Kerala High Court
Suja Issac vs The Deputy Labour Commissioner on 16 September, 2014
Author: Anil K.Narendran
Bench: Anil K.Narendran
IN THE HIGH COURT OF KERALAAT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
TUESDAY,THE 16TH DAYOF SEPTEMBER 2014/25TH BHADRA, 1936
OP.No. 9838 of 2001 (U)
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PETITIONER:
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SUJA ISSAC, W/O.ISSAC GEORGE,
PROPRIETRIX, HOTEL FORT HERITAGE,
1/283, NAPER STREET,
FORT COCHIN, KOCHI-1.
BY ADV. SRI.JIMMY GEORGE
RESPONDENTS:
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1. THE DEPUTY LABOUR COMMISSIONER,
ERNAKULAM(THE AUTHORITY UNDER THE MINIMUM WAGES ACT),
CIVIL STATION, KAKKANAD,
COCHIN-30.
2. THE ASST.LABOUR OFFICER,
COCHIN II CIRCLE, KOCHI-1.
BY GOVERNMENT PLEADER SRI P.P.PADMALAYAN
THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 29-05-2014, THE
COURT ON 16-09-2014, DELIVERED THE FOLLOWING:
APPENDIX IN OP.NO.9838/2001
PETITIONER'S EXTS:
EXT.P1: COPY OF ORDER IN M.W.A.NO.31/99
RESPONDENTS' EXTS: NIL
TRUE COPY
P.S.TO JUDGE
dsn
"CR"
ANIL K.NARENDRAN, J
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O.P.No.9838 of 2001
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DATED THIS THE 16th DAY OF SEPTEMBER, 2014
JUDGMENT
The petitioner who is the Proprietrix of Hotel Fort Heritage, Fort Kochi, has filed this Original Petition seeking a writ of certiorari or any other appropriate writ, order or direction to quash Exhibit P1 order passed by the Commissioner for Workmen's Compensation, Ernakulam, the 1st respondent herein, in a claim petition filed by the Assistant Labour Officer, Kochi 2nd Circle, the 2nd respondent herein, under Section 20 of the Minimum Wages Act, 1948 (hereinafter referred to as 'the Act') and for other consequential reliefs.
2. The 2nd respondent filed MWA No.31/1999 before the 1st respondent alleging that the petitioner has not paid minimum wages to the employees referred to in the claim petition and that she has to pay arrears of wages amounting to 41,654.55 to those employees, for the period from 3/99 to 8/99. On receipt of notice in the claim petition, the petitioner entered appearance and filed counter stating that, the arrears referred to in the claim petition were paid to the employees by way of cheques dated 31.12.1999 O.P.No.9838/01 -2- and requested the 1st respondent to dismiss the claim petition. The 2nd respondent filed rejoinder stating that, even though notices were issued to the employees, no reply was received regarding the payment made by the petitioner.
3. The claim petitioner was examined as AW1 and Exhibits A1 to A5 were marked on his side. On the side of the management, DWs 1 and 2 were examined and Exhibits B1 and B2 were marked. The employees who were examined as DWs 1 and 2 have stated that they have received arrears of wages by way of cheques dated 31.12.1999 issued by the management. Exhibits D1 and D2 are the receipts for payment of arrears of wages. DWs 1 and 2 have further stated that to their knowledge other employees have also received arrears of wages by way of cheques issued by the management. Though there is discrepancy in the evidence of DWs 1 and 2 regarding the cheques issued by the management and received by the employees, the 1st respondent concluded in Exhibit P1 order that, the employees have received arrears of wages and as such they are not interested in giving evidence against the management. In such O.P.No.9838/01 -3- circumstances, the claim petition cannot be allowed. But, the 1st respondent directed the management to deposit a compensation amounting to 20,827/- under Section 20(3)(i) of the Act (50% of the arrears of wages for the period from 3/99 to 8/99 amounting to 41,654.55) within 30 days from the date of order, failing which action as envisaged under the Act will be initiated against the management for realisation of the said amount. It was further directed that the compensation amount will be disbursed among the beneficiaries included in the claim petition. It is aggrieved by Exhibit P1 order passed by the 1st respondent, the petitioner is before this Court in this Original Petition, filed under Articles 226 and 227 of the Constitution of India.
4. Heard arguments of the learned counsel for the petitioner and the learned Government Pleader appearing for the respondents.
5. The learned counsel for the petitioner contended that, as there was no dispute as to the rates of minimum wages, the 1st respondent has no jurisdiction to entertain the claim petition filed by the 2nd respondent. It was further contended that, when O.P.No.9838/01 -4- the employer paid the excess amount referred to in clause (i) of Section 20(3) of the Act during the pendency of the proceedings before the 1st respondent, no compensation can be imposed on the employer. Per contra, the learned Government Pleader appearing for the respondents contended that, Exhibit P1 order passed by the 1st respondent is perfectly legal and no interference of this Court is called for.
6. I have considered the rival submissions made at the Bar.
7. On an inspection conducted by the 2nd respondent at Hotel Fort Heritage, it was detected that the petitioner has not paid minimum rates of wages to her employees, namely, M.J.Thomas (Receptionist), O.B.Manoj (Supplier), K.O.Polly (Supplier), Eldho Paul (Supplier), Anish Zacheria (Supplier), P.O.Polly (Storekeeper), A.Binesh (Cleaner), I.Naseer (Room Boy), Treesa Koreya (Sweeper), and Philomina Joseph (Sweeper) at the rate of 2,519.85, 6,515.85, 2,315.85, 3,297.90, 6,515.85, 2,315.85, 3,917.85, 4,019.85, 5,117.85 and 5,117.85, respectively. Exhibit A1 is the inspection note O.P.No.9838/01 -5- prepared by the 2nd respondent at the time of inspection on 4.9.1999. Exhibit A2 is the inspection order issued by the 2nd respondent to the petitioner. Exhibit A3 is the show cause notice issued by the 2nd respondent and Exhibit A4 is the postal acknowledgment card of the said show cause notice. Exhibit A5 is the notice issued by the 2nd respondent to the petitioner along with calculation statement, as per which the arrears of wages arising out of payment of less than the minimum rates of wages is calculated at 41,654.55, for the period from 3/99 to 8/99. Then the 2nd respondent filed MWA No.31/1999 before the 1st respondent, under Section 20(2) of the Act. On receipt of notice in the claim petition, the petitioner entered appearance and filed counter stating that, the matter has been settled by paying arrears to the employees by way of cheques dated 31.12.1999 and the employees have also issued receipts for such payment. Therefore, it is not in dispute that the wages paid by the petitioner to her employees was less than the minimum rates of wages payable under the Act to such employees and that the petitioner paid arrears of wages before the disposal of the the O.P.No.9838/01 -6- claim petition filed by the 2nd respondent.
8. Section 20 of the Act deals with claims arising out of payment of less than the minimum rates of wages or in respect of payment of remuneration for days of rest or for work done on such days under clause (b) or clause (c) of Sub-section (1) of Section 13 or of wages at the overtime rate under Section 14 to the employees employed. Going by Sub-section (2) of Section 20, where an employee has any claim of the nature referred to in Sub-section (1), the employee himself or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf, or any Inspector or any person acting with the permission of the Authority appointed under Sub-section (1), may apply to such Authority for a direction under Sub-section (3). Sub-section (3) of Section 20 of the Act reads thus;
"20(3) When any application under Sub-section (2) is entertained, the Authority shall hear the applicant and the employer, or give them an opportunity of being heard, and after such further inquiry, if any, as it may consider necessary, may without prejudice to any other penalty to which the employer may be liable under the Act, direct:-
O.P.No.9838/01 -7-
(i)in the case of a claim arising out of the payment of less than the minimum rates of wages, the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid, together with the payment of such compensation as the Authority may think fit, not exceeding ten times the amount of such excess;
(ii)in any other case, the payment of the amount due to the employee, together with the payment of such compensation as the Authority may think fit, not exceeding ten rupees, and the Authority may direct payment of such compensation in cases where the excess or the amount due is paid by the employer to the employee before the disposal of the application."
9. Section 20(3)(i) of the Act empowers the Authority, in the case of a claim arising out of payment of less than the minimum rates of wages, to direct payment to the employee of the amount by which the minimum wages payable to him exceeded the amount actually paid, together with the payment of such compensation as the Authority may think fit, not exceeding ten times the amount of such excess. Going by Section 20(3), the Authority may direct payment of such compensation in cases O.P.No.9838/01 -8- where the excess amount referred to in clause (i) is paid by the employer to the employee before the disposal of the claim petition. Therefore, Section 20(3) of the Act empowers the Authority to impose compensation on the defaulting employer not only in cases where the Authority passes an order for payment of the excess amount referred to in clause (i), but also where the said excess amount is paid by the employer during the pendency of that proceedings.
10. In Town Municipal Council v. Presiding Officer, Labour Court (1969 (1) SCC 873) the Apex Court held that, the purpose of Section 20(1) seems to be to ensure that the rates prescribed under the Minimum Wages Act are complied with by the employer in making payments and, if any attempt is made to make payments at lower rates, the workmen are given the right to invoke the aid of the Authority appointed under Section 20(1). Paragraphs 7 and 8 of the judgment read thus;
"7. ....... We have mentioned these provisions of the Minimum Wages Act, because the language used at all stages in that Act leads to that clear inference that that Act is primarily concerned with fixing of rates rates of minimum wages, overtime rates, rate for payment for O.P.No.9838/01 -9- work on a day, of rest and is not really intended to be an Act for enforcement of payment of wages for which provision is made in other laws, such as the Payment of Wages Act No. 4 of 1936, and the Industrial Disputes Act No. 14 of 1947. In Section 20(1) of the Minimum Wages Act also, provision is made for seeking remedy in respect of claims arising out of payment of less than the minimum rates of wages or in respect of payment of remuneration for days of rest or for work done on such days under clause (b) or clause (c) of sub-section (1) of Section 13 or of wages at the overtime rate under Section 14. This language used in Section 20(1) shows that the Authority appointed under that provision of law is to exercise jurisdiction for deciding claims which relate to rates of wages, rates for payment of work done on days of rest and overtime rates. If there be no dispute as to rates between the employer and the employees, Section 20 (1) would not be attracted. The purpose of Section 20(1) seems to be to ensure that the rates prescribed under the Minimum Wages Act are complied with by the employer in making payments and, if any attempt is made to make payments at lower rates, the workmen are given the right to invoke the aid of the Authority appointed under Section 20(1). In cases where there is no dispute as to rates of wages, and the only question is whether a O.P.No.9838/01 -10- particular payment at the agreed rate in respect of minimum wages, overtime or work on off days is due to a workman or not, the appropriate remedy is provided in the Payment of Wages Act. If the payment is withheld beyond the time permitted by the Payment of Wages Act even on the ground that the amount claimed by the workman is not due, or if the amount claimed by the workman is not paid on the ground that deductions are to be made by the employer, the employee can seek his remedy by an application under Section 15(1) of the Payment of Wages Act. In cases where S.15 of the Payment of Wages Act may not provide adequate remedy, the remedy can be sought either under Section 33C of the Act or by raising an industrial dispute under the Act and having it decided under the various provisions of that Act. In these circumstances, we are unable to accept the submission made by Mr. Sen on behalf of the appellant that Section 20(1) of the Minimum Wages Act should be interpreted as intended to cover all claims in respect of minimum wages or overtime payment or payment for days of rest even though there may be no dispute as to the rates at which those payments are to be claimed. It is true that, under Section 20(3), power is given to the Authority dealing with an application under Section 20(1) to direct payment of the actual amount found due; but O.P.No.9838/01 -11- this, it appears to us, is only an incidental power granted to that Authority, so that the directions made by the Authority under Section 20(1) may be effectively carried out and there may not be unnecessary multiplicity of proceedings. The power to make orders for payment of actual amount due to an employee under Section 20(3) cannot, therefore, be interpreted as indicating that the jurisdiction to the Authority under Section 20(1) has been given for the purpose of enforcement of payment of amounts and not for the purpose of ensuring compliance by the employer with the various rates fixed under that Act. This interpretation, in our opinion, also harmonises the provisions of the Minimum Wages Act with the provisions of the Payment of Wages Act which was already in existence when the Minimum Wages Act was passed. In the present appeals therefore, we have to see whether the claims which were made by the workman in the various applications under Section 33-C (2) of the Act were of such a nature that they could have been brought before the Authority under Section 20(1) of the Minimum Wages Act inasmuch as they raised disputes relating to the rates for payment of overtime and for work done on weekly off-days.
8. We have examined the applications which were presented before the Labour Court under Section 33-C O.P.No.9838/01 -12- (2) of the Act in these appeals and have also taken into account the pleadings which were put forward on behalf of the appellant in contesting those applications and we are unable to find that there was any dispute relating to the rates. It is true that, in their applications, the workmen did plead the rates at which their claims had to be computed; but it was nowhere stated that those rates were being disputed by the appellant. Even in the pleadings put forward on behalf of the appellant as incorporated in the order of the Labour Court, there was no pleading that the claims of the workmen were payable at a rate different from the rates claimed by them. It does appear that, in one case, there was a pleading on behalf of the appellant that no rates at all had been prescribed by the Mysore Government. That pleading did not mean that it became a dispute as to the rates at which the payments were to be made by the appellant. The only question that arose was whether there were any rates at all fixed under the Minimum Wages Act for overtime and for payment for work done on days of rest. Such a question does not relate to a dispute as to the rates enforceable between the parties, so that the remedy under Section 20(1) of the Minimum Wages Act could not have been sought by the applicants in any of these applications. No question can, therefore, arise of the jurisdiction of the Labour O.P.No.9838/01 -13- Court to entertain these applications under Section 33-
C(2) of the Act being barred because of the provisions of the Minimum Wages Act. The first point raised on behalf of the appellant thus fails."
11. Going by the principle laid down by the Apex Court in Town Municipal Council's case (supra), the power to make orders for payment of actual amount due to an employee under Section 20(3) of the Minimum Wages Act, conferred on the Authority under Section 20(1) of the Act, is for the purpose of ensuring compliance by the employer with the various rates fixed under that Act. If any attempt is made by an employer to make payments at rates lower than that prescribed under the Minimum Wages Act, the employee is given the right to invoke the aid of the Authority appointed under Section 20(1) of the Act.
12. In Town Municipal Council's case (supra) one of the questions raised for consideration before the Apex Court was as to whether the jurisdiction of the Labour Court to entertain the applications under Section 33-C(2) of the Industrial Disputes Act is barred because of the remedy available under Section 20(1) of the Minimum Wages Act. In the applications filed before the O.P.No.9838/01 -14- Labour Court, the workmen did plead the rates at which their claims had to be computed; but it was nowhere stated that those rates were being disputed by their employer. Even in the pleadings put forward on behalf of the employer, there was no pleading that the claims of the workmen were payable at a rate different from the rates claimed by them. As noticed by the Apex Court, the only question raised was whether there were any rates at all fixed under the Minimum Wages Act for overtime and for payment for the work done on days of rest, which question does not relate to a dispute as to the rates enforceable between the parties and the remedy under Section 20(1) of the Minimum Wages Act could not have been sought by the workmen. No question can, therefore, arise of the jurisdiction of the Labour Court to entertain the applications under Section 33-C(2) of the Act being barred because of the provisions of the Minimum Wages Act.
13. The judgment in Town Municipal Council's case (supra) has been referred to by the Apex Court in its subsequent judgment in Manganese Ore (India) Ltd. v. Chandi Lal Saha and others (1991 Supp (2) SCC 465), a decision relied on by O.P.No.9838/01 -15- the learned Counsel for the petitioner. In Manganese Ore's case (supra) the question raised for consideration before the Apex Court was as to whether the monetary value of grain supplied at concessional rates and the amount paid as attendance bonus can be included and counted into the minimum wages payable to the employees under the Government of India notification dated 19.5.1969 issued under the Minimum Wages Act, fixing the minimum rates of wages payable to different categories of employees employed in Manganese mines. Paragraphs 14 and 15 of the judgment read thus:
"14. The scheme of the Act recognises "Wages" as defined under Section 2(h) and also "wages in kind"
under Section 11 of the Act. Reading both the provisions together "wages in kind" can only become part of the "wages" if the conditions provided under sub-sections (2), (3) and (4) of Section 11 of the Act are complied with. Admittedly, there was no notification by the Central Government under Section 11(3) of the Act and as such the supply of grain at a concessional rate cannot be considered "Wages" under Section 2(h) of the Act. We may examine the question from another angle. The supply of grain at concessional rate to the workers is in the nature of an amenity or an additional O.P.No.9838/01 -16- facility/service. The managements specially of public undertakings, are bound by the Directive Principles of the State Policy enshrined under Part IV of the Constitution of India. The workers must be ensured a living wage, just and human conditions of work and a decent standard of life. The management must endeavour to secure for the workmen apart from "Wages" other amenities like supply of essential commodities at concessional rates, medical aid, housing facility, education for children, old age benefits and opportunities for social, cultural and sports activities. All these amenities may be capable of being expressed in terms of money but it is clear from the scheme of the Act that these concessions do not come within the definition of "Wages" as given under S.2(h) of the Act. We have thus no hesitation in holding that the supply of grain at a concessional rate to the workmen is an amenity and cannot be included in the rates of wages prescribed by the notification.
15. As regards the attendance bonus it was an additional payment made to the workmen as a means of procuring their regular attendance with the ultimate object of increasing production. The bonus was in the nature of extra remuneration for regular attendance. The said bonus was not payable to all the workmen at the time of joining the employment. It was payable to a O.P.No.9838/01 -17- workman who had put in continuous service for a specified period and who was loyal to the management. The attendance bonus was only an incentive and it was not a wage. There is a basic difference between the incentive bonus and the minimum wage. Every workman is entitled to the minimum wage from the very first day of his joining the employment whereas the bonus has to be earned and it becomes payable "after the event". In the present case the attendance bonus was payable after regular attendance for a specified period and remaining loyal to the management. The scheme of payment of attendance bonus was thus an incentive to secure regular attendance of the workmen. It was an additional payment made to the workmen as a means of increasing production. In M/s. Titaghur Paper Mills Co. Ltd. v. Its Workmen (1959 Supp. (2) SCR 1012 : AIR 1959 SC 1095) this Court held that the payment of production bonus is in the nature of an incentive and is in addition to the wages. We are, therefore, of the view that the attendance bonus is in the nature of an incentive and it cannot be treated as part of the minimum wages fixed under the Act."
14. In Manganese Ore's case (supra) also there was no dispute regarding the rates of minimum wages and it was O.P.No.9838/01 -18- admitted by the parties that the minimum rates of wages were fixed by the Government of India under the Minimum Wages Act. The workmen approached the Labour Court aggrieved by deduction from their wages the cash value of various benefits and amenities such as attendance bonus and concessional supply of food grains and the Apex Court held that, under such circumstances the remedy under Section 20 of the Act was not available to the workmen and the Labour Court rightly exercised its jurisdiction under Section 33-C(2) of the Industrial Disputes Act.
15. As held by the Apex Court in Town Municipal Council's case (supra), the power to make orders under Section 20(3) of the Minimum Wages Act, conferred on the Authority under Section 20(1) of the Act, is for the purpose of ensuring compliance by the employer with the various rates fixed under that Act and if any attempt is made by an employer to make payments at rates lower than that prescribed under the Act, the employee has the right to invoke the aid of that Authority appointed under Section 20(1) of the Act. In view of O.P.No.9838/01 -19- the above principle of law, I am respectfully not in agreement with the view taken by the learned Single Judge of the Patna High Court in Binod Kumar v. Union of India (2000(II) LLJ 692), another decision relied on by the learned Counsel for the petitioner, that if there is no dispute regarding the rates of minimum wages and the complaint made is that the workers were paid less than the minimum rates of wages the Authority under the Minimum Wages Act has no jurisdiction to deal with such claim.
16. In the case on hand, it is not in dispute that the rates of wages paid by the petitioner to her employees was less than the minimum rates of wages payable under the Minimum Wages Act. Therefore, the 1st respondent rightly entertained the claim petition filed by the 2nd respondent under Section 20(2) of the Act. It is also not in dispute that the petitioner paid arrears of wages to her employees before the disposal of the claim petition. As Section 20(3) of the Act empowers the Authority to impose compensation on the defaulting employer also in cases where the employer paid the excess amount referred to in clause (i) of O.P.No.9838/01 -20- Section 20(3) of the Act during the pendency of the proceedings, the 1st respondent acted well within its authority and powers while imposing compensation on the petitioner and the contentions to the contra raised by the petitioner can only be rejected.
17. Section 20(3)(i) of the Act enables the Authority in the case of payment of wages less than the minimum rates of wages to direct compensation to be paid, as the Authority may think fit, not exceeding ten times the amount of such excess. A reading of this clause shows that there is a discretion in the Authority to award the compensation or not and if it decides to award compensation it is within its discretion to decide what amount it should award as compensation. This discretion has to be exercised judicially. The purpose of making this provision is to see that an employer did not contumaciously refuse to implement the provisions of the Minimum Wages Act, as non-payment of wages notified under the Act will result in forced labour prohibited under Article 23 of the Constitution of India.
18. In Sarpanch, Lonand Grampanchayat v. Ramgiri O.P.No.9838/01 -21- Gosavi (AIR 1968 SC 222), the Apex Court held that no appeal lies from an order of the Authority under Section 20 of the Minimum Wages Act. But the High Court is vested with the power of judicial superintendence over it under Article 227 of the Constitution of India. Paragraph 5 of the judgment reads thus;
"5. No appeal lies from an order of the Authority under Section 20. But the High Court is vested with the power of judicial superintendence over the tribunal under Article 227 of the Constitution. This power is not greater than the power under Article 226 and is limited to seeing that the tribunal functions within the limits of its authority, see Nagendra Nath Bora v. Commissioner of Hills Division and Appeals, Assam, 1958 SCR 1240 at p. 1272 : (AIR 1958 SC 398 at p. 413). The High Court will not review the discretion of the Authority judicially exercised, but it may interfere if the exercise of the discretion is capricious or perverse or ultra vires. In Sitaram Ramcharan v. M. N. Nagarshana, 1960 (1) SCR 875 at p. 884 : (AIR 1960 SC 260 at p. 263) this Court held that a finding of fact by the authority under the similarly worded second proviso to Section 15 (2) of the Payment of Wages Act 1936 could not be challenged in a petition under Article 227. The High Court may refuse to interfere under Article 227 unless O.P.No.9838/01 -22- there is grave miscarriage of justice."
19. During the pendency of the claim petition, the petitioner paid the excess amount to her employees. Taking into consideration the facts and circumstances of the case, the 1st respondent in exercise of its discretion under Section 20(3)(i) of the Act directed the petitioner to deposit 50% of such excess amount as compensation amounting to 20,827/-, to be disbursed among the beneficiaries included in the claim petition. Such exercise of discretion by the 1st respondent cannot be termed as either perverse or capricious, warranting interference of this Court in exercise of its judicial superintendence under Article 227 of the Constitution of India. While issuing Exhibit P1 order, the 1st respondent exercised powers well within the limits of its authority and hence no interference of this Court under Article 227 of the Constitution of India is warranted. In the result, the challenge made against Exhibit P1 order fails.
20. This Original Petition is liable to be rejected on yet another ground viz., that the employees who are the beneficiaries of Exhibit P1 order are not parties to the Original O.P.No.9838/01 -23- Petition. In Prabodh Verma v. State of Uttar Pradesh (1984 (4) SCC 251), the Apex Court held that, "a High Court ought not to decide a writ petition under Article 226 of the Constitution without the persons who would be vitally affected by its judgment being before it as respondents or at least by some of them being before it as respondents in a representative capacity, if their number is too large." The above principle laid down by the Apex Court is equally applicable to an Original Petition filed under Article 227 of the Constitution of India. Going by Exhibit P1 order, the compensation amounting to 20,827/- has to be disbursed among the beneficiaries included in the claim petition. None of those employees are made parties to this Original Petition and on that ground the Original Petition is liable to be dismissed for non-joinder of necessary parties. In the result, the Original Petition is dismissed. No order as to costs.
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ANIL K.NARENDRAN, JUDGE dsn