Constitutional Validity of the Minimum Wages Act, 1948 | Labour & Industrial Laws | SABD Law

In India, the Minimum Wages Act, 1948 is providing jurisdiction to both the central government as well as the state governments in fixing minimum wages that is legally non-binding but statutory in nature. The constitutional validity of the said Act is challenged on the grounds that-

a) The Act is unreasonable as it violates the guarantee of freedom of trade or business that is envisaged under Article 19 (1) (g) of the Indian Constitution which is bound to affect harshly and even oppressively a particular class of employers who are unable to pay minimum wages fixed with no intention of dishonesty and exploitation of workers.

b) The Act violates Article 14 of the Indian Constitution which guarantees equality before the law to all.

c) Notification under the Act fixing different rates of minimum wages in respect of any scheduled employment for different locations under the Act is discriminatory.

Following are the grounds that stating the constitutional validity of the Minimum Wages Act, 1948

THE ACT IS REASONABLE

In India, it can be disputed that securing Living Wages to labourers to whom not only bare physical subsistence but also maintenance of health and decency should be ensured under one of the Directive Principles of the State Policies under Article 43 of the Constitution of India. Because of that, the individual employers might find it difficult to carry on business on the basis of minimum wages fixed under the Act, but in some of the cases, this must be due entirely to the economic conditions of employers that cannot be the sole reason for unreasonability of the Act.

Restrictions which are imposed on the freedom of trade or business guaranteed under Article 19 (1) (g) are reasonable and imposed in the interest of the general public under Article 19(6) of the Constitution of India.

And in regards to the procedure for the fixing of minimum wages, the Appropriate Government have given very large powers under the Act, which provides that with the advice of committees, and review of the decision of Appropriate Government, the fixation of rates of minimum wages would not make the provisions of the Act unreasonable.

THE ACT IS NOT VIOLATIVE OF ARTICLE 14 OF THE INDIAN CONSTITUTION

The provisions and the machinery set up by it provided under section 3 (3) (iv) of the Act does not contravene Article 19 (1) nor does it infringe Article14 of the Indian Constitution. And also, the constitution of committees and Advisory Board provided under sections 7, 8 and 9 did not contravene the statuary provisions on that behalf prescribed by the legislature.

NOTIFICATION FIXING DIFFERENT RATES OF MINIMUM WAGES IN RESPECT OF ANY SCHEDULED EMPLOYMENT FOR DIFFERENT LOCATIONS UNDER THE ACT IS NOT DISCRIMINATORY

Where fixation of rates of minimum wages and their revisions of minimum wages is preceded by a detailed survey and enquiry and the rates were brought into force after full consideration of representation made by the employers concerned in any scheduled employment.

It would be difficult to hold that the notification which fixed different rates of minimum wages was based on intelligent differentia having a rational nexus with the object of the Act and thereby not violative under Article 14 of the Constitution of India.

CASE LAWS RELATING TO THE CONSTITUTIONAL VALIDITY OF THE MINIMUM WAGES ACT, 1948

CASE: BIJOY COTTON MILLS v STATE OF AJMER[1]

In this case, the validity of the Minimum Wages Act, 1948 was challenged wherein sections 3,4 and 5 of Act were challenged on the ground that the restrictions imposed by these sections upon the freedom of contract and thus violated the fundamental rights provided under Article 19 (1) (g) of the Indian Constitution.

The court held that fixation of rates of minimum wages is reasonable and even oppressive with regard to the one class of employers, who for purely economic reasons are unable to pay minimum wages, but those who have no intention to exploit labour, in such cases, the Act have no reasonable relation to the object of the Act.

Further, the court held that securing living wages to labourers to whom not only bare physical subsistence but also maintenance of health and decency should be ensured under one of the Directive Principles of the State Policies under Article 43 of the Constitution of India and the adequate living wages should be secured irrespective of the intention of employer. And, moreover, the court stated that reasonable restrictions which are imposed on the freedom of trade or business guaranteed under Article 19 (1) (g) are reasonable and imposed in the interest of the general public under Article 19(6) of the Constitution of India.

CASE: EDWARD MILLS CO. LTD. v STATE OF AJMER[2]

In this case, the Supreme Court was assigned with the task to determine the constitutional validity of the Minimum Wages Act, 1948 wherein the validity of section 27 was challenged on the grounds of excessive delegation and the powers of the Appropriate Government to appoint committees provided under section 5 of the Act also came before the Court.

Under section 27 of the Act, the Appropriate Government, after giving 3 months’ notice of its intention to do so, may add any employment in respect to which minimum wages should be fixed to either part of the schedule of the Act.

The court held that legislature could not be said to have delegated as its provided essential power or assigned to administrative authority that clearly indicated necessary to carry out the purpose and policy of the Act, and in regard to nature of Advisory Committee under section 5(2) is only recommendatory and the final decision is still left in the hands of the Appropriate Government and hence it is declared valid.

CASE: U. UNICHOYI v STATE OF KERALA[3]

In this case, the court dealt with the question of the constitutional validity of the Act and the capacity of employers to pay the minimum wages under the Act by applying ‘need-based minimum wages’ norms as laid down by the 15^th session of the International Labour Conference, 1957. The following are the other issues considered in this case are-

(I) Wage structure recommended by the committee by following the criteria of need-based minimum wages, would lead to Fair Wages.

(ii) Court observations made in the Express Newspaper Case i.e., the fixation of statuary minimum wages is required to consider the capacity of the employer to pay is valid.

(iii) The settlement arrived contrary to the provisions of the Act at the instance of the government because notification issued under the Act is valid.

CASE: CHANDRA BHAVAN BOARDING & LODGING, BANGALORE v STATE OF MYSORE[4]

In this case, the challenge was laid to the notification fixing minimum wages and the problem raised before the court was to strike & balance between these following two propositions:

(i) One, should not a worker be paid, by way of minimum wages, an amount which would enable the two ends to meet and to survive.

(ii) Fixing of minimum wages may result in industry or unit being taking away its right to exit.

The court held that the freedom of trade or business provided under Article 19 (1) (g) of the Constitution of India doesn’t mean freedom to exploit nor as to the barrier to progress because they provide a social order contemplated by the Preamble of the Constitution and the Constitution of India provides duties to build a welfare society in which justice, social, economic and political conditions of our national life aroused by the minimum needs of citizens. Further, the court stated that the Act is constitutionally valid.

CASE: BHIKUSA YAMASA KSHATRIYA v SANGAMNER AKOLA TALUKA BIDI KAMGAR UNION[5]

In this case, the court held that machinery set up under section 3 (3) (iv) neither contravene Article19(1) of the Constitution of India nor does it infringe the equal protection clause under Article 14 of the Constitution of India and stated that the constitution of the Committees and Advisory Board didn’t contravene the statutory provision in that behalf prescribed by the legislature.

Minimum Wages Act 1948 Study Material

[1] Bijoy Cotton Mills v State of Ajmer, (1995) 1 SCR 752: (1955) 1 LLJ 129: AIR 1955 SC 33.

[2] Edward Mills Co. Ltd. v State of Ajmer, (1955) 1 SCR 735: (1954) 2 LLJ 686: AIR 1955 SC 25.

[3] U. Unichoyi v State of Kerala, (1962) 1 SCR 946: (1961) 1 LLJ 631: (1961) 3 FLR 73: AIR 1962 SC 12.

[4] Chandra Bhavan Boarding & Lodging, Bangalore v State of Mysore, (1969) 3 SCC 84: (1970) 2 LLJ 403: (1969) 19 FLR 325: (1970) 2 SCR 600: AIR 1970 SC 2042.

[5] Bhikusa Yamasa Kshatriya v. Sangamner Akola Taluka Bidi Kamgar Union, 1962 Supp (1) SCR 524: (1963) 6 FLR 74: (1962) 2 LLJ 736: (1963-64) 24 FJR 79: AIR 1963 SC 806.