ESIC Officers transfer: Amend the Act first before allowing a role for Minister!

A Study on Authority to Transfer the Officers of the ESIC was done in the year 2004 when Hon’ble Mr.Sahib Singh Verma, the then Minister for Labour wanted to acquire the power to transfer the Group ‘A’ and Group ‘B’ officers of the ESI Corporation. And, the paper was circulated among various units of the ESIC Officers’ Association. Now, in the context of similar intense desire shown by the present Minister for Labour, Hon’ble Mr. Sis Ram Ola to have a role in the matter of transfer of officers of the ESI Corporation, the Study Paper circulated then is published, now, for the benefit of the public. The following is the text of that Paper:

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The issue whether the transfers and postings of the officers of the ESI Corporation can be done by the Hon’ble Minister for Labour, Government of India in the capacity of his being the Chairman of the ESI Corporation had been examined on various occasions in the past in various fora. But, it was found that such power could not be vested in the Hon’ble Minister. Unless the Sec. 94 (A) of the ESI Act, 1948 and the Reg. 4 of the ESIC (Staff & Conditions of Service) Regulations, 1959 are amended to provide for such vestiture, the power for ordering such transfers cannot be exercised by the Hon’ble Minister.

The fact that the Hon’ble Minister exercises such powers in the Employees’ Provident Fund Organisation made it necessary for us to make a comparative study of the provisions of the both the Organisations. And it became clearer that no executive power for running the Administration is vested in the Chairman of the ESI Corporation in contrast to the executive powers vested in the Chairman of the Central Board of Trustees of the Employees’ Provident Fund Organisation.

In the EPFO, The Board is the Appointing Authority as per Sec. 5 D of the EPF&MP Act, 1952 and Para 22-A of the EPF Scheme, 1952. As per Sec. 5 E of the EPF&MP Act, 1952 the Central Board can delegate the Executive Committee or to the Chairman of the Board or to any of its officers any of its powers for the efficient administration of the Scheme. Accordingly, as empowered under Para 24-A (2) of the EPF Scheme, 1952, the Central Board, by a resolution, enabled its the Chairman to act as the Appointing Authority in respect of the Officers and Staff other than the CPFC and the FA&CAO. This para 24-A(2) prescribes a specific method and the Board has adopted that method to make its Chairman the Appointing Authority. It is by virtue of having thus become the Appointing Authority, the Chairman of the EPFO is able to exercise the power of transfers and postings of these officers. The provisions in the EPF&MP Act, 1952 and the EPF Scheme, 1952 are very explicit to enable the Chairman to act as the Appointing Authority and thereby exercise the powers of transfer of officers.

Transfer is one of the essential conditions of service for government servants. The authority which functions as the Appointing Authority has the inherent power to enforce transfers and postings also. In other words, the authority to transfer goes together with the authority to appoint. As per the Appendix – 3 to the F.R Part I read with F.R 6 and F.R 15, full power to transfer employees has been delegated to the Heads of Departments.

It is only such an inherent power which enables the Chairman of the EPFO to exercise the powers for the transfers and postings of the Officers in the EPFO. If the Chairman of the EPFO had not been empowered, by a specific resolution of the Board passed under Para 24-A (2) of the EPF&MP Act, 1952, to act as the Appointing Authority he cannot exercise the powers of transfer of the officers in the EPFO.

It is only because the Chairman of the EPFO is not the Appointing Authority in respect of the CPFC and the FA&CAO in the EPFO that he is not, at present, exercising the powers of transfer and posting of these two officers.

There is no provision in the ESI Act to enable the Corporation to pass a resolution to empower the Chairman to act as the Appointing Authority. The Parliament has specifically mentioned in the original ESI Act in the year 1948 itself that the Director General shall be the Chief Executive Officer of the Corporation. That would imply that the executive powers of the Corporation would be carried out through the Director General. Although the CPFC has also been shown in Sec. 5D (1) of the EPF&MP Act, 1952 as the Chief Executive Officer of the Central Board, the Board has resolved, as per Sec. 5 E and Para 24-D to vest the powers of the Appointing Authority in the Chairman and not on the CEO.

This is in striking contrast to the decision of the ESI Corporation which, in the year 1959, resolved to vest the powers of the Appointing Authority in the CEO and not the Chairman.

So, the Director General of the ESI Corporation has alone been empowered by the Corporation to exercise the powers of transfer and postings of the officers in the Corporation (except the Financial Commissioner), by virtue of his being the Appointing Authority as per Reg. 4 of the ESIC (S&CS) Regs. 1959. Thus, as long as the Reg. 4 remains in the present form, it is only the Director General who can do the transfers and postings of the officers and staff of the Corporation.

If the Reg. 4 is sought to be amended, such amendment must be in consonance with Sec. 94 (A) of the ESI Act, 1948 which gives the option to the Corporation to direct any officer or authority to perform the functions of the Corporation. But, such officer or authority must be the one who is subordinate to the Corporation. The Chairman of the Corporation cannot be called as a subordinate to the Corporation whereas the Director General is a subordinate, as could be seen from the duties cast upon him, especially through Rule 16 (1) (vi) of the ESI (Central) Rules, 1950.

A cursory reading of Sec. 5 E of the EPF&MA Act, 1952 in the context would make it very clear that the Sec. 94 (A) of the ESI Act, 1948 is in sharp contrast to the provisions of the former which enables the Central Board ‘to delegate’ any or all its powers to the Chairman of the Board while the latter enables the Corporation ‘to direct’ only its subordinate officers or authority to carry out such functions.

So, as long as the Sec. 94 (A) remains in its present form, the Corporation cannot vest the power of the Appointing Authority on anyone who is not its subordinate and the Chairman of the Corporation can never be classified as its subordinate.

The apparent differences between the earlier ESI Act of the year 1948 and the later EPF&MP Act of the year 1952 would clearly prove that the Parliament of India wanted to make the ESI Corporation an autonomous one while it did not want to confer such status on the EPFO.

The ESI Corporation has not been given authority by the ESI Act, 1948 to delegate its powers and more particularly the executive powers to the Chairman of the ESI Corporation. So, the resolution, if any, passed by the ESI Corporation on 13.2.2004 empowering its Chairman to transfer the officers of the Corporation would only be ultra vires.

Moreover, the Director General of the ESI Corporation is the Head of Department as per Reg. 8 (5) (vi) of the ESIC (Staff & Conditions of Service) Regulations, 1959. So, as per the Appendix – 3 to the F.R Part I read with F.R 6 and F.R 15, he, and he alone, does have the power, the full power, to transfer all the employees, i.e., officers and staff members of the ESI Corporation.