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West Coast Employers' Federation, Willingdon Island, Cochin, represented by Its Secy. P. Sethuram and Ors. Vs. State of Kerala, represented by the Chief Secy. to Govt., Govt. Secretariat, Trivandrum and Ors. (06.03.1967 - KERHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial;Constitution
CourtKerala High Court
Decided On
Case NumberWrit Appeal No. 238 of 1966
Judge
Reported in(1967)IILLJ523Ker
ActsMinimum Wages Act, 1948 - Sections 3 and 5; Constitution of India - Articles 14 and 226; Evidence Act, 1872 - Sections 101
AppellantWest Coast Employers' Federation, Willingdon Island, Cochin, represented by Its Secy. P. Sethuram an
RespondentState of Kerala, represented by the Chief Secy. to Govt., Govt. Secretariat, Trivandrum and Ors.
Appellant Advocate P.K. Kurien, Adv.
Respondent Advocate Govt. Pleader, Respondent 1,; T.C.N. Menon and; T.N. Har
DispositionAppeal dismissed
Cases ReferredOfficer v. Mammed Keyl
Excerpt:
.....(2) challenged - by impugned notification state divided into three separate areas for fixation of minimum wages - committee should have held capacity to pay not relevant factor at all for fixation of minimum wages under act of 1948 - government directed to conduct fresh enquiry into facts of situation and to modify impugned notification in light of enquiry. - - they challenged without success, the validity of ext p1, a notification issued by the 1st respondent the state of kerala under section 3(1)(b) of the minimum wages act, 1948, read with section 5(2) of the said enactment and published in the kerala gazette dated the 16th march, 1965 2. ext. quilon and trichur areas depend practically on the same market for the purpose of the sale of tiles, that 65 per cent of the total tiles..........on the standard of life to which they have been accustomed. ext. r-1, the report of the minimum wages committee which preceded the issue of ext. p-1, says:'quilon feroke and alwaye are industrial centres where persons have scope for employment in other alternate industries whereas trichur area has a rural set up where the only scope for alternate employment is in agriculture where the wage level is still lower. the quality and prices of tiles in the trichur area are also lower than those in the other areas. the proportionate increase in the prices of tiles in the trichur area after the wages were raised does not also come to the same level as in other areas. in consideration of the special factors mentioned above and with a view to enable the industry in the trichur and alwaye areas.....
Judgment:

1. The petitioners in O.P No. 792 of 1965 are the appellants in this writ appeal. They challenged without success, the validity of Ext P1, a notification issued by the 1st respondent the State of Kerala under Section 3(1)(b) of the Minimum Wages Act, 1948, read with Section 5(2) of the said enactment and published in the Kerala Gazette dated the 16th March, 1965

2. Ext. P1 divided the State into three separate areas:

(1) Quilon and Feroke area, consisting of Quilon. Trivandrum. Kozhikode and Cannanore Districts.

(2) Alwaye area, consisting of Ernakulam, Alleppey and Kottavam Districts, and

(3) Trichur area, consisting of Trichur and Palghat Districts and fixed the minimum wages for each of those areas. The earlier notification--the notification that Ext. P1 superseded--was dated the 12th May 1958

3. The minimum wages fixed for the Trichur area are lower than those fixed for the other two areas; and the contention of the appellants is that such a fixation is not warranted by the Minimum Wages Act, 1948. The contention is not that the minimum wages fixed for the areas with which they are concerned are too high. The contention is that the lower rate fixed for the Trichur area loads the scales very much against them as the tile industry is essentially dependent on man power and sells its products in an identical and competitive market The judgment under appeal sums up their submissions as follows:--

'Counsel for the petitioners submitted that there is nothing to show that the needs of the workers in the industry in the Trichur area are less than the needs of the workers. In other areas or that the workload in the Trichur area is less than in the other areas, that in similar notifications the Madras and Mysore States did not make any regional classification for the purpose of fixing minimum wages, and that the Kerala Government have not fixed different minimum wages for different areas in the State in respect of other industries, that all the owners of tile factories in Feroke. Quilon and Trichur areas depend practically on the same market for the purpose of the sale of tiles, that 65 per cent of the total tiles are manufactured in the Trichur Area and the quality of the tiles manufactured in the Trichur area is as good as those produced elsewhere in the State'.

4. The only relevant consideration for the fixing of minimum wages is the minimal requirements of the workers concerned. No other consideration--for example, the capacity of the industry to pay the minimum wage -arises for consideration

5. A fair wage is the demand and the destination. Its upper limits is the 'living wage' One of the Principles of State Policy -- the principle embodied in Article 43 of the Constitution--directs that the State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work a living wage and conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities.

6. The minimum wage is the lower limit of the fair wage. It should provide, according to the Committee on fair wages 'not merely for the bare sustenance of life but for the preservation of the efficiency of the worker by providing for some measure of education medical requirements and amenities'

7. The minimum wage as envisaged by the Committee, is not far removed from the subsistence wage of Adam Smith and David Ricardo Adom Smith wrote in his Wealth of Nations:

'The wages paid to journeymen (workers) and servants of every kind must be such as may enable them, one with another to continue the race of journeymen and servants, according as the Increasing diminishing or stationary- demand of the society may happen to require.'

and David Ricardo in his Principles of Political Economy and Taxation:

'The natural price of labour is that price which is necessary to enable the laborers one with another, to subsist and to perpetuate their race without either increase or diminution.'

8. The minimum wage, therefore, represents the limit below which the wages shall not be allowed to drop. In other words the prescription of minimum wages puts a floor under wages as the prescription of maximum hours puts a ceiling on the hours of work. The capacity to pay does not enter into the picture. And that is why the Supreme Court said in Crown Aluminium Works v. Their Workmen : (1958)ILLJ1SC :

'There is one principle which admits of no exceptions. No industry has a right to exist unless it is able to pay its workmen at least a bare minimum wage. It is quite likely that in under-developed countries, where unemployment prevails on a very large scale, unorganised labour may be available on starvation wages, but the employment of labour on stravation wages cannot be encouraged or favoured in a modern democratic welfare state if an employer cannot maintain his enterprise without cutting down the wages of his employees below even a bare subsistence or minimum wage, he would have no right to conduct his enterprise on such terms .'

9. The first enactment specifically to regulate wages in this country is the Minimum Wages Act, 1948, the act with which we are concerned in this rase. What it has done is briefly summarised in the report of the Committee on Fair Wages as follows:

'This Act is limited in its operation to the so-called sweated industries in which labour is practically unorganised and working conditions are far worse than in organised industry Under that Act the appropriate Government has either to appoint a Committee to hold enquiries and to advise it in regard to the fixation of minimum rates of waxes or if it thinks that it has enough material on hand !o publish its proposals for the fixation of wages in the official gazette and to invite objections. The appropriate Government finally fixes the minimum rates of wages on receipt of the recommendations of the Committee or of objections from the public. There is no provision for any appeal There is an advisory board in each Province to co-ordinate the work of the various committees. There is also a Central Advisory Board to co-ordinate the work of provincial boards Complaints of nonpayment of the minimum rates of wages fixed by Government may he taken to claims authorities Breaches of the Act are punishable by criminal courts.' (Paragraph 52).

10. In paragraph to of the report the Committee on Fair Wages posed the question:

'What then should be the level of minimum wages which can be sustained by the present stage of the country's economy?' And answered:

'Most employers and some Provincial Government consider that the minimum wage can at present be only a bare subsistence wage. In fact, even one important all India organization of employees has suggested that 'a minimum wage is that wage which is sufficient to cover the bare physical needs of a worker and his family' Many others, however who have replied to our questionnaire consider that a minimum wage should also provide for some other essential requirements such as a minimum of education, medical facilities and other amenities. We consider that a minimum wage must provide not merely for the bare sustenance of life but for the preservation of the efficiency of the worker. For this purpose the minimum wage must also provide for some measure of education, medical requirements, and amenities. '

11. Sub-section (3) of Section 8 of the Minimum Wages Act, 1948 provides that in fixing or revising minimum rates of wages different minimum rates of wages may be fixed for different localities. Such minimum wages represent payments below which the wages shall not fall. The only rational basis for a variation, therefore, will be the difference in the needs of the workers in the localities concerned.

12. Are the minimum needs of the tile workers in the Trichur area less than the minimum needs of the tile workers in the other two areas? If they are, the lower wages fixed by Ext. P-1 are justified If they are not, they cannot be sustained.

13. The minimum needs of workers depend not merely on nutritional necessities but also on the standard of life to which they have been accustomed. Ext. R-1, the report of the Minimum Wages Committee which preceded the issue of Ext. P-1, says:

'Quilon Feroke and Alwaye are industrial centres where persons have scope for employment in other alternate industries whereas Trichur area has a rural set up where the only scope for alternate employment is in agriculture where the wage level is still lower. The quality and prices of tiles in the Trichur area are also lower than those in the other areas. The proportionate increase in the prices of tiles in the Trichur area after the wages were raised does not also come to the same level as in other areas. In consideration of the special factors mentioned above and with a view to enable the industry in the Trichur and Alwaye areas to effect the transition to a Higher wage structure smoothly we recommend that the minimum wages be fixed on a regional basis after dividing the Tile Industry into three regions as follows:

A. The Quilon and Feroke areas comprising the administrative districts of Quilon, Calicut, Cannanore and Trivandrum.

B. The Alwaye area comprising the Ernakulam, Kottayam and Alleppey District.

C. The Trichur area comprising the Trichur and Palghat Districts.'

Paragraph 11 of the affidavit filed on behalf of the State quotes the above passage and says:

'I submit that the Committee recommended regional fixation of wages only because it came to the conclusion that in the interests of industry regional differences in wages have necessarily to be kept for some time more.'

14. There can be no doubt that many of the reasons given for fixing a lower minimum rate of wages for the Trichur area cannot be justified. There is ,however the statement that the Trichur area, as distinct from the other areas, 'has a rural set up where the only scope for alternate employment if in agriculture where the wage level is still lower.'

15. It is notorious that agricultural wages are invariably lower than the wages obtaining in organised industries. If the statement of the Committee about the rural set up in the Trichur area is correct, then the lower wages of that area would have accustomed the labour in that area to a lower standard of life and minimal requirements. This may be the reason for the lack of a clamour on the part of the tile workers in the Trichur area for the same wages as have been prescribed for the tile workers in the other two areas.

16. We have no reliable material before us to hold definitely and categorically that the conclusion of the Committee that a lower minimum wage will suffice for the Trichur area is incorrect and cannot be sustained. As observed by the Supreme Court in Unichoyl v. State of Kerala, : (1961)ILLJ631SC -- a case in which the earlier notification of the 12th May 1958 came up for consideration -- we should ordinarily refuse to consider the merits of a wage structure prescribed by a notification under the Minimum Wages Act, 1948.

17. The burden of proving discriminatory treatment for the purpose of invoking Article 14 of the Constitution is on the party alleging a violation of the equality guaranteed by that article. As stated by the Supreme Court in State of Uttar Pradesh v. Kartar Singh, : 1964CriLJ229 :

'That where a party seeks to impeach the validity of a rule made by a competent authority on the ground that the rules offend Article 14 the burden is on him to plead and prove the infirmity is too well established to need elaboration.'

and in First Additional Wealth-tax Officer v. Mammed Keyl, : [1964]52ITR605(SC) .

'It is for the party who comes forward with the allegation that equality before the law or the equal protection of the laws is being denied to him to adduce facts to prove such denial.'

18. All that we can do on the material before us is to say that the burden has not been discharged and affirm the decision under appeal But that by itself may not be sufficient in the circumstances of this case.

19. That the Committee which produced Ext R.1 and not fully understood what exactly is a minimum wage is clear from paragraph 36 of that report. It is stated therein:

'No doubt the principle of 'capacity to pay' is a relevant factor to be considered in the fixation of minimum wages, especially in India where the industry has not developed very much and where the burden on the land is too heavy even now. It will be unwise to compel some industries to close down on account of their inability to pay the minimum wages prescribed when the country is faced with the problem of great unemployment and it is straining every nerve to develop industries and put herself in the industrial map of the world. If some industries cease to operate not only will the country's industrial development be retarded but many workers will also be thrown out of employment'

20. The Committee should have held that the capacity to pay is not a relevant factor at all for the fixation of minimum wages under the Minimum Wages Act, 1948. They have not done so.

21. In these circumstances we feel that while dismissing this writ appeal we should also direct the Government to conduct a fresh enquiry as early as possible into the actualities of the situation and modify Ext. P-1, if found necessary, in the light of that enquiry. We do so.

22. The writ appeal is disposed of as above. No costs.


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