1961 (4) TMI 140 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the Minimum Wages Act, 1948.
2. Validity of the notification issued by the Government of Kerala prescribing minimum wages.
3. Consideration of the employer's capacity to pay in fixing minimum wages.
4. Alleged discriminatory effect of the Act.
5. Alleged procedural irregularities and violation of principles of natural justice.
6. Comparison of wage rates with other regions and industries.
7. Impact of the notification on the tile industry in Trichur.

Issue-wise Detailed Analysis:

1. Validity of the Minimum Wages Act, 1948:
The petitioners challenged the Act on multiple grounds, including the claim that it conferred arbitrary authority on the government, violating Article 19(1)(g) of the Constitution. They argued that the Act did not define "minimum wage" and allowed for unreasonable restrictions on employers. The Supreme Court, however, upheld the validity of the Act, citing previous decisions that had firmly established its constitutionality. The Court emphasized that the Act's purpose was to prevent the exploitation of labor and that the capacity of the employer to pay was irrelevant in fixing minimum wages.

2. Validity of the Notification Issued by the Government of Kerala:
The petitioners argued that the notification prescribed wage rates above the minimum wage level and did not consider the employers' capacity to pay. The Court rejected this argument, stating that the notification was in line with the recommendations of a representative Committee that had carefully considered various factors. The Court found no evidence that the wage rates were above the minimum wage level and upheld the notification's validity.

3. Consideration of the Employer's Capacity to Pay in Fixing Minimum Wages:
The petitioners contended that the employers' capacity to pay should have been considered before fixing minimum wages. The Court reiterated that the principle established by previous decisions was that the capacity of the employer to pay was irrelevant in the context of minimum wages. The Court clarified that a statutory minimum wage could be higher than a bare subsistence wage, but the Act only aimed to fix minimum wages, not fair wages.

4. Alleged Discriminatory Effect of the Act:
The petitioners claimed that the Act was discriminatory as it subjected some industries to arbitrary procedures for fixing minimum wages while leaving others to the more regulated procedures of the Industrial Disputes Act. The Court did not find merit in this argument and upheld the Act's provisions, emphasizing its purpose of preventing labor exploitation.

5. Alleged Procedural Irregularities and Violation of Principles of Natural Justice:
The petitioners argued that the Act did not lay down a reasonable procedure for fixing minimum wages and authorized procedures that could violate principles of natural justice. The Court found that the Committee appointed under the Act had followed a thorough and representative process, including issuing questionnaires, visiting factories, and recording evidence. The Court concluded that there were no procedural irregularities or violations of natural justice.

6. Comparison of Wage Rates with Other Regions and Industries:
The petitioners pointed out that the minimum wage rates prescribed by the Kerala notification were higher than those in other regions and industries. The Court acknowledged these comparisons but emphasized that the determination of minimum wages involved various relevant factors. The Court noted that the Committee had considered the weak bargaining position of workers in Kerala and the historically low wages in the tile industry. The Court concluded that the comparison with other regions and industries did not undermine the validity of the notification.

7. Impact of the Notification on the Tile Industry in Trichur:
The petitioners highlighted that 62 tile factories in Trichur had closed following the notification, leading to significant unemployment. The Court noted that this closure might have been due to financial difficulties or other reasons. The Court criticized the respondent (Government of Kerala) for facilitating a settlement in Trichur that was contrary to the provisions of the Act. The Court suggested that the respondent reconsider the notification's applicability to Trichur and other areas to ensure fairness and compliance with the Act.

Conclusion:
The Supreme Court dismissed the petition, upholding the validity of the Minimum Wages Act, 1948, and the notification issued by the Government of Kerala. The Court emphasized that the capacity of the employer to pay was irrelevant in fixing minimum wages and found no procedural irregularities or violations of natural justice. The Court suggested that the respondent reconsider the notification's applicability to ensure fairness and compliance with the Act.