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Saravana Rajan   04 August 2008

Minimum Wages - Vertically Integrated Setup

Dear Experts,

Pls throw some light on this.

Case : A manufacturing set up (for Ex apparel / garment making) is vertically integrated (End to End manufacturing process - from cotton - yarn - dyeing - fabric - cut - sew - pack)

This involved different activities like Spinning / Weaving / Dyeing / Washing / Stiching etc.

Query :

1. How to classify this set up based on industrial classification?

2. How to decide on minimum wages as there are different minimum wages based on the TRADE / INDUSTRY / PROCESS etc within a state ???

3. Can the set up have only one business license to operate?

Pls clarify.

-Saravana Rajan



 5 Replies

sangram (service)     04 August 2008

what co. is manufacturing and in which state?

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     04 August 2008

Mr.Saravana Rajan,

Section 3 of the Minimum Wages Act, 1948 explains about the "Fixing of Minimum RATES of wages". It provides that the appropriate govt. shall fix the minimum rates of wages payable to employees employed in an employement specified in Part - I or Part-II of the Schedule of the act. Besides these establishment/employements, the appropriate govt. State or Central Govt. may add any other employements under the purview of this act. Section 27 empowers to do so. Section 2 (g) defines " Scheduled employement".  "Sceduled Employement means an employement specified in the Schedule, or any process or branch of work forming part of such employment.

THE SCHEDULE (see section 2(g) and 27)

H. S. Thukral (Lawyer)     04 August 2008

The establishment would be a factory. All other departments  performing adminsitrative functions etc. shall also be classified as a factory. If the workers are employed exclusively in any trade within the factory and can be differentiated then minimum wages should be paid accoriding the vocation in which the workman is employed. . As the whole set up is one factory, one license shall be required.   

Saravana Rajan   05 August 2008

Thank you for the inputs.

-Saravana Rajan

Saravana Rajan   05 August 2008


I fully agree with you.Could you pls quote any court judgements in similar issues.
-Saravana Rajan

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