Legal Concerns Over Wage Reduction for ITI Staff: Can They Seek Pay Protection?

Legal Implications of Wage Changes for ITI Staff

I work in a central government PSU Mine. Last year, we signed a Memorandum of Understanding (MoU) with the State Government (where the PSU is situated) to establish and run an ITI. According to the MoU, all expenditures were to be borne by us.

In the initial stage, due to delays by the State Government, we deployed five housekeeping and cleaning staff in the ITI through a contract. As the contract was issued by us and aligned with other contracts we issued, the contractor was paying Central Government wages to the laborers.

Now, the concerned State Government wishes to take over the total management of the ITI, including the deployment of staff, through their contractor. They have agreed to prioritize engaging the current housekeeping and cleaning staff through their contractor.

However, the housekeeping and cleaning staff will now receive State Government minimum wages as per the terms and conditions of the contract issued by the State Government. The State Government minimum wage is less by Rs. 22 per day.

Are there any legal issues involved in this? Can the staff approach the Labor Authority for a reduction of wages? Is there any rule of pay protection in this?

Regards,
[Username]

Dear Baishaliamit,

Contextually, yours seems to be a tricky question. When the State Government takes over the entire management of the ITI as per the MOU, it becomes a unit of the State Government despite all the expenditure being borne by the PSU belonging to the Central Government. In the absence of information relating to the type, nature, or main activity of the Central PSU, whether the PSU-funded ITI is exclusively for the wards of the employees of the PSU or open to all, etc., finding the right answer becomes even more difficult. This is because the fixation of minimum wages undertaken by the appropriate governments is only scheduled employment-wise and not industry-wise or establishment-wise.

The same term "appropriate government," though used in the Industrial Disputes Act, 1947, The Minimum Wages Act, 1948, and the Contract Labour (Regulation and Abolition) Act, 1970, has different meanings with reference to the object of the Acts. So, the minimum wages fixed by the Central Government in respect of the employment of housekeeping and cleaning in a PSU, to which it is the appropriate government by virtue of the former's classification under the ID Act, cannot be applied to the contract labor engaged in the same employment in a different type of establishment managed by the State Government. Therefore, my personal view is that only the minimum rates of wages fixed by the State Government would be applicable to the contract labor engaged in such operations, even though it is lesser than the central rates of minimum wages. Since it is altogether a different contract, the affected contract labor cannot have any judicial remedy in this regard. I would like to solicit the views of our learned members.

Regards