Professional Documents
Culture Documents
VIth Semester
Section B
Faculty of Law
Jamia Millia Islamia
ACKNOWLEDGEMENT
Firstly, I would like to express my profound sense of gratitude towards the
almighty ALLAH for providing me with the authentic circumstances which
were mandatory for the completion of my project.
Secondly, I am highly indebted to my teacher Ms. Manleen Kaur at Faculty of
Law, Jamia Millia Islamia, New Delhi for providing me with constant
encouragement and guidance throughout the preparation of this project.
Thirdly, I thank the Law library staff who liaised with us in searching material
relating to the project.
My cardinal thanks are also for my parents, friends and all teachers of law
department in our college who have always been the source of my inspiration and
motivation without which I would have never been able to unabridged my project.
Without the contribution of the above said people I could have never completed
this project.
Sahil Ahmed
B.A.LL.B (Hons)
VIth Semester
3rd Year
Table of Contents
Historical Background..................................................................................4
Introduction: Minimum WagesAct 1948.......................................................5
Criteria for notification of Scheduled Employments......................................7
Penal provisions & other deterrence under Minimum Wages Act...................8
Section 20 Claims........................................................................................8
Section 22 Penalties for certain offences........................................................8
Section 22A General provision for punishment of other offences....................9
Section 22B Cognizance of offences..............................................................10
Section 22C Offences by companies..............................................................10
Section 22D Payment of undisbursed amounts due to employees....................12
Section 22F Application of Payment of Wages Act, 1936 to scheduled
employments.................................................................................................12
Section 23 Exemption of employer from liability in certain cases.....................13
Section 25 Contracting out.............................................................................13
Indian perspective: Penal provision under Labour Laws...................................14
1.) Apprentices Act, 1961...............................................................................14
2.) Contract labour (Regulation & Abolition) Act, 1970...................................14
3.) Factories Act, 1948....................................................................................15
4.) Industrial Disputes Act, 1947.....................................................................15
5.) Industrial Employment (standing orders) Act, 1946 & the Rule...................16
Conclusion.....................................................................................................17
Bibliography...................................................................................................18
Historical Background
* The initiative started with the resolution placed by one Shri. K. G. R. Choudhary in 1920 for
setting up Boards for determination of minimum wages in each industry.
* The International Labour Conference adopted in 1928 Convention No.26 and Recommendation
No. 30 relating to wage fixing machinery in trades or parts of trades.
* On the recommendation of the Standing Labour Committee and Indian Labour Conference, a
Labour Investigation Committee was appointed in 1943 to investigate into the question of wages
and other matters like housing, social conditions and employment.
* A draft bill was considered by the Indian Labour Conference in 1945.
* The 8th meeting of the Standing Labour Committee recommended in 1946 to enact a separate
legislation for the unorganized sector including working hours, minimum wages and paid
holidays.
* A Minimum Wages Bill was introduced in the Central Legislative Assembly on 11.4.46 to
provide for fixation of minimum wages in certain employments. It was passed in 1946 and came
into force with effect from 15.3.48.
Under the Act, Central and State Governments are appropriate Governments to
(a) notify scheduled employment
(b) fix/revise minimum wages
The Act contains list of all these employments for which minimum wages are to be fixed by the
appropriate Governments. There are two parts of the Schedule. Part I has non-agricultural
employments whereas Part-II relates to employment in agriculture.
Type of Intervention
To enable workers of a number of small units to
form unions, who can bargain wages and other of
work.
To enable unions to raise industrial disputes on wages
and the conciliation machinery to intervene.
Assure equal wage to women for same or similar work.
To regulate the manner of payment of wages and their
realisation in case of non-payment.
The contractor is required to pay wages and in case of
failure on the part of the contractor to pay wages in
part or in full, the Principal Employer is liable to
pay the same.
The Minimum Wages Act, 1948 provides for fixation of minimum wages by the appropriate
governments at the Centre and State for the different scheduled employments under their
respective domains for different time periods. The Act lists out the schedule of employments
where minimum wages are applicable and are notified by the Central/State Government
respectively. There are two parts of the Schedule. Part I has non-agricultural employments
whereas Part-II relates to employment in agriculture. As of now there are 45 scheduled
employments at the Centre and as many as 1679 employments at the State level (Annexure-I).
All the list of industries mentioned in the schedule of the Act may not be applicable to all the
States. The States may notify minimum wages only if there are more than 1000 workers working
in the State in a particular employment. The Act mandates revision of the wages by respective
Governments at an interval of every five years. The minimum wage fixed has two components
the basic wage and the variable dearness allowance which is adjusted to the Consumer Price
Index every two years. The Act also provides for overtime allowance wherein a worker who
works more than the stipulated hours of work is entitled to overtime wages fixed according to the
rules framed by the State Government.
In India, there is no uniform nationally applicable minimum wage. The minimum wage is sector/
occupation driven and varies across States for the same occupation/industry. The Minimum
1 Minimum Wages in India: Issues and Concerns by Prof. BijuVarkkey and Khushi
Mehta
Wages Act 1948 does not define minimum wages nor does it lay down the criteria for fixing
minimum wages. The criteria arrived at in the 1957 Indian Labour Conference forms the basis.
The Minimum Wages Act also entrusts the appropriate government to lay down the hours of
work for the scheduled employments as under: (a) fix the number of hours of work which shall
constitute a normal working day, inclusive of one or more specified intervals; and (b) provide for
a day of rest in every period of seven days which shall be allowed to all employees or to any
specified class of employees and for the payment of remuneration in respect of such days of rest;
and provide for payment for on a day of rest at a rate not less than the overtime rate. Even
remuneration for piece rate work is fixed in Minimum Wages Act.
Offence
Punishment
Imprisonment
months or with
Rs.500/Imprisonment
months or with
Rs.500/-
upto
6
fine upto
upto
6
fine upto
Section 22. Penalties for certain offences. -- Any employer who-- (a) pays to any employee less
than the minimum rates of wages fixed for that employee's class of work, or less than the amount
due to him under the provisions of this Act, or (b) contravenes any rule or order made under
section 13, shall be punishable with imprisonment for a term which may extend to six months, or
with fine which may extend to five hundred rupees, or with both:
Provided that in imposing any fine for an offence under this section, the Court shall take into
consideration the amount of any compensation already awarded against the accused in any
proceedings taken under section 20.
Section 22 lays down that an employer shall be punishable with imprisonment for a term which
may extend to six months or with the fine which may extend to five hundred rupees or with both,
if he -1. pays to any employee less than the minimum rates of wages fixed for that employees'
class of work, or less than the amount due to them under the provisions of this Act; or
2. contravenes any rule or order made under Section 13.
The Court, while imposing any fine for an offence under this section, shall take into
consideration the amount of any compensation already awarded against the accused in any
proceedings taken under Section 20.
Bijay Cotton Mills Ltd v. State of Ajmer3, the Apex court held that it is a criminal offence not to
pay the minimum wages fixed under the provisions of the Act.
3 (1955) I LLJ129
Section 22-A General Provisions for punishment of other offences.Any employer who contravenes any provision of this Act or of any rule or order made thereunder
shall, if no other penalty is provided for such contravention by this Act, be punishable with fine
which may extend to five hundred rupees.
Explanation: According to Section 22-A any employer who contravenes any provision of this
Act or of any rule or order made thereunder shall, if no other penalty is provided for such
contravention by this Act, be punishable with fine which may extend to five hundred rupees.
When the question relates to non-payment of wages for work done on Sundays which is referred
to Industrial Tribunal, the Tribunal cannot allow any additional payment as penalty under this
section.
In Champak Lal Thakkar v. State of Gujarat4, Morvi Vegetable Products Ltd. and its Managing
Director and Secretary were prosecuted under Section 22-A of the Minimum Wages Act for their
failure to maintain certain documents which were required to maintained under Section 18 of the
Act. The prosecution was possible only when the Act applied to a mill manufacturing Vanaspati.
Employment in any oil mill is covered by item 5 of Part I of the Schedule of the Act. Therefore,
the Act could apply to the company only when a mill manufacturing Vanaspati was covered
under the head "oil mill". It was held that the word 'oil' is not defined in the Act and, therefore,
its dictionary meaning may be applied. In view the meaning of the word 'oil' as given in
Webster's Dictionary 'Vanaspati' is essentially an oil although it is a different kind of oil than that
oil which forms its basic ingredient. Oil will remain oil if it retains its essential properties and
merely because it has been subjected to certain processes would not convert into different
substance. Therefore, prosecution of the petitioner under Section 22-A was possible.
22-B. Cognizance of offences
10
(1) No court shall take cognizance of a complaint against any person for an offence
(a) under clause (a) of section 22 unless an application in respect of the facts constituting
such offence has been presented under section 20 and has been granted wholly or in part,
and the appropriate government or an officer authorized by it in this behalf has
sanctioned the making of the complaint;
(b) under clause (b) of section 22 or under section 22A except on a complaint made by or
with the sanction of an Inspector.
(2) No court shall take cognizance of an offence
(a) under clause (a) or clause (b) of section 22 unless complaint thereof is made within
one month of the grant of sanction under this section;
(b) under section 22A unless complaint thereof is made within six months of the date on
which the offence is alleged to have been committed.
Explanation: According to Section 22-B(1)(a) no court shall take the cognizance of complaint
against any person for an offence under clause (a) of section 22 unless an application in respect
of the facts constituting such offence has been presented under section 20 and has been granted
wholly or in part, and that application must be sanctioned by the appropriate government or an
officer authorised in this regard.
Clause (2) of Section 22-B talks about the limitation period for a complaint under Section (22)
i.e, within 1 month of the grant of sanction and for Section (22-A) it is within 6 month of the
date on which the offence is alleged to have been committed.
22C. Offences by companies
(1) If the person committing any offence under this Act is a company every person who at the
time the offence was committed was in charge of and was responsible to the company for the
conduct of the business of the company as well as the company shall be deemed to be guilty of
the offence and shall be liable to be proceeded against and punished accordingly :
Provided that nothing contained in this sub-section shall render any such person liable to any
punishment provided in this Act if he proves that the offence was committed without his
knowledge or that he exercised all due diligence to prevent the commission of such offence.
Explanation: Section 22-C deals with an offence committed by a company. Every person who at
the time of offence was committed was in charge of or responsible for the conduct of the
company shall be liable, unless such person proves that :1. the offence was committed without his knowledge; or
2. he exercised all due diligence to prevent the commission of such offence
11
(2) Notwithstanding anything contained in sub-section (1) where any offence under this Act has
been committed by a company and it is proved that the offence has been committed with the
consent or connivance of or is attributable to any neglect on the part of any director manager
secretary or other officer of the company such director manager secretary or other officer of the
company shall also be deemed to be guilty of that offence and shall be liable to be proceeded
against and punished accordingly.
Explanation: Section 22-C(2) starts with non-obstante clause (which means that the provision
under non-obstante clause would prevail over the other clause)5, which says if it is proved that
(i) offence has been committed with the consent or connivance of, or
(ii) is attributable to any neglect on the part of any Director, Manager, Secretary or other Officer
of the Company, such that offence and shall be liable to proceeded against and punished
accordingly
For the purposes of this section
(a) "company" means any body corporate and includes a firm or other association of individuals
and
(b) "director" in relation to a firm means a partner in the firm.
It was held in Haricharan Singh Dugal and others v. State of Bihar6 that Section 22-C of the
Minimum Wages Act, 1948, is in pari materia with Section 10 of the Essential Commodities
Act 19557, and therefore, Directors of a company can be prosecuted along with the Company
5 Parasuramaiah v. Lakshamma AIR 1965 AP 220
6 (1990) I LLJ 310 (Patna) the Labour Inspector had inspected the company of the
petitioner known as M/s U.S. Dugal and Company and found that certain registers
were not maintained in accordance with the requirements of the Minimum Wages
Act and the Rules framed thereunder. Petitioners submitted that the petitioners are
shown as the directors of M/s U.S. Dugal and Company and there is no specific
allegation that they were responsible for the conduct of the business.
7 Section 10 in The Essential Commodities Act, 195510. Offences by companies.
(1) If the person contravening an order made under section 3 is a company, every person
who, at the time the contravention was committed, was in charge of, and was responsible
to, the company for the conduct of the business of the company as well as the company,
shall be deemed to be guilty of the contravention and shall be liable to be proceeded against
and punished accordingly: Provided that nothing contained in this sub-section shall render
any such person liable to any punishment if he proves that the contravention took place
without his knowledge or that he exercised all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act
has been committed by a company and it is proved that the offence has been committed
with the consent or connivance of, or is attributable to any neglect on the part of any
12
under the Minimum Wages Act and the rules, if a violation is committed. It is necessary to keep
in point the specific part played by each of them or their individual responsibility in the
complaint.
22D. Payment of undisbursed amounts due to employees
All amounts payable by an employer to an employee as the amount of minimum wages of the
employee under this Act or otherwise due to the employee under this Act or any rule or order
made thereunder shall if such amounts could not or cannot be paid to the employee on account
of the prescribed authority who shall deal with the money so deposited in such manner as may
be prescribed.
Explanation: According to Section 22-D all the amount(minimum wage) payable by the
employer to an employee shall be deposited with prescribed authority, if the same could not be or
cannot be paid to the employee on account of his death or an account of his whereabouts not
being known. The prescribed authority shall deal with the deposited amount in such a manner as
may be prescribed.
22-F. Application of Payment of Wages Act 1936 to scheduled employments
(1) Notwithstanding anything contained in the Payment of Wages Act 1936 (4 of 1936) the
appropriate government may by notification in the Official Gazette direct that subject to the
provisions of sub-section (2) all or any of the provisions of the said Act shall with such
modifications if any as may be specified in the notification apply to wages payable to employees
in such scheduled employments as may be specified in the notification.
(2) Where all or any of the provisions of the said Act are applied to wages payable to employees
in any scheduled employment under sub-section (1) the Inspector appointed under this Act shall
be deemed to be the Inspector for the purpose of enforcement of the provisions so applied within
the local limits of his jurisdiction.
Basic Shiksha Parishad And Others v. P.A. And Others8 Allahabad High Court held that, on a
careful reading of the Section 22-F of the Minimum Wages Act 1948 it reveals that
notwithstanding anything contained in the payment of wages Act, 1936, the appropriate
Government may by notification apply all or any of the provisions of said Act in respect of
director, manager, secretary or other officer of the company, such director, manager,
secretary or other officer shall also be deemed to be guilty of that offence and shall be liable
to be proceeded against and punished accordingly. Explanation.For the purposes of this
section,
(a) company means any body corporate, and includes a firm or other association of
individuals; and
(b) director in relation to a firm means a partner in the firm.
8 [2006]RD-AH 7
13
wages payable to the employees in such scheduled employment as may be specified in such
notification. In other words, it means that irrespective of non-application of provisions of the Act
1936 on its own strength in respect of certain class of employees, the provisions of the Act-1936
can be made applicable by notification of appropriate Govt. in respect of payment of wages of
such employees if their employment is under scheduled employment of Act-1948.
14
Provision
Offences
Punishment
15
Section 22
Section 23
Obstruction
Violation
Factories Act,1948
Objective:-
OFFENCE
For contravention of the Provisions of
the Act or Rules
PENALTIES
Sec 92 to 106A
On Continuation of contravention
On contravention of Chapter IV
pertaining to safety or dangerous
operations.
Obstructing Inspectors.
16
PENALTIES
OFFENCE
Section 25-U
Committing
practices
Section 28
Section 30
unfair
PUNISHMENT
labour Imprisonment of upto 6
months or with fine upto
Rs.3,000
Imprisonment
for
6
months or with fine upto
Rs.1,000
PENALTIES
17
Failure of employer to submit draft Standing Orders fine of Rs.5000 and Rs.200 for every day
on continuation of offence.
Fine of Rs.100 on contravention and on continuation of offence Rs.25 for every day.
CONCLUSION
Why many employers are not so serious in implementing the minimum rates of
wages is due to the reason that the penal provisions under the Act have no
deterrent effect. The maximum penal punishment for paying less than the
minimum rates of wages fixed for the employees is imprisonment for a term
18
which may extend to six months or with fine which may extend to five hundred
rupees, or with both. In cases where any employer contravenes any provision of
the Act or of any rule or order made thereunder shall be punishable with fine,
which may extend to five hundred rupees. The information regarding the
prosecutions under the Act, clearly establishes that in all the cases of violation
only the fines were imposed on the erring employers. By violating the
compliance of minimum wage notifications, the employers might be saving
huge amount of money and they may not be so serious in paying a meager
amount by way of fines under the Act. The solution to this problem, penal
provisions pertaining to the violations under the Act, must be deterrent without
any option of payment of fine.
Lack of awareness10 about the minimum wages act among employers and
workers is also an issue which has been highlighted in the Evaluation Studies
on Implementation of the Minimum Wages Act, 1948 conducted by the Labour
Bureau under the Ministry of Labour & Employment 11. On the other hand
despite being aware about the minimum wages the willingness of workers to
accept lower wages is influenced by other compelling factors such as weak
bargaining power, the rural push induced by conditions of drought, nonavailability of work, loss of income yielding assets, indebtedness etc. the
Government should undertake the schemes providing minimum educational
programmes in order to bring an awareness of the important rights and
privileges of the exploited labour under various labour laws.
If the above suggestions are incorporated into the labour jurisprudence,
it is believed that the constitutional objective of securing socio-economic justice
will be fulfilled.
Bibliography
10 In the Evaluation Study on the Implementation of Minimum Wages Act, 1948 in
Stone Breaking & Stone Crushing Industry in Karnataka 2007-08 among the units
surveyed only 30 per cent of the units and 8 per cent workers reported awareness
about the Act.
11 Report on the Working of the Minimum Wages Act, 1948 for the year 2012
19
Minimum Wages and the Working Poor: Global Wage Report 2012/13.
James Sherk (2013): What is Minimum Wage: Its History and Effects on the
Economy, Testimony before Health, Education, Labor and Pensions
Committee, United States Senate on June 25, 2013.
Patrick Belser and Uma Rani (2010): Extending the Coverage of minimum
wages in India: Simulations from household data Conditions of Work and
Employment Series No.26, International Labour Office Geneva.
Prof. BijuVarkkey and Khushi Mehta: Minimum Wages in India: Issues and
Concerns.
World of Work Report (2013): Repairing the economic and social fabric.
Implementation of the Minimum Wages Act, 1948 - Case Study of India By
Ms. A. Srija.