Employers must provide notice and a hearing before altering employee wages under the Industrial Disputes Act; arbitrarily reducing pay without due process is unlawful.

ORDER

(Pronounced by Hon'ble Mr. M. Swaminathan, Judicial Member)

This OA have been filed by the applicants seeking the following relief:

“(i) To set aside the pay fixation order dated 25.04.2016 issued nd by the 2 respondent Management in refixing and proposed recovery of the excess pay granted to them as being illegal, arbitrary and contrary to the corporate instructions and;

(ii) For a direction to the 2nd respondent Management to give appropriate notice calling for their individual explanation and to consider the same after giving fair opportunity of hearing to the applicants and to pass a reasoned order and;

(iii) To pass such other orders or directions as this Hon’ble Tribunal may deem fit and proper in the circumstances of the case, award cost and thus render justice.”

2. The facts leading to the filing of the OA are as follows:

The Respondent is a Public Sector Company owned by the Government of India. Employees wages are revised based on a Memorandum of Agreement (MOA) entered into by the National Joint Committee for the Steel Industry, which includes both Central Trade Unions and Employers, including the Respondent. This agreement is valid for a five-year period. The most recent MOA was signed on July 1, 2014, covering the period from 01.01. 2012, to 31.12 2016. The wage revisions were made based on this agreement. However, the Respondents have refixed the pay for non- executive employees, who are members of the Petitioner union, without prior notice, a hearing, or issuing a notice as required under Section 9A of the Industrial Disputes Act , 1947. This has resulted in a reduction of wages, dearness allowance, perks, and house rent allowance, effective from the wages payable for April and May 2016. Consequently, the Original Application has been filed.

3. The learned counsel for the applicants contended that the respondents is a Public Sector Company owned by the Government of India. Employees wages are revised based on a Memorandum of Agreement (MOA) entered into periodically between the National Joint Committee for the Steel Industry, which includes Central Trade Unions and Employers, such as the Respondent. These agreements are typically valid for a period of five years, after which fresh negotiations are held to determine the terms and conditions of employment, including pay scales. The most recent agreement was signed in 2007 and expired in December 2011.

4. The counsel further contended that a new MOA was entered into on July 1, 2014, covering the period from 01.01. 2012, to 31.12. 2016. This agreement was implemented by both the employer (the Respondent) and the employees, represented by the first applicant's Union and the second applicant, an affected employee and also a member of the said Union. The pay scales established under the MOA clearly reflect the fixation of personal pay effective from 01.01. 2012, resulting in higher wages for the employees.

5. The learned counsel further submitted that, in violation of Article 14 of the Constitution of India, an order dated 25.04.2016, was issued reducing the pay scale with retrospective effect from April 1, 2005. This not only led to a reduction in pay but also triggered a recovery process, all without prior notice or a hearing. As an example, he pointed out that the pay of Matheswaran, who had his pay fixed according to the agreement dated July 1, 2014, was reduced from a personal pay of Rs. 11,060/- as of 1^st July, 2012, to Rs. 5,820/-, and similarly, pay reductions and recovery actions were implemented for all affected employees without any notice.

6. He also contended that the order, dated 25.04.2016, challenged in the present Original Application, does not provide any ju