Dear Sridharan,
Your question seems to be unrelated to this thread. Moreover, the issues of determining the parity between the minimum wages fixed under the MW Act,1948 and the industry wages in the face of componential difference in their structures have already been discussed here several times in the light of the judgment of the Supreme Court in the case of Air Frieght Ltd., Vs The State of Karnataka and Others [ AIR 1999 SC 2459 ]. However, let me answer the same query once again as follows:
When the sum total of the industry wages minus the value of the excluded components as per the MW Act is equal to or more than the sum total of the minimum wages fixed, the compliance by the employer becomes complete is the principle evolving from the judgment.
For the sake of ready reference, the extracts of the relevant paragraphs of the judgment are given below:
Para 24: " .... hence, in cases where employer is paying total sum which is higher than the rates of minimum wages
fixed under the Act including the cost of living index (VDA), he is not required to pay VDA separately."
Para 26: " (2) ..... for determining whether they are paying minimum rates of wages or not, the amount paid for the
value of items which are excluded u/s 2(h) of the Act is not to be taken into consideration.
(3) Minimum rates of wages fixed under the Act is remuneration payable to the worker as one package of
fixed amount. In cases where minimum wages is linked with cost of living index, the amount paid on
the basis of dearness allowance is not to be taken as an independent amount of the minimum wages
but as part and parcel of the process of computing the rates of minimum wages which is to be
determined after taking into consideration the cost of various necessities."
But, restricting the total of basic wages plus D.A to that of a lower proportion of the minimum wages would result in the reduction of certain indirect benefits like contributions to EPF and ESI, BONUS, Gratuity etc., which would lead to the allegation of unfair labor practice on the part of the employer is my personal opinion. Who knows, if such an issue is raised by some workmen before the Supreme Court in future, the Court may reverse its opinion! Therefore, my advice would be to restructure the existing wage scales in such a manner that the basic and dearness allowance remain always at par with the minimum rates of wages