Which one of the following is statutory machinery functioning at the central level?

Correct — D, (d) Employee’s State Insurance Corporation. The word doing the work in this stem is ‘statutory’. All four options are bodies functioning at the central level in the field of labour, and three of them were brought into being by a decision of the Government. Only one owes its existence to an Act of Parliament.

That one is the corporation named in this option, whose correct style is the Employees’ State Insurance Corporation, with the plural possessive, taken from the Employees’ State Insurance Act, 1948 — the form the same paper prints when it names the Act itself a few questions later. Section 3(1) of that Act provides that with effect from such date as the Central Government may appoint by notification in the Official Gazette, ‘there shall be established for the administration of the scheme of Employees’ State Insurance in accordance with the provisions of this Act a Corporation to be known as the Employees’ State Insurance Corporation’. Section 3(2) makes it ‘a body corporate ... having perpetual succession and a common seal’ which may sue and be sued by that name. Section 4 fixes its composition — members nominated by the Central Government and the State Governments, and representatives of employers, of employees, of the medical profession and of Parliament — and sections 8 and 10 provide for its Standing Committee and its Medical Benefit Council. The Act was passed in 1948 and the scheme was first put into operation at Kanpur and Delhi on 24 February 1952.

The test the item is really applying is one an officer uses constantly, and it is worth stating as a rule: a body is statutory if a section of an Act creates it or provides for its constitution. Two things are commonly mistaken for that. One is being set up by the Government under a Ministry, which describes an administrative body however important it is. The other is being registered under a statute, which is what the Central Board for Workers’ Education is — registration under the Societies Registration Act, 1860 does not create a body, it records one that persons have formed for themselves.

The comparison worth carrying away is with the candidate's own organisation. The Central Board of Trustees that runs the Employees’ Provident Fund Organisation is constituted under section 5A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and the Central Provident Fund Commissioner is appointed under section 5D of that Act. Both are statutory for the same reason as the corporation in this option: a section of an Act provides for them by name.

Why the others are wrong

• (a)Central Implementation and Evaluation Committee — The Central Implementation and Evaluation Committee belongs to the tripartite machinery the Ministry of Labour has built up for consultation with employers and workers, and its concern is with how labour laws, awards and settlements are actually being implemented on the ground. Useful as that work is, the committee is constituted by a decision of the Government rather than by any Act, and it has no legal personality, no power to hold property or to sue, and no functions conferred on it by statute. Everything it produces takes the form of review and recommendation.
• (b)Central Board for Workers’ Education — The Central Board for Workers’ Education is the body that carries out workers’ education in India, and it is the clearest illustration of the distinction this question is testing. It was set up in 1958 and registered as a society under the Societies Registration Act, 1860, and it functions as an autonomous tripartite body under the Ministry of Labour and Employment, since renamed as the national board for workers’ education and development. Being registered under an Act is not the same as being created by one: the Societies Registration Act provides machinery by which persons who have formed an association may register it, and no section of it establishes this Board or any other. Contrast the language of section 3 of the Employees’ State Insurance Act — ‘there shall be established ... a Corporation’ — which does create the body it names.
• (c)Standing Labour Committee — The Standing Labour Committee is the tripartite body that settles the agenda for the Indian Labour Conference and considers matters referred to it between the Conference's sessions. Both bodies date from 1942, when the first tripartite national labour conference was held, and both are non-statutory: the Indian Labour Conference is the apex tripartite consultative committee in the Ministry of Labour and Employment, existing to advise the Government on matters concerning the working class, and neither it nor its standing committee is constituted by any Act. Their influence is real — the wage norms recommended by the Conference of 1957 are still cited in minimum wage fixation — but influence is not statutory status.

The institutions of Indian labour administration divide into two families, and the division is worth holding as a list. Statutory bodies are created by a section of an Act and have the powers that Act gives them: the Employees’ State Insurance Corporation under section 3 of the Employees’ State Insurance Act, 1948; the Central Board of Trustees under section 5A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; the adjudicating authorities under the Industrial Disputes Act, 1947 — the Labour Court under section 7, the Industrial Tribunal under section 7A and the National Tribunal under section 7B; the Board of Conciliation under section 5 and the Court of Inquiry under section 6 of the same Act; and the certifying officer and appellate authority under the Industrial Employment (Standing Orders) Act, 1946. Non-statutory bodies are created by executive decision and work by consultation and recommendation: the Indian Labour Conference and the Standing Labour Committee, both dating from 1942; the industrial tripartite committees for particular industries; the committees concerned with the implementation and evaluation of labour laws; and the Central Board for Workers’ Education, a registered society. The tripartite principle — government, employers and workers together — runs through both families, and comes from the ILO's own structure.

Key facts

• The Employees’ State Insurance Corporation is established by section 3 of the Employees’ State Insurance Act, 1948, and is a body corporate with perpetual succession and a common seal which may sue and be sued.
• The body's correct name takes the plural possessive — Employees’ State Insurance Corporation — as in the title of the Act itself.
• Section 4 of the Act fixes the Corporation's composition; sections 8 and 10 provide for its Standing Committee and Medical Benefit Council.
• The Employees’ State Insurance Act was passed in 1948 and the scheme was first implemented at Kanpur and Delhi on 24 February 1952.
• The Indian Labour Conference and the Standing Labour Committee both date from 1942 and are non-statutory tripartite bodies; the Conference is the apex tripartite consultative committee in the Ministry of Labour and Employment.
• The Central Board for Workers’ Education was set up in 1958 and registered under the Societies Registration Act, 1860; registration under an Act does not make a body statutory.
• The Central Board of Trustees of the Employees’ Provident Fund is constituted under section 5A, and the Central Provident Fund Commissioner appointed under section 5D, of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
• A body is statutory when a section of an Act creates it or provides for its constitution, not merely when it is set up under a Ministry.

Common traps

• Treating a body registered under the Societies Registration Act, 1860 as a statutory body. Registration records an association; it does not create one.
• Treating a body attached to a Ministry as statutory because it is official and permanent.
• Assuming that a body with wide influence must have statutory backing. The Indian Labour Conference has shaped minimum wage policy without any Act behind it.
• Confusing the Employees’ State Insurance Corporation with the Employees’ Provident Fund Organisation; both are statutory, but under different Acts and different sections.
• Overlooking the word 'central' in the stem, which excludes State-level machinery even where the same kind of body exists at both levels.

• practice — not a real PYQ

  The Employees’ State Insurance Corporation is established under which section of the Employees’ State Insurance Act, 1948?

  • (a)Section 1
  • (b)Section 3
  • (c)Section 4
  • (d)Section 8

  Answer(b) Section 3

• practice — not a real PYQ

  Which one of the following is a non-statutory body?

  • (a)The Employees’ State Insurance Corporation
  • (b)The Central Board of Trustees under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • (c)The Indian Labour Conference
  • (d)The Central Provident Fund Commissioner

  Answer(c) The Indian Labour Conference