Three reasons why 15 crore workers are on strike despite the government's offer of a higher wage

An estimated 15 crore workers in factories, banks, mines, in transport – nearly a third of India's working population of 46 crore people – are expected to strike work on Friday in response to a call by ten central trade unions. The unions are opposing the dilution of workers' rights through changes in labour laws and deteriorating work conditions, among other issues.

The days preceding the strike witnessed hectic negotiations between the government and trade unions, including the Rashtriya Swayamasewak Sangh-affiliated Bharatiya Mazdoor Sangh. While the Bharatiya Mazdoor Sangh withdrew from the strike after meeting union ministers on August 24, the other unions decided to go ahead with their agitation.

Here are three reasons the workers' representatives have refused to accept the government's offer.

1. Most workers are excluded from provisions granting higher wages

Finance Minister Arun Jaitley announced on August 31 that the government has decided to increase the minimum wages of workers in the unskilled category from Rs 246 a day to Rs 350 a day. This comes to a monthly minimum wage of Rs 9,100. Minister of labour and employment Bandaru Dattatreya then appealed to the trade unions to call off their agitation.

But union leaders point out that the wage announcement will apply to only those employed in the non-agricultural sector in categories in which Central government has the power to fix wages. Under the Minimum Wages Act, the Central government can fix minimum wages in 48 categories, of which the main ones are iron ore mines, unloading railways goods and stone crushing. The states fix minimum wages in 1,679 job categories. Jaitley's wage announcement, thus, leaves out a large majority of workers, including workers in manufacturing.

“By government's own estimates, only about 70 lakh workers out of 46 crore, or about 1.5% of working population fall in categories where the Centre fixes the minimum wages,” said Tapan Sen, member of parliament from CPI(M) in Rajya Sabha. “Even in these categories, in some groups such as iron ore mines, contract workers already earn this much.”

The trade unions have been demanding for past several years that the national minimum wage floor set by the Centre is made legally binding on all state governments.

At present, this is set at Rs 160 a day, and is non-statutory, which means it is not binding on states. The Centre only suggests this as a minimum floor and the states can set wages even lower than this in 1,679 job categories. A proposal to have a statutory national minimum wage floor is pending before the ministry of labour and employment.

Jaitley also announced that the government had fixed Rs 350 on the basis of recommendations made by the Minimum Wage Advisory Board. But board members denied this.

“A meeting was hurriedly convened on August 29, on just two days notice,” said Dr Kashmir Singh, a board member and union representative. “We demanded Rs 18,000 as minimum monthly wage, which is at par with the Central Pay Commission's recommendations. But there was no consensus and the meeting ended inconclusively.”

The announcement of Rs 350 daily wage is thus, far lower than than unions' demand which comes to Rs 629 per day. Unions are asking for a higher wage as data from last 25 years show that inflation adjusted-wages have stagnated and even declined since 1990-'91.

2. Bonus payments have been pending for two years

In its announcement, the government put emphasis on its amendment to the Payment of Bonus Act, which increases the ceiling on bonus from Rs 3,500 earlier to Rs 7,000 now. The Central government will pay bonus for 2014-'15 and 2015-'16 based on revised norms. The government will take necessary steps to resolve the cases pending in High Courts and the Supreme Court with regard to bonus payments, Jaitley added.

But union leaders ask why has the government failed to notify the law even after the recent announcement. The Payment of Bonus Act was amended in December 2015, but the bonus payments of these two years have not been made in any state so far, the leaders pointed out.

3. Social security for unorganised sector yet to be implemented

The inter-ministerial group on labour led by Jaitley also stressed that among the 12-point charter of demands that the unions submitted in August 2015, the government had already made an effort to extend social security through Provident Fund and Employees' State Insurance to unorganised sector workers. This includes, for instance, more than 20 lakh anganwadi staff appointed on contract in the Integrated Child Development Services.

But unions leaders said that while the government has repeatedly formed committees to deliberate the change, it has failed to make a notification to this effect.

“For workers covered under ESI Act, the contribution is only 1.75% of their monthly wages for full benefits,” said AR Sindhu, general secretary of Anganwadi Federation of Workers. “But the government has asked these workers to contribute Rs 250 monthly, which comes to 8.3% of the paltry honorarium of anganwadi workers, 16% for helpers and 25% for the mid-day-meal workers."

She added: "Why are they announcing a new committee? Already, there have been three parliamentary committees. How many more committees do they want to set up? This is nothing but posturing."