Judgment :- 1. Associations of Hotels and Restaurants, of drugs and medicines, of grain merchants, and shops and establishments have joined together in this batch of writ petitions, challenging the Notification, issued under the Minimum Wages Act, 1948 and dated 15th May, 1987, published in the Kerala Gazette on 25th May, 1987. The main arguments were advanced by Shri. K.A. Nayar in O.P. No. 8688 of 1987, filed on behalf of Hotels and Restaurants. We shall, therefore, confine mainly to the particulars and facts mentioned in that writ petition and shall advert to the facts in other writ petitions wherever they are necessary. 2. Entry 21 of the Schedule to the Minimum Wages Act, as amended in Kerala in 1957 reads "Employment in shops and establishments (including hotels and restaurants) " and the State Government is therefore competent to fix the minimum rates of wages payable to employees in this "scheduled employment". In exercise of this power, the Government issued a Notification in 1960 which was revised in 1967, again revised in 1977 and revised still later in 1987. The Act authorises the review of the minimum rates at such intervals, as it may think fit, such intervals, however not exceeding five years. But if, for any reason, a review was not made within an interval of five years, the Government was still empowered under the Act. to review even after the expiry of the said period of five years, and revise the minimum rates. However, the minimum rates fixed before the expiry of the period of five years remain in force till the revisions are made. This is the purport of S.3 (1) of the Act. 3. In 1984, the Government appointed a Committee to hold inquiries and advise the Government in the matter of revision of minimum rates of wages payable to the employees employed in scheduled industry covered by entry 21 and nominated nine members representing the employers, nine persons representing the employees and one independent member, who was appointed. as Chairman of the Committee. By being consecutively absent or otherwise, one representative each from the category of employers and employees Forfeited their membership and eventually there were eight members representing the employers and eight members representing the employees along with one independent member, Chairman. The Committee made detailed enquiries for revising the minimum rates of wages in the following establishments. 1. Hotels, restaurants and canteens. 2.
The Committee made detailed enquiries for revising the minimum rates of wages in the following establishments. 1. Hotels, restaurants and canteens. 2. Shops (including cloth shops) 3. Chitty Fund. 4. Other commercial establishments (including cold drinks manufacturing plants)." The committee collected materials through questionnaires, visited several places and inspected several establishments, collected evidence from employers, employees and trade unions, and held discussions on the subject and prepared its report. The report shows that after considering the service conditions and the nature of the employment, the employees were divided into seven categories and further sub divided into 4 to 6 grades and different posts are included under different grades. Chitties and Kuries were classified in Category B, Shops and Commercial establishments in Category C, Hotels, Canteen and Restaurants in Category D, Lodges in Category E and Daily wagers as Category F. The committee formulated the principles adopted for fixation of the minimum rates and also recommended -varying rates of dearness allowance. The report has been substantially accepted by the Government and a notification was issued fixing "the minimum rates of wages payable to the classes of employees employed in shops and establishments including hotels and restaurants and lodges in the State. This notification is challenged in all these writ petitions. 4. Leading the arguments on behalf of the petitioners, Shri. K.A. Nayar, submitted that: (i) The composition of the statutory committee was not according to law because (a) there was no adequate representation of independent members and (b) there was no representation of the employers of the hotel and restaurant industry. (ii) That there has been no classification or any application of the mind and thus there was violation of Art.14; and (iii) That the committee exceeded its jurisdiction when it fixed, not the minimum, but if at all, only "fair" wages. 5. We shall proceed to consider these submissions. 6. On the first point as to whether there was adequate representation of independent members in the Committee constituted under the Act, S.9 of the Act requires to be noted: "9. Composition of Committees etc.
5. We shall proceed to consider these submissions. 6. On the first point as to whether there was adequate representation of independent members in the Committee constituted under the Act, S.9 of the Act requires to be noted: "9. Composition of Committees etc. Each of the Committees, subcommittees and the Advisory Board shall consist of persons to De nominated by the appropriate Government representing employers and employees in the scheduled employment, who shall be equal in number, and independent persons not exceeding one third of its total number of members; one of such independent persons shall be appointed the Chairman by the appropriate Government." 7. The Committee constituted under the Act cannot be loaded with persons representing either the employers or the employees. The Act therefore provides that the employers and the employees shall have equal representation namely, that they have equal number of representatives in the Committee. There is no such stipulation for inducting independent members. The number of independent members may be equal to or less than but never more than the number of the representatives of the employers or those of the employees. While there is no fixation of any minimum number of independent persons who should be nominated to the committee, there is a ceiling on the maximum number, as the number of independent members cannot exceed one third of the total members. Nomination of only one independent member to the committee is thus possible under the Act. This view is amply supported by the decision of the Supreme Court in Express Newspaper. Ltd. v. Union of India (A. I. R.1958 S.C. 573) where in Para.88 it is held thus: "It is clear therefore that a wage board relating to a particular trade or industry constituted of equal number of representatives of employers and employees, with an independent member or members one of whom is appointed a Chairman, is best calculated to arrive at the proper fixation of wages in that industry". (emphasis supplied) 8. We also note that the Government at the Centre and in this State have on very many occasions nominated only one independent member to the Committee, as seen from the reported decisions. 9.
(emphasis supplied) 8. We also note that the Government at the Centre and in this State have on very many occasions nominated only one independent member to the Committee, as seen from the reported decisions. 9. When the Act speaks of "independent persons" in the Committee and mentions about representatives of employers and employees, it only means that there should be persons in the Committee who are not representatives of the employers or the employees, but independent of them. These independent persons could, therefore, very well be persons who are or who were in the service or employment of the Government. This position too is well settled by the Supreme Court in State of A.P. v. Narayana Velur Beedi Mfg. Factory (1973) 4 S.C.C. 178: A.I.R. 1973 S.C.1307, where it is held thus: "....The language of S.9 does not contain any indication whatsoever that persons in the employment of the Government would be excluded from the category of independent persons. These words have essentially been employed in contradistinction to representatives of employers and employees. In other words, apart from the representatives of employers and employees there should be persons who should be independent of them". 10. This view was reiterated in Ministry of Labour & Rehabilitation v. Tiffin's B. A. & P. Ltd. (A.I.R. 1985 S. C. 1391) where it was held thus: "The "independent persons" contemplated by S.9 of the Act are persons who belong neither to the category of employers nor to the category of employees, and there is no reason to think that Government employees whose task is merely to implement Parliamentary Legislation made pursuant to Directive Principles of State Policy and the state's social obligations in that direction are excluded. The term "independent persons", it must be emphasised, is used in the section in contradistinction to the words 'persons representing employers and employees in the scheduled employments' " 11. We are, therefore, in full accord with the view expressed by Justice Vaidialingam in D.M.S. Rao v. State of Kerala (A.I.R.1963 Kerala 115) and Justice V.P. Gopalan Nambiar in Gangadharan Pillai v. State of Kerala and Others (A.I.R. 1968 Kerala 218: 1968 K.L.T. 952). 12. The second limb of the argument is that there was no representative of the petitioners' industry, namely, Hotel and Restaurants in the Committee.
12. The second limb of the argument is that there was no representative of the petitioners' industry, namely, Hotel and Restaurants in the Committee. The same contention was raised by Shri. Scaria, learned counsel appearing in O.P. No.7629 of 1987 when he submitted that there was no dealer of drugs and medicines or his representative in the committee. 13. Under S.3 of the Act, the minimum rates of wages payable to employees are to be fixed in respect of a scheduled employment. The scheduled employment in this case is "Employment in shops and establishments (including hotels and restaurants". Hotels and restaurants are thus grouped in the same class, under the same entry. They are only species of the same genus, namely, shops and establishments. There may be different classes and various grades of shops and establishments; and particular employments in the various shops and establishments, hotels and restaurants are still parts of the same scheduled employment. These particular classes of employments thus merge in the general pattern of scheduled employment. Same is the case with dealers "of drugs and medicines. They have no particular identity to distinguish them from shops and establishments in the scheme of Minimum Wages under the Act. The Act only contemplates representatives of the employers and employees in a scheduled employment and not of any particular scheduled employment. It is enough if a nexus exists between the class of representatives nominated to a committee and the particular employment concerned. Thus, persons engaged in shops and establishments can reasonably represent hotels and restaurants as well and it cannot be said that they are entirely unconnected with or ignorant of the particular employment in hotels and restaurants or in shops selling drugs and medicines. This principle has been, very clearly stated, if we may so with respect, in Ministry of Labour & Rehabilitation v. Tiffin's B. A. & P. Ltd (A.I.R. 1985 S. C. 1391) thus: "For the purpose of appointing the committee to represent the employers in a scheduled employment, it was not necessary that the person appointed should be engaged for profit : in the particular employment. It is enough if a nexus exists between the persons so appointed to represent the employers in the particular employment and the particular employment concerned.
It is enough if a nexus exists between the persons so appointed to represent the employers in the particular employment and the particular employment concerned. For example it may be absurd to appoint persons engaged in the newspaper industry to a committee to represent employers concerned in the employment of Barytes mines or Bauxite mines. The case before us is not one of that nature at all. There was no material before the High Court nor was the High Court in a position to say that the persons appointed to the committee to represent the employers were entirely unconnected with or ignorant of the particular employments". 14. In fact, there is an earlier decision of the Supreme Court in M/s. B.Y. Kshatriya v. S.A.T.B. Kamgar Union (A. I. R.1963 S.C. 806) where it was held thus: "The Act does not require that the Board should consist of representatives of any particular scheduled industry.. The Board is to consist of representatives of employees and employers in the scheduled employments, and such a Board was constituted". 15. It was contended before us that this decision of the Supreme Court is distinguishable as it applied only to Advisory Boards and not to any committee. We do not see any force in this contention. The Advisory Board and the committees have both advisory jurisdiction and their composition and constitution are on identical lines. The principles stated by the Supreme Court are thus applicable to the committees constituted under the Act. We, therefore, hold that there was no illegality in the composition or the constitution of the Committee under the Act. 16. The Committee is only an advisory body and the Government may or may not accept its recommendations. The procedural irregularities pointed out by the petitioners in the constitution of the Committee cannot thus vitiate or affect the validity of the Notification issued by the Government fixing minimum wages for the scheduled employment in entry 21 of the schedule to the Act. Moreover, the petitioners did not challenge in this court nomination to the Committee when it was made in 1984. Instead, they submitted replies to the questionnaires sent by the Committee and most of them or their representatives participated in the discussions on the subject when the Committee went all over the State and visited different places and several establishments and collected evidence.
Instead, they submitted replies to the questionnaires sent by the Committee and most of them or their representatives participated in the discussions on the subject when the Committee went all over the State and visited different places and several establishments and collected evidence. They waited till the Government issued the Notification fixing the minimum wages. They were sitting on the fence to see whether the final report would be in their favour or not. Their conduct thus, at any rate, disentitles them at this stage to challenge the legality of the composition of the Committee constituted by the Government 17. The second submission relates to the alleged violation of Art.14. It is contended that there was no application of the mind to the classification of grades or categories of the employees in the various establishment, and the committee acted arbitrarily when it did not divide the State into several zones, as has been done in the neighbouring States, for fixing minimum wages. Our attention was also drawn to the fact that Attenders were classified in Grade E for shops and establishments and included in Grade D for Hotels and Restaurants. Though the petitioner did not pray for setting aside the notification in respect of attenders alone, this point was highlighted to assert that the whole exercise has been arbitrary. It cannot be said that the classification of "office assistants" in shops and the peon/attender in hostels/restaurants in two different grades was not warranted by the function and duties in the two establishments. A reading of the report clearly reveals that the Committee has taken pains to collect evidence from various sources and at various levels, referred to the earlier reports of the Minimum Wages Committees, classified the employees in different categories and grades, noted the cost of living index in each District and fixed the minimum wages for the establishments in the scheduled employment. The wages thus vary from District to District depending on the cost of living index and a District wise classification made under the circumstances cannot be characterised by this Court as arbitrary. 18. The last submission was that the Committee exceeded its jurisdiction when, under the guise of fixing minimum wages, the Government really fixed fair wages.
The wages thus vary from District to District depending on the cost of living index and a District wise classification made under the circumstances cannot be characterised by this Court as arbitrary. 18. The last submission was that the Committee exceeded its jurisdiction when, under the guise of fixing minimum wages, the Government really fixed fair wages. Elaborating the contention, it was submitted that the committee recommended and the Government fixed not only wages required for food, shelter and clothing, for bare subsistence, but also wages necessary to meet the other needs of the employee and his family, for a fair living and thus did not have in mind the correct concept of Minimum Wages. It Was also submitted that the employees of hotels and restaurants are also given free food in addition to the wages payable and no provision is made for the increasing cost of food supplied. What has been fixed, therefore, is not minimum wages, according to the petitioners. 19. It is too late in the day to enter into a long discussion on the concept of minimum wages or fair wages as these are no longer res integra, concluded as we are by the decisions of the Supreme Court in Express Newspaper Ltd., v. Union of India (A.I.R.1958 S.C. 578), in U. Unichoyi v. State of Kerala (A.I.R. 1962 S.C. 12) and in Chandra Bhavan v. Mysore (A.I.R. 1970 S.C. 2042) and the other decisions. 20. We shall refer only to the decision in Chandra Bhavan v. Mysore (A.I.R. 1970 S.C. 2042) for the present. It was held thus: "Minimum wage does not mean wage just sufficient for bare sustenance. At present the conception of a minimum wage is a wage which is somewhat intermediate to a wage which is just sufficient for bare sustenance and a fair wage. That concept includes not only the wage sufficient to meet the bare sustenance of an employee and his family, it also includes expenses necessary for his other primary needs such as medical expenses, expenses to meet some education for his children, in some cases transport charges etc.-See U. Unnichoyi and Ors. v. State of Kerala. The concept of minimum wage is likely to undergo a change with the growth of our economy and with the change in the standard of living. It is not a static concept.
v. State of Kerala. The concept of minimum wage is likely to undergo a change with the growth of our economy and with the change in the standard of living. It is not a static concept. Its concomitants must necessarily increase with the progress of the society. It is likely to differ from place to place and from industry to industry. That is clear from the provisions of the Act itself and is inherent in the very concept." "The contention that the Government has no power to fix different minimum wages for different industries or in different localities is no more available in view of the decision of this Court in M/s. Bhaikusa Yamasa Kshatriya v. Sangamner Akola Taluka Bidi Kamgra Union. The fixation of minimum wages depend on the prevailing economic conditions, the cost of living in a place, the nature of the work to be performed and the conditions in which the work is performed. The contention that it was impermissible for the Government to divide the State into several zones is opposed to S.3(3) as well as to the scheme of the Act" 21. In the present case, the Committee referred to the concept of Minimum Wages as explained in several decisions of the Supreme Court, in the decisions of the labour conventions and in the reports of the fair wages committees and then fixed the wages with reference to the materials collected and the evidence available. The committee recommended only'unavoidable changes' in the existing grades and took note of the fact that "giving free food to the employees of hotels, canteens and restaurants is an important condition of service" in existence for years together and therefore it was not practicable to change this condition. The employees were divided into grades considering the size and need of the establishments. In calculating the family budget, the earlier method of calculation based on the food needs as recommended by Dr. Ikroid was followed. A catalogue of the balance diet of ordinary food used for labourers submitted by the State Nutrition office was also considered. The expenses for 2900 calories of balanced diet were calculated; and the price of wearing apparel and the house rent calculated at Rs. 25/-per month were also taken note of. 22. It was contended that there was no basis for fixing the balanced diet at 2o00 calories.
The expenses for 2900 calories of balanced diet were calculated; and the price of wearing apparel and the house rent calculated at Rs. 25/-per month were also taken note of. 22. It was contended that there was no basis for fixing the balanced diet at 2o00 calories. In fact, the Committee has given good reasons for arriving at this figure. Dr. Ikroid recommended that 2700 caloric food is necessary for an ordinary worker. The Labour Secretaries Committee on the basis of the recommendation of the Nutrition Advisory Committee in the year 19o7. recommended that an ordinary labour requires 2800 calories of food, 3000 calories required for an employee doing heavy work. It was considering all these facts that the Committee recommended that an employee in this industry requires diet of 2900 caloric and 5o00 caloric for 2 consumers units which include wife and 2 children. As free food was a condition of service as recommended by the Committee in the hotels and restaurants industry, the contention that the increase in the cost of food was not taken into consideration, does not help the petitioners. Even when the value of the food supplied increases and that also has to be taken into consideration separately as an item for fixing wages, the minimum wages may then have to be necessarily increased. This, the petitioners do not claim. 23. It is thus clear that the Committee can fix minimum wages not only for bare sustenance but also taking into account the expenses necessary for other primary needs as well. 24. Minimum wage is not mere "maintenance wage" enabling the worker to cover his bare physical needs and keep himself just above starvation. It should ensure not only his sustenance and that of his family but also preserve his efficiency as a worker. It has, therefore, to provide for some measure of education, medical requirements and other necessary amenities. The capacity of the employer to pay has no relevance in the concept of minimum wages. The contention that minimum wage has to be co-related to bare sustenance cannot be accepted. Minimum wage is bare wage with a plus element. In this case we are satisfied, the Committee has fixed only minimum wages and not fair wages. They have not exceeded their jurisdiction. This contention also has to fail. 25.
The contention that minimum wage has to be co-related to bare sustenance cannot be accepted. Minimum wage is bare wage with a plus element. In this case we are satisfied, the Committee has fixed only minimum wages and not fair wages. They have not exceeded their jurisdiction. This contention also has to fail. 25. On behalf of dealers of drugs and medicines it was contended that the constitution of the committee for fixation of minimum wages was actuated by mala fides out of political considerations and that the minimum wages fixed do not take note of the corresponding wages in the neighbouring States and that in any case, the wages are excessive and have no reference to the price structure fixed under the relevant statutes for sale of medicines and drugs. Apart from the fact that there is no factual foundation made in support of these submissions, we cannot accept the contention that the minimum. wages in this State should be fixed with reference to the wages in other States. A decision of the Government to constitute a Committee under the Act, in the discharge of a statutory duty to fix minimum wages for a scheduled employment cannot be characterised as mala fide. In the result, there is no merit in these Original petitions and they are dismissed but, without costs.