The current appeals stem from proceedings initiated by employees under the Minimum Wages Act of 1948, who continued their employment following the prohibition notification issued under the Contract Labour (Regulation ...
No Acts & Articles mentioned in this case
REPORTABLE
IN THE SUPERME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). 8094 OF 2011
STEEL AUTHORITY OF INDIA LTD. & ANR. …..Appellant(s)
VERSUS
JAGGU & ORS. ETC. .Respondent(s)
WITH
CIVIL APPEAL NO(s). 8334 OF 2011
J U D G M E N T
Rastogi, J.
1.The present appeals arise from the proceedings initiated by
the workers under the Minimum Wages Act, 1948 who had been
in employment after issuance of the prohibition notification dated
17
th
March 1993 under the Contract Labour(Regulation and
Abolition) Act, 1970(hereinafter being referred to as “CLRA Act”)
1
upto April, 1996 in the captive mine of the Steel Authority of
India(hereinafter called as “SAIL”) in Kuteshwar Limestone
Mines(Barhi), Gairtalai, Distt. Jabalpur.
2.The indisputed facts which has come on record are that
after issuance of the prohibition notification dated 17
th
March,
1993 by the appropriate Government under Section 10(1) of the
CLRA Act,1970 no fresh agreement, in the interregnum period
(17
th
March, 1993 to April, 1996) was executed between the
appellant and the contract labour and the agreement in existence
was extended from time to time by the competent authority and
the contract labour was allowed to continue on the same terms &
conditions till their services were terminated by the contractor
after they had proceeded on strike in the month of April, 1996.
3.The contract labours (2040 employees) of Kuteshwar
limestone mines who had worked in the establishment of SAIL
after issuance of the prohibition notification dated 17
th
March,
1993 filed their claim applications in the year 1998 on different
dates under Section 20(1) of the Minimum Wages Act, 1948.
2
4.Before we advert to the question raised in the instant
appeals, it may be relevant to take the brief history of the matter
for proper appreciation. The erstwhile contract
labourers(respondents herein) worked at the captive Limestone
and Dolomite mines in the establishment of the appellant SAIL
initially filed writ petitions claiming regularisation with back
wages in view of the law laid down by three Judge Bench of this
Court in the case of Air India Statutory Corporation and
Others Vs. United Labour Union and Others
1
wherein it was
held that on issuance of prohibition notification under Section
10(1) of the CLRA Act, the logical and legitimate consequences
would be that the erstwhile contract labourer covered by the
sweep of such abolition for the activities concerned would be
entitled to be treated as direct employee of the employer on
whose establishment they were earlier working and they would be
entitled to be treated as regular employees from the day on which
the contract labour system in the establishment for the work
which they were doing gets abolished. The aforesaid judgment of
1 1997(9) SCC 377
3
this Court was subsequently overruled by the Constitution Bench
of this Court in Steel Authority of India Ltd. and Others Vs.
National Union Waterfront Workers and Others
2
.
5.The Single Judge of the High Court earlier allowed the writ
petitions but the matter was finally remitted back to the High
Court to decide as per the law laid down in the Constitution
Bench judgment of this Court in Steel Authority of India Ltd.
and Others(supra).
6.It is to be noted that the application filed by Jaggu was
considered to be the lead application which has been placed on
record (Annexure P1 of the paper book) and the only fact stated
by him in the application was that the applicant was employed in
the Captive Mine of the SAIL in Kuteshwar Limestone
Mines(Barhi), Gairtalai, Distt. Jabalpur on 1
st
September, 1984
and was still in that employment at the time of filing of an
application and worked as a skilled workman and was working as
Sikor/Loader/Suitor/Rake Loader and that the employment of
Kuteshwar Limestone Mines is a scheduled employment within
2 2001(7) SCC 1
4
the meaning of Section 2(e ) of the Minimum Wages Act, 1948
and rates of wages of the workers of SAIL are governed by various
settlements/agreements entered into between the management
and the Union which are legally binding and are the wages to
which employees of SAIL are entitled on the basis of contract of
service, agreement and/or otherwise.
7.The extract pleadings of his application on the basis of
which he claimed wages and other benefits payable to an
employee vis
àvis those who are regular employee employed in
SAIL are as under:
“1.The applicant is employed in the Captive Mine of the
Steel Authority of India (hereinafter called as SAIL’) in
Kuteshwar Limestone Mines (Barhi), Gairtalai, Distt.
Jabalpur from 01.09.1984 and is still in employment.
He is a skilled workman and is working as
Sikor/Loader/Suitor/Rake Loader.
6.The rates of wages of workers of Steel Authority of
India are governed by various settlements/Agreements
entered into between the management and the Union
which are legally binding and is the wages to which
employees of Steel Authority are entitled on the basis
of contract of services, agreement and or otherwise.
The Applicant is entitled to wages and all other benefits
as per settlement. The agreement also prohibit
employment of contract labour on job of permanent
and perennial nature.
7.The management/opponent has been reusing to
make payment to the employees as per wage
agreement which is their minimum wages Sri
5
Bachchan Nayak and other office bearers of the
Applicant’s Union repeatedly represented the matter of
the Assistant Labour Commissioner, Chief Labour
Commissioner Secretary, Ministry of Labour, Hon’ble
Minister for Steel, Chairman, Steel Authority of India
and even the Prime Minister, for payment of wages as
regular employees. Because of the strong and
persistent opposition of one of the opponent, Minimum
Wages is denied to the Applicant.
12. The applicant has been reporting for work on
all the working days from 17/3/1993 onwards.
However, after May, 1996 he was refused work even
when the reports for duty. The applicant was always
ready and willing to work. There was no termination of
services of the applicant. The applicant will be deemed
to be in service and entitled to all the benefits,
including wages.
16. The applicant has not been paid the wages as
per Minimum Wages from 17/3/1993. The exact
figures of amount due i.e. difference etc. are available
with the management and within their special
knowledge. The opponents are in possession of all the
records and details of the payment due as per wage
agreement and other details. They are liable to produce
the same before this Hon’ble Authority to make
appropriate and proper calculation. In case they fail to
produce the documents an adverse inference is liable
to be taken against them.
17. The applicant therefore pray that a direction
may be issued under Section 20 [3] of the Act for:
[i]payment of difference of wages payable
under the Minimum Wages Act and the
wages actually paid as per details given in
AnnexureA.
[ii]compensation of 10 times amounting to
Rs. 24,86,13000.
[iii]delay if any, in filing the petition may be
condoned.”
6
8.The complaint of the applicant Jaggu (annexure P1) in his
application under Section 20(1) of the Minimum Wages Act, 1948
before the prescribed authority of which a reference has been
made, appears to be that the rates of wages of SAIL which were
governed by various settlements/agreements entered between the
management and the registered Union of regular employees of
SAIL are legally enforceable and the applicant is also entitled to
the wages and such other service benefits as per those
settlements after a prohibition notification has been published by
the appropriate Government under Section 10(1) of the CLRA Act.
9.The matter was contested between the parties and the
prescribed authority after holding a summary enquiry as
contemplated under the Minimum Wages Act, 1948 under its
Order dated 2
nd
December, 2003 allowed the claim petitions with
five times of compensation in favour of 2040 contract employees
who have been represented by Ispat Khadan Janta Mazdoor
Union, Koteshwar Limestone Mine, Gairtalai, Katni.
10.The order of the Payment of Wages Authority dated 2
nd
December, 2003 came to be challenged by the appellant SAIL by
7
way of writ petition before the Single Judge of High Court of
Madhya Pradesh at Jabalpur which was partly allowed vide Order
dated 24
th
January, 2006 holding that the justice would be met if
the respondents(employees) are allowed 6% interest on the
amount payable to each of them as compensation from the date
of passing of the impugned order of the authority till its payment.
It was further challenged before the Division Bench of the High
Court that came to be dismissed vide impugned judgment dated
11
th
December, 2006 with a modification that instead of grant of
6% interest as compensation, a consolidated sum of Rs. 5 crore
be paid towards compensation to the aggrieved employees, which
is a subject matter of challenge in these appeals before us.
11.Learned senior counsel for the appellants Mr. Ranjit Kumar
and Mr. Parag P. Tripathi submit that the parity of wages was
one of the issue nos. 5 & 6 based on the pleadings of the parties
framed by CGIT pursuant to the reference made by the
appropriate Government and both the issues have been
negatively answered under its award dated 16
th
September, 2009
holding that respondents are not entitled to wages as per
National Joint Committee for the Steel Industries(NJCS) vide
8
memorandum of agreement dated 30
th
July, 1975 which is
applicable only to direct/regular employees of SAIL.
12.The submission of the learned counsel is that at least the
parallel proceedings which are summary in nature initiated
under the Minimum Wages Act, 1948 keeping the reference made
for adjudication to the CGIT at bay were unwarranted and
despite their objection being raised, it was overruled and the
applications of the workmen came to be decided under Order
dated 2
nd
December, 2003 by the prescribed authority under the
Minimum Wages Act, 1948 which was without jurisdiction and
such applications filed at the instance of the workmen was not
maintainable under the law.
13.Learned counsel further submits that it is nowhere pleaded
by the respondents that the principle of equal pay for equal work
was applicable and they were entitled for the wages payable to
the regular employees on the basis of Rule 25(2)(v)(a) of the CLRA
Rules, 1971. The burden to prove was on the respondents to
show that the contract labour was discharging the same and
similar nature of duties and work as performed by the regular
9
employees of the establishment but such facts were neither
pleaded nor established by the respondents either before the
prescribed authority or before the High Court in writ
petition/letters patent appeal and has not adverted to any finding
that the respondents were performing same or similar nature of
work as that of the regular employees of the appellant SAIL. In
the absence thereof, the contract labour was not entitled for the
wages payable to the employees who were directly employed by
the SAIL for a work which is neither same nor similar as being
performed by the respondent contract labourers.
14.Learned counsel further submits that the tripartite
agreement which was entered between the contract labourers,
contractor and appellant SAIL in presence of the labour
authorities dated 12
th
November, 1991 specifically takes care of
the Rule 25(2)(iv) & (v) of the CLRA Rules, 1971 and indisputedly,
each of the worker was paid Rs. 11.65/ per day over the
minimum wages notified by the appropriate Government, as
agreed between the parties. The tripartite agreement was
effective from 1
st
April 1991 although it was entered on 12
th
10
November, 1991 but wages were paid to each of the contract
worker in terms of the tripartite agreement.
15.Learned counsel submits that it was never the case of the
respondents that the tripartite agreement dated 12
th
November,
1991 has not been complied with. In fact, the arrears were paid
over the minimum wages notified by the appropriate Government
in terms of Rule 25(2)(v)(a) of the CLRA Rules, 1971 and
appellant became liable to pay the minimum wages agreed in
terms of the agreement after issuance of the prohibition
notification under Section 10(1) of the CLRA Act, since the
contract stood automatically extinct, it became the liability of the
employer to see that every workmen who is working thereafter
must have been paid his due wages in terms of the agreement
which has been signed in presence of the concerned labour
authorities dated 12
th
November, 1991 and binding upon the
parties.
16.Learned counsel for the appellants further submits that in
sequel to the notification dated 12
th
November, 1991, the Ministry
of Labour, Government of India, vide its notification dated 12
th
11
July, 1994 revised the minimum rate of wages payable to the
workers employed in the mines appended Clause 5 to the
explanation that in case the existing rates of wages of any
employee as per agreement are more than the minimum notified
rates shall be protected and be treated as the minimum rates of
wages and that according to the appellants have been paid to
each of the workmen who had served the establishment of the
appellants after issuance of the prohibition notification dated 17
th
March, 1993 till their services came to be terminated by the
contractor in April 1996.
17.Learned counsel further submits that the State of Madhya
Pradesh under its Act No. 23 of 1961 has made certain
amendments to the Minimum Wages Act, 1948. These
amendments as explained in its object and reasons was enacted
as validating legislation. The validation arose in the context of
the High Court of Rajasthan quashing its notifications pertaining
to fixing of minimum rates of wages. The said amendment Act is
merely to validate fixation and has no applicability to the dispute
having raised by the respondents in the proceedings initiated
under the Minimum Wages Act, 1948 and in support thereof,
12
learned counsel has placed reliance on the judgment of this
Court in Town Municipal Council, Athani Vs. The Presiding
Officer, Labour Courts, Hubli and Others, Etc.
3
; BHEL
Workers Association, Hardwar and Others Vs. Union of
India and Others
4
and Hindustan Steel Works Construction
Ltd. Vs. Commissioner of Labour and Ors.
5
.
18.Per contra, Mr. Colin Gonsalves, learned senior counsel for
the respondents in support of the judgment of the High Court
submits that after issuance of the prohibition notification dated
17
th
March, 1993, it is an admitted position that the contract
labourers had continued to work in the same capacity in the
establishment of SAIL and that would make them entitled for the
wages which are being notified by the SAIL from time to time
payable to its regular employees for the period the contract
labour had worked after the issuance of prohibition notification
dated 17
th
March, 1993 till April, 1996 and clause(v) of the
notification prescribing minimum wages dated 6
th
March, 1990
and 12
th
July, 1994 clearly stipulates that the existing rate of
3 1969(1) SCC 873
4 1985(1) SCC 630
5 1996(10) SCC 599.
13
wages to any employee based on contract or agreement or
otherwise if higher than the rates notified herein, the higher rate
shall be protected and be treated as rate of wages payable for the
purpose of its notification and once this fact has been admitted
that there was an agreement entered into between union of
regular employees and the management of the establishment, at
least the lowest rate of wages in the establishment of the
appellant payable to a regular and permanent employee became
the benchmark of minimum wages payable to the contract labour
who had worked in the establishment of the appellant SAIL as an
employee after issuance of notification dated 17
th
March, 1993
until termination of service and this what the prescribed
authority under the Minimum Wages Act, 1948 has computed
towards arrears of each of the 2040 employee who have, inter
alia, filed applications for legitimate wages under the Minimum
Wages Act, 1948.
19.Learned counsel further submits that as regards their
absorption and regularisation of service, it was indeed a subject
matter of adjudication in a reference made by the appropriate
Government under its notification dated 27
th
January, 2003
14
followed with 22
nd
February, 2005 but so far as their minimum
wages payable to the employees are concerned, it was an
independent issue having no relationship to the terms of
reference pending before the CGIT at the relevant point of time
and after issuance of prohibition notification dated 17
th
March,
1993 under CLRA Act, such of the contract workers who had
served thereafter in the establishment of the appellants became
their employee and can no longer be treated as contract workers.
20.Learned counsel submits that after the contract of service
agreement stands extinguished indisputedly the work discharged
by the employees(earlier contract workers) is same and similar as
of the regular employees and it is not open for the appellant to
have two different wage structures for the employees of the
establishment of SAIL and it was indeed arbitrary and violative of
Article 14 & 39(d) of the Constitution of India and the wage
structure applicable to the employees of SAIL has rightly been
extended by the prescribed authority under the mandate of the
Minimum Wages Act, 1948 and since the respondents have
demanded lowest rate of wages in terms of settlements dated 6
th
March, 1990 and 12
th
July, 1994, no further finding was required
15
to be recorded with respect to the same or similar nature of work
being discharged and at least those rates of wages are applicable
to the present employees(earlier casual labourers) and this what
has been computed by the prescribed authority under the
Minimum Wages Act and confirmed by the High Court under the
impugned judgment and in support of submission, learned
counsel has placed reliance on the judgment of this Court in
BHEL Workers Association, Hardwar and Others (supra).
21.We have heard learned counsel for the parties and with
their assistance perused the material available on record.
22.To appreciate the rival submissions made by the respective
counsels, it is considered appropriate to first take note of the
indisputed facts and the scheme of the Minimum Wages Act,
1948 & CLRA Act emerged from the records are that the
appellant SAIL is a Government of India Undertaking and is a
State within the meaning of Article 12 of the Constitution of India
having its steel plants in different parts of India and was a
registered establishment under Section 7 of the CLRA Act and the
contractor through whom the service of the contract labour was
16
engaged was holding its licence as envisaged under Section 12 of
the CLRA Act. The tripartite memorandum of settlement dated
12
th
November, 1991 which became effective from 1
st
April, 1991,
was signed by the appellant, contractor and the respondent
through Union before the Assistant Labour Commissioner
(Central), Jabalpur. Under the said settlement, it was agreed
that the contract labour would be paid Rs. 11.65/ per day over
and above the minimum wages notified by the appropriate
Government under the Minimum Wages Act, 1948. Indisputedly,
each of the member of the union was paid his wages in terms of
the memorandum of settlement dated 12
th
November, 1991. At
the later stage, the appropriate Government issued a prohibition
notification of employment of contract labour dated 17
th
March,
1993 and the fact remains that the contract labour which was
engaged prior to the prohibition notification was allowed to
continue in the establishment of the appellant(SAIL) on the same
terms and conditions with no change in their service conditions
under the agreement which was executed prior to the prohibition
notification dated 17
th
March, 1993, was extended from time to
time by the competent authority and the services of the contract
17
labour came to be terminated by the respective contractor in the
month of April, 1996 after they went on strike.
23.After discontinuance of the service of the contract labour by
the respective contractor in April, 1996, 2040
employees/contract labour through their union filed their
respective applications in the year 1998 under Section 20(1) of
the Minimum Wages Act, 1948 before the prescribed authority to
claim parity with the wages payable to the employees who were
direct/regular employees of the establishment of SAIL under the
Minimum Wages Act.
24.After issuance of a prohibition notification under the CLRA
Act dated 17
th
March, 1993, the erstwhile contract
labourers/respondents herein filed writ petitions to claim
regularisation of service and backwages in view of the law laid
down by three Judge Bench of this Court in Air India Statutory
Corporation and Others case(supra) wherein it was held that on
issuance of prohibition notification under Section 10(1) of the
CLRA Act, the logical and legitimate consequences were that the
erstwhile regulated contract labourer covered by the sweep of
18
such abolition for the activities concerned would be entitled to be
treated as direct employee of the employer on the day on which
the contract labour system in the establishment has been
abolished. But the theory of automatic absorption of contract
labour by the principal employer in the establishment on
issuance of a notification by the appropriate Government under
Section 10(1) of the Act was later overruled by the Constitution
Bench of this Court in Steel Authority of India Ltd. and
Others(supra).
25.It is necessary to point out that Ministry of Labour,
Government of India vide its notification dated 12
th
July, 1994,
while revising minimum rate of wages payable to the employees
employed in the mines had also specifically mentioned in clause
5 to the explanation that in case the existing rate of wages of any
employee as per the agreement are higher than the minimum
rates, the higher rates shall be protected and treated as
minimum rates of wages. Relevant para of the said notification is
quoted herein as under:
“Where the existing rates of wages of any employee,
based on contract or agreement or otherwise are higher
than the rates notified herein, the higher rates shall be
19
protected and treated as the minimum rates of wages
applicable for the purpose of this notification to such
employees.”
26.Such rate of wages as agreed in its tripartite agreement
dated 12
th
November, 1991 were paid at Rs. 11.65/ per day over
and above the minimum wages with effect from 1
st
April, 1991
and that was indisputedly complied with and each of the
employee (contract labour) who had served/worked in the
establishment had been paid his due wages until their services
came to be terminated by the respective contractors in April,
1996.
27.The claim of the respondents in their application filed under
Section 20(1) of the Minimum Wages Act, 1948 was that as they
had discharged the same or similar nature of work as that of
direct employee of the establishment, it makes them entitled for
the wages which are payable to an employee who is
directly/regularly appointed in the establishment to whom wages
are paid in terms of NJCS memorandum of Agreement dated 30th
July, 1975.
20
28.It is to be noted that National Joint Committee for the Steel
Industry (NJCS) started its functioning initially in the name of
JWNC(Joint Wage Negotiating Committee) in October 1969 and
was primarily established in pursuance of the decision taken by
the industrial committee on iron & steel in October, 1969. The
Committee has now changed its name as National Joint
Committee for the Steel Industry (NJCS). The scope of the NJCS
presently covers :
i) Negotiations for wage agreement and its
implementation.
ii)Matters pertaining to and steps to be taken for
increase in production, productivity, improvement
in quality, reduction of cost and wastage etc.
iii)Review of welfare amenities and facilities.
iv)Matters on which it is necessary to draw the
attention of the government; and
v) Any other matter pertaining to steel industry and
its employees as may be agreed to in the NJCS,
from time to time.
29.The membership of NJCS comprises 21 union leaders three
each from four national centres of trade unions: INTUC, AITUC,
CITU and HMS, one each from recognized unions of the steel
plants like Bhilai, Durgapur, Rourkela, Bokaro, TISCO, IISCO,
Alloy Steels, Salem and VISL, and 12 management staff
21
managing directors of the steel plants of Bhillai, Rourkela,
Durgapur, Bokar and IISCO, Bumpur; executive directors of Alloy
Steels Plant, Salem Steel Plant and VISL; VicePresident(HRM),
TISCO; ViceChairman and Directors(Finance) of SAIL. The
Director(Personnel) of SAIL is the ConvenorMember of the
Committee. It is a permanent bipartite committee whose scope
extends beyond wage negotiations to implementation aspects and
other matters of concern to the industries and its employees. It
is applicable to the wage structure across the steel industries in
the country.
30.It may be noticed that there are no pleadings on record and
primarily the burden was on the respondent applicants to
establish that the duties discharged by each of the employee was
same or similar to that of a regular/direct employee
appointed/employed by the establishment and this can be
discerned from the facts pleaded in the application filed by one
Jaggu of which a reference has been made. In absence of the
initial burden being discharged in the first instance by the
respondent employees, the onus could not have been shifted
upon the appellant SAIL to counter the nature of work
22
discharged by each of the workmen as to whether it was the
same or similar to that of a permanent/regular employee of the
establishment and how far the principles of equal pay for equal
work claimed as enshrined under Article 14 and 39(d) of the
Constitution of India would be attracted in the facts of the case.
31.In this backdrop of the matter, it would be apposite to first
take note of the scheme of the Minimum Wages Act, 1948. If we
look into the objects and reasons of the scheme of the Act, it
clearly manifests that the main object of the Act is to provide
minimum rates of wages for certain scheduled employment and
also provides for fixation and revision of minimum wages of the
workers, overtime rates, remuneration for the work done on a day
of rest, just to ensure that the employee has enough to provide to
his family and to ensure a decent living standard that pertains to
a social comfort of the employee and the cost of living index. The
procedure for fixing and revising minimum rate of wages, which
has to be prescribed, is supported by the recommendation of
Advisory Committees/Advisory Board/ Central Advisory Board
being constituted under Sections 7 and 8 of the Minimum Wages
Act, 1948 and the appropriate Government on its acceptance
23
notified the minimum wages which are payable to the category of
employees referred to under Section 2(i) of the Minimum Wages
Act, 1948.
32.Indisputedly, in the first place, the minimum wages which
were notified by the appropriate Government from time to time
under tripartite memorandum of agreement dated 12
th
November,
1991, signed by the appellant SAIL and the respondents before
the Assistant Labour Commissioner(Central), Jabalpur effective
from 1
st
April, 1991, it was agreed that the contract labour would
be paid Rs. 11.65/ per day over and above the notified minimum
wages with effect from 1
st
April, 1991 which has been
indisputedly paid by the appellant SAIL till the employees were
allowed to work in the establishment i.e. April, 1996 when their
services came to be terminated by the contractor.
33.The exposition of scheme of the minimum wages Act, 1948
and its jurisdiction to invoke Section 20(1) of the Act has been
examined by this Court in Town Municipal Council, Athani Vs.
The Presiding Officer, Labour Courts, Hubli and Others, Etc.
(supra).
24
“7. The long title and the preamble to the Minimum
Wages Act show that this Act was passed with the object
of making provision for fixing minimum rates of wages in
certain employments. The word “wages” has been given a
wide meaning in its definition in Section 2(h) of that Act
and, quite clearly, includes payment in respect of
overtime and for work done on weekly offdays which are
required to be given by any employer to the workmen
under the provisions of that Act itself. Section 13(1),
which deals with weekly offdays, and Section 14(1),
which deals with overtime, are as follows:
13. (1) In regard to any scheduled
employment minimum rates of wages in
respect of which have been fixed under this
Act, the appropriate Government may—
(a)fix the number of hours of work
which shall constitute a normal
working day, inclusive of one or
more specified intervals;
(b)provide for a day of rest in every
period of seven days which shall be
allowed to all employees or to any
specified class of employees and for
the payment of remuneration in
respect of such days of rest;
(c)provide for payment for work on a
day of rest at a rate not less than
the overtime rate.
14. (1) Where an employee, whose minimum
rate of wages is fixed under this Act by the
hour, by the day or by such a longer wage
period as may be prescribed, works on any
day in excess of the number of hours
constituting a normal working day, the
employer shall pay him for every hour or for
part of an hour so worked in excess at the
overtime rate fixed under this Act or under
any law of the appropriate Government for
the time being in force, whichever is higher.
25
In order to provide a remedy against
breach of orders made under Sections 13(1)
and 14(1), that Act provides a forum and the
manner of seeking the remedy in Section 20
which is as follows:
20. (1) The appropriate Government may, by
notification in the Official Gazette appoint
any Commissioner for Workmen's
Compensation or any officer of the Central
Government exercising functions as a Labour
Commissioner for any region, or any officer of
the State Government not below the rank of
Labour Commissioner or any other officer
with experience as a Judge of a civil court or
as a stipendiary Magistrate to be the
Authority to hear and decide for any specified
area all claims arising out of payment of less
than the minimum rates of wages or in
respect of the payment of remuneration for
days of rest or for work done on such days
under clause (b) or clause (c) of subsection
(1) of Section 13 or of wages at the overtime
rate under Section 14, to employees
employed or paid in that area.
(2) Where an employee has any claim of the
nature referred to in subsection (1), the
employee himself, or any legal practitioner or
any official of a registered trade union
authorised in writing to act on his behalf, or
any Inspector, or any person acting with the
permission of the Authority appointed under
subsection (1), may apply to such Authority
for a direction under subsection (2):
Provided that every such application shall
be presented within six months from the date
on which the minimum wages or other
amount became payable:
Provided further that any application may
be admitted after the said period of six
months when the applicant satisfies the
Authority that he had sufficient cause for not
making the application within such period.
26
(3) ….
(4)….
(5)….
(6)….
(7)….
We have mentioned these provisions of the Minimum
Wages Act, because the language used at all stages in
that Act leads to the clear inference that that Act is
primarily concerned with fixing of rates — rates of
minimum wages, overtime rates, rate for payment for
work on a day of rest — and is not really intended to be
an Act for enforcement of payment of wages for which
provision is made in other laws, such as the Payment of
Wages Act, 4 of 1936, and the Industrial Disputes Act 14
of 1947. In Section 20(1) of the Minimum Wages Act also,
provision is made for seeking remedy in respect of claims
arising out of payment of less than the minimum rates of
wages or in respect of payment of remuneration for days
of rest or for work done on such days under clause (b) or
clause (c) of subsection (1) of Section 13 or of wages at
the overtime rate under Section 14. This language used
in Section 20(1) shows that the Authority appointed
under that provision of law is to exercise jurisdiction
for deciding claims which relate to rates of wages,
rates for payment of work done on days of rest and
overtime rates. If there be no dispute as to rates
between the employer and the employees, Section 20(1)
would not be attracted. The purpose of Section 20(1)
seems to be to ensure that the rates prescribed under
the Minimum Wages Act are complied with by the
employer in making payments and, if any attempt is
made to make payments at lower rates, the workmen
are given the right to invoke the aid of the Authority
appointed under Section 20(1). In cases where there is
no dispute as to rates of wages, and the only question is
whether a particular payment at the agreed rate in
respect of minimum wages, overtime or work on offdays
is due to a workman or not, the appropriate remedy is
provided in the Payment of Wages Act. If the payment is
withheld beyond the time permitted by the Payment of
Wages Act even on the ground that the amount claimed
by the workman is not due, or if the amount claimed by
the workman is not paid on the ground that deductions
are to be made by the employer, the employee can seek
his remedy by an application under Section 15(1) of the
27
Payment of Wages Act. In cases where Section 15 of the
Payment of Wages Act may not provide adequate remedy,
the remedy can be sought either under Section 33C of
the Act or by raising an industrial dispute under the Act
and having it decided under the various provisions of
that Act. In these circumstances, we are unable to accept
the submission made by Mr Sen on behalf of the
appellant that Section 20(1) of the Minimum Wages Act
should be interpreted as intended to cover all claims in
respect of minimum wages or overtime payment or
payment for days of rest even though there may be no
dispute as to the rates at which those payments are to be
claimed. It is true that, under Section 20(3), power is
given to the Authority dealing with an application under
Section 20(1) to direct payment of the actual amount
found due; but this, it appears to us, is only an incidental
power granted to that Authority, so that the directions
made by the Authority under Section 20(1) may be
effectively carried out and there may not be unnecessary
multiplicity of proceedings. The power to make orders for
payment of actual amount due to an employee under
Section 20(3) cannot, therefore, be interpreted as
indicating that the jurisdiction to the Authority under
Section 20(1) has been given for the purpose of
enforcement of payment of amounts and not for the
purpose of ensuring compliance by the employer with the
various rates fixed under that Act. This interpretation; in
our opinion, also harmonises the provisions of the
Minimum Wages Act with the provisions of the payment
of Wages Act which was already in existence when the
Minimum Wages Act was passed. In the present appeals,
therefore, we have to see whether the claims which were
made by the workmen in the various applications under
Section 33C(2) of the Act were of such a nature that they
could have been brought before the Authority under
Section 20(1) of the Minimum Wages Act inasmuch as
they raised disputes relating to the rates for payment of
overtime and for work done on weekly offdays.”
(Emphasis supplied)
34.The scheme of the Act of which reference has been made by
this Court clearly manifests that the Act is primarily concerned
with fixing rates of minimum wages, overtime rates, rate for
28
payment of work on a day of rest and is not really intended to be
an Act for enforcement of payment of wages for which provision
has been made in other laws such as the Payment of Wages Act,
1936 and the Industrial Disputes Act, 1947. Section 20 of the
Minimum Wages Act, 1948 is primarily enacted to resolve
disputes about the rates of wages, rates of payment of work done
on days of rest and overtime rates and to ensure that the rates of
wages which are notified by the appropriate Government for
various categories of employees under the Minimum Wages Act
are to be strictly complied with by the employer in making
payments and if any payment is made at the rates lower than the
minimum rates of wages prescribed by the appropriate
Government, the remedy has been provided to the
workmen/employee to invoke Section 20(1) of the Act and being a
selfcontained Code and a beneficial legislation, it is a social
protection to ensure and secure adequate living wage in the
interest of public and looking to the nature of enquiry postulated
under the scheme of Minimum Wages Act, 1948, there appears
no scope of enquiry to examine the principles of equal pay for
equal work which is a dispute to be determined by a adjudicatory
mechanism provided under the law.
29
35.It was not the case of the respondent employees(2040 in
number) that the minimum rates of wages which were notified by
the appropriate Government from time to time or as agreed
between the parties under the Minimum Wages Act, 1948 have
not been paid. But their claim in the application under Section
20(1) of the Act, was that, once they have been allowed to work
after the prohibition notification dated 17
th
March, 1993 has
come into force, pursuant to which their status as contract
labour in the establishment ceased to operate as a result of
contract of principal employer with the contractor in regard to the
contract labour
having been statutorily extinguished, their relationship stood
automatically converted into the employer (i.e., SAIL in the
instant case) and the employee (i.e. contract labour) making them
entitled for wages which are notified by the NJCS as per the
memorandum of agreement which is payable to direct/regular
employees of SAIL.
36.The Division Bench of the High Court has also relied on the
scheme of CLRA Rules, 1971 and Rules 25(iv) and (v) in
30
particular while arriving to a conclusion that the workmen since
were allowed to continue to work by the principal employer after
the prohibition notification dated 17
th
March, 1993 has come into
force, and they were discharging same or similar kind of work as
the workmen directly employed by the principal employer in the
establishment, makes them entitled for similar wages admissible
to the regular employees appointed/engaged by SAIL. Rules
25(iv) and (v) of Rules, 1971 are extracted hereunder:
(iv) the rates of wages payable to the workmen by the
contractor shall not be less than the rates prescribed
under the Minimum Wages Act, 1948 (11 of 1948), for
such employment where applicable and where the
rates have been fixed by agreement, settlement or
award, not less than the rates so fixed;
(v) (a) in cases where the workman employed by the
contractor perform the same or similar kind of work as
the workmen directly employed by the principal
employer of the establishment, the wage rates,
holidays, hours of work and other conditions of service
of the workmen of the contractor shall be the same as
applicable to the workmen directly employed by the
principal employer of the establishment on the same or
similar kind of work:
Provided that in the case of any disagreement with
regard to the type of work the same shall be decided by
1 [the Deputy Chief Labour Commissioner (Central)];
(b) in other cases the wage rates, holidays, hours of
work and conditions of service of the workmen of the
contractor shall be such as may be specified in this
behalf by 1 [the Deputy Chief Labour Commissioner
(Central)];
31
Explanation. —While determining the wage rates,
holidays, hours of work and other conditions of
services under (b) above, the Deputy Chief Labour
Commissioner (Central) shall have due regard to the
wage rates, holidays, hours of work and other
conditions of service obtaining in similar employments;
37.The submission, in our view, is misplaced for the reason
that the CLRA Act is a complete code in itself and regulate the
employment of contract labour in certain establishments and
provide for its abolition in certain circumstances and for matters
connected therewith. The title of the Act itself indicates that the
Act does not provide for total abolition of the contract labour, but
only for its abolition in certain circumstances, and to regulate the
employment of contract labour in the establishments which are
registered under Section 7 and working through the contractors
who are holding licence under Section 12 of the Act. Section 8
provides for the revocation of registration in certain cases and
Section 9 provides the effect of nonregistration. Section 10 is
one of the back bone of the Act which provides for prohibition of
employment of contract labour in any establishment and we are
fortified in our view supported by the Judgment of this Court in
Hindustan Steel Works Construction Ltd. (supra).
32
38.In the instant case, the establishment was duly registered
under Section 7 of the Act and the contractor through whom the
contract labour was engaged was holding its licence under
Section 12 of the Act but in the changed circumstances, the
appropriate Government took a decision to put a prohibition in
making employment of contract labour in scheduled employment
for various reasons which is not a subject matter of enquiry in
the instant case and in consequence of the prohibition
notification dated 17
th
March, 1993 published under Section
10(1) of the CLRA Act, the contract labour working in the
establishment ceased to function and the contract between the
principal employer and contractor stands extinguished.
39.To make it further clear, Rule 25 of the Rules, 1971 of
which there was an emphasis before the High Court, may not
come to the rescue of the respondent employees for the reason
that it was an obligation upon the contractor who are holding a
licence under Section 12 of the Act and as per the terms and
conditions of the licence granted under subrule (1) of Rule 25 or
renewed under Rule 29, to comply with certain conditions
enumerated under subrule (2) of Rule 25 of the Rules 1971
33
which includes clause (iv) and (v) to be complied with by the
contractor and, if at all, there is any breach of the conditions of
licence, complaint can be made to the prescribed authority and
its consequences are imbedded under the Scheme of the CLRA
Act, 1970.
40.At the same time, an obligation to provide amenities
conferred by the Act to the workers has been referred to under
Chapter V of the CLRA Act and the primary responsibility is of a
contractor that each worker employed by him as contract labour
has to be paid his due wages before the expiry of such period as
may be prescribed with an exception provided under Section
21(4) of the Act, in case the contractor fails to make payment of
wages within the prescribed period or makes short payment, then
the principal employer shall be liable to make payment of wages
in full or the unpaid balance due, as the case may be, to the
contract labour employed by the contractor and recover the
amount so paid from the contractor under any of the methods
prescribed by law.
34
41.In the instant case, after issuance of the prohibition
notification dated 17
th
March, 1993 under Section 10(1) of the
CLRA Act having being published, in our considered view, the
provisions of the CLRA Act or CLRA Central Rules, 1971 framed
thereunder would not be available to either of the party to
strengthen its claim. As stated earlier, minimum wages as
prayed for in the application filed by respondents before the
prescribed authority under Section 20(1) of the Minimum Wages
Act, 1948 could be claimed independently under the Minimum
Wages Act, 1948 which indisputedly in the instant case was Rs.
11.65/ per day over the minimum wages to be paid by the
appellant to each of the respondent (2040 employees) in terms of
the agreement executed between the parties and that was indeed
complied with by the appellants in its true spirit.
42.The submission made by the learned counsel for the
respondents that the respondent workmen were doing the jobs of
perennial in nature and the contract labour was banned under
agreements entered between SAIL and the workers union from
1970 onwards and their performance of same or similar kind of
work as the workmen directly employed by the principal employer
35
make them entitled for wages in terms of NJCS Memorandum of
agreement is without substance for the reason that for fixation of
Minimum Wages under the Minimum Wages Act, 1948, there are
number of considerations which are to be kept in mind by the
committees while prescribing the minimum rate of wages payable
to the workmen of a different category. Under Section 3 of the
Minimum Wages Act, 1948 the appropriate Government may fix
minimum wages for time work, minimum rate of wages for piece
work, minimum wages in respect of overtime work defined under
subSection 2 of Section 3 of the Act and the amendment made
in Section 3 of the Act also take note of different
classes/categories of employees in such employment while the
notification under the Minimum Wages Act, 1948 came to be
published by the appropriate Government.
43.In the given circumstances, a mere assertion of fact that the
contract labour which was allowed to continue after the
prohibition notification came to be published dated 17
th
March,
1993 in the establishment of the appellant SAIL performing same
or similar kind of work in the establishment of the principal
employer is not sufficient to endorse their entitlement of claiming
36
wages notified by the NJCS memorandum of agreement for
direct/regular employees of the establishment applicable
universally to all the steel industries. The Judgment relied upon
by the learned counsel for the respondents in BHEL Workers
Association, Hardwar and Others (supra) may not be of any
assistance in the facts of the instant case for the reason that it
was a writ petition filed under Article 32 of the Constitution of
India by the workers union seeking declaration from this Court
for abolition of contract labour and be treated as direct
employees of the establishment and entitled to equal pay as
workmen of the BHEL but that being a matter of enquiry by the
competent authority, their petition came to be dismissed with the
direction to the Union of India to examine their grievance in
accordance with law.
44.In addition to it, in terms of reference made by the
appropriate Government dated 27
th
January, 2003 read with
Corrigendum dated 9
th
April, 2003 followed with 22
nd
February,
2005, the CGIT framed various issues including issue nos. V & VI
and answered it accordingly.
Issue nos. V & VI are reproduced as under:
37
“V. Whether lime stone mines violated the
provision of Clause8 of the memorandum of
agreement signed between the SAIL, New Delhi and
their Unions and employing workers through
contractors on jobs of permanent and perennial nature
was justified, legal and fair?
VI. Whether the workmen/heirs are entitled to
the wages to the post in which they were engaged with
parity of wages with that of regular employees of the
management with all consequential benefits?”
It has been answered as under:
“It is evident that it is not established that the alleged
contract labours were the employees of the SAIL, as
such they were not entitled to any wages as per the
agreement. Moreover they were not regular employees
of the management and the said agreement appears to
be for the regular employees of the management. Thus
these issues are also decided against the Union and in
favour of the management.”
45.The answer thereto has been upheld by us in the
independent proceedings.
46.In our considered view, the order of the prescribed authority
under the Minimum Wages Act, 1948 dated 2
nd
December, 2003
and confirmed by the High Court under the impugned judgment
dated 11
th
December, 2006 are unsustainable and deserves to be
set aside.
38
47.Consequently, Civil Appeal No. 8094 of 2011 filed by Steel
Authority of India Ltd. is accordingly allowed and order of the
prescribed authority under the Payment of Wages Act, 1948 and
Judgment of the High Court are hereby set aside.
48.Civil Appeal No. 8334 of 2011 filed by the employees(Jaggu
& Others) is dismissed. No costs.
49.Pending application(s), if any, stand disposed of.
………………………………..J.
(A.M. KHANWILKAR)
..………………………………J.
(AJAY RASTOGI)
New Delhi
July 05, 2019
39
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