Dear Members,
Kindly supplement your guidance on B&OCW. A factory is under commercial production. The said factory is going for an additional unit in the same boundary and premises. The labor department is asking the agency to register for this new job. The labor department is not convinced at all that the said act is not applicable to the unit. However, they are citing the example of the Apex court decision in the matter of the Lanco Anpara power plant case.
Regards
From India, Mumbai
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713Kindly supplement your guidance on B&OCW. A factory is under commercial production. The said factory is going for an additional unit in the same boundary and premises. The labor department is asking the agency to register for this new job. The labor department is not convinced at all that the said act is not applicable to the unit. However, they are citing the example of the Apex court decision in the matter of the Lanco Anpara power plant case.
Regards
From India, Mumbai
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Dear Prabhat ji,
In light of recent landmark judgement of the Hon'ble Supreme Court in Lanco Anpara Power v/s State of Uttar Pradesh & Ors rendered in Civil Appeal No 6223 of 2016 (reported in (2016) 10 SCALE 99), unfortunately you can not take the benefit of exclusion carved out under Section 2(1)(d) of the BOCW Act. Now you have no option but to obtain Registration Certificate under BOCW Act and also to pay Cess.
The Hon'ble SC, while coming to its conclusion, adopted a purposive interpretation to Section 2(1)(d) of BOCW Act giving primacy to the 'superior purpose' contained in the BOCW Act and the Welfare Cess Act, such purpose being the welfare of the unorganised labour class involved in construction activity. The Hon'ble SC further held that a literal interpretation as desired by the construction companies would result in a situation where the construction workers would be deprived of the benefits of both the BOCW Act and the Factories Act, which could not have been the legislative intent and therefore could not be accepted by the Courts.
From India, Mumbai
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In light of recent landmark judgement of the Hon'ble Supreme Court in Lanco Anpara Power v/s State of Uttar Pradesh & Ors rendered in Civil Appeal No 6223 of 2016 (reported in (2016) 10 SCALE 99), unfortunately you can not take the benefit of exclusion carved out under Section 2(1)(d) of the BOCW Act. Now you have no option but to obtain Registration Certificate under BOCW Act and also to pay Cess.
The Hon'ble SC, while coming to its conclusion, adopted a purposive interpretation to Section 2(1)(d) of BOCW Act giving primacy to the 'superior purpose' contained in the BOCW Act and the Welfare Cess Act, such purpose being the welfare of the unorganised labour class involved in construction activity. The Hon'ble SC further held that a literal interpretation as desired by the construction companies would result in a situation where the construction workers would be deprived of the benefits of both the BOCW Act and the Factories Act, which could not have been the legislative intent and therefore could not be accepted by the Courts.
From India, Mumbai
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Dear Keshav Korgaonkar Ji,
I appreciate and thank you for the comments on the matter and suggestions provided. I have reviewed the judgement of the Hon'ble Supreme Court in Lanco Anpara Power v/s State of Uttar Pradesh & Ors rendered in Civil Appeal No. 6223 of 2016 (reported in 2016).
The judgement pertains to Green Field projects whose plans and layouts were approved under the Factories Act but have not commenced commercial production. In essence, the judgement interprets the definition of a Factory. It explicitly states that a "Factory" under construction cannot be considered a Factory, and the Building and Other Construction Workers (BOCW) Act is applicable.
After carefully studying the judgement, I have formed the opinion that the BOCW Act does not apply to a Factory under commercial production. This conclusion is drawn from the following points discussed in the judgement:
- Point No: 11 on page No. 15
- Point No: 19 on page No. 23
- Point No: 23 on page No. 24-25
- Point No: 25 on page No. 26
Would you kindly review the above points of the judgement for an opinion and further discussion?
Thanks and Regards
From India, Mumbai
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I appreciate and thank you for the comments on the matter and suggestions provided. I have reviewed the judgement of the Hon'ble Supreme Court in Lanco Anpara Power v/s State of Uttar Pradesh & Ors rendered in Civil Appeal No. 6223 of 2016 (reported in 2016).
The judgement pertains to Green Field projects whose plans and layouts were approved under the Factories Act but have not commenced commercial production. In essence, the judgement interprets the definition of a Factory. It explicitly states that a "Factory" under construction cannot be considered a Factory, and the Building and Other Construction Workers (BOCW) Act is applicable.
After carefully studying the judgement, I have formed the opinion that the BOCW Act does not apply to a Factory under commercial production. This conclusion is drawn from the following points discussed in the judgement:
- Point No: 11 on page No. 15
- Point No: 19 on page No. 23
- Point No: 23 on page No. 24-25
- Point No: 25 on page No. 26
Would you kindly review the above points of the judgement for an opinion and further discussion?
Thanks and Regards
From India, Mumbai
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Thank you, Prabhat ji, for providing insights into the judgment, which I have not fully read, I admit. I only know that the Honorable SC, while coming to its conclusion, adopted a purposive interpretation of Section 2(1)(d) of the BOCW Act, giving primacy to the 'superior purpose' contained in the BOCW Act and the Welfare Cess Act. This purpose is the welfare of the unorganized labor class involved in construction activity.
It's good that you responded to me. I will not only have to read this judgment fully but also study it minutely.
From India, Mumbai
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It's good that you responded to me. I will not only have to read this judgment fully but also study it minutely.
From India, Mumbai
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Dear Prabhat,
I endorse your views. The Lanco judgment would apply only in the case of greenfield projects and is distinguishable for the expansion of activities in an already established factory. Indeed, the very purpose of the BOCW Act is to provide welfare amenities to the building and construction workers, which they are deprived of compared to factory workers due to the unorganized nature of work. However, once a factory is in operation, all statutory benefits like medical, canteen, PF, ESI, etc., are extendable to all, including the Building & Construction Workers deployed in the same premises.
Reading the Lanco Judgment as providing for coverage under the BOCW Act would be unnecessary duplication of liability without any gain.
Thank you.
From India, Mumbai
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I endorse your views. The Lanco judgment would apply only in the case of greenfield projects and is distinguishable for the expansion of activities in an already established factory. Indeed, the very purpose of the BOCW Act is to provide welfare amenities to the building and construction workers, which they are deprived of compared to factory workers due to the unorganized nature of work. However, once a factory is in operation, all statutory benefits like medical, canteen, PF, ESI, etc., are extendable to all, including the Building & Construction Workers deployed in the same premises.
Reading the Lanco Judgment as providing for coverage under the BOCW Act would be unnecessary duplication of liability without any gain.
Thank you.
From India, Mumbai
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I offer my thanks for giving your valueable opinion by learned members of the forum Shri Korgaonkar Ji and Shri KK-HR. Regards
From India, Mumbai
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From India, Mumbai
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In the BOCW Act, it's difficult to convince the labor department, and the interpretation of the Supreme Court judgment also favors their side. Therefore, opting to go for a STAY from the high court is preferable because an appeal at the labor commissioner will likely go in their favor.
From India, undefined
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From India, undefined
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Dear Mr. Singh,
Thank you for your opinion. Were you aware that around 20-25 cases were set aside by a single verdict of the Apex Court, which had been pending for the past 7-8 years? All of these cases had received a verdict in favor of B&OCW from the High Court and were subsequently challenged before the Apex Court.
At this present juncture, no High Court would dare to accept the case, even if they are aware that the matter is different from the previous ones. This dilemma in our judiciary to generalize all cases, even when they know it is not appropriate.
Regards
From India, Mumbai
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Thank you for your opinion. Were you aware that around 20-25 cases were set aside by a single verdict of the Apex Court, which had been pending for the past 7-8 years? All of these cases had received a verdict in favor of B&OCW from the High Court and were subsequently challenged before the Apex Court.
At this present juncture, no High Court would dare to accept the case, even if they are aware that the matter is different from the previous ones. This dilemma in our judiciary to generalize all cases, even when they know it is not appropriate.
Regards
From India, Mumbai
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You are right, Mr. Prabhat. The high court closed a number of cases in a single verdict after October 2016, but still, a few cases are in a stay status. This may be the only way to be exempt from recovery in expansion cases.
From India, undefined
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From India, undefined
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Yes, Mr. Singh,
The cases of the New Factory under construction have been closed. However, the cases of a dissimilar nature are maintaining a stay status. We have already communicated our views to the Inspector-cum-enforcement officer under B&OCW and to the principal employer to reimburse the costs, as we did not consider cess in our price quotation, given that it is a Factory.
Regards.
From India, Mumbai
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The cases of the New Factory under construction have been closed. However, the cases of a dissimilar nature are maintaining a stay status. We have already communicated our views to the Inspector-cum-enforcement officer under B&OCW and to the principal employer to reimburse the costs, as we did not consider cess in our price quotation, given that it is a Factory.
Regards.
From India, Mumbai
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