Hr NewsStatutory Compliance

Stay order for retrospective effect of Bonus by Kerala High Court

By | N Nataraajhan

PFA copy of Judgement by the Hon’ble SC in Airfreight v Stae of Karnataka, wherein SC has clearly held that  in cases where employer is paying total sum which is higher than minimum wages fixed under the Act including the cost of living index (VDA), he is not required to pay VDA seperately. However, that higher wages should be calculated as defined in Section 2 (h) of the Act” (copy attached). Section 2 (h) of the Minimum Wages Act 1948 defines “ wages means all remuneration capable of being expressed in terms of money … and includes house rent allowance … “(copy attached).

However, ignoring the specific provision in the Minimum Wages Act 1948 and the very clear and categorical Judgement of the Hon’ble Supreme Court, almost all State Governments have issued Gazette Notification fixing only Basic / Wages and Dearness allowance as Minimum Wages and ignoring HRA.

Moreover, the recent order of the EPF Tribunal (copy attached) also very specific that fixation of wages / allowances is between the employer and employee and the EPF authorities could only demand PF contribution on the Basic and DA so fixed as per the EPF & MP Act 1952.

Therefore in view of the recent amendment to the Payment of Bonus Act 1965, Employers should take it up through their representative Forums / Federation and challenge the Notifications of the respective State Governments issued under the Minimum Wages Act 1948 so that minimum Bonus of Rs 7000 /- only could be paid without reference to the Minimum wages. The revised fixation of wages and allowances could also help the employers in restricting the cost towards many other payments like Gratuity etc.,

N Nataraajhan     HP : + 91 94835 17402

Sakthi Management Services

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