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1997 DIGILAW 520 (KAR)

LEVGE GOWDA DETECTIVE AND SECURITY CHAMBER (PRIVATE) LIMITED, BANGALORE v. AUTHORITY UNDER THE MINIMUM WAGES ACT (SMALL CAUSES COURT) NAGPUR

1997-09-03

KUMAR RAJARATNAM

body1997
KUMAR RAJARATNAM, J. ( 1 ) THERE are 4 writ petitions. Writ Petition Nos. 13908 and 15405 of 1997 have been filed by the contractor. Writ Petition nos. 11270 and 11356 of 1997 had been filed by the principal employer. All the four writ petitions challenge the order passed by the authority under the Minimum Wages Act. ( 2 ) THERE was an order by the Authority under the Minimum wages Act directing the contractor and the principal employer to pay minimum wages. ( 3 ) THE facts very briefly are as follows. A claim application was filed against the contractor and against the principal employer. The contractor had employed security guards for guarding the establishment of the principal employer. It was alleged in the application that minimum wages were not paid as per the Minimum Wages Act, 1948 read with Karnataka minimum Wages Rules, 1958 (hereinafter referred to as the Act and the Rules ). The learned Authority after hearing the principal employer as well as the contractor held that minimum wages as required under the Act would include the minimum wages that is paid to the employees of the principal employer and that shall be paid to the workers who were employed by the contractor. The authority also determined damages at ten times and ordered payment making both the principal employer as well as the contractor jointly and severally liable. ( 4 ) MRS. Sheela, learned Counsel appearing for the employees strenuously submitted that although the Detective Service agency does not come within the purview of the Minimum wages Act, since such service has not been notified, it would still be treated for the purpose of Minimum Wages Act, as a service coining under the Engineering Industry. She elaborated her submission by saying that the contractor who dealt with the detective service had a contract entered into between the principal employer and the contractor and pursuant to the contract the employees were made to work with the principal employer and therefore, they are deemed to be workmen not under the contractor but under the principal employer. She elaborated her submission by saying that the contractor who dealt with the detective service had a contract entered into between the principal employer and the contractor and pursuant to the contract the employees were made to work with the principal employer and therefore, they are deemed to be workmen not under the contractor but under the principal employer. Learned counsel took me through the definition of employer as found in section 2 (e) of the Minimum Wages Act which reads as follows:"2 (E) "employer" means any person who employs, whether directly or through another person, or whether on behalf of himself or any other person, one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed under this act". She also drew my attention to the definition of an employee. "employee" under the Act reads as follows: "employee" means any person, who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment, in respect of which minimum rates of wages have been fixed, and includes an out-worker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of that other person where the process is to be carried out either in the home of the out worker or in some other premises not being premises under the control and management of that other person, and also includes an employee declared to be an employee by the appropriate government, but does not include any member of the armed Forces of the Union". It was submitted that reading of Section 2 (e) read with section 2 (i) would clearly indicate that the principal employer is bound to pay the minimum wages as per the principal employer's schedule. Her grievance is not against the contractor since it was strenuously submitted that the beneficiaries are deemed to be under the employment of the principal employer. It was common ground that detective service agency does not come within the purview of the minimum wages since such service has not been notified. Her grievance is not against the contractor since it was strenuously submitted that the beneficiaries are deemed to be under the employment of the principal employer. It was common ground that detective service agency does not come within the purview of the minimum wages since such service has not been notified. The judgment of this Court in A,v. Prakash and Others v Senior Labour Inspector, Bangalore 1st Circle, bangalore , has held that the provisions of the Minimum Wages act shall not apply to detective and security service since it is not covered by the Act. ( 5 ) MR. Gururajan, learned Counsel for the principal employer strenuously submitted that there was absolutely no employer and employee relationship between the principal employer and the beneficiaries and therefore, they are not bound to pay minimum wages. If however, the detective agency was notified under the Minimum Wages, then there would have been an obligation on the part of the principal employer to ensure that the contractor pays minimum wages. In the absence of a notification, it was strenuously submitted that the principal employer is not obliged to pay the minimum wages as are being paid to the other employees. ( 6 ) MR. Sanjeev, learned Counsel for the contractor strenuously submitted that even according to the claimants no liability is fastened on to the contractor since detective agency does not come within the purview of the Minimum Wages Act as detective agency has not been notified by the State Government even according to the claimants no liability is fastened on to the detective agency. ( 7 ) THE learned Authority in its order has dealt with this issue under issue No. 2 Whether the Minimum Wages Act is applicable to the respondent-company? ( 8 ) AFTER relying on certain judgments, the learned Authority came to the conclusion that the minimum wages of what is paid for an Engineering Industry shall also be paid to the security guards and therefore, treated security guards as employees of the principal employer. ( 9 ) I have given my careful consideration to the submissions of the learned Counsel. ( 9 ) I have given my careful consideration to the submissions of the learned Counsel. It appears to me that when no notification has been issued with regard to the detective services, there can be no liability as far as the contractor is concerned to pay the minimum wages as required under the Minimum Wages Act as has been held in the judgment of this Court in A. V. Prakash's case, supra. ( 10 ) NOW the question that will arise for consideration is, whether the principal employer can be asked to pay the minimum wages as if detective agency is an Engineering industry. There appears to be some fallacy in the logic that when a detective service employee works in the Engineering Industry, the management would be required to pay the minimum wages in the Engineering Industry and the same detective if he is posted elsewhere, for example, on private duty, he would not be entitled to minimum wages. ( 11 ) THIS is perhaps why certain services are notified under the Minimum Wages Act. The Legislature in its wisdom has incorporated certain services by notification to be brought under the provisions of the Minimum Wages Act. Unfortunately, as far as detective agencies are concerned there is no such notification under the Act. Therefore, it would be difficult to hold that some employees who are working under the management of an engineering industry would be entitled to minimum wages of that industry while others would not be entitled to minimum wages. The easiest thing for the State to do was to notify detective agencies to be brought under the purview of the minimum Wages Act. Having not done it, I am unable to accept the contentions of the learned Counsel for the beneficiaries. ( 12 ) THERE is obviously no employee-employer relationship between the principal employer and the security staff who work under the contractor. It is not the case of the beneficiaries that there was abolition of the contract system under the Abolition of contract Labour Act. As long as the contract system is not abolished, contractor is the employer and if the detective agency is not covered by notification under the Minimum Wages Act, then no relief can be granted under the provisions of the Act. ( 13 ) IT was submitted by Mr. As long as the contract system is not abolished, contractor is the employer and if the detective agency is not covered by notification under the Minimum Wages Act, then no relief can be granted under the provisions of the Act. ( 13 ) IT was submitted by Mr. Sanjeev, learned Counsel for the contractor that the workmen were paid substantial wages and were given all possible allowances such as uniforms, free accommodation and other perquisites. It was further submitted by him that the Minimum Wages Act will not apply to his employees unless it is notified by the State Government. He further submitted notwithstanding this they have been paid living wage and other amenities were also given to the employees. ( 14 ) MR. Gururajan, learned Counsel for the principal employer submitted that an agreement was entered into between the principal employer and the contractor and that agreement was strictly enforced and whatever was agreed in terms of the agreement was paid to the workmen. However, he submitted that by no stretch of imagination the workmen under the contractor can be treated as workmen under the principal employer unless the contract system was abolished. In this case, admittedly, the contract system as far as detective agency is concerned, is not abolished by the State Government. He further submitted that most of the employees under the contractor were agriculturists and used to perform part-time detective work whenever jobs were available. He further submitted that their employment was not perennial. In these circumstances, it was submitted that more than a living wage was paid to them and in the absence of the notification the employees are not entitled to take advantage of the provisions of the Act. ( 15 ) I have carefully considered the contentions of the beneficiaries and the employers. It is most unfortunate that the detective agency has not been brought under the provisions of the Minimum Wages Act. If that was done, there would have been a liability both on the principal employer as well as the contractor to pay minimum wages under the Act. In the absence of such a notification it would be difficult to hold that they are employees of the principal employer and would be entitled to minimum wages as is paid to the regular workmen of the principal employer. In the absence of such a notification it would be difficult to hold that they are employees of the principal employer and would be entitled to minimum wages as is paid to the regular workmen of the principal employer. ( 16 ) HOWEVER, taking into account the facts and circumstances of the case and since the claimants thrust is only against the principal employer to pay the minimum wages, I direct a total sum of Rs. 1,00,000/- to be paid as an ex gratia payment in Writ petition Nos. 11270 and 11356 of 1997. These are the writ petitions filed by the principal employer. The amount shall be paid within four weeks from the date of receipt of this order before the Authority. On such payment and on an application made by the beneficiaries before the Authority, the Authority shall disburse the amount equally to all the beneficiaries. ( 17 ) IT is stated that a sum of Rs. 25,000/- has been deposited before the Authority pending disposal of the writ petitions by the linge Gowda Detective Agency. The said detective agency is permitted to withdraw the amount. ( 18 ) CONSEQUENTLY the order passed by the Authority under the Minimum Wages Act in these writ petitions stand quashed. There will be no order as to costs. --- *** --- .