Project Work- Group 3

Submitted by: -

Arundhati Pandey - 21084

Dhruv Uppal- 21021

Prashant Verma - 21110

Sakshi Raj- 21048

Sweta Kumari - 21129

Tripti Singh- 21062

 Wage Boards – Introduction

The wage boards are tripartite in character having representatives of

workers, employers, and independent members participate and
finalize the recommendations. The utility of such boards in the present
context is debatable. Except for the wage boards for journalists and
non-journalist newspaper and news-agency employees, which are
statutory wage boards, all other wage boards are non-statutory in
nature. Therefore, recommendations made by these wage boards are
not enforceable under the law.

After independence, for about two decades, the organized labor sector
was at a nascent stage of its development without adequate
unionization. Trade unions were not as powerful as they are now, and
unions had inadequate bargaining power. The government, aware of
the problems which arise in the arena of wage fixation due to the
absence of bargaining power, constituted various wage boards.
 Significance/Impact of Wage Boards

To curb the problem that come up with regard to wage fixation on the basis
of various reasons the government of India formed various wage boards

The first wage board was set up in 1957 in the Cotton Textile Industry.
Following this, Wage Boards were set up for working journalists,
sugar, cement, jute, tea plantation, rubber and coffee, coal mining,
iron and steel, road transportation and electricity undertakings.

Wage Boards – Objectives

To achieve the following objectives the Wage Board was

set-up:

1. To align the wage settlements with the social and economic policies
of the Government.

2. To represent consumers/public interests.

3. To standardize wage structure throughout the industry concerned.

4. To provide a better climate for industrial relations.

5. To work out wage structure based on the principles of fair wages as

formulated by the Committee on Fair Wages,

6. To work out a system of payment by results.

7. To evolve a wage structure based on the requirements of social

justice.

8. To evolve a wage structure based on the need for adjusting wage

differentials in a manner to provide incentives to workers for
advancing their skill.

Structure of Wage Boards

The structure of a wage board constitutes the Chairperson, an equal

number of representatives of employers and employees (two members
each) and two other independent members (an economist and a
consumer’s representative) nominated by the Board.

The Chairman shall be appointed by the Appropriate Government in

consultation with the Chief Justice of the High Court concerned or
Supreme Court of India, as the case may be. An eligible person who is
or has been or is eligible to be appointed as a Judge of the High Court
shall be qualified for appointment as the Chairman.

It has been the practice to nominate a Member of the Parliament to

represent the interests of the consumer/ public. The members
representing the employees shall be appointed by the Appropriate
Government on the recommendation of the most representative
organizations of the employees for the further proceedings.

The wage boards while determining the wage

structure for a particular industry, uses the
following factors:

(i) Need-based minimum wage

(ii) Industry’s capacity to pay

(iii) Productivity of labor

(iv) Prevailing rates of wages

(v) Level of national income and its distribution

(vi) Place of industry in the economy of the country

(vii) Needs of industry in developing economy

(viii) Requirements of social justice; and

(ix) Adjustment of wage differentials in such a manner as to provide

incentives for skill formation

The wage boards do not use job evaluation as the basis for refixation of
existing wage structure. The argument is that the existing wage
differentials have been determined by custom and usage, local
circumstances, experience in working over a number of years, awards
and agreements, etc., which would be disturbed by job evaluation.

Thus the wage differentials have remained limited to – (a)

standardization of occupational nomenclature, and (b) classification of
various occupations into different types and fixing wage rates for each
of these occupations. However, this has resulted in different wages for
the same skills in different industries.

It is suggested that the Wage Boards should, as far as possible, use job
evaluation as the basis for determining the wage structure in an
industry and at the same time should keep in view the prevailing
practices in neighboring industries.
 WAGE BOARD IN INDIA

The Government of India constituted six wage boards, Majithia Wage

Boards one for working journalists and other for non-journalists
newspaper employees in 2007 as sixth Wage Board under the
Chairmanship of Justice Majithia as per the provisions of The Working
Journalists and Other Newspaper Employees (Conditions of Service) and
Miscellaneous Provisions Act, 1955. The Majithia Wage Boards
submitted their final report to the Government of India on 31st Dec.,
2010.

Since 1955, the government has constituted 6 wage boards at regular

intervals for the working journalists and non-journalist newspaper
employees. The following table gives the details of the constitution of
wage boards: -
 Majithia Wage Boards

● The Government accepted the recommendations of the Majithia

Wage Boards and accordingly notified it vide S.O. No. 2532(E)
dated 11/11/2011. In addition 11 other Writ Petitions have also
been filed upto Sept., 2012 before the Hon’ble Supreme Court by
the different employers of newspaper industry regarding
constitutional validity of the Wage Boards and not to implement
the recommendations of the Majithia Wage Boards.

Recommendations of the Majithia Wage Boards for Working

Journalists and Non– Journalist Newspaper Employees in
Newspaper Establishments: -

Short title and commencement: (1) These recommendations may be

called the Majithia Wage Board Award.

(1) "Act" means the Working Journalist and other Newspaper

Employees (Conditions of Service) and Miscellaneous Provisions Act,
1955 (XLV of 1955)

(2) "Accounting year" used with reference to a particular year shall in

the case of newspaper establishment mean financial year, the year
commencing on the first day of April. In case, however, the accounting
year of a newspaper establishment is different from the financial year,
it shall mean that the accounting year of the establishment, of which
more than half falls in the particular financial year. In the case of the
newspaper establishment whose accounting year starts from the 1st
day of October, the accounting year would be that year in which the
first six months fall. Illustration – If the accounting year of a
newspaper establishment starts from 1st day of January, 2009,
reference to the accounting year 2009 in this Award shall be construed
as reference to accounting year 2009-10. Again, if the accounting year
of the newspaper establishment starts from 1 st day of October,
reference to accounting year 2009 in this Award will be construed as
reference to the accounting year 2009-10 of that establishment.

(3) "Basic wage" means wages drawn in the prescribed scale of wages,
including stagnation increment, if any, but does not include any other
type of wages or pay, like special pay, personal pay, etc. 11

(4) 'Category' means any of those newspaper employees mentioned

under the groups set out in this Award.

5) “Gross Revenue” of a newspaper establishment (other than news

agency) means the total revenue derived by the establishment from all
sources of its newspaper business, including circulation and
advertisement in its newspaper or newspapers, and also include the
income from the assets acquired and investments made by it out of
funds earned in the newspaper business. Explanation – For the
purpose of this clause, (i) The revenue in respect of circulation and
advertisement shall be taken to be the amount arrived at after
deducting the commission actually allowed to the extent to which the
amount of commission so allowed is reasonable. (ii) Reasonable
commission is one which is finally accepted by the Income Tax
Authorities in case of a particular newspaper establishment. In cases,
where no such final decision of the Income Tax Authorities is
available, the circulation commission shall be 28 percent and the
advertisement commission shall be 15 percent of the respective
revenues.

(6) "Newspaper employee" means working journalist, or

non-journalist newspaper employee, or both.

(7) “Change of ownership” – If the ownership of the newspaper

establishment is transferred by one person to another, the provisions
of paras 3 and 4 of this Chapter shall apply to such newspaper
establishment as if the gross revenue of the newspaper establishment
for the relevant accounting years under the previous owner were it
 Challenges faced by Majithia Wage Board
Recommendation

https://www.thehindu.com/news/national/journalists-wage-board-after-sc
-direction-govt/article2318854.ece

The Supreme Court had on July 18 asked the central government

not to go ahead with the implementation of the recommendations of
Justice Majithia Wage Boards for the next two weeks.

The direction was issued in the course of the hearing of a petition

by the Anandabazar Patrika media group, which had challenged the
recommendations.

Raising the question, MP Achuthan (CPI) said arguments against

wage board recommendations were “unjustified and without basis.”
 Solution of Majithia Wage Board: -

https://www.business-standard.com/article/news-ani/sc-rules-in-favour-o
f-employees-in-majithia-wage-board-dispute-117061900702_1.html

The judgment by Chief Justice P. Sathasivam on behalf of a three-member

bench said the concept of 'variable pay' contained in the recommendations of
the Sixth Central Pay Commission has been incorporated into the Wage
Board recommendations to ensure that the wages of the newspaper
employees are on a par with employees of other sectors.

Such incorporation was made by the Majithia Wage Board after careful
consideration, in order to ensure equitable treatment to employees of
newspaper establishments, and it was well within its rights to do so.
 Challenges Faced by Wage Boards

The wage boards have, however, been criticized on the

following counts in general since its inception: -

i.) The recommendations of the Boards have no legal sanction so that

th

ii.) Very often the recommendations of the Boards are results of

compromise decisions and cannot therefore become consistent long
range wage policy.

iii.) When the Government has to legislate for giving effect to the
recommendations of a Board, as it happened in the case of the Textile
Board award, the element of compulsion is brought back, and that
militates against the very spirit of such boards.

iv.) Since the members of the Boards are not always the true
representatives of the employers and workers, individual units are led
to doubt the bona fides of the members.

v.) The Boards often make recommendations on an all-India basis,

with the result that at times the special problems relating to any
particular region may be ignored.

vi.) The time lag between the making of the recommendations and
their implementation is generally very great.
Some people have suggested that Wage Boards should be made statutory bodies. They
can probably be used as potent agencies for collective bargaining in units which are in
favor of this method of wage fixation.

Implementation of Wage Boards in India

● The first meeting of the Central level Monitoring Committee was

held on 24/9/2012 at Hyderabad. The meeting was attended by
the officers from the States of Tamil Nadu, Karnataka, Kerala
and Andhra Pradesh.
● The second meeting of the Central Level Monitoring committee
was held on 13/9/2013 at Bhubaneswar to review the status of
implementation of the Wage Board Awards in respect of 5
Eastern States, namely Bihar, Chhattisgarh, West Bengal,
Jharkhand and Odisha.
● The third meeting was held at Mumbai (Maharashtra) on
21.4.2014 for Western Region covering 7 States/ UTs viz.
Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Goa, Dadra
& Nagar Haveli and Daman & Diu.
● The 4th meeting of CLMC was held in Delhi (Shram Shakti
Bhawan) on 10.6.2014 in respect of 8 Northern States/ UTs. Viz.
Jammu & Kashmir, Himachal Pradesh, Uttrakhand, Uttar
Pradesh, Haryana, Punjab, Chandigarh and NCT of Delhi.
● The 5th meeting of CLMC was held in Guwahati on 2nd July,
.2014 in respect of Northern Eastern States/ UTs. Viz. Sikkim,
Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,
Nagaland and Tripura.
● The 6th meeting of CLMC was held in Raipur, Chhatisgarh on
27th August, 2014 covering the States of Bihar, Chhattisgarh,
Jharkhand, Madhya Pradesh and Odisha. The 7th meeting of
CLMC was held in Delhi on 16.10.2015 in respect of all the
States/UTs ( attended by the representatives of the States/UTs of
Delhi, Chhattisgarh, Jharkhand, Uttar Pradesh, Tamil Nadu,
Himachal Pradesh, Rajasthan, Punjab, Maharashtra , Meghalaya,
Asssam, Uttrakhand, Telangana, Goa, Kerala, Haryana, Madhya
Pradesh, Karnataka, Bihar, Gujarat) to expedite the
implementation of the recommendations of the Wage Boards for
working journalists and other newspaper employees working in
the country
 Cont:

➔ Since the primary responsibility for implementation of the

recommendations lies with the State Governments / UTs., a copy
of the notification (both Hindi & English) was forwarded to all
the State Governments / UTs vide this Ministry’s letter dated
24/11/2011. In order to monitor the implementation of the
notification, a Central Level Monitoring Committee has been set
up under the Chairmanship of Principal Labour and
Employment Adviser with Joint Secretary, Ministry of
Information and Broadcasting & Chief Labour Commissioner
(Central) as Members and Dy. Director General as Member
Secretary. An Order dated 24.4.2012 of the Ministry of Labor &
Employment regarding the constitution of the Tripartite
Monitoring Committee has been sent to all the Members of the
Committee with a copy to all Labor Secretaries of States / UTs.
 Conclusion: -

The composition of wage boards is as a rule tripartite, representing the

interests of labor, Management and Public. Labor and management
representatives are nominated in equal numbers by the government, with
consultation and consent of major Central Organizations.

These boards are chaired by government nominated members representing

the public. Wage board function industry-wise with broad terms of reference,
which include recommending the minimum wage differential, cost of living,
compensation, regional wage differentials, gratuity, hours of work etc.
 References

https://www.mbaknol.com/human-resource-management/wage-boards-in
-compensation-management/

https://www.ukessays.com/essays/business/growth-and-development-of-w
age-boards-business-essay.php