Minimum wage should be the basis for compensation

Observing that the Minimum Wages Act was enacted to curb the exploitation of unorganised labour and to provide for a minimum living wage to unorganised labourers, Justice Nisha Banu said, “When the wages actually paid to an employee is lesser than the minimum wages and the employee also claimed lesser compensation based on the actual pay, it is the duty of the Commissioner to take into account only the minimum wages applicable to the workman for arriving at the quantum and he can also award excess to the claim.” 

The High Court was hearing an appeal filed under the Workmen’s Compensation Act, 1923, by a woman whose husband had passed away in 2007. At the time of his death, the deceased was drawing a salary of  Rs 2,500 per month while working for the Tamil Nadu Electricity Board. 

The Commissioner had taken this salary as the basis for awarding a compensation of Rs 2.02 lakh to the claimant, inclusive of funeral expenses. 

Disposing the appeal in favour of the claimant, the judge enhanced the compensation from Rs 2.02 lakh to Rs 3.22 lakh after holding that, “It is the duty of the employer to pay the minimum wages fixed under the Act from time to time. But when the wage paid is less than the minimum wage, the minimum wage should be reckoned as wages for compensation.”