HYDRO (ENGINEERS) PVT. LTD. versus TIIE WORKMEN

Citation: [1969] 1 S.C.R. 156 · Decided: 30-04-1968 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Case Partly allowed

Cited by 2 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

156 
HYDRO (ENGINEERS) PVT. LTD. 
'V. 
TIIE WORKMEN 
April 30, 1968 
(S. M. SIKRI, J. M. SHELAT AND V. BHARGAYA, JJ.J 
l.ndustrial 
Dispute-Minimum 
Wag<-J'rinciple 
for 
fixaJwn of-
Revuwn of scale of wages fixed by rhe previous award by linking up with 
cost of living index-I/ double advantage to 
workmen-Retrospective 
operu11011 of award-Whether valid-What is '-'asonab/e qualifying period 
for gratuity. 
There were industrial disputes between the appellant and its workmen, 
the respaadcnts, which were the subject-matter of awards. 
The last of 
such awards fixed revised wage scales taking into consideration the cost 
of li\iog index then prevailing. 
It also provided for annual 
increments 
but rejected the workmen's demand to link up the wage scales with the 
index of cost of living. 
After the respondents had received two annual 
increments un.dcr that award. they served a notice on the appellant calling 
for revision of the scale of \\·ages and of the gratuity scheme. 
The dis. 
·pule was referred to the Industrial Tribunal and the Tribunal passed an 
.award. 
The award retained the scales fixed in the previous award and 
treating them as based on the cost of living index prevailing on the date 
.of that award. directed that the waRes should be linked up with the cost 
of living index. The award also directed that effect should be given to it 
retrospectively from approximately the date of demand hy .the respondents. 
As regards gratuity, the Tribunal reduced the existing qualifying period 
.of 10 years :o 8 years in cases where a workman died, resigned or retired; 
.and deleted completely the ex.isting qualifying period of 4 years in case 
·where the services of the workman were terminated by the appellant. 
A 
8 
c 
D 
E 
Jn appeal to this Court, it was contended that : (I) The award as 
regards wages should be <ct aside, because, (a) 
the Tribunal took 
a 
wrong view as to what \\'ould const~:ute minimum wages, (b) it ignored 
the financial capacity of the appellant. (c) the linking up of the waRe 
scales with the eost of living index was wrong, (d) the Tribunal failed 
F 
to take into consideradon the principle of region-cum-industry. ( e) the 
respondents would get double advantage during the same period, namely, 
increments and a raise in the wage scales, and (f) retrospective operation. 
should not have been given to the award; and (2) 1bc changes made in 
Ule gratuity scheme were illegal. 
HELD : (I) There was no reason to interfere with the minimum 
wage rate fixed by the Tribunal. (163 A-Bl 
G 
(a) The policy of the Minimum Wages Act, 1948. was to prevent 
employment of sweated labour in the general interesl and so the minimum 
wa~ must ensure not merely the physical needs o.f the ~orker but must 
ensure in addition to his sustenance and that of his family, the preserva-
tion of his efficiency as a workman by providing for some measure of 
education medical requirement~ and amenities. 
In the present cac;e, (i) 
the Trib~nal retained the scale.~ fixed by the previous award and only 
provided for automatic rise or fall therein with the correspondin.(!: chan~ 
in the index of cost of Iivin~ and (ii) the Tribunal observed that 
the 
appellant had to pay the minimum wages irrespective of its ability to 
H 
HYDRO (ENGINEERS) V. WORKMEN (She/at, !.) 
157 
A 
bear the add;tional burden. 
Therefore, what the Tribunal fixed was con-
solidated minimum wages and not fair wages. [161 G-H; 162 B-FJ 
B 
c 
D 
E 
F 
.G 
H 
(b) In prescribing such a minimum wage rate the capacity of the 
employer need not be considered as the State assumes that every employer 
must pay the minimum wages before he employs labour. [162 D-E] 
Bijay Cotton Mills Ltd. v. State of Ajmer. 
[1955] 1 S.C.R. 
752, 
Express Newspapers (Pvt.) Ltd. v. Union of llldia [1959] S.C.R. 12 and 
Unichovi v. State of Kera/a, [1962] 1 S.C.R. 946, followed. 
, 
( c) The idea of fixing minimum wages in the light of the cost of !iv' 
ing: at a particular juncture of time and of neutralising the prevailing-high 
prices of essential commodities by linking up scales of minimum wages 
with the cost of living index is not alien to the. concept of minimum 
wages. · It oould not be contended that the Tribunal erred in linking up 
the wage scales with ithe living cost, because, had it not been done, the 
Wage scales would have become unrealistic, as the cost of living index 
had gone very much higher up since the Tribunal give its last award and 
was threatening to

Excerpt shown. Read the full judgment & AI analysis in Lexace.