Supreme Court of India
Workmen v. Management of Reptakos Brett & Co. Ltd.
Whether a long-standing dearness allowance scheme could be abolished to the workmen's prejudice, and what norms guide the fixing of a minimum wage.
Decided under an earlier law
The Court decided this case on an industrial dispute over a dearness allowance scheme under the Industrial Disputes Act, 1947, in which the Court set out norms for fixing the minimum wage. Section 104 of the Industrial Relations Code, 2020 repeals the Industrial Disputes Act, 1947. The Court's words are shown below, with the Code provision this library lists the case on. This library does not say whether the decision holds good under the Code.
What the Court decided
Each point is this library's summary, followed by the Court's own words, checked word for word against the Supreme Court's typed copy of the judgment (JUDIS file 12573). The pinpoint gives the page of the Supreme Court Reports and the margin letter (A to H) printed beside the line where the words begin.
The Court described three levels of wages: the minimum wage at bare subsistence, the fair wage a little above it, and the living wage at a level of comfort.
Broadly, the wage structure can be divided into three categories the basic "minimum wage" which provides bare subsistence and is at poverty-line level, a little above is the "fair wage" and finally the "living wage" which comes at a comfort level.
[1991] Supp. 2 S.C.R. 129, at 135 F · open the report at p. 135 To the five norms for fixing the minimum wage accepted by the Indian Labour Conference in 1957, the Court added a further norm: children's education, medical needs, minimum recreation including festivals and ceremonies, and provision for old age and marriages, at 25% of the total minimum wage.
The Tripartite Committee of the Indian Labour Conference held in New Delhi in 1957 declared the wage policy which was to be followed during the Second Five Year Plan. The Committee accepted the following five norms for the fixation of ’minimum wage’:
[1991] Supp. 2 S.C.R. 129, at 136 D · open the report at p. 136 we are of the view that it is necessary to add the following additional component as a guide for fixing the minimum wage in the industry:-- "(vi) children education, medical requirement, minimum recreation including festivals/ceremonies and provision for old age, marriages etc. should further constitute 25% of the total minimum wage.
[1991] Supp. 2 S.C.R. 129, at 137 A · open the report at p. 137 Employees are entitled to the minimum wage at all times; an employer who cannot pay it has no right to engage labour.
The employees are entitled to the minimum wage at all times and under all circumstances. An employer who cannot pay the minimum wage has no right to engage labour and no justification to run the industry.
[1991] Supp. 2 S.C.R. 129, at 137 C · open the report at p. 137 The dearness allowance scheme, in force for almost thirty years and approved in settlements, should not have been abolished: nothing showed that the pay was higher than a need-based minimum wage.
We agree with Mr. Ramamurthy that the DA scheme--which had stood the test of time for almost thirty years and had been approved by various settlements between the parties--has been unjustificably abolished by the Courts below and as such the award of the Tribunal and the High Court Judgments are unsustainable.
[1991] Supp. 2 S.C.R. 129, at 144 A · open the report at p. 144 There is, however, no material on the record to show that what is being paid by the company is higher than what would be required by the concept of need based minimum wage.
[1991] Supp. 2 S.C.R. 129, at 145 A · open the report at p. 145
The Code
This library lists the case on: Code on Wages, section 6 (Fixation of minimum wages In force).