The Code of Wages has introduced dynamic reformations on the remuneration structure and a significant transformation to the archaic Equal Remuneration Act, 1976.The Equal Remuneration Act, applied to limited set of “Workers”, and mandated equal remuneration to men and women workers. Essentially, this law prevented discrimination against women, where they are engaged in “same work or work of a similar nature “
The Code of Wages has expanded the scope of payment of equal
remuneration to extend the definition to
cover even supervisory and managerial personnel with inclusive norm- men –
women – third gender, as well. Section 3
of the Code mandates that there shall be no discrimination in an establishment
or any unit thereof among employees on the ground of gender in matters relating
to wages,,.. in respect of the same work or work of a similar nature
done by any employee. The definition “employee” includes supervisory,
managerial, administrative, technical or clerical work and there is no wage
ceiling for application of these provisions.
Remuneration – legal precept
vs CTC model.
The workmen/workers are usually paid as per norms prescribed
by law e.g., the Minimum Wages Act or a settlement agreed between employer and
the employee. As for supervisory /managerial cadre the established practice by
the industries are the CTC Model, whereby the components of an employee is a
result of negotiation, written down in their employment contract. In the CTC
Model, the capacity to negotiate by the aspirant is limited to the prior CTC as
well as the urgency for change of job
and other attendant reasons. In the CTC Model, in any organization its common that certain employees performing
the same role and operating out of the same region with other same or similar
criteria are paid varying CTCs. The moot concerns for the employer as well as
employees are that will this Code, when implemented can change the way the CTC
regime works! As the employers may be concerned about a significant impact in their
budgets and also their remuneration policy, the employees may look for a
handsome jump in their perks.
The principle of Equal Work Equal Pay would require
application of mind as to whether or not the concerned employees were similarly
situated and what was the precise nature of their work. Unless the relevant parameters
are identical, the doctrine of Equal
Work Equal Pay can’t be applied. The Principles
of ‘equal pay for equal work’ has been well enunciated by the Supreme Court, in State of Haryana vs. Jasmer Singh,
(1996) 11 SCC 77. The SC, inter alia, held that:-
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the
principle of equal pay for equal work is not easy to apply and that there are
inherent difficulties in comparing and evaluating the work of different persons
in different organizations or even in the same organization.
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the principle of "equal pay for equal
work" has no mechanical application in every case of similar work.
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Article 14 permits
reasonable classification based on qualities or characteristics of persons
recruited and grouped together, as against those who were left out; that these
qualities or characteristics must have a reasonable relation to the object
sought to be achieved.
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in service matters merit or experience can be a
proper basis for classification for the purposes of pay in order to promote
efficiency in administration.
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a higher pay scale to avoid stagnation or
resultant frustration for lack of promotional avenues is also an acceptable
reason for pay differentiation.
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even though persons may do the same work, their
quality of work may differ.
The prime objective of the Equal Remuneration Act and the
recent Wage Code, mainstays that there shall be no discrimination basis the
gender and all that any employer need to ensure is that wherever an employee of
diverse gender stands par on same work or work of a similar nature, basis the
well founded precepts. Therefore, it is imperative that the employers review
their remuneration policy thorough, either through their remuneration committee
or a reputed advisory and streamline the policy to harmonise with the law and
the unique special organisational needs. The word of caution which there could
be apt differentiation basis the above factors, there should be no scope for
discrimination basis gender.
As for MSMEs and any other organizations having employees at
minimum wage structures, they should ensure that the wage structure for men,
women & other genders should be harmonized in strict alignment, as the
structure ought to be based on skills sets classification (e.g., unskilled,
semi -skilled) and the wages itself being at base minimum levels.
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