CASE ANALYSIS: U. UNICHOYI AND OTHERS VS. STATE OF KERALA

This Case analysis has been done by Himanshi Jain, a 4th year Law student pursuing BA LLB from Delhi Metropolitan Education, Noida affiliated with Guru Gobind Singh Indraprastha University.

 

Introduction

“U. Unichoyi and Others vs. the State Of Kerala”

Petitioner: “U. Unichoyi and Others”

Respondent: “State Of Kerala”

Citation: 1962 AIR 12

Bench: Gajendragadkar, P.B., Sarkar, A.K., Wanchoo, K.N., Gupta, K.C. Das, Ayyangar, N. Rajagopala

FACTS:

The petition was filed directly to Supreme Court under Article 32 of Indian Constitution enforcing one’s fundamental rights. The Government of Kerala exercising its power which is conferred under Section 5(1)(a) made a committee of the “Minimum Wages Act, 1948”. The committee was appointed to conduct inquiries and give recommendations in fixing minimum wage rates with regard to the industries of Tile. The government for the same nominated 8 persons to make the committee which is given under Section 9 of “Minimum Wages Act, 1948”.

On August 14, 1957, this notice was published. On March 30, 1958, the Committee issued its report. On 12th May, 1958, the Kerala government evaluated the report and released the notification mandating minimum pay rates as mentioned in the schedule annexed to it. On 26th May, 1958, this notice was directed to go into force.

On the day when the notification got released, nine petitioners representing six tile industries in Feroke Kozhikode District filed the current writ petition under Article 32, challenging the validity of the Minimum Wages Act, 1948 along with the validity of that notification which was released by the Government of Kerala.

ISSUES:

The validity of the “Minimum Wages Act, 1948” along with the notification which was made public by the Kerala Government was challenged.

PETITIONER CONTENTIONS:

1. The petitioners contended that the notification regarding minimum wage rates are far higher than the minimum wages, and also it was utmost necessary that the employers’ ability should be taken into account before the impugned wage rates are prescribed.
2. According to the Petitioners, the notification is ultra vires and ineffective because this essential feature was not noted by the Committee or the respondent.
3. The petitioner’s contended that the financial burden imposed by the notification is above the financial capability of industries and also their individual capacity in particular, as indicated by the fact that practically all 6 tile factories in Trichur shut soon just after that notification been released.
4.  As contended by the petitioners that the Act does not specify any appropriate mechanism for imposing restrictions by establishing a minimum wage or any procedure to be used which might violate natural justice principles.
5. Petitioners also claimed that the Act is discriminatory in nature since there is arbitrary minimum wage fixation mechanism for some industries whereas leaving others to the more orderly and regulated procedure of the “Industrial Disputes Act”. The legitimacy of the Act has called into question on several grounds. For the same grounds, the petitioners questioned the legitimacy of the notification as well.

RESPONDENT CONTENTIONS:

1. Respondent contended that the validity of the Act cannot be put to question open because the issue has been resolved by this Court’s decisions many times and it is also alleged that the purpose of the notification is to decide the minimum wage rate and nothing and the employer’s ability to pay such a minimum wage is irrelevant. 
2. Respondent also contended this Court’s decisions have firmly established the principle that employer should shut down the business if he is not able to pay wages to his employees at minimum wage rate.
3. It is further pointed out by the respondents that just six factories out of 18 in Feroke have approached to the Court, implying to the petitioners’ complaint of wage rates set above their capacity which is therefore, held false and dishonest in nature. 
4. Alternatively it is urged that the report of the said Committee   had not been ignored the capacity of the employers to pay. The Committee analyzed the impact of the minimum wage, as well as the rates indicated by it, before making its recommendations.
5. It was also contended regarding Trichur factory closures that the closures were likely driven by political objectives rather than economic incapacity of the factories to shoulder the load.

DECISION:

The decision was delivered by Justice Gajendragadkar. As a result, from these two rulings it is clearly confirmed about the Act’s legitimacy, and there would no longer be other dispute that the difficulty caused to employers and their incapacity to carry the responsibility is irrelevant on the Minimum Wage Rates imposed by the Act. The attempting to revive an issue that has been clearly resolved by the Court’s decisions is fruitless. The Committee’s composition as mentioned along with the report has also been briefly evaluated. If the committee constitutes of the representatives from employers side along with employees and together they consider the problem and therefore make recommendations on them.  Those notifications are thud accepted by the appropriate government. So, it not possible for the court to examine the merits of the notification along with the wage structure which is notified by the government. As a result, the fact that lower salaries being paid in other industries or locations may not always imply that the rates mentioned in the notifications are excessively high. In any case, these are concerns that we normally do not address because we are not contesting the Committee’s conclusions or the notifications that follows them.

INTERPRETATION:

There was another case in the same year which challenged the legitimacy of the “Minimum Wages Act, 1948”.  In “Bijay Cotton Mills ltd. vs. The State of Ajmer”.  Under this case some most important sections such as Section 3, Section 4, and Section 5, were challenged, with the claim that the constraints they imposed on contract freedom infringed the basic right enshrined under “Article 19(1)(g) of the Indian Constitution”. Justice Mukherjea rejected the appeal. The restrictions were established in the public interest and to carry out one of the directive principles of State policy enshrined under “Article 43 of Indian Constitution”.  

OBSERVATION:

Through this case analysis it is observed that n an underdeveloped country with a large-scale unemployment crisis, it is not conceivable.  The Minimum Wage Act’s purpose is to avoid the hiring such labour who works in poor conditions and still work hard, thus the employer’s capacity isn’t taken into account when minimum pay rates are decided. Minimum wage rates are being mandated, and expected by each and every state to be paid by the firm to every worker. It is also seen that the minimum wage is the wage which is essential to fulfil a worker’s and his family’s basic needs whereas many people has also contended that due to changing times the minimum wage should also cover few other requirements like primary education, medical facilities etc.

PROVISIONS:

• Section 3: It talks about “The appropriate Government is empowered to fix minimum rates of wages in regard to employments as therein specified, and review the same at such intervals as specified by Section 3(1)”.

Whereas, “Section 3(3) contemplates that in fixing or refixing minimum rates of wages different minimum rates of wages may be fixed for different scheduled employments, different classes of work in the same scheduled employments, adults, adolescents, children and apprentices, and different localities”.

• Section 5: It states that “in fixing minimum rates of wages in respect of any scheduled employment for the first time under this Act or in revising minimum rates of wages so fixed, the appropriate Government shall either appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision, as the case may be or by notification in the Official Gazette, publish its proposals for the information of persons likely to be affected thereby and specify a date, not less than two months from the date of the notification, on which the proposals will be taken into consideration”.

• Section 9:  It states that “Composition of committees, etc. Each of the committees, sub-committees and the Advisory Board shall consist of persons to be nominated by the appropriate Government representing employers and employees in SCHEDULED employments, 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”.
• Section 12(1): It states that “imposes on the employer the obligation to pay the minimum rates of wages prescribed under the Act”.
• Section 22: It states that “Any employer who pays to any employee less than the minimum rates of wages fixed for that employee’s class of work, or less than the amount due to him under the provisions of this Act; or

contravenes any rule or order made under section 13, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both: Provided that in imposing any fine for an offence under this section, the Court shall take into consideration the amount of any compensation already awarded against the accused in any proceedings taken under section 20”.

• Section 27: It states that “the appropriate Government, after giving by notification in the Official Gazette not less than three months’ notice of its intention so to do, may, by like notification, add to either Part of SCHEDULE any employment in respect of which it is of opinion that minimum rates of wages should be fixed under this Act”.