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Categorizing unskilled employees as semiskilled & semi-skilled as skilled based on their experience for fixing/revising minimum wages is Ultra Vires: SC

Updated: May 17, 2019 09:38:28am
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Categorizing unskilled employees as semiskilled & semi-skilled as skilled based on their experience for fixing/revising minimum wages is Ultra Vires: SC

New Delhi, May 17 (KNN) In a recent Judgement, the Supreme Court has held that categorization of unskilled employees as semiskilled and semi-skilled as skilled on the basis of their experience in the notification issued for fixing/revising the minimum rates of wages is beyond jurisdiction of Government.

The Labour Department of Haryana had issued a notification under Section 5 of the Minimum Wages Act which are categorized the employees as: 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".

The judgement came during a case of Hindustan Sanitaryware and Industries Ltd vs State of Haryana in which the Supreme Court was considering an appeal against Punjab and Haryana High Court order which had upheld the notification issued under Minimum Wages Act.

The bench comprised of Justice L. Nageswara Rao and Justice MR Shah. The bench observed that, "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."

 Mukesh Kumar Saxena, Advocate, labour law expert, shared a note with KNN India explaining the ruling.

“The Supreme Court held that no power is vested in the government by the Minimum Wages Act to make alterations to the terms of a contract. The Act only confers jurisdiction in government to fix/revise the minimum rate of wages notwithstanding the contract.  The provision granting time bound promotion to the workers in the next category of skill was held to be beyond the jurisdiction of the government,” the note explained.

The inclusion of security inspector / security officer / supervisor in the table of minimum rate of wages in respect of all scheduled employments in the notification was held to be ultra vires the provisions of the Act, as they do not fall within the definition of ‘employee’ in section 2(i) of the Act and they do not discharge any skilled or unskilled, manual or clerical work.  Similarly, not all trainees can be included in the notification, it added.

Further, the apex court also ruled that only trainees who are appointed for reward can be included in the notification.

Explaining this, Saxena said, “The bench also observed that not all trainees could be included in the notification. Though it upheld minimum wages fixed for trainees who are appointed for reward, the bench observed that the trainees who are not paid wages cannot be included in the notification. It also held that 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.”

The court held that 'employee' would bring the workmen employed through the contractors within the purview of the Act.

The bench also held that the prohibition of segregation of wages into components in the form of allowances in the Notification is impermissible.

Saxena, concluded by highlighting that the Supreme Court’s rulings:-

  - (a) The prohibition of segregation of wages into components in the form of allowances in the notification is impermissible.

  - (b) The security inspector/ security officer/ security supervisor cannot be included in the notification.

  - (c) Trainees who are employed without payment of any reward cannot be covered by the notification.

  - (d) Categorization of unskilled employees as semiskilled and semi-skilled as skilled on the basis of their experience is ultra vires.

  - (e) Fixing the training period for one year is beyond the jurisdiction of the Government. (KNN Bureau)

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