LABOUR Policy in India Has Evolved in Response to Specific Needs of the Situation To

730 India 2010

21 Labour

LABOUR policy in India has evolved in response to specific needs of the situation to

suit requirements of planned economic development and social justice and has a

two-fold objective, viz., maintaining industrial peace and promoting the welfare of

labour.

LABOUR REFORMS

Labour Reforms essentially means taking steps to increase production, productivity

and employment opportunities in the economy while protecting overall interest of

labour. Essentially it means skill development, retraining, redeployment, updating

knowledge base of workers-teachers, promotion of leadership qualities etc. Labour

Reforms also includes labour law reforms. Changes in the labour laws are also done

protecting the interests of workers. Brief notes on different labour laws are given in

subsequent paragraphs.

THE MINIMUM WAGES ACT, 1948

The Minimum Wages Act, 1948 provides for fixation, review, revision and enforcement

of minimum wage, both by the Central Government and the State Government, in

respect of scheduled employments in their respective jurisdictions. There are 45

scheduled employments in the Central sphere whereas the number of these

employments in the State sphere is 1596.

The Minimum Wages Act, 1948 does not allow discrimination between male

and female workers or different minimum wages for them. All the provisions of the

Act equally apply to both male and female workers.

In order to protect the minimum wages against inflation, the Central Government

has made provision of Variable Dearness Allowance (VDA) linked to Consumer

Price Index. As regards States/UT Administrations, 26 of them have made VDA as a

component of minimum wages. Both Central and State Governments revise the

minimum wages in respect of these scheduled employments from time to time.

Accordingly, VDA is revised periodically twice a year effective April and October in

the Central Sphere and the rates were last revised w.e.f. 01.04.2009.

NATIONAL FLOOR LEVEL MINIMUM WAGE

In order to have a uniform wage structure and to reduce the disparity in minimum

wages across the country, a concept of National Floor Level Minimum Wage was

mooted on the basis of the recommendations of the National Commission on

Rural Labour (NCRL) in 1991. Keeping in view the recommendation of NCRL and

subsequent rise in price indices, the National Floor Level Minimum Wage was fixed

at Rs. 35/- per day in 1996. Keeping in view the rise in Consumer Price Index the

Central Government raised the national Floor Level Minimum wage to Rs. 40/- per

day in 1998, to Rs. 45/- w.e.f. 01.12.1999 and Rs. 50/- per day w.e.f. 01.09.2002

Based on the norms suggested by the Working Group and its acceptance by the

Central Advisory Board subsequently in its meeting held on 19.12.2003, the National

Floor Level Minimum Wage was revised upwards to Rs.66/- per day with effect from

1.02.2004. On the basis of increase in the Consumer Price Index, the Central

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Government has recently revised the National Floor Level Minimum Wages from

Rs. 66/- to Rs.80/- per day with effect from 01.09.2007.

It is, however, clarified that the National Floor Level Minimum Wage, is a nonstatutory

measure to ensure upward revision of minimum wages in different States/

UT's. Thus, the State Governments are persuaded to fix minimum wages such that in

none of the scheduled employments, the minimum wage is less than National Floor

Level minimum Wages.

RECENT INITIATIVES

Based on the recommendations of the Minimum Wages Advisory Board (MWAB)

in its meeting held on 22.01.2008 and 26.06.2008, the Ministry of Labour &

Employment has issued the Final Notification in the Gazette of India (Extra Ordinary)

fixing the minimum rates of wages for workers employed in the scheduled

employments "Employment of Sweeping and Cleaning' in the Central sphere at Rs.

120/- Rs. 150/- and Rs. 180/- per day and for "Employment of Watch and Ward" (a)

without arms at Rs. 120/-, Rs. 150/- and Rs.180/- per day and (b) with arms at Rs.

140/-, Rs. 170/- and Rs. 200/- per day for Area 'C', 'B' and 'A' respectively and the

Final Notifications in respect of revision of minimum rates of wages for workers

engaged in the scheduled employments of "Construction" and "Loading and

Unloading" in the Central sphere at Rs. 120/- Rs.150/-and Rs. 180/- per day for

unskilled workers to Rs. 200/- Rs. 220/- and Rs. 240/- per day for highly skilled

workers in Area 'C', 'B' and 'A' respectively and for workers engaged in "Non-Coal

Mines" in the Central sphere at Rs. 120/- per day for unskilled Workers (Above

Ground) to Rs. 240/- per day for highly skilled workers (Below Ground).

THE PAYMENT OF WAGES ACT, 1936

The Payment of Wages Act, 1936 was enacted to regulate payment of wages to workers

employed in industries and to ensure a speedy and effective remedy to them against

illegal deductions and/or unjustified delay caused in paying wages to them. The

wage ceiling under Payment of Wages Act, 1936, was fixed at Rs. 1600/- pm in 1982.

With a view to enhance the wage ceiling to Rs. 6500/- p.m. for applicability of the Act,

to empower the Central Government to further increase the ceiling in future by way of

notification and to enhance the penal provisions etc., the Payment of Wages

(Amendment) Act, 2005, which was passed by both Houses of Parliament, was notified

on 06.09.2005 as an Act 41 of 2005 by the Ministry of Law & Justice. Subsequently, the

Ministry of Labour & Employment has issued the Notification S.O. 1577(E) to make

the Payment of Wages (Amendment) Act, 2005 effective from the 9th November 2005.

Further, in exercise of the powers conferred by sub-section (6) of Section 1 of the

Act, the Central Government, on the basis of figures of the Consumer Expenditure

Survey published by National Sample Survey Organization, has enhanced the wage

ceiling, further, to Rs. 10,000/- per month vide gazette notification No. S.O. 1380 (E)

dated 8th August, 2007.

THE PAYMENT OF BONUS ACT, 1965

The Payment of Bonus Act, 1965 provides for payment of bonus to employees of

factories and other establishments employing 20 or more persons.

The minimum bonus of 8.33% is payable by every industry and establishment

under the Section 10 of the Act. The maximum bonus including productivity linked

732 India 2010

bonus that can be paid in any accounting year shall not exceed 20% of the salary/

wage of an employee under the sections 11 and 31 A of the Act.

Consequent to the deliberations held in the 40th & 41st session of the Indian

Labour Conference (ILC), the Payment of Bonus Act, 1965 was amended to enhance

the eligibility limit and calculation ceiling and bring employees employed through

contractors on building operations within the ambit of the Act. Accordingly, the

Payment of Bonus (Amendment) Act, 2007 (45 of 2007) was notified on 13th

December 2007 enhancing the eligibility limit from Rs. 3,500/- to Rs. 10,000/- per

month and calculation ceiling from Rs. 2500/- to Rs. 3500/- per month by

amendment of sections 2 (13) and 12 of the Act. Section 32 (vi) of the Payment of

Bonus Act 1965 has also been omitted so as to make the employees employed

through contractors on building operations to be eligible to receive bonus. The

amendment came into effect from 01.04.2006.

WAGE BOARDS

In the 1950s and 60s, when the organised labour sector was at a nascent stage of its

development without adequate unionization or with trade unions without adequate

bargaining power, Government in appreciation of the problems which arise in the

arena of wage fixation, constituted various Wage Boards. The Wage Boards are

tripartite in character in which representatives of workers, employers and independent

members participate and finalize the recommendations. The utility and contribution

of such boards in the present context are not beyond question. Except for the Wage

Boards for Journalists and Non-Journalists, newspaper and news-agency employees,

which are statutory Wage Boards, all other Wage Boards are non-statutory in nature.

The Second National Commission on Labour (NCL) has recommended that

‘there is no need for any wage board, statutory or otherwise, for fixing wage rates

for workers in any industry’. However, the Government decided not to accept the

recommendations regarding the statutory wage boards i.e. Wage Boards for

Working Journalists and Non-Journalists Newspaper Employees under the

Working Journalists and Non-Journalists Newspaper Employees (Conditions of

Service) and Miscellaneous Provisions Act, 1955.

WAGE BOARDS FOR WORKING JOURNALISTS AND OTHER NEWSPAPER

EMPLOYEES

The Working Journalists and other Newspaper Employees (Conditions of Service)

and Miscellaneous Provisions Act, 1955 regulates conditions of service of working

journalists and other persons employed in newspaper establishments. The Act

provides for setting up of Wage Boards for fixation and revision of rates of wages

in respect of working journalists and non-journalists newspaper/news agency

employees. The Wage Boards for such employees were set up in the years 1956,

1963, 1975, 1985 and 1994. The last Wage Board i.e. Manisana Wage Boards was

constituted in the year 1994 and submitted its report to the Government on 25t h

July, 2000.

The Government has constituted two new Wage Boards one for Working

Journalisits and other for Non-Journalists Newspaper Employees under Sections

9 and 13 C respectively of the Working Journalists and Other Newspaper Employees

(Conditions of Service) and Miscellaneous Provisions Act, 1955 vide notification in

the Gazette of India (Extra Ordinary) S.O. Nos. 809 (E) and 810 (E) dated 24.05.2007

under the common Chairmanship of Dr. Justice K. Narayana Kurup. The Wage Boards

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have a common full time Member Secretary besides two common independent members

and three persons representing employers in relation to Newspaper establishments,

three persons representing working journalists for Wage Board under Section 9 and

three persons representing non-journalist Newspaper Employees under Section 13 C

of the Act. The Wage Boards have been given three years to submit their report to the

Union Government. The Headquarter of the Boards is at New Delhi.

The Wage Boards have recommended interim rates of wages at the rate of 30%

of basic wage, which has been accepted by the Government and was notified in

October, 2008.

Consequent upon the resignation of Dr. Justice K. Narayana Kurup, Justice G.R.

Majithia has taken over as the common Chairman of the two Wage Boards w.e.f. 4th

April, 2009.

A Central Level Monitoring Committee has been set up by the Government

under the Chairmanship of Labour and Employment Adviser, Ministry of Labour

and Employment to review the progress of the implementation of recommendations

for the Wage Boards from time to time and liaise with the State Government/Union

Territories, which are the appropriate Government, for effective implementation of

Wage Boards Awards.

CONTRACT LABOUR

The system of employing contract labour is prevalent in most industries for different

jobs including skilled and semi-skilled. It is also prevalent in agricultural and allied

operations and to some extent, in the services sector. A contract labour is a person

who is hired, supervised, contracted and remunerated by a contractor, who, in turn,

is compensated by the user enterprises. The concern to improve the working and

living conditions of contract labour and the Supreme Court of India’s observations in

the case of Standard Vacuum Refinery Company Vs. their Workmen, resulted in the

enactment of the Contract Labour (Regulation and Abolition) Act, 1970.

The Act seeks to regulate the employment of contract labour in certain

establishments and to provide for its abolition in certain circumstances and for

matters connected therewith. The Act and the Contract Labour (Regulation and

Abolition) Central Rules, 1971 came into force on 10 February 1971. The Act

provides for the constitution of Central and State Advisory Contract Labour Boards

to advise the respective Governments on matters arising out of the administration

of the Act. The Act contains specific provisions to ensure payment of wages and

certain amenities to be provided by the contractor to the contract labour.

The Central and State Governments are empowered to prohibit employment of

contract labour in any activity in an establishment and also to grant exemption to

establishments/contractors in the case of an emergency, from the applicability of the

provisions of the Act. The Central Government has issued 76 notifications prohibiting

employment of contract labour in different categories of works in different fields upto

01.09.2008.

CHILD LABOUR

Constitutional Provisions

The Government of India stands committed to the elimination of child labour in the

country. Our Constitution provides for protection of children from involvement in

economic activities and avocations unsuited to their age. Directive Principles of State

Policy in the Constitution strongly reiterates this commitment and this is also provided

734 India 2010

for in the Fundamental Rights. Realizing the multifaceted natue of this problem, the

Government had embarked on a holistic and multi-pronged programme to eliminate

child labour from the country in a phased manner, beginning with children working

in hazardous occupations and processes and progressilvely covering those working

in other occupations also. On the one hand, it provides for legal action for enforcement

purposes and on the other, it also focuses on general development programmes for

the economic empowerment of the families of children as well as project based action

in areas of high concentration of child labour.

POLICY

As per Child Labour (Prohibitation & Regulation) Act, employment of children below

the age of 14 years is prohibited in notified hazardous occupations and processes.

The Act also regulates employment of children in non-hazardous occupations and

processes. On the recommendation of the Technical Advisory Committee on Child

Labour, the Government has prohibited employment in one occupation, viz, diving;

and 8 processes, viz. processes involving exposure to excessivse heat (e.g. working

near furnace) and cold; mechanised fishing; food processing; beverage industry;

timber handling and loading; mechanical lumbering; warehousing; processes

involving exposure to free silica such as slate, pencil industry, stone grinding, slate

stone mining, stone quarries, and agate industry vide notification No. SO2280 (E)

dated 25.09.2008. There are at present 16 hazardous occupations and 65 processes,

where employment of children is prohibited. Some of the important prohibited

occupations and processes ar carpet weaving, building and construction work, brick

kilns, production of hosiery goods, work as domestic servants, and in tea-shops,

road side eateries, mechanized fishing, food processing, timber handling and loading,

mechnical lumbering, warehousing etc.

As per the Census 2001, there are 12.6 million economically active children in

the age group of 5 to 14 years, of which approximately 0.12 million are working in

hazardous occupations. The NSSO has agreed to take up a fresh comprehensive

nation wide survey of child labour in its 66th Round during 2009 - 2010, so as to have

a clear picture for formulation of strategies to tackle this social menace.

PROGRAMMES

The Government had initiated the National Child Labour Project (NCLP) Scheme

in 1988 to rehabilitate working children in 13 child labour endemic districts of the

country. Its coverage was increased progressively to cover 271 districts in this country.

Under the NCLP Scheme, children are withdrawn from work and put into special

schools, where they are provided with bridging education, vocational training, midday

meal, stipend, health-care facilities etc. At present, there are more than 10,000

NCLP schools being run in the country with an enrolment of 5 lakh children. Above

5.21 lakh working children have already been maintreamed to regular education

under the NCLP Scheme from 1996-97 to 2008-09. Besides, children who have been

provided with vocational training have joined the mainstream.

INITIATIVES

For the rehabilitation of migrant and trafficked child labour, the Government is

taking number of steps and has developed a detailed protocol for prevention, rescue,

repatriation and rehabilitation of these children in consultation with State

Governments, ILO, NGOs and other stakeholders.

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CONVERGENCE

Considering that the poverty and illiteracy are the root causes for child labour,

the Government is following a multi-pronged strategy to tackle this problem.

Educational rehabilitation of these children has to be supplemented with economic

rehabilitation of their families so that they are not compelled by their economic

circumstances to send their children to work. The Ministry of Labour & Employment

is taking various proactive measures towards convergence between the schemes of

different Ministries like Ministries of Human Resource Development, Women & Child

Development, Urban Housing & Rural Poverty Alleviation, Rural Development,

Panchayati Raj Institutions etc. so that child labour and their families get covered

under the benefits of the schemes of these ministries also.

INTERNATIONAL PROGRAMMES

The International Programme on elimination of Child Labour is a global

programme launched by the International Labour Organistion in December, 1991.

India was the first country to join it in 1992. The long-term objective of IPEC is to

contribute to the effective abolition of child labour. Its immediate objective are:

Enhacement of the capability of ILO constituents and NGOs to design,

implement and evaluate programmes for child labour.

To identify interventions at community and national levels which could

serve as models for replication; and

Creation of awareness and social mobilization for securing elimination of

child labour.

INDUS PROJECT

The Government of India and the US Department of Labour have initiated a

joint US$40 million project aimed at eliminating child labour in identified hazardous

sectors across 21 districts in five States, namely, Maharashtra, Madhya Pradesh,

Tamil Nadu, Uttar Pradesh and NCT of Delhi. The project ended its term on 31st

March, 2009.

ANDHRA PRADESH PROJECT

Besides this, ILO has also implemented phase 1 of the State based project in

Andhra Pradesh. The Phase-II of the AP Project is currently under implementation.

In the second phase the project is focusing on two most child labour endemic districts

in the State i.e. Mehboobnagar and Kurnool. The project is also focusing on the special

problems of urban areas and attempt to evolve a strategy for Hyderabad city. The

Project has concluded on 31.3.2009

KARNATAKA PROJECT

This State based project is being implemented in 2 districts of the State, i.e.

Chamarajanagar & Bidar. The project is being funded by the Government of Italy and