Minimum Wages Legislation

[faaiz]

Minimum Wages Legislation


Introduction:
 Prior to the state intervention in the field of wages, there existed widespread exploitation of women and children in those industries which were generally operated on a small scale (popularly known as sweat shops).
 In such industries, the workers did not have and still do not have, strong organizations to protect them against the excesses of employees.
 Strong public opinion gradually forced the state to adopt legislation for the fixation of minimum wages in such industries.
 This legislation is based on the philosophy: `wages cannot be left to be determined entirely by the market forces’.
Objectives behind the state regulation of quantum of wages:
 Prevention of hard work and toil and poverty arising from unduly low wages.
 Fixation of just and fair wages for preventing industrial disputes.
 Control of inflationary pressures.
 Raising purchasing power with a view to speeding up the pace of economic recovery.
 Wage regulation as a part of a national-income distribution policy and programmes of planned economic development.
Minimum Wages Act, 1948:
 This Act came into force on 15th March 1948.
 This is the first labour legislation in the country dealing with the fixation of minimum rates of wages for workers employed in different exacting employments including agriculture.


 Scope:
o The Act empowers the state and the central governments to fix minimum rates of wages in respect of workers employed in the following industries or employments listed in the Schedule of the Act.
o The industries are listed in two parts.
o Part I:
 Woollen carpet making or shawl weaving establishment;
 Rice mill, flour mill or dal mill;
 Plantation (any estate which is maintained for the purpose of growing cinchona, rubber, tea or coffee);
 Tobacco (including bidi making) manufacturing units;
 Oil mill;
 Road construction or building operations;
 Stone breaking or stone crushing;
 Lac manufacturing;
 Mica works;
 Public motor transport; and
 Tanneries and leather manufacturing units.
o Part II: Agriculture, including:
 Any form of farming (cultivation and tillage of the soil);
 Dairy farming;
 The production , cultivation, growing and harvesting of any agricultural or horticultural commodity;
 The raising of livestock, bees or poultry; and
 Forestry and timbering operations.
o The Act empowers the central and state governments to extend the application of the Act to any employments in their respective jurisdictions where fixation of minimum rates of wages is considered necessary.
 This was how the application of the Act was extended to all kinds of mining operations by the central government.
 Similarly, state governments have also extended the application of the Act to a number of additional industries or employments.
Fixation of minimum rates of wages: [Secs.3, 4]
 In respect of employments in their respective jurisdictions, the Act empowers the appropriate government:
o To fix minimum rates of wages for
 Time-work or for piece-work
o For specifically those employees employed on piece-work
 To fix guaranteed minimum time-rate
o Minimum rate of wages for overtime work.
 Different minimum rates of wages may be fixed for adolescents, children and apprentices, and for different localities.
 The rates may be fixed by the hour, by the day or by any prescribed longer wage period.
 This minimum rate of wages may consist of
o basic wage rate and cost of living allowance, or
o basic wage rate with or without cost of living allowance and the cash equivalent of the concession, in respect of essential commodities (available through the public distribution system), at concession, or
o an all-inclusive rate.
 The cost of living allowance and the cash value of the concession on essential commodities has to be calculated by a competent authority and the intervals for such calculations have also to be fixed under direction of the appropriate government.
 The appropriate government need not fix the minimum rates of wages for those scheduled employments where, in the whole State, less than 1000 people are employed.


Procedures for fixing and revising Minimum Rates of Wages: [Secs.5, 10]
 The minimum rates of wages may be fixed and later revised in the following two ways:
o A committee, sub-committees, and Advisory Boards (at the state and central levels) may be appointed.
 These bodies would hold enquiries an advise the appropriate government on the question of wage fixation.
o The appropriate government, by notification in the official gazette, may publish its own proposals on this matter.
 The notification will be specifically for the benefit of those likely to be affected by this fixation or revision.
 The notification would contain a date (not less than 2 months from the date of notification) on which the proposals will be taken into consideration.
 Such affected persons are entitled to send their representations.
 Based on these representations, minimum wages would now be fixed or revised and such a notification would again be published.
 When minimum rates are fixed or revised in this manner, they will come into effect on the expiry of 3 months from the date of notification.
 Composition of committees, sub-committees, and advisory boards: [Secs.8, 9]
o Each of these bodies would consist of representatives of the employers and the employees (in equal numbers) in the scheduled employments.
o Independent persons nominated by the appropriate government, will also be on these bodies.
 The number of independent persons will not exceed 1/3rd of the total number of members
o One of the independent persons will be appointed as the chairman.
o The work of the advisory boards, at the state and central level (as the case may be), will be to co-ordinate the work of the committees and sub-committees and advice the government in the matter of fixing and revising minimum rates of wages.
Revision of minimum rates of wages: [Secs.3, 5, 7, 8, 9]
o The procedure has been discussed earlier.
o Such a revision has to be made, generally, at a maximum interval of 5 years.
 Revision beyond the interval of 5 years may also be conducted by the appropriate government.
 So long as the rates are not revised, the minimum rates in force immediately before the expiry of the period of 5 years, will continue in force.
Minimum rates of wages during pendency of Industrial Disputes: [Sec.3]
 Let us take an example of an industrial establishment where there in a dispute relating to rates of wages payable.
o This establishment is of a nature included in the scheduled employment of the appropriate government.
o The proceedings regarding the dispute are awaiting adjudication by a Tribunal or National Tribunal.
o In the mean time, a notification fixing or revising the minimum rates of wages has been issued by the appropriate government.
o The newly fixed or revised rates of minimum wages will not apply to such an establishment while the adjudication decision is awaited.
o Such rates of minimum wages will also not be applicable during the period of operation of an adjudication award.

Mode of payment: [Secs.11, 16, 17]
 Payment of the fixed minimum wages has to be in cash.
 The appropriate government may authorize the payment of wages partly in kind.
 It may also authorize the provision of essential commodities at concessional rates (instead of giving its cash value).
o The value of wages in kind is to be estimated in a manner prescribed by the appropriate government.
Payment of minimum rates of wages and deductions from wages: [Sec.12]
 Only authorized deductions are allowed from these minimum wages.
 Where an employment is also covered by the Payment of Wages Act, 1936; the provisions of that Act will apply along with the Minimum Wages Act, 1948.
Provisions regarding hours of work, overtime, and weekly rest: [Secs.13-16]
 The appropriate governments are empowered to fix:
o Normal hours of work for a working day including interval(s);
o Overtime rate;
 If the scheduled employment is covered by the Factories Act, 1948; the overtime rate considered will be that provided in this Act, and that is double the normal rates of wages.
o Remuneration for the day of rest;
 This remuneration will not be less than that of the overtime rate.
 If an employee is required to work for a period less than the prescribed normal working day,
o he is entitled to received wages for a full normal day irrespective of the amount and duration of work done by him.
o But, if this failure to work is caused by the employees own unwillingness and for no fault of the employer, he is not entitled to the full wages.
Provision regarding claims: [Secs.20, 21]
 The following may be appointed as authorities under this Act to hear claims:
o The Commissioner for Workmen’s Compensation;
o Any officer of the central government exercising functions as a Labour Commissioner for any region;
o Any officer of the state government not below the rank of Labour Commissioner;
o Any other officer with the experience as a judge of a Civil Court.
 These authorities are empowered to:
o Hear and decide for any specified area;
 All claims arising out of payment of less than the minimum rates of wages, or
 In respect of the payment or remuneration for days of rest; or
 For work done on weekly or other rest day; or
 Wages at the overtime rate.
 An application for a claim may be submitted by:
o The employee himself;
o Any legal practitioner; r
o Any person acting with the permission of the Authority empowered to hear and decide the cases of claims.
 The maximum compensation that may be awarded is not to exceed 10 times the aggregate amount of the excess withheld by the employer.
 The Authority that is appointed to hear the claims is deemed to be a Civil Court with the corresponding powers.
Payment of undisbursed amounts due to employees: [Sec.22D]
 This provision is the same as that under the Payment of Wages Act, 1936.
Protection against attachment of assets of employer with government: [Sec.22E]
 An employer has deposited an amount with the government.
o This amount is for securing a contract with the government, or
 An amount is due from that government in respect of such contract.
 When this is the case, such amounts will not be liable to be attached under any order of any court in respect of any debt or liability incurred by the employer other than any debt or liability towards any employee, employed in connection with the said contract.
 Other than these amounts, an employer’s assets are liable to be attached under this Act if the appropriate government believes that he is likely to evade the payment he has been directed to pay.
Exemption of employer from liability in certain cases: [Sec.23]
 An employer charged under this Act may make a complaint that
o The offender is any other person and
o He proves , to the satisfaction of the court, that
 He observed due care and sincerity to enforce the provisions of the Act.
o He also manages to prove that this other person committed the offense without his knowledge, consent and support.
 In this situation, the other person is to be convicted of the offense and is liable to receive punishment as if he were the employer.
 The employer now stands absolved of the responsibility.
Exemptions and exceptions: [Sec.26]
 The central and state governments are empowered to direct that the provisions of the Act will not apply to certain categories of scheduled employment or a part of that employment.
Registers and records: [Sec.18]
 Every employer is required to maintain records and registers containing:
o Particulars of employees;
o Work performed by them;
o Wages paid to them;
o Receipts given by them; and
o Other prescribed particulars.
 Notices containing prescribed particulars have to be exhibited in the factory, workshop or a place where the employees in schedules employments are employed.
Penalties and procedure: [Secs.22, 24]
 An employer paying wages less than the minimum rates fixed or less than the amount due to them under the Act or contravention of any rule or order relating to hours for normal working day is punishable with imprisonment for a term extending up to 6 months or with a fine of up to Rs.500 or both.
 Contravention by the employer of any other provision of the Act or rule or order made under it, is punishable with fine of up to Rs.500.
 An employee that is found to have filed a claim that proves to be malicious or vexatious (not genuine but filed with an intent to trouble the employer), is liable to be punished with a fine of not more than Rs.50 that is payable to the employer.

Power of the government to add to the schedule: [Sec.27]
 The appropriate government is empowered to add to either part (I or II) of the schedule,
o any employment in respect of which it is of the opinion that minimum rates of wages should be fixed under the Act.
 Before the addition is made, the appropriate government is required to notify its intention in the official gazette.
o Such notification has to appear at least 3 months before making the additions.
Power of the Central Government to give direction: [Sec.28]
 The central government is empowered to give directions to state governments for executing this Act in the states.
Power of the Central and State governments to make rules: [Sec.29]
 The central government is empowered:
o To make rules prescribing the term of office of the members;
o To make the procedure to be followed in the conduct of business;
o To prescribe the method of voting;
o To prescribe the manner of filling up casual vacancies in membership; and
o To prescribe the quorum necessary for the transaction of business
Of the Central Advisory Board.
 The central and state governments are empowered to make rules for carrying out the purposes of the Act
o Subject to the condition of previous publication by notification in the official gazette.
 Working and assessment of the Act:

 

[jitendra05]

Minimum Wages Legislation


Introduction:
 Prior to the state intervention in the field of wages, there existed widespread exploitation of women and children in those industries which were generally operated on a small scale (popularly known as sweat shops).
 In such industries, the workers did not have and still do not have, strong organizations to protect them against the excesses of employees.
 Strong public opinion gradually forced the state to adopt legislation for the fixation of minimum wages in such industries.
 This legislation is based on the philosophy: `wages cannot be left to be determined entirely by the market forces’.
Objectives behind the state regulation of quantum of wages:
 Prevention of hard work and toil and poverty arising from unduly low wages.
 Fixation of just and fair wages for preventing industrial disputes.
 Control of inflationary pressures.
 Raising purchasing power with a view to speeding up the pace of economic recovery.
 Wage regulation as a part of a national-income distribution policy and programmes of planned economic development.
Minimum Wages Act, 1948:
 This Act came into force on 15th March 1948.
 This is the first labour legislation in the country dealing with the fixation of minimum rates of wages for workers employed in different exacting employments including agriculture.


 Scope:
o The Act empowers the state and the central governments to fix minimum rates of wages in respect of workers employed in the following industries or employments listed in the Schedule of the Act.
o The industries are listed in two parts.
o Part I:
 Woollen carpet making or shawl weaving establishment;
 Rice mill, flour mill or dal mill;
 Plantation (any estate which is maintained for the purpose of growing cinchona, rubber, tea or coffee);
 Tobacco (including bidi making) manufacturing units;
 Oil mill;
 Road construction or building operations;
 Stone breaking or stone crushing;
 Lac manufacturing;
 Mica works;
 Public motor transport; and
 Tanneries and leather manufacturing units.
o Part II: Agriculture, including:
 Any form of farming (cultivation and tillage of the soil);
 Dairy farming;
 The production , cultivation, growing and harvesting of any agricultural or horticultural commodity;
 The raising of livestock, bees or poultry; and
 Forestry and timbering operations.
o The Act empowers the central and state governments to extend the application of the Act to any employments in their respective jurisdictions where fixation of minimum rates of wages is considered necessary.
 This was how the application of the Act was extended to all kinds of mining operations by the central government.
 Similarly, state governments have also extended the application of the Act to a number of additional industries or employments.
Fixation of minimum rates of wages: [Secs.3, 4]
 In respect of employments in their respective jurisdictions, the Act empowers the appropriate government:
o To fix minimum rates of wages for
 Time-work or for piece-work
o For specifically those employees employed on piece-work
 To fix guaranteed minimum time-rate
o Minimum rate of wages for overtime work.
 Different minimum rates of wages may be fixed for adolescents, children and apprentices, and for different localities.
 The rates may be fixed by the hour, by the day or by any prescribed longer wage period.
 This minimum rate of wages may consist of
o basic wage rate and cost of living allowance, or
o basic wage rate with or without cost of living allowance and the cash equivalent of the concession, in respect of essential commodities (available through the public distribution system), at concession, or
o an all-inclusive rate.
 The cost of living allowance and the cash value of the concession on essential commodities has to be calculated by a competent authority and the intervals for such calculations have also to be fixed under direction of the appropriate government.
 The appropriate government need not fix the minimum rates of wages for those scheduled employments where, in the whole State, less than 1000 people are employed.


Procedures for fixing and revising Minimum Rates of Wages: [Secs.5, 10]
 The minimum rates of wages may be fixed and later revised in the following two ways:
o A committee, sub-committees, and Advisory Boards (at the state and central levels) may be appointed.
 These bodies would hold enquiries an advise the appropriate government on the question of wage fixation.
o The appropriate government, by notification in the official gazette, may publish its own proposals on this matter.
 The notification will be specifically for the benefit of those likely to be affected by this fixation or revision.
 The notification would contain a date (not less than 2 months from the date of notification) on which the proposals will be taken into consideration.
 Such affected persons are entitled to send their representations.
 Based on these representations, minimum wages would now be fixed or revised and such a notification would again be published.
 When minimum rates are fixed or revised in this manner, they will come into effect on the expiry of 3 months from the date of notification.
 Composition of committees, sub-committees, and advisory boards: [Secs.8, 9]
o Each of these bodies would consist of representatives of the employers and the employees (in equal numbers) in the scheduled employments.
o Independent persons nominated by the appropriate government, will also be on these bodies.
 The number of independent persons will not exceed 1/3rd of the total number of members
o One of the independent persons will be appointed as the chairman.
o The work of the advisory boards, at the state and central level (as the case may be), will be to co-ordinate the work of the committees and sub-committees and advice the government in the matter of fixing and revising minimum rates of wages.
Revision of minimum rates of wages: [Secs.3, 5, 7, 8, 9]
o The procedure has been discussed earlier.
o Such a revision has to be made, generally, at a maximum interval of 5 years.
 Revision beyond the interval of 5 years may also be conducted by the appropriate government.
 So long as the rates are not revised, the minimum rates in force immediately before the expiry of the period of 5 years, will continue in force.
Minimum rates of wages during pendency of Industrial Disputes: [Sec.3]
 Let us take an example of an industrial establishment where there in a dispute relating to rates of wages payable.
o This establishment is of a nature included in the scheduled employment of the appropriate government.
o The proceedings regarding the dispute are awaiting adjudication by a Tribunal or National Tribunal.
o In the mean time, a notification fixing or revising the minimum rates of wages has been issued by the appropriate government.
o The newly fixed or revised rates of minimum wages will not apply to such an establishment while the adjudication decision is awaited.
o Such rates of minimum wages will also not be applicable during the period of operation of an adjudication award.

Mode of payment: [Secs.11, 16, 17]
 Payment of the fixed minimum wages has to be in cash.
 The appropriate government may authorize the payment of wages partly in kind.
 It may also authorize the provision of essential commodities at concessional rates (instead of giving its cash value).
o The value of wages in kind is to be estimated in a manner prescribed by the appropriate government.
Payment of minimum rates of wages and deductions from wages: [Sec.12]
 Only authorized deductions are allowed from these minimum wages.
 Where an employment is also covered by the Payment of Wages Act, 1936; the provisions of that Act will apply along with the Minimum Wages Act, 1948.
Provisions regarding hours of work, overtime, and weekly rest: [Secs.13-16]
 The appropriate governments are empowered to fix:
o Normal hours of work for a working day including interval(s);
o Overtime rate;
 If the scheduled employment is covered by the Factories Act, 1948; the overtime rate considered will be that provided in this Act, and that is double the normal rates of wages.
o Remuneration for the day of rest;
 This remuneration will not be less than that of the overtime rate.
 If an employee is required to work for a period less than the prescribed normal working day,
o he is entitled to received wages for a full normal day irrespective of the amount and duration of work done by him.
o But, if this failure to work is caused by the employees own unwillingness and for no fault of the employer, he is not entitled to the full wages.
Provision regarding claims: [Secs.20, 21]
 The following may be appointed as authorities under this Act to hear claims:
o The Commissioner for Workmen’s Compensation;
o Any officer of the central government exercising functions as a Labour Commissioner for any region;
o Any officer of the state government not below the rank of Labour Commissioner;
o Any other officer with the experience as a judge of a Civil Court.
 These authorities are empowered to:
o Hear and decide for any specified area;
 All claims arising out of payment of less than the minimum rates of wages, or
 In respect of the payment or remuneration for days of rest; or
 For work done on weekly or other rest day; or
 Wages at the overtime rate.
 An application for a claim may be submitted by:
o The employee himself;
o Any legal practitioner; r
o Any person acting with the permission of the Authority empowered to hear and decide the cases of claims.
 The maximum compensation that may be awarded is not to exceed 10 times the aggregate amount of the excess withheld by the employer.
 The Authority that is appointed to hear the claims is deemed to be a Civil Court with the corresponding powers.
Payment of undisbursed amounts due to employees: [Sec.22D]
 This provision is the same as that under the Payment of Wages Act, 1936.
Protection against attachment of assets of employer with government: [Sec.22E]
 An employer has deposited an amount with the government.
o This amount is for securing a contract with the government, or
 An amount is due from that government in respect of such contract.
 When this is the case, such amounts will not be liable to be attached under any order of any court in respect of any debt or liability incurred by the employer other than any debt or liability towards any employee, employed in connection with the said contract.
 Other than these amounts, an employer’s assets are liable to be attached under this Act if the appropriate government believes that he is likely to evade the payment he has been directed to pay.
Exemption of employer from liability in certain cases: [Sec.23]
 An employer charged under this Act may make a complaint that
o The offender is any other person and
o He proves , to the satisfaction of the court, that
 He observed due care and sincerity to enforce the provisions of the Act.
o He also manages to prove that this other person committed the offense without his knowledge, consent and support.
 In this situation, the other person is to be convicted of the offense and is liable to receive punishment as if he were the employer.
 The employer now stands absolved of the responsibility.
Exemptions and exceptions: [Sec.26]
 The central and state governments are empowered to direct that the provisions of the Act will not apply to certain categories of scheduled employment or a part of that employment.
Registers and records: [Sec.18]
 Every employer is required to maintain records and registers containing:
o Particulars of employees;
o Work performed by them;
o Wages paid to them;
o Receipts given by them; and
o Other prescribed particulars.
 Notices containing prescribed particulars have to be exhibited in the factory, workshop or a place where the employees in schedules employments are employed.
Penalties and procedure: [Secs.22, 24]
 An employer paying wages less than the minimum rates fixed or less than the amount due to them under the Act or contravention of any rule or order relating to hours for normal working day is punishable with imprisonment for a term extending up to 6 months or with a fine of up to Rs.500 or both.
 Contravention by the employer of any other provision of the Act or rule or order made under it, is punishable with fine of up to Rs.500.
 An employee that is found to have filed a claim that proves to be malicious or vexatious (not genuine but filed with an intent to trouble the employer), is liable to be punished with a fine of not more than Rs.50 that is payable to the employer.

Power of the government to add to the schedule: [Sec.27]
 The appropriate government is empowered to add to either part (I or II) of the schedule,
o any employment in respect of which it is of the opinion that minimum rates of wages should be fixed under the Act.
 Before the addition is made, the appropriate government is required to notify its intention in the official gazette.
o Such notification has to appear at least 3 months before making the additions.
Power of the Central Government to give direction: [Sec.28]
 The central government is empowered to give directions to state governments for executing this Act in the states.
Power of the Central and State governments to make rules: [Sec.29]
 The central government is empowered:
o To make rules prescribing the term of office of the members;
o To make the procedure to be followed in the conduct of business;
o To prescribe the method of voting;
o To prescribe the manner of filling up casual vacancies in membership; and
o To prescribe the quorum necessary for the transaction of business
Of the Central Advisory Board.
 The central and state governments are empowered to make rules for carrying out the purposes of the Act
o Subject to the condition of previous publication by notification in the official gazette.
 Working and assessment of the Act:

Hey faaiz, many many thanks for sharing such a nice article, i read your whole article and it explained the concept very well. Well, i am also uploading a document on minimum wages legislation and it would be useful for many other people.