The Wage Code Bill Is a Mixed Bag

A ‘national minimum wage’ is a good idea, but its computation is cause for concern. Labour inspectors may become ineffective

The Wage Code Bill combining four labour laws — the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976 — has been introduced in the ongoing session of Parliament.

Though the draft Code is welcome on several grounds — such as with respect to universal minimum wage for the employed and a transparent wage payment system — there are some issues of concern.

The basic issue with respect to minimum wage is the methodology used. A set of criteria was arrived at during the tripartite proceedings of the Indian Labour Conference — supplemented by the Supreme Court’s prescription in Workmen v Reptakos Brett & Co. in 1992 — which basically combines minimum expenses on food and non-food (clothing, fuel and light, house rent, education, medical expenses, footwear, transport, etc.) items.

You might also be interested to read: Code On Wages 2019: A Universal Minimum Wage Is Fine But Can It Be Enforced?

Various bodies arrive at differing estimates and therein lies the problem. For example, recently the Seventh Pay Commission arrived at a rather generous minimum wage (₹18,000 for government employees) and the Expert Committee on Minimum Wages, a rather conservative estimate (₹9,750); the latter is likely to be contested by trade unions. However, these estimates provide the ‘bargaining zone’ for labour, industry and the government. The best part of the Expert Committee’s (EC’s) recommendation is a single national minimum wage, without several categories based on skill or other criterion.

Source: The Hindu BusinessLine

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