There
has been a lot of brain storming over “What is a retaining allowance?”So
let us clear the concept;History
of this world is very old as the Indian Industries are. This concept is
originated from Indian seasonal Industries. These Industries operated 3 to 6
and up to 9 months in a year and goes offline for rest of the month in the year
(primary Industries based on agriculture and agricultural product). Every year
Industry has to struggle for trained workers, basically workers who are
familiar with the process of the Industry they are working for. Such Industry
provides them additional wages for the period for which they remain offline so
as to retain these workers with them. This allowance is conceptually given to
them in the beginning of new season or as agreed.Indian
law is very flexible, sensitive and practice towards workmen; it’s recognised
retaining allowance as wages / wages component and provides provisions for
retaining allowance. One of the practice aspects is clearly visible in The
Provident Fund and Miscellaneous Act, 1952 section 2 (b), 5 and 6 where the
definition of the wages is laid down. Retaining allowance is also come in the preview
of section 2 (21) of The Payment of the Bonus Act, 1965.Retaining
allowance can also be treated as wages / salary in event of any disputed arises
provided same has been agreed also labour authorities can reach out a
settlement on the basis of the history of the payment of retaining allowance in
the industry.
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