QUANTIFICATION OF NEED-BASED
MINIMUM WAGE AND NEED FOR
REVISION OF MINIMUM WAGE OF
CENTRAL GOVERNMENT
EMPLOYEES
The
concept of the Need-Based
Minimum Wage has evolved in
India after
Independence and owes its origin
to the Directive Principles of
the
Indian Constitution and the
welfare policy of the
Government. Its
acceptance in principle connotes
a public effort at an
institutional
determination of wage rates
particularly in the industrial
sector of the
economy. Unfortunately the
computation of the need based
minimum wage
has become a controversial
subject in the country. While
the concept of
what the need based minimum wage
should cover is fairly clear and
generally accepted by both the
employer and employee, its
actual
assessment into monetary terms
has raised endless disputes not
alone by
the employer.
NEED-BASED MINIMUM WAGE
FORMULA:
Minimum
wages for the average family
will have to be based on
requirements of
food, clothing, housing and so
on. Additional components of
expenditure
to cover for children's
education, medical treatment,
recreation,
festivals and ceremonies.
In a vast country such as ours,
there
are bound to be regional
variations in these requirements
owing to
climatic conditions, food
habits, etc. At the same time in
order to
ensure a degree of uniformity
the Conference have adopted a
certain
norms. The food component
carries the largest- proportion
of the total
cost of living in a working
class family. The component’s
significance
is not only economic but human
also. On food depends the health
and
efficiency of the worker, which
is vital to the industrial
production.
After a protracted discussion
the Conference adopted Dr.
Aykroyd's
second dietary prescription of
the adequate diet level, the
other one
being the optimum diet level. An
optimum diet according to him,
is one
which ensures the functioning of
the various life processes at
their
very best; whereas an adequate
diet maintains these processes
but not at
their peak levels. The optimum
diet would include more of
vitamins and
less of proteins in its caloric
content, while the adequate diet
would
include more of proteins and
less of vitamins.
The Committee on
Fair Wages laid down that the
standard working class family
should be
reckoned as one consisting of
three consumption units,
supported by a
single male earner and including
his wife and two children below
the of
age 14 The 15th Session of
Indian Labour Conference
approved that the
wage should cover four
categories of needs considered
essential for the
worker's well being, viz. food,
clothing, housing and
miscellaneous. In
calculating the minimum wage,
the norms for the food category
should be
based on Dr. W.B. Aykroyd's
formula for an adequate and
balanced diet.
It thus came about that a wage
linked to the needs was
suggested as a
desirable minimum.
Subsequently, when attempting to
implement the
recommendations of the
conference, almost all the wage
fixing
authorities including the
committees appointed under the
Minimum Wages
Act, 1948 have invariably faced
difficulty in determining: (i)
the
calorific norm which should form
the basis of the diet content
(ii) the
exact composition of the diet
(iii) the qualities of the
various items
of diet and (iv) availabilities
of food commodities consumed by
the
worker and his pattern of
consumption. In this regard the
first assault
was launched by the II Central
Pay Commission (1959),
pertaining to the
calorific norm as laid down by
the 15th Indian Labour
Conference. The
Indian Labour Conference worked
out the three-unit formula, the
minimum
wage is worked out taking into
consideration the calorific
value
requirements of 2,700 each,
certain length of cloth
requirement, housing
rental value, education and
medical expenses etc.
CONCEPT OF LIVING WAGES:
Concept
of Living Wages It represents a
standard of living which
provides not
merely for bare physical
subsistence but for maintenance
of health and
decency, a measure of frugal
comfort, including education of
children,
requirement of essential social
needs and a measure of insurance
against
eh more important misfortunes
including old age. This is the
ideal
wages and envisaged in Article
43 of Directive Principles in
Part IV of
the Constitution. I. L. O.
Conventions also provide for
living wages.
Living
wages is the ideal wages and on
the line as stipulated in
Article 43 of
our Constitution. Wage
differentials are necessary part
of wage
structure if skill formation is
to be motivated and productivity
is to
be achieved but at the same time
it should be reasonable.
Hence it
is relevant to quote the
following observation made by
the Kerala High
Court in Association of Planters
of Kerala v State of Kerala in
this
regard: A failure to fix
or revise minimum wages was not
only a
statutory violation but is a
breach of fundamental right
enshrined in
Art. 23 of the Constitution. A
duty is cast upon the State by
provisions
of the Act and Article 23 to
fix and revise the minimum rates
of wages.
7th CPC REPORT PARA NO 4 HAS
ALSO DEALT THE ISSUE OF A NEED-
BASED MINIMUM WAGE TAKING INTO
THE CONCEPT OF THE
FOLLOWING.
a)
Normative family is taken to
consist of a spouse and two
children below
the age of 14. With the husband
assigned 1 unit, wife, 0.8 unit
and two
children, 0.6 units each, the
minimum wage needs to address 3
consumption units;
b) The food requirement per
consumption unit is
shown in the Annexure to this
chapter. The specifications were
derived
from the recommendations of Dr.
Wallace Aykroyd, the noted
nutritionist, which stated that
an average Indian adult engaged
in
moderate activity should, on a
daily basis, consume 2,700
calories
comprising 65 grams of protein
and around 45-60 grams of fat.
Dr Aykroyd
had further pointed out that
animal proteins, such as milk,
eggs, fish,
liver and meat, are
biologically more efficient than
vegetable proteins
and suggested that they should
form at least one-fifth of the
total
protein intake
c) The clothing requirements
should be based on per
capita consumption of 18 yards
per annum, which gives 72 yards
per
annum (5.5 meters per month) for
the average worker’s family. The
15th
ILC also specified the
associated consumption of
detergents
d) The
prescribed provision of Report
of the Seventh CPC 63Index 25
percent to
cover education, recreation,
ceremonies, festivals and
medical expenses
has been reduced to 15
percent.
THE THREE-UNIT BASED FORMULA
ADOPTED BY THE PAY COMMISSIONS
NEEDS A CHANGE TO SIX UNITS DUE
TO FOLLOWING FACTORS :
The
three-unit based formula to fix
minimum wages presently counts
only
four members of a family ie
husband, wife and two children.
It has no
provision to count dependent
parents, if any, or even if
there are more
than two children.
The three-unit formula gives the
husband a full unit, wife 0.8
unit, and 0.6 units for each of
the two children.
Now
the trade unions and the
employees associations are of
the opinion that
the three-unit system are not
sufficient to decide minimum
wages
because the children continue to
stay with the family for longer
periods. The two children and
wife should be accorded one
single unit
instead of 0.6 units,” also,
marriageable age of a child has
also
increased and they should also
be given full units, the gender
equality
should also be observed instead
of 0.8 units it should be full
unit for
the spouse.
Hence should be revised to the
four unit formula gives
the husband a full unit, wife
full unit, and full units for
each of the
two children.
After the 2010 Supreme Court
ruling that dependent
parents are to be taken care of
by children, two more units
should be
added and the formula be based
on six-unit formulae than
three.
"The
CrPC section 125 and
Maintenance of Parents and
Senior Citizens Act
make it mandatory for an earning
member to maintain his parents,
failing
which he/she may have to face
penal consequences. Today, the
average
life span of a person has
increased to 68.3 years compared
to that of 41
years in 1957. Hence two
additional units have to be
added,"
So there is a need to hike
number of units from three to
six to calculate minimum
wages.
OTHER FACTORS AFFECTING OUR
WAGES ARE AS FOLLOWS:
1)
The 7th CPC has taken into
consideration the 15% to cover
education,
recreation, ceremonies,
festivals and medical expenses
against 25%
prescribed by the Supreme Court.
Additional components of
expenditure to
cover for children’s education,
medical treatment, recreation,
festivals and ceremonies. This
followed from the Supreme
Court’s ruling
in the Raptakos Brett Vs
Workmencase of 1991 for
determination of
minimum wage of an industrial
worker. The Supreme Court had
prescribed
this amount at 25 percent of the
total minimum wage calculated
from the
first five components.
2) Secondly the prices of
essential
commodities for calculation of
the minimum wage is always a
debate , the
price essential commodities by
the using Consumer Price Index
for
Industrial Workers maintained by
Labour Bureau, Shimla and the
retail
prices are showing different
rates , the retail prices of
essential
commodities are at higher end
including that of state
Government run
co-operative society’s compared
to the retail prices maintained
by
Labour Bureau, Shimla by more
than 15%, that is the prices
maintained by
Labour Bureau, Shimla are lower
by more than 15% compared to
market
prices , the CG employees are
deprived of proper minimum wage
by an
extent of 25% . If proper retail
prices are taken into account
the
minimum wage shall be more than
Rs 26,000/- as on 1st Jan
2016.
THE PAYMENT OF WAGES ACT,
1936:
The
revision of payment of wages
act, 1936 , the Government has
raised the
monetary limit of wages to Rs.
24000/- per month for the
applicability
of the Act by issuing the
notification .This calculation
of Rs 24,000/
is based on Dr. W.B. Aykroyd’s
formula. This is done on the
basis of
figures of the Consumer
Expenditure Survey published by
the National
Sample Survey Organization.
The payment of wages act, 1936
monetary limit of wages to Rs.
24000/- per month is for
unskilled worker
, if we add Rs 25% for skilled
worker , it work out at Rs
30000/- for
skilled worker which includes
wages and allowances, at present
the
Central Government employees at
the initial stage are paid Rs
23,000/-
(Rs 18,000/ as minimum wage and
Rs 5,000/ as allowances ), still
there
is gap of Rs 7,000/ , if the
minimum wage of Central
Government
employees is re fixed at Rs
22,000/ then this gap shall be
reduced.
The breakup of the Central
Government employee's salary is
as follows.
Non Metro City
Minimum wage Rs 18,000/-
HRA Rs 1800/-
Transport allowances Rs
900/-
Children education
allowances Rs 2250/-
Total Salary : Rs
22950/-
The
Central Government employees
are deprived of the actual
minimum wage of
Rs 26,000/-. Hence there is a
need of revision of minimum wage
from Rs
18,000/ as Central Government is
a model
employer.
Via :
COC Karnataka
