Crown Aluminium Works v. Their Workmen
Rule established
An industry that cannot pay minimum wages has no right to exist. Employer's inability to pay is no defence against the minimum wage obligation.
Facts
- Crown Aluminium Works (Belur, Howrah): Canadian-owned company manufacturing aluminium utensils
- Industrial Tribunal revised and reconstituted the wage structure and dearness allowance
- Employer appealed, arguing:
- Financial condition of the industry did not permit paying the revised wages
- Wage revision would force closure
- Labour Appellate Tribunal upheld the revision
Issue
- Whether an employer's inability to pay minimum wages is a valid defence against the minimum wage obligation.
Held
- Inability to pay is no defence against minimum wages
- "No industry has the right to exist unless it can pay its workmen at least a bare minimum wage"
- If an employer cannot pay minimum wages, the industry must close
- Fair wages (above minimum) may consider capacity to pay; minimum wages cannot
Ratio Decidendi
An industry that cannot sustain minimum wages to its workers has no right to exist. The employer's financial incapacity is irrelevant to the minimum wage obligation. Capacity to pay is relevant only to fair wages, never to minimum wages.
How to use it in an exam
- The single most quoted line in Indian wage law: "No industry has the right to exist unless it can pay minimum wages"
- Use to distinguish minimum wage (absolute, non-negotiable) from fair wage (capacity-dependent)
- Always pair with Bijay Cotton Mills (constitutional validity) and Unichoyi (three-tier framework)
- Part C: if problem says "employer claims inability to pay" the answer is Crown Aluminium
Source
Source: AIR 1958 SC 30
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.