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Saturday December 04, 2021

Fixation of minimum wages: SHC directs govt to publish notification

October 16, 2021

KARACHI: The Sindh High Court on Friday directed Sindh government to immediately publish a notification on fixation of minimum wages for unskilled workers.

The court however ordered that since the grievance of the employers about fixation of minimum wages has come on record that rate is inequitable therefore the government regardless of the notification refer the matter to Sindh Minimum Wages Boar d for reconsideration under section 6 (5) of the Sindh Minimum Wages Act 2015.

The direction came on petitions of employers federation and others that challenged fixation of minimum monthly wage of Rs.25,000 for unskilled workers by Sindh government. They submitted that Sindh government in order to score political mileage announced during the budget session that minimum wage of workers was being increased from Rs.17,500 to Rs.25,000 per month without even initiating statutory requirements as contained in the Sindh Minimum Wages Act. The employers had earlier objected recommendation of the minimum wages board on various legal and factual grounds, they said. The government instead of considering employers offer issued impugned notification by fixing the minimum wage Rs.25,000 per month, though the secretary labour did not sent reference to the board proposing Rs.25,000 per month to be minimum wage.

They submitted that 43% increase in minimum wage was irrational and without any legal basis which will have consequential effect in terms of variable cost on account of allowances, leave bonus and gratuity etc. They said that besides, increase in the minimum wage of unskilled workers will also invoke proportionate increase in the wages of other categories of workers and employees which will effect the whole compensation structure of the petitioners and have an extremely adverse impact even amounting to closure of business. They submitted that minimum wage in other provinces has been fixed Rs.20,000 per month from July 1 and fixation of Rs.25,000 in Sindh will place the petitioners in most uncompetitive and disadvantageous position.

Additional advocate general submitted that board decision was advisory in nature and government was not bound to act upon the recommendation of the board as matter relates to the policy framed by the government in welfare of labour class hence policy cannot be challenged in writ jurisdiction. He said that government has rightly taken decision while announcing minimum rate of the wages to the tune of Rs.25,000.

The SHC’s division bench comprising Justice Salahuddin Panhwar and Justice Adnanul Karim Memon after hearing the arguments of the counsel observed that section 6 of the Act makes it clear that it shall be the government alone to agree or disagree with recommendation of the board. The court observed that if the government finds that any such rate is inequitable to the employers or the workers, the government can competently refer the matter back to the board for re-examination of the question. The court observed that question of any grievance even after publication of notification can well be redressed by approaching the government under the law. The court observed that such referral back to the board shall not operate as suspension of the declared/notified minimum wages rate.

The bench also observed that question of minimum wages directly affects the rights of the workers hence it could not be left hanging for indefinite period in the name of technicalities or procedural requirements along. The court also took exception over non-appointment of chairperson of the wages board and directed the government to ensure completion of the board.

The court observed that it shall not be appropriate to allow reprocessing the matter for fixation of minimum wages rate from its beginning because that would be at the cost of misery of the workers therefore government shall immediately publish the notification as required in term of the notification itself. The court directed government to refer the grievances of the employers for reconsideration and shall also give reasons for increase of the minimum wages rate as was recommended by the board. The court also observed that board shall ensure completion of the process not beyond a period of two months and shall submit the recommendations to the government which shall ensure compliance under the law without any unnecessary delay.

The court observed that since the government has declared the minimum wages as Rs.25,000 from July 1, 2021 therefore government cannot take an exception to such declaration of minimum wages rate while employing the daily wages worker or those working on contingency. The court ordered that Sindh government shall ensure payment of such minimum wages amount to all such workers from July 1, 2021 till the time government reviews such declaration.

The other member of the bench Justice Adnanul Karim Memon also observed in his separate note that federal and provincial governments must contemplate the rationale of the minimum wages in light of the law and keep raising the amount to adjust for inflation and other factors. The court observed that minimum wages should be fixed for both formal and informal sectors as there was need to evolve a mechanism of stringent legal action for the violation of the law by some industry, factory or other business entity.