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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.
So far, both Houses of Parliament have been witnessing disruptions. At the beginning of the session, 23 Bills were listed for passage, and 20 were listed for introduction. Two weeks in, one Bill has been passed by both Houses, and three others by Lok Sabha. These include Bills dealing with the re-haul of consumer protection laws, regulation of surrogacy, and recognition of transgender persons. Six Bills have been introduced. These include three Bills which replace the Ordinances currently in force, and a Bill to regulate dam safety. In this blog, we discuss the key features of some of these Bills.
Enhancing rights of consumers
The Consumer Protection Bill, 2018 replaces the Consumer Protection Act, 1986. It was introduced in view of the significant changes in the consumer market landscape since the 1986 Act. It introduces several new provisions such as enabling consumers to make product liability claims for an injury or harm caused to them, nullifying unfair contracts which impact consumer interests (such as contracts which charge excessive security deposits), and imposing penalties for false and misleading advertisements on manufacturers, as well as on the endorsers of such advertisements.
The Bill also sets up Consumer Dispute Redressal Commissions (or courts) at the district, state, and national level, to hear complaints on matters related to deficiencies in services or defects in goods. While these Commissions are also present under the 1986 Act, the Bill increases their pecuniary jurisdiction: District Commissions will hear complaints with a value of up to one crore rupees; State Commissions between one and ten crore rupees; and National Commission above 10 crore rupees. The Bill also sets up a regulatory body known as the Central Consumer Protection Authority. This Authority can take certain actions to protect the rights of consumers as a class such as passing orders to recall defective goods from the market, and imposing penalties for false and misleading advertisements.
Recognising transgender persons and their rights
Last week, Lok Sabha also passed the Transgender Bill, 2018. This Bill seeks to recognise transgender persons, confers certain rights and entitlements on them related to education, employment, and health, and carves out welfare measures for their benefit. The Bill defines a transgender person as one whose gender does not match the gender assigned at birth. It includes trans-men and trans-women, persons with intersex variations, gender-queers, and includes persons having such socio-cultural identities as kinnar, hijra, aravani, and jogta. The Bill requires every establishment to designate one person as a complaint officer to act on complaints received under the Bill.
The Bill provides that a transgender person will have the right to self-perceived gender identity. Further, it also provides for a screening process to obtain a Certificate of Identity, certifying the person as ‘transgender’. This implies that a transgender person may be allowed to self-identify as transgender individual, but at the same time they must also undergo the screening process to get certified as a transgender. Therefore, it is unclear how these two provisions of self-identification and an external screening process will reconcile with each other.
Regulating surrogacy and overhauling the Medical Council of India
The Surrogacy Bill, 2017 which regulates altruistic surrogacy and prohibits commercial surrogacy was also passed in Lok Sabha. Surrogacy is a process where an intending couple commissions an eligible woman to carry their child. In an altruistic surrogacy, the surrogate mother is not given any monetary benefit or reward, and the arrangement only covers her medical expenses and health insurance. The Bill sets out certain conditions for both the intending couple and the surrogate mother to be eligible for surrogacy. The intending couple must be Indian citizens, be married for at least five years, and at least one of them must be infertile. The surrogate mother must be a close relative of the couple, must be married and must have had a child of her own. Further, a surrogate mother cannot provide her own gametes for surrogacy.
The surrogate mother has been given certain rights with regard to the procedure of surrogacy. These include requiring her written consent to abort the surrogate child, and allowing her to withdraw from the surrogacy at any time before the embryo is implanted in her womb.
Another key Bill which was listed for passage in Lok Sabha this session but could not be taken up is the National Medical Commission Bill, 2017 (NMC Bill). Several amendments to this Bill were introduced in Lok Sabha last week. The NMC Bill seeks to replace the Medical Council of India, with a National Medical Commission. It introduces a common final year undergraduate medical examination called the National Exit Test which will also grant the license to practice medicine. Only medical students graduating from a medical institute which is an institute of national importance will be exempted from qualifying this National Exit Test. The Bill also gives the NMC the power to frame guidelines to decide the fees of up to 50% of seats in private medical colleges and deemed universities. The NMC may also grant limited license to certain mid-level practitioners connected with the medical profession to practice medicine. The qualifying criteria for such mid-level practitioners will be determined through regulations, and they may prescribe specified medicines in primary and preventive healthcare.
Regulating dam safety
The Dam Safety Bill, 2018 was introduced in Lok Sabha and applies to all specified dams across the country. These are dams with: (i) height more than 15 metres, or (ii) height between 10 metres to 15 metres and subject to certain additional design and structural conditions. It seeks to provide for the surveillance, inspection, operation and maintenance of specified dams for prevention of dam failure related disasters. It creates authorities at the national and state level to formulate policies and regulations on dam safety and implement them. It also puts certain obligations on dam owners by requiring them to provide a dam safety unit in each dam, among other things.
When the Bill was being introduced, few opposition members raised objections on the grounds of Parliament’s legislative competence to make a law on dam safety which applies to all states. They gave the example of the previous Dam Safety Bill, 2010, which applied only to the states of Andhra Pradesh and West Bengal who had adopted resolutions requiring Parliament to pass a law on dam safety.
So far the winter session has seen poor productivity with Lok Sabha working for 14% of its scheduled time, and Rajya Sabha for 5%. This is one of the least productive sessions of the 16th Lok Sabha. This is also the last major session before the dissolution of the 16th Lok Sabha. Both Houses will meet tomorrow after the Christmas break. With a packed legislative agenda, it is essential for Parliament to function in order to discuss and deliberate the Bills listed. However, with a limited number of sitting days available in the ongoing session and continued disruptions, it remains to be seen if Parliament will be able to achieve its legislative agenda.
- This post is a modified version of an article published by The Wire on December 26, 2018.
