RBE No. 20/2020: Contract Labour – Compliance of Statutory Requirements
No.2017/E(LL)/AT/CNR/33, dated 18.02.2020
Sub: C&AG’s Report No. 19 of 2018 on compliance to statutory requirement in engagement of contract labour by Indian Railways.
Ref: (i) Board’s letters No.2017/E(LL)/AT/Misc/Channels – CAG/2016-17, dated 07.12.2017, 30.01.2019 and the Board (MS)’s D.O. letter of same number dated 09.12.2019.
(ii) Board’s letter No.E(LL)70AT/CNR/1-3, dated 15.10.1971,
(iii) Board’s letter No.2018/E(LL)/AT/CNR/3, dated 24.01.2018.
1. Attention is drawn to the referred letter dated 07.12.2017 whereby chapter-wise comments on Audit observation on C&AG’s Report No.19 of 2018 were sought from Railways concerned. Thereafter, this report on “Compliance to statutory requirements in engagement of contract labour by Indian Railways” for the year ended March, 2017 was finalized and laid on the table in Lok Sabha & Rajya Sabha on 8th January, 2019. Full report may be downloaded from https://cag.gov.in/content/report-no19-2018-compliance-statutory-requirement-engagement-contact-labour-Indian. Afterwards, this Report was selected by Parliamentary Committee i.e. “Public Accounts Committee” (PAC) (2019-20) for examination. In this connection, PAC has already studied working of few Zonal Railways during their study visit of ER, SER, Kolkata Metro, ECoR, CR, WR, SR and SWR during year 2019-20.
2. Attention of the Railways is also drawn to the provisions and regard to nominations of “Principal Employer” as contained in Board’s letter No.E(LL)70AT/CNR/1-3, dated 15.10.1971 and also to the directions contained in Board’s letter No.2018/E(LL)/AT/CNR/3, dated 24.01.2018 and on other relevant instructions issued by Civil Engineering directorate to ensure that all the relevant statutory and other related provisions are strictly complied with.
3. However, C&AG has pointed out many violations/ irregularities/ non-compliances of statutory provisions governing contact labour. These violations etc. are summarized as Annexure-1 to this letter. It can be gleaned from the Annexure that as many as fifteen types of non-compliance etc. have been detected by C&AG auditors. Railways should go through these instructions and stripe to ensure that these are not repeated.
4. Furthermore, in order to facilitate compliance of statutory provisions by the designated Principal Employer as well as by the contractors, the following controls/ measures have been recommended by C&AG in Para 7.2 of the said Audit Report:-
(i) Preparation of estimates for labour component may be done duly taking into account the minimum wages fixed by Central/ State Government from time to time plus additional amount of contribution required to be made by the contractors towards ‘Employees’ Provident Fund’ (EPF), ‘Employee State Insurance Corporation’ (ESIC) and other related cost.
(ii) A comprehensive list of conditions towards ensuring compliance to statutory provisions relating to labour laws may be included in the tender document/ General Conditions of Contract/ Special Conditions of Contract, including penalties for non-compliance. The tender documents should include terms and conditions relating to timely payment of wages due, amenities for labour, safety of labour, etc.
(iii) Contracts may be awarded to contractors/ agencies who have been registered with the Labour Department, EPFO and ESIC etc.
(iv) Principal Employers for the various Departments of the organization may be identified and nominated. A comprehensive list of responsibilities for Principal Employer may be issued as a checklist for the Principal Employer.
(v) A mechanism may be put in place for effective monitoring by Principal Employer such as forming a dedicated cell/ team, which will be entrusted with the overall responsibility for enforcement of Labour Laws compliance in the organization. These team should be given powers to inspect work sites and records for checking complaints and also give a go-ahead before payments are made to the contactors. Detailed checklist for such inspections should also be issued.
(vi) A mandatory list of documents may be prescribed for submission by the contractor, without which the contractors’ bills should not be processed. A comprehensive checklist may also be prescribed for checking of compliances before passing of contractors’ bills.
(vii) For the contracts which are already in progress, Railway Administrations of all Zonal Railways may consider directing the Principal Employers in various contracts to examine the number of contract labour under their jurisdiction in preceding 12 months for all the contactors, determine if they are required to register themselves with the prescribed authorities under the Act and get themselves registered with the prescribed authorities, where required.
(viii) In works, where the applicability of CLRA, 1970 on the contractor is established, the contractor may be directed to apply for licence from the Labour Commissioner. If he fails to do so, Labour Commissioner may be informed, so as to take necessary action against the contractor.
(ix) Joint Procedure Order should be issued by Zonal Railways, clearly indicating obligation of Principal Employers, functions of the designated nominee of Principal Employer, function of paying authorities and the functions relating to filing of relevant returns with the prescribed authorities.
(x) In all ongoing contracts, the short payments, short deductions and short contribution may be identified, verified and amounts short-paid/ not-paid may be paid to the concerned contract Labour by the Railway administration as per the provisions of Acts. The amounts so paid should be recovered from the contractors, where applicable.
(xi) Railways may encourage the contractors to follow provisions of the EPF & MP Act, 1952 and EPFS, 1952 and effectively avail of the incentives under the newly introduced ‘Pradhanmantri Rojgar Protsahan Yojana’ to promote recruitment of unemployed persons and bring into books the informal employees.
(xii) Railways may consider putting in place an effective control mechanism through Internal Audit and/or inter-disciplinary team to monitor compliance of statutory requirements. Measures may also be taken for creating awareness amongst various levels of Railway Officers on the issue.
5. The Railway administrations/ PUs Should take note of all the aforementioned recommendations for strict compliance.
6. Recommendation at Para 4(iii) above shall be enforced only in such cases where such registration is required as per prevailing law.
7. In this regard, Civil Engineering Directorate has also issued following important supplementary instructions. These too should be strictly implemented so as to avoid violation of applicable labour laws,
(i) Board’s letter No.2012/CE-I/CT/O/22, dated 14.12.2012,
(ii) Board’s letter No.2018/CE-I/CT/4, dated 17.10.2018 (Shramik Kalyan Portal),
(iii) Board’s letter No.2017/CE-I/CT/8/GCC/Committee, dated 05.11.2018,
(iv) Board’s letter No.2018/CE-I/CT/37/GCC/Policy, dated 06.09.2019 (General Conditions of Contract).
8. This issues with the approval of Board.
9. Please acknowledge receipt.
Annexure
Annexure to Board’s letter No.2017/E(LL)/AT/CNR/33, dated 18.02.2020 regarding selection of subjects for examination by Parliament’s “Public Accounts Committee” (PAC) (2019-20) during the current year:
Instances of inadequate compliance as well as non-compliance to statutory provisions governing contract Labour out of 463 contacts over Nine Zonal Railways/ PUs noticed by C&AG office.
|
(I) |
Number of contractor showing compliance/ non-compliance to the provisions of CLRA, 1970 and CLRR, 1971 regarding registration of Principal Employer (PEs), submission of required returns to Labour office and provisions of amenities at work place by the contractors; |
|
|
(i) |
PEs NOT registered itself with the labour department |
323 |
|
(ii) |
PEs NOT submitted return to the labour department |
380 (Records not made available to Audit: 71) |
|
(iii) |
Contractors submitted returns to the Labour Department |
285 (Records not made available to Audit: 177) |
|
(iv) |
Provision of rest room NOT available |
7 |
|
(v) |
Provision of basic amenities i.e. drinking water, urinals, etc. |
Records not made available to Audit: 100 |
|
(II) |
Statement showing position of contracts having requisite Licence of Labour office before commencement of contract; |
|
|
(i) |
Number of contracts where licence was NOT obtained by the contractor |
172 |
|
(ii) |
Number of contracts where records NOT made available to Audit |
207 |
|
(III) |
Details of payments made to the workmen in selected contacts; |
|
|
(i) |
Number of contracts where payment was NOT made in the presence of Railway representatives |
111 (Records not made available to Audit: 212) |
|
(ii) |
Notices regarding payment of wages sent by contractor to PE NOT available on record |
463 |
|
(iii) |
Directive/ procedure for ensuring due payment to workmen and communication to PE in case of short payment with consequential recoveries from contractor not found |
463 |
|
(iv) |
Nomination of authorized representative to be present at the time of disbursement of wages not seen |
463 |
|
(IV) |
Details of payment of wages to labour; |
|
|
(i) |
Number of contracts where payment of wages made in cash |
169 (Records were not made available to Audit: 212) |
|
(V) |
Details of notice displayed by the contractor; |
|
|
(i) |
Number of contracts where notices were not displayed |
225 (Records were not made available to Audit: 99) |
|
(VI) |
Statement showing position of maintenance of attendance/ wages registers by contractor; |
|
|
(i) |
Number of contracts where muster roll/ attendance registers were NOT maintained |
112 (Records were not made available to Audit NOT available: 187) |
|
(ii) |
Number of contracts where wages register were NOT maintained |
156 (Records were not made available to Audit Not available: 185) |
|
(iii) |
Number of contracts where register of deduction were NOT maintained |
262 (Records were not made available to Audit: 198) |
|
(iv) |
Number of contracts where register of overtime was NOT maintained |
261 (Records were not made available to Audit: 198) |
|
(v) |
Number of contacts where register of fine was NOT maintained |
263 (Records were not made available to Audit: 198) |
|
(vi) |
Number of contracts where register of advances were NOT maintained |
263 (Records were not made available to Audit: 1988) |
|
(vii) |
Number of contracts where wages slip was NOT maintained |
246 (Records were not made available to Audit: 199) |
|
(VII) |
Compliance of Minimum Wages Act, 1948 by the contractors; |
|
|
(i) |
Number of contracts where minimum wages NOT paid i.e. short paid |
129 (Records were not made available to Audit: 229) |
|
(VIII) |
Details of short payment of weekly rest to labour by the contactors; |
|
|
(i) |
Number of contacts where short payment of weekly rest noticed |
62 |
|
(ii) |
Number of contacts where short payment towards weekly rest remained unascertained |
42 (Records were not made available to Audit: 239) |
|
(IX) |
Details of payment of overtime for working on rest day (i.e. double payment working on rest day); |
|
|
(i) |
Number of contacts where neither rest day provided nor double payment for working on rest day made by contractor |
49 |
|
(ii) |
Number of contacts where records relating to working on rest day were not made available to audit |
268 |
|
(IX) |
Details of short payment to contract labour for working more than nine hours in a day; |
|
|
(i) |
Number of contacts where overtime for working more than nine hours on any day @ double the normal rate was not provided |
30 |
|
(ii) |
Number of contacts where overtime for working of more than nine hours on any day @ double the normal rate, record was not made available to audit |
240 |
|
(IX) |
Statement showing the position of contract where PF code obtained; |
|
|
(i) |
Number of contracts where records regarding availability of PF code not made available to Audit by Railway Administration |
431 |
|
(ii) |
Responsibility of contractors |
1. PF records were not found on record: 96 2. Records were not made available to Audit: 321 |
|
(X) |
Statement showing Deduction/ Non-deduction/ Short deduction of Employees Provident Fund; |
|
|
(i) |
Contracts where short PF deduction made |
22 |
|
(ii) |
Contracts where no PF deduction made |
103 |
|
(XI) |
Details of contribution/ short contribution/ non contribution to Employees Provident Fund; |
|
|
(i) |
Number of contracts where PF contribution was short |
24 |
|
(ii) |
Number of contract where no PF contribution was made |
104 |
|
(iii) |
Number of contracts where records were not made available to audit |
306 |
|
(XII) |
Details of deduction of contribution to ESI from employees; |
|
|
(i) |
Number of contracts where there was a short deduction of ESI contribution from the employee |
12 |
|
(ii) |
Number of contract where no deduction of ESI contribution was made from the employee |
104 |
|
(iii) |
Number of contracts for which no records were made available to audit |
302 |
|
(XIII) |
Statement showing the position of contracts where contribution of employer to ESI made; |
|
|
(i) |
Number of contracts where employer’s contribution was made short |
10 |
|
(ii) |
Number of contract where employer’s contribution were NOT made at all |
88 |
|
(iii) |
Number of contracts for which no records were made available to audit |
335 |
|
(XIV) |
Contract where number of labour to be engaged work estimated; |
|
|
(i) |
Number of contracts where the number of labour to be engaged NOT estimated |
140 |
|
(ii) |
Number of contracts where records NOT made available to audit |
133 |
|
(XV) |
Statement showing estimation of labour and material separately; |
|
|
(i) |
Number of contracts where records relating to number of labour to be engaged considered in estimate NOT made available to Audit |
133 |
|
(ii) |
Number of contracts where estimate of labour and material with other components found short |
71 |
Download Railway Board Circular RBE No. 20/2020
Forward reference ⇒ RBE No.