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M/S The Indure Ltd. v. State Of U.P.Through Secretary,Ministry Of Labour & Others - WRIT - C No. 52601 of 2000  RD-AH 8898 (10 May 2007)
(Judgment reserved on 27.4.2007)
(Judgment delivered on 10.5.2007)
Civil Misc. Writ Petition No.52601 of 2000
M/s Indure Limited, Industrial area Sahibabad, Ghaziabad vs. State of U.P. and others
First writ petition has been filed by the workmen through their Union - Engineering Kamgaar Union against the employer M/s Indure Limited, Ghaziabad. The second writ has been filed by the same employer against their workmen through their Union - Engineering Kamgaar Union. The bone of contention between the parties is interpretation of Government Order dated 15.5.2000 issued by Labour Department-I, Government of Uttar Pradesh under Section 3(b) of U.P. Industrial Disputes Act fixing wages for Engineering Industry/Engineering Units employing 50 or more workmen. In the said Government Order such Industries which employ more than 50 workmen have been divided into two categories. First category consists of those Industries which employ more than 50 but less than 500 workmen and the second category is of those Industries which employ more than 500 workmen. The employer in these writ petitions falls within the first category as number of workmen employed by it is in between 50 and 500. The petitioners were heard on two or three dates. Learned counsel for the employer argued only one point and that was that prior to the date of the aforesaid Government Order employer was already paying such total wages to each of its employees which were more than the total wages required to be paid by the aforesaid Government Order even though dearness allowance actually paid by it was less than the variable dearness allowance (V.D.A.) required to be paid on basic wages by the aforesaid Government Order. On 27.4.2007 when arguments were finally heard and judgment was reserved the statement of learned counsel for the employer was specifically noted on the order sheet to the effect that he argued only the above point and he did not raise any argument regarding competence of the government to issue notification like the one in question under Section 3(b) of U.P.Industrial Disputes Act. The said question alone therefore needs not be decided.
In the Government order in question the employees are divided into three categories:
The employer in question also categorises its employees in the above three categories. Copy of gazette containing the aforesaid Government Order as well as its authorised English translation has been annexed alongwith Rejoinder affidavit in the second writ petition. The said rejoinder affidavit has been filed by the Union. Under the said Government Order it is provided that monthly basic minimum wages shall be Rs.2,535/- for un-skilled, Rs.2,785/- for semi skilled and Rs.3,090/- for skilled workers in the Industries employing 50 to 500 workmen. In clause 13 of the said Government Order it is provided that basic minimum wages as provided includes the variable dearness allowance (V.D.A.) upto 426 points. In clause -14 it is provided that above 426 of consumer price Index number the dearness shall be neutralized 100 percent and adjustment of dearness allowance shall be made twice a year on the basis given under the said clause. In the said clause an example is also given to the effect that if consumer price index number for July to December 1999 is 428 (i.e. 2 more than 426) then dearness allowance should be 2x2535/426 = Rs.11.90. Clause-16 of the said Government Order states as under:
"Where in any establishment the workmen are getting wages and dearness more than those prescribed in this order they shall continue to get the same and the workmen shall be free to adopt the wage structure as a whole as prescribed in this order or the one they are getting at present under any award or agreement or through any administrative order of the employer."
The employer has supplied complete chart showing payment to each workman. The Union has supplied a chart alongwith rejoinder affidavit dated 23.3.2007 of three workmen from each category. To illustrate the point the case of Chand Kran who is a skilled workman is taken in respect of his salary for October-2004. According to the chart of the employer under the aforesaid Government Order for October 2004 Chand Kran would have been entitled to minimum basic wages of Rs.3,090, V.D.A. Rs.581/- total Rs.3,671/- while he was paid total amount of Rs.6,867.17 and the split of the said amount was as follows:-
Basic : : Rs.2,576.00
V.D.A. : Rs.2,650.44
H.R.A. : Rs.1,030.40
Conv. Allow. : Rs. 310.33
Dusting Allow. : Rs. 65.00
Washing Allow. : Rs. 135.00
Children Education : Rs. 100.00
In the said chart it has also been mentioned that according to the Government Order Chand Kran in October 2004 was entitled to get only Rs.3,671 (3090 as basic wages + 581 as V.D.A.). According to the chart of the Union total emolument of Chand Kran in accordance with the aforesaid Government Order ought to have been:
Basic : Rs.4,397.77
V.D.A. : Rs. 581.00
H.R.A. : Rs.1,759.10
Conv. Allow. : Rs. 310.00
Dusting Allow. : Rs. 65.00
Washing Allow. : Rs. 135.00
Children Education : Rs. 100.00
TOTAL : Rs.7,347.87
It has further been shown in the said chart that employer actually paid only Rs.5,899.03 to Chand Kran for October, 2004. In this manner there was a difference of Rs.1,448.84.
From the above it is quite clear that even though under any of the heads of basic wages and V.D.A. the employer may be paying less to each employee but sum total of the two heads actually paid by the employer to each of its employee is more than the sum total of the two heads as required to be paid by the aforesaid Government Order. Moreover other allowances paid by the employer particularly house rent allowance is not required to be paid by the aforesaid Government order. The contention of the Union is that the basic pay of each employee as was being paid by the employer immediately before the aforesaid Government order should be maintained and schedule increment of Rs.40/- per year must be added to the said basic pay every year and then variable dearness allowance must be calculated on the said basic wages in accordance with the aforesaid G.O. In my opinion this is not permissible. Workmen cannot have best of both the things i.e. basic wages as actually paid to them prior to the G.O. and calculation and addition of variable dearness allowance on the said basic wages as per the aforesaid G.O. Moreover the other allowances which are being paid by the employer to the workman will also have to be taken into consideration. In the aforesaid G.O. there is no mention of any allowance.
Para-16 of the aforesaid G.O. quoted above makes it quite clear that workers are at liberty to have the complete wage structure changed in accordance with the G.O. Workers did not make any such demand either to the employer or in this writ petition upto the stage of argument. If the aforesaid G.O. is applied in its entirety then each worker will get less total emoluments than he is already getting. In this regard reference may be made to an authority of the Supreme Court cited by learned counsel for the employer reported in Air freight Limited vs. State of Karnataka 1999 (83) F.L.R. 126. In the said authority the Supreme Court has held as follows:
"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."
Before parting one small issue requires consideration. Under interim order dated 12.12.2000 passed in the second writ petition minimum amount was fixed to be paid to all the three category workers which was Rs.2,042.00, Rs.2,235.00 and Rs.2,520.00. However, it was categorically stated by the learned counsel for the employer that inspite of said stay order under which they could legally pay less to all its workmen the employer continued to pay the amount which was earlier being paid to each workman and the same was much more than the amount required to be paid under the stay order. This fact is not denied by the learned counsel for the Union. However, learned counsel for the employer has stated that 7 or 8 workmen who were employed after the aforesaid interim order were being paid their total wages in accordance with the said interim order. Learned counsel for the employer conceded and agreed that the employer would pay to those newly appointed workmen also the amount which is payable under its own wage structure and the total package will be more than required to be paid by the aforesaid G.O. Let the said amount be paid to the newly appointed workmen within three months from today.
Accordingly, both the writ petitions are disposed of and it is held that total pay package which is actually being paid by the employer is more than the total pay package payable under the aforesaid G.O. hence employer is not required to pay anything more to its workmen except those workmen who were employed after the interim order dated
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