Andhra HC (Pre-Telangana)
Secunderabad Club vs State Of Andhra Pradesh on 5 April, 1996
Equivalent citations: 1996(3)ALT873, (1997)ILLJ434AP
JUDGMENT Y. Bhaskar Rao, J.
1. These writ appeals arise out of the common judgment of the single Judge passed in a batch of writ petition. The appellants herein field the writ petitions challenging various final notifications issued in exercise of power confirmed under Section 3(1) and 5(2) of the Minimum Wages Act, 1948 (for short 'the Act') by the Government of Andhra Pradesh revising the minimum rates of wages payable to various categories of employees in different establishments as specified in Part-I of the Schedule.
2. The main contentions that were raised by the appellants are : Section 5 of the Act is ultra vires the Constitution; an opportunity of bearing was not given to the employers before issuance of final notification under See. 5(2) of the Act, which is mandatory; constitution of the Advisory Board under Section 7 of the Act is not in consonance with the provisions of Section 9 of the Act and the Advisory Board failed to discharge its duties; the provisions of the Act cannot be extended to the Scheduled Employments, the employees of which can form organisations for bargaining their wages; the rates of wages fixed in the impugned notifications are more than fair wages as the Government cannot fix higher rates of minimum wages than those prescribed in the draft notification issued under Section 5(1)(b) of the Act, etc. On behalf of the respondents, the Government Pleader defended the impugned notifications as valid on the grounds that the constitutional validity of Section 5 of the Act has already been upheld by the Supreme Court, composition of the Advisory Board is in consonance with the provisions of the Act, the Government considered the matter independently while fixing the minimum rates of wages apart from the report of the Advisory Board and the question of further opportunity of hearing to be given to the employers does not arise when their representations were considered and the rates of minimum wages fixed by the Government are proper and not discriminatory.
3. The Single Judge classified the impugned notifications into three groups : (1) Group-A consisting of notifications providing that payment of minimum rates of wages consisting of an all inclusive rate as contemplated under Section 4(1)(iii) of the Act, (2) Group-B consisting of notifications providing for payments of minimum rates of wages consisting of basic wages and cost of living allowance for the period from January 1 to July 1, 1989 as the case may be, upto the date of publication of final notification and payable from the date of publication of the final notification and (3) Group-C containing notification providing for payment of minimum rates of wages consisting of basic wage and cost of living allowance from the date of publication of final notification and payable from that date. The learned Single Judge after elaborately considering the affidavits filed in support of the writ petitions counter affidavits and hearing the arguments of both sides, dismissed the writ petitions which contain the notifications falling under Groups-A and C. Regarding the writ petitions covered by Group-B notification, he struck down the mode of computation of cost of living allowances providing for payment of cost of living allowance for any rise in consumer price index over and above 166 points (base year 1982 = 100) as on January 1, 1989 and 169 points (base year 1982 = 100) as on July 1, 1989 and directed the Government of Andhra Pradesh to revise the mode of computation of cost of living allowance in accordance with the law and publish the same in the Official Gazette within four months from the date of receipt of the order. Aggrieved by the said judgment of the learned Single judge, these writ appeals are filed.
4. The learned Counsel for the appellants submitted that the procedure followed by the Government in fixing the minimum rates of wages is not valid as it ought to have followed the procedure prescribed in Section 5(1)(a) of the Act, that the draft and final notifications are not in conformity with the principles laid down by the Court and are not issued by the competent authority and so they are without jurisdiction and that fixation of minimum rates of wages by reducing four zones into two is bad as there will be difference in the increase of price index of each zone.
5. Fixation of minimum rates of wages for scheduled employments is provided for in the Minimum Wages Act, 1948. Definitions are provided in Section 2 of the Act. 'Cost of living index number' has been defined in Section 2(d) as under :
"'Cost of living index number' in relation to employees in any scheduled employment in respect of which minimum rates of wages have been fixed means the index number, ascertained and declared by the competent authority by notification in the Official Gazette to be the cost of living index number applicable to employees in such employment."
Section 2(g) defines 'scheduled employment' as under :
"An employment specified in the schedule or any process or any branch of work forming part of such employment."
'Wages' are defined in Section 2(h) to be :
"All remuneration, capable of being expressed in terms of money, which would if the terms of the contract of employment, express or implied, were fulfilled be payable to a person employed in respect of his employment or of work done in such employment, and includes house rent allowance but does not include -
(i) the value of -
(a) any house accommodation, supply of light, water, medical attendance, or
(b) any other amenity or any service excluded by general or special order of the appropriate Government.
(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any Scheme of social insurance;
(iii) any travelling allowance or the value of any travelling concession;
(iv) any sum paid to the person employed to defray special expenses entitled on him by the nature of his employment; or
(v) any gratuity payable on discharge."
Section 3 of the Act empowers the appropriate Government to fix minimum rates wages payable to employees employed in an employment specified in Part-I or Part-II of the schedule and in an employment added to either part by notification under Section 27. Section 4 of the Act envisages that the minimum rates of wages fixed or revised by the appropriate Government under Section 3 may consist of basic rate of wages and special allowances or basic rate of wages with or without the cost of living allowance or an all-inclusive rate allowing for the basic rates, the cost of living allowance. The procedure for fixing and revising minimum wages has been dealt with under Section 5 of the Act. Under Section 5(1)(a), the Government shall appoint committee to hold inquiries and advise in respect of fixation or revision of minimum wages or as per Section 5(1)(b) publish proposals of minimum wages in the Gazette for the information of persons likely to be affected by specifying a date, not less than two months from the date of notification, on which the proposal will be taken into consideration. After receipt of representations or the report of the advisory Committee, the Government by notification fix or revise the minimum rates of wages in respect of each scheduled employment. Section 7 of the Act empowers the Government to appoint an Advisory Board. Section 9 deals with the Composition of committees. Section 12 contemplates for payment of minimum rates of wages.
6. The point to be decided is whether the procedure followed by the Government in revising the minimum rates of wages in respect of the scheduled employments, mentioned in the impugned notifications, is contrary to the procedure prescribed in Section 5(1) of the Act.
7. Leading the arguments on behalf of the appellants, Sri. Amancharla Krishna Murthy, contended that the Government in fixing the minimum rates of wages added the cost of living allowance to the wages fixed taking the cost of living index into registration, that the Government ought to have appointed a Committee to conduct inquiry and had the Committee been appointed and opportunity could have been given to the appellants, they could have filed representations and put forth their case and that the action of the Government is vitiated as appointment of Advisory Committee is contrary to Section 5(1)(a) of the Act.
8. Section 5 of the Act empowers the Government to have recourse to the procedure prescribed either in Section 5(1)(a) or Section 5(1)(b) in fixing minimum rates of wages in respect of scheduled employments. It is a fact that Section 5(1)(a) envisages appointment of committees or sub-committees to hold inquiries and advise the Government in respect of fixation or revision of minimum wages of scheduled employments. Section 5(1)(b) contemplates the Government to publish the proposals in official Gazette for information of persons likely to be affected so as to enable them to file their representations and to appoint an advisory committee. It is not prescribed that it is obligatory on the part of the Government to follow a particular procedure in case of fixation of revision of minimum rates of wages. On the other hand, discretion is given to the Government to adopt any one of the procedures. The two procedures prescribed under Section 5 are for the purpose of collecting material by appointment of advisory committee and giving opportunity to the employers and employees for fixation or revision of wages. When the Act has not contemplated the Government to follow a particular procedure, the same cannot be read into it, which amounts to restricting the power of the Government. The contention of the learned Counsel for the appellants that the Government ought to have followed the procedure laid down under Section 5(1)(a) and not the procedure laid down under Section 5(1)(b) cannot be entertained in view of the decision of the Supreme Court in Chandrabhavan Boarding and Lodging v. State of Mysore, 1970-II-LLJ-403, wherein it was held at page 409 :
"...... The legislature has prescribed two different procedures for collecting the necessary data, one contained in Section 5(1)(a) and the other in Section 5(1)(b). In either case it is merely a procedure for gathering the necessary information. The Government is not bound by the advice given by the committee appointed under Section 5(1)(a). Discretion to select one of the two procedures prescribed for collecting the data is advisedly left to the Government. In the case of a particular employment, the Government may have sufficient data in its possession to enable it to formulate proposals under Section 5(1)(b). Therefore, it may not be necessary for it to constitute a committee to tender advice to it but in the case of another employment it may not be in possession of sufficient data. Therefore, it might be necessary for it to constitute a committee to collect the data and then tender its advice. If the Government is satisfied that it has enough material before it to enable it to proceed under Section 5(1)(b) it can very well do so. Which procedure should be adopted in any particular employment depends on the nature of the employment and the information the Government has in its possession about that employment. Hence, the powers conferred on the Government cannot be considered as either unguided or arbitrary ......."
In respect of the present case, it cannot be denied that there was material in the form of notifications issued earlier in respect of same scheduled employments. It cannot, therefore, be said that the procedure followed by the Government in issuing draft notifications, calling for objections from the employers and employees and appointing advisory committee is not proper and is in anyway contrary to Section 5(1) of the Act. It has to be noticed that the constitutional validity of Sections 3 and 4 of the Act has been upheld by the Supreme court in Bijay Cotton Mills Ltd. v. state of Ajmer (1955-I-LLJ-129) and M/s. B. Y. Kshatriya v. S. A. T. B. Kamgar Union (1962-II-LLJ-736). Except the bald contention that Section 5 is unconstitutional, no other material is placed to show that how Section 5 is unconstitutional. Section 5 provides for the procedure to be followed for fixing or revising minimum wages. The procedures are upheld as proper and valid according to the decisions of the Supreme Court. We, therefore, do not accede to the contention of the learned counsel for the appellants that the Government ought to have appointed a committee as contemplated under section 5(1)(a) of the Act and the procedure followed as envisagesd under Section 5(1)(b) is illegal.
9. It is secondly contended that the draft and final notification issued by the Government are not in conformity with the principles laid down by the Courts as minimum rates of wages are not properly fixed.
10. In the present case, the Government followed the procedure prescribed in Section 5(1)(b) of the Act, which is not in dispute. It is submitted that since the wages fixed are not bare or minimum, fixation of wages in the name of minimum wages is bad. The learned counsel relied on the decision of the Supreme Court in Express Newspaper Ltd. v. Union of India. (1961-I-LLJ-339)
11. It is to be noticed that the Minimum Wages Act, 1948 is a preconstitutional enactment. The object of the Act is to provide social justice to the workmen employed in the scheduled employment by prescribing minimum rates of wages. The minimum rates of wages should be fixed in respect of scheduled employments keeping the twin objects of providing sustenance and maintenance of the worker and his family and preserving his efficiency as a worker in view. Though the Directive Principles of State Policy enshrined in the Constitution are not enforceable by any court, but the State shall apply these principles in making laws in the governance of the country. According to Articles 38, 39(e), 42 and 43 of the Constitution, the State shall direct its policy towards securing that the citizens have the right to an adequate means to livelihood, that the is equal pay for equal work for both men and women and that the health and strength of workers are not abused. Article 42 provides that the State shall make provision for securing just and humane conditions of work and for maternity relief. The State shall endeavour to secure by suitable legislation to all workers a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. The preamble of the Constitution coupled with the directive principles constitutes the conscience of the Constitution. When the provisions of a preconstitutional legislation are being enforced after Constitution, the provisions of the said Act have to be interpreted in consonance with the provisions of the Constitution. One of the aims of the directive principles of State Policy is to is ameliorate the socio-economic conditions of the working class. At sometimes, the directive principles may violate some fundamental rights, then they have to be read as reasonable restrictions on the fundamental rights as contemplated under Art. 19 of the Constitution. Minimum Wages as envisaged in the Act have to be interpreted so that the workers and their families could lead a minimum standard of life in a developing country like ours. The State has to provide such amenities through welfare legislations. If the words 'minimum wages are interpreted as bare minimum wages sufficient for the livehood and not for any other need, it amounts to forcing the labourer to work under sub-standard conditions ignoring his other requirements such as clothing, health, maintenance of children and family members. The Constitution guarantees fundamental right of education to all the children of the employees and the expenses to educate the children have to be met from the earnings of the employee. Therefore, the contention that the minimum wages are fair or living wages only is not tenable.
12. It would be relevant to look at the conditions governing wage, life and other social aspects of workers, which are delineated in SUKRA NEETI, an ancient treatise. The English translation of which is :
"Wages to be considered as fair must be sufficient to procure the necessities of life from out of the wages. The wage of an employee should therefore be a fair wage, so as to enable him to procure all the necessary requirements of life." (Sukra Neeti II, 805-806).
"By payment of very low wages, employees (of the king) are likely to become his enemies and they are also likely to become plunderers of treasuries and cause harassment to the general public." (Sukra Neeti II, 807-808).
13. The above principles lay down the concept of wages to be paid to the employees and they are as modem as provided in a labour legislation of a Welfare State. It is to be noticed that in ancient India labour welfare provisions were very much existing and being implemented and the spirit of Directive Principles of State Policy are akin to the worker wage policy of ancient India. The Courts, therefore, while interpreting the provisions of labour legislations have to be guided by the directive principles of State Policy.
14. Coming to the decision cited by the learned counsel for the appellants in Express Newspaper's case (supra) for the proposition that the capacity of the employer has to be taken into consideration while fixing or revising the rates of minimum wages, a Constitution Bench of the Supreme Court in U. Unichoyi v. State of Kerala (1961-I-LLJ-631) refused to accept the principle that the capacity of the employer has to be taken into consideration because the Act prescribed minimum wages rates.
15. In view of the above discussion, the contention of the learned counsel for the appellants that paying capacity and other factors of the employer have to be taken into consideration cannot be countenanced to. The view that was expressed by the Supreme Court in Unichoyi's case (Supra) has been reiterated in Hydro Engineers (Pvt.) Ltd. v. Workmen (1969-I-LLJ-713) and approved the observations made in Unichoyi's case (Supra) that while prescribing the minimum wage rates, the capacity of the employer need not be considered as the State assumes that every employer must pay the minimum wages before he employs labour.
16. In the present case, the Advisory Board has conducted enquiry, examined witnesses on behalf of the employer and the employees and submitted its report. The Government considered the report and other material and arrived at particular figures to be fixed as minimum rates of wages. It is settled principles of law that when the Government after considering relevant data and report of Advisory Committee revises or fixes minimum wages, the same will not be interfered with sitting as appellate authority while exercising power of judicial review.
17. It is thirdly contended by the learned counsel for the appellants that the constitution of the Advisory Board is not proper since it was not constituted as per the mandate of Section 9 of the Act and there was no representation from the is employers and employees of each category of employment.
18. The Advisory Board was reconstituted vide G.O.Ms. No. 115, dated November 21, 1990, consisting of a Chairman, nine employers' representatives, nine employees' representatives and two independent members and special invitees. It has to be noticed that the appellants did not question the constitution of the Advisory Board. With regard to the composition of the Advisory Board the Supreme Court in M/s. Kshatriya v. S. A. T. B. Kamgar Union (supra) observed that the function of the Board is not to make a detailed investigation in any particular industry but it shall consist of representatives of employers and employees in the scheduled employments. Thus, there is no irregularity in the composition of Advisory Board in the case on hand. It is settled principle of law that it is not mandatory that from every scheduled employment there must be one representative, but there must be nexus between representatives and the scheduled employments. We, therefore, cannot accede to the above contention.
19. With regard to the contention of the appellants that the Advisory Board has failed to discharge its duties satisfactorily, we must at the outset say that the High Court while exercising the power of judicial review under Article 226 of the Constitution is not sitting as appellate body. Further, the Advisory Board conducted detailed enquiry by examining witnesses on behalf of the employers and the employees and trade-unions and submitted its report to the Government. The proceedings of the Advisory Board meetings mainfestly show that the Advisory Board did take the view expressed by the representatives of the employers and the employees into consideration. We, therefore, see no force in the above contention.
20. It is fifthly contended by the learned counsel for the appellants that the provisions of the Act cannot be extended to the employees who can form themselves into an organization to bargain for their wages. This contention is also not tenable in view of the fact that the Government followed the prescribed procedure while fixing minimum wages and that the constitutional validity of the Act or the schedule of employments has (sic. not) been challenged. Apart from it, it will be difficult for the labour unions to bargain for the wages from time to time and reap fruits immediately without fail as done by the Government by discharging its statutory duty.
21. The learned counsel for the appellants attacked the division of the State into two zones as arbitrary and submitted that the shops and commercial establishments of towns and villages cannot be equated with those located in municipalities. Except the argument, no material is produced before us in support of it. The classification made by the Government is proper and the above contention does not sustain since Section 3(3) empowers the Government to fix or revise different rates of wages for different scheduled employments, classes of work and localities.
22. The next contention of the learned counsel for the appellants is that no date is mentioned in the notification for consideration of objections/representations received from the employers and others and that therefore the notification is bad.
23. In the notification issued, it is mentioned that notice is given that the draft will be taken into consideration after two months from the date on which the Gazette has been made public and that the objections received before the said date will be considered. Thus, it is clear from the above that objections or suggestions will have to be filed within two months, which will be considered after two months. Merely because no date is given for consideration of objections or suggestions, no prejudice would be caused to the persons who filed their objections. In an identical situation, a Division Bench of this Court in W.P. Nos. 1364, 1514, 3751 of 1976 and 818 of 1977, held :
"Having considered all the circumstances in the case carefully we are unable to accept the contention of the petitioners that the provision regarding specification of a date is mandatory and as the draft notification has not specified the date it is illegal. On the other hand, in providing that the proposals will be considered after two months and all objections received before that date will be taken into consideration, there has been a substantial compliance with the provision of Section 5(1)(b)."
Therefore, we do not see any force in the above said contention.
24. The other contention of the learned counsel for the appellants is that higher rates of minimum wages cannot be fixed than those published in the draft notification.
25. It has to be noticed that the draft notification was issued on August 27, 1989 and the final notification was issued on March 6, 1991 after consideration of objections/suggestions and the report of the Advisory Committee. Thus, there is a gap of 18 months time between the two notifications. Taking the increase of cost of living from the date of draft notification to the date of final notification into consideration, the authorities fixed the wages. In C. B. Boarding & Lodging's case (supra), the Supreme Court held that if the Government has the power to reduce the rates of wages as desired by the employers, then it has the power to enhance them also. In Basti Ram v. State, AIR 1969 AP 227 this Court held :
"Draft proposals are only tentative and representations are received not merely from the employers but also from the employees ..... Any representations made by the parties must contemplate and take into account possible enhancement or reduction ..."
A Division Bench of this court in T. G. Lakshamaiah Setty & Sons v. State of A. P. 1981 Lab - I.C 690 held that if the employees had exercised their right to represent and ask for higher wages and if eventually the State authorities had adopted higher rates of minimum wages, that cannot be found fault with. We, therefore, reject this contention of the appellants.
26. The further contention of the learned counsel for the appellants that the notification is not valid since it is not issued by competent authority is also not tenable in view of the fact that the Government after considering the report of the Advisory Board and taking all aspects into consideration fixed the minimum rates of wages and issued the notification accordingly. It cannot be said that the Government was influenced by the recommendations of the Commissioner of Labour, who was then assigned the status of Ex-Officio Principal Secretary to the Government, because his recommendations are not binding on the Government.
27. The learned Counsel for the appellants contended that introduction of payment of cost of living allowance to the employees under the impugned notification is bad as the same is not permissible in payment by minimum wages, but is permissible in cases of payment of fair or living wages.
28. Counsel appearing for the trade unions and the Government contended that the introduction of payment of cost of living allowance by the Government is correct since the Minimum Wages Act specifically provides for payment of the same and that minimum wages without cost of living allowance are no wages at all as the employees will not be able to survive without it.
29. The question that has to be decided is whether introduction of cost of living allowance in revision of minimum wages is illegal.
30. Section 3 of the Act empowers the Government to fix minimum rates of wages from time to time. While fixing minimum rates of wages, different minimum rates of wages can be fixed for different scheduled employments, for different classes of works in the same scheduled employment and for different localities. Section 4 of the Act lays down the elements consisting of minimum rates of wages and it reads :
"(1) Any minimum rate of wages fixed or revised by the appropriate Government in respect scheduled employment under Section may consist of -
(i) a basic rate of wages and a special allowance at a rate to be adjusted at such interval and in such manner appropriate Government may direct to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the cost of living allowance); or
(ii) a basic rate of wages with or without the cost of living allowance and the cash value of the concession in respect of supplies of a essential commodities at concession rates, where so authorised; or
(iii) an all-inclusive rate allowing for the basic rates, the cost of living allowance and the cash value of the concession, if any.
(2) The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rates shall be computed by the competent authority at such intervals and in accordance with such direction as may be specified or given by the appropriate Government."
31. Thus, the Government is empowered to introduce the cost of living allowance and the competent authority has to compute the same and the cash value of concessions for supply of essential commodities. Cost of living allowance introduced under the impugned notification cannot be said to be illegal or bad since it is in accordance with the mandate of law. One should not forget that the cost of living allowance is paid along with the wages to neutralise the inflation rate and increase in prices of commodities. There is no bar in the Act for payment of cost of living allowance, (but whereas) Section 4 of the Act clearly lays down that cost of living allowance has to be paid to the employees irrespective of minimum rates of wages. We are, therefore not able to agree with the contention of the learned counsel for the appellants and the learned single Judge gave cogent reasons in this behalf, with which we are not able to disagree.
32. The contention of the learned counsel for the appellants that introduction of payment of cost of living allowance amounts to double payment as wages were revised earlier the price index number and increase in prices were taken into consideration, cannot be countenanced for the reason that the prices are increasing in geometrical progression and the labourer of a factory or industry or establishment must be able to lead a minimum life with his family members. Otherwise, the wages paid cannot be said to be wages at all.
33. Lastly, the learned counsel for the appellants contended that inclusion of Shops and Commercial establishments in Part-I of the Schedule to the Act is bad. This contention is also not tenable as G.O.Ms. No. 1949 dated December 29, 1970, whereby shops and commercial establishments to Part-I of the schedule to the Act, has not been challenged at any time during the last twenty five years and that after issuance of the said G.O. minimum wages for the employees of shops and commercial establishments have been revised for a number of times. Further, no other material is produced in support of the contention to show as to why the inclusion is not proper.
34. For the aforesaid reasons, we see no reasons to interfere with the judgment of the learned single Judge as no grounds are made out in these appeals for interference. The writ appeals are dismissed accordingly. No costs.