LABOUT LAW II – UNIT I

LABOUR LAW-II
Unit -1

The Remunerative Aspects – Wages – Concepts of wages - Minimum, Fair, Living Wages -
Wage and Industrial Policies - Whitley Commission Recommendations - Provisions of Code
on wages, 2019 – Timely payment of wages - Authorized deductions – Claims - Minimum
Wages under the code of wages, 2019 - Definitions - Types of wages - Minimum rates of
wages - Procedure for fixing and revising Minimum Wages – Claims –Remedy.
Unit-II:

Bonus – concept - Right to claim Bonus – Full Bench formula - Bonus Commission - Payment
of Bonus under the code on wages, 2019 - Application – Computation of gross profit,
available, allocable surplus - Eligibility of Bonus -Disqualification of Bonus - set on – set off of
allocable surplus- Minimum and Maximum Bonus-Recovery of Bonus.
Unit-III:

Employees Security and Welfare aspect - Social Security - Concept and meaning - Social
Insurance - Social Assistance Schemes. Social Security Legislations - Law relating to
workmen’s compensation – The Employee’s Compensation Act 1923 – Definitions -
Employer’s liability for compensation - Nexus between injury and employment - payment of
compensation - penalty for default - Employees State Insurance Act 1948 –Application -
Benefits under the Act - Adjudication of disputes and claims – ESI Corporation – Legislation
in favour of Social Security.
Unit-IV:

Employees Provident Fund and Miscellaneous Provisions Act 1952 – Contributions-

SchemesundertheAct-Benefits.TheMaternityBenefitincluding Amendment Act, 2018 -
Definitions-Application - Benefits. The Payment of Gratuity Act 1972 – Definitions –
application - Payment of gratuity - eligibility – forfeiture – Nomination – Controlling
authorities.
Unit-V:

The Factories Act 1948 - Chapters dealing with Health, Safety and Welfare of Labour. Child
Labour - Rights of child and the Indian Constitution - Salient features of the Child Labour
(Prohibition and Regulation) Act 1986 – The Equal Remuneration Act, 1976.
Suggested Readings

1. S.N.Misra, Labour and Industrial Laws, Central lawpublication

2. V.G. Goswami, Labour and Industrial Laws, Central LawAgency.

3. Khan &Kahan, Labour Law-Asia Law house,Hyderabad

4. K.D. Srivastava, Payment of Bonus Act, Eastern BookCompany

5. K.D. Srivastava, Payment of WagesAct

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LABOUT LAW II – UNIT I

6. K.D. Srivastava, Industrial Employment (Standing Orders) Act1947

7. S.C.Srivastava, Treatise on SocialSecurity

8. Sukumar Singh, Labour Economics, Deep& Deep, NewDelhi

9. V.J.Rao, Factories Law.

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LABOUT LAW II – UNIT I

PYQ’S
15 M ( PART –B)
1. Define wages and explain the authorized deductions that can be made from wage under payment
of wages Act ?****
2. Explain various benefits available to employees under the Employees State Insurance Act .1948
?******
3. Write sailent provisions of the the payment of Gratutity act .1972 ?********
4. Explain the law relating to child labour in India with the help of decided cases ?)
5. Define wages and Write the salient provisions of the payment of Wages Act , 1936 .?
6. Explain the concept of Bonus and Set –on and set –off of Allocable surplus ?**
7. Write a note on the Equal Remuneration Act , 1976 with the help of decided cases .?
8. What is Minimum Wages ? Explain the procedure for fixation and revision of Minimum Wages ?
9. Explain the law relating to child labour in India with the help of decided cases ?
10. Explain the procedure for fixation and revision of minimum wages under the Minimum Wages Act
, 1948 .?**
11. Define Gratuity and discuss the salient provisions of the payment of Gratuity Act ,1972?
12. Explain the law relating the child labour in India ? *
13. Define Bonus . Explain the computation of gross profit available and allocable surplus . what is
Minimum and Maximum bonus ?
14. What is Bonus ? How the bonus is calculated and paid the payment of Bonus Act 1965 ?
15. Explain the salient feature of the child Labour ( prohibition and Regulation ) ?
16. Discuss the provisions relating to health and safety under Factories Act . 1948 ?*
17. Discuss the concept of Bonus and salient features of the payment of Bonus Act, 1965 ?
18. Define the term Workmen and discuss the liability of the employer for the injuries sustained by
the workmen during the course of employment ?*****
19. Discuss the concept of wages . What is the constitutional goal with regard to wages ?
20. Explain the salient feature of the Employees Provident Fund and Miscellaneous Provisions Act
,1952?
21. Write a comment on the Child Labour ( Prohibition and Regulation ) Act , 1986 ?

6M ( PART – A )
1. Whitely Commission Recommendations ?****
2. Fair wage **
3. P.U.D.R. V. Union of India
4. Full Bench formula of Bonus ****
5. Allocable Surplus
6. Social security ****
7. Maternity Benefit ********
8. Equal pay for equal work
9. Living Wage ***
10. Social Insurance
11. ESI Corporation ****
12. Payment of Gratuity **
13. Child Labour ***
14. Dearness Allowance

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LABOUT LAW II – UNIT I

15. Eligibility of Bonus

16. Social Assistance *
17. Welfare of Labour **
18. Equal Remuneration
19. Authorized deductions of wages *
20. Bonus Commissions **
21. Social Insurance ***
22. Occupational diseases **
23. Sickness benefit
24. Nomination
25. Labour Welfare **
26. Set off of allocable surplus
27. Social Security legislations
28. Forfeiture
29. Right of Child labour
30. Wage Boards
31. Set –on and set –off of allocable surplus *
32. Definition of Wages *
33. Notional extension
34. Minimum and Maximum Bonus
35. Disablement
36. Concept of Wages
37. Fixation of wages
38. Minimum wages
39. Total disablement

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LABOUT LAW II – UNIT I

UNIT -I
Unit -1

The Remunerative Aspects – Wages – Concepts of wages - Minimum, Fair, Living Wages -
Wage and Industrial Policies - Whitley Commission Recommendations - Provisions of Code on
wages, 2019 – Timely payment of wages - Authorized deductions – Claims - Minimum Wages
under the code of wages, 2019 - Definitions - Types of wages - Minimum rates of wages -
Procedure for fixing and revising Minimum Wages – Claims –Remedy.
Concept of Wages
The legislations pertaining to remunerative aspects of the wages are:
• Minimum Wages Act, 1998
• Payment of Wages Act, 1936 , and
• Equal Remuneration Act, 1976.

Wage is the price or money paid for labour, remuneration given to hired person for his or
her services.
The Award given to workers, whether for mental or physical work are termed as wages.
It is the paid by the employer, if the terms of the employment are fulfilled.
Bentham, defines wage as “A wage is a sum of money paid under contract by an employer
to a worker for services rendered.”
Prof. J.L. Hanson says “wage is a payment to a labourer for its assistance to production.”
• In Kamani Metals & Alloys vs their workmen, (AIR 1967 SC 1175), it was held that
“fixation of wage structure is always a delicate issue because of the reason that it
has to struck balance between the demand of social justice and wages.
The wages are divided into 3 categories:
• Minimum wage
• Fair wage and
• Living wage.
Minimum wages as the irreducible level of wages paid to an unskilled worker, considering him
as a human being living in a civilized society. It indicates that
(i) it is paid to an unskilled worker,
(ii) it is an irreducible level which cannot be further reduced and
(iii) it is paid to meet basic needs of food, clothing and shelter.

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LABOUT LAW II – UNIT I

Workmen of Raptakos Brett & Co. Ltd vs. Management ((1992) 1 Lab LJ 340 (SC))
The Supreme Court has held that keeping in view the socio-economic aspect of the wage
structure, one more component to the minimum wage should be added, namely, children
education, medical requirement, and minimum recreation including festivals, ceremonies and
provision for old age, marriages etc. that further constitute 25 % of the total minimum wage.
Standards to be followed for fixing Minimum Wage
1. The family should be taken to consist of three consumption units for earner.
2. The minimum food requirement is 2700 calories as recommended by doctor for an
average Indian adult of moderate activity.
3. The clothing requirement should be estimated as18 yards per annum, which would
give for the average worker’s family of four, a total of 72 yards.
4. In respect of housing the rent corresponding to the minimum area provided for under
Government Housing Scheme should be taken for consideration.
5. Fuel, lighting and other miscellaneous items of expenditure should constitute 20% of
the total minimum wage.
6. Children’s education, medical requirement, minimum recreation including festival
ceremonies and provision for old age, marriage etc, should further constitute 25% of
the total minimum wage.
7. In Unichoy vs. State of Kerala [AIR 1962 SC 12] it was held that “in fixing minimum
wage, capacity of management to pay is not a consideration”.
Living Wage’ definition by the Supreme Court cases
In the Standard Vacuum Oil Company vs. Its Workmen (1961)1LLJ 227 case, it has been
observed that there is a minimum basic wage, which the employer of any industrial labor
must pay in order to be allowed to continue an industry. Above this is the fair wage, which is
adequate to cover the normal needs.
Above the fair wage is the living wage. It is a wage which provides with all the material things
which are needed for health and physical well being.
In Kamani Metals and Alloys Ltd vs. The Workmen, [AIR 1967 SC 1175]
The SC has observed that the living wage is a wage which is not only sufficient to provide a
standard family with food, shelter, clothing medical care and education of children but also
fair measure of frugal comfort with an ability to provide for old age and evil days.
In Crown Aluminium Works Ltd. Vs. Their Workmen, [(1958) 1 LLJ (SC) 30] it has been
observed that the term ‘living wage cannot be defined accurately as the contents of living
wage, in an expanding national economy, expand and vary.
In All India Reserve Bank Employees Association v. Reserve Bank of India [ AIR 1966 SC 305]
it has been observed that ‘our political aim is living wages though in actual practice living wage
has been an ideal which has eluded our efforts like an ever-receding horizon and will so
remain for some time to come”

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LABOUT LAW II – UNIT I

Fair Wage
Fair wage is the mean between the living wage and the minimum wage. The rate of wages
prevailing in an occupation is considered as ‘fair’, if it is about on par with the average
payment for tasks in other trades which are of equal difficulty and disagreeableness, which
require equally rare natural abilities and equally expensive training.
In S.A.F. L Works vs. State Industrial Court, Nagpur AIR 1978 SC 1113 case, the Supreme
Court observed that in fixing the paying capacity the Tribunal will have to fix the income as
well as permitted deductions and allowances properly incurred. There can be no dispute that
expenses incurred for purchase of raw material, maintenance of the factory, expenses
incurred towards rent, public charges, maintenance of the establishment and expenses
incurred in marketing of the produce should be deducted.
It was held in Transport Corporation of India Ltd vs. State of Maharashtra & Others (1993)2
LLJ 365(Bom) that, it is the case of not for the Labor Court or Tribunal to fix the minimum rate
of wages. While fixing fair wages the Courts or Tribunals take into consideration the minimum
rate of wages and where the Government has not fixed the minimum rate of wages then the
Courts or Tribunals ascertain for themselves what would be the minimum rate of wages.
Wage and industrial policy of the Government of India
Industrial policy before independenceThe Acts before independence
• The Fatal Accidents Act, 1858;
• The Workmen’s Compensation Act, 1923;
• The Children (Pledging of Labour) Act, 1933;
• The Payment of Wages Act, 1936;
• The Factories Act, 1936;
• The Employers liability Act, 1938;
• The Weekly Holiday’s Act, 1942
• The Industrial Employment (Standing Orders) Act 1946
Wage and Industrial policy after Independence
 Equality before law (Art 14),
 (Art 15) Prohibition of Discrimination on grounds of religion, race, sex, caste or place
of birth
 (Art16) Equal Opportunities
 Protection of life (Art 21),
 Prohibition of forced labour (Art 23)
 Child labour (Art 24)
 The Directive Principles of State Policy provides right to work (Art 41),
 Provision for just and humane conditions of work and maternity benefit (Art 42),

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LABOUT LAW II – UNIT I

 Living wages for workmen (Art 43)

 Participation of workers in management of industries (Art 43-A),
 Equal pay for equal work (Art 39).
Enactments after Independence
 Industrial Dispute Act, 1947
 Minimum wages Act, 1948.
 The Employees State Insurance Act, 1948.
 The Factories Act, 1948.
 The industrial Development and Regulations Act, 1951
 The Employees Provident Funds and Miscellaneous Provisions Act, 1952
 The Slum Areas (Improvement and Clearance) Act, 1956
 The Maternity Benefit Act, 1961
 The Payment of Bonus Act, 1965
 The Payment of Gratuity Act, 1972
 The Bonded Labour System (Abolition) Act, 1976
 The Equal Remuneration Act, 1976
 The Contract Labour (Regulation and Abolition), 1970 etc.
The Payment Of Wages Act 1936
The Act has come in to force on 21tst March 1937.This Act was passed to regulate the
payment of wages for certain classes of persons employed in industry. It ensures payment of
wages in a particular form and at regular intervals without unauthorized deductions.
Recommendations of The Royal Commission of Labor
• Children should be exempted from fine;
• The minimum amount of fine should not exceed in any month half an anna in the
rupee of the worker’s earnings;
• The sum realized as fine should be utilized for the benefit of the employees;
• A notice specifying the acts and omissions in respect of which fines may be imposed
should be posted and any other fine should be deemed to be illegal;
• Any deduction made for goods having been damaged should not exceed the wholesale
price of the goods damaged;
• Deductions may be made for housing accommodation and raw materials;
• Imposition of any fine and deduction made which is not permitted by law should be
made penal.

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History

 Laissez faire continued to govern the field of industrialization for quite a long time.
 First instance was 1918 dispute at Ahmedabad textile industry where Gandihji played
an important role.
 The strike of workers continued for 23 days and ended with voluntary arbitration of
both employees represented by Gandhiji and employers by Ambalal Sarabhai the
president of Mill Owners Association. They agreed for payment of DA increase and
determined the wages.
 However, third party intervention in industrial dispute started through Trade Disputes
Act, 1929 invoked by Govt. only in selective cases.
Whitley Commission
Whitley Commission, also known as the Royal Commission on Labour
o The Royal Commission on Labour was established in 1929.
o The Commission was led by John Henry Whitley.
o The Commission reported in 1931 that the cause of India's industrial and social
problems is poverty.
o The report also criticized the role of British employers in perpetuating the problems.
o The Commission suggested the collection of systematic labour statistics.
o The Commission recommended the adoption of suitable legislation enabling the
collection of information regarding the living, working, and socio-economic
conditions of industrial labour.
o The Commission also suggested the establishment of industrial councils all over the
world.
o The Whitley Commission also led to the passage of the Payment of
Wages Act in 1936.
 Commonly called as The Royal Commission appointed during 1931-33.
 It examined various issues relating to wage- levels and reported on minimum wages,
standardized wages, wage incentives and suggested for collection of relevant wage
data to resolve the wage determination.
 Recommended for minimum wages
 Brought govt. attention towards unfair deduction made by employers.
 Called for making new law in this regard Outcome- Payment of wages act, 1936
Rege Committee
• Various ad hoc committees were constituted by govt. to settle the wage disputes and
recommend for wage structure.
• It identified the difference in levels of wages in agriculture and in industries and observed
that such difference should not be over-emphasized. It can be partly justified because of
conditions under which industrial workers were made to work and live.
• 'Agricultural wages are low' could not be a justification for keeping industrial wages low.

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Industrial Truce Resolution, 1947

 Passed after World War II.

 With a view to save the industries from being affected by World War II exigencies.
 This Resolution called upon labour and the management to maintain industrial peace
and avert strikes, lock-outs and slowing down of production for a period of three years
and for the management to ensure fair wages to labour, fair return on capital
employed in the industry, and reasonable reserves for the maintenance and expansion
of the undertaking'.
The Industrial Policy Resolution 1948

 It fixed minimum wages in sweated industries and stressed on promoting fair wage
agreement in organized sector of industries.
 Minimum Wages Act, 1948 was passed.
 Committee on fair wage was appointed.
 The committee described wages with reference to three levels-
 Minimum wages
 Fair Wages
 Living Wages
 Various factors were recommended to fix the above.
Kinds of wages
Minimum wages- Justice Higgins- irreducible level of wage paid to an unskilled worker,
considering him a human being living in a civilized society.
Three important consideration-
1. it is irreducible
2. It is paid to unskilled worker
3. Worker is to be considered as a human being living in civilized society and therefore he is
entitled to basic needs of food, clothing and shelter like any other human being.
Living wage
One should not only provide for food, shelter and clothing but for some frugal comfort of life,
good education to children, some amusement and provision for sickness and old- age
including some measure of social security.
Express Newspaper Ltd v Union of India
SC observed- living wage should enable the wage earner to provide for himself and his family
not only for the three basic necessities of life but also for frugal comforts, good education to
children, protection against ill-health and a measure of insurance against the more important
misfortune including old-age.

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Crown Aluminum Works Itd v Their workmen

The SC observed that though it is very difficult to define or even to describe accurately the
contents of living wage, in an expanding national economy the contents of these expressions
also expand and vary.
The committee on fair wage describes living wage as- the living wage should enable the male
earner to provide for himself and his family not merely the bare essentials but a measure of
frugal comfort including education for children, protection against ill-health, requirements of
essential social needs and a measure of insurance against the more important misfortunes
including old-age.
Fair wage
• The CFW defined three levels of wages- minimum, living and fair wages.
• Fair wage is a mean between the living wage and the minimum wage
• Any amount in excess of minimum wage can be regarded as fair wage and it continues to
remain fair until it is merged into living wage.
Prof Pigou describes fair wage as-
• Fair wage in narrow sense.
• Fair wage in wider sense
• A fair wage is narrow in sense if it is equal to the rate current for similar work in the same
trade and neighbourhood . It is wider in sense when it is equal to the predominant rate for
similar work throughout the country and in the generality of trades.

CFW

 Determination of Fair wage would depend not on the present economic position of
the industry but on its future prospects also.
 In between these two limits the actual wage would depend on-
 The productivity of labour
 The prevailing rates of wages
 The level of national income and its distribution
 The place of industry in the economy of the country.
 But actual weightage cannot be given to the above factors.
 Sangam Press v Its workmen- SC observed that in case of fair wage, besides the
principle of industry cum region, the company's capacity to bear the financial burden
must receive due consideration.

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WAGE:
Wage is paid to the assembly line workers or worker at operational level. It is paid
hourly/daily/weekly.
MINIMUM WAGE:
It must provide not only for the bare sustenance of life but for the preservation of the
efficiency of the workers by providing some measures of education, medical care etc.
LIVING WAGE:
It is not only for the bare essentials for the worker and his family but also for comfort
protection against ill-insurance for old age.
FAIR WAGE:
It is in between minimum wages and living wages but below the living wage.
Concepts of Different Wages
MINIMUM WAGES:

 Minimum amount of remuneration paid to workers..

 Under Minimum Wages Act 1948.
FAIR WAGES:

 Workers performing work of equal skills, difficulty or unpleasantness should receive

equal or fair wages.
 Match the prevailing wage rates.
LIVING WAGES:
Living wages should enable the male earner to provide for himself and his family, not only the
bare essentials of food, clothing and shelter, but also a measure of frugal comfort including:
Education for the children, Protection against ill-health, Requirements of essential social
needs, A Measure of insurance against the more important misfortunes including old age.
Concept of Minimum, Fair And Living Wage
Fair Wage is the wage which is above the minimum wage but below the living wage. The lower
limit of the fair wage obviously the mini minimum wage: is the upper limit is to be set by the
capacity of the industry to pay.
Thus, fair wage depends on different variables affecting wage determination.

 Productivity of labour
 Prevailing wage rates in the localities
- Level of national income & its distribution
- Place of industry in the economy of the country

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At present, the concept of fair wages is followed by the most business organizations.
Fair Wage
The Encyclopedia of Social Sciences describes a COPY "fair wage" as one equal to that received
by workers performing work of equal skill, difficulty or unpleasantness
The Committee on Fair Wages stated that the fair wage was something between a minimum
wage and a living wage
The lower limit of a fair wage must obviously be the minimum wage, the upper limit is equally
set by what may broadly be called the capacity of the industry to pay.
The Payment of Wages Act, 1936 ( Salient features )
INTRODUCTION

 Wage is a reward for the service rendered or remuneration for the work done and it
is as old as the society itself.
 After industrialization the quantum of wages assumed a common cause of friction
between the employers and the wage earners.
 Demand for wage increase resulted in strikes.
 The determination of adequate wages was not only economic problem but was linked
with various other factors like place of industry, prices of the product, living standard,
basic needs and the govt, policies in a given society.
• Chapter 1 (section 1 & 2) Introduction, Objects, Applications and Definitions
• Chapter 2 (section 3 to 13) Payment and Deduction of wages
• Chapter 3 (section 14 to 19) Authorities under the Act
• Chapter 4 (section 20 to 26) Miscellaneous
The Payment of Wages Act, 1936 was passed to regulate the payment of wages to certain
classes of persons employed in industry.
It is essentially meant for the benefit of the industrial employees not getting very high salaries
and the provisions of the Act were enacted to safeguard their interest.
It also provides against irregularities in payment of wages and unauthorized deductions there
form by the employers.
Further, it ensures payment of wages in a particular form and at regular intervals without
unauthorized deductions.

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OBJECT OF THE ACT

The main objects of the Act are-
• To avoid unnecessary delay in payment of wages to the employees,
• To prevent unauthorized deduction from the wages,
• To require to employer to pay wages on working day and not on holiday,
• To prevent the employer from making payment of wages in kinds,
• To regulate the payment of wages to certain class of persons employed in industries.
APPLICATION OF THE ACT:
The Payment of Wages Act, 1936 extends to the whole of India. It comes into force on 28th
March, 1937. It applies to the payment of wages to:

 Persons employed in any factory.

 Persons (otherwise than a factory) employed in any railway by railway administration
or either directly or through a contractor or by persons fulfilling a contract with railway
administration.
 Appropriate Government is empowered to make the Act applicable to any class of
person employed in any industrial establishment or in any class or group of industrial
establishment subject to the following two conditions.
 Issue of three months notice of its intention of doing so; and
 Notification of extension in the Official Gazette.
Provided that in relation to any such establishment owned by the Central Government, no
such notification shall be issued except with the concurrence of that Government.
DEFINITIONS
1. EMPLOYED PERSON [Sec. 2 (ia)):-
Includes the legal representative of a deceased employed person.
2. EMPLOYER [Sec.2 (ib)]:-
Includes the legal representative of a deceased employer.
3. INDUSTRIAL OR OTHER ESTABLISHMENT [SEC. 2 (II)]:-It means
a) Tramway service, or motor transport service engaged in carrying passengers or goods or
both by road for hire or reward; air transport service other than such service belonging to, or
exclusively employed in the military, naval or air forces of the Union or the Civil Aviation
Department of the Government of India;
b) Dock, wharf or jetty;
c) Inland vessel, mechanically propelled;

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d) Mine, quarry or oil-field;

e) Plantation;
f) Workshop or other establishment, in which articles are produced, adapted or
manufactured, with a view to their use, transport or sale;
g) establishment in which any work relating to the construction, development or maintenance
of buildings, roads, bridges or canals, or relating to operations connected with navigation,
irrigation, or to the supply of water or relating to the generation, transmission and
distribution of electricity or any other form of power is being carried on.
h) any other establishment or class of establishments which the Central Government or a
State Government may, having regard to the nature thereof, the need for protection of
persons employed therein and other relevant circumstances, specify, by notification in the
Official Gazette.
4. Wages [Sec. 2 (vi)]: Means all remuneration (whether by way of salary, allowances, or
otherwise) expressed in terms of money or capable of being so expressed which would, if the
terms of employment, express or implied, were fulfilled, be payable to a person employed in
respect of his employment or of work done in such employment, and includes-
(a) Any remuneration payable under any award or settlement between the parties or order
of a court;
(b) Any remuneration to which the person employed is entitled in respect of overtime work
or holidays or any leave period;
(c) Any additional remuneration payable under the terms of employment (whether called a
bonus or by any other name);
(d) Any sum which by reason of the termination of employment of the person employed is
payable
under any law, contract or instrument which provides for the payment of such sum, whether
with
or without deductions, but does not provide for the time within which the payment is to be
made;
(e) Any sum to which the person employed is entitled under any scheme framed under any
law for the time being in force,

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PAYMENT OF WAGES (Sec. 3 to 6)

II. Fixation of wage-periods. [Section 4]
Every person responsible for the payment of wages under section 3 shall fix periods in respect
of which such wages shall be payable.
No wage-period shall exceed one month.
That means wage can be paid on daily, weekly, fortnightly (for every 15 days) and monthly
only. Wage period for payment of wages to employees by employer should not exceed 30days
i.e. one month according to this act.
But wages cannot be paid for quarterly, half yearly or once in a year.
III. Time Of Payment Of Wages. [Section 5]
In railway factory or industrial or other establishment, if there are less than 1000
employees, wages of employees should be paid before the expiry of the 7th day after the last
day of the wage period. (ex:- wages should be paid on starting of present month within 7 days
i.e. before 7th date if wage is paid on 1st in previous month)
In other railway factory or industrial or other establishment, if there are more than 1000
employees, wages of employees should be paid before the expiry of the 10th day after the
last day of the wage period. (ex:- wages should be paid on starting of present month within
10 days i.e. before 10th date if wage is paid on 1st in previous month)
For employees of port area, mines, dock, wages of employees should be paid.
Sec 5 (2)]
If the employee is terminated or removed for the employment by the employer the wage of
that employee should be paid within 2 days from the day on which he was removed or
terminated.
Illustration: if the employee was terminated or removed from the employment by the
employer on 10th of this month, his wage should be paid within 2 days from the day on which
he was removed or terminated, i.e. his/her wage should be paid by 12th date of this month
and this date should not exceed.
[Sec 5 (3)]
With the consultation of the central government, state government having power and can
change the person responsible for the payment of the wages in Railways, or person
responsible to daily-rated workers in the Public Works Department of the Central
Government or the State Government.

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[Sec 5 (4)]
Except the payment of wage of the terminated employee, all the wages of the employees
should be paid by their employer on the working day only .
WAGES TO BE PAID IN CURRENT COIN OR CURRENCY NOTES [Section 6]
All the wages of the employees must be paid in form of currently using currency notes or
coins or in both forms. Currently using currency notes are 1000/-, 500/-, 100/-, 50/-, 20/-, 10/-
, 5/- and currently using coins are 10/-, 5/-, 2/-, 1/-.
DEDUCTION FROM WAGES (Sec.7 to 13)
I DEDUCTIONS FOR FINES [Sec.7 (2)(a) and 8]
a)No fine shall be imposed on any employed person save in respect of such acts and omissions
on his part as the employer, with the previous approval of the State Government or of the
prescribed authority, may have specified by notice under sub- section (2)
b) A notice specifying such acts and omissions shall be exhibited in the prescribed manner on
the premises in which the employment is carried on or in the case of persons employed upon
a railway (otherwise than in a a factory), at the prescribed place or places.
c) No fine shall be imposed on any employed person until he has been given an opportunity
of showing cause against the fine, or otherwise than in accordance with such procedure as
may be prescribed for the imposition of fines.
d) The total amount of fine which may be imposed in any one wage-period on any employed
person shall not exceed an amount equal to three per cent of the wages payable to him in
respect of that wage-period.
e) No fine shall be imposed on any employed person who is under the age of fifteen years.
f) No fine imposed on any employed person shall be recovered from him by instalments or
after the expiry of sixty days from the day on which it was imposed.
g) Every fine shall be deemed to have been imposed on the day of the act or omission in
respect of which it was imposed.
II DEDUCTIONS FOR ABSENCE FROM DUTY [Sec.7 (2)(b) and 9]
(1) Deductions may be made under clause (b) of sub-section (2) of section 7 only on account
of the absence of an employed person from the place or places where, by the terms of his
employment, he is required to work, such absence being for the whole or any part of the
period during which he is so required to work.
(2) The amount of such deduction shall in no case bear to the wages payable to the employed
person in respect of the wage-period for which the deduction is made in a larger proportion
than the period for which he was absent bears to the total period, within such wage-period,
during which by the terms of his employment, he was required to work

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PROVIDED that, subject to any rules made in this behalf by the State Government, if ten or
more employed persons acting in concert absent themselves without due notice (that is to
say without giving the notice which is required under the terms of their contracts of
employment) and without reasonable cause, such deduction from any such person may
include such amount not exceeding his wages eight days as may by any such terms be due for
to the employer in lieu of due notice.
III. DEDUCTIONS FOR DAMAGE OR LOSS [Sec.7 (2)(c), (m), (n) and (o) and 10]
(1) A deduction under clause (c) or clause (o) of sub-section (2) of section 7 shall not exceed
the amount of the damage or loss caused to the employer by the neglect or default of the
employed person.
(1A) A deduction shall not be made under clause (c) or clause (m) or clause (n) or clause (o)
of sub-section (2) of section 7 until the employed person has been given an opportunity of
showing cause against the deduction or otherwise than in accordance with such procedure as
may be prescribed for the making of such deduction.]
(2) All such deduction and all realizations thereof shall be recorded in a register to be kept by
the person responsible for the payment of wages under section 3 in such form as
may be prescribed.
IV. DEDUCTIONS FOR SERVICES RENDERED [Sec.7 (2) (d), (e) and 11]
A deduction under clause (d) or clause (e) of sub-section (2) of section 7 shall not be made
from the wages of an employed person, unless the house-accommodation amenity or service
has been accepted by him, as a term of employment or otherwise, and such deduction shall
not exceed an amount equivalent to the value of the house-accommodation amenity or
service supplied and, in the case of deduction under the said clause (e), shall be subject to
such conditions as the State Government may impose.
V. DEDUCTIONS FOR RECOVERY OF ADVANCES [Sec.7 (2)(f) and 12]
Deductions under clause (f) of sub-section (2) of section 7 shall be subject to the following
conditions, namely:
a) Recovery of an advance of money given before employment began shall be made from the
first payment of wages in respect of a complete wage-period, but no recovery shall be made
of such advances given for traveling-expenses; recovery of an advance of money given after
employment began shall be subject to such conditions as the State Government may impose.
b) Recovery of advances of wages not already earned shall be subject to any rules made by
the State Government regulating the extent to which such advances may be given and the
installments by which they may be recovered.
VI. DEDUCTIONS FOR RECOVERY OF LOANS [Sec.7 (2)(fff) and 12-A]
Deductions for recovery of loans granted under clause (fff) of sub-section (2) of section 7 shall
be subject to any rules made by the State Government regulating the extent to which such
loans may be granted and the rate of interest payable thereon.

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VII DEDUCTIONS FOR PAYMENTS TO CO-OPERATIVE SOCIETIES AND INSURANCE SCHEMES

[Sec.7 (2)(j) and (k) and13]
a) Deductions for payment to co-operative societies approved by the government or to a
scheme of insurance maintained by the Indian Post Office [Sec. 7 (2) (j) and
b) Deductions made with the written authorization of the person employed for the payment
of any premium on his life insurance policy to the Life Corporation of India or for the purchase
of securities of the government of India or of any appropriate Government or for being
deposited in any Post Office Saving Bank in furtherance of any saving scheme of any such
Government [Sec. 7 (2) (k)].
These deductions shall be subject to such conditions as the appropriate government
may impose [Sec.13]
AUTHORITIES
• Inspector of factories also inspector under this act. sec(14)
• Appointment of a person to hear claims for deductions, late payment sec(15). That Person
can be-
 commissioner for workers compensation
 Regional or assistant labour commissioner
 Presiding officer of labour court or industrial tribunal
CLAIMS ARISING OUT OF DEDUCTIONS FROM WAGES OR DELAY IN PAYMENT OF WAGES
AND PENALTY FOR MALICIOUS OR VEXATIOUS CLAIMS. [Sec 15]
To hear and decide all claims arising out of deductions from the wages, or delay in payment
of the wages, of persons employed or paid, including all matters, incidental to such claims,
there will be a officer mentioned below appointed by the appropriate government.
(a) any Commissioner for Workmen's Compensation; or
(b) any officer of the Central Government exercising functions as -
i. Regional Labour Commissioner; or
ii. Assistant Labour Commissioner with at least two years' experience; or
(c) any officer of the State Government not below the rank of Assistant Labour Commissioner
with at least two years' experience; or
(d) a presiding officer of any Labour Court or Industrial Tribunal, constituted under the
Industrial Disputes Act, 1947 (14 of 1947) or under any corresponding law relating to the
investigation and settlement of industrial disputes in force in the State; or
(e) any other officer with experience as a Judge of a Civil Court or a Judicial Magistrate, as the
authority to hear and decide for any specified area all claims arising out of deductions from
the wages, or delay in payment of the wages, of persons employed or paid in that area,
including all matters incidental to such claims.

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SINGLE APPLICATION IN RESPECT OF CLAIMS FROM UNPAID GROUP. [Section16] There is no

necessity of many applications if there are many employees whose wages has not been paid.
Such all employees can make one application to the authority for payment of wages according
to this act.
APPEAL. [Section 17]
In the following situation the parties whoever dissatisfied can appeal to the district court
• If the application dismissed by above authorities
• If the amount exceeding 25/- rupees withheld by the employer to single unpaid employee.
50/- in case of many unpaid employees
POWERS OF AUTHORITIES APPOINTED. [Section 18]
Taking evidence and enforcing the attendance of witnesses and compelling the
production of documents
PENALTY FOR OFFENCES UNDER THE ACT. [Section 20] (2005 amendments)
I . Penalty for delaying payment of wages within the prescribed period or making
unauthorized deductions:-
Whoever being responsible for the payment of wages to an employed person delays of wages
within the period laid down under the Act or makes unauthorized deductions shall be
punishable.
with fine which shall not be less than Rs.200 but which may extent to Rs.1000 [Sec.20(1)].
PENALTY FOR OFFENCE UNDER THE ACT (SEC. 20)
II. Penalty for not paying wages on a working day or in current coin or not recording fines
or not displaying the abstracts of the Act:-
Not paying the wages on a working day, or not paying wages in current coin or currency or
both, or not recording the fines or amounts realized for damage or loss in a register, or not
displaying by notice abstracts of the Act and rules, are also offences punishable with a fine
which may extend to Rs.500 for each offences [Sec. 20(2)].
PENALTY FOR OFFENCE UNDER THE ACT (SEC. 20)
III. Penalty for failure to maintain, furnish records and returns:-
Whoever being required under this Act to maintain any records or registers or to furnish any
information or return-
(a) Fails to maintain such register or record; or
(b) Wilfully refuses or without lawful excuse neglects to furnish such information or return;
or

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LABOUT LAW II – UNIT I

(c) Wilfully furnishes or causes to be furnished any information or return which he knows to
be false; or
(d) refuses to answer or wilfully gives a false answer to any question necessary for obtaining
any information required to be furnished under this Act,
Shall, for each such offence, be punishable with fine which shall not be less than 200/- rupees
but which may extend to 1000/- rupees [Sec.20 (3)].
IV. Penalty for obstructing, etc. Inspector: - Whoever-
a) Wilfully obstructs an Inspector in the discharge of his duties under this Act; or
b) refuses or wilfully neglects to afford an Inspector any reasonable facility for making any
entry, inspection, examination, supervision, or inquiry authorized by or under this Act in
relation to any railway, factory or 12[industrial or other establishment]; or
c) Wilfully refuses to produce on the demand of an Inspector any register or other document
kept in pursuance of this Act; or
d) prevents or attempts to prevent or does anything which he has any reason to believe is
likely to prevent any person from appearing before or being examined by an Inspector acting
in pursuance of his duties under this Act:
Shall be punishable with fine which shall not be less than two hundred rupees but which may
extend to one thousand rupees [Sec.20 (4)].
V. Subsequent offences:-
If any person who has been convicted of any offence punishable under this Act is again guilty
of an offence involving contravention of the same provision, he shall be punishable on a
subsequent conviction with imprisonment for a term which shall not be less than one month
but which may extend to 3 months and with fine which shall not be less than five hundred
rupees but which may extend to three thousand rupees or with both [Sec. 20(5)].But no
cognizance shall be taken of any earlier conviction made more than two years before the date
on which the commission of the present [Proviso to Sec. 20(5)]
VI. Additional fine for failure to pay wages by the fixed date:-
If any person fails or wilfully neglects to pay the wages of any employed person by the date
fixed by the authority in this behalf, he shall, without prejudice to any other action that may
be taken against him, be punishable with an additional fine which may extend to one
hundred rupees for each day for which such failure or neglect continues [Sec. 20(6)].

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PAYMENT OF UNDISBURSED WAGES IN CASE OF DEATH OF EMPLOYED PERSON. [Sec 25A]

• Paid by the employer to the person nominated by the employee.
• Wage deposited by the employer with the prescribed authority, the employer shall be
discharged of his liability to pay those wages.
• Where no such nomination has been made or where for any reasons such amounts cannot
be paid to the person so nominated, be deposited with the prescribed authority who shall
deal with the amounts so deposited in such manner as may be prescribed.
RESPONSIBILITIES OF EMPLOYER
1. Wage period not exceeding one month.
2. Wages by cash or cheque.
3. Pay wages on any working day.
4. Not to impose fines exceeding 3% of wages.
5. Recover fines with 90 days of offence.
6. To maintain register of wages, fines, deductions, advances.
CONTRACTING OUT-[Section 23]:
Section 23 lays down that any contact, agreement, whether made before or after the
commencement of this act whereby an employed person relinquishes any right conferred by
this Act shall be null and void in so far as it purports to deprive him of such right.
In Dine Ram v. Divisional Manager - A.I.R. 1958 Assam 77,
the employer revised the wage structure of his workmen by increasing the basic wages
and dearness allowance hitherto payable and deducting servant allowance but with
the result that the total wages to workmen were not reduced. It was held that mere
deduction of servant allowance either partial or whole cannot be said to contravene
Section 23 of the Act.
It was held in the case R.M.M Singh v. B.A.F.- A.I.R. 1971 Bombay 31
that a genuine and valid compromise made between an employee and employer in
connection with the dispute between them as regards the true and correct amounts of illegal
deductions payable to the employer cannot beheld to be relinquishment of rights conferred
by the Act. Such an agreement is not null and void.
It was observed in the case of F.W. Heilger & Co. v. Nagesh Chander Chakravarthi and others
– A.I.R 1949 F.C. 142
that Section 23 only prevents the employer from contracting away the rights which are given
to him by the Act and that it does not prevent him from entering into an agreement
advantageous or beneficial to him. An agreement to grant bonus to the employee does not
violate the provision of Section 20 and 23.

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Where an employee has been given a right to file an application under section 15, any
agreement depriving the employee of this right is null and void (Union of India v. Kundan Lal
- A.I.R. 1957 All. 362).
CASES ON PAYMENT OF WAGES
Arvind Mills ltd vs. K.R. Gadgil [AIR 1941 Bom.26]
It has been observed that “ the general purpose of the Act is to provide that employed persons
shall be paid their wages in a particular form and at regular intervals without any
unauthorized deductions”
It has been observed that “ the general purpose of the Act is to provide that employed persons
shall be paid their wages in a particular form and at regular intervals without any
unauthorized deductions”
Cominco Binani Zinc Ltd. vs Pappachan on 28 December, 1988
Equivalent citations: (1989) ILLJ 452 Ker
The manager was held not responsible for the payment of wages to the employees of canteen
attached to the establishmen tas the employees of the canteen were employed by the
contractor and not directly by the management.
K.L. Garg vs. New India Assurance Ltd. and Others(1992) 1 Lab LJ 190 (P&H).,
It was decided that the application for recovery of loan was not maintainable as loan did not
fall within the definition of wages under Section 2(vi) of the Payment of Wages Act, 1936 nor
the amount claimed could be said to be a deduction as provided under Section 7 of the Act.
G Y N CHAINULU AND ORS
Versus
DEPOT MANAGER, A P S R T C, AMALAPURAM AND ANR
Citation: 1988 Law Suit(AP) 368
The union after submission of failure report of the conciliation officer issued notice of strike
under section 22 of Industrial Disputes Act, 1947. The workmen went on strike for one day.
Meanwhile the goenment issued a notification declaring the strike as illegal under Andhra
Pradesh Essential Service Maintenance Act, 1971. The Manageent issued a notice under the
provisio to section 9(2) of the payment of wages Act to show cause as to why wages should
not be deducted.
Thereafter, the management ordered deduction of 3 days wages which has been challenged
in the petition.
It was held that once strike is declared as illegal under section 22 of the Industrial Disputes
Act is not due notice and without a reasonable cause. But such absence from duty is made an
offence under section 4 of the Essential Services Maintenance Act. The court futher held that
the right given to employer under proviso to sec 9(2) of thePayment of wages Act is
inconsistent with the penal Liability created under section 4 of the Essential Services

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Maintenance Act.Therefore,the deduction of wages is without authority of law and without

jurisdiction.
MINIMUM WAGES ACT 1948
History of minimum wages.
The initiative by Shri K.G.R.Choudhary in 1920 set up boards for determination of wages.
The International Labour Conference adopted convention no.26 and 30 in 1928 relating to
wage fixing machinery in trades or parts of trades.
A Minimum Wages Bill was introduced in the Central Legislative Assembly on 11.04.1946 and
came into force with effect from 15.03.1948.
The Minimum wages.
The minimum wages Act 1948, was to secure the welfare of unorganised workers in certain
industries by fixing the minimum rates of wages. The Act contemplates that minimum wages
rates must ensure for him not only his subsistence and that of his family but also preserve his
efficiency as a workman.
The Act empowers the appropriate Government for fixation of minimum wages in
employments enumerated in the schedule to the Act. The fixation of minimum wages relates
to the industries where sweated labour is most prevalent or where there is inevitable chance
of exploitation. In prescribing the minimum wages rates, the capacity of the employers need
to be considered as the State assumes that every employer must pay the minimum wages if
he employs labour.
Objectives of of the act.

 To provide minimum wages to the workers working in organized sector.

 To stop exploitation of the workers.
 To empower the government to take steps for fixing minimum wages and to revising
it in a timely manner.
 To apply this law on most of the sections in organized sector.
Short title and extent (sec. 1)

 This Act, the Minimum Wages Act, 1948 extends to the whole of India.
 This Act may be called the Minimum Wages Act, 1948.
Interpretation/Definition (sec.2)
(a) 'Adult', 'Adolescent' and 'Child'
Adult- is who has completed his eighteen years of age.
Adolescent - completed his fifteen years but not eighteen years of age.
Child-who has not completed his fifteen years of age

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(b) Appropriate government India has federal form of Government at the centre and state
level. The minimum wages act provide separate areas of jurisdiction for both centre and
state government.
(e) Employer means any person who employs one or more employees in any schedule of
employment.
(h) Wages means all remuneration capable of being expressed in terms of money.
(i) Employee means any person employed for hire or reward and includes an out-worker.
FIXATION AND REVISION OF MINIMUM WAGES
fixing of minimum rates of wages (sec.3)

 The minimum rates of wages will be reviewed/ revised, for every five years, by the
appropriate govt.
 Appropriate govt. can add any employment, to the schedule(part-I or part - II),
wherein one thousand or more employees are found working
 Different minimum rates of wages may be fixed for different scheduled employments/
different classes of work /different localities
Minimum rates of wages (sec.4)
1. Basic + Special Allowance (Which varies with the cost of living index).
2. Basic + Cash value of concessional supply of materials like food, clothes, etc.
3. An all inclusive rate which includes Basic + Cost of living Allowance + Cash value of
concessional supply of materials.
Types of Wages
Sec 3(2) of the Minimum Wages Act, 1948 defines various kinds of wages
Time work wages: Wages may be fixed
(a) by the hour;
(b) by the day
(c) by the month;
(d) by such other longer wage period as may be prescribed.
Piece-work Wages: Is fixed for a specific piece of work.
Guaranteed time-rate wages: They are payable to an employee employed on piece-work to
secure wages on a time work basis.

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LABOUT LAW II – UNIT I

Over time wages: The appropriate Government may fix the number of hours constituting a
normal working day. Sec 14(1) of the Act, the employer shall pay to an employee wages at
the overtime if he works in excess of the number of hours constituting a normal working.
Other kind of wages: basing on the day manner of payment there are two types of wages
namely wages in cash and wages in kind.
Based on amount they are classified into (i) living wage (ii) Fair wage and
(iii) minimum wages.
Minimum rates of wages (sec.4)
• Basic + Special Allowance (Which varies with the cost of living index).
• Basic + Cash value of concessional supply of materials like food, clothes, etc.
• An all inclusive rate which includes Basic + Cost of living Allowance + Cash value of
concessional supply of materials.
Procedure for Fixing and Revising Minimum Wages
According to Section 5 of the Act, in fixing or revising minimum rate of wages in respect of
any scheduled employment for the first time, the Appropriate Government can follow the
two methods viz.:
• Committee Method.
• Notification Method.
Committee Method
The Appropriate Government may appoint as many committees and sub- committees as it
considers necessary to hold enquiries and advise it in respect of such fixation or revision as
the case may be.
After considering the advice the committee or committees, the Appropriate Government, by
notification in the Official Gazette fix or revise the minimum rate of wages.
Publish its proposals in the official gazette asking comments from the affected parties.
The committees/sub-committees and advisory boards constituted by the Government consist
of equal number of members of Employers, Employees, and Independent persons .
Procedure for fixation and revision of minimum rates of wages (sec.5)
Publish its proposals in the official gazette asking comments from the affected parties.
Constitute committees/sub committees for the purpose.
The committees/sub-committees and advisory boards constituted by the Government
consist of equal number of members of :

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Employers
Employees, and
Independent persons

Advisory board (sec.7)

 Appointed by appropriate government.

 To co-ordinate the work of committees and sub committees appointed under Section
5.
Central advisory board (sec.8)

 To advise the Central and State Governments in fixation and revision of minimum rates
of wages.
 To co-ordinate the work of the Advisory Boards.
Composition of Committees, etc. (Sec. 9)
Each of the committee, sub-committee and the Advisory Board shall consist of:
a. persons to be nominated by the appropriate Government.
b. representing the employers and employees in the scheduled employments who shall be
equal in number and
c. independent persons not exceeding one-third of its total number of members: one of such
independent persons shall be appointed the Chairman by the appropriate Government.

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PAYMENT OF MINIMUM WAGES

Wages in kind (sec. 11)
Minimum wages shall be paid in cash.
The appropriate govt. may authorize, where there has been a custom of payment in this
manner, payment of minimum wages either wholly or partly in kind.
The appropriate govt. may authorize supply of essential commodities at concessional rates.
Payment of minimum rate of wages (sec. 12)
• The Minimum Wages has to be paid without any deductions other than Statutory
Deductions.
• Payment of wages less than minimum wages on the ground of less performance or
output is illegal.
Fixing hours of work (sec. 13)
For an Adult Worker working in Factories:

 Number of Working Hours should not exceed 48 Hours in a week with a weekly
Holiday.
 The Daily Hours should not exceed more than 9 Hours with 1 Hour Rest Interval.
 Provision of Compensatory Holiday/Overtime Wages if working on holiday.
Overtime wages (sec. 14)
• If the person has worked for more than 48 hours in a week then, the excess hours worked
will be treated as Overtime.
• Overtime wage rate will be twice of the normal wage rate.
Wages for a person who has worked less than normal working hours (sec. 15)
Employer could not provide the activities of the job then, the employee is entitled to receive
full salary.
Employee has not worked due to his unwillingness then, the employee is not entitled to
receive full salary.
Records to be maintained (sec, 18)
The Registers should contain the following particulars-
(i) particulars of employed persons
(ii) the work performed by them
(iii) the wages paid to them
(iv) the receipts given by them

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19- Powers of Inspectors

• Entering in the premises in any scheduled employment
• Examining of any register, record of wages or notices required to be kept or exhibited for
inspection;
• Examine employee;
• Seize or take copies of register, record or wages or notices or portions as he may consider
relevant in respect of an offence under the Act which he has reason to believe has been
committed by an employer; and
• Exercise such other powers as may be prescribed.
Claims (sec. 20)
A Labour Commissioner or any other appointed authority is authorized to hear claims
regarding non-payment of minimum wages.
Any aggrieved person may apply to the authority for settling his claims within 6 months.
Persons Appointed as Authority
• Any Commissioner for Workmen's Compensation;
• Any officer of Central Government exercising functions as a Labor Commissioner for any
region; or
• Any officer of the State Government not below the rank of a Labor Commissioner; or
• Any other officer with experience as a Judge of a Civil Court or as Stipendiary Magistrate.
Persons Eligible for Raising Claim 20(2)

⚫ the employee himself; or

⚫ any legal practitioner authorized in writing to act on his behalf, or

⚫ any official of a registered Trade Union authorized in writing to act on behalf of the
employee; or

⚫ any Inspector; or any person acting with the permission of the Authority.

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Penalties (sec, 22)

Offence Punishment

Payment of less than Minimum Wages to Imprisonment which may extend up to 6

employee Months or Fine which may extend up to
Rs 500/- or Both

Contracting out (Sec. 25)

Any contract or agreement, whether made before or after the commencement of this Act,
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 so far as it
purports to reduce the minimum rate of wages fixed under this Act.
Power of State Government to add schedule (sec.27)
The State Government has to notify in the Official Gazette not less than three months of its
intention to do so .
Power of Central Government to give directions (sec.28)
The Central Government may give directions to a State Government as to the carrying into
execution of this Act in the State.
BIJAY COTTON MILLS LTD. V. THE STATE OF AJMER, 1954.
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 resricted, 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.
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.

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KARNATAKA FILM CHAMBER OF COMMERCE VS STATE OF KARNATAKA ON 17 APRIL, 1986

The petitioners have questioned the validity of the Minimum Wages Notifications notified by
the State Government in the Karnataka Gazette dated 20th March, 1986 fixing certain rates
of Minimum wages to the workmen employed in the Film Industry, Hotel Industry, Printing
Industry, Tailoring, Plywood and other industries.
It is further submitted by the petitioners that what has been fixed under the impugned
Notifications are not the minimum wages as required to be fixed under Section 4(1)(i) of the
Minimum Wages Act (in short the 'Act') and therefore the said Notifications are wholly
without jurisdiction.
U. UNICHOYI AND OTHERS
Vs.
THE STATE OF KERALA [AIR 1962 SC 12]
The petitioners, representing certain tile factories, challenged the validity of the
Minimum Wages Act, 1948, also the notification issued by the Kerala Government
prescribing minimum rates of wages in respect of employment
in the tile industry on the report of a committee
constituted under the Act and consisting of the representatives both of the
employers and employees who agreed with its recommendations.
The case of the petitioners was that the notification had in effect fixed
not minimum wages but fair wages and since neither the committee nor the Government
in fixing them had considered the capacity of the employers to pay, the notification was
void. Held, that in view of the decisions of this Court the con- stitutional validity of the Act
could no longer be in doubt and any hardship that may be caused to employers by the
wages fixed under the Act or their incapacity to pay the same are irrelevant considerations
in fixing such wages.
“in fixing minimum wage, capacity of management to pay is not a consideration”.
In the Standard Vacuum Oil Company vs. Its Workmen (1961)1LLJ 227 case
It has been observed that there is a minimum basic wage, which the employer of any
industrial labor must pay in order to be allowed to continue an industry. Above this is the fair
wage, which is adequate to cover the normal needs.
Above the fair wage is the living wage. It is a wage which provides with all the material things
which are needed for health and physical well being.
In Kamani Metals and Alloys Ltd vs. The Workmen, [AIR 1967 SC 1175]
The SC has observed that the living wage is a wage which is not only sufficient to provide a
standard family with food, shelter, clothing medical care and education of children but also
fair measure of frugal comfort with an ability to provide for old age and evil days.

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Crown Aluminium Works Ltd. Vs. Their Workmen, [(1958) 1 LLJ (SC) 30]
It has been observed that the term ‘living wage cannot be defined accurately as the contents
of living wage, in an expanding national economy, expand and vary. The supreme court
examined a very crucial objection that whether the the employer’s capacity to pay minium
wages is a relevant factor while requiring him to pay minimum wages, the court said that
capacity of employer to pay minimum wages is not relevant as the employerwho does not
have the capacity to pay minimum wages has no right to employ the workers.
All India Reserve Bank Employees Association v. Reserve Bank of India [ AIR 1966 SC 305]
It has been observed that ‘our political aim is living wages though in actual practice living
wage has been an ideal which has eluded our efforts like an ever-receding horizon and will so
remain for some time to come”
In S.A.F. L Works vs. State Industrial Court, Nagpur AIR 1978 SC 1113 case
The Supreme Court observed that in fixing the paying capacity the Tribunal will have to fix the
income as well as permitted deductions and allowances properly incurred. There can be no
dispute that expenses incurred for purchase of raw material, maintenance of the factory,
expenses incurred towards rent, public charges, maintenance of the establishment and
expenses incurred in marketing of the produce should be deducted.
Transport Corporation of India Ltd vs. State of Maharashtra & Others (1993)2 LLJ 365(Bom)
It is the case of not for the Labor Court or Tribunal to fix the minimum rate of wages. While
fixing fair wages the Courts or Tribunals take into consideration the minimum rate of wages
and where the Government has not fixed the minimum rate of wages then the Courts or
Tribunals ascertain for themselves what would be the minimum rate of wages.
People's Union for Democratic Rights v. Union of India, 1982
It is a landmark judgment in the same aspect; determining the workers' rights and settling
specific laws on minimum wages, and conditions of workers, specifically in construction sites,
to name a few.
The Apex Court of India, taking into consideration the loose protection of the law, the Right
of a worker was enforced by upholding the then labour laws, including the Contract Labor
(Regulation and Abolition) Act, 1970, Employment of Children Act, 1970, Equal Remuneration
Act, 1976, and Minimum Wages Act, 1948. The Court also expanded upon the Right to Life
with Dignity and broadened the application of Article 21 of the Indian Constitution.
Sangam Press v. Workmen, (1975) Lab. I.C. 149 (SC),
The Supreme Court noted that in case of fair wage, besides the principle of industry-cum-
region, the company's capacity to bear the financial burden, past performance of the
company, and future prospects must receive due consideration.
The Financial capacity of the employer i.e, his capacity to pay the minimum wages is an
irrelevant condition.

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P.U.D.R V UNION OF INDIA ( 6M )

The P.U.D.R (People's Union for Democratic Rights) vs. Union of India case in 1982 is a
landmark judgment in the history of labor law in India ¹. The following are key aspects of the
case:
The People's Union for Democratic Rights, an organization dedicated to protecting
democratic rights, filed a petition against the Union of India and others.
The petition alleged violations of various labor laws, including the Minimum Wages Act, Equal
Remuneration Act, and the Employment of Children Act, by contractors engaged in the
construction work for the Asian Games projects.
The petitioners argued that the Union of India, as the principal employer, was responsible for
ensuring compliance with labor laws by the contractors.
The Supreme Court held that public interest litigation can be maintained even if there is no
personal injury or legal wrong, and that the traditional rule of standing should be relaxed to
allow public-spirited individuals or institutions to move the court for judicial redress.
The court further held that the Union of India, as the principal employer, had a constitutional
obligation to ensure compliance with labor laws and protect the rights of workers employed
by contractors.
The court directed the Union of India to take steps to ensure compliance with labor laws and
to protect the rights of workers employed in the construction work for the
Asian Games projects.

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