For “Efficient” transaction of “ESI Corporation’s” business!

The ESI Corporation has been set up as per the ESI Act, 1948, which is a social security legislation that provides for medical care and cash benefits in the contingencies of sickness, maternity, disablement and death due to employment injury to the employees drawing Rs.15,000 or less as wages in the factories and establishments covered by the Act. The social security system of a nation aims at providing the much-needed economic basis, thus, for the development of the resources of a nation. The security-net provided by the ESI Corporation constitutes the essential basic structure of such a social security system in India by ensuring the “willing participation of labour”in the making of the nation.

The Charter of the International Labour Organisation had declared, in the year 1919 itself, that “the peace and harmony of the world are imperilled” when “the condition of labour exist involving such injustice, hardship and privation of large numbers of people (so) as to produce unrest”. The link between the ‘peace and harmony of the world’ and the ‘security-net provided to the labour’ is  intimate and intertwined. It is in the interest of every nation that its social security system is run in a flawless manner so that there is no social upheaval and unrest in the nation.

 The ESI Corporation which was set up in India to carry forward the lofty ideals of the International Labour Organisation, as per Art. 41 of the Constitution of India, is an important organ of the Government of India to ensure peace and progress of the nation. It is only because the Government had realized the importance of the organization, the ESI Corporation had been made an autonomous body and its officers empowered with functional independence to enable them to concentrate, without any interference, on the goal for which the organization had been set up.

In order to discharge the responsibility enshrined in the ESI Act, 1948, the ESI Corporation needed the services of employees. The ESI Corporation had, therefore, been empowered, as per Sec.17 of the ESI Act, to appoint employees in various cadres as may be necessary for the efficient transaction of its business.

Such an efficient transaction of its businessnecessitates proper management policies in the area of Human Resources Management to ensure fair and just conditions of serviceof the employees. It is a constitutional requirement that such conditions of service are made applicable to all the employees universally and are enforced without any partiality and bias.

One of the conditions of service governing the employees of the ESI Corporation is periodical transfers and placements. Such periodical transfers of the employees have been recognized by the Government of India and the Central Vigilance Commission as one of the many aspects of preventive vigilance. Formal and routine transfer of officials from one place to another is not a new phenomenon.  The procedure of “routine transfer of officials from one province to another” was initiated by Sher Shah Suri (1540-1545) ( Page 54 – Part II – History of Medieval India – V.D.Mahajan – S.Chand Publications – 1995) and it had become the hallmark of administration thereafter. It is, therefore, in the interest of the Organization to make use of this concept of preventive vigilance and enforce periodical transfers to reap the benefit for the organization “for the efficient transaction of its business, as mandated by Sec. 17 of the ESI Act, 1948. While enforcing such periodical transfers, the Administration has to take into account the individual interests of the employees also. The Government of India have, in their MHA, OM, No.75/55-Ests (A)- dated 24.3.1955, said, “In a Welfare State, a balance has to be struck between the public interest and the welfare of the individual concerned. The Government of India have also accepted the position that a transfer to distant place involves hardships not only to the Officer concerned but also to his dependants.....

In the context of the ESI Corporation, all the employees in the cadre of Inspectors and above in the ESI Corporation join the organization only with prior knowledge and clear understanding that they are liable to be transferred anywhere in India during the period of their service. But, all of them can have a reasonable expectation that such transfers would be ordered in respect of all the officers in their respective cadre without any bias and in a systematic, pre-determined and impartial manner universally without any discrimination. They have, therefore, no reason to nurture any legally valid grievance, if and when they are subjected to transfers in public interest in the exigency of public service. But, they can have legitimate grievance if the transfers are ordered by the persons in power in the Administration Division selectively on subjective considerations. Because, the “right to transfer an employee is a powerful weapon in the hands of the employer. Sometimes, it is more dangerous than other punishments. Recent history bears testimony to this. It may, at times, bear the mask of innocuousness. What is ostensible in a transfer order may not be the real object. Behind the mask of innocence may hide the sweet revenge, a desire to get rid of an inconvenient employee. ..” Asserting that there can a “deceptive innocuousness” in the transfer orders, the Hon’ble Court said, “ a transfer can uproot a family, cause irrepairable harm to employee and drive him to desperation.” {Pushpakara Vs Chairman Coir Board, Cochin 1979 – SLR-309-315 316 Kerala) and in llyas Ahmad Vs Station Director, All India Radio, Hyderabad (1979 – 2.5 LR -58, 1979-Slj -592. K. K. Jindal Vs. General Manager, Northern Railway}.

But, there had been no transfer policy in the ESI Corporation for a very long time. The ESI Corporation had even filed Counter Affidavits in the Honble Central Administration Tribunal, Jabalpur, in the year 1989, alleging that there was no transfer policy in the Corporation, which observation was not viewed favourably by the Hon’ble Tribunal. There arose many power-centres in within and outside the organization on the issue of transfers and postings. Total adhoc-ism was prevailing in the matters of transfers. Transfers and postings were made as per the whims and fancies of the persons in position in the Administration Division of the Organisation. The organizational interest had been the prime consideration only occasionally as exceptions. The loyalty to the persons in position in the Administration Division had been the prime factor of consideration while deciding transfers and postings. Consequently, political interference was also at its peak and influence-peddlers had a heyday. Persons inside and outside the organization had been playing godfathers to the officers of the organization.

The consequences of such political interference in the matters of transfers of public servants have been summed-up best by the Hon’ble High Court of Himachal Pradesh in Ram Krishan Vs. District Education Officer(ILR 1979 H.P.481). The Hon’ble Court has observed, We hereby record our strong disapproval of such type of interference from outsiders in day-to-day administration of the State. If such interference is to be allowed, it would only mean that the government servants should run after those who are taking part in public life and in politics for getting better terms of service and better place of their postings, and should do everything to please them and not to please the department by their ability, honesty and integrity. It need not be emphasized that such interference of outsiders in day-to-day administration of the State is highly detrimental to the public interest as it would result in nepotism and corruption wherein only those who can wield influence and purse can succeed. Therefore, we want by this judgment to bring it to the notice of all concerned that sooner this type of interference is discouraged and stopped the better for the administration and people of the State.” The direct link between the political interference and the corruption has, thus, been clearly recognized and recorded by the Hon’ble High Court, in the aforesaid judgment. That precisely was the situation prevailing in the ESI Corporation for a long time and the organization had been affected very much in various spheres because of such adhoc-ism in the matter of transfers and placements of its officers.

Wherever a cadre in the ESI Corporation consists of more than one person, the principles of equity and justice necessarily demand that the Administration must keep a reasonable system in place regarding their transfers and postings. Because, the officers who were subjected to transfers had been resorting to inter-personal comparison when it came to their transfers and postings, and rightly so, because the concept of inter-personal comparison is also an element of natural justice. But, such a comparison with fellow-officers resulted in bitterness among colleagues, which could have been avoided if only the Administration had been fair and enforced the transfers in a just and transparent manner through a publicized Transfer Policy. But, that was not to be. Consequently, the officers’ fraternity got divided by the Administration into two classes, viz., those who were ‘Favoured’ and those who were ‘Not Favoured’. This affected the normal official work too.

Justice being always relative, natural justice demanded the Administration to demonstrate and convince that such transfers were effected in a fair manner by observing all parameters of objectivity like the Doctrine of Equality, the Doctrine of Transparency, and the Doctrine of Predictability. But, that the Administration division of the ESI Corporation could not do, in the absence of any Transfer Policy. It had been rightly observed in K.K. Jindal Vs. General Manager, Northern Railway & Others (ATR – May 1986 – Page 304 & 305) that “a welfare state, governed by Rule of Law, has, therefore, attempted to ensure fairness and equality of treatment and eliminate arbitrary action even in the matter of transfers by enunciating a policy.” But, the ESI Corporation did not have any Transfer Policy at all. This had its own negative effect in the Administration of the organization as could be seen from the Agenda Item No. SC-12 of the 166th meeting of the Standing Committee of the ESI Corporation held on 8.6.2004, which says, the absence of transfer policy for long in the ESI Corporation had resulted in many visible and invisible negative effects both to the Corporation as whole and also to many individual employees.

It was, in this context, the Director General, who assumed charge of the organization in January, 2003 introduced the Transfer Policies in respect of the Group A and B officers on the Administration Side and in respect of the Medical Officers on 29.5.2003. 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. By virtue of the said status, as per the Appendix – 3 to the F.R Part I read with F.R 6 and F.R 15, he is vested with full power to transfer employees of the ESI Corporation. Yet, the Director General promulgated the Transfer Policy on 29.5.2003 with the avowed objective of ensuring and demonstrating transparency and equity in the enforcement of transfers and informing the world how he was going to enforce the “full powers” vested in him in this regard. “It is the basic principle of rule of law and good administration that even the administrative actions should be just and fair” (Shesharao Nagarao Umap Vs. State of Maharashtra and others – Services Law Reporter- Vol. 36- 1984 (2) Page 332). He ensured that there was a transparent system in place to ensure justice and fairness in the matter of transfers and postings.

However, the All India ESIC Officers’ Federation, which had been demanding introduction of Transfer Policies from the year 1991 on various occasions, had, all of a sudden, changed its stand and resorted to manipulations to avoid enforcement of the Transfer Policy introduced by the former Director General on 29.5.2003. The letter dated 22.2.1991 of the All India ESIC Officers’ Federation demanding introduction of the Transfer Policy explains in detail the methods of enforcing the Transfer Policy and says that this was a “vexed issue bothering the Administration as well as ourselves (officers)”. Strangely enough, when the much-sought-after Transfer Policy was introduced, the Federation did a volte-face and conveyed a totally contradictory stand in its letter dated 28.1.2004.

What the then office bearers of Federation had demonstrated through that letter dated 28.1.2004 was that the Federation had had no concern at all for public interest and also about the interests of the affected officers who also belonged to the same Federation. It would become very clear from the said letter that the Federation did not intend to look after the interests of either the organization as a whole or the interests of all its members but only a majority of them.

The criterion for being included in that majority had also not been made public by the Federation. It was not in public knowledge as to who would be in that majority and whether those in the majority would always be in the majority or whether anyone in the majority would also become part of the minority and vice versa, now and then. The fact, however, was that it was subject to variation and dependent on the fancies and whims of the individuals who happened to occupy the positions of power in the Administration Division of the Headquarters Office. As a result, the officers tended to discharge their functions in such a manner that it pleased the bosses and not in the manner that would please the organization, which is an impersonal body. The way they submitted their notes without bringing all the relevant facts pertaining to the issues in hand on various crucial issues would show that while dealing with each and every file, the prime consideration of the officers had been whether the facts recorded by them would please or displease the superiors in the hierarchy. Adhoc-ism in transfers and placements had such a negative effect in the manner in which each and every crucial file in the organization was dealt with by each and every officer. Consequently, public interest became the casualty and the mandate of Sec.17 of the ESI Act for “efficient” transaction of the business of the ESI Corporation stood violatedin a very flagrant manner.

(N.B: The above are part of the excerpts from the Affidavit filed in the Central Administrative Tribunal by an Applicant. More from that document would follow in the next post.  It is proposed to submit a comprehensive note to the Sub-committee on these lines.  Readers are welcome to communicate their views and additional information relevant to the issue for inclusion in the note being prepared for submission to the Sub-committee. This portion of the note deals only with transfers. The desires of the Hon’ble Minister of Labour to be the Appointing Authority and Disciplinary Authority of officers in the ESIC  and its consequences would be dealt with later.)

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1 Comment

Filed under Amendments 2010, For Trainees, Transfers

One response to “For “Efficient” transaction of “ESI Corporation’s” business!

  1. c s balakrishnan iyer

    BS Reporter | Chennai September 29, 2013 Last Updated at 20:38 IST Staffing body unhappy with hike in salary cap of ESIC beneficiariesThe Indian Staffing Federation said more jobs would now move to informal sectorThe Indian Staffing Federation (ISF), an apex body of flexi staffing industry in India said it “strongly” disagreed with the labour ministry’s decision to raise the ‘wages’ cap of the Employees’ State Insurance Corporation (ESIC) beneficiaries to Rs 25,000 from the current Rs 15,000.

    The federation stated as of 2012, ESIC was sitting on a corpus in excess of half the contribution of Rs 7,070 crore. That amounts to a substantial fund to address plaguing issues, including inadequate doctors, poor diagnostic services and non-availability of common drugs.

    It is more critical to address the absolutely lack of faith in the institution of ESIC among the very people that the authorities are presumably trying to protect.

    In a statement, it said, an employee with a gross salary of Rs 25,000 a month works up to a cost-to-company salary of approximately Rs 28,000. “This single move would lead to an additional burden of Rs 1,200 for employers on every employee with a gross salary of Rs 25,000 and decrease the net pay of the employee by Rs 450. Given the uncertainty all around, which is affecting industries, this single move is yet another step discouraging the job creation and encouraging available work to be shifted to the informal sector.”

    On the outcomes of this decision, it said, so far informal jobs were largely at the grass-root level. This move actually would add impetus for informality to creep in at higher level as well.

    “The ISF would like to urge the ESIC authorities to take on greater accountability in making the scheme actually beneficial for the needy by easing the access to basic healthcare facilities and giving them the flexibility to choose the kind of healthcare they want for themselves,” it said.

    Date: Fri, 27 Sep 2013 01:18:04 +0000 To: csbalakrishnan@hotmail.com

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