By Aniruddh Shastree
The Act is Not Unreasonable
It can scarcely be disputed that securing of living wages to labourers which ensure not only bare physical subsistence but also the maintenance of health and decency is conducive to the general interest of the public. This is one of the directive principles of the State Policy embodied in Article 43 of the Constitution.
Individual employers might find it difficult to carry on the business on the basis of minimum wages fixed under the Act but this must not be the entire premise and reason to strike down the law itself as unreasonable. The same questions were raised in the case of Gulmuhommad Tarasaheb v. State of Bombay, AIR 1962 Bom 97: whether a State can be prevented from making any law, in the interest of the general public, where it creates restrictions and interferes to some extent with the freedom of trade or business guaranteed under Article 19(1)(g) of the Constitution of India.
“Fixation of minimum wages is for preservation of public order, and if no minimum wage is fixed then it shall lead to arbitrariness by the employers and that shall lead to clashes of interest between employer and labour which shall cause friction in society.”
“The restrictions, though they interfere to some extent with the freedom of trade or business guaranteed under Article 19(1)(g) of the Constitution, are reasonable and, being imposed in the general interest of the public, are protected by the terms of clause (6) of Article 19.”
Another important judgement that favours and supports the constitutional validity of the Minimum Wages Act, 1948 is V. Unichonoy v. State of Kerala, 1962 SC 12.
The Article 14 of the Indian Constitution, which relates to equality before the law, must be noted. Minimum wages are not fixed equally across the whole nation but they vary from occupation to occupation and industry to industry and from place to place.
“As regards to the procedure for fixing of the minimum wages, the ‘appropriate government’ has undoubtedly been given very large powers, but it has to take into consideration, before fixing wages, the advice of the committee if one is appointed on the representations on proposals made by persons who are likely to be affected thereby. The various provisions constitute an adequate safeguard against any hasty or capricious decision by the ‘appropriate government’. In suitable cases, the ‘appropriate government’ has also been given the power of granting exemptions from the operations of the provisions of the Act. There is no provision, undoubtedly, for a further review of the decision of the appropriate government, but that itself would not make the provisions of the Act unreasonable.”
The Act does not violate Article 14 of the Indian Constitution
“On a careful examination of the various provisions of the Act and the machinery set up by this Act, Section 3(3)(v) neither contravenes Article 19(1) of the Constitution nor does it infringe the equal protection clause of the Constitution. The Courts have also held that the constitution of the committees and the Advisory Board did not contravene the statutory provisions in that behalf prescribed by the legislature.” This was held in the case of Bhikusa Yamasa Kshatriya v. Sangamner Akola Bidi Kamgar Union, AIR 1963 SC 306.
Further, as decided in the case C.B. Boarding & Lodging, Re (1970) 1 LLJ 403; AIR 1970 SC 2042, it added to the above-mentioned case that the mere fact that two different procedures are provided for collecting information would not make the provision unconstitutional.
Notification fixing different rates of minimum wages for different localities is not discriminatory
Where the fixation of rates of wages and their revision were manifestly preceded by a detailed survey and enquiry and the rates were brought into force after a full consideration of the representations which were made by a section of the employers concerned, it would be difficult in the circumstances to hold that a notification which fixed different rates of minimum wages for different localities was not based on intelligent differentia having a rational nexus with the object of the Act, and thereby violated Article 14.
When the Government issued a notification improving upon the existing minimum wages as revised minimum wages, disregarding the contrary report of the committee appointed under Section 5-1(a), such notification was bad under the law and was to be made inoperative.
As pointed out by one of India’s Union Labour and Employment Ministers, Shri Mallikarjuna Kharge, the variation of minimum wages between the States is due to differences in socio-economic and agro-climatic conditions, prices of essential commodities, paying capacity, productivity and local conditions influencing the wage rate. The regional disparity in minimum wages is also attributed to the fact that both the Central and the State Governments are the appropriate Governments to fix, revise and enforce minimum wages in Scheduled employments in their respective jurisdictions under the Act.
Referring to the case of N.M. Wadia Charitable Hospital v. State of Maharashtra, 1993, it was decided by the Court that fixing different minimum wages for different localities is permitted under the Constitution and under labour laws; hence the question that any provision of the Minimum Wages Act is in any way against the provisions of the Constitution is wrong.
The Constitution of India accepts the responsibility of the State to create an economic order in which every citizen finds employment and receives a “fair wage”. This made it necessary to quantify or lay down clear criteria to identify fair wage. Therefore, a Central Advisory Council, in its first session in November 1948, appointed a tripartite Committee on Fair Wages. The committee consisted of representatives of employers, employees, and the Government. Their task was to enquire into and report on the subject of fair wages to labour.
Sanctity of the Minimum Wage Act
The Supreme Court in three separate rulings has held that non-payment of minimum wages is tantamount to ‘forced labour’ prohibited under Article 23 of the Constitution. The Supreme Court holds that ‘forced labour’ may arise in several ways, including “compulsion arising from hunger and poverty, want and destitution”.
In Sanjit Roy v. State of Rajasthan (1983), the Supreme Court held that the Exemption Act insofar as it excluded the applicability of the Minimum Wages Act, 1948 to workmen employed in famine relief work is “clearly violative” of Article 23. Thus even public works ostensibly initiated by the Government for the sole purpose of providing employment are subject to the Minimum Wage Act.
Drawing on the Supreme Court rulings, the Andhra High Court set aside the Government of India notification mandating that prevailing State minimum wage be paid. This has been underscored in the legal opinion provided by Additional Solicitor General, Ms. Indira Jaising, to the Central Employment Guarantee Council (CEGC) Working Group on Wages where she made it clear that using Section 6(1) to allow a payment of less than minimum wage in MGNREGA works will amount to forced labour.
Fifteen eminent jurists and lawyers of India too have asked the Government of India to immediately revoke its unconstitutional notification and ensure that minimum wages are paid to all workers in India.
The Act and the judgements are in favour of equality provided under Article 14 of the Constitution and a judgement in the case namely Engineering Workers Union v. Union of India (1994) 1 LLJ Supp. 942 Bom. pronounces that the provision under Section 3(2)(A), that minimum rate of wages in scheduled employment fixed or revised shall not apply to the employees during the period of adjudication, violated the equality clause of Article 14 and hence that section is void.
In the view of the Directive Principles of State Policy contained in Article 43 of the Indian Constitution, it is beyond doubt that securing of living wages to labourers which ensures not only bare physical subsistence but also the maintenance of health and decency is conducive to the general interest of the public.
The Minimum Wages Act was passed to fulfill the aspiration contained in the following resolution:
“If the labourers are to be secured the enjoyment of minimum wages and they are to be protected against exploitation by their employers, it is absolutely necessary that restraints should be imposed upon the freedom of contract and such restrictions cannot be said to be unreasonable. On the other hand, they cannot be heard to complain if they are compelled to pay any minimum wages to their labourers even though the labourers, on account of their poverty and helplessness, are willing to work even at lesser wages.”
Bijay Cotton Mills Ltd. v. The State of Ajmer
In the case of Bijay Cotton Mills Ltd. v. The State of Ajmer, judgment dated 14 October 1954, the constitutional validity of this Act was attacked on the ground that it violates the guarantee of freedom of trade or business envisaged by Article 19(1)(g) of the Indian Constitution.
It was held that the restrictions imposed upon the freedom of contract by the fixation of minimum rates of wages, though they interfere to some extent with the freedom of trade or business guaranteed under Article 19(1)(g) of the Constitution, are not unreasonable and, being imposed in the interest of the general public and with a view to carry out one of the Directive Principles of State Policy as embodied in Article 43 of the Constitution, are protected by the terms of clause (6) of Article 19.
It can thus be said that the provisions of the Act are bound to affect harshly and even oppressively a particular class of employers who for purely economic reasons are unable to pay the minimum rate of wages fixed by the authorities, but have absolutely dishonestly intended to exploit their workers. The fact that an employer might find it difficult to carry on business on settled principles cannot be a sufficient reason for striking down the law itself as unreasonable. The poverty of labourers is also a factor to be taken into consideration while determining the question whether a particular provision is in the interest of the general public.