The Building and other Construction Workers (Regulation of
Employment and conditions of Service) Act, 1996 and The Building and other
construction workers’ Welfare Cess Act, 1996 were passed by the Parliament in
the year 1996 and subsequently “the building and other construction workers’
(Regulation of employment and conditions of service) central Rules and The
Building and other construction workers welfare Cess Rules were framed.
In building and other construction works more than tens of
millions of workers are engaged, who are exposed to higher risk of life and
limb. These workers are one of the most vulnerable segments of the unorganized
labour and don’t get basic amenities and social security. These twin Acts were
enacted with an object to regulate the employment and conditions of the service
of building and other construction workers and to provide for their safety,
health and welfare measures.
The scheme of the BOCW (Regulation of Employment and conditions
of Service) Act, 1996 is that it empowers the Central Government and the State
Governments to constitute Welfare Boards to provide and monitor social security
schemes and welfare measures for the benefit of the building and other
construction workers. As per the section 1(4) the BOCW Act applies to every
establishment which employs, or had employed on any day of the preceding twelve
months, ten or more building workers in any building or construction work.
Section 2 (d) of the Act defines “the building and other construction works”.
Section 7 of the Act requires every employer in relation to an establishment to
which the BOCW Act applies to get such establishment registered. Section 10
makes this requirement mandatory and therefore, without such registration, the
employer of an establishment, to which the BOCW Act applies, cannot employ
building workers.
Chapter IV of the BOCW Act contains provisions stipulating the
registration of building workers as beneficiaries and requires certain
contributions to be made by such beneficiary at such rate per month as may be
specified by the State Government. Where the worker is unable to pay his
contribution due to any financial hardship, the Board can waive the payment of
such contribution for a period not exceeding three months at a time.
Section 18 sets out the constitution of State Welfare board.
Under the provision of the section 18 every State Govt. is required to
constitute the Welfare Board. Section 22 stipulates the provisions regarding
functions of the Building and Other Construction Workers’ Welfare Boards.
Section 24 sets out the provision for the constitution of the Welfare Fund and
its application.
Chapter VI of the BOCW Act contains provisions relating to the
safety, health and welfare of the construction workers.
The Building and other construction workers’ welfare Cess
Act’1996 was enacted with an object to provide for the levy and collection of a
Cess on the cost of construction incurred by the employers with a view to
augmenting the resources of the Building and other construction Workers’
welfare Boards constituted under the section 18 of the Building and other
construction Workers’ (Regulation of Employment and Conditions of Service)
Act’1996.
Section 3 of the BOCW Cess Act setout the provisions for levy
and collection of Cess at such rate not exceeding two percent, but not less
than one percent of the cost of the construction incurred by the Employer. Rule
4 of the Building and other construction workers’ welfare Cess Rules, 1998
makes it mandatory for deduction of Cess payable at the notified rates from the
bills paid for the building and other construction work of a Government or a
Public Sector Undertaking. Rule 5 prescribes the manner in which the proceeds
of Cess collected under Rule 4 shall be transferred by such Government office,
Public Sector Undertakings, local authority, or Cess collector, to the Board.
The powers of the Assessing Officer and the Board of Assessment are enumerated
in Rules 7 to 14 of the Cess Rules.
Although the twin Acts were enacted in 1996, but a majority of
states failed to implement the Building and Other Construction Workers
(Regulation of Employment and Condition of Service) Act, 1996, and the Building
and Other Construction Workers Welfare Cess Act, 1996 untill 2002, when
Government of NCT of Delhi constituted the Delhi Building and Other
Construction Workers Welfare Board vide Notification No. DLC/CLA/BCW/02/596
dated 2nd September, 2002. A PIL was filed by an NGO National Campaign
Committee for Central Legislation on Construction Labour’ (NCC-CL) in the
Supreme Court for implementation of the Twin Acts.
On the direction of the Supreme Court issued in the matter of
National Campaign Committee for Central Legislation on Construction Labour’
(NCC-CL) most of the states has constituted the Labour Welfare Board and
started collecting Cess @ 1% of the Construction Cost where the construction
cost is more than 10 Lacs.
The constitutional validity of the BOCW Act was also challenged
by the Builders Association in the Builders Association of India vs Union of
India, (2007) 139 DLT 578. The Division of the Delhi High court upheld that the
BOCW Act, the Cess Act, 1998 Central Rules and the 2002 Delhi Rules were
constitutionally valid.
The supreme court of India in civil appeal no. 1830 0f 2008
entitled M/S. Dewan Chand Builders Contractors versus Union of India has
also upheld the constitutional validity of the twin Acts.
Although the Supreme Court has upheld the constitutional
validity of the twin Acts but the issue regarding effective date of the Cess
Act is still unresolved. The Supreme Court in Dewan Chand Builder Case a view
has been taken that the Cess Act and the Cess Rules are operative in the whole
of NCT of Delhi w.e.f. January, 2002. But in SLP (C) 33486-33488 of 2011
Supreme Court has observed that the as per Section 1(3) of BOCW Act provides
that the Act shall be deemed to have been come into force on 1st day of
March’1996.
Although BOCW Acts came into force in 1996 but due to late implementation
of the same by states on different dates has given rise to various disputes
between principle employer and contractors regarding liability of Cess on the ground of
subsequent legislation. The contention of the Principle Employers is that the
Act came into force on 01st March, 1996 and after this date it was
duly of the Contractor to pay Cess, except otherwise agreed in contract, even the same was notified by the States on
later date. On the other side contention of the Contractors is that the reckoning
date should be from the date of Sates notified the same. The matter is still
pending in the Supreme Court.
Azeez Nazar Sabri
Email: azeezsabri@gmail.com
