Supreme Court Allows Appeals of Ex-Employees in Minimum Wages Act Case; Past Employees Entitled to Claim Minimum Wages Under Section 20(2). Section 2(i) of Minimum Wages Act, 1948, as Construed with Form VI of Minimum Wages (Central) Rules, 1950, Includes Past Employees, Reversing High Court's Literal Interpretation That Excluded Them.

Case Note & Summary

The dispute arose when former employees of the Army School, Jallandhar, claimed before the Authority under the Minimum Wages Act, 1948, that the school had not paid minimum wages fixed by the State Government for various periods. They filed applications under Section 20(2) seeking directions for payment of the difference and other reliefs. The Authority ruled in their favour. The employer, the Managing Committee of the Army School, challenged the Authority's orders in the High Court of Punjab and Haryana by way of writ petition. The High Court allowed the writ petition and set aside the Authority's orders, relying on a Division Bench decision of the Punjab High Court in Municipal Committee v. Sham Lal Kaura and a Single Bench decision in Mahiya v. State of Haryana, which had held that the word 'employee' defined in Section 2(i) of the Minimum Wages Act did not include an ex-employee, and therefore a person not in actual employment at the time of filing the application under Section 20(2) was not entitled to relief. The former employees then filed special leave petitions in the Supreme Court. The central legal issue was whether an ex-employee falls within the meaning of 'employee' under Section 2(i) and can maintain an application under Section 20(2) of the Minimum Wages Act, 1948, for wages accrued during past employment. The appellants contended that the inclusive interpretation adopted by several High Courts and supported by the statutory forms should prevail. The respondent argued that the literal construction excluding ex-employees, as accepted by the Punjab High Court, was correct, and also argued that other issues remained to be decided. The Supreme Court granted special leave and examined the relevant provisions. It noted that Section 20(2) permits an employee to apply to the Authority for directions in respect of claims enumerated under sub-section (1). Section 2(i) defines 'employee' as any person who is employed for hire or reward in a scheduled employment, but the Court observed that the definition must be read with the rules and forms. The Minimum Wages (Central) Rules, 1950, framed under Section 30 of the Act, prescribe Form VI for applications under Section 20(2). Paragraph one of Form VI states that the applicant 'was/has been employed' from a particular date, thus equating past and present employment as alternatives. The Court held that this statutory language is a strong indication that past employees are entitled to invoke the remedy. The Court reviewed the conflicting High Court decisions: the Madras High Court in Wakefield Estate v. P.V. Perumal had taken a literal view excluding past employees, but another Single Judge of the same Court in Murugan Transports v. P. Rathakrishnan differed and held that past employees were covered. The Kerala High Court in Chacko v. Varkey, the Patna High Court in Labour Enforcement Officer (Central) v. Presiding Officer, and the Mysore High Court in Athni Municipality v. Shetteppa Laxman Pattan had all adopted the inclusive view. The Punjab High Court had followed the earlier Madras view in Wakefield Estate and in Municipal Committee v. Sham Lal Kaura, but the Supreme Court observed that had the existence of Rule 6 and Form VI been brought to the notice of that Division Bench, the interpretation might have been different. The Court concluded that a purposive approach, aided by the Form and Rules, furthered the intendment of the Act and that both past and present employees are entitled to seek relief under Section 20(2). Accordingly, the Supreme Court allowed the appeals, set aside the impugned High Court order, and remitted the matters back to the High Court for decision on other points, with interim orders revived and no order as to costs.

Headnote

Issue of Consideration

Final Decision

The Supreme Court allowed the appeals, set aside the impugned order of the High Court, and remitted the matters back to it for decision on other points. Any interim orders which prevailed in the High Court during the pendency of the writ petitions would automatically stand revived. No order as to costs.

Law Points