In­dus­try Re­lieved as Gov­ern­ment clar­i­fies

min­i­mum monthly wages

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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.

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