Fair Wages under the Minimum Wages Act, 1948.

Fair Wages under the Minimum Wages Act, 1948.

Fair wages

Fair wages are sufficiently high compared to minimum wages and it provides a standard family with food, shelter, clothing, medical care, education for children etc. Fair wages depends on the earning capacity and workload. Fair wages also depends upon the company's capacity to bear the financial burden or employer's capacity to pay.

Case Laws:-

1) S.A.F.L. Works Vs. State Industrial Court, Nagpur.

In this case supreme Court observed that:-

Before fixing the paying capacity the tribunal should first fix all the income, deductions, and allowances which are incurred.

Such expenses of the company cannot be determined or deducted for fixing fair wages such as:-

• Purchase of raw material.
• Expenses incurred towards rent.
• Public charges.
• Maintenance of the establishment.
• Expenses incurred in marketing.
• Payment of income tax.

However such expenses can be determined and deducted from a company for fixing fair wages such as:-

• Payment of wage bill inclusive of.
• Dearness allowances.
• Bonus.
• Gratuity etc.

Hence after determining the paying capacity of the industry the tribunal will have to proceed to fix fair wages.

2) Transport Corporation of India Ltd Vs. State of Maharashtra and Others.

In this case it was held that government shall fix the minimum rates of wages and labour Court or tribunal fixes the fair wages by considering the minimum wage rates. But if government has not fixed the minimum of rates of wages yet then the labour Court or tribunal can fix by assuming minimum rates of wages by themselves.

Reference  :-

Textbook - Labour and Industrial Laws, 29th Edition by S.N. MISRA