Hindustan Sanitaryware and Industries Ltd. & Others vs The State of Haryana

1.2 There is no power vested in the Government by the Act to make alterations to the terms of a contract. Jurisdiction is conferred by the Act on the Government to fix/revise the minimum rate of wages notwithstanding the contract. The Notification dated 21.10.2015 postulates that unskilled employees having five years experience would be deemed categorized as semi-skilled “A”; that after three years of experience in semiskilled “A”, the employees would be deemed categorized as semi-skilled “B”; that after three years of experience in skilled “A”, the employees would be deemed categorized as skilled “B”. Such categorization or classification by deeming workmen in one category to belong to another category is in direct contravention of the contract between the employer and the employee and is beyond the jurisdiction of the Government. Inclusion of Security inspector/ Security officer/ Supervisor in the table “Minimum rates of wages in respect of all scheduled employment” in the Notification is ultra vires the provisions of the Act. They do not fall within the definition of “employee’ in s. 2(i) as they do not discharge any skilled or unskilled, manual or clerical work. Similarly, not all trainees can be included in the Notification. Trainees who receive wages during the period of training would fall under the definition of “employee” as has been fairly admitted by the appellants. Only a person who is employed for “hire or reward” will fall under the definition of “employee”. The trainees who are not paid wages cannot be included in the notification and the fixation of minimum wages for such trainees at 75% is also not valid. The minimum wages fixed for trainees who are appointed for reward is not interfered with. The period of training to be undergone by a trainee would depend upon the contract between the employer and the employee. There is no power vested in the Government under the Act to decide the period of training and any stipulation with regard to the training period is ultra vires. [Para 13][1101-B-H; 1102-A-B]

1.3 The word “employee” as defined in the Act means any person who is employed for hire or reward in a scheduled employment. There is no distinction made between a person employed by the principal employer and a person employed through a contractor. Any person who employs, whether directly or through any other person, one or more employees in a scheduled employment falls within the definition of an “employer”. A close scrutiny of the definitions of the employer and the employee would bring the workmen employed through the contractors within the purview of the Act. It cannot be said that the contract workmen are not covered under the Act. [Para 14][1102-B-C]

1.4 “Wages” is defined in s. 2(h) to mean all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of the employment, express or implied were fulfilled, be payable to a person in respect of his employment or of work done in such employment and includes house rent allowance. There are four exclusions in the definition relating to travelling allowance, value of housing accommodation, supply of light, water, medical attendance, etc. If certain components of the remuneration are taken care of by the employer, he cannot be asked to pay twice over such allowance/ payments which are part of the remuneration. Therefore, the prohibition on segregation of the wages into components under the notification is not a valid exercise of power. [Para 16][1102-F-G; 1103-A]

1.5 The prohibition of segregation of wages into components in the form of allowances in the Notification is impermissible. The security inspector/ security officer/ security supervisor cannot be included in the Notification. Trainees who are employed without payment of any reward cannot be covered by the Notification. Categorization of unskilled employees as semi-skilled and semiskilled as skilled on the basis of their experience is ultra vires. Fixing the training period for one year is beyond the jurisdiction of the Government.” [Para 18][1103-D-F]

1.6 The conclusion in respect of some parts of the Notification would not affect the Notifications as such. The part of the Notifications other than that which are dealt with by this judgment shall continue to be in force. The employers shall not be entitled to recover any amounts paid under the Notifications to the workmen on the ground that they have succeeded in this case. The workmen are not precluded from seeking redressal of their grievances by resorting to other remedies available to them under law. [Para 17][1103-B-C]

Apparel Exporters & Manufacturers Association v. State of Haryana CWP No.9942 of 2007 dated 06.09.2007; Bidi, Bidi Leaves and Tobacco Merchants’ Association v. State of Bombay [1962] 1 Supp l. SCR 381 ; Haryana Unrecognised Schools’ Association v. State of Haryana (1996) 4 SCC 225 : [1996] 1 Suppl. SCR 253 ;

Airfreight Ltd. v. State of Karnataka (1999) 6 SCC

567 : [1999] 1 Suppl. SCR 22 – referred to.