Madras High Court
Cg Igarashi Motors Ltd vs Deputy Commissioner Of Labour-Ii on 15 March, 2006
Author: Elipe Dharma Rao
Bench: Elipe Dharma Rao
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 15/03/2006
Coram
The Hon'ble Mr. Justice Elipe DHARMA RAO
W.P. No.15137 of 2005
CG Igarashi Motors Ltd.
rep. by Head HRD & Admn.
Tambaram ... Petitioner
-Vs-
1. Deputy Commissioner of Labour-II
Teynampet, Chennai 600 006
2. Chennai Yettrumathi Valaga
Uzhiyargal Podhu Thozhilalar Sangam
No.11, M.E.S. Road, Kadaperi
Tambaram, Chennai 600 045 ... Respondents
Petition under Art.226 of the Constitution of India, praying for a
Writ of Certiorari, calling for the records and quash the order dated 2
5-1-2005 passed in M.W. No.34 of 2004 by the first respondent, Deputy
Commissioner of Labour-II, Chennai.
!For Petitioner :: Mr. Manohar Gupta
^For Respondents :: Mr. R. Prasadh (for R2)
Mr. R. Chandrasekaran
(for R1)
:ORDER
By this writ petition, the Management challenges the order dated 25-1-2005 passed by the competent authority under the Payment of Minimum Wages Act, directing the petitioner Management to pay a sum of Rs.74 ,673.25 as minimum wages to one J. Renuka.
2. The facts in brief are:
Petitioner is a company engaged in the manufacture of DC Permanent Magnet Micro Motors used in electrical work. Petitioner employs persons initially as Trainees and such persons, after successful completion of the training, are absorbed as permanent employees.
One Ms. J. Renuka was taken as a Trainee on 1-9-1998 for a period of one year and the traineeship was extended on 1-0-1999 for a further period of one year. She resigned from the services of the petitioner on 25-10-2002 and her resignation was accepted. After resigning, she raised a dispute under the Industrial Disputes Act alleging that she was forced to submit her resignation. The said dispute is still pending.
The second respondent filed a petition on behalf of Renuka, claiming minimum wages payable to her under the said Act for the period she worked under the petitioner Management. The claim was made on the basis of a Government Order passed in respect of the employees engaged in electronic industry. The said application was, however, withdrawn by the second respondent.
The second respondent again filed a petition under Sec.20(2) of the said Act, claiming a sum of Rs.74,673/- as minimum wages payable to Renuka for the period from 1-1-1998 to 31-10-2002. The claim was made on the basis of the Government Orders, G.O. Ms. No.1050 dated 30-8-1995 and G.O.Ms.No.(2-D)17 (Employees and Department of Labour) dated 23-4-2002. The second application was made on the basis of the Government Order passed in respect of the employees engaged in the Engineering industry.
The claim was resisted by the Management. Before the competent authority, the claimant produced certain documentary evidence in support of her claim. She also examined herself as a witness. No evidence was let in by the Management.
The competent authority, on the basis of the evidence made available before him, came to the conclusion that the petitioner is an engineering industry and, therefore, G.O. Ms. No.1050 dated 3-8-1995 and G. O.Ms. No.17 dated 23-4-2002 are applicable to them. The competent authority also gave a finding that the claimant is not a Trainee, but a workman under the Management and, therefore, she is entitled to claim minimum wages for the said period. While determining the amount payable, the competent authority held that since the Management failed to make the payment even after the filing of the petition, ten times of the amount claimed by the workman, i.e. Rs.7,46,732/- shall be paid as unpaid salary within a period of thirty days.
Aggrieved by the order passed by the competent authority, the Management has filed this writ petition.
3. Learned counsel for the petitioner submitted that the impugned order is illegal and against the provisions of the Act. Learned counsel submitted that the said Renuka, on whose behalf the claim was made by the second respondent, was a Trainee and not a regular workman. She was paid monthly stipend and her traineeship was extended for a further period of one year. Her resignation was voluntary and not due to force or coercion by the petitioner Management. When she was relieved from the employment on the basis of her resignation letter, she was only a Trainee and not a regular workman and, therefore, she is not entitled to claim minimum wages. The total wages paid to her were much more than what was prescribed in the Government Order relating to the engineering industry. If the sum total of wages paid to the employee under various heads exceeded the minimum rate of wages then the employer could not be held guilty of contravening the provisions of the Minimum Wages Act. The wage slips produced by the claimant herself as documentary evidence would show that she was paid basic wages, trainee allowance, performance pride money, service allowance, attendance bonus and sundry allowance. The competent authority has completely ignored the payments made to the claimant under different heads and has proceeded on an erroneous basis that minimum wages will only mean basic and dearness allowance. There is no prohibition under the Minimum Wages Act or in the Government Orders in question that payment should be made only as basic and dearness allowance. The Management could pay wages under different heads and all such payments which could be expressed in terms of money would be wages except those which are excluded under the exclusion clause. Therefore, the claim made by the employee excluding the various payments made by the Management under different heads was not sustainable in law. A mere perusal of the statement would clearly prove that what was paid to the employee was much more than the claim made by her. The first respondent without considering the said statement has mechanically allowed the claim and also imposed the penalty of ten times of the claim without any basis. When the claim filed by the second respondent itself was not maintainable, the first respondent grievously erred in levying ten times penalty. The petitioner is engaged in the manufacture of DC Permanent Magnet Micro Motors and the said product is used only in electrical works and not in engineering works. Therefore, the Government Order is not applicable to the petitioner as the activity carried on by the petitioner does not fall under the Engineering industry. When the Government Order itself was not applicable to the petitioner, then the question of the petitioner being liable to implement the said Government Order did not arise and hence the impugned order passed without considering the said aspect is clearly erroneous.
4. On the other hand, learned counsel for the second respondent submitted that Renuka joined the services of the petitioner Management as temporary employee on 1-9-1998 and she was paid Rs.400/- as basic, which was increased to Rs.500/- in 1999. She was discharging regular work along with the permanent employees. The work performed by her is a perennial nature. She had also completed 480 days of continuous service in a period of 24 calendar months. She was forced to submit her resignation and denied employment from 26-10-2002. The petitioner has not paid wages as contemplated under the Government Order relating to the electronic industry. The petitioner is manufacturing D.C. Motors and therefore it is an engineering industry. Even in the records maintained by the Madras Export Processing Zone (MEPZ), the petitioner unit is shown as an engineering industry. At the time of terminating the services, the claimant had put in the continuous service period of three and a half years. As evidence from the wage slips issued to her, she was paid only basic wages and no dearness allowance or House Rent Allowance was paid. Other allowances and sundry incentive do not constitute wages as contemplated under the said Act and the relevant Government Order. The Minimum Wages Act being a welfare legislation, the intention of the Legislature was to neutralize the cost of living by linking with consumer price index and if any Dearness Allowance paid is linked with the consumer price index, then only it will neutralize any increase in price of commodities. Therefore, other allowances paid to the claimant cannot be termed as wages as contemplated under Sec.2(h) of the Act. Under the Act, the statutory authority is vested with power to impose penalty if the establishment fails to implement the scheme of the Act. In the present case, since the petitioner Management has failed to implement the scheme of the Act, the authority has rightly levied the penalty.
5. The point for consideration is whether the impugned order passed first respondent allowing the claim of the second respondent with ten times penalty is sustainable in law.
6. A perusal of the imugned order indicates that the first respondent authority has not properly considered the contentions raised by the Management and the materials placed on record particularly with regard to the wages paid to the workman concerned, which was determined by him at Rs.400/-. Further, the workman has not raised the dispute regarding payment of minimum wages when she was in the service of the petitioner. The issue was raised by the second respondent union on her behalf after she resigned from the services of the petitioner management. The authority failed to take into consideration the statement of payments filed by the Management wherein it is indicated that the petitioner was paying more than Rs.400/- per month as wages to the concerned workman. It is not known under what circumstances the first respondent authority has come to the conclusion that the concerned workman was paid only a sum of Rs.400/- per month as wages. From the counter filed by the petitioner before the first respondent authority and the wage slips produced, it is seen that the concerned workman was paid Rs.2,100/- per month as wages. In their counter filed before the first respondent authority, the petitioner has raised objections regarding the correctness of the amounts mentioned in the annexure to the petition filed by the second respondent and also raised a specific contention that she was paid whatever the amount she is entitled to. No reason has been assigned in the impugned order by the first respondent except stating that the petitioner has filed to comply with the provisions of the Act for levying ten times penalty on the petitioner. The first respondent has also failed to consider the issue regarding the very maintainability of the claim petition since the concerned workman made her claim through the second respondent Union after she submitted her resignation to the petitioner Management.
7. Therefore, considering the facts and circumstances of the case, I am of the considered opinion that the impugned order suffers from legal as well as factual infirmities as the first respondent has failed to take into consideration the relevant materials placed on record and the contentions raised by the petitioner. I, therefore, consider it appropriate to set aside the impugned order and remand the matter back to the authority concerned for fresh consideration in the light of the discussion made above. The concerned authority is directed to consider the matter afresh and after giving opportunity to both parties pass appropriate orders within three months from the date of receipt of copy of this order.
8. The impugned order is set aside and the writ petition is allowed. Connected W.V.M.P. No.1854 of 2005 and W.P.M.P. No.16435 of 2005 are closed.
To:
Deputy Commissioner of Labour-II Teynampet Chennai 600 006