Karnataka HC has recently ruled that employers should be consulted when fixing or revising minimum wages.
This decision came after a division bench comprising Chief Justice N V Anjaria and Justice K V Aravind heard an appeal by various employers’ associations, including the Karnataka Employers Association.
The ruling overturned a single judge’s order from September 26, 2023, which had set aside a government notification issued on July 28, 2023, revising minimum wages for foundry employments.
The single judge’s decision was based on petitions filed by trade unions, including the All India Trade Union Congress (R), Karnataka State Committee, and Engineering & General Works Union.
Employers as Stakeholders: Legal Arguments
The High Court emphasized that employers are crucial stakeholders whose obligations are directly impacted by minimum wage revisions.
The court noted that excluding employers from the process would render the exercise unjust and arbitrary.
The bench stated that employers should have the opportunity to present their position before the government issues notifications regarding minimum wages.
The employers’ associations argued that they were unfairly excluded from the single judge proceedings. This was despite their prior representations to the Advisory Board.
They also highlighted that the trade unions’ demand for a living wage differs significantly from minimum wage considerations.
The employee unions countered that Sections 3 and 5 of the Minimum Wages Act, 1948, do not distinguish between fixing and revising wages.
They argued that the notification was legislative in nature and did not require a hearing.
Karnataka HC Ruling and its Implications for Employers
The High Court determined that while the notification could be considered subordinate legislation, the process leading to it involves a statutory exercise.
This exercise requires reasonable implementation.
Karnataka HC emphasized that principles of natural justice are integral to such statutory procedures.
The matter has been returned to the single judge for fresh consideration, with instructions to hear the appellants’ arguments.
The entire process must be completed within 10 weeks.
This ruling has significant implications for employers, as it ensures their voices are heard in the wage revision process.
It also highlights the importance of fair and transparent procedures in setting minimum wages.
These procedures can impact the financial health and operational efficiency of businesses.
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