This petition under Articles-226 and 227 of the Constitution of India has been preferred challenging the order dated 21.03.2012 passed by the Authority under the Minimum Wages Act, 1948 ("the Act", for short).
The brief facts of the case, as can be gathered from the petition and the material on record are that, the petitioner is a Private Limited Company providing Security services to Banks, Malls, Shopping Arcades, Hospitals and other organizations. According to the petitioner, its services are well-recognized in the country and abroad. For the purpose of providing security services, the petitioner hires people from different parts of India, as per requirement, and Security Officers are appointed on monthly wages. The petitioner appointed Security Officers on monthly wages for its client, Food Corporation of India, FSD, Bhomiya, Godhra. These Security Officers worked for the period from 01.10.2009 to 31.01.2011. According to the petitioner, said Security Officers were paid wages for every month, which were duly accepted by them. On 25.03.2010 at 18:00 hours, the Labour Enforcement Officer inspected the premises at Food Corporation of India, FSD, Bhomiya and found various irregularities. The nature of these irregularities has been mentioned in the Inspection Report annexed at running Pages-15 and 16 of the paper-book. By a notice dated 07.04.2011, the Labour Enforcement Officer (C), Ahmedabad, informed the petitioner of the said irregularities by enclosing copy of the Inspection Report, and requested it to remove the irregularities. The petitioner was also directed to show cause within 15 days from the date of receipt of the notice, as to why legal action under the penal provisions of the Minimum Wages Act, 1948, and Rules, should not be initiated against it for the irregularities mentioned in the Inspection Report.
A Claim Application dated 10.08.2011 came to be filed under Section-20(2) of the Act by the Labour Enforcement Officer (C)-I, Ahmedabad, against the petitioner, for directions to pay the difference of wages amounting to Rs.1,30,592/- arising out of payment of wages at lesser rates than the minimum wages, along with maximum compensation, in favour of fourteen employees. It transpires from the record that during the course of hearing, the petitioner stated that he was desirous of making payment of the claim amount. The petitioner deposited an amount of Rs.1,02,608/-, i.e. Rs.9,328/- for each employee, as the difference in wages. As regards the quantum of compensation, the petitioner does not appear to have filed any reply, in spite of opportunity being granted. For reasons stated in the impugned order, the Authority granted compensation equal to ten times the difference of wages, and directed the petitioner to deposit a total sum of Rs.13,05,920/- towards the same, within 15 days. Aggrieved thereby, the petitioner has approached this Court by way of the present petition.
Mr.Manas Kumar Samantray, learned advocate for Mr.Sanjay G. Joshi, learned advocate for the petitioner, has submitted that the petitioner had already paid an amount of Rs.9,328/- per employee during the course of hearing on account of the difference in wages, therefore, there is no justification for grant of maximum compensation by the Authority. It is further submitted that though the Authority has the power to grant ten times the compensation, it ought to have kept in view the concept of "Humanitarian Justice". That the petitioner was in financial difficulties, as it had not received payments from its clients on time, therefore, it could not pay the full amount of minimum wages to the concerned employees. Lastly, it is submitted that the Court may exercise discretion in reducing the amount of compensation.
I have heard the learned advocate for the petitioner and perused the averments made in the petition and the material on record.
In order to decide whether the impugned order passed by the Authority suffers from any legal infirmity or not, it would be fruitful to advert to the relevant provisions of law. Section-20 of the Act reads as below:
"20.
Claims-(1) The appropriate Government may, by notification in the Official Gazette, appoint [any Commissioner for Workmen's Compensation or any Officer of the Central Government exercising functions as a Labour Commissioner for any region, or any officer of the State Government not below the rank of Labour Commissioner or any] other officer with experience as a Judge of a Civil Court or as a stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of payment of less than the minimum rates of wages [or in respect of the 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 employees employed or paid in that area.
(2) [Where an employee has any claim of the nature referred to in sub-section
(a)], 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):
Provided that every such application shall be presented within six months from the date on which the minimum wages [or other amount] became payable:
Provided further that any application may be admitted after the said period of six months when the applicant satisfies the Authority that he had sufficient cause for not making the application within such period.
[(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 this Act, direct
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(i) in the case of a claim arising out of 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.] (4) If the authority hearing any application under this section is satisfied that it was either malicious or vexatious, it may direct that a penalty not exceeding fifty rupees be paid to the employer by the person presenting the application.
(5) Any amount directed to be paid under this section may be recovered -
(a) if the authority is a Magistrate, by the Authority as if it were a fine imposed by the Authority as a Magistrate, or
(b) if the Authority is not a Magistrate, by any Magistrate to whom the Authority makes application in this behalf, as if it were a fine imposed by such Magistrate.
(6) Every direction of the Authority under this section shall be final.
(7) Every Authority appointed under sub-section (1) shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), for the purpose of taking evidence and of enforcing the attendance of witnesses and compelling the production of documents, and every such Authority shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (5 of 1898)."
(emphasis supplied) As is clear from Sub-section (3) of Section-20, when any application under Sub-section (2) is entertained, the Authority shall grant the applicant and the employer an opportunity of being heard. Admittedly, this requirement has been scrupulously adhered to by the Authority, as is clear from the impugned order itself, which mentions the dates of hearing. Thus, the petitioner has been granted ample opportunity of being heard. After hearing the parties and after any further inquiry, as may be considered necessary, the Authority is empowered to direct the payment of compensation to the employees, in a case of claim arising out of payment of less than the minimum wages. The compensation can be awarded at the discretion of the Authority, as it may think fit without prejudice to any other penalty to which the employer may be liable, but should not exceed ten times the amount of difference of wages. In the present case, the compensation that has been awarded under the provisions of Sub-section (3)(i) of Section-20 is the maximum compensation equal to ten times the difference of wages. The grant of such compensation is, therefore, within the power of the Authority as per the provisions of the Statute.
A perusal of the impugned order makes it clear why the Authority was constrained to grant the maximum compensation to the employees. Though the petitioner appears to have made an oral request for leniency with regard to compensation, no reply has been filed on the quantum of such compensation, in spite of opportunity being granted by the Authority, for this purpose. The Labour Enforcement Officer, on the other hand, prayed for maximum compensation, stating that apart from failure to pay minimum wages to the concerned employees in the instant case, the petitioner had failed to pay the employees even the regular wages in time, not only at the establishment in question, but also at other establishments in the State of Gujarat where security was provided by it. It transpires from the impugned order that an application dated 20.12.2011 had also been made by 15 employees against the petitioner for non-payment of wages in the months of September-2011, October-2011, November-2011 till 10.12.2011, apart from other issues. Various other reasons were cited relating to the alleged insensitivity of the petitioner to the plight of its employees. The lack of response on the part of the petitioner to the quantum of compensation and to the successive notices issued by the Authority for a long period of time, coupled with failure to pay correct minimum wages to its employees, have weighed with the Authority while granting maximum compensation. No material has been placed on record to the contrary by the petitioner.
In Kamani Metals and Alloys Ltd. v. The Workmen
- AIR 1967 1175, the Supreme Court has held as below:
"7.
Fixation of a wage-structure is always a delicate task because a balance has to be struck between the demands of social justice which requires that the workmen should receive their proper share of the national income which they help to produce with a view to improving their standard of living, and the depletion which every increase in wages makes in the profits as this tends to divert capital from industry into other channels thought to be more profitable. The task is not rendered any the easier because conditions vary from region to region, industry to industry and establishment to establishment. To cope with these differences certain principles on which wages are fixed have been stated from time to time by this Court. Broadly speaking the first principle is that there is a minimum wage which, in any event, must be paid, irrespective of the extent of profits, the financial condition of the establishment or the availability of workmen on lower wages. This minimum wage is independent of the kind of industry and applies to all alike big or small. It sets the lowest limit below which wages cannot be allowed to sink in all humanity. The second principle is that wages must be fair, that is to say, sufficiently high to provide a standard family with food, shelter, clothing, medical care and education of children appropriate to the workman but not at a rate exceeding his wage earning capacity in the class of establishment to which he belongs. A fair wage is thus related to the earning capacity and the workload. It must, however, be realised that 'fair wage' is not 'living wage' by which is meant a wage which is sufficient to provide not only the essentials above-mentioned but a fair measure of frugal comfort with an ability to provide for old age and evil days. Fair wage lies between the minimum wage, which must be paid in any event, and the living wage, which is the goal. As time passes and prices rise, even the fair wage fixed for the time being tends to sag downwards and then a revision is necessary. To a certain extent the disparity is made up by the additional payment of dearness allowance. This allowance is given to compensate for the rise in the cost of living. But as it is not advisable to have a 100 per cent. neutralisation lest it lead to inflation, the dearness allowance is often a little less than 100 per cent neutralisation. In course of time even the addition of the dearness allowance does not sufficiently make up the gap between wages and cost of living and a revision of wages and/or dearness allowance then becomes necessary. This revision is done on certain principles."
In People's Union for Democratic Rights and others v. Union of India and others
- AIR 1982 SC 1473, it is held thus:
"15.
Now the next question that arises for consideration is whether there is any breach of Art.23 when a person provides labour or service to the State or to any other person and is paid less than the minimum wage for it. It is obvious that ordinarily no one would willingly supply labour or service to another for less than the minimum wage when he knows that under the law he is entitled to get minimum wage for the labour or service provided by him. It may therefore be legitimately presumed that when a person provides labour or service to another against receipt of remuneration which is less than the minimum wage, he is acting under the force of some compulsion which drives him to work though he is paid less than what he is entitled under law to receive. What Article 23 prohibits is 'forced labour' that is labour or service which a person is forced to provide and 'force' which would make such labour or service 'forced labour' may arise in several ways. It may be physical force which may compel a person to provide labour or service to another or it may be force exerted through a legal provision such as a provision for imprisonment or fine in case the employee fails to provide labour or service or it may even be compulsion arising from hunger and poverty, want and destitution. Any factor which deprives a person of a choice of alternatives and compels him to adopt one particular course of action may properly be regarded as 'force' and if labour or service is compelled as a result of such 'force', it would we 'forced labour'..."
The learned advocate for the petitioner has submitted that the petitioner was not in a position to pay the full amount of minimum wages to the concerned employees, as it had not received payments from its clients in time. This defence appears to have been introduced only at the stage of filing of the writ petition, as no reply was filed before the concerned Authority and such a stand does not appear to have been taken before it.
In view of the principles of law laid down by the Supreme Court in Kamani Metals and Alloys Ltd. v. The Workmen (supra) and People's Union for Democratic Rights and others v. Union of India and others (supra) the above-quoted judgments, the submission made by the learned advocate for the petitioner regarding late receipt of payments from its clients as a reason for not paying the minimum wage, cannot be sustained.
The denial of minimum wages to an employee erodes the very substratum of dignity with which every citizen is entitled to live, as per the Constitutional guarantee. The learned advocate for the petitioner has submitted that 'Humanitarian Justice' ought to have been given to the petitioner by the Authority. On the contrary, it is the petitioner who ought to first practice what it preaches, by granting minimum wages to its employees, when it speaks about lofty terms such as "Humanitarian Justice".
No legal grounds worth considering have been made out by the learned advocate for the petitioner in the petition and during his submissions, for reduction of the amount of compensation granted by the Authority.
On the other hand, the impugned order is a well-reasoned one and has, in my view, correctly taken into consideration the salient aspects of the case. The aspect that during the course of hearing before the Authority, the petitioner has paid the differential amount of Rs.9,328/- per employees, does not, in any manner, detract from the power of Authority to grant maximum compensation, keeping in mind the entirety of the facts and circumstances of the case.
The petition is devoid of merit and deserves to be rejected.
It is, accordingly, rejected.
(Smt.
Abhilasha Kumari, J.) (gaurav/sunil) Top