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Monday, March 19, 2012

Minimum Wages

                 The Minimum Wages Act, 1948 is intended to primarily safeguard the interest of workers particularly in unorganised sector. While fixing the minimum wages for different employments covered in the Schedule, the norms recommended by Indian Labour Conference    (ILC) 1957 and the judgement of Hon’ble Supreme Court delivered in the case of Reptakos& Co. Vs. its workers are kept in view.
                There is large scale variation of minimum wages both within the country and internationally owing to differences in prices of essential commodities, paying capacity, productivity, local conditions, items of the commodity basket, differences in exchange rates etc.
                In view of this it is not possible to compare the minimum wages in the country with International Standards.
                The summary of the discussion held in the Labour Conference pertaining to minimum wages is at Annexure I.

                The norms recommended by the Indian Labour Conference (ILC), held in 1957 are taken into accountwhile fixing the minimum wages.  These are as follows:-
(i)            3 consumption units for one earner.
(ii)           Minimum food requirements of 2700 calories per average Indian adult.
(iii)          Clothing requirements of 72 yards per annum per family.
(iv)          Rent corresponding to the minimum area provided for under Government’s Industrial Housing Scheme.
(v)           Fuel, Lighting and other miscellaneous items of expenditure to constitute 20% of the total minimum wage.
This information was given by Minister of Labour and Employment Shri   Mallikarjun Kharge  in reply in reply to a written question whether the minimum wage in the country is at par with international standards for offering a reasonably comfortable life in the current economic scenario; the recommendations of the Indian Labour Conference in this regard; and  any proposal to adjust the wage on the basis of calorie intake of the workers family in the Lok Sabha today.
                A Conference Committee of the 44th session of ILCwas constituted to discuss Minimum Wages and related issues. These issues, inter alia, include norms for fixation/revision of minimum rates of wages, Variable Dearness Allowance(VDA),  National Floor Level Minimum Wages etc. On the basis of detailed discussion, the following points emerged.
1.       There was broad consensus that the Government may fix minimum wages as per the norms/ criteria recommended by the 15th ILC (1957) and the directions of the Hon’ble Supreme Court (Reptakos& Co. Vs. its workers Union) 1992.  The Government may take necessary steps accordingly.
2.     It was suggested that the Minimum Wages Act should cover all employments and the existing restriction for its applicability on the scheduled employments only should be deleted. This will also help India ratify ILO Convention No.131.
3.       It was broadly agreed that there should be national minimum wages applicable to all employments throughout the country.
4.       It was pointed out that the payment to the apprentices should be treated differently from the other categories.
5.       The Committee noted that at present there are 12 States/UTs who have not adopted VDA. There was consensus that all States/UTs should adopt VDA.
6.        It was also recommended that the payment of minimum wages should be done through Banks/Post Offices etc.
7.       It was felt that the enforcing agencies should not be given the power of adjudication and, therefore, this proposal should be re-examined.
8.        Regarding penal provision for violation of the Act, it was felt that imprisonment clause under Section 22 and 22A is harsh to the employer and may be re-examined.  Further, it was felt that non-maintenance of registers should not attract imprisonment. 
9.        The proposal of paying different minimum wages in respect of same employment either in the Centre or in the States should be done away with.
Source : PIB Release, March 19, 2012

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