Hydro (Engineers) Pvt. Ltd. v. The Workmen (1968 SC)

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 There were industrial disputes between the appellant and its workmen, and the last of the awards revised wage scales taking into consideration the cost of living index then prevailing. It also provided for annual increments but rejected the workmen’s demand to link up the wage scales with the index of cost of living.
 After the workers had received two annual increments under that award, they served a notice on the employer calling for revision of the scale of wages. The dispute was referred to the Industrial Tribunal and the Tribunal retained the scales fixed in the previous award and treating them as based on the cost of living index prevailing, directed that the wages should be linked up with the cost of living index. The award also directed that effect should be given to it retrospectively from the date of demand by the respondents.
 It came in appeal to the SC and it was contended that the award as regards wages should be set aside because
(a) the Tribunal took a wrong view as to what would constitute minimum wages
(b) it ignored the financial capacity of the appellant
(c) the linking up of the wage scales with the cost of living index was wrong; and
(d) the Tribunal did not take into consideration the principle of region-cum-Industry.
 The SC held that there was no reason to interfere with the minimum wage rate fixed by the Tribunal.
 The Tribunal retained the scales fixed by the previous award and only provided for automatic rise or fall therein with the corresponding change in the index of cost of living. The tribunal also observed that the appellant had to pay the minimum wages irrespective of its ability to bear the additional burden.
 The SC agreed with the Tribunal and said that in prescribing a minimum wage rate the capacity of the employer need not be considered as the, State assumes that every employer must pay the minimum wages before he employs labour, and must not run an enterprise employing workers is it is unable to pay the minimum wage.
 The idea of fixing minimum wages in the light of the cost of living at a particular juncture of time and of neutralizing the prevailing high prices of essential commodities by linking up scales of minimum wages with the cost of living index is not alien to the concept of minimum wages.
 If the tribunal had not linked up the wage scales with the living cost, the wage scales would have become unrealistic, as the cost of living index had gone very much higher up since the Tribunal gave its award.
 The capacity of the employer and the wage scales prevailing in comparable industries in the region, are relevant factors while, fixing fair wages, but not when fixing minimum wages.

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