Is It Right to Apply Construction Minimum Wages to Oil & Gas Pipeline Maintenance?

Respected Shri Umakanthan M., Additional Commissioner of Labour (Retired) [Phone Number Removed For Privacy-Reasons] & others

Classification of Oil & Gas Industries under The Minimum Wages Act, 1948

Oil & Gas Industries are not classified under Scheduled Employment as regards to The Minimum Wages Act, 1948 (Central) and are governed under Central Rules.

Question on Service Agency Classification

My question is: the Service Agency (Contractor) who is carrying out Operations & Maintenance jobs (Pipelines Maintenance) will fall under which category of industry for payment of Minimum Wages?

Scheduled Employment under The Payment of Minimum Wages Act, 1948 (Central)

The following industries are classified as Scheduled Employment under The Payment of Minimum Wages Act, 1948 (Central):

1. Agriculture
2. Mines
3. Construction / Maintenance of Roads and Building Operations & Runways
4. Employment in laying of underground electric, wireless, radio, television, telephone, telegraph and overseas communication, cables and similar other underground cabling, electric lines, water supply lines, and sewerage pipelines
5. Loading & unloading in Goodsheds, Parcel offices of Railways, other Goodsheds, Godowns, warehouses, and Docks & Ports
6. Housekeeping (Sweeping & Cleaning)
7. Watch & Ward (Security)

The agency is not carrying out any activities of Construction / Maintenance of Roads and Building Operations & Runways in the client's premises but is doing maintenance for their Stations & Pipelines in multiple states.

Client's Requirement for Minimum Wages

The client is insisting on paying the Minimum Wages as per the "Construction / Maintenance of Roads and Building Operations & Runways." Is it correct?

Provision under Minimum Wages Act

As far as my knowledge, there is a provision under the Minimum Wages Act for the classification of Industries known as Residuary Factories or Registered Factories which are not covered under any Classified Scheduled Employment. The Minimum Wages defined under this industry are payable to workmen.

Request you to kindly look into it and advise accordingly.

Thanks & Best Regards,

Suresh

Location: Thane, India

The classification of industries for the purpose of minimum wages is crucial in determining the applicable rates. In the context of the Oil & Gas industry, which is not specifically categorized under Scheduled Employment, the Service Agency (Contractor) engaged in Operations & Maintenance activities such as Pipelines Maintenance needs to be analyzed.

Considering that the Service Agency is not involved in Construction or Maintenance of Roads and Building Operations & Runways, and is primarily focused on maintaining Stations and Pipelines across multiple states, the client's insistence on applying the minimum wages related to Construction and Maintenance industries may not align with the actual nature of work being performed.

In such scenarios, where a specific industry classification is not available under the Scheduled Employment but the work falls under the broader scope of industrial activities, it is essential to refer to the provisions for Residuary Factories or Registered Factories as per the Minimum Wages Act. These categories encompass industries not covered under the explicitly listed Scheduled Employments.

Therefore, in the case described, if the Service Agency's operations do not fit within the defined Scheduled Employments but rather fall under a residual or unclassified category, the applicable minimum wages should be determined based on the provisions for Residuary or Registered Factories. It is advisable to review the specific guidelines and regulations under this classification to ensure compliance with the minimum wage requirements for the workmen involved in the Operations & Maintenance of Pipelines in the Oil & Gas sector.