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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.
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[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.
The shortage of skilled man-power is a cause for concern in most sectors in India. Experts acknowledge that the present higher education system in India is not equipped to address this problem without some changes in the basic structure. Official records show that the gross enrollment ratio in higher education is only 11 per cent while the National Knowledge Commission says only seven per cent of the population between the age group of 18-24 enters higher education. Even those who have access are not ensured of quality. Despite having over 300 universities, not a single Indian university is listed in the top 100 universities of the world. Present Regulatory framework The present system of higher education is governed by the University Grants Commission (UGC), which is the apex body responsible for coordination, determination and maintenance of standards, and release of grants. Various professional councils are responsible for recognition of courses, promotion of professional institutions and providing grants to undergraduate programmes. Some of the prominent councils include All India Council for Technical Education (AICTE), Medical Council of India (MCI) and the Bar Council of India (BCI). The Central Advisory Board of Education coordinates between the centre and the states. Universities in India can be established by an Act of Parliament or state legislatures such as Delhi University, Calcutta University and Himachal Pradesh University. Both government-aided and unaided colleges are affiliated with a university. The central government can also declare an institution to be a deemed university based on recommendation of the University Grants Commission. There are about 130 deemed universities and includes universities such as Indian Institute of Foreign Trade and Birla Institute of Technology. Such universities are allowed to set their own syllabus, admission criteria and fees. Some prominent institutions are also classified as institutions of national importance. Reforms in Higher Education There have been calls to revamp the regulatory structure, make efforts to attract talented faculty, and increase spending on education from about 4% of the Gross Domestic Product (GDP) to about 6%. Presently, the allocation for higher education is at a measly 0.7% of GDP. From time to time government appointed various expert bodies to suggest reforms in the education sector. The two most recent recommendations were made by the National Knowledge Commission (NKC) formed in 2005 under the chairmanship of Mr Sam Pitroda and the Committee to Advise on Renovation and Rejuvenation of Higher Education, formed in 2008 under the chairmanship of Shri Yashpal.
| Key Recommendations of NKC | Key Recommendations of Yashpal Committee |
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| Sources: The Report to the Nation, 2006-09, NKC; Yashpal Committee Report, 2009; PRS | |
The Draft NCHER Bill, 2010 In response to the reports, the government drafted a Bill on higher education and put it in the public domain. The draft National Commission for Higher Education and Research Bill, 2010 seeks to establish the National Commission for Higher Education and Research whose members shall be appointed by the President on the recommendation of the selection committee (include Prime Minister, Leader of the Opposition in Lok Sabha, Speaker). The Commission shall take measures to promote autonomy of higher education and for facilitating access, inclusion and opportunities to all. It may specify norms for grant of authorisation to a university, develop a national curriculum framework, specify requirement of academic quality for awarding a degree, specify minimum eligibility conditions for appointment of Vice Chancellors, maintain a national registry, and encourage universities to become self regulatory. Vice Chancellors shall be appointed on the recommendation of a collegium of eminent personalities. The national registry shall be maintained with the names of persons eligible for appointment as Vice Chancellor or head of institution of national importance. Any person can appeal a decision of the Commission to the National Educational Tribunal. (For opinions by some experts on the Bill, click here and here.) Other Bills that are in the pipeline include The Foreign Educational Institutions (Regulation of Entry and Operation) Bill, 2010; the Central Educational Institutions (Reservation in Admission) (Amendment) Bill, 2010; and the Innovation Universities Bill, 2010.
