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Section 2 of Minimum Wages Act, 1948

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Section 2(h)

Section 2(h) says:

  • Wages includes
  • all remunerations
  • capable of being expressed in terms of money
  • payable to employee in respect of his employment or for work done in such employment
  • payable to workmen
  • Includes house rent allowance.
  • Does not include: house accommodation, supply of light, water, medical assistance or other amenity or service

Classification of Wages

Supreme Court classified wages into:

  • Living Wage (highest standard wages)
  • Fair Wage
  • Minimum Wage (lowest and minimum standard of wages)

Living Wage

  • Justice Higgins: A wage which does not allow of the matrimonial condition and the maintenance of about five persons in a home would not be treated as a living wage.
  • Supreme Court in Kamani Metals & Alloys Ltd vs its Workmen (1967) said: Living Wage is a wage which is not only sufficient to provide a standard family with food, shelter, clothing, medical care and education of children, but also fair measure of frugal comfort with an ability to provide for old age and evil days.

Fair Wage

  • Prof Pigou defined fair wage as:
    • Fair wage in narrower sense: Equal to the rate current for similar workmen in the same trade and neighborhood
    • Fair wage in wider sense: Equal to the predominant rate for similar work throughout the country and in the generality of trades.
  • In Shivraj Fine Arts Litho Works vs LIC (1978), the Supreme Court said, '.. The fair wage is, however, not a living wage. It lies between the minimum wage and the living wage..'.
  • Industrial state of India, Maharashtra, being an industrial zone, sees fair wages as a combination of the following factors:
    • Productivity of the laborers
    • Prevailing rates of wages in the same or similar occupations in the same or similar neighboring localities
    • Level of national income and its distributions
    • place of the industry in the economy of the country

Minimum Wages

  • The minimum wages is that wage which is sufficient to meet the worker's bare necessities.
  • The minimum wages takes in the factor of the prevailing cost of essential commodities whenever such minimum wage is to be fixed.
  • State Governments have the power to fix different minimum rates of wages for
    • different scheduled employments
    • different class of work in the same scheduled employments
    • adults, adolescents, children and apprenticies and
    • different localities
  • If minimum wages are not paid, the employee has legal remedies against the employer.
    • Employee has the right to claim against the employer and can approach the inspector or any other appropriate officer appointed by the State Government
    • Employee has the right to sue.
    • Inspector or any other appropriate officer appointed by the State Government can take appropriate action against the Employer.
    • A Public Interest Litigation can be filed against the employer. Supreme Court of India treats even a telegram or post card as a writ petition, as seen in several instances.
  • Subsistence Wage is a wage lower than the minimum wage. Supreme Court says, an employer who is unable to pay Subsistence Wage is not entitled to exist. It is irrelevant to the Court, the financial situation of the industry to pay minimum wage.

See Also