On June 3, the Center issued an opaque press release stating that he set up a committee of experts under the chairmanship of Professor Ajit Mishra, director of the Institute for Economic Growth (now the Mishra Committee) “to provide technical inputs and recommendations on the setting of minimum wages and national minimum wages”.

And that “… was constituted for three years from the date of notification”.

This central government decision is puzzling for several reasons. The mandate of the committee is three years.

When I first read it I thought it was a printing error and would be corrected at three months. But the comments of the senior labor and employment adviser to the government and the secretary member of the commission confirmed that his mandate is indeed three years. Why any committee with a limited mandate like this – unless it is a commission charged with investigating a host of issues like the Second National Labor Commission or the National Commission on Labor? unorganized sector companies – would be granted such a long period?

Nevertheless, we must wait for the explicit terms of reference of the Mishra Committee to be able to make sense of this government decision.

In the meantime, four questions need to be debated and addressed:

1) What is the background prior to the appointment of the Mishra Committee?

2) Is this a welcome addition to the existing body maze?

3) What value can it add, given the rigid legal mandate?

4) What are the possible implications of this measure?

The first draft of the Wages Code was presented to Parliament on August 10, 2017, and the revised Code was adopted in 2019.

On January 17, 2018, the Center constituted an expert committee chaired by Dr Anoop Sathpathy, member of the VV Giri National Labor Institute (now Sathpathy committee) with a broad mandate to conduct a detailed review of minimum wages given the historical and judicial context and recommend national and regional minimum wage recommendations, “… bearing in mind global best practices, their adaptability and relevance to the Indian context”.

The Sathpathy Committee, which included a wages expert from the ILO office in New Delhi, submitted its detailed scientific report in 2019.

The committee discussed in detail several aspects such as the history of minimum wage policy in India, the ILO framework regarding the minimum wage system and minimum wage systems in several countries. Ultimately, he recommended a national minimum wage rate of Rs 375 per day and a monthly wage of Rs 9,750 (and a housing allowance of Rs 1,430 for workers living in urban areas) and minimum wages. regional (five regions).

The report was not well received by unions, although it received some support for specific parties. Most Indian unions demanded a national minimum wage of 600 rupees per day because according to the salary rate recommended by the Seventh Pay Commission, which is not surprising because, as a pressure group, they will be pushing for higher minimum wages.

Incidentally, the Sathpathy committee report did not feature in any of the government-initiated wage discussions. The Centre’s decision to give a meager increase, from Rs 176 to Rs 178, in 2019 was considered a possible rejection of the sathpathy committee report. Again, the very constitution of the Mishra committee reflects the implicit rejection of the recommendations of the Satpathy committee.

Sanitation workers in Jaipur, Rajasthan. Photo: PTI

committee members

The presence of three government officials on the Mishra committee could raise eyebrows, as it could lead to a moderation of recommendations regarding minimum wage rates. It is a mere anticipated economic rationale that the Mishra Committee may be forced to recommend a lower minimum wage than recommended (adjusted for inflation) by the Sathpathy Committee – otherwise why another committee?

Ideally, the Mishra committee should enjoy autonomy and be a panel “with open arms”, with no overt government leadership.

Alternatively, the central government could have outsourced this work to ILO officials, as the organization has global technical expertise. Some ILO officials have made valuable work on minimum wages in India and developing countries. It is therefore a mistake to call the Mishra Committee a “committee of experts”.

Of course, I am in no way questioning the academic qualifications of the technical members of the committee.

The Indian state, regardless of which party is in power in the Center, has always reveled in setting up committees and commissions and then throwing them in the trash of already piled up committee reports.

The report of the Committee on Sathpathy suffered such a fate. What is the guarantee that the Mishra commission report, even if it is delivered well before its due date of June 2024, will not meet the same fate as the reports of its predecessors?

Representative image of rural workers. Photo: United Nations Development Program / Flickr (CC BY-NC-ND 2.0)

Is this a welcome addition to the existing body maze?

The wage code and the rules framed below provide for a maze of bodies – Article 8 (1) (a) and Article 38 provide for the appointment of a multi-stakeholder committee (composed of representatives of employers and employees and independent persons) and Article 42 and Article 28 for an advisory council at central and state levels. Rule 4 (2) provides for the establishment of a committee made up of representatives from several trade union ministries and two technical experts to categorize the skills of workers.

Pursuant to the draft salary code regulation notified on July 7, 2020, the central administration on March 1, 2021, issued a notification for the constitution of an Advisory Board inviting suggestions and objections from stakeholders and commercial matters concerning its operation.

So we do have another expert committee. The question in passing is whether this body has a statutory basis? The fairly brief press release does not mention any legal clause supporting its formation.

What value can it bring given the legal and tripartite mandate?

The press release very briefly gives the mandate of the Mishra committee. The panel will make recommendations to the government on minimum wages and the national minimum wage (NFLMW).

To arrive at the wage rates, the group will look at international best practices on wages and develop a scientific criterion (sic) and the wage setting methodology.

I have already dealt with the review by the Sathpathy Committee of International Practices. Now the Mishra Committee is expected to provide recommendations to the government on minimum wages and to the NFLMW. But the wages code and rules provided enough information about them.

The Wages Code and Rules provide for a statutory NLFMW, regional minimum wages (metropolitan area, non-metropolitan area and rural area as defined in rule 4 framed in article 6) and minimum wages at the state level. . The central government will determine the first two and the second by the respective states and Union territories.

The wages code and rules have provided all of the criteria to be taken into account in determining a statutory NFLMW and minimum wages (regional and state levels). For example, section 9 prescribes the “minimum standard of living of a worker” to determine the NFLMW. For the fixing of the minimum wage under Article 6 by the competent government, the Code defines a variety of factors such as the skills of workers, the arduousness of the work [Section 6(6)(b)], and any other prescribed standard [Section 6(6)(c)].

Migrant workers stranded in Rajasthan due to the lockdown look out of a train window after arriving in West Bengal on May 5, 2020. Photo: Reuters / Rupak De Chowdhuri

Rule 3 framed under Article 6 (5) [wrongly stated as it should have been Section 6(6)(b)(c) as required under Section 67(2)(b)(c)] defines the criteria following the recommendations of the Indian Labor Conference (CIT) and the criteria prescribed in the Supreme Court ruling in Workers represented by the secretary against the management of Reptakos Brett. And Co. Ltd. and Anr., 1992 (AIR 504) for the calculation of the minimum wage rate.

The tripartite body, the ILC and the Supreme Court dealt with the criteria and the Sathpathy Committee made the appropriate revisions they deemed appropriate. Advisory boards will need to follow the criteria set out in Rule 3 to determine minimum wages. Rule 11 specifies that the Statutory NFLMW will also be determined by the criteria set out in Rule 3.

What will be the functions of the expert committees and advisory councils that will be set up under the regulations in force? What will happen to their recommendations in light of the recommendations of the Mishra Committee as they arrive?

So the question is: what added value can the Mishra Committee bring to the prescribed legal mandate discussed above? What is the guarantee that stakeholders will welcome the recommendations of this Committee?

What are the practical implications?

Even though the wages code was promulgated in August 2019, any rules notifying the advisory board at the central level were not adopted until March 2021, arguably due to the economic downturn and the terrible negative impact of COVID-19 on business. But workers, both formal and informal, have suffered multiple deprivations, including sharply reduced income opportunities and depreciated real wages. The central government’s non-statutory minimum wage rate is a measly Rs 178. Various surveys and anecdotal evidence document a substantial decrease in income levels and an increase in informality among workers. Millions of people are said to have lost their jobs during the COVID period.

The non-application of the four Labor Codes and a very partial application such as the one we have noted here indicate an enormous legal vacuum. In the recent period, several state governments and the central government have announced changes in the variable cost allowance (VDA) component of the minimum wage while some, like Kerala, have revised the wage rate. basic minimum for a sector.

The practical question is: when will the universal minimum wage system be implemented? The central government must quickly announce the statutory NFLMW. Then state governments can take appropriate action to revise the minimum wage rate in addition to announcing appropriate changes in the ARV.

The CITU, in a letter dated June 4, 2021, questioned the validity of the appointment of the Mishra committee. He asked for his dismissal. De novo procedures in the context of what we have discussed above are superfluous. This would run counter to the process of social dialogue on the basis of which the government included the “criteria” in the rules for determining minimum wages. In addition, there are provisions in the regulations, as mentioned above, to include experts in expert committees and advisory boards.

The constitution of the said committee, despite the technical expertise, will send unfavorable signals to the stakeholders that the government is simply biding its time and is not interested in the implementation of the codes. Another committee with a three-year term will frustrate the aspirations of the working class who expect a minimum wage.

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