Financial Capacity of Employers v. Workers’ Rights in Wage Determination

Abstract

This paper looks at how employers' financial capacity and workers' rights affect pay decisions through group talks and the 'industry and area test'. It studies the case of The VFF Ltd Employees Union v. M/s. VVF India Limited & Anr to see how court’s view pay changes and what bosses must do. At first, the Bombay High Court agreed with the Union saying pay should match other local businesses. But the Supreme Court said we must also think about if bosses can afford it. The decision shows its key to check if a boss can pay when setting wages, so businesses don't have to lose money. This tries to give workers fair pay and respect, while also seeing what bosses can afford. This case sets a new rule for deciding pay making sure the law fits with what's possible money-wise.