Category Archives: Labour Code 2019

A complaint had been lodged with the Hon’ble National Human Rights Commission on 01.05.2020, about the contents of the Code on Social Security, 2019 which has been tabled on the Lok Sabha as Bill No. 375 of 2019.

The essence of the Complaint was that the action and inaction of the said Secretary, Ministry of Labour & Employment, had resulted in violation of the continued right of the  employees employed in factories and establishments covered under the ESI Act, to the existing social security benefits, which was their fundamental human rights and that he was guilty of having committed the offence under Sec.12 (a) (i) and (ii) of the Protection of Human Rights Act, 1993.  (Copy of the complaint is available in https://flourishingesic.info/2020/05/01/complaint-to-the-nhrc-bill-violates-human-rights/

Hon’ble Commission examined the plea (Case No. 383/90/0/2020) and has given direction to the Secretary, Ministry of Labour & Employment “to take appropriate action at their end within 8 weeks associating the complainant / victim and inform them of the action taken in the matter”.

29.04.2020

To

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: comm.labour-lss@sansad.nic.in)

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), 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.

Sir,
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), 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), 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), 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), 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), 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,

 

Presentation given in the seminar organised by the All India Progressive Forum on “Social and Economic Justice in India: Emerging Trends” on 25. 01.2020 at Chennai.

AIPF Seminar Presentation January 2020  

 

The Paper presented at the Seminar is available in the following link:

AIPF Seminar Paper

 

Art. 39 (b) & (c)of the Indian Constitution says,

“The State shall, in particular, direct its policy towards securing—….

• (b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good;
• (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;”

Existing benefits under the ESI Act are under threat because of the Subordinate Legislation for which power is being sought in the present Labour Code.

Subordinate Legislation is secretive.

A legislation cannot leave it to the Executive to correct the situation which produces unexpected consequences. 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). B

ut, the Drafting Team does not know of these niceties and the authorities also do not care.

The Supreme Court of India has in
Samatha Vs. State of Andhra Pradesh (1997) 8 SCC 191 (Para 75)  observed,

“The core constitutional objective of ‘social and economic democracy’ in other words, just social order, cannot be established without removing the inequalities in income and making endeavour to eliminate inequalities in status through the rule of law. The mandate for social and economic retransformation requires that the material resources or their ownership and control should be so distributed as to subserve the common good.

         A relatively small Powerpoint presentation on the core issues of the  Labour Code 2019 is in the following link;

Slave Labour Code 2019

Removal of percentage: Clever drafting of Labour Code on Social Security, 2019

(A parody)

 

October 2019. The venue is Ministry of Labour. A meeting of the bureaucrats of the Drafting Committee to rework the Labour Code on Social Security is on. Non-officials are also present including some co-opted Consultants.

The Head of the Drafting Committee welcomes the meet and explains the purpose of the meet that day.

“Dear all, It is very sad that the PMO has returned the Draft Labour Code that was put in public domain on 17.09.2019. Many of you are new and we are now to rework the draft publicized on 17.09.2019. What should we do about it?”

All are silent.

An official member, who was drafted anew for reworking the Draft, gathers courage and comes up with an idea. “Sir, the Economic Times (04.10.2019) has reported that the The PMO is unhappy as the concept of “universal” was missing in the draft code”. Let us simply prepare another draft providing that the benefits available to the employees covered under the ESI Act would be available to all the employees everywhere. I am told that that was the intention of the law makers when they framed the ESI Act in the year 1948. It is quite evident from Sec 1 (5) of the said Act, which says that the appropriate government shall “extend the provisions of this Act or any of them, to any other establishment, or class of establishments, industrial, commercial, agricultural or otherwise”. That Act was intended to provide social security to all the workers everywhere, ultimately. It is so simple to do so instead of preparing such a large Code without knowing the direction”.

The Head of the Committee was nodding his head in agreement. The other members also feel relieved that a real solution was in hand.

On seeing the reaction of the Head and the other members, the consultant who was in the meet becomes annoyed. He shouts at them, “What do you mean? The intention behind the Code on Social Security is not to extend real social security to the people but to take away the Security-net provided to the work force by the ESI Act and EPF Act. At the same time, we have to cite the uncovered sectors and project that we are extending social security to them? You should not talk of ESI benefits and extending it to all.”

The role of the ILO

The official who spoke first replies, “But the benefits provided under the ESI Act is the bench mark on social security. The ILO has said even that is not enough. The ILO had, in its ‘World Social Security Report’ released on 16.11.2010 said that there were many “informal labour practices” in India and that the people of India are exposed to “very high vulnerability” to poverty. Our aim should be to provide to all the working class at least the benefit that is provided by the ESIC now. That should be our goal post. A civilised nation cannot afford to shift the post to a lower level.”

The face of the Consultant gets reddened with anger. He screams at the official, “What do you think of yourself? I know what the ILO is doing. They would not open their mouth in our meet. We could project it as their consent. It happened last time also thus. What we should do is what is convenient to the employers, who want cheap labour. The ESI benefits have put unnecessary burden on the employers. You reduce the ESI benefits. I know how to manipulate public opinion. We can, through appropriate propaganda, project hell as heaven and the working population would also believe it.”

Clever drafting on 17.09.2019

“But the people are opposing when we are reducing the benefit that is already being given through the ESIC.”

“That we have already taken care of in the Draft dated 17.09.2019 itself”

“Already taken care of? ! How was it taken care of ?”

The Consultant looks at him beaming with pride. “Yes, we have done it. In the previous Drafts we had mentioned the quantum of benefits that would be provided to the beneficiaries, in respect of many benefits. For example, in the draft publicised on 24.04.2017, we mentioned that the benefit payable to an dependants in the event of death of an employee would be 50%. Immediately, many people started objecting saying that when the ESI Act provided about 90% of the wages of an employee to his dependant family as “Dependants Benefit”, how could we reduce it to 50%”.

“Yeah! That was the right question”, says that innocent newcomer.

The consultant felt a little irritated at the sense of justice and fair play displayed by that official. He rebuked, “Do not be carried away by your sense of justice. We knew what to do and we had done that on 17.09.2019. That is why no such questions are coming now from the public.”

The official is surprised. He asks. “What did you do, Sir?”

The Consultant replies with pride, “ Look! It was so simple. We did not mention the quantum of any benefits in the Draft publicised on 17.09.2019. We just said that the quantum of benefits would be decided later by the Government through subordinate legislation. Just the way we had done in the earlier Drafts in respect of Sickness Benefits.  Hah hah ha! Now, nobody would be able to say whether the Bill on Labour Code for Social Security placed before the Parliament is going to provide more or less benefits than what are being given now. See how clever we are!”

The newcomers at the Committee meant to rework the Draft displayed on 17.09.2019 are stunned. One of them asks, “Sir, when are we going to publicise the reworked Draft, for which purpose we have assembled here today”

Para 692 of the SC judgment 

The Consultant says, “We will not publicise the reworked draft. Because, it was made public that we were going to rework, people waited for another draft and did not send representations of substance. Now, we will go to the Parliament straight with the reworked draft, the contents of which would not be publicised as was done earlier.

And, we have majority in Parliament and we can do anything. As long as nobody remembers the contents of Para 692 of  judgment of the Hon’ble Supreme Court in the Kesavananda Bharathi case, we can ride roughshod over the rights of the labour force.”

Another official who is a newcomer says, “Sir, I have read the report of the Royal Commission of Labour which prepared its report on examining the condition of labour, by touring around the nation for two years from 1929 to 1931. The condition of the working population would, in the absence of benefits as provided at present by the ESIC, would take the entire nation back to that era. Are we to progress or travel backwards?”

The Consultant feels more irritated. He says, “How do you say that we do not progress? You see the data.

• In January 2016, 1% of Indian population had had 53% of national resources in its control.
• In January 2017, that 53 became 58%.
• In January 2018, it leaped to 73% of national resources.
• In January 2019, that 1% came to be in possession of 78%.

In January 2020, it would be even more. Is this not progress? We want to achieve even more! And, we are restructuring the Social Security to achieve that progress, you see!”

(The meeting of the reworking committee ends)

For more:

https://flourishingesic.info/2017/11/08/ever-greedy-utlra-rich-servile-politicians-sheepish-ilo-and-the-orphaned-working-class/