Understanding DA and Basic Pay
DA is separate from basic pay, and in the industry, it is also considered as Consolidated Basic. As mentioned in the Industrial Disputes Act, 1947, DA depends upon the place of posting of an employee. According to the Supreme Court's view, all categories of staff receiving the same wages and posted at one place should be given the same scale of DA, regardless of whether they are working as clerks, members, subordinate staff, or factory workmen.
On the basic pay, the scale of pay should be determined after considering the nature of the work done, the capacity of the industry to pay, and other similar factors. Whether the employer is able to make a profit or not has no bearing on the question of proper wages for a workman.
To determine the proper basic wages of a workman, a comparison with the rates prevailing in similar businesses in the locality is useful.