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In a set back to the Delhi Government, the Delhi High Court has set aside notifications revising the minimum rate of wages for all classes of workmen/employees across all scheduled employments under the Minimum Wages Act, 1948 (Act) and re-constituting the Minimum Wages Advisory Committee (Committee) for such scheduled employments.
The judgement was passed by the bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar in a batch of writ petitions moved by various associations such as the Delhi Factory Owners’ Federation, New Delhi Traders’ Association etc. challenging the two notifications dated September 15, 2016 and March 3, 2017.
The notifications were assailed on the ground that objections and representations submitted to the Committee by the employers or the employees were not considered either at all, or were insufficiently dealt with.
Further, the petitioners had contended that no local association of any scheduled employment in Delhi was made a member of Committee and therefore, the “employers” were given no representation as required by the Minimum Wages Act.
Hence, it was their argument that not only were the two notifications ultra vires the Constitution of India and the provisions of the Minimum Wages Act, 1948, but also violative of the principles of natural justice.
It was the petitioners’ stand that clubbing dissimilar scheduled employments for fixing one minimum rate of wages for all of them amounted to “invidious discrimination”. Further, it was the contention of the petitioners that while reconstituting the Minimum Wages Advisory Committee, the Delhi Government did not follow the procedure prescribed under the Act.
The Court held that minimum wages have to be more than wages at the subsistence level and must take into consideration the norms and component as approved by the Supreme Court in Workmen vs. the Management of Reptakos Brett & Co. Ltd. & Anr (1992 (1) SCC 290).
While issuing the notification which impacts workmen in different industries and scheduled employment, the Advisory Committee was required to scrutinize all relevant materials not only regarding the Scheduled employments but also the variations in prices of commodities in different localities/districts in Delhi, economic climate, benefits and facilities created and advanced by the Government.
“Such an exercise was admittedly not undertaken” by the Delhi Government, the Court held.
It observed that there was complete non-application of mind while issuing the said notifications without making any reasonable classification.
“The respondents have, by complete non-application of mind, issued the impugned notification for all scheduled employments and treating all workers alike. The respondents have failed to make any classification at all, let alone a reasonable classification.”
In making recommendations, the Committee and the respondents ignored vital and critical aspects having a material bearing on the issue.
“The Committee in making its recommendations as well as the respondents in issuing the singular notification for uniform minimum wages for all scheduled employments have completely ignored vital and critical aspects having material bearing on the issue…The constitution of the Committee was completely flawed and its advice was not based on relevant material and suffers from non-application of mind.”
The Court also found substance in the contention of the petitioners that they were not given representation in the Committee. This was based on the fact that that instead of appointing representatives of local scheduled employments on the Committee who would have been in the best position to put forth the stance of the employers, national level organizations not representing the interests of the employers engaged in scheduled employments were nominated on the Committee.
This, the Court held, amounted to a denial of statutorily mandated representation to the actual employers in scheduled employments in Delhi and consequently, non-compliance with Section 9 of the Act.
Additionally, the Court clarified that under Article 226 of the Constitution of India, it can interfere with a notification fixing minimum wages only on “the most substantial grounds”.
Further, since the Supreme Court has rejected challenges to the Constitutionality of the Minimum Wages Act, 1948 for the reason that the legislation has ensured the mechanism provided under Section 5, 7 and 9 of the enactment, the requirement of compliance with the provisions thereunder is on an extremely high pedestal and had to be strictly adhered to by the respondents, the Court concluded.
The Court further said that an “appropriate government” under the Act was not bound by the recommendations of the Committee and was expected to apply independent mind and take a balanced decision so far as fixation or revision of minimum wages is concerned.
It, therefore, proceeded to quash the two notifications.
“365. The Notification bearing no. F-13(16)/MW/1/2008/Lab/1859 dated 15th September, 2016 issued by the respondents constituting the Minimum Wages Advisory Committee for all scheduled employments is ultra vires Section 5(1) and Section 9 of the Minimum Wages Act, 1948 and is hereby declared invalid and quashed.
366. The Notification bearing no. F.Addl.LC/Lab/MW/2016 dated 3rd of March 2017 issued by the respondents revising minimum rates of wages for all classes of workmen/employees in all scheduled employments is ultra vires Article 14 of the Constitution of India; of Section 3 & Section 5(2) of the Minimum Wages Act, 1948, of Rule 20 of the Minimum Wages (Central) Rules; appears from non-application of mind, is based on no material and is in contravention of principles of Natural Justice and is hereby declared invalid and quashed.”
Read judgement below.