Category Archives: Labour Bill of 2014

There is a strong connection between the funding-‘system’ of political parties in India and the manner in which the labour welfare measures  are diluted by the political parties that capture and run the government. The money siphoned off by the corporate houses is very very huge that the politicians in various political parties sell their souls easily to the corporate crocodiles.

The result is that these politicians yield willingly to the pressure brought on them by the corporates and betray the ordinary people. It is a shame on the educational system that it does not inculcate honesty in the people that many choose politics as a source of livelihood, attracted by the easy money that they are able to make. Common people of India are going to lose a lot at the hands of these wily politicians, who are there to make money through unfair means, while at the same time, projecting themselves as the saviours of the commoners.

In its editorial dated 24.12.2014, Kashmir Times writes:

“Majority of the political parties have been getting most of their funds from corporate houses, who donate money as per the size and numbers of a political party and patronize all of them as per their preferances. As of now, BJP is one of the parties, which has not filed its return for the previous year for the donations received by it in excess of Rs 20,000 or more. … Other parties are no different so far disclosures on donations are concerned. The Income Tax exemption to the extent of 4 percent on the profits of a corporate house is too much keeping in view the volumes of money siphoned off to the political parties on annual basis. Unless some arrangement is made to ensure transparency in donations to political parties is made, the black money will continue to breed black politics in India where poor masses will continue to suffer”. (http://www.kashmirtimes.com/newsdet.aspx?q=39725)

The Small Factories (Regulation of Employment & Conditions of Service) Bill, 2014 is one such irresponsible bill intended to convert the masses into slave labour in a massive scale. Employers, except a few who are really benevolent, do not want proper labour laws. When there was a survey in Mumbai in the late 1990s, 85% of the employers did not want ESI Scheme while  85% of the employees wanted the scheme for them. Labour welfare can be protected only when government is ready to monitor and enforce it, in the Indian circumstances. But, the politicians in power do not worry about the labour but only about the corporate money for their political parties. And, the pity is that there are so many bureaucrats who aid this betrayal of common people.

Unless we address the root cause of the problem and compel all the political parties to make every single donation public, through their website, irrespective of the quantum of such donation, the poor will suffer for long and the politicians will ally themselves with the rich for the money they throw at them.

To

Mr. S. C. Sharma, Deputy Director [IR (PL)],

Ministry of Labour and Employment,

New Delhi 110001 sc.sharma56@nic.in

Sub:	The Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014
Ref:	Note No. Z-13025/31/2014-IR (PL) dated 10.10.2014 of the Ministry of Labour and Employment.

Sir,

This refers to “The Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014”, intended to be made law.

Kindly drop your proposal to make that draft Bill as Law. That will convert our nation to be an uncivilized one once again. In the year 1922, when India was reluctant to enforce any of the labour welfare measures suggested by the International Labour Organisation, one member went on record saying that among the civilised countries, India was the only country where no social security measures was in existence. Immediately, the embarrassed Indian representatives gave an assurance that steps would be taken to enact legislation for insurance in respect of accidents. It was because of that commitment that the Workman’s Compensation Act came into existence in the year 1923.

Now your intention to exempt the factories from the applicability of even “The Employees’ Compensation Act, 1923” , as could be seen from Cl. 54 of the Bill, shows that your aim is to set the clock back to pre-1923 era. Can we, then, call ourselves a civilized nation?

The Law Commission of India in its report on Workman’s Compensation Act, 1923, had said, “It is an oft repeated slogan: ‘The cost of the product should bear the blood of the workman’. The objective may not have been realized fully. But, it gives us, in striking language, a clue to the governing principle of the Act, and its socio-economic importance”.

Now, by exempting the factories from the purview of even this Act, even the elementary protection that was given to the working population is going to be taken away.

The Employees’ State Insurance Act, 1948 was brought into force immediately after independence in 1947, as part of a bouquet of labour welfare measures along with the Factories Act, 1948. It was the brainchild of Prof. Adharkar who modeled it on the report of Sir William Beveridge, whose report is still considered as the monumental document on social security. It provided a host of benefits both to the employer and the employees. It is a protective umbrella to the employer safeguarding him from huge unforeseen liabilities. It provides a security net to the employees so that their living conditions would not fall below certain standards.

The Hindu had also, in its editorial dated 01.01.2005, said, “The package (of benefits provided by the ESIC) can rarely be matched by private employers on their own because of the heavy costs involved – not to mention the disinclination among employers, with honorable exceptions, to operate health care systems for their workforce”.

None of the civilized nations who top the list in the Human Development Index follow the method proposed to be adopted by you, now, by making the important labour welfare enactments ineffective. We do not find Germany or Japan saying that they could improve their economy only by inviting foreign capital, selling the land to the foreigners by displacing the natives by alluring them of menial jobs, and then by closing down the factories within a short while and, thereby, making the natives refugees.

The draft Bill will make the working population of our nation to be virtual slaves. They will be squeezed by the ‘rich’ (the businessmen) and the ‘powerful’ (the politicians of the ruling party) and there will only be misery everywhere. The fact is that “The wealthiest nations do not have the healthiest people. Instead, it is countries with the smallest economic gap between the rich and poor”. (Mark Bourrie- Interpress Service – 23.07.1999).

There will be large scale migration of the working population resulting in loss of proper education to their wards and that lack of education will continue the vicious cycle of continued supply of slave labour. Our nation will not flourish as a mature democracy but will decay to become a society of medieval era. The charter of the International Labour Organisation of 1919 says that the peace and harmony of the world was imperiled, because the welfare of the working population was not taken care of.

While addressing businessmen, in the year 1945, after the Second World War, UK Minister Ernest Bevin stressed on the need for providing basic economic security to create fairer conditions of living for the working population also. “If profit can be the only motive, the natural corollary is economic disorder, and economic disorder will bring you back to the same position you are in now, ever recurring, and future generations will again pay, in the same form or another, the bitter price we are paying now…” he said.

The Declaration of Philadelphia of 1949 says that “Labour is not a Commodity” and it warns that “Poverty anywhere constitutes danger to prosperity anywhere”.

I, therefore, request you to kindly drop the ill-considered proposal to exempt the factories from the purview of the well-intentioned labour laws. The decision to re-classify the term ‘small factories’ as those employing 39 workmen and below (excluding the persons in the wings of administration, distribution, etc) shows the sadistic cleverness of the people who drafted the Bill. Dr. F. J. Foakes Jakson has said,

“It is no use trying to be clever – we are all clever here.

Just try to be kind – a little kind”

Please find attached two articles on the same issue published in the website ‘Flourishing ESIC’.

1. Builders : Germans : : Sellers : Indians.

(https://flourishingesic.info/2014/10/14/builders-germans-sellers-indians-part-i/   )

2. Opaque Party funds and Repressive Labour Laws.

(https://flourishingesic.info/2014/10/16/opaque-party-funds-repressive-new-labour-laws/ )

Yours faithfully,

Copy to Mr. Piyush Sharma, Consultant, MOL&E.

Running a political party in India is not for rendering service to the people. It is more of a business. If one needs to be rich, one can start a political party, collect donations through various means and then claim the privilege of immunity from disclosing the source and then, claim again, that the party needs a lot of money to perform its ‘democratic’ duty.

The Association for Democratic Reforms (ADR) has shown that about 75% of the funding of the major political parties, including Congress and BJP, comes from unknown sources.According to the ADR analysis of income tax returns and statements with the Election Commission, the total income of the six national parties from 2004-05 to 2011-12 was Rs 4,896 crores. Yet, for as much as Rs 3,675 crores, those parties gave no details of their sources.

Running a political party requires, thus, money and more money. So, the politicians of all the parties tend to collect money from businessmen. All that is collected is not brought to party’s accounts, and most of it is apportioned among the party-men at lower and higher levels, who are there, precisely, for that purpose. All this results in unholy ‘Politicians and Businessmen’ nexus.

The unscrupulous among the top-level bureaucrats, mainly from the IAS, seize this opportunity to act as facilitators between the two. This leads to a lot of corruption within various departments under the control of these officers. Ultimately, nation ends up seeing the purpose for which a department was set up is not achieved, only  or mainly because of this “Politician + Bureaucrat + Businessmen” nexus.

All businessmen are not Robert Owen or George Cadbury. They do not worry about the welfare and security of that section of humanity which is called as labour force. They want only their pound of flesh, the profit for themselves. Naturally, the first victim in the process, because of such malicious nexus among the aforesaid trio, is Labour. The proposed Bill in respect of Small Factories is one of that kind, which paves way for abundant supply of slave labour and sweatshops.

Unless all the political parties are compelled to make public by displaying all their sources of funds irrespective of the quantum of donation, through website, the irrepressible willingness of the Indian politicians to kowtow before the money-bags cannot be checked. The victims, in the process, will only be the poor who will always remain poor.

The manner in which Rajiv Gandhi wanted to avoid going to various businessmen for party fund was made public by Dr. A.P. Mukherjee, former CBI Director in 1989-90.  A news item, with reference to his book “Unknown Facets of Rajiv Gandhi, Jyoti Basu and Indrajit Gupta” is given below for the information of the readers

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Trampling of Beneficial Legislation
by Employees State Insurance Corporation

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(Mr. Hiren Chheda has sent this for publication as comment. But, considering the importance of the issue it is published as a Post. Readers may read the comment below too to have a complete picture of the case)

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The Employees’ State Insurance Act, 1948 is a beneficial legislation. The contributions payable to the fund is in the nature of a tax and hence no “quid pro quo” is attached.

In this regard Sec. 38 of the Act mandates that all employees should be insured and Sec. 44 imposes obligations to furnish returns, maintain registers as specified therein. Regulation 11 &12 prescribe procedure for obtaining Declaration forms from employees. Sec. 14 specifies furnishing of Declaration forms with a return within 10 days of obtaining the particulars. The definition of employee in the Act is also very wide. Sec. 2(14) defines “insured person”. It covers both present and past employees against whom contributions are or were payable. Sec. 2A puts an obligation on the employer to register his factory and establishment as soon as the Act applies. There is no provision in the Act which enjoin a duty on the part of the corporation to keep on informing the employer that they are covered under the Act. Sec. 45 A to Sec. 45 I prescribe the procedure for determination and recovery of contributions. Thus it is clear that once the factory or establishment is covered u/s. 2A, all the coverable employees are automatically become insured persons

Since it is a tax, the Act does not prescribe any limitation for determination and recovery proceedings against the defaulting employer. The legislature was aware that the employer’s default may render the dependants of the deceased employees without any relief. Hence while putting an absolute bar u/s. 53 of the Act for the employees to seek relief under EC Act, 1923 or any other law, Sec. 68 mandates that ESIC must pay to the dependants of the deceased employee the dependants benefit despite violations of the provisions of the Act and recover the same from the employer as if it were an arrears of land revenue at the rate twice the amount of the contribution. Sec. 68 is in addition to other penal provisions like Sec. 39 (5), 45 (C), 85, 85 A, 85 B, 86 and 86 A of the Act and Regulation 31-B and 31-C.

However it is noticed that the beneficial provisions are misconstrued by some of the High Courts, thereby forcing the coverable employees to seek the remedy under Employees Compensation Act merely because the employer had failed and neglected to cover them and send the form no. 1 before their death under Regulation 11 &12 with returns within 10 days to the ESIC under Regulation 14 or for covering them posthumously. The High Courts, it appears, were more concerned to punish the employer who had tried to wriggle out of the financial liability cast on them in a last ditch effort unmindful of the fact that even otherwise for ESIC there is ample scope within the frame work of the Act itself to proceed against the employer.

The ESIC itself, also, it appears, is unable to comprehend these beneficial provisions in proper perspective. It is more attuned to interpret these provisions in a pedantic manner so as to deny them the dependants benefit. In the recent past after the judgement of Gujarat High Court in the case of Ranisati Processor Pvt Ltd., v. Deputy Director, ESIC, the ESIC Headquarters New Delhi has framed contradictory and conflicting policies aimed at misinterpreting the provisions of the Act and Law. For example, by their circular dated 29.09.2009 it was directed that the dependants benefits be denied if application for registration of workers with ESIC was submitted after the death of employee due to some accident at work place because according to the judgement of Hon. High Court of Gujarat, they are not liable to pay benefits to the employees/dependants if application for registration was submitted posthumously. On 06.04.2010 these instructions were modified so as to accept the declaration forms where the signature of deceased insured person is available on declaration form though submitted posthumously. On 21.10.2010 these instructions were again modified in which it was directed that declaration forms of coverable employees are to be accepted even posthumously irrespective of whether signatures/thumb impressions are there or not with further directions that the negligent employer is to be proceeded with u/s. 68 including prosecution for violations of the provisions if any. But the circular is totally silent as to how the past denied cases are to be dealt with due to change in their illegal policies undertaken at frequent intervals.

These circulars by themselves are fine examples as to how the Corporation which is responsible for implementing the beneficial provisions of the Act has misinterpreted them time to time at their sweet will even when there is no change in the law passed by legislature. One is clueless to fathom the undercurrent and the mindset of the corporation which changes its policy, depending on the judgement selectively to suit its convenience with single minded objective as to how best to deprive the benefits even when the law remaining unchanged.

There is no doubt that these misinterpretations have a colossal impact on the beneficiaries. It has victimised them and their dependants who have to run pillar to post in search of relief thereby forcing them to enter into costly litigations and yet compelling them to live in lurch and in a state of despair. It is noticed that there are plethora of cases rejected illegally on these grounds in West, Central and Southern regions of the country.
It is hoped that the ESIC may reconsider all these cases and that the policy of the ESIC should be based on a firm footing in accordance with law without any scope for variation in terms of conflicting judgements delivered from time to time by the Courts. If this is done it will go a long way in correctly implementing the beneficial legislation entrusted to ESIC. The thrust must therefore be how to give relief to the beneficiaries and not how to deny it.
Advocate S. D. Puri