Dear Friends,
If we read paragraph 19 of the said judgment, it reads as follows:
"The idea of fixing such wage in the light of the cost of living at a particular juncture of time and of neutralizing the rising prices of essential commodities by linking up scales of minimum wages with the cost of living index is provided for in Section 4 but VDA is part and parcel of wages. Once rates of minimum wages are prescribed under the Act, whether as all-inclusive under Section 4(1)(iii) or by combining basic plus dearness allowance under Section 4(1)(i), they are not amenable to split up. It is one pay package. Neither the scheme nor any provision of the Act provides that the rates of minimum wages are to be split up on the basis of the cost of each of the necessities taken into consideration for fixing the same."
It may please be noted that the definition of wages under the Act never says that the minimum wages can be bifurcated under various heads.
Regards,
samvedan
Hello,
The answer to your query is YES!
If you kindly get hold of a Supreme Court judgment (1999 II CLR 537) Airfreight Ltd. v State of Karnataka, the issue will be clear. Your labor advisor should have the judgment with him. In case he does not have it, please communicate your fax number, and I could fax it to you.
But remember, the judgment does not go too well with Inspecting Authorities as many of them like to play GOD to workmen by calling the Minimum Rate of Wages the "Basic Salary" and the Special Allowance the "Dearness Allowance" and virtually force the employer to pay PF, Gratuity, and Bonus on a higher quantum.
One has to be skillful in warding off such authorities if they happen to harass you.
In my line of work, I have helped many employers implement their own structure of wages without many problems. But what is life without problems?
If you have more questions, ask!
Regards,
samvedan
September 8, 2007