Facing a Bribe Demand from a Labor Inspector: How Should We Handle This When Our Compliance is Perfect?

I want your opinion regarding what to do when a labor inspector demands a bribe. How should we resolve that issue when our compliance document is perfect?

Dear Nadal06, Never make any complaint to anyone if you and your company want to be in the construction field. Please take him to some good hotel, feed him, bargain, and then pay it out to clear the issue. Even though you maintain the records perfectly, if the labor inspector wishes to fix you, he has many ways to do so and many ways to help you.

Questions to Consider

Is the toilet facility adequate? Is a canteen facility available? Is the water supplied by you potable? Where is your creche? Questions like these, you cannot adopt as per the statutory requirement.

He will simply come to your site, inquire 7 or 8 laborers about their wages, obtain their signatures, and then simply leave the site. One fine day, you will receive a summons from the court stating that you have underpaid your workmen. Your workmen's strength is 1000 per day, and you have to pay Rs. 238,000/-, but according to the inquiry, you have only paid Rs. 130,000/-, leaving Rs. 108,000/- per day. Your site has been running for 18 months. Hence, Rs. 108,000/- * 26 days * 18 months = ______. Please deposit with the Labor court. You will receive a summons like this. Think about your position in your company, outside, Labor Court trips, lawyer fees, your peace of mind, your disturbed mind will obviously affect your family and children.

Think and discuss the matter with your management and resolve it by offering some concession.

With warm regards,

Regards

Dear Pradeep Yadav, If you pay the escalated rate of a bribe even after filing the case and it is pending with the labor court (here, the labor inspector need not go to court), he will guide you on how to escape from the case. He will advise you to submit for providing food to the worker, costing around ____ rupees. The advance given in his home village will be deducted from his monthly wages Rs. _____/-, which costs per day ______, and he will guide you on what else can be done.

With warm regards,

S. Bhaskar [Phone Number Removed For Privacy Reasons]

I fully support Mr. Bhaskar and Mr. Sanju. I suggest you talk with your senior and coordinate fully with the labor officer. He has the power to help you and your company.

Thank you.

If you are in the good books of your Inspector of Labour and JCL or DCL, whoever your licensing issuing authority is, then you need not worry about anything. It is not possible to be good to everyone, but try to be good to everyone.

With warm regards,
S. Bhaskar
[Phone Number Removed For Privacy Reasons]

Dear Nadal, bribery has become a part and parcel of our society. In every government office, you will find a board (merely for statutory purposes) that announces, "If you are subject to harassment by any official who seeks a bribe/favor, you can write or complain to." Do not get carried away by such announcements.

Assuming that you have bribed an inspector who has sought money from you, you might temporarily escape consequences. However, as Mr. Bhaskar has pointed out, your organization may face more statutory inspections.

The law is nothing but interpretation, so there may not be much you can do about it.

In fact, we often overlook certain bribes we pay in our day-to-day lives. For instance, we pay Rs. 300/head for a quick darshan of Lord Venkateswara while several hundred people wait in the queue for sarva darshan.

We are allowed to book tickets through Tatkal by paying extra, while many others remain on the waitlist. Is this a form of legalized bribery?

We pay fees to driving schools to obtain our driving licenses, to officers for issuing family ration cards, and so on.

If you choose not to pay a small amount to restore your power supply after a blown fuse, you may end up relying on a DG set, which will be at least 10 times costlier. Therefore, you need to consider your options carefully.

We are not encouraging bribery, but it is essential for officials in statutory departments to understand and reform themselves.

Regards,
M.V. Kannan

Good advice. I agree with Mr. Bhaskar here. "Throw bones to the dogs" is an apt usage in this situation. 

How nice to hear all the comments. No surprise we open the newspaper every day with one new scandal. We have lost complete faith in ourselves, have forgotten to stand up and raise our voice against ill and become part of the ill. Let us not blame Kalmadi, Raja, Balkrishnan, and scores of others. I was passing by yesterday in a posh area in Baroda where I located a young tribal couple with a 5-6-year-old son. The boy, I noticed, was barefooted. In prosperous Gujarat! Nadal, I would not encourage bribing the inspector. Be faithful to the law and your profession, and if you cannot, just get out of the GULAMI and be on your own. I am sure you will be able to feed yourself and your family, if not buy a bungalow worth Rs 1 crore.

Collective Action Against Corruption

The HR family can locate the corrupt inspectors and teach them a lesson by taking collective action. The UP IAS Officers' Association is locating corrupt IAS officers and demanding action against them. Can this community think in that direction?

Dear Nadal, Shekhar, Bhaskar, Joshi, Kanan, etc.,

I'm afraid I do not entirely subscribe to this method of becoming a 'Part of The Problem' by succumbing to the system. I understand the necessity of paying a small/large amount to avoid further harassment, but that is like feeding a fire. The problem will not go away! Please do not succumb to temptation. You have to stand up for your rights by putting a little starch in your backbone!

Conducting Operations Correctly

Firstly, you have to be correct in your conduct of operations. Do everything correctly, as far as possible. There is enough profit even after all compliances. And believe me, once you look after all your workers, the word spreads, and your business will grow.

Don't be offensive to the inspector but politely refuse to submit to his illegal demands. Tell him to endorse his remarks for further compliance, if necessary. Correct your procedures and have them recorded. Have the documents inspected by your principal employer as proof. When the inspector visits again, show him the proof of compliance. Arrange to have his visit recorded, either in camera (many devices are now available) or in the presence of a senior representative of the principal employer and a trusted member of your staff. Ask questions and generate discussion. Of course, you have to know the minimum standards you are required to maintain. Apprise the inspector of the remarks made by him on his previous visit and the action taken by you on them. If he brings up more points, note the same for compliance - AND ensure compliance by a given date. Invite the inspector again.

Be ready to explain again! Repeat the entire procedure.

Expectations and Outcomes

Also, be prepared to expect a delayed or 'NO SHOW' by the inspector. If not this time, the next time certainly. Why? Because he realizes that you are a fighter and will not give up. That he probably has easier pickings elsewhere! See, a predator only goes to places where prey is available - EASILY!

By succumbing to the bribe syndrome, you are not only harming your own business by accepting perpetuation, you are encouraging the concept of bribery. You are becoming a part of the overall problem. You are contributing to giving the country a bad name. Can you, after this, ever complain about the system?

Please remember, "THE WEAK WILL ALWAYS BE OPPRESSED. THE BIG FISH WILL ALWAYS EAT THE SMALL FISH."

Set your house in order. Do the right thing. Accept no nonsense - you don't need to! Your profits will be small initially, but they will grow, surely. It takes time, patience, and moral courage. If you are actually right, you should have no problem standing up for your rights! So, do so. You'll sleep easy and ultimately find success.

I am doing it. And doing it successfully. I'm not Tata or Birla, but I'm comfortable and happy!

Here's wishing you luck and the entire country a better future.

Warm regards and a Happy New Year.

Colonel Jagdeep Gahlot

I agree with Mr. Kannan. It is not only a particular person; the system itself is corrupt. So if you try to complain, it may boomerang on you, indicating that you have failed to achieve compliance. This is especially true when we talk about labor laws, which are more rigid compared to other laws like income or sales tax. Our labor laws have numerous provisions, making it difficult to run a business while trying to comply with all of them.

Therefore, it is wise to manage these people to the best of our ability and make an effort to achieve compliance within the boundaries of the organization.

Dealing with Bribery Demands

Being educated, don't be afraid of any official who asks for a bribe. If your management cooperates well, please report the individual in a proper manner with the assistance of the Anti-Corruption Bureau (ACB). All the best.

It depends upon the ethics and culture your company believes in. As suggested, bribing him to get rid of the issue may seem like a simple and temporary solution.

Since you mentioned that you are diligently maintaining records, registers, and all compliances, and have fair policies regarding health, safety, welfare, etc., there is no need to be afraid. Show him all the records whenever he asks, try to convince him about the culture and ethics your company upholds, and demonstrate that you or anyone in the company is not involved in such practices.

If he is convinced, that's good. Otherwise, if he sends any notice or observation memo, ensure a timely response until he is satisfied with the documents or convinced about your position. This approach will definitely assist you and help in establishing a permanent fair image. Before proceeding with this, ensure that your records are accurate and your management shares the same mindset.

Regards,
Mukesh Mehta

Dear all, thank you for your valuable opinions. I want to provide you with a clearer picture of my company. Basically, we are one of the top consulting companies in India, and I am associated with the project of sub-contracting. The issue in Gurgaon is that inspections happen on a daily basis because our resources are deployed at many client sites.

In my personal opinion, labor laws pose significant obstacles to India's growth. Taking the example of the IDA mid-1980 Amendment: if any organization employs more than 100 workers, it cannot lay off any employees even in situations like recession or other reasons. This is why more than 80% of manufacturing organizations employ fewer than 100 workers. The IDA Act is a stringent law that is hindering India's manufacturing capabilities.

However, this does not mean that we should not have any laws, but rather that the laws should be balanced. I will take your views into consideration when presenting my stance to the company on whether we should offer bribes or not.

Thank you.

Yes, do that, and you shall remain where you are. They will know you are easy prey. They will come back for more, more, and more!

Stand up to them, and they will contrive your fall. Okay, so stand up again. You will feel better for it, and you would have done yourself and the country a great service. The starch in your backbone will be so evident.

Whatever your decision, let me wish you the very best of luck.

Regards,
Colonel Gahlot
TRURECRUIT
[Phone Number Removed For Privacy Reasons]

Solution 1: Simple solution - just throw the bone to the dog, not the other way around.

Solution 2: If all your documentation is perfect, contact the CVC (Central Vigilance Commission) branch or the Anti-Corruption Bureau. If the labor inspector is caught, disciplinary proceedings will be initiated against him. However, this may lead to enmity with the labor inspector. If he holds influence and power, he may emerge unharmed, making your life difficult. This unnecessary conflict can cause suffering to your company. Even though the anti-corruption officials encourage you to seek their help, the legal system in India still needs significant improvement. This fear is rooted in the current system's shortcomings.

Solution 3: Not advised unless you genuinely seek to eradicate corruption and possess sufficient power to do so. Teaching the labor inspector a lesson the hard way involves various forms of physical and mental torture, ultimately driving the labor inspector to madness.

Dear Friends, I am constrained to close this thread herewith, while thanking the members for their participation and for contributing their valuable suggestions. The original query posted, viz. "I want your opinion regarding when a labor inspector demands a bribe, so how should we resolve that issue when our compliance document is perfect?" has received sufficient inputs to enable the 'poster' to make an informed decision.

This is an 'ethical' issue, and there can be several suggestions depending on the personal or organizational ethical values of the members.

Ultimately, the question that we need to ask ourselves is, "What kind of world do we intend to give to our children and theirs?"

"Can we do something OURSELVES to make this world a better place to live (or are we truly helpless)?"

Any civilized society is capable of rooting out its social evils; even in India, we have had several such examples. There is no reason to believe that corruption cannot be eliminated; all it requires is individual and collective will, and all of us can contribute our own bit.

Warm regards.

I faced the same situation in my organization a few weeks back. We have proper documents, but he asked me silly questions like needing a written statement of all my documents and posting all employee details on the notice board, and so on. At that time, I was the only person handling the department, and my Senior Manager was out of the station. Finally, he planned to file a case against our company. However, I tried to convince him and asked for some time. He directly asked for 5k to not take any further action, but I informed him that we would provide it the next day as the manager was unavailable. They agreed and left.

Later, I discussed with my manager, and he disagreed with giving a bribe. He emphasized that we had the necessary documents and should not give even a single penny. If they decide to file a case, we will meet in court.

The next day, the Labor Inspector called and inquired about the bribe amount or threatened to file a case. Again, I stated that the manager was unavailable, and we would meet in their office upon his return. The inspector seemed tense and abruptly ended the call.

This back-and-forth continued for more than four days until the inspector became frustrated, and I have not received any calls from him since. I am still unsure whether they filed any complaints or not. I realize that we often try to avoid further conversations and prevent the Labor Inspector from entering our premises as the only way to evade such situations.

Regards.