PETITIONER: JAYDIP INDUSTRIES, THANA Vs. RESPONDENT: THE WORKMEN DATE OF JUDGMENT16/12/1971 BENCH: MATHEW, KUTTYIL KURIEN BENCH: MATHEW, KUTTYIL KURIEN VAIDYIALINGAM, C.A. CITATION: 1972 AIR 605 1972 SCR (2) 920 1972 SCC (3) 302 CITATOR INFO : R 1974 SC 526 (14) ACT: Industrial Tribunal-Jurisdiction to fix minimum wages at rates higher than those fixed by government during pendency of industrial dispute-Minimum Wages Act 1948 S. 3(2A). Industrial dispute-Minimum wages, what is. HEADNOTE: During the pendency of an industrial dispute between the appellant and its workmen, arising out of the demand of the workmen for higher scales of pay, the appropriate government fixed under section 3 of the Minimum Wages Act, 1948, the minimum rates of wages for the employees employed in scheduled employments including the appellant's industry. The tribunal found that the appellant concern was not finan- cially stable. It fixed the minimum wages at rates higher than the rate fixed by the government. In its award the tribunal referred to the minimum rates of wages fixed in the several awards passed by it from 1962 onwards and also considered the rist in the cost of living. It also took into account the consumer price index for the month of December, 1966, and that for the month of January, 1967, for coming to the conclusion that rates higher than those specified in the notification published by government should be fixed as minimum wages. On the questions whether the tribunal was right in fixing wages at rates higher than the rates fixed by the government under s. 3 of the Act and whether what was fixed by the tribunal were minimum wages, HELD : (i) Sub-section (2A) of section 3 makes it clear that even after the fixation of minimum rates of wages by the appropriate government under s. 3 of the Act, it is open to an Industrial Tribunal adjudicating an industrial dispute relating to wages payable to the employees in a scheduled employment to fix minimum wages at higher or lower rates, if the dispute was pending at the time of fixation of minimum ages under s. 3. [924 G] (ii ) Minimum wages can provide not only for the sustenance of life, but also for the preservation of the efficiency of the worker. The rates of wages fixed by the tribunal were neither fair wages nor wages bordering on fair wages. They were minimum wages as explained by this Court. As such the capacity of the industry to pay was not a relevant consideration. [925 F] U. Unichovi v. State of Kerala. [1962] 1 S.C.R. at p. 957, applied. The tribunal was not wrong in taking into account the rates of minimum wages fixed in the several awards for the workmen employed in the city of Bombay as affording criteria for fixing minimum rates of wages with suitable modification for the workmen employed under the appellant. [926 E] JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 912 of 1967.
921
Appeal by Special Leave from the Award dated March 3, 1967
of the Industrial Tribunal, Maharashtra, Bombay in Reference
(IT) No. 1 of 1968.
I. N. Shroff for the appellant.
The Judgment of the Court was delivered by
Mathew, J. This appeal Mathew, j. This appeal, by special
leave, is from an award passed by the Industrial Tribunal,
Maharashtra, Bombay, on March 3, 1967.
The Government of Maharashtra referred to the Tribunal on
December 31, 1965, under section 10(1) (d) of the industrial
Disputes Act, 1947, the industrial dispute between M/s.
Jaydip Industries, Thana, and the workmen employed under
them, arising out of the following demands made by the
workmen
(A) Following monthly scales of pay should be introduced
for all categories of workmen :
Rs.
Unskilled 150-5.00-200.00
Semi-skilled 175-7.50-250.00
Skilled 225-10.00-325.00
Highly skilled 350-25.00-600.00
(B) The above scales of pay are
consolidated and are on the basis of Bombay
Working Class Cost of Living Index Number 480.
In case if index number move above 480 for
every point rise in Index Number, workmen
should be paid ten paise per day as dearness
allowance.
(C) The above rates of pay should be made
effective from 1st February 1965.
(D) For the conversion of present daily
rates into monthly rates, the present rate
should be multiplied by thirty. The amount
should then be fitted in the above grades.
If the amount fells short of minimum of Grades
demanded the same should be brought up to the
minimum.
(E) After making adjustment in the above
manner adjustment increments at ‘the rate of
one for every one year of service or part
thereof in excess of six months should be
added to the pay.
922
The employer is a partnership concern consisting of five
partners and is carrying on the business of manufacturing
“paper board”, at its factory situated in Majiwada within
the limits of the panchayat of that village. The
partnership was started in the year 1959, on a capital of
Rs. 1,50,0001-. The capital has since then been increased
and it was Rs. 2 lakhs in 1965. The number of workmen
employed in the concern, at the time of the reference, was
about 150. The workmen were being paid fixed consolidated
wages.
The employer contended before the Tribunal, by its written
statement dated February 8, 1966, that it has no financial
capacity to pay any additional wages, as it has been
suffering heavy losses year after year.
During the pendency of the disputes before the Tribunal, the
Government of Maharashtra fixed the minimum rates of wages
for the employees employed in scheduled employments
including the paper and paper-board manufacturing industry
under section 3 of the Minimum Wages Act, 1948, hereinafter
called the Act, by notification published in the Maharashtra
Government Gazette dated August 4, 1966. In implementation
of the notification, the wages of the workmen concerned were
raised with effect from October, 1966. The workmen were
being paid wages at the following rates, before the date of
the award, in pursuance of the notification :-
Unskilled Rs. 90 per month
Semi-skilled Rs. 100 per month
Skilled-B Rs.115 per month
Skilled-A Rs. 130 per month
The Tribunal considered in detail the financial capacity of
the employer on the basis of the balance sheets and profit
and loss accounts of the employer for the years 1960 to 1965
and found that its total loss for those years amounted to
Rs. 78,000′ and on that basis its annual average loss worked
out to Rs. 13,000 and so the concern was not financially
stable. The Tribunal then came to the conclusion, on the
basis of the minimum rates of wages fixed by it in the
awards in the case of M/s. Kondivitta Paper and Board Mills
(Private) Limited, Bombay, published in Maharashtra
Government Gazette, dated November 14, 1963, page 3750), in
the case of Bombay Metal Factory, published in the
Maharashtra Government Gazette dated May 27, 1965 (page
1963), and in the case of Ratan Industries, Bombay,
published
923
in Maharashtra Government Gazette dated June 23, 1966 (page
1974), that the rates of wages for the workmen employed in
question should be fixed at the following rates:-
Daily-rated Monthly-rated
Unskilled Rs. 4 .50 Un-skilled Rs. 117.00
Semi-skilled Rs. 6 .00 Semi-skilled Rs. 156.00
Skilled Rs. 7 .50 Skilled Rs. 195.00
Highly-skilled Rs. 9 -50 Highly-skilled Rs. 247.00
and said that
“The above wage rates shall be deemed to be
fixed as at Bombay Consumer Price Index figure
660. For a rise of every ten points in the
Index Figure the workmen shall be given an
increase in the wages at the rate of seven
paise per day. And for a fall of every ten
points in the Index Figure there shall be a
reduction in the wages at the rate of seven
paise per day.”
The Tribunal also held that wages it fixed were the minimum
rates of wages for the workmen in question and therefore,
the capacity of the employer to pay was irrelevant.
It was argued for the appellant that the Tribunal was wrong
in fixing minimum wages at higher rates than those fixed by
the Government under section 3 of the Act without taking
into account the financial capacity of the employer to pay.
In other words, the argument was that when once the
appropriate Government has fixed minimum rates of wages in
the employment under section 3 of the Act, it was not open
to the Tribunal to fix higher rates of wages as minimum
wages and, therefore, the rates of wages fixed by the
Tribunal were not minimum wages, but fair wages, or at any
rate wages bordering on fair wages, and so, the financial
capacity of the employer to bear the additional burden
should have been taken into account.
The short question for consideration, therefore, is whether
the Tribunal was right in fixing wages at rates higher than
the rates fixed by the Government under section 3 of the
Act, and whether what was fixed by the Tribunal were minimum
wages.
Section 3(1) of the Act provides that the appropriate
Government may fix the minimum rates of wages payable to em-
ployees employed in employments specified in Part I or Part
R of the Schedule thereof and in any employment added to
either
924
part by notification under section 27. By clause (b) of
section 3(1), the appropriate Government is given power 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. Sub-
section (2A) of section 3 provides
“(2A) Where in respect of an industrial
dispute relating to the rates of wages payable
to any of the employees employed in a
scheduled employment, any proceeding is
pending before a Tribunal or National Tribunal
under the Industrial Disputes Act, 1947, or
before any like authority under any other law
for the time being in force, or an award made
by any Tribunal, National Tribunal or such
authority is in operation, and a notification
fixing or revising ‘the minimum rates of wages
in respect of the scheduled employment is
issued during the pendency of such proceeding
or the operation of the award, then,
notwithstanding anything contained in this
Act, the minimum rates of wages so fixed or so
revised shall not apply to those employees
during the period in which the proceeding is
pending and the award made therein is in
operation, or, as the case may be, where the
notification is issued during the pe
riod of
operation of an award, during that period; and
where such proceeding or award relates to the
rates of wages payable to all the employees in
the scheduled employment, no minimum rates of
wages shall be fixed or revised in respected
that employment during the said period.”
It is, therefore, clear that the minimum wage can provide
ceedings before the Tribunal that the notification by the
Maharashtra Government fixing minimum rates of wages came
into operation. The sub-section would make it clear that
even after the fixation of minimum rates of wages by the
appropriate Government under section 3 of the Act, it is
open to an Industrial Tribunal adjudicating an industrial
dispute relating to wages payable to the employees in a
scheduled employment to fix minimum wages at higher or lower
rates, if the dispute was pending at the time of fixation of
minimum wages under section 3 of the Act. So it was open to
the Tribunal to fix rates of minimum wages at rates higher
than the rates fixed by the Government under section 3 of
the Act. In other words the Tribunal was not bound by the
fixation of the minimum rates of wages by the Government
under the provisions of section 3 of the Act and could fix
higher rates as minimum wages in its award.
925
In considering the question what are the component elements
of minimum wages, this Court observed as follows in U.
Unichoyi v. State of Kerala(1): –
“Sometimes the minimum wage is described as a
bare minimum wage in order to distinguish it
from the wage structure which is ‘subsistence
plus’ or fair wage, but too much emphasis on
the adjective ‘bare’ in relation to the
minimum wage is apt to lead to the erroneous
assumption that the maintenance wage is a wage
which enables the worker to cover his bare
physical needs and keep himself just above
starvation. That clearly is not intended by
the concept of minimum wage. On the other
hand, since the capacity of the employer to
pay is treated as irrelevant, it is but right
that no addition should be made to the
components of the minimum wage which would
take the minimum wage near the lower level of
the fair wage, but the contents of this
concept must ensure for the employee not only
his subsistence and that of his family but
must also preserve his efficiency as a worker.
The Act contemplates that minimum wage rates
should be fixed in the scheduled industrial
with the dual object of providing sustenance
and maintenance of ‘the worker and his family
and preserving his efficiency as a worker.”
It is, therefore, clear that the minimum wage can provide
not only for the bare sustenance of life but also for the
preservation of the efficiency of the worker. We do not
think that the rates of wages fixed by the Tribunal were
fair wages or wages bordering on fair wages. The Tribunal
has referred to The minimum rates of wages fixed in the
several awards passed by it from 1962 onwards, and also
considered the rise in the cost of living. In particular,
the Tribunal was careful to take into account the Consumer
Price Index for the month of December, 1966. and that for
the month of January, 1967, for coming to the conclusion
that rates higher than those specified in the notification
published by Government should be fixed as minimum wages.
As the rates fixed by the Tribunal were minimum rates of
wages as explained in the case of U. Unichoy v.State of
Kerala(1), we do not think that the capacity of the industry
to pay was a relevant consideration.
There was also no material before the Tribunal to come to
the conclusion that the Government in fixing the minimum
rates of wages, took into consideration all the components
in the fixation
(1) [1962] 1 S.C.R. 957.
926
Of minimum wages as explained by this Court in U. Unichoyi
v. State of Kerala(1).
In the light of the provisions of section 3 (2A) of the Act,
we hold that the Tribunal was not bound by the rates of
minimum wages fixed by the Government under section 3 of the
Act and that it was open to the Tribunal to fix rates of
minimum wages to be paid to the workmen concerned in the
disputes at figures higher than those fixed by the
Government.
It was contended on behalf of the appellant that the
employer has his place of business outside the city of
Bombay and that in the city of Bombay, the wages for workmen
are generally higher than those outside the city, and
therefore, the Tribunal went wrong in taking the minimum
rates of wages fixed in the various awards for workmen in
the city of Bombay as criteria for fixing the minimum wages
for workmen outside the city. The Tribunal considered this
question and held that the rates of minimum wages fixed by
the Government for the city of Bombay, the town of Thana and
also for the village of Majiwada, where the appellant’s
factory is situate, are the same and so, the rates of wages
at Majiwada are not lower than the wage rates obtaining in
the city of Bombay and Thana. We do not, therefore, think
that the Tribunal went wrong in’ taking into account the
rates of minimum wages fixed in the several awards for the
workmen employed in the city of Bombay as affording criteria
for fixing minimum rates of wages with suitable modification
for the workmen employed under the appellant.
We dismiss the appeal but, since there is no appearance for
the respondent, we make no order as to costs,.
K.B.N. Appeal dismissed.,
(1) [1962] 1 S.C.R. 957
927