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Fortunately for the Government, the CSS,2020 has not been enforced yet!

The Times of India carried the following news item today, the 30th April 2021.

It says that the Government of India has “announced a slew of measures for beneficiaries of the ESIC, who are afflicted by Covid-29, including free medical care to insured persons adn their family members in any of the 21 ESI Hospitals ….;;;;”. The news item goes on describing not only the reimbursement facilities but also explains how 70 % of the beneficiary’s average daily wages for a maximum of 91 days could be availed of by them as Sickness Benefit.

If only the Government of India had enforced the Code on Social Security, 2020, which was made law, in an unlawful manner in September 2020, this sort of publicity blitz could not have been made and real medical care could not be extended to the insured persons in a meaningful way. The IPs would then be paid Sickness Benefit only on the basis of the definition of the term ‘Wages’ on the basis of Minimum Wages as per Sec. 2 (y) of the Code on Wages, 2019.

Fortunately the IPs and the Government have been saved by the existing ESI Act, 1948.

Hope the authorities now realise the importance of the well-thought out provisions in the ESI Act, 1948, especially the definition of the term ‘wages’ under Sec. 2 (22) and retain that section as it is, by removing the present Sec. 2 (88) of the Code on Social Security, 2020.

Mr. Ratan Tata has, in the context of the living conditions of the poor in Dharavi of Mumbai, said that we should think over about the “acceptable standards of quality of life”. He has added, “… we’re dealing with populations that need to be a part of new India. We are creating a community which we are ashamed of. We should be driven by the desire of creating a world culture” (Times of India 21.04.2020).

ESIC assures proper and acceptable standards of quality of life. The quantum of these benefits should be the goal post and the extension of coverage under the ESI Act itself is possible to all sectors of the society as per Sec. 1 (5). The Code on Social Security, 2020 is an ill-thought out statute. Let the same benefits as are available now under the ESI Act be extended in future too to the working population in all sectors.

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”  – The Hindu (1.1.2005)

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W.P. 4809 of 2021 regarding the definition “Wages” under Sec. 2 (88) of the Code on Social Security, 2020!

Sec. 2 (88) of the Code on Social Security, 2020 tampers with the existing and time-tested definition of the term ‘wages’ under Sec. 2  (22) of the Employees’ State Insurance Act, 1948, and, thereby, totally nullifies the purpose for which the ESI Act was brought into existence along with the Minimum Wages Act, in the year 1948, even before the Constitution of India was finalised and brought into existence.

The Minimum Wages Act (Act No. 11 of 1948) was made law on 15.03.1948 and the ESI Act (Act No. 34 of 1948) was made law, one month later, on 19.04.1948. It would thus become clear that the law-making process had been going on simultaneously for both laws. But the definition of the term ‘Wages’ that appeared in both these enactments of 1948 was kept different from each other, deliberately, and with foresight by the lawmakers who knew the subject in depth.

But the present Code on Social Security, 2020 published in the Gazette on 29.09.2020 has been prepared by the officials without understanding and appreciating the basic concepts behind the Minimum Wages Act and the ESI Act.

The Minimum Wages Act, 1948 was enacted to ensure minimum livelihood to the workers when they do their work in the factories covered under the Act whereas the ESI Act was intended to provide the security of livelihood to the workers when they are not able to work and earn owing to various contingencies like sickness, maternity, etc.,

The definition of the term ‘Wages’ as available in the Minimum Wages Act, 1948, prevented the employer from showing from many variable components of remuneration (like overtime allowances) paid by him to his workers as part of the said minimum wages. The definition of the term ‘Wages’ under the ESI Act, on the other hand, made it incumbent on the employer to take into account many variable components of remuneration paid by him to his employees and pay contribution on them too, so that the cash benefit that the workers would receive, in the event of sickness or other contingencies, would be attractive and substantial with reference to the total emoluments that they earned under whatever nomenclature.

An employee who draws total wages of Rs. 20,000 pm and is covered under the ESI Act, now, would get Rs. 18,000 pm, if he meets with an accident during the course of employment and gets temporarily disabled from doing his work for a month. Because the ESI Act takes into account all his remuneration as wages, except a few exceptions. But he would get only about Rs. 5000 or even less if and when the impugned Sec. 2 (88) of the Code on Social Security, 2020 comes into force. Because, Sec. 2 (88) decides the quantum of benefit payment only on the minimum wages.

Payments made to the employees as Overtime Allowance, House Rent Allowance, Incentive Bonus, Attendance Bonus, etc., are now excluded. Similar is the case with the women whose Maternity Benefit which is around their entire wages now, would be halved, because of the impugned Sec. 2 (88).The working population in the entire nation would never find the concept of Social Security meaningful, hereafter, because of the impugned Sec. 2 (88) wrongly inserted into the Code which claims to provide Social Security.

Social Security implies reasonable standard of living for the working population, by providing ‘income security’ as mentioned in Sec. 2 (78) of the Code on Social Security, 2020 itself. But the impugned Sec. 2 (88) of the said Code denies the attractive income security, that had, so far, been provided under Sec. 2 (22) of the ESI Act. The impugned Sec. 2 (88) of the Code on Social Security, affects the reasonable standard of living assured to the workers by the ESI Act, affecting the fundamental rights of the employees covered under the ESI Act..

There cannot be one and the same definition of the term ‘wages’ for both the Code on Wages, 2019 and the Code on Social Security, 2020. The officials did not follow the Due Process of Law in the law-making-process, and did not adhere to the canons of Pre-Legislative Consultative Policy dated 05.02.2014 and the established procedure laid down in Para 9.11.7 of the Manual of Parliamentary Procedure.

The Writ Petition filed before the Hon’ble High Court of Madras at Chennai challenges the said Sec. 2 (88) of the Code on Social Security, 2020 published in the Gazette of India on 29.09.2020 and prays for quashing it.

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IP’s quota of Medical College seats: Bureaucrats mastered the art of use and throw!

The Parliamentary Standing Committee on Labour (PSCL) was examining the Bill No. 375 of 2019 during the period from 23.12.2019 to 29.07.2020.

The Committee was seriously apprehensive of involving ESI Corporation with the responsibility of medical education and wanted the Corporation be absolved of the duty of medical education related aspects.

But the officials used the concept of ‘Quota for the Wards of IPs’ to convince the MPs that running the Medical Colleges by the ESIC was beneficial to the IPs. They threw out the said concept, later, within six days after they got the Code passed with Sec. 39 (5) of it coming out of Parliament unscathed.

Now, the details:

When the PSCL asked questions about the need for medical colleges to be run by the ESIC, the officials of the Ministry of Labour & Employment, adduced inappropriate reasons and justified the Clause 39 (5).

They said that the said cause was parallel to the provisions of Sec. 59 B of the ESI Act. This was a section inserted unlawfully without following the Due Process of Law in the years 2009 and 2010. Moroever, the Corporation regretted that decision to start medical colleges and resolved to get out of it in 2015.

Yet the officials of the Ministry of Labour & Employment ventured to justify the medical colleges in the ESIC fold and convince the PSCL by uttering misleading statements, as recorded in Para 8.9 of the Report dated 30.07.2020 of the PSCL.

They informed the PSCL

  1. that the medical colleges under the ESIC fold was “fulfilling the objective of reducing” the shortage of doctors in the ESIC and
  2. that under the Wards of IPs Quota, “more than 300 ward of IPs have got admission in ESI Medical Colleges to pursue the MBBS courses”.

Both statements cannot constitute the proper and relevant reply to the apprehensions raised by the PSCL.

  1. The ESIC had let loose many home-grown graduates from the ESI Medical Colleges to go free, after completing their graduation. (For more, https://flourishingesic.info/2019/04/15/rationalisation-and-the-peculiar-claim-of-non-availability-of-doctors/ )
  2. It did not enforce even the Bond executed already in respect of many of them. (For more, https://flourishingesic.info/2015/12/18/the-fine-art-of-squeezing-out-the-esi-fund-account-no-1/ )
  3. The Quota for the Wards of IPs for medical seats has been annulled all of a sudden on 28.09.2020 on the ground that there had been court judgments of June and August 2019.

Now the question is,

  1. If the court judgments of June and August 2019 could be cited as the reason for annulling the quota in medical seats for the Wards of IPs, why was the PSCL not informed of this fact, when it was functioning for seven months from 23.12.2019 to 29.07.2020?
  2. Why was the order annulling the quota issued abruptly all of a sudden on 28.09.2020, six days after the Parliament passed the Code on Social Security, 2020 on 22.09.2020?

The impression that one can legitimately gather from these facts is that the bureaucrats were working for a lobby, willy nilly, to hand over the ESIC Medical Colleges along with the major hospitals to private persons without imposing any obligation on them even to accommodate the Wards of IPs in providing medical education, especially when the judgments concerned were appealable on valid grounds.

If there is no utility at all for the ESIC to run the medical colleges, the ESIC should close down the medical colleges and utilise the infra (created amidst a lot of corrupt activities of humongous scale) to generate permanent revenue to the ESI Corporation by leasing them out to business houses in public auction in a transparent manner.

Working overtime to entrust the ESIC medical institutions to ‘any person’ as mentioned in Cl. 41 (5) of the Draft Code on Social Security circulated on 17.09.2019 or to ‘any other body of persons’ as inserted later in the Bill No. 375 of 2019 point to the lobby that is working for siphoning off the property of the Corporation.

It was absolutely improper for the officials to inform the PSCL about the benefit derived by the wards of IPs in admission to medical colleges and convince them about the need for the ESIC to run the medical colleges, while they had annulled the quota on 28.09.2020 and had been aware of the consequence of the concerned judgments given by the Courts 13 or 15 months ago.

Are they accountable or not for such a conscious and deliberate misleading statements made by them before the Parliamentarians?

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The unlawful Code on Social Security, 2020: Certain Questions of Law!

The Code on Social Security, 2020 which was presented as the Bill No. 121 of 2020 in the Parliament on 19.09.2020 by the central bureaucrats and got passed by the two Houses on 22.09.2020 and 23.09.2020 was a record of sorts exemplifying the capability of the bureaucrats to bend the Parliament to their will. The tricks played by the British bureaucrats to use the politicians in power, as shown in the legendary BBC serial ‘Yes, Minister!’, pales, simply, into oblivion when one sees the audacious capability of the Indian bureaucrats who have mastered the art of deceiving the Parliamentarians and diverting their attention to get any law passed as the bureaucrats pleased.

The law-making-process adopted by the central bureaucrats in the making of the Code on Social Security, 2020 poses the following Questions of Law:

a. whether a law can be enacted with provision to reduce or annul the existing benefits payable to the working class under the ESI Act, which amounts to denial of the recognized fundamental human rights, especially when the benefits had been paid for decades from the funds contributed only by the employers and employees and not by the Central Government with the financial position of the ESI Corporation still remaining stable and commendable;

b. whether a law can be enacted without placing before the nation in general and the Parliamentarians in particular the fact whether the Respondents had estimated and assessed, on record, the impact of the proposed legislation on fundamental rights, lives and livelihoods of the affected people, the working population in this case, as mandated in Para 2 of the Decision of the COS communicated in the D.O. letter  No. 11 (35)/ 2013-L. 1 dated 05.02.2014;

c. whether a law can be enacted without following the ‘due process of law’ codified in the Pre-Legislative Consultative Policy evolved by the Ministry of Parliamentary Affairs and publicized on 05.02.2014.

d. whether a law can be made without incorporating the suggestions given by the PSCL but making false statement to the Parliament that the fresh Bill has been proposed after incorporating the valuable suggestions of the PSCL;

e. whether a law can be made without following the due process of law, codified in Para 9.11.7 of the Manual of Parliamentary Procedure of the Government of India, and without making changes in the Bill scrutinised by the PSCL, through amendment motions;

f. whether the Secretaries of the Ministry of Labour, the Ministry of Law & Justice and the Ministry of Parliamentary Affairs do have the authority to pilot the Bill No. 121 of 2020 as a ‘fresh Bill’ containing numerous modifications made by them on their own, as per their own whims and fancies, without the knowledge of the PSCL, without any suggestion by the PSCL and after the report had been given by the PSCL;

g. whether the abovementioned three officers can place a ‘fresh Bill’ , the Bill No. 121 of 2020, before the Parliament on 19.09.2020 with numerous new modifications and expect the Parliamentarians to go through those contents and find out for themselves what those modifications were, especially when the Parliament session had, already, been scheduled to be a very short one; and

h. whether the Secretary, Ministry of Labour and the Secretary, Ministry of Parliamentary Affairs, can deviate from the established procedure of legislative drafting and place as Bill a bland document which does not specifically show and invite the attention of the Parliamentarians to the specific modifications proposed to be made, especially when the Bill is not for enacting a new law in the field but only meant for amending, amalgamating and consolidating the existing laws.

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Black day: The Black law on Social insecurity got passed in the LS!

A Black Day for the nation. The sinister Code on Social Security, 2020 got passed in the LS without proper discussion. A death knell for a civilised society.

The personal contribution of B. R. Ambedkar to India during his tenure as Labour Minister from 1942 to 1946 was the three basic laws for working population which materialised in 1948 as the Minimum Wages Act, The ESI Act and the Factories Act, even before Constitution came into existence.

These laws which make the society civilised have been buried deep by the BJP today. The Code on Social Security, 2020 is an eyewash to remove the real security provided so far.

The walk out by the opposition is puzzling. It cannot be appreciated at all.

Ambedkar: An Empathetic Economist | Forward Press

Times of India 23.09.2020

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The sinister Bill No. 375 of 2019: A comparative Table of Benefits!

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1948 to 1982: IPs drew more than the District Collectors, APFCs and the Income Tax Inspectors!

05.06.2020

To
The Director General,
Hqrs. Office,
ESI Corporation,
New Delhi 110002.

 

Sub: Undermining the basic concept of social security – through definition of the terms ‘employee’ and  ‘wages’ – Clause 2 (26) and Clause 2 (80) of the Code on Social Security, 2019 (Bill No. 375 of 2019 in the Lok Sabha) – representation – submitted.

 

Ref: 1. The Legal notice sent by me on 25.05.2020.

2. Email dated 29.05.2020 sent from the Wage Cell of the Ministry of Labour & Employment to the Director General, ESI Corporation, New Delhi.

 

Sir,

1 . I invite your kind attention to the references cited. I submit that the Ministry of Labour has, in the reference second cited, requested for the views of the Hqrs. Office of the ESI Corporation on the issue of wrong equation of the definition of the term ‘wages’ given in Sec. 2 (y) of the Code on Wages, 2019 with the definition of the term ‘wages’ given in the Clause 2 (80) of the Bill on the Code on Social Security, 2019 (Bill No. 375 of 2019) which has been tabled on the Lok Sabha.

Successful Economy presupposes Successful Social Security:

2 . Historically, right from the day when the Royal Labour Commission had undertaken tour in the year 1929 (after the enforcement of the Workman’s Compensation Act, 1923) to study the living conditions of Indian Labour, the employers had been resisting labour welfare measures, as they were under the popular impression (popular among themselves) that the such measures would be increasing their overheads and that they could not compete in the world market. A ‘successful economy’ cannot be built without ‘successful social security’. Both are intricately intertwined, as has been demonstrated by West Germany during the period between 1945 (when Germany was defeated in the WW II) and 1971 (when its DM attained full value). Franklin D. Roosevelt has gone on record having said, at the time of signing the Social Security Act, on 14th August, 1935, that Act was, “in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness.”

3. “Willing participation of labour” can be obtained only through social security as observed by the Sir William Beveridge in his monumental report presented in November, 1942. Indian social security system was modelled on the report of Beveridge by Prof. Adharkar. Such willing participation would not be there if the benefits provided at the time of contingencies like sickness, accident, maternity, etc., are not really meaningful and substantial to enable the workers to sustain themselves. That was the precise reason that the term ‘wages’ under Sec. 2 (22) had been so defined in the original Act that it was not only the fixed components but also the variable components  would be taken into account for determining the recovery of contribution from the employers and to pay benefits to the employees.

Inspections were meant to confirm contribution on real wages and detect concealed employment:

4. I submit that the present opportunity extended by the Ministry of Labour to examine the issue may kindly be made use of and the spirit of the definition under Sec. 2 (22) of the ESI Act,1948 maintained and those provisions retained. This is all the more essential in the context of downplaying the real importance of inspection of records of the employers to ensure proper compliance. “You don’t get what you expect. You get only what you inspect”. This is what the IAS officers are taught too at Mussorie. But the recent labour legislations are to the contrary and the result is that the workers remain uncared for.

5. Proper and in-depth inspections alone can ensure that all the coverable employees have been covered without being left out, and that contributions are paid on their behalf on all items of wages. Simply expecting that the employers would pay contribution on all items on which it is payable, just because there is a law to that effect would not work. All the officers from the level of Insurance Inspectors (later SSOs) to the level of Deputy Directors of the ESI Corporation, who had attentively handled the subject would provide numerous evidences of the manner in which the employers tried to play with the term ‘wages’ to pay contribution on reduced amount of wages which would, in turn, result in reduced quantum of benefits to the employees facing contingencies. (More in this regard in the Appendix).

6. It is, therefore, necessary to maintain the difference in the definition of the term ‘wages’ which was conceived of in the year 1948 itself, at the time of enactment of both the Acts, the Minimum Wages Act, 1948 and the ESI Act, 1948. There cannot, therefore, be one and the same definition of the term ‘wages’ for both enactments, the Code on Wages, 2019 and the Code on Social Security, 2019.

ESI Wage Ceiling was on par with the salary of Group ‘A’ Officers:

7. Already because of the weakness of the politcians-in-power to yield to the pressure from the lobby of the employers, the ‘wage ceiling’ under the ESI Act was not kept at the appropriate original stage, especially after 1975. There was a lot of resistance from the employers to revise the wage ceiling for coverage under the ESI Act, periodically, on par with the Consumer Price Index. The ESI Scheme had, in the process, lost its original direction and, thereby, its purpose too, to cover a large section of the middle-level income earners among the Indian population. Consequently, the ESI scheme could not extend its coverage to other classes of establishments, although a provision had, thoughtfully, been made for it under Sec. 1 (5) of the ESI Act.

8. It is, therefore, necessary to examine the issues under Sec. 2 (9) of the ESI Act also while examining the impact of Sec. 2 (22) as both are inter-twined. In the context, I would like to submit a few facts for your kind consideration:

a. When the ESI Act was enacted in the year 1948, the wage ceiling for the purpose of coverage was Rs. 400 pm excluding overtime allowances, as per the proviso to Sec. 2 (9) of the Act. At that time, the total salary of a District Collector was less than that. “A princely sum of Rs. 350 was what used to be the total salary of an IAS (ICS) officer at the start of his services in 1949”. It would show that the framers of the Act conceived of the extension of social-security-net not just to the ‘downtrodden’ but to the well-enlightened and well-paid employees too.

b. In the year 1966, this wage ceiling was increased to Rs. 500 pm (excluding overtime allowance), through a formal amendment to the Act, by the Parliament of India. At that time, the Basic Pay for a new entrant IAS officer in the Junior Scale was Rs. 400 pm in the scale of Rs. 400-400-500-40-700-EB-30-1000 (Ref: Page 109 – Chapter 11 – All India Services – Report of the Third Central Pay Commission – Vol I – Published by the Ministry of Finance, Government of India). A new entrant IAS officer was drawing a total salary of less than Rs. 500 pm in a ‘C’ class of the city.

c. Another relevant and interesting fact in this regard was that as per Sec. 17 (1) of the original ESI Act, permission of the Central Government was required to be obtained by the ESI Corporation, only for the creation the posts which carried the pay scale, the maximum of which was Rs. 500. This figure of Rs. 500 in the year 1948 which was the maximum of the required pay scale for such creation of posts would amply illustrate the importance of the wage ceiling of Rs. 400 pm, at that time, (excluding over time allowance) prescribed for coverage of employees in the factories and establishments. That was the then-intended reach of the ESI Act. (Later this provision has been shifted to subordinate legislation, through an amendment in the year 1975,  and now such a permission of the Central Government is sought only for the posts in NFSG as per Rule 20 of the ESI (General) Rules, 1950. )

d. In the year 1975, the wage ceiling for coverage was increased to Rs. 1000 pm, through another formal amendment, by the Parliament of India. At that time, the Third Pay Commission had given its report, according to which the Pay Scale of Income Tax Inspector was 425-700. The Customs Inspector was also drawing in the same scale of 425-700. Thus, when the ESI Act was amended in the year 1975 increasing the wage ceiling to Rs.1000 pm (excluding over time allowance), a new entrant Income Tax Inspector was drawing around Rs. 500 pm only as his total salary in a C class city. A new entrant Class I officer, like the Deputy Director in the ESI Corporation or the Assistant Provident Fund Commissioner in the EPF Organisation then, was drawing less than Rs. 1000 pm as his total salary, as his Scale of Pay was only Rs. 700 – 1300, after the enforcement of the Third Pay Commission Report.

e.  Given the above scenario, the impact of coverage of the employees in the factories and establishments drawing wages up to Rs. 1000 (excluding over time allowance) could be easily understood. On numerous occasions, during the personal hearings afforded to employers as per Sec. 45 (A) of the ESI Act, 1948, the Deputy Directors of the ESI Corporation had to encounter the employer’s staff members who were drawing more than the Deputy Directors of the ESI Corporation. It was only in the year 1982 that the salary of the Income Tax Inspectors in the ‘C’ class cities crossed the limit of Rs. 1000 pm, and started overtaking the wage ceiling prescribed under the ESI Act for the coverage of the Insured Persons, which continued to remain at Rs. 1000 (excluding over time allowance).

f.  In the year 1984 the wage ceiling was increased to Rs. 1600 pm under Sec. 2 (9), excluding over time allowances. But, soon, as per the Fourth Pay Commission recommendations, from 01.01.1986 onwards, the Pay Scale of the Income Tax Inspectors overtook, again, the wage ceiling prescribed under the ESI Act. The Pay Scale of the Income Tax Inspectors was increased to Rs. 1640-2900 and the salary of the Deputy Directors in the ESI Corporation and the Assistant Provident Fund Commissioners in the EPFO were fixed in the Pay Scale of 2200-4000.

g.  Thereafter, the wage ceiling for coverage of insured persons under the ESI Act was not increased at any time on the pattern of the increase made earlier through amendments made to the ESI Act in the year 1966 or 1975, to keep within coverage the insured persons who were drawing wages on par with the salary of the central governments at the middle management level in the Central Civil Service, let alone the position conceived of in 1948 to keep within coverage all those drawing wages even above the salary of the District Collectors.

h .The initial salary of a District Collector now in a ‘C’ class city with a Grade Pay of Rs. 8700, the salary of a new entrant Income Tax Inspector with a Grade Pay of Rs. 4600 and the salary of the APFC with a Grade Pay of Rs. 5400, at present, are far above the wage ceiling of Rs. 21000 presently fixed for coverage of employees under the ESI Act. It is only the salary of the MTS, whose cadre is the lowest point of entry into Central Civil Service ranges from 18000 to 20000 now and is below the wage ceiling of Rs. 21000 pm (excluding over time allowance) prescribed under the ESI Act for coverage of insured persons working in factories and establishments.

I submit that the aforesaid facts would convince everyone how the enlightened section of the employees of the factories and establishments were silently made to keep themselves away, in phases, from the ESIC and from having active participation in monitoring the functioning of the ESI Scheme.

9. The employees’ representatives in the supreme body of the organisation could not get better feedback from such enlightened well-paid employees of the factories and establishments. They, in turn, could not represent the cases of the employees before the the ESIC administration, especially about the medical benefits provided by various state governments, especially the state governments of Bihar, MP, Rajasthan, and UP.

10. A social security scheme, which was originally intended to cover not only the so-called ‘blue-collared workers’ but also the ‘white-collared employees’ was, thus, made to leave out the white-collared employees in bulk during the course of just three decades from 1952. It is significant to point out at this juncture that in the year 1947 when the Bill was prepared, it was called only as “Workman’s State Insurance Bill” on the lines of the Workman’s Compensation Act, 1923. But its name was changed later as “Employees’ State Insurance Bill” considering the extent of its intended reach.

Social Security a ‘service’ not a ‘business’:

11. It is submitted that if the present definition of the term ‘wages’ as per Clause 2 (80) and the definition of the term ‘employee’ as per Clause 2 (26) of the present Bill on the Code on Social Security is made law, the coverage of employees for the purpose of providing social security benefit would not only be infinitesimal but also insignificant. Providing Social Security to the people of the nation, which is a ‘Service’ to be provided by the sovereign government, will get converted by the aforesaid two definitions into ‘business’ by and for the private ultra-rich.

No proper study for Social Impact Assessment:

12. All these modifications have, apparently, been done without conducting any study on the Social Impact on the Indian society. It is submitted that the report of the Second National Commission of Labour cannot be cited as a ruse for these micro level changes which would are intended to have far-reaching deleterious effect on the Indian society as a whole. It is a fact that the Second National Labour Commission did not say anything about drafting a labour law, a Social Security Code, to facilitate handing over the ESIC Medical Colleges along with major hospitals to ‘any person’ or any ‘organisation of persons’, by inserting such questionable phrases as has been recorded in Clause 41(5) of the draft Code dated 17.09.2019  and Clause 39(5) of the Bill 375 of 2019 respectively.

West Bengal ESI Hospitals well-run and incentive grant provided:

13. It is submitted that providing social security to the working population is a sovereign function of the State just like running the nation through Revenue Departments or maintaining law and order through Police Department and administering  justice through Courts of Law. Just because there is deterioration in services in certain pockets because of the corrupt politician-bureaucrat nexus, as is said to be there in Revenue Department and Police Department or the political interference said to be there in the Judiciary, there is no proposal coming up from any quarters to dispense with these departments or institutions but to insulate them from corruption and political interference. The  concept of the ESI Scheme cannot also be derided and attempted to be dispensed with, for the very same reason. Experience has demonstrated, on many occasions, that the ESIC could be run finer and could be run corruption-free, when there is no political interference in the administration of the organization. The Scandinavian countries top the Human Development Index consistently for long, only because the organizations which provide social security benefits there are run corruption-free.

14.  The Chief Minister of West Bengal had said, “The excellent performance of the ESI Hospitals in West Bengal run by our labour department has been recognized by the Centre. An incentive grant of Rs 22.33 crore has been provided, which is first time ever to be received by any ESI Hospital in the country,” (Times of India 09.11.2014).

Judiciary wanted to impose costs on the draftsmen and the legislators:

15.  Lord Justice Scrutton observed the following in Roe vs. Russel (1928) :“I regret that I cannot order the costs to be paid by the draftsmen of the Rent Restriction Acts, and the members of the Legislature who passed them, and are responsible for the obscurity of the Acts.” (Page 94- The Closing Chapter – Lord Dennings). The Act passed by the British Parliament was so ambiguous that Lord Scrutton regretted his inability to impose penalty (cost) on the persons who brought into existence such a loosely drafted law.

16.  Another Judge Sir Ernest Gowers who said the following in the Plain Words case in the year 1948 as the duty of the draftsmen (Page 95 ibid.): “…. to try to imagine every possible combination of circumstances to which his words might apply and every conceivable misinterpretation that might be put on them, and to take precaution accordingly. ….All the time he must keep his eyes on the rules of legal interpretation and the case law on the meaning of particular words [and on the previous statutes on the same subject-matter] and choose his phraseology to fit them.”. We the Indians, who are said to have adopted the British system of governance more, have to demonstrate that we are capable of framing laws in a proper manner. But the present Bill No. 375 of 2019 does not fit into the parameters of proper law.

Nexus between Clauses 2 (26), 2 (80) and Clause 39(5):

17. I submit that the phraseology of Clauses 2 (26) and 2 (80) read with the phraseology of Claus 39 (5) give a discerning reader reason to believe that there is close nexus between the purpose for which these clauses have been inserted the way they are. I submit that I have used the phrase ‘reason to believe’ in the foregoing sentence with all its legal import as elucidated by the Hon’ble Supreme Court of India in Sony India Ltd Vs. Commissioner of Income Tax on 12.05.2005. The contents of Clause 39 (5) on the one hand and the contents of Clauses 2 (26) and 2 (80) on the other, lead one to the belief that there is a rational connection between the two. The contents of Clause 39 (5) do have a relevant bearing on Clause 2 (26) which leads to the formation of the aforesaid belief.

18. I, therefore, pray that action may kindly be taken to retain in the Bill on the Code on Social Security, 2019 (Bill No. 375 of 2019) the definition of the term ‘wages’ as given in Sec. 2 (22) of the ESI Act, 1948. In the alternative, the contents of Cl. 2 (80) of the said Bill No. 375 of 2019 may be caused to be re-examined and the following words and phrases deleted from the definition of the term ‘wages’ as given therein:

a. The phrase ‘any conveyance allowance or” appearing in the Exclusion Clause (d) of the definition has to be deleted;

b. The phrase ‘house rent allowance” appearing in the Exclusion Clause (f) of the definition has to be deleted;

c. The phrase ‘any overtime allowance” appearing in the Exclusion Clause (h) of the definition has to be deleted;

d. The phrase ‘any commission payable to the employee” appearing in the Exclusion Clause (i) of the definition has to be deleted;

e. The first proviso should be totally deleted as it does not have relevance in a social security enactment. In other words, this proviso starting with the phrase “provided that for calculating” and ending with the phrase “added in wages under this clause” requires to be deleted in toto.

Thanking you,

Yours faithfully,

Encl: Appendix.

 

 

Copy submitted to

The Secretary, Ministry of Labour & Employment, GOI, New Delhi.

The Secretary, Ministry of Law & Justice, GOI, New Delhi.

 

 

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Answer within 8 weeks: NHRC tells Secretary, MOL&E.

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”.

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

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), (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.

 
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), (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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Sec. 97 (2A) of the ESI Act, 1948: Why was it inserted?

It is very essential for the bureaucrats to go by law. Not everything they do becomes lawful just because they are in power.

The purpose for which Sec. 97 (2A) was inserted in the ESI Act, is to be understood before attempting at nullifying its effect.

The following application is sent to the Hqrs. Office of the ESI Corporation under the RTI Act, 2005:

===========

                  Sub: Amendment to ESI Act – Insertion of Sec. 97 (2A) – copy of Agenda and                                    Minutes – requested.

Sir,

I would like to state that the provisions under Sec. 97 (2A) of the ESI Act, 1948 were not in the original Act of 1948. They were inserted later, through the Amendment Act 53 of 1951 (and brought into existence from 06.10.1951), while Sec. 97 (3) of the said Act was part of the original legislation enacted in the year 1948. . As the supreme body of the ESI Corporation had come into existence immediately after the enactment of the Act in 1948, this amendment of 1951 through Sec. 97 (2A), had, obviously, been made at the behest of the said supreme body, the ESI Corporation, which had deliberated on the need for such a provision under Sec. 97 of the parent Act.

I, therefore, request you to kindly provide me with the following information under Sec. 6 of the Right to Information Act, 2005.

  1. Kindly provide me with the copies of (1) the Agenda and (2) the Minutes of the meetings of the Standing Committee in which the details explaining the need for inserting Sec. 97 (2A) in the ESI Act, 1948 had been placed before the Standing Committee and its approval obtained.
  2. Please provide me with the copies of (1) the Agenda and (2) the Minutes of the meetings of the ESI Corporation in which the details explaining the need for inserting Sec. 97 (2A) in the ESI Act, 1948 had been placed before the ESI Corporation, the supreme body of the organisation, and its approval obtained.

I have paid Rs. 20 by means of IPO, (Rs. 10 being the fee payable under the RTI Act and the remaining Rs. 10 being the cost of photocopying the required documents). I undertake to pay extra charges for photocopying if advised to do so when the pages to be supplied are more than five.

Yours faithfully,

(R. Natarajan)

 

 

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