07 - Chapter 1
07 - Chapter 1
INTRODUCTION
also the term 'wages' has acquired various connotations depending on the
and considering those contractual incomes which are payments for hired
wage earner as a labourer who carries bricks in the sun as long as they
both receive payments which are fixed and certain for a contractual period
surpluses as a part of wage are also predetermined and fixed, they are
and choices exercised by the two contracting parties the employer who
hires labour and the employee who offers his labour for an income. It is
conference known as the Industrial Truce resolution subscribed to the view that
emphasis should be on minimum wages for 'sweated' industries and fair wages
Act, 1948 and a tripartite committee on fair wages was also established in 1948
'to determine the principles on which the fair wages should be based and to
suggest the lines on which these principles should be applied' (Report of the
three levels of wages—minimum wage, living wage and fair wage. According to
the committee, a minimum wage must provide not merely for bare sustenance of
life but for the preservation of the efficiency of the workers and must take into
Further a living wage was to enable a worker to provide for himself and 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,
age. Regarding a fair wage, the committee observed that while the lower limit of
the fair wage was to be the minimum wage, the upper limit be set by the capacity
the economy, the level and distribution of national income and the prevailing
meat and sugar. Clothing requirements are to include 18 yards of cloth per capita
government for houses to its employees under the subsidised industrial housing
scheme for low income groups. Another 20% is to be added for light, fuel and
sweated industries and fair wage agreements need to be promoted in the more
system.
> There should be compensation for any rise in the cost of living.
The Supreme Court ruled that an employer who cannot pay minimum
consideration to determine fair wages. According to this rule the wages should be
determined on the basis of the basic needs of labour and a living wage should
While reviewing the verdicts of the Supreme Court on the different aspects of
i) Basic Wage
ii) Dearness allowance
iii) Other cash allowances/cash benefits
iv) Incentive money
v) Employee benefits in kind
vi) Social security benefits—statutory arid non-statutory
vii) Annual bonus
viii) Paid leave
point in time when other components were not common represented the
total compensation for work done. A basic wage may refer to a fixed figure
for a job or a man which may be increased by the employer from time to
time. A basic wage may also refer to a step in a wage scale for a job.
The wage scale may be one that was introduced at a time the establishment
hending a wage-price spiral and even the Third Pay Commission in linking
DA to the consumer price index annual average had observed that there
most of the allowances are not statutorily binding. At the same time
are found in India. Incentive money is that component of wage which can
sometimes all three. The existence of incentives can also be linked to the
additional time spent at work over the normal time and overtime
manufacturing employees.
Since employee benefits other than work place facilities and limited
social security are not statutorily governed there are differences from
varies with the definition in each Act. Statutory benefits include Provident
Fund since 1952, Gratuity since 1972, Minimum bonus since 1965, Life
profits in 1965 when the Payment of Bonus Act was introduced and a
ex-gratia payment for a long time though some adjudicators did grant
bonus in an industry that has made a profit and where the wages have not
(viii) Paid leave: Paid leave is a statutory right but organisations are free
(Randeria, 1975).
As the above aspects of prospect wage system shows more and more
benefits to the workers who are working in industries and other organizations
under public and private managements, the impfementatfons are not take p/ace
at a significant level.
The wage system in foreign countries found different with out country. A
brief review of the experiences of some countries can enable parallels and
(i) Britain: The Table Boards Act of 1909 brought in minimum wages in Britain.
The Whitley Committee (1916-18) stressed the value of joint councils. The Wage
Councils Act of 1945 and the Terms and Conditions of Employment Act of 1959
collective bargaining at the plant level and although the dual system has
persisted, Thomson and Gregory (1980) have found that decentralised collective
bargaining has become the norm in the private sector. According to one
estimate, wage disputes as a proportion of all industrial disputes have risen from
61% in 1960 to 85% in 1970 and industrial conflict is clearly due to frustrations of
workers' aspirations for better wages and working conditions {Bourn, 1972).
for a relativities board to rationalise differentials which have arisen due to diffe-
and the first comprehensive agreement called the 'Matignon' agreement was
drawn up only in 1936. Labour legislation plays a role in the collective bargaining
process and an act established the legal framework for collective bargaining in
1950. Wage systems are increasingly being regarded as an internal matter for an
(iii) Sweden: No formal wage policy exists and state intervention has been
minimal although informal talks between unions and the Government on the
relative sectoral shares of national income do take place. Both employees' and
employers' federations are well developed and have been functioning for over 50
agreements' which have, no executive force but on the basis of which provisions
are embodied in collective agreements. The blue collar employees and white
10
at the Federal level. The manual workers' unions about 30 in number are
grouped into the Swedish Federation of Trade Unions which has over 2 million
members. The non-manual employees are grouped into the Central Organisation
has also started functioning. In the private sector, the Swedish Employees'
enterprises and in the public sector, National Collective Bargaining Office is the
At the apex level, the National budget drawn up by the Ministry of Finance
percentage of wage bill. Differences for local conditions are built in at the plant
level. Only industry level agreements are legally enforceable. The decentralised
have resulted in wild cat strikes in the state public services and Lapland Mines in
the 1970's and wages have become a significant source of industrial unrest
(OECD, 1975).
II
about 1957 the Dutch operated a compulsory wage and price fixing system which
gave the government, acting through a special board of mediators, the power to
determine wage levels and structures. Trade unions have been relatively weak
which probably explains why state intervention has been significant. Three major
general courts and arbitration boards also function. The social and economic
council created in 1950 has given way to another body called Foundation of
Labour under whose auspices negotiations take place. Official policy on wages
was weakened in the early 1960's when it was challenged by the metal workers.
Due to galloping inflation caused by the oil crises there was a freeze on wages
and dividends after the rate of inflation had doubled between 1972 and 1973 and
again between 1973 and 1974. As a result, wage agreements could not be made
for a period more than 12 months and attempts to contain increases resulted in a
major strike in the steel industry and several other industries and interim relief
and pay advances for anticipated inflation continued to be given a time when the
12
workers in 1975, the other two being the Federation for Salaried Employees and
wages and prices, among other issues at the macro level in which discussion the
on the framework within which collective bargaining can take place. This made it
possible for Germany to cope with the global inflation pressures since 1974 by
revisions in the 1973-74 round of agreements. Wage claims were in the region of
15% to 17% but a settlement was reached at 8.5% in the leading industry-metals.
When this settlement was sought to be confirmed for iron and steel, the
because only 52% favoured the alternative course of action to strike work and
the constitution of the union required 76% for such action. Other industries too
accepted lower revisions but industrial peace was short-lived. Wild cat strikes
13
expiry because of major strikes in the public sector, banks and metals and
wholesale trade. The .failure to implement the 1973 round of settlements with
inter-union rivalry. Even relative share of wages in national income rose and
profits and investments shrank. A hard line was taken by employers after the
Metal Industry had been given a 15 % increase in 1974 and when a 9% claim
was made by the employees' federation in 1975 an offer of 6% was made and a
settlement reached at 6.8% increase, and public sector employees were made to
(Steward, 1972).
(vi) Norway: Wage agreements are made collectively at the national level
Employers Confederation. Norms of standard output are set nationally with 'self
(vii) Portugal: Wage determination takes place through national labour laws,
14
Under Italian law a worker can claim earnings in accordance with his
(ix) Belgium: Statutory measures do not appear to have had much effect and
even industrial commissions instituted have hardly influenced wage systems. The
(x) Japan: Minimum wages were legislated in 1947 in the -recovery period after
the Second World War. A number of central, regional and special tripartite bodies
more popular.
(xi) U.S.A.: Local state laws play a more important part than Federal Regulation
return' and has been widely extended after the Fair Standards Act 1938 close on
the heels of the Walsh Healey Public Contracts Act which brought in lasting
15
become common in enterprise level collective bargaining and payroll costs are
(Thomson, 1977).
employees in an enterprise ranging from unskilled to the most highly skilled and
managerial personnel are represented by the same union. Trade unions are
entitled to recognition only if they are affiliated to the Central Council of Trade
Unions which can take overall decisions on wage and wage policy binding on its
the practice for wage policy and wage structure to be agreed between the
was achieved; in footwear, the records of the Czech Bata Factory were
16
bonuses for a number of workmen who realised that increasing productivity need
not be synonymous with physical strain and increased production costs but
reduced unit cost of production. More production was achieved through the same
to health, old age and disablement and regulation of wage rates for limited
system with national level bodies determining the quantum of increase and the
(xiii) China: There is very little literature available or, wage determination in
China. It appears that a concept of pay for the job with few differentials and a
whose wage levels are compared with those prevailing in the agricultural sector.
The existence of socialised benefits like education, health and other services
makes it difficult to visualise the money earnings of persons in the same way as
17
American countries are not being discussed individually as they face common
nations are coping with the problems of wages and wage policy through a
the enterprise level where large enterprises often assume the role of market
leader.
Laws of 1799 and 1800 in Britain which were later repealed represented
not surface in other nations which industrialised later since history had
taught the futility of such endeavours. However, even when the existence of
18
a) Minimum wages
By the turn of the twentieth century the natural minimum wage was no
wage regutation are New Zealand (1894), Australia (1896), USA (1912) and
regulation by 1918.
In U.S.A. the thrust for minimum wages received a set-back when after 17
states had enacted minimum wage legislation, the US Supreme Court declared
all minimum wage laws unconstitutional in the Adkins case in 1923. In USA the
National Industrial Recovery Act (1933) culminated in about 546 different codes
of fair competition and 22 million workers became covered under minimum wage
laws passed by States. However in 1936, the US Supreme Court once again
minimum wages under the New Deal was struck down. Only after the US
Supreme Court had revised its position in the West Coast Hotel Company case
(Charles, 1973). Although wage policies in the inter war years yielded
19
With the onset of the depression in the 1930's some countries tried to
Federal Court monitoring federal wage adjustments for cost of living and
wage rates can be said to have increased. The international focus after
system more than others and although ability to pay higher remuneration
departments.
The inter-war years and the post-war years when disequilibrium surfaced
20
industry level with both taking place simultaneously in some countries within
a general framework set by the State. In USA where the New Deal
external to the organisation and try to persuade workers that their wages
were generally better than those elsewhere and they had nothing to gain
public enterprises like railways, post and telegraphs, mines and steel.
bargained with society and such of those who became employees have
21
all employees. Since ordinary Court Judges may not be fully aware of the special
problems involved in industrial relations, special labour courts have been set up
Germany, Ireland and some p Asian, African and Latin American countries. In
are left uncovered. Legislation has been enacted for this purpose in Canada,
(OECD, 1975).
22
bargaining like Britain and France now seem to be relying more on decentralised
collective bargaining although the dual system of industry bargaining and plant
bargaining has survived. The Economist of July 15, 1981 reported that whereas
employer agreements covered only 27% of manual workers with 73% being
like USA and Sweden where trade unions have resisted government intervention
continue to rely on collective bargaining. Even countries like Netherlands and the
same time socially responsible wage policies to achieve social justice and cope
with inflation are gaining increased acceptance. Such policies have four aspects.
have been found to be more closely associated with prices than with employment
23
of prices and employment. Fourthly, since wages only represent one kind of
income, the disparities between wages and other incomes also assume
importance. In developing countries it has been found that the income of wage
earners as a rule is higher than the rest of the population particularly the rural
productivity and this was a part of a total incomes policy implemented by the
State between 1954 and 1963. A group of economic advisers had made
what can be paid out of national productivity increase as a whole. However, since
did not work satisfactorily. In France the Prime Minister in an Open letter
national economic factors in view even when wage revisions linked with
24
indexation for cost of living is absent have had higher increases in wage bill than
Luxembourg and Italy. In Italy, cost control despite indexation has been possible
due to a uniform cost of living allowance per point since 1977 with one full point
being the difference between one step and the next unlike Australia, Belgium,
Denmark, Netherlands and Luxembourg where allowance and bonuses are fixed
as a percentage of basic rate and lead to double linkage—one linkage with the
price index and another with pay. In Australia proportional increases for different
harmonised working and living conditions in its nine member countries but
a part of wage are also predetermined and fixed, they are traceable in origin to
25
his labour for an income. It is the very existence of choice that distinguishes
wage systems of the present day from slavery, serfdom and artisanship.
In slave societies the price of labour was not determined contractually with
the slave but determined in the form of a commodity price depending on demand
for and supply of slaves. The price represented a one time fixed cost to which a
determined for the slave and the output of work extracted which in turn were a
function of labour supply since a master could work his slaves hard if he could
the middle ages, the serf owed customary tribute or services to his lord and was
attached to the lands of the feudal lord. In seventeenth and eighteenth century
Germany and nineteenth century Russia, estates with so many 'souls' used to be
transacted. History is full of examples and even Edward I in England had made a
grant of the royal mines to his Italian creditors, the Frescobaldi, together with the
26
between social groups and categories. Under both slavery and serfdom, these
rights were severely curtailed by (aw. Even the free craftsman or artisan under
late feudalism was not a wage earner being self employed with a feudality
committed occupational choice making and selling his own product and retaining
any surplus or net revenue. Changes in agrarian relations brought about by the
in the first Industrial Revolution in England around 1760. The emergence of the
new industrial system under captains of industry motivated by profit who owned
persons who had hardly any resources of their own except labour.
of wage earners: (1) persons owning material and physical exploitable resources
on which labour could be hired, and (2) persons who became compulsory wage
earners because the prevailing distribution of property did not enable them to
persons had a choice to become wage earners out of preference, the choice of
27
is, therefore, not surprising that the relationship of employer and wage earner
universal feature of the industrial society today. With the increasing participation
has become widely dispersed and can no longer be equated with actual control.
In such a situation, the de facto custodians and their subordinates are seen in the
The definition of 'wage' as the income of a man who relies entirely on his
own labour to provide him and his family with a living (Mouly, 1969) appears to
be all embracing. Not only does it fail to distinguish the extent to which an income
earner relies on his own labour in contrast to other income from land, property or
other invested resources, it completely ignores the social reality that even income
earned by a man entirely from his own labour may not all be wage. Social and
industrial conflict that arises today is not merely between the so called capitalist
entrepreneur and the common labour but also between the lower categories of
employees who identify themselves with labour and the higher categories of
28
Wages other than at the lowest level of unskilled employees, are likely to
include surpluses in addition to remuneration for labour hired since even the
lowest strata of unskilled labour varies in quality and productivity with the general
difficult to draw since all employee earnings are Rely to include surpluses and
include monetary non-monetary benefits. Most wages are akin to salaries which
term generally connotes earnings of skilled labour of all sorts. The dictionary
meaning of the word salary as a periodic payment to persons doing jobs other
than mechanical has little relevance in the context of present day technology
when a scientist working on jet engines may be engaged in mechanical work and
off figures from a dial and making a periodic record of the same with very limited
before with changing technology and recognition of a new status for skilled
different profiles from the blue collar worker of yesterday. In the context or rapid
technological development it is likely that the distinction between the blue coin
29
5?.L;
incomes individually determined his also become elusive and illusory with the
into lower and higher categories without establishing whether the major
1.6 Methodology
The purpose of the study was to be analyse the problems and prospects,
condition and performance factors of the daily wage workers of the selected steel
the method of statistical treatment used for analysis of data have been explained.
The steel industry provided about 159,000 wage and salary jobs in 2008.
30
mills and ferroalloy production, which employed 98,900 workers; and steel
products from purchased steel, which employed 60,100 workers. The steel
industry traditionally has been located in the eastern and midwestern regions of
the country, where iron ore, coal, or one of the other natural resources required
for steel are found. Even today, about 42 percent of steelworkers are employed
steelmaking to spread to virtually all parts of the country, although many firms
find lower cost rural areas the most attractive. Although most steel mills are
Although the steel making process varies with the type of furnace used,
the jobs associated with the various processes are similar. By a large margin,
steel mills. In addition, significant numbers of daily wage workers are needed to
line, such as the blast furnace or rolling mill areas, and their titles reflect the
31
to the topic understudy. The study also analyse opinon of the daily wage workers
about their wages and payment procedure at steel plant. This will help the future
generation and policy makers to consider the challenges of the daily wage
workers facing for their livelihood. Further, the study provides scope for
security measures. The study would be highly helpful for further research in
related areas of problems and prospect measures with reference to any public or
private enterprise.
Visakhapatnam Steel Plant. Hence, the problem may be stated as whether there
is any significant variation among the daily wage workers in their socio-economic
income levels etc., and also, the study is going to analyse significant levels of
daily wage labourers in the Organizational structure (Profile of the unit), Work
Incentives to the workers and Women welfare. Therefore, the problem for the
33
sector.
3. To study the difference among the study units where the daily wage
workers.
5. To analyse the safety measures taken by the units for the welfare of the
6. To find out the work details performing by the daily wage workers in the
steel plant.
7. To analyse the wages and wage related factors observed by the daily
wage workers.
9. To identify the possible ways for protecting the daily wage workers.
10. To study the incentives given by the organizer/ contractor to the daily
wage workers.
11. To analyse the women welfare activities taken by the organizer/ contractor
34
conditions of the daily wage workers in the industrial organizations like Vizag
Steel Plant where the productivity of daily wage workers make some decisions
about changes that would like to make to use the human power more effectively
human power of the daily wage workers; however, it is important to get to know
any industry/organization so that it can make good decisions about how to use
through training facilities, improve the health and education. If the daily wage
workers perceive that this is an area of the life that needs improvement, this
program is for them. Throughout the study, the research will learn the problems
and prospects of daily wage workers in the study area and indicate effective
1.6.6 Database
In this study, the daily wage workers who are working under different
data. The number of daily wage workers from different organizations, where they
are performing their daily duties, selected for analysis of the study.
35
workers are engaged regulary day to day works.These labourers are worming
under different zones.There are number of daily wage labour supply units to the
Vizag Steel Plant where 20,269 daily wage laboureres are working under nine
zones. Among there labourers both skilled and unskilled are engaged daily in the
The sample daily wage workers are considered from both skilled and
unskilled labour. The wage system of the daily wage workers are also depending
on their working performance. The skilled workers are getting little bit higher
wages than the unskilled workers. The distinguish skills among the daily wage
workers are considered by their work experience. According to the survey it was
found that the skilled workers are getting around 200-300 rupeer per day and the
unskilled workers are getting between 75-200 rupees per day. And their work
timings are morning are between morning 9.0 AM to evening 6.0 PM. In the
36
accidental benefits, etc., are not yielding complete results due to lack of proper
education, ignorance and lack of the knowledge especially the migrate labour
from the areas like rural, tribal and remote villages. There are so many labour
welfare organizations and voluntary organizations which are taking many steps to
create awareness in the labourers on the labour act, minimum wage rates etc,, it
shows that there is a need for preserving these daily wage workers by extending
the needed support through special laws and policies to make benefit to these
important, as it is design to present the history and present status of daliy wage
workers, different types of public and private organizations with suggestions for
resource management and at the same time for the improvement of their
personal life. Hence, there is a scope to analyse the problems of the daily wage
wage workers on problems and prospects at their work place of Vizag Steel
immense help to the management of the organisations and also the government
for the formulation of sound labour oriented policies in future. The study with a
large sample of 335 respondents provides scope to find out how the views of
32
taken as sample for the present study who are working at Vizag Steel plant at
nine zones. The details of the sample respondents under the nine zones
presented the table 1.1. Out of the total daily wage workers selected for the
present study, 12.24 percent are in Roling Mills and Auxilary Shops zone, 11.34
percent are in Services & Utilities zone, 10.45 percent are at Blast Furnace zone,
12.84 percent are working at Air Seperation & Auxilaries zone, 11.94 percent are
working at Steel Melting Shop & Calium and Refractory Plant zone, 11.34
percent are at Sinter Plant zone, 10.75 percent are working under Raw Material
Handling Plant, 10.15 percent are working at Thearmal Power Plant & Coke
Ovens zone and the remaining 8.96 percent of the sample daily wage workers
development and also recognized with Vizag Steel Pant which is one of the best
steel plant in the country. The steel plant workers those who are working as daily
wage workers under different zones, the investigator has collected the sample
data for the current study. These pricate contractors are playing a vital role in
providing daily workers to the plant for performing their regular activities under
the above said nine zones still the plant was established during 1985 and have
been functioning with a profitable industry. Today, we are finding the impact of
these daily wage workers in each and every corner of the plant. The subjects
38
activities and the daily wage workers are playing an important role in performing
many job works {both technical and non-technical) by the public & private labour
contractors. The daily wage workers are performing their duties with their best of
simple units on the basis of their credibility. They used to work at different place
with different types of works assigned by their supervisors. Some of them are
critical and risky but these daily wage workers performing their jobs without
hesitate or ignore.
For the selection of the subjects from these nine types of zones the
> Collecting the information about the zones/departments where the daily
> By enquiring the list of daily wage workers under the control of different
> By enquiring in the Vizag Labour Office, about the list of organizations,
which are providing daily wage workers to the Vizag Steel Plant in
Visakhapatnam.
The sample obtained from the above selected departments showed a total
39
1975). The researcher has gone through various studies relating to the daily
wage workers and with the help of those previous studies designed a suitable
factors of the respondents along with the Organizational structure (Profile of the
unit). Work environment, Safety measures, Work details, Wage related, Welfare
activities, Incentives to the workers and Women welfare factors are standardized
of the test It is closeness of the agreement between what the test measures and
content validity criterion related validity. It means that the test is the degree to
40
are so meaningful and aim at collecting the data valid for the study. As such
The investigator used a self designed questionnaire with the help of few
daily wage workers. Later, the newly designed questionnaire standardized with
the help of spit-half, validity and reliability methods. The purpose of this research
study was to measure the prospects of daily wage workers in relation to profile of
the unit, work environment, safety measures, work details, payment of wages,
welfare facilities and incentives to the workers and at the same time the study
wants to measure the problems faced by the daily wage workers in Vizag Steel
b) Selection of variables
from journals, periodicals, and research papers and taking into consideration the
need of study and the feasibility criteria, the following independent and
i) Independent variables
1. Sex
2. Age
41
1. Work environment.
2. Safety measures.
3. Work details.
4. Wage related.
5. Welfare activities
6. Incentives to the workers
7. Women welfare
c) Statistical procedures
The obtained data were analysed by using cross tables, ANOVA (f-test)
tables and 't' test tables. Two way across tables was used to find out the
significant difference between and among groups, and f-test, t-tests were
42
significant the means were compared and the Scheffy's test was used as post
Hoc Test of Significance to find out any significant difference between any three
and above paired means. The T test was used to find out the significance of
difference between and among the groups of independent variables with the
means of each dependent variables. The hypotheses were tested and discussed
accordingly. The data were processed and tabulated with the help of SPSS
1.6.8 Chapterisation
For clarity and comprehension, the study has been presented in seven
chapters. The first chapter deals with the introduction of wage system in India
and abroad, and methodology of the study. In the methodology the discussion
has taken on scope, need, objectives and impact of the study along with
database, tool and techniques etc., The review of literature is discussed in the
second chapter where, the studies within the country and out side the country
from text books, articles in journals and publications. The impact of daily wage
system on labour productivity is discussed in the third chapter. The fourth chapter
throws light on the profile of Vizag Steel Plant and labour activities takes place.
The problems and prospects of daily wage workers in Vizag Steel Plant is
analysed with the help of primary data is presented in chapter five. The sixth
The last chapter presented the summary of findings along with important
suggestions.
43
problems and prospects of daily wage workers working at Vizag Steel Plant in
Visakhapatnam of Andhra Pradesh and the study areas include statutory welfare
facilities, non-statutory welfare facilities and also the social security measures
provided by the company to its employees. However, secondary data have been
collected for a period of 12 years from 1997-98 to 2008-09 and the same has
been presented in the research work. Wherever data are found to be scarce, the
study period has been restricted for five years from 2006-07 to 2010-11 in the
study areas.
1.6.10 Hypothesis
2. There is no significant difference between the male and female daily wage
44
45
determine not only to the ware related factors of the workers but also look in to
The study was limited in the following respects and the limitations would
> The study was confined to 335 Sample from the selected nine Units
taken in to consideration.
> The important elements like, age, sex, education, caste, religion, etc.,
welfare activities to the daily wage workers has taken in the current study.
46