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Fair Pay Legislation - Equal Pay for Equal Work

Fair Pay/Equal Pay/Wage Gap/Legislation/Laws/Software/Software Development/Equality/Salary/Court/Technology/Tech/Compensation
Slogging hard at your workplace, but not getting a fair consideration? Here's everything you need to know about fair pay legislation.
Written by
Akshita Kohli
Published on
January 19, 2024

Shreya, an MBA graduate from IIM-A, is working in a big consulting firm and earning amazingly well. While she is happy with her job, there's something that irks her, and that is the grave salary disparity that she has to endure. Some of her male colleagues from the same batch at IIM-A earn almost double what she draws on a monthly basis. While their nature of work is the same, Shreya is really disappointed and somewhat annoyed with this huge salary gap.

Devinder Singh, too, is sailing in the same boat. He is working as a daily-wage Ledger Keeper/ Ledger Clerk with the State of Punjab, but he is upset as his salary is not on par with that of the other regular employees. Devinder Singh accordingly implored the Hon'ble Punjab & Haryana High Court, soliciting emoluments at parity with other regular employees working on similar posts. While the High Court granted him the relief that he prayed for, the State Government challenged the same, and their contention was accepted by the Apex Court.

The High Court judgment was accordingly overruled by the Hon'ble Supreme Court, and the appeal was permitted to a limited extent. It was held that the respondent would be entitled to the minimum pay scale of the Ledger-Keepers, which may be available to the other regularly appointed Ledger-Keepers. (State of Punjab v. Devinder Singh (1998) 9 SCC 595)

There are several others like Shreya and Devinder Singh, not just in India but all over the world, who are silently enduring this upsetting pay disparity. While some wish to still hold on to their jobs, several talented individuals have resigned from their well-paid jobs en masse, particularly during the Great Resignation period. Some of the most prominent reasons for quitting their jobs included wage stagnation amidst the rising costs of living, hostile work environment, bleak opportunities for career advancements, strict remote-work policies, and long-lasting job dissatisfaction, including the enormous pay disparity.

Equal pay is thus quite a pertinent concern, and it can undoubtedly ruffle the feathers of employees who work as hard as their colleagues. So here's a detailed blog for all the employers and employees working in different organizations who would like to enlighten themselves in this regard. We have endeavored to encapsulate the state and international laws on wage disparity, and we hope this helps you get a clear picture.

Significance of Equal Pay for Equal Work

The phrase 'equal pay for equal work' signifies that an individual who has been employed for a work allotted to him must be paid sufficiently well, and his pay must be in accordance with that of his other colleagues who hold the same rank or level. There must not be any discrimination in the monetary consideration, but this is most prevalent in the context of sexual discrimination, i.e. the wage disparity owing to the gender pay gap.

Furthermore, all temporary workers working in place of permanent workers are entitled to the same remuneration as permanent workers. Simple differences in the nomenclature shall not disqualify an employee from being paid the same wages as the other permanent employees. Any such act of paying lesser wages to the temporary employees would amount to exploitative enslavement.

An Overview of the Issue Vis-à-Vis India & UN

The supreme law of the land viz our Indian Constitution does not expressly state equal pay for equal work as a fundamental or even as a constitutional right. However, it has been read into the Constitution while interpreting Articles 14, 15, and 16 that form the very substratum of Part III of our Constitution and guarantee equality before the law, protection against discrimination, and equality of opportunity in matters of public employment. Also, it is pertinent to note that Article 39(d) of the Constitution ensures equal pay for equal work for both men and women, but since this falls within the ambit of the Directive Principles of State Policy, it is thus not enforceable in the court of law. While DPSP's are integral to the governance of a country, and the State is duty-bound to acknowledge those whilst enacting laws, but it is only through the interpretation of Articles 14, 15, and 16 of the Constitution that equal pay for equal work becomes a fundamental right. Also the same has taken the shape of a fundamental right through a catena of Court judgments.

It is also pertinent to note that the 1951 Equal Remuneration Convention, Convention 100 of the International Labor Organization, a United Nations body states as follows -

"Each member shall, by means appropriate to the methods in operation for determining rates of remuneration, promote and, in so far as is consistent with such methods, ensure the application to all workers of the principle of equal remuneration for men and women workers for work of equal value."

Furthermore, equal pay for equal work is also covered by Article 7 of the International Covenant on Economic, Social and Cultural Rights, Article 4 of the European Social Charter, and Article 15 of African Charter on Human and Peoples' Rights.

The Constitution of the International Labor Organization also demonstrates "the principles of equal remuneration for equal value".

The Equal Employment Opportunity Commission (EEOC), United States furnishes four affirmative defenses that allow unequal pay for equal work if in case the wages are fixed in pursuance to - • A seniority system • A merit system • A system which measures earnings by quantity or quality of production • Any other factor other than gender.

Therefore, a pay differential that is due to any of the aforementioned factors is not a violation of the Convention. Having that said, equal pay for equal work is acknowledged as good practice across the globe and has been recognized by various organizations including the UN.

Do Indian Laws Guarantee Equal Pay? The principle of 'equal pay for equal work' was primarily perused by the Apex Court in the case of Kishori Mohanlal Bakshi vs. Union of India, AIR 1962 SC 1139. In this case, the Supreme Court declared the said principle as incapable of being enforced in the court of law. However, it was 1987 when the equal pay principle essentially received its due acknowledgment in the Mackinnon Mackenzie and Co. Ltd. vs. Audrey D'Costa and Ors. (1987) 2 SCC 469 case wherein the legal issue revolved around equivalent compensation for both male and female stenographers. The Court had decided in favor of lady stenographers as the Ld. Court was also in favor of equal pay for equal work.

The Supreme Court in the case of Randhir Singh vs. Union of India, AIR 1982 SC 879 held that even though the equal pay principle was beyond the purview of Fundamental Rights, but it was deemed as a constitutional goal and it was thus held enforceable through the constitutional remedies route of Article 32. This right can thus be enforced in cases of unequal scales of pay, basis irrational classification.

In another case of Frank Anthony Public School Employee's Association vs. Union of India (1986) 4 SCC 707, the Apex Court abolished Section 12 of the Delhi School Education Act, 1973 as it was unconstitutional and in violation of Article 14. The Court observed that the teachers and employees of Frank Anthony Public School, a recognized unaided minority school, were receiving emoluments that were in severe disparity as compared to the teachers and employees of other Government schools. The petitioner teachers association accordingly knocked on the doors of the Apex Court under Article 32 of the Constitution, praying for equalization of their salary pay scales and other service conditions with those of their counterparts. The Apex Court granted the necessary relief to the petitioners and held that Section 12 of the Delhi School Education Act, 1973 is void and constitutionally invalid as it was directly in the teeth of Articles 14, 21, and 23 of the Indian Constitution.

Furthermore, in the case of Federation of All India Customs and Central Excise Stenographers (Recognized) vs. Union of India (1988), a two Judge bench of the Hon'ble Supreme Court decided upon the principle of equal pay for equal work.

Brief facts of the case are that the petitioners herein were deputed as Personal Assistants and Stenographers in the Customs and Central Excise Department of the Ministry of Finance. They were placed in the pay scale of Rs.550-900. The petitioners averred that their basic qualifications along with the manner, method, source of recruitment, and grades of promotion were the same as some of their other counterparts who too, were posted at the same posts viz Personal Assistants and Stenographers to Joint Secretaries or Secretaries and other officers of similar rank in the Central Secretariat. It was however alleged that their counterparts were placed in the pay scale of Rs.650-1040. The Petitioners accordingly contended that the duties discharged by them were similar to the duties of their other counterparts. The Petitioners thus stated that this was directly in the teeth of their fundamental rights under Articles 14 and 16 of the Constitution of India.

Per contra, the assertions made by the petitioners were strongly repudiated by the defendants viz the Union of India. They averred that the fellow counterparts of the Petitioners discharged duties that involved higher responsibilities. It was contented that the very fundamental principle of ’equal pay for equal work’ depends on the nature of work, and not just on the sheer volume or kind of work. Furthermore, the respondent asserted that individuals discharging duties and responsibilities which were qualitatively different when perused on the touchstone of responsibility and reliability, could not be placed in the same pay bracket.

Thus, after meticulously perusing the facts of the case, the Apex Court adjudicated upon this controversy and held that the differentiation in the pay scale was not sought to be justified solely on the basis of functional work discharged by the petitioners and their counterparts in the Secretariat, but rather on the dissimilarity of their responsibility, confidentiality and the relationship with the public, etc. It was accordingly held that the same amount of physical work could entail different quality of work, some more sensitive whereas some requiring more tact and some less. It was therefore decided that the principle of ‘equal pay for equal work’ could not be translated into a rigid mathematical formula with exact precision.

Hence in the light of the aforesaid arguments, the Hon'ble Supreme Court disposed of the petition as it was of the view that equal pay must depend upon the nature of the work done, and that it cannot be judged merely on the basis of the volume of the work, and functions may be the same, but the responsibilities alone make a huge difference. Therefore, the Petitioners did not succeed in this case.

Per contra, the Apex Court in the SLP of State of Punjab and Ors. vs. Jagjit Singh and Ors (2016), recognized the constitutional principle of 'equal pay for equal work' vis-à-vis the rights of temporary employees engaged in various government sectors.

A Double Bench of Hon'ble CJI S.A. Bobde and Hon'ble Justice J.S. Khehar delved into this grave legal issue that whether temporarily engaged employees (daily-wage employees, employees appointed on a casual basis, ad-hoc appointees, contractual employees, and the like) are entitled to receive the minimum wages in accordance to their respective regular pay-scale, along with the dearness allowance, on account of such employees performing similar duties as are discharged by those engaged in regular government employment on varied sanctioned posts.

The Hon'ble Court was of the view that the principle of ‘equal pay for equal work’ constitutes a clear and unambiguous right, and that such a right is vested in every employee, whether engaged on regular or on temporary basis. The Court ruled that in a welfare state, temporary employees who perform similar duties and functions as are discharged by permanent employees, are entitled to draw wages that are at par with those of permanent employees. The Court also termed the denial of equal pay for equal work as "oppressive", "suppressive", "coercive" and "exploitative enslavement". The Ld. Court held that one employee cannot be paid less than the other because such an action jolts the very foundation of human dignity as an individual who is compelled to work for lesser wages, would surely not do so voluntarily. However, the Court clarified at length the varied legal considerations for the application of this principle of ‘equal pay for equal work’. Some crucial points that were highlighted by the Apex Court are as follows -

  1. The onus probandi of establishing parity in the varied duties and responsibilities of the subject post vis-à-vis the reference post lies on the individual who claims it and thus solicits relief.
  2. For the application of the principle of 'equal pay for equal work', an employee must perform work that is not just functionally equal, but is also of the same quality and sensitivity.
  3. The fact that the subject post occupied by the claimant individual is in a different department with respect to the reference post, does not hold water for the determination of a claim.
  4. The reference post with which parity is claimed under the principle of ‘equal pay for equal work’, has to be in the same hierarchy in the service as the subject post.
  5. Individuals performing similar functions, duties, and responsibilities can also be placed in different pay scales. However, such a difference must arise out of a legitimate foundation, for example, merit, seniority, or some other kind of relevant criteria.
  6. It shall not be possible to draw a lucid comparison between the subject post and the reference post under the principle of ‘equal pay for equal work’ in case the subject post and reference post are in different establishments with different managements. This also prevails if the establishments are located at different geographical locations, even if owned by the same master.
  7. The principle of 'equal pay for equal work' shall not be applicable in cases wherein the reference post holds the responsibility to take crucial decisions, and the same isn't applicable for the subject post. This principle also doesn't apply in cases wherein the duties and responsibilities of one of the posts are more onerous and are exposed to higher nature of operational work or risks.

It is pertinent to note that it is not just the Courts, but our legislature too has implemented various legislations in order to ensure the applicability of equal pay for equal work. The following Acts have been passed by our Parliament -

  • Workmen Compensation Act, 1923 - The Workmen Compensation Act, 1923 endeavors to offer financial protection to the workmen and his dependents in case of accidental injury by way of compensatory relief by a class of employers. Due to variations in bargaining power, women are likely to face exploitation, but this Act helps diminish that risk.
  • Minimum Wages Act, 1948 - The Minimum Wages Act, 1948 offers a statuary bracket of the minimum fixed wages as the workers usually have little to no bargaining power, and are thus exploited in the Indian markets. This Act equalizes the wages for both men and women workers.
  • The Factories Act, 1948 - The Factories Act, 1948 was implemented in order to regulate the employment conditions that laborers are subjected to in factories. The Act was introduced to regulate safety welfare, ensure healthy work conditions, and enact special provisions with respect to women and children who are employed in factories.
  • The Contract Labour (Regulation and Abolition) Act, 1970 - The Contract Labour (Regulation and Abolition) Act, 1970 provides for the prevention of exploitation of contract labor. The Act lays down rules and regulations to ensure a fixed number of job hours for women, along with proper and habitable working conditions for the labor. Herein contract labor refers to a workman who is hired for the work of an establishment by or through an independent contractor.
  • The Equal Remuneration Act, 1976 - The Indian Government implemented the Equal Remuneration Act, 1976 in order to bridge the wage gap between men and women workers. The Act endeavors to offer equal wages to both men and women based on the nature of their employment, to offer equality of opportunity in employment; to safeguard individuals against discrimination with regard to their employment or occupation, and to ensure that no employee shall be unfairly dismissed from work on grounds of his gender. This Act facilitates and ensures equality among all the sexes, be they male or female. The Act extends to the whole of India except the States of Jammu and Kashmir.

Exceptions to the Doctrine of Equal Pay for Equal Work The principle of equal pay for equal work falls under the blanket of fundamental rights, but there are still some exceptions to this rule. These exceptions have not been explicitly mentioned anywhere, but have developed over time through the judgments pronounced in a catena of cases. As also discussed supra, in case of Federation Of All India Customs & Central Excise Stenographers vs Union of India and Ors (1988) 3 SCC 91, a Double Bench of the Supreme Court comprising of Hon'ble Chief Justice R.S. Pathak and Hon'ble Justice Sabyasachi held that different pay scales can be decided for government servants holding the same designation and performing similar work, and the basis of difference herein shall be the degree of responsibility and reliability. The Ld. Court was of the opinion that the equal pay principle cannot always be translated into a rigid mathematical formula. The Court further held that equal pay primarily depends on the nature and complexity of work, and not just on the volume of work and that there may be qualitative differences in varied different aspects that need to be taken into consideration.

Also, in the case of Mewa Ram Kanojia vs AIIMS, AIR 1989 SC 1256, the Institute had made different posts with different pay scales for employees with different qualifications, functions, duties, and responsibilities. Herein the Apex Court held that if the functions and duties are of similar nature but if the educational qualifications are different and there is accordingly a difference in the degree of responsibilities, then the principle of equal pay for equal work shall not be applicable. The main grievance of the petitioner was that the Hearing Therapist qua the petitioner performed the same functions and duties as the Senior Speech Pathologist, Senior Occupational Therapist, Senior Physiotherapist, Speech Pathologist, and Audiologist, but the petitioner still had a lower pay scale and the respondent Institute thus practiced discrimination. The Ld. Court emphatically denied the plea of the petitioner and held that there can be a difference in pay owing to a difference in educational qualifications. The Court was of the opinion that the doctrine of equal pay for equal work is not an abstract one, and the State thus has the liberty to prescribe varying scales of pay for different posts having regard to the educational qualification of an individual coupled with the duties and responsibilities of the said post. The Hon'ble Court held that while considering the applicability of the equal pay principle, the State has the liberty to classify employees on basis of their qualifications, responsibilities, and duties of the posts concerned. The Court was of the view that in case the said classification has a rational nexus with the objective sought to be achieved, then in that case the State would be justified in prescribing different pay scales for its employees. The petitioner's prayer for parity in pay, therefore, did not succeed.

Furthermore, in the case of Associated Bank Officers Association vs. State Bank of India, AIR 1998 SC 32, the Double Bench of the Apex Court held that officers employed in State Bank of India are not in a comparable position to the officers employed in the subsidiary banks of State Bank of India, and therefore the doctrine of equal pay for equal work would not hold waters in this case.

Gender Pay Gap in India : The doctrine of equal pay for equal work is enshrined as one of the objectives in the Constitution of India, however, the actuality is far different from what is mentioned in our Constitution. The gender pay gap refers to the disparity in earnings between men and women in the paid employment and labor market.

According to the recent Global Wage Report 2020-21 by the International Labour Organization, it was observed that while Indian women earned 48% less as compared to their male counterparts in 1993-94, this gap, however, declined to 28% in 2018-19, but the catastrophic Covid-19 pandemic overturned decades of progress as the Periodic Labour Force Survey (PLFS) 2020-21 preliminary estimates display a sharp rise in the gender pay gap by a whopping seven percent between 2018-19 and 2020-21. The data further highlights that the steep decline in female workforce wages during the pandemic contributed to this decline as compared to a growth in the wages of the male workforce. This humongous wage reduction for women signifies that the pre-existing gender pay gap has widened. It is pertinent to note that childcare is usually perceived as a woman's job, and women thus take up part-time jobs, and many times they even end up taking a sabbatical even while they are sailing on the peak of their careers, and thereafter when these women return back to work, they are usually paid lower wages as compared to their male counterparts. Also, the gender pay gap is still prevalent in India due to the difference between male and female literacy rates in our country. Boys are considered an asset to their parents and are deemed to be the future bread-earners. Therefore, parents, especially in rural areas prefer spending more on educating their sons rather than their daughters who are still considered to be a liability, and this too is one significant reason for women to be earning less as compared to their male colleagues in the professional world. However, the Equal Remuneration Act, 1976 has been a major stepping stone for the implementation of the doctrine of "equal pay for equal work".

The Act was passed with the objective of providing equal monetary consideration to both men and women workers, and abolishing discrimination on basis of gender in all matters relating to employment and employment opportunities. This legislation helps women solicit equal pay, and also in addition to this, any inequality with regard to the recruitment process, promotions, transfers and job training, etc can also be challenged under this Act. Companies have the complete onus to maintain the threshold standards prescribed under this Act. However, nothing in this Act shall apply-

  • to cases that affect the terms and conditions of a woman's employment in complying with the requirements of any law that accords special treatment to women; or
  • to any special treatment accorded to women with respect to the birth or expected birth of a child, or terms and conditions relating to retirement, marriage or death or to any provision made in connection with the retirement, marriage or death.

However, it is sad to state that despite all these efforts undertaken by the government, the situation has not really changed, especially in the private sector wherein there is a gross disparity in the remuneration received by women versus the male workforce. This is especially the case with the low-paying jobs in the unorganized sector wherein the employers pay no heed to the government legislation. Having that said, there's no denying the fact that the gender pay gap in India is narrowing, but given the current rate of progress, it would take close to seventy more years to completely vanquish this glaring pay disparity.

It is important to mention that one principle target viz Goal 8 of the UN Sustainable Development is to "achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value by 2030."

Therefore in order to achieve this goal, an Equal Pay International Coalition (EPIC) was established in 2017 as a multi-stakeholder initiative that was led by the UN Women, ILO, and the Organization for Economic Co-operation and Development (OECD) that endeavors to achieve equal pay for both women and men across the globe.

India too has played a cardinal role in the formulation and implementation of the United Nations Sustainable Development Agenda 2030, and also our country's National Development Agenda is along the lines of the Sustainable Development Goals (SDGs). The equal pay doctrine is one such Goal that India wishes to attain as it is critical to achieving social justice for working women, and economic growth for the nation as a whole.

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