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Constitutional Validity of the Minimum Wages Act, 1948

Background of the Act
In 1928, the International Labour Organisation while referring to the wages of the workers of the industries where the wages were considerably low introduced the concept of minimum wages to protect the labour from exploitation of the employers as at that time the labour does not possessed any bargaining power. It was only after World War II, when the need was felt by the legislation to fix minimum wage for the labour in India. Therefore, in 1945, a bill was introduced in Indian Labour Conference.

Thereafter, it was presented before the Legislative Assembly on 11th April, 1946 and finally on 15th March, 1948, the Bill got passed and came into. This Act empowers the government of Centre and of different States to fix minimum wages which are not uniform throughout the country and differs on various factors which includes region, skills, occupation, and capacity of industry of a particular region to pay, etc.

Legal Issues Regarding the Validity of the Act

Currently, there is no unresolved issue regarding the reasonableness and Constitutional validity of the Act. But initially there was lot of conflict regarding the Constitutional validity of the Act as it was considered to be in contravention primarily with two provisions of Part III of the Constitution of India, 1950 i.e. Article 14[1] and 19(1) (g)[2] whereby Right to Equality and Freedom of Right to Practice any Profession, Occupation, Trade, Business, etc. are enumerated respectively.

Therefore, the legal issues were:

  1. Whether the provisions of the Act[3] are violative of Article 14[4] or not?
  2. Whether the provisions of the Act[5] are violative of Article 19(1)(g)[6] or not?

Judicial View

The judiciary come across with these legal issues in catena of judgments The list of judgments with Court's observation are as follows:

a) M/S. Bhikusa Yamasa Kahatriya v. Sangamner Akola Taluka[7]

Facts
The owners of bidi factories are the appellant in this case who before this appeal approached to the High Court of Bombay under Article 226[8] whereby they prayed to declare Section 3(3)(iv) of the Act and notification issued by the government as violative of Acrticle 14[9] and 19(1)(g)[10] and the High Court gave the decision against the appellant therefore they appealed to Supreme Court under Article 133(1)(c)[11].

Decision
Supreme Court also upheld the decision of the High Court and observed that the notification and Section 3(3)(iv)[12] is not violative of Article 14 and 19(1)(g).

b) Chandra Bhavan Boarding and Lodging, Bangalore and others v. State of Mysore and others.[13]

Facts
In this case there were writ petitions have been filed whereby the legal issues were identical; therefore Supreme Court gave a common judgment for both the writ petition filed under Article 32[14]. In both the writ petitions, the petitioners challenged the validity of the notification of the Mysore Government dated 01.06.1967 which was notified to direct all the residential hotels and eating houses to fix a minimum wage for employees belonging to different categories and also challenged the provisions of the Minimum Wage Act[15]. The Mysore High Court rejected all the contentions of the petitioners. Hence, the petitioners approached Supreme Court.

Decision
It was observed by Supreme Court that government can fix different minimum wage depending upon the economical conditions, cost of living, nature of work, category of employment, etc. and held that the provisions of the Act[16] and notification of government does not violate article 14 and 19(1)(g) of the Constitution.

c) Gulamahamed Tarasaheb and others. v. State of Bombay and others.[17]

Facts
A Special Civil Application under Article 226 of the Constitution was filed by four Bidi Manufacturing Factories in Marathwada against the government's final notification pertaining to the revision of minimum wages of the workers working in the bidi manufacturing factory primarily on the grounds that the final notification issued by the Government is void because it has raised the rates of minimum wages to such an extent that it would be impossible for the petitioners to carry to their bidi-manufacturing business and therefore, that would be in contravention of their fundamental right enumerated under Article 14 and 19(1)(g)[18].

Decision
In para 11 of the judgement the Honourable Bombay High Court observed by citing Supreme Court judgment i.e. Bijay Cotton Mills Ltd. v. State of Ajmer[19] rejected the plea of the petitioner by stating that:
If the labourers are to be secured in the enjoyment of minimum wages and are to be protected against exploitation by their employers, it was absolutely necessary that restraints should be imposed upon their freedom of contract and such restrictions cannot, in any sense, be 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.

It was further observed that maybe for individual employers it will be difficult to sustain in the business but it is no ground for denying the minimum wages of the employees.


d) Bijay Cotton Mills Ltd vs The State Of Ajmer[20]

Facts
In this case two connected writ petitions were taken together. In 1950, a dispute arises between an employer and its employees pertaining to the hike in wages which was referred to Industrial Tribunal whereby the Tribunal refused for the raise in wages and dearness allowance.

Thereafter, the employees approached the Appellate Tribunal. During the pendency of the appeal, the Chief Commissioner of Ajmer took some steps to fix minimum wages for the labour of textile industry as per the provisions of the Act[21] and a committee was set up for fixing the minimum wages off the employees of textile industry.

On 4th October, 1952 and issued a notification on 7th October, 1952 to fix the minimum wages. During this period the Appellate Tribunal also sent back the case to the Tribunal for holding proper investigation and on 8th September, 1953 whereby the Tribunal repudiated the recommendation of the Ajmer's Chief Commissioner and lower it down to Rs. 35 including dearness allowance.

There were over 1500 employees in the mill and many of them approached the management of the company and agreed to work on the wages as decided by the Tribunal i.e. Rs. 35 but mill owners does not open their mills as it was a criminal offence to take work on the lesser wages than the prescribed wages. Therefore, various textile companies filed writ petitions contended that the notification and substantial provision of the Act[22] are violative of Article 14 and 19(1)(g) and the workmen who were willing to work on less wages also filed petition in support of the companies' view.

Decision
The Supreme Court held that the notification and substantial provisions of the Act[23] or not violative of Article 14[24] and 19(1)(g)[25] as fundamental rights are not absolute in nature and there are certain reasonable restrictions and minimum wages were fixed by the government in public interest while fulfilling one of the Directive Principle of State Policy enumerated under Article 43[26].

Therefore, such action of government gets the immunity of reasonable restrictions. It was further observed in para 4 of the judgment that:
if the labourers are to be secured in the enjoyment of minimum wages and are to be protected against exploitation by their employers, it was absolutely necessary that restraints should be imposed upon their freedom of contract and such restrictions cannot, in any sense, be 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.

It was further observed that maybe for individual employers it will be difficult to sustain in the business but it is no ground for making whole law unreasonable and unconstitutional.

e) U. Unichoyi and ors. v. The State of Kerala[27]

Facts
The Kerala Government set up a committee to inquire about the minimum wage for the tile industry employees and on the advice of the committee, the Government published a notification dated 12th May, 1958 whereby the government fixed the minimum wages. For challenging the validity of the Act[28] and the notification of the government, a petition was filed by nine petitioners representing six factories under Article 32 of the Constitution

Decision
It was held that the constitutional validity of the Minimum Wages Act, 1948 would not be doubted - Also the hardship caused to the employers by the wages fixed under the Act were irrelevant considerations in fixing the wages.

Conclusion
The Act[29] aims to provide at least minimum wages and social justice to the workers. Even in the preamble of the Act[30] it is said that to provide for fixing minimum rates of wages in certain employments. Although to some extent it can be said that the Act[31] is violative of certain fundamental rights but even those fundamental rights are not absolute in nature and have certain restrictions which are also given in the Constitution itself which includes public interest, health, morality and public order, etc.

Therefore, the provisions of the Act[32] and notification of the government pertaining to the fixation of minimum wages were fall within the restrictions of fundamental rights enumerated in the Constitution and hence, constitutionally valid.

Bibliography:
  1. Referred India Kanoon website
  2. Referred Manupatra online.
  3. Object, Constitutional Validity and Salient Features of Minimum Wages Act, 1948 by Shubhi_3014, November 24, 2017, https://www.legalbites.in/law-notes-object-validity-features-minimum-wages-act-1948/
  4. The Constitutional Validity of The Minimum Wages Act, 1948, Shastree, http://www.legalserviceindia.com/article/1770/The-Constitutional-validity-of-The-wages-Act,1948.html
  5. Constitutional Validity of The Minimum Wages Act, 1948, Suchi Sharma, https://www.academia.edu/38617952/Constitutional_Validity_of_Minimum_Wages_Act
  6. Indian Labour laws-Minimum Wages Act, 1948, Akansha, https://www.google.com/amp/s/blog.ipleaders.in/labour-law-indian-laws-caselaws/amp/

End-Notes:
  1. The Constitution of India, 1950
  2. Supra 1
  3. The Minimum Wages Act, 1948 (Act 9 of 1948)
  4. Supra 1
  5. Supra 3
  6. Supra 1
  7. 1963 AIR 806
  8. Supra 1
  9. Supra 1
  10. Supra 1
  11. Supra 1
  12. Supra 3
  13. Supra 3
  14. 1970 AIR 2042
  15. Supra 1
  16. Supra 3
  17. AIR 1962 Bom 97
  18. Supra 1
  19. 1955 AIR 33
  20. Supra 19
  21. Supra 3
  22. Supra 3
  23. Supra 3
  24. Supra 1
  25. Supra 1
  26. Supra 1
  27. AIR 1962 SC 12
  28. Supra 3
  29. Supra 1
  30. Supra 3
  31. Supra 3
  32. Supra 3

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