SBI contract workers in West Bengal are covered by state minimum-wage rates, Calcutta High Court rules

The petitions challenged an order dated 16 March 2026 and corrigendum dated 24 March 2026 made by the Authority under the Minimum Wages Act, 1948 and the Regional Labour Commissioner (Central), Asansol, in Application MW No. 11 of 2025.

The authority had held SBI, as principal employer, liable for the difference between the Central minimum-wage rates and the wages paid to contract workers.

SBI contended that it was required only to reimburse its contractor for wages legally payable by the contractor, and that the State minimum-wage rates applied.

The contractor separately challenged the same order; both petitions were heard together.

The dispute concerned wages for the period April 2022 to September 2025.

Whether the Central or the State minimum-wage rates applied to contract workers engaged through a contractor at SBI’s establishment in West Bengal, and whether SBI was liable for the Central-rate shortfall.

Whether the impugned order was liable to be set aside for alleged non-compliance with Section 20(7) of the Minimum Wages Act, 1948, including the asserted failure to allow the parties to adduce evidence.

Section 2(b) of the Minimum Wages Act, 1948 distinguishes between scheduled employment carried on by or under the authority of the Central Government, for which the Central Government is the appropriate Government, and other scheduled employment, for which the State Government is the appropriate Government.

The Court relied on Steel Authority of India Ltd. v. National Union Waterfront Workers, (2001) 7 SCC 1, for the principle that a Central Government company or instrumentality is not, for that reason alone, equivalent to the Central Government; the appropriate Government depends on the statutory framework and the facts concerning the authority under which the industry is carried on.

It also relied on Nashik Workers Union v. Hindustan Aeronautics Ltd., (2016) 6 SCC 224, which, as the Court understood it, supports State Government jurisdiction in relation to the company concerned.

The Court further referred to its earlier order in HDFC Bank v. Union of India & Ors. concerning the application of State minimum wages to contractor-employed workers.

The Court treated the relevant workers as employees supplied by contractors operating within West Bengal and distinguished the question of the appropriate Government for the principal employer from the wage regime applicable to those contract workers.

Applying its reading of SAIL and Nashik Workers Union, it concluded that SBI’s statutory status did not, by itself, make the Central Government the appropriate Government for the contractor-supplied workforce.

Because the workers were engaged through contractors for work in West Bengal, the Court held that the State minimum-wage regime applied; it also considered that the contractor’s wage liability, and SBI’s reimbursement obligation, should correspond to that regime.

Although SBI had raised a Section 20(7) procedural objection, the judgment did not separately determine it; the orders were set aside on the appropriate-Government and applicable-wage-rate grounds.

It set aside the order dated 16 March 2026 and corrigendum dated 24 March 2026, and allowed both writ petitions.