Basic Wages - Definition - Law Dictionary Home Dictionary Definition basic-wages

Definition :

Basic wages, means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include-(i) the cash value of any food concession; (ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment; (iii) any presents made by the employer. [Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), s. 2 (b)]

The phrase 'basic wages' is ordinarily understood to mean that part of the price of labour, which the employer must pay to all workmen belonging to all categories. The phrase is used ordinarily in marked contra-distinction to 'dearness allowance', the quantum of which varies from time to time, in accordance with the rise or fall in the cost of living, Muir Mills Co. Ltd. v. Its Workmen, (1960) 3 SCR 488: AIR 1960 SC 985 (988). [U.P. Industrial Disputes Act (1947), s. 3]

The expression 'basic wages for the time being payable to each of the employees' under s. 6 of the Act means the 'basic wages' at the relevant time. When the existing pay scales are revised with effect from back date then the revised wages posterior to that date are the 'basic wages for the time being payable', Prantiya Vidhyut Mandal Mazdoor Federation v. Rajasthan SEB, (1992) 2 SCC 723 (724): AIR 1992 SC 1737. [Employee's Provident Funds and Miscellaneous Provisions Act, (19 of 1952) s. 6]