Dear Members,
Kindly supplement your guidance on B&OCW. A factory is under commercial production. The said factory is going for an additional unit in the same boundary and premises. The labor department is asking the agency to register for this new job. The labor department is not convinced at all that the said act is not applicable to the unit. However, they are citing the example of the Apex court decision in the matter of the Lanco Anpara power plant case.
Regards
From India, Mumbai
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731Kindly supplement your guidance on B&OCW. A factory is under commercial production. The said factory is going for an additional unit in the same boundary and premises. The labor department is asking the agency to register for this new job. The labor department is not convinced at all that the said act is not applicable to the unit. However, they are citing the example of the Apex court decision in the matter of the Lanco Anpara power plant case.
Regards
From India, Mumbai
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Dear Prabhat ji, in light of the recent landmark judgment of the Hon'ble Supreme Court in Lanco Anpara Power v/s State of Uttar Pradesh & Ors rendered in Civil Appeal No 6223 of 2016 (reported in (2016) 10 SCALE 99), unfortunately, you cannot take the benefit of exclusion carved out under Section 2(1)(d) of the BOCW Act. Now you have no option but to obtain a Registration Certificate under the BOCW Act and also to pay Cess.
The Hon'ble SC, while coming to its conclusion, adopted a purposive interpretation of Section 2(1)(d) of the BOCW Act, giving primacy to the 'superior purpose' contained in the BOCW Act and the Welfare Cess Act, such purpose being the welfare of the unorganized labor class involved in construction activity. The Hon'ble SC further held that a literal interpretation, as desired by the construction companies, would result in a situation where the construction workers would be deprived of the benefits of both the BOCW Act and the Factories Act, which could not have been the legislative intent and therefore could not be accepted by the Courts.
From India, Mumbai
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The Hon'ble SC, while coming to its conclusion, adopted a purposive interpretation of Section 2(1)(d) of the BOCW Act, giving primacy to the 'superior purpose' contained in the BOCW Act and the Welfare Cess Act, such purpose being the welfare of the unorganized labor class involved in construction activity. The Hon'ble SC further held that a literal interpretation, as desired by the construction companies, would result in a situation where the construction workers would be deprived of the benefits of both the BOCW Act and the Factories Act, which could not have been the legislative intent and therefore could not be accepted by the Courts.
From India, Mumbai
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Dear Keshav Korgaonkar Ji, I appreciate and thank you for the comments on the matter and suggestions provided. I have reviewed the judgment of the Hon'ble Supreme Court in Lanco Anpara Power v/s State of Uttar Pradesh & Ors rendered in Civil Appeal No. 6223 of 2016 (reported in 2016).
Judgment Overview
The judgment pertains to Green Field projects whose plans and layouts were approved under the Factories Act but have not commenced commercial production. In essence, the judgment interprets the definition of a Factory. It explicitly states that a "Factory" under construction cannot be considered a Factory, and the Building and Other Construction Workers (BOCW) Act is applicable.
Conclusion on BOCW Act Applicability
After carefully studying the judgment, I have formed the opinion that the BOCW Act does not apply to a Factory under commercial production. This conclusion is drawn from the following points discussed in the judgment:
- Point No: 11 on page No. 15
- Point No: 19 on page No. 23
- Point No: 23 on page No. 24-25
- Point No: 25 on page No. 26
Would you kindly review the above points of the judgment for an opinion and further discussion?
Thanks and Regards
From India, Mumbai
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Judgment Overview
The judgment pertains to Green Field projects whose plans and layouts were approved under the Factories Act but have not commenced commercial production. In essence, the judgment interprets the definition of a Factory. It explicitly states that a "Factory" under construction cannot be considered a Factory, and the Building and Other Construction Workers (BOCW) Act is applicable.
Conclusion on BOCW Act Applicability
After carefully studying the judgment, I have formed the opinion that the BOCW Act does not apply to a Factory under commercial production. This conclusion is drawn from the following points discussed in the judgment:
- Point No: 11 on page No. 15
- Point No: 19 on page No. 23
- Point No: 23 on page No. 24-25
- Point No: 25 on page No. 26
Would you kindly review the above points of the judgment for an opinion and further discussion?
Thanks and Regards
From India, Mumbai
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Thank you, Prabhat ji, for providing insights into the judgment, which I have not fully read, I admit. I only know that the Honorable SC, while coming to its conclusion, adopted a purposive interpretation of Section 2(1)(d) of the BOCW Act, giving primacy to the 'superior purpose' contained in the BOCW Act and the Welfare Cess Act. This purpose is the welfare of the unorganized labor class involved in construction activity.
It's good that you responded to me. I will not only have to read this judgment fully but also study it minutely.
From India, Mumbai
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It's good that you responded to me. I will not only have to read this judgment fully but also study it minutely.
From India, Mumbai
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I endorse your views. The Lanco judgment would apply only in the case of greenfield projects and is distinguishable for the expansion of activities in an already established factory. Indeed, the very purpose of the BOCW Act is to provide welfare amenities to the building and construction workers, which they are deprived of compared to factory workers due to the unorganized nature of work. However, once a factory is in operation, all statutory benefits like medical, canteen, PF, ESI, etc., are extendable to all, including the Building & Construction Workers deployed in the same premises.
Reading the Lanco Judgment as providing for coverage under the BOCW Act would be unnecessary duplication of liability without any gain.
Thank you.
From India, Mumbai
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Reading the Lanco Judgment as providing for coverage under the BOCW Act would be unnecessary duplication of liability without any gain.
Thank you.
From India, Mumbai
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In the BOCW Act, it's difficult to convince the labor department, and the interpretation of the Supreme Court judgment also favors their side. Therefore, opting to go for a STAY from the high court is preferable because an appeal at the labor commissioner will likely go in their favor.
From India, undefined
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From India, undefined
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Yes, Mr. Singh,
The cases of the New Factory under construction have been closed. However, the cases of a dissimilar nature are maintaining a stay status. We have already communicated our views to the Inspector-cum-enforcement officer under B&OCW and to the principal employer to reimburse the costs, as we did not consider cess in our price quotation, given that it is a Factory.
Regards.
From India, Mumbai
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The cases of the New Factory under construction have been closed. However, the cases of a dissimilar nature are maintaining a stay status. We have already communicated our views to the Inspector-cum-enforcement officer under B&OCW and to the principal employer to reimburse the costs, as we did not consider cess in our price quotation, given that it is a Factory.
Regards.
From India, Mumbai
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Dear All,
Kindly go through the judgment of the Bombay High Court in the case of Wardha Power Company Ltd vs. State of Maharashtra reported in 2017 (1530 FLR 139) and the judgment of the Madhya Pradesh High Court in the case of Vippy Industries Ltd. vs. Assessing Officer reported in 2017 (153) FLR 951. Both of these judgments are by Division Bench, where the matters related to the existing factory and the applicability of the BOCW Act. This should clarify the issue.
Thanks,
S. Sensharma
Industrial Law Consultant, Meerut
From India, undefined
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Kindly go through the judgment of the Bombay High Court in the case of Wardha Power Company Ltd vs. State of Maharashtra reported in 2017 (1530 FLR 139) and the judgment of the Madhya Pradesh High Court in the case of Vippy Industries Ltd. vs. Assessing Officer reported in 2017 (153) FLR 951. Both of these judgments are by Division Bench, where the matters related to the existing factory and the applicability of the BOCW Act. This should clarify the issue.
Thanks,
S. Sensharma
Industrial Law Consultant, Meerut
From India, undefined
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The judgments of the High Court are contradictory. While in Vippy Industries, the MP High Court clearly holds that the BOCW Act would apply even if the construction is in the existing factory premises, in Wardha Power, the Bombay High Court answers, "... after the manufacturing process starts, the work on a factory building or any other civil work therein which can be subjected to provisions of the Factories Act 1948, shall not attract provisions of Act No.27/1996 or the Cess Act."
Both the judgments are of the Division Bench. The MP High Court is the later one, but the Bombay judgment was not considered. So the issue is still open. I think the final word can be said only after the Supreme Court decides on the issue. I believe there is a strong case in favor of the exclusion of liability.
Kind regards,
[Your Name]
From India, Mumbai
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Both the judgments are of the Division Bench. The MP High Court is the later one, but the Bombay judgment was not considered. So the issue is still open. I think the final word can be said only after the Supreme Court decides on the issue. I believe there is a strong case in favor of the exclusion of liability.
Kind regards,
[Your Name]
From India, Mumbai
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