Monday, 23 January 2017

Equal Pay for Equal Work: A Constitutional Goal Achieved

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This article was written by Rudra Srivastava and Ritika Modee (Singhania and Partners), one of our key authors for our best-selling Asia Pacific Employment Law (HELP) subscription.
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One of the trends in the labour market of India that has been persistent and has become a reason of worry is the practice by employers to keep large section of workforce particularly the blue collar1 as temporary workers. Recruited through an elaborate system of contractors, these workers, though they are as competent as their “regular” counterparts, are denied not only the same wages and emoluments for the same work done but also other benefits. Such workers constitute almost 50%, sometimes more, of the workforce in many organisations and even in government departments2



Constitution of India in its preamble talks about equality in terms of both status and opportunity. The Constitution does not categorically provide for “Equal pay for equal work” with reference to the permanent and temporary or contract labour. The Supreme Court of India in its landmark judgement State of Punjab and ors v Jagjit Singh and ors , on 26th October, 2016 while taking a step in furtherance of social justice has conferred the right of equal pay for equal work upon the temporary workers vis-a vis the permanent workers. On a constructive reading of Article 143 , Article 15(1)4, Article 16(1)5 and Article 39 (d)6 it may be said that the Hon’ble Supreme Court has expanded the application of equal pay for equal work so as to cover within the ambit of the principle the right of temporary labour to receive same wages/salary as their permanent counterparts provided they are engaged in same work of equal difficulty and responsibility.

The question that arose for determination before the Hon’ble Supreme Court in the aforesaid matter was:

  • Whether temporarily engaged employees (daily-wage employees, ad-hoc appointees, employees appointed on casual basis, contractual employees and the like), are entitled to minimum of the regular pay-scale, along with dearness allowance (as revised from time to time) on account of their performing the same duties, which are discharged by those engaged on regular basis, against sanctioned posts?
For the purposes of determination of this question the Court examined nearly 35 leading judgements on the “principal of equal pay for equal work”. The Court after examining the prior decisions on this issue held that “… the principle of equal pay for equal work constitutes a clear and unambiguous right and is vested in every employee-whether engaged on regular or temporary basis … There can be no doubt, that the principle of ‘equal pay for equal work’ would be applicable to all the concerned temporary employee, so as to vest in them the right to claim wages, at par with the minimum of the pay-scale of regularly engaged Government employee, holding the same post …” while holding the aforesaid the court upheld the decision in rendered in State of Punjab & ors v Ranjinder Kumar 7 with modification that “the concerned employees would be entitled to the minimum of the pay-scale, of the category to which they belong, but not entitled to allowances attached to the posts held by them.

The Court acknowledged the fact that India being a welfare state, could not have an employee who is engaged for the same work, be paid less than another, who performs the same duties and responsibilities. The Court was of the view that “…Anyone, who is compelled to work at a lesser wage, does not do so voluntarily ... he does so to provide food and shelter to his family, at the cost of his self-respect and dignity … Any act, of paying les wages, as compared to others similarly situate, constitutes an act of exploitative enslavement, emerging out of domineering position. Undoubtedly, the action is oppressive, suppressive and coercive, as it compels involuntary subjugation.”

Hon’ble Supreme Court in order to arrive at the aforesaid judgment considered various cases which included:
  • Where all relevant considerations are same then person holding the identical posts ought not to be treated differently, in the, matter of pay. It is no classification or irrational classification if the two sets of employees who perform identical duties and responsibilities are paid different wages, merely because one is engaged on temporary basis and the other on regular8.
  • Differentiation of pay-scale is justified if the work discharged by the petitioners and their counterparts is not the same and, it is due to the dissimilarity of their responsibility and level of confidentiality involved.
  • Equal pay depends on nature of work done and cannot be judged by the mere volume; for any disparity there has to be a difference with regard to reliability and responsibility. So long as the judgment is bona fide, reasonably on an intelligible criterion which has rational nexus with the object of differentiation, such differentiation will not amount to discrimination. Differentiation in pay scales of persons holding the same posts and performing similar work on the basis of difference in the degree of responsibility, reliability and confidentiality would be a valid differentiation9.
  • Where temporary workers are doing the same work as the regular workers then they cannot be denied parity in wages and cannot be thereby discriminated against10.
  • If the duties and responsibilities of post are more onerous and exposed to higher operational risk then the principle is not applicable.
The Hon’ble Supreme Court while dealing with the issue of equal pay for equal work in the aforesaid matter also observed that pay parity and the concept of equality cannot be invoked so as to make the temporary employees permanent or for the regularisation of temporary labour. The principle of equal pay for equal work cannot be unreasonably extended to hold that temporary employees should be treated on par with regularly recruited candidate, and be made permanent. Thus the principle of “Equal pay for equal work” is not the same as regularisation of labour.

On the perusal of the judgment it is clear that the Court has followed the principle of intelligible differentia and reasonable classification. Since there is no reasonable ground for granting different wages or for pay parity if work of same nature and responsibility are being performed by temporary and permanent employees, the principle of “equal pay for equal work” has been interpreted so as to extend its applicability on the case in hand.


While an argument can be made that the outcome of the judgment of the Hon’ble Supreme Court may have detrimental effects like extra financial burden on the government exchequer and if made applicable to the private sector then it might result in the reduction of basic salaries or change in the terms of employment to the detriment of the permanent employees etc. But this decision of the Supreme Court is definitely a socially progressive decision and would ensure pay parity for same work. This will help in ensuring equality where there is no reasonable ground for differentiation or classification. The judgment has come as fresh breath of air and will definitely be a sigh of relief for temporary and contract workers. However, it remains to be seen how the various States will bring their departments in compliance with the decision. The legislature will have to play an active role in developing wage code to be attuned to the decision and provide a concrete framework for its implementation.

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Footnotes:
1. relating to manual work or workers,  particularly in industry
2. www.frontline.in/the-nation/end-of-wage-disparities/article9373781.ece last visited on 29/11/2016
3. The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India
4. The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them
5. There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State
6.  The State shall, in particular, direct its policy towards securing that there is equal pay for equal work for both men and women
7. (LPA NO. 1024 of 2009, decided on 30.08.2010)
8. Randhir Singh v. Union of India (1982) 1 SCC 618
9. State Bank of India v. M.R. Ganesh Babu (2002) 4 SCC 556
10. Bhagwan Das v. State of Haryana (1987) 4 SCC 634

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