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In a contempt petition, a Bench of Justices Madan B Lokur and Deepak Gupta expressed grave concern and displeasure at the fact that the directions given by the Supreme Court from time to time were flouted with impunity.
Symbolic justice
The Court began its verdict by empathising with the fate of 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.”
And the reason?
“The reason is quite simple. No State Government and no Union Territory Administration (UTA) seems willing to fully adhere to and abide by (or is perhaps even capable of fully adhering to and abiding by) two laws solemnly enacted by Parliament, namely, 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). Directions given by this Court from time to time to implement the two laws have been flouted with impunity.”
The Court noted that under the Cess Act, more than Rs. 37,400 crore was collected for the benefit of construction workers, but only about Rs. 9,500 crore was utilized ostensibly for their benefit.
“What is being done with the remaining about Rs. 28,000 crores? Why is it that construction workers across the country are being denied the benefit of this enormous amount? These are some questions that arise in this petition – are the answers blowing in the wind?”, the Court asked before delving into the history of the case and the legislations.
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 Court noted.
Parliament simultaneously enacted the Cess Act which enables the State Governments and the UTs to collect a cess from every employer as defined in the BOCW Act to be utilized for the benefit of registered construction workers.
Notwithstanding the law being clear and constitutionally valid, it was not being implemented in accordance with the intent of Parliament. Therefore, the petitioner moved the Supreme Court.
Bearing in mind the welfare and beneficial intent behind the BOCW Act and the Cess Act and for their effective and meaningful implementation, the Supreme Court had been issuing a series of directions since May 2008. The Court was compelled do so since even twelve years after the enactment of the BOCW Act, the basic statutory mandates had not been carried out by the State Governments and UTs.
Contempt of court
Notwithstanding specific and some general directions by the Supreme Court, the State Governments and UTs apparently failed to take adequate steps to push ahead the implementation of the BOCW Act. The Central government then stepped forward and submitted before the Court in 2011 that implementation of the directions had not taken place at the ground level for the reason that such directions were not enforceable with penal consequences.
It, therefore, told the court that it would take steps to amend the BOCW Act and if necessary to enact statutory Rules in that regard. However, the Centre also failed to take any effective steps to amend the BOCW Act. The flouting of the directions issued by the Supreme Court eventually led to contempt of court proceedings.
“Not only did the Union of India not take any effective steps to amend the BOCW Act but even the State Governments and UTAs continued the unashamed and unabashed flouting of the directions issued by this Court as well as by the Central Government. In a sense, it seems to have been decided by the powers that be that the BOCW Act ought not to be implemented faithfully. Faced with this situation, this Court had no option but to initiate proceedings for contempt of Court. An opportunity was given to all concerned to file a reply. Some State Governments filed a reply, while others did not.”
The Court then noted that the amounts collected by the State Governments and the UTs under the provisions of the Cess Act had not been subjected to any audit by the Comptroller and Auditor General (CAG). It was also noticed that large funds were lying with the Welfare Boards, but had not been disbursed.
“The possibility of these amounts being diverted for other heads of expenditure could not be ruled out by this Court.”
Affidavit by CAG
Adverting to the affidavits filed by the office of Comptroller and Auditor General, the Court said that it revealed a shocking state of affairs.
“…affidavits gave a clear picture of 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, purchase of washing machines for construction workers and purchase of laptops for construction workers. This Court found that rather astonishing since it appeared that there was no rationale in providing washing machines and laptops to construction workers who were by and large poor and uneducated as well as migrant labour.”
What should be done with the thousands of crores that have been collected for the benefit of construction workers but cannot be utilized for their benefit? The court considered this question and then said that “it is entirely for the Government of India and Parliament to decide how to legally appropriate these thousands of crores of rupees and then utilize the amounts for the benefit of construction workers, at least for the future, assuming nothing can be done for the past”.
Four Specific directions
The Court then issued four specific directions.
Our first direction, therefore, is 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.
Our second direction to the Ministry, the State Governments and UTAs in this regard is to establish and strengthen the machinery for the collection of cess. It is a matter of common knowledge that there is a tremendous amount of construction activity going on all over the country and there is no reason why establishments involved in the construction activity, both formal as well as non-formal, should not pay the cess, especially when they are utilizing the services of the construction workers….
Our third direction, therefore, is to 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 who are actually working at the grassroots level with construction workers. While there is an urgency in framing such a Model Scheme, we would caution the Ministry of Labour and Employment to make haste slowly and to prepare a Model Scheme that is comprehensive and can easily be implemented, is pragmatic and does not involve too much paperwork.
Our fourth direction is to 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. If a mistake has occurred, and we have no doubt that hundreds of mistakes have occurred in the implementation of the BOCW Act, it is more appropriate to admit the mistake for a better future rather than to justify it or continue to repeat the mistake. This is more so in the case of the BOCW Act where crores of men, women and children are involved on a day-to-day basis and Parliament has thought it appropriate to legislate for their benefit.
Apart from the specific directions, the Court also passed some general directions so that the BOCW Act can be “fully implemented with responsibility”.
The matter is now fixed for May 1, 2018 to ascertain whether timelines have been fixed by the concerned authorities for compliance of the directions.
My View
HR of construction companies need to read this and see how to change things for workers.

From India, Pune

In deed the Labour Department have been extra vigilant only in extracting contribution under BOCW Cess but has been negligent in extending the benefit to the most unorganised and massively exploited section of workers. SC has been drawing attention of the Government machinery towards this glaring omission for the last 3-5 years but the ground situation is that there is no substantial improvement. Perhaps we are likely to hear some radical action by the Court on May 1 (like arrest/detention or conviction in criminal contempt) if there is no improvement in the situation.
From India, Mumbai
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