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of <h1>Appellant Company Bound by Minimum Wages Act; No Exemption for Paying Above Minimum Wage</h1> <h3>Airfreight Ltd. Versus State Of Karnataka And Ors.</h3> The Supreme Court held that the appellant-company falls under the definition of 'shops' and 'commercial establishments' and is subject to the Minimum ... - Issues Involved:1. Applicability of the Minimum Wages Act to the appellant-company.2. Whether the appellant-company is paying more than the minimum wages prescribed.3. The necessity of bifurcating wages into basic wages and dearness allowance under the Act.4. Interpretation and application of the Notification dated 19th August 1987 issued under the Minimum Wages Act.Issue-wise Detailed Analysis:1. Applicability of the Minimum Wages Act to the appellant-company:The appellant-company contended that it does not fall under the categories of 'shops and commercial establishments' as defined under the Karnataka Shops and Commercial Establishment Act, 1961. However, the Supreme Court found no merit in this contention. The appellant-company admitted before the competent authority that it is engaged in activities such as import and export clearance, forwarding of cargo, travel and tourism, and courier services, and is registered as a commercial establishment. The Court referred to various precedents where similar establishments were considered 'shops' or 'commercial establishments' under the Act. The Court concluded that the appellant-company's activities clearly fall within the ordinary meaning of 'shops' and 'commercial establishments,' making the Minimum Wages Act applicable to it.2. Whether the appellant-company is paying more than the minimum wages prescribed:The appellant-company argued that it pays a total pay packet higher than the minimum wages prescribed in the Notification, and therefore, the Notification should not apply to it. The Court rejected this argument, stating that the object of the Minimum Wages Act is to prevent exploitation of workers by ensuring they receive at least the minimum wage. The Court emphasized that the Act applies universally to all shops and commercial establishments, regardless of whether they pay more than the minimum wage. The Court cited the principle that minimum wage is the lowest limit below which wages cannot sink, and paying more than the minimum wage does not exempt an employer from the Act's provisions.3. The necessity of bifurcating wages into basic wages and dearness allowance under the Act:The appellant-company contended that it is not required to bifurcate wages into basic wages and dearness allowance. The Court examined the Notification dated 19th August 1987, which fixed minimum wages inclusive of dearness allowance as per the State Average Consumer Price Index. The Court clarified that the Notification does not require bifurcation of wages into basic and dearness allowance; rather, it sets a total minimum wage, which includes dearness allowance. The Court held that the minimum wage is a single unit of remuneration, and dearness allowance is part of the cost components considered in fixing the minimum wage.4. Interpretation and application of the Notification dated 19th August 1987 issued under the Minimum Wages Act:The appellant-company argued that the Notification should not apply to it as it pays more than the prescribed minimum wages. The Court referred to the Notification, which fixed minimum wages inclusive of dearness allowance and provided for additional dearness allowance based on the cost of living index. The Court reiterated that the Notification applies universally to all shops and commercial establishments, and paying more than the minimum wage does not exempt an employer from compliance. The Court emphasized that the minimum wage is a package, and the dearness allowance is part of this package, not a separate component.Conclusion:The Supreme Court held that the appellant-company is covered by the expression 'shops' and 'commercial establishments' and is subject to the Minimum Wages Act. The Court clarified that the minimum wage is a single unit of remuneration, inclusive of dearness allowance, and there is no requirement to bifurcate wages into basic and dearness allowance. The Court set aside the High Court's order and remanded the matter to the Labour Officer for fresh decision in accordance with the law. The appeal was allowed to the extent specified, with no order as to costs.
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