Citation Codes

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Case Number

Writ Petn. No. 284 of 1958

Attorney(S)

For the Appellant: K.P. Adiga, M.K. Nambiyar, Advocates

Judges

Rajagopala Ayyangar, J.

Acts

Section 20(1) of the Central Act XXX of 1957
Section 20(1) of the Minimum Wages Act, 1948
Section 20(1) of the Minimum Wages Act.
SECTION 5 MINIMUM WAGES ACT
SECTION 20 MINIMUM WAGES ACT
rule 23 of the Central Rules, 1950
Minimum Wages Act (Act XI of 1948)
rule 23 of the Central rules.
provisions of sub-rule 1
14-10-1950. Rule 23 ran:(1)
PAYMENT OF WAGES ACT
MINIMUM WAGES ACT
24-6-1953 rule 23

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Smart Summary

Structured Summary of the Opinion — Associated Cement Co. Ltd. (Minimum Wages Petition No. 26 of 1956)

Factual and Procedural Background

The Associated Cement Co. Ltd., petitioner, manufactures cement at Madukkarai. The matter arises from an application made under Section 20(2) of the Minimum Wages Act, 1948 by the Labour Inspector of the Central Government at Coimbatore before the Labour Court constituted under Section 20(1) of the Act. The Labour Inspector alleged that certain employees engaged in time stone quarries were paid less than the minimum rate of wages: specifically, failure to pay wages for weekly holidays for the period March 1956 to June 1956 to three named employees, with the application filed as a test case representative of many similar employees.

The Labour Court accepted the Labour Inspector's interpretation of the relevant rule (rule 23) and, by an order dated 20-12-1957, directed the company under Section 20(3) of the Act to make payments accordingly. The petitioner filed this writ petition for certiorari seeking to quash that order. Two primary legal contentions were advanced by counsel for the petitioner: (1) that the Labour Court lacked jurisdiction under Section 20(1) as it stood at the relevant time to make directions about remuneration for days of rest; and (2) that the Labour Court misinterpreted rule 23 promulgated under the Minimum Wages Act.

Legal Issues Presented

Whether the authority constituted under Section 20(1) of the Minimum Wages Act (as originally enacted, i.e., before the 1957 amendment) had jurisdiction to entertain an application relating to failure to make payment in respect of remuneration for days of rest (weekly holidays).
What is the proper construction of rule 23 (as promulgated by the Madras Government in terms identical with rule 23 of the Central Rules): does rule 23 require payment both for the Sunday on which a worker works and for the substituted holiday (i.e., effectively double payment), or does the provision that a substitute holiday be paid mean payment only for that holiday?
Whether the Labour Court's order dated 20-12-1957, which followed the Labour Inspector's interpretation of rule 23 and directed payments under Section 20(3), was legally correct and should be quashed.

Arguments of the Parties

Petitioner's Arguments (Associated Cement Co. Ltd., represented by Mr. Nambiar)

First argument: The complaint period (March 1956 to June 1956) and the date of filing preceded the amendment (Central Act XXX of 1957) to Section 20(1). Therefore, on the law as it stood at those dates, the authority under Section 20(1) had no jurisdiction to make directions regarding remuneration for days of rest; the Tribunal could only exercise powers under the unamended Section 20(1).
Second (more substantial) argument: Rule 23 was wrongly construed by the Labour Court. The petitioner contended that rule 23 does not require payment both for the Sunday and also for the substituted holiday (i.e., the construction adopted by the Labour Court was erroneous), and that the correct construction would not establish a breach of the Minimum Wages Act by the petitioner-company.

Labour Inspector / Labour Court Position

The Labour Inspector proceeded on the basis that under rule 23 wages were due for the weekly holiday of Sunday as well, and filed the application under Section 20(2) alleging payment shortfall for weekly holidays.
The Labour Court accepted the Labour Inspector's interpretation of rule 23 and held that it had jurisdiction to make the direction; it overruled the objection based on timing of the Section 20 amendment by stating that the amendment was declaratory and retrospective.
It is noted in the opinion that the Labour Inspector ultimately did not contest the writ petition.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
The Trustees of the Port of Bombay v. The Authority under the Payment of Wages Act, 1957-1 Lab LJ 626 (Judgment by Gajendragadkar J.)	Interpretation of rule 23 of the rules framed under the Minimum Wages Act: the phrase “for which” in the clause requiring payment “for which he shall receive payment equal to his average wages during the preceding week” refers to the substituted holiday mentioned earlier in the clause (the holiday), not to the first day of the week (Sunday) itself; the rule allows employment on Sunday only if specified conditions are satisfied and requires payment for the holiday granted within the specified period.	The court adopted the Bombay High Court's interpretation as correct and concluded that the Labour Court's contrary interpretation was erroneous. On that basis, the Labour Court's order under Section 20(3) was found to be vitiated and was set aside.

Court's Reasoning and Analysis

The court's analysis proceeded in two linked strands corresponding to the petitioner's two primary points.

1. Jurisdiction under Section 20(1) (pre-amendment) as to remuneration for days of rest:

The court examined the definition of “wages” in Section 2(h) of the Minimum Wages Act, which covers “all remuneration capable of being expressed in terms of money which would ... be payable to a person employed in respect of his employment.” The statute then lists certain exclusions, and payment of remuneration in respect of days of rest is not among the excluded items.
Section 13 empowers the appropriate Government to provide for a day of rest in every seven-day period and to provide for payment of remuneration in respect of such days of rest, including payment for work on such a day at not less than the overtime rate.
Given that payment for a day of rest constitutes remuneration and therefore falls within the Act's definition of wages, the court reasoned that, even under Section 20(1) as originally enacted, the authority would have jurisdiction to entertain claims where remuneration for days of rest had not been paid. Thus the Tribunal's view that the later amendment was merely declaratory was consistent with this interpretive conclusion.

2. Construction of Rule 23:

The court identified the core question as the proper construction of rule 23: whether a worker who works on the first day of the week (Sunday) must be paid both for that Sunday and for the holiday he is entitled to, or whether the payment prescribed by the rule was referable only to the holiday.
The court examined and relied upon the decision of a Bench of the Bombay High Court in The Trustees of the Port of Bombay (Gajendragadkar J.), which held that the phrase “for which” in rule 23 refers to the holiday mentioned in the earlier clause and not to the first day of the week. The headnote and excerpts cited show that the Bombay Bench construed rule 23 as permitting Sunday work only if two conditions are satisfied (government permission and grant of a holiday within the specified period with payment equal to average wages), and that the payment requirement applies to the holiday granted, not to require payment for both the Sunday and the holiday.
The Labour Court had been shown that precedent, but it declined to follow it and adopted an interpretation which the present court described as one it could "not clearly understand" and ultimately found erroneous.
Relying on the Bombay decision, the present court concluded that the Labour Court's construction of rule 23 was incorrect. Because the Labour Court's order under Section 20(3) was based on that erroneous construction, the order was vitiated by apparent error and had to be set aside.

Holding and Implications

Holding: PETITION ALLOWED. The writ petition succeeds and the rule nisi is made absolute. The Labour Court's order dated 20-12-1957 (the direction under Section 20(3) requiring payments on the Labour Inspector's interpretation of rule 23) is set aside as vitiated by apparent error.

Implications:

Direct effect on the parties: The direction previously issued by the Labour Court requiring the petitioner-company to make payments on the basis of the Labour Court's interpretation of rule 23 is quashed. It is explicitly noted that the Labour Inspector did not contest the writ petition. There is no order as to costs.
On the law: The court accepted the interpretation of rule 23 as articulated by the Bombay High Court in The Trustees of the Port of Bombay, holding that the payment obligation in rule 23 refers to the substituted holiday and does not require payment both for the Sunday and for the substituted holiday. The opinion does not assert that it is laying down a new principle beyond following the cited High Court authority.

Note: This summary is confined strictly to the matters and language contained in the provided opinion. No information has been added beyond the text of that opinion.

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Associated Cement Co. Ltd. Madukkarai Cement Works, Madukkarai v. Labour Inspector (Central) Coimbatore And Another

1. This is a petition for the issue of a writ of certiorari to call for the records in Minimum Wages Petition No. 26 of 1956 on the file of the Labour Court at Coimbatore and quash an order passed by that Tribunal dated 20-12-1957.

2. The Associated Cement Co. Ltd. carrying on the business of manufacturing cement at Madukkarai is the petitioner. The proceedings out of which this petition arises originated in an application under Section 20(2) of the Act filed by the Labour Inspector of the Central Government at Coimbatore before the Labour Court — which is the authority constituted under Section 20(1) of the Minimum Wages Act, 1948 — for a direction under sub-sec. 3 of S. 20, on the allegation that the respondent there, the Associated Cement Co. Ltd., had paid less than the minimum rate of wages to certain of the company's employees. The workmen to whom according to the Labour Inspector wages less than the minimum wages had been paid were those employed in time stone quarries. The violation of the Minimum Wages Act and the rules made thereunder was stated to consist in failure to pay wages for the weekly holidays for the period March 1956 to June 1956 to three employees whose names were set out in the annexure to the application. It was common ground that the application was filed as a test case, and that there was a very large number of other employees to whom also payments on the same basis had been made by the company.

3. There is no dispute that employment in stone-breaking or stone-crushing is an employment in a scheduled industry to which the Minimum Wages Act would apply. A committee for the fixation of the minimum wages for stone-breaking and crushing operations had been self up by the Government of Madras on 26th September, 1950 under Section 5(a) of the Minimum Wages Act, and the Committee had, after an exhaustive enquiry, fixed the minimum wages payable for workers in those industries. The basis upon which the Committee fixed this wage was to fix the minimum Wage first for a month on the basis of the minimum requirements of the worker for a month of 30 days and to calculate the daily wage by dividing this sum by 26.

4. It would thus be seen that the daily wage fixed had also taken into account payments for the weekly holiday to which the workmen were statutorily entitled. Subsequently, a second Committee was appointed, constituted by the same members as the first Committee to fix the rate of minimum wages for similar operations in mines, and the Committee submitted a report working out the minimum wage for workers in this industry on the same basis, that is by taking the minimum monthly wage on the basis of 30 days in a month and then dividing it by 20 so as to arrive at the daily minimum wage for the worker.

5. The Government of Madras accepted the report of this Committee and passed a G.O on 15-2-1952 fixing the minimum rates for employment in stone-breaking carried on in mines. It is not necessary for the purpose of the points arising in this petition to go into the exact figures and hence I am not mentioning them. Subsequent thereto the Government of Madras promulgated on 24-6-1953 rule 23 in conformity with this fixation of minimum wages. Rule 23, which was promulgated by the Madras Government was in the same terms as rule 23 of the Central Rules, 1950 on minimum wages promulgated by the Central Government on 14-10-1950. Rule 23 ran:

“(1) Unless otherwise permitted by the Government no worker shall be required or allowed to work in a scheduled employment, on the first day of the week (hereinafter referred to as the ‘said day’) except where he has or will have a holiday for the whole day on one of the three days immediately before or after the said day. Every worker who shall be required or allowed to work in a scheduled employment on the said day shall be paid wages equal to his average daily wages during the week he has last worked.

Provided that the weekly holiday may be substituted by another day;

Provided further that no substitution shall be made which will result in any worker working for more than ten days consecutively without a holiday for a whole day.

(2) Where in accordance with the provisions of sub-rule 1 any worker works on the said day and has had a holiday on one of the five days immediately preceding it, the said day shall, for the purpose of calculating his weekly hours of work, be included in the preceding week.

Explanation: For the purpose of this rule “week” shall mean a period of seven days beginning at midnight on Saturday night.”

6. It is the proper construction of this rule that is in the main involved in this petition. Stated shortly the point arising is whether under this rule a payment had to be made for Sundays also which was allowed to the workmen as a weekly holiday. The complaint of the Labour inspector proceeded on the basis that wages were due for the weekly holiday of Sunday also under the terms of rule 23 and the Labour court, the authority under the Minimum Wages Act, has accepted this interpretation and had passed a direction under Section 20(3) of the Act requiring the company to make payments on that basis. It is the correctness of this decision and the legality of this direction that is challenged in this write petition.

7. Two points were urged by Mr. Nambiar, the learned counsel for the petitioner, in support of the petition. The first was that the period in regard to which there was a complaint of failure to pay wages covered March 1956 to Tune 1958 and that the authority constituted under Section 20 of the Minimum Wages Act had, on the law as it stood on those dates, no jurisdiction to make a direction in regard to the wages for weekly holidays. S. 20, as it was originally enacted in 1948, vested “the authority” with jurisdiction to hear and decide matters arising out of the “Payment of wages less than the minimum rate of wages to employees employed or paid in that area.” (S. 20(1)). This sub-section was amended by Central Act XXX of 1957 (which received the assent of the President on 17-9-1957), by the introduction of the words

“or in respect of the payment of remuneration for days of rest or for work done on such days under clause (b) or clause (c) of sub-sec. (1) of Sec. 13 or of wages at the overtime rate under S. 14.”

8. Even the petition filed by the Labour inspector was before the date of this amendment. The question that was raised before the Tribunal was whether the Tribunal had any jurisdiction to entertain an application relating to a failure to make a payment in respect of remuneration for days of rest before the amendment came into force, and that since on the date covered by the complaint, as also the date when the petition was filed the amendment had not come into force, the tribunal could only exercise the powers under the unamended Section 20(1) of the Minimum Wages Act. The tribunal overruled this objection by stating that the amendment was declaratory and was, therefore, retrospective.

9. The learned counsel for the petitioner urged that this reasoning was unsound and that the tribunal had assumed jurisdiction on an erroneous interpretation of the statute. The decision on this point would primarily depend upon the meaning of the expression “rates of wages” or rather the expression “wages” occurring in sub-sec. (1) of S. 20. It is common ground that the Tribunal had jurisdiction to entertain claims where payment was made at less than the “minimum wage”. If “wages” included the remuneration payable for days of rest, the jurisdiction of the authority under S. 20(1) would naturally extend to entertain a claim as regards that species of remuneration.

“Wages” are defined in the Act by S. 2(h) to mean ‘all remuneration capable of being expressed in terms of money which would if the terms of the contract of employment express or implied, were fulfilled, “be payable to a person employed in respect of his employment” or of work done in such employment” (underlining (here in ‘???’) mine). This is followed by certain items which are not to be treated as wages and the payment of remuneration in respect of days of rest is not one of the items so excluded. Section 13 of the Act enables the appropriate Government to provide for a day of rest in every period of seven days which shall be allowed to all employees or to any specified class of employees and for the payment of remuneration in respect of such days of rest; as I also to provide for payment for work for a day of rest at a rate not less than the overtime rate.

10. The payment of remuneration for a day of rest would, therefore, be “wages payable to a person employed in respect of his employment” within the definition of S. 2(h). If such a payment constituted remuneration, and therefore, wages, it appears to me that even on S. 20(1) as it originally stood a payment for a day of rest would fall within the scope of Section 20(1) of the Act. In this view the interpretation placed by the Tribunal on the purpose of the amendment effected to Section 20(1) of the Central Act XXX of 1957 would appear to be well founded.

11. The more substantial point, however, which Mr. Nambiar, the learned counsel for the petitioner, urged was in relation to the interpretation of rule 23 as promulgated by the Madras Government, which is in terms identical with rule 23 of the Central rules. The construction of this rule came up for consideration before a Bench of the Bombay High Court in The Trustees of the Port of Bombay v. The Authority under the Payment of Wages Act, 1957-1 Lab LJ 626, and the judgment of the Bench was delivered by Gajendragadkar J. as he then was. It is sufficient to refer to the headnote of the report to under stand the point decided. This headnote runs:

“Rule 23 of the rules framed under the Minimum Wages Act (Act XI of 1948) provides that no worker shall be required or allowed to work in a scheduled employment on the first day of the week. In other words, the object of the rule is to allow the employment of a worker on a Sunday which is described as the first day of the week only if two conditions are satisfied: (1) the Central Government must permit such a course; and (2) if a worker is asked to work on a Sunday then he must have a holiday for a whole day on one of the five days immediately before or after the said day, for which he shall receive payment equal to his average wages during the preceding week.

12. Negativing the contention that if a workman is required to work on a Sunday he must receive payment as directed both for the Sunday on which he works and for the holiday, which he is entitled to receive, it must be held that the expression ‘for which’ in rule 23 refers to the holiday mentioned in the earlier part of the clause. The words ‘for which’ do not refer to the first day of the week but refers to the holiday in the preceding clause.”

13. This decision was cited to the Labour court, but by a process of reasoning, which I am not able clearly to understand, it refused to follow this decision, and held that the interpretation which this Bench of the Bombay High Court placed upon this rule, was not correct.

14. I feel unable to agree with this conclusion of the Tribunal. I will extract only a short passage from the judgment of Gajendragadkar J. which expresses my own view of the matter:

“This rule provides that no worker shall be required or allowed to work in a schedule employment on the first day of the week. In other words, the object of the rule is to allow the employment of a worker on a Sunday, which is described as the first day of the week, only if two conditions are satisfied:

(1) the Central Government must permit such a course; and

(2) if a worker is asked to work on a Sunday then he must have a holiday for a whole day on one of the five days immediately before or after the said day, for which he shall receive payment equal to his average daily wages during the preceding week.

This second condition involves that, whenever a workman is required to work on a Sunday, within the specified period he must be granted a holiday and he must receive his wages as prescribed. The first proviso permits that the weekly holiday may be substituted by another day; and the second proviso provides a valuable safeguard to the worker by directing that no substitution shall be made which would lead to the result that the worker would work more than ten days consecutively without a holiday. The usual rule appears to be that every Sunday should be a day of weekly rest. Rule 23 provides for an exception; it allows the employer to require or permit his workman to work on a Sunday, but since this course amounts to depriving a workman of his legitimate and usual day of weekly rest, the employer is required to obtain the consent of the Central Government requiring the workman to work on a Sunday and he is also required to give the workman a holiday within the period mentioned and pay wages to him as prescribed……. We are unable to appreciate how this rule can be pressed into service by the employees in the present cases when it is common ground that they were neither required nor allowed to work on any of the Sundays in question”.

15. The construction which the Tribunal adopted on the terms of rule 23 was clearly erroneous, and this order under S. 20(3) based. On such interpretation is, therefore, vitiated by apparent error and has therefore to be set aside. It is not disputed that if rule 23 is interpreted as in the judgment of the Bombay High Court, there has been no violation of the Minimum Wages Act committed by the petitioner-company.

16. The writ petition succeeds and the rule nisi is made absolute. I have only to add that the Labour Inspector has not contested this petition. There will be no order as to costs.

DD/G.M.J

17. Petition allowed.

Associated Cement Co... v. Labour Inspector (Ce...