Minimum Wages Act,1948

• Act provides for fixing minimum wages in certain

employment situation where sweated labor prevails
or where there exists possibilities of exploitation of
labor.
• Act provides for fixation of
- Minimum time rate or
- Minimum piece rate or
- Guaranteed time rate ( it is average of both above)
- Overtime rate
Suitable for various occupations & class of workers
 Minimum Wages Act,1948
• A Minimum Wage rate incorporates
- A basic rate of wages & cost of living allowances or
- A basic rate with/ without cost of living allowances or
- Cash value of concessions regarding supplying of
essential commodities at nominal rates
Act provides for payment of wages in cash or partially in
kind
- Act provides for revision of minimum rate at suitable
intervals, not exceeding 5 years.
 Minimum Wages Act,1948
• In calculating the minimum wage, the standard working
class family should be taken to comprise three
consumption units for one earner, the earnings of
women, children & adolescents being disregarded.
• Minimum food requirements should be calculated on
the basis of set intake of calories as recommended by
Dr Aykroyd for an Indian adult of moderate activity
• Clothing requirements should be estimated on the basis
of per capita consumption of 18 yards per annum which
give for the average of worker’s family of four a total of
72 yards.
• Employees have to be paid Minimum Wages as per
categories..Highly skilled, Skilled, Semi skilled,
Unskilled and Part time.
• Rates vary as per zones
• Sec 23- Deals with the responsibility for payment of
wages is of Principal employer
• Sec 21- Deals with responsibility for payment of
wages in case of contact labor, Contractor is liable for
payment under contract labor regulation &
arbitration Act 1970.
• Sec 21(4) If Contractor he fails to make payments
than Principal employer is liable for payment of wage
 Minimum Wages Act,1948

• In respect of housing, the rent corresponding

to the minimum area provided for under
government Industrial housing scheme
should be taken into consideration for fixing
the minimum wages.
• Fuel lighting & other miscellaneous items of
expenditure should constitute 20% of the
total minimum wage.
 Fair Wages
• It is that wage which is above the minimum wage
but below the living wage. According to committee
of Fair Wages,1948, fair wage should be determined
taking the following factors into account,
• The productivity of labor;
• The prevailing rate of wages in the same or similar
occupations in the same region or neighboring
regions;
• The level of national income & distribution;
• The place of industry in the economy of country;
• The employer’s capacity to pay.
 Living Wages
• According to Committee of Fair Wages, the
living wage is the highest among the three. It
must provide
1. Basic amenities of life;
2. Efficiency of worker;
3. Satisfy social needs of worker such as
medical, education, retirement etc. living
wage is a dynamic concept, which grows in
line with the growth of National Income.
THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970

• An Act to regulate employment of contract labour in

certain establishments and to provide for its abolition in
certain circumstances and for matters connected
therewith
• Allows Employers (principal Employers) to use Contractors
for supply of labour.
• It applies to establishments employing twenty or more
persons.
• It does not apply to establishments where nature of work
is intermittent or casual.
• Principal Employer as well as the Contractor have to
register themselves.
• The Contractor has to provide amenities and facilities
which include canteens, rest-rooms, first-aid facilities etc.
• In case the Contractor fails to provide the facilities the
Principal Employer will have to provide the same and
adjust and recover the expense from the Contractor.
• Both the Principal Employer and the Contractor have to
maintain Registers and Records of the Contract Labour
employed.
• The appropriate Government in consultation with the
Central and State Board can prohibit employment of
contract labour in any process, operation and
establishment- if it is of the view that it is perennial in
nature, the work can be carried out by regular workmen.
 Drafting Of Employment Contracts For Companies Setting Up
Operations In India
• Identify the long term requirement of employees.
• Identifying the workmen and employees not covered under
definition of workmen, respectively.
• Local laws of the State should be borne in mind while drawing up the
contracts
• Issue appointment letters which clearly define the employment
terms and conditions.
• Employment contracts, where necessary, should be put in place with
clauses for wages, benefits, non-compete, confidentiality, term,
termination etc.
• Depending on the requirement, use fixed term contracts for
workmen.
• The terms and conditions of the employment should be clearly
explained to employees before execution and should be drafted
without any ambiguity.
 Fixed Term Contracts- Section 2(Oo) (Bb)
• It applies to workmen under a contract for fixed term and
termination of such workmen would not amount to
retrenchment.
• The Supreme Court in the case of Harmohinder Singh v
kharagh canteen, Ambala reported in (2001) 5 SCC 540
has held that an employee’s services could be terminated
on the basis of a stipulation in his contract fixing a
particular tenure or period beyond which the employee
would be discharged.
• The Supreme Court in the case of Morinda Co-operative
Sugar Mills v Ram Krishna reported in (1995) 5 SCC 653
has held that seasonal workers by their nature of
employment would be covered under section 2(oo) (bb).
• Recently, the Supreme Court in the case of Kishor
Chandra Samal v Divisional Manager, Orissa State
Cashew Development Corporation, reported in JT
2005 (10) SC 46 has held that even if there were
repeated contracts issued for successive terms
spread over several years, so long as each contract
was for a fixed period, section 2(OO) (bb) would
apply, and termination of employment would
stand excluded from the definition of
“retrenchment”.
• It applies to workmen under a contract for fixed
term and termination of such workmen would not
amount to retrenchment.
 Employee State Insurance Act 1948
Object: To provide certain benefits to employees for
sickness, employment injury, maternity and to make
certain other matters in relation to
Preamble: Acc. Chapter I, II,& VIII were brought into
force on 01/09/1948 in all provinces
Application: the act extends to whole India sec 1(4)
that it shall apply in the 1st instance to all factories,
establishment (including factories belonging to
govt. other than seasonal factories)
• Sec 1(5) that appropriate govt. may extend the
provisions of this act to any other establishment(s)
industrial, commercial, agricultural undertaking
• Insurable Employees: Sec 38 provides that subject
to the factories or establishments, provisions of
this act, all employees shall be insured in manner
provided by the act
• Contributions: Sec 38 provides that a combination
of contribution at prescribed ate for each wage
period
• Sec 39(1) the contribution of employer and
employee is 4.75% &1.75% respectively,
contribution shall be paid at the rate prescribed by
Central Govt.
Sec 1(5) that appropriate govt. may extend the provisions of this act
to any other establishment(s) industrial, commercial, agricultural
undertaking
• Insurable Employees: Sec 38 provides that subject to the factories
or establishments, provisions of this act, all employees shall be
insured in manner provided by the act
• Dependents: Sec 2 (6A) any of following relatives of deceased
person namely;
• Widow, a minor legitimate/ adopted son/ daughter
• Widowed mother
• Son/ daughter attained age of 18 years & infirm
• Parent other than a widowed mother & IIIrd Category In which
includes
• A minor illegitimate son, unmarried illegitimate daughter,
legitimate daughter if married & minor
 Benefits: (Sec 46)
• Sickness Benefit: It is in the form of periodical
payments made to an insured person during a
period of sickness
• Maternity Benefit: it implies periodical payments to
an insured women in case of confinement certified
by a dully appointed doctor or midwife
• Disablement Benefit: It comprises periodical
payments if insured person suffers from
disablement/ injury
• Medical Benefit: the benefit to a member of family
whose name was endorsed
 Benefits: (Sec 46)
• Funeral Benefit: Payable to eldest member of
family or such person who bears funeral
expenses
• Liability: Acc. Sec 5(a) if any contribution
payable under this act is not paid by the
principle employer, on due date, he shall be
liable to pay simple interest@ 12% per annum
or such higher rate as specified in the
regulation till the date of actual payment
• ESI corporation Vs Rajshree Pictures Pvt Ltd.
Guvahati, (1991) 1 LLJ 109 Guwahati
 Trade Unions Act, 1926
Section 2(h) of the Trade Unions Act, 1926 has defined a
trade union as

“Any combination, whether temporary or permanent,

formed primarily for the purpose of regulating the
relations between workmen and employers, or
between workmen and workmen, or between
employers and employers, or for imposing restrictive
conditions on the conduct of any trade or business,
and includes any federation of two or more trade
unions.”
• This Act provides for the registration of Trade Unions
and in certain respects to define the law relating to
registered Trade Unions
• Seven or more persons can get together to form a
Trade Union.
• In order for the Trade Union to register it has to have at
least ten percent or one hundred of the workmen
whichever is less as its members.
• Section 9 - On registration the Registrar will issue a
Certificate of Registration.
• Section 19 – agreement between members will not be
void or voidable merely by reason that the object of
the agreement amounts to restraint of trade.