Page 170 - DMGT306_MERCANTILE_LAWS_II

Unit 9: Minimum Wages Act, 1948

(iii) by the month, or Notes
(iv) by such other large wage periods as may be prescribed;
and where such rates are fixed by the day or by the month, the manner of calculating wages for
month or for a day as the case may be, may be indicated.
However, where wage period has been fixed in accordance with the Payment of Wages Act, 1986
vide Section 4 thereof; minimum wages shall be fixed in accordance therewith [Section 3(3)].

Task What points should be taken into consideration while fixing minimum wages?

9.3.3 Minimum Rate of Wages (Section 4)

According to Section 4 of the Act, any minimum rate of wages fixed or revised by the appropriate
Government under Section 3 may consist of –
(i) a basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in
such manner as the appropriate Government may direct to accord as nearly as practicable with
the variation in the cost of living index number applicable to such worker (hereinafter referred
to as the cost of living allowance); or

(ii) a basic rate of wages or without the cost of living allowance and the cash value of the
concession in respect of supplies of essential commodities at concessional rates, where so
authorized; or

(iii) an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash
value of the concessions, if any.
The cost of living allowance and the cash value of the concessions in respect of supplies essential
commodities at concessional rates shall be computed by the competent authority at such intervals
and in accordance with such directions specified or given by the appropriate Government.

9.3.3 Procedure for Fixing and Revising Minimum Wages (Section 5)

In fixing minimum rates of wages in respect of any scheduled employment for the first time or
in revising minimum rates of wages, the appropriate Government can follow either of the two
methods described below.

First Method [Section 5(1)(a)]

This method is known as the “Committee Method”. The appropriate Government may appoint
as many committees and sub-committees as it considers necessary to hold enquiries and advise
it in respect of such fixation or revision as the case may be. After considering the advice of the
committee or committees, the appropriate Government shall, by notification in the Official
Gazette fix or revise the minimum rates of wages. The wage rates shall come into force from
such date as may be specified in the notification. If no date is specified, wage rates shall come
into force on the expiry of three months from the date of the issue of the notification.

Notes It was held in Edward Mills Co. v. State of Ajmer (1955) AIR SC that Committee
appointed under Section 5 is only an advisory body and that Government is not bound to
accept its recommendations.

LOVELY PROFESSIONAL UNIVERSITY 165