The Legal Dilemma Behind Equal Pay for Equal Work in India

Abstract

Principle of equal pay for equal work is applicable among equals. It can't be applied to unequal. The dilemma is that equal pay for equal work cannot be always calculated in the form of a mathematical formula. Although, this right is enshrined under Article 39 of the Constitution, its accomplishment with regard to the Equality clause under Article 14 has led to several difficulties over the years.

India addressed this problem way back in 1976 and enacted The Equal Remuneration Act which mandates ‘equal pay for men and women for the same or similar work’. It also bars hiring discrimination on the basis of gender. However, the enforcement of the same in letter and spirit remains a distant dream. In India, both the Constitution and legislation refer to equal pay for equal work, without mentioning equal value.

The doctrine of 'equal pay for equal work' is not an abstract doctrine and is capable of being enforced in a court of law. But equal pay must be for equal work of equal value. The Indian courts initially provided a relatively wide definition of equal work, which would apply regardless of different hours of work, or employment status. However, this has been reversed by the Courts in recent years. Our paper will focus on equal pay for equal value with reference to the job opportunities in the contemporary times. We aim to address the gender based pay parity on multiple fronts with respect to transparent pay structures, responsive ombudsman and reasonable legislations.

Introduction

Research Problem

1. What are the legal dilemmas involved in achieving equal pay for equal work in India?
2. Whether there is an existing conflict between equal pay for equal work and equal pay for equal value?

According to the Global Wage Report, 2016- 17 released by ILO, India’s gender wage disparity exceeds 30 per cent. These numbers are startling because Article 14, 15 and 16 of the Constitution emphasizes on providing equal opportunities of working conditions for all the citizens to achieve social justice. The directive principles enshrined under Article 39 of the Constitution states that equal pay should be given for performing equal work. In order to give effect to these constitutional principles, the Equal Remuneration Act was passed in the year 1976. However, a conflict arises since the legislations and Constitution of India mention only equal pay for equal work without mentioning the concept of equal value which focuses on the quality of the work.

There is lack of adequate literature with regard to the concept of equal pay for equal value as well as regarding the gender pay disparity in the IT firms. This shows that there is enough scope of study in this particular field. We will be reviewing

1. Background Paper for the Working Group on Discrimination against Women in Law and Practice (the Working Group): Economic and Social Life, The Right to Equal Pay for work of Equal Value, Sandra Fredman, Oxford University
2. The second article is ‘Gender pay gap in the Indian IT sector’ written by Salminen-Karlsson, M. in the year 2015, published by Centre for Gender Research, Uppsala University. The article examines the causes behind gender pay disparity in the IT field.

The scope of the research is to analyze the concept of equal pay for equal value over the existing concept of equal pay for equal work to cope with up with the changing trends in employment. Further, the paper also examines the legal tussle existing in the issue of gender pay parity in India. Our main objectives include:

• We intend to study the impacts of equal pay for equal work in the Indian IT companies.
• We intend to address the issue of gender pay disparities on multiple fronts like transparent pay structure and responsive ombudsman.

The study will be analytical in nature based the already available facts and information to make an analysis of the material at hand. The researcher has used Equal Remuneration Act, 1976 as a primary source of study. Internet sources including journals and research articles are used as secondary sources for the study. Books have also been referred to gain a deeper understanding on the subject.

Legal and Constitutional Provisions

The preamble of our Constitution includes the constitutional objectives that the framers of the Constitution intended to achieve, one of which is social justice. The word socialist in the preamble implies equal pay for equal work. Even though the right to equal pay for equal work is not a fundamental right, it can be construed through Article 14, 15, 16 of the Constitution. Article 14 ensures the implementation of equality clause and Article 16 declares that there should be equality of employment opportunity for all the citizens. Article 39 (d) states that there should be equal pay for equal work for both men and women.

Directive principle should be read interpreted harmoniously interpreted and read with fundamental rights. But there has been a conflict between the implementation of Article 14 and 39(d) because the doctrine of equal pay for equal work cannot be confined to stringent limitations. According to Article 14 of the Constitution, if any classification is made on intelligible differentia which has a direct nexus with the object sought to be achieved, then such classification is permissible. Article 14 states that equals should be treated alike, it does not mean that unequal ought to be treated equally because mechanical equality before the law may result in injustice.

The Supreme Court in State of U.P. vs. J.P held that different scale of pay in the same cadre of person doing similar work can be fixed if there is a difference in the nature of work done. Further, in Federation of A. I. Custom and Central Excise Stenographers (Recog.) vs. Union of India, the Court emphasized that equal pay must depend on the 'nature of the work done' and not 'mere volume of work' as 'there may be qualitative difference as regard reliability and responsibility. It noted that functions performed may be the same but the responsibilities make a different.

In Markendeya vs. State of Andhra Pradesh, Court noted that difference in pay scale due to difference in educational is justifiable and would not offend Article 14 and 16. Thus, if employees are classified on the basis of their educational qualification, work experience for determining their wages, then such classification is permissible. There is no violation of Article 39 (d) if the classification is just, fair and reasonable.

Equal Pay for Equal Value

The right to equal pay for equal work should not be limited to equal pay for the same work, but should be extended to work of equal value as per the ILO Convention 100. This is because, the underestimation of the value of work due to discrimination against a particular group, is mainly related to women. Like the fact that women work at home and are primarily child caregivers, among others, means that their paid work in the labour market is undervalued.

Eliminating unequal pay for the same job is only the first step in this process. In the case of widespread occupational segregation, the problem is not that women receive less pay for the same job, but rather that they are concentrated in underestimated feminization. The concept of work of equal value stresses on the fact that comparison should not be limited to the content of the work, but rather to compare work requirements, such as skill level, effort and responsibility, and working conditions.

In India, the initial recognition of the principle of equal value under Constitutional Guarantee was revoked when the Supreme Court of India saw it as ‘creating havoc’. Different groups across India started claiming parity pay with other groups, such as government employees in one state claiming equal pay with government employees in another state. Because this is a violation of the principle of decentralization to interfere with workers’ wages, the court’s subsequent view on the principle is very narrow.

Markandey J said: ‘In our opinion fixing pay scales by Courts by applying the principle of equal pay for equal work upsets the high Constitutional principle of separation of powers between the three organs of the State. Realizing this, this Court has in recent years avoided applying the principle of equal pay for equal work, unless there is complete and wholesale identity between the two groups (and there too the matter should be sent for examination by an expert committee appointed by the Government instead of the Court itself granting higher pay).’ This resulted in a restrictive interpretation of the principle of equal pay for equal work. In the sense, that unless there is a “complete and wholesale identity between the two groups”, there is no requirement for equal pay for equal work.

In a 2017 report the International Labour Organization (ILO) pointed out that the wage gap between Indian women and men is enormous. The survey clearly reflects that men earn more than women in similar jobs. In many cases, the gap has reached a staggering 30%. The data from the Monster Salary Index (2016) shows that India's gender wage gap is still booming as the index points out that the median hourly wage for men is 345.8 rupees, while for women it is only 259.8 rupees. In fact, the gender wage gap averaged 25% in 2016. However, this figure varies from industry to industry. Example- In manufacturing, the gender wage gap is 29.9%, while in the IT sector it is 38.2% the index points out.

However, there are a number of laws that protect equal pay for equal work for men and women, such as the 'Equal Remuneration Act of 1976' which aims to provide equal pay for both workers and prevents gender based discrimination in matters related to employment and employment opportunities. This not only provides women with their right to equal pay for equal work, but according to the Act, any inequalities in the recruitment process, vocational training, promotion and transfer within the organization may also be questioned.

However, the definition of “same work or work of a similar nature” does not meet the ILO’s requirement for equal pay for work of equal value. The statute defines it as “the same job or work of a similar nature” as ‘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 ILO's CEACR has always emphasized that this definition is too strict and restrictive, because the concept of equal value goes beyond “similar work” and include work of a completely different nature, but they must be of equal value. The Committee is also concerned that India has not fulfilled its obligations under Article 3 of the Convention and has taken measures to promote an objective assessment of its work based on the work to be carried out. It states that in India, women's remuneration is determined by classification, and this does not reflect the actual nature of the work involved.

Sankaran confirmed this by pointing out that according to the “Minimum Wage Law, 1938”, women’s occupations are usually classified as non-technical aka unskilled. For example, in transplanting (which is exclusively done by women in most parts of India), agriculture, weeding etc although skills and experience are necessary for both activities, but classified as unskilled, while other activities are usually performed by men which are considered as skilled work for which they avail higher wages.

Gender Pay Disparity in IT Firms in India

According to Section 1 of the Equal Remuneration Act, 1976, this Act is applicable to establishments only via notifications issued by the Appropriate Government. As per notification number S.O. 144 (E), dated 02 March 1977 ‘Data processing and tabulating services’ falls under the ambit of the Act. Hence, the IT and ITES industries are now covered under the Equal Remuneration Act. Gender disparity in the labor market is a common phenomenon. IT service firms are no exception to it. The reasons attributed for the gender disparity in the IT service firms are as follows:

1. In IT firms, work experience is a determinant factor in deciding the salary. Since women were expected to perform family responsibilities, they took career breaks in between which made it hard for them to acquire the experience that led to high salary. It is often difficult for women to continue working after taking maternity breaks because the gap might affect their performance, salary levels etc. A survey on IT professionals where they came up with the conclusion that only 14% women have work experience of 11 years or more and this confirms the fact most of the women tend to leave their jobs after getting married. The report also confirmed a gender pay parity of 29% in the IT companies in India.
2. Women’s traditional role as a wife and mother affected their progress and growth in the software industry as they were restricted from working for longer hours or weekends. Thus availability factor has given men an upper hand over women in the Indian IT companies.
3. In the Indian software sector, the gender pay parity is due to the organizational practices of the companies. They still believe in paternalistic leadership.
4. Most of the IT companies in India make their employees to sign a confidentiality agreement, thereby preventing to disclose their salaries to prevent comparison of wages. Further, they also do not discuss or compare their salaries with their male counterparts.
5. While men change companies often in search of better salary and perks, women tend to stay longer in their particular company. They choose better working conditions over better pays.

Thus, it is to be noted that there could be different factors that has caused in the wage disparity between the men and women. None of this factors are particular to India because gender pay disparities in the IT companies is a global issue. But the laws, to an extent, has been successful in reducing the gender gap prevalent in the software companies by looking at the quality of work rather than differentiating men and women on the basis of quantity of work because equal pay depends on the nature of work.

Nowadays, IT companies use different formulas to calculate the wages such as the salary is calculated on the basis of ratings given by the customers and supervisors rather than on the whims of the managers. Also weekly and monthly ratings could be taken so as to keep an update on the performance of the employees. Such evaluations would not be discriminative, it will be gender- neutral in nature. The salary will be determined only on the basis of their performance. Recently, Adobe India declared that it attained 100 per cent gender pay equality in India. It stopped seeing previous remuneration of the employees to determine their new wages. Salaries were determined only on the basis of their merit and work performance.

Conclusion and Recommendations

The staggering pay parity that exists in our country across various sectors is a matter of concern. Though India’s GDP gears towards surpassing major economies of the world according to the IMF reports, the average gender pay parity draws a different picture. According to a report by the Wage Indicator Foundation and the Indian Institute of Management, Ahmedabad, the pay gap increases with women’s age, work experience, educational qualifications and rise in occupational hierarchy. Pay parity, thus have to be addressed on multiple fronts to build a work culture that provides for the growth and opportunities for everyone. Some of the measures that can be imbibed to reduce the pay parity that exists in our country are:

Firstly, the job has to be well defined, it should best reflect their nature of work. Usually brand marketing managers to event managers are placed at a similar pedestal of ‘marketing managers’ without differentiating their roles and responsibilities thus resulting in unequal pay. Adobe, the software giant realized this lacunae and embarked on an exercise they called the “job architecture.” This entailed review of the job classification led to the introduction of many new job families that better represented their actual work which helped employees get an equitable pay for their work. This would give more emphasis on the specific work performed that would generate value for the firm.

Secondly, the practice of enquiring the candidates about their salary history should be discontinued. This practice leads to carrying forward the pay parity that existed in their previous place of work. Salary offered by an employer should be based on the skill, experience, qualification and the nature of work. This would ensure that employees get an equitable pay.

Thirdly, the government should play an active role to reduce the gender wage parity. They can do so by mandating every employer to have a transparent pay structure which enables both the government and other fellow employees to be aware of the wages being offered thereby making the system more transparent. Iceland is the first country to require every company employing 25 or more people to gain a certificate demonstrating pay equality.

The government should enact a legislation for permitting paternity leave, shared parental leave and subsidize childcare to share the duty of child care. In order to help the the female workers in the informal sectors , the government should provide the facility of mobile creches.

Fourthly, every company should have a responsive ombudsman to ensure that employees have an internal forum to address their concerns regarding their working environment. Many reports suggest that women generally drop out from their work due to the unfavourable working conditions. This would ensure that employers provide a suitable atmosphere to work that encouraging more women to join and return to their workforce.

Fifthly, companies and organisations should have a mentoring system which involves educating and training all employees in their respective job profile. This training becomes pertinent when an employee returns to work after a break either due to sickness or maternity leave or any other reasonable reason, this helps them cope up with the working environment. This enables them to be efficient and valuable at the workplace.