In a recent judgment, the Madras High Court reiterated that compensation payable for the death of employees must be based on the wages payable under the Minimum Wages Act, 1948, unless the employee’s actual wages exceed the minimum wage.
In doing so, Justice Nisha Banu also observed that if this scheme is not followed, the purpose of the enactment of the Minimum Wages Act would be defeated.
The Court was hearing an appeal filed under the Workmen’s Compensation Act, 1923, by a woman whose husband had passed away in 2007. At the time of his death, the deceased was drawing a salary of Rs 2,500 per month while working for the Tamil Nadu Electricity Board.
The Commissioner had taken this salary as the basis for awarding a compensation of Rs 2,02,250 to the claimant, inclusive of funeral expenses.
In the appeal filed against the same, the following questions were considered by the High Court:
Whether the minimum wages should be considered for assessing the compensation as against the actual wage paid to the workmen if it is less than the minimum wage?
Whether the statutory compensation should be awarded and paid to the claimant even if the petitioner claimed less compensation than that of the statutory compensation?
Whether the claimant is entitled to an interest at 12% p.m. from 30 days after the date of accident (04.08.2011) till the date of deposit of the compensation before the Commissioner for Workmen Compensation on 08.06.2011?
As regards the first two questions, the Court concurred with the Karnataka High Court’s ruling in Shankar v Chief Engineer, KPTCL that the minimum wage under the Minimum Wages Act must act as the basis to fix compensation.
In that case, the Karnataka High Court had observed that an employer who comes within the meaning of state cannot avoid legal liability under the Minimum Wages Act. Further, it had held that even otherwise, when the wage paid is less than the minimum wage, the minimum wage should be reckoned as wages for compensation.
The Court also noted that in Century Chemicals v Esther Maragatham, the Madras High Court had ruled that statutory compensation will have to be awarded irrespective of the claim made. In that case, a single judge had observed that the due compensation will have to be paid, even if a mistake has been committed by the claimants.
Therefore, the Madras High Court enhanced the compensation payable to the claimant/appellant, observing that,
“It is the duty of the employer to pay the minimum fixed under the Act from time to time. If the wages of the employee is higher than the minimum wages, there cannot be dispute in taking into account.
When the wages actually paid to an employee is lesser than the minimum wages and the employee also claimed lesser compensation based on the actual pay, it is the duty of the Commissioner to take into account only the minimum wages applicable to the workman for arriving at the quantum and he can also award excess to the claim.”
The Court found that a compensation of Rs 3,22,100 is payable to the appellant, keeping the minimum wage of the deceased as the basis for the same.
As for the third question, the Court noted that the Supreme Court has already held that an interest rate of 12% per annum is payable from the date of the incident, in Saberabibi Yakubbhai Shaikh and others v. National Insurance Company Ltd., and others.
Source of information: https://barandbench.com/minimum-wage...ion-madras-hc/
My view
All employers must ensure that MW is observed in full and no type of shortcuts in wages to workers.
This judgement is clear and lucid as to our duties towards wages as employers/HR.
From India, Pune
3131In doing so, Justice Nisha Banu also observed that if this scheme is not followed, the purpose of the enactment of the Minimum Wages Act would be defeated.
The Court was hearing an appeal filed under the Workmen’s Compensation Act, 1923, by a woman whose husband had passed away in 2007. At the time of his death, the deceased was drawing a salary of Rs 2,500 per month while working for the Tamil Nadu Electricity Board.
The Commissioner had taken this salary as the basis for awarding a compensation of Rs 2,02,250 to the claimant, inclusive of funeral expenses.
In the appeal filed against the same, the following questions were considered by the High Court:
Whether the minimum wages should be considered for assessing the compensation as against the actual wage paid to the workmen if it is less than the minimum wage?
Whether the statutory compensation should be awarded and paid to the claimant even if the petitioner claimed less compensation than that of the statutory compensation?
Whether the claimant is entitled to an interest at 12% p.m. from 30 days after the date of accident (04.08.2011) till the date of deposit of the compensation before the Commissioner for Workmen Compensation on 08.06.2011?
As regards the first two questions, the Court concurred with the Karnataka High Court’s ruling in Shankar v Chief Engineer, KPTCL that the minimum wage under the Minimum Wages Act must act as the basis to fix compensation.
In that case, the Karnataka High Court had observed that an employer who comes within the meaning of state cannot avoid legal liability under the Minimum Wages Act. Further, it had held that even otherwise, when the wage paid is less than the minimum wage, the minimum wage should be reckoned as wages for compensation.
The Court also noted that in Century Chemicals v Esther Maragatham, the Madras High Court had ruled that statutory compensation will have to be awarded irrespective of the claim made. In that case, a single judge had observed that the due compensation will have to be paid, even if a mistake has been committed by the claimants.
Therefore, the Madras High Court enhanced the compensation payable to the claimant/appellant, observing that,
“It is the duty of the employer to pay the minimum fixed under the Act from time to time. If the wages of the employee is higher than the minimum wages, there cannot be dispute in taking into account.
When the wages actually paid to an employee is lesser than the minimum wages and the employee also claimed lesser compensation based on the actual pay, it is the duty of the Commissioner to take into account only the minimum wages applicable to the workman for arriving at the quantum and he can also award excess to the claim.”
The Court found that a compensation of Rs 3,22,100 is payable to the appellant, keeping the minimum wage of the deceased as the basis for the same.
As for the third question, the Court noted that the Supreme Court has already held that an interest rate of 12% per annum is payable from the date of the incident, in Saberabibi Yakubbhai Shaikh and others v. National Insurance Company Ltd., and others.
Source of information: https://barandbench.com/minimum-wage...ion-madras-hc/
My view
All employers must ensure that MW is observed in full and no type of shortcuts in wages to workers.
This judgement is clear and lucid as to our duties towards wages as employers/HR.
From India, Pune
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Minimum Wage of UP & UK.pdf