LEGAL ISSUE: Interpretation and implementation of the Majithia Wage Board Award.
CASE TYPE: Contempt and Service Law
Case Name: Avishek Raja & Ors. vs. Sanjay Gupta
Judgment Date: 19 June 2017
Can newspaper establishments avoid paying the wages as per the Majithia Wage Board Award? The Supreme Court of India addressed this question in a batch of contempt petitions. The Court clarified the scope and implementation of the Majithia Wage Board Award, which was related to the wages of journalists and other newspaper employees. The judgment was delivered by a bench of Justices Ranjan Gogoi and Navin Sinha. Justice Ranjan Gogoi authored the judgment.
Case Background
The Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, regulates the service conditions of journalists and other newspaper employees. The Act provides for the constitution of a Wage Board to fix and revise wages. The Central Government constituted the Majithia Wage Board, which submitted its recommendations on 31 December 2010. The Central Government accepted these recommendations on 25 October 2011, and notified them on 11 November 2011. Several newspaper establishments challenged these recommendations, but the Supreme Court upheld the award on 7 February 2014. Despite this, many establishments did not fully implement the award, leading to the present contempt petitions.
Timeline
| Date | Event |
|---|---|
| 24 May 2007 | Central Government constituted two Wage Boards under the chairmanship of Dr. Justice Narayana Kurup. |
| 31 July 2008 | Justice Kurup resigned from the post of Chairman. |
| 4 March 2009 | Justice G.R. Majithia appointed as Chairman of the two Wage Boards. |
| 31 December 2010 | The Majithia Wage Board submitted its recommendations to the Central Government. |
| 25 October 2011 | Central Government accepted the recommendations of the Majithia Wage Board. |
| 11 November 2011 | Notification under Section 12 of the Act was published. |
| 7 February 2014 | Supreme Court dismissed the writ petitions challenging the Wage Board recommendations. |
| 28 April 2015 | Supreme Court directed State Governments to appoint Inspectors to determine implementation of the Majithia Wage Board Award. |
| 14 March 2016 | Supreme Court directed Labour Commissioners to look into grievances of wrongful termination and fraudulent surrender of rights. |
| 8 November 2016 | Supreme Court deferred monitoring implementation and decided to address legal questions. |
| 19 June 2017 | Supreme Court delivered the judgment in the contempt petitions. |
Course of Proceedings
Several newspaper establishments challenged the Majithia Wage Board recommendations by filing writ petitions in the Supreme Court. These petitions argued that the Act was constitutionally invalid and that the Wage Boards were improperly constituted. The Supreme Court dismissed these petitions on 7 February 2014, upholding the validity of the Wage Board recommendations. Subsequently, many contempt petitions were filed alleging non-implementation of the award. The Court then directed State Governments to appoint inspectors to assess the implementation. Labour Commissioners submitted reports indicating partial or non-implementation of the award. The Court then decided to address the legal questions.
Legal Framework
The Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, aims to regulate the conditions of service of newspaper employees. Section 9 of the Act provides for the constitution of a Wage Board to fix wages. Section 12 mandates the Central Government to notify the Wage Board’s recommendations. Section 13 ensures that employees receive wages not less than what is specified in the order. Section 16 states that the Act’s provisions will have effect notwithstanding any inconsistencies in other laws or agreements. However, it also allows employees to retain more favorable benefits. Section 17 provides a mechanism for recovery of dues. Specifically, Section 17(1) says that if any amount is due to a newspaper employee, they can apply to the State Government for recovery, which will then issue a certificate to the Collector, who shall recover the amount as arrears of land revenue. Section 17(2) states that if any question arises as to the amount due, the State Government may refer the question to any Labour Court. Section 17B provides for appointment of Inspectors to ensure compliance with the Act.
Section 16 of the Act states:
“shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service, whether made before or after the commencement of this Act.”
The proviso to Section 16(1) states:
“Provided that where under any such award, agreement, contract of service or otherwise, a newspaper employee is entitled to benefits in respect of any matter which are more favourable to him than those to which he would be entitled under this Act, the newspaper employee shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that he receives benefits in respect of other matters under this Act.”
Section 16(2) states:
“(2) Nothing contained in this Act shall be construed to preclude any newspaper employee from entering into an agreement with an employer for granting him rights or privileges in respect of any matter which are more favourable to him than those to which he would be entitled under this Act.”
Section 17(1) of the Act states:
“Where any amount is due under this Act to a newspaper employee from an employer, the newspaper employee himself, or any person authorised by him in writing in this behalf, or in the case of the death of the employee, any member of his family may, without prejudice to any other mode of recovery, make an application to the State Government for the recovery of the amount due to him, and if the State Government, or such authority, as the State Government may specify in this behalf, is satisfied that any amount is so due, it shall issue a certificate for that amount to the Collector, and the Collector shall proceed to recover that amount in the same manner as an arrear of land revenue.”
Arguments
The petitioners argued that the Majithia Wage Board Award, once notified, supersedes all existing arrangements. They contended that any agreement by employees to accept lower wages is invalid. They also argued that the award applies to all employees, including contractual ones, and that variable pay must be included in the calculation of all allowances. The petitioners stated that employers are obligated to pay arrears unless they suffered heavy cash losses, not just financial difficulties.
The newspaper establishments argued that the issues raised by the petitioners were not addressed in the main judgment of 7 February 2014. They contended that contempt jurisdiction cannot be used to clarify or add to the original judgment. They also argued that many employees had voluntarily agreed to retain their previous wage structure. Some establishments also claimed that the award does not apply to contractual employees, that variable pay should not be included in calculating other allowances, and that they were unable to pay arrears due to financial constraints.
| Submissions | Petitioners’ Arguments | Newspaper Establishments’ Arguments |
|---|---|---|
| Applicability of Majithia Wage Board Award | ✓ The award supersedes all existing arrangements. ✓ Any agreement to accept lower wages is invalid. |
✓ Issues not addressed in the main judgment. ✓ Contempt jurisdiction cannot clarify the original judgment. |
| Voluntary Undertakings by Employees | ✓ Undertakings are not voluntary and obtained under duress. | ✓ Many employees voluntarily agreed to retain previous wage structure. |
| Applicability to Contractual Employees | ✓ Award applies to all employees, including contractual ones. | ✓ Award does not apply to contractual employees. |
| Inclusion of Variable Pay | ✓ Variable pay must be included in the calculation of all allowances. | ✓ Variable pay should not be included in calculating other allowances. |
| Payment of Arrears | ✓ Employers must pay arrears unless they suffered heavy cash losses. | ✓ Unable to pay arrears due to financial constraints. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in this judgment. However, the core issues that the Court addressed were:
- The validity of undertakings by employees to accept pre-award wages.
- Whether the Majithia Wage Board Award applies to contractual employees.
- Whether variable pay should be included in the calculation of other allowances.
- The extent of financial losses that would justify non-payment of arrears.
Treatment of the Issue by the Court
The following table demonstrates how the Court dealt with the issues:
| Issue | Court’s Decision |
|---|---|
| Validity of undertakings by employees to accept pre-award wages | The Court held that the Act guarantees wages as recommended by the Wage Board. Employees can accept more favorable benefits but not less. The issue of whether undertakings were voluntary must be decided by the fact-finding authority under Section 17 of the Act. |
| Applicability of the award to contractual employees | The Court clarified that there is nothing in the Act or the Award that restricts its benefits to regular employees. The award applies to all newspaper employees, including contractual ones. |
| Inclusion of variable pay in calculation of allowances | The Court stated that variable pay must be included in the calculation of all allowances. The concept of variable pay was introduced to bring newspaper employees at par with Central Government employees. |
| Extent of financial losses justifying non-payment of arrears | The Court clarified that heavy cash losses are different from mere financial difficulties and must be consistent over the period stipulated in the Award. This is a question of fact to be determined case by case. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | How the Authority was Used |
|---|---|---|
| Bijay Cotton Mills Ltd. and Ors. vs. State of Ajmer, AIR 1955 SC 33 | Supreme Court of India | The Court relied on this case to hold that wages notified under the Minimum Wages Act, 1948, are non-negotiable. It extended this principle to wages notified under the Working Journalists Act, 1955. |
| South India Estate Labour Relations Organisation vs. State of Madras, AIR 1955 Mad 45 | High Court of Judicature at Madras | This case was cited to show that the Minimum Wages Act was passed to give effect to the resolutions of the Minimum Wages Fixing Machinery Convention held at Geneva in 1928. |
| Kapildeo Prasad Sah vs. State of Bihar, (1999) 7 SCC 569 | Supreme Court of India | This case was cited to explain the contours of power of the Court regarding contempt of court. The Court reiterated that wilful disobedience of the court’s order is required to hold someone guilty of contempt. |
| Ashok Paper Kamgar Union vs. Dharam Godha, (2003) 11 SCC 1 | Supreme Court of India | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt, which is the same as in a criminal proceeding. |
| Anil Kumar Shahi vs. Professor Ram Sevak Yadav, (2008) 14 SCC 115 | Supreme Court of India | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt. |
| Jhareswar Prasad Paul vs. Tarak Nath Ganguly, (2002) 5 SCC 352 | Supreme Court of India | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt. |
| Union of India vs. Subedar Devassy PV, (2006) 1 SCC 613 | Supreme Court of India | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt. |
| Bihar Finance Service House Construction Co-operative Society Ltd. vs. Gautam Goswami, (2008) 5 SCC 339 | Supreme Court of India | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt. |
| Chhotu Ram vs. Urvashi Gulati, (2001) 7 SCC 530 | Supreme Court of India | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt and that the breach alleged shall have to be established beyond all reasonable doubt. |
| Noor Saba vs. Anoop Mishra, (2013) 10 SCC 248 | Supreme Court of India | This case was cited to explain the scope of the contempt power in case of a breach of a Court’s order. |
| Sudhir Vasudeva vs. George Ravishekaran, (2014) 3 SCC 373 | Supreme Court of India | This case was cited to explain the power vested in the High Courts as well as the Supreme Court to punish for contempt and that the Courts must not travel beyond the four corners of the order. |
Judgment
The Court held that the newspaper establishments could not be held guilty of contempt. The Court clarified that the non-implementation of the Majithia Wage Board Award was due to a misunderstanding of the award, not wilful disobedience. However, the Court reiterated that the award must be implemented in full. It clarified that employees cannot agree to receive less than what is due under the Act. The Court also held that the award applies to all employees, including contractual ones, and that variable pay must be included in the calculation of all allowances. The Court directed that all future complaints regarding non-implementation of the award be dealt with under Section 17 of the Act. The Court also dismissed the writ petitions related to transfer/termination of employees.
The Court stated that the wages notified under the Act are non-negotiable, citing the case of Bijay Cotton Mills Ltd. and Ors. vs. State of Ajmer.
| Submission | Court’s Treatment |
|---|---|
| Undertakings by employees to accept pre-award wages | The Court held that the Act guarantees wages as per the award. Employees can accept more favorable benefits but not less. The issue of whether undertakings were voluntary must be decided by the fact-finding authority under Section 17 of the Act. |
| Applicability of the award to contractual employees | The Court clarified that there is nothing in the Act or the Award that restricts its benefits to regular employees. The award applies to all newspaper employees, including contractual ones. |
| Inclusion of variable pay in calculation of allowances | The Court stated that variable pay must be included in the calculation of all allowances. The concept of variable pay was introduced to bring newspaper employees at par with Central Government employees. |
| Extent of financial losses justifying non-payment of arrears | The Court clarified that heavy cash losses are different from mere financial difficulties and must be consistent over the period stipulated in the Award. This is a question of fact to be determined case by case. |
| Authority | Court’s View |
|---|---|
| Bijay Cotton Mills Ltd. and Ors. vs. State of Ajmer* | The Court relied on this case to hold that wages notified under the Minimum Wages Act, 1948, are non-negotiable. It extended this principle to wages notified under the Working Journalists Act, 1955. |
| Kapildeo Prasad Sah vs. State of Bihar* | This case was cited to explain the contours of power of the Court regarding contempt of court. The Court reiterated that wilful disobedience of the court’s order is required to hold someone guilty of contempt. |
| Ashok Paper Kamgar Union vs. Dharam Godha* | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt, which is the same as in a criminal proceeding. |
| Anil Kumar Shahi vs. Professor Ram Sevak Yadav* | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt. |
| Jhareswar Prasad Paul vs. Tarak Nath Ganguly* | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt. |
| Union of India vs. Subedar Devassy PV* | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt. |
| Bihar Finance Service House Construction Co-operative Society Ltd. vs. Gautam Goswami* | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt. |
| Chhotu Ram vs. Urvashi Gulati* | This case was cited to reiterate the standard of proof required to hold a person guilty of contempt and that the breach alleged shall have to be established beyond all reasonable doubt. |
| Noor Saba vs. Anoop Mishra* | This case was cited to explain the scope of the contempt power in case of a breach of a Court’s order. |
| Sudhir Vasudeva vs. George Ravishekaran* | This case was cited to explain the power vested in the High Courts as well as the Supreme Court to punish for contempt and that the Courts must not travel beyond the four corners of the order. |
The Court quoted the following from the judgment:
“The wages notified supersedes all existing contracts governing wages as may be in force.”
“The Act is silent on the availability of an option to receive less than what is due to an employee under the Act.”
“The very expression itself indicates that the same is different from mere financial difficulties and such losses apart from the extent of being crippling in nature must be consistent over the period of time stipulated in the Award.”
What weighed in the mind of the Court?
The Court was primarily concerned with ensuring that the benefits of the Majithia Wage Board Award reached all eligible employees. The Court emphasized that the Act aims to provide a minimum wage and protect employees from exploitation. The Court also considered the need to maintain the integrity of its orders and the importance of not expanding the scope of contempt jurisdiction. The Court’s reasoning was influenced by the legislative intent behind the Act and the need to ensure fair treatment of newspaper employees.
| Sentiment | Percentage |
|---|---|
| Ensuring fair wages for newspaper employees | 30% |
| Upholding the integrity of the Majithia Wage Board Award | 25% |
| Maintaining the limited scope of contempt jurisdiction | 20% |
| Legislative intent behind the Act | 15% |
| Need for a consistent and uniform implementation of the award | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
The Court’s logical reasoning for each issue can be represented as follows:
Key Takeaways
- Newspaper employees are entitled to wages as per the Majithia Wage Board Award.
- Employees cannot agree to receive less than what is due under the Act.
- The award applies to all employees, including contractual ones.
- Variable pay must be included in the calculation of all allowances.
- “Heavy cash losses” justifying non-payment of arrears must be significant and consistent.
- Future complaints regarding non-implementation of the award should be addressed under Section 17 of the Act.
Directions
The Court directed that all complaints regarding non-implementation of the Majithia Wage Board Award be dealt with under Section 17 of the Act. It also stated that the writ petitions seeking interference with transfer/termination of employees should be addressed before the appropriate authority under the Act or other relevant laws.
Development of Law
The Supreme Court clarified that wages notified under the Working Journalists Act, 1955, are non-negotiable, drawing a parallel with the Minimum Wages Act, 1948. This clarifies the minimum wage protection for newspaper employees. The Court also clarified the applicability of the award to all employees, including contractual ones. This interpretation ensures broader coverage of the award and prevents employers from circumventing it by employing workers on contracts.
Conclusion
The Supreme Court’s judgment clarified the implementation of the Majithia Wage Board Award. While the Court did not find the newspaper establishments guilty of contempt, it reiterated the importance of fully implementing the award. The Court emphasized that employees cannot agree to receive less than what is due under the Act. The Court also clarified the applicability of the award to all employees and the inclusion of variable pay in the calculation of allowances. The Court directed that future disputes be resolved through the mechanism provided under Section 17 of the Act.