Civil CONSTRUCTIONS ACTS:

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.
 
WELFARE BOARDS:
 
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.
 
WELFARE FUND:
 
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.
 
PENALTIES:
 
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: ramanamurty9967@yahoo.co.in