Evolution of the Minimum Wage in India

  • Delayed deposit of ESI contribution when explained no damages can be levied.

Employees State Insurance Corporation vs. M/s. Neyveli Lignite Corporation Limited, 2020 LLR 996 (Mad. HC)

  • Criminal breach of trust committed by the employer by not depositing EPF dues despite deduction of employee’s share.

South Indian Federation of Fishermen Societies, Karamana Rep. by its Chairman, Thiruvananthapuram vs. Regional Provident Fund Commissioner and another

  • Damages for delayed deposit of EPF dues can be waived for a sick establishment.

Tamilnadu Agro Engg. and Service Co-operative Federation Limited vs. The Director (Recovery), Employees’ Provident Fund Organization and Ors., 2021

  • Attachment of bank-account of the employer is not justified when the appeal is filed in Tribunal.

Kovai Medical Center and Hospital Limited vs. Regional Provident Fund Commissioner-I, Coimbatore, 2020 LLR 915 (Mad. HC)

History of the Minimum Wage Act 

The evolution of Indian labour legislation is obviously interlaced with the history of British colonialism. British political economy was considered natural 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 organizations and hence labour laws became essential. These were obviously in order to protect the interests of British bosses. 

The history of legislation around minimum wages takes us back to New Zealand in 1894, where the first national minimum wage laws were enacted. This was the Industrial Conciliation and Arbitration Act. It introduced compulsory arbitration with trade unions for the negotiation of wages. 

In 1907, the Harvester decision was handed down in Australia. It established a ‘living wage’ for a man, his wife and two children to “live in frugal comfort”. A significant development in this regard was the inclusion of a reference to minimum wages in the Federal Constitution of Mexico adopted in 1917.

Another development which has global influence was the Minimum Wage Fixing Machinery Convention passed by the ILO in 1928. The importance of the 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 1. 

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.

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 Royal Commission on Labour was adopted which considered the subject of minimum wages.

The Minimum wages Act was enacted to fulfill the aspiration of the workers as contained in the resolution based on the Geneva Convention held in 1928. 

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, 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.

The limitation to this act was that the Minimum Wages Act was only applicable to employees engaged in establishments which were included in the schedule under the Act, but the Code on Wages ensures universal applicability of provisions related to minimum wages to all employees irrespective of the sector they are working in. 

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