Minimum Wages: Significance During the Covid - 19 Pandemic

Introduction

The cost of ten grams of gold has soared beyond Rs. 50,000/- in today’s fast-growing world. Investing in gold is just a ‘dream’ of many, as people are struggling to find jobs and earn enough money for their daily bread and butter. In addition to those who do not have jobs, employed people are also not able to provide for themselves. This condition is prevalent in rural and urban India despite laws being formulated to ensure timely payments to workers. This issue causes a hindrance to the development of the Indian economy. The development of a Nation’s economy depends on the financial development of the citizens. If the workers do not receive monetary compensation in return for the work they do, their health will be jeopardized, resulting in the dormant development of India as an economy. Many people in India are unaware of the laws formulated for the regulation of workers’ salaries. This lack of awareness restricts the aggrieved to come forward and raise a complaint against their employers who do not give them their salaries on time. In India, the laws related to the wages of the workers, offences related to the same and the competent authority to try these matters are incorporated under the Minimum Wages Act, 1948.  This article aims to educate the masses on the importance of the Minimum Wages Act, 1948 by explaining the important sections of the act.

 

The Minimum Wages Act, 1948

The Minimum Wages Act, 1948 is a legislation passed by the Indian Parliament to ensure that employers are under an obligation to credit salaries to their employees according to their position. The Act consists of 31 Sections which cover the following:

• Minimum wages to be provided by the employer to his employee.

• The maximum number of working hours in a day.

• Offences that constitute if one does not make payments to his/her/their employees promptly and the penalties and punishments for the same.

• Exemption of employer from liability in certain cases and so on.

It is advised that every working person must be aware of what is mentioned in the Act as it is important to have knowledge of one’s rights and the offences that can be avoided by paying one’s employees on a timely basis.

Payment of minimum wages in the Pandemic: Necessary or Not?

In the case of Align Components Pvt. Ltd, & Anr. v. Union of India & Ors., even though the management of the manufacturing companies was willing to offer work to the employees and the employees were also willing to work in the respective manufacturing companies, a lockdown was imposed during the Covid – 19 Pandemic in 2020. Due to this, despite the willingness of the workers to work, they were not able to do so due to Government restrictions to curtail the spread of the virus. All manufacturing activities were completely stopped for a certain period when there was a significant rise in the number of Covid – 19 cases in the country. On reduction in the number of cases, the lockdown was lifted partially, and people were allowed to work physically in their workplaces. However, in areas where work-from-home was possible, companies were advised to facilitate the same to reduce the risk of exposure to the deadly virus. The management of Align Components Pvt. Ltd filed a writ petition in the Bombay High Court which stated that the company wanted to be exempted from paying the monthly wages to its employees. The Company’s exemption was regarding the period in which the activities of the company would be completely shut down due to the lockdown imposed during the Covid – 19 Pandemic. The Petitioners submitted that they were ready to pay 50% of the gross wages or the minimum rates of wages prescribed under the Minimum Wages Act, 1948, whichever is higher. The court ruled that the company is obliged to pay the minimum wages as per the rates prescribed in Section 17 of the Act, but the company is exempt from paying the food and conveyance allowance to the employees if they are not required to physically report to work. The court also ruled that in areas where the employees are physically required to report to their duties and voluntarily remain absent, the management or employers are free to deduct their salary or wages. The deduction in salary was dependent on the number of days an employee does not report to work subject to the procedure laid down in law. This judgment was applicable in areas where there was no lockdown as well.

The above judgment proved to be of vital importance for employees as there were financial losses faced by companies during the Pandemic. As a result of this, in certain cases, employees were denied access to even minimum wages which are essential for the survival of man. The judgment given by the Court was fair from the point of view of the employers as well as the employees. This was because both, employers and employees would not face any loss due to the orders of the judgment. As everyone has a right to the money they earn during their employment, and it would be wrong on the part of employers to not pay their employees just because the activities of the company are shut down. The management is under an obligation to understand the seriousness of the situation that the employees are dependent on their employers for their living as employers are the ones who provide them with the salaries. In the trying times of Covid – 19, the only need of the employees was that their employers support them financially, if not fully, at least partially. That is what the judgment passed by the Court aimed at fulfilling and it also made sure that employees who do not come for work should not be given the payment. This way fairness would be maintained by companies in the payment of wages and salaries to their employees. This was an important step taken by the Courts for the fair implementation of the Minimum Wages Act, 1948.

Minimum Wages Code, 2019

The Minimum Wages Code, 2019 or the Wage Code is an Act by the Indian Parliament which consolidates the provisions of the four major labour laws of India under one roof. The Code repeals and replaces the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The Code was passed on 2^nd August 2019 by the Rajya Sabha and came into force on 18^th December 2020. The judgment in the case of Align Components Pvt. Ltd was passed before the enforcement of the Minimum Wages Code, 2019 and is hence referred to under the Minimum Wages Act, 1948. Since the provisions of the major labour laws of India are compiled under the Wage Code, the Modi Government thinks that it will result in better enforcement of the labour laws and lead to the development of the country.

Under the Code, 2019 the National Floor Wage is set by the Government of India. National Floor Wage is the amount of wage below which the Government of India cannot set the amount for minimum wages.  It automatically results in the fact that companies and establishments cannot give salaries and wages to their employees below the specified National Floor Wage. As per Section 5 of the Minimum Wages Code, 2019, “No employer can fix the minimum wages below the specified amount as set by the National Floor Wage by the Government of India.” This makes it obligatory for the companies to follow the rule, violation of which would result in an offence and a punishment and/or penalties as per the Minimum Wages Code, 2019. Currently,  the National Floor Wage has been set at Rs. 178/- per day.

The effective enforcement of the Code is essential as even today there are cases where minimum wages have not been provided to people, especially after the losses suffered by companies during the Covid – 19 Pandemic. The concept of ‘living wage’ should also be considered by the Parliament of India to formulate laws related to it. ‘Living Wage’ is the highest level of wage which if given to the workers and employees will include amenities such as healthcare, housing facilities, education and other similar areas which are required to be fulfilled for a person to be able to live a decent life. The minimum wage, which is Rs. 178 per day, is not sufficient for a person to live a decent life. On average, a person receiving Rs. 178 per day, receives an amount of Rs. 5518 as his/her/their salary every month. This amount is not sufficient to support one’s family and provide education to children and have food that is of good quality. Due to the rising prices of commodities and educational expenses, a person with a minimum wage would not be able to lead a normal life in which he does not need to compromise on spending money on different essential aspects of a good lifestyle. It is very important for the country’s development that people receive ‘living wages’ instead of minimum wages to lead a successful life. Diligent enforcement of the Minimum Wage Code, 2019 along with consideration of the concept of living wages will result in the development of the people in the society. If the quality of the facilities included under living wages is improved, it would benefit the national economy and the individual citizens of the country.

Conclusion

The above case law and legal provisions related to minimum wages in India aim at educating the masses about the laws related to the workplace and their salaries. This article also states the revised provisions concerning the labour Laws in India. Every person needs to receive fair payment for the hard work which they put in at their respective workplaces. The labour laws in India also aim at regulating the actions of employers concerning paying salaries to their employees. There is no justification for the holding of salaries by employers despite the hard work of the employees who deserve their payments. Employees can lodge complaints against the violation of their rights only if they are aware of the same. It is important for both, employers as well as employees to be aware of their responsibilities and rights to live a better work–life.

 

References

1. https://www.whatishumanresource.com/the-payment-of-wages-act-1936
2. https://www.news18.com/business/less-than-10-construction-jobs-provide-pf-most-workers-not-paid-minimum-wage-says-report-6923191.html
3. https://timesofindia.indiatimes.com/readersblog/legal-articles/make-the-move-from-minimum-wages-to-living-wages-51366/
4. https://labour.gov.in/code-wages
5. THE MINIMUM WAGES ACT, 1948 (labour.gov.in)
6. Align Components Pvt. Ltd, and another v. Union of India and others - (Writ Petition Stamp No. 10569 of 2020)