Bombay High Court
Harilal Jechand Doshi Ghatkopar Hindu ... vs Maharashtra General Kamgar Union & ... on 12 August, 1999
Equivalent citations: 2000(1)BOMCR620, (2000)ILLJ419BOM, 2000(2)MHLJ123
Author: A.P. Shah
Bench: A.P. Shah
ORDER A.P. Shah, J.
1. This petition under Article 226 of the Constitution of India challenges the order dated 29th January, 1999 made by the Industrial Court, Mumbai, in Complaint (U.L.P.) No. 133 of 1995, a proceeding under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, hereinafter referred to as the M.R.T.U. Act.
2. The petitioner Harilal Jechand Doshi Ghatkopar Hindu Sabha Hospital is a charitable hospital. The respondent No. 1 is a trade union, who had filed the above complaint before the Industrial Court, Mumbai, on behalf of a member-employee Smt. Indira Vyas. The concerned employee was working with the petitioner as part-time clerk since 1979 and drawing a sum of Rs. 892.60 as wages comprising of Rs. 412/- as basic and Rs. 480.60 as dearness allowance. On 8th November, 1991, the concerned employee was appointed as a full-time permanent clerk. She was paid total wages amounting to Rs. 1154/- comprising of Rs. 227/- as basic and Rs. 927/- as dearness allowance. From 1-1-1992, the concerned employee is drawing a total salary of Rs. 1227/-, comprising of Rs. 300/- as basic wages and Rs. 927/- as dearness allowance.
3. On 14th March, 1988 the State Government issued a notification, being Notification No. MWA 5287/6730/LAB/-7 under section 3(1)(a) and (b) read with section 5(2) of the Minimum Wages Act, 1948, hereinafter referred to as the Act, prescribing the minimum monthly basic pay of Rs. 818/- and special allowance of Rs. 336/- for the clerks employed in hospitals.
4. On 4th January, 1995, the Union filed Complaint No. 133 of 1995 before the Industrial Court under Items 5 and 9 of Schedule IV of the M.R.T.U. Act. It is urged by the Union that by not paying the basic rate of wages as per the notification issued under the Act, the petitioner hospital has indulged in unfair labour practice and, therefore, a prayer is made for refixation of the basic rate of wages of concerned employees. By the impugned order dated 29-1-1999, the Industrial Court declared that the petitioner has committed an unfair labour practice under Item 9 of Schedule IV of the M.R.T.U. Act and directed the petitioner to pay to the concerned employee at Rs. 818/- and dearness allowances of Rs. 927/- per month along with annual increments applicable to the basic rate of wages of Rs. 818/- per month from 8-11-1991 onwards excepting for the period from 8-11-1992 to 4-1-1995. The legality and correctness of this order is challenged in the present petition.
5. A reading of the order of the Industrial Court shows that the Industrial Court noted that the total wages paid to the employee were more than the minimum wages prescribed under the relevant notification issued under section 5 of the Act. However, what has been held by the Industrial Court is that the employee was not paid the basic wage of Rs. 812/- per month as per the notification and this amounts to violation of a mandatory provision of the Act. In that view of the matter, the Industrial Court directed the employer to pay basic wages at the rate of Rs. 818/- per month.
6. The main argument of Mr. Bukhari, learned Counsel for the petitioner, is that the wages paid to the employee were more than the total minimum wages prescribed under the notification. Mr. Bukhari urged that what the employee is entitled to get is the wages, the totality thereof, at a rate not less than the minimum rate prescribed and, therefore, if the employee is paid more than the minimum wages, it cannot be said that there was breach of the employer's duty, as defined by section 12(1) of the Act.
7. In reply, Mr. Ganguli, learned Counsel for the respondent, contended that the payment of basic rate of wages was separately prescribed under the notification and since that notification has not been challenged by the petitioner-employer, the employer is bound to pay the basic rate of wages as notified by the State Government.
8. The employee concerned was during the relevant period paid wages made up of two component parts, namely, basic wage and dearness allowance i.e. special allowance. It is a common ground that the total of the two payments actually made to the employee each month during the relevant period, calculated on the basis of the contractual rates, never fell below the total of the minimum wages calculated on the basis of the minimum wages prescribed by the notification dated 14th March, 1988. It is also a common ground that what was paid as basic wage by the employer was Rs. 300/- per month, whereas the notification provided for the basic wage of Rs. 818/- a month. Whether, in the circumstances of the case, the employee was also entitled to the difference between Rs. 300/- and Rs. 818/- is the question, which is required to be decided in this petition.
9. In order to appreciate the rival contentions, it is necessary to look into the relevant provisions of the Act. Section 2(h) of the Act defines "wages" as follows:
"Wages means all remunerations, 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 allowances or the value of any travelling concession;
(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(v) any gratuity payable on discharge;"
10. Section 3(1) of the Act directs the appropriate Government to fix the minimum rates of wages. Section 3(1) reads thus:
"Section 3(1)- The appropriate Government shall, in the manner hereinafter provided-
(a) fix the minimum rates of 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:
Provided that the State Government may, instead of fixing minimum rates of wages under this clause for the whole State, fix such rates for a part of the State or for any specified class or classes of such employments in the whole of the State or any part thereof; and in the case of an employment under any local authority; the State Government may fix such rates for any specified local authority or class of local authority;
(b) 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:
Provided that, where for any reason the appropriate Government has not reviewed the minimum rates of wages fixed by it in respect of any scheduled employment within any interval of five years, nothing contained in this clause shall be deemed to prevent it from reviewing the minimum rates after the expiry of the said period of five years and revising them, if necessary, and until they are so revised the minimum rates in force immediately before the expiry of the said period of five years shall continue in force.
(1A) XXXXXXX"
11. Section 4 of the Act prescribes the minimum rate of wages and reads as follows:
"4. Minimum rate of wages.---(1) Any minimum rate of wages fixed or revised by the appropriate Government in respect of Scheduled employments under section 3 may consist of :
(i) a basic rate of wages and special allowance at a rate to be adjusted to such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such worker (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 essential commodities at concession rates, where so authorised, or
(iii) an all inclusive rate allowing for the basic rate, 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 concession 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."
12. The duty cast upon by section 3(1) in fixing the wages has to be discharged by publication of a notification as provided under section 5(2) of the Act. When such a notification is published, the duty is then cast upon the employer by section 12(1) of the Act to pay to the employer the wages not less than what has been notified by the Government as the minimum payable.
13. Mr. Bukhari's argument is that the scheme of the Act is to provide a minimum wage for each employee and so long as that minimum wage is paid, there is compliance with the provisions of the Act. It is not the requirement of the statue that each component part of the minimum wages, such as the basic wage and the dearness allowance/special allowance should be paid at the rate prescribed under the notification.
14. Mr. Bukhari brought to my notice a recent judgment of the Apex Court in the case of Airfreight Ltd. v. State of Karnataka, . In that case, the appellant Company was paying more than the minimum wages including dearness allowance. The question before the Court was whether the workers were entitled to variable dearness allowance (V.D.A.) under a notification issued by the State Government under the Minimum Wages Act. The Apex Court held that neither the Scheme nor any provision of the Act provides that the rates of minimum wages are to be split up on the basis of the cost of each necessity taken into consideration for fixing the same. Hence, in the cases where an employer is paying a total sum which is higher than the minimum rates of wages fixed under the Act, including the cost of living index (V.D.A.), he is not required to pay V.D.A. separately. Where minimum wage is linked with the cost of living index, the amount paid on the basis of dearness allowance is not to be taken as an independent component of the minimum wages but as part and parcel of the process of computing the rates of minimum wages which is to be determined after taking into consideration the cost of various necessities.
15. Mr. Bukhari also drew my attention to the case of Chairman of the Madras Port Trust v. Claims Authority, , wherein it was held by the Madras High Court that what the employee is entitled to is the wages and the scheme of the Minimum Wages Act is to provide for a minimum wage for each employee. It further also lays down that the Act provides for a payment of a minimum. So long as that minimum is paid, the contractual wage structure is left unaffected and the component parts of wages could still be regulated by contract between the employer and employee and that definition of wages postulates a contractual basis, express or implied. If the contract rate of wages is higher, the statutory right and obligation do not come into play. It was also held that if the wages paid to the concerned workmen under various heads of monthly wages, dearness allowance, house rent allowance, etc. exceeded the minimum rate of wages fixed under the Act, the employer could not be held guilty of contravening the notification, though a particular component of the wage structure, viz., dear-ness allowance, was at a rate lower than the one fixed under the Act.
16. Mr. Bukhari also drew my attention to the decision of this Court in the case of Union of India v. Rathi, in which it was laid down that the object of the said Act being to provide minimum wages to the employees according to the nature and the duration of the work done by the employees, one has to find out what is the total liability imposed on the employer.
17. The next case relied upon by Mr. Bukhari is of Municipal Borough v. Gundawan, 1965(2) Lab.L.J. 26 : A.I.R. 1965 Mys. 317 (V- 52), wherein learned Single Judge was pleased to hold that from the scheme of the Act it is clear that its object was to guarantee to those who are working in scheduled employment, a minimum rate of wages, and if the wages paid by the employer are more than what the employees would have got on the basis of the minimum wages, then no relief can be given under the Act.
18. The last case relied upon by Mr. Bukhari is of the Patna High Court in Imperial Tobacco Co. v. State, . In that case, the Division Bench, after considering the decision of the Madras High Court held that if the wages paid by the employer are more than what the employees would have got on the basis of the minimum wages, then no relief can be given under the Act inspite of the Act providing for the regulation of the hours of work, or Rule 25 prescribing wages for the overtime work at double the ordinary rate of wages.
19. It is thus clearly seen that section 4(1) of the Act provides for the minimum rate which could consist of component parts. Section 4(1) does not postulate different minima for the several components; nor can each such minimum constitute the minimum rate of wages within the meaning of section 4(1). If the employer has paid the total wages more than the minimum rate of wages within the meaning of section 4(1), there cannot be any contravention of the provisions of the Act. In the instant case, the minimum wages comprises of two component parts, namely, basic wage and dearness allowance. It is not disputed that the employee in the present case has been paid the wages under both the component parts and the total amount paid to the employee is higher than the minimum wages prescribed under the notification. Under the circumstances, it cannot be said that the employer has contravened the provisions of the Minimum Wages Act.
20. In the result, the petition succeeds. The impugned order dated 29th January, 1989 passed by the Industrial Court, Mumbai, in Complaint (U.L.P.) No. 133 of 1995 is quashed and set aside. No order as to costs.
Parties to act on an ordinary copy duly authenticated by the Associate of this Court.
Certified copy expedited.
21. Petition allowed.