Gujarat High Court Upholds Award Passed By Industrial Tribunal Based On Principle Of 'Equal Pay For Equal Work'

A division Bench of the Gujarat High Court comprising of Justices A S Supehia and Mauna M Bhat of the Gujarat has held that if employees who perform similar duties as their colleagues aren't given benefits such as allowances attached to a pay structure, it will be discriminatory and against the principle of 'equal pay for equal work'.

Background:

A settlement was entered into between Hindustan Chemicals Company (appellant) and its employees on 21.03.1996. As per the settlement, the benefits arising out of the settlement would extend only to the employees who were employed in the Company before 31.12.1994.

Seventeen employees who joined the employment after 31.12.1994 and were not signatories to the settlement dated 21.03.1996 approached the Industrial Tribunal claiming the benefits that arose out of the settlement. The Industrial Tribunal passed an award granting benefits to them. Consequently, the Company filed a writ petition against the award before the Single Judge who affirmed the award citing the principle of 'equal pay for equal work'. The Single Judge referred to the decision of the Apex Court in Jagjit Singh & Ors wherein it was held;

"In our considered view, it is fallacious to determine artificial parameters to deny fruits of labour. An employee engaged for the same work cannot be paid less than another who performs the same duties and responsibilities. Certainly not, in a welfare State. Anyone, who is compelled to work at a lesser wage does not do so voluntarily. He does so to provide food and shelter to his family, at the cost of his self-respect and dignity, at the cost of his self-worth, and at the cost of his integrity. For he knows that his dependants would suffer immensely, if he does not accept the lesser wage."

The Single Judge also cited the case of Sabha Shanker Dube that followed the case of Jagjit Singh & Ors. , 2016 SCC OnLine SC 1200, where the Supreme court disagreed with the High Court's decision that the Appellants didn't deserve to be paid the minimum salary. The Apex Court had also held that temporary employees had the right to the minimum pay while they are working, as held in the case of Jagjit Singh & Ors.

Citing the principle of 'equal pay for equal work' based on a catena of judgments including Mohammad Alimam and others, National Engineering Industries Ltd., the Single Judge upheld the Award of the Tribunal holding that no error was committed by the Tribunal in granting the benefits arising out of the settlement to the workers who were not signatories to the settlement.

Aggrieved by the decision of both the Tribunal and the Single Judge, the Company filed an appeal before the Division Bench.

Contentions by the appellant:Relying on the judgement of the Apex Court in National Engineering Industries Ltd. Vs. State of Rajasthan & Ors (2000) 1 SCC 371, the counsel for the appellant company submitted that the petitioners were not entitled to any benefits as the terms of the settlement were only applicable to those employees, who were in employment before 31.12.1994. It was contended that the respondents not having signed the settlement could not avail any benefits having joined the employment after 31.12.1994.

It was further submitted that although the respondents were paid wages as per the wage structure of the settlement, they were not entitled to other allowances because certain conditions as mentioned in the settlement were not fulfilled by them. The Counsel also mentioned that the employees who were signatories to the settlement were bound by it as it was a settlement under 2(p) read with Section 18(1) of the Industrial Disputes Act, 1947.

Contentions by the Respondents:

The counsel argued that the non-payment of allowances to the respondents despite being paid wages as per the basic wage structure was discriminatory. It was submitted that the judgement of the Single Judge was justified as per the Supreme Court. The Tribunal had held that the respondents can not be discriminated against their colleagues based on the settlement being employed in the same department. It was submitted that there was no need for any interference in the award of the Tribunal which was later upheld by the Single judge.

Findings of the Court:

The court perused clause 7 of the settlement which stated, “that the terms of the settlement shall be applicable to the permanent workman employed in the company on 31st December, 1994 and are still in employment of the Company. Further it is clarified that no benefit in any manner will be payable to those workmen who have joined the company or who will be joining the company after 31st December, 1994.”

It was observed that there was no dispute regarding the appointment of the respondents after 31.12.1994. It held that the respondents working in different departments had a similar wage structure, however the allowances attached to the wage structure were not availed by them as per the settlement like their colleagues.

The Court held that the appellant Company did not dispute that the work performed by the respondent-employees was similar to that of their colleagues in the same departments. Since the Company had implemented a pay structure and associated allowances, the same would apply to all employees under the principle of "equal pay for equal work," unless a distinction in job responsibilities was demonstrated.

The Court held that it would be discriminatory if the employees working in the same department, performing similar work/duties would have two different wages/allowances.

Making these observations, the Court dismissed the appeal filed by the Company and affirmed the decision of the Tribunal and the Single Judge.

Case title: HINDUSTAN CHEMICALS COMPANY Versus CYANIDES AND CHEMICALS KARMACHARI SANGH & ANR

LL Citation: 2024 LiveLaw (Guj) 138

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