Apathy in Implementation of Legal Provisions for Welfare of Construction Workers

The construction industry is one of the most inherently unorganized and decentralised sectors. The sector is also highly transitory with the majority of workers being in migratory and non-permanent employment.

Legal Provisions

• To effectively address the concerns about the wellbeing of these workers the parliament enacted has enacted Building and Other Construction Workers Act in 1996 and Building and Other Construction Workers’ Welfare Cess Act, 1996 (the BOCW Acts).
• The Other Construction Workers’ Welfare Cess Act provides for a cess at the rate of 1 per cent on the construction cost incurred by the builders on each new project.
• The funds so raised are handed over to state-level Building and Other Construction Workers Welfare Boards, set up as per the said Act.

Legal Loopholes

• While it is mandatory for the builder to pay the cess towards the welfare of the workers employed by him, before the commencement of any construction, the enrolment of the workers with the welfare board is a voluntary exercise left to the workers.
• This is in contrast with the similar beneficial legislations like Provident Fund or ESIS, where both the registration of a worker as well as the employer’s contribution is compulsory.
• The Welfare Act also provides that the administrative expenditure should not exceed 5 per cent of the expenditure incurred on welfare. Even though such limits are necessary, they are highly misconstructed in the law.
• The law completely undermines the fact that an elaborate administrative setup has to be in place prior to the enrolment of prospective beneficiaries from among such a huge and unorganised set of workers, and the extension of any welfare schemes to them.

Apathy in Implementation

There has been a complete failure to register even 25 per cent of the total construction workers in the country. Rs 28,000 crore of Rs 37,000 crore collected under the Building and Other Construction Workers’ (BOCW) Cess Act is lying unutilised for years over the last 11 years.

Even the Supreme Court pulled up the states for the lax in the implementation. The Supreme Court judgement stated that “Directions given by this Court from time to time to implement the two laws have been flouted with impunity… the BOCW Act has been disregarded by State Governments and UTAs. Hopefully, the gravity of the situation… will be realised by someone, somewhere and at some time”.