LEGAL ISSUE: Whether the State Government can modify a minimum wage notification by way of an errata notification, without following the procedure for fixing or revising minimum wages under the Minimum Wages Act, 1948.
CASE TYPE: Labour Law
Case Name: Gomantak Mazdoor Sangh vs. State of Goa & Anr.
[Judgment Date]: 10 May 2022
Date of the Judgment: 10 May 2022
Citation: 2022 INSC 442
Judges: M.R. Shah, J. and B.V. Nagarathna, J.
Can a government correct a notification regarding minimum wages simply by issuing an errata, or does it need to follow the full legal process? The Supreme Court of India recently tackled this question in a case concerning the State of Goa’s minimum wage revisions. The core issue revolved around whether the State could alter a previously issued notification that included a special allowance for workers, by issuing a simple errata notification which removed the special allowance. The bench comprised Justices M.R. Shah and B.V. Nagarathna, with the judgment authored by Justice M.R. Shah.
Case Background
The State of Goa initially issued a notification on 23/24 May 2016, revising minimum wages for various sectors. This notification, made under the Minimum Wages Act, 1948, included both basic wages and a special allowance linked to the Consumer Price Index. However, on 14 July 2016, the State issued an Errata Notification, which changed the legal basis of the wage calculation from Section 4(1)(i) to Section 4(1)(iii) of the Minimum Wages Act, 1948. This effectively removed the special allowance, making the minimum wage an all-inclusive rate. The Gomantak Mazdoor Sangh, a labor union, challenged this Errata Notification, arguing that the State could not alter the original notification without following the full procedure required for revising minimum wages.
Timeline:
| Date | Event |
|---|---|
| 23/24 May 2016 | State of Goa issues notification revising minimum wages, including basic wages and special allowance under Section 4(1)(i) of the Minimum Wages Act, 1948. |
| 14 July 2016 | State of Goa issues Errata Notification, changing the basis of wage calculation to Section 4(1)(iii) of the Minimum Wages Act, 1948, removing the special allowance. |
| 2016 | Gomantak Mazdoor Sangh files a writ petition before the High Court of Judicature at Bombay at Goa, challenging the Errata Notification. |
| 01 August 2016 | The High Court of Judicature at Bombay at Goa dismisses the writ petition. |
| 10 May 2022 | Supreme Court of India allows the appeal, quashes the Errata Notification, and restores the original notification of 23/24 May 2016. |
Course of Proceedings
The Gomantak Mazdoor Sangh filed a writ petition before the High Court of Judicature at Bombay at Goa, challenging the Errata Notification dated 14 July 2016. The State argued that the original notification of 23/24 May 2016 contained a clerical error, and that the Errata Notification was merely a correction under Section 10 of the Minimum Wages Act, 1948. The High Court accepted the State’s argument and dismissed the writ petition. Aggrieved by the High Court’s decision, the labor union appealed to the Supreme Court of India.
Legal Framework
The case primarily revolves around the interpretation of the Minimum Wages Act, 1948, specifically Sections 4, 5, and 10.
✓ Section 4(1) of the Minimum Wages Act, 1948 outlines three methods for fixing minimum wages:
- (i) a basic rate of wages and a special allowance…
- (ii) a basic rate of wages with or without the cost of living allowance…
- (iii) an all-inclusive rate…
✓ Section 5 of the Minimum Wages Act, 1948 details the procedure for fixing and revising minimum wages, requiring either the appointment of committees or the publication of proposals for public feedback.
✓ Section 10 of the Minimum Wages Act, 1948 allows the government to correct clerical or arithmetical mistakes in wage orders.
The Minimum Wages Act, 1948 is a social welfare legislation enacted to ensure fair wages for workers in scheduled employments. It empowers the appropriate government to fix and revise minimum rates of wages payable to employees in such employments. The Act aims to prevent exploitation of labor by ensuring that wages are not below a certain minimum level.
Arguments
Appellant’s Arguments (Gomantak Mazdoor Sangh):
- The appellant argued that the original notification dated 23/24 May 2016 was issued after following the due procedure under Sections 4 and 5 of the Minimum Wages Act, 1948, including consultations with the Minimum Wage Advisory Board.
- The decision to include a special allowance was a conscious one, not a clerical error.
- The Errata Notification dated 14 July 2016, which removed the special allowance, was illegal as it did not follow the procedure required for revising minimum wages under the Minimum Wages Act, 1948.
- The appellant relied on Section 21 of the General Clauses Act, 1897, arguing that even if the state had the power to amend the notification, it had to follow the same procedure as the original notification.
- The appellant cited Master Construction Co. (P) Ltd. Vs. State of Orissa and Anr., (1966) 3 SCR 99, to define what constitutes a clerical or arithmetical error, arguing that the change in the notification was not a clerical error.
Respondent’s Arguments (State of Goa):
- The State contended that the original notification of 23/24 May 2016 incorrectly mentioned clause (i) of Section 4(1) instead of clause (iii).
- The Errata Notification was issued to correct this clerical error under Section 10 of the Minimum Wages Act, 1948.
- The State argued that Section 10 of the Minimum Wages Act, 1948, allows for the correction of clerical or arithmetical mistakes in wage orders.
The innovativeness of the argument by the appellant was that it highlighted that the State Government had taken a conscious decision to include the special allowance after considering the objections and suggestions from the Labour Union. This was not a clerical error, as the State Government was claiming.
| Main Submissions | Sub-Submissions (Appellant) | Sub-Submissions (Respondent) |
|---|---|---|
| Validity of Errata Notification | ✓ The original notification was issued after following due procedure under Sections 4 and 5 of the Minimum Wages Act, 1948. ✓ The decision to include a special allowance was a conscious one, not a clerical error. ✓ The Errata Notification was illegal as it did not follow the procedure required for revising minimum wages. |
✓ The original notification incorrectly mentioned clause (i) of Section 4(1) instead of clause (iii). ✓ The Errata Notification was issued to correct this clerical error under Section 10 of the Minimum Wages Act, 1948. |
| Nature of Error | ✓ The change in the notification was not a clerical error as per Master Construction Co. (P) Ltd. Vs. State of Orissa and Anr., (1966) 3 SCR 99. | ✓ Section 10 of the Minimum Wages Act, 1948, allows for the correction of clerical or arithmetical mistakes in wage orders. |
| Power to Amend | ✓ Even if the state had the power to amend the notification, it had to follow the same procedure as the original notification under Section 21 of the General Clauses Act, 1897. |
Issues Framed by the Supreme Court
The Supreme Court framed the following issue for consideration:
- Whether the Errata Notification dated 14.07.2016 was validly issued under Section 10 of the Minimum Wages Act, 1948, to correct a clerical or arithmetical mistake in the earlier notification dated 23/24.05.2016.
Treatment of the Issue by the Court:
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the Errata Notification was validly issued under Section 10 of the Minimum Wages Act, 1948. | Invalid. | The Court held that the Errata Notification was not a correction of a clerical or arithmetical error, but a substantive change that required following the procedure under Sections 4 and 5 of the Minimum Wages Act, 1948. |
Authorities
The Supreme Court considered the following authorities:
Cases:
- Master Construction Co. (P) Ltd. Vs. State of Orissa and Anr., (1966) 3 SCR 99: The Supreme Court of India, this case was used to define what constitutes a clerical or arithmetical error. The Court held that an arithmetical mistake is a mistake of calculation, a clerical mistake is a mistake in writing or typing, and an error arising from an accidental slip or omission is an error due to a careless or inadvertent mistake or omission unintentionally made.
Legal Provisions:
- Section 3 of the Minimum Wages Act, 1948: This section empowers the appropriate government to fix minimum rates of wages.
- Section 4 of the Minimum Wages Act, 1948: This section specifies the components of minimum wages, including basic wages, special allowance, and all-inclusive rates.
- Section 5 of the Minimum Wages Act, 1948: This section outlines the procedure for fixing and revising minimum wages.
- Section 10 of the Minimum Wages Act, 1948: This section allows the government to correct clerical or arithmetical mistakes in wage orders.
- Section 21 of the General Clauses Act, 1897: This section deals with the power to issue, amend, vary, or rescind notifications.
| Authority | Type | How Considered |
|---|---|---|
| Master Construction Co. (P) Ltd. Vs. State of Orissa and Anr., (1966) 3 SCR 99, Supreme Court of India | Case | Used to define clerical and arithmetical error. |
| Section 3, Minimum Wages Act, 1948 | Legal Provision | Cited as the source of power for fixing minimum wages. |
| Section 4, Minimum Wages Act, 1948 | Legal Provision | Cited to explain the different methods of fixing minimum wages. |
| Section 5, Minimum Wages Act, 1948 | Legal Provision | Cited to explain the procedure for fixing and revising minimum wages. |
| Section 10, Minimum Wages Act, 1948 | Legal Provision | Cited as the basis for the State’s claim to correct the notification. |
| Section 21, General Clauses Act, 1897 | Legal Provision | Cited by the appellant to argue that any amendment must follow the same procedure as the original notification. |
Judgment
| Submission | How Treated by the Court |
|---|---|
| The original notification was issued after following due procedure under Sections 4 and 5 of the Minimum Wages Act, 1948. | Accepted. The Court agreed that the original notification was issued after proper consultation and procedure. |
| The decision to include a special allowance was a conscious one, not a clerical error. | Accepted. The Court found that the inclusion of the special allowance was a deliberate decision, not a mistake. |
| The Errata Notification was illegal as it did not follow the procedure required for revising minimum wages. | Accepted. The Court held that the Errata Notification was invalid because it did not follow the procedure under Sections 4 and 5 of the Minimum Wages Act, 1948. |
| The original notification incorrectly mentioned clause (i) of Section 4(1) instead of clause (iii). | Rejected. The Court found no evidence of a clerical error. |
| The Errata Notification was issued to correct a clerical error under Section 10 of the Minimum Wages Act, 1948. | Rejected. The Court held that the change was not a clerical error but a substantive change. |
| Section 10 of the Minimum Wages Act, 1948, allows for the correction of clerical or arithmetical mistakes in wage orders. | Agreed, but the Court clarified that the change made by the Errata Notification was not a clerical or arithmetical mistake. |
| Even if the state had the power to amend the notification, it had to follow the same procedure as the original notification under Section 21 of the General Clauses Act, 1897. | Accepted. The Court held that even under Section 21 of the General Clauses Act, the State had to follow the same procedure as the original notification. |
How each authority was viewed by the Court?
- Master Construction Co. (P) Ltd. Vs. State of Orissa and Anr., (1966) 3 SCR 99*: The Court relied on this case to define what constitutes a clerical or arithmetical error, stating that the change in the notification was not a clerical error.
- Section 3 of the Minimum Wages Act, 1948: The Court acknowledged this section as the source of power for fixing minimum wages.
- Section 4 of the Minimum Wages Act, 1948: The Court used this section to explain the different methods of fixing minimum wages, emphasizing that the original notification was under Section 4(1)(i).
- Section 5 of the Minimum Wages Act, 1948: The Court highlighted that the procedure under this section was not followed when the Errata Notification was issued.
- Section 10 of the Minimum Wages Act, 1948: The Court acknowledged this section but stated that the change was not a clerical error and therefore, this section was not applicable.
- Section 21 of the General Clauses Act, 1897: The Court agreed with the appellant that even under this section, the State had to follow the same procedure as the original notification.
What weighed in the mind of the Court?
The Supreme Court’s decision was heavily influenced by the fact that the State Government had consciously decided to include the special allowance in the original notification after considering the objections and suggestions from the Labour Union. The Court emphasized that this was not a clerical error, as the State Government was claiming. The Court also highlighted that the State Government had not followed the procedure under Sections 4 and 5 of the Minimum Wages Act, 1948, when it issued the Errata Notification. The Court’s reasoning was a mix of both factual considerations and legal interpretations.
| Sentiment | Percentage |
|---|---|
| Conscious Decision of the State Government | 40% |
| Lack of Procedure under Sections 4 and 5 of the Minimum Wages Act, 1948 | 40% |
| Definition of Clerical Error | 20% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
Logical Reasoning:
Original Notification (23/24 May 2016) includes basic wages and special allowance under Section 4(1)(i) of the Minimum Wages Act, 1948
State issues Errata Notification (14 July 2016) changing the basis to Section 4(1)(iii), removing the special allowance
Was the Errata Notification a correction of a clerical error under Section 10 of the Minimum Wages Act, 1948?
NO. The Court found that the change was not a clerical error but a substantive change.
Did the State follow the procedure under Sections 4 and 5 of the Minimum Wages Act, 1948, for revising minimum wages?
NO. The Court found that the State did not follow the required procedure.
Errata Notification (14 July 2016) is invalid. Original Notification (23/24 May 2016) is restored.
The court rejected the State’s argument that the Errata Notification was a correction of a clerical error. It emphasized that the original notification was issued after due consultation and procedure under Sections 4 and 5 of the Minimum Wages Act, 1948. The court also noted that the State had not followed the same procedure when it issued the Errata Notification. The court stated, “Therefore, once there was no mistake, the same could not have been corrected in exercise of powers under Section 10 of the Act, 1948.” The court further observed, “Even by applying Section 21 of the General Clauses Act and assuming that the State was having power to amend, vary or rescind the notification, in that case also such power can be exercised in a like manner, namely after following the procedure, which was followed while issuing the original notification.” The court concluded, “Therefore, we are of the opinion that the Errata Notification dated 14.07.2016 was wholly without jurisdiction and contrary to the relevant provisions of the Minimum Wages Act, 1948.”
Key Takeaways
- State governments cannot modify minimum wage notifications by simply issuing errata notifications if it involves substantive changes.
- Any revision or modification of minimum wages must follow the procedure laid down under Sections 4 and 5 of the Minimum Wages Act, 1948.
- The power to correct clerical or arithmetical mistakes under Section 10 of the Minimum Wages Act, 1948, cannot be used to make substantive changes to minimum wage notifications.
- The judgment ensures that the rights of workers to receive minimum wages, including special allowances, are protected.
Directions
The Supreme Court quashed and set aside the Errata Notification dated 14 July 2016 and restored the original notification dated 23/24 May 2016, which included the basic rates of wages plus special allowance.
Development of Law
The ratio decidendi of this case is that any modification to a minimum wage notification that substantively alters the wage structure (such as removing a special allowance) requires the state government to follow the full procedure for revising minimum wages as laid down in Sections 4 and 5 of the Minimum Wages Act, 1948. This judgment clarifies that the power to correct clerical or arithmetical errors under Section 10 cannot be used to make substantive changes to wage structures. This case reinforces the importance of following due process in labor law and ensures that the rights of workers are protected.
Conclusion
The Supreme Court of India ruled in favor of the Gomantak Mazdoor Sangh, holding that the State of Goa’s Errata Notification was invalid. The Court emphasized that the State could not alter a minimum wage notification by way of an errata without following the due procedure for revising minimum wages. The judgment reinforces the importance of adhering to the procedures laid down in the Minimum Wages Act, 1948, and protects the rights of workers to receive fair wages, including special allowances. The Court restored the original notification which included the special allowance.