Andhra HC (Pre-Telangana)
The Andhra Pradesh Hotels Association, ... vs Govt. Of A.P., Labour Employment, ... on 12 June, 2001
Equivalent citations: 2001(4)ALT292, (2001)IILLJ1378AP
Author: E. Dharma Rao
Bench: E. Dharma Rao
ORDER E. Dharma Rao, J.
1. The petitioner, which is the Andhra Pradesh Hotels Association, represented by its Secretary filed the present writ petition seeking writ of Mandamus declaring the G.O.Ms.No.53 Labour, Employment, Training and Factories ( Lab. II) dated 17-10-2000 as illegal, arbitrary and unconstitutional and to issue consequential directions to the respondent and pass such other order or orders as this Honorable court deems fit and proper in the circumstances of the case.
2. The brief facts of the case are as follows: The petitioner is the secretary of the Andhra Pradesh Hotels Association, which is registered association representing the hotels functioning in the State of Andhra Pradesh. The respondent issued draft notification in G.O.Rt.No.599 dated 23-3-1999 published in the Gazette proposing revision of minimum wages in the hotel industry under Sec.5(2) of the Minimum Wages Act. The previous revision of minimum wages has taken place under G.O.Ms.No.89 dt.15-5-1991. The present revision was proposed by taking cost of living index at 309 points ( base year 1982=100 series). It was also proposed that for any rise in cost of price index over the 309 points the cost of living allowance shall be paid as shown in G.O. It was shown that Rs.3/- shall be the cost of living allowance in respect of basic wage of Rs.500/- whenever there is an increase of a point in the cost of living index above 309 points. It was also proposed that for the basic wage above Rs.500/- the cost of living allowance shall be calculated at the rate of Rs.0.25. For every Rs.50/- of the basic wage subject to an upper limit of Rs.10-50 for the basic wage of Rs.2,000/-. The employees were categorized into six categories, the post of Manager carrying a basic wage of Rs.2,376/-, category A drawing basic wage of Rs.1,901/-, category B drawing Rs.1,663/-, category C drawing Rs.1,496/-, category D drawing Rs.1,426/- and category E drawing Rs.1,320/-. The petitioner association submitted its objections on 21-7-1999 in writing to the respondent raising various aspects to be considered by the Advisory Board before finalizing the wage revision. It is further stated that the basic wage fixed in respect of the post of Manager in the final notification is Rs.3625/-, a difference of Rs.1,259/- over the draft notification. In respect of the category A employees the basic wage is fixed at Rs.2,909/- which is Rs.1,008/- above the draft notification. In respect of category B the basic wage is fixed at Rs.2,544/- which is Rs.881/- above the draft notification. The basic wage for category C is fixed at Rs.2,289/- which is Rs.893/- above the draft notification. The basic wage of category D is fixed at Rs.2,182/- which is Rs.756/- above the draft notification. The steep increase in the basic wage within a period of one and half years is unreasonable, excessive exorbitant and arbitrary. In the instant case, the time gap is around one and half years and the fixation of basic wage at a very high figure is highly arbitrary. The basic wage for the purpose of final notification could be increased only by adding the basic wage as provided in the draft notification and the VDA payable for the difference in the cost of living index between the date of draft notification and the final notification. Applying the said reasoning the basic wages as provided in the final notification are exorbitant and unrealistic. The mode of calculation of cost of living allowance under the draft notification and the final notification remained the same, but for the difference that the base point of the cost of living index has been taken at 411 points in the final notification whereas it was 309 points in the draft notification. The cost of living allowance is provided separately for the purpose of neutralizing the increase in the cost of living index beyond the date of the notification till the date of next notification. In order to compensate the workman for the rise in the inflation that the dearness allowance is provided are variable basis by linking it to a certain level of cost of living index as on the date of the notification by fixing certain rate on which the neutralization will have to be done. It has been held by the Supreme Court in the judgment reported in MANAGEMENT OF SHRI CHALTHAN VIBHAG KHAND UDYOG SAKAKARI MANDLI LIMITED V. G.S.BAROT1 that the neutralization of 100% is not permissible in law. In the present case the Government fixed uniform rate of cost of living index at Rs.10-50 per point over and above 411 points for all categories of employees since the lowest category is also provided with the basic wage of Rs.2020/-. The fixation of cost of living allowance at Rs.10-50 per point is erroneous and on higher side as the neutralization is clearly above 100%. The respondent acted in an arbitrary manner without providing an opportunity of personal hearing to the representatives of the petitioner while revising minimum wages. It is further submitted that the impugned government order provides for deduction at the rate of Rs.300/- towards the monthly food provided to the workman by the establishment and Rs.75/- towards the accommodation provided. This fixation is at a very low level and there are no valid reasons for fixing these deductions at such low levels. Providing food consisting of 2 meals, two tiffins and coffee to each workman costs more than Rs.30/- per day for the management and the deduction for the month should be at least around Rs.900/- per workman. Similarly the deduction for providing accommodation has been provided at Rs.75/- per month and the respondent has not taken realistic approach. The implementation of the present government order would impose an additional burden running into lakhs of rupees on the hotels and it is not possible for them to pass on the entire amount to the customers. There is already a steep increase in the charges towards electricity, water, property tax etc., and increasing the minimum wages to a very high level would further break the back of the establishments. The Government cannot act in a manner, which is violative of Article 19(i) (g) of the Constitution of India, and the instant revision of minimum wages is totally illegal and unconstitutional. Hence the petitioner filed the present writ petition for the relief as stated above.
3. After issuing rule nisi the respondent filed counter stating that the employment of Hotels and Restaurants is covered in Part I of the schedule of Minimum Wages Act 1948. The V.D.A. is applicable to this employment in pursuance of G.O.Ms.No.36 dated 15-3-1989 of Women Development, Child Welfare and Labour Department. As per G.O.Ms.No.16 dated 25-5-1995 Labour, Employment, Training and Factories Department the revision of wages have to be taken up once in five years. The last revision was taken place in 1991. Subsequently under Sec. 5(1) (b) of the Minimum Wages Act 1948 basing on consumer price index increases draft notification was issued in G.O.Rt.No.599 dated 23-3-1998 L.E.T.& F.( Lab. II) Department wherein it was stipulated that any objections and suggestions in respect of minimum wages proposed will be taken into consideration after expiry of two months from the date of Gazette notification. The said draft wages were published in Gazette No.118 dt.25-3-1999 and the same was communicated to all the affected parties vide this office endorsement No.J2/19961/96 dated 14-6-1999. The draft was discussed by the A.P. Minimum Wages Advisory Board in its 13th meeting held on 27-6-2000 and later recommended a weight age of 20% over draft wages. The minimum wage rates have to be revised once in five years after completion of stipulated time from the date of Gazette notification. But due to lengthy process in finalization of wages i.e. for issuance of draft notification and final notification the revision of wages took place after a lapse of nine years in this employment. Due to steep increase in consumer price index points from 1991 to 2000 i.e. from 186 points to 411 points there is an increase of 225 points, which comes to 121% natural increase. Further the consumer price index increase from draft notification was also 102 points, which comes to 33% increase. The A.P. Minimum Wages Advisory Board, after prolonged discussions taking all aspects into consideration i.e. consumer price index etc., had recommended a weight age of 20% over draft wages. Accordingly final wages were proposed with an increase of 33% and minimum wages to the category E employees is arrived at Rs.2,020/- in zone I and Rs.1818/- in zone II which is not a higher wage in the present stage of cost of living. The neutralisation rate is more than 100% but the practice of neutralization is vogue since 1991 which was also upheld by this court in writ petition No.9248 of 1991 dated 29-1-1994. It is further contended that the impugned order was issued in accordance with sections 3 and 4 of the Minimum Wages Act 1948 duly following the procedure prescribed under Sec.5 of the Act. The Advisory Board has taken into consideration all the necessary aspects keeping in view the prevailing economic conditions, cost of living and nature of work and made recommendations for revising the minimum rates of wages and accordingly the impugned government order was issued. The fact that no personal hearing was given to the petitioner does not cause any prejudice since the A.P. Minimum Wages Advisory Board has considered all relevant aspects while making the recommendations. The revised rates fixed under impugned notification after a gap of nine years is justified and the petitioner is not entitled to the relief sought.
4. The respondent filed additional counter that while fixing minimum rates of wages in respect of scheduled employments under Minimum Wages Act 1948 the procedure as prescribed in Sec. 5(i)(b) is being followed. Section 5(1)(b) of the Minimum Wages Act stipulates that:
Section 5 (i) (b): by notification in the official Gazette publish its proposals for the information of persons likely to be affected there by and specify a date, not less than two months from the date of notification, on which the proposal will be taken into consideration.
5. As per sec.4 (1) (i) of the Act the minimum rates of wages fixed by the appropriate Government in respect of a scheduled employment may consist of basic rate of wages and a special allowance at a rate to be adjusted at such interval and in such manner as the appropriate Government may direct to accord as nearly as practicable with the variation in the consumer price index number applicable to such workers. Thus the special allowance has to be decided with regard to the variation in the consumer price index number applicable to such workers as on the date of final notification. Hence it is mandatory to take the variation in CPI numbers while proposing draft notification and issuing the final notification. This court in writ petition No. 9248 of 1991 and batch dealt with revision of minimum wages in respect of employees working in Hotels, Restaurants and Eating Houses and directed that the cost of living allowance should be paid on the basis of average rise in the State Industrial workers as on the date of publication of final notification. It is further submitted that the Government have constituted the State Minimum Wages Advisory Board under Sec.7 of the Minimum Wages Act 1948 to advise the Government with regard to the fixation of the Minimum rates of wages. Whenever draft notification is placed before the Board it takes into consideration all aspects i.e. nature of work, prevailing wage structure and market prices of basic needs etc., and will suggest different wages for different scheduled employments. It is further submitted that last revision was taken place in 1991. When the minimum wages were fixed in G.O.Ms.No.89 the consumer price index numbers were neutralized at 186 points ( base 1982-100). In the year 1998, when the draft notification was issued vide G.O.Rt.No.599 dt.23-3-1998 the wages were proposed neutralizing the consumer price index numbers at 309 points. The draft notification was placed before the A.P. State Minimum Wages Advisory Board in its 13th meeting held on 27-6-2000 for its recommendations. By that time the existing consumer price index is at 411 points i.e. there is an increase of 102 points and the same shall be taken into consideration for fixing the special allowance. By issue of G.O.Ms.No.36 dated 15-3-1989 and G.O.Ms.No.37 dated 15-3-1989 the workmen are entitled to draw special allowance in accordance with the VDA notifications issued periodically by the Commissioner of Labour, basing on the Industrial Workers consumer price index. numbers. Thus the workmen have already been drawing special allowance up to 411 points ( i.e. from 186 points to 411 points on the existing G.O.Ms.No.89 dated 25-5-1991 by June 2000 basing on the relevant C.P.I. numbers. The Minimum Wages Advisory Board recommended 20% increase on draft wages at 309 points i.e. taking into consideration the consumer price index numbers as on 23-3-1998. When the Board suggested 20% increase over and draft wages the Board wanted that the neutralisation of consumer price index numbers should be at 309 points. If the same was implemented it would result in decrease of wages since VDA at CPI numbers 411 points has already been allowed to the workmen. The Commissioner while issuing final notification took into consideration the latest consumer price index numbers at 411 points. The difference of 309 points and 411 points comes to 102 points and it constitutes increase of 33% of VDA above draft notification. It is further stated that the action of the Government in taking into consideration the consumer price index at 411 points as on the date of final notification is in accordance with law and in the interest of workmen. The Government is competent to issue final notification on the basis of the consumer price index and it cannot said to be arbitrary or illegal. Hence it is prayed that the writ petition may be dismissed.
6. The Hyderabad and Secunderabad Hotels Workmen Union represented by its General Secretary filed implead petition to implead it as second respondent in the writ petition supporting the stand of the Government in the writ petition. They filed counter affidavit stating that when the Government has revised minimum rates of wages in the year 1991 in the employment of hotels, restaurants and eating houses vide G.O.Ms.No.89 Women Development, Child Welfare and Labour ( Lab. III) Department dated 25-5-1991 challenged the said notification in W.P.No.9248 of 1991 and batch and the same was dismissed. Thereafter revision did not take place. When representations were made by the workers union to the Government of Andhra Pradesh, the Commissioner of Labour has addressed a letter dt.27-5-1998 with proposals submitted by them forwarded to the Government and the Government issued draft notification for revision of minimum rates of wages. Subsequently the Government issued G.O.Rt.No.599 Labour, Employment, Training and Factories Department dated 23-3-1999 published in A.P. Gazette on 25-3-1999 inviting objections and suggestions within a period of two months to the principal Secretary to Government. Thereafter the Government of A.P. in exercise of powers conferred under Sec.5 have fixed the minimum rates of wages for the employees who are employed in the employment of Hotels, Restaurants and Eating Houses vide G.O.Ms.No.53 dt.17-10-2000. Instead of complying with the notification issued by the Government of A.P. the petitioner has filed the present writ petition. The draft notification was issued vide G.O.Rt.No.599 dt.23-3-1999 notifying wages in respect of Managers and Category A to E taking into consideration the neutralizing the cost of living allowance at 309 and subsequently final notification was issued on 17-10-2000 revising minimum wages as on that date the cost of living has been notified by the Government at 411. Thus there is an increase of 102 points in the cost of living allowance. Therefore, in the final notification the cost of living allowance is neutralized at 411. If this aspect is taken into consideration the revision from the draft notification to final notification is only nominal. The allegation that there is steep increase in the basic wage within a period of one and a half years is misconceived. The above contention is further clarified by the second respondent in category E draft notification. If the cost of living allowance is neutralized at 309 the increase in the cost of living allowance is 102 by taking the cost of living allowance for the difference between 411 and 309 the minimum wages of an employee as per the draft notification as on 17-10-2000 would be Rs.2070/- whereas in the final notification the wage was fixed at Rs.2050/-. Cost of living index as notified by the Government was taken into consideration while fixing the final notification by neutralizing the cost of living allowance at 411 points as on the date of notification i.e. 17-10-2000. As per sec.4 of the minimum wages consist of basic wages with or without cost of living and cash value of concessions. The Act also provides computation of cost of living allowance provided by the competent authority at intervals. The Government has been computing the cost of living allowance at 6 monthly intervals in the State of A.P. The said cost of living allowance is applicable to all the scheduled employments notified under the Minimum Wages Act 1948. Reference to Supreme Court Judgment in has no relevance as it is with regard to industrial dispute raised by the workmen and award of Industrial Court, Gujarat. The same cannot be taken into consideration for fixation of the minimum wages irrespective of capacity of the industry. The Supreme Court in catena of decisions reiterated this view. This court in T.G.LAKSHMAIAH SETTY AND SONS ( 1981 LIC 960) held that while fixing the minimum wages the State is only discharging constitutional obligation imposed upon it by the Directive Principles of State Policy. This performance of a sacred constitutional duty towards the economically weaker sections of the society cannot be allotted to the defeated on a theory of capacity of the industry to pay which is a judicial blast on the meaning of Article 19 (1)(f)(g) of Constitution of India. Therefore the neutralization of 100% as alleged by the petitioner is wholly misconceived and baseless. Hence it is prayed that the Honorable court may be pleased to dismiss the writ petition.
7. A Constitutional Bench of this court have gone into the power of the Government to fix the minimum wages rates under Sections 3, 4, and 5 of the Minimum Wages Act 1948 as violative of Art.19(1)(g). The validity of the said Act was upheld by huge decisions of the Supreme Court in EDWARD MILLS COMPANY LIMITED, BEAWAR V. STATE OF AJMER2 and BIJAY COTTON MILLS LIMITED V. STATE OF AJMER3. The Supreme Court in the decision reported in U. UNICHOYI V. STATE OF KERALA 4 held as follows:
"When the Act purports to achieve is to prevent exploitation of labour and for that purpose authorizes the appropriate Government to take steps to prescribe minimum rates of wages in the scheduled industries. In an underdeveloped country which faces the problem of unemployment on a very large scale it is not unlikely that labour may offer to work even on starvation wages. The policy of the Act is to prevent the employment of such sweated labour in the interest of general public and so in prescribing the minimum wage rates the capacity of the employer need not be considered. What is being prescribed is minimum wage rates which a welfare State assumes every employer must pay before he employs labour. A minimum wage according to the Committee on Fair Wages must provide not merely for the bare subsistence of life but for the preservation of the efficiency of the worker, and so it must also provide for some measure of education, medical requirements and amenities. The concept about the components of minimum wage thus enunciated by the Committee has been generally accepted by the industrial adjudication in this country. Sometimes the minimum wage is described as a bare minimum wage in order to distinguish it from the wage structure which is subsistence plus or fair wage but too much emphasis on the adjective bare in relation to the minimum wage is apt to lead to the erroneous assumption that the maintenance wage is a wage which enables the worker to cover his bare physical needs and keep himself just above starvation. That clearly is not intended by the concept of minimum wage. On the other hand since the capacity of the employer to pay is treated as irrelevant, it is but right that no addition should be made to the components of the minimum wage which would take the minimum wage from near the lower level of the fair wage, but the contents of this concept must ensure for the employee not only his sustenance and that of his family but must also preserve his efficiency as a worker. The Act contemplates that minimum wage rates should be fixed in the scheduled industries with the dual object of providing sustenance and maintenance of the worker and his family and preserving his efficiency as a worker.
It is further held that the determination of the minimum wages must inevitably take into account several relevant factors and the decision of this question has been left by the Legislature to the committee which has to be appointed under the Act. When a committee consisting of the representatives of the industry and the employees considers the problem and makes its recommendations and when the said recommendations are accepted by the Government it would ordinarily not be possible for us to examine the merits of the recommendations as well as the merits of the wage structure finally notified by the Government. When the Kerala Government has appointed a Committee in exercise of its power conferred by clause (a) of sub-section (1) of Sec.5 of the Minimum Wages Act 1948 to hold enquiries and advise the Government in fixing the minimum rates of wages in respect of the employment in the tile industry and nominated eight persons to constitute the said committee under S.9 of the Act. The committee gave its report. The Government of Kerala then considered the report and issued notification prescribing the minimum rates of wages as specified in the schedule annexed thereto. Question the above said notification writs were filed in the High court of Kerala and when the matter went to the Supreme Court the Supreme court has considered the matter and upheld the notification.
Another Constitutional Bench of the Supreme Court in the decision reported in CHANDRA BHAWAN BOARDING AND LODGING, BANGALORE V. STATE OF MYSORE 5 has gone into the issue and the validity of the notification issued by the Government of Mysore in S.O.No.1038 dt.1-6-1967 fixing the minimum wages of different classes of employment in residential hotels, restaurants and eating houses in the State of Mysore under the provisions of Minimum Wages Act, 1948, was called in question. When the High Court of Mysore again rejected various contentions advanced on behalf of some of the hotel owners, they have questioned the validity of the impugned notification. It was observed by the Supreme Court that that the Act came to be enacted to give effect to the resolutions passed by the Minimum Wages fixing the Machinery Convention held at Geneva in 1928. The relevant resolutions of the convention are embodied in Articles 223 to 228 of the International Labour Code. The object of these resolutions as stated in Art.224 was to fix minimum wages in industries in which no arrangements exist for the effective regulation of wages by collective agreements or otherwise and wages are exceptionally low. The Central Legislature enacted the Act in 1948 and it came into force on March 15, 1948. The long title to the Act says that it is an Act for fixing minimum rates of wages for certain employments. The preamble to the Act says that it is expedient to provide for fixing minimum rates of wages in certain employments. Section 2 defines certain terms. Section 3 empowers the appropriate Government which expression is defined in section 2 (b) to fix the minimum rates of wages payable to the employees employed in an employment specified in Part I or in Part II of the schedule and in any employment added to either part in exercise of the powers granted under section 27 of the Act. Clause (b) of Section 3 (2) empowers the appropriate Government to review at such intervals not exceeding five years, minimum rates of wages so fixed and revise the minimum rates, if necessary. Sub section (3) of that section stipulates that in fixing or revising minimum rates of wages under that section different minimum rates of wages may be fixed in different scheduled employments for different classes of work in the same scheduled employment for adults, adolescents, children and apprentices and for different localities. Section 4 prescribes the different methods in which the minimum rates of wages can be fixed. Section 5 is important for our present purpose. It reads thus:
" (1) In fixing minimum rates of wages in respect of any scheduled employment for the first time under this Act or in revising minimum rates of wages so fixed, the appropriate Government shall either-(a) appoint as many committees and sub committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision, as the case may be, or (b) by notification in the official Gazette, publish its proposals for the information of persons likely to be affected thereby and specify a date not less than two months from the date of the notification on which the proposals will be taken into consideration.
(2) After considering the advice of the committee or committees appointed under clause (a) of sub section (1) of the Act or as the case may be, all representations received by it before the date specified in the notification under clause (b) of that sub section, the appropriate Government shall, by notification in the official gazette, fix or as the case may be, revise the minimum rates of wages in respect of each scheduled employment and unless such notification otherwise provides, it shall come into force on the expiry of three months from the date of its issue.
Provided that where the appropriate Government proposes to revise the minimum rates of wages by the mode specified in clause (b) of sub section (1), the appropriate Government shall consult the Advisory Board also.
Section 7 says that for the purpose of coordinating the work of committees and sub committees appointed under section 5 and for advising it generally in the matter of fixing and revising the rates of wages, the appropriate Government should appoint an Advisory Board. Section 8 provides for the appointment of a Central Advisory Board. Section 9 prescribes the composition of the various committees and sub committees under Section 5 and the Advisory Boards under sections 7 and 8. Section 11 authorities the appropriate Government to fix wages in kind under certain circumstances and to fix its value in terms of money. Section 12 stipulates that the employer shall pay to every employee engaged in a scheduled employment the minimum rates of wages fixed by the notification. The other provisions of the Act except section 27 are not relevant for our present purpose. Section 27 empowers the appropriate Government to add to either part of the schedule any employment in respect of which it is of opinion that the minimum rates of wages should be fixed under the Act. It was further observed in the said judgment of the Supreme Court as follows:
`" We are not convinced that the rates prescribed would adversely affect the industry or even a small unit therein. If they do then the industry or the unit as the case may has no right to exist. Freedom of trade does not mean freedom to exploit. The provisions of the Constitution are not erected as the barriers to progress. They provide a plan for orderly progress towards the social order contemplated by the preamble to the Constitution. They do not permit any kind of slavery, social economic or political. It is a fallacy to think that under our Constitution there are only rights and no duties. While rights conferred under Part III are fundamental, the directives given under Part IV are fundamental in the governance of the country. We see no conflict on the whole between the provisions contained in Part III and Part IV. They are complementary and supplementary to each other. The provisions of Part IV enable the legislatures and the Government to impose various duties on the citizens. The provisions therein are deliberately made elastic because the duties to be imposed on the citizens depend on the extent to which the directive principles are implemented. The mandate of the Constitution is to build a welfare society in which justice, social, economic and political shall inform all institutions of our national life. The hopes and aspirations aroused by the Constitution will be belied if the minimum needs of the lowest of our citizens are not met.
The fixation of minimum wages depends on the prevailing economic conditions, the cost of living in a place the nature of the work to be performed and the conditions in which the work is performed.
The cost of living is one thing, cost of living index is another. What is relevant is the former and not the latter. The latter depends on the base year, which is not the same in all the towns and the prices of certain selected goods in each of the towns concerned in the base year and thereafter which again is likely to differ from town to town. For all the reasons the notification was upheld."
8. As rightly contended by the second respondent Union the decision relied on by the petitioner in SHRI CHALTHAN VIBHAG KHAND UDYOG SAHAKARI MANDLI LIMITED Case (1 supra) is not applicable to the facts and circumstances of the case as it relates to grant of dearness allowance in sugar factories of U.P. State. When the Labour Minister gave the award and as a result of that award, an order was passed under Sec.3(b) of the U.P. Industrial Disputes Act 1947 by the Government of Uttar Pradesh. This order relating to U.P. Pattern of Pay, Graduated Dearness Allowance, Variable Dearness Allowance came into force from October 31, 1974 and effect was to be given to these pay scales and dearness allowance from October 1, 1974. As the sugar factories were seasonal factories a retention allowance for unskilled seasonal workmen for off-season at the rate of 10% of the basic wage and dearness allowance payable during the crushing year 1974-75 was also provided for. The demand put forward by the workmen in all these appeals is for payment according to the U.P. Pattern. The purpose of grant of dearness allowance is to neutralize the increase in the cost of living due to rise in prices. Neutralisation may be such as to neutralize fully the increase in cost of living or may be restricted to neutralize only a portion of the increase. Full or cent per cent neutralization can be achieved if the increase in the cost of living is fully compensated so that the pay of the worker is not adversely affected. But an award of more than 100% of an increase in the cost of living would be more than neutralization and would in effect give the worker an increased wage. The result would be the worker would be getting an increased wage packet whenever there is a price rise-a result which would not have been envisaged in making provision for grant of dearness allowance. In the present case, the issue involved is revision of minimum wages to the employees working in hotels, restaurants and eating houses as contemplated under the provisions of the Act. Wage includes basic pay and dearness allowance and the dearness allowance is one of the components of the wage. Therefore, I see no relevancy to apply the principle laid down in SHRI CHALTHAN VIBHAG KHAND UDYOG SAHAKARI MANDALI LIMITED case ( 1 supra ).
9. With regard to the issue raised by the petitioners in this writ petition that the basic wage may defer between the final notification and the draft notification, the difference has to be reasonable keeping in view the time gap between the two notifications. In the instant case the time gap is around 1.1/2 years and the fixing of basic wage at a very high figure is highly arbitrary. The basic wage for purpose of final notification could be increased only by adding the basic wage as provided in the draft notification and the VDA payable for the difference in the cost of living index between the date of draft and final notification. Applying the said reasoning, the basic wages as provided in the final notification are exorbitant and unrealistic. He gave an example to support his contention that the basic wage of a Manager could not be Rs.3,625/- in the final notification when the basic wage in the draft is Rs.2,376/- and the VDA at the rate of Rs.10.50 per point, even assuming it to be correct, is around Rs.200/-. Hence the basic wages of that post can be around Rs.2,576/- but no where in the range of Rs.3,625/-. It is further contended that the base point of the cost of living index has been taken at 411 points in the final notification whereas it was 309 points in the draft notification. The cost of living index is provided separately for the purpose of neutralizing the increase in the cost of living index beyond the date of the notification till the date of next notification. In order to compensate the workmen for the rise in the inflation that the dearness allowance is provided are variable basis by linking it to a certain level of cost of living index as on the date of the notification by fixing certain rate on which the neutralization will have to be done. Therefore the neutralization of 100% is not permissible in law. In case the Government fixed uniform rate of cost of living index at Rs.10.50 per point over and above 411 points for all categories of employees since the lowest category is also provided with the basic wage of Rs.2,020/-. The fixation of cost of living allowance at Rs.10.50 per point is erroneous and on high side as the neutralization is clearly above 100% as could be seen from the statement enclosed. Therefore the rate at which the cost of living allowance is provided by the respondent in G.O.Ms.No.53 is clearly illegal and arbitrary and liable to be set aside. It is further contended that the deduction at the rate of Rs.300/- towards the monthly food provided to the workman by the establishment and Rs.75/- towards the accommodation provided. This fixation is at a very low level and there are no valid reasons for fixing these deductions at such low levels. Providing food consisting of 2 meals, 2 tiffins and coffee to each workman costs more than Rs.30/- per day, for the management and the deduction for the month should be at least around Rs.900/- per workman. Similarly the deduction for providing accommodation has been provided at Rs.75/- per month and realistic approach has not been taken by the respondent.
10. The learned Government pleader contended that the employment of hotels and restaurants is covered in Part I of the schedule of the Minimum Wages Act 1948. The V.D.A. is applicable to this employment in pursuance of G.O.Ms.no.36 dated 15-3-1989 of Women Development, Child Welfare and Labour Department. As per the provisions of the Act and G.O.Ms.No.16 dated 25-5-1995 Labour, Employment Training and Factories Department the revision of wages have to be taken up once in five years. The last revision was taken place in the year 1991. While exercising the power under Section 5(1) of the Minimum Wages Act basing on increase of consumer price index draft notification was issued in G.O.Rt.No.599 dated 23-3-1998 calling for the objections and suggestions from the employees of Hotel Management. Even communication was given to the concerned Hotel management who are affected by the revision of minimum wages to its employees and after receiving suggestions and objections the matter was referred to the A.P. Minimum Wages Advisory Board and the Board in its 30th meeting held on 27-6-2000 recommended the weight age of 20% over draft wages. The wages were not revised within five years from 1991. For the reason that due to lengthy process in finalisation of wages i.e. for issuance of draft notification and final notification the revision of wages took place after a lapse of nine years in this employment. Due to steep increase in consumer price index from 1991 to 2000 i.e. from 186 points to 411 points there is an increase of 225 points which comes to 121% natural increase. Further the consumer price index increase from draft notification was also 102 points ( i.e. 411-309) which comes to 33% increase. The A.P. Minimum Wages Advisory Board after prolonged discussions, taking all aspects into consideration i.e. consumer price index had recommended a weight age of 20% over draft wages. Accordingly final wages were proposed with an increase of 33% and minimum wages to the category E employees is arrived at Rs.2020/- in Zone I and Rs.1818/- in Zone II which is not a higher wage in the present stage of cost of living. It is further contended that the wages were revised as per the provisions of the Act contemplated under sections 3 and 4 of the Minimum Wages Act 1948 duly following the procedure prescribed under Sec.5 of the Act. The Advisory Board has taken into consideration all the necessary aspects keeping in view the prevailing economic conditions cost of living and nature of work and made recommendation for revising the minimum rates of wages and accordingly notification was issued. The Act does not contemplate to issue any personal hearing of the petitioners while finalizing the revised minimum rates of wages. It is further submitted that under Sec.4(1) of the Act the minimum rates of wages fixed by the appropriate Government in respect of a scheduled employment ay consist of basic rate of wages and a special allowance at a rate to be adjusted at such interval and in such manner as the appropriate Government may direct to accord as nearly as practicable with the variation in the consumer price index number applicable to such workers as on the date of final notification Hence it is mandatory to take the variation in consumer price index numbers while proposing draft notification and issuing the final notification. The Government have constituted the State Minimum Wages Advisory Board under Sec.7 of the Minimum Wages Act 1948 to advise the Government with regard to the fixation of the Minimum rates of Wages and following the advice given by the Board final notification was issue by the Government. The last revision of minimum rates of wages in the employment of hotels, restaurants and eating houses was made in 1991 when the minimum wage rates were fixed in consumer price index price were neutralized at 186 points ( base 1982-100). In the year 1998 when draft notification was issued the wages were proposed neutralizing the consumer price index numbers at 309 points. The draft notification was placed before the Board in its 13th meeting held on 27-6-2000 for its recommendation. By that time the existing consumer price index is at 411 points i.e. there is an increase of 102 points and the same shall be taken into consideration for fixing the special allowance. By virtue of G.O. Ms. Nos. 36 and 37 dt.15-3-1989 the workmen are entitled to draw special allowance in accordance with VDA notifications issued periodically by the Commissioner of Labour, basing on the Industrial Workers consumer price index numbers. Thus the workmen have already been drawing special allowance up to 411 points ( i.e. from 186 points to 411 points on the existing G.O.Ms.No.89 dt.25-5-1991) by June 2000 basing on the relevant consumer price index numbers. The Board recommended 20% increase on draft wages at 309 points i.e. taking into consideration the consumer price index number as on 23-3-1998. The Government while issuing final notification took into consideration the latest consumer price index numbers at 411 points. The difference of 309 points and 411 points comes to 102 points and it constitutes increase of 33% of VDA above the draft notification. The action of the Government in taking into account the consumer price index at 411 points as on the date of final notification is in accordance with law and in the interest of workmen. The Government is competent to issue the final notification on the basis of the consumer price index and it cannot be said to be arbitrary or illegal.
11. As seen from the facts of the case, the Act was promulgated by the Parliament to achieve the prevention of exploitation of labour. Therefore the Act has taken steps to prescribe minimum wages in the schedule employment. In an underdeveloped country which faces the problem of unemployment on a very large scale it is not unlikely that labour may offer to work even on starvation wages. The policy of the Act is to prevent the exploitation of such sweated labour. Further the Act came to be enacted to give effect to the resolutions passed by the minimum wages fixing machinery convention held in Janeva in 1928. Art.224 of International Labour Code contemplates the fixation of minimum wages in industries in which no point of time existed for the effective regulation of wages by award of grace or otherwise of wages are exceptional low. The Central Act is an Act fixing the minimum rates of wages for certain employees.
12. From the above background of the matter let us consider the contentions raised by the concerned parties that as per the provisions of the Minimum Wages Act the Government of Andhra Pradesh has revised the minimum rates of wages in the year 1991 under G.O.Ms.No.89 dt.25.5.1991. At that time the consumer price index was neutralized at 186 points. As per Sub section (1) (b) of Sec.3 of the Act, the appropriate Government shall review at such intervals as it may think if such intervals not exceeding five years within the minimum rates of wages and shall revise minimum wages if necessary. If for any reason the appropriate Government has not reviewed the minimum wage rates so fixed in respect of any scheduled employment within interval of five years nothing shall be deemed to prevent it from reviewing minimum rates after expiry of the stated period of five years and revising them if necessary and until there so revised minimum rates afore said immediately after expiry of period of five years. So while exercising the power under sec.3 of the Act the State Government has issued G.O.Ms.No.16 dt.25-5-1995 fixing the revision of rates of wages once in five years. Though the reasons explained by the Government in its counter for the delay in revising the rates of wages immediately after expiry of five years is not satisfactory the provisions of Sec.3 of the Act are not made it compulsory to revise the rates of wages within the interval of five years from one period of revision to another interval of revision. Any how the Government for the reasons best known to it have taken steps to revise the rates of wages after a lapse of nine years. During this period the consumer price index increased from 1991 to 1998 at 309 points and from draft notification to final notification which has increased from 309 to 411 points. Therefore, if the revision is made immediately after expiry of interval of five years neutralization could not be more than hundred per cent for which the petitioner may not have any complaint. Relying on the decision of the Supreme Court in SRI CHALTHAN VIBHAG KHAND UDYOG SAHAKARI MANDALI LIMITED case (1 supra) the neutralization should not be more than hundred percent. The consumer price index point from 1991 to 2000 is increased to 225 points ( 186 - 411 ) which comes to 121 neutral increase. Even from the draft notification to final notification the increase is 102 points i.e. 411-309 which comes to 33% increase. A.P. Minimum Wages Advisory Board which was constituted under the provisions of Sec. 7 of the Act, have gone into the matter and it has considered all the relevant aspects while making the recommendations allowing the Government to give weight age of 20% over and above the draft notification. But as explained above by the Government has increased to 33% on the ground that if the weight age of 20% is given, the employees will get lesser minimum rate of wages. There is a decrease of wages since VDA at consumer price index numbers held 411 points has already been allowed to the workmen by the Commissioner of Labour. Basing on the industrial worker consumer price index point 411 from 1991 to 2000. Therefore, as stated by the Government the increase of the neutralization is nominal of above hundred percent. In view of the increase of cost of living, prevailing in the society, which vary from town to town, hence, I cannot appreciate the contentions raised by the counsel for the petitioner. Therefore I see no reasons to interfere with the impugned notification issued by the Government revising the minimum wages of employees working in the hotels, restaurants and eating-houses. Accordingly the impugned G.O.Ms.No.53 dated 17-10-2000 is held to be valid and reasonable and in accordance with the provisions of the Act.
13. As stated by the respondent that deduction in respect of providing food and accommodation is concerned, since the increase in deduction is also made with regard to the basic wage therefore I am rejecting this contention also raised by the petitioner. Taking into consideration the scope and ambiguity of the Act as it was enacted by the Union Government in consonance with the provisions of International Labour Code. Further to build a welfare society in which justice, social, economic and political, as contemplated under the provisions of the Constitution of India and that to satisfy the hopes and aspirations aroused by the Constitution by providing the minimum needs of the lowest citizens in the Society, I reject the contention of the petitioner that by virtue of present revised wages, ultimately, the consumer will suffer. The Advisory Board which was constituted under the Act, has gone into the matter and suggested the increase of 20%. Therefore, once the Body, for which purpose it was constituted, has rightly exercised its power, it is not proper for this court to take a different view i.e., contrary to the view taken by the Expert Body which was represented by the officials of the Government, Representatives of the Workers and the Representatives of the Management. Therefore, a slight increase in the neutralization above 100% is not arbitrary or contrary to the provisions of the Act and the revised minimum rates of wages were fixed to avoid the exploitation of the employees who are working particularly in the hotels, restaurants and eating houses.
14. Therefore, I am satisfied that the impugned G.O. is held to be valid and legal and in accordance with the law. I find no merit in the writ petition. Writ petition is accordingly dismissed. No order as to costs.