The Wage Code - 2019 and The Draft Code on Wages (Central) Rules, 2020: An Assault on the Fundamental Right to Minimum Wages

The Wages Code, 2019 and the Draft Code on Wages (Central) Rules, 2020 puts forward a direct assault on the most fundamental rights of workers. One of these is the right of workers to minimum wages, which this article concentrates on.  

Living Wage

The Constitution in Article 43 speaks of a “living wage” for workers and provides that the State shall endeavor to secure, by suitable legislation or economic organization or in any other way, to all workers - agricultural, industrial or otherwise - a living wage and better conditions of work to ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. Further, Article 39 provides that the State shall direct its policy towards securing – for its citizens, men and women equally - the right to an adequate means of livelihood and that the operation of the economic system should not result in the concentration of wealth and means of production to the common detriment.

Minimum Wage

While, the dream of the Constitution is one of a living wage, unfortunately, the law hitherto, the Minimum Wages Act, 1948 only provided for a “minimum wage” to the workers. However, with the coming of the Wage Code, 2019 and the Draft Rules being proposed by the Central Government, even this minimum wage is being denied.

The Supreme Court has held that the concept of Minimum Wages is dynamic, and not static, and that it is to undergo change with the growth of the economy and with the change in the standard of living. The Supreme Court in Chandra Bhawan Boarding and Lodging vs State of Mysore and Anr [AIR 1970 SC 2042], held that “the concept of minimum wage is to undergo change with the growth of the economy and with the change in the standard of living. It is not a static concept. Its concomitants must necessarily increase with the progress of society.” The Court in Workmen Represented By Secretary vs Management Of Raptakos Brett [AIR 1992 SC 504] held that each category of the wage structure has to be tested at the anvil of social justice which is the live-fibre of our society today. 

With the growth and development in society, the wages recognized as minimum wages is required to be increased and its various components is to be developed. In fact, the idea of minimum wage is to grow into a living wage, which recognizes workers as full human beings and provides enough to ensure their development and participation as full citizens of the country. It is only when the basic needs of workers are met, they would be able to spare time away from the workplace for the building up of citizenship and to participate as citizens. 

Less Than Minimum Wage is Nothing But a Forced Labour

The Supreme Court in People's Union For Civil Liberties vs Union Of India & Others [AIR 1982 SC 1473], held that where a person provides labour or services to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the scope and ambit of the words "forced labour" prohibited under Article 23. What we see with the bringing in of the Code on Wages, 2019 and the proposed Draft Code on Wages (Central) Rules, 2020 is the complete erosion of this most basic right to minimum wages and a step by the Government that pushes all workers into a condition of forced labour. 

Manner of calculating the minimum rate of wages as per the Rules that would result in workers working under conditions of forced labour.

Rule 3 of the Draft Code on Wages (Central) Rules, 2020 provides for the manner of calculations of minimum wages and provides the following criteria:

  1. Number of consumption units: The Draft Rules provide for the “standard working class family which includes a spouse and two children apart from the earning worker; an equivalent of three adult consumption units”. The standard working class family consumption units of 3 has been arrived as follows:

    1 (male) + 0.8 (female) + 0.6 (child) + 0.6 (child) to total to 3 adult consumption units. 

    Such an assignment of value is gender discriminatory, as it assigns lower consumption to the female adult member of the household. An issue identified as a cause for high levels of malnutrition amongst women, is now being codified. Further, a child’s consumption unit is kept as low as 0.6. That apart, the condition of parents of the workers has been given a complete go-by. 
  2. Food: The Draft Rules provides for a net intake of 2700 calories per day per consumption unit, a recommendation made as far back as 1948. Nutrition Advisory Committees or Expert Groups set up by the The Indian Council of Medical Research (ICMR) recommend the "Dietary Allowances" in respect of energy (Calories), proteins, fats, minerals, iron, vitamins etc. for various age groups within the population including special groups like infants, pregnant/nursing mothers, children etc. and at the same time recommend dietary allowance by activity groupings also. However, these aspects are given a complete go-by and a net intake of calory prescribed over 60 years ago is used as a standard. 
  3. Clothing: The Draft Rule proposes that 66 meters cloth per year be taken per standard working class family. There is nothing provided for warm clothing, no personal clothing, home textile requirements, footwear, socks and detergents or even stitching charges. 
  4. Housing and Shelter: In the method of calculation of housing, the Government exposes itself in its complete disdain for workers and the working class. The Draft Rule proposes that rent expenditure is not to be calculated by how much it actually costs, but as a percentage (10%) of food and clothing expenditure. Studies have found that people spend a minimum of 50% of their total wages on rent, and the Draft Rules provides for it to be calculated as a ridiculous percentage of the amount spent on food and clothing. The Global Strategy for Shelter to the Year 2000 declared by the United Nations General Assembly in December 1988, defined “adequate housing” as “adequate privacy, adequate space, adequate security, adequate lighting and ventilation, adequate basic infrastructure and adequate location with regard to work and basic facilities” – a basic right now being denied to workers. 
  5. The draft rules also provide for calculation of amount for fuel, electricity and other miscellaneous items to constitute 20 percent of minimum wage and expenditure for children education, medical requirement, recreation and expenditure on contingencies to constitute 25 percent of minimum wage. With increase in privatization in both education and health, fixing constituents at such minor percentage, instead of looking at actual costs expose the real face of the Government.
  6. Provision of revision of Dearness Allowance: Draft Rule 5 provides that endeavour shall be made so that the cost of living allowance and the cash value of the concession in respect of essential commodities at concession rate shall be computed once before 1st April and then before 1st October in every year to revise the dearness allowance payable to the employees on the minimum wages. Therefore, while inflation continues to take place, the Draft Rules only provides for “an endeavor” to be made to revise the dearness allowance linked to the minimum wage and places no mandatory obligation to ensure such revision. 
  7. Provision of a Floor Wage: Section 9 of the Act and Draft Rule 11 provides for the fixation of a floor wage by taking into account the minimum living standard including the food, clothing, housing and any other factors considered appropriate by the Central Government from time to time of the standard working class family. This entire notion on floor wages envisages a wage which is less than minimum wages and has no place in the law, when the law clearly lays down that workers forced to work for less than minimum wages amounts to forced labour prohibited under Article 23 of the Constitution. 

What we see with the coming of the Wages Code, 2019 and the Draft Code on Wages (Central) Rules, 2020 is thus a complete destruction of the most basic rights of the working class, and a far cry to the dreams of the Constitution of an equal and just society.