Minimum Wages Act.

WAGES – 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. [section 2(h)].

FIXING OF MINIMUM WAGES – Minimum wages will be fixed by Appropriate Government after following prescribed procedure. The rate fixed can be revised periodically. [section 3(1)].The rate can be fixed on * time work basis * piece work basis * a ‘guaranteed rate’ when rate is fixed on piece work basis and * overtime rate. [section 3(2)]. 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. [section 3(3)(a)]. Rates can be fixed on basis of hour, day or month, or even larger period. [section 3(3)(b)]. – – The rate shall consist of basic rate of wages with or without allowance for cost of living allowance based on ‘cost of living index number’. An all inclusive rate allowing for basic wage, cost of living allowance and cash value of concession can also be fixed. [section 4].

PROCEDURE FOR FIXING MINIMUM WAGES – Minimum wages will be fixed after appointing a committee. Their proposals will be published by way of notification. After hearing representations, rate of minimum wages will be notified. [section 5].

Government is required to constitute Advisory Board to recommend minimum wages. The recommendations of Advisory Board are not binding on Government. – State of AP v. Narayana Vellur Beedi Mfg Factory AIR 1973 SC 307.

IT IS SUFFICIENT IF TOTAL WAGES PAID ARE MORE THAN MINIMUM WAGES – 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. – Airfreight Ltd. v. State of Karnataka 1999(4) SCALE 451 = 1999 AIR SCW 2608 = AIR 1999 SC 2459 = 95 FJR 395 = 1999 LLR 1008 = 83 FLR 126 (SC) – same view in Harilal Jechand Doshi v. Maharashtra General Kamgar Union 2000(1) Bom CR 620 (Bom HC) * Management of Ramkrishna Pharmaceuticals v. State Authority 2002 LLR 988 (AP HC) * Andhra Pradesh Hotels Association v. Government of AP 2002 LLR 1122 = 101 FJR 703 (AP HC DB). – Thus, even if rates fixed by State Government indicate basic and DA separately, it is not necessary to show them separately by employer in his wage sheet. It is sufficient if employer pays total amount which is equal to or more than total minimum wages (including DA) as specified by State Government in a notification.

EMPLOYER TO CLOSE UNIT IF HE CANNOT AFFORD TO PAY MINIMUM WAGES – If an employer cannot pay minimum wages, he has to close down the undertaking. * Crown Aluminium Works v. Their Workmen AIR 1958 SC 30 = 1958 I LLJ 587 (SC) * Deepak Photos v. State of Kerala 2001 LLR 10 (Ker HC DB) * Andhra Pradesh Hotels Association v. Government of AP 2002 LLR 1122 = 101 FJR 703 (AP HC DB). Paying capacity is not relevant consideration for rate of minimum wages. Cost of living and general wages in locality are relevant. – Chandrabhavan Boarding v. State of Mysore AIR 1968 Mys 156 = 1968 Lab IC 879.

Minimum wages are payable irrespective of financial position of individual employer. – Hindustan Aeronautics v. Workmen AIR 1967 SC 948.