1992 (2) TMI 386 - HC - Indian Laws

Summary

Issues Involved:

1. Validity of the Notification dated 2nd July 1979 fixing minimum wages.
2. Jurisdiction of the State Government to issue the Notification.
3. Neutralization of wages more than 100%.

Detailed Analysis:

1. Validity of the Notification dated 2nd July 1979 fixing minimum wages:

The petitioners, who manufacture Millboard by sundry process, challenged the Notification dated 2nd July 1979, issued by the Government of Gujarat, fixing minimum rates of wages for employees in the scheduled employment of "Employment in any Pulp and Paper or Board Manufactory" effective from 15th July 1979. They argued that the notification should be quashed as it did not account for the distinct nature of their industry compared to fully automatic board manufacturing processes. The court, however, found that the notification was valid as the Government had the authority to fix minimum wages under the Minimum Wages Act, 1948, and had followed the due procedure by appointing a Committee to inquire and advise on the matter.

2. Jurisdiction of the State Government to issue the Notification:

The petitioners contended that the State Government lacked jurisdiction to issue the notification since the Board Manufacturing Industries employed less than one thousand employees. They referred to Section 3(1-A) of the Minimum Wages Act, which states that the Government may refrain from fixing minimum wages if less than one thousand employees are engaged in the scheduled employment. The court clarified that the appropriate Government may refrain but is not mandated to refrain from fixing minimum wages if less than one thousand employees are engaged. It was established that the total number of employees in the scheduled employment of pulp and paper or board manufactory in the State of Gujarat was 3563, thus giving the Government the authority to issue the notification. The court also noted the lack of specific particulars from the petitioners regarding the number of employees, further weakening their contention.

3. Neutralization of wages more than 100%:

The petitioners argued that the special allowance fixed under the notification resulted in more than 100% neutralization of the increase in the cost of living, which is impermissible under the law. They cited the Supreme Court's decision in the case of the Management of Shri Chalthan Vibhag Khand Udyog Sahakari Mandali Ltd. v. G.S. Barot, which held that more than 100% neutralization is not permissible. The court examined the notification and the statement at Annexure 'E' to the petition, which showed that the neutralization for unskilled, semi-skilled, and clerical-B employees was 130.43%, 111.82%, and 101.29%, respectively. The court agreed that the neutralization was more than 100% and thus not permissible. However, considering the notification's beneficial nature and the potential hardship to the employees if it were struck down, the court decided not to quash the notification. Instead, it chose to exercise its discretionary powers under Article 226 of the Constitution to do substantial justice between the parties.

Conclusion:

The court dismissed the petitions, upheld the validity of the notification, and directed the petitioners to disburse the accumulated special allowance to the employees. The decision emphasized the discretionary nature of the court's power under Article 226, allowing it to balance legal principles with equitable considerations to achieve substantial justice.