I am working with a manufacturing concern & Charter of Demands is not settling since last 5 months. The Union is 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 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.
I shall be very much greatful if anyone put some rays on the above topic.
Raja Das

From India , Calcutta
Industrial Relations
Associate Consultant
Sr Manager-hr & Admin
+2 Others


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.

From India, Kumbakonam

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.
Raja Das

From India , Calcutta
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.

From India , Nagpur

Dear Mr. Das,
First of all i am not able to understand DA connection with Charter of Demand (COD), in Settlement process, after completion of settlement period ( agreement period), Union raise COD, as a HR/IR professional , first step is to evaluate the CODs and work out the Financial Implication of COD, on the basis of that, one way to finalise the figure on which management agree depending upon \" Organisation\'s capacity to pay \" . Second step is to write a letter to union marking cc to Asst. Labour Commissioner or Conciliation officer, justifying your reply and force union to revise their COD. or else start conducting Collective Bargaining meeting.
Instead of Bargaining, point to point of COD, ask union committee, to arrive at Single Expectation in terms of figure, benefits etc. One should also needs to see , whether there is tradition of providing VDA in accordance with past settlements or not. if so, then Union will definitely going to ask to continue VDA, as this is the on

From India , Thana
just want to know in proceeding of 7A in EPF, at what level department can conduct inquiry
From India, Nasik

Dear Mt.Das,
From your query it is not clear as to why the union is insisting on DA. May be because most of the terminal benefits as also PF is linked to it.
What is the nature of your activity and where is it located? Does the union mean the special allowance being declared by govt.every 6 months, that is being paid in Maharashtra? If your company does not fall within any of the schedules of Minimum Wages Act, then region cum industry payments are taken into consideration in similar industries.

From India , Pune

If you are knowledgeable about any fact, resource or experience related to this topic - please add your views using the reply box below. For articles and copyrighted material please only cite the original source link. Each contribution will make this page a resource useful for everyone.

Add Reply → Start New →

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2022 Cite.Co™

All Material Copyright And Trademarks Posted Held By Respective Owners.
Panel Selection For Threads Are Automated - Members Notified Via CiteMailer Server