Equal Pay for Equal Work: Statute and Constitution

On March 28, a two-judge bench of the Supreme Court remanded Chemical Mazdoor Panchayat vs Indian Oil Corporation for a fresh decision by the High Court of Gujarat. The original decision under appeal, Indian Oil Corporation vs Chief Labour Commissioner – raised a crucial question of the interplay between the constitutional principle of equal pay for equal work, and the statutory guarantee contained in Rule 25(2)(v) of the Contract Labour (Regulation and Abolition) Rules of 1971, framed under the Contract Labour (Regulation and Abolition Act) of 1970.

Before the High Court of Gujarat, the issue, briefly, was whether various contract labourers, including cooks, sweepers, and gardeners, who were working in the premises of the Indian Oil Corporation, were entitled to equal wages, on parity with permanent employees. The Gujarat Mazdoor Panchayat – the representative union of the workmen – made their first reference to the Labour Commissioner on this issue in 1994. After a few rounds of litigation, in 1992, the Labour Commissioner found that the work done by the contract labourers, and the permanent employees, was “same or similar”, and consequently, Rule 25(2)(v) of the CLRA Rules was applicable. This order was challenged, and eventually, in 2013, a division bench of the Gujarat High Court issued notice, observing that the Commissioner was wrong in taking into account only the nature of work:

“… if only apparent work is to be seen without ignoring the quality and capability of the person concerned, based on his qualification, experience, etc., such would frustrate the basic requirement. The essential purpose of Rule 25 is to ensure that there is no exploitation by the principal employer by engaging person through contract labourer, but that does not mean that the other requirements of qualification, experience, quality of work, nature of the work, responsibility and the accountability for the work are to be done away.”

Subsequently, on 8th May 2014, the High Court set aside the order of the Labour Commissioner, holding that the source, mode of recruitment/appointment, nature of work, value judgment, responsibility etc. – and not only similarity in designation or quantum of work – was relevant for equating two sets of employees. In this case, the regular employees were recruited through a written examination, and were required to have certain qualifications, which the contract labourers didn’t. Consequently, there was no obligation of equal pay. It was against this judgment that the labour union approached the Supreme Court, and the case – as observed above – has now been remanded on the question of the status of the contract labourers.

The issue, however, is an important one. Let us look closely at Rule 25(2)(v) of the CLRA Rules. This Rule states:

“In cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishments, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work.”

It is obvious that, under the CLRA Rules, parity between contract labourers and regular employees is dependent only on whether they perform “the same or similar kind of work.” Where then does the High Court get “mode of recruitment”, qualifications, and the like from? The answer, paradoxically, lies in the constitutional jurisprudence of equal pay for equal work.

The Supreme Court first constitutionalised the right to equal pay for equal work – which is Directive Principle 39(d) in the Constitution – in a 1982 judgment called Randhir Singh vs Union of India, the Supreme Court grounded equal pay for equal work in Article 14 of the Constitution, and observed that in cases where all “relevant considerations are the same“, the government could not deny equal pay simply by performing the bureaucratic manoeuvre of splitting the workforce into different posts, or different departments. In that case, because “there cannot be the slightest doubt that the drivers in the Delhi Police Force perform the same functions and duties as other drivers in service of the Delhi Administration and the Central Government“, equal pay for equal work was attracted.

The focus on the “same functions and duties” resembles the language of the CLRA – “same or similar work“. However, in the years after Randhir Singh, the Supreme Court progressively walked back on the broad principles that it laid down in 1982. In a number of judgments in the 1990s and the 2000s, the Court effectively gutted the principle of equal pay for equal work, incorporating into it the multiple additional aspects referred to by the Gujarat High Court – including mode of recruitment, qualifications etc (see e.g., State of Haryana vs Charanjeet Singh). Equality of work was no longer about the manner or character of the work, but much more about the relative positions of the workers. In other words, the Supreme Court effectively converted equal pay for equal work from a constitutional principle requiring effective equality, to a service law principle that focuses on the prerogative of employers to create hierarchies of posts in their workforce, by splitting it up into different cadres, departments, etc.

Rule 25 of the CLRA Rules, however, remained in its original form, still using the phrase “same or similar kind of work.” This leads to the following paradoxical position: Rule 25 of the CLRA Rules – textually – embodied a broader idea of equal pay for equal work, then did the Constitution (through Articles 14 and 39(d)). The Gujarat High Court resolved the contradiction by holding that Rule 25 had to be read in light of the Constitution, and that consequently, despite its focus on the character of work, it would be the constitutional understanding of equal pay for equal work – that took into account both the work and the worker – that would apply even to Rule 25. The Gujarat High Court relied upon the one Supreme Court judgment on the point – U.P. Rajya Vidyut Utpadan Board vs U.P. Vidyut Mazdoor Sangh. In that case, while discussing whether contract labourers at a filtration plant were entitled to equal pay with permanent employees, the Supreme Court held, with respect to Rule 25:

“Nature of work, duties and responsibilities attached thereto are relevant in comparing and evaluating as to whether the workmen employed through contractor perform the same or similar kind of work as the workmen directly employed by the principal employer. Degree of skill and various dimensions of a given job have to be gone into to reach a conclusion that nature of duties of the staff in two categories are on par or otherwise. Often the difference may be of a degree. It is well settled that nature of work cannot be judged by mere volume of work; there may be qualitative difference as regards reliability and responsibility.” (paragraph 10)

This paragraph, however, is ambiguous at best. “Degree of skill” could be taken to refer to the skill required to do the job (qualifying “work”), or the level of skill that is a pre-condition for permanent employment (qualifying “worker”). In the case itself, there was no controversial issue over differential recruitment qualifications; the Court’s decision was based on the fact that the Labour Commissioner, in mandating equal pay for equal work, had failed to take into account the evidence presented before him; this evidence, referred to in paragraph 12 of the judgment, included differences in both the nature of the work, and the recruitment qualifications. After extracting this, the Court noted, in paragraph 13, that:

“Despite such a specific case set up by the present appellants before the Labour Commissioner to show that the contract labour in filtration plant engaged through the contractors do not perform the same or similar kind of work as is done by the employees employed directly by the employer in main plant, the Labour Commissioner did not advert to these aspects at all. The Labour Commissioner ought to have adverted to the nature of duties of the staff in the two categories, degree of skill and dimensions of the job for reaching the conclusion that the work done by the contract labour in the second filtration plant is same or similar to the kind of work done by the employees employed by the principal employer directly in the main plant. There is no discussion at all by the Labour Commissioner as to how he arrived at the conclusion about similarity of work. The evidence let in by the parties and the material placed by them seem to have not at all been considered by the Labour Commissioner.” 

Here, in fact, the Court seems to be leaning more towards the similarity of work, than that of the workers. Consequently, UP Rajya Vidyut Utpadan Board is not authority for the Gujarat High Court’s view that Rule 25 of the CLRA Rules is to be read “in light” of the Constitution, and of its view that the constitutional jurisprudence of equal pay for equal work is to be imported into Rule 25.

Independent of precedent, however, the question remains: was the Gujarat High Court right in doing what it did? In my view, it was not. Of course, it is a very standard principle of interpretation that statutes are to be construed “in light” of constitutional principles and values. There are two reasons, however, while that interpretive technique ought not to be applied in interpreting Rule 25. The first is that the constitutional jurisprudence of equal pay for equal work is grounded in Article 14 of the Constitution, which lays down the abstract concept of equality. The concept of equality is consistent with many separate, more concrete, conceptions of what equality might require in a specific fact situation. In terms of parity of pay, one conception is that of the Supreme Court, which focuses on both the nature of the work, and the character of the worker. The other is that of Rule 25, which focuses only on work. Both these are equally valid conceptions of the principle of equality, as applied to “equal pay for equal work”. Consequently, importing the Supreme Court’s constitutional jurisprudence of equal pay for equal work into Rule 25 is not so much as reading the latter “in light” of the Constitution, but substituting the Court’s specific conception of what equal pay for equal work and equality require, with the legislature/executive’s equally valid conception of the same abstract principle.

Secondly, reading statutes “in light” of the Constitution has a specific purpose: ordinary statutes (as well as common law, for that matter, as was held by the Supreme Court in Rajagopal) ought not to set a lower bar for protection of rights than what the Constitution requires. However, the Constitution only establishes a floor for rights-protection, not a ceiling. It is surely open for Parliament to go beyond the Constitution, and establish a higher threshold for rights-protection than what the Constitution requires. This is exactly what Rule 25 does: by limiting the enquiry to the nature of work, it ensures that contract labourers who are claimants for equal pay have to demonstrate only that they are engaged in substantially similar work to that of the permanent employees; correspondingly, the wiggle room for employers is substantially limited, by ensuring that they cannot get around the obligation by simply stating that the contract labourers have come through a different recruitment process.

In fact, any other reading of Rule 25 would defeat its very purpose, because contract labourers, by definition, are engaged through a contractor, and not through the main recruitment process. If the Supreme Court’s reading of the “constitutional jurisprudence of equal pay for equal work” is imported into Rule 25, then claimants for equal pay will first have to show that the contract was a sham and a fraud, and that they are effectively permanent employees; however, if that was the burden upon such claimants, then a separate Rule 25, guaranteeing equal pay for similar work, would be more or less redundant.

For these reasons, it is submitted that the Gujarat High Court was arguably incorrect in reading Rule 25 of the CLRA Rules as importing the “work plus worker” formulation of the Supreme Court. That reading refers to equal pay for equal work as a specific interpretation of Article 14 of the Constitution, and has nothing to do with the textual standard set by Rule 25, which is more favourable to contract labourers. While the remand to the Gujarat High Court has been on the issue of the status of the workers (contractual or otherwise), the position of law remains open.