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These issues are very difficult to decide. Moreover, since the cost
of living varies with the price level, it follows that this index
should be periodically reviewed and modified.
However, the principles for determining minimum wages were
evolved by the Government and have been incorporated in the
Minimum Wages Act, 1948, the important principle being that
minimum wages should provide not only for the bare sustenance of life but also for the preservation of the efficiency of
the workers by way of education, medical care and other
amenities.
Living Wage
This wage was recommended by the Committee as a fair wage
and as ultimate goal in a wage policy. It defined a Living Wage as
one which should enable the earner to provide for himself and
his family not only the bare essentials of food, clothing and
shelter but a measure of frugal comfort, including education for
his children, protection against ill-health, requirements of
essential social needs and a measure of insurance against the
more important misfortunes, including old age.
In other words, a living wage was to provide for a standard of
living that would ensure good health for the worker, and his
family as well as a measure of decency, comfort~ education for
his children, and protection against misfortunes. This obviously
implied a high level of living.
Such a wage was so determined by keeping in view the national
income, and the capacity to pay of an industry. The Committee
was of the opinion that although the provision of a living
wage should be the ultimate goal, the present level of national
income did not permit of the payment of a living wage on the
basis of the standards prevalent in more advanced countries.
A Minimum Wage
It has been defined by the Committee as the wage, which
must provide not only for the bare sustenance of life, but for
the preservation of the efficiency of the worker. For this
purpose, the minimum wage must provide for some measure
of education, medical requirements and amenities.
11.622.1
Fair Wage
According to the Committee on Fair Wages, it is the wage
which is above the minimum wage but below the living wage.
The lower limit of the fair wage is obviously the minimum
wage; the upper limit is set by the capacity of the industry to
pay.
57
COMPENSATITION MANAGEMENT
LESSON 9:
INTRODUCTION TO MINIMUM, FAIR AND LIVING WAGE
COMPENSATITION MANAGEMENT
Labour Bureau
Government of
India
Report
Onevaluation studies on
implementation of The minimum
wages act, 1948
In bidi making establishments in
Madhya pradesh
11.622.1
The wage loss due to rejection should not be more than 2.5
percent instead of 5 percent.
Alternatively, the rejected bidis should be returned to workers
after deducting proportionate cost of tendu leaf and tobacco
issued to them at the rates to be fixed by the State Governments from time to time alongwith wages.
The State Governments as well as Welfare Commissioners have
been requested to give wide publicity to the statutory provisions
of the Bidi and Cigar Workers (Conditions of Employment)
Act, 1966, pertaining to rejection of not more than 2.5 percent
bidis of sub-standard quality and ensure that employer/
Contractor supplies tendu leaf of the optimum quality to the
workers. *
* Annual Report 1999-2000, Ministry of Labour, Government
of India,
5.2 Prescribed Rates of Minimum Wages
Tobacco (including bidi making) Manufactories is a Scheduled
Employment originally included in Part-I of the Schedule
appended to the Act. The minimum wages applicable to the
bidi workers at the time of the Study were notified by the State
Government of Madhya Pradesh as provided under Section
3(1)(b) and Section 5 of the Minimum Wages Act, 1948.Prior to
1953, Minimum Wages were fixed at Re. 0.62 to Rs. 1.37 per
thousand bidis.
These wages were revised to Rs. 2.00-2.25 for the first time in
1966.Since then they have been revised several times. The latest
wage revision, which was in force at the time of the study, had
become effective from 1st October, 2000 vide notification No.
1/9/A/5/97/32759-33288 dated 12-10-2000.
The minimum rates of wages for various categories of
employees in Tobacco (including Bidi Making) Manufactories
appearing in Part I of the Schedule were linked to the Consumer Price Index Numbers (Industrial Workers).The revised
rates of minimum wages applicable during the period of study
are given below:Prescribed Minimum rates ofWages for piece rated employees
Class of Employees
Minimum Wages ( in Rs.)
1. Bidi Rolling
36.17(per thousand bidis)
2. Wrapping/Packing/Labelling
Rs. 19.65 per thousand bundles
(a) Pasting of Slips on bidi bundles
Rs. 22.00 perthousand bundles
(i) Labelling, Puda Making etc.
Rs. 15.85 per thousand bundles
(ii) Labelling on both sides of bundles
Rs. 11.26 per thousand bundles
(b) Wrapping and Labelling
Rs.4.76 per thousand bundles
(i) Thin paper labelling
Rs.5.01 perthousand bundles
(ii)Thin paper sticking
Rs. 68.35 perlakh bidis
(iii)Labelling
Rs. 81.05 perlakh bidis
(iv)Puda Making
Rs. 81.05 per lakh bidis
( c) Wrapping on 1000 bundle (each
bundle of 25 bidis)
(i) Wrapping of Horizontal & Vertical
Strips
(ii)Wrapping/Pasting of paper
(iii)Wrapping and Pasting of Trade Mark
11.622.1
Puda
Maker
and
Skill Category
1.
2.
3.
Skilled
Semi-Skilled
Unskilled.
Monthly
Wages (Rs.)
1995.44
1828.30
1662.80
Daily Wages
(Rs.)
76.75
70.32
63.95
59
COMPENSATITION MANAGEMENT
COMPENSATITION MANAGEMENT
Stratum/ District
Stratum I
Sagar
Stratum II
Jabalpur, Satna
Stratum III
Gwalior, Datiya and Vidisha
Stratum IV
Balaghat
Stratum V
Bhopal, Indore, Devas,
Ujjain& Hoshangabad
2
3
4
5
All Strata
82.6
19.2
80.8
24.1
75.9
20.8
79.2
18.5
81.5
Categories of Employees
1.
Wrapper/Labeller/Packer
2.
Taraiwala (Sorter)/Checker
3.
Furnaceman (Bhattiwala)
4.
Clerk
5.
Raw Material Distributor
6.
Bidi Roller
All Categories
60
Percentage of Employees
paid on the basis of
Time-rate
Piece-rate
100.0
100.0
100.0
100.0
100.0
100.0
18.5
81.5
Categories of Employees
1
2
Wrapper/Labeller/Packer
Taraiwala
(Sorter)/
Checker
Furnaceman (Bhattiwala)
Clerk
Raw Material Distributor
3
4
5.
6
Bidi Roller
All Categories
100.0
100.0
26.5
100.0
73.5
100.0
100.0
5.4.2 It will be seen from the Table that all the factory workers
and office staff viz., Wrappers, Labellers, Raw Material Distributors, and Clerical Staff, etc., were paid on monthly basis.On the
other hand all the Bidi Rollers were paid on weekly basis.
As such the overall proportion of bidi employees paid on
weekly basis worked out to 73.5 percent, as against 26.5 percent
of other workers who were receiving wages on monthly basis.It
was observed that in operations like bidi rolling, wages were
calculated on the basis of daily production and payments were
made on weekly basis or adjusted on a monthly basis.
It was also observed that because of these adjustments after a
week or a month, the Bidi Rollers did not have a clear idea
about their actual earnings.
5.5 Hours of Work
The working hours in the Scheduled Employment Tobacco
(including Bidi Making) Manufactories are governed by the Bidi
and Cigar Workers (Conditions of Employment) Act, 1966.The
Act restricts the hours of work to nine per day and forty eight
per week with a maximum spread over of 10.30 hours per day.
Under the Act no employee can be made to work beyond five
hours without a rest interval of at least half an hour. An adult
employee can work in excess of the prescribed hours of work
subject to the payment of over time wage rate. However, the
period of work should not exceed 10 hours in a day and 54
hours in a week, inclusive of overtime work.
The payment for overtime work has to be made at twice the
ordinary rate of the wages or the average daily full time earnings
in case of piece rate workers. The Minimum Wages Act, 1948 on
the other hand only provides for fixation of normal hours of
work, a weekly day of rest and payment of overtime wages in
the Scheduled Employments by appropriate Government.
However, all these and similar provisions of the Act are of little
consequence to a major proportion of the employees in this
industry comprised of a sizeable number of Bidi Rollers who
roll bidis within the four walls of their houses.
11.622.1
Sl.
No.
1
2
3
4.
5
11.622.1
Categories
Wrapper, Labeller,
Packers.
Taraiwala/Sorter/
Checker
Furnaceman
(Bhattiwala)
Raw
Material
Distributor
Clerk
All Categories
5.6.2.2 The above table reveals that the average daily earnings
of Clerks were Rs. 89.32 per day, far above the prescribed wages
in the Trade Mark Establishments, in keeping with the requirements of management and responsibilities assigned to
them.For the purpose of the study, Managers have been
clubbed with the clerks because wages had not been notified for
the managerial staff.
The average daily earnings of Clerks worked out to be the
highest (Rs.122.60) in Stratum III and the lowest (Rs.76.71 per
day) in Stratum II.Overall average daily earnings of Raw
Material Distributors and Furnacemen worked out to Rs. 61.62
and Rs. 67.96 respectively.The average earnings of Raw Material
Distributors were the lowest (Rs.57.69 per day) in Stratum III
which were attributed to low wage paid areas of Datiya and
Vidisha dominated by Contractors, Sattedars and Sub-Contractors.
They were not only distributing raw materials but also were
actively involved in collecting the bidis.Surprisingly, a system of
obtaining commission from the Bidi Rollers by the Sattedars to
compensate the low wages paid to them by the Trade Mark
Establishments and Contractors was in vogue.For piece rated
workers viz., Wrappers/Labellers/Packers the average daily
earnings worked out to Rs.62.33.
5.6.3 Bidi Rollers and Helpers
Stratum-III
62.67
Stratum-IV
65.22
Stratum V
50.53
All Strata
62.33
69.29
72.89
51.83
85.17
69.98
68.98
67.93
68.29
66.62
67.13
68.89
67.96
63.96
65.23
57.69
61.11
61.62
89.82
71.31
76.71
69.36
122.60
69.08
80.40
75.14
86.54
65.23
89.32
69.36
61
COMPENSATITION MANAGEMENT
COMPENSATITION MANAGEMENT
1
2
3
4
5
Bidi Rollers
Helping
Dependants
Overall
Stratum I
Sagar
Stratum II
Jabalpur,, Satna
Stratum III
Gwalior, Datiya and Vidisha
Stratum IV
Balaghat
Stratum V
Bhopal, Indore, Devas,
Ujjain&Hoshangabad
All Strata
20.36
14.21
17.77
24.76
19.52
22.31
26.16
20.99
23.76
18.88
17.17
18.01
20.46
14.66
18.00
22.04
16.62
17.88
EXHIBIT 8
The Bidi Rollers did not get regular employment in bidi making
establishments also.They had always remained an exploited lot
in the hands of petty Contractors who did not even keep the
records and registers of the Bidi Rollers.The employment
opportunities in agriculture had also not been encouraging
enough for the Bidi Rollers to lean on.
5.6.3.3 The above table also reveals that the average daily
earnings of the registered Bidi Rollers were substantially higher
than their helping dependants in all the Strata except Stratum
IV where it was marginally higher. It shows that these helping
dependants of Bidi Rollers made a significant contribution
towards the production of the bidi industry, yet they constituted a neglected lot, deprived of the benefits of various labour
laws. With the modern salesmanship entering the bidi industry
the margin of profit in the bidi industry is quite lucrative for the
brands established in the market. There is, therefore, an urgent
need for bringing this hidden work force under the labour laws
with a well defined employer-employee relationship for effective
enforcement of the minimum wage legislation.
5.6.3.2 It emerges from the Table that in all the five Strata the
wages paid were below the prescribed wage levels. The average
daily earnings of the Bidi Rollers worked out to Rs. 22.04 per
day. The average daily earnings were highest in Stratum III (Rs.
26.16 per day) followed by Stratum II (Rs. 24.76 per day),
Stratum V (Rs. 20.46 per day), Stratum I (Rs. 20.36 per day) and
the lowest in Stratum IV (Rs.18.88 per day).
In Stratum III the highest average daily earnings of Bidi Rollers
were attributed to the non-availability of Bidi Rollers ( whose
average daily earnings were lower than those of Bidi Workers) in
the districts of Gwalior, Datiya and Vidisha where the average
daily employment in the establishments was the lowest.
Moreover, in the absence of any trade unions the Bidi Rollers
were not strong enough to bargain for the prescribed wages.
The other important reasons for low earnings were malpractices
in matters of rejection of finished bidis on the ground of not
conforming to quality standards, issue of inadequate quantity
and poor quality of tendu leaf and tobacco by the employers or
their Contractors or agents.The workers in these areas accepted
whatever wages the employers gave.
62
11.622.1