Hind Kamgar Sanghatana Vs. State of Maharashtra (Bombay High Court)
Payment of due wages to a workman is a statutory right under section 5 of the Payment of Wages Act & is a fundamental right of a worker under Article 21 of the Constitution. Financial difficulties of employer cannot be a ground for non-payment or delayed payment of wages to workmen. It cannot also be made contingent upon receipt of export orders by the employer.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Heard Ms. Gayatri Singh, learned Senior Counsel for the petitioners; Ms. Salunkhe, learned AGP for respondent Nos.1 to 6-State; and Mr. Shailesh Naidu, learned counsel for respondent No.7.
2. First petitioner is a trade union claiming to represent 150 workers of M/s. India Steel Limited, respondent No.7. Petitioner Nos.2 and 3 are workers of respondent No.7 who are also members of petitioner No.1.
3. This petition has been filed under Article 226 of the Constitution of India whereby and whereunder petitioners seek a direction to respondent Nos.3 and 4 to ensure that workers of respondent No.7 are paid full wages from December 2019 onwards. Petitioners also seek a direction to respondent Nos.3 and 4 to ensure that respondent No.7 takes all necessary measures for safety of its workers in its industrial plant at Khopoli in the district of Raigad and also to make suitable arrangement for transportation of the workers in view of restrictions imposed by the state to combat COVID-19 pandemic. Further prayer made is for a direction to respondent Nos.3 and 4 to initiate appropriate proceedings under the Disaster Management Act, 2005 against respondent No.7 and its officials for failure to comply with the directions of the central as well as state governments issued during the lockdown to curtail the spread of COVID-19.
3.1. Respondent No.7 is a company which is engaged in the manufacture of steel bright bars and has a steel melting and rolling plant at Khopoli in the district of Raigad. Industrial plant of respondent No.7 at Khopoli has two furnaces of 20 tonnes and 25 tonnes respectively, employing about 150 workers, both skilled and unskilled.
3.2. On 11.03.2020, World Health Organization (WHO) declared coronavirus, known as COVID-19, as a global pandemic. Following the same, Government of India invoked the Disaster Management Act, 2005 and declared nation wide lockdown for a period of 21 days on 24.03.2020. Guidelines were issued by the National Disaster Management Authority for maintaining social distancing as well as the steps to be taken to prevent and arrest the spread of the pandemic. State of Maharashtra also enforced the aforesaid lockdown which was subsequently extended from time to time. In the meanwhile, guidelines issued for maintaining social distancing during the lockdown were revised from time to time by both the central government as well as by the state government.
3.3. According to the petitioners, workers of respondent No.7 were not paid wages from December 2019 onwards despite reporting for work regularly. It is stated that respondent No.7 was fully operational and all its workers had reported for duty during the period from December 2019 to March 2020 but they did not receive any wages for this period.
3.4. Though initially verbal instructions were issued by respondent No.7 to the workers to stop reporting for work from 19.03.2020, subsequently specific instructions were issued on 23.03.2020 calling upon the workmen not to report for work with effect from 24.03.2020.
3.5. Petitioners have stated that respondent No.7 was fully operational in its activities prior to the lockdown but halted its functioning from 24.03.2020 onwards due to declaration of lockdown. Subsequently, as per the guidelines of the central government dated 15.04.2020, industrial enterprises like respondent No.7 were permitted to commence operations being a permitted industrial establishment located in an industrial estate. But at the same time, central government had made it abundantly clear that certain conditions were required to be fulfilled for restarting industrial activities. Such standard operating procedure and related guidelines were in force till 18.05.2020. Allegation of the petitioners is that such standard operating procedure and guidelines were not followed by the management of respondent No.7 and carried out industrial activities in complete contravention of the guidelines.
3.6. As per order of the state government dated 02.05.2020, the industrial plant of respondent No.7 was located in an orange zone. Workers reside at far-off places and not nearby the factory. Because of restrictions imposed, they could not commute from their residence to the factory premises as they did not have any transportation of their own. As a matter of fact, no arrangements were made by respondent No.7 for transportation of the workers from their residence to the industrial plant or for stay of the workers in and around the factory premises. Notwithstanding the same, some of the workers did manage to make the journey from their residence to the industrial plant on their own but they were prevented from entering through the main gates of the factory. Other workers were unable to report for duty as no transportation was arranged by respondent No.7.
3.7. Result of the above was that workers in dire need of wages and fully willing to work were either unable to reach the premises of respondent No.7 or not allowed to enter.
3.8. Acting on a complaint made by the petitioners that respondent No.7 did not pay wages to the workers from December 2019 onwards, respondent No.5 i.e., Deputy Commissioner of Labour, Raigad issued a show cause notice to respondent No.7 on 04.05.2020 stating that respondent No.7 had violated section 5 of the Payment of Wages Act, 1936 and called upon respondent No.7 to clear the due wages of the workers with immediate effect. Unfortunately, respondent 3No.7 has not complied with the said show cause notice.
3.9. On the other hand respondent No.7 issued a notice dated 07.05.2020 alleging that its plant was closed on 20.03.2020 and that the workers had decided to stay at home much before declaration of lockdown further alleging that the workers represented by the petitioners had initiated an illegal strike against the company. Workers were called upon to resume their duties.
3.10. Petitioners have denied the allegations made against the workers by respondent No.7 in the notice dated 07.05.2020. Besides, petitioners have contended that respondent No.7 had not paid wages of the workers for the months of December 2019, January 2020 and February 2020. Petitioners responded to the said notice by a detailed letter dated 11.05.2020 particularly refuting the allegation that the workers were on strike.
3.11. It is stated that on 04.04.2020, a token payment of only Rs.1000.00 was made to the workers for the month of March 2020 and thereafter an amount of Rs.4,000.00 was paid on 16.04.2020 for the month of April 2020 which cannot be construed to be adequate payment considering the fact that no worker of respondent No.7 receives wages below Rs.8,000.00 per month. It is further stated that no worker of respondent No.7 has received more than 50% of a single month’s salary for the months of March, April and May 2020, besides not receiving any payment for the previous months of December 2019, January 2020 and February 2020.
3.12. It is further stated that respondent No.7 had circulated a notice dated 27.04.2020 sanctioning only 45 workers to report for duty. According to the petitioners, this will only go to show that there was no strike by the workers. Had the workers been on strike, question of calling the said group of workmen to report for duty would not have arisen.
3.13. After the lockdown was extended from 19.05.2020 till 31.05.2020, the workers made an attempt to reach the factory premises to report for work. However, they were not allowed to enter the premises. Resultantly, they waited the whole day outside the main gates of the factory with the hope that they would be allowed to enter into the factory premises and to resume their work but it was to no avail.
3.14. Petitioners have relied upon a circular dated 20.03.2020 of the Ministry of Labour and Employment, Government of India as well as order of the Ministry of Home Affairs, Government of India dated 29.03.2020 issued under section 10(2) of the Disaster Management Act, 2005 calling upon all employers to make payment of wages to their workers on the due date without any deduction for the period the establishment was under closure during the lockdown.
3.15. Reliance is also placed on consequential notification dated 31.03.2020 of the Industry, Energy and Labour Department, Government of Maharashtra clarifying that all the factory workers who had to remain at home due to outbreak of COVID-19 and lockdown should be deemed to be on duty and should be paid their full wages. In contravention of the above government directives, respondent No.7 has paid only Rs.1000.00 and Rs.4,000.00 respectively to the workers for the months of March and April 2020 besides wages for the months of December 2019, January 2020 and February 2020 having not been paid.
3.16. Petitioners had also represented before respondent Nos.1 to 6 on 13.05.2020 regarding non-payment of wages by respondent No.7 and the resultant distress conditions of the workmen. Unfortunately no action has been taken by respondent Nos.1 to 6 against respondent No.7.
3.17. It is with the above grievance that the present writ petition has been filed seeking the reliefs as indicated above.
4. Respondent Nos.3, 4 and 5 have filed a common reply affidavit through Shri. Pradeep Namdev Pawar, Deputy Commissioner of Labour, Raigad stating that since petitioners’ grievance primarily pertain to payment of wages for the period from December 2019 to 24th March 2020 till the date of lockdown, response of the said respondents would be confined to this grievance only, besides the answering respondents having no authority under the Disaster Management Act, 2005 to respond to the other grievances.
4.1. It is stated that petitioners and workers of respondent No.7 lodged complaints on 28.12.2019 and 28.04.2020 about delay in payment of wages as well as non-payment of wages by respondent No.7 to the workers. On receipt of the initial complaint, office of Deputy Commissioner of Labour, Raigad issued notice to respondent No.7 calling upon representatives of respondent No.7 for discussions on 06.02.2020 and 20.02.2020. However, respondent No.7 did not pay wages to the workmen on the ground of business difficulties attributable to the workmen themselves since December 2019.
4.2. It is stated that such act on the part of respondent No.7 either in delayed payment of wages or for non-payment of wages is violative of section 5 of the Payment of Wages Act, 1936 (referred to hereinafter as the ‘Payment of Wages Act’). Therefore, a show cause notice dated 04.05.2020 was issued to respondent No.7 by the Government Labour Officer, Raigad, being the competent authority under the aforesaid Act. Respondent No.7 submitted reply to the show cause notice through email on 11.05.2020 citing financial difficulties as the reason for nonpayment of wages.
4.3. Since the reply was found to be not satisfactory, the competent authority sought for approval from the sanctioning authority for prosecution. Accordingly, sanction for prosecution was granted on 26.05.2020. It is stated that the criminal complaint for violation of Payment of Wages Act would be filed by the Inspector i.e., the competent authority against respondent No.7. Finally, it is stated that office of respondent No.5 has taken due cognizance of the complaint and accordingly appropriate legal action has been initiated.
5. Respondent No.7 in its affidavit has raised preliminary objection as to maintainability of the writ petition. It is stated that alleged grievance of the petitioners is breach of the provisions contained in the Payment of Wages Act in which event section 15 thereof provides for an efficacious remedy. Since petitioners have statutory remedy for redressal of their grievance, High Court should not entertain the writ petition so filed in exercise of its extra-ordinary jurisdiction under Article 226 of the Constitution of India. It is further stated that petitioners have not approached the Court with clean hands. They have suppressed the fact that there is a registered trade union representing the workmen employed with respondent No.7 which is the Bhartiya Kamgar Karmachari Mahasangh registered under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. Respondent No.7 had entered into settlement with the said Mahasangh regarding payment of wages which have been accepted by the workmen.
Such settlement has been suppressed by the petitioners. Petitioners have also suppressed the fact that respondent No.7 had lodged a complaint against petitioner No.1 of indulging in unfair labour practice which has been registered as Complaint (ULP) No.265 of 2014 before the Industrial Court, Thane which is pending. Industrial Court has passed order in the said complaint prohibiting petitioner No.1 from forcibly preventing movement of men, material and vehicles into the factory premises. Of course, petitioner No.1 has also filed counter complaint against respondent No.7 before the Industrial Court at Thane which has been registered as Complaint (ULP) No.9 of 2020 which is pending. It is further stated that petitioners have suppressed the fact that respondent No.7 is a continuing process industry. Declaration of lockdown did not result in suspension of operation or closure of factory of respondent No.7. However, it is alleged that the workmen refused to report for work on and from 20.03.2020. Further stand taken is that Bhartiya Kamgar Karmachari Mahasangh being the recognized union of workmen of respondent No.7 is a proper and a necessary party which ought to have been added as a respondent. For non-joinder of necessary party, writ petition should be dismissed.
5.1. Petitioners’ claim to wages for the workmen is disputed on the ground that majority of the workmen did not report for duty during the period from December 2019 to February 2020. Therefore, the workmen are not entitled to wages for the said period as a matter of right. Besides, the issue as to payment of wages has been amicably resolved between respondent No.7 and the recognized trade union by way of settlement. As per the settlement, the condition precedent for receiving wages is that all workmen should resume duty and restore operation of the factory to the normal level. Wages are to be paid in six monthly installments after adjustment of advances paid to the workers.
5.2. On merit it is stated that Government of India, Ministry of Home Affairs notification dated 24.03.2020 has no application to respondent No.7 as it was one of the establishments which was not required to be closed during lockdown. Therefore, the industrial plant of respondent No.7 was not under closure during the lockdown. On the basis of the said notification, petitioners cannot claim wages for the lockdown period. In any case the said notification is under challenge before the Supreme Court in Writ Petition (Civil) Diary No.11193 of 2020, Hand Tools Manufacturers Association Vs. Union of India in which case Supreme Court while issuing notice has passed an interim order directing that no coercive action shall be taken in the meanwhile. Therefore, payment of wages as per Government of India notification dated 24.03.2020 is subjudiced before the Supreme Court.
5.3. After giving description of the factory of respondent No.7, facilities extended to workmen have been referred to. It is stated that there are about 350 employees of respondent No.7. Out of them, provision for accommodation of around 150 workers have been made by respondent No.7 in the neighbourhood of the factory. Besides, food was provided to the workers during the lockdown period. Workmen come to the factory on bicycle, scooter or motorcycle availing their own conveyance. Since the distance between residence of the workers and the factory being in close proximity, the notification directing the industrial units to provide transportation facilities to the workers would not be attracted in the case of respondent No.7.
5.4. Reference has been made to an industrial accident which took place on 11.07.2019 when the induction furnace got punctured and liquid metal started coming out. As a result fire had broken out in the plant. Because of the above accident, operations of the factory had come to a standstill for about 40 days leading to delayed payment of wages.
5.5. Reference has been made to the Industrial Employment (Standing Orders) Act, 1946 and the Rules framed thereunder as well as the Model Standing Orders. Reliance has been placed on clause 18 of the Model Standing Orders to contend that in the event of a fire etc., management may stop the factory without notice and without compensation to the workers. Despite heavy loss sustained by respondent No.7, it had entered into an understanding with the recognized trade union regarding payment of wages. As per the agreement, respondent No.7 agreed to advance Rs.5,000.00 per worker. Accordingly, a sum of Rs.1000.00 was paid on 04.04.2020 and a further sum of Rs.4,000.00 was paid on 16.04.2020 to each worker. It is further stated that the aforesaid amount of advance is to be adjusted against the payment of wages for the months of December 2019, January 2020 and February 2020, while denying that the advance so paid was against outstanding wages for the months of March and April 2020.
5.6. Respondent No.7 has filed a self-declaration dated 27.04.2020 before the authority declaring that it has complied with all the safety measures as per directives of Government of India as well as Government of Maharashtra.
5.7. Regarding the notice dated 07.05.2020, it is stated that factory of respondent No.7 remained closed since 20.03.2020 as the workers decided to stay at home. Workers were informed that there were neither any production activities nor any dispatches after 20.03.2020 due to which there was no inflow of cash to meet the expenses of respondent No.7. Workmen were requested to co-operate with the management.
5.8. Regarding the show cause notice issued by respondent No.5, it is stated that the same has been responded to by respondent No.7 on 11.05.2020 via e-mail. Referring to the settlement arrived at with the recognized trade union, it is stated that the amount agreed to be paid for the period from December 2019 to February 2020 in lieu of wages would be paid in six equated monthly installments and in response to the said notice, the recognized trade union vide letter dated 16.05.2020 agreed to resume work while assuring full co-operation to the management. On request of the recognized trade union, respondent No.7 agreed to pay one month’s wages to all the workers who resumed their duty while paying the balance amount in six equated installments spread over six months commencing from June 2020.
5.9. Respondent No.7 has alleged that petitioners have not resumed their work; rather they are threatening the management for which police complaint had to be lodged.
5.10. In such circumstances, respondent No.7 has contended that the workers are not entitled to any wages for the months of April 2020 and May 2020, further asserting that they will not be entitled to wages till they report for duty and commence normal work.
6. Petitioners have filed a composite rejoinder affidavit to the reply affidavit of respondent Nos.3, 4 and 5 on the one hand and reply affidavit of respondent No.7 on the other hand. Preliminary objections raised by respondent No.7 have been disputed and denied by the petitioners on the ground that petitioners seek compliance to government instructions to enable the workers to work in the factory of respondent No.7 while maintaining social distancing and adopting safety standards. Regarding settlement entered into between management of respondent No.7 and Bhartiya Kamgar Karmachari Mahasangh, it is stated that petitioners do not want to challenge the said settlement and therefore, Bhartiya Kamgar Karmachari Mahasangh is neither a necessary party nor a proper party to the present proceeding. That apart, petitioners are not aware of the settlement; even a copy thereof has not been placed on record. It is however contended that when a workman is denied wages or a union representing the workers whose wages have not been paid, can initiate proceedings for recovery of wages. Settlement cannot be contrary to the law. Workers are entitled to payment of wages that too on due date. The same cannot be diluted or divested by way of a settlement. Averments have been made regarding residence of some workers stating that those workers are residing in such area much before factory of respondent No.7 was set up. Many workers reside in far-off places and commute to the factory by way of public transport. In the absence of public transport during the lockdown, it became difficult, rather impossible for the workers to reach the factory. Therefore, prayer was made for arrangement of transportation by respondent No.7 for the workers.
6.1. Regarding the fire incident, it is stated that the same has got no relation to the present grievance of the petitioners. That apart, the accident has been magnified and blown out of proportion to blame the workers, thereby absolving respondent No.7 of its negligence and wrong doing. Without the co-operation of the workers, it would not have been possible for respondent No.7 to have started production again after the fire incident. Once production activity started, dispatch of finished goods never stopped which were continuously delivered to the customers. Provisions of the Standing Orders are not applicable to the facts of the present case. Regarding wages of the workers, it is stated that average wage of 90% of workers is between Rs.8,000.00 and Rs.16,000.00 per month and upto Rs.22,000.00 for 10% of workers. Allegation of respondent No.7 that the workers did not report for duty has been denied.
7. Respondent No.7 has filed an affidavit in sur-rejoinder to the rejoinder affidavit of the petitioners. Grievance has been made therein to an order passed by this Court on 15.06.2020 whereby a direction was given to respondent No.5 to take all possible steps as permissible under the law to ensure that the due wages are paid by respondent No.7 to its workmen. Regarding the fire incident, it is stated that respondent No.7 was entitled to lay-off the workers if the manufacturing activity had come to a standstill on account of the fire incident. However, because of the request made by the recognized union, such a course of action was not adopted by the management. Respondent No.7 and the recognized union have entered into a settlement vide the minutes of meeting dated 28.05.2020, copy of which has been placed on record. It is stated that as per the minutes of the meeting, workers have accepted payment of compensation equivalent to one month’s wages for the wage period i.e. December 2019 to March 2020. Workers who had earlier refused to resume duty and had prevented willing workmen from reporting for duty have now themselves reported for work. Attendance of workmen has been marked and payment for the month of June 2020 onwards shall be made as per record of attendance. As per the settlement, the workmen have received or shall receive compensation equivalent to full wages as per statement made in paragraph 10 of the said affidavit, which is extracted hereunder:-
