Minimum Wage Compensation Case: Supreme Court Revises Compensation Award

The case involves a dispute regarding the payment of minimum wages to skilled workers employed at the General Reserve Engineers Force (GREF) workshop in Pathankot, under the Union of India. The workers claimed that they were paid less than the legally mandated minimum wages under the Minimum Wages Act, 1948, for the period between 01.03.2001 and 30.06.2004. The Supreme Court was called upon to adjudicate whether the awarded compensation should be 100% or 200% of the unpaid amount.

Background of the Case

The respondents, who were skilled workers, argued that they were entitled to a wage difference of Rs.49,804/- each. As the appellants failed to pay this amount, the workers filed applications under Section 20(3) of the Minimum Wages Act before the Specified Authority in Chandigarh.

The Specified Authority ruled in favor of the workers, awarding them Rs.49,804/- as wage difference and an additional Rs.99,608/- as compensation (200% of the claim), leading to a total sum of Rs.1,49,412/- per worker.

Appeal and High Court’s Decision

The Union of India challenged this order before the Punjab and Haryana High Court. However, the High Court upheld the decision of the Specified Authority and dismissed the appellants’ petition.

Arguments Before the Supreme Court

Petitioners (Union of India) Argued:

• In a similar case (CWP No. 3127/2007 decided on 01.03.2007), compensation was awarded at 100%, whereas, in the present case, it was awarded at 200%.
• No justification was provided for the higher rate of compensation.
• The lack of consistency in awarding compensation was unfair.

Respondents (Workers) Argued:

• Their claim was valid under the Minimum Wages Act, and they were entitled to the awarded compensation.
• The appellants failed to provide legal justification for reducing the compensation from 200% to 100%.

Supreme Court Judgment

The Supreme Court found merit in the appellants’ argument, stating that compensation should be uniform for similarly placed workers. Since the High Court had awarded only 100% compensation in another identical case, it was inappropriate to award 200% in this instance without justification.

The Supreme Court, therefore, modified the High Court’s order and directed that each worker should receive Rs.49,804/- as wage difference and an equal amount as compensation, making a total of Rs.99,608/- per worker. The Union of India was ordered to pay this amount within three months.

Conclusion

The case highlights the importance of uniformity in judicial decisions and the necessity of providing a clear rationale when awarding compensation beyond the standard precedent. The Supreme Court’s ruling ensures fairness and consistency in compensation for minimum wage violations.

Petitioner Name: Union of India & Anr..
Respondent Name: Avtar Chand & Others.
Judgment By: Justice Abhay Manohar Sapre, Justice L. Nageswara Rao.
Place Of Incident: Pathankot, Punjab.
Judgment Date: 19-02-2019.

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