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
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.
Issued by COC Karnataka
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