Case –Bharat Financial Inclusion Ltd. vs. State of Kerala
Case no- WP(C) No. 24859 of 2019(F)
Judgment by- K.Vinod Chandran, J. and V.G.Arun, J.
The minimum wages provided is an amount taking in all factors, assuring the employee and his family a dignified living condition. The Minimum Wages Act is one brought in with the avowed objective of ensuring minimum wages to an employee, not for mere sustenance but a dignified living condition for himself and his family. This attracts Article 21 which ensures protection of personal liberties for one and all. A dignified living condition is a matter of right endowed upon us by the Constitution of India as our Fundamental Rights which also includes Right to Privacy as a widening dimension of Article 21.
This case is regarding an amendment made to Kerala Minimum Wages Rules, 1958 by notification dated 08.07.2015 which introduced a procedure by which inter alia the payment of wages has been enabled through a Wage Payment System (‘WPS’ for short) facilitated under the information technology. The employers of the scheduled employments as specified are required to submit electronically or upload an I.T. Enabled ‘Register of Employment and Wages’ in the form prescribed.
The ground of hardship and cumbersome procedure are only raised for reason of reluctance to shift to a digital form, a total changeover from the earlier mundane practice of recording details in a worn-out Register which could also be substituted or manipulated. The maintenance of Registers, which is mandatory is possible of supervision immediately.
An officer could verify the details of all the establishments under his jurisdiction and ensure that the same has been uploaded in the electronic media by a few clicks. It is also mandated that the employers shall pay and disburse the wages to the employees only through individual bank accounts. Amendments made to Act were-
- Rule 29 (4A) – requires the ‘Register of employment and wages’ in Form XIV to be authenticated by the employer or by an authorized person before the submission or the uploading of the same in the WPS.
- Rule 29 (4B) – confers power on the Inspector authorized by the Labour Commissioner to electronically authenticate the submitted or uploaded form, which authenticated form shall be maintained as duly signed either physically or in the electronic media.
- Rule 29 (4C) – requires the Bank account numbers of the employees entered in Form XIV for effecting payment of wages through Banks, by the employers.
- Rule 29 (4D) – The Register in Form XIV shall be electronically submitted or uploaded in the WPS at least three days before the crediting of wages in the individual bank accounts of the employees.
- Rule 29 (4E) – prescribes that the employers covered under WPS to issue electronically generated wage slip to all its employees through the System at least a day before effecting payment of wages.
1. There can be no insistence that the wages should be paid only through Bank accounts. The subordinate legislation is ultra vires, especially looking at Section 11, which mandates payment of wages in cash. It is specifically pointed out that the website provides about 16 Banks to which the payments are to be made directly through the System. It is, hence, argued that the Government does insist on payment through the Department, ie: through the WPS. It is pointed out that there can be no insistence on the employees to open a Bank account
2. The provisions made and the details required warrant disclosure of confidential information, which put the employer and the employee to prejudice and result in impugning their right to privacy.
- The employer cannot insist on their employees to open an account in a particular bank. When the provisions in the Act prescribe the payment of minimum wages in cash, a violation would entail invocation of the penal clauses under the Rules, which, at this point, would extend to a fine of Rs.2 lakhs. An employee if he refuses to open an account in a Bank and insists payment in cash, the employer would necessarily have to do that. Subordinate legislation can be questioned on the ground of unreasonableness not in the sense of it being ‘not reasonable’, but in the sense that it is manifestly unjust.
- Referring to the issue of infringement of privacy, the Court said that there is no private employee information that is required to be divulged in the data furnished in terms of the amended rules. On this aspect, we have to pertinently notice that the bonus paid, maternity benefits allowed and the arrears paid, which were required under Columns 26, 27 and 28 of Form XIV are now deleted, which alone could be asserted to be very personal.
- Whereas the disclosure of all allowances paid to the employee, benefits the employer also, in satisfying the authorities of due compliance under the Minimum Wages Act. More importantly, it ensures that deductions are not made more than what is mandated under the other enactments which result in depriving the employee of such benefit. It has also been categorically stated by the Government that Form XIV uploaded in the website of the Department would not be accessible to the public and can only be viewed by the employer and the jurisdictional Inspectors.
- The System is password protected and login is permitted only by using the unique ID and password allotted to the individual employer as also to the jurisdictional Inspectors. No employee can view the details of another on the website. Therefore, the ground of infringement of privacy cannot also be raised on the sole ground of a mere apprehension of a malfunctioning of or an illegal penetration into the System.
- Quoting Krishnamurthy, “Where a rule is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the court is simple and easy.” The court said that here, the Rule is in direct conflict with the statutory provision, which mandates payment in cash. In a situation where either of the modes has resorted, of payment in cash or through Bank accounts, it would result in allegations of violation of the provisions under the Act or under the Rules leading to the imposition of penalty as prescribed under Section 22 of the Minimum Wages Act.
- It is, hence, a ‘no win’ situation for the employer. Even if the provision were to be upheld, there can be no insistence that the payment should be only through the WPS. There is no such mandate provided in the rules. The choice of Bank vests exclusively with the employee and there cannot be any insistence by the Department or the employer. Court held that if voluntarily the employers make payments through Banks with the consent of the employees, there would be no penalty imposed on ground of violation of Section 11(1) of the Minimum Wages Act. therefore the Writ Appeals are partly allowed by the Court upholding the other amendments.
Edited by Vartika Gajendra Singh
Approved & Published – Sakshi Raje