Splitting of Minimum Wages is Permissible - Supreme Court Of India

On 29 April 2019, the Supreme Court of India (Supreme Court) in Hindustan Sanitaryware and Industries Limited and Ors v State of Haryana, Civil Appeal Nos. 2539 of 2010 and 4454 of 2019 (Hindustan Sanitaryware) ruled on the validity of the minimum wages notification dated 21 October 2015 issued by the Department of Labour, Government of Haryana (Notification). The ruling is significant when viewed from the standpoint of the powers of the appropriate government under Section 4 of the Minimum Wages Act 1948 (MW Act). In relation to segregation of components of wages, the Supreme Court has reiterated its judgment in Airfreight, where it held that when an employer is paying a total sum which is equal to or higher than the minimum rates of wages fixed under the Minimum Wages Act, the employer would be in compliance with the Minimum Wages Act, provided that such wages are calculated in accordance with Section 2(h) thereof.

"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 of the necessities taken into consideration for fixing the same."

In other words, if the remuneration paid to the employees is equal to or more than the minimum rates of wages, the employer has complied with the law in substance. 

Reference :-

1. Hindustan Sanitaryware and Industries Limited and Ors v State of Haryana, Civil Appeal Nos. 2539 of 2010 and 4454 of 2019 (Hindustan Sanitaryware)
2. Airfreight Ltd vs State Of Karnataka And Ors on 4 August, 1999
3. Faridabad Industries Association Versus The State of Haryana & Another

Above presented exploration & reference been adopted from the exhibit of Hon'ble Supreme Court of India. Trust this may provide you required aid.

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