Is there any judgement by the Honble Supreme Court of India in which the special allowance (which is universally used as a balancing figure in the CTC) will be a part of Basic Wages while calculating the contribution of EPF/EPS under the Provident Fund & Misc Act.
Request if anyone can share the judgement copy
9th October 2018 From India, Gurgaon
The following gist will be helpful to know the position-
Surya Roshni Ltd. vs. Employees Provident Fund and Anr.
Citation: 2011 LLR 867
Decided on: 24.03.2011
Court: High Court of Madhya Pradesh
Facts:
The Petitioner-company was remitting the provident fund contribution of eligible employees in accordance with the Employees’ Provident Fund Act, 1952 (‘Act’) and the Scheme and it was deducting provident fund contribution on two components of salary, i.e., Basic + VDA (dearness allowance). However, it was not deducting provident fund contribution on other components, i.e., Transport Allowance + Attendance incentive + Special allowance + Lunch Incentive.
The Assistant Provident Fund Commissioner noticed that the petitioner was paying wages to its workers in guise of allowances to avoid the EPF liability, hence it issued summon under Section 7A of the Act for determination of provident fund dues against the petitioner. The Authority held that that other allowances are part of basic wages for the purpose of provident fund contribution hence, petitioner is liable to deposit provident fund of Rs. 69,09,534.
Against the aforesaid order, the petitioner filed an appeal which was dismissed.
Issue
Whether other allowances paid by petitioner is covered under “basic wages” for the purpose of calculating provident fund contribution.
Contentions
Petitioner: Relying on the judgment of Hon’ble Supreme Court in the case of Manipal Academy of Higher Education v. Provident Fund Commissioner [(2008) 5 SCC 428], petitioner contended that it is not liable to deduct provident fund from the wages of the workers except basic wages + VDA and it has been depositing the provident fund contribution with the department accordingly.
Respondent: As per the test laid down by the Hon’ble Supreme Court in the case of Bridge and Roofs Co. Ltd. v. Union of India and Ors. [AIR 1963 SC 1474], the principle of universality has to be applied in determining the basic wages and on the basis of the aforesaid principle the orders passed by both the Authorities are in accordance with law.
Held
The Court relied on Supreme Court judgment in Manipal Academy case (supra); Jay Engg. Works Ltd. v. Union of India [AIR 1963 SC 1480] and Cycles of India v. M.K. Gurumani[ (2001) 7 SCC 204] to reiterated that:
“On combine reading of Section 2(b) and Section 6 of the Act, the wages’ which is universally, necessarily and ordinarily paid to all across the board, such emoluments are ‘basic wages’ and where the payment is available to be specially paid to those who avail of the opportunity is not the ‘basic wages'”.
Applying the above principles, High Court held that the canteen allowance could not be included in ‘basic wages’ and there is no liability of the Petitioner to deduct provident fund of the employees against the aforesaid amount. However, the rest of the special allowances paid by the Petitioner to the workers in this case were liable to be included under the ‘basic wages’.
Accordingly, the Court allowed the petition partially to the above extent.
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Motage Enterprises Pvt. Ltd. Vs. Employees’ Provident Fund and Anr.
Citation: 2011 LLR 867
Decided On: 24.03.2011
Court: High Court of Madhya Pradesh
xxxx
Contentions
Petitioner:
It was not liable to pay provident fund contribution of its workers on other heads of wages except basic wage + VDA (relying on the judgment of Supreme Court in Manipal Academy of Higher Education v. Provident Fund Commissioner (2008) 5 SCC 428)).
In order to reduce the provident fund liability the management separated Special allowance being paid to the employees as a part of monthly salary from the basic wages.
Respondent:
Basic wages includes all emoluments earned by the workers under all circumstances. Accordingly, other allowances are part of basic wages for the purpose of provident fund contribution.
As per the test laid down by the Supreme Court in Bridge and Roofs Co. Ltd. v. Union of India and Ors. (AIR 1963 SC 1474), the principle of universality has to be applied in determining the basic wages and on the basis of this principle the orders passed by both the Authorities are in accordance with law.
Held
Here the Madhya Pradesh High Court relied on the judgment of Supreme Court in Manipal Academy of Higher Education vs. Provident Fund Commissioner [(2008) 5 SCC 428], and also considered the earlier judgments of Supreme Court in Bridge and Roofs Co. Ltd, v. Union of India and Ors. [AIR 1963 SC 1474]; Jay Engg. Works Ltd. v. Union of India [AIR 1963 SC 1480]; and Cycles of India v. M.K. Gurumani [(2001) 7 SCC 204] to reiterate that that:
“on combine reading of Section 2(b) and Section 6 of the 1952 Act, the ‘wages which is universally, necessarily and ordinarily paid to all across the board, such emoluments are ‘basic wages’ and where the payment is available to be specially paid to those who avail of the opportunity is not the ‘basic wages'”
Applying the above principle, the Court held that:
The Petitioner was deducting contribution on two components of salary, i.e., basic wage + VDA. It was also noted that Petitioner was paying conveyance allowance to all of its employees in the Non-executive category, without making any exception for some employees. The Court accordingly held that the conveyance allowance could be included in basic wages because it is universally, necessarily and ordinarily paid to all across the board.
Similarly, special allowance paid to the employees in the Executive category was also paid to all the employees in this category and there was no criteria to decide the special allowance. Therefore, the Court affirmed the findings recorded by APFC and EPFAT with regard to special allowance as well.
Consequently, the petition was dismissed.
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https://indiankanoon.org/doc/1638054/
xxxx
47.In the very same judgment, after referring to a case of Indian Drugs of Pharmaceuticals Ltd. (1996 (8) Scale 688), in paragraph 13, the Supreme Court had observed as follows:
"13.In the case of Indian Drugs & Pharmaceuticals Ltd.3 a Bench of two learned Judges of this Court, K. Ramaswamy and G.B. Pattanaik, JJ., considered the question of overtime wages in the light of the definition of wages as found in Section 2 sub-section (22) of the Act. In this connection it was observed that whatever remuneration paid or payable forms wages under implied terms of the contract. It is of course true that none of these judgments dealt with the question with which we are concerned in these appeals. However, the common thread which runs through these three judgments is to the effect that the definition of the word wages should be liberally construed as the Act is a welfare piece of legislation. On the interpretation of the relevant terms found in the definition of the term wages, as discussed earlier, it cannot be gainsaid that anything paid even by way of subsistence allowance to an existing employee though suspended by the employer cannot but be said to be remuneration paid to him under the terms of the contract of employment if they were fulfilled by the employee as well as by the employer...."xxxx
10th October 2018 From India, Bangalore
Pl.also make use of the attached write-up
10th October 2018 From India, Bangalore

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SUPREME COURT RULED - SPL.ALLOW.IS PART OF SALARY FOR EPF.
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Supreme Court judgement on PF contribution: How it impacts your PF and take-home pay
By: Sunil Dhawan | Updated: March 1, 2019 12:32 PM
Currently, as per the salary structure, the employees are supposed to contribute the mandatory 12 per cent of their Basic Salary or Wage ( 10 per cent for certain establishments) towards their PF.
Supreme Court, allowances, special allowances, basic wages, basic salary, net-take home pay, Employees' Provident Funds, EPF, salaried
In addition to basic salary, the other emoluments are shown as different allowances such as house rent allowance, special allowance etc. in the salary structure.
The recent Supreme Court judgement on PF contributions may have substantial impact on your PF kitty and even your take-home pay. Currently, as per the salary structure, the employees are supposed to contribute the mandatory 12 per cent of their Basic Salary or Wage ( 10 per cent for certain establishments) towards their PF. The other emoluments are shown as different allowances such as house rent allowance, special allowance etc. even though they form a part of the total salary or cost to the company.
Presenting a judgment related to EPFO and certain establishments, the Court has ruled out that the allowances in question were essentially a part of the basic wage camouflaged as part of an allowance so as to avoid deduction and contribution accordingly to the provident fund account of the employees.
Essentially, it means that the PF contribution will be on the total amount including all the allowances paid to an employee and not just on the basic salary.
The matter of concern
The appeals made by the various establishments to the SC raised a common question of law i.e. if the special allowances paid by an establishment to its employees would fall within the expression “basic wages” under Section 2(b)(ii) read with Section 6 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 for computation of contribution towards employees provident fund.
SC version
SC stated that “No material has been placed by the establishments to demonstrate that the allowances in question being paid to its employees were either variable or were linked to any incentive for production resulting in greater output by an employee.”
The Court also felt that “In order that the amount goes beyond the basic wages, it has to be shown that the workman concerned had become eligible to get this extra amount beyond the normal work which he was otherwise required to put in.”
Definition of wages
As per the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him. However, the Act excludes these two important emoluments following from the definition of Basic Wages or Salary:
(i) the cash value of any food concession;
(ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment
Impact
The impact of such a decision could be two-fold. One, the contribution towards EPF will be on a higher amount and hence less take-home pay for the employee. And, secondly, the retirement kitty will see more inflows as higher monthly PF contribution will move into the employee’s PF account.
1st March 2019 From India, Bangalore

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Dear Friends,
Multiple reviews are coming, but not found any single as Authentic as many Circulars has been issued by the CPFC where many Allowances are been Excluded from Basic Wages. Till date in any Judgment Definition of Minimum Wage has not been seen / checked.
What I have derived whether it may be Right / Wrong Don't know but at some Point found Fact about Minim Wages
DIRECTIVE PRINCIPLES OF STATE POLICY IN RELATION TO ‘LABOUR’
ARTICLE 37: The provisions contained in this part shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the state to apply these principles in making laws.
ARTICLE 38: STATE TO SECURE A SOCIAL ORDER FOR THE PROMOTION OF WELFARE OF THE PEOPLE
(1) The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
(2) The State shall, in particular, strive to minimize the inequalities in income, and endeavor to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different areas or engaged in different vocations.
ARTICLE 39: CERTAIN PRINCIPLES OF POLICY TO BE FOLLOWED BY THE
STATE
The State shall, in particular, direct its policy towards securing
(a) That the citizen, men and women equally, have the right to an adequate means of livelihood;
(b) That the ownership and control of the material resources of the community are so distributed as best to sub serve the common good;
(c) That the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;
(d) That there is equal pay for equal work for both men and women;
(e) That the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength;
(f) That the children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment.
ARTICLE 41: RIGHT TO WORK TO EDUCATION AND TO PUBLIC ASSISTANCE
IN CERTAIN CLASSES
The State shall, within the limits of its economic capacity and development, make effective provisions for securing the right to work, to education and to public assistance in case of unemployment, old age, sickness and disablement, and in other cases of undeserved want.
ARTICLE 42: PROVISION FOR JUST AND HUMANE CONDITIONS OF WORK AND
MATERNITY RELIEF
The State shall make provision for securing just and humane conditions of work and for maternity relief.
ARTICLE 43: LIVING WAGE, ETC., FOR WORKERS
The State shall endeavor to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavor to promote cottage industries on an individual or co-operative basis in rural areas.
ARTICLE43-A: PARTICIPATION OF WORKERS IN MANAGEMENT OF INDUSTRIES
The State shall take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organizations engaged in any industry.
ARTICLE 47: DUTY OF THE STATE TO RAISE THE LEVEL OF NUTRITION AND
THE STANDARD OF LIVING AND TO IMPROVE PUBLIC HEALTH
The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and in particular, the State shall endeavor to bring about prohibition of the consumption except for medical purposes of intoxicating drinks and of drugs which are injurious to health.
1. Introduction: -
At any time a worker is entitled to ‘Market Wage’, basis being “Demand and Supply.” It was the position in a police state. But with the advent of welfare state concept, Governments of different countries tried to interfere with the market basis wage in order to protect workmen from exploitation by employers. The Governments started fixing rates of wages necessary for the bare sustenance of life, which is minimum wage. Different concept of wage developed in course of time, and “Living wage” has become the ultimate goal of the workmen.
(A) Different concepts of “Wage”:
The Minimum Wages Act, 1948 is an Act providing for fixation of minimum rates of wages to the employees employed in certain scheduled employments. The Act, however, does not define the words ‘minimum wage’ nor has it specified the various factors to be taken into account while fixing the minimum rates of wages. In practice, it has been a ‘compromise wage’ and judicial balance of different factors like humanneed, the importance of industry in the national economy, the cost of living, the prevailing wage levels, etc.
The report of Fair Wages Committee, 1949, referred to concepts of “minimum wages”, “fair wage” and living wage”. The relevant concepts read as under: -
(1) We consider that a minimum wage must provide not merely for the bare sustenance of life but for the preservation of the efficiency of the worker. For this purpose the minimum wage must also provide for some measure of education, medical requirements, and amenities.
(2) It will be seen from this summary of the concept of the living wage should enable the male worker to provide himself and his family not merely the bare essentials of food, clothing and shelter but a measure of frugal comfort including education for the children, protection against ill-health, requirements of essential social needs, and measure of insurance against the more important misfortunes including old age.
(3) While the lower level of the fair wage must be the minimum wage, the upper level is equally set by what may be broadly called the capacity of the industry to pay.
As stated by the Apex Court itself 1992 (1) LLJ 342 “The Fair Wages Committee” report has been broadly approved by Apex Court in Express News Papers v. Union of India, [1961 (1) LLJ 339 (SC).] and Standard Vacuum Refining Co. of India v. Its Workmen and another [1961 (2) FLR 224 (SC) = 1961 (1) LLJ 227 (SC)].
As summed up by Apex Court in the case of Workmen of Reptokos Brett and Co. Ltd. V. Management [1991 (63) FLR 928 (SC) = 1992 (1) LLJ 343 (SC)].
“Broadly the wage structure can be divided into 3 categories: (1) Basic Minim Wage which provides bare subsistence and is at poverty-line level, (2) a little above is the “fair wage”, (3) and finally the “living wage” which comes at a comfort level. It is not possible to demarcate these levels of wage broadly distinguish one category of pay structure from another”.
Our Constitution, however, speaks of living wage and decent standard of life (Article 43) and prohibits different forms of forced labour (Articles 23).
(B) Need – Based Minimum Wage:
A concept of ‘need-based minimum wage’ was developed by the Triparitite Committee of the Indian Labour Conference held at New Delhi in 1957 and following five norms were accepted for fixation of minimum wage:
(1) In calculating the minimum wage, the standard working class family should be taken to consist of 3 consumption units for one earner; the earnings of women, children and adolescents should be disregarded. The worker is treated as one consumption unit, his wife as 0.8 unit and 2 children as 1.2 units.
(2) Minimum food requirement should be calculated on the basis of a net in-take of calories as recommended by Dr. Aykroyd for an average Indian adult of moderate activity:-
Viz., 2,700 calories per day comprising-
(1) 14 Oz cereals, 3 OZ pulses, 10 Oz vegetables, 21 Oz Milk, 2 Oz Sugar, 20 Oz Oil and Ghee, 2 Oz fruits, 3 Oz fish and meat and 1 Oz, eggs, Bread and wheat.
(2) Clothing requirements should be estimated at per captia consumption of 18 yards per annum which would give for the average worker’s family of four a total of 72 yards.
(3) In respect of housing, the rent corresponding to the minimum area provided for under Government’s Industrial Scheme should be taken into consideration for fixing the minimum wage.
(4) Fuel, lighting and other miscellaneous items of expenditure should constitute 20% to 30% of the total minimum wage”.
The Supreme Court, however, in its judgment in the case of Workmen of Reptakos Brett & Co. Ltd. V. The Management, [1991 (63) FLR 928 (SC) = 1992 (1) LLJ 343 (SC)], expressed as below and added another component as a guide for fixing the minimum wage in the industry. In the words of Supreme Court:
“The concept of ‘minimum wage’ is no longer the same as it was in 1936. Even 1957 is way behind. A worker’s wage is no longer a contract between an employer and an employee. It has the force of collective bargaining under the labour laws. Each category of the wage structure has to be tested at the anvil of social justice which is the live fibre of our society today. Keeping in view the socio-economic aspect of the wage structure, we are in view that it is necessary to add the following additional component as a guide for fixing the minimum wage in the industry;
(5) Children education, medical requirement, minimum recreation including festivals/ceremonies and provision for old age, marriages, etc., should further constitute 25% to 30% of the total minimum wage.
The wage structure which approximately answers the above 5 components is nothing more than a minimum wage at subsistence level. The employees are entitled to the minimum wage at all times and under all circumstances. An employer, who cannot pay the minimum wages, has no right to engage labour and no justification to run the industry.
In the case of Transport Corporation of India Ltd. C. State of Maharashtra and others, [1993 (2) LLJ 369 at p. 370], the High Court of Bombay summed up law relating to different concepts of ‘wages’ as below.
“Now the difference between ‘minimum’ and ‘fair wage’ may be noted in Workmen v. Raptakas, [1991 (63) FLR 928 (SC) – 1992 (1) LLJ 343], it was stated that ‘minimum wages’ were fixed on the basis of 6 norms or components, viz.,
(i) Calculating the minimum wages the standard working class family should be taken no consist of 3 consumption units for 1 earner; the earnings of women, children and adolescents should be disregarded.
(ii) Minimum food requirements should be calculated on the basis of net intake of calories, as recommended by Dr. Aykroyed for an average Indian adult moderate activity.
(iii) Clothing requirements should be estimated at per captia consumption of 18 yards per annum which would give for the average worker’s family of 4 a total of 72 yards.
(iv) In respect of housing, the rent corresponding to the minimum area provided for under Government’s Industrial Housing Scheme should be taken into consideration in fixing the minimum wages.
(v) Fuel, lighting and other ‘miscellaneous’ items of expenditure should constitute of 20% to 30% of the total minimum wage, and
(vi) Children education, medical requirements; minimum recreation including festivals / ceremonies, and for provision in old age, marriages etc., should further constitute 25 % to 30% of the total minimum wage.
It was then stated the wage structure which approximately answers the above 6 components is nothing more than a minimum wage at subsistence level”.
(C) Payment of Minimum Wage is must:
The employees are entitled to a minimum wage at all limes and under all circumstances. An employer who cannot pay the minimum wage has no right to engage labour and no justification to run the industry. Thus, in order to fix minimum wages the inquiry is restricted to determine the amount required for the workers bare subsistence. The financial capacity of the employer has no bearing on the question of fixing minimum wages. On the other hand ‘fair wages’ indicates that the financial capacity of the employer has to be taken into consideration. It may, therefore, be higher than minimum wages but never lower than that. In Raptaka’s case it was stated – ‘broadly the wage structure can be divided into three categories-the basic minimum wage’ which provides bare subsistence and is at poverty line level, a little above is the ‘fair wage’ and finally the ‘living wage’, which comes at ‘comfort level’.
In the case of A. P. Hotel Asstt. V. Government of A.P. and another, (writ Appeal No. 1036 of 2001 = 2003 (96) FLR 35 (Sum.) the A. P. High Court expressed the following views :
Minimum wage is a wage intermediate to a wage, which is just sufficient to meet the bare sustenance of an employee and his family but also expenses necessary for his other primary needs. Concept of minimum wage is likely to change with growth and development of economy. It is not a static concept. Statutory minimum wage is the minimum wage which is prescribed by statute. It may be higher than the bare subsistence or minimum wage. Fair wage or reasonable wage is different from minimum wage.
Earlier in the case of Express News Papers (P) Ltd. V. Union of India [AIR 1958 SC 578 = 1961 (1) LLJ 339 (SC)], the Apex Court observed that the “statutory minimum wage” may provide for measure of education, medical requirements and amenities as per connotation of “Minimum Rates of Wages” in section 3 of the Act.
(D) Incidental Remarks of D. B. of High Court of Orissa:
In the case of F.C.I., Workers Union v. F.C.I., [2005 (105) FLR 25], the Division Bench of High Court of Orissa expressed the following views:
“Article 43 of the Constitution provides that the state shall endeavour to secure by suitable legislation or economic organisation or in any other way, to all workers-agricultural, industrial or otherwise, ‘a living wage’. In Express News Papers (Private) Limited. And other v. The Union of India and others, [AIR 1958 SC 578 – 1961 (1) LLJ 339 (SC)]. The Supreme Court after discussing at length the concepts of ‘living wage’ prevalent in various parts of the world observed that there is a general agreement that ‘the living wage’ should enable the male earner to provide for himself and his family not merely the bear essentials of food, clothing and shelter but measure of frugal comfort including education for the children, protection against ill-health requirements of essential social needs and a measure of insurance against the more important misfortunes including old age. In the Standard Vacuum Refineries Co. of India v. Its Workmen and another, [1961 (2) FLR 224 (SC).], the Supreme Court further held that ‘a living wage’ is something far greater that the figures of a wage schedule and it is at the same time a condemnation of unmerited and unnecessary poverty and a demand for some measure of justice. After quoting Philip showdenon the concept of ‘The Living Wage’, the Supreme Court further held in the said case the concept of ‘Living Wage’ is not a static but an expanding concept and the number of its constituents and their respective contents are bound to expand and widen with the development and growth of national economy. In the Workmen represented by Secretary v. The Management of Reptakos Brett and co. Ltd. And another [1991 (63) FLR 928 (SC) = AIR 1992 SC 504], the Supreme Court made a distinction between basic ‘Minimum Wage’ which provides bare subsistence and is at poverty-line level, ‘fare wage’ which is a little above the minimum wage and the ‘living wage’ which comes at comfort level”.
(E) Capacity of the Industry / Establishment has no relevance in payment of Minimum
Wage:
In the case of Express News Papers v. Union of India [AIR 1958 SC 578 = 1958 (14) FJR 211 – 1961 (1) LLJ 339], the Apex Court held as under:
“There is also a distinction between a bare subsistence or minimum wage and a statutory minimum wage. The former is a wage which would be sufficient to cover the bare minimum needs of a worker and his family, that is, rate which has got to be paid to the worker irrespective of the capacity of the industry to pay.
If an industry is unable to pay its workmen at least a bare minimum wage it has no right to exist as was observed by us in Civil Appeal No. 235 of 1956 (Crown Aluminium Works v. Their Workmen) [1957 (13) FJR 292 = AIR 1958 SC 30 = 1958 (1) LLJ 1].
In the case of Crown Aluminium Works v. Their Workmen, [1958 (1) LLJ 1 (SC) = AIR 1958 SC 30 = 1958 (1) LLJ 1], the Apex Court held that “No industry has right to exist unless it is able to pay its workmen at least a bare Minimum Wage”.
In the case of Hindustan Aluminum Works v. Their Workmen, [1963 (6) FLR 313 (SC)], the Apex Court held that at the bottom of the ladder is the minimum basic wage which the employer of any industrial labour must pay in order to be allowed to continue any industry.
The Apex Court once again in the case of Raptakos Brett and Co. Ltd. V. Management, [1991 (63) FLR 928 (SC) = 1992 (1) LLJ 343], had said that an employer who cannot pay the minimum wages has no right to engage labour and no justification to run the industry.”
The Bombay high Court in the Case of Arbuda Bhuvan Tea Shop and others v. state of Maharashtra and others, [1991 (62) FLR 530 = 1998 (11) LLJ 811], held that in matter of fixation of Minimum Wages it is well settled that the capacity of the trade or industry is irrelevant.
According to Apex Court case of Bakshish Singh v. M/s. D. E. works and others, [1993 (67) FLR 1070 = 1994 (1) LLJ 209].
“It is settled law that the establishments which have no capacity to give to their workmen the minimum conditions of service prescribed by the statute has no right to exist Vide Bijay Cotton Mills Ltd., v. The State of Ajmer, [1955 (1) LLJ 129], M/s. Crown Aluminum Works v. Their Workmen, [1958 (1) LLJ 1] and U. Unichoyi and others v. State of Kerala (supra).
In this regard the Kerala High court (1994 (1) LLJ 1197) expressed the following views:
“Adverting to the scope of this article, this Court in the decision reported in Principal, Trichur Engg. College v. Sreenivasan, [1993 (1) KLT 364], has held that any employment in which the employee is denied the minimum wages will amount to ‘forced labour’ attracting the prohibition contained in Article 23 of the Constitution of India so that failure to pay minimum wages as enjoined in Article 23 by the employer to the employee will amount to violation of the constitutional right enshrined in Article 23. It was also held that the right guaranteed under Article 23 by the employer to the employee will amount to violation of the constitutional right enshrined in Article 23. It was also held that the right guaranteed under Article 23 can be forced even against private individuals”.
The A. P. High Court has also held that in case an employer cannot pay Minimum Wage, he has also no right to carry on his activities for running the Industry. A. P. Hostel Assn. v. Government of AP and others [2001 (91) FLR 717 = 2002 LLR 1122 (AP)].
In the Writ Appeal No. 1036 of 2001 in the case of A. P. Hostel Assn. v. Government of AP and another [2001 (91) FLR 717], the AP High Court again held that a minimum wage is a wage which must be paid irrespective of extent of profit, financial conditions of the establishment”.
In the case of M. G. B. and A Factories Workers Association v. state of Karnataka and others, [2003 (99) FLR 617], the Division Bench of High court of Karnataka stated as under:
“In addition in umpteen numbers of cases
(i) Chandra Bhavan Boarding and Lodging v. State of Mysore, [1969 (190 FLR 325 (SC)].
(ii) Kamani Metals and alloys Ltd. V. The Workmen [1967 (15) FLR 1 (SC)].
(iii) Sangam Press Ltd. V. The Workmen [1975 (3) FLR 43 (SC)].
(iv) Bijay Cotton Mills v. State of Ajmer [1954 – 55 (7) FLR 350].
(v) Hydro Engineers Pvt. Ltd. C. Their Workmen [1969 (18) FLR 189 (SC)].
(vi) Air Freight Ltd. V. State of Karnataka [1999 (83) FIR 126 (SC)].
(vii) Jayadip Paper Industries v. Their Workmen [AIR 1972 SC 603 = 1971 (40) FJR 540].
To cite a few, it was held that the capacity of the Industry or of any individual employer to pay the rates of minimum of wages is immaterial and irrelevant. Therefore, the contention of learned Counsel for the management that the Government of Karnataka ought to have taken; into account the capacity of the Beedi manufacturing industries to pay the rates of revised minimum wages while fixing the minimum wage is not acceptable to us”.
(F) Courts refrain from interference:
In the case of A.P. Hostel Assn v. Government of AP and another [2001 (91) FJR 717], the A.P. High Court held that the Notifications fixing Minimum Wages are not to be lightly interfered with under Article 226 of the Constitution.
The Division Bench of High court of Karnataka in the case of Manglore Ganesh Beedi and Allied Beedi Factories Workers v. State of Karnataka and others, stated as under:
“A notification fixing minimum wages in a country like ours where wages are already minimum should not be interfered with under Articles 226 except on the most substantial grounds. The Act is a social welfare legislation, undertakes to further Directive Principles of state policy and action taken pursuant cannot be struck down on mere technicalities”.
(G) Recovery of ‘minimum wage’ – Whether writ remedy is available:
The Division Bench of High court of Gujarat answered this a revision in the court of Gujarat answered this a revision in the Court of Gujarat Mazdoor sabha v. Commissioner of Labour and others [2006 (1) LLJ 546 (Guj.)], in the following terms:
“True it is that in the matter of Peoples Union for Democracy Rights and others v. Union of India and others, [AIR 1982 SC 1473 = 1982 (3) SCC 253 = 1982 (2) LLJ 454], the Supreme Court has observed that non-payment of the minimum wage amounts to violation of the fundamental rights but at the same time, it observed that it would also be for the State to take appropriate action against such erring officers, whether they are private or department. In paragraph-17 while disposing of the Writ applications, it was observed by the Supreme court that in case where the Government on the State or the Government Corporation take work from the labour or get the labour from the contractor, then their endeavour must be to see that the minimum wages are paid to them and no violations made. However, the Supreme Court, even in the said matter, did not say that it would issue a writ against the employers or the contractors, but, simply required the State and its agencies to see that the minimum wages are paid. The supreme court had observed that the authorities must take great care to see that the provisions of the Labour Laws are being strictly observed and they should not wait for complaint to be received from the workmen in regard to nonobservances of any such provisions before proceeding to take action against the erring officers or contractors, but, they should institute an effective system of periodic inspections, coupled with occasional surprise inspections by the higher officers, in order to ensure that there are no violations of the provisions of the Labour Laws and the workmen are not denied the rights and the benefits, to which they are entitled under such provisions, and if any such violations are found, immediate action should be taken against the defaulting Officers or contractors.
From these observations made by the Supreme Court, it is clear that the Supreme Court, despite holding that non-payment of the minimum wages was amounting to violation of the fundamental rights, did not issue any writ against the erring contractors or the employers, but, simply required the state Government and its Officers to institute an effective system.
In our considered opinion, when the Labour Laws provide for a procedural forum, then, the same cannot be short-circuited simply because they are time consuming. Even otherwise, if we start entertaining such applications, then, any order made by us or any writ issued by us, would again lead to a problem. This Court, after issuing the writs, will have to act as a Labour Court for enforcing the writs, which, in facts, is not the intention of the Constitution of India.
When the law provides for a proper forum, then, any person, for redressal of his grievance, must approach the said forum because the Officers are trained, they know how to handle the matters and the law further provides that in what manner, such orders can be executed.
We refuse to interfere in the matter. The appeal deserves to be and is accordingly dismissed.
2. CONCLUSION
To sum up, ‘Minimum Wage’ is a wage for bare sustenance and preservation of efficiency of an employee and his family. It is payable without reference to capacity of the industry to pay. An establishment or employer who cannot pay minimum wage has no right to stay in the Industry. Courts will not normally interfere with the minimum wages fixation matter. Concept of minimum wages changes with growth and development of economy.
The next step in the ladder is statutory minimum wage fixed under the provisions of Minimum Wages Act, 1948.
Next is ‘Fare Wage’ or reasonable wage whose upper limit depends upon the capacity of the industry to pay.
Above all is ‘Living Wage’ for which there is constitutional obligation under Article 43. This is a ‘good wage’ or ideal’ or ‘target wage’ and efforts of any Government are to achieve this goal.
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Recently it has been heard that SPL is going to be file against the Order of Supreme Court in very Short Period. Till then Lets wait & watch what New upcoming came from said Matter.
Regards,
Arihant
4th March 2019 From India, Surat
As per Supreme court judgement, it is mandatory to club all the allowances under one head so that it attracts P.F contribution.But my question is if we have to execute this, it has a huge impact on financial stability of an employer.Though it is always beneficial for the employees aspects. But can we bifurcate or give another way out so that it does not attracts P.F. My suggestion to this is that to implement this rather than contravene the judgement of the Supreme Court. But on the employers front , Can you please suggest alternative ways so that it does not attracts P.F and the liabilities of the employer does not increase.
Indranil Biswas
5th March 2019 From India, Kolkata
Any arrangement by restructuring the present emoluments 'with a view to reduce' the EPF contribution by employers itself is bad in law, that too post SC judgment has no hope. Such instances were struck down by courts in various cases decided earlier. I feel review petitions to SC in this regard might end up futile only. My hunch is that the impact of judgment in organised sector could only be very marginal as most of the employees would have already exceeded gross salary of Rs.15000/- Employers having employees who would be benefited by this judgment should work out the financial implications and see whether it worth the cost of review and decide. However I feel there should be a ban on implementing it from retrospective effect to avoid implied workload and operational & financial strain.
5th March 2019 From India, Bangalore
please clear the query about epf contribution of employees is increased or not
and what is the amount on which we would been deduct the pension contribution as per order by supreme court new judgement.
Is this is decreased or Increased.
EPF contribution on Gross or Basic Salary as per new order and from which date is start
18th April 2019 From India
Dear Seniors,
I request your views on the new judgement of Hon'ble Supreme Court regarding merging the allowances for PF contribution.
We have so many heads in salary:-
1. Basic
2. HRA
3. Conveyance
4. Special Allownce
5.
6th May 2019 From India, Bathinda
Dear Seniors,
I request your views on the new judgement of Hon'ble Supreme Court regarding merging the allowances for PF contribution.
We have so many heads in salary:-
1. Basic
2. HRA
3. Conveyance
4. Special Allowance
5. Misc. Allowance
6. Floating Allowance
So which head should be merged in basic for PF calculation and which should be excluded.
Our organization is contributing PF on complete basic. So according to this new judgement should be merge the salary heads in of all employees or only for those who are drawing basic less than 15000/-
Kindly share your views.
Thanks & Regards,
Shailza
6th May 2019 From India, Bathinda
Where is the GO boss
from EPFO India
26th July 2019 From India, Bangalore
Hi Shailza & BSuresh,
If you would read the full text of the SC's judgment on 'Spl.Allowance' you'll note that it didn't direct employers either to merge all or some of these allw.discussed in your post dt.6.5.19. Instead, such allowances camouflaged in different names are not to be there. You'll know little more when you read the attachments which will help you how to proceed further in the matter. Also read (https://www.citehr.com/612771-sc-jud...sic-wages.html).
The circular issued by the EPFO also is attached.
27th July 2019 From India, Bangalore

Attached Files
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File Type: docx DISCUSSIONS ON SC's JUDGMENT REG.SPL.ALLW FOR EPF CONTN.docx (19.6 KB, 36 views)
File Type: pdf EPFO's CIR. DATED 14.03.2019 to follow SC judgment.pdf (221.1 KB, 48 views)
File Type: docx Analysis on SC's judgment on EPF Contribution on Spl.Allow.docx (16.7 KB, 37 views)

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