Labour Bureau
Government of India
R E P O R T

ONEVALUATION STUDIES ON IMPLEMENTATION OF

THE MINIMUM WAGES ACT, 1948 

IN BIDI MAKING ESTABLISHMENTS IN
MADHYA PRADESH

CHAPTER V

WAGES, EARNINGS AND HOURS OF WORK 

5.1   INTRODUCTION 

5.1.1   The Minimum Wages Act, 1948 is both a protective and beneficial legislation guaranteeing the payment of minimum rates of wages to the workers in the various Scheduled Employments scattered over different parts of the country.Although the Act does not provide for registration of establishments, yet it is applicable to employments where the workers are particularly vulnerable to exploitation, due to ignorance, poverty, illiteracy and lack of bargaining power.The workers in bidi industry are scattered over large areas and do not have collective bargaining power.Therefore, they are in need of protection. The Act empowers both the Central and the State Governments to fix and revise the minimum rates of wages in the Scheduled Employments falling under their respective jurisdictions. The bidi making establishments fall under the Scheduled Employment “Tobacco” (including Bidi Making) Manufactories’ in the State Sphere. Therefore, the responsibility for implementation of the provisions of the Minimum Wages Act, 1948 rests with the State Governments. They notify the minimum wages for bidi workers within their jurisdiction.

5.1.2   In Madhya Pradesh, the rates of minimum wages for Bidi Rollers are fixed on a piece rate basis (number of bidis rolled), the traditional measure being per thousand bidis.However, fixation and revision of minimum wages is of no consequence unless these are actually paid to them.The problems of the bidi workers continue to be a cause of concern for the labour administrators and enforcement authorities as the workers often complain of the unfair treatment at the hands of manufacturers, Contractors and agents in matters of rejection of finished products, issue of inadequate quantity and poor quality of raw material (tendu leaves, tobacco, thread, etc.) as well as the violation of the provisions of the Bidi and Cigar Workers (Conditions of Employment) Act, 1966, the Minimum Wages Act, 1948 and the Equal Remuneration Act, 1976.The Regional Labour Ministers Conference held during 1994-95 had endorsed the recommendations of the Ministry of Labour for the Constitution of a Tripartite Standardisation and District Level Vigilance Committee and had made the following recommendations in respect of bidi workers:-

5.2   Prescribed rates of Minimum Wages:

‘Tobacco (including bidi making) Manufactories’ is a Scheduled Employment originally included in Part-I of the Schedule appended to the Act.The minimum wages applicable to the bidi workers at the time of the Study were notified by the State Government of Madhya Pradesh as provided under Section 3(1)(b) and Section 5 of the Minimum Wages Act, 1948.Prior to 1953, Minimum Wages were fixed at Re. 0.62 to Rs. 1.37 per thousand bidis.These wages were revised to Rs. 2.00-2.25 for the first time in 1966.Since then they have been revised several times.The latest wage revision, which was in force at the time of the study, had become effective from 1st October, 2000 vide notification No. 1/9/A/5/97/32759-33288 dated 12-10-2000.The minimum rates of wages for various categories of employees in Tobacco (including Bidi Making) Manufactories appearing in Part I of the Schedule were linked to the Consumer Price Index Numbers (Industrial Workers).The revised rates of minimum wages applicable during the period of study are given below:- 
 
Prescribed Minimum rates ofWages for piece rated employees
 
Class of Employees
Minimum Wages ( in Rs.)
 
1. Bidi Rolling
36.17(per thousand bidis)
 
2. Wrapping/Packing/Labelling

(a) Pasting of Slips on bidi bundles

(i) Labelling, Puda Making etc.

(ii) Labelling on both sides of bundles

(b) Wrapping and Labelling

(i) Thin paper labelling

(ii)Thin paper sticking

(iii)Labelling

(iv)Puda Making

( c) Wrapping on 1000 bundle (each bundle of 25 bidis)

(i) Wrapping of Horizontal & Vertical Strips

(ii)Wrapping/Pasting of paper

(iii)Wrapping and Pasting of Trade Mark

Rs. 19.65 per thousand bundles

Rs. 22.00 perthousand bundles

Rs. 15.85 per thousand bundles

Rs. 11.26 per thousand bundles

Rs.4.76 per thousand bundles

Rs.5.01 perthousand bundles

Rs. 68.35 perlakh bidis

Rs. 81.05 perlakh bidis

Rs. 81.05 per lakh bidis

In bidi making industry all the time-rated (monthly/daily paid) workers other than the above mentioned piece rated categories have been classified into three broad categories as Skilled, Semi-skilled and Unskilled workers. The occupations' which comprise these three skill categories are as under: -
 
1. Skilled :
Driver (Heavy Vehicle), Accountant, Munim, Cashier, Store Keeper, Head Clerk, Godown keeper
2.Semi-Skilled :
Sorter/Checker, Bhattiwala, Driver (Light Vehicle), Typist, Billman, Clerk
3.Unskilled:
Loader, Un-loader, Puda Maker and Chowkidar.

Prescribed rates of Minimum Wages (including V.D.A.) for time rated employees were as below:

Sl. No.
Skill Category
Monthly Wages (Rs.)
Daily Wages (Rs.)
1. 
Skilled
1995.44
76.75
2. 
Semi-Skilled
1828.30
70.32
3. 
Unskilled.
1662.80
63.95

N.B.- The wages include the variable dearness allowance.

5.2.1   These wages have been linked to 1206 points of the Labour Bureau Series of All-India Consumer Price Index Numbers for Industrial Workers (Base 1960=100).The Variable Dearness Allowance (VDA) is payable at the rate of 1 paisa per point for an increase of 930 points over 1206 points upto 30.09.2001.

5.2.2   The revised rates of minimum wages are subject to the following conditions:-

5.3   Mode of Payment

5.3.1   Section 3(2) of the Minimum Wages Act, 1948 empowers the Appropriate Governments to fix the minimum rates of wages either for time rated work or for piece-rated work.In bidi making establishments employers have adopted both the systems of payment of wages i.e., 'time rate' and 'piece rate'. Wages for bidi rolling, wrapping, packing and labelling operations are paid on 'piece rate basis' while those in all other operations on 'time rate basis'.The stratum-wise system of payments is shown in Table 5.1.

Table 5.1   Percentage Distribution of Employees by Stratum and System of Payments
 
Sl. No.
Stratum/ District
Percentage of employees paid on the basis of 
Time-rate
Piece-rate
1
Stratum I

Sagar

16.0
84.0
2
Stratum II

Jabalpur, Satna

17.4
82.6
3
Stratum II

Gwalior, Datiya and Vidisha 

19.2
80.8
4
Stratum IV

Balaghat

24.1
75.9
5
Stratum V

Bhopal, Indore, Devas, Ujjain& Hoshangabad

20.8
79.2
All Strata
18.5
81.5

5.3.2   It is evident from the Table that major proportion (81.5 percent) of employees were paid on piece rate basis and only 18.5 percent were paid on time rate basis. The proportion of employees paid on piece rate basis in different Strata oscillated between 84.0 percent and 75.9 percent the former being in Stratum I and the later in Stratum IV. Inter-stratum variation was attributed to the fact that Stratum-I was the largest bidi producing area dominated by the smaller establishments of agents and middlemen engaged in getting the bidis rolled for passing on to bigger or Trade Mark Establishments for wrapping, packing and marketing.

5.3.3   The category-wise system of payment of wages is given in Table 5.2.It will be seen from the Table that all the Bidi Rollers, Packers, Labellers and Wrappers were paid on piece rate basis.All other workers, like,Sorters, Furnace Men, Raw Material Distributors, Clerks, etc., were paid on time rate basis.

Table 5.2   Percentage Distribution of Bidi Employees by their Categoriesand by the System of Payments
 
Sl. No.
Categories of Employees
Percentage of Employees paid on the basis of
Time-rate
Piece-rate
1
Wrapper/Labeller/Packer
-
100.0
2
Taraiwala (Sorter)/Checker
100.0
-
3
Furnaceman (Bhattiwala)
100.0
-
4
Clerk
100.0
-
5.
Raw Material Distributor
100.0
-
6
Bidi Roller 
-
100.0
All Categories
18.5
81.5

5.4   Wage Period

5.4.1   Section 3 (3b) of the Minimum Wages Act, 1948 provides for different wage periods ranging from hour to month. The minimum wages notified by the Government of Madhya Pradesh for different types of operations were either time rated or piece rated.The wage periods adopted by the bidi manufacturers for different categories of employees covered by the study are presented in Table 5.3.

Table 5.3    Percentage Distribution of Bidi Employees According to Wage-periods

Sl. No.
Categories of Employees
Percentage of Employees paid
Monthly
Weekly
Total
1
Wrapper/Labeller/Packer
100.0
-
100.0
2
Taraiwala (Sorter)/ Checker
100.0
-
100.0
3
Furnaceman (Bhattiwala)
100.0
-
100.0
4
Clerk
100.0
-
100.0
5.
Raw Material Distributor
100.0
6
Bidi Roller 
-
100.0
100.0
All Categories
26.5
73.5
100.0

5.4.2   It will be seen from the Table that all the factory workers and office staff viz., Wrappers, Labellers, Raw Material Distributors, and Clerical Staff, etc., were paid on monthly basis.On the other hand all the Bidi Rollers were paid on weekly basis.As such the overall proportion of bidi employees paid on weekly basis worked out to 73.5 percent, as against 26.5 percent of other workers who were receiving wages on monthly basis.It was observed that in operations like bidi rolling, wages were calculated on the basis of daily production and payments were made on weekly basis or adjusted on a monthly basis.It was also observed that because of these adjustments after a week or a month, the Bidi Rollers did not have a clear idea about their actual earnings.

5.5   Hours of Work

The working hours in the Scheduled Employment ‘Tobacco (including Bidi Making) Manufactories’ are governed by the Bidi and Cigar Workers (Conditions of Employment) Act, 1966.The Act restricts the hours of work to nine per day and forty eight per week with a maximum spread over of 10.30 hours per day.Under the Act no employee can be made to work beyondfive hours without a rest interval of at least half an hour.An adult employee can work in excess of the prescribed hours of work subject to the payment of over time wage rate. However, the period of work should not exceed 10 hours in a day and 54 hours in a week, inclusive of overtime work.The payment for overtime work has to be made at twice the ordinary rate of the wages or the average daily full time earnings in case of piece rate workers. The Minimum Wages Act, 1948 on the other hand only provides for fixation of normal hours of work, a weekly day of rest and payment of overtime wages in the Scheduled Employments by appropriate Government. However, all these and similar provisions of the Act are of little consequence to a major proportion of the employees in this industry comprised of a sizeable number of Bidi Rollers who roll bidis within the four walls of their houses. These home workers do not have any prescribed hours of work as they roll bidis as and when they are free from their domestic chores.The premises/factory workers, however, are the real beneficiaries of these provisions.As far as the Trade Mark Establishments and the medium sized establishments are concerned, the provisions of the Act, relating to hours of work, rest interval, weekly holidays, etc. were being implemented.The time rated employees were usually working as Clerks, Raw Material Distributors, Taraiwalas, etc.

5.6   Wages and Earnings

5.6.1   During the course of Study, it was observed that although the big manufacturers were keeping records of the wages paid to premises workers and the Bidi Rollers who were directly employed by them, yet the records for Bidi Rollers engaged by the Contractors were not maintained correctly as they showed only production.As the payments were made through Contractors, there were, therefore, chances of exploitation of the Bidi Rollers at the behest of the former.The employees in bidi making industry constitute a heterogeneous lot with various categories of bidi workers on the one extreme and the Bidi Rollers (home workers) engaged either directly or through the Contractors on the other.The dependants of the home workers rendering effective assistance in rolling bidis constitute a large segment of Bidi Rollers who could not be treated as employees for want of an established employer-employee relationship. Hence for properly analysing the earnings of the Bidi Rollers (home workers), it is necessary to identify and isolate the contribution of this hidden segment of Bidi Rollers.During the study, an effort was made to separate the estimated earnings of these workers from those of the registered or the identified Bidi Rollers.

5.6.2   Bidi Workers

5.6.2.1   The bidi workers constituted 26.5 per cent of the employees covered by the Study. Average daily earnings of different categories of bidi workers are given in Table 5.4.

Table 5.4   Average Daily Earnings of Bidi Workers  (in Rupees)

Sl. 
Categories
Average daily earnings in 
No.
Stratum-I
Stratum-II
Stratum-III
Stratum-IV
Stratum V
All Strata
1
Wrapper, Labeller, Packers.
63.69
66.64
62.67
65.22
50.53
62.33
2
Taraiwala/Sorter/ Checker
69.29
72.89
51.83
85.17
69.98
68.98
3
Furnaceman (Bhattiwala)
67.93
68.29
66.62
67.13
68.89
67.96
4.
Raw Material Distributor
63.96
65.23
57.69
-
61.11
61.62
5
Clerk
89.82
76.71
122.60
80.40
86.54
89.32
All Categories
71.31
69.36
69.08
75.14
65.23
69.36

5.6.2.2   The above table reveals that the average daily earnings of Clerks were Rs. 89.32 per day, far above the prescribed wages in the Trade Mark Establishments, in keeping with the requirements of management and responsibilities assigned to them.For the purpose of the study, Managers have been clubbed with the clerks because wages had not been notified for the managerial staff.The average daily earnings of Clerks worked out to be the highest (Rs.122.60) in Stratum III and the lowest (Rs.76.71 per day) in Stratum II.Overall average daily earnings of Raw Material Distributors and Furnacemen worked out to Rs. 61.62 and Rs. 67.96 respectively.The average earnings of Raw Material Distributors were the lowest (Rs.57.69 per day) in Stratum III which were attributed to low wage paid areas of Datiya and Vidisha dominated by Contractors, Sattedars and Sub-Contractors. They were not only distributing raw materials but also were actively involved in collecting the bidis.Surprisingly, a system of obtaining commission from the Bidi Rollers by the Sattedars to compensate the low wages paid to them by the Trade Mark Establishments and Contractors was in vogue.For piece rated workers viz., Wrappers/Labellers/Packers the average daily earnings worked out to Rs.62.33.

5.6.3   Bidi Rollers and Helpers

5.6.3.1   In Madhya Pradesh Bidi Rollers constituted the largest segment among the bidi employees. They collected the raw material from the Employers or Contractors and rolled the bidis in their dwellings. They get a lot of assistance from their family members in rolling bidis.It is a fact that most of these helping dependants, who were skilled rollers, did not have registration in any bidi factory as the manufactures avoided registration of a large number of Bidi Rollers to evade the fringe benefits due to them.The employers met their requirements of daily production by giving huge amounts of raw material to the registered Bidi Rollers for rolling bidis with the help of their dependants.The average daily earnings of the Bidi Rollers and their helping dependants are given in Table 5.5.

Table 5.5   Average Daily Earnings of Bidi Rollers and their Helping Dependants(in Rupees)
 
Sl. No.
Average daily earnings of 
Stratum/ District
Bidi Rollers
Helping Dependants
Overall
1
Stratum I

Sagar

20.36
14.21
17.77
2
Stratum II

Jabalpur,, Satna

24.76
19.52
22.31
3
Stratum II

Gwalior, Datiya and Vidisha 

26.16
20.99
23.76
4
Stratum IV

Balaghat

18.88
17.17
18.01
5
Stratum V

Bhopal, Indore, Devas, Ujjain&Hoshangabad

20.46
14.66
18.00
All Strata
22.04
16.62
17.88

EXHIBIT – 8 


Average Daily Earnings of Bidi Rollers and their Helping Dependants (Table 5.5)

5.6.3.2   It emerges from the Table that in all the five Strata the wages paid were below the prescribed wage levels.The average daily earnings of the Bidi Rollers worked out to Rs. 22.04 per day.The average daily earnings were highest in Stratum III (Rs. 26.16 per day) followed by Stratum II (Rs. 24.76 per day), Stratum V (Rs. 20.46 per day), Stratum I (Rs. 20.36 per day) and the lowest in Stratum IV (Rs.18.88 per day).In Stratum III the highest average daily earnings of Bidi Rollers were attributed to the non-availability of Bidi Rollers ( whose average daily earnings were lower than those of Bidi Workers) in the districts of Gwalior, Datiya and Vidisha where the average daily employment in the establishments was the lowest.Moreover, in the absence of any trade unions the Bidi Rollers were not strong enough to bargain for the prescribed wages. The other important reasons for low earnings were malpractices in matters of rejection of finished bidis on the ground of not conforming to quality standards, issue of inadequate quantity and poor quality of tendu leaf and tobacco by the employers or their Contractors or agents.The workers in these areas accepted whatever wages the employers gave.The Bidi Rollers did not get regular employment in bidi making establishments also.They had always remained an exploited lot in the hands of petty Contractors who did not even keep the records and registers of the Bidi Rollers.The employment opportunities in agriculture had also not been encouraging enough for the Bidi Rollers to lean on. 

5.6.3.3   The above table also reveals that the average daily earnings of the registered Bidi Rollers were substantially higher than their helping dependants in all the Strata except Stratum IV where it was marginally higher. It shows that these helping dependants of Bidi Rollers made a significant contribution towards the production of the bidi industry, yet they constituted a neglected lot, deprived of the benefits of various labour laws.With the modern salesmanship entering the bidi industry the margin of profit in the bidi industry is quite lucrative for the brands established in the market.There is, therefore, an urgent need for bringing this hidden work force under the labour laws with a well defined employer-employee relationship for effective enforcement of the minimum wage legislation. 

**** End of Chapter 5 *****