COVID 19OP. ED.

On 24-3-2020 the Prime Minister announced nationwide lockdown [1] in India. Such stringent action was taken as precautionary action to prevent large scale COVID-19 outbreak. What followed was the exodus of migrant workers across States. These migrant workers belonged to both the organised and unorganised sector. Majority of the migrant workers are daily wagers who worked at construction sites, rickshaw pullers, domestic workers, etc. They were dependent on a daily source of income for their day to day survival.

The Census of 2011 estimates the total number of internal migrants in the country to be 45.36 crores. Professor Amitabh Kundu of Research and Information System for Developing Countries has done a comprehensive study of Economic Survey 2017, Census of India 2011 and NSSO data. He estimates that there are a total of about 65 million inter-State migrants, and 33 per cent of these migrants are workers[2].

A writ petition [3]was filed by Harsh Mander before the Supreme Court requesting it to issue a direction to the Central/State Governments to ensure minimal wages for all the migrant workers, to prepare national and State disaster management plans for dealing with the COVID-19 epidemic or to pass any such orders that the Court may find appropriate. Meanwhile the Union Home Ministry directed [4] the employers to pay wages to their workers at their place of work without deduction during the period of lockdown. The order also refrains landlords from collecting rent from the migrant workers living in rental accommodation.

The Supreme Court vide order dated 31-3-2020[5] directed the Centre to ensure accessibility of basic necessities and medical facilities for migrant workers in view of the nationwide lockdown.  The order was based on the status report filed by the Solicitor General Tushar Mehta on behalf of the Central Government apprising the Court of actions taken till now.  However even after the Supreme Court’s order few contractors were not paying wages to their workers who were ultimately left destitute with no option but to leave for their hometown on foot.

At the time of writing this article the final order of the Supreme Court is still awaited. Meanwhile the COVID-19 crisis looms large on the entire world and it doesn’t appear to end any time soon. Hence it is imperative that the migrant crisis is rectified at the earliest. The same cannot be done without resorting to the existing labour legislation. However, the Indian labour legislations appear to be insufficient in this time of crisis, more so vis-à-vis migrant workers. We will try to point out laws governing such migrant workers and few of the fallacies associated with it during the course of this article.  Migrant workers belong to both the unorganised and organised sectors. Majority of them work in the construction sector. A word of caution to the readers that the other labour legislations also apply to the organised sector migrant workers which are not dealt here for instance, the Minimum Wages Act.

The Unorganised Workers’ Social Security Act, 2008

The Unorganised Workers’ Social Security Act, 2008 was enacted on 30-12-2008 with an aim to ensure social security and welfare of unorganised workers and to implement the national Security Social Scheme. The Act specifically aims to cater to the needs of the workers of unorganised sector. Section 3[6] of the Act mandates the Central Government to formulate schemes for the unorganised workers on matters relating to:

  1. Life and disability cover;
  2. Health and maternity benefits;
  3. Old age protection; and
  4. Any other benefit as may be determined by the Central Government.

To enjoy the benefits of these schemes by the Central Government, the Act mandates the unorganised workers to get registered. Under Section 10 [7] of the Act, an unorganised worker is required to submit an application to the District Administration after which the District Administration issues an identity card by which the worker will be assigned a unique identification number (UIN). The unorganised worker is to submit a small contribution to get entitled for the benefits of the social security benefits. This is a time consuming process and in time of such pandemic it is expected that the Government make some modification and instead allow the District Administration to take cognizance of every unorganised worker in the area who is entitled to get the benefit of schemes like Pradhan Mantri Garib Kalyan Yojna and other schemes.

Schedule I[8] enumerates the schemes made for the welfare of the unorganised sector. One such scheme is  Rashtriya Swasthya Bima Yojana[9] that aims to provide appropriate health insurance coverage to unorganised workers. The Scheme entitles people coming under BPL (Below Poverty Line) cashless insurance as they are provided a smart card by which they are entitled to get hospitalised in private as well as public hospitals.

The majority of the migrant workers cannot avail the benefits of Public Distribution System (PDS) since they migrate from one State to another State. Hence, they do not enjoy the benefits under many schemes formulated under the Act.

The Contract Labor (Regulation and Abolition) Act, 1970

After independence, India tried to build up its self-sufficient economy. The global industrialisation had its effect on India as well and hence there was a demand for workers in not just agricultural field but also in large industrial plants, mines, etc. Thereby a large chunk of workers migrated from less developed States (UP, Bihar) to industrial States (Gujarat, West Bengal, Orissa) and cities. There was hence felt a need to regulate the working conditions of such migrant workers, thus this Central lobour legislation was enacted.

The Contract Labour (Regulation and Abolition) Act, 1970 (CLA) aims to safeguard the interests of contract labourers who indulge in all forms of contract labour in certain establishments and its abolition in certain circumstances. Section 2(1)(b)[10] defines contract labour as:

“A workman shall be deemed to be employed as “contract labour” in or in connection with the work of an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer.”

Exodus of migrants was witnessed on the streets of Delhi amidst the lockdown due to COVID- 19. The migrant workers were returning to their homes because these workers were not ensured food[11], health[12] and payment of wages[13]. The workers told the media that contractors were not paying or were paying minimal amount and asked them to leave.

License to the contractors enlists conditions[14] that mandate the contractors to fulfil all the essential amenities as the Government may deem fit to impose in accordance with the rules, under Section 35[15]. As it has been highlighted in the news that contractors are not paying wages to the daily wage workers due to the lockdown despite the Government guidelines this would have attracted violation of the Act and such licenses should have been revoked[16]. But no such action was initiated.

The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

The 1979 Act was brought as the Contract Labour (Regulation and Abolition) Act, 1970 proved to be insufficient in dealing with the plight of the contract workers and failed to curb the malpractices indulged in by the principal employer/contractor/sardar/khatedars, etc. The Act went on further to deal with inter-State migrants which was not dealt with by the previous Act. The Act provided for, among other things, equal/similar wages for the similar nature of work applicable to the local workmen (Section 13),  displacement allowance of 50% of monthly wages or Rs 75 whichever is higher (Section 14), home journey allowance (Section 15) for inter-State workers. The Act also provides for the right to raise industrial disputes in the provincial jurisdiction where they work or in their home province.

Apart from the requirement of registration that was required under the CLA this Act makes the availment of benefits contingent on the action of the contractor including providing passbook and registration ID. In addition to it the Act provides an escape route to principal employers if they can show that transgressions were committed without their knowledge. The aggrieved workers, as mentioned above, can approach the adjudicatory authority under the Industrial Disputes Act, 1947 (IDA). However, the record of prosecutions or dispute settlement is almost nil. The reason is obvious.

Relief to construction workers

The relief package of Rs 1 lakh 70 thousand crores (Pradhan Mantri Garib Kalyan Yojana) was announced by the Finance Minister. It aimed to provide economic relief to ease the suffering of the people belonging to different sector including farmers, old age, women, construction workers, etc. To ease the plight of the construction workers which form the majority of the migrant workers, the  Government directed the use of Building and Other Construction Workers Welfare Fund under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996(BOCW). However there are only 3.5 crore registered workers in the Fund. This fund is collected by the States by levying 1-2% cess on construction establishments under the BOCW Welfare Cess Act (the Cess Act) of 1996.

2018 Judgment

In 2018, the Supreme Court dealt[17] with the status of the implementation of the BOCW Act. The Supreme Court reprimanded the Central Government, State Governments and the Union Territories Administration (UTA) for sheer ignorance and official apathy shown over the plight of the construction workers.  The Supreme Court took cognizance of several problems associated with the implementation of the BOCW Act.

  • That the State Governments had not framed statutory rules in terms of Section 62 of the BOCW Act.
  • That in the absence of the registration of establishments involved in construction activities, it would be extremely difficult for the authorities under the BOCW Act to implement the provisions of labour laws (Section 7).
  • That there has been no constitution of the State Building and Other Construction Workers‘ Welfare Board under the provisions of Section 18 of the BOCW Act in many States.  One of the more important functions of the Welfare Board is to constitute a fund called the Building and Other Construction Workers‘ Welfare Fund.
  • That the crux of the implementation is registration of workers under Section11 of the Act but unfortunately the State Governments and UTAs have paid little attention to it.

The Supreme Court also took cognizance of the slew of directions issued by it since 2008 and affidavits filed by the respective Governments informing the Court of the status of implementation. The Supreme Court noticed the sorry state of affairs and the Governments’ ignorance in implementing the BOCW or using the fund collected under the BOCW cess that stands at around Rs 30000 crores or more.

The Supreme Court issued four directions on 19-3-2018[18]:

  1. To put in place and strengthen the registration machinery, both for the registration of establishments as well as registration of construction workers.
  2. To establish and strengthen the machinery for the collection of cess as there is a tremendous amount of construction activity going on and it is unclear whether the pay the cess or not.
  3. The Ministry of Labour and Employment to frame one composite Model Scheme for the benefit of construction workers in consultation with all stakeholders including NGOs.
  4. The Ministry of Labour and Employment, the State Governments and the UTAs to conduct a social audit on the implementation of the BOCW Act so that in future there is better and more effective and meaningful implementation of the BOCW Act.

In addition to the aforesaid direction, the Courts also issued general directions for responsible implementation of BOCW; constitution of advisory committee by State Governments and UTA; establishment of welfare board, issuance of Universal Access Number to construction workers and more. In pursuance of the directions, the Ministry of Labour and Employment formulated the Model Welfare Scheme for Building and Other Construction Workers and Action Plan for Strengthening Implementation Machinery which was uploaded on its website. How will the fund be used by the States for the migrant workers who are stuck in States other than their home State is yet to be seen as there is still no clarity on it.

Limited definition in organised sector labour legislations

The Industrial Disputes Act serves as an umbrella legislation which provides overlapping definitions and also provides the adjudicatory forums for dispute settlement between employer and employee. The IDA is limited in its scope, first for it is only applicable to organised sector and second, restricted interpretation of “industry” (Section 2(j)].

The Supreme Court has tried to expand the definition to give relief to a wider section of workers however the position has remained unchanged since Bangalore Water Supply case[19]. There have been two conflicting opinions of Court in Chief Conservator of Forest v. Jagannath Maruti Kondhare[20] and State of Gujarat v. Pratamsingh Narshinh Parma[21]. A reference is made to the Supreme Court to finally settle the matter which is still pending.

Majority of the migrant workers work as contract workers who are employed by a contractor who in turn is employed by the “employer”. To avail the benefit under social welfare legislation the migrant workers must fall under the definition of “employee”. For Section 12  of the erstwhile Workmen’s Compensation Act, 1923  holds the employer vicariously liable even for the injury caused to  the workman in the course of  his employment of the contractor,  employed by him. For the purpose of this Act, an inter-State migrant workman shall, on and from the date of his recruitment, be deemed to be employed and actually worked in the establishment or as the case may be, the first establishment in connection with the work of which he is employed (see Section 21 of the Act).  If a workman encounters an occupational disease it is considered to be an injury by accident under the Workmen’s compensation Act making it eligible for compensation by the employer.

Migrant workers may also be said to be entitled under the Employees’ State Insurance Act, 1948. However, the Supreme Court judgment in Calcutta Electric Supply Corporation Ltd. v. Subhash Chandra Bose[22] has left the ambit of “employee” uncertain vis-à-vis contract labours. Even assuming its applicability the ESIC comes with its own set of contingencies including but not limited to contribution from the employee side monthly wage cap (an employee earning more than Rs 3000 will not be covered under the Act). The same is true for the Employees’ Provident Funds and (Miscellaneous Provisions) Act, 1952. .

Remarks

Uttar Pradesh and Bihar contribute major chunk of this migrant workers workforce. According to Professor Kundu’s estimates[23] around 1.8 to 2.8 migrant people will be moving to Bihar during this lockdown. Bihar has the biggest per capita migrant worker population. Hence, we approached the Bihar Representative of India Trade Union Congress Mr Gajnafar Nawab who remarked that no such help is being provided by the Government. He informs that Bihar Chief Minister has announced a relief package of Rs 100 crores for migrant workers however they need to provide their Aadhar card for the same. He also points out that many workers cannot avail the befit of PDS as many of them don’t have the ration cards. Mr R.N. Thakur, member of All India Trade Union Congress points out that around Rs 1700 crores of cess is pending under the BPOCW cess which is not being used.

The above discussion allows us to contend that the current labour legislation does not provide the requisite relief to the migrant workers. In addition these Acts have hardly addressed the issue of migrants due to lack of mediators to pass on the information and communication gap. The legislations governing such workers are already limited in quantity and quality.

India has been a committed and founding member of the International Labor Organisation (ILO) and hence it expected to implement the social welfare legislation. The International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families, 1990[24] was introduced with an objective of welfare of migrant labourers across the world. Apart from International mandate, as per  the Directive Principles of State Policy also the State is required to secure for the citizens, both men and women the  right to an adequate means of livelihood, equal pay for equal work for both men and women, protection against abuse and exploitation of workers, economic necessity, protection of their health and strength, to secure for children opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and protect children and youth against exploitation and moral and material abandonment (Articles 39, 41 and 43).

Thereby it becomes imperative for the Supreme Court to devise an extraordinary remedy for this extraordinary time. The welfare of millions of such workers hangs in balance. We would like to leave the readers with these lines:

“Recall the face of the poorest and the weakest man/woman whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him/her. Will he/she gain anything by it? Will it restore him/her to a control over his/her own life and destiny? In other words, will it lead to Swaraj (freedom) for the hungry and spiritual starving millions?”

Mahatma Gandhi


*Animesh Upadhyay & Shashank Pandey are Fourth Year students, BA LLB (Hons), Dr. Ram Manohar Lohiya National Law University.

[1] Business Standard, PM Modi announces nationwide 21-day lockdown, appeals for social distancing; https://www.business-standard.com/article/current-affairs/pm-modi-announces-nationwide-21-day-lockdown-appeals-for-social-distancing-120032401687_1.html (April 2, 2020, 1:25 pm)

[2] The Indian Express, Explained: Indian migrants, across India, https://indianexpress.com/article/explained/coronavirus-india-lockdown-migran-workers-mass-exodus-6348834/

[3]. Harsh Mander v. Union of India, WP (Civil) Diary No(s). 10801/2020

[4]. https://mha.gov.in/sites/default/files/MHA%20Order%20restricting%20movement%20of%20migrants%20and%20strict%20enforement%20of%20lockdown%measures%20-%2029.03.2020pdf

[5].Alakh Alok Srivastava v. Union of India, 2020 SCC OnLine SC 345

[6].The Unorganised Workers’ Social Security Act, 2008.

[7] Ibid

[8] Ibid

[9]. https://www.india.gov.in/spotlight/rashtriya-swasthya-bima-yojana#rsby1

[10].The Contract Labour (Regulation and Abolition) Act, 1970.

[11] Ibid, Section 16.

[12] The Contract Labour (Regulation and Abolition) Act, 1970, Section 19.

[13] The Contract Labour (Regulation and Abolition) Act, 1970, Section 21

[14].The Contract Labour (Regulation and Abolition) Act, 1970, Section 12

[15].The Contract Labour (Regulation and Abolition) Act, 1970

[16].Ibid, Section 14

[17].National Campaign Committee for Central Legislation on Construction Labour v. Union of India, (2018) 5 SCC 607

[18] Ibid

[19] Bangalore Water Supply and Sewerage Board v. A Rajappa, (1978) 2 SCC 213

[20].(1996) 2 SCC 293

[21] (2001) 9 SCC 713

[22].(1992) 1 SCC 441

[23] The Indian Express, Explained: Indian migrants, across India, https://indianexpress.com/article/explained/coronavirus-india-lockdown-migran-workers-mass-exodus-6348834/

[24] https://www.ohchr.org/EN/ProfessionalInterest/Pages/CMW.aspx

Legislation UpdatesStatutes/Bills/Ordinances

Rajya Sabha passed The Code on Wages Bill, 2019  after due consideration and discussion. Lok Sabha has already passed the bill on July 30, 2019. The Bill will become an Act after Presidential assent.

It will be the first Code to become an Act out of the four Codes: Code on Wages; Industrial Relations; Social Security and Occupational Safety, Health and Working Conditions which Ministry of Labour and Employment has formulated.

Ministry aims to simplify, rationalise and amalgamate various labour laws into four Labour Codes in line with the recommendations of the second National Commission on Labour. One more Code on Occupational Safety, Health and Working Conditions has also been introduced in Lok Sabha.


[Press Release dt. 02-08-2019]

[Source: PIB]

Legislation UpdatesStatutes/Bills/Ordinances

Union Cabinet has approved for the introduction of the Code on Occupational Safety, Health and Working Conditions Bill, 2019 in the Parliament. This proposal would enhance the coverage of the safety, health and working conditions provisions manifold as compared to the present scenario. The decision will enhance the coverage of the safety, health and working conditions provisions manifold as compared to the present scenario.

New Code has been drafted after amalgamation, simplification and rationalisation of the relevant provisions of the 13 Central Labour Acts:

  • The Factories Act, 1948;
  • The Mines Act, 1952;
  • The Dock Workers (Safety, Health and Welfare) Act, 1986;
  • The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996;
  • The Plantations Labour Act, 1951;
  • The Contract Labour (Regulation and Abolition) Act, 1970;
  • The Inter-State Migrant workmen (Regulation of Employment and Conditions of Service) Act, 1979;
  • The Working Journalist and other Newspaper Employees (Conditions of Service and Misc. Provision) Act, 1955;
  • The Working Journalist (Fixation of rates of wages) Act, 1958;
  • The Motor Transport Workers Act, 1961;
  • Sales Promotion Employees (Condition of Service) Act, 1976;
  • The Beedi and Cigar Workers (Conditions of Employment) Act, 1966; and
  • The Cine Workers and Cinema Theatre Workers Act, 1981. After the enactment of the Code, all these Acts being subsumed in the Code will be repealed.

[Press Release dt. 10-07-2019]

Cabinet

Cabinet DecisionsLegislation Updates

As reported by PTI, Cabinet has approved the Code on Wages Bill which seeks to :

” subsume existing laws related to workers remuneration and enable the Centre to fix minimum wages for the entire country.”

The said Code would combine four labour laws — Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, and Equal Remuneration Act, 1976.

The wages code bill was introduced in the Lok Sabha on August 10, 2017. The bill was referred to the Parliamentary Standing Committee which submitted its report on December 18, 2018. However, the bill lapsed after 16th Lok Sabha dissolved in the month of May.

The bill provides that the central government will fix minimum wages for certain sectors, including railways and mines, while the states would be free to set minimum wages for other categories of employment.

The code also provides for setting up of a national minimum wage. The central government can set a separate minimum wage for different regions or states.

The draft law also says that the minimum wage would be revised every five years.


Ministry has taken steps for drafting four Labour Codes on Wages; Industrial Relations; Social Security; and Occupational Safety, Health and Working Conditions respectively, by simplifying, amalgamating and rationalizing the relevant provisions of the existing Central Labour Laws. The 4 Labour Codes contain provisions relating to wage, social security, safety, health and grievance redressal mechanism for workers. These initiatives are expected to provide wage security, social security, occupational safety and decent working conditions to the workers. However, there is no proposal at present to dismantle and merge of Employees’ State Insurance Corporation (ESIC), Employees Provident Fund Organization (EPFO) with other central schemes and privatization of social security fund.

The process of Legislative reforms on Labour includes consultation with stakeholders including Central Trade Unions, Employers’ Associations and State Governments in the form of tripartite consultation. Besides, the draft Labour Codes were also placed on the website of the Ministry, seeking comments/suggestions from all stakeholders including the general public. The draft legislations are finalised after considering comments/suggestions received from various stakeholders.

The proposed labour reforms initiatives will reduce the complexity in compliance due to a multiplicity of labour laws and facilitate setting up of enterprises and thus creating the environment for the development of business and industry in the country and generating employment opportunities without diluting basic aspects of safety, security and health of workers.

Ministry of Labour and Employment


[Source: PTI]

OP. ED.

International Labour Day is in common parlance celebrated on 1st of May, every year. The day is celebrated with the objective of giving due recognition for the struggle and contribution of the working class.

Struggle Path:

International Workers’ Day is the big celebration on the world level and it is celebrated to commemorate the 4th of May of 1886, the Haymarket affair (Haymarket Massacre) in Chicago. It is the big event of that year when workers were on the general strike for their eight-hour workday and police were doing their job of dispersing the general public from the crowd. Suddenly, a bomb was thrown over the crowd by an unidentified person and then the police started firing over the workers and four demonstrators were killed.[1]

Recognition of May Day in India:

India witnessed its’ first International Labour’s Day in the Year 1923, in Madras by the Labour Kisan Party of Hindustan.

The red flag that popularly represents the working class was raised for the first time in India on this day.

Labour Laws in India:

In the wake of better and fair conditions for the workers, various laws were introduced for the protection and fair justice system.

Here is the list of a few Labour Laws in existence:

Labour Laws may be classified under the following heads:

  • Laws related to Industrial Relations such as:
  1.  Trade Unions Act, 1926
  2. Industrial Employment Standing Order Act, 1946.
  3. Industrial Disputes Act, 1947.
  • Laws related to Wages such as:
  1. Payment of Wages Act, 1936
  2. Minimum Wages Act, 1948
  3. Payment of Bonus Act, 1965.
  4. Working Journalists (Fixation of Rates of Wages Act, 1958
  • Laws related to Working Hours, Conditions of Service and Employment such as:
  1. Factories Act, 1948.
  2. Mines Act, 1952.
  3. Working Journalists and other Newspaper Employees’ (Conditions of Service and Misc. Provisions) Act, 1955.
  4. Merchant Shipping Act, 1958.
  5. Motor Transport Workers Act, 1961.
  6. Beedi & Cigar Workers (Conditions of Employment) Act, 1966.
  7. Contract Labour (Regulation & Abolition) Act, 1970.
  8. Sales Promotion Employees Act, 1976.
  9. Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979.
  10. Dock Workers (Safety, Health & Welfare) Act, 1986.
  11. Building & Other Construction Workers (Regulation of Employment & Conditions of Service) Act, 1996.
  12. Building and Other Construction Workers Welfare Cess Act, 1996
  13. Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
  14. Dock Workers (Regulation of Employment) Act, 1948
  15. Dock Workers (Regulation of Employment) (Inapplicability to Major Ports) Act, 1997
  16. Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act, 1993
  17. Industrial Employment (Standing Orders) Act, 1946
  18.  Mines and Mineral (Development and Regulation) Act, 1957
  19. Plantation Labour Act, 1951
  20. Private Security Agencies (Regulation) Act, 2005
  • Laws related to Equality and Empowerment of Women such as:
  1. Maternity Benefit Act, 1961
  2. Equal Remuneration Act, 1976.
  • Laws related to Deprived and Disadvantaged Sections of the Society such as:
  1. Bonded Labour System (Abolition) Act, 1976
  2. Child Labour (Prohibition & Regulation) Act, 1986
  • Laws related to Social Security such as:
  1. Employees Compensation Act, 1923.
  2. Employees’ State Insurance Act, 1948.
  3. Employees’ Provident Fund & Miscellaneous Provisions Act, 1952.
  4. Payment of Gratuity Act, 1972.
  5. Beedi Workers Welfare Cess Act, 1976
  6. Beedi Workers Welfare Fund Act, 1976
  7. Cine Workers Welfare Fund Act, 1981
  8. Fatal Accidents Act, 1855
  9. Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Cess Act, 1976
  10. Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Fund Act, 1976
  11. Unorganised Workers’ Social Security Act, 2008

[1] iwww.org

Image Credits: Times of India

Case BriefsSupreme Court

Supreme Court: The bench of Madan B. Lokur and NV Ramana, JJ directed the the Ministry of Rural Development to prepare an urgent time bound mandatory program to make the payment of wages and compensation to the workers in consultation with the State Governments and Union Territory Administrations. The Bench said:

“This is not only in the interest of the workers who have expended unskilled manual labour but also in furtherance of the rule of law which must be followed in letter and spirit.”

On the issue pertaining to the delay in payment of wages and compensation to the beneficiaries under the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (Act) and the Scheme framed thereunder, the Court said that in terms of the Act and Schedule II thereof a worker is entitled to payment of wages within a fortnight of the date on which the work was done, failing which the worker is entitled to the compensation as prescribed in paragraph 29 of the Schedule II of the Act. Stating that one entity cannot pass on the burden to another and vice versa, the Court said that the burden of compliance is on the State Governments and Union Territory Administrations as well as the Central Government.

On Central Government’s argument that it has no responsibility after the second signature is placed on the Fund Transfer Orders, the Court said:

“The Central Government cannot be seen to shy away from its responsibility or taking advantage of a person who has been placed in the unfortunate situation of having to seek employment under the Act and then not being paid wages for the unskilled manual labour within the statutorily prescribed time. The State Governments and Union Territory Administrations may be at fault, but that does not absolve the Central Government of its duty.”

Stating that delays are simply not acceptable, the bench said that the law requires and indeed mandates payment of wages not later than a fortnight after the date on which the work was done by the worker or labourer. Any reason for the delay in receiving wages is not at all the concern of the worker. He or she is entitled to get the due wages within a fortnight of completion of the work. It was hence held that if there are any administrative inefficiencies or deficiencies or laxity, it is entirely for the State Government and the Ministry of Rural Development to sort out the problem. [Swaraj Abhiyan (VI) v. Union of India,  2018 SCC OnLine SC 578, decided on 18.05.2018]

Case BriefsSupreme Court

Supreme Court: The Bench of Dr. A.K. Sikri and N.V. Ramana, JJ held that construction workers are not covered by the Factories Act, 1948 and, therefore, are entitled to the welfare measure specifically provided for such workers under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (BOCW Act) and Buildings And Other Construction Workers Welfare Cess Act, 1996 (Welfare Cess Act).

The appellants, who were in the process of construction of civil works/factory buildings etc. wherein they had planned to set up their factories, had contended that Section 2(d) of the BOCW Act which defines ‘building or other construction work’ specifically states that it does not include any building or construction work to which the provision of the Factories Act, 1948 or the Mines Act, 1952 apply. Since the appellants stood registered under the Factories Act, they were not covered by the definition of building or other construction work as contained in Section 2(d) of the Act and, therefore, said Act was not applicable to them by virtue of Section 1(4) thereof.

Interpreting Section 2(d) of BOCW Act, the Court said that the provisions of the Factories Act would “apply” only when the manufacturing process starts for which the building/project is being constructed and not to the activity of construction of the project. The Court said that that is how the exclusion clause, which excludes those building or other construction work to which the provisions of Factories Act or Mines Act apply, is to be interpreted and that would be the plain meaning of the said clause.

The Court said that if the contention of the appellants is accepted, the construction workers engaged in the construction of building undertaken by the appellants which is to be used ultimately as factory, would stand excluded from the provisions of BOCW Act and Welfare Cess Act as well. That could not have been the intention of the Legislature. BOCW Act and Welfare Cess Act are pieces of social security legislation to provide for certain benefits to the construction workers.

The appellants would not be covered by the definition of factory defined under Section 2(m) of the Factories Act in the absence of any operations/ manufacturing process and, therefore, mere obtaining a licence under Section 6 of the Factories Act would not suffice and rescue them from their liability to pay cess under the Welfare Cess Act. It was held that a bare reading of the definition of “Factory” makes it abundantly clear that before this stage, when construction of the project is completed and the manufacturing process starts, ‘factory’ within the meaning of Section 2(m) of the Factories Act does not come into existence so as to be covered by the said Act. [Lanco Anpara Power Limited v. State of Uttar Pradesh, 2016 SCC OnLine SC 1153 , decided on 18.10.2016]