Understanding Wage Calculations Under Section 25: How Do You Determine Average Pay?

Dear All,

Please share your views on the following for better clarity:

A. How to calculate Average pay u/s 25 F?
B. Do we have to divide the month's salary by 26 days? If yes, where is it written?
C. What components have to be included in the Pay for this purpose?

Regards,
B.S. Bhadauriya

In case of a monthly-paid workman, their average pay is the average of the pay for the last three months. For a weekly-paid workman, their average pay is the average of the pay for the last four weeks. The average pay for a daily-paid workman is the average of the pay for the last twelve days.

There is no mention in the ID Act as to whether to calculate the daily pay by dividing the monthly salary by 26 or 30. Pay for any purpose under Labour Acts means basic salary plus dearness allowance.

Regards,
Madhu.T.K

Thanks for comments.
In the meantime I have further discussed this issue and my views are as follows:
(i) As per definition of “Wages/ Salary” under Section 2 (rr) of the Industrial Dispute Act, 1947 includes Basic, DA, HRA/Value of House Accomodation and other Allowances payable on monthly basis but does not include Annual Benefits like Bonus, Gratuity, Contribution to PF, LTA.

(ii) The Average Pay of 15 days is to be calculated by dividing the monthly rate of Wages/Salary last drawn by the employee by 26 days and multiplying the quotient by 15 days. Although there is no direct reference of this calculation in Industrial Dispute Act, however the same is advised by Labour Law Advocates with specific reference to the provisions of calculating Gratuity under the payment of Gratuity Act.
regards
B.S.BHADAURIYA