Employment LawEqual Pay for Equal Work: The Impact of the Code on Wages Act, 2019

Introduction

The gender pay gap in India has been a persistent issue, reflecting deep-seated societal norms and economic structures that have disadvantaged women. Historically, women in India have faced significant barriers to equal pay, stemming from cultural biases, discriminatory practices, and limited access to education and employment opportunities.

Efforts to address the gender pay gap in India have been ongoing, yet pay inequality persists.. A 2024 study conducted by the Indian Institute for Population Sciences and the Tata Institute of Social Sciences reveals that women spend an average of 301 minutes daily on unpaid domestic work, compared to 98 minutes by men. India’s position in gender pay parity remains low, ranked 127th out of 148 countries according to the Global Gender Gap Report 2023 by the World Economic Forum.

In the light of the same, the Code on Wages Act ,2019  (hereinafter referred to as the “Act“), was introduced in the Lok Sabha on July 23, 2019, and became a law on August 8, 2019, is a significant piece of legislation in India that aims to update and combine several pay and bonus rules. One of the critical aspects of the Act is its provisions for ensuring gender equality in pay.

Understanding Equal Pay for Equal Work

Equal pay for equal work refers to the principle that individuals performing the same or substantially similar work should receive the same remuneration, irrespective of gender. This principle is essential for promoting fair and non-discriminatory employment practices. By ensuring that pay is determined based on the nature of the work and the skills required, rather than on the gender of the worker, it helps in fostering a more equitable workplace.

Research indicates that gender discrimination predominantly favours men, affecting women’s career progression, mental health, and overall life quality. Equality at work involves providing equal opportunities, pay, and acceptance of differences regardless of gender, race, disability, religion, nationality, sexual orientation, or age. Addressing gender inequalities impacts various indices such as sex ratio, educational attainment, and economic conditions.

In India, the principle of “equal pay for equal work” has been interpreted as a fundamental right by the Supreme Court, drawing from Articles 14, 16, and 39(d) of the Constitution. In State of Madhya Pradesh v. Pramod Bhartiya, the Supreme Court underscored that the doctrine of equal pay for equal work is implicit in the right to equality enshrined in Article 14 and flows from it. This principle mandates that employees performing similar work under similar conditions should receive equal pay.

Constitutional Provisions:

• Article 14: Guarantees equality before the law, ensuring equal rights and opportunities for men and women in political, economic, and social spheres.
• Article 15(1): Prohibits discrimination on grounds of caste or sex.
• Article 15(3): Empowers the state to make special provisions in favor of women and children.
• Article 16: Ensures equality of opportunity in matters of public employment, including provisions benefitting women.
• Article 39: Directs the state to frame policies securing equal pay for men and women.
• Article 42: Mandates the state to ensure just and humane working conditions and provisions for maternity relief.
• Article 51(A)(e): Obligates citizens to renounce practices derogatory to the dignity of women.

Judicial Precedents:

• Kishori Mohanlal Bakshi v. Union of India (1962): The Supreme Court initially rejected the plea for equal pay for equal work.
• Randhir Singh v. Union of India (1982): The Supreme Court recognized “equal pay for equal work” as a constitutionally valid principle under Articles 14, 16, and 39(c), enforceable through Article 32.
• Punjab and Others v. Jagjit Singh and Others: The court ruled that the principle applies to daily wagers, casual, and contractual employees performing the same duties as regular employees, condemning the denial of equal pay as “exploitative enslavement,” “coercive,” and “oppressive suppression.”

Relevance and Need for Legislation

Achieving equal pay for equal work in India remains challenging due to factors like occupational segregation, direct gender-based discrimination, undervaluation of women’s skills, and limited access to education and training.

These discriminatory practices perpetuate economic disparities and hinder the professional advancement of women and other marginalized communities.

India’s legislative framework for labour rights includes various laws addressing wage and employment conditions like

• The Workmen’s Compensation Act of 1923 provides financial protection for workers’ dependents in case of accidental injury, albeit for a specific class of employers.
• The Minimum Wages Act of 1948 mandates statutory minimum wages to protect poorly paid workers.
• The Factories Act of 1948 regulates labor conditions in industrial establishments.

The Contract Labour (Regulation and Abolition) Act of 1970 ensures specific provisions and fixed working hours for women.

The Equal Remuneration Act of 1976, despite its significance, had several limitations. Its definition of “same work or work of a similar nature” was interpreted narrowly, failing to account for the intrinsic value of different types of work. This narrow interpretation allowed for continued gender disparities, as it did not recognize the undervaluation of female-dominated jobs, such as caregiving and domestic labor. Furthermore, Section 16 of the Act permitted the government to declare pay differences as non-discriminatory if based on factors other than sex, leading to ambiguities and potential exploitation.

The Act sought to rectify these issues by replacing the Equal Remuneration Act. It aimed to eliminate binary gender distinctions and extend equal pay protections to all genders. Importantly, it removed Section 16, which had allowed for government declarations that could undermine gender pay equality. However, while the Code advanced gender inclusivity, it still retained the principle of “same work or work of a similar nature,” echoing the limitations of the previous law. Moreover, the Code focuses solely on equal pay, not addressing discrimination in conditions of service, which the Equal Remuneration Act had covered.

The Act extends its scope beyond the principle of ‘equal pay for equal work’ to address broader forms of wage discrimination. It includes provisions that mandate non-discriminatory practices in hiring, promotions, and other employment conditions. The Act obligates employers to ensure equal remuneration for employees performing the same work or work of a similar nature, considering factors such as skills, effort, responsibility, and experience.

Provisions Related to Equal Pay in the Act

The Act includes specific provisions designed to eliminate wage discrimination based on gender. The Act prohibits employers from discriminating against employees on grounds of gender with respect to wages, recruitment, and conditions of employment for the same or similar work. These provisions aim to ensure that men and women performing comparable roles are remunerated equally, thus addressing one of the key factors contributing to the gender pay gap.

Extant Framework vs Prospective (Current) Framework

Previously, the Equal Remuneration Act, 1976 mandated equal pay for men and women performing the same or similar work and prohibited gender discrimination in employment practices. Employers were required to consider skills, effort, and responsibilities when determining remuneration.

The Code on Wages Act adopts a gender-neutral approach, prohibiting discrimination in recruitment and remuneration. It mandates equal pay for employees performing the same or similar work, considering work experience along with skills, effort, and responsibility. The Act subsumes the Equal Remuneration Act, 1976, and broadens the definition of remuneration to include a comprehensive list of wage components, reducing potential disputes.

The Constitution of India,1949 enshrines the principle of gender equality, prohibiting discrimination based on gender, among other factors. The Act, specifically Sections 3 and 4, reinforces this by prohibiting gender discrimination in wages and recruitment. It ensures no reduction in wages to comply with equal pay provisions and mandates that disputes regarding the similarity of work be resolved by designated authorities.

AMLEGALS Remarks

The Act is a significant Indian legislation that consolidates and amends laws on wages and bonuses. It ensures gender pay equality by mandating equal pay for equal work, aiming to eliminate wage discrimination based on gender. The Act also establishes a minimum wage set by the central government in consultation with state governments and the Central Advisory Board on wages, aiming to raise average wages and reduce poverty and inequality.

Despite these strides, implementing the Act faces challenges. Awareness among employees and employers about the Act’s provisions is lacking, hindering effective enforcement. Some employers resist equal pay mandates, and enforcement mechanisms are insufficient, complicating compliance.

Efforts to achieve gender pay equality must continue despite existing legislative measures. Ongoing vigilance, advocacy, and education are essential to raise awareness and ensure compliance with gender justice principles in workplaces globally.

Discrimination against women persists globally despite advances in feminist movements and legislation. Effective implementation of equal pay laws and heightened awareness are crucial. Stakeholders must consistently uphold gender justice in workplaces.

Understanding and applying the concept of “equal pay for work of equal value” is crucial in addressing the gender pay gap. This approach is more effective than “equal pay for equal work” in combating gender-based wage discrimination by considering different job roles and working conditions for men and women.

Unequal pay persists in India despite legislative, executive, and judicial efforts. Recognition of equal pay as a fundamental right and implementation of legal interventions have led to improvements. Increased employee advocacy for equal rights pressures the government to strengthen workplace laws.

Continuous education for workers about their right to equal pay is vital. Outreach programs should inform rural women about their rights and available remedies under different acts. Organizations should adopt anti-discrimination policies promoting pay equality and establish mechanisms to address complaints.

Globally, pay equity has gained prominence with increased scrutiny of compensation practices. Pay transparency laws in several countries aim to reduce pay inequality by mandating employers to disclose salary information, helping employees identify and rectify pay discrepancies.

In conclusion, the Act represents a significant stride toward achieving gender pay equality in India. Sustained efforts are imperative to realize its potential and tackle remaining challenges. Through coordinated efforts at national and organizational levels, coupled with ongoing advocacy and education, gender pay equality can be progressively realized.