ORDER

This petition is filed challenging the notification dated 21.2.2014 issued by the 1st respondent in exercise of power under Sections 3(1)(a) and 5(1)(a) of the Minimum Wages Act, by which, minimum wages payable to workers working in the employment of tailoring was revised insofar as it relates to Clause No.3, which specifies that, if the workmen's wage rates are higher, it shall be continued to be paid, and increased dearness allowance from time to time shall also be paid.

2. Heard the learned counsel for the parties.

3. The petitioner's contention is that the workers are being paid wages more than minimum wages fixed by the State Government, and there is no requirement of paying dearness allowance separately. The Hon'ble Supreme Court in the case of Airfreight Ltd. -vs- State of Karnataka and others (AIR 1999 SC 2459) at paras-21 and

23 has held as follows.

21. But while deciding the question of payment of minimum wages, the Competent Authority is not required to bifurcate each component of the costs of each item taken into consideration for fixing minimum wages, as lump sum amount is determined for providing adequate remuneration to the workman so that he can sustain and maintain himself and his family and also preserve his efficiency as a worker. Dearness allowance is part and parcel of cost of necessities. In cases where the minimum rates of wages is linked up with VDA, 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.

22. In the result, it is held that:

(1) The appellant Company would be covered by the expression “shops” and/or “commercial establishment” as it is carrying out various systematic commercial activities with profit motive and also it sells services on a retail basis.

(2) The Notification issued under the Act prescribing minimum wages applies to all kinds of shops and commercial establishments big or small- and that payment of more than prescribed minimum rates of wages is not relevant for deciding its applicability. It cannot be stated that as they are paying more than the prescribed minimum wages, the Act or the Notification would not be applicable. For determining whether they are paying minimum rate of wages or not, the amount paid for the value of items which are excluded under Section 2(h) of the Act is not be taken into consideration.

(3) Minimum rate of wages fixed under the Act is remuneration payable to the worker as one package of fixed amount. In cases where minimum wage is linked with the cost of living index, the amount paid on the basis of dearness allowance is not to be taken as an independent component of the minimum wages which is to be determined after taking into consideration the cost of various necessities.

23. In this view of the matter, the order passed by the High Court holding that the State Government has fixed two separate categories of minimum rates of wages to be paid to the employees - one basic and the other “other allowance”, that is, DA, is erroneous and is set aside. The matter is remanded to the Labour Officer (the Competent Authority under the Minimum Wages Act) for fresh decision in accordance with law. The appeal is allowed to the aforesaid extent with no order as to costs.

4. This Court in the case of Karnataka Film Chamber of Commerce, Bangalore -vs- State of Karnataka (ILR 1986 (Karnataka) 2183) has held at para-18 as follows:

"18. Thus there were two different modes of working out the neutralisation factor. Though, in my view, the pattern adopted by the LIC for working out the neutralisation factor appears to be based on the principles laid down by the Supreme Court in Ahmedabad Mill Owners' Association [1966 (1) LLJ 1.] it is unnecessary to go into the controversy in this case since the percentage of neutralisation, in my view, will not be more than 100%, if this Court is satisfied that 470 CPI should be taken into consideration alo