From UPSC perspective, the following things are important :
Prelims level : Wage Code
Mains level : Analysis of Wage Code Act and its rules
The rules to the Labour Code on Wages Act 2019 were proposed.
Code on Wages
- It is expected that the draft rules to the Act would be a game-changer for the workers in the informal sector.
- Informal workers account for 93% of the total working population and contribute to over 60% of India’s GDP.
- The law proposes to increase income capacity and the purchasing power of the informal workers.
- Raptakos case – Supreme Court of India’s judgement in the ‘Raptakos’ case (1991) advocated the concept and the right of a living wage.
- Starvation wages continue – The proposed framework to determine wage will continue pushing ‘starvation wages’ in India.
- Floor wage – this would mean that “starvation wages” which currently guarantees just ₹178 per day, will continue to exist.
- Consumer Expenditure Survey shows the average family expenditure in rural areas to be ₹83 per day and in urban areas as ₹134. These figures show how workers will continue to live in exploitative and marginalised conditions.
- Supreme Court judgement – This is despite ‘Need-Based Minimum Wage’ being a Supreme Court jurisprudence.
Good case study
- The governments of Delhi and Kerala have managed to achieve a living wage jurisprudence in recent years.
- They have also set the highest living wage in India (₹14,842 a month in Delhi and ₹600 a day in Kerala).
Challenges with the new reform
- Archaic – The concept and intention of floor wage in the draft rules reiterate archaic principles echoed by the Constitutional Bench of the Supreme Court.
- Oversupply – labour market preys on the excess availability of workers for whom living a precarious life is their permanent mode of existence.
- A floor-level wage would only encourage and exacerbate this archaic practice and promote forced labour.
- Deduction of wages – Another concern with the law is the provision of an arbitrary deduction of wages based on performance, damage or loss, advances, etc.
- Social inequalities – In India, employers, due to their higher social status, continue to exploit labour with impunity.
- Inspection – the draft rules propose another ad-hoc and unclear mechanism called the “inspection scheme”.
- No mechanism – the draft rules do not clarify the governance and institutional structure for the “labour inspection system” in the law.
- The ambiguity of rules – in the absence of clarity in the draft rules, workers will not be able to demand even basic work rights in the fear of wage deductions and will continue to be oppressed and marginalised.
- The International Labour Organisation’s Labour Inspection Convention of 1947 (Convention C081) has been ratified by India. It provides for a well-resourced and independent inspectorate that allows thorough inspections and free access to workplaces.
- The Labour Code on Wages Act 2019 and the draft rules have failed the lives and aspirations of over 50 crore informal workers in India.
- Working people are a national asset; undermining their well-being should be considered the biggest anti-national act.
Wage Code Bill