India is home to a large pool of labourersÂ working in public as well as private sector. Every year, on the 1st of May, International Labour Day or May Day is celebrated to fete the laborersÂ and the working class.
On the occasion of LabourÂ Day, this write-up on Minimum Wages Act, 1948 is a tribute to the relentless effort of working class towards building our nation from scattered pieces to staunch structures. We would like to thank them for all the times they have raised their voice against the wrongdoings of State or non-state parties. Over the years, they have overcome many challenges and chaos, formed organized trade unions and groups and secured many rights for themselves. It is therefore paramount to acknowledge that their contribution has been significant to both – the physical enrichment of our nation as well as the constitutional enrichment. May they continue to fight for their rights so long as there is exploitation. We extend our support and wish them justice that they truly deserve!
What is a minimum wage?
A minimum wage is the lowest minimum remuneration that the employers legally pay to their workers. It is generally set or determined by a statute, a competent authority or by way of enforcing legislation to supplement the collective agreements. The idea behind minimum wages is to protect the workers from undue harassment due to low pay. It is to ensure that a just and equitable pay is provided to all those who are employed. The Indian Parliament enacted Minimum Wages Act in 1948 making it mandatory for every employer to pay nothing less than a fixed minimum wage to all employees. The Indian Constitution broadly categorizes two types of wages:
- Living wage: Living wage the wage that would ensure the basic health, shelter, food, education, and assistance for any contingency. The constitution provides for it, and, it is mandatory.
- Fair wage: It is a relative wage; relative to the income and capacity of the industry. If the industry is running good, then it has the capacity as well as the social responsibility to provide a little more than the living wages. The concept of fair wages seeks to improve the quality of life of the workers.
History of The Minimum Wage Concept
Can you imagine there was also a period when there were no trade unions or labour organizations? There was a time when none of this was needed at all and then there was a period when the need arose but the society was still void of the concept of labour rights because the outrage was not enough. It all started with the rise of industrialization when the working class had to work for up to 15 hours a day. The exploitation at the hands of industrialists had begun. The only motive of the industrialists was to maximize their product output and profits and the victims of their ruthless ambitions were the working class. For the first time in 1928, the International Labour Organization emphasized on the need for States to adopt national mechanisms for the protection of labour rights. Many contrasting social, political and economic ideologies emerged in favour of and against the concept of minimum wages. It was inevitable for a country like India to adopt a minimum wage fixing instrument. The reasons were many – one of which was that the workers’ organizations were unorganized and weak. They had poor or no negotiation skills and their collective power could not make much of a difference. And with that, The Minimum Wages Act was introduced.
The Minimum Wages Act 1948
The Minimum Wages Act was introduced in 1948 giving both the Central and State Governments the jurisdiction in fixing minimum wages. The act is not legally binding, but statutory. As per the Act, payment of wages below the minimum wage rate amounts to forced labour. The MWA covers in its ambit all workers whether skilled or unskilled, manual or clerical provided they are engaged in employment listed in the schedule to the MWA. The minimum rates of wages are fixed or revised under the MWA according to the employment listed in the said schedule. The Act seeks to protect the rights of workers in sweated factories. The act further appoints a Fair Wage Committee for the settlement of issues relating to wage fixation in the organized sector. The said Committee outlines the components of the minimum wage which should be taken into account, but, it does not quantify them. What is a fair wage differs from region to region and industry to industry? The standard of living and many other factors are also favourable in deciding a fixed fair wage.
Provisions of the Act
The act provides for wage rate for any industry on the basis on time, pieces of production, guaranteed time and overtime. The following are the issues that are looked into:-
- Working hours
- Wage rate according to the amount of production
- Number of workers employed in the industry
- The working hours should contain the breaks or intervals in between.
- Minimum one day should be off in a week
- The employer shall maintain the records of the work done by the workers and all the receipts as well.
Revision of the minimum wages
Wages are revised from time to time keeping in view the cost of living index. Both the state and center have the power to do it. However, when an act specifies that the specific government should revise the rate, then any other government cannot do it. For example, the wages in relation to railway administration are fixed by the central government.
Process of complaint
If a worker feels that he or she is not getting a fair wage, then he/she can go the commissions appointed for this purpose. The appropriate government appoints such Labour Commissions with officers with the experience of a judge or stipendiary judge.
The issue that needs to be addressed:
- Poor implementation: Around 40% of workers do not get the minimum wage rate across India.
- The casual and uneducated are most likely to be exploited at the hands of the employers.
- Also, the women workers are the most exploited in terms of the fair wages.
- The reason behind the acceptance of less than the fair wage is that there is mass unemployment in India.
- Many states do not provide for the revision in wages as per the rules and dearness allowance is not allowed during inflation.
- There is a lack of awareness among the citizens regarding the act for the minimum wages and the complaint procedures.
- Moreover, there is a delay in the appointment of the committee for fixing the minimum wages and there is a delay in action.
- The terminology, living wage, fair wage and the minimum wage is not clearly defined.
Remember the time when there were no trade unions or a concept of labour organizations and their rights? If we look back, we will see that the working class has fought a long battle and has come a long way in securing a position for itself. However, there is still a long way to go and many battles to fight. The exploitation and harassment has not ceased to exist. Many workers are unaware of their rights and are exploited at the hands of the employers by accepting less than the fair wage. Awareness programmes need to be conducted by the government and strict penalties should be imposed on those violating the laws regarding minimum fair wage. Workers have the weapon of collective bargaining and a right to conduct peaceful protests, strikes and lockouts.