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Minimum Wages and unsettled demand with 7th CPC – Item No. 5 – Explanatory Notes – Charter of Demands – All India Strike 2nd Sep, 2015

Minimum Wages and unsettled demand with 7th CPC –
Item No. 5 – Explanatory Notes – Charter of Demands – All India Strike 2nd Sep,

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
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
1. The Fair Wage Committee has held that an industry which is incapable of
paying minimum wage has no right 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 multi-skilled 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.
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.
(viii) No labour reforms which are inimical to the interest of the workers.
(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.
6. Stoppage of disinvestment in Central/State PSUs. . Stoppage of contractorisation in permanent perennial work and payment of same wage and benefits for contract workers as regular workers for same and similar work.
(v) No outsourcing, contractorisation, privatization of governmental functions; withdraw the proposed move to close down the printing presses, the publications, form stores and stationery departments and medical stores Depots; regularize the existing daily-rated/casual and contract workers and absorption of trained apprentices.
(vi) Revive the JCM functioning at all level as an effective negotiating forum for settlement of the demands of the Central Government Employees.

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