Presently, there are around 40 state and central laws regulating different aspects of labour, such as resolution of industrial disputes, working conditions in factories, and wage and bonus payments. Over the years, some experts have recommended that these laws should be consolidated for easier compliance.[1] Since the current laws vary in their applicability, consolidation would also allow for greater coverage.
Following these recommendations, the Code on Wages was introduced in the Lok Sabha in August 2017. The Code consolidates four laws related to minimum wages, payment of wages and bonus, and a law prohibiting discrimination between men and women during recruitment promotion and wage payment.
The Code was subsequently referred to the Standing Committee on Labour for examination. The Committee has met some experts and stakeholders to hear their views. In this context, we explain the current laws, key provisions of the Code, and some issues to consider.
Who will be entitled to minimum wages?
Currently, the Minimum Wages Act, 1948 lists the employments where employers are required to pay minimum wages to workers. The Act applies to the organised sector as well as certain workers in the unorganised sector such as agricultural workers. The centre and states may add more employments to this list and mandate that minimum wages be paid for those jobs as well.[2] At present, there are more than 1700 employments notified by the central and state governments.[3]
The Code proposes to do away with the concept of bringing specific jobs under the Act, and mandates that minimum wages be paid for all types of employment – irrespective of whether they are in the organised or the unorganised sector.
The unorganised sector comprises 92% of the total workforce in the country.1 A large proportion of these workers are currently not covered by the Minimum Wages Act, 1948. Experts have noted that over 90% of the workers in the unorganised sector do not have a written contract, which hampers the enforcement of various labour laws.[4]
Will minimum wages be uniform across the country?
No, different states will set their respective minimum wages. In addition, the Code introduces a national minimum wage which will be set by the central government. This will act as a floor for state governments to set their respective minimum wages. The central government may set different national minimum wages for different states or regions. For example, the centre can set a national minimum wage of Rs 10,000 for Uttar Pradesh and Rs 12,000 for Tamil Nadu. Both of these states would then have to set their minimum wages either equal to or more than the national minimum wage applicable in that state.
The manner in which the Code proposes to implement the national minimum wage is different from how it has been thought about in the past. Earlier, experts had suggested that a single national minimum wage should be introduced for the entire country.1,[5] This would help in bringing uniformity in minimum wages across states and industries. In addition, it would ensure that workers receive a minimum income regardless of the region or sector in which they are employed.
The concept of setting a national minimum wage exists in various countries across the world. For instance, in the United Kingdom one wage rate is set by the central government for the entire country.[6] On the other hand, in the United States of America, the central government sets a single minimum wage and states are free to set a minimum wage equal to or above this floor.[7]
On what basis will the minimum wages be calculated and fixed?
Currently, the central government sets the minimum wage for certain employments, such as mines, railways or ports among others. The state governments set the minimum wage for all other employments. These minimum wages can be fixed based on the basis of different criteria such as type of industry or skill level of the worker. For example, Kerala mandates that workers in oil mills be paid minimum wages at the rate of Rs 370 per day if they are unskilled, Rs 400 if they are semi-skilled and Rs 430 if they are skilled.[8]
The Code also specifies that the centre or states will fix minimum wages taking into account factors such as skills required and difficulty of work. In addition, they will also consider price variations while determining the appropriate minimum wage. This process of fixing minimum wages is similar to the current law.
Will workers be entitled to an overtime for working beyond regular hours?
Currently, the central or state government define the number of hours that constitute a normal working day. In case an employee works beyond these hours, he is entitled to an overtime rate which is fixed by the government. As of today, the central government has fixed the overtime rate at 1.5 times normal wages in agriculture and double the normal wages for other employments.[9]
The Code proposes to fix this overtime rate at twice the prevailing wage rate. International organisations have recommended that overtime should be 1.25 times the regular wage.[10]
Does the Code prohibit gender discrimination between workers?
Currently, the Equal Remuneration Act, 1976 prohibits employers from discriminating in wage payments as well as recruitment of workers on the basis of gender. The Code subsumes the 1976 Act, and contains specific provisions which prohibit gender discrimination in matters related to wages. However, unlike in the 1976 Act, the Code does not explicitly prohibit gender discrimination at the stage of recruitment.
How is the Code going to be enforced?
The four Acts being subsumed under the Code specify that inspectors will be appointed to ensure that the laws are being enforced properly. These inspectors may carry out surprise checks, examine persons, and require them to give information.
The Code introduces the concept of a ‘facilitator’ who will carry out inspections and also provide employers and workers with information on how to improve their compliance with the law. Inspections will be carried out on the basis of a web-based inspection schedule that will be decided by the central or state government.
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[1]. Report of the National Commission on Labour, Ministry of Labour and Employment, 2002, http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf.
[2]. Entries 22, 23 and 24, List III, Seventh Schedule, Constitution of India.
[3]. Report on the Working of the Minimum Wages Act, 1948, Ministry of Labour and Employment, 2013, http://labourbureaunew.gov.in/UserContent/MW_2013_final_revised_web.pdf.
[4]. Report on Conditions of Work and Promotions of Livelihood in the Unorganised Sector, National Commission for Enterprises in the Unorganised Sector, 2007, http://nceuis.nic.in/Condition_of_workers_sep_2007.pdf.
[5]. Report of the Working Group on Labour Laws and other regulations for the Twelfth five-year plan, Ministry of Labour and Employment, 2011, http://planningcommission.gov.in/aboutus/committee/wrkgrp12/wg_labour_laws.pdf.
[6]. Section 1(3), National Minimum Wage Act, 1998, http://www.legislation.gov.uk/ukpga/1998/39/pdfs/ukpga_19980039_en.pdf.
[7]. Section 206(a)(1), The Fair Labour Standards Act, 1938, https://www.dol.gov/whd/regs/statutes/FairLaborStandAct.pdf.
[8]. G.O. (P) No.36/2017/LBR, Labour and Skills Department, Government of Kerala, 2017, https://kerala.gov.in/documents/10180/547ca516-c104-4b31-8ce7-f55c2de8b7ec.
[9]. Section 25(1), Minimum Wages (Central) Rules, 1950
[10]. C030-Hours of Work (Commerce and Offices) Convention (No. 30), 1930,http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:312175.
The Governor of Rajasthan promulgated two Ordinances amending the Code of Criminal Procedure, 1973 and Indian Penal Code, 1860 applicable in Rajasthan on September 7. The Ordinances restrain any investigation to be conducted against a judge, magistrate or public servant without prior sanction of the government. The decision to grant sanction will have to be taken within six months, failing which such sanction will be deemed to have been granted. The Ordinances also restrain any person from reporting on the individual in question until sanction for investigation is granted. Two Bills replacing these Ordinances were introduced in the Rajasthan Assembly by the state Home Minister last week, on October 23.[i] After introduction, the Bills were referred to a 15-member select committee comprising of legislators from the state Assembly, and headed by the Home Minister of Rajasthan. This blog examines the role of committees and some of the practices observed in state legislatures.
Purpose of committees in legislatures
In India, state legislatures sit for 31 days a year on an average.* Several Bills are passed within a few days of their introduction. One of the primary responsibilities of the legislature is to hold the executive accountable, and examine potential laws. Due to paucity of time, it is difficult for the members go through all the bills and discuss them in detail. To address this issue, various committees are set up in Parliament and state assemblies where smaller group of members examine Bills in detail, and allow for an informed debate in the legislature. Apart from scrutinising legislation, committees also examine budgetary allocations for various departments and other policies of the government. These mini-legislatures provide a forum for law makers to develop expertise, engage with citizens and seek inputs from stakeholders. Since these committees consist of members from different parties, they provide a platform for building consensus on various issues.
Figure 1: Average sitting days in a year (2012-16)
Sources: Website of various state assemblies as on October 30, 2017.
Types of committees
There are broadly three types of committees: (i) Financial committees: These scrutinise the expenditure of the government and recommend efficient ways of spending funds (example: Public Accounts Committee and Estimates Committee), (ii) Department-Related Standing Committees (DRSC): These scrutinise performance of departments under a ministry, (iii) Other committees: These deal with day-to-day functioning of the legislature (example: Business Advisory Committee, Papers Laid, Rules, etc.) While there are 3 financial committees and 24 department related committees in Parliament, the number of committees in state legislatures varies. For example, Kerala has 14 subject committees examining all departments, while Delhi has seven standing committees scrutinising performance of various departments. [ii],[iii] However, not all states have a provision for specific DRSCs or subject committees.
Similar to Parliament, state legislatures also have a provision to form a select committee to examine a particular legislation or a subject. Such a committee is disbanded after it presents a report with its findings or recommendations. Several Bills in states are referred to select committees. However, the practice in some state legislatures with respect to select committees deviate from those in the Parliament.
Independence of select committee from the executive
The rules in several states provide for the minister in-charge piloting the bill to be an ex-officio member of the select committee. These states include Rajasthan, Assam, Andhra Pradesh, Chhattisgarh, Telangana. Moreover, in Manipur, the rules provide for the minister to be chairman of the select committee. Note that the minister is part of the executive. His inclusion in the committee may be in conflict with the committee’s role of scrutinising the functioning of the executive.
The practice of including ministers in committees is in contrast with the protocol followed in Parliament where a minister is not part of any DRSC or select committee. As committees of the legislature hold the executive accountable, having a minister on the select committee undermines the role of legislature as an oversight mechanism. A minister, as a representative of the executive being part of such committees may impede the ability of committees to effectively hold the executive accountable.
The two Bills introduced in the Rajasthan Assembly last week were referred to a select committee headed by the Home Minister of the state. There have been several instances in other state legislatures where the minister introducing a bill was chairman of the select committee examining it. In Goa, a bill empowering the government to acquire land for development of public services is headed by the Revenue Minister of the state.[iv] Similarly, in Arunachal Pradesh, the select committee examining a bill for establishment of a university was headed by the Education Minister.[v] In Maharashtra as well, the Education Minister was chairman of the select committee scrutinising a bill granting greater autonomy to state universities.[vi] For rigorous scrutiny of legislation, it is essential that the committees are independent of the executive.
Strengthening state legislature committees [vii]
The functioning of committees in states can be strengthened in various ways. Some of these include:
(i) Examination of Bills by assembly committees: In the absence of DRSCs, most bills are passed without detailed scrutiny while some bills are occasionally referred to select committees. In Parliament, bills pertaining to a certain ministry are referred to the respective DRSCs for scrutiny. To strengthen legislatures, DRSCs must examine all bills introduced in the assembly.
(ii) Scrutiny of budgets: Several states do not have DRSCs to examine budgetary proposals. Some states like Goa, Mizoram and Arunachal Pradesh have a budget committee to examine budget proposals. Post the 14th Finance commission, there is a higher devolution of funds to state governments from the centre. With states increasingly spending more, it is necessary for them to have DRSCs that scrutinise the allocations and expenditures to various departments before they are approved by state assemblies.
*Based on the average sitting days for 18 state assemblies from 2012-2016.
[i] The Code of Criminal Procedure (Rajasthan Amendment) Bill, 2017 http://www.rajassembly.nic.in/BillsPdf/Bill39-2017.pdf;The Criminal Laws (Rajasthan Amendment) Bill, 2017 http://www.rajassembly.nic.in/BillsPdf/Bill38-2017.pdf.
[ii] List of subject committees http://niyamasabha.org/codes/comm.htm.
[iii] Delhi Legislative Assembly National Capital Territory Of Delhi Composition Of House Committees
2017 – 2018, http://delhiassembly.nic.in/Committee/Committee_2017_2018.htm.
[iv] The Goa Requisition and Acquisition of Property Bill, 2017 http://www.goavidhansabha.gov.in/uploads/bills/468_draft_BN18OF2017-AI-REQUI.pdf.
[v] The Kameng Professional and Technical University Arunachal Pradesh Bill 2017 http://www.assamtribune.com/scripts/detailsnew.asp?id=oct1717/oth057.
[vi] Maharashtra Public Universities Bill, 2016 http://mls.org.in/pdf/university_bill_english.pdf.
[vii] Strengthening State Legislatures http://www.prsindia.org/uploads/media/Conference%202016/Strengthening%20State%20Legislatur
