Labour Issues

End of wage disparities?

Print edition : December 09, 2016

Contract workers desilting storm water drains in Chennai. Photo: R. Ragu

Justice S.A. Bobde. Photo: V. Sudershan

Justice J.S. Khehar. Photo: K. Murali Kumar

The Supreme Court, in a landmark judgment, upholds the principle of equal pay for equal work irrespective of whether one is a “permanent” or a “contract” employee.

ONE worrisome and persistent phenomenon in the labour market has been the growing tendency of employers to keep a significant proportion of their workforce, especially the blue-collar sections, in temporary forms of employment. Recruited through an elaborate system of contractors, these workers, though they are as competent as their “regular” counterparts, are denied not only the same wages and emoluments for the same work done but also other benefits. Such workers constitute almost 50 per cent, sometimes more, of the workforce in many organisations and even in government departments. These are the precariat of the 21st century, the social class of people subject to the uncertainty of existence.

On October 26, in a landmark judgment, setting aside a clutch of appeals and adjudicating on the principle of “equal pay for equal work”, a two-judge bench of the Supreme Court comprising Justices J.S. Khehar and S.A. Bobde directed the Punjab government to pay equal wage for equal work to thousands of casual, temporary, daily wage workers employed by the State government.

The court ruled that it was “fallacious to determine artificial parameters to deny fruits of labour”. An employee, observed Justices Khehar and Bobde, “engaged for the same work, cannot be paid less than another who performs the same duties and responsibilities. Certainly not, in a welfare state.” Such an action, they said, “besides being demeaning, strikes at the very foundation of human dignity. Anyone who is compelled to work at a lesser wage does not do so voluntarily. He does so to provide food and shelter to his family at the cost of his self-respect and dignity, at the cost of his self-worth and at the cost of his integrity. For, he knows that his dependants would suffer immensely if he does not accept the lesser wage. Any act, of paying less wages, as compared to others similarly situated, constitutes an act of exploitative enslavement, emerging out of a domineering position. Undoubtedly, the action is oppressive, suppressive and coercive, as it compels involuntary subjugation.”

The judgment not only highlighted the exploitative nature of such employment but reminded the state that it is a signatory to the 1966 International Covenant on Economic, Social and Cultural Rights. The covenant calls upon state parties to “recognise the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular, remuneration which provides all workers, as a minimum, with fair wages and equal remuneration for work of equal value without distinction of any kind…”.

India ratified this covenant on April 10, 1979. “There is no escape from the above obligation, in view of different provisions of the Constitution and in view of the law declared by this court under Article 141 of the Constitution of India, the principle of ‘equal pay for equal work’ constitutes a clear and unambiguous right and is vested in every employee—whether engaged on regular or temporary basis,” ruled the bench.

The order was the culmination of protracted legal and juridical proceedings in the Punjab and Haryana High Court that began in the late 1980s. The Supreme Court entered the picture only in 2013. The matter of wage parity pertinent to this particular judgment had been hanging fire since 1988 in the High Court. It all began after a single judge of the High Court directed the State (CWP no. 1536 of 1988, decided on February 5, 2003) to pay the writ petitioners—daily wagers who were working as pump operators, fitters, helpers, drivers, plumbers, chowkidars, and so on—the minimum of the pay scale, revised from time to time, with permissible allowances that were being paid to similarly placed regular employees. The single judge order also directed the State government to pay them wage arrears, limited to a period of three years.

A division bench of the High Court in 2009 ( State of Punjab &Ors vs Rajinder Singh &Ors) set aside in an intra-court appeal the order of the single judge and held that temporary employees were not entitled to the minimum of the pay scale that was being paid to “similarly placed regular employees”.

Another division bench of the same High Court ( State of Punjab &Orsvs Rajinder Kumar) in 2010 set aside an intra-court appeal against the judgment of the single judge and affirmed the decision of the single judge in Rajinder Singh & Ors. The Supreme Court judges observed that the earlier judgment had not been noticed by the later bench. A conflict of views arose and then the case was referred for adjudication to a larger bench on May 11, 2011. A full bench of the High Court, which took up the matter, accepted in its order that the workers were entitled to the minimum of the regular pay, subject to certain conditions. Its conclusion was that temporary employees did not become entitled to the minimum of the regular pay scale simply because the work they did was similar to that done by “regular” workers. This order was challenged in the Supreme Court.

On its part, the Supreme Court, in its October 26 order, disagreed with the manner in which the full bench had arrived at its decision. Justices Khehar and Bobde observed that the government counsel had acknowledged that the temporary employees in the cases under appeal were appointed against posts that were available in the regular cadre/establishment. The government counsel also accepted that the employees were being randomly deputed to discharge duties and responsibilities that were assigned to regular employees.

The Supreme Court bench relied on past judgments of the apex court wherein the principle of equal pay for equal work had been upheld and some others where it had not been. In Randhir Singh vs Union of India (1982 1 SCC 618), which was decided by a three-judge bench, the petitioner, a driver with the New Delhi Police, demanded that he should be placed in the same scale of pay as other drivers in government organisations in New Delhi. His contention was that his duties were the same. In this case, the court held that the fact that employees were engaged in different departments was not a sufficient reason to justify different pay scales, especially if their powers, duties and responsibilities were identical.

It concluded that the principle of “equal pay for equal work”, which meant equal pay for everyone irrespective of sex, was deducible from the Preamble and Articles 14, 16 and 39 (d) of the Constitution. In 1983, a five-judge Constitution Bench, while affirming the principle of “equal pay for equal work” extended it to pensionary entitlements as well. In yet another case, in 1988, a two-judge bench decided that the principle could not be “translated into a mathematical formula” and declined the prayer of the petitioners.

The significant part of the October 26 judgment is that it has come at a time when the impermanence of employment and the trend of classifying workers as “temporary” or “casual” have been on the rise. Even so, there have been controversial amendments recently to laws, such as the amendment to the Apprenticeship Act that allows employers to keep a large proportion of their workforce as apprentices for unspecified durations even if those apprentices are qualified and discharge duties at the same level of competence as their non-apprentice “regular’ counterparts. It is the spirit of the judgment that stands out. It relies on references to previous judgments where claims for pay parity raised by temporary employees were settled in favour of such workers. In one such instance (the Dhirendra Chamoli case), the court observed that “the action of not paying the same wage, despite the work being the same, was considered violative of Article 14 of the Constitution”. It was held that the action “amounted to exploitation—in a welfare state committed to a socialist pattern of society”.

Rooted in reality

In another instance, ruling on a claim for equal wages, the court had ruled that criteria such as the duration for which an employee had been engaged and the manner of his/her selection and appointment made no difference. The only relevant criteria were whether the employee was discharging similar duties and responsibilities as regular employees were and whether he or she possessed the qualifications prescribed for the post.

The October 26 judgment, therefore, stated that “the legal position relating to temporary employees, which has been repeatedly declared, is being reiterated by us, again”. The judgment is rooted in the realities of today’s India.

Trade unions have welcomed the judgment. The Centre of Indian Trade Unions (CITU) pointed out that the issue of denial of same wage for the same kind of work was raised at every tripartite forum, especially the Indian Labour Conferences (ILCs). Despite the existence of the Equal Remuneration Act, which, a trade union leader clarified, had to do with non-discrimination against women workers, the provision for equal pay for similar work was not implemented anywhere. In 2009 and in 2010, the ILC had agreed to amend the Contract Labour (Abolition and Regulation) Act to ensure same wage for same work and similar jobs. The 46th ILC in 2015 reiterated this commitment. Representatives of the CITU and other central trade unions feel that with the Supreme Court order, all ambiguities regarding the principle of equal pay for equal work have been settled and that the government should, therefore, ensure the implementation of the judgment and amend the Contract Labour Act accordingly. A.K. Padmanabhan, president of the CITU, told Frontline that the Supreme Court order had statutory status. “The amendment to the Contract Act is awaiting Parliament’s approval. The public sector has become a model of exploitation. There are contract workers in the Labour Ministry. The government should ensure that the Supreme Court’s order is implemented in both the public and the private sector,” he said.

Concerns about wage disparities are not confined to India. The Organisation for Economic Cooperation and Development, in a 2015-report on inequality, pointed out that much of the job creation in its 34 member countries since the mid 1990s was “non-standard” vis-a-vis more secure and standard jobs. Compared with permanent workers, such temporary workers faced “wage penalties, earnings instability and slower wage growth”. The zero-hour contracts in the United Kingdom, in which employees are entitled only to the minimum wage and no other benefits, including sick leave, have been a burning issue. While the bulk of such work is in the private sector, the public sector, particularly the health care services, are also using such contracts. The issue of gender discrimination in wages is also gaining traction in some countries in Europe such as France, the U.K. (which has a four-decade-old Equal Pay Act) and Iceland.

It has been globally recognised that non-formal types of employment are on the rise, and bodies such as the International Labour Organisation, taking cognisance of this phenomenon, have urged employers to make the transition from non-formal to formal types of employment. Rising industrial unrest is one of the reasons for this concern.

While the unorganised and the private sectors are notorious for flouting the principle of natural justice in the matter of equal pay for equal work, such violations have far greater ramifications when government departments opt for such employment on a large scale, ostensibly to reduce their financial burden. This has been a dominant characteristic of neoliberal economic policies for the last two and a half decades that subtly and overtly advocate flexibility in the labour market to make it easy to hire and fire. Temporary, casual, ad hoc, daily wage and contract employees are the easiest to fire, and more so in an environment that legitimises and encourages the “ease of doing business” to the detriment of everything else.

The Supreme Court judgment in this context has come as a much-needed relief. The onus of its implementation, however, lies with the Central and State governments.

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