Elite Distilleries And Beverages Company v. Secretary To Government, Labour & Skills(E) Department
2024-11-26
N.NAGARESH
body2024
DigiLaw.ai
JUDGMENT : The petitioners in these writ petitions are in the business of manufacture of Indian Made Foreign Liquor (IMFL). They run their own Distilleries. The writ petitioners challenge GO(P) No.103/2021/LBR dated 27.12.2021 (Ext.P3 Notification in W.P.(C) No.28861/2022). 2. By GO dated 27.12.2021, the Government of Kerala, in exercise of powers conferred by Clause (b) of sub-section (1) of Section 3 of the Minimum Wages Act, 1948 read with sub-section (2) of sub-section (5) thereof has revised the minimum rates of wages payable to the employees employed in Breweries (including manufacture of beverages and distillation and rectification of spirit) industry sector in the State of Kerala, as specified in the schedule annexed to the GO. 3. The petitioners state that the GO is illegal and has been issued in violation of the provisions of the Minimum Wages Act, 1948. According to the petitioners, fixation of grades cannot be a component in the matter of fixation of minimum wages. Though grades and weightages were taken as components in the draft notification, weightage has been taken away in Ext.P3 GO while retaining grades, without any legal basis. 4. The Government has fixed a graded scale of wages with increment to all groups of employees ranging from 7 to 15% of the basic wages based on length of service. The petitioners would urge that fixation of wage scales and providing weightage based on length of service are not within the scope and ambit of the Minimum Wages Act. Ext.P3 is unsustainable for the further reason that it takes within its fold persons who do not fall within the definition of 'employee' as given in the Minimum Wages Act. 5. The petitioners state that the minimum wages prevailing in the Brewery Sector was on the higher side even before Ext.P3 revision. The petitioners would further state that to initiate a process of review of minimum wages, it has to be first ascertained as to whether the increase in Dearness Allowance which is coupled with the Consumer Price Index would neutralise the hike in the cost of living during the period in question. Only if the increase for the period in question has not neutralised the living cost, is a revision envisaged under the Act is called for. 6.
Only if the increase for the period in question has not neutralised the living cost, is a revision envisaged under the Act is called for. 6. The petitioners further urged that instead of calculating the living cost in accordance with the guiding norms, the Government has simply made a further addition of 55% to the existing basic salary fixed as per Ext.P1 notification. There is no basis for the increase of 55% of the basic wages since the living cost has already been neutralised by the merging of Dearness Allowance which is linked to the Consumer Price Index. Ext.P3 GO is therefore liable to be set aside, contended the petitioners. 7. Respondents 1 and 2 filed a counter affidavit in W.P.(C) No.28861/2022, which was adopted by the respondents in other writ petitions also. The respondents submitted that steps were taken to revise the minimum wages of the workers employed in the Breweries Sector under Section 5 of the Act. A Sub Committee was constituted. The Sub Committee held a number of sittings and made their recommendations. The recommendations were considered by the Minimum Wages Advisory Board held on 22.02.2020. The proposals were approved by the Board and were forwarded to the Government for publication. 8. The respondents stated that only relevant components are taken for fixing the minimum wages of employees in Brewery Sector. The GO has been issued adhering to the norms and conditions prevailing in the sector. The revision of minimum wages in the Brewery Sector was previously done on 01.06.2013. The present revision is done after expiry of about nine years, as against the stipulated period of five years. While fixing minimum wages, increase in the DA also was considered. 9. The counsel for the petitioners relied on the judgments in Hindustan Sanitaryware and Industries Limited and others v. State of Haryana and others [ AIR 2019 SC 2194 ], Bidi, Bidi leaves and Tobacco Merchants Association v. The State of Bombay [1962 Suppl 1 SCR 381] and Kerala Non Banking Finance Companies Welfare Association v. State of Kerala and others [ 2019 (4) KLT 977 ] and contended that fixing a scale of wages and grading of employees on the basis of experience, are beyond the powers conferred to the Government under the statute. 10.
10. The petitioners contended that Ext.P3 GO has been issued in violation of the well settled principles of fixation of minimum wages and the guidelines laid down by the Apex Court in The Workmen represented by Secretary v. The Management of Reptakos Brett and Company Limited and others [ (1992) 1 SCC 290 ]. Instead of calculating the living cost in accordance with the six guiding norms, the Government has simply made a further addition of 55% to the existing basic salary and merged the DA upto 300 points to the basic wages. The petitioners, relying on the judgment of the Apex Court in U. Unichoyi and others v. State of Kerala [ AIR 1962 SC 12 ], argued that if the notification has prescribed a wage structure which is nearer the fair wage level and above the minimum wage structure, it would introduce an infirmity in the notification. 11. The Government Pleader resisted the arguments of the counsel for the petitioners. Relying on the judgment of this Court in All Kerala Plywood and Block Board Manufacturers Association and others v. State of Kerala and others [ 2017 (4) KHC 233 ] the Government Pleader submitted that the norms prescribed by the Apex Court in The Management of Reptakos Brett and Company Limited and others (supra) were intended merely to guide the appropriate Government in the fixation of minimum wages. The components that go into the fixation of a minimum wage must be determined, after taking note of the rights of the workmen, that are now viewed as fundamental, and breathing economic reality into them. In the judgment in Ministry of Labour and Rehabilitation and another v. Tiffin's Barytes Asbetos and Paints Limited and another [ (1985) 3 SCC 594 ], the Apex Court has emphasised that notifications fixing minimum wages are not to be lightly interfered with under Article 226 of the Constitution of India on the ground of some irregularities in the constitution of the Committee or in the procedure adopted by the Committee. 12.
12. On the allegation that the enhancement of minimum wages granted as per Ext.P3 GO is excessive, the Government Pleader relied on the judgment in The Management of Reptakos Brett and Company Limited and others (supra) wherein it has been held that the 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 requirement and amenities. The pendency of these writ petitions has blocked payment of due minimum wages for the last nearly three years. The writ petitions are therefore liable to be dismissed, contended the Government Pleader. 13. I have heard the learned counsel for the petitioners and the learned Government Pleader representing the respondents. 14. The arguments advanced by the petitioners to impugn the GO(P) No.103/2021/LBR dated 27.12.2021, are as follows: (1) The minimum wages prevailing in the Brewery Sector was on the higher side and hence a revision of minimum wages was uncalled for. (2) The GO takes within its ambit persons who do not fall within the definition of ‘employee’ as defined in the Minimum Wages Act, 1948. (3) Fixation of Grades cannot be a component while fixing minimum wages under the Minimum Wages Act, 1948. (4) Instead of calculating the living cost in accordance with the guiding norms, the Government has simply made a further addition of 55% to the existing basic salary. (5) There is no basis for the increase of 55% in the basic wages since the living cost is neutralised by merging DA which is linked to the Consumer Price Index. 15. The minimum wages of various sectors are to be reviewed every five years. The revision of minimum wages in the Brewery Sector was previously done on 01.06.2013. The present revision is done after expiry of about nine years. A Committee was appointed under Section 5 of the Minimum Wages Act, 1949 to revise the minimum wages. Proposals were made through notification. Objections were considered in detail and thereafter recommendations were made. The Government considered all aspects of the case and published the Notification revising the minimum wages. While revising the minimum wages, all aspects including inflation and escalation in the price of essential commodities were taken into consideration. The revision has come nearly after nine years.
Proposals were made through notification. Objections were considered in detail and thereafter recommendations were made. The Government considered all aspects of the case and published the Notification revising the minimum wages. While revising the minimum wages, all aspects including inflation and escalation in the price of essential commodities were taken into consideration. The revision has come nearly after nine years. In the circumstances, the contention of the petitioners that revision of minimum wages were uncalled for cannot be accepted. 16. The petitioners contend that the impugned Notification takes within its fold persons who do not fall within the definition of 'employee' as given in the Act. Administrative Officers and Assistant Managers were brought under Group 1 of the Schedule to the Minimum Wages Notification. 17. As per Section 2(i) of the Minimum Wages Act, 1948, '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. 18. In the light of the definition of the term 'employee' as contained in the Minimum Wages Act, 1948, it cannot be said that the impugned Notification also takes within its fold persons who do not fall within the definition of 'employee' as given in the Act. 19. The petitioners urge that fixation of grades cannot be a component while arriving at minimum wages.
19. The petitioners urge that fixation of grades cannot be a component while arriving at minimum wages. In the judgment in All Kerala Plywood and Block Board Manufacturers Association and others (supra), this Court held that the norms prescribed by the Hon’ble Apex Court in The Management of Reptakos Brett and Company Limited and others (supra) were intended to merely guide the appropriate Government in the fixation of a minimum wage and the decisions of the Supreme Court do not mandate that the norms are to be applied rigidly in all cases, or that no departure therefrom can be made by the appropriate Government. This Court held that the appropriate Government cannot lose sight of its constitutional obligations while fixing the minimum wage for the workmen in any of the scheduled employments under the Minimum Wages Act. 20. This would be so in view of the expanded meaning that has been given to the right to life under Article 21 of our Constitution, and the express provision of Article 43 thereof, which states 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, as living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. 21. The components that go into the fixation of a minimum wage must be determined after taking note of those rights of the workmen, that are now viewed as fundamental, and breathing economic reality into them. As held by this Court in All Kerala Plywood and Block Board Manufacturers Association and others (supra) in a republic such as ours, legal rights cannot remain a teasing illusion or a mirage to its intended beneficiaries, and hence a Constitutional Code, while examining the validity of a welfare measure, take it upon itself to expedite the process of judicial scrutiny, so as to avoid any delay in the adjudication of such cases. 22. The question of prescribing scale of pay in the minimum wages was considered by a Full Bench of this Court in Malayalam Plantations Limited and others v. State of Kerala and others [ 1975 KLT 296 (FB)] wherein this Court held that there can be no objection in the scale of pay provided in the case of employees.
22. The question of prescribing scale of pay in the minimum wages was considered by a Full Bench of this Court in Malayalam Plantations Limited and others v. State of Kerala and others [ 1975 KLT 296 (FB)] wherein this Court held that there can be no objection in the scale of pay provided in the case of employees. This Court held that there is no provision in the Act that prescribing a scale of wages would in any way be beyond the purview of the Act. 23. The petitioners have a further case that instead of weighing separately various components fixed for arriving at computation of minimum wages, the Government has simply enhanced minimum wages by increasing the basic wages by 55%. While fixing the minimum wages in the brewery sector, the Government initially published a draft notification. Thereafter, a Sub Committee was constituted. The Sub Committee held elaborate sittings and arrived at their recommendations. The recommendations of the Sub Committee were then considered by the Minimum Wages Advisory Board. Thereafter, the proposals were approved by the Board and were forwarded to the Government. 24. The Advisory Board considered the components for the purpose of fixing minimum wages. The minimum wages were fixed thereafter. Therefore, it is evident that the increase in the minimum wages was not by simply increasing a percentage of basic wages. The argument of the petitioners in this regard, therefore, cannot be accepted. 25. Dearness Allowance was primarily intended as a protection of persons whose salaries are at the subsistence level to protect them against the adverse effect of the rise in prices. Historically, DA was regarded as applicable to those employees whose salaries are at the subsistence level or at a little above in order to enable them to face the increase in dearness of essential commodities. Unless money/wages rise as fast as consumer prices, it will result in an erosion of real wages. But, the extent of its impact will depend on the margin of cushion available at different levels of income. The National Commission of Labour recommended that 95% neutralisation should be granted against rise in cost of living to those drawing minimum wage in non-scheduled employments. 26. In Ext.P3 GO dated 27.12.2021, DA has been provided only for points above 300, in the Consumer Price Index “1998-1999 = 100”.
The National Commission of Labour recommended that 95% neutralisation should be granted against rise in cost of living to those drawing minimum wage in non-scheduled employments. 26. In Ext.P3 GO dated 27.12.2021, DA has been provided only for points above 300, in the Consumer Price Index “1998-1999 = 100”. Therefore, it cannot be said that there should not be increase in the basic wages since the living cost is neutralised by merging DA which is linked to the Consumer Price Index. 27. As the Minimum Wages Act provides for a comprehensive mechanism for fixing the minimum wage in scheduled employments, and the decision is one that has to be taken by the appropriate Government using data that is gathered by it, courts will not ordinarily, in exercise of their power or judicial review under Article 226 of the Constitution of India, interfere with the said decision of the Government, save in exceptional situations that call for an interference with policy decisions, such as illegality, irrationality, procedural impropriety or unreasonableness of the decision. If prima facie the fixation appears to be fair, there is nothing more for the Court to do. As far as GO dated 27.12.2021 is concerned, there is no illegality, irrationality, procedural impropriety or unreasonableness warranting interference by this Court. The writ petitions are hence dismissed.