‘Centre Hurting Workers by Not Fixing Minimum Wage’: Trade Unions

The Centre’s recent draft rules for the implementation of a new wage law has left workers and trade unions worried.

The Centre’s recently released draft rules for the implementation of a new wage law is worrying workers and trade unions.

(Photo: Altered by The Quint)

The Centre’s recently released draft rules for the implementation of a new wage law is worrying workers and trade unions. The draft rules do not spell out a minimum wage, but instead say that expert committees will suggest the same to the central government in future.

The trade unions are also unhappy with the concept of a dual wage rate mentioned in the draft rules – a non-binding minimum wage and a binding floor wage (lower than the minimum wage).

What does that mean?

• Each state government fixes a range of minimum wages applicable to their state. The bone of contention is that the Centre’s new draft rules allow the states to set their minimum wages below the Centre’s minimum wage (but not below the floor wage).
  
• This has naturally raised fears about the prospect of states setting wage bars lower than even the minimum wage prescribed by the Centre.
  
• The unions argue that there should be a binding national minimum wage, and no worker can be allowed to be paid wages below that standard.

RSS-Affiliated Trade Union Criticises Draft Rules

CK Saji Narayanan, president of the RSS-affiliated Bharatiya Mazdoor Sangh (BMS), has expressed his utter disappointment with the draft rules.

Speaking to The Quint, Narayanan said, “Even after 70 years of independence, we have the existence of floor wages, which is a shameful, primitive and exploitative wage practice. It is there so that workers can be paid much lesser than even the minimum wages prescribed by the Centre.”

He adds, “Floor wages are currently around half of the minimum wages, and are arbitrarily set without any criteria or calculations. BMS demands a binding national minimum wage, as well as the abolition of floor wages.”

A report by the Union labour ministry had stated that “the single value of the national minimum wage for India should be set at Rs 375 per day as of July 2018". The report had also suggested that a housing allowance of Rs. 1,430 should be provided for urban workers.

The Left-affiliated Centre of Indian Trade Unions (CITU) has also criticised the draft rules. “We have opposed the wage code and we shall oppose the (draft) rules because they are not talking about workers welfare," CITU vice president AK Padmanabhan told Mint.

House Rent Estimate out of Touch With Reality?

The draft rules estimate that housing rent expenditure will “constitute 10 per cent of food and clothing expenditure.”

While determining the minimum wage rate, the Centre proposes to divide the country into three geographic categories – metropolitan areas, non-metropolitan areas and rural areas.

While detailing the criteria that will be used to calculate the minimum wages, the draft rules estimate that housing rent expenditure will “constitute 10 percent of food and clothing expenditure.” However, the rules do not clarify whether this estimate will be changed depending on the category of cities that people live in.

For example, to say that house rent is 10% of food and clothing expenses in any Tier-I or metropolitan city is to simply be out of touch with reality.

BMS chief Narayanan agrees, “This aspect too definitely needs to be reviewed and updated.”

Inviting Feedback

The draft rules have been uploaded online and over the next month, the Ministry of Labour and Employment is inviting inputs and suggestions from the public.

The Ministry of Labour and Employment is inviting inputs and suggestions from the public on the draft rules.