Tuesday, November 3, 2009

Bakground of wages act

Background A tripartite Committee Viz.,"The Committee on Fair Wage" was set up in 1948 to provide guidelines for wage structures in the country. The report of this Committee was a major landmark in the history of formulation of wage policy in India. Its recommendations set out the key concepts of the `living wage', "minimum wages" and "fair wage" besides setting out guidelines for wage fixation. Article 39|- The State shall, in particular, direct its policy towards securing (a) that the citizen, men and women equally shall have the right to an adequate livelihood and (b) that there is equal pay for equal work for both men and women. Article 43 |- The State shall endeavour, by suitable legislation or economic organisation or in any other way, to give all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure, and social and cultural opportunities. Enactment of the Minimum Wages Act Historical Backdrop * The initiative started with the resolution placed by one Shri K.G.R.Choudhary in 1920 for setting up Boards for determination of minimum wages in each industry. * The International Labour Conference adopted in 1928 Convention No.26 and Recommendation No. 30 relating to wage fixing machinery in trades or parts of trades. * On the recommendation of the Standing Labour Committee and Indian Labour Conference, a Labour Investigation Committee was appointed in 1943 to investigate into the question of wages and other matters like housing, social conditions and employment. * A draft bill was considered by the Indian Labour Conference in 1945. * The 8th meeting of the Standing Labour Committee recommended in 1946 to enact a separate legislation for the unorganised sector including working hours, minimum wages and paid holidays. * A Minimum Wages Bill was introduced in the Central Legislative Assembly on 11.4.46 to provide for fixation of minimum wages in certain employments. It was passed in 1946 and came into force with effect from 15.3.48. Under the Act, Central and State Governments are appropriate Governments to (a) notify scheduled employment (b) fix/revise minimum wages The Act contains list of all these employments for which minimum wages are to be fixed by the appropriate Governments. There are two parts of the Schedule. Part I has non-agricultural employments whereas Part-II has employment in agriculture. Criteria for notification of scheduled employment The appropriate Government fixes the minimum wage in respect of only those scheduled employments where the number of employees is 1000 or more. Fixation/revision of minimum wages Norms The norms include those which were recommended by the Indian Labour Conference in its session held in 1957 at Nainital. (i) 3 consumption units for one earner. (ii) Minimum food requirements of 2700 calories per average Indian adult. (iii) Clothing requirements of 72 yards per annum per family. (iv) Rent corresponding to the minimum area provided for under Government's Industrial Housing Scheme. (v) Fuel, lighting and other Miscellaneous items of expenditure to constitute 20% of the total Minimum Wages. Other parameters (i) "Children education, medical requirement, minimum recreation including festivals/ceremonies and provision for old age, marriage etc. should further constitute 25% of the total minimum wage." This judgment was delivered by the Supreme Court of India in 1991 in the case of Reptakos Brett and Co.Vs.its workmen. (ii) Local conditions and other factors influencing the wage rate. Methods for fixation/revision of minimum wages Fixation Section 3 empowers appropriate Government to fix the minimum rates of wages in the scheduled employments. Revision Revise the Minimum rates at an appropriate interval of not exceeding five years. Procedure for Fixation/Revision In Section 5 of the Minimum Wages Act,1948, two methods have been provided for fixation/revision of minimum wages. They are Committee method and Notification method. Committee Method Under this method, committees and sub-committees are set up by the appropriate Governments to hold enquiries and make recommendations with regard to fixation and revision of minimum wages, as the case may be. Notification method In this method, Government proposals are published in the Official Gazette for information of the 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 will be taken into consideration. After considering advice of the Committees/Sub-committees and all the representations received by the specified date in Notification method, the appropriate Government shall, by notification in the Official Gazette, fix/revise the minimum wage in respect of the concerned scheduled employment and it shall come into force on expiry of three months from the date of its issue. Variable Dearness Allowance (VDA) It was recommended in the Labour Ministers' Conference held in 1988, to evolve a mechanism to protect wages against inflation by linking it to rise in the Consumer Price Index. The Variable Dearness Allowance came into being in the year 1991. The allowance is revised twice a year, once on 1st April and then on 1st October. In the State Sphere, 22 States/Union Territories have provisions for Variable Dearness Allowance, at present. Enforcement Machinery The enforcement of the provisions of the Minimum Wages Act in the Central Sphere , is secured through the officers of Central Industrial Relations Machinery. In so far as State Sphere is concerned, the enforcement is the responsibility of the respective State Government/Union Territory. National Wage Policy Though it is desirable to have a National Wage Policy it is difficult to conceive a concept of the same. The National Wage Policy has been discussed on many occasions in different fora. Because fixation of wages depends on a number of criteria like local conditions, cost of living and paying capacity also varies from State to State and from industry to industry, it would be difficult to maintain uniformity in wages. The Indian Labour Conference, held in November, 1985 expressed the following views- “Till such time a national wage is feasible, it would be desirable to have regional minimum wages in regard to which the Central Government may lay down the guidelines. The Minimum Wages should be revised at regular periodicity and should be linked with rise in the cost of living” Accordingly, the Government issued guidelines in July, 87 for setting up of Regional Minimum Wages Advisory Committees. These Committees renamed subsequently as Regional Labour Ministers’ Conference, made a number of recommendations which include reduction in disparities in minimum wages in different states of a region, setting up of inter-state Coordination Council, consultation with neighbouring States while fixing/revising minimum wages etc.

Disciplinary & Grievance Procedures

Disciplinary procedures: easy when you know what you're doing, but a costly & bureaucratic nightmare when you don't tick all the right boxes during the process. Getting a clear set of disciplinary rules in place for your organisation isn't difficult, and then following these when the need to go through a disciplinary process arises can save a lot of trouble in the longer-term.

Despite the frequency of errors in following disciplinary rules, applying these shouldn't be difficult, or particularly time-consuming... and there's plenty of support available from Employment Law Clinic, including a convenient flowchart that reminds you of each step, with a summary guide of the points you'll need to consider as you go through the disciplinary process.

Grievance procedures are similar to disciplinary procedures, and are often included in the same company policy. The main difference is that for disciplinary matters, the employer is not happy about the conduct of an employee and will be contemplating action against them; for grievances, the employee is not happy about something related to their employment, and will be looking for something to be done by the employer.
Disciplinary & Grievance Policies in Your Business

Most (but despite the legal requirement for these, not all) employers do have Disciplinary & Grievance Procedures in place. The problems for small businesses often arise from the infrequency with which these need to be considered, and then ensuring the documents are relevant & compliant with the current standards - the ACAS Code of Practice.

Even assuming all points are satisfied, employers will often try to issue a disciplinary penalty in haste, and then think about the need to comply with their own rules & attempt to make the disciplinary process fit their decisions.

In other instances, employers will be thinking about dismissing an employee, and then both try to ensure the disciplinary process leads to this preconceived outcome & the result is achieved as quickly as possible.

Both of these approaches, as well as the various other practices employers adopt, invariably only ever cause unnecessary complications and serve no interest to the business. If the desired result (dismissal or otherwise) is the appropriate action, following the right steps will lead to this, with the decisions reached at the right stage in the disciplinary process, and so protecting the interests of the business at the same time.

With grievances, employers often see an employee as simply being disgruntled, making a fuss about nothing, perhaps assuming the employee does not even understanding what it is they are complaining about. However, for the employee the matter is obviously important, and therefore there's a responsibility on the employer to consider the grievance and treat it seriously.

For clients of Employment Law Clinic, we can be on-hand to discuss the various stages with you, ensuring these are done as promptly & efficiently as possible. If you want to discuss the option of a telephone advice service, please call us on 020 3239 0569 or consider any convenient option to contact us.
About Disciplinary Procedures

Disciplinary rules & procedures are there to ensure the effective operation of your business, setting standards for performance and conduct, and how you will address the matter when the need arises.

Disciplinary procedures should always be designed to encourage & promote improvement where necessary, and not be weighted towards sanctions - sanctions, including dismissal, will be a possibility in the most serious cases, but these would normally be the exception, and certainly not relevant in every case; the procedures should be a key management tool, there to promote good management & good standards among your staff.

The disciplinary rules & procedures will often be unique to your company, reflecting what is necessary in your business. However, common points to include will be:

* when & how the disciplinary procedures will be applied;
* who will be involved in disciplinary action, and the possible outcomes;
* the appeals procedure.

The rules will also cover the type of areas for which the disciplinary procedure might be applied, which could include:

* general conduct;
* timekeeping;
* attendance;
* personal use of business equipment (including use of telephones, internet, stationery).

This list will not normally include every possible point for which disciplinary action could be necessary, but it should give a clear indication to employees on the types of areas for which the disciplinary procedures might be used.
About Grievance Procedures

A grievance can be a complaint, a concern, or a problem an employee has about their employment. As it can be in no-one's interest for something of this nature to be ignored, it is appropriate that all employers have a formal grievance procedure in place.

Dealing with most grievances can be quick & easy, and should not require much in the way formality – a private chat will often suffice to identify the problem, from which point the employer will often be able to provide reassurances, or address the matter of concern to the employee. Nonetheless, an option should exist for more formal steps for those occasions the matter is not resolved so easily.

Employers are expected to treat all grievances seriously, and take what action may be appropriate to resolve the matter. This does not mean that all employees' grievances must be upheld or settled in the manner favoured by the employee, but the employer should at least to consider the grievance and decide if anything practical can be done to appease the employee.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.


Press Information Bureau

Government of India

Wednesday, April 16, 2008

Ministry of Labour & Employment


17:40 IST


The Maternity Benefit (Amendment) Bill, 2008 to provide for (i)

enhancing Medical Bonus from Rs. 250/- to Rs. 1,000/- if no pre-

natal confinement and post-natal care is provided by the employer

free of charge; and (ii) Granting powers to the Central Government

to revise Medical Bonus before three years subject to a maximum of

Rs. 20,000/- has been passed by the Parliament. The Bill has also

received the assent of the President on 1st April, 2008 and has

been published in the Gazette of India on 2nd April, 2008.

This information was given by the Minister of State (Independent

Charge) of the Ministry of Labour and Employment, Shri Oscar

Fernandes in a written reply in the Rajya Sabha today.

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