IIM Ahmedabad And Firm That Built Modi’s Office In Gujarat Accused Of Not Paying Minimum Wages To Workers

Akshay Deshmane
Indian Institute of Management-Ahmedabad (Photo: Official website)

NEW DELHI—The Indian Institute of Management-Ahmedabad (IIM-A) and PSP Projects Limited, an influential construction firm in Gujarat which built then Chief Minister Narendra Modi’s office in Gandhinagar and also did the interiors for Bharatiya Janata Party’s sprawling new national headquarters in New Delhi, have been accused of not paying minimum wages, withholding wages during the lockdown, and denying benefits, to workers who were hired to build the IIM-A’s new campus in Ahmedabad.

The contract to build the campus, according to exchange filings submitted by PSP Projects Ltd. in February 2019, is worth Rs 333 crore. The contract ticket size, according to a PSP Projects Ltd. presentation from November 2019 reviewed by HuffPost India, has been subsequently revised to Rs 328 crore.

Ahmedabad based advocate Anandvardhan Yagnik has claimed that about 500 migrant workers engaged by PSP Projects Ltd. for the IIM-A project were neither paid minimum wages for work they did prior to India’s nation-wide lockdown, nor were the workers given allowances to go back home. He demanded that these payments be made immediately. 

Yagnik, who is representing the workers, made his accusations through a legal notice on May 19—a day after after a violent clash between workers and policemen near the IIM-A campus. Police officers accused migrant workers of violently demanding a way back to their home states; Yagnik blamed IIM-A and PSP Projects Limited for not paying workers their legally mandated travel allowance to return home, and also the Gujarat and central governments for their failure to make the necessary arrangements for travel.

The workers were also not paid anytime during the past two months of lockdown period when, though construction work stopped, they ought to have been paid as per the directives of the union government, Yagnik said in his legal notice sent to the IIM-A Director, the Chief Secretary of the Gujarat government, as well as three other functionaries of the state administration which included the police chief. He reiterated this point in an addendum to the notice sent on May 20 with additional claims as well.  

Collage of brand logos of the IIM-A (in blue) and PSP Projects Ltd (in red and black). The contractor for building the new IIM-A building is PSP Projects Limited and IIM-A is the principal employer. Both bear responsibility for the plight of the workers, the notice sent by advocate Anandvardhan Yagnik says. (Photo: HuffPost India )

“The migrant workers from Jharkhand and West Bengal working at IIM- A campus are not paid minimum wages by the contractor for the work they have already rendered and considerable amount is due,” said the notice, sent by Yagnik on May 19.

The contractor is PSP Projects Limited and IIM-A is the principal employer; both bear responsibility for the plight of the workers, the notice says.

On its part, the IIM-A refuted some of Yagnik’s allegations while responding to HuffPost India’s questions about them; though it conceded that there were delays in making arrangements for the workers’ journey back to their home states. A response from PSP Projects Limited and state government is still awaited. 

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WORKERS’ RIGHTS DURING RECESSION CAUSED BY PANDEMIC

Yagnik’s notice comes at a fraught moment as companies and workers brace for a long, deep recession prompted by the global coronavirus pandemic. Several state governments, including Gujarat, have responded to the crisis by stripping away labour protection laws under the guise of encouraging investment, even as millions of workers have been pushed to the brink of destitution.

While some commentators have described these pro-business decisions as much-needed “labour reform”, Yagnik’s legal notice reveals how labour laws — even when poorly implemented — offer a degree of protection to some of the country’s most vulnerable citizens.

In the case of IIM-A and PSP Projects Ltd, Yagnik the lawyer said workers were not provided wages and benefits inline with the relevant labour laws.

“Wages and accompanied benefits for work rendered by the workmen are not paid in accordance with Section 13 of the Inter-State Migrant Workmen Act, 1979 and this also reflects violation of Article 23 of the Constitution of India as discussed by the Hon’ble Apex court in “PUDR and Ors. Vs. Union of India and Ors” reported in (1982) 3 SCC 235,” Yagnik’s notice says.

The Narendra Modi government introduced the occupational safety, health and working conditions code, 2019 in July 2019 in the Lok Sabha. This bill proposes to subsume and replace 12 labour laws relating to safety, health and working conditions of workers. One of the laws it proposes to replace is the Inter-State Migrant Workmen Act of 1979, a move which has been criticised by the trade unions. 

Following much criticism, the government sent the controversial bill to the parliamentary standing committee on labour for closer scrutiny last year. The committee submitted its report in February 2020. But before the committee’s report could be taken up for consideration in parliament, the Gujarat state government issued an ordinance exempting firms from the necessity to comply with almost all labour laws in the state except four. The inter-state migrant workmen act is not one of the four. Gujarat’s decision, as stated earlier, is part of similar decisions taken by several states.This attracted the ire of many trade unions including the Rashtriya Swayamsevak Sangh-backed Bharatiya Mazdoor Sangh which strongly criticised the move. 

The trade unions back the Inter-State Migrant Workmen Act of 1979 as it has strong guarantees for migrant workers. These guarantees are at the heart of the Ahmedabad lawyer’s legal notice to the IIM-A and other state government functionaries.

Yagnik’s notice claims that “wages and accompanied benefits” were not given to the migrant workers according to Section 13 of the Inter-State Migrant Workmen Act 1979.

Section 13 provides a legal guarantee for how much a worker must be paid as well as what his or her other conditions of service must be. This section specifically says ‘inter-state workmen’ shall not be paid wages less than those fixed under the Minimum Wages Act, 1948 and the mode of payment should be cash. 

Yagnik’s notice said the workers from West Bengal and Jharkhand were paid less than the mandated minimum wages, and no other eligible benefits are provided to them, so this is “forced labour” which “not only violates the Minimum Wages Act but also violates the Inter-State Migrant Workmen Act, 1979 and hence the same is unconstitutional, being violative of Articles 14, 19, 21 and 23 of the Constitution of India.”

The lawyer’s notice also quoted two other sections from the same law. Citing section 14 and section 15 of the Inter-State Migrant Workmen Act 1979, which describe the displacement allowance and journey allowance to be given to the workers, the notice stated, “These sections impose statutory obligation and liability upon contractor first and then upon principal employer to bear repatriation, displacement and journey allowance and send back the migrant workers to their parent state of Jharkhand and West Bengal.” 

However, the notice claimed, both the IIM-A and the PSP Projects Limited were interested in ensuring that the workers do not leave. 

“IIM-A and contractor want migrant workers not to go back to their parent states and so that as soon as the restrictions are eased out they can commence with the construction work again so as to meet with their project completion deadline/s, which is also in violation of fundamental rights of these migrant workers protected under Articles 19, 21 and 23 of the Constitution of India,” the notice claimed. 

It also accused the BJP-led Gujarat government of being “not interested in repatriating these groups of migrant workers”.

Yagnik, who is representing the workers, further claimed in the notice that most of them have not been given passbooks having all their details, as mandated in the 1979 law about migrant workers.

 “It appears that section 8, certain sections of chapter 3 besides section 23 of the Act of 1979 are flagrantly violated as not a single workman is provided with a passbook and if they are, then these passbooks are not with them,” the notice says and goes on to blame both the IIM-A and PSP Projects Limited for allegedly failing to adhere to the law.

The contractor has absolutely failed in performing his duties as enumerated in Section 12 of the Act of 1979 and the principal employer, despite being the most distinguished and a premier institute of management of the country and world at large, is least bothered about implementation of labour legislations and performance of its obligations as principal employer. It is absolutely shameful. Advocate Anandvardhan Yagnik in legal notice dated May 19

“The contractor has absolutely failed in performing his duties as enumerated in Section 12 of the Act of 1979 and the principal employer, despite being the most distinguished and a premier institute of management of the country and world at large, is least bothered about implementation of labour legislations and performance of its obligations as principal employer. It is absolutely shameful,” the notice asserts.

The section 12 of this law cited above describes the duties of contractors. One of these duties is to issue passbooks to the workers with affixed passport size photographs on each one of them. They are expected to have the following details: the name and place of the establishment where the workman is employed; the period of employment; the proposed rates and modes of payment of wages; the displacement allowance payable; the return fare payable to the workman on the expiry of the period of his employment and during contingencies specified in the contract of employment and any deductions made. This is an indicative list and more details could be added to it.   

The alleged failure of the management school and construction firm to follow labour laws affected workers adversely beyond their workplaces as well.

According to the notice, the workers are made to stay in shanties of metal sheets, which heat up in Gujarat’s blazing summers. 

“With the kind of temperature that the city of Ahmedabad experiences in summer, it is completely inhumane to accommodate the poor workmen in such a facility wherein it is even unbearable to stand in the afternoon even for few minutes,” the notice claimed and demanded “bare minimum” facilities where workers can “live with dignity”. An addendum to the legal notice, sent the following day on May 20, further alleged that women and children who are working at the construction site were not being provided facilities as mandated in labour laws.

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CLASHES BETWEEN POLICE AND MIGRANT WORKERS

The workers stranded at the IIM-A construction site have been trying to get back to their homes in Bengal and Jharkhand for over 20 days, Yagnik’s notice said, because they were not being paid their “earned wages because of the lockdown”. 

“The contractors and principal employer have not been listening and are completely oblivious to their conditions and grievances. Owing to the same, there has been unrest amongst the workers and hence yesterday these workmen went to meet the concerned authorities of IIMA,” the notice said. “However not having received any response and out of frustration they came out on the street which led to the clash between them and the police.”  

Workers were violently beaten by “erring officers”, Yagnik said, even as the IIM-A administration remained “mute spectators to stripping of the very fundamental rights of the migrant labourers”.  He claimed that many workers were still under “illegal confinement” of the police and needed to be released. 

The Ahmedabad lawyer, in an addendum sent on May 20 to the previous day’s legal notice, also mentioned that he has heard reports of at least two from the hundreds of workers who were detained by the police were found to be positive for coronavirus after testing conducted by the cops. 

Yet neither IIM-A nor the construction firm had taken any steps to test the workers who are staying in hellish cramped accommodation in which “social distancing is far from possible”. 

THE ROLE OF PSP PROJECTS LIMITED

On 13 February, in a written communication to the Bombay stock exchange and the national stock exchange, the PSP Projects Ltd informed that it had emerged as the lowest bidder for the project of a major construction project for IIM-A.

The contract, the construction firm’s communication stated, is worth Rs 333 crores and involves “construction and implementation work of Faculty Houses, Student Dormitories and Staff Houses New Academic Block, ISW School of Public Policy and Sports Complex” for IIM-A. 

Deepak Bhatt, IIM-A’s Manager, Communication, told HuffPost India that PSP Projects Ltd was contracted for the construction project in March 2019. 

According to a corporate presentation prepared by PSP Projects Limited in November 2019, from the IIM Ahmedabad project’s ‘total contract value’ which it now put at a little over Rs 328 crores, its ‘outstanding contract value’ till September 2019 was a little over Rs 300 crores. In other words, work relating to a major chunk of the project was still under progress.

Among the other notable projects it mentioned under progress in this presentation included the prestigious diamond bourse project in Surat and another project of building a ‘multi-tenanted office’ for Dalal Street Co-operative Society Limited inside what is often billed as India’s first operational smart city—Gujarat International Finance Tec-City which is better known by its acronym GIFT. The firm also boasted of a “growing order book” in the presentation. If the presentation is anything to go by, the firm accused of not having paid minimum wages to the workers it engaged for a major construction project or provided humane living conditions appears to have a robust business. 

IIM-A RESPONDS

HuffPost India reached out to the PSP Projects Ltd, IIM-A as well as the Chief Secretary of Gujarat seeking their responses to Yagnik’s specific claims. While PSP Projects and Chief Secretary were yet to respond till the time of publishing, IIM-A was quick to revert with responses to most questions posed by this reporter pertaining to Yagnik’s assertions. 

In response to a question about Yagnik’s assertion that since workers were not provided minimum wages and other benefits, the institute and the contractor were in violation of minimum wages act and inter-state migrant workmen act, the IIM-A said, “We are compliant with all legislation”. 

Many workers who were employed for construction at the site from states other than West Bengal and Jharkhand were assisted and have gone back to their homes. For these two states, the public authorities are working towards providing them travel permits and arranging for a train to take them home in consonance with the state governments. The lockdown has not made it easy to fix the logistics of the process and delays have taken place. Indian Institute of Management-Ahmedabad To HuffPost India

But the institute conceded that there have been delays in arranging the migrant workers’ journey back home in response to the lawyer’s claim that neither the IIM-A nor the contractor made any logistical arrangements for migrant workers from Jharkhand and West Bengal to help them get back to their home states. It blamed lockdown restrictions for the delay. 

“Many workers who were employed for construction at the site from states other than West Bengal and Jharkhand were assisted and have gone back to their homes. For these two states, the public authorities are working towards providing them travel permits and arranging for a train to take them home in consonance with the state governments. The lockdown has not made it easy to fix the logistics of the process and delays have taken place,” the IIM-A’s written response said. 

To a question about Yagnik’s accusation that neither the management school nor the contractor want migrant workers to go back to their home states because the construction project’s deadlines are more important for them, the IIM-A response said, “This is an attribution of intention on the part of the advocate which has no truth. If that were the case then the contractor or the institute would not have allowed many of the workers who have already left to return to their homes.” 

Though another question quoted part of Yagnik’s notice which accused the contractor of not having paid the workers minimum wages for work already done and existence of dues of a “considerable amount”, the IIM-A said in its written response that “to the best of our knowledge and as per our records, this is not the case.” But it also added that if evidence were to be made available, the institute is “prepared to pay the due the contractor has allegedly not honoured”. 

The management school also denied the lawyer’s claim that the arrangements made for workers to stay were “inhumane”. It said, “Suitable accommodation is provided to the workers and there have been no complaints received by us about this till now.” 

Responding to a question about the controversial clash between migrant workers and the police which quoted from Yagnik’s claim that workers wanted to meet IIM-A authorities to press their demands relating to wages payment and getting back home on the day of the clash and the institution’s unresponsiveness frustrated them, the B school told this reporter, “The workers did not meet the authorities of IIM-A. They went to the office of the contractor to inquire as to why only from their states is the repatriation being delayed”. 

The institute also appeared to point towards the role of other public authorities while explaining why the workers were frustrated that day. “The unrest of the workers from the construction site is not about wages and living conditions but about the delay in obtaining travel permits and the arranging of transportation by the public authorities to take them back to their home states,” the Manager, Communication Bhatt said. 

The IIM-A further denied Yagnik’s accusation that women and children working at the site are denied facilities mandated under labour laws. To the lawyer’s claim that construction workers were not being tested for coronavirus despite two of them being detected positive after the police tested them in the aftermath of the violent clash on May 18, the management school said that the Ahmedabad municipal corporation’s health team conducted a test of samples taken from 30 workers in April which gave a negative result and no other tests were done till the clash between the police and workers because the workers did not show any symptoms. 

“As you know, people can be asymptomatic for a period of time and no preliminary symptoms such as fever, cough etc. has been found till the time of the agitation by the workers to be sent back to their home states,” the IIM-A said in a written response to a question about the lawyer’s claim. “After the arrest of workers by the police they got them tested and now they have been found positive. They have been separated and a few others from the colony who were staying with them have been taken to a quarantine facility.”  

The management school also denied accusations from the lawyer that workers who were beaten up by the police were not provided help by the IIM-A or PSP Projects Ltd. Calling them “baseless”, the IIM-A said, “We are in touch with the police and the contractor. We have requested for their quick release by the police is adamant about keeping the workers in detention for causing a law and order problem.”

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This article originally appeared on HuffPost.