Applications for the LAMP Fellowship 2025-26 will open soon. Sign up here to be notified when the dates are announced.
Presently, there are around 40 state and central laws regulating different aspects of labour, such as resolution of industrial disputes, working conditions in factories, and wage and bonus payments. Over the years, some experts have recommended that these laws should be consolidated for easier compliance.[1] Since the current laws vary in their applicability, consolidation would also allow for greater coverage.
Following these recommendations, the Code on Wages was introduced in the Lok Sabha in August 2017. The Code consolidates four laws related to minimum wages, payment of wages and bonus, and a law prohibiting discrimination between men and women during recruitment promotion and wage payment.
The Code was subsequently referred to the Standing Committee on Labour for examination. The Committee has met some experts and stakeholders to hear their views. In this context, we explain the current laws, key provisions of the Code, and some issues to consider.
Who will be entitled to minimum wages?
Currently, the Minimum Wages Act, 1948 lists the employments where employers are required to pay minimum wages to workers. The Act applies to the organised sector as well as certain workers in the unorganised sector such as agricultural workers. The centre and states may add more employments to this list and mandate that minimum wages be paid for those jobs as well.[2] At present, there are more than 1700 employments notified by the central and state governments.[3]
The Code proposes to do away with the concept of bringing specific jobs under the Act, and mandates that minimum wages be paid for all types of employment – irrespective of whether they are in the organised or the unorganised sector.
The unorganised sector comprises 92% of the total workforce in the country.1 A large proportion of these workers are currently not covered by the Minimum Wages Act, 1948. Experts have noted that over 90% of the workers in the unorganised sector do not have a written contract, which hampers the enforcement of various labour laws.[4]
Will minimum wages be uniform across the country?
No, different states will set their respective minimum wages. In addition, the Code introduces a national minimum wage which will be set by the central government. This will act as a floor for state governments to set their respective minimum wages. The central government may set different national minimum wages for different states or regions. For example, the centre can set a national minimum wage of Rs 10,000 for Uttar Pradesh and Rs 12,000 for Tamil Nadu. Both of these states would then have to set their minimum wages either equal to or more than the national minimum wage applicable in that state.
The manner in which the Code proposes to implement the national minimum wage is different from how it has been thought about in the past. Earlier, experts had suggested that a single national minimum wage should be introduced for the entire country.1,[5] This would help in bringing uniformity in minimum wages across states and industries. In addition, it would ensure that workers receive a minimum income regardless of the region or sector in which they are employed.
The concept of setting a national minimum wage exists in various countries across the world. For instance, in the United Kingdom one wage rate is set by the central government for the entire country.[6] On the other hand, in the United States of America, the central government sets a single minimum wage and states are free to set a minimum wage equal to or above this floor.[7]
On what basis will the minimum wages be calculated and fixed?
Currently, the central government sets the minimum wage for certain employments, such as mines, railways or ports among others. The state governments set the minimum wage for all other employments. These minimum wages can be fixed based on the basis of different criteria such as type of industry or skill level of the worker. For example, Kerala mandates that workers in oil mills be paid minimum wages at the rate of Rs 370 per day if they are unskilled, Rs 400 if they are semi-skilled and Rs 430 if they are skilled.[8]
The Code also specifies that the centre or states will fix minimum wages taking into account factors such as skills required and difficulty of work. In addition, they will also consider price variations while determining the appropriate minimum wage. This process of fixing minimum wages is similar to the current law.
Will workers be entitled to an overtime for working beyond regular hours?
Currently, the central or state government define the number of hours that constitute a normal working day. In case an employee works beyond these hours, he is entitled to an overtime rate which is fixed by the government. As of today, the central government has fixed the overtime rate at 1.5 times normal wages in agriculture and double the normal wages for other employments.[9]
The Code proposes to fix this overtime rate at twice the prevailing wage rate. International organisations have recommended that overtime should be 1.25 times the regular wage.[10]
Does the Code prohibit gender discrimination between workers?
Currently, the Equal Remuneration Act, 1976 prohibits employers from discriminating in wage payments as well as recruitment of workers on the basis of gender. The Code subsumes the 1976 Act, and contains specific provisions which prohibit gender discrimination in matters related to wages. However, unlike in the 1976 Act, the Code does not explicitly prohibit gender discrimination at the stage of recruitment.
How is the Code going to be enforced?
The four Acts being subsumed under the Code specify that inspectors will be appointed to ensure that the laws are being enforced properly. These inspectors may carry out surprise checks, examine persons, and require them to give information.
The Code introduces the concept of a ‘facilitator’ who will carry out inspections and also provide employers and workers with information on how to improve their compliance with the law. Inspections will be carried out on the basis of a web-based inspection schedule that will be decided by the central or state government.
——————————————–
[1]. Report of the National Commission on Labour, Ministry of Labour and Employment, 2002, http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf.
[2]. Entries 22, 23 and 24, List III, Seventh Schedule, Constitution of India.
[3]. Report on the Working of the Minimum Wages Act, 1948, Ministry of Labour and Employment, 2013, http://labourbureaunew.gov.in/UserContent/MW_2013_final_revised_web.pdf.
[4]. Report on Conditions of Work and Promotions of Livelihood in the Unorganised Sector, National Commission for Enterprises in the Unorganised Sector, 2007, http://nceuis.nic.in/Condition_of_workers_sep_2007.pdf.
[5]. Report of the Working Group on Labour Laws and other regulations for the Twelfth five-year plan, Ministry of Labour and Employment, 2011, http://planningcommission.gov.in/aboutus/committee/wrkgrp12/wg_labour_laws.pdf.
[6]. Section 1(3), National Minimum Wage Act, 1998, http://www.legislation.gov.uk/ukpga/1998/39/pdfs/ukpga_19980039_en.pdf.
[7]. Section 206(a)(1), The Fair Labour Standards Act, 1938, https://www.dol.gov/whd/regs/statutes/FairLaborStandAct.pdf.
[8]. G.O. (P) No.36/2017/LBR, Labour and Skills Department, Government of Kerala, 2017, https://kerala.gov.in/documents/10180/547ca516-c104-4b31-8ce7-f55c2de8b7ec.
[9]. Section 25(1), Minimum Wages (Central) Rules, 1950
[10]. C030-Hours of Work (Commerce and Offices) Convention (No. 30), 1930,http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:312175.
Recently, the Supreme Court collegium reiterated its recommendations for the appointment of 11 judges to certain High Courts. It had first recommended these names earlier this year and in August last year, but these appointments were not made. The Indian judiciary faces high vacancies across all levels (the Supreme Court, High Courts, and subordinate courts). Vacancy of judges in courts is one of the reasons for delays and a rising number of pending cases, as there are not enough judges to hear and decide cases. As of today, more than four crore cases are pending across all courts in India. In this blog post, we discuss vacancies across courts over the years, delays in appointment of judges, and methods to determine the adequate judge strength required to handle the caseload courts face.
High vacancy of judges across courts
Vacancies in courts keep on arising periodically due to retirement, resignation, demise, or elevation of judges. Over the years, the sanctioned strength of judges in both High Courts and subordinate courts has been increased gradually. However, vacancies persist due to insufficient appointments (see Figures 1 and 2). Between 2010 and 2020, vacancies increased from 18% to 21% across all levels of courts (from 6% to 12% in the Supreme Court, from 33% to 38% in High Courts, and from 18% to 20% in subordinate courts).
|
Figure 1: Vacancy of judges in High Courts |
Figure 2: Vacancy of judges in subordinate courts |
|
|
|
|
Sources: Court News 2010-2018; Vacancy Statement, and Rajya Sabha replies, Part I, Budget Session (2021), Department of Justice; PRS. |
|
As on November 1, 2021, the Supreme Court had a vacancy of one judge (out of a sanctioned strength of 34). Vacancy in High Courts stood at 37% (406 posts vacant out of a sanctioned strength of 1,098). Since May, 2021, the Supreme Court collegium has recommended more than 130 names for appointment as High Court judges. In three High Courts (Telangana, Patna, and Calcutta), at least half of the posts are vacant (see Figure 3). The Standing Committee on Personnel, Public Grievances, Law and Justice (2020) noted that every year, 35-40% of posts of High Court judges remain unfilled.
|
Figure 3: Vacancy of judges across High Courts (in %) (as on November 1, 2021)
|
|
Source: Vacancy Statement, Department of Justice; PRS. |
Appointments of High Court judges are guided by a memorandum of procedure. As per this memorandum, the appointment process is to be initiated by the concerned High Court at least six months before a vacancy occurs. However, the Standing Committee (2021) noted that this timeline is rarely adhered to by High Courts. Further, in the final stage of the process, after receiving recommendations from the Supreme Court collegium, the executive appoints judges to the High Court. No timeline is prescribed for this stage of the appointment process. In 2018 and 2019, the average time taken to appoint High Court judges after receiving the collegium’s recommendations was five to seven months.
As of today, over 3.6 crore cases are pending before subordinate courts in India. As on February 20, 2020, 21% posts for judges were vacant (5,146 posts out of the sanctioned strength of 24,018) in subordinate courts. Subordinate courts in Bihar, Haryana, and Jharkhand (among the states with high population) had a high proportion of vacancies of judges (see Figure 4). Note that the Supreme Court is monitoring the procedure for appointment of judges to subordinate courts.
For an analysis of the data on pendency and vacancies in the Indian judiciary, see here.
Figure 4: Vacancy of judges across subordinate courts (in %) (as on February 20, 2020)
|
|
|
Source: Report No. 101, Standing Committee on Personnel, Public Grievances, Law and Justice (2020); PRS. |
How many judges do we need?
The Law Commission of India (1987) had noted the importance of manpower planning for the judiciary. Lack of adequate number of judges means a greater workload per judge. Thus, it becomes essential to arrive at an optimal judge strength to deal with pending and new cases in courts. Over the years, different methods of calculating the required judge strength for subordinate courts (where the backlog of cases in the Indian judiciary is concentrated) have been recommended (see Table 1).
Table 1: Methods recommended for calculating the required number of judges for subordinate courts
|
Method of calculation |
Recommendation and its status |
|
Judge-to-population ratio: optimum number of judges per million population |
The Law Commission of India (1987) had recommended increasing this ratio to 50 judges per million people. This was reiterated by the Supreme Court (2001) and the Standing Committee on Home Affairs (2002). For 2020, the judge-to-population ratio was 21 judges per million population. Note that this figure is calculated based on the sanctioned strength of judges in the Supreme Court, High Courts and subordinate courts. |
|
Rate of disposal: number of additional judges required (to clear the existing backlog of cases and ensure that new backlog is not created) based on the average number of cases disposed per judge |
The Law Commission of India (2014) proposed this method. It rejected the judge-to-population ratio method, observing that filing of cases per capita varies substantially across geographic units depending on socio-economic conditions. |
|
Weighted case load method: calculating judge strength based on the disposal by judges, taking into account the nature and complexity of cases in local conditions |
The National Court Management Systems Committee (NCMS) (2016) critiqued the rate of disposal method. It proposed, as an interim measure, the weighted case load method, which addresses the existing backlog of cases as well as the new flow of cases every year in subordinate courts. In 2017, the Supreme Court accepted this model. |
|
Time-based weighted case load method: calculating the required judge strength taking into account the actual time spent by judges in different types of cases at varying stages based on an empirical study |
Used widely in the United States, this was the long-term method recommended by the NCMS (2016) to assess the required judge strength for subordinate courts. It involves determining the total number of ‘judicial hours’ required for disposing of the case load of each court. The Delhi High Court used this approach in a pilot project (January 2017- December 2018) to calculate the ideal judge strength for disposing of pending cases in certain courts in Delhi. |
Sources: Reports No. 120 (1987) and 245 (2014), Law Commission of India; Report No. 85, Standing Committee on Home Affairs (2002); Note for Calculating Required Judge Strength for Subordinate Courts, National Court Management Systems Committee (NCMS) (2016); Imtiyaz Ahmad vs. State of Uttar Pradesh, Supreme Court (2017); PRS.
