Madhu.T.K
Industrial Relations And Labour Laws
Gannahope
Asst.commissioner Of Labour..a.p.
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
Imran_ilu49
Hr Executive

Thread Started by #Madhu.T.K

There have been differences of opinion about the applicability of the Building and Other Constriction Workers (Regulation of Employment and Conditions of Service) Act, 1996 to such operations or civil constructions carried out within a factory premises which is part of the factory covered under Factories Act. This is mainly due to the lack of clarity in the definition of construction work as given in section 2(d) of the BOCW Act which excludes building and construction work to which the provisions of the Factories Act and Mines Act will apply. Obviously, when a construction work is carried out within the factory premises, it is natural that the employer will take it for granted and say that they are under the coverage of Factories and therefore, no cess is payable as per the BOCW Act. However, it should be understood that Factory licence is given to work connected with manufacturing activities and for a factory which is meant for manufacture of, say, cement, it is for the manufacturing of cement that the licence is issued. Similarly, the Factories Act provides for health, welfare and safety of workers employed in the factory and these workers are the workers employed for manufacturing and not those who are employed for construction of building. Therefore, such construction activities will come under the purview of BOCW Act and cess as per Welfare Fund Act should be paid. The Supreme Court verdict is attached for reference.
28th June 2018 From India, Kannur

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File Type: pdf BOCW Act for construction in factory premises- SC.PDF (249.3 KB, 323 views)

Respected Madhu ji,
You have rightly said that there are differences of opinion about the applicability of the Building and Other Constriction Workers (Regulation of Employment and Conditions of Service) Act, 1996 to such operations or civil constructions carried out within a factory premises which is part of the factory covered under Factories Act.
In light of the landmark judgement 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 can not take the benefit of exclusion carved out under Section 2(1)(d) of the BOCW Act. Now you have no option but to obtain Registration Certificate under BOCW Act and also to pay Cess.
The Hon'ble SC, while coming to its conclusion, adopted a purposive interpretation to Section 2(1)(d) of 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 unorganised labour 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.
The entire judgment of Lanco Anpara (supra) revolved around the issue as to whether the provisions of the BOCW Act could be made applicable on those establishments, which intended to construct a factory and for which they had obtained a license under the Factories Act and where the manufacturing process had not commenced.
However there is a recent judgement of HC at Chhattisgard WPC No. 2636 of 2010 delivered on 16.02.2018. According to this judgement, what I understood is, if you take up an expansion project in the premises of the running factory, the provisions of BOCW would not be attracted including payment of cess. once the manufacturing process starts in an establishment, thereafter the provisions of BOCW Act cannot be made applicable and the provisions of BOCW Act would stand excluded
This decision of HC at Chhattisgard is based on decision of the Hon’ble Supreme Court in Arnit Das vs. State of Bihar reported in (2000) 5 SCC 488.
28th June 2018 From India, Mumbai
Sorry Sir, I didn't get the judgement but the given citation is about a criminal case. Can you please clarify. Moreover, in Lanco Anpara Power case also it is extension and not construction of new factory building because the Factories Act will be applicable once the factory is functional.
28th June 2018 From India, Kannur
Respected Madhu ji,
You are correct. The SC judgement in Arnit Das vs. State of Bihar reported in (2000) 5 SCC 488 as mentioned in the judgement of HC at Chhattisgard WPC No. 2636 of 2010, is pertained to criminal case.
However, I am attaching the judgement of HC at Chhattisgard WPC No. 2636 of 2010 for your reference and study.
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28th June 2018 From India, Mumbai

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File Type: pdf Chatishgarh HC WP(C)2636_10(16.02.18).pdf (193.1 KB, 65 views)

SIR
ATLAST I WISH TO SAY LATEST PRACTICE AND LEGAL APPLICABILITIES
ARE LIKE THIS.
BOCW ACT AND RULES APPLIES ALWAYS TO ALL WORKERS WORKING IN CONSTRUCTION ACTIVITIES OF FACTORY PREMISES...OR NEW FACTORY CONSTRUCTION IN A SITE OR EXPANSION AND EXTENSION OF ALREADY EXECUTED FACTORY...AND EVEN ALSO WORKERSS OF FIXING THE NEWLY IMPORTED MACHINERY TO THE FACTORY .....
FOR ANY CONSTRUCTION WORK CESS ACT APPLIED
AND EMPLOYER HAS TO PAY CESS @ONE PERCENT OF TOTAL COST OF CODTRUCTION TO GOVT.CONCERNED...PLAN APPROVAL AUTHORITIES.
ANY CONSTRUCTION WORKER WORKING IN THE CONSTRUCTION SITE WORKS OF A FACTORY PREMISES..
ALL THE BENEFITS OF "
THE B.O.C.W.ACT AND ALL THE BENEFITS OF WORKMEN'S COMPENSATION ACT "(Now called as EMPLOYEES COMPENSATION ACT APPLICABLE AND will come in to force like wifi
connection to his rescue and protecting the construction worker died in accident deceased/ or severely injured full or partial permanent disability workers families not only working at present for factory construction...Or anywhere out of premises of factory once registered AS BENEFICIARY under BOCW ACT .And more to say...
28th June 2018 From India, Nellore
Dear Mr Madhuji & Mr. Koregaonkarji,
The case WPC No. 2636 of 2010 had reported by me quite sometime back. Self has remained part & parcel to the case.
29th June 2018 From India, Mumbai
Yes, the HC judgement in L&T case is very clear and this distinguishes the building and construction activities in a proposed factory premises and the one in a factory premises which has already started manufacturing activity.
Now my interpretation is still spinning around the exclusion part of the definition of building and other construction work as per section 2(1)(d) of BOCW Act which says that construction activities TO WHICH the provisions of Factories Act apply. A factory is registered to manufacture a given product. The operations may include the allied activities like storage of materials, warehousing etc but in no case it can include construction of building. As such a building construction is not an operation covered by Factories Act.
The definition of worker under Factories Act covers only workers who are employed for manufacturing and allied activities. When the Factories Act is mandated for ensuring the health, safety and welfare of the workers in the Factory, will the occupier take care of the health, welfare and safety of the workers engaged in construction? I don't think anybody will extend it to them. If the arrangement is like, the occupier purchases the require materials, engages workers and gets the building constructed, then there will be direct employee employer relationship between the workers and the occupier and certainly, it will be the occupier who would ensure health, safety and welfare of these workers. In such a situation the provisions of BOCW Act will not apply. However, in reality, the arrangement is that there will be a builder who will undertake to construct a building as per the specifications of the occupier and that builder will bring in materials, manpower, machines etc.Here the occupier doe not know who all are engaged in the work, how many are engaged in the work. In this arrangement the construction workers are workers of the builders and as such their health,safety and welfare matters will be taken care of by the builders. In order to compensate it the occupier will pay a certain amount,say,one percent of the cost of construction, towards cess.
Therefore, what is important is whether the builders have ensured health, safety and welfare of their workers by paying them minimum wages, providing them medical aid, and other facilities which are required as per law. This would include PF, ESI, Bonus etc. If the factory occupier is ready to bear it, the question of payment of cess or welfare fund does not come whereas if it is borne by the builders it is their responsibility to establish that the workers' health, safety and welfare were taken care of. Since the activity of construction of building is carried out for the occupier, and in the absence of records to show that the construction workers were given PF etc, the occupier should pay a certain amount, say,one percent of the cost of construction to the Welfare Fund constituted for the construction workers.
29th June 2018 From India, Kannur
Dear Madhuji,
There is absolutely no hesitation in paying cess @1%, if the contractor gets it from the Principal Employer. The issue lies in defination because contractors do not add up 1% extra against cess while quoting rate for any work within factory or mine premises.
The facility of EPF, ESI, Bonous is remained intact in absence of B&OCW.
The Lanco Anpara case is purely B&OCW one as was reamined a green field project. So one should not see both the case in similiar line, because legitimately different. At the same time paid a bigger sum as cess for Tata Steel Project because project was green field one.
As on date no verdict came to case of M/s Sterelite Ltd because all the cases declared disposed off with the M/s Lanco Anpara case.
29th June 2018 From India, Mumbai
Dear Madhu T.K.
with reference to BOCW act, would like to know that is it applicable in case of expansion (further construction of new building,canteen etc..) carried out in factory which is being running?
Also, what is the procedure to pay 1% cess, where to pay it ? and how to calculate amount on which cess is applicable?
Await for response from senior like you.
Thanking you
30th June 2018 From India, Mumbai
his is what we have been discussing. When the Supreme Court verdict says that the activities connected with construction of building within a factory premises will come under the purview of BOCW Act and cess as applicable should be paid, the Chatisgharh HC verdict says that it is not applicable to extensions or such construction activities in a factory which has already started manufacturing.
Now the answer to the second part of your question is that there will be a Welfare Fund Board constituted in your state following the BOCW Act. The cess at the rate of 1% of the cost of the project is payable to that Building and Other Construction Workers' Welfare Fund Board.
30th June 2018 From India, Kannur
Thank you sir for your prompt & Satisfactory response.
30th June 2018 From India, Mumbai
If we have BOCW certificate then how to enroll construction employees in ESIC. as per my knowledge it is mandatory to submit esic contribution of construction labour.
29th November 2018 From India, Gurgaon
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