Wage Code Bill: Placing Workers At The Mercy Of Bosses

Corporates Made Laws!

MODI led BJP government introduced and passed the wage code bill within a week, overriding several recommendations of the Parliamentary Standing Committee in 2018. The striking difference between existing acts and the new one is that the Code provides greater scope for ambiguity, vagueness, inconsistencies in terms of definitions and for a definite pro-corporate tilt and orientation. In turn, it has provided greater scope for administrative and government interventions and manipulations of law. If it was ‘judge-made laws’ earlier, it is converted into ‘government / bureaucrats / corporate-made law’ now. This is the strikingly distinguishing feature of the Wage Code. ‘Labour’ laws that were meant to protect labour, is now transformed into a ‘Law of capital’. If all labour welfare legislations were enacted in the past to protect workers from the vagaries of market and from the inhuman attack and exploitation by capital in the race for super profit, now the purpose has been turned topsy-turvy. The present Wage Code has been enacted to offer all kinds of protections to capital and corporates to suck the blood of workers and intensify their exploitation without any hindrance. Crores of workers are thrown at the mercy of corporate and multinational companies.

‘Coverage’: A Fraud on People

The government claims that the Wage Code has expanded the coverage of law to cover the entire fifty crore workforce instead of coverage only to a few crores of organised sector formal workers. This is utterly false and a naked fraud on the people and the workers. In fact, the Parliamentary Standing Committee recommended eligibility for bonus to all establishments with a threshold limit of employing 10 workers. The Wage Code has rejected that recommendation and retained the proposal of threshold limit of 20 workers thereby denying the benefit of bonus to crores and crores of workers. Informal sector which is predominantly employing less than 10 workers, is not at all under the purview of the code. If at all the coverage has been expanded, that is only to include managerial, administrative, technical or clerical workforce, mainly the middle level, which is generally part of the management and well taken care by the industrialists. BJP government has extended its care and concern to the management staff while leaving workers in the lurch.

Ambiguous Definition of a ‘Worker’ and’Employee’: Exclusion of Vast Majority of Outsourced Contract Workers

What is the distinction the Code makes between “employee” and “worker”? We are yet to unravel the mystery as the accompanied rules are yet to be framed. The Standing Committee has specifically raised objections to this cunning differentiation. It says that there is a lack of consistency in definitions of employee and worker. But, as expected, the government has overruled it. Apprentices are completely out of the definition of a worker, thereby allowing corporates to exploit apprentices to the hilt. They are not even entitled for minimum wages as per amendments now. The salary limit for a supervisor is only Rs 15,000 while minimum wage itself is around 15,000 in many states today.

The concept of ‘permanent’ employment is eliminated. Even the rights and benefits enjoyed by permanent employees have been stolen. Instead of bringing contract and other informal workers on par with permanent employees of any establishment; permanent employees’ rights, wages, terms of employment, working conditions, etc., are being lowered and brought on par with those of informal employees!

Fixed Term Employment has already come to stay through the backdoor method of amending rules of Standing Order Act and has been awarded prime/main status of employment in the country now. With the enactment of wage code and others to follow, ‘Hire and Fire’ has become the law now. Informal employment whether it is in formal organised sector or informal unorganised sector, is the norm. Fixed Term Employment, contract, apprenticeship systems, trainees and other informal exploitative forms of employment are being encouraged to escalate the intensity of exploitation.

The definition of ‘contract worker’ applies only to labour supplied through a contractor, in other words, ‘labour supply contractor’, to work in the premises of principal employer, while workers engaged in outsourced work in the same premises or outside is out of the ambit of law. The Code says that the worker employed in contractor’s establishment is excluded. We are seeing lot of manpower companies, like TeamLease, etc., who handle all HR related matters of other corporate companies, claim that workers supplied by them to work in other companies are workers of TeamLease only and not of the Principal Employer. The Code offers them necessary legal protection. Evasion of law, in itself has become the law now.

Workers engaged on mutually agreed contracts, agreements, getting regular wage hike and other benefits as per law are excluded from the definition of a contract worker irrespective of their place of work. It says, “his employment is governed by mutually accepted standards of the conditions of employment (including engagement on permanent basis)” and they are not contract workers. It also says, (if a worker) “gets periodical increment in the pay, social security coverage and other welfare benefits in accordance with the law for the time being in force in such employment” are not contract workers.

The definition itself excludes a vast majority of workers from the ambit of law. No wonder that industrialists can create their own categories of workers to evade laws and the code is encouraging such ‘illegal’ practices. Neither the principal employer is responsible for all workers engaged in any operation connected with the company / PSU/ central or state government nor can the principal employer be identified.

The concepts like prohibition of employment of contract labour in ‘perennial’ nature of work, operations ‘incidental’ to work, labour ‘control’ and ‘supervision’ by whom’ etc., are thrown to the winds. ‘Core’ – ‘non core’, ‘perennial’ – ‘peripheral’ differentiation of work that prohibited companies from employing contract labour in core operations of the company is also flouted. The Code provides ample scope for any employer to evade law just by entering into individual contracts or just by providing meagre Dearness Allowance as regular increment. So, the idea of the act is to throw workers at the mercy of capital and exploiters. The message is loud and clear. A new form of slavery is being scripted by the Wage Code.


Depressing Wages for Super Profits

The Code says that allowances would also mean wages, if it is more than 50 percent, or some percentage notified by the central government, equivalent to components like basic, DA and retaining allowance. The definition of wage and allowances is also left to the discretion of the government. Secondly, it says that House Rent Allowance, Overtime wages and other allowances will also be considered as wages when it comes to equal wages for women. Is this to reduce wages for women workers or to actually get really equal wages for a women worker is a question mark! When it comes to equal wages for women, it has also added skill, effort, responsibility and experience. It is a real mockery how the ‘effort’ would be defined. We have to wait for the rules to be framed, to laugh at. But, when it comes to fixing minimum wages, experience and service in the company will not be counted. It is the company’s discretion to pay same wage for a new entrant and also a worker with several years of experience. Discrimination in wages is in-built in the code. Accentuating inequalities and poverty among various sections is the logic behind the code. The government has specifically rejected the recommendation of the Standing Committee on this matter despite registering strong objections.

The much bigger disaster is that the Code has not come up with any scientific formula or method of fixing wages. Recommendations of Indian Labour Conferences, Supreme Court judgement on Raptakos Brett case, etc., insisted on fixing wages to monetarily compensate expenses for generation of 2700 calories of energy for each person with 4 member unit of a family. Later, the government brought in legislations to protect aged parents. So, logically, a family should be a unit six people. But none of them are taken into account but for saying that appropriate government will devise the method of calculation, again, providing room for bureaucratic distortions and manipulations in favour of corporates.

Now, we have two wage systems in the country. “Floor Wages” and “Minimum Wages”. In a cruel joke, the floor wage was increased by Rs 2 by this Modi 2.0 government in 2019. The increase is not even equivalent to the increase in the Consumer Price Index to arrest the fall in real wages, leave alone any real increment. As on date, the floor wage is only Rs 178 per day, i.e., Rs 4628 per month. With the repeal of Minimum Wages Act 1948, the central government should have made it clear in wage code that payment of minimum wage is mandatory. Rather, it is proposing floor wages or national minimum wages. As on date, minimum wages are touching Rs 15000 per month in several states. Several other states are to follow suit. But, the Wage Code is ambiguous on this part.

Hence, it appears that the Modi government is extending helping hands to the corporates and industrialists by depressing wages. Now, the wages are neither decided by the market nor by the existing scientific criteria for fixation of minimum wage based on energy requirement, but by a conspiratorial intervention by the pro-corporate central government. Profit for employers, by robbing off the workers, not  through increased production and productivity. ‘Industry cum region’ formula is a quite popular yardstick to decide on wages in addition to skill level and other factors. But, Wage Code has eliminated the approach and is introducing the formula of region, which is much bigger, also for ‘floor’ wages.

Eight Hour Workday is Being Done Away With

Eight hour work day had been the war cry of working class movement all over the world. Thousands of workers had to sacrifice their life to make it a legal right. The emerging demand is to reduce working hours to six hours a day. But, Modi government is not willing to make even 8-hour workday mandatory. Standing Committee has specifically recommended to include it in the act. But, the government says that “the central or state government can fix the number of hours which will constitute a normal working day”. Wage Code has neither laid down criteria for deciding minimum wages nor has categorically made clear the number of working hours of a workday. This is the Wage Code which is a total fraud on the working masses of the country. We celebrate May Day every year remembering sacrifices of working class martyrs to secure 8 hour work day but we have elected a government that is conspiring to increase working hours of a day and thereby making workers ineligible to overtime wages also. It is a multi-pronged, systematic and systemic attack on working class.

Stealing “Right To Strike”  

Wage Code has also said that 10 or more workers absenting from duty will be considered as strike without notice and 8 days wages will be deducted. In the name of terms for deductions, the government is making strike illegal and mandates deduction of 8 days wages through Wage Code. Deduction of 8 days wages will be enforced even if union or workers did not issue any notice for strike. Mere coincidental absence of 10 workers is enough for 8 days wage deduction. The Modi’s intention of stealing the workers’ ‘right to strike’ is much more obvious in this clause.


Bonus is Employers’ Discretion, Not Worker’s Right

Only 8.33 percent minimum bonus may be available to workers. Eligibility for Bonus and also Ceiling for calculation of Bonus is to be notified by the appropriate government subsequently. But, even minimum bonus is also subjected to stringent conditions. First five years, companies are offered a blanket exemption from paying bonus and subsequent years too bonus is linked to company profit and level of allocable surplus. For scrutinising company’s justification to offer whatever percentage bonus, workers have no right to demand balance sheet to study allocable surplus related matters. Only the concerned officer can get it while sharing of the same with workers dependent on the consent of the management. The concept of considering bonus as ‘unpaid wages’ is done away with. Practically speaking, payment of bonus is the right and discretion of the employer and not the right of the worker. This is another special feature of the wage code.

It is being celebrated by the media that burden of proof lies with the management in case of payment of bonus and remuneration. Big hue and cry is being made out of it. But, they are silent on the fact that the same ‘responsible’ employers are relieved of responsibility through several other clauses like entering into contract, mutual consent, start-up, stand-up, allocable surplus, etc. According to old laws, any clause in any agreement or contract entered into against statutory, mandatory provisions can be overruled. But, according to new code, any statutory provision can be overruled by any contract or agreement. Employers can easily evade laws legally if they make it part of any contract of mutual consent, including bonus. By the same standards, payment of minimum wages, ESI, PF, Gratuity and many more rights and benefits, including bonus, are no more mandatory. Moreover, providing above benefits is no more the responsibility of the employer but of the workers themselves. The same is codified in Draft Code for Social Security.

Mockery of Inspection and Ridicule of Penal Clause

The Wage Code indulges in encouraging companies to violate law. In the old acts, there were penal provisions extending up to imprisonment for some months depending on the nature of violation, at least, on paper. Now, the system of inspection is being dismantled systematically. Thieves are offered keys to resort to loot and plunder without any accountability to the state or to the people. Good conduct certificate can be self-issued by the culprit companies themselves. ‘Inspector’ is only a ‘Facilitator’. Facilitator can only advise the companies if they violate law for the first time. If they do not abide by the direction of Facilitator, they are penalised only upto a meagre Rs. 50, 000 for the first time and only upto Rs. one lakh for the second time, within 5 years and not more and no imprisonment. If it is more than 5 years of first default, then the circle of advise, fine, etc., will start. Even one lakh fine is only for committing offence for the second time within five years.

Modi’s independence day speech emphasised on honouring ‘wealth creators’. The toiling masses in the country claim, any scientific approach asserts and also the history has taught us that the working masses are the wealth creators. But, Modi says investors are the wealth creators who should be respected and shall be provided conducive atmosphere for ‘ease of doing business’. The point is that these investors and wealth creators are none else but corporate and multinationals. ‘Make in India’ is enough to loot the country as they are the wealth creators. Modi and Sangh Parivar minced no words to openly exhibit their admiration to investors. So, he also says that he has already eliminated more than 1450 laws, additionally another 60 laws in this Modi 2.0 regime of 70 days just to promote ease of doing business and ease of living for the business class. PM Modi made it very clear in his speech that privatisation and investment by corporate and multinationals are the panacea for the problems of “unemployment”, removing “inequality” and “abolishing poverty”. So, it is quite natural that wage code offers unfettered freedom to capital. It is a code for intensified and inhuman exploitation of labour so as to honour ‘wealth creators’ who are actually the looters and plunderers of all wealth of this country. Wage Code and other codes are obviously aimed at providing ease of doing business to the business class. “Dear Mr Wealth Creators! The Investors! Make in India! Loot India! Loot the Toiling Masses!” – is the mantra of BJP-Sangh Parivar and their Hindu Rashtra. It is nothing but scripting modern slavery. It is a code for the sacrifice of labour at the altar of capital in the era of neo-liberalism.