Home Legal News Financial Difficulties faced by Employers Cannot be a Ground for Non-Payment of Due Wages to Workers; U/Art. 21 of the Constitution: Bombay HC

Financial Difficulties faced by Employers Cannot be a Ground for Non-Payment of Due Wages to Workers; U/Art. 21 of the Constitution: Bombay HC

by Shreya
Bombay HC
The Bombay High Court has held that financial difficulties faced by employers can be no ground for non-payment of due wages to workers. Court noted that Payment of due wages is a fundamental right of a worker under Article 21 of the Constitution of India.

Division bench of Justice Ujjal Bhuyan and Justice NR Borkar was hearing a writ petition filed by Hind Kamgar Sanghatana through its President Shantaram Kadam for non-payment of wages since December last year.

The petitioner is a trade union claiming to represent 150 workers of M/s. India Steel Limited, which is a company engaged in the manufacture of steel bright bars and has a steel melting and rolling plant at Khopoli in Raigad district. The industrial plant of India Steel at Khopoli has two furnaces of 20 tonnes and 25 tonnes respectively, employing about 150 workers, both skilled and unskilled.

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According to the petitioners, workers were not paid wages from December 2019 onwards despite reporting for work regularly. Moreover, the company 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.

Though initially verbal instructions were issued by the said company to the workers to stop reporting for work from March 19, 2020, subsequently specific instructions were issued on March 23, 2020 calling upon the workmen not to report for work with effect from the next day.

Petitioners have contended that the company was fully operational in its activities prior to the lockdown but halted its functioning from March 24 onwards due to declaration of lockdown. Subsequently, as per the guidelines of the central government dated April 15, industrial enterprises like the respondent company were permitted to commence operations being a permitted industrial establishment located in an industrial estate.

But at the same time, the 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 May 18. Allegation of the petitioners is that such standard operating procedure and guidelines were not followed by the management of the company and industrial activities were carried out in complete contravention of the guidelines.

As per order of the state government dated May 2, 2020, the industrial plant of the company was located in an orange zone. Workers reside at far-off places and not near the factory. Because of restrictions imposed on travelling, they could not commute from their residence to the factory premises as they did not have any transportation of their own.


However, it was submitted on behalf of the petitioners that no arrangements were made by the company for transportation of the workers from their residence to the industrial plant or for stay of the workers in and around the factory premises. Although, 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.

Thereafter, acting on a complaint made by the petitioners that the company did not pay wages to the workers from December 2019 onwards, the Deputy Commissioner of Labour, Raigad issued a show cause notice to the said company on May 4 stating that they had violated section 5 of the Payment of Wages Act, 1936 and called upon the company to clear the due wages of the workers with immediate effect. Unfortunately, the respondent company has not complied with the said show cause notice.

On the other hand, the respondent company issued a notice dated May 7 alleging that its plant was closed on March 20 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.

Reference was made to an industrial accident which took place on July 11, 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, Advocates Shailesh Naidu and Sairam Chandanani submitted on behalf of the respondent company.

Whereas, Senior Advocate Gayatri Singh appeared on behalf of the petitioners and contended that the company had circulated a notice dated April 27, 2020 sanctioning only 45 workers to report for duty. This will only go to show that there was no strike by the workers. Had the workers been on strike, the question of calling the said group of workmen to report for duty would not have arisen, Singh argued.

Regarding the fire incident, Adv Gayatri Singh submitted 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 the respondent company of its negligence and wrong doing. Without the cooperation of the workers, it would not have been possible for the company to have started production again after the fire incident, Singh said.

On behalf of the respondents, a common affidavit in reply was filed by Pradeep Namdev Pawar, Deputy Commissioner of Labour, Raigad. The affidavit states that the company submitted a reply to the show cause notice issued by Deputy Commissioner of Labour through email on May 11, 2020 citing financial difficulties as the reason for nonpayment of wages.

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 May 26. It is stated in the common affidavit that the criminal complaint for violation of Payment of Wages Act would be filed by the Inspector i.e., the competent authority against the respondent company. 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.

Whereas the company in its affidavit has raised preliminary objection as to maintainability of the writ petition. Moreover, it was alleged that the 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 them (company) which is the Bhartiya Kamgar Karmachari Mahasangh and the company had entered into settlement with the said Mahasangh regarding payment of wages which have been accepted by the workmen, it was contended.

Finally, after hearing submissions of all parties, the bench observed-

“Pausing here for a moment, we may ask ourselves whether in the absence of due wages or delayed payment of due wages by several months not authorized under the statute in question i.e., Payment of Wages Act, can a person be said to live with human dignity? The answer to us appears to be quite obvious. Denial of due wages either by way of non-payment or by way of deferred payment or by way of installments would certainly infringe upon the cherished human right of a workman under Article 21 of the Constitution of India.”

Thereafter, the bench referred to the argument of settlement by the company-

“Even if for the sake of argument it is construed to be a settlement, in our view, such a settlement may not be sustainable in law. As per this settlement, wages for the month of December 2019 would be deposited into the accounts of the workmen on or after May 28, 2020 which is almost after a period of five months.

Balance outstanding wages would be paid by September 2020 contingent upon export of products by respondent No.7.

Payment of due wages is a fundamental right of a worker under Article 21 of the Constitution. Financial difficulties of employers 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.”

Thus, Court directed the respondent authorities to pursue the complaint made by the petitioners against the respondent company under section 15 of the Payment of Wages Act and carry it to its logical conclusion within a period of three months. The order dated June 15, 2020 directing the respondent company to pay due wages to the workers, has been made absolute.

Importantly, Court asked Deputy Commissioner of Labour, Raigad and Superintendent of Police, Raigad to carry out joint inspection of the factory premises of respondent company at Khopoli within a period of 15 days and submit a report about safety measures adopted by the company as well as compliance to various government instructions by the company in view of Covid-19 situation.

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