Applicability Of Minimum Wages - Contract Labour
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Applicability Of Minimum Wages - Contract Labour

ramkumarvijay Started The Discussion:

Dear Friends,

Please clarify the following...

Our company is rendering contract services for a Central Government Organization located in Chennai. Please clarify whether applicability of Minimum wages is as per Central Govenment Act or State Government Act.

Request your guidence in this regard

Regards,

Ramkumar

saiseven - Member Since: Dec 2011
Sub- Minimum Wages

There is no State Act on mimimum wages.There is only Central Act called the Minimum Wages Act 1948. However, the Minimum Wages Act permits the state Government to notify minimum wages for various establishments falling under it's jurisdiction.

Now your doubt is since you employed contarct labour for a central governement undertaking, whther minimum wages shallbe paid as per central govt. notification or state government notification. So far as minimum wages are concerned, they are payable as per the Government of Tamil Nadu notification since your establishment is located in (presumably) Chennai.

B.Saikumar
HR & Labour Law consultant
Chipinbiz Consultancy. Pvt.Ltd
Mumbai
Tel: 022-28324234

ramkumarvijay - Member Since: Oct 2008
Dear Mr. Saikumar,

Thanks for your clarification.

I have one more doubt in this regard. Could you please clarify why Central Government minimum wages is not applicable though the contract labour is employed at Central Government establishment.

Regards,

Ramkumar

v.harikrishnan - Member Since: Apr 2011
Dear Mr.Ramkumar
If you go through the Minimum Wages Act, you would see that the Act gives power to the "appropriate Government" to fix minimum rates of wages for certain employments. The term "appropriate Government" is defined in section 2(b) of the Minimum Wages Act. Specifically section 2(b)((i) states the scheduled employments for which the Central Government is the appropriate Government and section 2(b)(ii) states the scheduled employments for which the State Government is the appropriate Government. The term "carried on by or under the authority of the Central Government" has been interpreted by the Honourable Supreme Court and High Courts. The information furnished by you is not sufficient to apply the rulings of the Supreme Court and the High Courts and to find out whether in the case specified by you the appropriate Government is the Central Government or the State Government. Moreover in your post you have not specified the employment with reference to which your query is made.
With regards

saiseven - Member Since: Dec 2011
Sub-minimum wages
Dear Ram kumar

You need to approach the issue in the way Mr.Hari Krishnan explained.However, going by the brief details and your statement that you supplied contract labour to a central government organisation, the applicability of minimum wages to the contract labour will, in my view, be decided with reference to contractor's establishment but not with reference to Principal employer's establishment. Otherwise what happens is you may be supplying some contract labour to a central undertaking and some contract labour to a state undertaking and some to a private indutry. Thus you will be paying minimum wages to some contract workers as per state rates and to some of your contract labour at central rates. You may also shift some contract workmen from a state establishment to a central establishment or vice versa to meet any peculiar need or urgent need in the respective estbalishments. In such case , one day you will be paying minimum wages to the same contarct labour at state rates and on another day, at central rates.

If it is to be decided with reference to contractor's establishment, this anamoly will not be there, if so, your establishment being in private sector and located in Chennai, the appropriate government will be state Government and hence the minimum wages at state rates will be applicable, in my view.However, you can confirm it by contacting the Asst. Labour Commissioner(state) under whose jurisdiction, your establishment falls.

B.Saikumar
HR & labour Law Consultant
Chipinbiz Consultancy Pvt.ltd
Mumbai
022-28324234

ratikanta - Member Since: Mar 2008
Dear Ram Kumar,

Minimum wages slab is different in Central Govt & State Govt. Kindly check the existing slab of Chennai.

As per your views your company going to have a Contract services for a Central Government Organization located in Chennai. That means for Labor License you will go to your Local Regional labor Commissioner office not District Labor commissioner office. Since your principal employer is covered under Central Govt. all the labor laws of Central govt. will be applicable to your organization also. Similarly Minimum wages slab of Central Govt. also applicable to your organization.

Experts need your comment.

Ratikanta Rath

v.harikrishnan - Member Since: Apr 2011
Dear Mr.Ratikanta Rath
I request you to see section 3 of the Minimum Wages Act. This section gives power to the appropriate Government to fix minimum rates of wages for EMPLOYMENTS and not minimum rates of wages for ESTABLISHMENTS. What rate of minimum wages have to be followed in the case of an employment through a contractor in a Central Government organisation and for which employment the Central Government has not fixed minimum rates of wages, but the State Government has fixed minimum rates of wages. I want to repeat that the employees are the employees of the contractor and not employees of the Central Government organisation and the appropriate Government for the employment is the State Government. I request you to offer your views.
With regards

ratikanta - Member Since: Mar 2008
Dear Mr. V.Harikrishnan

currently my company is a mining based contractor. we are giving services to 7 Big mines in orissa. All the mines are registered under Central Govt. and their statutory records & returns as per mines act and come under Central Govt when central govt minimum wages revised we also revised our Salary pattern as per the updated Basic DA. we are taking all the statutory licence. return etc.

Ratikanta Rath

hr@monalisa - Member Since: Jan 2012
Dear Sir, We are a Man Power supplying company in Maharashtra, and we have branch offices accross India,would like to clarify if we are supposed to pay minimum wages as per Maharashtra State govt.Jurisdiction or follow jurisdiction of govt's where our branch offices are located....

Whatever be the answer to my question, i shall appreciate if i could have a govt. document or a webpage/link stating the true facts....

saiseven - Member Since: Dec 2011
In my view, the branch falls under the jurisdiction of the Government of the State in which it is located for the purpose of the minimum wages. B.Saikumar HR& Labour Law advisor mumbai



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