Labor Unrest Over Wage Disparities: How Should a CPSU Legally Address This Issue?

Respected sirs, this is a case of a CPSU where registration of the Principal Employer under the CLR&A Act, 1970 has been obtained from ALC (Central).

Types of contracts awarded

Two types of contracts are generally awarded:

1. Service Contract (Repair and Maintenance Work)
2. Works Contract (All major Contract)

For the service contract, they are paying minimum wages as specified by CLC (Central), and for works contract, estimates are prepared through Project Scheduled Rate, which is derived from minimum wages as specified by the Labour department of the State Government.

Now, there is always labor unrest due to different wage rates in the same establishment.

Kindly examine in a legal context.

Appropriate government under the Minimum Wages Act 1948

Being a Central Government Sector undertaking, who is the appropriate government as per the Minimum Wages Act 1948, and what will be the solution as described above?

What is the difference between a Service contract and a Works Contract?

When repairs and maintenance of machines and equipment, other than those covered under an Annual Maintenance Contract (AMC), which is outside the purview of the CLRA Act, are carried out by a section of employees deployed for the purpose, the rate of wages applicable to that kind of work/job will be payable.

Other than the above, what is a works contract? Is it that workers are deployed to perform the work/core activities of the establishment, such as production? If so, let me say that such engagement is illegal and will attract complications in the future.

You can have different wage rates for different kinds of employment within the same organization, provided the skills required are also different. That cannot be questioned. The Minimum Wages Act also provides for different wages for different categories of employment under the same scheduled employment.

Dear Colleague,

Definition of Appropriate Government

The definition of "Appropriate Government" is a term worth analyzing. For any scheduled establishment carried on by or under the authority of the Central Government, the appropriate government is the Central Government. In the case of a CPSU, the Minimum Wages stipulated by the Central Government will be appropriate for both types of contracts. It is expected that the licenses for contractors and RC to the Principal Employer would have been obtained from Central Labour Authorities. Hence, from the perspectives of the Minimum Wages Act, the Contract Labour Act, and the Industrial Dispute Act, it is correct to follow the Central Government's Fixed Minimum Wages for the respective scheduled employment. Within that notification, you may follow different wages for different skill categories depending on the classification given in the notifications based on skill levels.

For Your Reading

A) The definition of "Appropriate Government" under the Minimum Wages Act 1948 is as follows:

2(b) "appropriate Government" means, (i) in relation to any scheduled employment carried on by or under the authority of the [Central Government or a railway administration], or in relation to a mine, oilfield, or major port, or any corporation established by [a Central Act], the Central Government, and (ii) in relation to any other scheduled employment, the State Government.

B) The definition of "Appropriate Government" under the Contract Labour Act is as follows:

2. Definitions.-(1) In this Act, unless the context otherwise requires,-(a) 'appropriate Government' means,-(i) in relation to an establishment in respect of which the appropriate Government under the Industrial Disputes Act, 1947 (14 of 1947), is the Central Government; (ii) in relation to any other establishment, the Government of the State in which that other establishment is situated.

C) The definition of "Appropriate Government" under the Industrial Disputes Act 1947 is as follows:

2. Definitions.- In this Act, unless there is anything repugnant in the subject or context,--

(a) "appropriate Government" means-- (i) in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government, ................ or the Oil and Natural Gas Commission established under section 3 of the Oil and Natural Gas Commission Act, 1959 (43 of 1959),...................................., the Central Government, and (ii) in relation to any other industrial dispute, the State Government;