REPORT ON  THE WORKING OF  MINIMUM WAGES ACT, 1948 FOR YEAR 1998


PREFACE

 
In a developing economy like India where about 90 percent of the workers work in the informal sector, not having collective bargaining power, wages couldn’t be left to be determined entirely by the interplay of market forces and intervention on the part of the government became imminent. It is with this objective of protecting the vulnerable/less privileged strata of the society from exploitation by the capitalist class that government of India enacted the Minimum Wages Act, 1948. The act provides for fixation/revision of minimum rates of wages in sweating employments by involving the authority of the state. The minimum rates of wages helps in reducing the inequalities in the standard of living of different social groups of workers by statutorily prescribing minimum wage rates. Labour Bureau, Chandigarh has been bringing out an annual report on the working of the Minimum Wages Act, 1948 as desired by the Labour Ministry. The present report pertains to the year 1998.The basic objective of this annual report is to provide a bird eye view of the prevailing minimum wage rates in different scheduled employments in Central Sphere, States and U.Ts in a single volume. The report also presents the available information on the employments covered under the Act, fixation/revision of the minimum wage rates in different scheduled employments during the year, enforcement and implementation of the Act along with general evaluation and conclusions. Information contained in this volume is based on the annual reports received from the Chief Labour Commissioner (Central) and authorities of the State Governments and Union Territories.Personal visits by the team of officials of the Bureau were also made to collect data on actual Minimum Wages prevailing in States/Union Territories.The Labour Bureau, therefore, expresses its gratitude to all of them for their co-operation. I would also like to express my appreciation for efforts put in by the team of officers and staff members (Annexure-IV) for bringing out this publication. The views, expressed in this report, if any, are not necessarily those of the Government of India, Ministry of Labour. Suggestions for improvement are welcome.

CHANDIGARH                S.R.S.GILL

                                     DIRECTOR GENERAL

DATED :-
 

C O N T E N T S
 
SECTION
SUBJECT
PAGE NO.
I
Introduction
II
Scope and Coverage of the Act
III
Delay in submission of the Annual Returns
IV
Rules framed under the Act
V
Advisory Boards appointed under the Act
VI
Competent Authorities
VII
Employments Covered
VIII
Extension of the provisions of the Act to other employments
IX
Exemptionsgranted
X
Procedure adopted for fixing Minimum Wages
XI
Principles evolved by the Minimum Wages Advisory Committee/ Board
 
XII
Fixation of Minimum Wages
XIII
Revision of Minimum Wages
XIV
Scheduled Employments and Prevailing Minimum Wage Rates 
XV
Payment of Wages in kind
XVI
Hours of work and overtime wages
XVII
Weekly holidays
XVIII
Enforcement of the Act
XIX
Claims
XX
Payment of wages and deductions made therefrom
XXI
Implementation of the Act in Agricultural Employment
XXII
Difficulties experienced in the Enforcement of the Minimum Wages Act and Suggestions thereof
XXIII
General Evaluation
XXIV
Conclusions
Annexure I
List of original employments included in the Schedule under Minimum Wages Act, 1948.
Annexure II
Inspectors appointed under the Minimum Wages Act, 1948 in States and Union Territories during the year 1995.
Annexure III
Claims Authorities in States and Union Territories during the year 1995.
Annexure IV
Officers/Officials associated with preparation of the report.

GOVERNMENTOFINDIA

MINISTRY OF LABOUR

LABOUR BUREAU

SCO 28-31,SECTO-17-A

CHANDIGARH-160 017.

COMMENTS / SUGGESTIONS / OBSERVATIONS ON

THE REPORT “ WORKING OF THE MINIMUM WAGES ACT, 1948” FOR THE YEAR 1998
 
 
1.1.Name of the Organisation
(with complete address)
 
 
 
 
2.2.Usefulness/Application of data
byyour Organisation
 
 
 
3.3.Quality of Data 
 
 
 
4.4.Comments/ Suggestion for the
Improvement ofdata
 
 
 
 

Remarks

 
 
 

SIGNATURE:

NAME:

POST:

DATE:
 
IMPORTANT FINDINGS OF THE REPORT ON THE WORKING OF THE MINIMUM WAGES ACT, 1948 FOR THE YEAR 1998.
A. FIXATION / REVISION OF MINIMUM WAGES
1.1. Minimum Wage Rates fixed by the Central / States/UTs. in 275 common employments all over India. 

2.2. Till 1998, minimum wages were fixed / revised in 1156 employments all over India.

3. During 1998, out of 1156 employments in the country minimum wages fixed/revised in 350 employments in 8 States / U.Ts. viz Goa (16),Haryana (48), Maharashtra (6), Orissa (82), Punjab (59) , Rajasthan (38)Uttar Pradesh (65) & Chandigarh (42). 

4. The number of Scheduled Employments for which Minimum Wages werefixed / revised was highest in the State of Orissa (82) and lowest in the States ofMizoram (2) and Pondicherry (2). 

5.The lowest minimum wages per day of Rs. 8.46 (Brick of Roof Tiles employment) prevailed in the state of Maharashtra and the Highest Minimum Wages of Rs. 157.81 (Cashew Industry) in the State of Kerala 

6.In the Scheduled Employment of Agriculture, the highest Minimum Wage rate was Rs. 75.40 per day in the State of Delhi and the lowest Rs. 19.25 per day in the State of Pondichery. 

B.INSPECTIONS AND IRREGULARITIES

12,145 inspections made and 1,41,913 irregularities detected in the Central sphere.The highest number of inspections made and irregularities detected in Hydrated and Banglore region respectively and the lowest number of inspections made and irregularities detected in New Delhiregion.

In the State sphere 497380 inspections made and 642531 irregularities detected. The highest number of inspections made and irregularities detected in Maharashtra State and the lowest number of inspections/ irregularities detected in Pondichery and Goa respectively.

C. PROSECUTIONS AND CONVICTIONS
1.1.Out of a total of 45265 cases (38521 cases pending from previous year and 6744 cases launched during the year), fines amounting to Rs. 1287998 imposed in 5001 cases and still 40200 cases pending at the end of year in Central Sphere.

2.2.Out of total of 141679 cases (106641 cases pending from previous year and 35038 cases launched during the year) fines amounting to Rs. 5659284 imposed in 21714 cases and 114749 cases pending at the end of year in the State sphere.

D. CLAIMS PREFERRED IN CENTRAL AND STATE SPHERES

1.1.In the Central Sphere, 5501 claims preferred whereas 3675 claims pending from previous year.Out of these claims, 1525 cases decided. 

2.2.In the State Sphere, 14217 claims preferred whereas 22439 claims pending from previous year.Out of these claims, 13329 claims decided at the end of 1998.25551 claims still pending for settlement with the Claims Authorities. 

E. PAYMENT OF WAGES IN CENTRAL AND STATE SPHERES

1Only(19%) 3912 out of 20409 establishments covered under the Act submitted returns.All the 1111433 average daily number of persons was an adult. 

2. In State sphere, response was very poor as only (7.4%) establishments covered under the Act submitted returns.Out of 2766586 average daily number of persons employed 2765145 adults and 1441 children.

INTRODUCTION
In a labour surplus economy like India wages couldn’t be left to be determined entirely by the interplay of market forces as it would lead to the fixation of wage at a very low level resulting in exploitation of less privileged class.Keeping this in view the Government of India enacted the Minimum Wages Act 1948. The Act provides for fixation/ periodic revision of minimum wages in employments where the labour is vulnerable to exploitation. Under the Act the appropriate governments[1], both central and state, can fix / revise the minimum wages in the scheduled employments falling in their respective jurisdiction. 
Minimum wage consists of a basic wage and an allowance linked to the cost of living index and is to be paid in cash, though payment of wages fully in kind or partly in kind may be allowed in certain cases. The term ‘Minimum Wage Fixation’ implies the fixation of the rate or rates of minimum wages by a process or invoking the authority of the State.The statutory minimum wage has the force of law and it becomes obligatory on the part of the employers not to pay below the prescribed minimum wage to its employees. The obligation of the employer to pay the said wage is absolute. This process helps the employees in getting fair and reasonable wages more particularly in the unorganised sector.Also the other gain which could be derived by fixing minimum wages under statutory provisions are to eliminate exploitation of labour to ensure rapid growth and equitable distribution of the national income thereby ensuring sound development of the national economy. The concept of fixing minimum wages originated as far back as 1928, when Royal Commission of Labour in India suggested and recommended fixing of the minimum rates of wages in those employments where workers lacked the collective bargaining power and were vulnerable to exploitation. The matter was later discussed in the meetings of the Indian Labour Conference (1943) and Standing Labour Committee (1944).The ILC also discussed the issue of establishing machinery to fix minimum wages. However, it was in October 1944 only that the framing of statutory provisions for fixing minimum wages was approved in principle by the 6th Indian Labour Conference. A draft bill was introduced in the Central Assembly in 1946, which became an Act in March 1948, and came to be known as the Minimum Wages Act, 1948. The Act provides for the creation and maintenance of machineries both at the central and State levels, and regulating fixation/revision of minimum rates of wages of workers employed in sweated industries.It also provides for 

Fixation of hours of work, payment of overtime wages besides providing penalties for offences under the Act and rules made there under. The present report reviews the working of the Minimum Wages Act, 1948 in the Central Sphere/ States/ Union Territories during the year 1998. The report presents details relating to the minimum rates of wages fixed/revised for the existing scheduled employment[1] as well as those added subsequently, difficulties experienced in implementing the Act in scheduled employments especially Agriculture, general evaluation of the working of the Act, etc.

II.SCOPE AND COVERAGE OF THE ACT

The Minimum Wages Act, 1948 is applicable throughout India including Jammu & Kashmir. One of the important provisions under the Minimum Wages Act is that the appropriate Government may refrain from fixing minimum rates of wages in respect of any scheduled employment in which less than one thousand workers are engaged in the whole State/U.T. Besides the above provisions, the Minimum Wages Act seeks to provide minimum wages in the “Sweated Industries” that is industries in which labour is, by and large, unorganised and not able to care for itself.Also under the Minimum Wages Act, the appropriate Government can fix or revise the minimum rates of wages payable to employee[1] in respect of scheduled employments-employments originally included in the schedule (Part I and Part II) appended to the Act and those added to the schedule subsequently.There are in all 13 employments originally included in this schedule which are given in Annexure–I.There is also a provision in the Act (Section 27) which empowers appropriate Governments to extend the application of the Act to any other employment considered proper.For this purpose a notification in the official gazette giving not less than three months notice is necessary.

III DELAY IN SUBMISSION OF THE ANNUAL RETURNS

The present report on the working of the Minimum Wages Act, 1948 at All India Level is compiled on the basis of annual returns received by the Labour Bureau from different States/U.Ts. /Central Government. The States/ U.Ts. /Central Government are required to submit the return to Labour Bureau in the prescribed format by 31st May of the succeeding year. However, the Labour Bureau receives returns with considerable time lag. The delay in receipt of the returns pertaining to the year 1998 has been presented in Table-I.

Table No. 1. Statement on submission of the Annual Returns received under the

Minimum Wages Act, 1948 by States / U.Ts.for 1998.
 
The delay in the submitting of returns by various States/U.Ts. / Central Govt. to the Labour Bureau varied from 1 to 12 months. It may be senn from this table that many states have not submitted the returns till now. This unusual delay in submission of annual returns by the States and U.Ts. is one of the major reasons for delay in compiling the All India Report on the working of the Minimum Wages Act, 1948. 
IV.IV.RULES FRAMED UNDER THE ACT Section 30 of the Act empowers, the appropriate Governments to frame rules for implementing various provisions of the Act.All the State Govt./U.Ts have framed their rules for the effective implementation of the Minimum Wages Act, 1948. These rules prescribe the constitution and procedures to be followed by the various Committees and Boards appointed under the Act. Besides, it also indicates mode of computation of cash value of wages paid in kind, time & condition for payment of wages and the deductions permissible therefrom, daily hours of work constituting a normal day, weekly day of rest, form of registers and records to be maintained by the employers, power of inspectors appointed under the Act, etc. The Minimum Wages (Central) Rules, 1950 framed by the Central Government for the Central Sphere undertakings served as a model for the States/U.Ts. in framing the rules.During the year 1998, no amendments were carried out in the Act/Rules by appropriate authorities.

V.ADVISORY BOARDS APPOINTED UNDER THE ACT

(A) Advisory Boards appointed under section 7 of the Act: - One of the basic guiding principle of the Minimum Wages Act is to provide fixation/ revision of minimum rates of wages of workers.In this regard there is a provision in the Minimum Wages Act, 1948 in which the appropriate Government is authorized under Section 7, to appoint an Advisory Board for advising the Govt. in the matter of fixation/revision of the minimum rates of wages.The state-wise details in this regard for the year 1998 are given as below: -

(i)(i)Gujarat 

Four meetings of Minimum Wages Advisory Board were held from 29.9.98 to 18.12.98. 

(ii)(ii)Kerala 

The Minimum Wages Advisory Committee was formed for collection of River Send and its loading / Unloading. 

(iii)(iii)Orissa 

The 39th meeting of the State Minimum Wages Advisory Board was held on 6.4.1998. 

(iv)(iv)Tripura 

A Tripartite Labour Advisory Board with representatives of employers and employees and State Government officials formed and is in exixtence. An Advisory Committee has also formed for Plantation Labour Housing Scheme and is in existence. 

(B) Central Advisory Board under the Act.

The Central Government is empowered by section 8 of the Act to appoint a Central Advisory Board for the purpose of advising the Central/State Govts.and Union Territories in the matter of fixation and revision of minimum rates of wages and other connected matters. It helps in coordinating the work of all advisory boards appointed under Section 7 of the Act.The constitution of the board is governed by the Minimum Wages (Central Advisory Board) Rules, 1949.Such a Board was first constituted in May 1950.The Board consists of independent persons and members representing employers[1] and employees.Two meetings of the Minimum Wages Advisory Board and one meeting of the Sub-committee were held during the year 1998. 

VI COMPETENT AUTHORITIES

Section 4 (2) of the Minimum Wages Act, 1948 provides that the cost of living allowance and cash value of concessions in respect of supplies of essential commodities at concessional rates shall be computed by the competent authorities at such intervals and in accordance with such directions, as may be specified or given by the appropriate Governments.Most of the appropriate Governments have accordingly appointed their competent authorities[1] under Section 2 (c) of the Act, in order to ascertain from time to time the Consumer Price Index Numbers applicable to employees employed in scheduled employments. Director, Labour Bureau, is the Competent Authority in respect of Union Territories and the Central Sphere undertakings as per Notification No. LWI -24(3) dated 24.10.1949. 

VII.EMPLOYMENTS COVERED

In India large part of the labour force is in the unorganised sector that is vulnerable to exploitation. This necessitated the need to have a mechanism by which the possible exploitation of this group of workers could be avoided. The enactment of the Minimum Wages Act, 1948 was a step in this direction and the provisions of this Act ensured minimum wages in sweated Industries /employments.Under the Minimum Wages Act, 1948, the appropriate Government could notify its own set of scheduled employments for which it thinks appropriate that minimum wages should be fixed.Accordingly, all the States/U.Ts.have notified their own set of scheduled employments.The details of these scheduled employments and minimum wages fixed in each of the State/U.T as notified by them have been dealt at length in the subsequent discussions of the Review. 

(VIII)(VIII)EXTENSION OF THE PROVISIONS OF THEACT TOOTHER EMPLOYMENTS

The State Governments and the Union Territories authorities and the Central government reviews from time to time the scheduled employments in their jurisdiction and add new employments in respect of which it is of the opinion that minimum rates of wages should be fixed statutorily. Section 27 of the Act empowers them to add any scheduled employment to the existing ones.During the year 1998,7 State Governments i.eArunachal Pradesh , Bihar, Goa, Gujarat ,Karnataka, Orissa and Tamil Nadu have added employments to the schedule appended to the Act.The details are given in Table No. 2.

Table No. 2 - Employments added subsequently to the Schedule appended to the

Minimum Wages Act, 1948 during the year, 1998
 

IX. EXEMPTIONS GRANTED

Section 26 of the Minimum Wages Act, 1948 empowers the appropriate Government to grant exemptions from all or any provision of the Act to all or any class of employees engaged in the scheduled employments or to any locality where a scheduled employment is carried on.During the year 1998, only Central Government granted such exemptions. The details of exemptions granted upto the year 1998 are given in Table No.3.

Table No. 3 - Details of exemptions granted under the Minimum Wages Act, 1948 upto the year 1998 in Central Sphere

X.PROCEDURES ADOPTED FOR FIXING MINIMUM WAGES
Under the Minimum Wages Act, 1948, procedures laid down for prescribing the minimum rates of wages in respect of any scheduled employment for the first time or in revising minimum rates of wages so fixed are mainly of two types.It is upto the appropriate Govt.to decide, what procedure is to be adopted for fixing/revising the minimum rates of wages for any scheduled employment. The procedures prescribed under the Act are as follows:
(a)(a)The appropriate Government may appoint advisory Board to fix / revise the minimum wages.

(b)(b)By notifications in the officialGazettee, publish its proposal for the information of persons likely to be affected thereby andspecify a date not less than two months from date of notification on which proposals will be taken into consideration.

The appropriate Government may fix: -

(i)(i)A minimum rate of wages for time work;

(ii)(ii)A minimum rate of wages for piece work; 

(iii)(iii) A minimum rate of remuneration to apply in the case of 

(iv)(iv) employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis(or a guaranteed time-rate). 

(v)(v)A minimum rate (whether time or piece rate) to apply in substitution for the minimum rate which would otherwise be applicable in respect of overtime work done by employees(overtime rate). 

Also the minimum rates of wages may be fixed for any one or more of the following wage periods: - 

1.1.By the hour 

2.2.By the day 

3.3.By the month 

4.4 By such other large wage period as may be prescribed. 

The Central Government and State Govts.have been fixing /revising minimum rates of wages for a set of scheduled employments under their respective jurisdiction. However, some time the Central Government delegates its power to a particular State/U.T.to fix ,review and revise the minimum rates of wages for employment of a specific scheduled employment in that State/U.T. During the year 1998, the powers of Central Government relating to fixation, review and revision of minimum wages in respect of employees of the Damodar Valley Corporation continued to have been delegated to the Bihar Government.

XI PRINCIPLES EVOLVED BY THE MINIMUM WAGES ADVISORY COMMITTEES /BOARDS

The Minimum Wages Act,1948 does not define “minimum wage” nor does it prescribe any guidelines for its quantification. Government constituted the Committee on Fair Wages for defining the minimum wage. The committee observed that minimum wage should not only ensure bare subsistence but also preserve efficiency of the worker by providing basic facilities such as education, medical facilities etc. Committee of Labour Secretaries set up in 1981 observed that while fixing/ revising the minimum wages following factors should be kept in mind such as prevailing rates of wages and conditions of service, increase in the cost of living index since last fixation/revision, rates fixed in other states, Rates in other employments, nature of work and the position of the organization of workers. These concepts provided the basis for the fixation of minimum wages, by the central government and the state /. UT authorities. 

XII.XII. FIXATION OF MINIMUM WAGES

During the year 1998, the minimum wages were fixed by States of Arunachal Pradesh , Bihar, Goa, Gujarat ,Karnataka and Orissafor the first time for the employments given in Table No.4.

Table No.4 - Employments in which the Minimum Wages fixed for the first time during 1998

XIII REVISION OF MINIMUM WAGES UNDER THE MINIMUM WAGES ACT, 1948.
Under the Minimum Wages Act, 1948 the appropriate Governments review from time to time the minimum wages fixed in the different scheduled employments under their jurisdiction and revise the minimum rates of wages as per the recommendations of Advisory Boards on Minimum Wages.During the year 1998, various State Governments/U.T authorities revised the minimum rates of wages for the employments as given in Table No.5.

Table No. 5 - Employments in which Minimum wages revised during the year 1998
 

XIV SCHEDULED EMPLOYMENTS AND PREVAILING MINIMUM WAGE RATES

The Central Government as well as the State Govts./Union Territories are authorized under the MinimumWages Act, 1948 to notify in the official gazette employments within their respective jurisdiction for which it considers appropriate that minimum wages should be fixed from a prescribed date. The employments for which the process of fixing minimum wages has been invoked by the Central Government or the States/Union Territories under the Minimum Wages Act are included in the schedule appended to the Minimum Wages Act., 1948. The Central Government and the different State Governments/ U.T authorities have been maintaining a set of Scheduled Employments for fixing minimum rates of wages under their respective jurisdiction. However, there have been additions to the list of Scheduled Employments as and when the governments feel the need to cover an employment under the Act. Labour Bureau collects details of these scheduled employments and the minimum rates of wages in each of these scheduled employments as on 31st December each year and update the information every year for Central sphere/State Govt./Union Territory. The compilation of these statistics helps not only in providing the information at one place, which could be useful to the Central Government and other State Governments for drawing up comparative information but also help us in building up a time series of data on prevailing minimum wages in different scheduled employments in different States/Union Territories. In the present report Table 6 contains details of all the scheduled employments notified by the Central Government and States/Union Territories so far as well as prevailing minimum wage rates in these employments as on 31.12 1998. The components of wage rates like Basic Wage and Dearness Allowance have also been presented wherever available.In some of the Scheduled Employments in some States/Union Territories consolidated wage rates have been fixed/revised.In some of the Scheduled Employments it was noticed that more than one rate of minimum wage rates have been prescribed which indicates the minimum wages fixed/revised for different Areas/Regions/Zones in the particular State/Union Territories.Some of the States/Union Territories are yet to fix minimum rates of wages for some of the Scheduled Employments (new or already existing) names of such employments are also featuring in this Table.

TABLE-6 - MINIMUM WAGES FIXED/REVISED AS ON 31.12.1998 IN SCHEDULED EMPLOYMENTS

 
 
 
 
(XV)SCHEDULED EMPLOYMENTS AND RANGE OF MINIMUM WAGE RATES
Table 7 presents details about the total number of employments for which minimum wage rates have been fixed/revised and the range of minimum wage rates in different State Governments/U.Ts. as on 31.12. 1998. It emerges from the table that the number of Scheduled Employments for which minimum wages were fixed /revised was highest in the State of Orissa (82) , followed by Uttar Pradesh (65), Bihar and Maharashtra each (62),Punjab (60), Andhra Pradesh Karnataka and Tamil Nadueach (58),Assam(57). And Gujarat and Haryana (50). The dispersion of rates as measured by the range between the maximum minimum wage rate and the minimum minimum wage rate is very wide, Rs 8.46as the lowest minimum wages of (Brick or roof tiles employment) in the State of Maharashtra and the highest minimum wage of Rs. 157.81(Cashew Industry) in the State of Kerala.

TABLE NO. 7 - Scheduled Employments in Central/State/UnionTerritory and Range of

Minimum Wages as on 31.12.1998for unskilled workers
 
END OF REPORT



[1] Appropriate Government Means in relation to any scheduled employment carried on by or under the authority of the Central government, the Central government and in relation to any scheduled employment carried under the authority of the state government,the state government.
[1] Employee means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed.
[1] Employer means any person who employs, whether directly or through any person , whether on behalfof himself or another person one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed under the Act.
[1] Competent authority means the authority appointed by the appropriate government by notification in the official gazette from time to time the cost of living index number applicable to the employees employed in the scheduled employments specified in such notification.