Immense ESI Benefits: No assurance for Continuance in Bill 375 of 2019!



1 Hon’ble Speaker,
House of the People (Lok Sabha),
17, Parliament House,
New Delhi 110011
2 Mr. Bhartruhan Mahtab,
Hon’ble M.P. & Chairman,
Standing Committee of Parliament on Labour,
South Block,
New Delhi – 110011.
(Through Mr. Kulvinder Singh, Deputy Secretary, Parliament of India,
House of the People. Email:
Sub: The Code on Social Security, 2019 – Bill No. 375  of 2019 – Benefits extended to the working population – Clauses 32, 39, 40 read with Clause 154 (2) (f), (s), (u), (w) and (x)- cannot be left to Subordinate Legislation in a new law – uncanalised powers cannot be delegated – reduced benefits affect the rights under Art. 21 – representation – submitted.

1. I respectfully submit that the Employees’ State Insurance Act, 1948, which is in force, at present, provides security-net to the working population in the factories and in the industrial and commercial establishments in the organised sector. Its long-term goal, as spelt out in Sec. 1 (5) of the Act, is to extend the security-net not only to all the factories but universally to all kinds of establishments including those which are agricultural or otherwise.

2. Hon’ble High Court of Madras has, while dealing with issues pertaining to the ESI Act, observed that “the object of the Act is to provide certain benefits to the employees or dependants in case of sickness, maternity and employment injury, etc., to give effect to Art. 1 of the Universal Declaration of Human Rights, 1948, which assures human sensitivity of moral responsibility of every State that all human beings are born free and equal in dignity and rights” (C. Indira Vs. Senthil & Co. – 2009 (2) LLN. 302). “The object of the legislation is to protect the weaker section with a view to do social justice” (Chandramathi Vs. ESIC – 2003 (4) LLN. 1143). Such an important statute, the ESI Act, has been providing five major benefits along with many other important benefits to the working population for the past 68 years. Not many employers could provide superior or substantially equivalent benefits and get exemption as provided for under Sec. 87 – 91 of the Act.

3. When such an important Act is attempted to be replaced through the impugned Bill No. 375 of 2019 tabled on the Lok Sabha on 06.12.2019, labelled as “The Code of Social Security, 2019’,  the authorities who drafted the Bill have attempted to reduce the benefits provided so long to the working population. The Ministry of Labour had, in his two earlier Draft Codes put in public domain on 16.03.2017 and 01.03.2018, demonstrated very clearly that their intention was to reduce the benefits already available through the ESI Act. Now, in the impugned Bill, the Ministry of Labour keeps the conditions of eligibility, rate and scale of those benefits unknown not only to the beneficiaries but even to the lawmakers in the Parliament.

4. Parliament cannot enact vague legislation and confer the Executive with unbridled powers and thereby enable the Executive to create uncertain situation that produces unexpected consequences. But the draftsman has done exactly the same in this case by preparing the impugned Bill to deceive the legislators and make them vote for vesting unknown powers in the Executive. Hon’ble Supreme Court has said, “Unlike Parliamentary legislation which is publicly made, delegated legislation or subordinate legislation is often made unobtrusively in the chambers of a minister, a secretary to the Governor or other official dignitary.” (ITC Bhadrachalam Paperboards Vs. Mandal Revenue Officer 1996 (6) SCC 634 and Harla Vs. State of Rajasthan AIR 1951 SC 467 and B.K. Srinivasan Vs. State of Karnataka AIR 1987 SC 1059). Subordinate legislations made by the Executive can only supplement the parent legislations made by the Legislature and cannot be substitute them. But the authorities who drafted the impugned do not know of these niceties and do not care too.

5. Clauses 32, 39, 40 read with Clause 154 (2) (f), (s), (u), (w) and (x) of the  impugned Bill are totally evasive about the conditions of eligibility, rate and scale of the benefits that would be available to the working population, if and when such Code comes into force. When a new law is enacted to replace the existing law, people should be given adequate information through that law, to ascertain for themselves whether the new law would provide the same or more or less benefits to them. That was how the ESI Act, 1948 was also enacted first in the year 1948, with its Sec. 46 declaring and assuring unequivocally all the specific details regarding the conditions of eligibility, rate and scale of all the five benefits it sought to provide. That was the right and only method to be followed while bringing in a new law. But the impugned Bill No. 375 of 2019 makes conscious and deliberate efforts to hide from the public such essential details pertaining to the benefits which are claimed to be provided through that Bill This is not the way a new law is made to replace the existing one.

6. Clause 154 (2) (f), (s), (u), (w) and (x) of the impugned Bill mysteriously take the details of the eligibility, rate and scale of benefits,  to Subordinate legislation, in spite of the fact that the impugned Bill totally dismantles the existing structures and brings in a new statute. These provisions confer arbitrary powers to the bureaucracy and empower it to decide later the details of such benefits. The contents of the impugned Bill make it very clear that the Executive has blatantly abused its position and power to table such an incomplete Bill on the Parliament expecting the lawmakers to give arbitrary and sweeping powers to the Executive. The legislators are attempted to be cheated by the draftsmen of the impugned Bill. Parliament is tricked to empower the Executive to do anything with the existing benefit provisions and do away with everything, without even being aware of what that Executive would do, after such empowerment.

7. Such an indefinite extension of executive power to the bureaucracy results in abdication of responsibility on the part of the lawmakers in the Parliament. It is the duty of the lawmakers in the Parliament to make law knowing thoroughly not only the contents of the Bill but also its anticipated consequences. But, the very nature of the impugned Bill and its Clauses 32, 39, 40 read with Clause 154 (2) (f), (s), (u), (w) and (x) show that the Legislature would not have any chance to know what the Executive would do, once the Bill became law. The Legislature has, effectively, been prevented by the draftsman of the impugned Bill from knowing the eligibility, rate and scale of benefits which are going to be extended to the working population. The legislators cannot be asked to vote on such incomplete Bills. But they are asked to do so in the Bill No. 375 of 2019.

8. Moreover, the Executive has inserted suitable phrases to be used by it, later, to throw the blame on the Legislature itself, if and when, the Executive makes rules,, as subordinate legislation, under the new enactment, providing only for reduced rate and scale of benefits to those who were already getting more under the ESI Act, for SB, ESB, TDB, PDB, DB, Unemployment Allowance, etc., The Executive would, then, cite Sec. 154(1) of the new enactment and claim that its action to reduce the benefits is “not  inconsistent with” the code and that the Parliament has already empowered it to reduce the benefits too. There will be no scope for the Parliament to examine whether the subordinate legislation is in excess of the power conferred by the enabling Act.  Excessive delegation is, simple and plain, unconstitutional, re Delhi Laws Act case. Yet, the impugned Bill attempts at circumventing the ratio decidendi laid down by the Hon’ble Supreme Court in Hukam Chand Vs Union of India on 22.08.1972 and a plethora of other cases on delegated legislation.

9. The impugned Bill has been drafted by the Executive with the improper intention of arming itself with arbitrary and indefinite powers to reduce the benefits already in force. The impugned Bill, therefore, becomes a patently unlawful enactment affecting the rights of the livelihood of the working population and, thereby, violating Art. 21 of the Constitution of India. There is no assurance anywhere in the impugned Bill on the Code of Social Security, 2019 that the eligibility for, the rate and scale of the benefits available as per the present statute would be continued.

10. Vesting arbitrary and unlimited powers on the Executive without even knowing the intention of the Executive which tabled such a vague, evasive and incomplete Bill, would be unlawful on the part of the Parliament. The impugned Bill attempts at ensuring that in the matter of providing benefits to the working population what would prevail is the will of the Delegate and not the will of the Legislature. It is patently anti-Constitutional as the transgression of any kind by the Delegate cannot be questioned even by the Parliamentary Standing Committee on Subordinate Legislation, because of the evasive terminologies used in the impugned Bill. A provision in the parent law that confers the delegate “uncanalised and uncontrolled power” is “ultra vires” of the power of the Legislature itself. (Hamdard Dawakhana Vs. UOI – 18.12.1959). Accordingly, the Clauses 32, 39, 40 read with Clauses 154 (2) (f), (s), (u), (w) and (x) of the Bill No. 275 of 2019 are ultra vires.

11. Besides, the Ministry of Labour did not put the contents of the impugned Bill in public domain to enable the stakeholders to represent their grievances to him. People have been denied opportunity to take to the knowledge of the Respondent-1 the unlawful contents and the evasive manner in which the draftsmen had drafted the impugned Bill. There is, therefore, no other alternative for me except to approach the Hon’ble High Court under Art. 226 of the Constitution for justice.

12. I, therefore, pray that that the Clauses 32, 39, 40 read with Clauses 154 (2) (f), (s), (u), (w) and (x) of the Bill No. 275 of 2019 for “The Code on Social Security, 2019” placed before  the Lok Sabha on 06.12.2019 may be examined in depth and direction issued to the Ministry of Labour to take  action to prepare and put in public domain a complete Code on Social Security containing in it all the details regarding the conditions of eligibility and rate and scale of all the benefits  proposed to be extended to the beneficiaries through Chapter IV of the impugned Code and call for the comments of the stakeholders  and public afresh for and before placing that draft as a Bill before either house of the Parliament, and (b) that the Bill No. 375 of 2019, may kindly be kept withheld until the defects pointed out in respect of the above mentioned benefit provisions are rectified and a new Bill re-presented by the Ministry of Labour.

With profound regards,

Yours faithfully,


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