Fix minimum wage with provisions of indexation – Item No.5 Charter of Demands

Fix minimum wage with provisions of indexation – Item No.5 Charter of Demands

Item No.5.

Fix minimum wage with provisions of indexation.

(i) Effect wage revision of the Central Government Employees from 01.01.2014 accepting memorandum of the staff side JCM; ensure 5-year wage revision in future; grant interim relief and merger of 100% of DA; Include Gramin Dak Sevaks within the ambit of 7th CPC. Settle all anomalies of 6th CPC.

The 7th CPC was set up in 2013 by the then Government consequent upon the continuous struggles undertaken by the Central Government under the leadership of the Confederation of Central Government employees and workers. Under its banner various struggles were carried out from December, 2010 till the announcement of the setting up of the 7th CPC. During this period, the Confederation organized one day strike on 12th December, 2012 and again two day strike action on12th and 13th February, 2014. As per the terms of reference, the Commission is to submit its report within 18 months. If they abide by the stipulated time frame, its report must be available by the end of August, 2015. In this context, the formulation made before the Commission untidily by all organizations of the Central Government, especially those participating in the National negotiating forum of JCM is worth reproducing.

All previous Pay Commissions were of the opinion that wages cannot be determined on any single principle but has to be based upon a combination of all the enunciated principles or those principles are to be factored into the process of quantification. Since the Government as an employer had not been able to grant the need based minimum wage to its own employees till date we are of the opinion that the 7th CPC must endeavour to compute the wage structure on 15th ILC norms. We suggested two other principles to be factored in to the quantification of pay beyond the minimum level. We enumerate hereunder the factors to be taken into account:

1) The Need-Based Minimum Wage concept to compute pay at the minimum level.

2) The intrinsic value of the job content of each grade and post at the intermediary level to be assessed by an expert committee. Pending finalization of such a study, the Commission may maintain the presently existing vertical and horizontal relativities.

3) To take into account the outside rates to determine the pay package at senior levels of bureaucracy but maintain the ratio between the minimum and maximum at 1 : 8 (MTS: Secretary to Govt. of India).

We make the above suggestion, being just and reasonable on the following grounds:

1. The Fair Wage Committee has held that an industry which is incapable of paying minimum wage has no justify to exist.

2. 86% of Central Government Employees are industrial or operational workers.

3. The need based minimum wage concept formulated by Dr. Aykhroyd and approved by 15 ILC was considered the most important principle in computing salary of Government employment especially of those lower level functionaries, by the 2nd, 3rd, 4th and 6th CPC.

4. It is only the fear of a heavy financial implication and the incapacity of the Indian economy at the relevant point of time, to meet the extra expenses the 2nd, 3rd and 4th CPCs were constrained to alter the formula itself with the opinion of certain nutritional experts. The legitimacy provided to Dr. Aykhroyd formula by the 15th ILC (in which the representative of Labour, Employers and Government participated) was not available for any other conceptual frame work proposed by any other “experts”. The 4th Pay Commission cited the per capita net national product increase over the years to justify lower minimum wage than what could have been as per the ILC norms. It could be seen that the earlier Pay Commissions had adopted a different principle other than the Dr. Aykhroyd formula due to financial constraints.

5. Despite elaborately detailing the concept of living wage and the amendment to the preamble of the Indian Constitution, the 4th CPC stated that the per capita net national income increase if factored would not allow them to fix the minimum wage at a higher level than Rs.750/-.

6. Even though no specific reference on the adoption of the concept of need based minimum wage was made by the Government, the 5th CPC did dwell upon it. They advocated that the 25% addition suggested by the Supreme Court to enable the worker to meet the expenses, viz., children education, medical requirements, social obligation connected with festivals, marriages, etc. must be added to arrive at the minimum wage. However, they computed the minimum wage discarding the same principle but made the percentage increase of the per capita net national product over a period of ten years as the base (or the constant relative income criterion as the most equitable norm). In order to arrive at the minimum pay, the Commission added 30.9% over the emoluments of a lowest paid employee as on 1.1.1996.

7. The 6th CPC adopted the 15th ILC norms to compute the minimum wage but made several changes to the concept Viz., the retail prices of the commodities, which goes into the reckoning was altered; the stipulated 10% for housing and 25% for social obligations, medical, children education, etc. were discarded on the plea that separate allowances had been granted. Dr. Aykhroyd had factored 7.5% as housing component in the computation of minimum wage. The question of incorporating the cost of requirement for medical, education and other social obligation was the subject matter of litigation before the Supreme Court. The Hon’ble Court directed that 25% of the minimum wage so computed must be added as a factor for the above requirement of a worker, which had not been taken into account by the ILC norms.

The contention of the 6th CPC that since children education allowance, Medical and house rent allowances are specially granted to the Central Govt. employees, the same must be taken out of the reckoning is not only wrong but also amounts to contradiction of a stand taken by the Highest judiciary of the country- Supreme Court. The 6th CPC has failed to take note of the fact that the allowances, be it HRA, Children Education allowance or Medial, granted are awfully insufficient to meet the requisite expenses. Had it not been the case, the 3rd CPC also ought to have taken the similar stand adopted by the 6th CPC. The computation appearing in page No. 60, Chapter 6 (3rd CPC report) establishes our view in the matter.

We have given in Table (.5.1..) the computation of minimum wage as per 15th ILC norms. The retail prices of the commodities/articles are the average of the retail prices ruling as on 1.1.2011 at the following cities:
1. New Delhi,2 Mumbai, 3. Chennai, 4. Kolkata, 5 Hyderabad, 6. Bhubaneswar, 7. Thiruvananthapuram, 8. Bangalore.

The minimum wage as per our computation works out to Rs.20,856/-. This must be the minimum wage for the unskilled worker as per the ILC norms. In Central Government employment presently there is no unskilled labour. The lowest level of employment is multiskilled worker/employees. The minimum educational qualification prescribed is either ITI or matriculation (10th Standard). The percentage increase of the wages of a skilled worker to that of an unskilled worker on an average had been more than 25% all throughout. We have therefore added 25% to arrive at the minimum pay for the lowest employee in Government service, which comes to Rs. 26,071/- , i.e. Rs. 26,000/- when rounded off.

Incidentally, we may mention that the minimum wages at the level of an unskilled worker as per recent wage agreement in Coal India Ltd. Is Rs.29697/-. The per-capita Net National Product increase at factor cost between – (2004-05 – 2011-12) years as per the Economic Survey for 2012-13 presented to Parliament is 57.55..%. This, if applied to the present wage at the lowest level shall work out to Rs.22857/-. For the reasons stated in the preceding paragraphs and more specifically for the reason that the Government has presently the capacity to pay as detailed in this memorandum, we request the 7th CPC to recommend the minimum pay to be assigned to the lowest level of Group C functionary in Government of India service at Rs. 26,000/-.

Another important issue, we took with the Government was the inclusion of the Grameen Dak Sewaks of the Postal Department within the ambit of the consideration of the 7th CPC. The Government did not concede our demand. The Postal Department had been objecting to this demand consistently on the plea that the Grameen Dak Sewaks were not civil servants. They had, therefore, resorted to setting up separate committees to consider the service conditions and wage rise of the Extra Departmental Agents, or Grameen Dak Sewaks. It must be stated with some satisfaction that during the negotiation that took place with the organizations of the Postal employees on the eve of the commencement of the indefinite strike action, the Postal Department had to agree to recommend the acceptance of this demand to the Government, though belatedly.

Despite the said belated suggestion made by the Postal authorities, there had been no positive response from the Government of India till date with the result the GDS, a significant segment of the Postal Department will be denied the wage revision along with the other Central Government employees, if immediate steps are not taken by the Government to ask the Commission to consider their case within a stipulated time. We give hereunder the reasons we have advanced for inclusion of GDS within the purview of the 7th CPC.

Grameen Dak Sewaks constitutes the single largest chunk of the postal workforce. Without them perhaps the rural postal system in the country will break down. The dedicated service of the Grameen Dak Sewaks keeps the postal department operational throughout the year.The system of Extra Departmental Agency was introduced by the colonial British rulers to reduce the running expenses of the postal system in the country. The exploitative system continued even after independence. By excluding the Gramin Dak Sewaks from the purview of inquiry of the Pay Commission, the Government wanted the system to continue as a means to reduce the running expenses of the Postal Department. The exclusion is sought to be made on the specious plea that the GDS are not Civil Servants.

The Government’s contention on this score had been the subject matter of judicial scrutiny. The Honourable Supreme Court has held that the Extra Departmental Agents are holders of Civil post. The 4th Central Pay Commission also held the same view and asserted that their service conditions must be inquired into by the Pay Commission. However, when the 5th CPC is constituted, Government set up a Committee under Justice Talwar to look into their case. The Government did not implement many of the recommendations of the Talwar Committee. It is in this context we plead that the Gramin Dak Sewaks must be brought within the purview of the 7th Central Pay Commission and justice rendered to them.

Source: Confederation