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LabourMin proposes uniform wage definition in new code

The labour ministry has also sought comments on the draft code by April 20.

Written by Surabhi | New Delhi | Updated: April 13, 2015 12:00:49 am

As it tries to ease compliance burden for employers in tandem with the “Make in India” campaign, the labour ministry plans to streamline the definition of wages across labour laws by amalgamating four wage related statutes into a single code.

Accordingly, the labour ministry has proposed a draft labour code on wages that would combine four Central acts on wages including the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.

At present, there are about half a dozen definitions of what constitute wages in various acts across the Centre and states, which employers have to grapple with.

But ironically, neither trade unions nor employer representatives are happy with the move and labour minister Bandaru Dattatreya has called for fresh consultations on the draft code on April 13.

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“A fresh closed door meeting has been called by the labour minister on Monday to discuss the draft Code,” said a person close to the development. This follows a tripartite meeting last month of the minister with employee and employer representatives and state government officials.

The proposed Code seeks to define wages as “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”.

It would, however, exclude bonus, value of any house-accommodation, or of the supply of light, water, medical attendance, contribution to pension and provident fund by the employer, travelling allowance and gratuity.

It would cover all establishments including those of state and Central government and has barred discrimination among male, female and transgender employees on the ground of sex in the payment of wages.

The labour ministry has also sought comments on the draft code by April 20.

However, experts point out that the draft code still does not reflect the current salary structure used by most private sector firms.

“Most companies pay wages on a cost to company basis that the proposed code does not discuss,” said Michael Dias, secretary of the Employers’ Association in Delhi, adding that the crucial issue of bonus has also not been dealt with fully in the code. Trade union leaders, too, believe that the proposed changes would reduce the carry home salary of workers.

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