The construction workers are the most numerous and vulnerable section in India.As the construction companies are growing more and more, many of farm labourers are joining into Reality and Construction Sector as unskilled workers because of poor income and uncertainty in the agriculture sector.The workers are being hired from the remote villages and sent to the construction sites without explaining the nature of work, complexity and intricacies of building works.The migrant workmen are forced to work at deplorable conditions without proper food, shelter and basic amenities.Many face severe health problems because of geographical condition of that particular area/place where the construction site is located.
In the construction industry, there is inherent risk to the life of the workers.There are various labour legislations in India for the welfare of the construction workers.The Minimum Wages Act 1948, Contract Labour (Regulation and Abolition) Act 1970 and Inter-state Migrant Workmen (Regulation of Employment and Conditions of Services) Act 1979 will applicable to the building and other construction workers.Further, two more Central Acts were enacted for the benefit of the construction workers and those are - 1) The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996; and 2) The Building and Other Construction Workers Welfare Cess Act, 1996.
The Building and Other Construction Workers (Regulation and Conditions of Service) Act, 1996 (for short the BOCW Act) aims to provide for regulation of employment and conditions of service of the building and other construction workers as also their safety, health and welfare measures in every establishment which employs or employed ten or more workers. The BOCW Act exempts for the construction of residential houses for own purpose constructed with a cost not exceeding Rs. 10 Lakh. The provisions in the Act for health and safety measures for the construction workers are in conformity with International Labour Organisation convention No.167 concerning safety and health in construction sector revising the Safety Provisions (Building) Convention, 1937.
There is also a provision in the BOCW Act for constitution of safety committees in every establishment employing 500 or more workers with equal representation from workers and employers in addition to appointment of safety officers qualified in the field.It also specifies the Penalties of fine and imprisonment for violation and contravention of the BOCW Act.
The provisions of the Workmen’s Compensation Act 1923, shall so far as may be, apply to building workers as if the employment to which this Act applies had been included in the Second Schedule to the BOCW Act.
Whereas, the Building and Other Construction Workers Welfare Cess Act, 1996 is to provide for the levy and collection of a cess on the cost of construction incurred by employers with a view to augmenting the resources of the Building and Other Construction Workers’ Welfare Boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act,1996.
Under the Act 1% cess shall be collected from every employer where the cost of construction is more than Rs. 10 lakhs. The proceeds of the cess so collected shall be paid by the local authority or the State Government collecting the cess to the Board after deducting the cost of collection of such cess not exceeding 1% 0f the amount collected.Further, the Central Government may, by notification in the Official Gazette, exempt any employer or class of employers in a State from the payment of cess payable under this Act where such cess is already levied and payable under any corresponding law in force in that State.
The enforcement of the Act primarily lies with the State Governments/Union Territories.The collection of cess and administration of the Welfare Boards would be the responsibility of concerned State Governments. The proceeds of the cess collected under this Act shall be paid by the local authority or the State Government collecting the cess to the Welfare Board after deducting the cost of collection of such cess not exceeding one percent of the amount collected.
Every State Government shall constitute a Board to be known as the (name of the State) Building and other Construction Workers Welfare Board to exercise the powers conferred on, and perform the functions assigned to it, under the BOCW Act.
The functions of the welfare boards are - (a) to provide immediate assistance to a beneficiary in case of accident; (b) to make payment of pension to the beneficiaries who have completed the age of sixty years; (c) to sanction loans and advances to a beneficiary for construction of a house not exceeding such amount and on such terms and conditions as may be prescribed; (d) to pay such amount in connection with premium for Group Insurance Scheme of the beneficiaries as it may be deem fit; (e) to give such financial assistance for the education of children of the beneficiaries as may be prescribed; (f) to meet such medical expenses for treatment of major ailments of a beneficiary or, such dependent, as may be prescribed; (g) to make payment of maternity benefit to the female beneficiaries; and (h) to make provision and improvement of such other welfare measures and facilities as may be prescribed.
The welfare fund is constituted by a Board and the fund is being called as the Building and Other Construction Workers' Welfare Fund and there shall be credited thereto - (a) any grants and loans made to the Board by the Central Government; (b) all contributions made by the beneficiaries; (c) all sums received by the Board from such other sources as may be decided by the Central Government.
Whoever contravenes the provisions of any rules under BOCW Act shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to two thousand rupees, or with both, and in the case of a continuing contravention, with an additional fine which may extend to one hundred rupees for everyday during which such contravention continues after conviction for the first such contravention.
If any person who has been convicted of any offence punishable under the Act is again guilty of an offence involving a contravention or failure of compliance of the same provision, he shall be punishable on a subsequent conviction with imprisonment for a term which may extend to six months or with fine which shall not be less than five hundred rupees but which may extend to two thousand rupees or with both.
WHETHER THE CESS COLLECTED UNDER THE ACT IS A “TAX OR FEE”- THE SUPREME COURT OF INDIA UPHELD THE BOCW ACT:
The Supreme Court of India in Civil Appeal No. 1830 of 2008 – Dewan Chand Builders & Contractors Vs. Union of India and Others (judgment dated 18-11-2011),while dealing with the constitutional validity of Building and Other Construction Workers Welfare Cess Act, 1996 a question was aroused that “there is a two pronged attack on the legislative competence of the Parliament to enact the Cess Act: (i) whether it is a ‘tax’ and not a ‘cess’ because no element of quid pro quo exists between the payer of the cess and the beneficiary and (ii) if it is a tax then it is a tax on “land and buildings” falling within the ambit of Entry 49 List II of the Seventh Schedule, ousting the legislative competence of the Parliament.
The core issue before the court is that whether the cess levied under the scheme of the impugned Cess Act is a ‘fee’ or a ‘tax’.The Supreme Court expressed its view that “ the essential purpose, the enactment seeks to achieve i.e., to augment the Welfare Fund under the BOCW Act.The levy of Cess on the cost of construction incurred by the employers on the building and other construction works is for ensuring sufficient funds for the Welfare Boards to undertake social security schemes and welfare measures for building and other construction workers.The fund, so collected, is directed to specific ends spelt out in the BOCW Act.Therefore, it is clear that the said levy is a fee and not tax. ”
The Supreme Court further said that “ the fund is set apart and appropriated specifically for performance of specified purpose; it is not merged in the public revenues for the benefit of the general public and as such the nexus between the Cess and the purpose for which it is levied gets established, satisfying the element of quid pro quo in the scheme.The subject levy has to be construed as ‘fee’ and not a ‘tax’."
The author is a Legal, IPR, Print and Electronic Media Consultant based at Hyderabad and he can be reached at: firstname.lastname@example.org
K. V. Ramana Murthy