What is the maximum period in which the appropriate government shall review and revise the minimum rates of wages under the Minimum Wages Act, 1948 ?

Correct — D, (d) 5 years. The obligation is in section 3(1)(b) of the Minimum Wages Act, 1948, which directs the appropriate Government to 'review at such intervals as it may think fit, such intervals not exceeding five years, the minimum rates of wages so fixed and revise the minimum rates, if necessary'. Read that clause slowly, because it does two things at once. It leaves the Government free to choose how often it reviews — 'at such intervals as it may think fit' — and then puts a hard outer edge on that freedom, 'not exceeding five years'. The question asks for the maximum period, so five years is the number, and the other three options are all shorter than a limit rather than equal to one. The clause also pairs review with revision: the Government must look at the rates within five years, and revise them if the review shows revision is necessary. What it does not do is make rates lapse. The proviso to section 3(1)(b) protects rates that have run past the five-year mark — where for any reason the appropriate Government has not reviewed within that period, the rates already in force continue until they are revised — so the five years is a duty owed by the Government, not an expiry date stamped on the wage notification.

Why the others are wrong

• (a)2 years — Two years appears nowhere in section 3. The number that does belong nearby is two months, and it is easy to half-remember: under the notification method in section 5(1)(b), when the appropriate Government publishes its proposals in the Official Gazette it must specify a date, not less than two months from the date of the notification, on which the proposals will be taken into consideration. That is the time given to affected persons to make representations, not the review cycle.
• (b)3 years — Three years is not in the Act either. Three months is: a notification fixing or revising minimum rates under section 5(2) ordinarily comes into force on the expiry of three months from the date of its issue, unless the notification itself provides otherwise. A candidate carrying a vague memory of 'three' from the wage-fixing procedure can easily attach it to the wrong provision. Three years is also a plausible-sounding revision cycle because many state governments in practice revise far more often than the statute requires — but practice is not the statutory maximum.
• (c)4 years — Four years corresponds to nothing at all in the Minimum Wages Act, 1948, and it is the option in this set with no half-truth behind it. It sits in the list to make the sequence look like a smooth ladder from two to five, which is how numeric option sets on this paper are commonly built. When a numeric item offers consecutive years, the answer is usually the one that is quoted in the statute rather than the one that sounds like reasonable administrative practice.

The Minimum Wages Act, 1948 does not itself state any wage. It creates the machinery by which an 'appropriate Government' — the Centre for the employments in the central sphere, the State otherwise — fixes wages for the employments listed in the Schedule and keeps them current. Section 3(1)(a) is the fixing duty and section 3(1)(b) the reviewing duty, with its five-year outer limit; section 3(1A) allows the Government to refrain from fixing rates for a scheduled employment in which there are fewer than one thousand employees in the whole State, and requires it to fix them once that number is reached. Section 4 says what a minimum rate of wages may consist of — a basic rate with a cost-of-living allowance, a basic rate with or without that allowance plus the cash value of concessions, or an all-inclusive rate — which is why the variable dearness allowance component in the central sphere is revised half-yearly, with effect from 1 April and 1 October, on the movement of the consumer price index, quite independently of the five-yearly review of the rates themselves. Section 5 gives two procedures for fixing or revising: the committee method, in which the Government appoints committees and sub-committees to hold enquiries and advise it, and the notification method, in which proposals are published in the Official Gazette with at least two months for representations. Section 7 sets up the Advisory Board and section 8 the Central Advisory Board; section 9 fixes their composition, with employers and employees represented in equal numbers and independent persons not exceeding one-third of the total, one of whom chairs. Section 12 obliges the employer to pay not less than the minimum rate, section 13 lets the Government fix the normal working day and section 14 governs overtime; section 20 provides the claims machinery and section 22 the penalties. Section 27 lets the appropriate Government add employments to the Schedule, which is how the Act's coverage has grown.

Key facts

• Minimum Wages Act, 1948, section 3(1)(b): the appropriate Government shall review the minimum rates of wages at such intervals as it may think fit, such intervals not exceeding five years, and revise them if necessary.
• The proviso to section 3(1)(b) keeps rates in force where the review has not happened within five years, until they are revised — the delay does not invalidate the existing rates.
• Section 3(1A): the Government may refrain from fixing minimum rates for a scheduled employment with fewer than one thousand employees in the whole State, and must fix them once that number is reached.
• Section 4: a minimum rate of wages may be a basic rate plus a cost-of-living allowance, a basic rate with or without that allowance plus the cash value of concessions, or an all-inclusive rate.
• Section 5 supplies the two procedures — the committee method and the notification method, the latter allowing not less than two months for representations before proposals are considered.
• Section 9: committees and the Advisory Board carry equal numbers of employer and employee representatives, with independent persons not exceeding one-third of the total, one of whom is the Chairman.
• Section 27 empowers the appropriate Government to add an employment to Part I or Part II of the Schedule, which is how the Act's coverage expands.
• The Code on Wages, 2019 keeps the same outer limit: section 8(4) requires the appropriate Government to review or revise minimum rates of wages ordinarily at an interval not exceeding five years, and section 9 adds a floor wage below which no minimum wage may be fixed.

Common traps

• Reading five years as the required frequency of revision. The statute fixes a maximum interval; a Government that revises every year is fully compliant.
• Thinking a rate lapses if the five years pass without a review. The proviso to section 3(1)(b) keeps it in force until revised.
• Confusing the review interval with the procedural periods in section 5 — two months for representations, three months before a notification ordinarily comes into force.
• Assuming the Act itself prescribes a wage figure. It prescribes machinery; the figures live in notifications for each scheduled employment in each State.
• Assuming the same Government fixes wages for every employment. The 'appropriate Government' is the Centre for employments in the central sphere and the State for the rest, and the same occupation can carry different rates on either side of that line.

• practice — not a real PYQ

  Under section 5 of the Minimum Wages Act, 1948, the appropriate Government may fix or revise minimum rates of wages by which one of the following pairs of methods ?

  • (a)The committee method and the notification method
  • (b)The adjudication method and the arbitration method
  • (c)The collective bargaining method and the conciliation method
  • (d)The tribunal method and the referendum method

  Answer(a) The committee method and the notification method

• practice — not a real PYQ

  Under the Code on Wages, 2019, the appropriate Government shall review or revise minimum rates of wages ordinarily at an interval not exceeding :

  • (a)Two years
  • (b)Three years
  • (c)Five years
  • (d)Ten years

  Answer(c) Five years