The Bijay Cotton Mills Ltd. v. Their Workmen AIR 1960 SC 692

THE BIJAY COTTON MILLS LTD. V. THEIR WORKMEN

Whether in ascertaining minimum wages, statutory notification under the Minimum Wages Act, 1948, takes precedence over agreement for lower wages between employer and employed?
Whether dearness allowance should be considered while fixing minimum wages in accordance with industry standards?

When determining minimum wages, reliance on statutory notifications under the Minimum Wages Act is advisable, as they offer valuable guidance. Furthermore, assessments of basic wages should include comparisons with industry standards, factoring in both the basic wage and the dearness allowance to ensure comprehensive consideration of workers’ overall earnings.

The industrial dispute in question arose between Bijay Cotton Mills Ltd. (“the Appellant”) and their workmen (“the Respondents”).
The Respondents claimed that minimum wages should be fixed for them because the payments made by the Appellant were below subsistence level.
Initially, the Industrial Tribunal declined to set wages due to regional economic concerns.
The Respondents challenged the award of the Industrial Tribunal before the Labour Appellate Tribunal. The Labour Appellate Tribunal remanded the matter back to the Industrial Tribunal, directing it to decide and fix appropriate wages.
After the case was sent back for reconsideration, the Industrial Tribunal fixed the basic wage as Rs. 25 per month and the dearness allowance as Rs. 10 per month, relying on industry standards in the nearby areas.
The Respondents once again challenged the award of the Industrial Tribunal before the Labour Appellate Tribunal.
The Labour Appellate Tribunal set the basic wage as Rs. 30 per month and dearness allowance as Rs. 10 per month, relying solely on the minimum wages specified in a statutory notification under the Minimum Wages Act, 1948.
The Appellant challenged the increase of basic wage to Rs. 30 before the Supreme Court, in light of prevailing industry standards and an agreement the parties to fix minimum wages at Rs. 27 per month.

The Supreme Court held that the statutory notification under the Minimum Wages Act, 1948, can be relied upon for fixing basic wages, despite any agreements to contrary between the parties.
The Supreme Court held the dearness allowance being paid to employees should be considered while fixing minimum wages in accordance with industry standards. The Industrial Tribunal had omitted to consider the same.
The Supreme Court dismissed the appeal, upholding the decision of the Appellate Tribunal to set basic wages at Rs. 30 per month and dearness allowance at Rs. 10 per month.