Minimum Wages Act does not empower government to alter terms of contract

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In the case of Hindustan Sanitaryware and Industries Ltd & Ors v State of Haryana and Faridabad Industries Association v State of Haryana and Ors, the Supreme Court held that the government, in reconsidering minimum wages, should not exceed its jurisdiction and alter the provision of the contract between the employee and the employer. The court further held that fixing the training period and direction for payment of minimum wages to trainees are ultra vires the Minimum Wages Act, 1948 (act).

In the case, Haryana passed two notifications, dated 27 June 2007 and 21 October 2015, issued under section 5 (2) of the act. These were challenged on the ground that the provision for categorization of unskilled employees as semi-skilled and of semi-skilled employees as skilled on their acquiring experience of a certain number of years was beyond the jurisdiction of the government. It was also argued that the prohibition of segregation into components in the form of allowances was beyond the competence of the government.

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