Allowed

M/S. Udaya T v. Vs Deputy Labour Commissioner and Authority

Karnataka HC22 Aug 2024WP/12205/2020

Case brief

AI extract

What is this about?

Employer challenged a Deputy Labour Commissioner's order directing payment of omitted dearness allowance to workmen despite total wages exceeding notified minimum wages. Following precedent that VDA is part of a single wage package, the court held separate DA need not be paid where total wages exceed minimum wages and set aside the order.

What did the court decide?

Impugned order dated 31.12.2019 of respondent No.1 set aside.

M/S. Udaya T v Vs Deputy Labour… — Labour and Industrial Disputes | Karnataka HC (2024)

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NC: 2024:KHC:34926 WP No. 12205 of 2020

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 22^ND DAY OF AUGUST, 2024 BEFORE

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THE HON'BLE MRS JUSTICE K.S. HEMALEKHA

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WRIT PETITION NO.12205 OF 2020 (L-MW)

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BETWEEN:

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M/S. UDAYA T.V. (SUN NETWORK LTD.), NO.09, MARAN TOWER, BARTON ROAD, OFF. M.G. ROAD, BENGALURU – 560 025 REPRESENTED BY ITS DIRECTOR MR. SELVAM. ... PETITIONER

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(BY SRI S.N. MURTHY, SENIOR ADVOCATE A/W SRI SOMASHEKAR, ADVOCATE (THROUGH VC.)

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AND:

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Digitally signed by SHYAMALA Location: HIGH COURT OF KARNATAKA

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DEPUTY LABOUR COMMISSIONER AND AUTHORITY UNDER SECTION 20 (1) THE MINIMUM WAGES ACT, 1948 DIVISION-1, KARMIKARA BHAVANA, ITI LAYOUT, BANNERGHATTA ROAD, BENGALURU – 560 029.

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THE SENIOR LABOUR INSEPCTOR, 8^TH CIRCLE, KARMIKARA BHAVANA, BANNERGHATTA ROAD, BENGALURU – 560 029. ... RESPONDENTS

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(BY SRI MANJUNATH K., HCGP)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR RECORDS AND QUASH THE ORDER DATED 31.12.2019 PASSED BY THE RESPONDENT NO.1 AS ANNEXURE-L.

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THIS WRIT PETITION, COMING ON FOR FINAL HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA

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ORAL ORDER

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Assailing the legality and correctness of the order dated 31.12.2019, passed by respondent No.1 (Deputy Labour Commissioner and Authority under Section 20 (1) of the Minimum Wages Act, 1948 [“the MW Act” for short]) directing the petitioner to pay a sum of Rs.54,88,192/- as omitted dearness allowance, holding that the petitioner has not paid the dearness allowance to 290 workmen employed with the petitioner.

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Heard Sri S.N.Murthy, learned senior counsel

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for the petitioner and Smt. Rashmi Rao, learned High

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Court Government Pleader for the respondents.

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Factual Matrix:

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Petitioner is a company engaged in the business

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of providing Regional Entertainment and News Channel to the General public through television and the petitioner is registered under Karnataka Shops and Commercial Establishments Act, 1961 (‘the Act’ for short). Respondent

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No.2 - Senior Labour Inspector, on visiting the premises of

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the petitioner, pointed out that the petitioner is not paying dearness allowance as per the minimum wages gazette notification dated 04.07.2012 and issued notice to the petitioner. The petitioner replied stating that they have paid more than the minimum wages and produced documents to indicate that the petitioner has not paid dearness allowance separately, but forms part and parcel of the total wage payable to its employees.

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Respondent No.2, having not been satisfied with the reply, filed a complaint before respondent No.1, that the petitioner has violated the provisions of the MW

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Act by not paying the dearness allowance as per the gazette notification dated 04.07.2012. The petitioner appeared and filed its explanation stating that they have not violated any provisions of the MW Act and all along contended that there is no requirement to pay dearness allowance separately as per the law laid down by the Apex

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Court in Airfreight Ltd. vs. State of Karnataka and

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others¹ (Airfreight) and only requirement is that the total of wages should be equivalent to or more than the minimum rate wages fixed by the Government.

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Learned senior counsel for the petitioner submits that the Apex Court in the case of Airfreight stated supra has clearly laid down that the minimum rate of wages fixed under the MW Act is a remuneration payable to the worker as one package of fixed amount and in the cases, where minimum wages is linked with cost of living index, the amount paid on basis of the dearness allowance is not to be taken as an independent component of the minimum wages, but as part and parcel fo the process of computing the rate of minimum wages which is to be determined after taking into consideration the cost of various necessities and further the Apex Court has held that if the total wages paid is more than the minimum wages prescribed by the Government, the wages paid by the petitioner than the wages paid by the petitioner

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1 1999 Supp. 1 SCR 22

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include basic pay wages plus the dearness allowance, therefore, the direction issued by the respondent No.1 to pay additional variable dearness allowance (VDA) to the employees is illegal.

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Learned senior counsel taking this Court to the

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provisions of the MW Act, more particularly Sections 3, 4 and 5 would submit that the minimum rate of wages consists of two components, one is basic and the other is VDA and the mandatory requirement of the Act is that the petitioner should pay wages more than the minimum wages prescribed under the Act and it is not mandatory to pay dearness allowance separately. Further, learned senior counsel drawing the attention of the Court to the Annexures-M, N and P produced along with an application submits that the gross salary of each employee as well as the salary earned by them during the said period is higher than the minimum wages fixed by the Government of Karnataka at Annexure – M for shops and commercial establishments. Further, it is brought to the notice of this

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Court that the petitioner is paying the gross wages which is more than the wages fixed by the Government and VDA of Rs.3,070.80/- for six months from 01.04.2017 to 31.10.2017 and thus, the impugned order passed by respondent No.1 is without considering that the petitioner has paid wages more than the minimum wages fixed by the Government of Karnataka as per the notification. Therefore, the direction issued by respondent No.1 to pay the VDA is illegal and apparently erroneous without taking into consideration that the wages paid by the petitioner include the VDA and more than the total wages prescribed as minimum wages.

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The point that arises for consideration in the present petition is :

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“Whether the order of respondent No.1 directing the petitioner to pay VDA is justified, even when the total wages paid by the petitioner is more than the prescribed minimum wages under the notification?”

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To ensure the social justice and economic well

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being of the workers, the Parliament enacted the MW Act.

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Enacted to address the growing concerns of worker exploitation and inequality, the Act has far reaching implications for both employees and employers. The primary objective of the MW Act is to safeguard the interest of the workers by providing a mechanism for ensuring a bare minimum level of remuneration. The benefits include, but not limited to the following:

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(i) Protecting workers from exploitation - by providing minimum wage for a fixed number of hours, the exploitation of the workers shall be reduced to a great extent.

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(ii) Ensuring a basic income/minimum wages are fixed revised based on adequate living standards. Thus, fixing minimum wages for workers shall ensure a basic income for them.

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(iii) Reducing income equality – disparity and

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income can be reduced by fixing the minimum wages for workers.

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(iv) Promoting economic stability – fixing minimum

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wages for workers shall provide the way to promote economic stability by improving the standard of living.

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(v) Setting labour standards – by reducing the exploitation of workers, the standard of work would improve to a great extent.

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(vi) Addressing poverty – fixing minimum wages of

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the employees paves the way for poverty eradication by encouraging more people to undertake work of any kind.

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(emphasis supplied)

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The main objective of Minimum Wages Act are,

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(i) To fix and revise the minimum wages to be paid by the employer to employees in certain employment.

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(ii) To fix an adequate minimum wage for all the employees in the interest of public.

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(iii) To fix the daily working hours of an employee according to the employment.

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(iv) To prevent exploitation of the workers.

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(v) To resolve any issue pertaining to non-payment

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or less payment of wages.

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(vi) To establish and provide the powers and duties of inspectors.

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(vii) To establish and provide the powers and duties of Labour Commissioner and other important officers.

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(viii) To provide the powers to make rules to the appropriate Government.

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Section 2(h) of the MW Act, provides an inclusive definition for wages which reads as under:

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“ 2. Interpretation.— In this Act, unless there is anything repugnant in the subject or context,—

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(h) “wages” means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance, but does not include—

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(i) the value of

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(a) any house accommodation, supply of light, water, medical attendance, or

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(b) any other amenity or any service excluded by general or special order of the appropriate Government;

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(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance;

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(iii) any travc1ling allowance or the value of any traveling concession;

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(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or

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(v) any gratuity payable on discharge;”

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Section 2(h) envisages all the remuneration

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capable of being expressed in terms of money that the employer pays to the employee during the course of employment. It also includes house rent allowance,

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however, it does not include any accommodation, supply of light, water, medical attendance or any other amenity as the appropriate Government may deem fit, any contribution of the employer towards pension fund or provident fund, travel allowance, defray special expense and any gratuity payable on discharge of the employee.

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Section 3 envisages that the appropriate Government shall in any manner provided, fix the minimum rates of wages payable to the employees employed in employment specified in part I and part II of the schedule and in an employment added to other party by the notification under Section 27 and the said minimum wages are required to be reviewed at such intervals as the appropriate Government may think fit, but it is required to be reviewed and revised within 55 years.

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Section 4 provides the minimum wage may consist of basic pay, wages and special allowance which reads as under:

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“ 4. Minimum rate of wages.— (1) Any minimum rate of wages fixed or revised by the appropriate Government in respect of scheduled employments under section 3 may consist of—

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(i) a basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the “cost of living allowance”); or

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(ii) a basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect of supplies of essential commodities at concession rates, where so authorised; or

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(iii) an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any.

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(2) The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rates shall be computed by the competent authority at such intervals and in accordance with such directions as may be specified or given by the appropriate Government.”

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Section 5 of the Act provides that the appropriate Government may fix or revise minimum wages either by appointing committees and sub-committees or publishing its proposal for the people likely to be affected by such proposals in the official gazettes.

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The Apex Court in the case of The Standard Vacuum Refining Company of India vs. Its Workmen

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and another² , the Apex Court enumerated the guiding principle for determining the minimum wages by all wage fixing authorities:

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(i) In calculating the minimum wage, the standard working class family should be taken to consist of 3 consumption units for one earner; the earnings of women, children and adolescents should be disregarded.

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(ii) Minimum food requirement should be calculated on

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the basis of a net intake of calories, as recommended by

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2 AIR 1961 SC 895

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Dr. Aykroyd for an average Indian adult of moderate activity.

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(iii) Clothing requirements should be estimated at a per capita consumption of 18 yards per annum which would give for the average workers family of four, a total of 72 yards.

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(iv) In respect of housing, the rent corresponding to the minimum area provided for under Government's Industrial Housing Scheme should be taken into consideration in fixing the minimum wage.

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(v) Fuel, lighting and other ‘miscellaneous’ items of expenditure should constitute 20% of the total minimum wage.

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With regard to the question, whether dearness allowance would constitute a part of the minimum wages. The Bombay High Court in the case of Harilal Jechand Doshi vs. Maharashtra General Kamgar Union and

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another³ (Harilal Jechand Doshi) held that the provisions of Minimum Wages Act, 1948 do not postulate different category for calculation of minimum wages. If the employer pays the total wage that is about the minimum wage fixed under the Act, he cannot be held to be in contravention of the provisions of the MW Act, as the total wage would comprise of basic wages and the dearness allowance. The Apex Court, in the case of Airfreight stated supra, has held that in cases where the minimum wages are linked with cost of living index, the amount paid on the basis of dearness allowance is not to be taken as an

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independent component, but rather has to be considered part and parcel of the minimum wages and observed at para Nos.24 and 25 as under:

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“24. As stated above minimum wage must provide not merely for the bare subsistence of life but for the preservation of the efficiency of the worker and so it must also provide for some measure of education, medical requirements and amenities of himself and his family. While fixing the minimum wages, the capacity of the employer to

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3 2000 (2) Mh.L.J. 123

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pay is treated as irrelevant and the Act contemplates that rates of minimum wage should be fixed in scheduled industries with a dual object of providing sustenance and maintenance for the worker and his family and preserving his efficiency as a worker. So it is required to take into consideration the cost of bare subsistence of life and preservation of efficiency of the workers and for some measure of education, medical requirements and amenities. This cost is likely to vary depending upon the cost prevailing in the market of various items. If there are inflationary conditions prevailing in the country, then minimum wages fixed at a particular point of time would not serve the purpose. Therefore, Section 4 contemplates that minimum wages fixed at a particular point of time should be revised from time to time. Section 4 postulates that minimum wage fixed or revised by the appropriate Government under Section 3 may consist of basic rates of wages and special allowance at a rate to be adjusted at such intervals in such manner as the appropriate Government may direct to accord as nearly as practicable with a variation in the cost of living index number applicable to such workers; alternatively, it permits the fixation of basic rate of wages with or without the cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concessional

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rates where so authorised; or in the alternative, it permits an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of concessions, if any. The purpose of Section 4 is to see that minimum wage can be linked with increase in cost of living so that increase in cost of living can be neutralised or all inclusive rates of minimum wages can be fixed. But, from the aforesaid Sections 3 and 4, it is apparent that what is fixed is total remuneration which should be paid to the employees covered by the Schedule and not for payment of costs of different components which are taken into consideration for fixation of minimum rates of wages. It is thus clear that the concept of minimum wages does take in the factor of the prevailing cost of essential commodities whenever such minimum wage is to be fixed. The idea of fixing such wage in the light of the cost of living at a particular juncture of time and of neutralising 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 V.D.A. 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), are not amenable to split up. It is one pay package. Neither the scheme nor any provision of the Act

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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. Hence, in cases where the employer is paying a total sum which is higher than the minimum rates of wages fixed under the Act including the cost of living index (VDA), he is not required to pay VDA separately. However, those higher wages should be calculated as defined in Section 2(h) of the Act. Section 2(h) specifically provides that the value of the following items is not required to be computed for finding out whether the employer pays minimum wages as prescribed under the Act:

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(i) the value of any house, accommodation, supply of light, water, medical care, or any other amenity or any service excluded by general or special order of the appropriate Government.

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(ii) any pension fund or provident fund or under any scheme of social insurance.

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(iii) any travelling allowance or the value of any travelling concession.

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(iv) any sum paid to any person employed to defray special expenses curtailed on him by the nature of his employment or

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(v) any gratuities payable on discharge.

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25. But while deciding the question of payment of minimum wages, the Competent

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Authority is not required to bifurcate each component of the costs of each item taken into consideration for fixing minimum wages, as lump sum amount is determined for providing adequate remuneration to the workman so that he can sustain and maintain himself and his family and also preserve his efficiency as a worker. Dearness allowance is part and parcel of cost of necessities. In cases where the minimum rates of wages is linked up with V.D.A., it would not mean that it is a separate component which is required to be paid separately where the employer pays a total pay package which is more than the prescribed minimum rate of wages.”

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Under similar circumstances, the Co-ordinate Bench of this Court in Sunrise Industries vs. Sunrise Industrial Unit⁴ (Sunrise Industries) has held at para No.11 as under:

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“11. Before entering into discussion with regard to points 2 and 3 formulated hereinabove, certain facts relating to the period anterior to the disputed period is required to be stated. The workmen were undisputedly being paid consolidated wages by petitioner – management and this fact is evidenced

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4 W.P.No.18207/2011 dated 30.05.2005

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from the Salary Register produced by the petitioner relating to the period April 1998 as per Annexure-B. On a Judgment being rendered by this court to the effect that Dearness Allowance should be paid separately as per the Minimum Wages Notification, petitioner – management started paying wages to its workmen separately i.e., the Dearness Allowance component was split-up by cutting out the said component from the consolidated wages that was being paid every month to the workmen as per Annexure-C. This mode of payment continued from the year 1998 till 2000 undisputedly. It was also agreed by the management that Dearness Allowance was paid in accordance with Minimum Wages Notification as applicable to Engineering Industry shall be paid with retrospective effect from 1.1.1999 and it shall be in force till 31.3.2000. The Hon’ble Supreme Court in Airfreight’s case reversed the judgment of this court and held that consolidated wages paid by the employer, if it is more than the total of the basic wages which includes the Dearness Allowance component, the employer need not show separately the Dearness Allowance component and held that in cases where the minimum rates of wages is linked up with VDA it would not mean that it is a separate component which is required to be paid separately and when the employer pays a total pay package which is

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more than the prescribed minimum rates of wages then such employer need not pay Dearness Allowance separately. It has been held in Airfreight’s case referred to supra by the Hon’ble Apex Court as under:

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23. Section 3, inter-alia, provides that appropriate Government shall in the manner provided, fix the minimum rates of wages payable to the employees employed in any employment specified in Part I or in Part II of the Schedule and in an employment added to other party by the Notification under Section 27 and said minimum wages are required to be reviewed at such intervals as the appropriate Government may think fit, but it is required to be reviewed and revised within 5 years. Section 4 which provides that minimum wage may consist of basic rate of wages and special allowance reads as under:

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4. Minimum rate of wages (1) Any minimum rate of wages fixed or revised by the appropriate government in respect of schedule employments under Section 3 may consist of-

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(i) a basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in such manner as the

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appropriate government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the “cost of living allowance”); or

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(ii) a basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect of suppliers of essential commodities at concession rates, where so authorized; or

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(iii) an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any.

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(2) The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rate shall be computed by the competent authority at such intervals and in accordance with such directions as may be specified or given by the appropriate government.

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24. As stated above minimum wage must provide not merely for the bare subsistence of life but for the preservation of the efficiency of

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the worker and so it must also provide for some measure of education, medical requirements and amenities of himself and his family. While fixing the minimum wages, the capacity of the employer to pay is treated as irrelevant and the Act contemplates that rates of minimum wage should be fixed in schedule industries with a dual object of providing sustenance and maintenance of the worker and his family and preserving his efficiency as a worker. So it is required to take into consideration cost of bare subsistence of life and preservation of efficiency of the workers and for some measure of education, medical requirements and amenities. This cost is likely to vary depending upon the cost prevailing in the market of various items. If there are inflationary conditions prevailing in the country, then minimum wages fixed at a particular point of time would not serve the purpose. Therefore, Section 4 contemplates that minimum wages fixed at a particular point of time should be revised from time to time. Section 4 postulates that minimum wages fixed or revised by the appropriate Government under Section 3 may consist of basic rates of wages and special allowance at a rate to be adjusted at such intervals in such manner as the appropriate Government may direct to accord as nearly as

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practicable with a variation in the cost of living index number applicable to such workers; alternatively, it permits the fixation of basic rate of wages with or without cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concessional rates where so authorized; or in the alternative, it permits an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of concessions, if any. The purpose of Section 4 is to see that minimum wage can be linked with increase in cost of living so that increase in cost of living can be neutralised or all inclusive rates of minimum wages can be fixed. But, from the aforesaid Sections 3 & 4, it is apparent that what is fixed is total remuneration which should be paid to the employees covered by the Schedule and not for payment of costs of different components which are taken into consideration for fixation of minimum rates of wages. It is thus clear that the concept of minimum wages does take in the factor of prevailing cost of essential commodities whenever such minimum wage is to be fixed. The idea of fixing such wage in the light of cost of living at a particular juncture of time and of neutralising the rising prices of essential Commodities by linking up scales of minimum

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wages with the cost of living index is provided for in Section 4 but V.D.A. 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) 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 necessities taken into consideration for fixing the same. Hence, in cases where employer is paying total sum which is higher than minimum rates of wages fixed under the Act including the cost of living index (VDA), he is not required to pay VDA separately. However, that higher wages should be calculated as defined in Section 2(h) of the Act. Section 2(h) specifically provides that value of the following items are not required to be computed for finding out whether employer pays minimum wages as prescribed under the Act:

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(i) the value of any house, accommodation, supply of light, water, medical care, or any other amenity or any service excluded by general or special order of the appropriate Government,

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(ii) any pension fund or provident fund or under any scheme of social insurance

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(iii) any travelling allowance or the value of any travelling concession

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(iv) any sum paid to any person employed to defray special expenses curtailed on him by the nature of his employment or

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(v) any gratuities payable on discharge.

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In the above case, the employer sought for a declaration that notification dated 19.8.1987 issued by the state Government in exercise of its power under section 27 of the Minimum Wages Act fixing the minimum rates of wages payable to the categories of employees as specified in the said notification for item No.28, namely “Shops and Commercial Establishments” was not applicable to the appellant – Industry and for setting aside the order passed by the competent authority under the Minimum Wages Act. The employees of the company had claimed payment of Variable Dearness Allowance (VDA) as a separate component on the basis of the said notification. The authority as well as this court up held the claim of workmen. The Hon’ble Apex Court while reversing the finding of this court held the rates of Minimum wages mentioned in the notification were inclusive of the rates of Dearness Allowance and Hon’ble Apex Court

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also took the cost of living allowance into consideration and as such it held that, if an employer is paying total sum which is higher than minimum rates or wages fixed under the Act, including the cost of living index (VDA), such employer is not required to pay VDA separately. It was further held that wages should be calculated as defined u/s.2(h) of the Minimum Wages Act. In conclusion, it was held where the employer was paying wages at a higher rate than the minimum wages such employer would not be liable to pay Dearness Allowance in addition to the minimum wages prescribed under the notification.”

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And further at para No.12 giving illustrations in light of the contentions raised by the parties and in the backdrop of the law laid down by the Apex Court in Airfreight’s case has held as under:

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“12. In order to consider the arguments advanced by the learned advocates, it would be of benefit to give the following illustrations which would reflect some amount of light on the contentions, in the back drop of the law laid down by the Hon’ble Apex Court in Airfreight’s case.

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Illustration No.1:

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In case the minimum wage is Rs.75/- and VDA fixed under the said notification (issued under the Minimum Wages Act) is Rs.25/- the total component of wages would be Rs.100/-. If a workmen say for example is paid Minimum wages @ Rs.75/- as fixed under notification but VDA @ Rs.15/- is only paid, the total component would be Rs.90/- and in such circumstances workmen can claim the minimum VDA fixed under the notification which is Rs.25/- to make the total component at Rs.100/- since there is a shortfall in the component of VDA. In such circumstances, the workmen can contend that VDA paid to him is less and seek for payment of the balance amount of Rs.10/- in accordance with the notification.

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Illustration No.2:

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In case the minimum wage is Rs.75/- and VDA is fixed under the said notification (issued under the Minimum Wages Act) is Rs.25/- the total component would be Rs.100/-. If a workmen say for example is paid Minimum wages @ Rs.90/- as fixed under notification (much more than the amount fixed under the notification) and VDA @ Rs.15/- is paid, the total component would be Rs.105/- and as such, the workmen would be receiving more than Minimum Wages than fixed under the notification namely he would be receiving the Minimum Wages

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@ Rs.105/- as against Rs.100)/- fixed under the notification. In such circumstances, the workmen cannot contend that VDA component fixed under the Minimum Wages Notification being Rs.25/- the management is required to pay the balance amount of Rs.10/-. In such circumstances, if the plea of the workmen is accepted, the total component would become Rs.125/- which would be Rs.25/-more than the Minimum wages fixed under the notification.”

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Careful reading of Sections 3 and 4 of MW Act,

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and from the decisions of the Apex Court in the case of Airfreight and the decision of the Co-Ordinate Bench of this Court in the case of Sunrise Industries it is apparently clear that what is fixed is the total remuneration which should be paid to the employees covered under the schedule and not for the payment of cost of different components which are taken into consideration for fixation of minimum wage of wages and thus, the minimum wage when linked with cost of living, the amount paid on the basis of dearness allowance is not to be taken as an independent component of the minimum wages, but as part and parcel of the process of computing

¶179

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the rates of minimum wages which is to be determined taking into consideration the cost of living and necessities. The Labour Commissioner was not required to bifurcate the wage and the dearness allowance, as lumpsum is determined for providing adequate remuneration to the workman, so that he can sustain and maintain himself and

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his family and also preserve his efficiency as a worker. The dearness allowance is part and parcel of cost of necessity and it is not required to be paid separately where the employer pays a total pay package, which is more than the prescribed minimum rate of wages. In the instant case, the petitioner is not paying the dearness allowance separately, but as could be seen from the salary slips of the employees, annexed to the writ petition, the petitioner has paid more than the minimum wages fixed

¶182

by the Government and the order dated 31.12.2019 passed by respondent No.1 deserves to be set aside.

¶183

For the foregoing reasons, the point framed for consideration is answered in favour of the petitioner

¶184

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¶185

and it has to be held that when the total of the basic pay which includes the dearness allowance component is more, then the minimum wages, the employer need not show separately the dearness allowance component and in cases where the minimum wages of minimum rate of wages is linked up with VDA, it would not mean that it is a separate component, which is required to be paid separately, and when the employer pays a total pay package which is more than the prescribed minimum rate of wages, then the employer need not pay dearness allowance separately and accordingly, this Court pass the following:

¶186

ORDER

¶187