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TheConstitutionalValidityofTheMinimumWagesAct,1948

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Author:Shastree
Publishedon:March01,2015

TheConstitutionalValidityof
TheMinimumWages
Act,1948

Shastree'sProfileand
details

Name:
Aniruddh
Shastree

Resource
consultant,
IndiaintroducedtheMinimumWagesActin1948,givingboth
recruiter,assistingin
theCentralgovernmentandStategovernmentjurisdictionin
clientacquisition.
fixingwages.Theactislegallynonbinding,butstatutory.
MastersfromI.L.S.Law
Paymentofwagesbelowtheminimumwagerateamountsto
College&MBA(HR).
forcedlabour.WageBoardsaresetuptoreviewtheindustrys
capacitytopayandfixminimumwagessuchthattheyatleast
coverafamilyoffoursrequirementsofcalories,shelter,clothing,education,medical
assistance,andentertainment.Underthelaw,wageratesinscheduledemploymentsdiffer
acrossstates,sectors,skills,regionsandoccupationsowingtodifferenceincostsofliving,
regionalindustries'capacitytopay,consumptionpatterns,etc.Hence,thereisnosingle
uniformminimumwagerateacrossthecountryandthestructurehasbecomeoverlycomplex.
(A)Theactisnotunreasonable:
Itcanscarcelybedisputedthatsecuringoflivingwagestolabourerswhichensurenotonly
barephysicalsubsistencebutalsothemaintenanceofhealthanddecencyisconducivetothe
generalinterestofthepublic.Thisisoneofthedirectiveprinciplesofthestatepolicy
embodiedinArticle43oftheconstitution.
Individualemployersmightfinditdifficulttocarryonthebusinessonthebasisofminimum
wagesfixedundertheActbutthismustbenotbetheentirepremiseandreasontostrikedown
thelawitselfasunreasonable.
Therestrictions,thoughtheyinterferetosomeextentwiththefreedomoftradeorbusiness
guaranteedunderArticle19(1)(g)oftheconstitution,arereasonableand,beingimposedon
thegeneralinterestofthegeneralpublic,areprotectedbythetermsoftheclause(6)ofthe
article19.ThisquoteisapartofjudgmentinthecaseGulmuhommadTarasaheb,abidi
factorybyitsproprietorsShamraovsStateofBombay,AIR1962Bom97:AIR1955,
Sc33:1963,Ker115:1964Tri32.
AnanotherimportantjudgmentthatfavoursandsupportstheconstitutionalValitityofthe
MinimumWagesAct,1948is,V.UnichonoyvsStateofKerala,1962,SC12.Thiscase
raisedthesamequestionswhichwereraisedinthecaseofGulmuhommadTarasahebvs
StateofBombay,AIR1962Bom97.,whichwere,that,canastatebepreventedfrom
makinganylaw,intheinterestofgeneralpublic,whereitcreatesrestrictionsandinterferesto
someextentwiththefreedomoftradeorbusinessguaranteedunderArticle19(1)(g),ofthe
ConstitutionofIndia,anditwasheldthat,Fixationofminimumwagesisforpreservationof
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PrintArticle:TheConstitutionalValidityofTheMinimumWagesAct,1948

publicorder,andifnominimumwageisfixedthenitshallleadtoarbitrarinessbythe
employersandthatshallleadtoclashesofinterestbetweenemployerandlabourwhichshall
causefrictioninsociety.
Thearticle14oftheIndianConstitutionwhichrelatestoequalitybeforethelaw,itmustbe
notedthatminimumwagesarenotfixedequallyacrossthewholenationbuttheyvaryfrom
occupationtooccupationandindustrytoindustryandfromplacetoplace.
ThecaseofUchinoyvsStateofKerala,1962SC12,furtherquotesthefollowing,As
regardstotheprocedureforfixingoftheminimumwages,theappropriategovernmenthas
undoubtedlybeengivenverylargepowers,butithastotakeintoconsideration,beforefixing
wages,theadviceofthecommitteeifoneisappointedontherepresentationsonproposals
madebypersonswhoarelikelytobeaffectedthereby.Thevariousprovisionsconstitutean
adequatesafeguardagainstanyhastyorcapriciousdecisionbytheappropriategovernment.
Insuitablecases,theappropriategovernmenthasalsobeengiventhepowerofgranting
exemptionsfromtheoperationsoftheprovisionsoftheAct.Thereisnoprovision
undoubtedly,forafurtherreviewofthedecisionoftheappropriategovernment,butthatitself
wouldnotmaketheprovisionsoftheactunreasonable.

(B)TheActdoesn'tviolateArticle14oftheIndian
Constitution.
OnacarefulexaminationofthevariousoftheActandthemachinerysetupbythisAct,
Section3(3)(iv)neithercontraveneArticle19(1)oftheconstitutionnordoesitinfringethe
equalprotectionclauseoftheconstitution.theCourtshavealsoheldthattheconstitutionof
thecommitteesandtheAdvisoryBoarddidnotcontravenethestatutoryprovisionsinthat
behalfprescribedbythelegislature,thiswasheldinthecaseofBhikusaYamasa
KshatriyavsSangammarAkolaBidiKamgarUnion,AIR1963SC306.Further,as
decidedinthecaseC.B.Boarding&Lodging,Re(1970)IILLJ403:AIR1970:SC2042:38
FIRI.,itaddedtotheabovementionedcasethat,...northereasonthattwodifferent
proceduresareprovidedforcollectinginformation..

(C)Notificationfixingdifferentratesofminimumwages
fordifferentlocalitiesisnotdiscriminatory.
wherethefixationofratesofwagesandtheirrevisionweremanifestlyprecededbyadetailed
surveyandenquiryandtherateswerebroughtintoforceafterafullconsiderationofthe
representationswhichweremadebyasectionoftheemployersconcerned,itwouldbe
difficultinthecircumstancestoholdthatnotificationwhichfixeddifferentratesofminimum
wagesfordifferentlocalitieswasnotbasedonintelligentdifferentiahavingarationalnexus
withtheobjectoftheAct,andtherebyviolatedarticle14.whentheGovernmentissued
notificationimprovingupontheexistingminimumwagesasrevisedminimumwages
disregardingthecontraryreportofthecommitteeappointedunderSection51(a)such
notificationwasbadunderthelawandwastobemadeinoperative..
AspointedoutbyoneoftheIndiasUnionLabourandEmploymentMinisterShri
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MallikarjunaKharage,Thevariationofminimumwagesbetweenthestatesisdueto
differencesinsocioeconomicandagroclimaticconditions,pricesofessentialcommodities,
payingcapacity,productivityandlocalconditionsinfluencingthewagerate.Theregional
disparityinminimumwagesisalsoattributedtothefactthatboththeCentralandtheState
GovernmentsaretheappropriateGovernmentstofix,reviseandenforceminimumwagesin
ScheduledemploymentsintheirrespectivejurisdictionsundertheAct.
ReferringthecaseofN.M.WadiaCharitableHospitalvsStateofMaharashtra,1993,it
wasdecidedbytheCourtthatFixingdifferentminimumwagesfordifferentlocalitiesis
permittedundertheconstitutionandunderlabourlaws,hencethequestionthatanyprovisio
oftheMinimumWagesActisinanywayagainsttheprovisioofconstitutioniswrong.
TheconstitutionofIndiaacceptstheresponsibilityoftheStatetocreateaneconomicorder,in
whicheverycitizenfindsemploymentandreceivesafairwage.Thismadeitnecessaryto
quantifyorlaydownclearcriteriatoidentifyfairwage.Therefore,aCentralAdvisory
Council,initsfirstsessioninNovember1948,appointedatripartiteCommitteeonFair
Wages.Thecommitteeconsistedofrepresentativesofemployers,employees,andthe
Government.Theirtaskwastoenquireintoandreportonthesubjectoffairwagestothe
labour.

(D)SanctityofTheMinimumWageAct
SupremeCourtinthreeseparaterulings,hasheldthatnonpaymentofminimumwagesis
tantamounttoforcedlabourprohibitedunderArticle23oftheConstitution.TheSupreme
Courtholdsthatforcedlabourmayariseinseveralways,includingcompulsionarisingfrom
hungerandpoverty,wantanddestitution.InSanjitRoyVs.StateofRajasthan(1983),the
SupremeCourtheldthattheExemptionActinsofarasitexcludedtheapplicabilityofthe
MinimumWagesAct1948totheworkmenemployedinfaminereliefworkisclearly
violativeofArticle23.Thusevenpublicworksostensiblyinitiatedbythegovernmentforthe
solepurposeofprovidingemploymentaresubjecttotheMinimumWageAct.
DrawingontheSupremeCourtrulings,AndhraHighCourtsetasidetheGovernmentofIndia
(GoI)notificationmandatingthatprevailingstateminimumwagebepaid.Thishasbeen
underscoredinthelegalopinionprovidedbyAdditionalSolicitorGeneral,Ms.IndiraJaising,
totheCentralEmploymentGuaranteeCouncil(CEGC)WorkingGrouponWageswhereshe
madeitclearthatusingSection6(1)toallowapaymentoflessthanminimumwagein
MGNREGAworkswillamounttoforcedlabour.15eminentjuristsandlawyersofIndiatoo
haveaskedGovernmentofIndiatoimmediatelyrevokeitsunconstitutionalnotificationand
ensurethatminimumwagesarepaidtoallworkersinIndia.
TheActandthejudgmentsareinfavourofequalityprovidedunderArticle14ofthe
Constitutionandajudgementinthecasenamely,EngineeringWorkersUnion/vs/Unionof
India(1994)I.LLJSup.942Bom.,pronouncesthejudgmentthat,Theprovisionunder
Section3(2)(A),thatminimumrateofwagesinscheduledemploymentfixedorrevised,shall
notapplytotheemployeesduringtheperiodofadjudication,violatedequalityclauseof
Article14andhencethatsectionisvoid.
IntheviewoftheDirectivePrinciplesofStatePolicyascontainedintheArticle43ofthe
IndianConstitution,itisbeyonddoubtthatsecuringoflivingwagestolabourerswhich
ensuresnotonlybarephysicalsubsistencebutalsothemaintenanceofhealthanddecency,itis
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conducivetothegeneralinterestofthepublic.
TheMinimumwagesActwaspassedtofulfilltheaspirationascontainedinthefollowing
resolution:
Ifthelabourersaretobesecuredtheenjoymentofminimumwagesandtheyaretobe
protectedagainstexploitationbytheiremployers,itisabsolutelynecessarythatrestraints
shouldbeimposeduponthefreedomofcontractandsuchrestrictionscannotbesaidtobe
unreasonable.Ontheotherhand,thecannotbeheardtocomplainiftheyarecompelledtopay
anyminimumwagestotheirlabourerseventhoughthelabourers,onaccountoftheirpoverty
andhelplessness,arewillingtoworkevenatlesserwages.
InthecaseofPETITIONER:BIJAYCOTTONMILLSLTD./Vs./
RESPONDENT:THESTATEOFAJMER.DATEOFJUDGMENT:
14/October/1954,
TheConstitutionalvalidityofthisActwasattackedonthegroundthatitviolatestheguarantee
offreedomoftradeorbusinessetc.,envisagedbyArticle19(1)(g)oftheIndianConstitution,
(ConstitutionofIndia,Article.19(1)(g),19(6)MinimumWagesAct(XIof1948),sections.
3,4and5Appropriate
GovernmentFixingminimumrateofwagesWhetheroffendsfundamentalrightsguaranteed
underArt.19(1)(g).)
,itwasheldthat,therestrictionsimposeduponthefreedomofcontractbythefixationof
minimumratesofwagesthoughtheyinterferetosomeextentwiththefreedomoftradeor
businessguaranteedunderArt.19(1)(g)oftheConstitutionarenotunreasonableandbeing
imposedintheinterestofgeneralpublicandwithaviewtocarryoutoneoftheDirective
PrinciplesofStatePolicyasembodiedinArt.43oftheConstitutionareprotectedbytheterms
ofel.(6)ofArt.19.ItcanthusbesaidthattheprovisionsoftheActareboundtoaffect
harshlyandevenoppressivelyaparticularclassofemployers,whoforpurelyeconomic
reasonsareunabletopaytheminimumrateofwagesfixedbytheauthorities,buthave
absolutelydishonestintentionofexploitingtheirworkers.
Thefactthatemployermightfinditdifficulttocarryonbusinessonsettledprinciplecannotbe
asufficientreasonforstrikingdownthelawitselfasunreasonable.Thepovertyoflabourersis
alsoafactortobetakenintoconsiderationwhiledeterminingthequestionwhetheraparticular
provisionisintheinterestofthegeneralpublic.

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