Industry Relieved as Government clarifies
minimum monthly wages
After a lot of confusion and debate over the increase in minimum wages as per the new labour laws, the Government has finally given some relief to the already struggling garment industry by stating that the minimum monthly wages are not going to be fixed at Rs 18,000/-. Prior to this, The Apparel Export Promotion Council (AEPC) had urged the Indian Government to clear the confusion over minimum wages for the garment sector at the earliest, as a clarification would restore the confidence of foreign buyers.
“The confusion was affecting booking of export orders,” said ashok g rajani, Chairman, aepc. The cost of wages in the garment export sector is around 30% of freight on board (FOB), the highest by any standard, exacerbated by the ground reality that the apparel industry is passing through a challenging phase due to the slowdown of global economy. Doubling the minimum wages from the present Rs 9,000/- odd per month would have been a big blow as garment manufacturing would have become unviable and unsustainable and would grossly affect employment in the sector. Moreover, women would have faced the brunt of the impact, as around 70% of the workforce in readymade garments Industry is comprised of women.
The Central Government clarified in early September that the Ministry of Labour has not fixed or mentioned any amount as ‘national minimum wage’ in the Code on Wages Bill 2017. The apprehension that minimum wage of Rs. 18000/- per month has been fixed for all employees is thus incorrect, false and baseless. The minimum wages will vary from place to place depending upon the skill set required, arduousness of the work assigned and geographical location.
The response came in after multiple news reports regarding the fixation of minimum wage as Rs. 18000/- per month by the Ministry of Labour in the Central Government were published across the media. It is now clear that there was neither any intervention by the Ministry of Labour in wage fixation nor any declaration of a ‘national minimum wage’ in the Code on Wages Bill 2017. The rumour of fixation of any minimum monthly wage, be it Rs. 18000/- or any other sum per month, is a hoax. That said, minimum wages will indeed vary from place to place. The factors governing such a wage would depend upon the skill set required, the arduousness of the work assigned and the geographical location.
Further, the Code on Wages Bill 2017, in clause 9 (3), clearly states that the Central Government, before fixing the national minimum wage, may obtain the advice of the Central Advisory Board, which includes representatives from both the employer and employee segments. Therefore, the Code provides for a consultative mechanism before determining the national minimum wage.
Some reports have also been appearing in the media regarding the revised methodology for calculation of minimum wages by enhancing units from three to six family members. It was purely a demand raised by Trade Unions in the recent meeting of the Central Advisory Board on Minimum Wages. It is, however, clarified that such a proposal is not part of the Code on Wages Bill.
2017 has been a year of makeable implementations and reforms. Government of India added another feather to its crown by making changes in archaic labour laws. As a part of labour law reform, the Government has undertaken the exercise of rationalisation of the 38 Labour Acts by framing 4 labour codes, viz., Code on Wages:
1. Code on Industrial Relations 2. Code on Social Security 3. Code on Occupational Safety 4. Health and Working
‘the Code on wages bill 2017’ was introduced in Lok Sabha on August 10, 2017 and subsumes four existing laws: The Minimum Wages Act, 1948; The Payment of Wages Act, 1936; The
The new Code on Wages will ensure minimum wages to one and all and timely payment of wages to all employees irrespective of the sector of employment and without any wage ceiling.
Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976.
After the enactment of the Code on Wages, all these four
Acts will stand repealed. The Codification of the Labour Laws will remove the multiplicity of definitions and authorities leading to ease of compliance without compromising wage security and social security to the workers.
At present, the provisions of the Minimum Wages Act and the Payment of Wages Act do not cover a substantial number of workers, as the applicability of both these acts are restricted to Scheduled Employments / Establishments. The new Code on Wages will ensure minimum wages to one and all and timely payment of wages to all employees irrespective of the sector of employment and without any wage ceiling.
A concept of statutory National Minimum Wage for different geographical areas has also been introduced. It will ensure that no State Government fixes the minimum wage below the National Minimum Wages for that particular area as notified by the Central Government.
The proposed payment of wages through cheque or digital/ electronic mode would not only promote digitisation but also extend wage and social security to the worker. Provision of an Appellate Authority has been made between the Claim Authority and the Judicial Forum which will lead to speedy, cheap and efficient redressal of grievances and settlement of claims.
Penalties for different types of violations under this Code have been rationalised with the amounts of the fine varying as per the gravity of the violations and repetition of the offences. A provision of compounding of offences has also been made for those violations that are not punishable by a penalty of imprisonment.