HINDUSTAN SANITARYWARE AND INDUSTRIES LTD. & OTHERS versus THE STATE OF HARYANA

Citation: [2019] 6 S.C.R. 1086 · Decided: 29-04-2019 · Supreme Court of India · Bench: L. NAGESWARA RAO · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 6 S.C.R.
HINDUSTAN SANITARYWARE AND INDUSTRIES
LTD. & OTHERS
v.
THE STATE OF HARYANA
(Civil Appeal No. 2539 OF 2010)
APRIL 29, 2019
[L. NAGESWARA RAO AND M.R. SHAH, JJ.]
Minimum Wages Act, 1948: s. 5(2) – Fixing or revising the
minimum rates of wages – Issuance of Notification dated 27.06.2007
and 21.10.2015 by the State Government fixing/revising the minimum
rates of wages in respect of different scheduled employments as
mentioned in the schedule therein wef 01.07.2007 and 01.11.2015
respectively – Writ Petition challenging the Notifications – Dismissed
by the High Court – On appeal, held: Jurisdiction is conferred by
the Act on the Government to fix/revise the minimum rate of wages
notwithstanding the contract – Categorization of unskilled employees
as semi-skilled and semi-skilled as skilled on the basis of their
experience is beyond the jurisdiction of the Government –
Prohibition of segregation of wages into components in the form of
allowances in the Notification is impermissible – Security inspector/
security officer/ security supervisor cannot be included in the
Notification – Trainees who are employed without payment of any
reward would not be covered by the Notification – Fixing the training
period for one year is beyond the jurisdiction of the Government –
Conclusion in respect of some parts of the Notification would not
affect the Notification as such.
Allowing the appeals, the Court
HELD: 1.1 The appropriate government is empowered by
Section 3 of the Minimum Wages Act, 1948 to fix the minimum
rates of wages payable to the employees employed in an
employment specified in Part I and Part I (b) of the Schedule.
The procedure for fixing or revising the minimum rate of wages
is dealt with in Section 5 of the Act. After following the procedure
prescribed under Section 5, the appropriate government can fix/
revise the minimum rates of wages and issue notification to that
[2019] 6 S.C.R. 1086
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effect. An obligation is imposed on the employer by Section 12 of
the Act to pay to every employee engaged in a scheduled
employment wages at a rate not less than the minimum rates of
wages fixed by the notification issued under Section 5 of the Act.
[Paras 10, 11][1097-F; 1098-C-D]
1.2 There is no power vested in the Government by the
Act to make alterations to the terms of a contract. Jurisdiction is
conferred by the Act on the Government to fix/revise the
minimum rate of wages notwithstanding the contract. The
Notification dated 21.10.2015 postulates that unskilled employees
having five years experience would be deemed categorized as
semi-skilled “A”; that after three years of experience in semi-
skilled “A”, the employees would be deemed categorized as
semi-skilled “B”; that after three years of experience in skilled
“A”, the employees would be deemed categorized as skilled “B”.
Such categorization or classification by deeming workmen in one
category to belong to another category is in direct contravention
of the contract between the employer and the employee and is
beyond the jurisdiction of the Government. Inclusion of Security
inspector/ Security officer/ Supervisor in the table “Minimum
rates of wages in respect of all scheduled employment” in the
Notification is ultra vires the provisions of the Act. They do not
fall within the definition of “employee’ in s. 2(i) as they do not
discharge any skilled or unskilled, manual or clerical work.
Similarly, not all trainees can be included in the Notification.
Trainees who receive wages during the period of training would
fall under the definition of “employee” as has been fairly admitted
by the appellants. Only a person who is employed for “hire or
reward” will fall under the definition of “employee”. The trainees
who are not paid wages cannot be included in the notification and
the fixation of minimum wages for such trainees at 75% is also
not valid. The minimum wages fixed for trainees who are appointed
for reward is not interfered with. The period of training to be
undergone by a trainee would depend upon the contract between
the employer and the employee. There is no power vested in the
Government under the Act to decide the period of training and
any stipulation with regard to the training period is ultra vires.
[Para 13][1101-B-H; 1102-A-B]
HINDUSTAN SANITARYWARE AND INDUSTRIES LTD.v.
STATE OF HARYANA
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[2019] 6 S.C.R.
1.3 The word “employee” as defin

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