| Hi, I am working with a manufacturing concern & Charter of Demands is not settling since last 5 months. The Unions are demanding DA which is Illegitimate. As I know that legally DA is not mandetory to pay in Private Sector. All I need help from all the forum experts is the LEGAL NOTE where it is mentioned that DA is not mandetory to pay or any Clause under Wage Act etc. or any reference of any legal Notices/Documents or any reference of legal books or any case reference. I shall be very much greatful if anyone put some rays on the above topic. Regards, Raja Das Dear Raja Das Hope you are adopting the Wage Rates fixed by the appropriate government from time to time. Once you are paying as per the minimum wages fixed by the Government, then you need not to pay any DA as the Minimum wages is having both the components i.e., Basic Wages and VDA (Variable DA). The VDA is fixed by the appropriate government by considering the inflation taking place in that area and accoring the CPI will be derived which is known as cost of living Index. With that CPI Points we can derive the VDA which will be added with Basic Wages. The total of VDA and Basic Wages should be divided by 26 and that amount will be Daily Minimum Wages to be paid to a workman. Dear Mr. Bhaskar, This is to inform you that our company line of business does not fall under the categories of Minimum Wages. I would not have posted the above query if we would have paid minimum wages. Wage settlement is done through Charter Of Demands with Unions after every 3yrs. Already we have settled 4 COD earlier. All the workers are entitled for PF, ESI, Gratuity. This year all the Unions are demanding DA along with general increment in Basic Salary. We don't want to give DA as in last 4 agreements we were giving increment on flat rate system that is a package. I heard that paying DA is not legally mandatory in private sector. Hence request you to kindly help me with some LEGAL NOTE where it is mentioned that DA is not mandatory to pay or any Clause under Wage Act etc. or any reference of any legal Notices/Documents or any reference of legal books or any case reference. Please help me with this. Regards, Raja Das Mr. Raja, Dearness Allowance is one of the components of the Minimum Wages. If you are paying the wages which are more than the rate of Minimum Wages( Basic+DA) as declared by the appropriate govt.,then there is no need of paying any dearness allowance. SInce there is already general increment clause, I feel you satnd on a better ground. In case the negotiations are not resulting in any settlement, as it appears, try intervention of the Conciliation Officer under the Indusrial Disputes Act or a Reference to the Industrial Tribunal. I would like to know the activity undertaken by your establishment when you say the the provisions of MWAct are not applicable, so that I can elaborate. Regards S.G.Zinjarde,Adv.
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