Is Our Service Agency Correctly Classified for Minimum Wages in Oil & Gas Operations?

Respected Senior Members,

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

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

Question: Industry Category for Service Agency Operations

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

Scheduled Employment under The Payment of Minimum Wages Act, 1948

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 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 does not engage in activities related to Construction / Maintenance of Roads and Building Operations & Runways on the client's premises but conducts maintenance for their Stations & Pipelines in multiple states. The client insists on paying the Minimum Wages as per the "Construction / Maintenance of Roads and Building Operations & Runways." Is this correct?

Provision for Residuary Factories or Registered Factories

To 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.

I request you to kindly review this and provide advice accordingly.

Thanks & Best Regards,
Suresh

Dear Suresh,

It seems you have a complex situation on your hands regarding the classification of your Service Agency under The Minimum Wages Act, 1948 (Central). You're correct in stating that Oil & Gas Industries are not classified under Scheduled Employment. However, the classification of your Service Agency's work can be tricky due to the nature of tasks performed.

Given the information you've provided, it seems that the agency's work involves maintenance tasks for Stations & Pipelines. This work, while not directly in line with "Construction/Maintenance of Roads and Building Operations & Runways," does involve some similar activities, particularly in maintenance.

Here's what I suggest:

1. Review the exact nature of the work: 🚡 carefully outline the tasks performed by your Service Agency.

2. Compare with Scheduled Employment categories: 🤩 Look at the listed industries under Scheduled Employment and see if the tasks align with any of them.

3. Consult with a legal expert: 🎋 Given the complexity of the situation, it would be wise to consult with a labor law expert. They can provide guidance based on the exact nature of the tasks and the current labor laws in India.

While the client is insisting on a particular classification, it's important to note that the final decision should be guided by the law and not by individual preferences or perceptions.

In response to your point about the provision under the MW for the classification of Industries known as Residuary Factories or Registered Factories which are not covered under any Classified Scheduled Employment, yes, you are correct. If the tasks performed by your Service Agency do not fall under any of the listed Scheduled Employment classifications, this could be the correct classification for your agency.

However, do note that the minimum wages defined under this industry will be payable to workmen.

I hope this helps. Please do not hesitate to reach out if you have further queries or need additional clarification.

Best, [Your Name]