Comptroller Auditor General Report 19 of 2018

                                               Comptroller Auditor General   Report 19 of 2018

            -          R.Pattabiraman

I happened to go thro the report of CAG regarding Contract Labours in Railways and Compliance to Statuary Requirements.  Unfortunately no such report for BSNL was found and it is not known also whether CAG intended to have one such audit in BSNL about the system of contract and its compliance of statuary provisions spelt in various acts. The HOC of BSNL in their meeting recorded that one lakh contract Labours are presently working in BSNL.   If  such a big  size means, the issue is very serious regarding the compliance of statuary requirements like Minimum Pages and Paying the same in the prescribed period- Taking responsibility for EPF and ESI- Keeping registers  speaking details of Contractors and labours- wage register etc.

I have given here some relevant observations from the report of CAG (of course w.r.t Railways) which may be useful to those working for the welfare of labours. These are all CAG Paras and so have some importance.

It seems that Railways do not have any such Contract Labour Payment Management Portal  a kind of  in-house developed application initiated by Minister Piyush Goyal for CIL. NLC  is  also following this type of portal management system. It is a comprehensive database of all contract workers engaged by different contractors and the system has in-built mechanism to validate minimum wages paid, generate wage slips and employment card etc. of contract workers as required under the Act. The portal provides access to all contract workers, through a Workers Identification Number (WIN), to view their personal details and payment status. Contract workers can also register their grievance through this portal.

CAG observed that Railways not used the opportunity utilizing the Unified Shram Suvidha Portal of Ministry of Labour to improve compliance of labour laws.  It is difficult to understand whether BSNL management from top to bottom has any awareness about these all.

 Paras From CAG  Report

1.1.1 What constitutes 'contract labour'

Contract labour is a term which is applied to manpower engaged by somebody else to produce a given result to the Principal Employer, where this manpower has no direct relationship of employer-employee with the Principal Employer. This includes supply of manpower to Principal Employer by a contractor, where the contractor is not involved in the specified activity. Thus, contract labour system is not restricted to outsourcing only. 'Contract labour' reflects manpower whereas 'outsourcing' reflects the job or the activity.

When the jobs and services are outsourced and are carried out in some other premises not being premises under control and management of the Principal Employer, CLRA, 1970 will not apply. All other outsourced jobs and services, which are carried out in the premises of the Principal Employer will be covered under CLRA, 1970

2.4.5 In case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the Principal Employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.

2.5 Maintenance and preservation of prescribed registers and records

a) Maintenance of records by the Principal Employers In respect of each registered establishment, Principal Employers are required to maintain a ‘Register of Contractors’ in Form XII (Appendix VI) showing name and address of the Principal Employer, name and address of the establishment, name and address of contractor, nature of work on contract, location of contract work, period of contract and maximum number of contract labour employed by contractor

b) Maintenance of records by the contractors Every contractor is also required to maintain a number of important records. This includes Muster Roll, Register of Wages, Register of Deductions, Register of Overtime, Register of Fines, Register of Advances, Wages Slips34 etc.

3.1.1Responsibility of the Principal Employer to ensure registration of the contractor before award of contract

As per the directives of Employee’s Provident Fund Organization  , before awarding any contract, the Principal Employer shall ensure that the contractor is registered with EPFO. After award of the contract the contractor details should also be entered by the Principal Employer in the EPFO portal.

3.1.3 Allotment of Provident Fund Account Number to Contract Labour Rules50 require that the employer (contractor) shall send to the organisation of EPF Commissioner within 15 days of the close of each month, a return in Form 5 of the employees qualifying to become a member of the fund for the first time during the preceding month together with the declaration in Form 2 furnished by such qualifying employees’. The Commissioner shall promptly allot a PF Account

Number to each employee qualifying to become a member and shall communicate the Account Number to the member through the employer 3.1.4 Responsibility of the Principal Employer towards payment of EPF deduction from the wages of contract labour and contribution by the contractors

Principal Employer is responsible to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges. In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (member’s contribution) and shall pay to the Principal Employer the amount of member’s contribution so deducted together with an equal amount of contribution (in employer’s contribution) and also administrative charges

About irregularity in Railways: CAG’s Observations  (sampling 463 contracts)

In all 463 contracts, notices regarding payment of wages were not sent by the contractors to the Principal Employers/nominee of the Principal Employer. No directions had been issued by Railways to the Principal Employers or their nominees for ensuring payments to contract labour and recovering the same from the contractors in case of non-payment/short payment. Railway Administration had not nominated any authorised representative to be  present at the time of disbursement of wages in all 463 contracts. Despite Railway Board’s instructions to ensure payment of wages to the contract labours through Bank/ Cheque, the same was ensured only in respect of 82 contracts. In 212 contracts, information regarding means of payment was not made available to Audit

Minimum wages were paid in compliance to the provision of MWA, 1948 in respect of 105 contracts only. Payment of minimum wages to contract labour was not ensured in respect of 129 contracts. Audit assessed a sum of ` 9.23 crore as short payment to 3310 contract labour over the contract period towards payment of minimum wages. Records were not made available in respect of 229 contracts.

Railway Administration had verified the registration of contractor with the EPFO before award of the contracts only in 20 contracts. In 431 contracts, records were not made available.

Para 3.1.1   Only in 46 contracts, PF Registration was found to be taken by the contractors.

In 321 contracts, information was not found on record. Para 3.1.2  In only 61 contracts, PF Account Numbers of contract labour were available.

In 258 contracts, relevant records were not made available to Audit In 116 contracts, contractors were not registered with concerned Regional offices of ESIC, and had not been allotted Employer’s code numbers. Records were not made available for 235 contracts

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