Umakanthan53
Labour Law & Hr Consultant
Nathrao
Insolvency N Gst Professional
+1 Other

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If there is substantial variation in the salary of skilled category workers the what could be right reply to labor department.
Dear Pankaj,
Right or wrong, the quality of any reply to any contentious issue depends upon the occasion which gives rise to the very issue. What prompts such a reply to the Labor Department? Any industrial dispute regarding revision of wages on the principle of equal wages for equal work? Any claim relating to non-payment of minimum wages? What are the reasons for the substantial difference in wages when the workmen belong to the same or similar category in respect of skill levels? Unless you provide a conspectus with such particulars, I don't think it is possible to provide a convincing reply.

If we are paying more than minimum wages but variance is there?
Mr Pankaj,
What was the query from Labour department to begin with?
Paying Minimum wages is mandatory to be compliant with laws.
What kind of variance is there in wages-between trades/different skilled workers or within same skills based on seniority, performance.
for getting a good reply/suggestions you need to be more descriptive of problem faced.
Did you get any letter from Labour department?
What was the query?

Substantial variation in the salary of workers whereas designation of same of all workers. Department asked written explanation about salary variation. The variation which is coming in the salary of workers are of designation as Driver, casual Operators, office Boy, HK Supervisors & Guesthouse Cook but in document it was mentioned as helper for all.
Designation will have to be changed to reflect actual work being done.
Are you paying more than minimum wages for each category of worker-driver etc.
The exact wording of query can be put up for better understanding.
How did the query come about?
Any complaint or by random visit of Labour inspector.

Wages payable over and above the Minimum Wages prescribed for schedule of employment comprising of different components inclusive of Basic and DA would amount to statutory violation? Here, Basic + DA payable is more than 55% of the total Minimum wages prescribed under statute?
Request expert views please
Regards,

Dear Sridharan,
Your question seems to be unrelated to this thread. Moreover, the issues of determining the parity between the minimum wages fixed under the MW Act,1948 and the industry wages in the face of componential difference in their structures have already been discussed here several times in the light of the judgment of the Supreme Court in the case of Air Frieght Ltd., Vs The State of Karnataka and Others [ AIR 1999 SC 2459 ]. However, let me answer the same query once again as follows:
When the sum total of the industry wages minus the value of the excluded components as per the MW Act is equal to or more than the sum total of the minimum wages fixed, the compliance by the employer becomes complete is the principle evolving from the judgment.
For the sake of ready reference, the extracts of the relevant paragraphs of the judgment are given below:
Para 24: " .... hence, in cases where employer is paying total sum which is higher than the rates of minimum wages
fixed under the Act including the cost of living index (VDA), he is not required to pay VDA separately."
Para 26: " (2) ..... for determining whether they are paying minimum rates of wages or not, the amount paid for the
value of items which are excluded u/s 2(h) of the Act is not to be taken into consideration.
(3) Minimum rates of wages fixed under the Act is remuneration payable to the worker as one package of
fixed amount. In cases where minimum wages is linked with cost of living index, the amount paid on
the basis of dearness allowance is not to be taken as an independent amount of the minimum wages
but as part and parcel of the process of computing the rates of minimum wages which is to be
determined after taking into consideration the cost of various necessities."
But, restricting the total of basic wages plus D.A to that of a lower proportion of the minimum wages would result in the reduction of certain indirect benefits like contributions to EPF and ESI, BONUS, Gratuity etc., which would lead to the allegation of unfair labor practice on the part of the employer is my personal opinion. Who knows, if such an issue is raised by some workmen before the Supreme Court in future, the Court may reverse its opinion! Therefore, my advice would be to restructure the existing wage scales in such a manner that the basic and dearness allowance remain always at par with the minimum rates of wages

Thank you so much Sri Umakanthan Sir, for your detailed answer to my query in determining the MW components. Your advice concerning the social security on employees side is well taken by us. Regards,
Dear Pankaj,
The clarification sought by labour department on variance of the wages paid to categories of workmen is justified which is evident from your clarification. As per you some skilled category workmen are paid under minimum rate of wages of USK category, where as they fall under SK (Driver, Casual Operators, Office Boy, Supervisors & Guesthouse Cook) category.
You can not call it as substantial variation rather a serious violation. This can be treated as wilfull violation of Minimum wages. As an employer wilfully (a) pays to any employee less than the minimum rates of wages fixed for that employee's class of work or less than the amount due to him under the provisions of this Act or (b) contravenes any rule or order made under section 13; shall be punishable ............................
If your rate of payment is equal or more as per the original skill category to which the workmen belong than the category maintained in register is not that serious, can be said happened due to cleric mistake. But if the rate of wages paid to those workmen is less, is to be considered as violation.
In this regard you have to rectify your register as per the skill and to pay variation amount from the date their name borne in muster roll till date.

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