Workers on Strike Over Dearness Allowance: Is Their Demand Legitimate? Seeking HR Guidance

We were a small Ltd company with about 55 workers. We have stopped paying variable Dearness Allowance (DA) to the workers based on a case from the Allahabad High Court verdict. The court stated that if the employer is already paying significantly more than the minimum wages in any form (such as House Rent Allowance and other allowances), there is no requirement to pay the DA until their gross wages fall below the minimum wage threshold. This decision was also confirmed by the labor department.

Currently, the workers' union is staging a strike to demand the reinstatement of the DA benefits. Is this legitimate? We request guidance on the appropriate course of action from the HR side.

In any case, any change detrimental to the employees/workers in the absence of Section 9A of the Industrial Dispute Act would be illegal from the employer's standpoint. So, if you are covered under the above case, I am sure the Notice of Strike is legal.

You cannot stop paying the DA on the grounds that you are already paying more than minimum wages because the wages of the workmen cannot be reduced at any point in time. This could lead to an industrial dispute, and the action of the workmen is justified.

Regards,
D. Phani Kumar
DGM - HR
Vasaadatta Cement
Sedam, Karnataka