Supreme Court issues direction for implementation of the BOCW Act and Cess Act

Supreme Court issues direction for implementation of the BOCW Act and Cess Act for the benefit of building and other construction workers.

Symbolic justice-there is nothing more to offer to several millions of construction workers in the unorganized sector – not social justice, not economic justice. The reason is quite simple. No State Government and no Union Territory Administration (UTA) seems willing …..

ABCAUS Case Law Citation:
ABCAUS 2251 (2018) (03) SC

The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (the BOCW Act) and the Building and Other Construction Workers‘ Welfare Cess Act, 1996 (the Cess Act), both were enacted in 1996. The BOCW Act was meant to regulate the employment and conditions of service of building and other construction workers and to provide for their safety, health and welfare measures and for other connected matters. Similarly, the Cess Act was meant to provide for the levy and collection of cess on the cost of construction incurred by employers with a view to augmenting the resources of the Building and Other Construction Workers Welfare Boards constituted under the BOCW Act.

Supreme Court issues direction for implementation of the BOCW Act

The BOCW Act is a welfare legislation intended and enacted for the benefit of the unorganized sector of building and construction workers. It has a strong flavour of social justice and is a serious attempt by Parliament to ensure that building and construction workers are not exploited because of their poverty and their children do not suffer their fate in terms of education, healthy living and whatever it takes to live a life of dignity.

The Cess Act requires every employer to furnish a return to the concerned officer or authority and that officer or authority is obliged to make an assessment of the amount of cess payable by the employer. The concerned officer or authority is also empowered to specify the date within which the cess shall be paid by the employer on assessment. There is a provision for penal interest, appeal as well as an enforcement provision whereby penalty can be levied under the provisions of the Cess Act.

The petitioner represented registered trade unions and expressed concern with the rights of workers in the unorganized sector including construction workers, especially in areas of safety, occupational health and welfare measures. According to the petitioner, the attitude and ignorance‖of most State Governments and UTAs towards implementation of the BOCW Act violated the several Articles of the Constitution, which imposes a primary responsibility on the State to ensure that all the needs of workers are met and that their basic rights are fully protected. Also the non-implementation also violates Article 21 of the Constitution, which provides for the right to live with dignity.

In 2009 and again in 2010, the Court had Court issued set of directions so that the provisions of the BOCW Act could be effectively implemented. Again in 2014, the Court issued direction to the Ministry of Labour and Employment of the Government of India to convene a meeting of all the Secretaries in the corresponding Ministries of the State Governments and UTAs to discuss the modalities for effective implementation of the BOCW Act and the Cess Act and arrive at a consensus.

However, pursuant to the meeting, the Govt. submitted an affidavit which revealed non-utilization of the large amounts collected in State after State. It was further noted that there was no clear indication whether the CAG had audited the receipts and expenditure;  there were a multiplicity of schemes in operation and whether the schemes were being monitored by one authority or by a different authority for each scheme.

The Hon’ble Supreme Court took the assistance of the office of the CAG to determine the amount collected as cess and the amount actually spent. It was revealed that amount of cess collected was in the bracket of Rs. 27,000 crores – Rs. 29,000 crores. Overall, the affidavits by CAG gave a shocking state of affairs inasmuch as some Welfare Boards had expenditure out of the collected cess for payment of entry tax/value added tax abacus.in and to the astonishment of the Court, for purchase of washing machines for construction workers and purchase of laptops for construction workers.

Since 2047, the Ministry of Labour and Employment filed several affidavits from time to time with respect to directions issued under Section 60 of the BOCW, Schemes framed by State Governments and UTAs etc.

The Hon’ble Supreme Court observed that the statistics regarding the collection and utilization of cess suggested a complete mess, even the CAG did not have accurate figures from the State Governments and the UTAs.

The Hon’ble Supreme Court opined that there is something terribly rotten with the collection and accounting mechanism and the exercise of registration, both of the establishments and of the construction workers is not being carried out satisfactorily. This is an area that has to be very seriously looked into by all the State Governments and the UTAs as well as by the Ministry of Labour and Employment.

Supreme Court issues direction for implementation of the BOCW Act

The Hon’ble Court in view of the above, issued the following directions to the Ministry of Labour and Employment/the State Governments/UTAs:

SPECIFIC DIRECTIONS

(1) to the Ministry of Labour and Employment, the State Governments and the UTAs to put in place and strengthen the registration machinery, both for the registration of establishments as well as registration of construction workers. This should be done within a specified time-frame to be decided by them, but at the earliest.

(2) to establish and strengthen the machinery for the collection of cess.

(3) to frame one composite Model Scheme on or before 30th September, 2018, for the benefit of construction workers in consultation with all stakeholders including NGOs who are actually working at the grassroots level with construction workers.

(4) to conduct a social audit on the implementation of the BOCW

GENERAL DIRECTONS:

(1) Every State Government and UTA shall constitute a State Advisory Committee, if not already constituted, and that State Advisory Committee shall meet regularly for conducting its business. It may be mentioned that Rule 20 of the Building and Other Construction Workers‘ (Regulation of Employment and Conditions of Service) Central Rules, 1998 provides that the Central Advisory Committee shall meet at least once in six months. This could be used as a good guideline for meetings of the State Advisory Committee.

(2) Every State Government and UTA shall constitute an Expert Committee and frame statutory Rules under Section 62 of the BOCW Act, if such statutory Rules have not already been framed. Setting up an Expert Committee and framing statutory rules should be in a time bound manner, with the exercise being completed preferably within six months and in any event by 30th September, 2018.

(3) The State Governments and UTAs must appoint Registering Officers for registration of establishments and construction workers. This is a critical aspect of the implementation of the BOCW Act as well as the Cess Act.

(4) Every State Government and UTA should establish a Welfare Board in terms of Section 18 of the BOCW Act. It must be appreciated that this is not a body that can be created by an executive order. The law requires that the Welfare Board shall be a body corporate having perpetual succession and a common seal. There are therefore legal formalities to be carried out for the constitution of a Welfare Board.

(5) Every State Government and UTA should establish a Welfare Fund for the benefit of the construction workers, with appropriate rules for utilisation of the funds.

(6) It is imperative that all construction workers should be given identity cards and should be registered abacus.in in terms of Section 12 of the BOCW Act. The Ministry of Labour and Employment has proposed the issuance of a Universal Access Number for each construction worker. We make no comment or observation about the efficacy or otherwise of a Universal Access Number. It was submitted by learned counsel for the petitioner that smart cards should be issued to all construction workers.

(7) The Ministry of Labour and Employment shall actively consider making available to the construction workers the benefits of The Maternity Benefit Act, 1961 and The Minimum Wages Act, 1948, The Employees‘ State Insurance Act, 1948, the Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952, as well as (to the extent possible) the Mahatma Gandhi National Rural Employment Guarantee Act, 2005.

(8) The Ministry of Labour and Employment should also consider whether projects of the Government of India in the railways, defence and other establishments are brought within the purview of the BOCW Act.

(9) The Monitoring Committee which has had quite a few meetings so far should pro-actively ensure full compliance of the provisions of the BOCW Act, the Cess Act and the directions issued by this Court. It needs to meet far more frequently, and in any case once in three months, considering that thousands of crores of rupees are not being gainfully utilized, and in some instances, misutilized

With respect to the cess already collected, the Hon’ble Supreme Court observed that benefits and entitlements that have accrued to the construction workers (millions of whom have not been identified) cannot be passed on to them due to the passage of time, with the whereabouts of some of them not known. Accordingly, a decision will have to be taken by the Union of India on the gainful utilization of the cess already collected so that the Welfare Boards are not unjustly enriched – the beneficiaries having unfortunately lost out.

Supreme Court issues direction for implementation of the BOCW Act

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