Observation (CEACR) - adopted 2002, published 91st ILC session (2003)

Minimum Wage-Fixing Machinery Convention, 1928 (No. 26) - India (Ratification: 1955)

The Committee takes note of the Government’s report and the observations regarding the application of the Convention that were made by the organization Hind Mazdoor Sabha and supplied with the Government’s report. It also notes the Government’s comments concerning the observations of the Central of Indian Trade Unions (CITU). It notes with interest the statement made by the Government in reply to previous observations by the Committee, to the effect that the protection provided by the Minimum Wages Act of 1948 has been extended to some home and informal sector workers, and that efforts have been made to bring all home workers under the protection of the Act. The Committee requests the Government to supply the legislative texts that extend the protection of the Minimum Wages Act to the workers in question, and to keep the International Labour Office informed of the progress made with the draft amendments of the Minimum Wages Act referred to in its report.

I.  Introduction of a national "floor-level" wage applicable to all workers

1. The Committee previously requested the Government to supply its observations on the comments of the CITU regarding the absence of a wages policy for the great majority of informal sector workers. The CITU had explained that, for the Government, the national floor-level wage corresponded to the threshold below which no minimum wage should fall, and that it should not be below the poverty threshold. The CITU considered that many qualified workers were employed in the informal sector, where the minimum wage is below the poverty threshold and workers have no bargaining power to protect themselves against exploitation by their employers. However, despite the Government’s statements, the floor-level wage is, according to the CITU, below the poverty threshold. The organization considers that wages in the non-unionized sector should be above the poverty threshold.

2. The organization Hind Mazdoor Sabha indicates that, although there is no national minimum wage, the Government in 1996 arbitrarily introduced a national floor-level wage set at 35 rupees a day, which was increased to 45 rupees a day from 1999 onwards. The organization also regrets that the many minimum wage rates applied in the country’s different states and territories, on the one hand, and the rates applied among different occupations within the same state, on the other, vary so widely. It also adds in this respect that the minimum wage rates vary between Rs16.75 (in the State of Karnataka and Rs143.67 (in the State of Kerale).

3. The Government states in its comments on the observations made by the CITU that it would be difficult to devise a uniform wages policy given that wage fixing depends on many factors linked to the cost of living, which varies from one state to the other and from one industry to the other. The Government states nevertheless that it has established a national floor-level wage with a view to protecting the interests of workers employed in non-scheduled employments, that is to say, those not covered by a minimum wage. The central Government has therefore instructed the state governments to fix minimum wages in scheduled employments at a level not lower than the national floor-level wage which, since 30 November 1999, has been set at 45 rupees a day. With regard to the comments made by the organization Hind Mazdoor Sabha, the Government indicates that all the minimum wage rates applicable in the State of Karnataka have been revised except for one or two and that a request has been made to the State to know the reasons for not revising the minimum wages applicable in these employments so that they are equivalent to or more than the national floor level minimum wage rate.

4. The Committee requests the Government to supply copies of the legislation which established the national floor-level wage from 1996 onwards. The Committee is concerned by the fact that the Government’s report contains no information on the comments made by the Hind Mazdoor Sabha, according to which the Government set the national floor-level wage rates arbitrarily. The Committee requests the Government to indicate whether prior consultations were actually held with the social partners before the application of the machinery for fixing the national floor-level wage, and to provide information on the participation of employers’ and workers’ organizations in the operation of the machinery, in accordance with Article 3, paragraph 2(1) and (2), of the Convention. The Committee recalls that minimum wage-fixing machinery must be determined and applied in consultation with organizations of employers and workers, who should be associated in that process on equal terms and should be able to influence any decisions. The Committee requests the Government to supply with its next report any relevant information regarding measures taken or planned with a view to meeting its obligations under these provisions of the Convention.

II.  Application of the machinery for fixing and revising minimum wages   applicable to scheduled employments

5. The organization Hind Mazdoor Sabha, in its observations supplied with the Government’s report, states that the Central Advisory Board and the advisory committees in the different states and territories, which are supposed to advise the central Government and the state governments on matters relating to the fixing of minimum wages, has operated only irregularly. It claims that the Board met on only 14 occasions between 1948 and 1992, although there should have been 22  meetings. The organization adds that the Board’s last meeting was held on 27 June 2002, ten years after the previous meeting in 1992.

6. The Government states in its report that minimum wage-fixing machinery and procedures for applying it are established under the Minimum Wages Act of 1948. Under the terms of section 5 of the Act, the central Government or state governments, as appropriate, may fix and revise minimum wages in respect of scheduled employments by using two methods: either with the aid of advisory committees set up under the terms of the Minimum Wages Act, in which employers’ and workers’ representatives participate; or by notification. In the latter case, the competent authority publishes its minimum wage proposals in the Official Gazette. The act of publication marks the beginning of a two-month period during which any persons affected by the decision have the right to present objections or proposals. Furthermore, with regard to the application of the machinery for revising minimum wages, the Government states that it accepted and has been implementing since 1998 the recommendations of the subcommittee of the Central Advisory Board regarding criteria for fixing minimum wages in respect of the scheduled employments that come under its remit (45 occupations in the central government sphere) and has recommended a readjustment of minimum wages in line with the consumer price index, to take place every six months or whenever the index goes up by five points. The Government also states that 19 states have established such a system, which enables them to link minimum wages to the consumer price index. Furthermore, in the event that a state government fails for more than three years to fix or revise the minimum wage applicable for a given scheduled employment, the central Government states that it can fix or revise the applicable minimum wage itself after notifying the state government in question. Furthermore, with regard to the observation made by the Hind Mazdoor Sabha, the Government states that the Ministry of Labour will make efforts in the future to hold meetings of the Central Advisory Board more frequently, and that the state governments have been advised to convene regular meetings of their advisory boards.

7. The Committee takes this to mean that, even in the central government sphere, minimum wages for scheduled employments were revised by the method of notification in the Official Gazette in January 2002, eight years after the last adjustment. The Committee notes that the minimum wage fixing machinery can be applied either through minimum wage advisory committees, which each authority can set up to deal with occupations that come within its remit and which include government-appointed representatives of workers and employers in equal numbers, or by the method of notification. In this regard, the Committee requests the Government to specify the means by which, when using the notification method, the central Government and state and territorial governments ensure that organizations of employers and workers participate in equal numbers and on an equal basis in the operation of the minimum wage fixing machinery, in accordance with Article 3, paragraph 2(2), of the Convention. Furthermore, the Committee requests the Government in its next report to supply information on the way in which it acts to ensure the operation, with the participation of employers’ and workers’ organizations, of the machinery for revising minimum wages in states and territories whose governments do not apply the machinery in question, and where, in some cases, as in the case of Tamil Nadu, the machinery for fixing and revising certain minimum wages has not been operated since 1977, or where the social partners have not been associated in its operation. The result of this failure has been to set the minimum monthly wage at a level equivalent to the national floor-level wage normally payable for four days’ work. The Committee also requests the Government to provide information on the measures taken to ensure that state and territorial governments adhere to the established national floor-level wage rates that are applicable throughout the country, whether or not the employment in question is scheduled or non-scheduled.

III.  Practical application of the Convention

8. According to the information contained in the comments supplied by the Hind Mazdoor Sabha, efforts to monitor the application of the Minimum Wages Act of 1948 are ineffective because the labour inspectors do not even have the right to carry out inspections as a result of the new regulations in force in many states. The organization also refers to cases where the competent authorities under the Labour Commissioner have promoted agreements setting a minimum wage at a level below half the minimum wage in force within a given state for a particular occupation, as has occurred e.g. in the State of West Bengal. According to the Hind Mazdoor Sabha, such practices occur because employers threaten to relocate their production units to neighbouring states with a much lower minimum wage.

9. As regards this point, the Government states in its report that the Minimum Wages Act requires employers to pay their workers a wage that is at least equivalent to the established minimum wage. Inspectors carry out regular inspections to determine whether or not there are any contraventions of the minimum wage provisions. They have the authority to initiate civil or criminal proceedings against anyone found in breach of the law, and this right has been extended to workers. Furthermore, the Government indicates that, where complaints are made that labour inspectors are being prevented from conducting inspections, the matter is taken up with the state government concerned. The Government emphasizes that such discussions must be held with the Government of West Bengal on matters raised by the Hind Mazdoor Sabha. Finally, it notes that it is envisaging certain amendments to the Minimum Wages Act with a view to making its provisions more stringent.

10. The Committee requests the Government to keep the International Labour Office informed of the outcome of the discussions with the authorities in West Bengal. It requests the Government to indicate in its next report the measures which have been taken or are envisaged to prevent such cases from reoccurring in practice. It also requests the Government to indicate any appropriate measures that have been taken, in consultation with the States of the Union, to prevent labour inspectors from being prevented from discharging their duties. The Committee also notes that the Government similarly declines to respond to the comments made on a previous occasion by the Trade Union Congress, according to which there have been cases of employers bringing complaints regarding the minimum wage before the courts, which has had the effect of suspending payment of the minimum wage to the workers concerned. The Committee recalls that under the terms of Article 4, paragraph 1, of the Convention, the system of supervision established under the terms of the provision must provide appropriate sanctions for any violation of the applicable minimum wage rate.

11. In this regard, the Committee recalls that it has referred on previous occasions to certain cases presented to it through the observations of trade union organizations which, according to the Government, were still pending. The Government’s report refers to some of these cases, but also indicates that some of them have not been resolved. The Committee is bound to express its concern at the slowness of the judicial system intended to help workers recover the wages owed to them, and recalls that some of these cases go back to 1996. The Committee requests the Government to inform the International Labour Office of the outcome of these proceedings, and also requests the Government at the same time to take any necessary and appropriate measures to ensure that any wages owed to workers are paid promptly, given that the workers in question are paid the minimum wage and consequently highly dependent on their wages. The Committee also requests the Government to supply with its next report additional details regarding the powers of inspection of officials responsible for supervising the application of the Minimum Wages Act, both with regard to the central government sphere and that of the states and territories.

12. In addition, the Committee also observes that, according to certain information, the instructions issued by the central Government for the purpose of enforcing the national floor-level wage rate were, as of 1 October 2001, disregarded, even with regard to scheduled occupations, in 12 of the country’s 33 states and territories (Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Jammu and Kashmir, Kerala, Maharashtra, Manipur, Orissa, Tripura, Uttar Pradesh and Pondicherry). The Committee recalls that it is generally accepted that almost 92 per cent of waged workers are employed in the informal sector, many of them in jobs other than the scheduled jobs to which the minimum wages apply, and would therefore be eligible for the national floor-level wage. The Committee requests the Government to supply with its next report information, including statistical data, on the level of compliance with the national floor-level wage rate by state and territorial governments, and on the measures taken to ensure compliance, with regard to workers in both scheduled and non-scheduled employments, in accordance with Article 3, paragraph 2(3), of the Convention.

13. Lastly, the Committee recalls that under Article 3, paragraph 2(3), of the Convention, minimum rates of wages which have been fixed are binding on the employers and workers concerned so as not to be subject to abatement by them by individual agreement, nor, except with general or particular authorization of the competent authority, by collective agreement. The Committee requests the Government to provide further information regarding the comments made by the Hind Mazdoor Sabha to the effect that the competent authorities under the Labour Commissioner have promoted agreements setting wages at a level equivalent to less than half the minimum wage in force in the state in question, as for example in West Bengal. The Committee recalls that the Convention allows for this only in cases of collective agreements, and requests the Government to indicate whether, in the cases cited by the Hind Mazdoor Sabha, collective agreements have been concluded and how frequently use has been made of this possibility to abate minimum wage rates by general or particular authorization of the competent authorities.