Management of Rajamani Transport Ltd. vs Workers Employed in the Rajamani Transports Ltd. and Others

Rajamannar, C.J.—The petitioner is a private limited company incorporated under the Indian Companies Act and is engaged in the business

of providing bus transport in Madura, Ramnad, Tiruchirapalli and Tanjore districts. By G. O. Ms. No. 4096 (Development) dated 9-10-1950 the

Government referred to the Industrial Tribunal for adjudication the dispute between the workers and the management of the petitioner company.

The items of dispute comprised scales of wages, dearness allowance, etc. The Industrial Tribunal at Mathurai fixed basic wages for the different

categories of workers like drivers, conductors, checking inspectors, etc., on the basis of wages which were obtaining in other transport companies.

There was an appeal by the petitioner to the Labour Appellate Tribunal. That Tribunal confirmed the award of the Industrial Tribunal. The above

application is to quash the orders of the two Tribunals.

The contention of the petitioner company is that the award of the Industrial Tribunal has resulted in an increase in the rate of wages by 33 to 100

per cent and the financial position of the company was such that it could not bear such rates and therefore the award violates the guarantee of

equality before the law contained in Article 14 of the Constitution and also that the rights to property are curtailed. It was also urged that the

Tribunal should have taken into account the loss sustained by the petitioner employer in fixing the wages. The Appellate Tribunal refused to accept

this contention and observed:

But the fact remains that the financial position of the company has not much bearing on the question as to what should be the basic wages of the

workers therein. The workers must get minimum wages as are being paid in comparable undertakings in the local area and if the company cannot

afford to do it it has no right to exist.

The Appellate Tribunal found that there was no evidence before them to show that any comparable unit was making payments at lesser rates. They

therefore saw no reason for interfering with the scales fixed by the Tribunal. We are in entire agreement with the reasoning of the Appellate

Tribunal. Whether or not a particular employer is able to make profits has no bearing on the question as to what is the proper wage for the

different classes of workers in the business carried on by the company. We think that a comparison of the rates obtaining in similar businesses in

the locality is extremely useful in arriving at a proper basic wage. If after paying such wages the company is unable to make any profit that may be

a consideration for the company deciding to wind up. But the apprehension that the company may have to close the business cannot affect the

question what is the proper scale of pay having regard to relevant factors like the nature of the work done, the capacity of the particular class of

industry to pay and other similar factors.

Learned counsel for the petitioner relied upon certain decisions of the Supreme Court of the United States but we are unable to derive any

assistance from these cases. They do not materially bear on the question before us. In ''Adkins v. Children''s Hospital of Columbia'', (1923) 67

Law Ed. 785, it was held that an Act of the Congress giving a Board power to fix for women a minimum wage sufficient in its opinion to supply the

necessary cost of living and maintain the women in good health and protect their morals is repugnant to the provisions of the Federal Constitution

against deprivation of liberty or property without due process of law. Sutherland J. who delivered the opinion of the Court based it on the fact that

the impugned statute required the employer to pay wages at particular rates which were not fixed on the basis of the extent of the benefit obtained

from the service but that it was fixed on the extraneous circumstance that the employee needs to get a prescribed sum of money to insure her

subsistence, health and morals. The learned Judge observed:

The moral requirement, implicit in every contract of employment ,viz, that the amount to be paid and the service to be rendered shall bear to each

other some relation of just equivalence, is completely ignored. The necessities of the employee are alone considered and these arise outside of the

employment.

We do not see how this decision really helps the petitioner. The scales of wages in the case before us have not been fixed on the basis of the

money required for the worker to enable him to lead a healthy and decent and moral life. The scales were adopted from scales in other

undertakings similar to that in question.

But this case in -- ''Adkins v. Children''s Hospital of Columbia, (1923) 67 Law Ed. 785, is itself no longer law in the United States. In --''West

Coast Hotel Co v. Parrish'', (1937) 81 Law Ed. 703, this was expressly overruled by a majority of the Judges of the Supreme Court. In that case

it was held that a statute authorising the fixing of reasonable minimum wages for women and minors by state authority was not repugnant to the due

process clause of the Federal Constitution. Reference was also made to the well-known case in --''Wolff Packing. Co v. Court of Industrial

Relations'', (1923) 67 Law Ed. 1103, but there is nothing in that decision which has even the remotest bearing on the points arising in the case

before us. We are not concerned in this country with different classes of business in so far as they are or not businesses clothed with a public

interest. Nor are we concerned with the freedom of contract expressly or impliedly guaranteed to the citizens. The case in -- ''Wolff Packing Co.

v. Court of industrial Relations'', (1923) 67 Law Ed. 1103, proceeded on the basis that the right of employer and employee to contract with

respect to wages is part of the liberty protected by the 14th Amendment to the Federal Constitution.

As we have no hesitation in holding that the Industrial Tribunal has not taken any irrelevant fact into consideration in fixing the wages, the

application must be dismissed. There will be no order as to costs.