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Tuesday, December 24, 2024

Karnataka High Court Rules Employers Must Be Heard Before Minimum Wage Revision Notification

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Karnataka High Court Rules Employers Must Be Heard Before Minimum Wage Revision Notification

The Karnataka High Court has ruled that employers, as key stakeholders, must be given an opportunity to voice their concerns before the government issues a notification regarding the revision of minimum wages. The court’s decision came after employers, including the Karnataka Employers Association, challenged a previous ruling by a single judge who had set aside the government’s notification on minimum wage rates.

The case involved a notification issued by the state government on July 28, 2023, under the Minimum Wages Act, 1948. The notification revised the minimum wage rates for workers in the foundry industry, both with and without machine shops. However, the single judge had annulled the notification after a petition was filed by employee trade unions, including the All India Trade Union Congress (AITUC) and the Engineering & General Works Union.

The employers’ associations argued that they were not given a chance to present their case before the single judge, despite having represented their interests before the advisory board that advised the government on the wage revision. They claimed that the employers are essential stakeholders in the process, as they would be directly impacted by any changes to the minimum wage rates. Furthermore, they argued that the demand for a “living wage” raised by the trade unions was different from the concept of a “minimum wage,” and that this distinction had not been adequately addressed.


In response, the employee unions argued that the process of fixing and revising wages, as defined in Sections 3 and 5 of the Minimum Wages Act, does not require the participation of employers. They contended that the issuance of the notification was a legislative function and that the principles of natural justice, including the right to a hearing, did not apply.

However, the bench, consisting of Chief Justice N.V. Anjaria and Justice K.V. Aravind, disagreed with this argument. The court observed that while the notification could be seen as a piece of subordinate legislation, the process leading to its issuance involved statutory powers that must be exercised reasonably. The bench emphasized that natural justice must be upheld in such statutory exercises, especially when a decision could significantly affect the parties involved.

The court concluded that excluding employers from the process would render the notification unjust and arbitrary. It ruled that employers, as stakeholders, must be given a chance to be heard before any final decision is made. The bench remitted the case back to the single judge, instructing them to reconsider the matter and hear the employers’ views before issuing a final ruling. The entire process is to be completed within ten weeks.


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