Dear Friends,
Whether conveyance allowance should not be included in wage for ESI calculation in view of recent judgment i.e. In re Cosmopolitan Club, dated 30.6.2011.decided by division bench Madras High Court.
PLEASE READ THE ARTICLE JUDGEMENT.
Regards,
PBS KUMAR
From India, Kakinada
590Whether conveyance allowance should not be included in wage for ESI calculation in view of recent judgment i.e. In re Cosmopolitan Club, dated 30.6.2011.decided by division bench Madras High Court.
PLEASE READ THE ARTICLE JUDGEMENT.
Regards,
PBS KUMAR
From India, Kakinada
Sub- Conveaynce allowance as part of wages under ESI Act
Thank you Mr.kumar for sharing an important information. My view on this subject for academic discussion is as under.
The definition of wages under Sec.2(22) of the Act starts with the words " wages means all remuneration paid or payable to an employee, if the terms of the contract of employment, express or implied were fulfilled ". Since the definition thus did not specify as to what remunerations or payaments fall under this ambit, it attracted a lot of controversy and became a subject of intense court battles.However the courts over a period of time kept on expanding the ambit of the definition of wages, having regard to the welfare nature of the legislation, to include various allowances like substance allowance, house rent allowance, over time allowance, night shift allowance and food allowance etc.
While the legislature left the scope of the inclusive part of the definition of wages wide by not clearly spelling out as to what allowances can be construed as wages probabaly to allow maximum benefit of contribution to employees, it clearly specified as to what allowances can be excluded and one of them is travelling allowance or the valuse of any travelling concession. In my view, if any allowance falls under the exclusive part of the definition, that shall be excluded as the legislative intent is clear and where the legislative intent is clear, there is no room for interpretation. Therefore, in my view, any allowance which partakes the character of travelling allowance or travelling concession and by whatever name it is called whether conevayance allowance or by any other name, it shall be excluded.
B.Saikumar
HR & Labour Law consultant
Chipinbiz Consultancy. Pvt.Ltd
Mumbai
Tel: 022-28324234
From India, Mumbai
Thank you Mr.kumar for sharing an important information. My view on this subject for academic discussion is as under.
The definition of wages under Sec.2(22) of the Act starts with the words " wages means all remuneration paid or payable to an employee, if the terms of the contract of employment, express or implied were fulfilled ". Since the definition thus did not specify as to what remunerations or payaments fall under this ambit, it attracted a lot of controversy and became a subject of intense court battles.However the courts over a period of time kept on expanding the ambit of the definition of wages, having regard to the welfare nature of the legislation, to include various allowances like substance allowance, house rent allowance, over time allowance, night shift allowance and food allowance etc.
While the legislature left the scope of the inclusive part of the definition of wages wide by not clearly spelling out as to what allowances can be construed as wages probabaly to allow maximum benefit of contribution to employees, it clearly specified as to what allowances can be excluded and one of them is travelling allowance or the valuse of any travelling concession. In my view, if any allowance falls under the exclusive part of the definition, that shall be excluded as the legislative intent is clear and where the legislative intent is clear, there is no room for interpretation. Therefore, in my view, any allowance which partakes the character of travelling allowance or travelling concession and by whatever name it is called whether conevayance allowance or by any other name, it shall be excluded.
B.Saikumar
HR & Labour Law consultant
Chipinbiz Consultancy. Pvt.Ltd
Mumbai
Tel: 022-28324234
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Special Allowance not part of Basic Wages.pdf
Canteen Allowance is part of Basic Wages.docx
Part-003.jpg