1. Non-payment of minimum wages under the Minimum Wages Act — Award of wages and compensation by the Authority. (Para 3 )
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1998 Supreme(SC) 1208
SUPREME COURT OF INDIA
A.P.Misra : S.P.Bharucha : S.R.Babu
Prerna Sahygo
Versus
Authority Under Minimum Wages Act
Case No. : 6223 of 1998
Date of Decision : 12/7/98
Compensation awarded for the non-payment of minimum wages should not be exorbitant; the court held that compensation equivalent to the amount of unpaid wages is appropriate.
Headnote:(A) Minimum Wages Act - Quantum of compensation - Authority awarded wages to five workmen and further directed payment of compensation amounting to eight times the wages awarded, citing the employer's conduct and attempt to falsify the Inspector - High Court refused to interfere - Supreme Court held that the award of compensation is exorbitant - Compensation should be equivalent to the amount of wages awarded to each worker. (Paras 3, 4, 6)
Facts of the case:
An authority found that an employer had not paid minimum wages to five workmen and awarded an aggregate sum of wages. Due to the employer's conduct and alleged attempts to falsify an inspector, the authority directed the employer to pay compensation equal to eight times the wages awarded. The High Court dismissed a writ petition challenging this order.
Findings of Court:
The award of compensation at eight times the wages is exorbitant. The compensation should be modified to be equivalent to the amount of wages awarded to each worker.
Issues: Whether the compensation awarded by the authority, being eight times the amount of unpaid minimum wages, was exorbitant and required interference.
Ratio Decidendi: Compensation awarded for non-payment of minimum wages should not be exorbitant; in the given circumstances, an amount equal to the wages awarded is considered just and reasonable.
Result: Appeal allowed to this extent.
Legal Category Hierarchy
Table of Contents
2. Challenge to the quantum of compensation awarded by the Authority for non-payment of minimum wages. (Para 2 , 5 )
3. The compensation awarded by the Authority is exorbitant and requires modification to be reasonable. (Para 6 )
4. Compensation for non-payment of minimum wages must be reasonable and not exorbitant. (Para 6 )
5. Appeal allowed in part — Compensation modified to be equivalent to the amount of wages awarded. (Para 6 )
6. Is the Authority under the Minimum Wages Act empowered to award compensation for non-payment of wages?
Yes, the Authority can award compensation in addition to the unpaid wages, particularly when the employer's conduct is found to be adamant or involves ulterior motives. (Para 3 )
7. What happens if the compensation awarded by the Authority under the Minimum Wages Act is found to be exorbitant?
The court may interfere with the award to reduce the compensation to a reasonable amount, such as making the compensation equivalent to the amount of wages awarded. (Para 6 )
S.P.BHARUCHA, J.
(1) LEAVE granted.
(2) THE notice that was issued to the respondent on the special leave petition was restricted to the compensation that was awarded.
(3) THE Authority under the Minimum Wages Act found that the appellant had not paid minimum wages to the five workmen named in its order. Accordingly, it awarded them wages in the aggregate sum of Rs.11,550. The order recorded that the appellant "has also tried to falsify the Inspector who is also an applicant. The respondent proves that the respondent is adamant to pay less wages against the provisions of the Act". The Authority found ulterior motives in the appellants conduct and directed it to pay 8 times the wages awarded as compensation to the said workmen.
(4) IN other words, a workman who had been awarded Rs. 2550 as wages was awarded Rs. 20,400 as compensation, and so on. The aggregate amount of the compensation awarded was Rs. 92,400.
(5) THE appellant moved the High Court of Punjab and Haryana. The writ petition was dismissed, no interference, in the view of the High Court, being called for.
(6) WE do not agree that no interference with the award of the authority was called for. It was called for in the matter of the compensation awarded. Rather than remitting the matter to the High Court, we have heard learned counsel. We are satisfied that the award of compensation is exorbitant. We think, in the circumstances, that the amount of the compensation should be equivalent to the amount of the wages. In other words, each of the workers shall get as compensation an amount equal to the amount of wages awarded to him. The order of the Authority dated December 30, 1997 shall stand modified to this extent only. The appeal is allowed to this extent. No order as to costs.
