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07/08/2018 02:10pm

Delhi MSMEs to follow old Minimum Wages order as HC quashes AAP govt's March 3, 2017 order calling it invalid and hurried

image Delhi MSMEs to follow old Minimum Wages order as HC quashes AAP govt's March 3, 2017 order calling it invalid and hurried

New Delhi, Aug 7 (KNN) Quoting a famous quote from Alice in the Wonderland “The hurrier I go, the behinder I get”, a bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar of Delhi High Court quashed Aam Aadmi Party’s March 2017 order revising the minimum wages for all classes of workmen in scheduled employment.

Passing the Judgment, the bench said, “An attempt to constitute a Minimum Wage Advisory Committee by an order dated 12th April, 2016, had already disrupted the course of wage revision once. Alas, even though the revision is sorely needed, the hurried attempt again, inter alia failing to comport with binding the statutory requirements, without relevant material and contravening principles of Natural Justice has unfortunately disrupted this course, yet again.”

According to the March 3, 2017 notification, for an unskilled worker the minimum wages were fixed at Rs 13,350 per month against the then existing Rs 9,724 per month. For semi-skilled and skilled persons, it had increased from Rs 10,764 to Rs 14,698 and from Rs 11,830 to Rs 16,182 per month, respectively.

Several industry associations and individual industries had been opposing the Delhi Government’s decision to hike minimum wage was putting enormous burden on the industries especially the micro, small and medium enterprises (MSMEs) and was making their products uncompetitive in comparison to neighboring states.

In a decision which is being seen as a blow to the AAP government, the Delhi High Court said the "hurried" decision was taken without hearing the employers or employees who would be affected and was violative of the Constitution.

Talking about the decision and its impact on MSMEs, Mukesh Saxena, Advocate and an expert on Labour issues, told KNN India, “The excessive wages increased by the Delhi Government has been strike down by the Delhi High Court on Saturday.”

He said, it is a 218 pages long verdict, which clearly shows that the hike was too much at a time when at a time when inflation was also high.

In its 218-page verdict, the bench also set aside a September 2016 notification by which a Minimum Wages Advisory Committee for all scheduled employments was set up, saying that its constitution was "completely flawed".

The court noted that though the revision of wages "is sorely needed", the "hurried attempt" and "contravening principles of natural justice has unfortunately disrupted this course, yet again" and referred to a line from Alice in Wonderland by Lewis Carrol -- 'The hurrier I go, the behinder I get'.

The bench, however, also said that the fixation of minimum wages in Delhi cannot be faulted simply because they are higher than the rates of minimum wages fixed in surrounding states and towns.

The "flawed" Committee "gave a report which was not based on relevant material, denied fair representation to the employers as well as the employees, in fact without any effort even to gather relevant material and information. The government (of Delhi) decision based on such advice in violation of express statutory provision and principles of natural justice as well as to the prejudice of employers as well as employees is unsustainable.

"Given the detailed factual narrative, the law and the failure of the Committee as well as the respondents to comport to the same, we have no manner of doubt that the exercise of power by the respondents (Delhi government) was not reasonable and was manifestly arbitrary. The same has to be struck down as violative of Article 14 of the Constitution of India," the court said.

On impact of this, Mukesh Saxena said, “Since the court has quashed the notification of the Delhi Government on Minimum Wages, the industries can now follow the old minimum wage notification. They however cannot take back the money already paid to the workers eversince the minimum wage hike was implemented but they can now follow the old notification.

He said the judgement is applicable to all working classes in scheduled employment under the Minimum Wages Act.

"We have, in the present case found that in issuing the omnibus notification, employees who, keeping in view their skills/location etc., would have been entitled to higher wages, stand unfairly deprived of the same," it said.

The verdict added that "clearly the government of National Capital Territory of Delhi was aware of the requirement of law and consciously failed to comport to the same".

On the challenge to appointment of officers of the Labour Department or the Director of Economics and Statistics as members of the committee, the bench said that while their eligibility cannot be faulted, they "failed to conduct themselves dispassionately and did not apply their independent minds".

The court said that the Delhi government appointed the very same officials as independent persons on the committee, who had already taken a view in the matter and made recommendations in the year 2016.

"...therefore, when appointed for the second time, they were clearly close-minded and proceeded in the matter in a predetermined manner," it said.

"The Notification… dated 3rd of March 2017 issued by the respondents revising minimum rates of wages for all classes of workmen/employees in all scheduled employments is ultra vires Article 14 of the Constitution of India; of Section 3 & Section 5(2) of the Minimum Wages Act, 1948, of Rule 20 of the Minimum Wages (Central) Rules; appears from non-application of mind, is based on no material and is in contravention of principles of Natural Justice and is hereby declared invalid and quashed,” the bench said. (KNN Bureau)

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