Supreme Court Intervenes on Construction Workers’ Welfare: A National Disgrace Uncovered

Date of the Judgment: 19 March 2018

Citation: Not Available

Judges: Madan B. Lokur, J., Deepak Gupta, J.

Can the State continue to ignore the plight of millions of construction workers, who are among the most vulnerable in India? The Supreme Court of India, in a recent judgment, has expressed its deep concern over the non-implementation of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (BOCW Act) and the Building and Other Construction Workers’ Welfare Cess Act, 1996 (Cess Act). These laws, enacted by the Parliament to protect the rights and welfare of construction workers, have largely been disregarded by State Governments and Union Territory Administrations (UTAs). The court’s intervention highlights a severe lapse in governance and a failure to uphold the rights of a marginalized workforce. The bench comprised of Justice Madan B. Lokur and Justice Deepak Gupta, with the majority opinion authored by Justice Madan B. Lokur.

Case Background

The petitioner, the National Campaign Committee for Central Legislation on Construction Labour (NCC-CL), a non-registered committee of trade unions, filed a writ petition under Article 32 of the Constitution. The committee expressed deep concern over the lack of implementation of the BOCW Act, which they argued violates the rights of construction workers under Articles 15(3), 39(e) and (f), 45, 47, and 21 of the Constitution. The petitioner highlighted the absence of safe and healthy working conditions for construction workers, despite the existence of the BOCW Act and the Cess Act, which are based on International Labour Organization (ILO) conventions.

The BOCW Act aims to regulate the employment and conditions of service of building and other construction workers, ensuring their safety, health, and welfare. The Cess Act provides for the levy and collection of a cess on construction costs to augment the resources of the Building and Other Construction Workers Welfare Boards. The Acts were enacted in 1996 to address the vulnerable conditions of construction workers, characterized by casual employment, uncertain working hours, and lack of basic amenities.

Timeline

Course of Proceedings

The constitutional validity of the BOCW Act and the Cess Act was challenged in the Delhi High Court by the Builders Association of India. The Delhi High Court upheld the validity of both Acts, a decision that was later affirmed by the Supreme Court in Dewan Chand Builders & Contractors v. Union of India. The Supreme Court has been actively monitoring the implementation of these Acts since May 2008, issuing several directions to State Governments and UTAs to ensure compliance. Despite these directions, the implementation remained poor, leading to the present proceedings.

Legal Framework

The core of this case revolves around the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (BOCW Act) and the Building and Other Construction Workers’ Welfare Cess Act, 1996 (Cess Act). The BOCW Act aims to regulate the employment and conditions of service of building and other construction workers, ensuring their safety, health, and welfare. The Cess Act provides for the levy and collection of a cess on construction costs to augment the resources of the Building and Other Construction Workers Welfare Boards.

Key provisions include:

• Section 3 of the Cess Act: This section provides for the levy and collection of cess at a rate not exceeding two percent but not less than one percent of the cost of construction. It also specifies the manner of collection, including deduction at source and advance collection through local authorities.

  “3. Levy and collection of cess .––(1) There shall be levied and collected a cess for the purposes of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, at such rate not exceeding two per cent but not less than one per cent of the cost of construction incurred by an employer, as the Central Government may, by notification in the Official Gazette, from time to time specify.”

• Section 4 of the BOCW Act: This section mandates the constitution of a State Advisory Committee to advise the State Government on matters related to the administration of the BOCW Act.

  “4. State Advisory Committee .—(1) The State Government shall constitute a committee to be called the State Building and Other Construction Workers‘ Advisory Committee (hereinafter referred to as the State Advisory Committee) to advise the State Government on such matters arising out of the administration of this Act as may be referred to it.”

• Section 6 of the BOCW Act: This section requires the appropriate government to appoint gazetted officers as registering officers.
• Section 7 of the BOCW Act: This section requires the registration of establishments involved in construction activities.
• Section 12 of the BOCW Act: This section provides for the registration of building and construction workers as beneficiaries.
• Section 13 of the BOCW Act: This section mandates the issuance of identity cards to every beneficiary.

  “13. Identity cards .––(1) The Board shall give to every beneficiary an identity card with his photograph duly affixed thereon and with enough space for entering the details of the building or other construction work done by him.”

• Section 15 of the BOCW Act: This section obliges every employer to maintain a register showing the details of employment of beneficiaries.

  “15. Register of beneficiaries .––Every employer shall maintain a register in such form as may be prescribed showing the details of employment of beneficiaries employed in the building or other construction work undertaken by him and the same may be inspected without any prior notice by the Secretary of the Board or any other officer duly authorised by the Board in this behalf.”

• Section 18 of the BOCW Act: This section provides for the constitution of State Building and Other Construction Workers’ Welfare Boards.
• Section 22 of the BOCW Act: This section details the functions of the Welfare Boards, including providing assistance to beneficiaries in case of accidents, pensions, loans, and financial assistance for education.

  “22. Functions of the Boards .—(1) The Board may — (a) provide immediate assistance to a beneficiary in case of accident; (b) make payment of pension to the beneficiaries who have completed the age of sixty years;… (e) give such financial assistance for the education of children of the beneficiaries as may be prescribed;”

• Section 24 of the BOCW Act: This section provides for the constitution of a Welfare Fund for the benefit of construction workers.
• Section 60 of the BOCW Act: This section empowers the Union Government to issue directions to State Governments for the implementation of the Act.
• Section 62 of the BOCW Act: This section empowers the State Government to frame statutory rules for carrying out the purposes of this Act.

These legal provisions are rooted in the Directive Principles of State Policy, particularly Article 39 of the Constitution, which mandates the State to secure the health and strength of workers, and Article 42, concerning just and humane conditions of work. The right to life with dignity, as enshrined in Article 21, also forms the constitutional basis for these Acts.

Arguments

Petitioner’s Submissions:

• The petitioner argued that the BOCW Act and the Cess Act are not being implemented effectively by the State Governments and UTAs.
• The petitioner contended that the non-implementation of the Acts violates the fundamental rights of construction workers under Articles 15(3), 39(e) and (f), 45, 47, and 21 of the Constitution.
• The petitioner emphasized the need for proper utilization of the cess collected for the welfare of construction workers and not for other purposes.
• The petitioner highlighted the lack of safe and healthy working conditions for construction workers.
• The petitioner pointed out that the State Advisory Committees were not being constituted, and statutory rules were not being framed.

Union of India’s Submissions:

• The Union of India acknowledged that the directions issued by the Central Government under Section 60 of the BOCW Act have not been effectively implemented by the State Governments and UTAs.
• The Union of India stated that efforts are being made to ensure full and effective compliance with the provisions of the BOCW Act.
• The Union of India highlighted the steps taken to amend the BOCW Act and frame statutory rules.
• The Union of India mentioned the constitution of a Monitoring Committee to supervise the implementation of the Acts.
• The Union of India detailed the various schemes framed by State Governments and UTAs for the benefit of construction workers.
• The Union of India stated that a Universal Access Number is being considered to ensure portability of benefits for migrant workers.

Sub-Submissions:

The arguments were further broken down into sub-submissions. The petitioner argued that the lack of implementation was a violation of fundamental rights, while the Union of India detailed the various steps taken for implementation, even while acknowledging the lack of compliance. The petitioner emphasized the need for proper utilization of funds, while the Union of India highlighted the various schemes and benefits available to construction workers.

Innovativeness of the Argument: The petitioner’s argument was innovative in highlighting the systemic failure of governance in implementing welfare legislation, while the Union of India’s submissions were innovative in proposing a Universal Access Number for migrant workers.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section but the issues that the Court considered were:

1. Whether the BOCW Act and the Cess Act are being effectively implemented by the State Governments and UTAs?
2. Whether the cess collected under the Cess Act is being properly utilized for the welfare of construction workers?
3. Whether the State Advisory Committees are being constituted and statutory rules are being framed as mandated by the BOCW Act?
4. Whether the registration of establishments and construction workers is being carried out effectively?
5. Whether the Welfare Boards are functioning effectively and providing the necessary benefits to construction workers?
6. Whether the directions issued by the Central Government under Section 60 of the BOCW Act are being complied with by the State Governments and UTAs?
7. What steps should be taken to ensure the effective implementation of the BOCW Act and the Cess Act?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Hingir-Rampur Coal Co. Ltd. v. State of Orissa [(1961) 2 SCR 537]: The Court relied on this case to distinguish between a tax, a fee, and a cess, emphasizing that the cess under the Cess Act is a fee for services rendered to construction workers.
• Bandhua Mukti Morcha v. Union of India [(1984) 3 SCC 161]: The Court used this case to underscore the importance of Article 21 and the Directive Principles of State Policy in ensuring the welfare of workers.
• Francis Coralie Mullin v. Administrator, Union Territory of Delhi and others [(1981) 1 SCC 608]: The Court referred to this case to highlight the right to live with human dignity under Article 21.
• Builders Association of India v. Union of India [ILR (2007) 1 Del 1143]: The Court noted that the Delhi High Court had upheld the constitutional validity of the BOCW Act and the Cess Act.
• Dewan Chand Builders & Contractors v. Union of India [(2012) 1 SCC 101]: The Court affirmed its previous decision upholding the validity of the Acts.
• State of W.B. v. Kesoram Industries Ltd. [(2004) 10 SCC 201]: The Court referred to this case to further explain the concept of cess and its correlation with services rendered.
• A. Prabhakara Reddy and Company v. State of Madhya Pradesh [(2016) 1 SCC 600]: The Court relied on this case to emphasize the need for registering construction workers and providing them necessary benefits.

What weighed in the mind of the Court?

The Supreme Court was deeply concerned about the plight of construction workers and the lack of implementation of welfare legislation. The Court emphasized the constitutional mandate to ensure the health, safety, and dignity of workers. The Court was also concerned about the large amounts of cess collected that were not being used for the intended purpose.

Sentiment Analysis of Reasons given by the Supreme Court:

Fact:Law Ratio:

The Court’s reasoning was primarily driven by the factual evidence of non-implementation and misuse of funds, with a strong emphasis on the legal and constitutional obligations to protect workers’ rights. The court’s concern for the factual plight of the workers was the primary driving force.

Logical Reasoning:

The Court considered alternative interpretations but rejected them due to the clear evidence of non-compliance and the constitutional mandate for worker welfare. The court’s decision was based on the need to ensure that the benefits of the legislation reach the intended beneficiaries and that the constitutional rights of construction workers are protected.

The court’s reasoning was based on the following points:

• The BOCW Act and the Cess Act are welfare legislations enacted for the benefit of the unorganized sector of building and construction workers.
• The State Governments and UTAs have failed to implement the provisions of the Acts.
• Large amounts of cess collected have not been utilized for the benefit of construction workers.
• The State Advisory Committees are not being constituted and statutory rules are not being framed.
• The registration of establishments and construction workers is not being carried out effectively.
• The Welfare Boards are not functioning effectively and providing the necessary benefits to construction workers.
• The directions issued by the Central Government under Section 60 of the BOCW Act are being disregarded.

The Court emphasized that the State has a responsibility to ensure that the laws enacted by Parliament are implemented in letter and spirit. The Court also noted that the human rights and dignity of building and construction workers must be respected.

“Symbolic justice – there is nothing more to offer to several millions of construction workers in the unorganized sector – not social justice, not economic justice.”

“What is equally tragic is that multiple directions issued even by the Government of India under Section 60 of the BOCW Act have been disregarded by State Governments and UTAs.”

“The constitutional validity of the BOCW Act and the Cess Act was challenged in the Delhi High Court by the Builders Association of India. As regards the BOCW Act it was contended that it is bad for vagueness and as far as the Cess Act is concerned, it was contended that the cess is a compulsory and involuntary exaction without reference to any special benefit for the payer of the cess and therefore the cess was in fact a tax.”

Key Takeaways

• Strengthening of Registration Machinery: The Ministry of Labour and Employment, State Governments, and UTAs must strengthen the machinery for registration of establishments and construction workers.
• Strengthening of Cess Collection Machinery: The machinery for the collection of cess needs to be strengthened to ensure that all establishments pay the cess.
• Model Scheme: The Ministry of Labour and Employment is to frame a composite Model Scheme for the benefit of construction workers.
• Social Audit: The Ministry of Labour and Employment, State Governments, and UTAs must conduct a social audit on the implementation of the BOCW Act.
• Compliance with Directions: The Union of India must ensure that directions issued under laws enacted by Parliament are respected by the State Governments and UTAs.
• Constitution of Committees and Boards: State Governments and UTAs must constitute State Advisory Committees and Welfare Boards.
• Effective Implementation: The BOCW Act and Cess Act must be fully implemented with responsibility.
• Proper Utilization of Funds: The cess collected must be used for the welfare of construction workers, not for other purposes.

Final Directions

The Supreme Court issued the following directions:

1. The Ministry of Labour and Employment, Government of India, is directed to ensure that a composite Model Scheme is framed for the benefit of construction workers.
2. The Ministry of Labour and Employment, Government of India, is directed to ensure that the machinery for registration of establishments and construction workers is strengthened.
3. The Ministry of Labour and Employment, Government of India, is directed to ensure that the machinery for collection of cess is strengthened.
4. The Ministry of Labour and Employment, Government of India, is directed to ensure that a social audit is conducted on the implementation of the BOCW Act.
5. The Union of India is directed to ensure that directions issued under laws enacted by Parliament are respected by the State Governments and UTAs.
6. State Governments and UTAs are directed to constitute State Advisory Committees and Welfare Boards.
7. State Governments and UTAs are directed to ensure that the cess collected is used for the welfare of construction workers and not for other purposes.
8. State Governments and UTAs are directed to ensure that the BOCW Act and Cess Act are fully implemented with responsibility.