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In the nineteenth centurv the relation between employers and employees were usually governed (1) ; (2) ; , 884.543 by the economic principle of supply and demand, and the employers thought that they were entitled to hire labour on their terms and to dismiss the same at their choice subject to the specific terms of cont... |
The theory of " hire and fire " as well as the theory of " supply and demand " which were allowed free scope under the doctrine of laissez faire no longer hold the field. Ratio |
In constructing a wage structure in a given case industrial adjudication does take into account to some extent considerations of right and wrong, propriety and impropriety, fairness and unfairness. Ratio |
As the social conscience of the general community becomes more alive and active, as the welfare policy of the State takes a more dynamic form, as the national economy progresses from stage to stage, and as under the growing strength of the trade union movement collective bargaining enters the field, wage structure ceas... |
Considerations of the financial position of the employer and the state of national economy have their say, and the requirements of a workman living in a civilised and progressive society also come to be recognised. Ratio |
It is in that sense, and no doubt to a limited extent, that the social philosophy of the age supplies the background for the decision of industrial disputes as to wage structure. Ratio |
As Mrs. Barbara Wootton has pointed out, the social and ethical implications of the arithmetic and the economics of wages cannot be ignored in the present age (1). Ratio |
It is because of this socioeconomic aspect of the wage structure that industrial adjudication postulates that no employer can engage industrial labour unless he pays it what may be regarded as the minimum basic wage. Ratio |
If he cannot pay such a wage he has no right to engage labour, and no justification for carrying on his industry; in other words, the employment of sweated labour which would be easily available to the employer in all undeveloped and even under developed countries is ruled out on the ground that the principle of supply... |
70 544 matter of employment of human labour, and that it is the duty of the society and the welfare State to assure to every workman engaged in industrial operations the payment of what in the context of the times appears to be the basic minimum wage. Ratio |
This position is now universally recognised. Ratio |
In dealing with wage structure it is usual to divide wages into three broad categories: the basic minimum wage is the bare subsistence wage; above it is the fair wage, and beyond the fair wage is the living wage. Ratio |
It would be obvious that the concepts of these three wages cannot be described in definite words because their contents are elastic and they are bound to vary from time to time and from country to country. Ratio |
It would be difficult and also inexpedient to attempt the task of giving an adequate precision to these concepts. Ratio |
What is a subsistence wage in one country may appear to be much below the subsistence level in another; the same is true about a fair wage and a living wage; what is a fair wage in one country may be treated as a living wage in another, whereas what may be regarded as a living wage in one country may be no more than a ... |
Several attempts have nevertheless been made to describe generally the contents of these respective concepts from time to time. Ratio |
The most celebrated of these attempts was made by Mr. Justice Higgins in his judgment in 1907 in a proceeding usually referred to as the Harvester Case. Ratio |
Sitting as President of the Commonwealth Court of Conciliation and Arbitration, the learned Judge posed the question as to what is the model or criterion by which fairness or reasonableness is to be determined, and he answered it by saying that " a fair and reasonable wage in the case of an unskilled labourer must be a... |
In 1919 the Commissioner of the Bureau of Labour Statistics conducted a tentative budget enquiry in the United States of America, and analysed the objects with reference to three concepts, namely, the pauper and poverty level, the minimum of subsistence level and the minimum of health and comfort level; the last was ta... |
This classification was approved by the Royal Commission on the Basic Wage for the Commonwealth of Australia, and it proceeded through norms and budget enquiries to ascertain what the minimum of comfort level should be. Ratio |
The Commission quoted with approval the description of minimum health and comfort level in the following terms : " This represents a slightly higher level than that of subsistence, providing not only for the material needs of food, shelter and body covering, but also for certain comforts such as clothing sufficient for... |
According to the United Provinces Labour Enquiry Committee wages were classified into four categories, poverty level, minimum subsistence level, the subsistence plus level, and the comfort level (2). Ratio |
The third category would approximate to the fair wage, and the fourth to the living wage. Ratio |
According to the South Australian Act of 1912 the living wage means " a sum (1) Cited in the Report of the Committee on Fair Wages published by the Government of India, Ministry of Labour pp.5 and 6.(2) Ibid. Ratio |
546 sufficient for the normal and reasonable needs of the average employee living in a locality where work under consideration is done or is to be done ". Ratio |
On the other hand, the Queensland Industrial Conciliation and Arbitration Act provides that the basic wage paid to an adult male employee shall not be less than is " sufficient to maintain a well conducted employee of average health, strength and competence, and his wife and ' a family of three children in a fair and a... |
and provided that in fixing such basic wage the earnings of the children or wife of such employee shall not be taken into account " (1). Ratio |
The Fair Wages Committee which made its Report in 1949 broadly accepted the view expressed by the Royal Commission on the basic wage for the Commonwealth of Australia which we have already cited. Ratio |
According to the Committee, " the living wage should enable the male earner to provide for himself and his family not merely the bare essentials of food, clothing and shelter but a measure of frugal comfort including education for the children, protection against ill health, requirements of essential social needs, and ... |
" The Committee emphasised that " the minimum wage must provide not merely for the bare sustenance of life but for the preservation of the efficiency of the worker. Ratio |
For this purpose the minimum wage must also provide for some measure of education, medical requirements and amenities " (3). Ratio |
In this connection it would be useful to refer to the observations made by Philip Snowden in regard to the concept of living wage. Ratio |
These observations are generally cited with approval by industrial tribunals. Ratio |
Said Snowden, " it may be possible to give (1) Cited in the Report of the Committee on Fair Wages published by the Government of India, Ministry of Labour p. 5. Ratio |
(2) Ibid. Ratio |
(3) Cited in the Report of the Committee on Fair Wages published by the Government of India, Ministry of Labour p. Ratio |
8. 547 a precise or satisfactory definition of a living wage, but it expresses an idea, a belief, a conviction, a demand. Ratio |
The idea of a living wage seems to come from the fountain of justice which no man has ever seen, which no man has ever explained, but which we all know is an instinct divinely implanted in the human heart. Ratio |
A living wage is something far greater than the figures of a wage schedule. Ratio |
It is at the ' same time a condemnation of unmerited and unnecessary poverty and a demand for some measure of justice (1). Ratio |
" On the problem of converting the concept of living wage into monetary terms this is what Snowden had said: " The amount of the living wage in money terms will vary as between trade and trade, between locality and locality. Ratio |
But the idea is that every workman shall have a wage which will maintain him in the highest state of industrial efficiency, which will enable him to provide his family with all the material things which are needed for their health and physical well being, enough to enable him to qualify to discharge his duties as a cit... |
It is in this broad and idealistic sense that article 43 of the Constitution has referred to the living wage when it enunciates the Directive Principle that the State shall endeavour, inter alia, to secure by suitable legislation, or economic organisation, or in any other way, to all workers, agricultural, industrial o... |
This Court has recognised this idealistic position of the concept of living wage in the case of Express Newspapers (Private) Ltd. vs The Union of India (3). Ratio |
It would thus be obvious that the concept of a living wage is not a static concept; it is expanding and the number of its constituents and their respective contents are bound to expand and widen with the development and growth of national economy. Ratio |
That is why it would be impossible to attempt the (1) Philip Snowden " The Living Wage ", p. 1. Ratio |
(2) Ibid. Ratio |
(3) , 79 82. Ratio |
548 task of determining the extent of the requirement of the said concept in the context of today in terms of rupees, annas and pies on the scanty material placed before us in the present proceedings. Ratio |
We apprehend that it would be inexpedient and unwise, to make an effort to concretise the said concept in monetary terms with any degree of definiteness or precision even if a 'fuller enquiry is held. Ratio |
Indeed, it may be true to say that in an under developed country it would be idle to describe any wage structure as containing the ideal of the living wage, though in some cases wages paid by certain employers may appear to be higher than those paid by others. Ratio |
As observed in its Report by the Commission of Enquiry on " Emoluments and Conditions of Service of Central Government Employees, 1957 59 ", " taking a standard family as consisting of four members of whom only one is an earner, the average income of a family at the highest figure during the nine years ending in 1957 5... |
The minimum wage cannot be of the order of Rs. 125/when on the basis of the national income the average for a family works out only to Rs. 97/ per mensem. Ratio |
" Therefore, looking at the problem of industrial wages as a whole it would not be possible to predicate that our wage structure has reached even the level of a fair wage. Ratio |
It is possible that even so some employers may be paying a very high wage to their ' workmen, and in such a case it would be necessary to examine whether the wages paid approximate to the standard of the living wage; but in deciding this question the proper approach to adopt would be to consider whether the wage struct... |
For that purpose it may not be essential, and on the material produced before us it is not even possible, first to determine what in terms of money those constituents would denote in the context of today. Ratio |
The learned Attorney General 's argument that we should first determine independently what amount in terms of rupees, annas and pies would be treated as a living wage today 549 obviously ignores the complexity of the problem and the poverty of the material adduced by the appellant in the present proceedings. Ratio |
There is another aspect of this question to which we must incidentally refer. Ratio |
We are dealing with the contents of the living wage in the present appeal not for the purpose of fixing a wage structure; the contention raised by the appellant is that since the wages paid to the respondents have reached the stage of a living wage there is no gap between the actual wage and the living wage, and so the... |
While dealing with this contention there would be no justification for ignoring the idealistic character of the living wage is specified in article 43 of the Constitution ; and so, it would be necessary to enquire whether the wage in question satisfies the tests laid down by the Royal Commission on the basic wage for t... |
The question which we must now consider is whether the appellant has succeeded in showing that its wage structure has reached the standard of the living wage which has been specified as one of the ultimate objectives by article 43 and which is the ideal that the working population of the country hopefully looks forward... |
Before the tribunal the Union filed statements to show that the wage structure prevailing amongst the respondents is no more than the need based minimum wage. Ratio |
In support of this plea they referred to the resolution which has been unanimously passed at the 15th Session of the Indian Labour Conference held in New Delhi on July 11 and 12, 1957. Ratio |
This resolution makes a declaration about the wage policy which should be followed during the Second Five Year Plan. Ratio |
The Tripartite Committee which passed the resolution considered the relevant notes placed before it, and held that they would be useful as background material for (1) 550 wage fixation. Ratio |
It then took note of the difficulties in assessing quantitatively the individual importance of various factors affecting wage fixation such as product ivity, cost of living, the relation of wages to national income and so on, and proceeded to discuss the wage policy with specific reference to minimum wages and fair wag... |
With regard to the minimum wage fixation it was agreed that the minimum wage was need based to ensure the minimum human needs of the industrial worker irrespective of any other considerations. Ratio |
To calculate the minimum wage the Committee accepted the following norms and recommended that they should guide all wage fixing authorities including Minimum Wage Committees, Wage Boards, adjudicators, etc. Ratio |
(ii) Minimum food requirement should be calculated on the basis of a net intake of calories, as recommended by Dr. Aykroyd for an average Indian adult of moderate activity. Ratio |
(iii) Clothing requirements should be estimated at a per capita consumption of 18 yards per annum which would give for the average workers family of four, a total of 72 yards. Ratio |
(iv) In respect of housing, the rent corresponding to the minimum area provided for under Government 's Industrial Housing Scheme should be taken into consideration in fixing the minimum wage. Ratio |
(v) Fuel, lighting and other I miscellaneous ' items of expenditure should constitute 20% of the total minimum wage. Ratio |
" Having set forth these norms the Committee recognised the existence of instances where difficulties may be experienced in implementing its recommendations, and so it added that wherever the minimum wage fixed went below its recommendations it would be incumbent on the authorities concerned to justify the 551 circumst... |
Having thus unanimously agreed on the content of the need based minimum wage the Committee proceeded to observe that as regards fair wages it was agreed that the Wage Board should go into the details in respect of each industry on the basis of the recommendations contained in the Report of the Committee on Fair Wages. ... |
The respondents treated this unanimous resolution as the basis for their claim that the wages paid to them by the appellant were no better than the need based minimum contemplated by the said resolution. Ratio |
Accordingly they set out the diet requirements extracted from Health Bulletin No. 23, and converted the said requirements into monetary terms at Rs. 123 75 nP. Having thus arrived at the calculation of the value of the diet requirements of workmen (Exs.U 4 and U 5) they proceeded to make calculations about the money co... |
This conclusion has been reached on the basis that the minimum diet requirements would be Rs. 123 75 nP., clothing requirements would be Rs. 9/ , rent would be Rs. 42/ and miscellaneous expenditure at 20% of the total of the three preceding items would be Rs. 34 95 nP. Ratio |
Their case was that in view of the fact that Rs. 209 70 nP. approximates to the standard of the need based minimum wage the claim that the wage structure of the appellant has reached the living wage standard cannot be sustained. Ratio |
On the other hand the appellant sought to justify its claim principally on the calculations made by the Textile Labour Committee which had made its report in 1940. Ratio |
It may be pointed out that in its statement (exhibit C 6) the appellant has used the expressions " fair wage " and " living wage " somewhat indiscriminately, and seems to have assumed that the norms prescribed by the Tripartite resolution had relation to a fair wage and not the need based minimum wage. Ratio |
That, however, does not appear to be accurate, According to 71 552 the Textile Committee 's report the money content of the living wage in 1940 was Rs. 50/ to Rs. 55/ per month. Ratio |
This total is taken as the basis by the appellant in making its relevant calculations. Ratio |
The appellant has then referred to the norms prescribed by the Tripartite resolution and has assumed that the total of the need based minimum wage would be Rs. 40 14 0, and since there had been a rise in the cost of living after 1940 the appellant has multiplied Rs. 41/ by 3.5 which gave the amount of Rs. 143.50 nP. Ra... |
Thus, according to the appellant the need based minimum would not be the said amount of Rs. 209/ as calculated by the respondents. Ratio |
Then the appellant added that even if Rs. 55/was taken as the equivalent of the living wage in 1940 and the same is multiplied by 3 5 one gets Rs. 192.50 nP. and that should represent the living wage in the relevant year. Ratio |
Having thus reached the figure of Rs. 192.50 nP. as the monetary value of the living wage in the relevant year, the appellant purported to support its plea that its wage structure had reached the status of a living wage by relying on the average wages paid by it to the respective categories of its employees. Ratio |
Taking the class of operatives which comprises 524 workmen the average wage packet consisting of the basic salary, the dearness allowance and the value of the amenities supplied by the appellant to them equals Rs. 273.65 nP. Ratio |
The average wages in regard to the 124 clerks reach the figure of Rs. 370.11 nP., and the average wages for the total employees taken together reach the figure of Rs. 301.16 nP. According to the appellant whichever figure is taken it is much above Rs. 192.50 nP., and that must lead to the inference that the living wage... |
That is how both the parties presented their respective contentions before the tribunal and before us. Ratio |
We have already indicated that the appellant 's calculations are made on the assumption that the figure of Rs. 50/ to Rs. 55/ per month can be taken 553 to be the monetary content of the living wage in 1940. Ratio |
In support of this assumption the appellant strongly relies on the Textile Committee 's report. Ratio |
This Committee was appointed in 1940 and was charged with the duty of conducting an investigation into the question of adequacy of wages in cotton textile industry of the Province of Bombay and to kindred matters relating to the industry. Ratio |
It was asked to enquire, inter alia, into the adequacy or inadequacy of wages earned in relation to a living wage standard, and if it found that in any occupation, centre or unit of the industry wages were inadequate it was asked to enquire into and report upon the reasons therefor. Ratio |
The Committee realised that the data supplied before it was insufficient but nevertheless it thought that it would be possible to consider the broad constituents of the concept of the living wage and use the said measure " not for the determination of a dispute or the grant of an award but only for ascertaining in a ge... |
According to this formula each family was assumed to consist of a workman, his wife and two dependents or children and their consumption units were treated respectively as 1.8 and 0.6 each respectively, the total consumption units thus being 3.0. Ratio |
Then the Committee considered the problem of housing and the expenditure on rent and other items of expenditure such as clothing, fuel and lighting and miscellaneous. Ratio |
In regard to the housing the Committee thought that for a family of four 180 sq.ft. may be held as the minimum in Bombay though according to it the floor area may be put a 554 little higher in less overcrowded places. Ratio |
It is on these calculations that the amount of Rs. 55 was held by the Committee to be the monetary value of the living wage standard. Ratio |
Naturally enough the appellant treats this conclusion as the foundation for its claim that it is paying a living wage to the respondents. Ratio |
In our opinion it would be unreasonable and unsafe to treat the conclusions of this Committee as to the monetary value of the living wage in 1940 as sound and to make it the basis of our calculations today. Ratio |
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