Karnataka's draft rules to change calculation of minimum wage, trade unions miffed

The AICCTU released a statement detailing how the draft rules released by the state government last month will lead to reduced wages.
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The new Karnataka Code on Wages (Draft) Rules 2021, which changes the way minimum wages are calculated among other things, have been criticised by workers and unions since being released nearly a month ago. The All India Central Council of Trade Unions (AICCTU) on Thursday criticised the Karnataka Code on Wages (Draft) Rules 2021 and said that it will result in a reduction of the existing minimum wages.

A statement by the AICCTU raised objections to the draft rules and detailed why they are supposedly anti-labourer. It stated that the method of calculation of minimum wages proposed by the draft rules would result in the reduction of the already low wages. "It has modified the method of calculation of minimum wages in a manner that does not consider actual expenses of workers. This will result in reducing existing minimum wages, which are already low," the statement read.

"A comparison of the calculation under the existing law and the proposed rules would show a reduction in the wages of workers from the present Rs 9,935.61- to Rs 5,935.61," it further adds.

The difference was partly due to the proposed way to calculate the rent expenditure of a worker. "The draft rules propose that rent expenditure is to constitute 10% of food and clothing expenditure. This is completely out of touch with reality with high rise in rent costs. It is completely absurd to calculate rent as a percentage of the cost of food and clothing, instead of looking at the actuals," the AICCTU said.

According to the statement, the state government has not publicised the draft rules and that they are only available in English, making them inaccessible to a majority of the workforce who do not speak the language.

The statement also accuses the rules of not accounting for the increase in the cost of living, despite workers working for the same wage. "Growing inflation requires the increase in Variable Dearness Allowance (VDA) to combat growing price rise," it states. The AICCTU also claims that the draft rules do not have provisions for raising disputes in case of unequal wages paid to men and women.

The draft rules come at a time the Karnataka government has faced a series of challenges when it comes to labour rights, and has been trying to maintain its industry-friendly image.

In December 2020, thousands of workers at an iPhone manufacturing plant in Kolar district vandalised the plant in anger over unpaid dues and delayed payments. The company — Taiwan-based Wistron Corp — admitted to lapses and apologised for the incident.

In another instance, a lockout in November 2020 affected production at a Toyota Kirloskar Motors plant in Ramanagar district. The workers’ union at the plant alleged that the company wanted to raise the number of cars produced in a day from 300 to 360, without any increase in manpower or timings. 

A garment factory unit of Gokaldas Exports, which was making products for fashion company H&M among other brands, was also shut down in June 2020 leading to 1200 workers losing their jobs. However, in February 2021, many of them were offered the chance to return to the company. 

In 2020, the state government also proposed increasing overtime and work shifts, an idea that was met with resistance from labour unions. 

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