The Minimum Wages Act, 1948, primarily safeguards the interest of workers in unorganized sector and sets out the minimum wages that must be paid to skilled, semi-skilled, as well as unskilled labours. A minimum wage not only guarantees bare subsistence and preserves efficiency, but also provides for education, medical requirements and some level of comfort too. Payment of wages below the minimum wage rate amounts to forced labour.

Nonpayment of Minimum Wages

The Delhi High Court vide its order dated November 2, 2017 in the matter of Central Secretariat Club vs Geetam Singh[1], termed nonpayment of minimum wages as “unconscionable and unpardonable”.

The Hon’ble Court moreover drew attention on the necessity of payment of minimum wages and stated that payment of minimum wages is an essential characteristic of humanity. Further, calling nonpayment of wages as an inhuman act, the Hon’ble Court stated, “Extraction of labor without payment of minimum wages, per corollary, would reflect an attitude which is inhuman”.

The Hon’ble High Court also stated that minimum wages are the basic entitlement of the workman, and an industry which employs workmen without paying them their minimum wages has no right to continue. The Hon’ble High Court made these observations while allowing a plea by a gardener against his employer, Central Secretariat Club, on the issue of non-payment of wages.

The said order was pronounced by the Hon’ble Court as it allowed the petition of a gardener, Geetam Singh and dismissed the plea of his employer, the Central Secretariat Club.

Brief facts of the case are as follows:-

  • Mr. Geetam Singh registered a claim under the Industrial Disputes Act alleging that he was being paid less than what was the minimum wages payable to him under the Minimum Wages Act, 1948 by the Central Secretariat Club.
  • The Petition before the Court involved the management of the Central Secretariat Club challenging an award passed in July, 2004 by the Labour Court, wherein the Club was directed to pay Mr. Geetam Singh (workman) for a period of three years during which he worked with the Club i.e. September 13, 1989 till September 30, 1995.
  • The management of the Club took the stand that the Club was not liable to pay Mr. Singh as per the Minimum Wages Act, 1948 because it was not an “industry” under the Industrial Disputes Act.
  • The Labour Court rejected the Club’s argument by relying on Justice Krishna Iyer’s stand on the Constitution Bench of the Supreme Court in case of Bangalore Water Supply and Sewerage Board v. R. Rajappa,[2] wherein it was held that clubs were also industries.
  • The Hon’ble High Court stated that a reading of the Bangalore Water Supply judgment makes it clear that the applicability of the Act was exempted only in a case in which the enterprise was clearly charitable in nature, without any financial transaction being involved. As the Club did charge subscription from its members, no error can be discerned, in the finding of the Labour Court and thus, the club was an ‘industry’ within the meaning of the Act.
  • The Hon’ble High Court noted that non-payment of minimum wages, to a workman is, therefore, unconscionable and unpardonable in law as it strikes at the very root of our constitutional framework. Minimum wages are the basic entitlement of the workman and an industry which employs workmen without paying them minimum wages constitutes a criminal offence for which punitive sanctions are provided in Section 22 of the Minimum Wages Act, 1948.
  • The Hon’ble High Court directed the Club to pay the difference in payment between the wages paid and the minimum wages payable to Mr. Singh under the Industrial Disputes Act, 1947 from September 1, 1989 to September 30, 1992, in addition to the amount awarded earlier by the Labour Court.
  • The Court also directed the Club to pay INR. 50,000/- cost for not complying with the Labour Court’s order passed earlier, vide the order they had directed the Club to pay INR. 15,240/- to Mr. Singh for the period between October, 1992 and September, 1995.
  • The Hon’ble Court said the total amount to be paid with an interest @12% per annum from the date of award, July 16, 2004, till the date of paying him and directed that the payment be made within four (4) weeks.

The Hon’ble Court also stated that nonpayment of minimum wages or reluctance on part of the employer in paying the minimum wage is not only illegal, inhuman and immoral, but also attracts criminal liability on the head of the employer.