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THE MINIMUM WAGES ACT, 1948 1

Minimum Wages Act, 1948

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Page 1: Minimum Wages Act, 1948

THE MINIMUM WAGES ACT, 1948

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Page 2: Minimum Wages Act, 1948

-WORKERS IN GARMENT INDUSTRY

PRESENTATION BY:

SHIKHA MANCHANDA (313) & RAVI JOHAR (314)

WORKERS IN STEEL INDUSTRY

WORKERS IN BUTTON- INDUSTRY

Page 3: Minimum Wages Act, 1948

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Minimum Wages Act, 1948 Over the years, in a country like India, except certain highly organized industries, the labour as a whole was not able to put a face of collective bargaining and look after their own interests. Thus, Minimum Wages Act, 1948 was enacted in the country with the OBJECTIVE:

To provide minimum wages to the workers working in

organized sector(scheduled employment) To stop exploitation of the workers To empower the government to take steps for fixing

minimum wages and to revise this wages within a period of five years.

To provide for appointment of Advisory Committees & Advisory Boards, having equal representatives of employers and workers.

Page 4: Minimum Wages Act, 1948

Applicability of the Act• The Act extends to whole of India.• To any employment in any State if it employs

1000 employees.• The Act will not apply to employees in any

undertaking owned by the Central Govt. or of Federal railway, except with the consent of the Central Govt.

Thus, the wages have to be statutorily paid.

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RAILWAY WORKERS

Page 5: Minimum Wages Act, 1948

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• EMPLOYEE is anyone

(1) Employed for Hire or Reward

(2) To do skilled or unskilled work

(3) Manual or Clerical

(4) Job Worker

(5) Any person declared by the appropriate

Government as Employee but, does not include

any member of armed forces

• EMPLOYEE is anyone

(1) Employed for Hire or Reward

(2) To do skilled or unskilled work

(3) Manual or Clerical

(4) Job Worker

(5) Any person declared by the appropriate

Government as Employee but, does not include

any member of armed forces

Who is an employee?

WORKERS IN GARMENT INDUSTRY

Page 6: Minimum Wages Act, 1948

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What is wages? section 2(h)• Wages means all remuneration capable of being

expressed in terms of money. It includes house rent allowance but does not include

• value of house accommodation, supply of light, water, medical attendance

• Value of any other amenity provided, if excluded by Government order

• Contribution to pension fund or provident fund or insurance

• Traveling allowance • special expenses incurred by the nature of employment • Gratuity payable on discharge.

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Minimum wage fixation (section 3) 1. The appropriate government shall fix and

revise the minimum wages payable to employees employed in an employment specified in part I & II of the Schedule.

2.The rate can be fixed on a. time work basis b. piece work basisc. guaranteed rate basis when rate is fixed on piece work basis and d. overtime rate basis.

Page 8: Minimum Wages Act, 1948

3. Different minimum wage rates can be fixed for • different scheduled employments • different class of work in the same scheduled

employment • adults, adolescents, children

and apprentices • Different localities.

4. Minimum rates can be fixed on basis of hour, day or month, or even longer period.

BASIS: the fixation of minimum wages depends on various factors like Socio-economic and agro-climatic conditions, prices of essential commodities, paying capacity and the local factors influencing the wage rate. 8

Page 9: Minimum Wages Act, 1948

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Minimum Rate of wages (section 4)Any minimum rate of wages fixed or revised by the

appropriate govt. may consist of,• a basic rate of wages and a special allowance at a

rate to be adjusted at such intervals and in such a manner as the govt. may direct OR

• A basic rate of wages with or without allowance for cost of living allowance based on cost of living index number. OR

• An all inclusive rate allowing for basic wage, cost of living allowance and

cash value of concession,

if any

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Procedure for fixation of min wages(sec.5)

1. Committee method : a committee is appointed to hold enquiry and suggest minimum wages to be fixed.

2. Notification Method : notification is published in the official gazette and 2 months period is given to different parties to suggest their case. Based on the representations, the govt. will fix the minimum wages. The

notification can apply

from retrospective effect

also.

Page 11: Minimum Wages Act, 1948

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AUTHORITIES:Advisory board…Government is required to constitute Advisory

Board to recommend minimum wages. The recommendations of Advisory Board are not binding on Government.

Central Advisory Board…• It is constituted from persons nominated by

central government. • And consist of representatives of employers,

employees and independent members (up to 1/3rd of the total strength).

Page 12: Minimum Wages Act, 1948

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Can you pay wages in kind? • Sec. 11 of Min. Wages Act says that you can

only make the payment in cash. • If it is a custom to make payment wholly or

partly in kind, the appropriate govt. may permit it.

• It may by notification in

the Official gazette, authorize

the provision of essential

commodities at

concessional rates.

Page 13: Minimum Wages Act, 1948

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Are working hours fixed? • Sec. 13: the govt. may fix the hours of work. It

may provide for rest day and interval also.

Will there be overtime? • Sec. 14: if minimum wages is fixed by hours,

then the workers will be paid overtime if he works more than the hours prescribed. The overtime rate will be as fixed in this law or other law as applicable.

• He will receive minimum wages • However, he will not receive minimum wages

if he is not willing to work or circumstances as may be prescribed.

if a worker works less than normal hours

Page 14: Minimum Wages Act, 1948

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Employer to close the unit, if minimum wages cannot be paid… If employer cannot pay minimum wages, he has to close

down the undertaking. Paying capacity is not relevant consideration for rate of minimum wages.

Deepak Photos v. State of Kerala 2001 Minimum wages are payable irrespective of financial

position of individual employer Hindustan Aeronautics v. Workmen AIR 1967

WORKERS IN BUTTON INDUSTRY

Page 15: Minimum Wages Act, 1948

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If you pay more than minimum wages – fair ….

• Even if State Government notification prescribes variable dearness allowance which is linked with cost of living index, amount paid on basis of DA is not to be taken as an independent component of minimum wages, but as part and parcel of process of computing minimum wages. Hence, in cases where employer is paying total sum which is higher than minimum rates of wages fixed under the Act including the cost of living index (VDA), he is not required to pay VDA separately.

Harilal Jechand Doshi v. Maharashtra General Kamgar Union 2000

Page 16: Minimum Wages Act, 1948

Some interesting facts• There are 45 scheduled employments in Central sphere

and 1222 employments in State sphere.• It includes workers employed in unskilled, semi-skilled

and skilled sectors like shawl & carpet weaving, different mines, construction or maintenance of roads, agriculture or in conjunction with farm operations, industries and factories etc. as specified in Schedule I of the Act.

• Due to widespread disparity in the minimum wages throughout the country The National Floor Level Minimum Wage is fixed at Rs 80 per day

by the govt.

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Page 17: Minimum Wages Act, 1948

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Minimum wages in Delhi (per day)• Skilled Rs. 142.10

• Semi-skilled Rs. 132.20• Unskilled Rs. 125.80In Australia its 543.78 Australian dollars per week;

Denmark- none, nationally; instead, negotiated between unions and employer associations; 100.65 kroner, according to the terms of the country's largest collective bargaining agreement, negotiated in the spring of 2008 and covering almost the entire industrial sector

Page 18: Minimum Wages Act, 1948

NEPAL- 4,600 Nepalese rupees a month for unskilled labor (3,050 rupees as a basic salary, and 1,550 rupees as an allowance); 4,650 NRS for semi-skilled labor; 4,760 NRS for skilled labor; 4,950 NRS for highly skilled labor

PAKISTAN- 6,000 Pakistani rupees per month, applying only to industrial and commercial establishments employing 50 or more workers

THAILAND-ranges from 148 Thai baht to 203 baht per day, depending on the cost of living in various provinces; set by provincial tripartite wage committees that sometimes include only employer representatives

UNITED KINGDOM- £ 5.80 per hour (aged 22 and older), £4.83 per hour (aged 18-21) or £3.57 per hour (under 18 and finished compulsory education)

USA-the federal minimum wage is US$7.25 per hour; states may also set a minimum, in which case the higher of the two is controlling 18

Page 19: Minimum Wages Act, 1948

THANK YOU!!!

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