# STEEL AUTHORITY OF INDIA LTD. & ANR v. JAGGU & ORS. ETC

- **Citation:** [2019] 9 S.C.R. 65
- **Court:** Supreme Court of India
- **Decided:** 2019-07-05
- **Case number:** Civil Appeal No. 8094 of 2011
- **Bench:** A.M. Khanwilkar, Ajay Rastogi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/steel-authority-of-india-ltd-anr-v-jaggu-ors-etc-34290
- **Pages:** 29

## Headnote

Minimum Wages Act, 1948 - ss.2(e), 2(i), 3, 7, 8 and 20(1) -
Scheme of the Act - Tripartite memorandum of settlement signed by
the appellant, contractor (through whom the service of the contract
labour was engaged) and the respondents-contract labour, under
which the contract labour was to be paid Rs.11.65/- per day over
and above the minimum wages notified by the appropriate
Government under the 1948 Act - Prohibition notification dated
17th March, 1993 issued by the appropriate Government, however,
contract labour engaged prior to the notification was allowed to
continue working in the captive mine of the appellant in Distt.
Jabalpur upto April 1996, when their service was terminated after
they proceeded on strike - No fresh agreement in the interregnum
period (17th March, 1993 to April, 1996) was executed - Contract
labour sought parity with the wages payable to the direct/regular
employees of the appellant - Allowed by the Prescribed Authority -
Confirmed by the High Court - Held: There are no pleadings on
record and the burden was on the respondents to establish that the
duties discharged by each of the employee was same/similar to that
of regular/direct employee appointed by the appellant - In absence
of the initial burden being discharged by the respondents, the onus
could not have been shifted on the appellant to counter the nature
of work discharged by each of the workmen - Scheme of the Act
clearly manifests that it is primarily concerned with fixing rates of
minimum wages, overtime rates, rate for payment of work on a day
of rest and is not intended to be an Act for enforcement of payment
of wages for which provision has been made in other laws such as
the 1936 Act and the 1947 Act- Further, after issuance of the
prohibition notification, the provisions of the CLRA Act or 1971
Rules framed thereunder would not be available to either of the
party to strengthen its claim - Minimum wages as prayed by the
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respondents could be claimed independently under the 1948 Act,
which indisputedly was Rs. 11.65/- per day over the minimum wages
payable to each of the respondent (2040 employees) and was indeed
complied with by the appellants - Mere assertion of fact that the
contract labour which was allowed to continue after the prohibition
notification was performing same or similar kind of work is not
sufficient to endorse their entitlement of claiming wages notified
for direct/regular employees of the establishment applicable
universally to all the steel industries - Order of the prescribed
authority, confirmed by the High Court, set aside - Contract Labour
(Regulation and Abolition) Act, 1970 - ss.7-9, 10(1), 12- Payment
of Wages Act,1936 - Industrial Disputes Act, 1947 - CLRA Central
Rules, 1971 - rr.25(2)(iv) & (v), 25(2)(v)(a) - Constitution of India
- Arts. 12,14, 39(d) - Principle of equal pay for equal work.
Minimum Wages Act, 1948 - s.3 - Fixation of minimum wages
under - Considerations for - Discussed.
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

## Text

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 STEEL AUTHORITY OF INDIA LTD. & ANR.
v.
JAGGU & ORS. ETC.
(Civil Appeal No. 8094 of 2011)
JULY 05, 2019
[A.M. KHANWILKAR AND AJAY RASTOGI, JJ.]
Minimum Wages Act, 1948 - ss.2(e), 2(i), 3, 7, 8 and 20(1) -
Scheme of the Act - Tripartite memorandum of settlement signed by
the appellant, contractor (through whom the service of the contract
labour was engaged) and the respondents-contract labour, under
which the contract labour was to be paid Rs.11.65/- per day over
and above the minimum wages notified by the appropriate
Government under the 1948 Act - Prohibition notification dated
17th March, 1993 issued by the appropriate Government, however,
contract labour engaged prior to the notification was allowed to
continue working in the captive mine of the appellant in Distt.
Jabalpur upto April 1996, when their service was terminated after
they proceeded on strike - No fresh agreement in the interregnum
period (17th March, 1993 to April, 1996) was executed - Contract
labour sought parity with the wages payable to the direct/regular
employees of the appellant - Allowed by the Prescribed Authority -
Confirmed by the High Court - Held: There are no pleadings on
record and the burden was on the respondents to establish that the
duties discharged by each of the employee was same/similar to that
of regular/direct employee appointed by the appellant - In absence
of the initial burden being discharged by the respondents, the onus
could not have been shifted on the appellant to counter the nature
of work discharged by each of the workmen - Scheme of the Act
clearly manifests that it is primarily concerned with fixing rates of
minimum wages, overtime rates, rate for payment of work on a day
of rest and is not intended to be an Act for enforcement of payment
of wages for which provision has been made in other laws such as
the 1936 Act and the 1947 Act- Further, after issuance of the
prohibition notification, the provisions of the CLRA Act or 1971
Rules framed thereunder would not be available to either of the
party to strengthen its claim - Minimum wages as prayed by the
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respondents could be claimed independently under the 1948 Act,
which indisputedly was Rs. 11.65/- per day over the minimum wages
payable to each of the respondent (2040 employees) and was indeed
complied with by the appellants - Mere assertion of fact that the
contract labour which was allowed to continue after the prohibition
notification was performing same or similar kind of work is not
sufficient to endorse their entitlement of claiming wages notified
for direct/regular employees of the establishment applicable
universally to all the steel industries - Order of the prescribed
authority, confirmed by the High Court, set aside - Contract Labour
(Regulation and Abolition) Act, 1970 - ss.7-9, 10(1), 12- Payment
of Wages Act,1936 - Industrial Disputes Act, 1947 - CLRA Central
Rules, 1971 - rr.25(2)(iv) & (v), 25(2)(v)(a) - Constitution of India
- Arts. 12,14, 39(d) - Principle of equal pay for equal work.
Minimum Wages Act, 1948 - s.3 - Fixation of minimum wages
under - Considerations for - Discussed.
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
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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 1st 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
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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
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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
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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
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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 27th 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
2nd 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.
Case Law Reference
[1996] 9 Suppl. SCR 579
referred to
Para 3
[2001] 2 Suppl. SCR 343
referred to
Para 3
[1970] 1 SCR 51
relied on
Para 17
[1985] 2 SCR 611
distinguished
Para 17
[1996] 5 Suppl. SCR 447
relied on
Para 17
STEEL AUTHORITY OF INDIA LTD. & ANR.v. JAGGU & ORS.
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8094
of 2011
From the Judgment and Order dated 11.12.2006 of the High Court
of Madhya Pradesh at Jabalpur in W.A. Nos. 34 and 83 of 2006
 With
Civil Appeal No. 8334 of 2011.
Ranjit Kumar, Parag P. Tripathi, Sr. Advs., Sunil Kumar Jain, Punya
Garg, R. C. Srivastava, Abhishek Jain, Ms. Anusha Agarwal, Ms. Saumya
Jay Karan Singh, Rishi Raj Sharma, Lalltaksh Joshi, T. G. Narayanan
Nair, Advs. for the Appellants.
Colin Gonsalves, Ms. Indira Nair, C. N. Sreekumar, Sr. Advs.,
T. G. Narayanan Nair, Rajas Pohankar, M. T. George, Ramesh Babu M.
R., Amit Sharma, Ms. Malavika B. Pillai, C. N. Sree Kumar,
M. T. George, Ramesh Babu M. R., Advs. for the Respondents.
The Judgment of the Court was delivered by
RASTOGI, J. 1. The present appeals arise from the proceedings
initiated by the workers under the Minimum Wages Act, 1948 who had
been in employment after issuance of the prohibition notification dated
17th March 1993 under the Contract Labour(Regulation and Abolition)
Act, 1970(hereinafter being referred to as "CLRA Act") upto April,
1996 in the captive mine of the Steel Authority of India(hereinafter called
as "SAIL") in Kuteshwar Limestone Mines(Barhi), Gairtalai, Distt.
Jabalpur.
2. The indisputed facts which has come on record are that after
issuance of the prohibition notification dated 17th March, 1993 by the
appropriate Government under Section 10(1) of the CLRA Act,1970 no
fresh agreement, in the interregnum period (17th 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.
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 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 17th 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 Others1 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 of this 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 Others2.
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 1st
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
11997(9) SCC 377
2 2001(7) SCC 1
STEEL AUTHORITY OF INDIA LTD. & ANR.v. JAGGU & ORS.
[RASTOGI, J.]
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Sikor/Loader/Suitor/Rake Loader and that the employment of Kuteshwar
Limestone Mines is a scheduled employment within the 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 as under:-
"1.The applicant 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
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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."
8. 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 2nd 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.
STEEL AUTHORITY OF INDIA LTD. & ANR.v. JAGGU & ORS.
[RASTOGI, J.]
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10. The order of the Payment of Wages Authority dated 2nd
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 24th 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 11th 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.
11. Learned senior counsel for the appellants Mr. Ranjit Kumar
and Mr. Parag P. Tripathi submit that the parity of wages was one of the
issue nos. 5 & 6 based on the pleadings of the parties framed by CGIT
pursuant to the reference made by the appropriate Government and
both the issues have been negatively answered under its award dated
16th September, 2009 holding that respondents are not entitled to wages
as per National Joint Committee for the Steel Industries(NJCS) vide
memorandum of agreement dated 30th July, 1975 which is applicable
only to direct/regular employees of SAIL.
12. The submission of the learned counsel is that at least the parallel
proceedings which are summary in nature initiated under the Minimum
Wages Act, 1948 keeping the reference made for adjudication to the
CGIT at bay were unwarranted and despite their objection being raised,
it was overruled and the applications of the workmen came to be decided
under Order dated 2nd December, 2003 by the prescribed authority under
the Minimum Wages Act, 1948 which was without jurisdiction and such
applications filed at the instance of the workmen was not maintainable
under the law.
13. Learned counsel further submits that it is nowhere pleaded by
the respondents that the principle of equal pay for equal work was
applicable and they were entitled for the wages payable to the regular
employees on the basis of Rule 25(2)(v)(a) of the CLRA Rules, 1971.
The burden to prove was on the respondents to show that the contract
labour was discharging the same and similar nature of duties and work
as performed by the regular employees of the establishment but such
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facts were neither pleaded nor established by the respondents either
before the prescribed authority or before the High Court in writ petition/
letters patent appeal and has not adverted to any finding that the
respondents were performing same or similar nature of work as that of
the regular employees of the appellant SAIL. In the absence thereof,
the contract labour was not entitled for the wages payable to the
employees who were directly employed by the SAIL for a work which
is neither same nor similar as being performed by the respondent contract
labourers.
14. Learned counsel further submits that the tripartite agreement
which was entered between the contract labourers, contractor and
appellant SAIL in presence of the labour authorities dated 12th November,
1991 specifically takes care of the Rule 25(2)(iv) & (v) of the CLRA
Rules, 1971 and indisputedly, each of the worker was paid Rs. 11.65/-
per day over the minimum wages notified by the appropriate Government,
as agreed between the parties. The tripartite agreement was effective
from 1st April 1991 although it was entered on 12th November, 1991 but
wages were paid to each of the contract worker in terms of the tripartite
agreement.
15. Learned counsel submits that it was never the case of the
respondents that the tripartite agreement dated 12th November, 1991
has not been complied with. In fact, the arrears were paid over the
minimum wages notified by the appropriate Government in terms of
Rule 25(2)(v)(a) of the CLRA Rules, 1971 and appellant became liable
to pay the minimum wages agreed in terms of the agreement after
issuance of the prohibition notification under Section 10(1) of the CLRA
Act, since the contract stood automatically extinct, it became the liability
of the employer to see that every workmen who is working thereafter
must have been paid his due wages in terms of the agreement which has
been signed in presence of the concerned labour authorities dated 12th
November, 1991 and binding upon the parties.
16. Learned counsel for the appellants further submits that in sequel
to the notification dated 12th November, 1991, the Ministry of Labour,
Government of India, vide its notification dated 12th July, 1994 revised
the minimum rate of wages payable to the workers employed in the
mines appended Clause 5 to the explanation that in case the existing
rates of wages of any employee as per agreement are more than the
minimum notified rates shall be protected and be treated as the minimum
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[RASTOGI, J.]
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rates of wages and that according to the appellants have been paid to
each of the workmen who had served the establishment of the appellants
after issuance of the prohibition notification dated 17th March, 1993 till
their services came to be terminated by the contractor in April 1996.
17. Learned counsel further submits that the State of Madhya
Pradesh under its Act No. 23 of 1961 has made certain amendments to
the Minimum Wages Act, 1948. These amendments as explained in its
object and reasons was enacted as validating legislation. The validation
arose in the context of the High Court of Rajasthan quashing its
notifications pertaining to fixing of minimum rates of wages. The said
amendment Act is merely to validate fixation and has no applicability to
the dispute having raised by the respondents in the proceedings initiated
under the Minimum Wages Act, 1948 and in support thereof, learned
counsel has placed reliance on the judgment of this Court in Town
Municipal Council, Athani Vs. The Presiding Officer, Labour Courts,
Hubli and Others, Etc.3; BHEL Workers Association, Hardwar and
Others Vs. Union of India and Others4 and Hindustan Steel Works
Construction Ltd. Vs. Commissioner of Labour and Ors.5.
18. Per contra, Mr. Colin Gonsalves, learned senior counsel for
the respondents in support of the judgment of the High Court submits
that after issuance of the prohibition notification dated 17th March, 1993,
it is an admitted position that the contract labourers had continued to
work in the same capacity in the establishment of SAIL and that would
make them entitled for the wages which are being notified by the SAIL
from time to time payable to its regular employees for the period the
contract labour had worked after the issuance of prohibition notification
dated 17th March, 1993 till April, 1996 and clause(v) of the notification
prescribing minimum wages dated 6th March, 1990 and 12th July, 1994
clearly stipulates that the existing rate of wages to any employee based
on contract or agreement or otherwise if higher than the rates notified
herein, the higher rate shall be protected and be treated as rate of wages
payable for the purpose of its notification and once this fact has been
admitted that there was an agreement entered into between union of
regular employees and the management of the establishment, at least
the lowest rate of wages in the establishment of the appellant payable to
31969(1) SCC 873
4 1985(1) SCC 630
51996(10) SCC 599
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a regular and permanent employee became the benchmark of minimum
wages payable to the contract labour who had worked in the establishment
of the appellant SAIL as an employee after issuance of notification dated
17th March, 1993 until termination of service and this what the prescribed
authority under the Minimum Wages Act, 1948 has computed towards
arrears of each of the 2040 employee who have, inter alia, filed
applications for legitimate wages under the Minimum Wages Act, 1948.
19. Learned counsel further submits that as regards their absorption
and regularisation of service, it was indeed a subject matter of adjudication
in a reference made by the appropriate Government under its notification
dated 27th January, 2003 followed with 22nd February, 2005 but so far as
their minimum wages payable to the employees are concerned, it was
an independent issue having no relationship to the terms of reference
pending before the CGIT at the relevant point of time and after issuance
of prohibition notification dated 17th March, 1993 under CLRA Act,
such of the contract workers who had served thereafter in the
establishment of the appellants became their employee and can no longer
be treated as contract workers.
20. Learned counsel submits that after the contract of service
agreement stands extinguished indisputedly the work discharged by the
employees(earlier contract workers) is same and similar as of the regular
employees and it is not open for the appellant to have two different
wage structures for the employees of the establishment of SAIL and it
was indeed arbitrary and violative of Article 14 & 39(d) of the Constitution
of India and the wage structure applicable to the employees of SAIL
has rightly been extended by the prescribed authority under the mandate
of the Minimum Wages Act, 1948 and since the respondents have
demanded lowest rate of wages in terms of settlements dated 6th March,
1990 and 12th July, 1994, no further finding was required to be recorded
with respect to the same or similar nature of work being discharged and
at least those rates of wages are applicable to the present
employees(earlier casual labourers) and this what has been computed
by the prescribed authority under the Minimum Wages Act and confirmed
by the High Court under the impugned judgment and in support of
submission, learned counsel has placed reliance on the judgment of this
Court in BHEL Workers Association, Hardwar and Others(supra).
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21. We have heard learned counsel for the parties and with their
assistance perused the material available on record.
22. To appreciate the rival submissions made by the respective
counsels, it is considered appropriate to first take note of the indisputed
facts and the scheme of the Minimum Wages Act, 1948 & CLRA Act
emerged from the records are that the appellant SAIL is a Government
of India Undertaking and is a State within the meaning of Article 12 of
the Constitution of India having its steel plants in different parts of India
and was a registered establishment under Section 7 of the CLRA Act
and the contractor through whom the service of the contract labour was
engaged was holding its licence as envisaged under Section 12 of the
CLRA Act. The tripartite memorandum of settlement dated 12th
November, 1991 which became effective from 1st April, 1991, was signed
by the appellant, contractor and the respondent through Union before
the Assistant Labour Commissioner (Central), Jabalpur. Under the said
settlement, it was agreed that the contract labour would be paid Rs.
11.65/- per day over and above the minimum wages notified by the
appropriate Government under the Minimum Wages Act, 1948.
Indisputedly, each of the member of the union was paid his wages in
terms of the memorandum of settlement dated 12th November, 1991. At
the later stage, the appropriate Government issued a prohibition
notification of employment of contract labour dated 17th March, 1993
and the fact remains that the contract labour which was engaged prior
to the prohibition notification was allowed to continue in the establishment
of the appellant(SAIL) on the same terms and conditions with no change
in their service conditions under the agreement which was executed
prior to the prohibition notification dated 17th March, 1993, was extended
from time to time by the competent authority and the services of the
contract labour came to be terminated by the respective contractor in
the month of April, 1996 after they went on strike.
23. After discontinuance of the service of the contract labour by
the respective contractor in April, 1996, 2040 employees/contract labour
through their union filed their respective applications in the year 1998
under Section 20(1) of the Minimum Wages Act, 1948 before the
prescribed authority to claim parity with the wages payable to the
employees who were direct/regular employees of the establishment of
SAIL under the Minimum Wages Act.
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24. After issuance of a prohibition notification under the CLRA
Act dated 17th March, 1993, the erstwhile contract labourers/respondents
herein filed writ petitions to claim regularisation of service and backwages
in view of the law laid down by three Judge Bench of this Court in Air
India Statutory Corporation and Others case(supra) wherein it was
held that on issuance of prohibition notification under Section 10(1) of
the CLRA Act, the logical and legitimate consequences were that the
erstwhile regulated 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 the day on which the contract labour
system in the establishment has been abolished. But the theory of
automatic absorption of contract labour by the principal employer in the
establishment on issuance of a notification by the appropriate Government
under Section 10(1) of the Act was later overruled by the Constitution
Bench of this Court in Steel Authority of India Ltd. and Others(supra).
25. It is necessary to point out that Ministry of Labour, Government
of India vide its notification dated 12th July, 1994, while revising minimum
rate of wages payable to the employees employed in the mines had also
specifically mentioned in clause 5 to the explanation that in case the
existing rate of wages of any employee as per the agreement are higher
than the minimum rates, the higher rates shall be protected and treated
as minimum rates of wages. Relevant para of the said notification is
quoted herein as under:-
"Where the existing rates of wages of any employee, based on
contract or agreement or otherwise are higher than the rates
notified herein, the higher rates shall be protected and treated as
the minimum rates of wages applicable for the purpose of this
notification to such employees."
26. Such rate of wages as agreed in its tripartite agreement dated
12th November, 1991 were paid at Rs. 11.65/- per day over and above
the minimum wages with effect from 1st April, 1991 and that was
indisputedly complied with and each of the employee (contract labour)
who had served/worked in the establishment had been paid his due wages
until their services came to be terminated by the respective contractors
in April, 1996.
27. The claim of the respondents in their application filed under
Section 20(1) of the Minimum Wages Act, 1948 was that as they had
STEEL AUTHORITY OF INDIA LTD. & ANR.v.