by Paula Määttä

VIII. India

B. Scope of the concepts on equal pay

1. The definition of "pay"

The Equal Remuneration Act 1976 defines "remuneration" in § 2(g) as follows:

"the basic wages or salary, and any additional emoluments whatsoever payable, either in cash or in kind to a person employed in respect of employment or work done in such employment, if the terms of the contract of employment, express or implied, were fulfilled."

A typical remuneration package in the organized sector (for a time rate payment system) consists of a basic wage, dearness allowance (to compensate for inflation), other allowances, and the house rent allowance. The dearness and the house rent allowances can be different in offices of the same company due to the cost of living in different cities. (Acharya 1995, 7-8.)

2. The definition of "equal work"

In India, the principle of equal pay means equal remuneration for "the same work or work of a similar nature" (§ 4), which in turn is defined in § 2(h) of the Act as follows:

"work in respect of which the skill, effort and responsibility required are the same, when performed under similar working conditions, by a man or a woman and the differences, if any, between the skill, effort and responsibility required of a man and those required of a woman are not of practical importance in relation to the terms and conditions of employment."

The principal operative section of the Equal Remuneration Act is § 4, which makes provision for equal remuneration as follows:

"() No employer shall pay to any worker, employed by him in an establishment or employment, remuneration, whether payable in cash or in kind, at rates less favourable than those at which remuneration is paid by him to the workers of the opposite sex in such establishment or employment for performing the same work or work of a similar nature.

(2) No employer shall, for the purpose of complying with the provisions of sub-section (1), reduce the rate of remuneration of any worker.

(3) Where, in an establishment or employment, the rates of remuneration payable before the commencement of this Act for men and women workers for the same work or work of a similar nature are different only on the ground of sex, then the higher (in cases where there are only two rates), or, as the case may be, the highest (in cases where there are more than two rates), of such rates shall be the rate at which remuneration shall be payable, on and from such commencement, to such men and women workers."

There is no obligation for employers to recognise the existing three (or any other) digit classification of occupations as set out by the ILO or the Government. Employers are free to classify occupations as they wish, thus rendering it difficult to compare essentially similar jobs (Acharya 1995, 7). Thus, even if the work of a man and a woman are of a similar nature, job differentiation can be made artificially. For example, a cashier is paid more than an accountant, even if the job content is similar in both cases. The cashier is paid more because he handles cash, and his job is classified as more sophisticated. (Acharya 1995, 6-7.)

3. Scope of the equal pay provisions

The Equal Remuneration Act, 1976 covers all industries and sectors, public and private, organized and unorganized, and all employees doing permanent, temporary and casual work. The law covers central, state and local authorities, hospitals and dispensaries, banks and financial services, educational institutions, mines, provident funds and other state insurance corporations, the Food Corporation of India and other warehouses, all industries under National Industrial Classifications (NIC) groups 1, 2 and 3; power, water and gas generation, trade, transport (water, land and air), construction, real estate and sanitation, religious community and medical and personal services. The Act does not cover self-employed workers like unpaid women workers in farming, households and in the unorganized sectors in large numbers. (Acharya 1995, 5, 9.)

The principle of equality is applicable within an establishment. The law permits wage differences to exist across establishments. The wage differentials can be high across establishments because of differences in productivity, and the capacity to pay may differ widely. Since wages in generl are low in India, very often there are de facto equal wages due to the general payment of minimum wages. Thus the Minimum Wage Act, 1948 is of overriding importance in respect to equal remuneration in India. (Acharya 1995, 7.)

The Act states that the basic wage or day-shift payment should be the same for the same or similar work. Thus men can earn more by working in night shifts since women, by law, are not permitted to be employed in night-shift in establishments other than luxury hotels, airlines, hospitals and a few other specific places. Temporary workers are entitled to fewer allowances than permanent workers for the same jobs, even in government jobs (Acharya 1995, 7-8.)

The Act does not apply in cases affecting the terms and conditions of a womans employment in compliance with the requirements of any law giving special treatment to any women, or to any special treatment accorded to women in connection with the birth or expected birth of a child, or the terms and conditions relating to retirement, marriage or death or to any provision made in connection with retirement, marriage or death.

There are two main reasons for the restriction in the scope and coverage of the law. The first is that legal requirements are different for different sectors and sizes of establishments. For example, the Factories Act, 1948 requires that only establishments which employ 10 or more workers and use electric power, and 20 or more without electric power, need to file full returns about the status of their workers for the authorities. Similar differentiations also apply to shops and commercial establishments. The regulations therefore do not apply to the smaller establishments. While they are expected to comply with the law, they seldom do. (Acharya 1995, 9.)

The other reason for the restricted application of the law arises in connection with the legal machinery, which makes provision for few means of overseeing compliance with the Act. Moreover, workers, their unions, and other public support groups do not bring the matter to the fore, since the need for jobs by the workers exceeds the need to practice gender justice within it. The nature of the labour market, high rates of illiteracy, and widespread poverty prevent such matters from being dealt with by the law. (Acharya 1995, 9-10.)