In its rush to relax the labour laws, the Centre has not taken into consideration the vast informal sector or the female labour force in the Draft Code on Wages Rules.

A group of migrant workers carrying their belongings over their heads and walking on a highway amid the nationwide lockdown
Voices Opinion Friday, September 04, 2020 - 14:32

The draft rules of the Code on Wages were put up for public feedback on 7 July 2020. To set the context, 44 labour laws are now clubbed into four Labour Codes and the Code on Wages will be the guiding policy subsuming four major laws, namely (i) The Payment of Wages Act, 1936 (ii) The Minimum Wages Act, 1948 (iii) The Payment of Bonus Act, 1965 (iv) The Equal Remuneration Act, 1976. 

The draft rules are organised around minimum wages and factors of consideration of the same, concept of floor wage, payment of wages, payment of bonus, central advisory board, technical committee, payment of dues and claims, forms, registers and wage slip. The rules require a lot more thinking as it is yet to be understood how these rules will unfold, if ever, in the benefit of the large section of informal workers in India who are employed without any contract and therefore fall outside the ambit of the Code on Wages.

Off the cuff, it needs to connect with the reality of informal sector workers and look at the sector/worker through the gender lens. A closer look at the draft rules reflects the fact that women workers were not even in the realm of imagination of those who drafted the rules.

First up, these rules are more relevant for workers in a formal set up, where the employee-employer relation is already defined and is governed by laws and recognition of rights rather than the informal sector which remains largely ungoverned and unregulated by either the state or the law. 

Ignores realities of informal sector 

In India where a vast majority of workers are employed in the informal sector — over 90% of the workforce is in the informal sector — these Code rules should mean something for them. This is particularly important considering in the not-so-distant-past we saw millions of migrant workers (from the informal sector) walking back home soon after the lockdown was imposed. They were left to fend for themselves. This is the right time for the government to ensure we are not faced with such a situation again in future.

The proportion of informal workers in the total labour force is around 93 percent, as per Economic Survey 2018-19, which is about 450 million workers. Further, the Periodic Labour Force Survey (PLFS) 2019 shows that 71% of these informal workers do not have a written job contract; 54% cannot avail paid leave; and, over 57% in rural areas and nearly 80% in urban areas work way beyond the eight-hour work shift.

Minimum wages are denied in most cases in the informal sector. Our work in the Assam tea gardens has shown that the minimum wages of a tea plantation worker is pegged as low as Rs 167 per day. The calculation of minimum wages suggested in the Code rules is agnostic of these realities and propose factors that are far removed from a worker’s life—formal or informal. 

For instance, the standard size of a working class family is considered to have four members with three adult consumption units. This counts an earning member as 1 consumption unit, the spouse as 0.8 consumption unit and 2 children as 0.6 consumption unit each. However, the reality is that a standard family size exceeds 3 consumption units if we have to include elderly and other dependents. The calculation also contradicts the standard size of five members as laid down in the National Food Security Act (NFSA). The rules refer to a requirement of 2700 calories per day per consumption unit; this seems only good enough to tick the calorie intake box and totally ignores the nutritional requirements. 

Then considering 26 working days a month disregards the right of the workers to paid holidays on Sundays. On the number of working hours per day, the rules do not adhere to the existing International Labour Organisation (ILO) norms, of 8 hours per day including resting time; instead it proposes 8 hours working with an additional hour for rest. 

The method suggested to calculate house rent (as 10 percent of food and clothing expenditure) turns a blind eye to the realities of workers living in cities. In urban and peri-urban areas, where the workers are concentrated, calculation of rent by this percentage will not get them basic and safe housing provision. The clause of accounting for a fixed 66 metres of cloth per year per family, in the minimum wages, is certainly not geography and climatic zone specific and has to be contextualised. 

The rules of the Wage Code Bill sets aside 25% of the minimum wages for expenditure on children’s education, medical needs, recreation, and expenditure of contingencies; this is simply not enough. Consider this data: For a family with a single earning member, the average expenditure on private schooling (for two children), constitutes 20% of household income (NSSO 2014). The average medical expenditure in private hospitals in rural areas is almost four times that in government hospitals. The difference in cost rises to over seven times in urban centres where the average spend in government hospitals is Rs 7,189 as against Rs 42,540 in private hospitals.

Fails women workers 

If we leave the formal-informal sector debate behind, and critique the rules through a gender lens, it fails this test too. The draft rules completely ignore women. For starters, it defines a worker as ‘he’ throughout the draft rules, thus completely ignoring the female labour force. 

In the 68th round (2011-12) of the National Sample Survey, the proportion of self-employed workers was higher among females (51.2%, for both urban and rural) than among males (48%). Women work mostly as domestic workers, other home-based work as part of Self Help Groups (SHGs), as scheme-based workers (Anganwadi and ASHAs); these are excluded from the definition of workplaces. It leaves out all private households and hence apprentices; domestic and home-based workers such as beedi workers and sumangli workers in textile industries are denied the status of a ‘worker’. 

While two important Acts —the Minimum Wages and Equal Remuneration Act, 1976—that protected/promoted women’s rights have been repealed and subsumed in the Code on Wages Bill, they have failed to incorporate the pro-women provisions in its entirety in the current draft rules. For instance, the clause that one working day can be up to 12 hours actually does not factor in women’s unpaid care work at home. Oxfam India’s study in the tea gardens of Assam showed that women in plantations woke up at very early hours (5 am) to finish all their domestic chores (cooking, cleaning, washing) before heading to the tea gardens for their entire shift; their average day often stretching beyond the 12 hours. 

The reference to the calorific requirements of a family is not just problematic in the amount it prescribes per family member, but is very sexist and ageist too. The overall calorific intake is calculated by assuming that women will consume 20% and children will consume 40% less than the value assigned for a male member. This clause does nothing to either improve the dismal condition of health and malnutrition among women and children nor the social status of women in the society.

The government has been in a rush to relax the labour laws and bring in the Code on Wage Bill. But in its rush it has not taken into consideration either the vast informal sector or the female labour force. The rules need to speak to the reality before they get implemented at the state levels. If the rules remain vague and exclude the majority of its workers it will only increase the adverse plight of the workers in India with no succour from any corner. If anything, the visuals of millions of informal workers walking home should have been an eye opener. It isn’t late, yet!

Ranjana Das is Lead Specialist, Private Sector Engagement and Ileena Roy is the Project Officer, Private Sector Engagement at Oxfam India. Both are working on issues of informal sector workers in supply chains. Views expressed are authors’ own.


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