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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

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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

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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

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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

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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.

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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