Constitutional Validity of Minimum Wages Act

 Labour LawSubject-Wise Law Notes

 The constitutional validity of Minimum Wages Act has been a matter of debate.

 The Minimum Wages Act of 1948 holds a pivotal place in India’s labour
legislation landscape. Enacted with the objective of ensuring a decent livelihood
for workers, the Act establishes the legal framework for determining and
implementing minimum wage standards.

 By focusing on both social welfare and economic growth, the Act addresses the
essential rights of workers while also contributing to the nation’s overall
development.


 What is the Minimum Wages Act 1948?
 The Minimum Wages Act of 1948 is a legal statute that empowers both the
Central and State Governments in India to establish and enforce minimum wage
standards for various types of employment. This Act outlines the procedures and
guidelines for determining minimum wages, ensuring fair compensation for
workers in different industries. It is a labour law in India.

 The Act differentiates between employments falling under the Central

Government’s jurisdiction and those under the State Government, specifying
which authority is responsible for setting minimum wage rates in different job
categories.


 Need for Minimum Wages Act
 In India, the minimum wages set for workers are often inadequate to cover even
basic needs like meals and housing. Establishing a minimum wage serves two
vital purposes:

 1. Social Goal: Ensuring a minimum standard of living for workers is crucial to

combating poverty.

 2. Economic Goal: The minimum wage should motivate employees to perform

well, boosting the economy and enhancing people’s lives.

 For effective change, Indian workers, trade unions and labour groups should
actively support minimum wage legislation. Additionally, state labour
departments should set fair minimum rates to secure unorganised sector
workers’ livelihoods. Ignorance and illiteracy are factors that enable worker
exploitation, which can be countered through education on legal rights and
benefits, facilitated by trade unions and NGOs.

 The Minimum Wages Act of 1948 was enacted by the Indian Legislature to
address worker pay concerns, aiming to cover basic needs and decent living
standards. The Act empowers both the federal and state governments to set
minimum wages and includes provisions for wage adjustments based on
essential commodity price changes.
 To ensure employees’ rights, the Act establishes advisory committees to resolve
wage disputes and appoints a Labor Commissioner to hear cases related to
inadequate minimum wage payment. The Act also imposes penalties on
employers who violate its rules.

 This Act is significant as it promotes social justice, provides legal minimum wage
rates, safeguards employee rights and prevents employer exploitation in
scheduled employment.


 Features of the Act
 The Minimum Wage Act is applicable to workplaces with over 1000 employees
and addresses issues related to hourly pay rates, time and piece rates. The Act
sets minimum rates of pay for basic needs and establishes regulations for hours,
overtime and weekly holidays. Violations can lead to a maximum jail term of six
months. The Act is seen as a significant development in labour law, with three
categories of earnings covered: minimum salary, fair pay and living wages.

 The Act doesn’t formally define “minimum wage” but ensures it covers basic
needs, healthcare and education. Fair pay is consistently higher, accounting for
an employee’s family needs. Both fair pay and minimum wage are never lower
than a livable wage, which extends beyond necessities to include social,
insurance and educational needs. Distinguishing between these wages can be
challenging, as they can change based on economic conditions. This was noted
in the Crown Aluminium Works v. Their Workmen case.


 What is the Constitutional Validity of Minimum Wages Act 1948?
 The constitutionality of Minimum Wages Act 1948 was challenged in court cases.
The judiciary played a key role in establishing its constitutionality, affirming that
the Act safeguards workers’ interests, ensuring access to essentials like food,
shelter, clothing, education and medical aid. It was emphasised that paying
below the minimum wage amounts to forced labour.


 Minimum Wages Act is Not violative of Article 19 of the Constitution
 The first challenge to the constitutional validity of the Minimum Wages Act, 1948
arose in the case of Bijay Cotton Mills Ltd. v. The State of Ajmer, 1954. In
this matter, a dispute emerged between a company and its workers concerning
wage improvements. The company contended that the Act’s provisions were
unlawful, asserting that they unreasonably restricted employers. The company
claimed that these provisions hindered the resumption of trade or business
unless minimum wages were paid to workers.

 The company also argued that the rights of employees were curtailed, as they
couldn’t work in a trade or industry unless mutually agreed terms existed
between them and their employers. Thus, the company alleged that this Act
violated Article 19(1)(g) of the Indian Constitution, which safeguards trade and
business freedom.

 However, the Supreme Court of India ruled that the Act’s provisions were not
unreasonable and were allowed under Article 19 of the Indian Constitution . The
 Court highlighted that these provisions were enacted for the public’s benefit, in
line with the Directive Principles of State Policy outlined in Article 43 of the
Constitution. Although these provisions might pose challenges for employers in
conducting or initiating businesses, they were established to safeguard the
broader public interest. As such, the Act could not be considered unreasonable or
invalidated on these grounds.

 Similarly, in the case of Bhikusa Yamasa Kshatriya v. Sangamner Akola

Bidi Kamgar Union, 1958, the Bombay High Court determined that the
establishment of committees and Advisory Boards under the Minimum Wages
Act, 1948 did not violate the legal stipulations of the enacted legislation. Upon
thorough scrutiny of the Act, it was observed that Section 3(3)(iv) of the Act did
not conflict with Article 19(1) of the Indian Constitution, nor did it infringe upon
the Constitution’s guarantee of equal protection under the law. Hence, the
Minimum Wages Act is constitutionally valid with respect to Article 19.


 Minimum Wages Act is Not violative of Article 14 of the Constitution
 Minimum Wages Act is not violative of Article 14 of the Constitution which states
equality before the law.

 India’s Union Labour and Employment Minister, Shri Mallikarjuna Kharage,

highlighted that the variation in minimum wages among different states stems
from diverse socio-economic conditions, commodity prices, paying capacity,
productivity and more. These factors influence the wage rates paid to workers in
specific states.

 In the case of N.M. Wadia Charitable Hospital v. State of

Maharashtra, 1986, the Bombay High Court ruled that setting distinct minimum
wage rates for various localities is in accordance with the Constitution and the
nation’s labour laws. As such, establishing different minimum wage rates for
different regions is not discriminatory and does not violate the principles of the
Constitution.

 Hence, the Minimum Wages Act is constitutionally valid with respect to Article
14.


 Minimum Wages Act is Not Violative of Article 43
 The importance of providing labourers with wages that cover not only basic
survival but also uphold health and dignity is a matter that’s difficult to
challenge. This aligns with a directive principle of State policy found in Article 43
of our Constitution.

 Employers shouldn’t raise concerns if they are required to pay minimum wages
to their labourers, even if these labourers, due to their financial constraints and
vulnerability, might agree to work for lower wages. This perspective was upheld
in the case of Bijay Cotton Mills Ltd v/s The State Of Ajmer.


 Present Status of Constitutional Validity of Minimum Wages Act 1948?
 The Minimum Wages Act 1948 is constitutionally valid.
 Despite challenges, the Act has been found constitutionally sound and in line
with the principles of the Indian Constitution. The Act’s provisions have been
recognised as serving the public interest by ensuring fair wages for workers,
promoting their well-being and safeguarding their basic rights.

 The Act’s alignment with the Directive Principles of State Policy, particularly
Article 43, which emphasises the importance of securing living wages for
labourers, further supports its constitutionality. Moreover, the Act has been held
not to violate fundamental rights such as Article 19 (freedom of trade and
business) and Article 14 (equality before the law) of the Indian Constitution.

 Courts have considered factors such as diverse socio-economic conditions and

local variations in setting minimum wages, finding them to be reasonable and
non-discriminatory. Overall, the Act’s constitutionality has been upheld based on
its contribution to the general welfare and the betterment of workers’ conditions.

 Conclusion
 The Constitutional Validity of Minimum Wages Act is upheld through judicial
affirmation, aligning with the Indian Constitution’s principles. The Act addresses
social and economic goals by ensuring a minimal standard of living for workers
and promoting productivity. It empowers federal and state governments to set
minimum wages, protects workers’ rights through dispute resolution
mechanisms and penalises non-compliance. The Act’s enactment supports social
justice, prevents exploitation and contributes to equitable labour practices.