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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