Code on wages- CBOA stand
Dear friends,
ALL INDIA NATIONALISED BANK OFFICERS FEDERATION (AINBOF) had been consistently demanding the minimum wages formula to be introduced to the Bankers even before the submission of the COD and the same was incorporated in the COD too at the insistence of AINBOF.
We demanded this formula to be introduced to the bankers expecting the argument from the IBA on the negative paying capacity owing to the loss posted by the industry in March 2016 due to the introduction of AQR.
We insisted the minimum wages formula on the four grounds
1. 1970 resolution of ILO which suggests the member countries to adopt the minimum wages formula and had been adopted by 93% of the member countries and now being followed in 7th CPC.
2. Pillai committee recommendations rationalised the bank officers salary to ₹ 700 Basic pay equivalent to the Grade A officers of GOI.
3. The GOVT has issued a circular equating the scale 1 officers of the Bank with the Grade A officers of the Govt. for getting benefits under creamy layer policy.
4. The Government has placed CODE ON WAGES BILL 2018 as on 18th Dec 2018 in both the Loksabha and Rajya sabha which is synonym to the Minimum wages policy.
Though the COD was signed and submitted by the four officers organisations, the negotiations with the IBA were being held on the age old practice of allocating certain percentage of funds based on the paying capacity of the Banks.
The initial offer was meagre 2% which was increased to ridiculous 8% even after the agitation of the Bankers which was an obvious attempt of belittling the education and excellence of Indian youth joined in the bank.
Majority employee organisation outrightly rejected the formula as the minimum wages formula can increase the salary once in ten years.
We have clearly established two very important factors that
- We have not demanded CPC formula, but we have demanded minimum wages formula which was incidentally used in CPC report.
- Both CPC and code on wages bill suggest the wage revision once in five years.
Meanwhile, we have responded to the Code on wages bill 2017 and through Mr Sanjay Manjarekar, GS of Syndicate Bank Officers Association submitted our views to the Parliamentary committee visited Syndicate Bank for getting views on the code on wages bill 2017 which was circulated by us.
Disturbed by the developments on the continuous discussion on the percentage basis with IBA, one of the CBOA cadre filed a writ petition in the Madurai high court demanding the decent wage settlement for the bank officers which was admitted by the Judiciary where the AIBOC and CBOA were the respondents along with IBA and DFS,
Though the other respondents are yet to submit their counters, the CBOA has submitted its counter affidavit supporting the petitioner.
Meanwhile, AIBOC has given a strike call and in the strike notice it was mentioned as one of the demand, “ Discussion as per the COD and the profit of the member Banks.”
CBOA has objected the demand of wage revision relate to the profitability of the banks and asked for the amendment of the strike notice to demand wage revision in lines with the minimum wages policy without linking to the profit and paying capacity.
On the revision of AIBOC’s stand to fight for the minimum wages without linking it to the profit and also on the assurance of filing counter in the Madurai high court, the entire youth of Canara bank officers’ Association participated in the strike in full and ensured its success.
Now the big question is,
what will happen to CODE ON WAGES BILL which is designed to introduce minimum wages and was placed in both the LOKSABHA and RAJYASABHA simultaneously on 18th December 2018?
LET’S SEE THE GENESIS OF THE SUBJECT BILL.
- The code on wages bill 2017 was originally introduced in Loksabha on 10 08 2017 and referred to the committee by the Hon’ble speaker, for examination. The committee obtained extension up to the winter session, 2018.
- The proposed legislation intends to amalgamate, simplify and rationalise the relevant provisions of four central labour enactments relating to wages viz.,
A. The payment of wages act 1936.
B. The minimum wages act 1948
C. The payment of bonus Act 1965
D. The equal Remuneration Act 1976
- The salient features of the code on wages are, to provide for all essential elements relating to wages, equal remuneration, its payment and bonus, provisions related wages shall be applicable to all the employments covering both organised and unorganised sector and the power to fix minimum wages to be vested with the central government and state government in their respective spheres etc.
- The committee invited the views and suggestions on the Bill from Trade unions/organisations/ individuals through a press communique and received about 100 views and suggestions.
- The committee took evidence of the representatives of the Ministry of Labour & employment on 6thOctober 2017, 11th January 2018 and 18th January 2018 besides obtaining written clarifications from the on major amendments proposed.
- The committee also heard the views of some central trade unions viz., CENTRE OF INDIAN TRADE UNIONS ( CITU), ALL INDIA TRADE UNJON CONGRESS ( AITUC), BHARATIYA MAZDOOR SANGH ( BMS) and HINDU MAZDOOR SABHA ( HMS) at their sitting held on 24th October, 2017.
- The committee considered and adopted the report at their sitting held on 19th November 2018.
- Accordingly, the committee has placed the subject bill along with the the Ministry’s views on the recommendations and suggestions made by the various trade unions like CITU, AITUC, BMS and HMS on 18th December 2018 in both the LOKSABHA AND RAJYA SABHA for adoption.
- The salient features of the Code on Wages, 2017, inter alia, are as follows:––
(a) it provides for all essential elements relating to wages, equal remuneration, its payment and bonus;
(b) the provisions relating to wages shall be applicable to all employments covering both organised as well as un-organised sector
(c) the power to fix minimum wages continues to be vested in the Central Government as well the State Government in their respective spheres.
(d) it enables the appropriate Government to determine the factors by which the minimum wages shall be fixed for different category of employees. The factors shall be determined taking into account the skills required, the arduousness of the work assigned, geographical location of the workplace and other aspects which the appropriate Government considers necessary.
(e) the provisions relating to timely payment of wages and authorised deductions from wages, which are presently applicable only in respect of employees drawing wages upto eighteen thousand rupees per month, shall be made applicable to all employees irrespective of wage ceiling. The appropriate Government may extend the coverage of such provisions to the Government establishments also.
(f) it provides that the wages to employees may also be paid by cheque or through digital or electronic mode or by crediting it in the bank account of the employee. However, the appropriate Government may specify the industrial or other establishment, where the wages are to be paid only by cheque or through digital or electronic mode or by crediting the wages in the bank account of the employee.
(g) it provides for national minimum wage for different geographical areas so as to ensure that no State Government fixes the minimum wage below the national minimum wage, notified for that area by the Central Government;
(h) in order to remove the arbitrariness and malpractices in inspection, it empowers the appropriate Government to appoint Facilitators in the place of Inspectors, who would supply information and advice the employers and workers concerning the most effective means of complying with the provisions of the proposed legislation. It has also been provided that the inspections are carried out through a transparent/ web based inspection scheme.
(i) it empowers the appropriate Government to determine the ceiling of wage limit for the purpose of eligibility of bonus and calculation of bonus, by notification, which will make it easier to revise ceilings.
(j) in the place of number of authorities at multiple levels, it empowers the appropriate Government to appoint one or more authorities to hear and decide the claims under the provisions of the proposed legislation.
(k) it enables the appropriate Government to appoint an appellate authority to hear appeals so as to ensure speedy, cheaper and efficient redressal of grievances and settlement of claims.
(l) it provides for graded penalty for different types of contraventions of the provisions of the proposed legislation.
(m) it provides that the Facilitator shall give an opportunity to the employer before initiation of prosecution proceedings in cases of contravention, so as to comply with the provisions of the proposed legislation. However, in case of repetition of the contravention within a period of five years such opportunity shall not be provided.
(n) it provides for compounding of those offences which are not punishable with imprisonment.
(o) it provides that where a claim has been filed for non-payment of remuneration or bonus or less payment of wages or bonus or on account of making deduction not authorised by the proposed legislation, the burden shall be on the employer to prove that the said dues have been paid to the employee.
(p) it enables the appropriate Government to constitute Advisory Boards at Central and State levels to advice the Central Government and the State Governments, respectively, on matters relating to wages, women employment, etc.
(q) the period of limitation for filing of claims by a worker has been enhanced to 3 years as against existing time period varying from 6 months to 2 years, to provide a worker more time to settle his claims.
OTHER IMPORTANT AND RELEVANT PORTIONS OF THE BILL
- “appropriate Government” means,––in relation to, an establishment carried on by or under the authority of the Central Government or the establishment of railways, mines, oil field, major ports, air transport service, telecommunication, banking and insurance company or a corporation or other authority established by a Central Act or a central public sector undertaking or subsidiary companies set-up by central public sector undertakings or autonomous bodies owned or controlled by the Central Government, including establishment of contractors for the purposes of such establishment, corporation or other authority, central public sector undertakings, 15 subsidiary companies or autonomous bodies, as the case may be, the Central Government.
- “employee” means, any person (other than an apprentice engaged under the Apprentices Act, 1961), employed on wages by an establishment to do any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, 40 technical or clerical work for hire or reward, whether the terms of employment be express or implied, and also includes a person declared to be an employee by the appropriate Government, but does not include any member of the Armed Forces of the Union.
- “worker” means any person (except an apprentice as defined under clause (aa) of section 2 of the Apprentices Act, 1961) employed in any industry to do any manual, 10 unskilled, skilled, technical, operational or clerical work for hire or reward, whether the terms of employment be express or implied, and includes working journalists as defined in clause (f) of section 2 of the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 and sales promotion employees as defined in clause (d) of section 2 of the Sales Promotion Employees
15 (Conditions of Service) Act, 1976, but does not include any such person—
(i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a supervisory or managerial or administrative capacity.
- industrial dispute” means,—(i) any dispute or difference between employers and employers, or between employers and workers or between workers and workers which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person; and (ii) any dispute or difference between an individual worker and an employer connected with, or arising out of, discharge, dismissal, retrenchment or termination of such worker.
- “wages” means all remuneration, whether by way of salary, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes,—
(i) any remuneration payable under any award or settlement between the parties or order of a court.
(ii) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any period of leave.
(iii) any additional remuneration payable under the terms of employment, whether called a bonus or by any other name.
(iv) any sum which by reason of the termination of employment of the 5 person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made.
(v) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force;
(vi) any house rent allowance,
6. No employer shall pay to any employee wages less than the minimum rate of wages notified by the appropriate Government for the area, establishment or work as may be specified in the notification.
For the purpose of fixation of factors referred to in sub-section, the appropriate Government shall take into account the skill required, the arduousness of the work assigned, the worker, geographical location of the place of work and other factors which the appropriate Government considers necessary.
7.1. Any minimum rate of wages fixed or revised by the appropriate Government, in respect of employment, may consist of
(i) a basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as “cost of living allowance”); or
(ii) a basic rate of wages with or without the cost of living allowance, and the 15 cash value of the concessions in respect of supplies of essential commodities at concession rates, where so authorised; or
(iii) an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any.
7.2. The cost of living allowance and the cash value of the concessions in respect of 20 supplies of essential commodities at concession rate shall be computed by such authority, as the appropriate Government may by notification, appoint, at such intervals and in accordance with such directions as may be specified or given by the appropriate Government from time to time.
7.3. In fixing minimum rates of wages in respect of any employment for the first time under this Code or in revising minimum rates of wages so fixed, the appropriate Government shall either—
(a) appoint as many committees and sub-committees as it considers necessary
to hold enquiries and recommend in respect of such fixation or revision, as the case may be; or
(b) by notification publish its proposals for the information of persons likely to be affected thereby and specify a date not less than two months from the date of the notification on which the proposals shall be taken into consideration.
7.4. Every committee and sub-committee appointed by the appropriate Government under clause (a) of sub-section (1) shall consist of persons–
(a) representing employers;
(b) representing employees which shall be equal in number of the members
specified in clause (a); and
(c) independent persons, not exceeding one-third of the total members of the
committee or sub-committee, as the case may be.
7.5. After considering the recommendation of the committee or sub- committee appointed under clause (a) of sub-section (1) or, as the case may be, all representations received by it before the date specified in the notification under clause (b) of that sub-section, the appropriate Government shall by notification fix, or as the case may be, revise the minimum rates of wages and unless such notification otherwise provides, it shall come into force on the expiry of three months from the date of its issue:
The appropriate Government shall review or revise minimum rates of wages at an interval of five years.
7.6.The minimum rates of wages fixed by the appropriate Government under section 6 shall not be less than the national minimum wage and if the minimum rates of wages fixed by the appropriate Government earlier is more than the national minimum wage, then, the appropriate Government shall not reduce such minimum rates of wages fixed by it earlier.
7.7.Where an employee whose minimum rate of wages has been fixed under this Code by the hour, by the day or by such a longer wage period as may be prescribed, works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every hour or for part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal rate of wages.
7.8.(1) The Central Government shall constitute the Central Advisory Board which shall consist of persons to be nominated by the Central Government—
(a) representing employers;
(b) representing employees which shall be equal in number of the members
specified in clause (a); and
(c) independent persons, not exceeding one-third of the total members of the Board.
7.8.(2).One-third of the members referred to in sub-section (1) shall be women and a member specified in clause (c) of the said sub-section shall be appointed by the Central Government as the Chairperson of the Board.
7.8.(3) The Central Advisory Board constituted under sub-section (1) shall from time to time advise the Central Government on reference of issues relating to
(a) fixation or revision of minimum wages and other connected matters;
(b) providing increasing employment opportunities for women;
(c) the extent to which women may be employed in such establishments or employments as the Central Government may, by notification, specify in this behalf; and 10
(d) any other matter relating to this Code,
and on such advice the Central Government may issue directions to the State Government as it deems fit in respect of matters relating to issues referred to the Board.
Any application before the authority for claim referred to in sub-section (1) may be filed by,—
(a) the employee concerned; or
(b) any Trade Union registered under the Trade Unions Act, 1926 of which the
employee is a member; or
(c) the Facilitator.
Recommendations by the AINBOF submitted to the Parliamentary committee.
Without prejudice to the employees’ right to have better service conditions through negotiated settlements by their trade unions with the respective managements, AINBOF is submitting below our suggestions on the Code of Wages Bill 2017.
1. The Bill should explicitly recognize the right of trade unions to obtain better service conditions in all or any of the service matters covered under the Bill through negotiated settlement with their respective managements.
2. It is said that at present, the provisions of the Minimum Wages Act and the Payment of Wages Act do not cover substantial number of workers, as the applicability of both these Acts is restricted to the Scheduled Employments/ Establishments, whereas the new Code on Wages will ensure minimum wages to one and all and timely payment of wages to all employees irrespective of the sector of employment without any wage ceiling. Keeping the said objective in mind, in the definition of “employee” in Section 2 of the Bill, persons employed on wages to do operational supervisory, managerial and administrative and technical works are also included in addition to the persons employed to do skilled, unskilled, manual and clerical work as hitherto. But there is apprehension in certain corners that persons in supervisory, managerial and administrative cadre included in the definition of “employee” may not be referring to the persons placed in Senior and Top Management but may be restricting to the persons employed in only upto Middle Management. Since all the persons upto the top in an establishment, other than the owners having controlling interest, are employed on wages to do one or the other work listed in the definition of “employee” in the Bill, we suggest that the definition of “employee” may be made simple to say that all persons employed on wages by an establishment/ owners other than the owners who have controlling interest in the establishment are “employees” of that establishment.
3. While the Government has taken steps to bring all employees under the purview of Code of Wage Bill, it appears that the Government intends to keep certain class / category of employees outside the purview of Industrial Dispute. In Section 2 of the Bill “Industrial Dispute” is defined as any dispute or difference between employers and employers, or between employers and workers or between workers and workers which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person and also any dispute or difference between an individual worker and an employer connected with or arising out of discharge, dismissal, retrenchment or termination of such worker. Thus, the scope of Industrial Dispute is restricted only to the level of employers and workers and the other category of employees are excluded from the same. It may be noted that the employees engaged in supervisory, managerial and administrative work in an establishment may also face similar disputes or differences but the same are not treated as Industrial Dispute. We suggest that all disputes and differences between all category of employees and employer should be treated as Industrial Dispute.
4. The Bill introduces the term “National Minimum Wage” which connotes that there will be a uniform minimum wage for the entire country. But Section 5 of the Bill provides for different National Minimum Wage to be fixed for different states or different geographical areas, instead of providing for a uniform National Minimum Wage for the entire country. The said provision may give scope for lobbying by different groups for fixing lower minimum wage in their respective area / part of the country. Hence it is necessary that a uniform National Minimum Wage should be fixed for the entire country. The Bill may provide for fixing Area Allowance at different rates for different areas to be paid in addition to the National Minimum Wage to compensate the hardship of the employees at different places.
5. The Bill is silent on the formula to be adopted for fixing the minimum wage. The 15th ILC in 1957 had recommended the following norms for fixation of minimum wage
a. The cost of three consumption units- husband, wife and two children for one earner
b. Satisfy the minimum food requirements of 2700 calories per person
c. Clothing requirements of 72 yards per annum per family
d. Rent of the minimum area as specified by Government’s Industrial Housing Scheme
e. 20% of minimum wage should be the cost of fuel and miscellaneous items of expenditure
Further, the Hon’ble Supreme Court, in the case of Raptakos & Co specified that 25% of the minimum wages should also account for Children’s education, required medical expenses, minimum recreation including festivals/ceremonies and provision for old age, marriage, etc.
Based on this formula, the 7th Pay Commission recommended Rs. 18,000/- as minimum wage to Central Govt employees and the Central Government accepted the same. We suggest that the same formula with additional consumption units for parents be adopted for fixing the National Minimum Wage.
6. Sub Section 5 of Section 5 of the Bill also provides for fixing factors by which the minimum wages so fixed be multiplied for different types of work and Sub Section 6 lists various factors to be taken into consideration for this purpose. But these factors do not include the financial and other risks and also transferability involved in the employments. We suggest that while fixing the minimum wage, the financial and other risks involved and transferability should also be taken into account.
7. The Bill is also silent on Annual Increment to be paid to the employees. We suggest that the Bill should also prescribe the Annual Increment in terms of the % (say 5%) of the existing pay to be paid to an employee on a fixed day every year.
8. Section 8 of the Code on Wages, 2017 states that the appropriate Government shall review or revise minimum rates of wages at an interval of five years where as at present there is a provision in the Minimum Wages Act, 1948 for the revision of minimum wages as and when required, which must not exceed five years. It is a major bargaining point for trade unions and the said provision is being modified in the Code on Wages, 2017. Further the Bill virtually removes the time line for revision by introducing the words review or revise and make the revision optional. We suggest that the existing provision in the Minimum Wages Act in this regard should be continued.
9. Under Section 13 of the Bill, the Government can fix the number of hours of work, which shall constitute a normal working day. The same Section also provides for a day of rest in every period of 7 days to all employees. But the Bill permits exclusion of following category of employees:
a. Employees engaged on urgent work or in any emergency, which could not have been foreseen or prevented;
b. Employees engaged in work of the nature of preparatory or complementary work which must necessarily be carried on outside the limits laid down for the general working in the employment concerned;
c. Employees whose employment is essentially intermittent;
d. Employees engaged in any work which for technical reasons must be completed before the duty is over; and
e. Employees engaged in a work, which could not be carried on except at times dependent on the irregular action of natural forces.
We suggest that the employees who belong to the 5 categories mentioned above should be compensated either by allowing staggering hours of duties so that their total hours work is restricted to the prescribed limit or by payment of appropriate amount of compensation at a rate not less the rate of overtime allowance.
10. Under Section 18 of the Bill, employer is permitted to effect deductions from the wage for various reasons / purposes. While some of the deductions are to be done as per the authority given by the employee, some are permitted to be done arbitrarily by the employer without giving show cause to the employee. We suggest that no deductions from the salary, without authority from the employee or without giving an opportunity to show cause should be permitted. Otherwise the employer may misuse this provision for making arbitrary, punitive and vindictive deductions from the workers.
11. Section 20 of the Bill permits the employer to deduct the wages for eight days, if ten or more employees remain absent. This appears to be a step to curb the trade union rights of the workers. To unite and organise and to protest, participate in demonstration and strike is the fundamental right accorded to the citizens of India and hence the said provision in Section 20 needs to be removed.
12. Section 26 of the Bill provides for payment of bonus to only a section of the employees. As per this Section employees who earn the wage above the limit fixed by the Government are not entitled for the payment of bonus. Bonus is a deferred wage and hence all employees irrespective of the wage earned and the position held by them in the establishment should be entitled to receive the bonus. Hence, we suggest that the provision for the Government to determine the eligibility for bonus on the basis of the amount of wage earned should be removed.
13. The right of the workers or their unions to question the accuracy of the Balance Sheet of the company or demand clarifications, to ascertain ‘allocable surplus’ while bargaining for bonus above the minimum level, which is available in the present Bonus Act is totally done away with in the Bill. Section 31(2) of the Bill states that ‘audited accounts of companies shall not normally be questioned’. Such a provision may lead to fudging of Balance Sheets by the employer as happened in the case of ‘Satyam Computers’. The said provision is contrary to the stated object of the Bill which states that the measure of amalgamating of the existing Acts in a single Code would bring transparency. We suggest that the employees should be given access to the accounts of the establishment and the employers should be compelled to submit any information about the affairs of the establishment as required by the employees and their unions.
14. Section 42 of the Bill provides for constitution of Central Advisory Board by Central Government and State Advisory Board by the State Government and the same will include persons representing employees also. Since the Advisory Board will be required to advise the Government/s on various issues concerning various sectors of employment, we suggest that the employees’ representatives should be selected from all sectors and representative of employees of particular sector should be nominated by the trade unions of that particular sector and not by the Government. Further it should be made mandatory for the Government/s to accept the recommendations of the Advisory Committee.
15. As per Section 42 of the Bill, the Advisory Board is required to advise the Central Govt on various issues one of them being providing increasing employment opportunities to women. Taking into consideration the specific problems (both physical and social) faced by the women, we suggest that the Bill should provide for “work from home” for women employees. The Advisory Board should be asked to identify the sectors and the type of work where the women employees can be allowed to work from home.
16. Under Chapter VIII of the Bill, the penal provisions to employers for the violations of the provisions of the Act are diluted. Whereas under the Minimum Wages Act, 1948, payment of less than minimum wage is punishable with imprisonment upon the first offence, in the proposed bill, there is a shift from criminal liability to civil liability in matters pertaining to wages, payment of wages and payment of bonuses. Those who commit offences can be acquitted if the offences are compounded. It may be noted here that in the case of Sanjit Roy v. State of Rajasthan (1983), the Supreme Court has observed that non-payment of minimum wages amounts to constitutionally prohibited forced labour The dilution in the penal provision may lead to more violations by the employers there by failing the objectives of the Bill. Hence, we suggest that the penal provisions for violation of the Act by the employers should be made very stringent.
In the meanwhile the committee resubmitted the bill on 18th December 2018 along with their views on certain suggestions and the GOI issued a press release on that:
PRESS RELEASE
(18.12.2018)
FORTY-THIRD REPORT OF THE STANDING COMMITTEE ON LABOUR ON 'CODE ON WAGES BILL, 2017'.
Dr. Kirit Somaiya, Chairperson, Standing Committee on Labour presented to Lok Sabha today the Forty-Third Report on ' The Code on Wages, Bill 2017'.
Gist of some of the important Observations/Recommendations of the Committee are as under:-
Subject
The Ministry of Labour &
Employment to clarify in
the Code that the concept
of minimum wage is
actually ‘the minimum
wage at the time of
entry/initial wage’ and
that
experience/loyalty/years
of service are to be taken
into account over and
above the minimum wage
and Clause 2 (u) & Clause
6 Sub-section (6)may be
modified accordingly.
-Recommended.
Recommendation
The Committee were of the firm opinion that experience of a worker in any establishment in the unorganized sector has largely not been recognized by the employers for payment of wages and therefore it needs to be considered as one component while comparing work of same and similar nature. They felt that a clarification may be required to be given in the Code that the concept of minimum wage is actually ‘the minimum wage at the time of entry/initial wage’ and that experience/loyalty/years of service are to be taken into account over and above the minimum wage. During their interaction with the Ministry of Labour and Employment, the Committee have gathered the impression that it is willing to explore the possibility of including the same. Hence, the Committee have recommended that Clause 2 (u) may be modified as under:
‘“same work or work of a similar nature”
1
The Ministry of Labour & Employment should try to address the issue related to Clause 2 Section (x-iii) and Clause 2 Section (x-A) in regard to the bonus and
Wages through simplification of relevant Clause and explanations
given therein and therefore, Clause 2 Sub-section (x) of the Code
may be substituted
accordingly.
-Recommended
means work in respect of which the skill, effort, experience and responsibility required are the same, when performed under similar working conditions by employees whether regular or on contract and the difference if any, between the skill, effort, experience and responsibility required for employees of any gender, are not of practical importance in relation to the terms and conditions of employment.’
(Para No. 3.15)
The Committee were of the opinion that the definition of ‘Wages’ given in the Code is very lengthy and needs further clarification and simplification. The Ministry have justified the same by stating that the said definition consists of two parts, one for the purpose of calculation of bonus, as taken from the Payment of Bonus Act and second, for the purposes such as minimum wages, payment of wages etc. The Committee found it confusing that in Clause 2 Section (x-iii) bonus is part of wages whereas in Clause 2 Section (x-A) bonus is not part of wages, though the Ministry have clarified that statutory bonus has been excluded from the wages, however, any other payment in the name of bonus is included. The Committee have therefore, recommended that the Ministry should try to address this issue through simplification of relevant Clause and explanations given therein. The Committee would also like the Ministry to consider a suggestion received from them by the employers that inclusion of bonus should be allowed to be taken over in case the Establishment concerned does not earn profit.
The Committee have therefore, recommended that Clause 2 Sub-section (x) of the Code may be substituted with the following Sub-section as under:
‘(x) “wages” means all remuneration, whether by way of salary, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes any, -
(i) dearness allowances;
(ii) house rent allowance;
(iii) remuneration payable under any award or settlement between the parties or order of a court; and
2
(iv) additional remuneration payable under the terms of employment, with whatsoever name it is called,
but does not include –
(a) any bonus payable under this Code, which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a court or Tribunal;
(b) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the appropriate Government;
(c) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;
(d) any travelling allowance or the value of any travelling concession;
(e) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or
(f) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex-gratia payment made to him on the termination of employment;
(g) any overtime allowance; and
(h) any commission payable to the employee:
Provided that for calculating the wage under this clause, if any payments made by the employer to the employee under clauses (a) to (h) exceeds one half of the all remuneration calculated under this clause, the amount which exceeds such one-half shall be deemed as
remunerationandshallbe
accordingly added in all remuneration under this clause.
Explanation – Where an employee is given in lieu
3
As regards Clause 3 Sub-section (1) and (2) of the Code, for better clarity in the same, at the end of Clause 3 Sub-section (1) the following phrase may be included: ‘In any one unit of Establishment’ and
this Code to be a
progressive measure
guaranteeing non-
discrimination, hence, Clause 3, Sub-section 2
may be substituted
accordingly.
-Desired.
The Ministry may insert the following phrase after the words ‘so fixed’ in Clause 8(1) (a) “based on
the norms/parameters
prescribed by the appropriate Government from time to time”. Further, under Sub-section (4) of the same Clause, it has been
provided that ‘the appropriate Government shall review or revise
of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed fifteen percent of the total wages payable to him, shall be deemed to form part of the wages of such employee. (Para No. 3.21)
Clause 3 Sub-section (1) and (2) of the Code deal with prohibition of discrimination on account of Gender. For better clarity in the same, the Committee have recommended that at the end of Clause 3 Sub-section
(1) the following phrase may be included: ‘In any one unit of Establishment’. In so far as the matter related to prohibition of discrimination in recruitment and employment conditions, the Ministry have argued that the same will be addressed in the Occupational Safety, Health & Working Conditions Code, which is due to come in future. However, the Committee desired this Code to be a progressive measure guaranteeing non-discrimination. Hence, the Committee have desired that Clause 3, Sub-section 2 may be substituted with the following:
“No employer shall, -
(i) for the purpose of complying with the provisions of sub-section (1), reduce the rate of wages of any employee; and
(ii) Make any discrimination between men and women while recruiting them for the same work or work of similar nature and thereafter in the conditions of employment except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force."
(Para No.3.26)
Under clause 8 Sub-section (1-A), it has been prescribed that ‘in fixing minimum rates of wages in respect of any employment for the first time under this Code or in revising minimum rates of wages so fixed, the appropriate Government shall either appoint as many Committees and Sub-Committees as it considers necessary to hold enquiries and recommend in respect of such fixation or revision, as the case may be’. The Committee have recommended that the following phrase may be inserted after the words ‘so fixed’ in Clause 8(1) (a) “based on the norms/parameters prescribed by the appropriate Government from time to time”. Further, under Sub-
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minimum | rates of wages | section (4) of the same Clause, it has been provided |
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at an interval of five | that ‘the appropriate Government shall review or |
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| In | order | to | revise minimum rates of wages at an interval of five |
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maintain |
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Governments flexibility in | Wages | Act | 1948 | gives | the State Governments |
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deciding | when | to revise | flexibility in deciding when to revise minimum wages |
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minimum wages, in Clause |
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8 Sub-section (4), the | as long as it is not more than five years. In order to |
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words ‘at an interval of | maintain that flexibility, the Committee have |
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five | years’ | may | be | recommended that in Clause 8 Sub-section (4), the |
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substituted | with | words ‘at an interval of five years’ may be substituted |
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‘ordinarily at an interval | with ‘ordinarily at an interval not exceeding five |
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not exceeding five years’. | years’. |
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-Recommended |
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The Ministry to frame the | The Committee have further recommended that the |
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code so that it must | State Governments must be consulted before |
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convey | the message | that | finalization of the National Minimum Wage by the |
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the workers, | who | are | Central Government. They observe that Clause 9 Sub- |
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getting minimum wages as | section | (3), | which | though | provides | that the Central |
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per the present Act shall | Government may obtain the advice of the Central |
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not get less than what |
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they are getting now, once | Advisory Board, does not reflect a positive obligation |
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the Code on Wages Bill, | to consult the State Governments. | The Committee |
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2017 is enacted and they | have desired that the Code must underline the fact |
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same shall continue to be | that the power to fix minimum wage shall continue to |
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revised |
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practice. -Desired |
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The Ministry to work on The existing provision under Clause 13 Sub-section the code so that the (1)(a) of the Code, it is stated as: ‘Where the minimum working hours should not
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be beyond eight hours a day and the following phrase may be added at the end of the Clause 13 Sub-section (1)(a): ‘not exceeding eight hours per day’ and further, under Clause 13 Sub-section (2) (a), the words ‘on urgent work or’ may be deleted.
-Recommended
The Clause 29 of the Bill providing disqualification of an employee from receiving bonus may be made more clear by substituting the same with the following:
‘Notwithstanding anything contained in this Code, an
employee shall be disqualified from receiving bonus under this code, if he is dismissed from service on conviction.
-Recommended
The Ministry to substitute the phrase ‘twenty or more persons’ by ‘ten or more persons’ in Clause 41 (2) .
-Recommended
The Code needs to
envisage consultations between Central and State
Governments while
determining National Minimum Wage and therefore, the following:
rates of wages have been fixed under this Code, the appropriate Government may (a) fix the number of hours of work which shall constitute a normal working day inclusive of one or more specified intervals’. The Committee felt that the working hours should not be beyond eight hours a day, hence, they have recommended that the following phrase may be added at the end of the above said Sub-section: ‘not exceeding eight hours per day’.
(Para No.3.53)
Concurring with the suggestion received from the State Government of Karnataka, the Committee have recommended that Clause 29 of the Bill providing disqualification of an employee from receiving bonus may be made more clear by substituting the same with the following:
‘Notwithstanding anything contained in this Code, an employee shall be disqualified from receiving bonus under this Code, if he is dismissed from service on conviction for-
(a) Fraud related to the establishment or its employees.
(b) Riotous or violent behaviour while on the premises of the establishment or directed at the establishment.
(c) Theft, misappropriation or sabotage of any property of the establishment.
(d) Sexual Harassment at the work place as per The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.’
(Para No.3.69)
Under Clause 41 regarding Non-applicability of this Chapter, the Committee have agreed with the suggestion made by the Government of Karnataka that in the larger interest of the workers, the criteria for applicability may be fixed at ten or more persons. Accordingly, the Committee have recommended that in Clause 41 (2) the phrase ‘twenty or more persons’ may be substituted by ‘ten or more persons’.
(Para No.3.76)
The Committee were of the view that the Code needs to envisage consultations between Central and State Governments while determining National Minimum Wage and therefore have recommended the following:
‘in Clause 42, in Sub-section (1),-
(iv) in item (b), omit the word “;and”,
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‘in Clause 42, in Sub- | (v) | after item (c), insert the word “;and”, |
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section (1),- |
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(i) | in item (b), omit |
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(iii) after (c) insert
the following item, namely:-
“(d) five representatives of the State Governments to be nominated by
theCentral
Government”’.
-Opined
The Clause 2 Sub-section The Committee have been informed that the Code on
(m) and Clause 51 the Wages Bill will benefit both the employers and
word ‘Facilitator’ be employees due to simplification and ease of substituted by ‘Inspector’ compliance as well as ensuring minimum wages and
in accordance with ILO timely payment of wages for all employees irrespective norms.
of wage ceiling and sector. In this connection, as
-Recommended
regards, the issue of using the term ‘Facilitator’ instead of ‘Inspector’ in the Code, the Ministry have sought to convince the Committee that the enforcement mechanism would be strengthened as the facilitator will also have the responsibility of preventing any violations of the provisions of the Code by way of providing guidance to both employers and workers. They have also stated that the inspection scheme is proposed to provide for risk based inspections and make it more effective and reduce
arbitrariness. Notwithstanding the same, the Committee felt that the use of the term ‘Facilitator’ instead of ‘Inspector’ in the Code gives the impression of diluting the enforcement mechanism and restricting the inspection which is the lifeline of enforcement.
Hence, the Committee have expressed agreement with the various suggestions received by them on inclusion of the word ‘Facilitator’ instead of ‘Inspector’ in the Code on Wages Bill, 2017. They, therefore, have recommended that under Clause 2 Sub-section (m) and Clause 51 the word ‘Facilitator’ be substituted by ‘Inspector’ in accordance with ILO norms.
(Para No. 3.86)
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The Ministry to suitably modify the Chapter VIII of the Code to fix the penalty for offences by the employer from rupees fifty thousand to rupees ten lakh.
-Recommended
Under Chapter VIII dealing with Offences and Penalties in the Code, penalty for offences by the employer vary from rupees ten thousand to rupees one lakh only. In Clause 53 (1)(a) particularly, it has been stated that any employer who pays to any employee less than the amount due shall be punishable with fine which may be extended upto rupees fifty thousand. While the Ministry have claimed that the penalties have been increased manifold in the Code as compared to the same in the existing Minimum Wages Act, the Committee still felt that in the present context the penalty amount proposed is not substantial enough to act as a deterrent. Hence, the Committee have recommended that the Chapter VIII of the Code may be suitably modified to fix the penalty for offences by the employer from rupees fifty thousand to rupees ten lakh only.
(Para No. 3.91)
OUR INFERENCE
1. Our country also decided to follow the ILO’s resolution of adopting minimum wages through the CODE ON WAGES BILL.
2. Bill was presented in 2017 and as per the decision, a committee was formed to collect the feed back from the various stake holders.
3. The committee met various stake holders which include the central trade unions like, AITUC,CITU,BMS and HMS and also from state Governments like Karnataka.
4. The committee placed their final recommendations along with their views on the suggestions of various trade unions and stake holders in both the LOKSABHA and RAJYASABHA on 18th December 2018.
5. Besides the hint that the Government may get the bill passed before election, the very attempt of the Government in placing the bill is an obvious intention of the Government to introduce MINIMUM WAGES POLICY in the country.
6. Thus the introduction of the MINIMUM WAGES POLICY may happen at any point of time and it is an opportunity for us to grab the beneficial clauses of the Bill.
7. As per the proposed bill
A. It amalgamated and rationalise the following central acts
(a) the Payment of Wages Act, 1936;
(b) the Minimum Wages Act, 1948;
(c) the Payment of Bonus Act, 1965; and
(d) the Equal Remuneration Act, 1976.
B. The central Government will fix the NATIONAL MINIMUM WAGES once in five years.
C. The appropriate Government which means the establishments like Banking and Insurance companies can fix the wages accordingly but not lesser than the NATIONAL MINIMUM WAGES.
D. The bill introduces a new nomenclature for the supervisory, managerial and administrative cadres working in the Banking and insurance establishments as “ EMPLOYEES ” whereas the workmen cadres are classified as “WORKERS”.
E. It enables the appropriate Government to determine the factors by which the minimum wages shall be fixed for different category of employees. The factors shall be determined taking into account the skills required, the arduousness of the work assigned, geographical location of the workplace and other aspects which the appropriate Government considers necessary.
F. Any minimum rate of wages fixed or revised by the appropriate Government may, inter alia, consist of basic rate, cost of living allowance and value of the concessions, if any.
G. The wages lesser than the minimum rates of wages notified by the appropriate Government for a State or any part thereof shall not be paid to any employee.
H. It empowers the appropriate Government to determine the ceiling of wage limit for the purpose of eligibility of bonus and calculation of bonus, by notification, which will make it easier to revise ceilings.
I. Bill seeks to provide for payment of wages for overtime work which is in excess of the number of hours constituting a normal working and the overtime rate shall not be lesser than twice the normal rate of wages.
J. It provides that where a claim has been filed for non-payment of remuneration or bonus or less payment of wages or bonus or on account of making deduction not authorised by the proposed legislation, the burden shall be on the employer to prove that the said dues have been paid to the employee.
PRESENT SCENARIO
A. AINBOF is insisting for the introduction of minimum wages formula similar to one adopted in the VII Central pay commission from the beginning.
B. The CHARTER OF DEMAND jointly submitted by four officers’ organisations echoed the similar demands though the employees’ organisations did not specify their stand on minimum wages formula in the charter of demand submitted by them.
C. The Bipartite discussions held by UFBU with IBA so far rested on the percentage basis opposite to the Minimum wages formula.
D. Though the AIBOC in the 21st December strike notice demanded, “ Discussion on the charter of demand and the profitability of the member banks” agreed ultimately to demand the Minimum wages formula and to delink the wage revision with the profitability of the member banks.
E. AIBOA who had taken different stand till recently, effected a welcome change in their approach by incorporating, “ Minimum wages of ₹18000 p.m.” as a demand during the proposed strike on 8th and 9thJanuary 2019.
F. Two individuals belong to Canara Bank and All India canara bank OBC employees welfare association filed a writ in the High court demanded the introduction of minimum wages formula and the same was admitted by the court and notices were sent to the respondents, DFS, IBA,AIBOC, CANARA BANK and CBOA.
G. CBOA has submitted the counter affidavit in support of the petitioner demanded the introduction of minimum wages formula delinking the wage revision with the Paying capacity and profitability of the Banks.
H. AINBOF has filed a wakalat and will file a counter during this week on the lines of Canara bank officers’ Association.
I. AIBOC has filed a wakalat and is expected to submit the counter in support of the Minimum wages formula shortly.
FUTURE STRATEGIES
1. Three stages are involved when we shift our focus to achieve the wage revision by employing MINIMUM WAGES FORMULA.
I. Achieving the introduction of MINIMUM WAGES FORMULA through which, getting the wages for leading decent life matching to the status in the respective institutions without linking profit and paying capacity of the institution.
II. Fixing the minimum wages at the entry level on the similar formula followed in VII CPC as on 01 11 2017. It is very much necessary as ₹18000 was fixed as minimum wages at entry level by the CPC as on 01 01 2016.
III. Fixing the wages of scale 1 officer equivalent to Grade A officers of GOI.
2. With our consistent efforts, we are likely to see the days to introduce Minimum wages formula in the Banking industry.
3. We have to initiate sincere and stern steps to achieve other two objectives which only will ensure the decent wages to the officers and above on.
4. In view of the bleak promotional chances in the coming years, in the interest of 70% youth employed in banking sector, we must introduce running scale of pay without any stagnation which is detrimental to lead the decent life by the officers.
5. To achieve the above, the AIBOC must file the counter affidavit in support of the petitioner demanded the MINIMUM WAGES FORMULA in the court immediately.
6. We may also explore the possibility of requesting the other constituents of UFBU and AIBOC also to file the affidavits in the High court, Madurai.
7. We may demand the Medical reimbursement scheme to all the officers and employees of the Banking industry on the lines of the scheme being practiced in SBI.
8. We shall continue to wage the war till we get the unconditional mandate for settling the wages up to scale VII in the Industry.
9. We shall write a letter to IBA either by UFBU or by the AIBOC highlighting our demands to pursue further wage revision.
AINBOF ZINDABAD
AIBOC ZINDABAD
MANIMARAN G V
GENERAL SECRETARY
ALL INDIA NATIONAL BANK OFFICERS’ FEDERATION
03 01 2019
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