Case: STEEL AUTHORITY OF INDIA LTD Vs. JAGGU

2. The indisputed facts which has come on record are that after issuance of the prohibition notification dated 17 th March, 1993 by the appropriate Government under Section 10(1) of the CLRA Act,1970 no fresh agreement, in the interregnum period (17 th March, 1993 to April, 1996) was executed between the appellant and the contract labour and the agreement in existence was extended from time to time by the competent authority and the contract labour was allowed to continue on the same terms & conditions till their services were terminated by the contractor after they had proceeded on strike in the month of April, 1996.3. The contract labours (2040 employees) of Kuteshwar limestone mines who had worked in the establishment of SAIL after issuance of the prohibition notification dated 17 th March, 1993 filed their claim applications in the year 1998 on different dates under Section 20(1) of the Minimum Wages Act, 1948.4. Before we advert to the question raised in the instant appeals, it may be relevant to take the brief history of the matter for proper appreciation. The erstwhile contract labourers(respondents herein) worked at the captive Limestone and Dolomite mines in the establishment of the appellant SAIL initially filed writ petitions claiming regularisation with back wages in view of the law laid down by three Judge Bench of this Court in the case of Air India Statutory Corporation and Others Vs. United Labour Union and Others 1997(9) SCC 377 wherein it was held that on issuance of prohibition notification under Section 10(1) of the CLRA Act, the logical and legitimate consequences would be that the erstwhile contract labourer covered by the sweep of such abolition for the activities concerned would be entitled to be treated as direct employee of the employer on whose establishment they were earlier working and they would be entitled to be treated as regular employees from the day on which the contract labour system in the establishment for the work which they were doing gets abolished. The aforesaid judgment ofthis Court was subsequently overruled by the Constitution Bench of this Court in Steel Authority of India Ltd. and Others Vs. National Union Waterfront Workers and Others 2001(7) SCC 1 .5. The Single Judge of the High Court earlier allowed the writ petitions but the matter was finally remitted back to the High Court to decide as per the law laid down in the Constitution Bench judgment of this Court in Steel Authority of India Ltd. and Others(supra).6. It is to be noted that the application filed by Jaggu was considered to be the lead application which has been placed on record (Annexure P-1 of the paper book) and the only fact stated by him in the application was that the applicant was employed in the Captive Mine of the SAIL in Kuteshwar Limestone Mines(Barhi), Gairtalai, Distt. Jabalpur on 1 st September, 1984 and was still in that employment at the time of filing of an application and worked as a skilled workman and was working as Sikor/Loader/Suitor/Rake Loader and that the employment of Kuteshwar Limestone Mines is a scheduled employment withinthe meaning of Section 2(e ) of the Minimum Wages Act, 1948 and rates of wages of the workers of SAIL are governed by various settlements/agreements entered into between the management and the Union which are legally binding and are the wages to which employees of SAIL are entitled on the basis of contract of service, agreement and/or otherwise.7. The extract pleadings of his application on the basis of which he claimed wages and other benefits payable to an employee vis-à-vis those who are regular employee employed in SAIL are asapplicant is employed in the Captive Mine of the Steel Authority of India (hereinafter called as SAIL?) in Kuteshwar Limestone Mines (Barhi), Gairtalai, Distt. Jabalpur from 01.09.1984 and is still in employment. He is a skilled workman and is working as Sikor/Loader/Suitor/Rake Loader.6. The rates of wages of workers of Steel Authority of India are governed by various settlements/Agreements entered into between the management and the Union which are legally binding and is the wages to which employees of Steel Authority are entitled on the basis of contract of services, agreement and or otherwise. The Applicant is entitled to wages and all other benefits as per settlement. The agreement also prohibit employment of contract labour on job of permanent and perennial nature.7. The management/opponent has been reusing to make payment to the employees as per wage agreement which is their minimum wages Sri Bachchan Nayak and other office bearers of the Applicant?s Union repeatedly represented the matter of the Assistant Labour Commissioner, Chief Labour Commissioner Secretary, Ministry of Labour, Hon?ble Minister for Steel, Chairman, Steel Authority of India and even the Prime Minister, for payment of wages as regular employees. Because of the strong and persistent opposition of one of the opponent, Minimum Wages is denied to the Applicant.12. The applicant has been reporting for work on all the working days from 17/3/1993 onwards. However, after May, 1996 he was refused work even when the reports for duty. The applicant was always ready and willing to work. There was no termination of services of the applicant. The applicant will be deemed to be in service and entitled to all the benefits, including wages.16. The applicant has not been paid the wages as per Minimum Wages from 17/3/1993. The exact figures of amount due i.e. difference etc. are available with the management and within their special knowledge. The opponents are in possession of all the records and details of the payment due as per wage agreement and other details. They are liable to produce the same before this Hon?ble Authority to make appropriate and proper calculation. In case they fail to produce the documents an adverse inference is liable to be taken against them.17. The applicant therefore pray that a direction may be issued under Section 20 [3] of the Act for:[i] payment of difference of wages payable under the Minimum Wages Act and the wages actually paid as per details given in Annexure-A. [ii]compensation of 10 times amounting to Rs. 24,86,130-00.[iii]delay if any, in filing the petition may be condoned.The complaint of the applicant Jaggu (annexure P-1) in his application under Section 20(1) of the Minimum Wages Act, 1948 before the prescribed authority of which a reference has been made, appears to be that the rates of wages of SAIL which were governed by various settlements/agreements entered between the management and the registered Union of regular employees of SAIL are legally enforceable and the applicant is also entitled to the wages and such other service benefits as per those settlements after a prohibition notification has been published by the appropriate Government under Section 10(1) of the CLRA Act.9. The matter was contested between the parties and the prescribed authority after holding a summary enquiry as contemplated under the Minimum Wages Act, 1948 under its Order dated 2 nd December, 2003 allowed the claim petitions with five times of compensation in favour of 2040 contract employees who have been represented by Ispat Khadan Janta Mazdoor Union, Koteshwar Limestone Mine, Gairtalai, Katni.10. The order of the Payment of Wages Authority dated 2 nd December, 2003 came to be challenged by the appellant SAIL by way of writ petition before the Single Judge of High Court of Madhya Pradesh at Jabalpur which was partly allowed vide Order dated 24 th January, 2006 holding that the justice would be met if the respondents(employees) are allowed 6% interest on the amount payable to each of them as compensation from the date of passing of the impugned order of the authority till its payment. It was further challenged before the Division Bench of the High Court that came to be dismissed vide impugned judgment dated 11 th December, 2006 with a modification that instead of grant of 6% interest as compensation, a consolidated sum of Rs. 5 crore be paid towards compensation to the aggrieved employees, which is a subject matter of challenge in these appeals before us.

Court's reasoning:
30. It may be noticed that 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.31. In this backdrop of the matter, it would be apposite to first take note of the scheme of the Minimum Wages Act, 1948. If we look into the objects and reasons of the scheme of the Act, it 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.The scheme of the Act of which reference has been made by this Court 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.35. 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 17 th 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.The submission, in our view, is misplaced for the reason that the CLRA 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. 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. Section 8 provides for the revocation of registration in certain cases and Section 9 provides the effect of non-registration. Section 10 is one of the back bone of the Act which provides for prohibition of employment of contract labour in any establishment and we are fortified in our view supported by the Judgment of this Court in Hindustan Steel Works Construction Ltd.(supra).38. 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 17 th 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.39. 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, 1970.40. 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.41. In the instant case, after issuance of the prohibition notification dated 17 th March, 1993 under Section 10(1) of the CLRA Act having being published, in our considered view, 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. As stated earlier, 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.42. The submission made by the learned counsel for the respondents that the respondent workmen were doing the jobs of perennial in nature and the contract labour was banned under agreements entered between SAIL and the workers union from 1970 onwards and their performance of same or similar kind of work as the workmen directly employed by the principal employer make them entitled for wages in terms of NJCS Memorandum of agreement is without substance for the reason that 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.43. 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 17 th 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. The Judgment relied upon by the learned counsel for the respondents in BHEL Workers Association, Hardwar and Others (supra) may not be of any assistance in the facts of the instant case for the reason that it was a writ petition filed under Article 32 of the Constitution of India by the workers union seeking declaration from this Court for abolition of contract labour and be treated as direct employees of the establishment and entitled to equal pay as workmen of the BHEL but that being a matter of enquiry by the competent authority, their petition came to be dismissed with the direction to the Union of India to examine their grievance in accordance with law.The answer thereto has been upheld by us in the independent proceedings.46. In our considered view, the order of the prescribed authority under the Minimum Wages Act, 1948 dated 2 nd December, 2003 and confirmed by the High Court under the impugned judgment dated 11 th December, 2006 are unsustainable and deserves to be set aside.