Beedi and Cigar Workers

Some words this chapter uses

Industrial premises, section 2(1)(zc), is any place or premises, not being a private dwelling house, including its precincts, in which any industry, trade, business, occupation or manufacturing is ordinarily carried on, with or without the aid of power, and includes a godown attached to it.

Beedi is a small hand rolled smoke made by wrapping tobacco in a leaf and tying it with thread. Wetting and cutting of leaves are the preparatory operations section 76 deals with.

Benami means held in the name of one person for the real benefit of another.

Bona fide means genuinely, in good faith.

Deemed to continue describes a licence which the statute treats as still valid while a renewal application is pending.

Private dwelling house, for section 77, means a house in which persons engaged in the manufacture of beedi or cigar or both reside, and family for that section does not include a child as defined in the Child and Adolescent Labour (Prohibition and Regulation) Act 1986.

Section 74: the licence for the premises

Section 74(1), the prohibition. Save as otherwise provided in this Part, no employer shall use or allow to use any place or premises as an industrial premises unless he holds a valid licence issued under section 119 for the purposes of this Part, and no such premises shall be used except in accordance with the terms and conditions of such licence.

Section 74(2), the application. The person who intends to use or allow the use of such premises applies to the authority under section 119(1), in the form and on payment of the fees the State Government prescribes.

Section 74(3), what accompanies it. The application shall specify the maximum number of employees proposed to be employed at any time of the day, and shall be accompanied by a plan of the place or premises prepared as the State Government prescribes.

Section 74(4), the five matters. This is the sub-section to learn. In deciding whether to grant or refuse a licence, the authority shall have regard to:

• (a) the suitability of the place or premises proposed to be used for the manufacture of beedi or cigar or both;
• (b) the previous experience of the applicant, or whether he has employed an experienced person or entered into an agreement with an experienced person for employment for the period of the licence;
• (c) the financial resources of the applicant, including his financial capacity to meet the demands arising out of the laws relating to welfare of labour;
• (d) whether the application is made bona fide on behalf of the applicant himself or in benami of any other person;
• (e) the welfare of the labour in the locality, the interest of the public generally, and such other matters as the State Government prescribes.

Clauses (c) and (d) are the ones to comment on. Clause (c) allows the authority to refuse a licence to an applicant who cannot afford to comply with labour welfare law, which is an unusual and sensible power in a trade whose employers are often undercapitalised. Clause (d) attacks the standard evasion of this industry, in which the real proprietor operates behind a nominee so that the licence, and the liability, sit on somebody with nothing to lose.

Section 74(5), validity. A licence is valid for five years and may be renewed.

Section 74(6), renewal. The application must be made at least thirty days before expiry, on payment of the prescribed fee, and where it has been made the licence is deemed to continue notwithstanding the expiry of its period, until renewal or rejection.

First proviso. The authority shall not grant or renew a licence unless satisfied that the provisions of this Part and the rules have been complied with.

Second proviso. The authority shall renew or refuse within the period prescribed by the State Government, and in deciding shall have regard to the matters in sub-section (4).

The deeming in sub-section (6) is a practical protection: a licence holder who applies in time does not become an offender because the office is slow. But it works only if he applied thirty days before expiry.

Section 74(7), cancellation and suspension. The authority may, after giving the holder an opportunity of being heard, cancel or suspend a licence if it appears that it was obtained by misrepresentation or fraud, or that there has been a contravention of or failure to comply with any provision of this Part or the rules, or any term or condition of the licence.

Section 74(8), directions. The State Government may issue written directions of a general character to the authority in respect of any matter relating to the grant or renewal of these licences.

Section 74(9), terms and reasons. The authority may grant or renew on such terms and conditions as it may determine; and where it refuses, it shall do so by an order communicated to the applicant, giving the reasons in writing.

Sub-section (9) matters. A licensing power exercised on grounds as broad as those in sub-section (4) would be unreviewable without reasons, and the Code requires them in writing.

Section 75: appeal

Any person aggrieved by the decision of the section 119(1) authority refusing to grant or renew a licence, or cancelling or suspending a licence, relating to this Part may, within such time and on payment of such fees as may be prescribed, appeal to the appellate authority referred to in section 119(6), and that authority may by order confirm, modify or reverse the order.

Compare section 52, the appeal in the contract labour Part. There the period is thirty days from communication, stated in the Code, extendable for sufficient cause. Here the period is prescribed, not stated, and no provision is made for condoning delay. The remedies, however, are stated more fully: confirm, modify or reverse.

Section 76: work outside the premises

Section 76(1), the permission. The State Government may permit the wetting or cutting of beedi or tobacco leaves by employees outside the industrial premises, on an application made to it by the employer on behalf of such employees, subject to prescribed conditions.

Section 76(2), the record. The employer shall maintain the record of the work so permitted in the prescribed form.

Section 76(3), the prohibition. Save as otherwise provided in this section, no employer shall require or allow any manufacturing process connected with the making of beedi or cigar or both to be carried on outside the industrial premises.

The proviso, and it is the largest hole in the Part. Nothing in sub-section (3) shall apply to any worker who is given raw material by an employer or a contractor to make beedi or cigar or both at home.

Read the three sub-sections together and the shape of the Part becomes clear, and so does its weakness.

The rule is that beedi is made in licensed premises. The narrow exception in sub-section (1) allows two named preparatory operations, wetting and cutting, to be done outside, but only with the State Government's permission, on the employer's application, subject to conditions, and with a record. The wide exception in the proviso to sub-section (3) allows the whole manufacture to be done at home by a worker given raw material by an employer or a contractor.

The wide exception is how most beedi is actually made. So the licensing scheme governs the premises of a trade whose characteristic form of production it expressly exempts. An answer that notices this is answering the real question about Part V.

Note also that the home worker in the proviso is not left with nothing. He is given raw material by an employer or a contractor, so he is an employee or contract labour of somebody, and the general Chapters of the Code and the Code on Social Security apply to him as they do to anyone else. What he escapes is this Part's requirement that the work be done in licensed premises.

Section 77: the self employed family in a private dwelling house

Nothing contained in this Part shall apply to the owner or occupier of a private dwelling house, not being an employee of an employer to whom this Part applies, who carries on any manufacturing process in such private dwelling house with the assistance of the members of his family living with him in such dwelling house and dependent on him.

Take the conditions one by one, because the exemption is narrower than it looks.

He must be the owner or occupier of a private dwelling house.

He must not be an employee of an employer to whom this Part applies. So the man who rolls beedi at home for a licensed manufacturer is outside section 77; his position is governed by the proviso to section 76(3).

The assistance must be from members of his family who both live with him in that house and are dependent on him. Assistance from a hired hand takes him outside the section, and so does assistance from a relative who lives elsewhere.

The Explanation supplies two definitions, and the first is the important one. Family does not include a child, as defined in the Child and Adolescent Labour (Prohibition and Regulation) Act 1986. So the exemption for a family enterprise does not permit the household's children to be put to work in it. Private dwelling house means a house in which persons engaged in the manufacture of beedi or cigar reside.

A worked example

Lata proposes to open a beedi works in a rented shed in a small town, employing about forty women.

May she start? No. Under section 74(1) no employer shall use or allow to use any place as industrial premises without a valid licence issued under section 119 for the purposes of this Part, and the premises may be used only in accordance with its terms and conditions.

What must her application contain? It goes to the section 119(1) authority in the form and on the fees prescribed by the State Government, must specify the maximum number of employees proposed to be employed at any time of the day, and must be accompanied by a plan of the premises: section 74(2) and (3).

On what may the authority refuse? The five matters in section 74(4): the suitability of the premises; her previous experience or the employment of, or an agreement with, an experienced person for the period of the licence; her financial resources including her capacity to meet labour welfare demands; whether the application is bona fide or benami; and the welfare of labour in the locality and the interest of the public generally.

It refuses. It must do so by an order communicated to her, giving the reasons in writing: section 74(9). She may appeal under section 75 to the appellate authority under section 119(6), within the prescribed time and on the prescribed fee, and that authority may confirm, modify or reverse.

She is granted a licence. How long does it last? Five years, renewable: section 74(5). She must apply for renewal at least thirty days before expiry, and if she does the licence is deemed to continue until renewal or rejection: section 74(6).

The authority later finds she declared a smaller number of employees than she employs. It may, after giving her an opportunity of being heard, cancel or suspend the licence for misrepresentation or fraud, or for contravention of the Part, the rules or the terms of the licence: section 74(7).

The shed is small and she wants the leaves wetted and cut in the yard of a nearby house. That requires the State Government's permission under section 76(1), on her application made on behalf of the employees, subject to prescribed conditions, and she must maintain a record of the work so permitted: section 76(2).

She wants the rolling itself done in the workers' homes. Section 76(3) forbids any manufacturing process connected with the making of beedi to be carried on outside the industrial premises, but the proviso excepts a worker who is given raw material by an employer or a contractor to make beedi at home. So a home worker supplied with raw material is outside the prohibition.

Her neighbour rolls beedi in his own house with his wife and his adult son, who both live with him and depend on him, and sells the product himself. Section 77 takes him outside this Part entirely: he is the owner or occupier of a private dwelling house, not an employee of an employer to whom this Part applies, and the assistance is from members of his family living with him and dependent on him.

He also uses his twelve year old daughter. The exemption does not cover it. The Explanation provides that family does not include a child as defined in the Child and Adolescent Labour (Prohibition and Regulation) Act 1986.

He hires a neighbour's son to help for wages. Then the assistance is not from a member of his family, and section 77 does not apply to him.

What this does NOT mean

The licence is not personal. It authorises the use of a place or premises, and the premises may be used only in accordance with its terms.

A private dwelling house is never industrial premises. Section 2(1)(zc) excludes it in terms.

The authority is not confined to the fitness of the building. It weighs experience, finances, whether the application is benami, and the welfare of labour in the locality.

A licence does not lapse merely because it has expired. If a renewal application was made at least thirty days before expiry, the licence is deemed to continue until renewal or rejection.

Cancellation is not summary. The holder must be given an opportunity of being heard.

Refusal is not unreasoned. Section 74(9) requires an order communicated to the applicant with reasons in writing.

Section 76(3) does not stop home based beedi rolling. The proviso expressly excepts a worker given raw material by an employer or a contractor to make beedi or cigar at home.

Section 77 does not exempt every home workshop. The person must be the owner or occupier, not an employee of a covered employer, and helped only by family members living with him and dependent on him, excluding children.

Limits and criticism

The Part licenses the premises and exempts the production. Section 74 builds an elaborate licensing scheme for industrial premises, and the proviso to section 76(3) leaves home based rolling, which is how the great majority of beedi is made, outside it. The women who most need the Part are the ones it reaches least.

Nothing in Part V regulates the home worker's conditions. There is no rate, no limit on hours, no requirement of a card or a record of what she was given and what she was paid, and no duty on the employer or contractor who supplies the raw material beyond the general provisions of the Code.

The appeal in section 75 has no stated period and no power to condone delay, unlike section 52 in the contract labour Part, which states thirty days from communication and allows a late appeal for sufficient cause.

The grounds in section 74(4) are wide and partly subjective. The welfare of the labour in the locality and the interest of the public generally could support almost any refusal, which is why the requirement of written reasons in sub-section (9) is doing a great deal of work.

Section 74(8) allows the State Government to give general directions to the licensing authority, which is a real qualification on the authority's independence in exercising a quasi judicial power.

Section 77 turns on dependence and residence, both of which are questions of fact in households where they are rarely documented, and the burden of proving them will in practice fall on whoever asserts the Part applies.

Quick revision

• Section 74(1): no employer shall use or allow to use any place as industrial premises without a valid licence under section 119, and the premises shall be used only in accordance with its terms and conditions.
• Section 74(2) and (3): application to the section 119(1) authority, in the form and on the fees prescribed by the State Government, specifying the maximum number of employees at any time of the day, with a plan.
• Section 74(4), five matters: suitability of the premises; previous experience or an experienced person employed or agreed with; financial resources including capacity to meet labour welfare demands; whether bona fide or benami; welfare of labour in the locality and the public interest.
• Section 74(5) and (6): valid five years; renewal applied for at least thirty days before expiry, and the licence then deemed to continue until renewal or rejection. No grant or renewal unless the Part and rules have been complied with; renewal decided within the prescribed period, having regard to sub-section (4).
• Section 74(7): cancel or suspend after an opportunity of being heard, for misrepresentation or fraud or contravention of the Part, the rules or the licence.
• Section 74(8) and (9): the State Government may give general written directions; a refusal must be communicated with reasons in writing.
• Section 75: appeal to the section 119(6) appellate authority, within the prescribed time and fee; it may confirm, modify or reverse.
• Section 76: the State Government may permit wetting or cutting of beedi or tobacco leaves outside the premises on the employer's application, with a record kept; otherwise no manufacturing process outside the premises, except a worker given raw material by an employer or contractor to make beedi or cigar at home.
• Section 77: the Part does not apply to the owner or occupier of a private dwelling house, not being an employee of a covered employer, working with family members living with him and dependent on him; family excludes a child under the Child and Adolescent Labour (Prohibition and Regulation) Act 1986.

Test yourself

1. What does section 74(1) prohibit, and what does the licence attach to? It prohibits an employer from using, or allowing the use of, any place or premises as industrial premises unless he holds a valid licence issued under section 119 for the purposes of the Part, and requires the premises to be used only in accordance with the licence's terms and conditions. The licence attaches to the premises, not to the person.

2. State the five matters in section 74(4). The suitability of the premises for the manufacture of beedi or cigar; the previous experience of the applicant, or his employment of or agreement with an experienced person for the period of the licence; his financial resources, including his capacity to meet demands arising out of labour welfare laws; whether the application is made bona fide on his own behalf or benami for another; and the welfare of labour in the locality, the public interest, and such other matters as the State Government prescribes.

3. A licence expires while a renewal application is pending. What is the position? If the renewal application was made at least thirty days before expiry, the licence is deemed to continue notwithstanding the expiry of its period, until the licence is renewed or the application is rejected: section 74(6).

4. On what grounds and by what procedure may a licence be cancelled? On the ground that it was obtained by misrepresentation or fraud, or that there has been a contravention of or failure to comply with the Part, the rules, or the terms and conditions of the licence; and only after giving the holder an opportunity of being heard: section 74(7).

5. When may work connected with beedi making be done outside the industrial premises? Where the State Government permits the wetting or cutting of beedi or tobacco leaves outside the premises on the employer's application on behalf of the employees, subject to prescribed conditions and a record under section 76(1) and (2); and, under the proviso to section 76(3), where a worker is given raw material by an employer or a contractor to make beedi or cigar at home.

6. Who is exempted by section 77, and what does the Explanation add? The owner or occupier of a private dwelling house, who is not an employee of an employer to whom the Part applies, and who carries on the manufacturing process there with the assistance of members of his family living with him in that house and dependent on him. The Explanation provides that family does not include a child as defined in the Child and Adolescent Labour (Prohibition and Regulation) Act 1986, and that a private dwelling house means a house in which persons engaged in the manufacture of beedi or cigar reside.

7. What is the central criticism of Part V? That it licenses the premises but exempts the production. Section 74 regulates the place in which beedi is made, and the proviso to section 76(3) leaves home based rolling, the form in which most beedi is actually made, outside the requirement to work in licensed premises. Nothing in the Part fixes the home worker's rate, hours or record.