Sindh govt went beyond its authority by raising wages: SC

ISLAMABAD: The Supreme Court has held that the Sindh government went way beyond its authority by raising the minimum wages to Rs25,000 per month for unskilled labour, working in the industrial and commercial units in the province.

A three-member bench of the apex court, headed by Chief Justice Umer Ata Bandial, announced the judgment in the appeals filed by the Federation of Chamber of Commerce and other companies against the minimum monthly wage of Rs25,000 for workers, fixed by the Sindh government. The court declared the notification issued by the Sindh government by raising the minimum wages of workers to Rs25,000 as without lawful authority and having no legal effect and also set aside the impugned judgment of the Sindh High Court endorsing the Sindh government’s move.

The eight-page judgment, authored by Justice Syed Mansoor Ali Shah, held that the provincial government travelled beyond its authority to encroach upon the mandate of the Board and issued the notification without lawful authority. “Taking into consideration the provisions of the Act and the objective behind it, we are of the view that the government travelled beyond its authority to encroach upon the mandate of the Board and issued the notification without lawful authority,” Justice Mansoor Ali Shah held.

At the same time, it needs to be said that we are not unmoved by the considerations which urged the government to issue the notification, says the judgment. The court, however, appreciated the concern shown by the government for the welfare of the workers but noted that the revision of the minimum wage is to be done according to the policy and mechanism laid down in the Act. The government cannot go against the provisions of the Act and arrogate to itself the function entrusted to the Board.

The petitioners were the employers, or organizations of employers, running different industrial/commercial establishments in the Province of Sindh and were aggrieved of the notification for the reason that the minimum rates of wages could only be declared on the recommendation of the Minimum Wages Board (Board) and that the government and its line department did not have the authority to itself decide the minimum rates of wages in disregard of the recommendation of the Board. Their challenge to the notification remained unsuccessful before the High Court of Sindh.

The court held that wage fixation is an important social welfare measure to be determined in the light of the economic reality of the situation and the minimum needs of the worker with an eye to the preservation of his efficiency as a worker. It is a delicate task, a fine balance is to be achieved. The judgment noted that in the instant case, the government decided to revisit the minimum rates of wages and the Board recommended that the minimum rates of wages be increased to Rs19,000 per month adding that the government did not agree with the recommendation of the Board and without sending the matter back to the Board as mandated by the Act, proceeded on its own to issue the notification after increasing the minimum rates of wages to Rs25,000 per month.

“We are conscious of the fact that minimum wage laws help ensure justice at work”, the court held adding that the minimum wage has remained a core element of public policy and the International Labour Organization (ILO) designated the minimum wage as an international labour standard. The judgment further held that minimum wages were originally proposed as a means to combat the proliferation of so-called sweatshops in manufacturing industries and to ensure that the workers received a fair wage for their work. “Minimum wage is a primary measure of the social value of work; they bring a change in workplace power balance by giving workers rights vis-à-vis employers, and they require employers and consumers to internalize costs of increased wages”, says the judgment.

It held that the minimum wage may preferably be fixed at a level that is “capable of meeting a worker’s basic living needs and those of his family, for housing, nourishment, education, health, leisure, clothing, hygiene, transportation and social security, with periodic adjustments to maintain its purchasing power. We also recognize that with the growth and development of the national economy, living standards improve and therefore our notions about minimum wage need to be more progressive,” the court held.

The court converted the petitions into appeals and allowed the same, set aside the impugned judgment of the High Court, accepting the constitutional petitions and declaring the notification, issued by the government without lawful authority and having no legal effect. The court held that objections if any, of the government to the recommendations made by the Board for the minimum wage to be Rs19,000 per month may be taken up by the government with the Board in accordance with Section 6(1)(b) of the Act. Given these circumstances, the government and the Board shall endeavour to resolve the matter of appropriate minimum wage enforced in the province of Sindh with effect from 01.07.2021 within a period of two months from the receipt of this judgment, it held.

The court held that in the alternative, the government may, if so inclined, issue a notification in accordance with the said recommendations in the exercise of its power under Section 6(1)(a) of the Act. Till the final resolution of the matter, as there is no material objection by the petitioners to pay a minimum wage of Rs19,000/- per month, as recommended by the Board, the court directed that subject to the final notification issued by the government, the recommendations of the Board fixing a minimum wage of Rs19,000/ - per month shall be payable by the employers to their eligible workers with effect from July 1, 2021.