Andhra Pradesh High Court rejects workers’ union plea for separate customary allowances over minimum wages

In a dispute testing the interplay between “all-inclusive” minimum wages and claims for customary allowances, on August 5, 2025 the Andhra Pradesh High Court dismissed a writ petition filed by the Visakha Hotel and Restaurant Workers Union challenging a 2006 Industrial Tribunal award in favour of Park Hotel, Visakhapatnam. The case arose from a 2002 government reference under Section 10(1)(c) of the Industrial Disputes Act, 1947, on whether the hotel’s workmen were entitled to payment of minimum wages by neutralising Dearness Allowance (“DA”) points with basic wages, while continuing to receive House Rent Allowance (“HRA”) and Conveyance Allowance (“CA”) as customary benefits.

The union argued that these allowances had been paid for over a decade and should remain separate from the “all-inclusive” minimum wages. The management countered that employees were already receiving wages above the statutory minimum and that the allowances formed part of the notified wage structure. The Industrial Tribunal, after evaluating oral and documentary evidence, held that under Sections 2(h) and 4 of the Minimum Wages Act, 1948, once minimum rates are prescribed whether basic plus DA or all-inclusive they form a single package and cannot be split into components. It found that employees were earning above the prescribed minimum wages, rendering the union’s claim unsustainable.

On writ, the Court rejected the petitioner’s contention that the case involved an “interest dispute” and that customary allowances should be preserved separately. The Court noted that such allowances are a matter of industry–cum–region bargaining and no material was produced to justify their continuance outside the notified wage package. Finding no jurisdictional error, perversity, or violation of statutory provisions in the Tribunal’s award, the Court dismissed the writ petition without costs, reiterating that all-inclusive minimum wages cannot be dissected to carve out additional customary allowances.