BOCW Act: Applicability on factories?

Lexology | March 24, 2022
Introduction:

The article discusses the applicability of Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (‘BOCW Act’) to factories wherein construction activity for the purpose of expansion or constructing godowns is being undertaken.

Definition of ‘building or other construction work’:

The term, ‘Building or other construction work’ has three limbs:

First limb deals with the different activities which are to be undertaken, namely, construction, alteration, repairs, maintenance or demolition.
Second limb covers those buildings or works in relation to which the aforesaid activities are carried out.
The third limb contains the exclusion clause i.e., any building or other construction works to which the provisions of the Factories Act, 1948 (‘Factories Act’) or the Mines Act, 1952 apply instead.
It is worthy to note that construction in a factory will get covered within the first two limbs of the definition.

On the other hand, on a plain reading of the exclusion clause, one can also take the view that since expansion or construction of a godown or any other place will take place inside the factory, which is subject to the provisions of Factories Act, therefore, said exclusion will apply to such construction.

A legal scrutiny of the above exclusion clause is required from the perspective of the Factories Act which is as follows:

‘Factory’ means any premises where manufacturing process is carried on with or without the aid of power.
‘Worker’ covers a person who is employed in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process.
The activity of undertaking construction of a godown, or any other place or for expansion of the factory, is not a manufacturing process.
In light of the above, the building constructed, as a godown or as a part of expansion of the factory, will not be treated as a factory since no manufacturing process is being carried out.

Consequently, workers engaged in the construction of said building by the contractor will also not be treated as workers for the purpose of Factories Act.

Accordingly, one can take a view that the provisions of Factories Act apply when the manufacturing process in the building which is being constructed has commenced and not to the activity of construction of the project itself. Therefore, the exclusion from the definition of ‘building or other construction work’ will not be available.

In case any contrary view is taken, there is a possibility that the workers engaged in the construction of building will get excluded from both the welfare legislations i.e. BOCW Act as well as the Factories Act.

Who is liable to pay cess?

The employer, in relation to an establishment, means the owner and the contractor. The contractor includes a sub-contractor.

Building and Other Construction Workers Welfare Cess Act, 1996 (‘Welfare Cess Act’) provides for the levy and collection of a cess on the cost of construction incurred by an employer. The cess levied shall be paid to the cess collector by the employer within thirty (30) days of completion of the construction project, or within thirty (30) days of the date on which assessment of cess payable is finalised, whichever is earlier.

Different mechanisms are prescribed for payment of cess for building and construction work (a) of a Government or of a Public Sector Undertaking, and (b) where approval from a local authority is required.

In case of building and construction work of private companies, the employer is to pay cess to the cess collector. The question arises as to who is liable to pay cess i.e., whether the employer of the establishment or the contractor, as the definition of employer covers both the owner and the contractor.

It is worthwhile to note that the Supreme Court has held that, as per the BOCW Act and the Welfare Cess Act, the liability to pay cess falls not only on the owner of a building or establishment but also on the contractor. It is to ensure that the cess is collected at source from the bills of the contractors to whom payments are made by the owner. The burden of cess is passed on from the owner to the contractor.

Accordingly, one can take a view that the contractor is to collect cess and make payments to the collector.

There are certain provisions in BOCW Act which cast the welfare related responsibility of the workers on the employer of the establishment such as for canteens, accommodation, creches, and first-aid.

On a concluding note, while paying and collecting cess, the impact of the BOCW Cess read with Welfare Cess Rules should be appropriately dealt with by businesses.

Visakhapatnam: 13-year-old girl rescued from brick kiln at Padmanabham

The Hindu | Staff Reporter | 13 Feb, 2022

Action will be taken against brick kiln owner, say officials

Members of Childline Services, Labour Department officials and the city police conducted raids on a brick kiln industry and rescued a 13-year-old girl who was allegedly made to work at the industry at Krishnapuram village under Padmanabham Police Station limits here on Sunday.

The teams conducted raid based on the complaint received by the District Collector, Child Welfare Committee (CWC) members and the city police from Visakhapatnam-based NGO Samata and Odisha-based NGO KBK Resource Centre.

According to Coordinator of Childline (1098) services David Raju, it was alleged that a four-year-old and 13-year old girl, daughters of one Raju, were made to work at the brick kiln industry. Raju is from Nandupala village of Balangir district of Odisha. “In the investigation, we found that only 13-year-old girl was made to work. The Labour Department as well as police officials are initiating action against the owner of the brick kiln industry as per law,” he said.

‘No molestation’
Meanwhile the Childline officials also ruled out the allegations of molestation against the wife of Raju and his minor daughters. “We have spoken to the wife of Raju. There were no such incidents,” Mr. David Raju said.

With the help of the Police Department, the family is being sent to their native place in Odisha.

Visakhapatnam: NGOs allege child labour and molestation at a brick kiln

The Hindu | Special Correspondent | 13 Feb, 2022

‘A middleman brought the family from Odisha to the kiln last year’

Odisha-based NGO KBK Resource Centre and Visakhapatnam-based Samata have lodged a complaint with the city police, District Collector and Child Welfare Committee on an alleged child labour and child molestation case at a brick kiln at Krishnapuram village in Padmanabham mandal of Visakhapatnam district on Saturday.

They alleged that a family from Nandupala village of Balangir district of Odisha, was trafficked to the kiln by a middleman, in October, last year.

The victim Raju Jal (40) had come to the kiln with his wife and three children, including two girl children, all aged between 4 and 13 years of age.

According to Sushant Panigrahi of KBK, Raju was not paid as promised and when he had asked he was not only allegedly assaulted but also denied payment. But he managed to escape and reach home, but his family members are being allegedly kept as hostage and even his four-year-old son is being made to work.

Mr. Sushant also said that Raju’s wife had spoken to them and had complained that the kiln owner’s son and his friends have been allegedly sexually molesting her and her minor daughters, every night under inebriated condition.

‘Prompt action promised’
“We have sent e-mail complaints to all the departments and have also spoken to them on Saturday, including the RDO and DCP (urban). We have been assured of prompt action,” he said.

AAL going for production shortly?

The Hindu | Sumit Bhattacharjee | 09 Feb, 2022

Activity picks up at plant, power plant trial run held

Anrak Aluminium Limited (AAL) which was set up in 2014 with an investment of around ₹6,000 crore at Rachapalle in Makavarapalem mandal of Visakhpatnam district, is yet to go into production. The plant was set up with an installed capacity of 1.5 million tonnes per year, but with the cancellation of G.O. 97 by the Jagan Mohan Reddy government and the company failing to get a linkage for bauxite ore, the operation of the plant has been stalled. Now there are strong rumours that the company is gearing up to start production and it is learnt that initially February 5 was the date given but it had to be postponed to a later date.

Initially, G.O. 97 had given permission to the plant to mine bauxite ore in Gudem and Chintapalle block in Visakhapatnam Agency, and the mining was to be done by the A.P. Mineral Development Corporation in the reserve forest area. But due to stiff resistance from the tribals who followed the Niyamgiri model of agitation, the YSRCP government had cancelled the G.O., sticking to its election promise.AAL, a joint venture between Penna Group and Ras Al-Khaimah Investment Authority (RAKIA), has been waiting since then to establish a bauxite linkage and start production.

Sources say that it has been importing bauxite ore from abroad and building up its stock. It is also learnt that AAL is going the Vedanta way that has an alumina refinery at Lanjigarh in Odisha.After Vedanta failed to get its linkage from Niyamgiri due to the resistance, it had established linkages from other States such as Rajasthan and Gujarat. Sources say that apart from importing bauxite, AAL is also planning to take one mine from Vedanta on lease to establish domestic linkage. However, no AAL official could be contacted for confirmation.

Sources say that a railway line is being laid from Bayyavaram in Kasimkota mandal to Makavarapalem, along with a siding to unload bauxite.

Hinting that something is on at the company, a few employees confirmed that hectic maintenance activity was on and the trial run of the power plant has been conducted successfully.

Ravi Rebbapragada of Samata, who was the architect of the Samata Judgement, based on which mining in the Fifth Schedule area by private parties was banned, said, “We do not mind if AAL imports bauxite or takes a mine on lease in some other State, but it cannot mine in Fifth Schedule areas.”

Visakhapatnam: Adivasis do not want to trade their rights for new districts

The Hansh India | Rani Devalla | 02 Feb, 2022

Visakhapatnam: Known for its pristine natural beauty, lush green plantations, and aromatic coffee, Araku is set to become Alluri Seetharamaraju district with its headquarters as Paderu if the proposed reorganisation of districts becomes a reality. The new district to be carved out will have three Assembly segments-Paderu, Araku and Rampachodavaram spreading over 12,251-sq-km with a population of 9.54 lakh.

Araku, also a Lok Sabha constituency, stands out from other constituencies as its segments are branched out to four districts Srikakulam (Palakonda), Vizianagaram (Kurupam, Saluru and Parvathipuram), Visakhapatnam (Araku and Paderu) and East Godavari (Rampachodavaram). However, once the new districts are formed, the parliament constituency will be shared by two districts instead of four. While Alluri Seetharamaraju district will have three segments, the other four fall under the ambit of another new district Manyam. Known as Ooty of Andhra Pradesh, Araku Valley is one of the major tourist destinations in the Eastern Ghats. But, the Adivasi associations raise objections against the reorganisation of districts as they opine that the proposal could not be practically implemented, especially in Araku wherein the tribal areas of the constituency are protected under the Fifth Schedule. Since provisions like the Panchayats (Extension to Scheduled Areas) Act (PESA) and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act are enforced in Araku, tribal activists express fear that challenges may crop up in implementation of the Acts after reorganisation of districts. “In case of reorganisation of districts, it should be done based on the ITDA mapping and in a scientific manner.

After all, formation of new districts is aimed at creating ease of administration. With a distance of 283-km stretching from Rampachodavaram to Araku, how far is it going to serve the purpose of administrative convenience?” wonders Ramarao Dora, district convener of AP Adivasi Joint Action Committee. Sharing their views, representatives of AP Adivasi, JAC say, “In the process of carving new districts, there is a scope for the existing scheduled areas being merged with non-scheduled areas and vice-versa. The exercise may not only lead to dilution of rights but also invites conflicts in future.”

For decades, the tribal activists mention, 553 Adivasi villages are left without being included in the Fifth Schedule. “What is the fate of such hamlets? In the process of formation of new districts, the Adivasis’ rights should not be diluted,” emphasises K Surendra, state leader of Girijana Sangham. Meanwhile, representatives of tribal associations demand that the views of the stakeholders should be considered before the state government takes the exercise of formation of new districts forward.

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