Abstract

The International Labour Organization has a great impact on labour law making exercises among the member countries. Since its basic objective is to protect labour rights, it has some basic conventions, and in this research article I try to explore what the impacts of ILO direction and guidelines are on Indian labour law for the welfare of the Indian labour class.

One of the earliest labour legislations in India is the Minimum Wages Act, 1948, which was enacted in 1948 immediately after India attained independence. But even today a large sector of the workforce remains outside the purview of the Minimum Wages Act.

This paper mainly elucidates the efforts made by the government of India since the enactment of the Act to improve the relevance of the minimum wages Act, its impact in bringing the workers out of the poverty line, the issues that still persist and the way forward.

In this paper, mainly I have dealt with the International Labour Organization’s conventions related to wages, which involve the recommendations and their impact on the Indian labour legislation.

Key Words

• Indian Labour Laws
• International Labour Organization
• The Minimum Wages Act, 1948

Introduction

The International Labour Organisation (ILO) was set up, with the aim to develop the conditions of labour not only in India but around the world, in the year 1919. India was the first member of the ILO, which now expanded its primary membership to 145 countries.

The International Labour Organization, through its resolutions and recommendations, supports countries in luring their own set of labour legislations for the well conduct of the labour class and the preservation of their rights.

The primary objective of action in the ILO is the creation of the International Labour Standards in the form of resolutions and recommendations.

ILO Resolutions and Recommendations

Resolutions are international treaties and instruments, which generate legally binding responsibilities on the nations that ratify those nations. Recommendations are non-binding but better set out guidelines orienting countrywide policies and procedures and help in developing actions.

ILO Instrument	Purpose
Resolutions	International treaties and instruments, which generate legally binding responsibilities on the nations that ratify those nations.
Recommendations	Non-binding guidelines orienting countrywide policies, procedures and help in developing actions.

Scope Of Labour Law

Labour law controls matters such as remuneration, labour employment and conditions of employment, trade unions, and industrial and labour management relations.

They also include social legislation regulating such characteristics as reimbursement for accidents triggered by a worker at the workplace, maternity benefits, fixation of minimum wages, distribution of the company’s profit to the organisation’s workers, etc.

Most of these acts regulate rights and the responsibilities of employees.

Organised and Unorganised Labour Sector in India

The Indian economy is dualistic, characterised by the existence of a comparatively well-organised sector along with an unorganised sector with a predominance of self-employment.

According to the NSSO Employment-Unemployment survey of 2011-2012, 92 per cent of the workers out of the total workforce of 474.23 million are informal workers.

These workers contribute to more than 60 per cent of India’s GDP growth.

Various studies hinted at jobless growth that had taken place in India during the late 20th and early 21st century.

While the economy grew at an annual average of 5-6 per cent, the net addition to employment was only 0.2 million in 2009-10 over 2004-05, as per the NSSO Employment and Unemployment Survey of 2009-10.

The employment generated was mainly low-skilled in the construction sector and of an informal nature.

Challenges Faced By Informal Workers

The workforce in the informal sector has no assurance of wage protection, social security, occupational safety or employment stability, not to talk of decent wages.

In order to address the issue of decent jobs, the government of India has been focusing on an inclusive strategy in terms of skill development, social protection and labour reforms, including stricter enforcement of the Minimum Wages Act, 1948.

• Wage protection
• Social security
• Occupational safety
• Employment stability
• Decent wage
• Skill development
• Social protection
• Labour reforms

Objectives

The main objective of this article is to explore the impacts of international labour organisation direction and guidelines on Indian labour law for the welfare of the Indian labour class.

And to discuss various conventions and recommendations related to international labour organisations related to wages.

Objectives Of The Study

• To explore the impacts of international labour organisation direction and guidelines on Indian labour law.
• To examine the welfare of the Indian labour class in the context of ILO directions and guidelines.
• To discuss various conventions related to the International Labour Organisation and wages.
• To discuss recommendations related to the International Labour Organisation and wages.

Methodology

In this research paper, I have used the narrative literature review methods for describing the impact of ILO guidelines and directions on Indian labour legislation.

Review of Literature

The question that therefore arises is how India has operationalised the implementation of Articles 39 and 43 through the prism of the Minimum Wages Act, 1948. The initiative for the determination of minimum wages was started in 1920 when a proposal for setting up boards in each industry was mooted. The International Labour Organization adopted in 1928 convention No. 26 and recommendation No. 30 relating to wage-fixing machinery in trades or parts of trades was established.

Subsequently, in 1943, on the recommendation of the Standing Labour Committee and the Indian Labour Conference, a labour investigation committee was appointed to investigate into the question of wages and other matters like housing, social conditions and employment. The Indian Labour Conference considered a draft bill in this regard in 1945. The standing labour committee in 1946 recommended enacting separate legislation for the unorganised sector, including working hours, minimum wages and paid holidays [1]. Accordingly, a minimum wages bill was introduced in the central legislative assembly to provide for the fixation of minimum wages in certain employments, which was passed in 1946 and came into force in 1948.

Minimum Wage Enforcement and Challenges

In many cases, while fixing the minimum wages, they are not linked to the payment of dearness allowance. As a result, real wages of workers keep eroding due to inflation, pushing them below the poverty line. (Prof. Biju Varkey and Khushi).

The criterion for inclusion of employment in the Minimum Wages Act, viz., the stipulation of 1000 workers, has left a very large number of workers in the unorganised sector outside the purview of the Act.

Enforcement of the minimum wages is done by both the centre and state governments within the respective spheres where they notify the minimum wages. Inspecting officers of the Labour Department at the centre and state conduct regular inspections, and in the event of detection of non-payment or underpayment of minimum wages, advise the employers to take corrective action. In case of non-compliance, penal provisions prescribed in the Act are taken into account [2].

The general observation is that workers get less than the minimum wages. Among the reasons mentioned for poor enforcement are:

• Inadequacy of the inspecting staff compared to the number of establishments covered by the act.
• The scattered nature and small size of the establishments.
• Insistence of authorities on fulfilling the target number of inspections without insisting on the quality of work.
• Rampant bribery and corruption.
• Ignorance of workers regarding their rights and privileges.
• Delays in justice when claims for non-payment are filed.

Above all, the workers being in a state of working poor are prepared to work for any wage rather than being unemployed. The survey of prosecutions and convictions made under the act reveals that very few cases have been taken up under the act so far.

The calculation of minimum wages is a cumbersome exercise often beyond the capability of the small-scale, unorganised sector employer and most often beyond the awareness level of the employee. Simplicity and uniformity in the calculation of minimum wages will go a long way in the enforcement of minimum wages.

Implementation of minimum wage is not uniform across states, as the variable dearness allowance is not clubbed with minimum wages, like, for instance, agriculture is not covered under the VDA in most states. Nearly 50 per cent of the workforce, consisting mainly of women, is outside the purview of this act, even after nearly 66 years of enactment of the act [3].

Minimum Wages and Women Workers

Further, women are working in piece-rated jobs or as helpers in their own account enterprises where they are either paid much below the minimum wages or no wages (National Commission on Rural & Self-Employed Women).

Payment of minimum wages cannot be evaded on the grounds of the financial capacity of the industry to pay. The Supreme Court of India has passed the judgement that the Minimum Wages Act is a piece of social legislation which protects the day-to-day living conditions of sweat labour.

Minimum Wages and Poverty in Developing Countries

Though it is believed that minimum wages reduce poverty in developed countries, this is not considered true of developing countries, where the dominant view is the one outlined in the World Development Report on Labour Markets.

“Minimum wages may help to protect the most poverty-stricken workers in industrial countries, but they clearly do not in developing countries, which are restricted to the formal sector, which forms a small segment of the total workforce, and therefore workers who benefit from the minimum wages are not the poorest of the poor, and lastly, a large section of the working poor is employed in the self-employed sector, which remains outside the purview of the Minimum Wages Act.”

However, as the working poor are mostly concentrated in unskilled work, the impact of minimum wages on wages paid for the unskilled labour could be looked at.

Minimum Wage Coverage in India

In India, with about 50 per cent of the workforce engaged in self-employment and another 30 per cent engaged in casual employment, the applicability of the Minimum Wages Act is limited to less than 20 per cent of the workforce. Therefore, while comparing the minimum wages stipulated for agriculture with the average daily wages of casual workers engaged in the National Rural Employment Programme or Public Works other than MNREGA (Mahatma National Rural Employment Guarantee Act) and other than Public Works, the following results emerge [4].

MNREGA and Agricultural Minimum Wages

The wages received under MNREGA are lower than the minimum wages prescribed for agriculture except in the states of Assam, Chhattisgarh, Meghalaya and Uttar Pradesh.

The MNREGA scheme is for the unskilled workers who report themselves as unemployed; the guarantee of the right to work under the scheme emanates from the need to avoid distress migration to urban areas. Under the act, a minimum of 100 days of employment is guaranteed by the state.

The duration of the work is more in the nature of a subsidiary activity than a principal activity [5]. Hence, a wage rate above the minimum wage rate fixed for agriculture will encourage the labour force to prefer MNREGA work over agricultural labour.

Comparison of Wage Rates

The comparison of average daily wage rates of casual labour with the minimum wages of agriculture gives a mixed picture [6]. In some states the average daily wages are higher than the minimum wages, while it is the vice versa in other states.

The MNREGA wages are higher than the average daily wages received under works other than public works, which are more paying than that received under the public works programme where the government is the employer.

Area of Comparison	Observation in the Source
Agricultural minimum wages	Comparison with average daily wages of casual labour gives a mixed picture.
MNREGA wages	Wages received under MNREGA are lower than agricultural minimum wages except in Assam, Chhattisgarh, Meghalaya and Uttar Pradesh.
Other public works	Wages are compared with casual labour wages and MNREGA wages.
Poverty line	Wages received under all three kinds of work are lower than the poverty line in several major states identified in the source.

State-Wise Wage Differences

The wages received under all three kinds of work are lower than the poverty line of the respective states in the case of major states like Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh and Maharashtra [7].

In Bihar and Madhya Pradesh, being poor states, the wage levels in rural areas could be lower due to illiteracy, lack of awareness and weak bargaining power of the labour force and also because they are labour surplus states [8].

But in the case of major states like Andhra Pradesh, Gujarat, and Maharashtra, it is quite surprising, and the possible explanation could be the influx of unskilled migrant labour from neighbouring states has enabled the employers to keep the wage levels low [9].

Kerala is an exceptional state where the wages received under works other than public works are more than double the minimum wage prescribed for agriculture, probably due to Kerala being a labour-scarce state.

ILO’s Constitution and the Living Wage

The preamble to ILO’s 1919 constitution says that “peace and harmony in the world requires the provision of an adequate living wage”. Major ILO Declarations in 1944 and 2008, which are similar in legal status to the ILO’s Constitution, call for policies to “ensure a just share of the fruits of progress to all, and a minimum living wage to all employed.”

Mainly an adequate living wage according to the ILO: Rules for the ILO constitution adopted in 1921 provide some indication, as does the more recent Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, adopted in 1977 and amended in 2000 and 2006.

It is “payment adequate to maintain a reasonable standard of living that is understood in their time and country.” According to the rules for the ILO constitution, it is “at least adequate to satisfy the basic needs of the workers and their families”, according to the recent Multinational Enterprises Declaration.

While these clarifications are vague, they do provide useful information. An adequate living wage according to the ILO should:

• Provide for more than subsistence, as it should “maintain a reasonable standard of life””,” and “at least satisfy basic needs”.
• Be determined in part by societal standards as “understood in their time and country” and therefore should change over time and differ across countries (presumably with economic development) [10].

Wages: ILO’s Principles

• Equality of treatment.
• Minimum wage fixing.
• Protection of wages.
• Labour clauses in public contracts.
• Promotion of collective bargaining.
• Labour relations in the public service.

Obligations Under ILO Instruments

Recommendation No. 135: Minimum Wage Fixing, 1970

Purpose of Minimum Wage Fixing

Minimum wage fixing should constitute one element in a policy designed to overcome poverty and to ensure the satisfaction of the needs of all workers and their families.

The fundamental purpose of minimum wage fixing should be to give wage earners necessary social protection as regards minimum permissible levels of wages.

Criteria for Determining the Level of Minimum Wages: Paragraph 3 of Recommendation 135

In determining the level of minimum wages, account should be taken of the following criteria, amongst others:

• (a) The needs of workers and their families;
• (b) The general level of wages in the country;
• (c) The cost of living and changes therein;
• (d) Social security benefits;
• (e) The relative living standards of other social groups;
• (f) Economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.

Coverage of the Minimum Wage Fixing System

Paragraph 4 of Recommendation 135

The number and groups of wage earners who are not covered in pursuance of Article 1 of the Minimum Wage Fixing Convention, 1970, should be kept to a minimum.

Paragraph 5 of Recommendation 135

(1) The system of minimum wages may be applied to the wage earners covered in pursuance of Article 1 of the Convention either by fixing a single minimum wage of general application or by fixing a series of minimum wages applying to particular groups of workers.

(2) A system based on a single minimum wage—

• (a) Need not be incompatible with the fixing of different rates of minimum wages in different regions or zones with a view to allowing for differences in costs of living;
• (b) Should not impair the effects of decisions, past or future, fixing minimum wages higher than the general minimum for particular groups of workers.

Minimum Wage Fixing Machinery

Paragraph 6 of Recommendation 135

The minimum wage fixing machinery provided for in Article 4 of the Convention may take a variety of forms, such as the fixing of minimum wages by—

• (a) Statute;
• (b) Decisions of the competent authority, with or without formal provision for taking account of recommendations from other bodies;
• (c) Decisions of wage boards or councils;
• (d) Industrial or labour courts or tribunals; or
• (e) Giving the force of law to provisions of collective agreements.

Paragraph 7 of Recommendation 135

The consultation provided for in paragraph 2 of Article 4 of the Convention should include, in particular, consultation in regard to the following matters:

• (a) The selection and application of the criteria for determining the level of minimum wages;
• (b) The rate or rates of minimum wages to be fixed;
• (c) The adjustment from time to time of the rate or rates of minimum wages;
• (d) Problems encountered in the enforcement of minimum wage legislation;
• (e) The collection of data and the carrying out of studies for the information of minimum wage fixing authorities.

In countries in which bodies have been set up which advise the competent authority on minimum wage questions, or to which the government has delegated responsibility for minimum wage decisions, the participation in the operation of minimum wage fixing machinery referred to in paragraph 3 of Article 4 of the Convention should include membership of such bodies.

The persons representing the general interests of the country whose participation in the operation of minimum wage fixing machinery is provided for in Article 4, paragraph 3, subparagraph (b) of the Convention should be suitably qualified independent persons who may, where appropriate, be public officials with responsibilities in the areas of industrial relations or economic and social planning or policy-making.

To the extent possible in national circumstances, sufficient resources should be devoted to the collection of statistics and other data needed for analytical studies of the relevant economic factors, particularly those mentioned in Paragraph 3 of this Recommendation, and their probable evolution.

Adjustment of Minimum Wages

Paragraph 11 of Recommendation 135

Minimum wage rates should be adjusted from time to time to take account of changes in the cost of living and other economic conditions.

Paragraph 12 of Recommendation 135

To this end a review might be carried out of minimum wage rates in relation to the cost of living and other economic conditions either at regular intervals or whenever such a review is considered appropriate in the light of variations in a cost-of-living index.

Paragraph 13 of Recommendation 135

13.(1) In order to assist in the application of Paragraph 11 of this Recommendation, periodical surveys of national economic conditions, including trends in income per head, in productivity and in employment, unemployment and underemployment, should be made to the extent that national resources permit.

(2) The frequency of such surveys should be determined in the light of national conditions.

Paragraph 14 of Recommendation 135

Measures to ensure the effective application of all provisions relating to minimum wages, as provided for in Article 5 of the Convention, should include the following:

• (a) Arrangements for giving publicity to minimum wage provisions in languages or dialects understood by workers who need protection, adapted where necessary to the needs of illiterate persons;
• (b) The employment of a sufficient number of adequately trained inspectors equipped with the powers and facilities necessary to carry out their duties;
• (c) Adequate penalties for infringement of the provisions relating to minimum wages;
• (d) Simplification of legal provisions and procedures, and other appropriate means of enabling workers effectively to exercise their rights under minimum wage provisions, including the right to recover amounts by which they have been underpaid;
• (e) The association of employers’ and workers’ organisations in efforts to protect workers against abuses;
• (f) Adequate protection of workers against victimisation.

Convention No. 131: Minimum Wage Fixing, 1970

Article 1

Each member of the ILO which ratifies this convention undertakes to establish a system of minimum wages which covers all groups of wage earners whose terms of employment are such that coverage would be appropriate. The competent authority in each country shall, in agreement or after full consultation with the representation organisations of employers and workers concerned, where such exist, determine the groups of wage earners to be covered.

Each member which ratifies this convention shall list in the first report on the application of the convention submitted under Article 22 of the constitution of the ILO any groups of wage earners which may not have been covered in pursuance of this Article giving the reasons for not covering them, and shall state in subsequent reports the positions of its law and practice in respect of the groups not covered, and the extent to which effect has been given or is proposed to be given to the convention in respect of such groups.

Article 2

Minimum wages shall have the force of law and shall not be subject to abatement, and failure to apply them shall not be subject to abatement, and failure to apply them shall make the person or persons concerned liable to appropriate penal or other sanctions. Subject to the provisions, the freedom of collective bargaining shall be fully respected.

Article 3

The elements to be taken into consideration in determining the level of minimum wages shall, so far as possible and appropriate in relation to national practice and conditions, include: The needs of workers and their families take into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups. Economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.

Article 4

Each member which ratifies this convention shall create and/or maintain machinery adapted to natural conditions and requirements whereby minimum wages for groups of wage earners covered in pursuance of can be fixed and adjusted from time to time.

Provision shall be made, in connection with the establishment, modification of such machinery, for full consultation with representative organisations of employers and workers concerned or, where no such organisations exist, representatives of employers and workers concerned.

Wherever it is appropriate to the nature of the minimum wage fixing machinery, provision shall also be made for the direct participation in its operation of representatives of organisations of employers and workers concerned or, where no such organisations exist, representatives of employers and workers concerned on a basis of equality. Persons having recognised competence for representing the general interests of the country and appointed after full consultation with representative organisations of employers and workers concerned, where such organisations exist and such consultation is in accordance with national law or practice.

Article 5

Appropriate measures, such as adequate inspection reinforced by other necessary measures, shall be taken to ensure the effective application of all provisions relating to minimum wages.

Article 6

This convention shall not be regarded as revising any existing convention.

Convention No. 26 – Minimum Wage Fixing Machinery, 1928

Article 1

Each member of the ILO which ratifies this convention undertakes to create or maintain machinery whereby minimum rates of wages can be fixed for workers employed in certain of the trades or parts of trades (and in particular in home-working trades) in which the arrangements exist for the effective regulation of wages by collective agreement or otherwise and wages are exceptionally low. For the purpose of this convention, the term ‘trades’ includes manufacture and commerce.

Article 2

Each member which ratifies this convention shall be free to decide after consultation with the organisations, if any, of workers and employers in the trade or part of trade concerned, in which trades or parts of trades, and in particular in which home-working trades or parts of such trades, the minimum wage-fixing machinery referred to in shall be applied.

Article 3

Each member which ratifies this convention shall be free to decide the nature and form of the minimum wage-fixing machinery and the methods to be followed in its operation. Provided that, before the machinery is applied in a trade or part of a trade, representatives of the employers and workers concerned, including representatives of their respective organisations, if any, shall be consulted as well as any other persons being specially qualified for the purpose by their trade or functions whom the competent authority deems it expedient to consult.

The employers and workers concerned shall be associated in the operation of the machinery in such manner and to such extent, but in any case in equal numbers and on equal terms, as may be determined by national laws or regulations. Minimum rates of wages which have been fixed shall be binding on the employers and workers concerned so as not to be subject to abatement by them by individual agreement, nor, except with general or particular authorisation of the competent authority, by collective agreement.

Article 4

Each member which ratifies this convention shall take the necessary measures, by way of a system of supervision and sanctions, to ensure that the employers and workers concerned are informed of the minimum rates of wages in force and that wages are not paid at less than these rates in cases where they are applicable. A worker to whom the minimum rates are applicable and who has been paid wages at less than these rates shall be entitled to recover, by judicial or other legalised proceedings, the amount by which he has been underpaid, subject to such limitation of time as may be determined by national laws or regulations.

Article 5

Each member which ratifies this convention shall communicate annually to the ILO a general statement giving a list of the trades or parts of trades in which the minimum wage fixing machinery has been applied, indicating the methods as well as results of the application of machinery, and in summary form, the approximate numbers of workers covered, the minimum rates of wages fixed, and the more important of other conditions, if any, established relevant to the minimum rates.

Convention No. 99: Minimum Wage Fixing Machinery (Agriculture), 1951

Article 1

Each member of the ILO which ratifies this convention undertakes to create or maintain adequate machinery whereby minimum rates of wages can be fixed for workers employed in agricultural undertakings and related occupations.

Article 2

Each member which ratifies this convention shall be free to determine after consultation with the most representative organisations of employers and workers concerned, where such exist, to which undertakings, occupations and categories of persons the minimum wage fixing machinery referred to in the preceding paragraph shall be applied.

The competent authority may exclude from the application fall or any of the provisions of this convention categories of persons whose conditions of employment render such provisions inapplicable to them, such as members of the farmer’s family employed by him.

National laws or regulations. Collective agreements or arbitration awards may authorise the partial payment of minimum wages in the form of allowances in kind in cases in which payment in the form of such allowances is customary or desirable. In cases in which partial payment of minimum wages in the form of allowances in kind is authorised, appropriate measures shall be taken to ensure that. Such allowances are appropriate for the personal use and benefit of the worker and his family, and the value attributed to such allowances is fair and reasonable.

Article 3

Each member which ratifies this convention shall be free to decide, subject to the conditions stated in the following paragraphs, the nature and form of the minimum wage fixing machinery and the methods to be followed in its operation. Before a decision is taken, there shall be full preliminary consultation with the most representative organisations of employers and workers concerned, where such exist, and with any other persons specially qualified by their trade or functions whom the competent authority deems it useful to consult.

The employers and workers concerned shall take part in the operation of the minimum wage fixing machinery or be consulted or have the right to be heard in such manner and to such extent as may be determined by national laws of regulations but in any case on a basis of complete equality. Minimum rates of wages which have been fixed shall be binding on the employers and workers concerned so as not to be subject to abatement. The competent authority may permit exceptions to the minimum wage rates in individual cases, where necessary to prevent curtailment of the opportunities of employment of physically or mentally handicapped workers.

Article 4 of Convention 99

Each member which ratifies this convention shall take the necessary measures to ensure that the employers and workers concerned are informed of the minimum rates of wages in force and that wages are not paid at less than these rates in cases where they are applicable. These measures shall include such provision for supervision, inspection and sanctions as may be necessary and appropriate to the conditions obtaining in agriculture in the country concerned.

Protection of Wages

Convention No. 95 – Protection of Wages, 1949

In this convention, the term ‘wages’ means remuneration or earnings, however designated or calculated, capable of being expressed in terms of money and fixed by mutual agreement or by national laws or regulations, which are payable in virtue of a written or unwritten contract of employment by an employer to an employed person for work done or to be done or for services rendered or to be rendered. This convention applies to all persons to whom wages are paid or payable. The competent applies to all persons to whom wages are paid or payable.

The competent authority may, after consultation with the organisations of employers and employed persons directly concerned if such exist, exclude from the application of all or any of the provisions of the convention categories of persons whose circumstances and conditions of employment are such that the application to them of all or any of the said provisions would be inappropriate and who are not employed in manual labour or are employed in domestic service or work similar thereto.

Article 1

Each member shall indicate in its first annual report upon the application of this convention submitted under Article 22 of the constitution of the ILO any categories of persons which it proposes to exclude from the application of all or any of the provisions of the application of all or any of the provisions of the convention in accordance with the provisions of the preceding paragraph; no member shall, after the date of its first annual report, make exclusions except in respect of categories of persons so indicated.

Article 2

Each member having indicated in its first annual report the categories of persons which it proposes to exclude from the application of all or any of the provisions of the convention shall indicate in subsequent annual reports any categories of persons in respect of which it reserves the right to have recourse to the provisions and any progress which may have been made with a view to the application of the convention to such categories of persons.

Article 3

Wages payable in money shall be paid only in legal tender, and payment in the form of promissory notes, vouchers or coupons, or in any other form alleged to represent legal tender, shall be prohibited. The competent authority may permit or prescribe the payment of wages by bank cheque or postal cheque or money order in cases in which payment in this manner is customary or is necessary because of special circumstances or where a collective agreement or arbitration award so provides, or where not so provided with the consent of the worker concerned.

Article 4

National laws or regulations, collective agreements or arbitration awards may authorise the partial payment of wages in the form of allowances in kind in industries or occupations in which payment in the form of such allowances is customary or desirable because of the nature of the industry or occupation concerned; the payment of wages in the form of liquor of high alcoholic content or of noxious drugs shall not be permitted in any circumstances. In cases in which partial payment of wages in the form of allowances in kind is authorised, appropriate measures shall be taken to ensure that such allowances are appropriate for the personal use and benefit of the worker and his family, and the value attributed to such allowances is fair and reasonable.

Article 5

Wages shall be paid directly to the worker concerned except as may be otherwise provided by national laws or regulations, collective agreement or arbitration award or where the worker concerned has agreed to the contrary.

Article 6

Employers shall be prohibited from limiting in any manner the freedom of the worker to dispose of his wages.

Article 7

Where works stores for the sale of commodities to the workers are established or services are operated in connection with an undertaking, the workers concerned shall be free from any coercion to make use of such stores or services. Where access to other stores or services is not possible, the competent authority shall take appropriate measures with the object of ensuring that goods are sold and services provided at fair and reasonable prices, or that stores established and services operated by the employer are not operated for the purpose of securing a profit but for the benefit of the workers concerned.

Article 8

Any deduction from wages with a view to ensuring a direct or indirect payment for the purpose of obtaining or retaining employment ,made by a worker to an employer or his representative or to any intermediary (such as a labour contractor or recruiter),, made shall be prohibited.

Article 9

Wages may be attached or assigned only in a manner and within limits prescribed by national laws or regulations.

Article 10

Wages shall be protected against attachment or assignment to the extent deemed necessary for the maintenance of the worker and his family.

Article 11

In the event of the bankruptcy or judicial liquidation of an undertaking, the workers employed therein shall be treated as privileged creditors either as regards wages due to them for service rendered during such a period prior to the bankruptcy or judicial liquidation as may be prescribed by national laws or regulations, or as regards wages up to a prescribed amount as may be determined by national laws or regulations.

Wages constituting a privileged debt shall be paid in full before ordinary creditors may establish any claim to a share of the assets. The relative priority of wages constituting a privileged debt and other privileged debts shall be determined by national laws or regulations.

Article 12

Wages constituting a privileged debt shall be paid in full before ordinary creditors may establish any claim to a share of the assets. The relative priority of wages constituting or privileged debt and other privileged debts shall be determined by national laws or regulations.

Article 15

The laws or regulations giving effect to the provisions of this convention shall- Be made available for the information of persons concerned. Define the persons responsible for compliance therewith. Prescribe adequate penalties or other appropriate remedies for any violation thereof.

Article 16

There shall be included in the annual reports to be submitted under Article 22 of the constitution of the ILO full information concerning the measures by which effect is given to the provisions of this convention. Each member having recourse to the provisions of this article shall indicate in subsequent annual reports any areas in respect of which it renounces the right to have recourse to the provisions of this article and any progress which may have been made with a view to the progressive application of the convention in such areas.

Recommendation No. 85 – Protection of Wages, 1949

I. Deductions from Wages

Paragraph 1 of Recommendation 85

All necessary measures should be taken to limit deductions from wages to the extent deemed to be necessary to safeguard the maintenance of the worker and his family.

Paragraph 2 of Recommendation 85

Deductions from wages for the reimbursement of loss of damage to the products, goods or installations of the employer should be authorised only when loss or damage has been caused for which the worker concerned can be clearly shown to be responsible. The amount of such deductions should be fair and should not exceed the actual amount of the loss or damage. Before a decision to make such a deduction is taken, the worker concerned should be given a reasonable opportunity to show cause why the deduction should not be made.

Paragraph 3 of Recommendation 85

Appropriate measures should be taken to limit deductions from wages in respect of tools, materials or equipment supplied by the employer in cases in which such deductions are a recognised custom of the trade or occupation concerned or are provided for by collective agreement or arbitration award, or are otherwise authorised by a procedure recognised by national laws or regulations.

II. Periodicity of Wage Payments

Paragraph 4 of Recommendation 85

The maximum intervals for the payment of wages should ensure that wages are paid not less often than twice a month at intervals not exceeding sixteen days in the case of workers whose wages are calculated by the hour, day, or week, and less than once a month in the case of employed persons whose remuneration is fixed on a monthly or annual basis.

Paragraph 5 of Recommendation 85

In the case of workers whose wages are calculated on a piece-work or output basis, the maximum intervals for the payment of wages should, so far as possible, be so fixed as to ensure that wages are paid not less often than twice a month at intervals not exceeding sixteen days.

In the case of workers employed to perform a task the completion of which requires more than a fortnight and in respect of whom intervals for the payment of wages are not otherwise fixed by collective agreement or arbitration award, appropriate measures should be taken to ensure that payments are made on account not less often than twice a month at intervals not exceeding sixteen days, in proportion to the amount of work completed, and that final settlement is made within a fortnight of the completion of the test.

III. Notification to Workers of Wage Conditions

Paragraph 6 of Recommendation 85

The details of the wage conditions which should be brought to the knowledge of the workers should include, wherever appropriate, particulars concerning the rates of wages payable, the method of calculation, the periodicity of wage payments, the place of payment, and the condition under which deduction may be made.

IV. Wages Statements and Payment Roll Records

Paragraph 7 of Recommendation 85

In all appropriate cases, workers should be informed, with each payment of wages of the following particulars relating to the pay period concerned insofar as such particulars may be subject to change: the gross amount of wages earned, any deduction which may have been made, including the reasons thereunder and the amount thereof, and the net amount of wages due.

Paragraph 8 of Recommendation 85

Employers should be required in appropriate cases to maintain records showing in respect of each worker employed the particulars specified in the preceding paragraph.

V Association of Workers in the Administrative Works

Paragraph 9 of Recommendation 85

Appropriate measures should be taken to encourage arrangements for the association of representatives of the workers concerned, and more particularly members of works welfare committees or similar bodies where such bodies exist, in the general administration of works stores or similar services established in connection with an undertaking for the sale of commodities or provision of services to the workers thereof.

Reasons for the Need for Enactment of the Minimum Wages Act, 1948, in India

The evolution of Indian labour legislation is obviously interlaced with the history of British colonialism. British political economy was considered paramount in modelling some of the early laws. In the initial phases it was very difficult to get adequate regular Indian workers to run British organisations, and hence labour laws became essential. These were obviously orders to protect the interests of British bosses [11].

Although this was a case, the attitude of Indian legislators, as it turned towards being independent from the clutches of the British empire, has been very constructive and pro-welfare state [12].

The importance of minimum wages as an instrument of social protection was already highlighted in the ILO constitution adopted in the year 1919 as a part of the Treaty of Versailles after the end of World War I. The preamble of this constitution recalls, “The High Contracting Parties, moved by sentiments of justice and humanity as well as by the desire to secure permanent peace, have called for the provision of an adequate living wage alongside other measures to improve the condition of labour.”

The concept of minimum wages first evolved with reference to remuneration of workers in those industries where the level of wages was substantially low as compared to the wages for similar types of labour in other industries [13].

First of all, at the International Labour Conference in 1928, a draft convention was adopted on the subject of minimum wages. In India in 1929, a royal commission on labour was adopted which considered the subject of minimum wages. The Minimum Wages Act was enacted to fulfil the aspiration of the workers as contained in the resolution based on the Geneva Convention held in 1928, which reads:

“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 restraint should be imposed upon their freedom of contract, and such restrictions cannot be in any sense said to be unreasonable. On the other hand, the employers cannot be heard to complain if they are compelled to pay minimum wages to their labourers even though the labourers, on account of their poverty and helplessness, are willing to work on lesser wages.”

The fact that an employer might find it difficult to carry on the business on the basis of minimum wages is a relevant consideration. (Held in U. Uchinoy V State of Kerala [14]). The question of establishing statutory wage-fixing machinery in India was first discussed in 1929 by the Royal Commission on Labour, which was appointed, and this commission considered the subject of minimum wages. The question of establishing statutory wage-fixing machinery in India was again discussed at the third and fourth meetings of the standing labour committee held in May 1943 and January 1944, respectively, and at successive sessions of the tripartite labour conference in September 1943, October 1944 and November 1945.

The last of these was approved in principle, the enactment of the minimum wages legislation. On 11 April 1946, a minimum wages bill was introduced, but the passage of the bill was considerably delayed by the constitutional changes in India. It reached the statute book only in March 1948.

Minimum Wages and the Welfare State

1. In a free competitive market, the level of wages payable to workers is determined by the forces of demand and supply. In a welfare state the protection of the interests of the workers is one of the aims of the legislation which is enacted in the labour field. The same is true with regard to the minimum wages act enacted by the Indian parliament.

In the case of ‘People’s Union for Democratic Rights v. Union of India’, it was stated that ‘The Minimum Wages Act is, as is all other legislation, a welfare measure to alleviate the suffering of sections of the society labouring under economic distress.’ However, knowledge of one’s rights or the capacity or strength to enforce it often does not exist among the relevant classes. It is through public interest litigation, a strategic aim of the legal aid movement, that the problems of the poor are now coming to the forefront and the entire theatre of law is changing.

2. The Indian labour class, besides being illiterate, is by and large not organised to protect its interests in a competitive market where the supply of labour is always in excess of demand. Under such conditions the labour class is left to itself and is unable to protect its legitimate interests [15].

In a country which is still underdeveloped, the exploitation of labour in certain industries can become a common feature due to reasons such as unemployment and few avenues for gainful employment, which forces the labourers to accept the employment even on starvation wages. Therefore, the Act was enacted to secure the welfare of workers in a competitive market by providing for a minimum limit of wages in certain employments.

3. The object of this Act is to “prevent exploitation of the workers”, and for this purpose, it aims at fixation of minimum wages which the employer must pay. What the act purports to achieve is to prevent exploitation of labour, and for that purpose, authorizes appropriate government to take steps to prescribe minimum rates of wages in scheduled industries. What is being prescribed are minimum rates of wages which a welfare state assumes every employer should pay before employment of any labourer. It is only with regard to certain specified industries that the provisions for the payment of statutory minimum wages have been laid down. The legislature undoubtedly intended to apply the Act to those industries or localities in which, by reason of causes such as unorganised labour or absence of machinery for the regulation of wages which are paid to workers, they were in the light of the general level of wages and their subsistence was inadequate.

The provisions of the Act were intended to achieve the object of doing social justice for workers employed in the scheduled employment by prescribing minimum rates of wages to them [16].

4. As pronounced in the judgement of the case of ‘Hydro (Engineers) P. Ltd V Workmen’ [17]. “The Act contemplates that minimum wage rates must ensure not merely the physical need of the worker, which would keep the worker just above starvation, but ensure for the worker not only subsistence and that of his family but also preserve the worker’s efficiency as a workman. It should, therefore, provide not merely the bare subsistence of life but the preservation of life but the preservation of workers’ health and, for some measure, education, medical requirements and amenities.
5. In the case of “Edward Mills Co. Ltd, Beawer v State of Ajmer [18]”, it is decided that the object of the Minimum Wages Act is “the object of this Act is to prevent exploitation of the workers, and for this purpose, it aims at fixation of minimum wages which the employer must pay.”
6. In the case of “M/S Bhikua Yamasa Kshatriaya v Sangamner Akola Taluka Beedi Kamgar Union [19]”, it was decided that “the legislature undoubtedly intended to apply the Act to those industries or localities in which, by reason of causes such as unorganised labour or absence of machinery for regulation of wages, the wages paid to workers were in light of the general level of wages and subsistence level inadequate.” Like other branches of labour legislation, the security of industrial peace and efficiency may be kept in view when giving effect to the provisions of this act.

In the view of the fulfilment of the purpose of the welfare state, it was upheld in the case of Ishwarbhai Prahladbhai V Taluka Development Officer [20] that,

“Every person who provides labour or service to another is entitled at least to a minimum wage. ”.

7. The judgement in the case of “Crown Aluminium Works V Their workmen [21]” states the motivation of the legislature for enactment of the minimum wages act, 1948, in the following words: “In a developing country like ours which faces the problem of unemployment on a very large scale, it is not unlikely that labour may offer to work even on starvation wages.” The policy of the Act, therefore, is to prevent employment of sweat labour in general interest, and so in prescribing the minimum wage rates, the capacity of the employer need not be considered, as the state assumes that every employer must pay minimum wages for the employee’s labour.”

Therefore, the entire scheme of the Act is a pointer towards the direction of ensuring minimum wages to workers engaged in certain specific industries [22].

The Constitutional Validity of the Minimum Wages Act, 1948

India introduced the Minimum Wages Act in 1948, giving both the central government and state government jurisdiction in fixing wages. The act is legally non-binding but statutory. Payment of wages below the minimum wage rate amounts to forced labour. Wage boards are set up to review the industry’s capacity to pay and fix minimum wages such that they at least cover a family of four’s requirements of calories, shelter, clothing, education, medical assistance, and entertainment. Under the law, wage rates in scheduled employments differ across states, sectors, skills, regions and occupations owing to differences in costs of living, regional industries’ capacity to pay, consumption patterns, etc.

1. The Act Is Not Unreasonable

It can scarcely be disputed that securing living wages for 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 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 on the general interest of the general public, are protected by the terms of clause (6) of Article 19.”

This quote is a part of the judgement in the case “Gulmohammad Tarasaheb, a bidi factory by its proprietors Shamrao vs State of Bombay [23]“. Another important judgement that favours and supports the constitutional validity of the Minimum Wages Act, 1948, is “Uchinoy v State of Kerala [24]”. This case raised the same questions which were raised in the case of Gulmohammad Tarasaheb V State of Bombay [25], which were

“That, can a state 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, and it was held that,

“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.” Under Article 14 of the Indian Constitution, which relates to equality before the law, it must be noted that 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.

The case of Uchinoy v State of Kerala [26] further quotes the following:

“As regards the procedure for fixing 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.”

2. The Act Doesn’t Violate Article 14 of the Indian Constitution

“On a careful examination of the various provisions of the Act and the machinery setup by this Act, Section 3(3)(iv) 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 Sangammar Akola Bidi Kamgar Union [27]’, AIR 1963 SC306.

Further, as decided in the case “C.B. Boarding & Lodging, Re(1970) [28] “, it added to the above-mentioned case that “… nor the reason that two different procedures are provided for collecting information.”

3. Notification Fixing Different Rates of Minimum Wages for Different Localities Is Not Discriminatory

Where the fixation of rates of wages and their revision was 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 notification which fixed different rates of minimum wages for different localities was not based on intelligent differentiation 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 Kharage, “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 [29]”, 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 proviso of the Minimum Wages Act is in any way against the proviso 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 a 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 the labour.

4. 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. 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 vs. State of Rajasthan [30] (1983), the Supreme Court held that the Exemption Act, insofar as it excluded the applicability of the Minimum Wages Act 1948 to the 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 act.

Drawing on the Supreme Court rulings, the Andhra High Court set aside the Government of India (GOI) notification mandating that the 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 (CECG) 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. 15 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) [31]”, pronounces the judgement 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.”

Minimum Wages and the Directive Principles of State Policy

In the view of the Directive Principles of State Policy as contained in Article 43 of the Indian Constitution, it is beyond doubt that securing living wages for 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 fulfil the aspiration as 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. Whether it offends fundamental rights guaranteed under Art. 19(1)(g), 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 Art. 19(1)(g) of the Constitution, are not unreasonable and are 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 Art. 43 of the Constitution are protected by the terms of (6) of Art. 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 dishonest intentions of exploiting their workers. The fact that an employer might find it difficult to carry on business on a settled principle 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.

Issues in Implementation of the Minimum Wages Act, 1948

1. Multiplicity of Minimum Wage Rates Across Centre and States, and Across Occupations: Multiplicity of minimum wage rates across centre and states, and across occupations. For the most common occupation, say agriculture, 33 states/UTs have reported different rates, wherein Delhi has the highest minimum wage of Rs.279 and the union territory of Puducherry (Yanam region) the lowest wage of Rs.55. Similarly, the state of Assam has the maximum number of minimum wage rates fixed for 104 scheduled employments, while Mizoram has one minimum wage fixed for all employments. As a result, there is divergence in minimum wages within a state. Like in the state of Andhra Pradesh, the lowest minimum wage fixed is Rs.69.27, and the highest minimum wage fixed is Rs.298.59. The wide difference in range between the minimum and maximum minimum wages fixed among states/UTs is observed only in certain states like Andhra Pradesh and Gujarat. Madhya Pradesh, Maharashtra, Karnataka, Kerala, Tamil Nadu, Tripura, etc. Fixing of minimum wages below the national floor level Minimum wage for certain occupations by the states and UTs is surprising.
2. Exclusion of Workers From the Purview of the Minimum Wages Act The criterion for inclusion in the list of scheduled employments, viz., more than 1000 workers in a state, has resulted in the exclusion of many activities from the list and a huge number of workers from the purview of the minimum wages act. As per the World of Work Report 2013, only about 60 per cent of the wage earners, excluding public-sector workers, were covered by minimum wage legislation in India in the mid-2000s.
3. Delay in Revision of Minimum Wages The Act provides for time-bound revision of the basic minimum wage at least once in 5 years. However, this is not happening, perhaps due to the provision of continuation of existing rates and linking it with Variable dearness allowance (VDA).
4. Lack of Awareness About Minimum Wages Lack of awareness about the Minimum Wages Act among employers and workers is also an issue which has been highlighted in the evaluation studies on the implementation of the Minimum Wages Act, 1948, conducted by the Labour Bureau under the Ministry of Labour & Employment. On the other hand, despite being aware of the minimum wages, the willingness of workers to accept lower wages is influenced by other compelling factors such as weak bargaining power, the rural push induced by conditions of drought, non-availability of work, loss of income yielding assets, and indebtedness.
5. Non-Linking of Minimum Wages to Variable Dearness Allowance: There is a problem of non-linking of payment of minimum wages to variable dearness allowance, eroding the real wages of the workers and keeping them as working poor.

Way Forward in Improving the Implementation

It cannot be concluded, as James Sherk said, that despite the best of intentions, the minimum wage has proved an ineffective and often counterproductive policy in the war on poverty.

In India, though many policy improvements were made in the minimum wage, its effect on raising the average daily wages of the unskilled workers is yet to set in.

Though there were reports of the MNREGA wage rates setting in a rise in the average daily wages in the rural sector, it was a short-run phenomenon resulting in a rise in the consumer price index of rural & agricultural labourers and a rate of increase in nominal agriculture and rural wages since 2011 [32].

1. Fix Basic Minimum Wages for Low-Skilled Activities The need of the hour is to fix the basic minimum wage, especially for low-skilled activities like agriculture, domestic work, stone crushing, etc., compatible with the living wage of the respective state/union territory so that the workers earning minimum wage are able to lead a decent life.
2. Link Dearness Allowance to the Consumer Price Index The Dearness Allowance (DA) should form a part of the minimum wages in all occupations and in all states, and the DA should be linked to the consumer price index to enable timely updation, and the worker remains protected from inflation.
3. Improve Labour Law Compliance Through a Single Window The compliance under minimum wages can be improved if the employers are given a single window clearance for filing all labour law-related returns.
4. Make the National Floor Level Minimum Wage Statutory The latest amendment to the minimum wages act, which is yet to come out as legislation, viz., making the National Floor Level Minimum Wage Statutory, extending the minimum wage statutory, and extending the minimum wages act to all employments irrespective of the size of the workforce in that employment, are some of the outstanding amendments that could bring about a remarkable change in the implementations of the minimum wages act in India.
5. Increase Penalties for Contravention The penalties for contravention need to be hiked for better compliance [33].

Conclusion

The concept of the minimum wage can be defined as the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.

While Convention No. 131 does not contain a specific definition of the minimum wage and does not enumerate its components, the Committee observes that national legislation shows great variety in this regard.

Although only the basic wage is taken into account in certain countries, others also include wage supplements such as commissions or productivity bonuses.

The issue of whether benefits in kind are to be taken into account is particularly delicate in view of the difficulty of assessing objectively the value of such benefits.

In general, if the minimum wage is really to offer social protection to workers and their families, it is necessary to ensure that only benefits in kind that respond to their needs are included among the components of the minimum wage, that a reasonable value is attributed to them and that they are only taken into account up to a certain level.

The Committee also notes that Convention No. 131 does not enumerate the type of needs that minimum wages should satisfy.

It has recalled that in several countries campaigns have been launched for a living wage which should enable workers not only to satisfy their basic needs, such as food and housing, but also to participate in social and cultural life.

The Committee has also highlighted the principal characteristic that distinguishes Convention No. 131 from earlier instruments on the subject: the obligation to establish a minimum wages system.

Such a system has to cover the greatest possible number of workers and be established and implemented in full consultation with the social partners, and even with their direct participation.

Minimum wage rates have to be fixed taking into account the needs of workers and their families, as well as economic factors, and must be adjusted from time to time to take into account fluctuations in the cost of living and the economic situation.

Finally, appropriate measures must be taken to ensure effective compliance with minimum wages.

Objectives of Minimum Wage Policy

With regard to the objectives of the minimum wages policy, Recommendation No. 135 provides that minimum wage fixing should constitute one element in a policy designed to overcome poverty and to ensure the satisfaction of the needs of all workers and their families, and that the fundamental purpose of minimum wage fixing should be to give wage earners necessary social protection as regards minimum permissible levels of wages.

Moreover, the Committee has emphasised that minimum wage fixing also contributes to establishing rules of the game that are equal for everyone.

Finally, at the national level, minimum wages are used in certain cases to achieve objectives other than the reduction of income inequalities.

The Committee observes that the extent to which minimum wages are able to achieve these different objectives is a matter of debate, and it notes the divergent opinions expressed on this issue by the IOE (International Organisations of Employers) and the ITUC (International Trade Union Confederation), respectively.

Suggestions

Most of the labour legislation in India is from before independence. The Fundamental Rights of the Constitution for providing safeguards to labourers.

Although most of the pre-constitutional labour legislations have been revoked or curtailed following the Doctrine of Severability and Doctrine of Eclipse, not a lot of changes had been made to the labour legislation which came before the adoption of the constitution.

The achievement of these labour laws must be credited to the ILO.

The ILO guidelines provided basic principles on which most of the labour legislation was drawn.

By observation of various amendments and enactments in labour laws, it can be easily seen that the ILO has a countless impact on the Indian labour laws.

A large number of laws were passed to incorporate the guidelines of the resolutions of the ILO.

All these revised and ratified legislations create provisions for the common welfare and protection of the importance of the Indian labourers.

The constructive effect of the ILO is seen in the form of appreciation of many new kinds of rights that were previously not available for the Indian labour class but were made available after the creation of the ILO.

Bibliography

Books and Reports Referred

1. AnupK.Karan & Sakthivel Selvaraj (2008): Trend in wages and earnings in India: Increasing wage differentials in a segmented labour market, ILO Asia – Pacific Working Paper Series.
2. Labour Bureau (2007-08) Evaluation study on the Implementation of the Minimum Wages Act, 1948, in the stone-breaking & stone-crushing industry in Karnataka.
3. Minimum wages and the working poor: Global Wage Report 2012/2013
4. Prof. Bijuvarkkey and Khushi Mehta: “Minimum wages in India: Issues and concerns.
5. World of Work Report (2013): Repairing the economic and social fabric.
6. Patrick Belsar and Uma Rani (2010): Extending the coverage of minimum wages in India: Simulations from household data ‘Conditions of Work and Employment’ series No. 26, International Labour Office, Geneva.
7. Dr Shanta A. Vaidya (1989): Minimum Wages in India: Concepts and Practices, Maniben Kara Institute, 167, P.D. Mello Road, Bombay 400038.
8. Code of International labour law, practice and jurisprudence, volume I, II, Book I, Principal standards of International labour law (Neville Rubin), Cambridge University Press, 2005 (pages 1422-1435)
9. Labour law and labour relations – cases and materials – The Indian Law Institute, 2007
10. Modern Industrial Relations and Labour Laws (Principles and Techniques) J. N. Jain & Ajay Bhola.

End Notes:

• Van Dale, Jasmine, “The International Labour Organization (ILO) in Past and Present Research,” International Review of Social History, 2008, 53(3): 485–511.
• Prof. Biju Varkkey and Khushi Mehta: Minimum Wages in India: Issues and Concerns.
• Dr Shanta A. Vaidya (1989): Minimum Wages in India: Concepts and Practices, Maniben Kara Institute, 167, P. D’Mella Road, Bombay 400038.
• Minimum Wages & The Working Poor: Global Wage Report 2012/2013.
• Labour Bureau (2013): Wage Rates in Rural India 2011–2012.
• Minimum Wages and the Working Poor: Global Wage Report 2012/2013.
• World of Work Report (2013): Repairing the Economic & Social Fabric.
• Minimum Wages & Poverty in Developing Countries, Nora.
• Labour Bureau (2013): Report of the Working Group of the Minimum Wages Act, 1948, for the Year 2011.
• ILO: Report of the Committee of Experts on the Application of Conventions and Recommendations, Report III (Part B).
• http://www.nelp.org/page/justice/2011/
• ILO: The Minimum Wage: Catalyst for Social Dialogue & Economic Policy Instrument.
• www.legalserviceindia.com
• 1961 I.L.L.J. 631.
• ILO: General Survey of 1992, para. 27.
• W. Cunningham: Minimum Wages and Social Policy: Lessons from Developing Countries.
• AIR 1969 SC 182.
• (1954) 11 L.L.J. 686.
• AIR 1963 SC 806.
• (1983) I Lab 7c 237 SC.
• AIR 1958 SC 30.
• A. Marinakis: The Role of ILO in the Development of Minimum Wages (ILO, 2008), p. 14.
• AIR 1962 Bom 97; AIR 1955 SC; 1963 KER 115; 196 TRI 32.
• AIR 1962 SC 12.
• AIR 1962 Bom 97.
• AIR 1962 SC 12.
• AIR 1963 SC 306.
• AIR (1970) 11 LLJ 403; AIR 1970 SC 2042; 38 FIRI.
• AIR (1993) SC 133.
• AIR (1983) SC 34.
• ILLJ Sup. 942 Bom.
• ILO: General Survey of 1992, para. 59.
• ILC: Minimum Wage Fixing Machinery, Discussion of Methods of Minimum Wage Fixing Machinery, Tenth Session (Geneva, 1927), pp. 11–15.

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