NON PAYMENT OF MINIMUM WAGES AMOUNTS TO FORCED LABOUR

[Mr. M. GOVINDARAJAN]

Sec.12 of Minimum Wages Act, 1948 ('Act' for short) provides that where in respect of any scheduled employment a notification under Section 5 is in force, the employer shall pay to every employee engaged in a scheduled employment under him wages at a rate not less than the minimum rate of wages fixed by such notification for that class of employees in that employment without any deductions except as authorized within such time and subject to such conditions as may be prescribed.

Sec. 11 of the Act provides that minimum wages payable under this Act shall be paid in cash. Where it has been the custom to pay wages wholly or partly in kind, the appropriate Government being of the opinion that it is necessary in the circumstances of the case may, by notification in the Official Gazette, authorize the provision of such supplies at concession rates.

Sec. 27 of the Act provides that the appropriate State Government, after giving by notification in the Official Gazette not less than three months' notice of its intention so to do, may, by like notification add, to either Part of the Schedule any employment in respect of which it is of opinion that minimum rates of wages should be fixed under this Act, and there upon the Schedule shall in its application to the State be deemed to be amended accordingly.

Sec. 22A of the Act provides that any employer who contravenes any provision of this Act or any rule or order made there under shall, if no other penalty is provided for such contravention by this Act, be punishable with fine which may extend to five hundred rupees.

Thus once an employment in added in the schedule to this Act, the concerned employer is liable to pay minimum wages at the rate fixed by the respective State Government. Failure to pay the minimum wages will attract the penal provisions of this Act. The Madras High Court in one case held that non payment of minimum wages amount to forced labor.

This has been reported in the Business Line daily dated 4th March, 2010. In this case the Tamil Nadu Government notify the 'General Engineering or Fabrication' under GO Ms. No. 2242. The petitioner, Venkateswara Wires, Porur, Chennai, was manufacturing a copper and aluminium wire which was a fabrication process.

The Labor Court held that an industry proceeding copper and aluminium products and distributing the same to various electricity boards would come under 'General Engineer or Fabrication'. The petitioner filed a writ petition before the High Court challenging the award of the III Additional Labor Court dated 18th December, 2008. The Labor Court had computed the difference in wages in the common order. In this petition the petitioner raised the issue of coverage under the 'scheduled employment'. Further he contended that the proceedings under Section 33-C of Industrial Dispute Act were not available to the employees, and therefore workers ought not to have gone before the Labor Court; instead, they should filed applications under Section 20 of the Minimum Wages Act.

The High Court held that the term 'General Engineering or Fabrication' industry, included as 'scheduled employment' under the Industrial Disputes Act, would widen the range of activities. Therefore the Court accepted the contentions of the Labor Court that the petitioner is coming under 'General Engineering or Fabrication'. Since the firm was an engineering industry the Court held that it could not reduce the coverage for payment of minimum wages to workers. In the absence of any evidence regarding the issue coverage under 'scheduled employment' merely raising a plea in a written statement could not be accepted.

The Labor Court, while accepting the plea of the first respondent for computing the difference in payment of wages has found fault with the petitioner in not showing evidence, the Court noted. The High Court further held that the petitioner had come forward to challenge the order after a year, and therefore no explanation given for not having challenged it earlier.

The High Court rejected the contention of the petitioner that proceedings under Section 33-C of the Act were not available and, therefore, the workers ought not to have gone before the Labor Court, instead, they should have filed under Section 20 of the Minimum Wages Act. The question raised was no longer res integra. The High Court relied on the order of the apex court in 'Chandra Bhavan Boarding & Lodging V. State of Mysore held that if an industry did not pay minimum wages, it has no right to exist.

The High Court further held that as held in 'People's Union for Civil Liabilities V. Union of India' non payment of minimum wages would amount to forced labour which is prohibited under Article 23 of the Constitution.