Basics of wage Board

1. Mid Sem Assignment
WAGE BOARD
LABOUR ECONOMICS

2. Wa
ge
Boar
d
A Wage Board is a tripartite body with represent
a­
tives of management, and
workmen, presided over by an independent person nominated by the Government.
The Board is required to fix wages in accordance with the principles of wage
fixation.

3. Wa
ge
Boards – Introductio
n
A wage board is a statutory body established by the government to tackle the
disputes relating to the employers or the employees.
In 1931, the Royal Commission on Labour recommend the setting-up of Wage
Boards for determination of wages.
In March, 1957 the first Wage Board was constituted for the cotton textile
industry .
The structure of a wage boards constitutes Chairperson, an equal number of
representatives of employers and employees (two members each) and two other
independent members (an economist and a consumer’s representative) nominated by
the Board.

4. Wa
ge
Boards – Meanin
g
A Wage Board is a tripartite body with represent
a­
tives of management, and workmen, presided over
by an independent person nominated by the Government. The Board is required to fix wages in
accordance with the principles of wage fixation.

5. Th
e wa
ge
boards have, however, been c
ri
tic
is
ed on
the
fo
ll
owing c
ou
nts
:
i. No legal sanction
ii. Results of compromise decisions and cannot therefore become consistent long range
wage policy.
iii. The Government has to legislate for giving effect to the recommendations of a Board.
iv. The members of the Boards are not always the true representatives .
v. The Boards often make recommendations on all-India basis.
vi. The time lag between the making of the recommendations and their implementation is
generally very great.

6. Wa
ge
Boards – Concep
t
The National Commission on Labour in its report submitted in 1969, recommended that the wage
boards should – (i) create a climate for harmonious industrial relations; (ii) safeguard the interests
of the community and to represent consumer’s interests; and (iii) derive standardised wage structure
for the concerned industry. However, these recommendations have yet to be followed.
The composition of the Wage Boards is Tripartite, i.e.; it comprises of the representatives from
industry, trade unions and the Government. A wage board is a non-statutory body comprising of
equal number of representatives of the employers and the employees or their trade unions who are
appointed by the Government and it is chaired by a serving or retired judge who is a Government
nominee.

7. Th
e wa
ge
boards while determining
the
wa
ge
st
ructure for
a pa
rt
icular indu
st
ry, us
es
the
fo
ll
owing factors
:
(i) Need-based minimum wage
(ii) Industry’s capacity to pay
(iii) Productivity of labour
(iv) Prevailing rates of wages
(v) Level of national income and its distribution
(vi)Place of industry in the economy of the country
(vii) Needs of industry in developing economy
(viii) Requirements of social justice; and
(ix) Adjustment of wage differentials in such a manner as to provide incentives for skill
formation.

8. Wa
ge
Boards – 8 Impo
rt
ant Objectiv
e
To achieve the following objectives the Wage Board was set-up:
1. To align the wage settlements with the social and economic policies of the
Government.
2. To represent consumers/public the interests.
3. To standardise wage structure throughout the industry concerned.
4. To provide better climate for industrial relations.
5. To work out wage structure based on the principles of fair wages as formulated
by the Committee on Fair Wages,
6. To work out a system of payment by results.
7. To evolve a wage structure based on the requirements of social justice.
8. To evolve a wage structure based on the need for adjusting wage differentials in a
manner to provide incentives to workers for advancing their skill.