CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT,

1948

A PROPOSAL MADE BY:

NAME: CHARULATA SINGH

ROLL NO. :1826

COURSE: B.B.A., LL.B.(Hons.)

A PROPOSAL SUBMITTED TO:

Ms. PALLAVI SHANKAR

(FACULTY OF LABOUR LAWS-I)

Research Project Submitted For The Course Labour Laws- I For Attaining The Degree Of
B.B.A.,LL.B.(Hons.)

03/2019

CHANAKYA NATIONAL LAW UNIVERSITY

Nyaya Nagar, Mithapur-800001

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

DECLARATION BY THE STUDENT

I hereby declare that the work reported in the B.B.A.,LL.B. (Hons.) Project Report entitled
“Constitutional Validity of Minimum Wages Act, 1948” submitted at Chanakya National
Law University, Patna is an authentic record of my work carried out under the supervision
of Ms. Pallavi Shankar.

I have not submitted this work elsewhere for any other degree or diploma and I am fully
responsible for the contents of my Project Report.

(Signature of the Candidate)

CHARULATA SINGH

ROLL NO. : 1826

COURSE: B.B.A., LL.B. (Hons.)

Chanakya National Law University, Patna

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

ACKNOWLEDGEMENT

I am highly elated to have worked on my research topic “Constitutional Validity of Minimum

Wages Act, 1948” under the guidelines of Ms. Pallavi Shankar (Faculty of Labour Laws-I). I
am very grateful to her for the proper guidance.

I would like to take this opportunity to express my profound gratitude and deep regard to her
for her exemplary guidance, valuable feedback and constant encouragement throughout the
duration of the project.

Her valuable suggestions were of immense help throughout my project work.

Her perceptive criticism kept me working to make this project in a much better way. Working
under her was an extremely knowledgeable experience for me.

I would also like to thank all my friends and my seniors. Apart from all these I would like to
give special regard to the librarian and other staffs of the library of my university who made a
relevant effort regarding to provide the materials to my topic and also assisting me.

Finally, I would also like to extend my gratitude to my parents and all those unseen hands
that helped me out at every stage of my project.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CONTENTS

INTRODUCTION…………………………………………………….………….pg no 05

• AIMS AND OBJECTIVES

• HYPOTHESIS
• RESEARCH METHODOLOGY
• SOURCES OF DATA
• LIMITATION

CHAPTERIZATION

1. HISTORY OF MINIMUM WAGES ACT, 1948…………………………pg no 07

1.1 TIMELINE OF THE MINIMUM WAGES ACT, 1948
1.2 MINIMUM WAGES ACT CONVENTION, 1970
2. OBJECTIVES OF MINIMUM WAGES ACT, 1948……………………..pg no 13
3. SALIENT FEATURES OF MINIMUM WAGES ACT, 1948……………pg no 15
4. FIXATION OF MINIMUM WAGES……………………………………..pg no 18
5. CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948...pg no 20
5.1 THE ACT IS NOT UNREASONABLE
5.2 THE ACT DOESN’T VIOLATE ARTICLE 14 OF THE INDIAN
CONSTITUTION
5.3 NOTIFICATION FIXING DIFFERENT RATES OF MINIMUM WAGES FOR
DIFFERENT LOCALITIES IS OT DISCRIMINATORRY
5.4 SANCTITY OF THE MINIMUM WAGES ACT, 1948

6. CASE LAWS……………………………………………………………….pg no 24

7. CONCLUSION……………………………………………………………...pg no 26

BIBLIOGRAPHY………………………………………………………………….pg no 27

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

INTRODUCTION
The Minimum Wages Act 1948 is an Act of Parliament concerning Indian labour law that sets
the minimum wages that must be paid to skilled and unskilled labour. The Indian Constitution
has defined a 'living wage' that is the level of income for a worker which will ensure a basic
standard of living including good health, dignity, comfort, education and provide for any
contingency. However, to keep in mind an industry's capacity to pay the constitution has
defined a 'fair wage'. Fair wage is that level of wage that not just maintains a level of
employment, but seeks to increase it keeping in perspective the industry’s capacity to pay. 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 industry’s capacity to pay and fix minimum wages such that they at least cover a
family of four’s 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.

AIMS AND OBJECTIVES

• To learn about the objectives of the Minimum Wages Act, 1948.

• To examine the sanctity of the Minimum Wages Act, 1948.

• To study about the constitutional validity of the Minimum Wages Act, 1948.

HYPOTHESIS
The researcher presumes that the Minimum Wages Act, 1948 is constitutionally valid.

RESEARCH METHODOLOGY

Doctrinal method- For the purpose of fulfilment of this project research is based on case- law,
statutes and other legal sources .

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

SOURCES OF DATA

Primary Sources – case laws, statutes

Secondary Sources – Books on family law, websites, journals, articles, magazines etc.

LIMITATION

Paucity of time- Due to paucity of time the quality and the quantity of the research project
may suffer.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CHAPTER 1: HISTORY OF MINIMUM WAGES ACT, 1948

The evolution of Indian labour legislation is obviously interlaced with the history of British
colonialism. British political economy was considered natural paramount in modelling some
of the early laws. In the initial phases it was very difficult to get adequate regular Indian
workers to run British organizations and hence labour laws became essential. These were
obviously in order to protect the interests of British bosses. Although this was a case, attitude
of Indian legislators, as it turned towards being independent from the clutches of British
empire, has been very constructive and pro-welfare state. The importance of the minimum
wages as an instrument of social protection was already high lightened in the ILO constitution
adopted in the year 1919 as a part of treaty of Versailles after the end of World War 1. The
preamble of this constitution recalls, “the High Contracting parties, moved by sentiments of
justice and humanity as well as by the desire to secure permanent peace has called for the
provision of an adequate living wage alongside other measures to improve the condition of
labour.
The concept of minimum wages first evolved with reference to remuneration of workers in
those industries where the level of wages was substantially low as compared to the wages for
similar types of labour in other industries. First of all, at the International Labour Conference
in 1928, a Draft Convention was adopted on the subject of minimum wages. In India in 1929
Royal Commission on Labour was adopted which considered the subject of minimum wages.
The Minimum wages Act was enacted to fulfill the aspiration of the workers as contained in
the resolution based on the Geneva Convention held in 1928, which reads:
“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 restraint should
be imposed upon their freedom of contract and such restrictions cannot be in any sense be said
to be unreasonable. On the other hand, the employers cannot be heard to complain if they are
compelled to pay minimum wages to their labourers even though the labourers on account of
their poverty and helplessness are willing to work on lesser wages”.
The fact that an employer might find it difficult to carry on the business on the basis of
minimum wages is an irrelevant consideration.( Held in U.Uchinoyi / vs/ State of Kerala.1)
The question of establishing statutory wage fixing machinery in India was first discussed in
1929 by the Royal Commission on Labour which was appointed and this commission
considered the subject of minimum wages. The question of establishing statutory wage fixing

1 U.Uchinoyi vs State of Kerala. 1961, I.LLJ 631.).

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

machinery in India was again discussed at the third and fourth meetings of the Standing Labour
Committee held in May 1943 and January 1944 respectively, and at successive sessions of the
tripartite labour conference in September 1943, October 1944, and November 1945. The last
of these, approved in principle, the enactment of the minimum wages legislation. On 11 April
1946, a minimum wages Bill, was introduced, but the passage of bill was considerably delayed
by the constitutional changes in India. It reached the statute book only in March 1948.2

1.1 Timeline of the Minimum Wages Act, 1948

1920: K.G.R. Choudhary recommended setting up boards for determining minimum wages for
each industry.

1928: International Labour Conference implemented system to fix wages for different trades.
However, the practice was not put into legislation in India.

1943: Standing Labour Committee, a Labour Investigation Committee was appointed on the
recommendation of Indian Labour Conference (ILC), 1943 to look into conditions of labour in
terms of their wages, housing, social conditions, and employment.

1945: The first bill on minimum wages was drafted in ILC.

1946: A bill on minimum wages was introduced in Central Legislative assembly on the
recommendations of 8th Standing Labour Committee. The 8th meeting of the Standing Labour
Committee, 1946 also recommended that a separate legislation that specified working hours,
minimum wages and paid holidays of unorganised sector be enacted.

1947: Post-independence representatives of labour, employers, and government attended a

government-organised conference. They defined minimum wages to be such that they should
not only provide for subsistence but should also be enough for education, medical requirements
and other amenities and should sustain efficiency.

1948: The Minimum Wages Act was eventually passed and was effective from 15 March.
Under the act a tripartite committee "The Tripartite Committee of Fair Wage" was appointed
that set definitions and guidelines for formulating a wage structure in India. The Committee of
fair wage definition of minimum wage as: "The minimum wages must be provided not merely
for the bare subsistence of life but also for the preservation of efficiency of the workers by

2Shastree, Evolution of Minimum Wages Act, 1948, http://www.legalservicesindia.com/article/1762/Evolution-

of-Minimum-wages-act-1948.html.
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

providing for some measures of education, medical requirement and amenities".

Recommendations of this committee have now set the foundations of wage fixation.

1957: The 15th Labour conference added some norms in the fixation of minimum wages such
that revision and fixation of wage rates are need-based. The recommendations were:

• The cost of three consumption units- husband, wife and two children for one earner.
Income from women and children should be ignored
• Satisfy the minimum food requirement of 2700 calories per person
• Clothing requirement of 72 yards for a family annually
• Rent of the minimum area as specified by Government’s Industrial Housing Scheme
• 20% of minimum wage should be the cost of fuel and miscellaneous items of expenditure

1987: Parliamentary sub-committee on unorganised labour concluded that minimum wages fail
to ensure a livelihood above the government defined poverty line for the unorganised sector. It
also revealed some flaws in implementation of the act. The committee noted that wages are not
fixed or revised regularly in some states. The committee recommended that factors such as
nutrition requirements, poverty line, shelter, clothing, fuel, light, medical and educational
expenses should be taken into account while fixing and revising minimum wages.

1988: Labour Minister’s Conference recommend the necessity of an allowance that safeguards
wages against inflation, called Variable Dearness Allowance (VDA).

1991: Hon’ble Supreme court’s judgment in the case of Reptakas & Co. specified that 25% of
the minimum wages should also account for Children’s education, required medical expenses,
recreation in festivals/ceremonies and provision for old age and marriage. National
Commission on Rural Labour (NCRL) recommended the government to introduce a national
minimum wage floor level for uniformity.

VDA became effective. It is revised twice in a year, on 1 April and 1 October.

1992: Thirtieth session of ILC observed the ineffectiveness of states' implementation

machinery and labour administration. It urged the civil society especially NGOs and workers'
organisations to inspect and ensure payment of minimum wages. The thirtieth session also
discussed that officials should be wary of fixing minimum wage rates to impracticable high
levels.

1994: The 9th Centre of Indian Trade Unions conference along with insisting a minimum wage
floor of Rs. 78.50, raised the following demands

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

• The family should be taken as five units instead of three.

• The Minimum Wages Act should cover all employments.
• There should be full neutralisation of cost of living with automatic linkage with the
consumer prices index and revision after every six months or 50-point rise in the CPI,
whichever is earlier.

1996: Government fixed the national minimum wage floor at INR 35/day as per the
recommendations of NCRL. Since 2009 it stands at INR 100/day.

2007: The Tamil Nadu state government announced that it has fixed minimum wages for 90%
of all occupations.

The Indian National Trade Union Congress appeals for a "national decent minimum wage" for
all industries that would be based on workers' needs.

2008: Working Women in Houses Union marched in Salem demanding statutory fixation of
minimum wages for house maids and servants.

2009: The Central government de-linked MGNREGA’s wage rates from minimum wages
through notification under Section 6(1). Wage rates that were initially aligned with respective
states' minimum wages were now fixed at a uniform wage rate of Rs. 100/- under the
scheme.[15]

On 12 August, the Andhra Pradesh wrote to the Ministry of Rural Development that workers
under the MGNREGA scheme are being paid less than the Minimum wage rate and this could
attract "contempt of court". There was no response to this.

On 10 July, the Labour Department responded to the notification of wage rate in MGNREGA
scheme as against the minimum wage rate: "Minimum Wages Act, 1948 guarantees minimum
wages to workers and there cannot be a wage rate less than the minimum wage rate in any
circumstances."

2010: Andhra Pradesh’s government says that any payment including that under the
MGNREGA scheme, below minimum wage rate is unconstitutional.

2011: As per Karnataka High Court’s interim order MGNREGA’s wage rates are to be aligned
with the Minimum Wage rates of the state.

National Human Right Commission convened a zonal workshop on fixation, revision and
enforcement of minimum wage is Brick kiln industry.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

2012: Mazdoor Kisan Shakti Sangathan urges the Supreme Court to withdraw the SLP to the
PM to rediscuss Karnataka High Court and Andhra Pradesh high Court's judgments.

Supreme Court asks the Central Government to consider respective states' minimum wages to
bring parity between them.

The Labour Department decides to make revisions in minimum wage rates mandatory within
three years.

2015: From 1 July 2015 the National Floor Level of Minimum Wage was raised to Rs 160 per
day.

2015: On 1 September 2015 labours in unorganised sector extended their support to one-day
nationwide general strike called by central trade unions (CTUs). Later than Shri Bandaru
Dattatreya, the Minister of State(IC) for Labour and Employment, elaborated on the initiatives
and continuing efforts of the Government to address the issues and concerns of the Trade
Unions for the welfare of workers. If the norms are implemented then the minimum wage
would be not less than Rs 273 per day which is currently Rs 160 per day.3

1.2 Minimum Wages Act Convention, 1970

(NO. 131) quoted that, “Minimum wages should be established for groups of wage earners
where, in consultation with employers’ and workers’ organizations, the competent national
authority finds it appropriate. Minimum wages, where they exist, should have the force of law
and should not be subject to abatement; failure to pay minimum wages should be subject to
penal or other sanctions.” The purpose of seeking employment is to sell labour to earn wages
so as to attain a ‘decent’ or ‘dignified’ standard of living. The wage or income that a worker
obtains from his/her work is therefore, what enables him/her to achieve a fair standard of living.
One seeks a fair wage both to fulfill one’s basic needs and to feel reassured that one receives a
fair portion of the wealth in return for one’s work to generate for the society. Society has a duty
to ensure a fair wage for every worker, to ward off starvation and poverty, to promote the
growth of human resource, to ensure social justice without which likely threats to law and order
may undermine economic progress. If ‘labour’ is to be defined, which is the central issue in
focus, for which an amount is fixed; labour is defined by prominent persons such as:-
S.E.Thomas , who says that , “Labour consists of all human effort of the body or of mind,

3 Minimum Wages Act, 1948, https://en.wikipedia.org/wiki/Minimum_Wages_Act_1948.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

which is undertaken in the expectation of reward”. Mr.Jevons states that,” Labour is any
exertion of mind or of body or both, undertaken partly or wholly with a view to some good
than the pleasure derived directly from work”. Thus, labour in broad sense of the term may be
defined as any hand or brain work which is undertaken for a monetary consideration.4

4Shastree, Evolution of Minimum Wages Act, 1948, http://www.legalservicesindia.com/article/1762/Evolution-

of-Minimum-wages-act-1948.html.
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CHAPTER 2: OBJECTIVE OF THE MINIMUM WAGES ACT, 1948

The Minimum Wages Act came into existence to safeguard the interests of the workers engaged
in the unorganized sector. This Act provides for fixation and revision of minimum wages of
the workers engaged in employment. Under this Act, both central, as well as State Government,
are responsible, in respect of scheduled employments within their jurisdictions to fix and revise
the minimum wages and enforce payment of minimum wages.

In case of Central sphere, any Scheduled employment carried on by or under the authority
of the Central Government or a railway administration, or in relation to a mine, oil-field or
major port, or any corporation established by a Central Act, the Central Government is the
appropriate Government while in relation to any other Scheduled employment, the State
Government is the appropriate Government. The Act is applicable only for those employments,
which are notified and included in the schedule of the Act by the appropriate Governments.

According to the Act, the appropriate Governments review/revise the minimum wages in the
scheduled employments under their respective jurisdictions at an interval not exceeding five
years. However, there is large-scale variation of minimum wages both within the country and
internationally owing to differences in prices of essential commodities, paying capacity,
productivity, local conditions, items of the commodity basket, differences in exchange rates
etc. The objective of this study lesson is to thoroughly acclimatize the students with the law
relating to minimum wages.

The Minimum Wages Act, 1948, is an Act to provide for fixing minimum rates of wages in
certain employments. The employment is those which are included in the schedule and are
referred to as ‘Scheduled Employments’.

The Minimum Wages Act was passed in 1948 and it came into force on 15th March 1948. The
National Commission on Labour has described the passing of the Act as a landmark in the
history of labour legislation in the country.

The philosophy of the Minimum Wages Act and its significance in the context of conditions in
India has been explained by the Supreme Court in Unichoyi v. State of Kerala ,5 as follows:
“What the Minimum Wages Act purports to achieve is to prevent exploitation of labour and
for that purpose empowers the appropriate Government to take steps to prescribe minimum

5 Unichoyi v. State of Kerala (A.I.R. 1962 SC 12).

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

rates of wages in the scheduled industries. In an underdeveloped country which faces the
problem of unemployment on a very large scale, it is not unlikely that labour may offer to work
even on starvation wages. The policy of the Act is to prevent the employment of such sweated
labour in the interest of general public and so in prescribing the minimum rates, the capacity
of the employer need not be considered. What is being prescribed is minimum wage rates which
a welfare State assumes every employer must pay before he employs labour”.

According to its preamble the Minimum Wages Act, 1948, is an Act to provide for fixing
minimum rates of wages in certain employments. The employment is those which are included
in the schedule and are referred to as ‘Scheduled Employments’. The Act extends to whole of
India.6

Applicability

The Act is applicable in those industries which consist of atleast 1000 workers. The minimum
wages further constitute 25% of children education, medical requirement, minimum recreation
including festival ceremonies and provisions for old age, marriage etc.7

6 Shastree, Evolution of Minimum Wages Act, 1948, http://www.legalservicesindia.com/article/1762/Evolution-

of-Minimum-wages-act-1948.html.
7 Minimum Wages Act, 1948, https://blog.ipleaders.in/minimum-wages-act-1948/.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CHAPTER 3: SALIENT FEATURES OF THE MINIMUM WAGES ACT,

1948

Under the Act, Central and State Governments are appropriate Governments to

1. (a) notify scheduled employment

2. (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.

A tripartite Committee Viz., "The Committee on Fair Wage" was set up in 1948 to provide
guidelines for wage structures in the country. The report of this Committee was a major
landmark in the history of formulation of wage policy in India. Its recommendations set out
the key concepts of the 'living wage', "minimum wages" and "fair wage" besides setting out
guidelines for wage fixation.

Article 39 states that the State shall, in particular, direct its policy towards securing (a) that the
citizen, men and women equally shall have the right to an adequate livelihood and (b) that there
is equal pay for equal work for both men and women.

Article 43 states that the State shall endeavour, by suitable legislation or economic organization
or in any other way, to give 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.8

Some of the salient features of minimum wages act 1948 are as follows:-

1. The Act applied to certain employments (listed in the Schedule). Both the governments
(Central and State) have to declare minimum wages for their sphere. The appropriate
government may add any employment to the list if there are 1000 workers are working
in that state.

8 Minimum Wages Act, 1948, http://ccppo.in/act/minimum_wages_act.pdf.

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2. Minimum wage means all remuneration in cash includes HRA (declared minimum
wage + special allowance).

3. Kinds of fixing of Minimum wages: (a) a minimum time rate, (b) a minimum piece
rate, (c) a guaranteed time rate, (d) a time rate or a piece rate applicable to overtime
rate.

4. Classes of fixing minimum rates of wages : (a) different scheduled employments; (b)
different classes of work in the same scheduled employment; (c) adults, adolescents,
children and apprentices; and (d) different localities (zone wise).

5. Norms to be considered for fixing minimum wage: Standard family of four members –
three consumption units (2 adults + 2 children) for one earner. Minimum food
requirement should be calculated on the basis of a net intake of calories. Clothing a
total of 72 yards; The rent corresponding to the minimum area (one room) Other routine
expenditure 20% of the total minimum wage. Social expenditure – further constitute
25% of the total minimum wage.

6. Period to revise minimum wages by the appropriate government is five years.

7. The appropriate Government shall declare special allowance after every six months (i.e.
1st April and 1st October of every year).

8. In case of not paying minimum wage, a claim can be made under section 20 before the
labor authority who can make or order of payment of 10 times of difference amount.

9. Not paying Minimum wages is an offence punishable up to six months’ imprisonment

or with fine up to Rs. 500 or with both.

10. Contracting out: Any contract or agreement whereby an employee either relinquishes
or reduces his right to a minimum rate of wages or any privilege or concession accruing
to him under this Act shall be null and void.

11. Regional Labour Commissioner (C) is the authority declared by Central Government
to decide claims (less than minimum wages) made under section 20 of the Act.
Assistant Commissioner of Labour is an authority in Gujarat.9

9Shastree, Evolution of Minimum Wages Act, 1948, http://www.legalservicesindia.com/article/1762/Evolution-

of-Minimum-wages-act-1948.html.
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

The act lays down for fixation of:

a) A minimum time rate of wages
b) A minimum piece rate
c) A guaranteed time rate and
d) An overtime rate
For different occupation, localities or classes of work and for adults, adolescents, children and
apprentices.

The minimum rate of wages may consist of:

a) A basic rate of wages and a cost of living allowance or
b) A basic rate of wages with or without the cost of living allowance and the cash value of the
concessions in respect of essential commodities supplied at concessional rates.
c) The act lays down that wages shall be paid in cash although it empowers the appropriate
government to authorize the payment of minimum wages either wholly or partly in kind in
particular cases.
d) It provides that the cost of living allowance and cash value of the concessions in respect of
supplies of essential commodities at concessional rates shall be computed by component
authority at certain interval.
e) The act empowers the appropriate government to fix the number of hours of work per day, to
provide for a weekly holiday and the payment of overtime wages of which minimum rates of
wages have been fixed under the act.
f) The act lays down for appointment of inspectors and other authorities to hear and decide claims
arising out of payment of wages at less than the minimum rates of wages or remuneration for
days of rest of work done on such days or of overtime wages.
g) All establishments covered by the act are required to maintain registers and office records in
the prescribe manner
h) The act provides the procedure for dealing with complaints arising out of the violation of the
provisions of the act and for imposing penalties for offences under the act.10

10Important Features of the Minimum Wages Act, 1948, https://manmaik.blogspot.com/2011/01/important-

features-of-minimum-wages-act.html.
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CHAPTER 4: FIXATION OF MINIMUM WAGES

The Minimum Wages Act 1948 generally specifies minimum wage rates on a per day basis, and
extends to the entire country and is revised within a period of not less than five years, however
there is a provision to increase dearness allowance every two years. The norms in fixing and
revision of minimum wages were first recommended by ILC, 1957.

Revision of minimum wage rates is based on a 'cost of living index' and wages can be fixed for
an entire state, part of the state, class or classes and employments pertaining to these categories.
The fixation of wages is based on the norms mentioned and a wage board (different for different
industry).

Under the Minimum Wages Act, State and Central Governments have the power to fix and
revise minimum wages. The act specifies that the "appropriate" government should fix the
wages i.e. if the wages to be fixed are in relation to any authority of Central government or
Railway administration then the Central government fixes it. However, if the wage rate is to
be fixed or revised for a scheduled employment, the respective state governments fix it. The
Centre fixes the National floor level Minimum Wage that is lower than most states' respective
minimum wages. The ambiguity and overlap in the jurisdiction of both these tiers of
government have caused debates and controversies. One of such debates revolves around fixing
wage rates of MGNREGA scheme, an employment guarantee initiative by the Central
Government.

As per Section 5 of the Minimum Wages Act, 1948, there are two ways of fixing and/or revising
minimum wages • Committee Method: Committees and Sub-committees are set up to make
recommendations or create inquiries. • Notification Method: The government publishes
proposals and an official date in the Official Gazette. All advice and recommendations form
various committees and sub-committees as well as representations are collected before the
specified official date and the government then proceeds to fix/revise minimum wages.11

Section 3 lays down that the Government shall fix the minimum rates of wages which is
payable to employees in the course of employment specified in Part I and Part ii of the
Schedule, and in an employment added to either part by notification under Section 27. In case
of the employments specified in Part II of the Schedule, the minimum rates of wages may not
be fixed for the entire State. Parts of the State may be left out altogether. In the case of an
employment specified in Part I, the minimum rates of wages must be fixed for the entire State,

11 Minimum Wages Act, 1948, https://en.wikipedia.org/wiki/Minimum_Wages_Act_1948.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

no parts of the State being omitted. The rates to be fixed need not be uniform. Different rates
can be fixed for different zones or localities: [Basti Ram v. State of A.P12]

The constitutional validity of Section 3 was challenged in Bijoy Cotton Mills v. State
of Ajmer,13 The Supreme Court held that the restrictions imposed upon the freedom of contract
by the fixation of minimum rate of wages, though they interfere to some extent with freedom
of trade or business guaranteed under Article 19(1)(g) of the Constitution, are not unreasonable
and being imposed and in the interest of general public and with a view to carrying out one of
the Directive Principles of the State Policy as embodied in Article 43 of the Constitution, are
protected by the terms of Clause (6) of Article 9.

Notwithstanding the provisions of Section 3(1)(a), the “appropriate Government” may not fix
minimum rates of wages in respect of any scheduled employment in which less than 1000
employees in the whole State are engaged. But when it comes to its knowledge after a finding
that this number has increased to 1,000 or more in such employment, it shall fix minimum
wage rate.

According to Section 3(1)(b), the Government may review at such intervals as it may think fit,
such intervals not exceeding five years, and revise the minimum rate of wages, if necessary.
This means that minimum wages can be revised earlier than five years also.14

12 Basti Ram v. State of A.P., AIR 1969 AP 227.

13 Bijoy Cotton Mills v. State of Ajmer, 1955 AIR 33.
14 Minimum Wages: Fixation and Procedure under Minimum Wages Act, 1948, https://www.legalbites.in/law-

notes-labour-law-minimum-wages-fixation-procedure-minimum-wages-act-1948/.
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CHAPTER 5: THE CONSTITUTIONAL VALIDITY OF 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 industry’s capacity to pay and fix minimum wages such that they at least
cover a family of four’s 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 the 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.

5.1 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 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 judgment in the case “ Golmohammad Tatyasaheb, a bidi factory
by its proprietors Shamrao v. State of Bombay15

Another important judgment that favours and supports the constitutional Validity of the
Minimum Wages Act, 1948 is, “ V. Unichonoy v. State of Kerala16. This case raised the same
questions which were raised in the case of Golmohammad Tatyasaheb v. State of

15 Shamrao v. State of Bombay, AIR 1962 Bom 97.

16 Unichoyi v. State of Kerala (A.I.R. 1962 SC 12).
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

Bombay17., 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 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 v. State of Kerala 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”.

5.2 The Act doesn’t violate Article 14 of the Indian Constitution.

“On a careful examination of the various Acts and the machinery set up 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 v.
Sangamner Akola Bidi Kamgar Union”18. Further, as decided in the case “C.B. Boarding &
Lodging, Re(1970) II LLJ 403: AIR 1970: SC 2042: 38 FIR I(5) .” , it added to the above-
mentioned case that, “… nor the reason that two different procedures are provided for
collecting information.”

17 Golmohammad Tatyasaheb v. State of Bombay, AIR 1962 Bom 97.

18 Bhikusa Yamasa Kshatriya v. Sangamner Akola Bidi Kamgar Union”, AIR 1963 SC 306.
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

5.3 Notification fixing different rates of minimum wages for different localities is not
discriminatory.

where the fixation of rates of wages and their revision was 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 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 India’s Union Labour and Employment Minister Shri Mallikarjuna
Kharge;, “The variation of minimum wages between the states is due to differences in
socioeconomic 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 v. State of Maharashtra , 1993”19,

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 proviso of
the Minimum Wages Act is in any way against the proviso of constitution is wrong.

5.4 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 v. State of Rajasthan (1983)20, 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

19 N.M.Wadia Charitable Hospital v. State of Maharashtra , 1993 IIILLJ 536 Bom.

20 Sanjit Roy v. State of Rajasthan 1983 AIR 328, 1983 SCR (2) 271.
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

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 to
have asked Government of India to immediately revoke its unconstitutional notification and
ensure that minimum wages are paid to all workers in India.

In the view a 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.21

21 Object, Constitutional Validity and Salient features of the Minimum Wages Act, 1948,
https://www.legalbites.in/law-notes-object-validity-features-minimum-wages-act-1948/.
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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CHAPTER 6: CASE LAWS

In the case of Aijaz Ahmad Malla v State of J&K22 the petitioner, a sweeper in the
respondent’s school in the region of Jammu and Kashmir, had been denied his minimum wage,
and was threatened to be disengaged when he protested. The court dismissed the case and
commanded the school authorities to regularize the services and provide the petitioner with the
wages prescribed by the Statute. This recent case from September, 2017 highlights the
improper implementations of the Act even decades after its first implementation.

The case Jitendra Nath Upadhyaya v State of Jharkhand and another,23 dealt with a
situation wherein the principal employer, who was also the petitioner, had not paid his
employees their due wages. It was held by the Hon’ble bench of the Jharkhand High Court that
the claims by the petitioner were factually and legally incorrect; thus they were dismissed. He
was instead forced to abide by an earlier order asking him to pay the wages to his employees,
along with compensations. The statements of the workers were evidence of the fact that the
petitioner had deliberately restrained from providing wages to his employees, and was making
frivolous claims before the court.

Another instance of violation of the Minimum Wages Act, 69 years after its first
implementation, is the case of Kerala State Electricity Board v Kurien.E. Kalathil24. This
case involves an agreement that had been executed between the First Respondent and the
Kerala State Electricity Board for the construction of a dam. The Government of Kerala had
revised the wages payable under the Minimum Wages Act. However, the labourers were denied
the revised payment by the Kerala State Electricity Board. This matter was subsequently
dismissed by the Court, directing the Board to provide the labourers with their legally entitled
wages along with interest. All these instances indicate a need for a more effective
implementation of the Act in the federated states.

22 Aijaz Ahmad Malla v State of J&K, 2017 SCC Online J&K 492.

23Jitendra Nath Upadhyaya S/o Krishn Jee Upadhaya v State of Jharkhand and another, 2017 Indlaw JHKD
714.

24 Kerala State Electricity Board v Kurien. E. Kalathil, 2000 Indlaw SC 363.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

Article 23 of the Indian Constitution provides us with fundamental protection against ‘any
similar forms of forced labour’. The case of PUDR v Union of India,25 provides an extensive
discussion on the topic of Forced Labour. The case involved the Delhi Administration, Delhi
Development Authority, and the New Delhi Municipal Committee as principal employers to
contractors responsible for necessary arrangements ahead of the Asian Games, 1982. The
contractors hired labourers from various states through jamadars, who received a commission,
deducted from the earnings of the labourers. An organization engaged in social service and
ensuring democratic rights to the citizens filed a writ before the court.

The case of Bandhua Mukti Morcha v Union of India,26 provides an insight into the working
conditions of the labourers at some of the stone quarries in the districts of Faridabad, Haryana.
A large number of the labourers were employed as bounded labourers and were not allowed to
leave, implying the poor enforcement and implementation of the welfare laws passed for the
benefit of this class. The petition prayed to end the “miseries, suffering and helplessness of
these victims of the most inhuman exploitation”. A major factor for the increased number of
violations is the ineffective compensating mechanisms. Meagre penalties are prescribed and
the issue appears to be a matter of indifference.

The bench in the case of South India Estate Labour Relations Organisation v State of
Madras,27 held a similar view. They opined that the Industrial Disputes Act and the Minimum
Wages Act, 1948 function on different terrains and are thus not contradictory in nature. The
Industrial Disputes Act deals with investigation and settlement of industrial disputes, whereas
the Minimum Wages Act cover the issues regarding the fixing of wages in industries where an
effective regulation of wages is absent. The rule of implied repeal cannot be used here.

25 People’s Union for Democratic Rights and another v Union of India, (1982) 3 SCC 235.

26 Bandhua Mukti Morcha v Union of India, AIR 1984 SC 802.

27 South India Estate Labour Relations Organisation v State of Madras, AIR 1955 MAD 45.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

CHAPTER 7: CONCLUSION

The hypothesis of the researcher that the Minimum Wages Act, 1948 is constitutionally valid
has been proved as the Act is not unreasonable, it doesn’t violate Article 14 of the Constitution
of India Minimum Wages Act, Notification fixing different rates of minimum wages for different
localities is not discriminatory and 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, 1948 is an act concerning minimum rates of wages for skilled and
unskilled labour and ensure a standard of living among them. To provide a basic wage structure
in India, a tripartite committee viz, “The Committee on Fair Wage” was established in 1948.
The committee’s report was the benchmark in the history of formulation of wage policy in
India. Besides setting out the guidelines it also give concept of ‘living wage’, ‘minimum wages’
and ‘fair wage’.

From the very inception of the idea of minimum wages, the aim of policy makers was to set up
a uniform wage rate across the entire country. However, such a policy would not be connected
to reality due to regional differences over consumption patterns, paying capabilities of
employers, requirements of employees, etc. Hence the modified aim was to achieve floor level
minimum wage for regions and then further it to a national floor minimum wage. However,
not everyone supported this view.

The Government of India should work towards effective working of the Minimum Wages Act,
1948 for better treatment of labour and providing them with the basic necessities by ensuring
a minimum wage.

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 CONSTITUTIONAL VALIDITY OF MINIMUM WAGES ACT, 1948

BIBLIOGRAPHY

BARE ACT

• Minimum Wages Act, 1948

• The Constitution of India, 1949

WEBSITES

• www.legalbites.in
• www.wikipedia.org
• www.manmaik.blogspot.com
• www.legalservicesindia.com
• www.ccppo.in
• www.blog.ipleaders.in

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