Salaries / Wages of workers – How much should it be?

This is a question of universal nature. It should be borne in mind that an employer is given a right to determine the salary of an employee to be employed by him, provided it should not be less than the salaries if fixed by Government under the Minimum Wages Act or any other Statute or if the same are fixed under any settlement, Agreement or Award.

If the salaries / Wages are not fixed by statutory authorities in the manner mentioned above, then it is left to the employer.  Again, salaries / Wages are generally fixed even by statutory authorities skill-wise i.e. salaries for unskilled workers will be lower than the salaries of semi-skilled or skilled workers. Even the rates of minimum wages also vary from State to State. The information about what is the minimum rate of wages fixed for any industry in a particular State is always available with “Office of Commissioner of Labour” in each State or its subordinate offices.

Once the salaries are above the minimum wages, then fixation of salaries above the minimum wages level is left to the parties i.e. the employer and the employees. Either the employer can uniformly announce the minimum wages which are accepted by the workers or both the parties jointly decide it or the workers take assistance of the Union and the Union on their behalf jointly decided with the employer what should be the rate of wages.

In such a situation, generally the workers or the union put up in the form of demands a proposal as to what should be the wages and other service conditions of the workers, including what should be the level of leave, allowances etc.

Again, there is no statutory compulsion on either of the parties to accept the proposal given by the other party. In the event no Settlement reached, then both the parties have an option to refer the demands, on which they could not agree upon, to “Industrial Tribunal” for adjudication for giving an Award. If this option is not acceptable to both the parties, then the workers are at liberty to unilaterally approach the office of the “Commissioner of Labour” and submit the demands to them who in turn call the parties i.e. the employer and the worker’s representatives or their union in their office.

It is pertinent to note that officers of the office of Commissioner of Labour do not have power to decide or adjudicate on the demands. Offices of Commissioner of Labour’s powers are limited only to call the parties and make an attempt to bring about a settlement. If any settlement is reached in front of such officer, he records the settlement which is generally known as “Settlement in Conciliation”. Such a settlement becomes binding on all the workers irrespective whether they are or not members of the Union which submitted the demands. In the event no settlement is reached, Conciliation Officer may give some suggestions but the parties may refuse and may not accept his suggestion. In such a situation, the officer will send a report to Government that he has failed to bring about a settlement. This report is known as “Failure Report”.

On receipt of "Failure Report", the Government refers the demands to Industrial Tribunal by a written order. The Industrial Tribunal thereafter, after hearing the parties, decides the charter of demands. While deciding the demands, the Industrial Tribunal takes into consideration the level of salaries and wages as well as other service conditions prevailing in other comparable concerns in the region as well as the financial capacity of the employer and passes an “Award”. Again, each party is at liberty to challenge the Award before the High Court and thereafter before the Supreme Court.

This is a very long strained procedure. Even the Award of the Tribunal takes years.

Hope this small write up will give insight about pertained subject.

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