ILO JOINS HANDS WITH MODI GOVT TO REDUCE
MINIMUM WAGE OF WORKERS : J S Majumdar
IN the ongoing world economic crisis situation, there is a
rightward political shift worldwide. This is resulting in the pursuit of an
aggressive neoliberal economic agenda in favour of the corporates and against
all sections of the working people. It is leading to cuts in wages, social
security, subsidies, employment, rights, and increase in taxation -- as
designed by the international finance capital -- combined with a
country-specific divisive agenda. The reflection of this trend is seen in the
rise of Trump in USA, his replicas in other countries and in the rise and
consolidation of the Modi-led regime representing the communal and corporate
forces in India.
In this background, it is not surprising that UN agencies such as
the International Labour Organisation (ILO) too are not untouched by it. Two
recent examples, both on minimum wages of workers, establish this fact. First,
ILO, completely bypassing labourers, joined hands with the Modi government to
prepare a report to give legitimacy to cut in the workers’ minimum wages in
India. Second, ILO constituted an enquiry committee and condemned the Maduro
government for increasing workers’ minimum wages in Venezuela. It condemned the
government of Venezuela for “ignoring the Chambers of Commerce and tripartite
mechanism” on raising workers’ minimum wage. But it conveniently ignored trade
unions in India and the tripartite mechanism while sitting in the Modi
government’s committee and fixing minimum wage.
ILO’S DIRECT ROLE IN REDUCING MINIMUM WAGES IN INDIA
The ILO did not stop there. In Delhi, it called a special meeting
with central trade unions for “an informal exchange of views” on the government
of India ‘Report of the Expert Committee for Determining the Methodology for
Fixing the National Minimum Wage’. The government used an “innovative
methodology to estimate a needs-based minimum wage”. This meeting was attended
by seven central trade unions -- INTUC, BMS, HMS, AITUC, CITU, AIUTUC and
NFITU. CITU was represented by its national secretariat member Karumalaiyan and
its Delhi state general secretary Anurag Saxena.
In the meeting, ILO officials took great pains to explain in
details the “merits” of the Modi government’s report and the “innovative
methodology” adopted by it. Unfortunately for the ILO, however, all seven
central trade unions, including the RSS-affiliated BMS, unanimously rejected
it. Karumalaiyan questioned the very basis of ILO’s participation in the
‘expert committee’ and the need for a new methodology when Indian Labour
Conferences (ILCs), all tripartite bodies and the Supreme Court, have upheld
the existing methodology. Saxena questioned the timing of the report as the
Delhi government’s notification on minimum wage, based on the current
methodology of calculation, is pending before the Supreme Court. The AITUC
representative pointed out that ILO officials themselves violated ILO
Convention 131 on fixation of minimum wage and having gone beyond their terms
of reference. BMS representatives highlighted various fallacies in the
methodology itself.
The development comes at a time when ILO is celebrating the centenary
of its formation. It was formed within two years of the Great October
Revolution by the working class and establishment of the first socialist state.
The meeting was followed by the union finance minister’s pre-budget
meeting with trade unions with the theme of ‘ensuring minimum wages for all
workforce’. Obviously, it was for clearing ground to enforce the reduction in
minimum wages as a big boost for the defaulting corporates.
DECEPTION ROUTE TO CUT MINIMUM WAGE
The expert committee report, published on February 14, is a big
fraud being played on the vast marginalised sections of workers. Like using new
EPF accounts for projection of higher rate of “formal employment”, new GDP
series to project higher economic growth and fudging facts with other manufactured
data, the Modi government adopted the deception route to cut workers minimum
wage to favour the corporates. It is trying to do this through this “innovative
methodology” replacing the existing one under the Minimum Wages Act, 1948 which
evolved over a period of 40 years.
CURRENT METHODOLOGY
Under directive principles of the constitution of India and on the
basis of Fair Wages Committee recommendations, the tripartite 15th Indian
Labour Conference (ILC) in 1957 decided on the current methodology of
calculation having - (i) workers family of three members consumption unit; (ii)
2,700 calories per unit in balanced food as per Dr Aykroyd formula; (iii) 72
yards of cloth per family per annum; (iv) house rent as charged by the
government for low income group housing; and (v) additional 20 per cent of
(ii)+(iii)+(iv) for fuel, lighting and other miscellaneous expenses.
The Supreme Court of India has approved this current methodology in
their judgement in the Raptakos Brett case in 1992, but by adding one more
criterion as (vi) Additional 25 per cent to the total of (ii)+(iii)+(iv)+(v)
for children’s education, medical treatment, recreation, festivals and
ceremonies. Thus, the total of (ii)+(iii)+(iv)+(v)+(vi) becomes the minimum
wage.
NEW INNOVATIVE METHODOLOGY
No doubt, the expert committee report’s methodology of calculation
is innovative, but only for the purpose of cutting workers minimum wage. For
fudging facts, the expert committee calculated workers family consumption unit
as 3.6 instead of 3. Yet, a worker’s total minimum wage, at current price
level, comes to Rs 8,892 – Rs 11,622 per month with regional variations, as
against Rs 18,000 per month in January, 2016 price level calculated by the
Seventh Central Pay Commission (CPC) using the current methodology. The Modi
government at the centre and most of the state governments have already
accepted and implemented the recommendations of the Seventh CPC. The central
trade unions and federations made it as one of the major demands for
implementation in all sectors – public and private – across the country and
resorted to countrywide strikes for it.
What were the innovative methods which the expert committee used to
cut workers minimum wages by about half? (i) First, by reducing per day per
consumption unit calorie intake from 2700 to 2400; (ii) Second, by taking very
low prices of food items; (iii) Third, by removing 20 per cent of total wage
for fuel, light and on miscellaneous expenses and 25 per cent of the total as
per Supreme Court judgement, and (iv) Fourth, by replacing all non-food
expenditures, including house rent, with two broad categories -- essential
non-food items and non-food items.
Publication and timing of the expert committee report has to be
seen in the background of employers’ organisations challenging in the Delhi
High Court the minimum wage notification, dated March 3, 2017, by the Delhi
government. The High Court scrapped the notification, following which the Delhi
government has moved the Supreme Court. The CITU Delhi state committee is an
intervener party in the matter.
In its interim order of October 31, 2018, the Supreme Court turned
down the Delhi High Court judgement, restored the minimum wages notification
temporarily and ordered implementation of the notified minimum wages effective
from November 1, 2018 till disposal of the case.
It also ordered the Delhi government to constitute a Minimum Wage
Advisory Board strictly under the provision of the Act and on its advice,
prepare a fresh draft of minimum wages notification and place the same before
the Supreme Court for scrutiny and approval. The notified minimum wage for an
unskilled worker in Delhi, calculated on the basis of current methodology is Rs
14,000 per month at January 2017 price level as against the expert committee’s
Rs 11,622 at January 2019 price level. The next date of hearing is July 2,
2019.
DESIGN TO IMPLEMENT CODE ON WAGES
The Code on Wages Bill, the first of the four labour codes
proposing to replace all 44 existing labour laws, was placed in the
now-dissolved 16th Lok Sabha. The Code on Wages Bill proposes to scrap the Minimum
Wages Act, 1948. The current methodology of calculating minimum wages is an
exercise to implement the Minimum Wages Act. Following scrapping of the Minimum
Wages Act, the current methodology will have no relevance. The government aims
to implement the expert committee’s methodology thereafter and it has already
taken ILO on board for its assault on minimum wages of workers.
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