Gujarat High Court Explains The Meaning Of "Full Wages Last Drawn" Under Section 17(B) of Industrial Disputes Act

Background

In the instant case, the Respondents were appointed in the company and their services were terminated as per the terms and conditions of their appointment letter. They were also paid three month's notice pay. Thereafter, the Respondents raised an industrial dispute against the Appellant-Company for reinstatement with full back wages which culminated into an award in their favour by the Labour Court. The Court directed the Appellant-Company to reinstate them and grant 20% back wages. The Appellant filed separate appeals against each award in Special Civil Applications. The Single Judge Bench directed the payment of ad-interim relief under Section 17(B) of the ID Act during the pendency of the applications. The aggrieved Appellant filed Civil Applications for direction in all Special Civil Applications, praying to vacate the directions under Section 17(B). The same was rejected by the Single Judge Bench.

The Appellant-Company filed Letter Patent Appeal against the aforesaid order on the ground that the workmen shall not be entitled to wages higher than minimum rates of wages payable from time-to-time as under the Minimum Wages Act ('MWA') as relief under Section 17(B). The Appellant has further contended that the Respondents were working as officers in the Management Cadre of the Company and were getting benefit as per performance appraisal method. The rest of the workmen were deriving wages and benefits as per Section 2(p) of the ID Act. Therefore, the Respondents were not 'workmen' within the meaning of Section 2(s) of the ID Act. Thus, they are not entitled to any benefit under Section 17(B) of the ID Act.

Additionally, the purpose of section 17(B) is to provide relief to the workman during the pendency of the proceedings and alleviate the hardship that is caused to the workman due to delay in implementation of the award. However, this amount is for the subsistence of the workman and should not be a windfall profit or unjust enrichment without doing any work. The Appellant claimed that the wages of the Respondent-workmen at the time of their termination far exceeds the subsistence allowance and hence, the same should not be granted. If the term 'full wages last drawn' is given a literal interpretation, then the sum granted to the workmen would be five times the minimum rate of wages as per the MWA. The Appellant relied on Uttaranchal Forest Department Corporation and Anr. vs K. B. Singh and Ors. (2005) 11 SCC 449]. [(2005) 11 SCC 449] where the Supreme Court had directed the payment of wages last drawn under Section 17(B) from the date of filing of the affidavit.Uttaranchal Forest Department Corporation and anr. vs. K. B. Singh and ors.

The Respondent-Workmen while supporting the impugned order argued that the ID Act is a beneficial legislation aimed at protecting the right of the workmen. Therefore, the phrase 'full wages last drawn' must be given a literal meaning to prevent any detriment to the workman. The phrase cannot be 'read down' to interpret it as wages under MWA. This interpretation of the phrase has been upheld in a catena of judgements including Dena Bank vs Kiritkumar T Patel [AIR 1998 SC 511].

Judgement

The Court identified primarily two questions for consideration:

1. Whether the workmen are to be paid minimum wages as per the MWA in lieu of full wages last drawn under Section 17(B) of the ID Act.
2. Such wages should be paid from which date ie., from the date of the award or from the date of filing of Writ Petition or from the date of filing affidavit as under Section 17(B).

For the first question, the Court observed:

"The Hon'ble Supreme Court, as well as this Court, have held that the provisions of Section 17(B) of the Act have to be read in a plain manner without adding or substituting or omitting any word and it is not open to the court to interpret or alter or amend the same"

"The Hon'ble Supreme Court, as well as this Court, have held that the provisions of Section 17(B) of the Act have to be read in a plain manner without adding or substituting or omitting any word and it is not open to the court to interpret or alter or amend the same."

"Thus, it is the duty of the Court to interpret the provisions of this legislation in a manner that benefits the workmen and fulfils the objective for which it was enacted by the Parliament. Therefore, if the employer does not reinstate the worker, the provisions of Section 17(B) would come into action. This provision cannot be read down and must be construed literally".

As regards the second question, the Court rejected the argument of the Appellant arising from the Uttaranchal Forest judgement. In the said case, the workmen had failed to file an affidavit and therefore, the Supreme Court granted the benefits of Section 17(B). The factual matrix of this case differs and therefore, the term 'during period of pendency of such proceedings before the High Court or Hon'ble Supreme Court' indicates that the workman is entitled to full wages during the pendency of proceedings at the High Court and not from the date of filing of affidavit.

The Court clarified:

"The purpose of filing affidavit by the workman is to bring fact on record that the workman was not employed in any establishment during the period of pendency of proceedings either in the High Court or Hon'ble Supreme Court."

"The purpose of filing an affidavit by the workman is to bring facts on record that the workman was not employed in any establishment during the period of pendency of proceedings either in the High Court or Hon'ble Supreme Court"

Accordingly, the Letters Patent Appeals were dismissed.

Case Title: Ineos Styrolution India Limited vs Shaileshbhai Manibhai Patel

Case No: C/LPA/1023/2021

Case citation: 2022 LiveLaw (Guj) 7

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