TMI Blog1961 (4) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... who represent six tile factories in Feroke, Kozhikode District, challenging the validity of the Act as well as the validity of the notification issued by the Government of Kerala. The State of Kerala is impleaded as respondent to the petition. 2. The petitioners allege that the minimum wage rates fixed by the notification are very much above the level of what may be properly regarded as minimum wages and it was essential that before the impugned wage rates were prescribed the employers' capacity to pay should have been considered. Since this essential element had not been taken into account at all by the Committee as well as by the respondent the notification is ultra vires and inoperative. According to them the burden imposed by the notification is beyond the financial capacity of the industry in general and of their individual capacity in particular, and this is illustrated by the fact that nearly 62 tile factories in Trichur closed soon after the notification was published. The petitioners seek to challenge the validity of the Act on several grounds set out by them in clauses (a) to (g) of paragraph 21 of the petition. It is urged that the Act does not define what the min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners that the wage rates fixed are beyond their capacity is not genuine or honest. The respondent also points out that the Committee appointed by it was a representative Committee and its report showed that it had considered the matter very carefully. Alternatively it is urged that the report of the said Committee would show that the capacity to pay had not been ignored by the Committee. The impact of the minimum wage rate suggested by it had been considered by the Committee and so the Committee made its recommendations areawise. In regard to the closure of factories in Trichur the respondent's case was that the said closure was not the result of financial inability of the factories to bear the burden but was probably actuated by political motives. The respondent also put in a general plea that in fact all the factories in the Kerala State except some of the factories in the Trichur area and one of the petitioners had implemented the notification without any objection or protest; and so it was argued that there was no substance in the grievance made by the petitioners. That in brief is the nature of the contentions raised by the respondent in reply to the petitioner's cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there being very little scope for alternative employment except is low paid agricultural occupations the bargaining position of the workers has all along been very weak and wages too have tended to remain at a relatively low level. It is in the light of this background that the Committee naturally proceeded to consider the problem of the fixation of minimum wage rates. 7. The Committee has accepted the observation of the Fair Wages Committee that the minimum wage must provide not merely for the bare subsistence of life but for the preservation of the efficiency of the workers. Then it examined the food requirements of the employee on the basis of three consumption units recognised in Dr. Aykroyd's formula. It then adopted the assessment made by the Planning Commission in regard to the requirements of the employees in cotton textiles and placed the employee's requirement at a per capita consumption of 18 yards per unit, then it took into account the requirement of housing and it held that the additional requirements of workers for fuel, lighting and additional miscellaneous items of expenditure should generally be fixed at 20% of the total wage in cases where the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued is substantially on the lines of the recommendations made by the Committee. Employees engaged in the tile industry have been categorised and their minimum wage rates have been classified into clauses A to E. In regard to dearness allowance the notification provides that a flat rate of dearness allowance for all workers irrespective of sex or grade shall be paid at the rate of one naya paisa for every two points in the cost of living index in each year in excess of Rs. 200. Thus the notification purports to prescribe the minimum rates of wages in regard to tile industry in the State; it is the validity of this notification that is impugned before us by the present petition. 9. Before dealing with the points raised by Mr. Nambiar on behalf of the petitioners it is necessary to refer very briefly to the material provisions of the Act. This Act was passed in 1948, because it was thought expedient to provide for fixing minimum rates of wages in certain employments. Under s. 3 the appropriate Government is empowered to fix minimum rates of wages in regard to employments as therein specified, and review the same at such intervals as specified by s. 3(1). Section 3(3) contemplates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter was left entirely to the discretion of the appropriate Government which can amend the schedule in any way it liked and such delegation virtually amounted to a surrender by the Legislature of its essential legislative function. This contention was rejected by Mukherjea, J., as he then was, who spoke for the Court. The learned Judge observed that the Legislature undoubtedly intended to apply the Act to those industries only where by reason of unorganised labour or want of proper arrangements for effective regulation of wages or for other causes the wages of labourers in a particular industry were very low. He also pointed out that conditions of labour vary under different circumstances and from State to State and the expediency of including a particular trade or industry within the schedule depends upon a variety of facts which are by no means uniform and which can best be ascertained by a person who is placed in charge of the administration of a particular State. That is why the Court concluded that in enacting s. 27 it could not be said that the Legislature had in any way stripped itself of its essential powers or assigned to the administrative authority anything but an acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tempted to argue that certain aspects of the matter on which he wished to rely had not been duly considered by the Court in Bijay Cotton Mills Ltd.'s case (1955)ILLJ129SC . In our opinion it is futile to attempt to reopen an issue which is clearly concluded by the decisions of this Court. Therefore, we will proceed to deal with the present petition, as we must, on the basis that the Act under which the Committee was appointed and the notification was ultimately issued is valid. 12. We have already seen what the Act purports to achieve is to prevent exploitation of labour and for that purpose authorises the appropriate Government to take steps to prescribe minimum rates of wages in the scheduled industries. In an under-developed 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 bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before such minimum wage is fixed. His argument is that in any event the impugned notification statutorily prescribes such minimum wage rates for the tile industry in the State of Kerala and as such the rates so recommended do not constitute merely the industrial and economic minimum as understood by industrial adjudication but it constitutes a statutory minimum which can be fixed only after taking into account the employers' capacity to pay the same. In support of this argument Mr. Nambiar has strongly relied on some observations made by this Court in the case of Express Newspapers (Private) Ltd. v. The Union of India (1961)ILLJ339SC . We will presently refer to the said observations but in appreciating the nature and effect of the said observations it is necessary to recall that in that case the Court was dealing with the problem of fixation of wages in regard to Working Journalists as prescribed by s. 9 of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 (45 of 1955). Section 9 of the said Act required that in fixing rates of wages in respect of working journalists the Board had to have regard to the cost of living, the prevalent rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that whereas the bare minimum or subsistence wage would have to be fixed irrespective of the capacity of the industry to pay the minimum wage thus contemplated postulates the capacity of the industry to pay and no fixation of wages which ignores this essential factor of the capacity of the industry to pay could ever be supported. Mr. Nambiar contends that the last part of the observation refers to the minimum wage prescribed by the Act and it requires that before prescribing the said wage the capacity of the industry must be considered. We do not think that this argument is well founded. It would be noticed that in considering the distinction drawn between the minimum wage fixed by industrial adjudication and the minimum wage prescribed by a statute which is called statutory minimum it has been made clear that the latter can be higher than the bare subsistence or minimum wage and as such is different in kind from the industrial minimum wage. We do not think that the observation in question was intended to lay down the principle that whereas a minimum wage can be laid down by an industrial adjudication without reference to an employer's capacity to pay the same it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standard and that again shows that the wage structure is above the minimum standard and goes towards the lower level of the fair wage. We are not impressed by this argument. It would be recalled that amongst the miscellaneous items in respect of which Rs. 2.84 nP. are added by the Committee in its calculations are rent, education, medical aid and entertainment. The first three are not inadmissible, and so the attack is against the inclusion of the last item alone. Even assuming that the last item is inadmissible it is not difficult to imagine that the addition of this last item could not have meant much in the calculations of the Committee, and so the grievance made on account of the inclusion of the said item cannot be exaggerated. There are, however, two other factors which are relevant in this connection. What the Committee has described as the 'subsistence plus' standard should on its own calculations represent the daily minimum of Rs. 2.84 nP., not Rs. 2.67 nP. Rs. 2.67 nP. is plainly the result of miscalculation so that it can be safely assumed that the said sum which is taken to represent the daily minimum to maintain a 'subsistence plus' standard in fact doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roblem 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. The notification has accepted the recommendations of the Committee to categorise the workers and that obviously was overdue. The fact that wages paid in other industries in Kerala, or in other States in comparable concerns, are lower would have been relevant for the Committee to consider when it made its recommendations. In appreciating the effect of the prevalence of lower rates it may also be relevant to bear in mind that in some places and in some industries labour is still employed on wages much below the standard of minimum rates. In fact, in its report the Committee has pointed out that in Kerala the bargaining position of the workers has all along been very weak and wages have tended to remain in a deplorably low level. Therefore, the fact that lower wages are paid in other industries or in some other places may not necessarily show that the rates prescribed by the notification are unduly high. In any event th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses a serious question. Under the Act notification has to apply to all the tile factories in the State and breach of the provisions of the notification is rendered penal under s. 22 of the Act. An agreement or contract contrary to the notification would be void under s. 25 of the Act. It is to be regretted that the respondent, acting through its Labour Minister, appears to have assisted in bringing about a settlement contrary to the terms of the Act. If the respondent thought that such a settlement was necessary in respect of Trichur factories it may consider the question of withdrawing the notification in respect of that area and in fairness may also reconsider the problem in respect of all the other areas and decide whether any modification in the notification is required. It is not appropriate that the respondent should be associated, though indirectly, with the settlement which is in breach of the provisions of the Act. We would, therefore, suggest that the respondent should seriously consider this aspect of the matter and should not hesitate to do what may appear to be just, reasonable and fair on an objective consideration of the whole problem. 19. In the result, the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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