Claiming The Benefit Under ESI And BOCW Act For The Same Cause

Dear Sir,

Construction workers are now covered under the provisions of the ESI Act. They are also covered under the BOCW Act and are paying contributions under both Acts. Can they or their nominee claim benefits under both Acts for the same cause?

Dear Mr. Korgaonkar,

As suggested, I have gone through your posting. A very interesting and valuable discussion between Mr. Harsha Kumar and yourself. The Construction Industry has every ingredient to be fully considered under the Factories Act. In fact, Authorities under the Inspector of Factories are empowered with certain sections, more particularly safety, under the BOCW Act.

Coming to my main query, I could not find the answer in the said posting as my query is whether he can avail the benefits under two acts for the same cause. The reason for my query is that the covered worker is contributing in both Acts.

Dear N. Mohan ji,

The answer to your query is provided in the quote below from the provided link:

A construction worker will be contributing to two different schemes under two different enactments with varying objectives and benefits under different conditions. Therefore, the construction worker can avail the benefits under both schemes.

ESIC is related to medical facilities and reimbursement of medical costs for workers. A secondary facility is insurance, typically of a small amount, and payment for sick leave for workers. The BOCW act has no connection with medical insurance. So, where do you see the overlap or dual claim?

Dear Mr. Saswata Banerjee,

I am talking about cash benefits and not direct medical benefits because under both acts, there is a provision for financial assistance towards hospitalization, disablement, dependents, funeral expenses, maternity, etc. My query is whether the insured/registered worker can avail the cash benefits under both acts for the same cause.

1. Sir, by virtue of provisions contained under Sections 53 and 61 of the ESI Act, 1948, the construction workers who are covered or coverable under the said Act will not be entitled to receive similar benefits under the BOCW Act, 1996.

2. However, there is no decision regarding the payment of cess under the BOCW Act by the Builder/Employer in cases where the ESI Act is made applicable. The Builder/employer of so-called construction sites will be required, in the present situation, to pay cess under the BOCW Act (perhaps it is around 1% of the total cost of construction) as well as to pay the employers' share of contribution at 4.75% of the wages of coverable employees under the ESI Act. The reaction of Builders' Associations/Organisations is to be observed.

3. In addition, the Building Workers are also required to contribute to the Welfare Board established under the BOCW Act some contribution (Section 16). Under the ESI Act, 1948, the said building worker is required to contribute 1.75% of their wages as a contribution. It is doubtful whether the trade unions will accept such a situation. It appears to me that the decision of ESIC via their said circular dated 31/7/2015 to cover workers in construction sites is premature and has been taken without considering the provisions of the BOCW Act, 1996.

Dear Harsh Kumar ji,
I respect your views. But my views are different than you.
There are no similar benefits under both the enactments. Both the enactments are having different objective, which I said earlier also. I have also said earlier that there was no exclusion of construction site from ESIS but due to peculiar nature of employment and work place, enforcement of ESIS to construction workers was not possible up till now.
I do not feel that any trade union will oppose ESI Scheme to construction workers. On the contrary, in last week only, Tamil Nadu All India Trade Union Congress Construction and Unorganized Workers’ Union staged a demonstration in Vellure for implementation of ESI and PF schemes for the construction workers.
Another point is to be noted that construction is unorganized sector and hardly any union is active in this sector. Therefore there is no chance to oppose the ESI Scheme.

Dear Korgaonkar ji,

Thank you for sharing your insights. I believe that your perspective and experience are extensive, thorough, and practical. However, let us consider the potential reactions of the employers or employees affected by this situation.

Dear Harsh Kumar ji,

I am pleased to read your kind words about me, but I don't feel the same way. I am a learner.

I am not saying that there will not be a reaction from the affected employers and employees, but what can they do? This is the law.

When PF was made applicable even for just one day in 1990 or upon the lifting of the stay by the HC Mumbai Nagpur Bench in February 2006, both construction employers and employees were reluctant to adapt to the change. Even today, they remain largely resistant. Therefore, the fact is that the Act is not followed in many places, and if it is followed, it is to a minimum extent. There is significant manipulation in records to minimize social security costs.

I have observed many employers who are unaware of the law, yet everything runs smoothly for them.

The same scenario will likely occur here as well—more manipulation, more arrangements. However, ESI is somewhat stricter than PF, and everyone must remember that the construction industry is accident-prone. (That is why ESIS was excluded until now by the Corporation.)

Thank you for inviting me to share all these thoughts. Writing this has brought more clarity to my mind. It serves as a rehearsal for me before engaging in discussions starting tomorrow.

"Same thing will happen here, too." It is said rightly. Someone should find out answers to the following questions through RTI:

1. How many IODs were issued during the past three years?
2. What is the cost of projects for which IODs were issued during the past three years?
3. How many RCs were issued in the name of PE or owners under the BOCW Act during the past three years?
4. How many RCs were issued in the name of PE or owners under the CLRA Act during the past three years?
5. How many PEs or owners have paid Cess under the BOCW Act and what amount during the past three years?
6. How many Contract Labors are enlisted in total RCs issued during the past three years?
7. How many Construction Workers are enlisted in total RCs under the BOCW Act issued during the past three years?
8. How many Beneficiaries are registered under the BOCW Act during the past three years?
9. How many Construction Workers are enrolled under PF?

You will be surprised upon receipt of the details. You will come to know what is going on in the construction industry.