WAGE POLICY AND WAGE REGULATION MACHINERY

Prepared By: Jitumoni Choudhury Pranab Jyoti Nath Anirban Roy Darshan Nunisa Thomson Basumotary Dipanjali Boro

Wage policy
The term wage policy refers to the legislation or government action undertaken to regulate the level or structure of wages or both, for the purpose of achieving specific objectives of social and economic policy.

A wage policy may be viewed from three different angles.

Macro economic level Semi aggregative level Plant level

Objective Of Wage Policy

To abolish malpractices and abuses in wage payment. To set minimum wages for workers having weak bargaining power because either they are unorganized or inefficiently organized, accompanied by separate measures to promote the growth of trade unions and collective bargaining. To obtain for the workers a just share in the fruits of economic development,supplemented by appropriate measures to keep workers expenditure on consumption goods in step with the available supplies so as to minimize inflationary pressure. To bring about a more efficient allocation and utilisation of manpower through age differentials and where appropriate systems of payment by results.

objectives of national wage policy In India

To provide minimum wage to workers employed in sweated industries . To fix wage ceilings. To improve the existing wage-structure. To control over inflationary tendencies. To accelerate export promotion.

Evolution and Development of wage policy in India

1928, ILO conference adopted a convention urging the creation of a machinery for fixing minimum wages. Trade Dispute Act,1929 and appointment of Royal Commission on Labour were two main important landmark in wage policy. The payment of wages Act,1936. In 1946, government adopted a three-fold wage policy which recommended: o A statutory prescription of minimum wages in sweated industries and occupations in agriculture. o A promotion of fair-wage agreements. o Steps to secure a living wage for workers in plantation industries.

The Industrial Dispute act,1947. The minimum Wages Act,1948. A committee was set up in 1949 to determine the principals on which fair wages should be based. The committee distinguished three level of wages ,namely minimum wage, living wage and fair wage. The wage policy was given due importance in Constitution of India Article 43 says: The state shall endeavour to secure by suitable legislation or economic organization or in any other way to all workers.a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and culture opportunities.

Wage Policy under different Five Year Plans

First Five year plan
Commenting on wage policy The first five year plan observed that any upward movement at this juncture might jeopardize the economic stability of the country, possibly without any real gain to the workers ,if it was reflected in the cost of production and consequently, in the prices of the product .

Second Five year plan

Regarding the workers right to fair wages. Regarding the machinery for ensuring an effective solution of wage disputes. To evolve a wage policy aiming at a structure with rising real wages. Emphasize the link between pay and productivity.

Third Five year Plan

The third Five year plan did not say anything new about wage policy. It recognized that there were wide disparities between the wages of working class and the salaries at the higher management level, hence said that for better implementation of the Minimum Wages Act, the machinery for inspection had to be strengthened.

Fourth Five year Plan

Implementation of an integrated income policy. The total wages should have three components. Efforts should be made to extend the scope of wage systems based on payment by results. A careful review of the working of the wage board and criteria followed by them should be undertaken. A concerted drive should be undertaken to achieve higher level of productivity in all branches of industry. Evolution of simple incentive scheme jointly by employers and workers at unit level.

Fifth Five year Plan

The Fifth Five year Plan simply reiterated the theme that increases in wage should be closely with increases in productivity and stand in very vague terms that the reward structure of industrial employees, in terms of wage and non-wage benefits, must be related to performance records in industrial enterprises.

Six Five year Plan

The Wage Policy was observed in this plan as under The accepted purpose of policy is to narrow the existing inequalities and to eliminate malpractices in regard to wage rates and wage payment.

Seven Five year Plan

According to this Plan The basic objectives of a wage policy are a rise in the level of real income in consequence with increase in productivity, promotion of productive employment, improvement in skills, sectoral shifts in desired direction, and reduction in wage disparities.

Eighth Five year Plan

Tendency to fix wages at unrealistically high levels should be checked. Implementation of wags once fixed should be ensured. The machinery for enforcement act has been strengthened over the years and also envisaged in the programmes included in the plan. A greater role should be played by the workers organizations, non governmental voluntarily organizations and the organized trade unions in ensuring the implementation of minimum wages instead of solely relaxing on the official enforcement machinery.

REGIONAL MINIMUM WAGE FOR SOME INDUSTRIES

The 28th session of Indian Labour Conference held in November, 1985 issued the following guidelines for determination of regional minimum wages. For determining wages, six regional wages advisory committees have been identified, which is composed by the Ministry of Labour and one member each of the state Government/Union Territories in the region The Regional minimum wage may be considered employment-wise for selected employments. While fixing the rate of regional minimum wages for a specific employment, the committee should take unto account the concept of poverty line, the prevailing wage rate in particular employment in different states in the region ,the capacity to pay etc. The Committee should meet at least twice a year to review the situation after the initial recommendation for fixing regional minimum wages. The wages fixed should bear a relation with the all-india consumer price index . However the state may revise the wage whenever there is a rise of 50 points in the C.P.I.

Regional Centres and Area Covered

Region Eastern Region North-Eastern Region Southern Region Northern Region State and Union Territories to be Covered West Bengal ,Orissa , Bihar, Andaman and Nicobar Islands. Assam, Manipur, Nagaland, Mizoram, Meghalaya, Tripura, Arunachal Pradesh. Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Pondicherry, Laksha-dweep. Punjab, Rajastan, Himachal Pradesh, Jammu & kashmir, Haryana,Delhi,chandogarh. Maharashtra, Gujrat, Goa, Daman &Diu, Dadra & Nagar Haveli. Uttar Pradesh and Madhya Pradesh.

Western Region Central Region

A CRITICAL APPRAISAL OF WAGE POLICY

In India , sizeable change of the work force in the strong clutches of poverty and indebtedness and is scantily armed with social security measures, the role of wages in maintaining happy industrial relations cannot be under-estimated. In India, wage policy in its true sense is certainly conspicuous by its absence. There is a gross disparity in the wages of employees similar types of work. Wage disparity between the lowest employee and highest employee is fairly high.

WAGE REGULATION MACHINERY

NEED FOR WAGE REGULATION MACHINERY Safeguard workers interest Economic development Maintaining efficiency of workers

GROWTH AND DEVELOPMENT OF WAGE BOARDS

The Royal commission on Labour in 1930 Industrial Dispute Act 1947 First Five Year Plan Second Five Year Plan 15th Indian Labour Conference First Wage Board in the cotton textile and sugar industry in 1957

COMPOSITION OF WAGE BOARDS

Employer

Decision

FUNCTIONS OF WAGE BOARD

Determine which categories of employees are to be brought within the scope of wage fixation. Work out a wage structure based on the principles of fair wages. Suggest a system of payment by results. Work out the principles that should govern bonus to workers in industries.

WORKING OF THE WAGE BOARD

THE FUNCTIONING OF BOARD INVOLVES THREE STEPS Prepare a comprehensive questionnaire Public hearing Secret session

WAGE BOARDS- THE INDIAN SCENE

EVALUATION OF THE WORKING OF THE WAGE BOARDS Three major problems A majority of the recommendations are not unanimous It takes long time The recommendations are difficult to implement

REMEDIES
The committee has mad some important recommendations. The chairman of the wage board should be selected by the common consent of the organizations of employers and employees in the industry concerned. In future, the wage board should function essentially as a machinery for collective bargaining and should strive for unity. The wage boards should be assisted by technical assessors and experts. The terms of reference of wage board should be decided by the government in consultation with the organizations of employers and workers concerned.

A central wage should be set up in the Union Ministry of Labour on a permanent basis to serve all wage boards. The wage board would not be set up under any statutes, but in their recommendations as finally accepted by the government should be made statutorily binding on the parties. For the industries covered by wage boards, a permanent machinery should be created for follow-up action.

CONCLUSION
In addition to encouraging greater participation by the parties and freedom in decision making, the boards have functioned with responsibility and restrain and their recommendations have not undermined the efficiency of the industry.