Introduction:
A significant legal battle concerning labour rights, wage regulation, and the transition from the Minimum Wages Act, 1948 to the Code on Wages, 2019 is presently unfolding before the Karnataka High Court. In Karnataka Employers’ Association & Another v. State of Karnataka & Others (W.P. No. 16145/2026), the Court is examining a challenge to the State Government’s notification dated May 22, 2026, proposing a substantial revision of minimum wages for 81 categories of employment across Karnataka.
The matter came before a Single Judge Bench of Justice Jyothi M, which, on June 9, 2026, passed an important procedural order permitting several workers’ associations and labour welfare bodies to be impleaded as parties to the proceedings. Though the Court has not yet adjudicated upon the merits of the challenge, the order assumes significance because the outcome of the litigation could potentially affect lakhs of workers and thousands of employers throughout the State.
The petition has been filed by the Karnataka Employers’ Association and Ethereal Machines Private Limited. The petitioners challenge the legality of the State Government’s wage revision exercise on both jurisdictional and substantive grounds. Their principal argument is that the notification has been issued under provisions of the Minimum Wages Act, 1948, a statute that, according to them, ceased to exist after the enforcement of the Code on Wages, 2019 on November 21, 2025.
The controversy has emerged against the backdrop of a long-standing dispute regarding wage fixation and revision in Karnataka. The State Government had previously undertaken revisions of minimum wages for various categories of employment, leading to multiple rounds of litigation before the High Court. Several interim orders had been passed in those proceedings, particularly concerning consultations with stakeholders and implementation of recommendations made by advisory bodies.
The latest notification proposes a wage increase that, according to the petitioners, reaches up to sixty percent in certain sectors. Employer organizations describe the proposed revision as excessive, economically burdensome, and legally unsustainable. Labour organizations, however, view the revision as a necessary measure intended to ensure fair wages and social security for workers amid rising living costs.
The June 9 order therefore represents an important stage in a larger dispute involving the interpretation of labour legislation, governmental powers under transitional legal regimes, the rights of workers to participate in proceedings affecting their livelihood, and the constitutional balance between economic regulation and industrial competitiveness.
Arguments of the Parties:
The petitioners, namely the Karnataka Employers’ Association and Ethereal Machines Private Limited, mounted a comprehensive challenge against the State Government’s notification. Their first and most fundamental contention relates to the legal authority under which the notification was issued.
According to the petitioners, the impugned notification was issued under Sections 3(1)(b) and 5(1)(b) of the Minimum Wages Act, 1948. They argued that the said enactment stood repealed with effect from November 21, 2025, upon the coming into force of the Code on Wages, 2019. Consequently, the State Government could not invoke powers derived from a repealed statute. In their view, any action purportedly taken under a law that no longer exists is legally void and unenforceable.
The petitioners further relied upon Section 69 of the Code on Wages, which contains saving provisions relating to actions taken under repealed labour enactments. It was argued that the saving clause protects earlier actions only to the extent that they are not inconsistent with the provisions of the new Code. According to the petitioners, the impugned notification fundamentally conflicts with the structure and philosophy of the Code on Wages.
A major aspect of their challenge concerns the concept of “scheduled employments.” Under the Minimum Wages Act, wage fixation was linked to specified scheduled employments. However, the Code on Wages has substantially altered that framework. The petitioners argued that because the Code no longer recognizes the concept in the manner contemplated under the repealed legislation, the entire foundation of a notification covering eighty-one scheduled employments stands undermined.
The employers also referred to earlier litigation concerning wage revision exercises undertaken by the State Government. They pointed out that revisions introduced in 2022-23 affecting thirty-four scheduled employments had already become the subject matter of judicial scrutiny. Subsequently, another draft notification issued on April 11, 2025 proposing revision for eighty-four scheduled employments also attracted multiple writ petitions.
The petitioners emphasized that in several of those proceedings, the High Court had passed interim orders restraining implementation of decisions emerging from advisory board deliberations. According to them, the State Government had given assurances before the Court that no further action would be taken without hearing industry representatives and conducting the necessary consultations.
The petition therefore alleges that despite the existence of those orders and undertakings, the Government proceeded to issue the impugned notification dated May 22, 2026. The petitioners characterize this conduct as a deliberate disregard of judicial directions and contend that it amounts to a serious affront to the authority of the Court.
Apart from jurisdictional objections, the petitioners also challenge the substance of the wage revision itself. They argue that the proposed increase, reaching up to sixty percent in certain sectors, is unprecedented and economically unsustainable. According to them, Karnataka already maintains some of the highest minimum wages in the country, ranking near the top among Indian States.
The petitioners submit that annual adjustments through Variable Dearness Allowance (VDA) already account for inflationary pressures. Therefore, quinquennial revisions should ordinarily remain moderate and proportionate. Historically, revisions have generally ranged between ten and fifteen percent. A sixty percent increase, they argue, imposes an unreasonable financial burden on industries, threatens competitiveness, and could adversely affect employment generation.
On the other hand, the State Government has defended the notification and the process leading to its issuance. During the proceedings, counsel appearing for the State informed the Court that detailed objections had been prepared and would be formally filed.
Though the substantive defence is yet to be adjudicated, the State’s position, as reflected in the proceedings, appears to be that the wage revision process was undertaken within the framework of labour welfare obligations and after consideration by the appropriate authorities. The Government is expected to justify the notification by relying on its statutory powers, the need to ensure fair wages, and the larger objective of protecting workers from economic vulnerability.
Labour organizations and worker welfare bodies have also sought participation in the proceedings. Their applications for impleadment indicate that they view the litigation as having direct implications for workers whose livelihood and economic security depend upon the proposed wage revisions.
The labour organizations contend that any adjudication affecting minimum wages cannot be undertaken without hearing the voices of those most directly affected by the outcome. Since the proposed notification concerns eighty-one categories of employment, the interests involved extend far beyond the immediate parties to the litigation.
Their participation therefore seeks to ensure that the Court has the benefit of a broader perspective encompassing labour welfare, social justice, living wage principles, and constitutional commitments towards workers’ rights.
Court’s Judgment:
The order passed by Justice Jyothi M does not finally determine the legality of the impugned notification. Nevertheless, it constitutes an important procedural development that will shape the future course of the litigation.
At the outset, the Court recorded the submissions made on behalf of the State Government regarding the filing of objections. The Court was informed that the State’s response had been prepared and would be placed on record. The Court also noted that the All India Trade Union Congress (AITUC), which is one of the respondents in the proceedings, had already filed its objections.
The principal issue considered by the Court on June 9 concerned a series of interlocutory applications filed by labour organizations and welfare bodies seeking impleadment in the writ proceedings.
These applications assumed significance because the challenge to the wage notification has ramifications extending beyond the immediate dispute between employers and the State Government. The outcome of the case is likely to affect workers across numerous sectors and industries covered by the proposed wage revision.
During the hearing, Senior Advocate S.S. Naganand, appearing for the petitioners, informed the Court that he had no objection to the impleadment applications being allowed. This concession facilitated the consideration of the applications and avoided unnecessary procedural contest.
The Court accordingly permitted the impleadment of several worker-related bodies and associations. Among the entities added as parties were the Karnataka Building and Other Construction Workers Welfare Board and the Karnataka State Unorganised Workers Social Security Board. These organizations were represented by Senior Advocate Vikram Huilgol.
The decision to permit impleadment reflects an important principle of procedural fairness. Courts frequently recognize that where litigation affects the rights, interests, or welfare of large groups of persons, those groups should be given an opportunity to participate in the proceedings.
By allowing the labour organizations and welfare boards to become parties, the Court ensured that the dispute would not be adjudicated solely from the perspective of employers and government authorities. Instead, the voices of workers and welfare institutions would also be available to assist the Court in arriving at an informed decision.
The Court further directed amendment of the cause title to reflect the addition of the newly impleaded parties. Such amendments are necessary to ensure procedural accuracy and proper representation in subsequent proceedings.
Recognizing that multiple petitions and connected matters concerning wage revision issues were pending, the Court also directed that details of all related cases be furnished to the Court Officer. This direction serves the objective of judicial efficiency and consistency.
When similar legal issues arise across multiple proceedings, courts often prefer to hear them together. Such consolidation minimizes the risk of conflicting orders and enables comprehensive adjudication of common questions of law and fact.
Accordingly, Justice Jyothi M directed that the connected matters be listed together and fixed July 3, 2026 as the next date of hearing. The Court also directed all respondents who had been impleaded to file their objections before the next hearing date.
An important contextual aspect of the proceedings is the Court’s earlier order dated June 2, 2026. On that occasion, notice had been issued in the writ petition and the petitioners’ oral request to implead the Central Government had also been allowed. The involvement of the Union Government may become relevant because the dispute concerns the interpretation and effect of the Code on Wages, 2019, a central legislation.
Although the Court has not yet entered into the merits of the controversy, the issues that await determination are of considerable legal significance. The Court will likely be required to examine the relationship between repealed and successor legislation, the scope of saving provisions under Section 69 of the Code on Wages, the continuing relevance of concepts previously recognized under the Minimum Wages Act, and the extent to which governmental actions initiated under earlier legal regimes survive after statutory repeal.
The Court may also have to consider the petitioners’ allegations regarding violation of previous judicial orders and undertakings, as well as the broader economic and social implications of the proposed wage revision.
For the moment, however, the High Court has focused on ensuring procedural inclusiveness and comprehensive representation of affected stakeholders. The impleadment order signals the Court’s recognition that the dispute is not merely a contest between employers and the State but a matter involving competing interests of labour, industry, welfare institutions, and public policy.
As the case proceeds, the Karnataka High Court’s eventual determination is expected to have far-reaching implications for wage regulation, labour rights, industrial relations, and the implementation of the Code on Wages across the State. The matter now stands posted for further hearing on July 3, 2026, when the Court is likely to begin considering the substantive legal issues raised by the challenge.