Minimum Wages Act in 1948, giving both the Central
government and State government jurisdiction in fixing wages. The act is legally
non-binding, but statutory. Payment of wages below the minimum wage rate
amounts to forced labour. Wage Boards are set up to review the industrys capacity
to pay and fix minimum wages such that they at least cover a family of fours
requirements of calories, shelter, clothing, education, medical assistance, and
entertainment. Under the law, wage rates in scheduled employments differ across
states, sectors, skills, regions and occupations owing to difference in costs of living,
regional industries' capacity to pay, consumption patterns, etc. Hence, there is no
single uniform minimum wage rate across the country and the structure has
become overly complex.4
In a developing economy like India where about 90 percent of the workers work in
the informal sector, not having collective bargaining power, wages couldnt be left
to be determined entirely by the interplay of market forces and intervention on the
part of the government became imminent. It is with this objective of protecting the
vulnerable/less privileged strata of the society from exploitation by the capitalist
class that government of India enacted the Minimum Wages Act, 1948. The act
3
As pointed out by the UNION LABOUR AND EMPLOYMENT MINISTER SHRI MALLIKARIUN
KHARGE,

4
https://www.linkedin.com/pulse/constitutional-validity-minimum-wages-act1948

provides for fixation/revision of minimum rates of wages in sweating employments

by involving the authority of the state. The minimum rates of wages helps in
reducing the inequalities in the standard of living of different social groups of
workers by statutorily prescribing minimum wage rates. Labour Bureau,

(A): THE ACT IS NOT UNREASONABLE:

It can scarcely be disputed that securing of living wages to labourers which ensure
not only bare physical subsistence but also the maintenance of health and decency
is conducive to the general interest of the public. This is one of the directive
principles of the state policy embodied in Article 43 of the constitution.

Individual employers might find it difficult to carry on the business on the basis of
minimum wages fixed under the Act but this must be not be the entire premise and
reason to strike down the law itself as unreasonable.

The restrictions, though they interfere to some extent with the freedom of trade or
business guaranteed under Article 19(1)(g) of the constitution, are reasonable and ,
being imposed on the general interest of the general public, are protected by the
terms of the clause (6) of the article 19. This quote is a part of judgement in the
case Gulmuhommad Tarasaheb5 , a bidi factory by its proprietors Shamrao /VS/
State of Bombay , AIR 1962 Bom 97: AIR1955, Sc33:1963, Ker 115: 1964 Tri 32.

An another important judgement that favours and supports the constitutional

Valitity of the Minimum Wages Act,1948 is , V. Unichonoy /VS/ State of
Kerala,1962, SC12. This case raised the same questions which were raised in the
case of Gulmuhommad Tarasaheb /vs/ State of Bombay, AIR 1962 Bom 97., which
were , that , can a state be prevented from making any law, in the interest of
general public, where it creates restrictions and interferes to some extent with the
freedom of trade or business guaranteed under Article 19(1)(g) , of the Constitution
of India, and it was held that , Fixation of minimum wages is for preservation of
5
GUL MOHAMMAD case.-1962

public order , and if no minimum wage is fixed then it shall lead to arbitrariness by
the employers and that shall lead to clashes of interest between employer and
labour which shall cause friction in society.

The article 14 of the Indian Constitution which relates to equality before the law, it
must be noted that minimum wages are not fixed equally across the whole nation
but they vary from occupation to occupation and industry to industry and from
place to place.

The case of Uchinoy /vs/ State of Kerala ,1962 SC12, further quotes the following ,
As regards to the procedure for fixing of the minimum wages, the appropriate
government has undoubtedly been given very large powers , but it has to take into
consideration, before fixing wages, the advice of the committee if one is appointed
on the representations on proposals made by persons who are likely to be affected
thereby. The various provisions constitute an adequate safeguard against any hasty
or capricious decision by the appropriate government. In suitable cases, the
appropriate government has also been given the power of granting exemptions
from the operations of the provisions of the Act. There is no provision undoubtedly,
for a further review of the decision of the appropriate government , but that itself
would not make the provisions of the act unreasonable.

(B) THE ACT DOES NOT VIOLATE ARTICLE 14

OF THE INDIAN CONSTITUTION.
On a careful examination of the various of the Act and the machinery setup by this
Act, Section 3(3)(iv) neither contravene Article 19(1) of the constitution nor does it
infringe the equal protection clause of the constitution. the Courts have also held
that the constitution of the committees and the Advisory Board did not contravene
the statutory provisions in that behalf prescribed by the legislature,- this was held
in the case of Bhikusa Yamasa Kshatriya /vs/ Sangammar Akola Bidi Kamgar Union,
AIR 1963 SC306. Further , as decided in the case C.B. Boarding & Lodging,
Re(1970) II LLJ 403: AIR 1970: SC 2042 : 38 FIR I . , it added to the above

mentioned case that , ... nor the reason that two different procedures are provided
for collecting information. .

(C) NOTIFICATION FIXING DIFFERENT RATES

OF MINIMUM WAGES FOR DIFFERENT
LOCALITIES IS NOT DISCRIMINATORY.
where the fixation of rates of wages and their revision were manifestly preceded by
a detailed survey and enquiry and the rates were brought into force after a full
consideration of the representations which were made by a section of the
employers concerned, it would be difficult in the circumstances to hold that
notification which fixed different rates of minimum wages for different localities was
not based on intelligent differentia having a rational nexus with the object of the
Act, and thereby violated article 14. when the Government issued notification
improving upon the existing minimum wages as revised minimum wages
disregarding the contrary report of the committee appointed under Section 5-1(a) ;
such notification was bad under the law and was to be made inoperative..

As pointed out by one of the Indias Union Labour and Employment Minister Shri
Mallikarjuna Kharage ;, The variation of minimum wages between the states is due
to differences in socio-economic and agro-climatic conditions, prices of essential
commodities, paying capacity, productivity and local conditions influencing the
wage rate. The regional disparity in minimum wages is also attributed to the fact
that both the Central and the State Governments are the appropriate Governments
to fix, revise and enforce minimum wages in Scheduled employments in their
respective jurisdictions under the Act.

Referring the case of N.M.Wadia Charitable Hospital /VS/ State of Maharashtra ,

1993, it was decided by the Court that Fixing different minimum wages for
different localities is permitted under the constitution and under labour laws , hence

the question that any provisio of the Minimum Wages Act is in any way against the
provisio of constitution is wrong.

The constitution of India accepts the responsibility of the State to create an

economic order, in which every citizen finds employment and receives a fair
wage. This made it necessary to quantify or lay down clear criteria to identify fair
wage. Therefore, a Central Advisory Council, in its first session in November 1948,
appointed a tripartite Committee on Fair Wages. The committee consisted of
representatives of employers, employees, and the Government. Their task was to
enquire into and report on the subject of fair wages to the labour.

(D) SANCTITY OF THE MINIMUM WAGE ACT

Supreme Court in three separate rulings has held that non payment of minimum
wages is tantamount to forced labour prohibited under Article 23 of the
Constitution. The Supreme Court holds that forced labour may arise in several
ways, including compulsion arising from hunger and poverty, want and
destitution. In Sanjit Roy Vs. State of Rajasthan (1983), the Supreme Court held
that the Exemption Act in so far as it excluded the applicability of the Minimum
Wages Act 1948 to the workmen employed in famine relief work is clearly
violative of Article 23. Thus even public works ostensibly initiated by the
government for the sole purpose of providing employment are subject to the
Minimum Wage Act.
Drawing on the Supreme Court rulings, Andhra High Court set aside the
Government of India (GoI) notification mandating that prevailing state minimum
wage be paid. This has been underscored in the legal opinion provided by Additional
Solicitor General, Ms. Indira Jaising, to the Central Employment Guarantee Council
(CEGC) Working Group on Wages where she made it clear that using Section 6(1) to
allow a payment of less than minimum wage in MGNREGA works will amount to
forced labour. 15 eminent jurists and lawyers of India too have asked Government of
India to immediately revoke its unconstitutional notification and ensure that
minimum wages are paid to all workers in India.

The Act and the judgements are in favour of equality provided under Article 14 of
the Constitution and a judgement in the case namely, Engineering Workers
Union /vs/ Union of India(1994) I .LLJSup.942Bom., pronounces the judgement
that , The provision under Section 3(2)(A), that minimum rate of wages in
scheduled employment fixed or revised, shall not apply to the employees during the
period of adjudication, violated equality clause of Article 14 and hence that section
is void.

In the view of the Directive Principles of State Policy as contained in the Article 43 of
the Indian Constitution, it is beyond doubt that securing of living wages to labourers
which ensures not only bare physical subsistence but also the maintenance of
health and decency, it is conducive to the general interest of the public.

The Minimum wages Act was passed to fulfill the aspiration as contained in the
following resolution:-

If the labourers are to be secured the enjoyment of minimum wages and they are
to be protected against exploitation by their employers, it is absolutely necessary
that restraints should be imposed upon the freedom of contract and such
restrictions cannot be said to be unreasonable. On the other hand, the cannot be
heard to complain if they are compelled to pay any minimum wages to their
labourers even though the labourers , on account of their poverty and helplessness,
are willing to work even at lesser wages.

In the case of PETITIONER: BIJAY COTTON MILLS LTD./Vs./

RESPONDENT: THE STATE OF AJMER.DATE OF JUDGMENT:

14/October /1954,

The Constitutional validity of this Act was attacked on the ground that it violates the
guarantee of freedom of trade or business etc., envisaged by Article 19(1)(g) of the

Indian Constitution, (Constitution of India, Article. 19(1)(g), 19(6)-Minimum Wages

Act (XI of 1948), sections. 3,4 and 5-Appropriate

Government-Fixing minimum rate of wages-Whether offends fundamental rights

guaranteed under Art. 19(1)(g).)

, it was held that , the restrictions imposed upon the freedom of contract by the
fixation of minimum rates of wages though they interfere to some extent with the
freedom of trade or business guaranteed under Art. 19(1)(g) of the Constitution are
not unreasonable and being imposed in the interest of general public and with a
view to carry out one of the Directive Principles of State Policy as embodied in Art.
43 of the Constitution are protected by the terms of el. (6) of Art. 19. It can thus be
said that the provisions of the Act are bound to affect harshly and even oppressively
a particular class of employers, who for purely economic reasons are unable to pay
the minimum rate of wages fixed by the authorities , but have absolutely dishonest
intention of exploiting their workers.

The fact that employer might find it difficult to carry on business on settled principle
cannot be a sufficient reason for striking down the law itself as unreasonable. The
poverty of labourers is also a factor to be taken into consideration while determining
the question whether a particular provision is in the interest of the general public.

Sanctity of The Minimum Wage Act

Supreme Court in three separate rulings, has held that non payment of minimum
wages is tantamount to forced labour prohibited under Article 23 of the
Constitution. The Supreme Court holds that forced labour may arise in several
ways, including compulsion arising from hunger and poverty, want and
destitution. In Sanjit Roy Vs. State of Rajasthan (1983), the Supreme Court held
that the Exemption Act in so far as it excluded the applicability of the Minimum
Wages Act 1948 to the workmen employed in famine relief work is clearly
violative of Article 23. Thus even public works ostensibly initiated by the

government for the sole purpose of providing employment are subject to the
Minimum Wage Act.
Drawing on the Supreme Court rulings, Andhra High Court set aside the
Government of India (GoI) notification mandating that prevailing state minimum
wage be paid. This has been underscored in the legal opinion provided by Additional
Solicitor General, Ms. Indira Jaising, to the Central Employment Guarantee Council
(CEGC) Working Group on Wages where she made it clear that using Section 6(1) to
allow a payment of less than minimum wage in MGNREGA works will amount to
forced labour. 15 eminent jurists and lawyers of India too have asked Government of
India to immediately revoke its unconstitutional notification and ensure that
minimum wages are paid to all workers in India.
Three Chief Ministers (Rajasthan, Andhra Pradesh and Kerala) have written to the
Prime Minister requesting the Ministry of Rural Developments (MoRD) compliance
with the Minimum Wage Act, followed by a letter from the Chairperson, NAC and
UPA, to the Prime Minister calling his attention to find urgent resolution of this
matter. Finally, the Labour Ministry too has reiterated its fundamental objection to
Section 6(1), warning that using Section 6(1) to allow payment of less than
prevailing state minimum wage will not stand legal scrutiny.
However despite this overwhelming legal and political consensus, both the GoI and
the Government of Andhra Pradesh continue to be in contempt of the Andhra
Pradesh High Court (July 2009) citing fiscal concerns. In fact in his response to the
Chairperson, NAC regarding violation of minimum wages in NREGA, the PM has
asserted that the wage rate under NREGA is independent of the provisions of
the Minimum Wages Act, a statement that runs counter of the established
Constitutional, legal and political opinion
The Act and the judgments are in favour of equality provided under Article 14 of the
Constitution and a judgment in the case namely,
Engineering Workers Union /vs/ Union of India(1994) I .LLJSup.942Bom.,
pronounces the judgment that , The provision under Section 3(2)(A), that minimum
rate of wages in scheduled employment fixed or revised, shall not apply to the

employees during the period of adjudication, violated equality clause of Article 14

and hence that section is void.
In the view of the Directive Principles of State Policy as contained in the Article 43 of
the Indian Constitution, it is beyond doubt that securing of living wages to labourers
which ensures not only bare physical subsistence but also the maintenance of
health and decency; it is conducive to the general interest of the public.
The Minimum wages Act was passed to fulfill the aspiration as contained
in the following resolution:
If the labourers are to be secured the enjoyment of minimum wages and they are
to be protected against exploitation by their employers, it is absolutely necessary
that restraints should be imposed upon the freedom of contract and such
restrictions cannot be said to be unreasonable. On the other hand, the cannot be
heard to complain if they are compelled to pay any minimum wages to their
labourers even though the labourers , on account of their poverty and helplessness,
are willing to work even at lesser wages.
In the case of PETITIONER: BIJAY COTTON MILLS LTD./Vs./
RESPONDENT: THE STATE OF AJMER.DATE OF JUDGMENT:
14/October /1954,
The Constitutional validity of this Act was attacked on the ground that it violates the
guarantee of freedom of trade or business etc., envisaged by Article 19(1)(g) of the
Indian Constitution, (Constitution of India, Article. 19(1)(g), 19(6)Minimum Wages
Act (XI of 1948), sections. 3,4 and 5 Appropriate.
Government fixing minimum rate of wages Whether offends fundamental rights
guaranteed under Art. 19(1)(g).) .
It was held that, the restrictions imposed upon the freedom of contract by the
fixation of minimum rates of wages though they interfere to some extent with the
freedom of trade or business guaranteed under Art. 19(1)(g) of the Constitution are
not unreasonable and being imposed in the interest of general public and with a
view to carry out one of the Directive Principles of State Policy as embodied in Art.

43 of the Constitution are protected by the terms of el. (6) of Art. 19. It can thus be
said that the provisions of the Act are bound to affect harshly and even oppressively
a particular class of employers, who for purely economic reasons are unable to pay
the minimum rate of wages fixed by the authorities, but have absolutely dishonest
intention of exploiting their workers.
The fact that employer might find it difficult to carry on business on settled principle
cannot be a sufficient reason for striking down the law itself as unreasonable. The
poverty of labourers is also a factor to be taken into consideration while determining
the question whether a particular provision is in the interest of the general public.

NEW ASPECTS IN MINIMUM WAGES ACT

The Union Labour & Employment Minister Shri Mallikarjun Kharge has
informed the Rajya Sabha that the norms recommended by the Indian
Labour Conference (ILC), held in 1957 are taken into account while fixing the
minimum wages. These are as follows: a)
b)

3 consumption units for one earner.

Minimum food requirements of 2700 calories per average Indian

adult.
c)
d)

Clothing requirements of 72 yards per annum per family.

Rent corresponding to the minimum area provided for under

Governments Industrial Housing Scheme.

e)

Fuel, Lighting and other miscellaneous items of expenditure to

constitute 20% of the total minimum wage.

The Honble Supreme Court delivered a judgment in the case of

REPTAKOS & CO. VS. ITS WORKERS

that the childrens education, medical requirement, minimum
recreation including festivals/ceremonies, provision for old age,
marriage etc. should constitute 25% of the minimum wage and used
as a guide in fixation of minimum wages. The State Governments have
been requested from time to time to keep the above norms and judicial
pronouncement in view while fixing/revising the minimum wages.

The recently held 44th Indian Labour Conference, inter alia, discussed
the issue of amendment of the Minimum Wages Act and made certain
recommendations for incorporation in the amendment proposals. The
recommendations were mainly on national minimum wage, enhancement of
penal provisions, adoption of VDA in all States/UTs, etc.
A Conference Committee of the 44th session of ILC was constituted to
discuss Agenda Item No.(i) concerning Minimum Wages and related issues.
These issues, inter alia, include norms for fixation/revision of minimum rates
of wages, Variable Dearness Allowance(VDA), National Floor Level Minimum
Wages etc. On the basis of detailed discussion, the following points emerged.
1.

There was broad consensus that the Government may fix minimum

wages as per the norms/ criteria recommended by the 15th ILC (1957) and
the directions of the Honble Supreme Court (Reptakos& Co. Vs. its workers
Union) 1992. The Government may take necessary steps accordingly.
2.

It was suggested that the Minimum Wages Act should cover all

employments and the existing restriction for its applicability on the

scheduled employments only should be deleted. This will also help India
ratify ILO Convention No.131.

3.

It was broadly agreed that there should be national minimum wages

applicable to all employments throughout the country.

4.

It was pointed out that the payment to the apprentices should be

treated differently from the other categories.

5.

The Committee noted that at present there are 12 States/UTs who

have not adopted VDA. There was consensus that all States/UTs should adopt
VDA.
6.

It was also recommended that the payment of minimum wages

should be done through Banks/Post Offices etc.

7.

It was felt that the enforcing agencies should not be given the power

of adjudication and, therefore, this proposal should be re-examined.

8.

Regarding penal provision for violation of the Act, it was felt that

imprisonment clause under Section 22 and 22A is harsh to the employer and
may be re-examined. Further, it was felt that non-maintenance of registers
should not attract imprisonment.
9.

The proposal of paying different minimum wages in respect of same

employment either in the Centre or in the States should be done away with.