Steel Authority of India Ltd. & Anr. vs Jaggu & Ors. etc.

Minimum Wages Act, 1948 – Enquiry under – Scope of – Discussed.

Contract Labour (Regulation and Abolition) Act, 1970 – ss.79, 10(1), 12 – Held: 1970 Act is a complete code in itself and regulate the employment of contract labour in certain establishments and provide for its abolition in certain circumstances and for matters connected therewith – Act does not provide for total abolition of the contract labour, but only for its abolition in certain circumstances, and to regulate the employment of contract labour in the establishments registered u/s.7 and working through the contractors holding licence u/s.12.

Contract Labour (Regulation and Abolition) Central Rules, 1971 – r.25 – When not applicable – Discussed. Disposing of the appeals, the Court

HELD: 1.1 There are no pleadings on record and primarily the burden was on the respondent applicants to establish that the duties discharged by each of the employee was same or similar to that of a regular/direct employee appointed/employed by the establishment and this can be discerned from the facts pleaded in the application filed by one Jaggu of which a reference has been made. In absence of the initial burden being discharged in the first instance by the respondent employees, the onus could not have been shifted upon the appellant SAIL to counter the nature of work discharged by each of the workmen as to whether it was the same or similar to that of a permanent/regular employee of the establishment and how far the principles of equal pay for equal work claimed as enshrined under Article 14 and 39(d) of the Constitution of India would be attracted in the facts of the case. The objects and reasons of the scheme of the Act clearly manifests that the main object of the Act is to provide minimum rates of wages for certain scheduled employment and also provides for fixation and revision of minimum wages of the workers, overtime rates, remuneration for the work done on a day of rest, just to ensure that the employee has enough to provide to his family and to ensure a decent living standard that pertains to a social comfort of the employee and the cost of living index. The procedure for fixing and revising minimum rate of wages, which has to be prescribed, is supported by the recommendation of Advisory Committees/Advisory Board/Central Advisory Board being constituted under Sections 7 and

8 of the Minimum Wages Act, 1948 and the appropriate Government on its acceptance notified the minimum wages which are payable to the category of employees referred to under Section 2(i) of the Minimum Wages Act, 1948. Indisputedly, in the first place, the minimum wages which were notified by the appropriate Government from time to time under tripartite memorandum of agreement dated 12th November, 1991, signed by the appellant SAIL and the respondents before the Assistant Labour Commissioner(Central), Jabalpur effective from 1st April, 1991, it was agreed that the contract labour would be paid Rs. 11.65/per day over and above the notified minimum wages with effect from 1 st April, 1991 which has been indisputedly paid by the appellant SAIL till the employees were allowed to work in the establishment i.e. April, 1996 when their services came to be terminated by the contractor. [Paras 30-32] [83-A-H]

1.2 The scheme of the Act clearly manifests that the Act is primarily concerned with fixing rates of minimum wages, overtime rates, rate for payment of work on a day of rest and is not really intended to be an Act for enforcement of payment of wages for which provision has been made in other laws such as the Payment of Wages Act, 1936 and the Industrial Disputes Act, 1947. Section

20 of the Minimum Wages Act, 1948 is primarily enacted to resolve disputes about the rates of wages, rates of payment of work done on days of rest and overtime rates and to ensure that the rates of wages which are notified by the appropriate Government for various categories of employees under the Minimum Wages Act are to be strictly complied with by the employer in making payments and if any payment is made at the rates lower than the minimum rates of wages prescribed by the appropriate Government, the remedy has been provided to the workmen/employee to invoke Section 20(1) of the Act and being a self-contained Code and a beneficial legislation, it is a social protection to ensure and secure adequate living wage in the interest of public and looking to the nature of enquiry postulated under the scheme of Minimum Wages Act, 1948, there appears no scope of enquiry to examine the principles of equal pay for equal work which is a dispute to be determined by a adjudicatory mechanism provided under the law. It was not the case of the respondent employees(2040 in number) that the minimum rates of wages which were notified by the appropriate Government from time to time or as agreed between the parties under the Minimum Wages Act, 1948 have not been paid. But their claim in the application under Section 20(1) of the Act, was that, once they have been allowed to work after the prohibition notification dated 17th March, 1993 has come into force, pursuant to which their status as contract labour in the establishment ceased to operate as a result of contract of principal employer with the contractor in regard to the contract labour having been statutorily extinguished, their relationship stood automatically converted into the employer (i.e., SAIL in the instant case) and the employee (i.e. contract labour) making them entitled for wages which are notified by the NJCS as per the memorandum of agreement which is payable to direct/regular employees of SAIL. [Paras 34-35] [87-G-H; 88-A-F]

1.3 The submission is misplaced for the reason that the Contract Labour (Regulation and Abolition) Act, 1970 is a complete code in itself and regulate the employment of contract labour in certain establishments and provide for its abolition in certain circumstances and for matters connected therewith. The title of the Act itself indicates that the Act does not provide for total abolition of the contract labour, but only for its abolition in certain circumstances, and to regulate the employment of contract labour in the establishments which are registered under Section

7 and working through the contractors who are holding licence under Section 12 of the Act. In the instant case, the establishment was duly registered under Section 7 of the Act and the contractor through whom the contract labour was engaged was holding its licence under Section 12 of the Act but in the changed circumstances, the appropriate Government took a decision to put a prohibition in making employment of contract labour in scheduled employment for various reasons which is not a subject matter of enquiry in the instant case and in consequence of the prohibition notification dated 17th March, 1993 published under Section 10(1) of the CLRA Act, the contract labour working in the establishment ceased to function and the contract between the principal employer and contractor stands extinguished. To make it further clear, Rule 25 of the Rules, 1971 of which there was an emphasis before the High Court, may not come to the rescue of the respondent employees for the reason that it was an obligation upon the contractor who are holding a licence under Section 12 of the Act and as per the terms and conditions of the licence granted under sub-rule (1) of Rule 25 or renewed under Rule 29, to comply with certain conditions enumerated under sub-rule (2) of Rule 25 of the Rules 1971 which includes clause

(iv) and (v) to be complied with by the contractor and, if at all, there is any breach of the conditions of licence, complaint can be made to the prescribed authority and its consequences are imbedded under the Scheme of the CLRA Act, 1970. At the same time, an obligation to provide amenities conferred by the Act to the workers has been referred to under Chapter V of the CLRA Act and the primary responsibility is of a contractor that each worker employed by him as contract labour has to be paid his due wages before the expiry of such period as may be prescribed with an exception provided under Section 21(4) of the Act, in case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor under any of the methods prescribed by law. [Paras 37-40] [89-F-H; 90-B-H]

1.4 In the instant case, after issuance of the prohibition notification dated 17th March, 1993 under Section 10(1) of the CLRA Act having being published, the provisions of the CLRA Act or CLRA Central Rules, 1971 framed thereunder would not be available to either of the party to strengthen its claim. Minimum wages as prayed for in the application filed by respondents before the prescribed authority under Section 20(1) of the Minimum Wages Act, 1948 could be claimed independently under the Minimum Wages Act, 1948 which indisputedly in the instant case was Rs. 11.65/- per day over the minimum wages to be paid by the appellant to each of the respondent (2040 employees) in terms of the agreement executed between the parties and that was indeed complied with by the appellants in its true spirit. For fixation of Minimum Wages under the Minimum Wages Act, 1948, there are number of considerations which are to be kept in mind by the committees while prescribing the minimum rate of wages payable to the workmen of a different category. Under Section 3 of the Minimum Wages Act, 1948 the appropriate Government may fix minimum wages for time work, minimum rate of wages for piece work, minimum wages in respect of overtime work defined under sub-Section 2 of Section 3 of the Act and the amendment made in Section 3 of the Act also take note of different classes/categories of employees in such employment while the notification under the Minimum Wages Act, 1948 came to be published by the appropriate Government. In the given circumstances, a mere assertion of fact that the contract labour which was allowed to continue after the prohibition notification came to be published dated 17th March, 1993 in the establishment of the appellant SAIL performing same or similar kind of work in the establishment of the principal employer is not sufficient to endorse their entitlement of claiming wages notified by the NJCS memorandum of agreement for direct/regular employees of the establishment applicable universally to all the steel industries. [Paras 41-43] [91-A-H]

1.5 In addition to it, in terms of reference made by the appropriate Government dated 27 th January, 2003 read with Corrigendum dated 9th April, 2003 followed with 22nd February, 2005, the CGIT framed various issues including issue nos. V & VI and answered it accordingly. The answer thereto has been upheld in the independent proceedings. The order of the prescribed authority under the Minimum Wages Act, 1948 dated

2 nd December, 2003 and confirmed by the High Court are unsustainable and deserves to be set aside. [Paras 44-48] [92-C, G-H; 93-A]

Town Municipal Council, Athani v. The Presiding Officer, Labour Courts, Hubli and Others, Etc. (1969) 1 SCC 873 : [1970] 1 SCR 51 ; Hindustan Steel Works Construction Ltd. v. Commissioner of Labour and Ors. (1996) 10 SCC 599 : [1996] 5 Suppl. SCR 447 – relied on.

BHEL Workers Association, Hardwar and Others v. Union of India and Others (1985) 1 SCC 630 : [1985]

2 SCR 611 – distinguished.

Air India Statutory Corporation and Others v. United Labour Union and Others (1997) 9 SCC 377:

[1996] 9 Suppl. SCR 579 ; Steel Authority of India Ltd. and Others v. National Union Waterfront Workers and Others (2001) 7 SCC 1 : [2001] 2 Suppl. SCR 343 – referred to.