The Government of Kerala has introduced significant changes to the Kerala Coir Workers’ Welfare Fund Act, 1987 through the newly passed Kerala Coir Workers’ Welfare Fund (Amendment) Bill, 2025. This legislation, now in effect, aims to streamline enforcement, introduce monetary penalties in place of criminal punishments, and simplify compliance processes for employers.
🔹 Why the Amendment?
The amendment seeks to:
- Improve fund recovery mechanisms.
- Replace outdated criminal provisions with civil penalties.
- Empower designated officers to enforce the law more effectively.
- Ensure compliance while reducing the burden on the judiciary.
📝 Key Amendments at a Glance
1. New Definitions Introduced
- Appellate Authority has been defined under Section 11(4).
- Compounding Officer designated under new Section 17D to facilitate out-of-court settlements.
2. Section 13 Omitted
- This section, which previously dealt with unspecified provisions, has been removed entirely.
3. Changes in Recovery Priority (Section 14)
- Welfare fund dues will now be subject to priority under Section 26E of the SARFAESI Act, 2002, aligning the Act with national financial legislation.
4. Penalties Replaced with Fines (Section 17)
- Employers failing to contribute to the fund are now liable to pay double the amount due instead of facing imprisonment.
- Second-time non-compliance attracts a ₹25,000 fine.
- Imprisonment is now reserved only for willful non-payment after 90 days (Section 17B).
5. Opportunity Before Penalty (Section 17A)
Before imposing any penalty:
- Employers must be given 90 days to comply.
- No penalty if compliance is achieved within this period.
6. New Mechanism for Imposing Penalties (Section 17C)
- Designated officers will:
- Conduct inquiries.
- Summon witnesses.
- Impose penalties.
- Appeals can be filed within 30 days to the Appellate Authority.
7. Compounding of Offences Allowed (Section 17D)
- Offences under Section 17B can now be compounded (settled) by paying 75% of the maximum fine.
- Compounding before prosecution bars court action.
- If done after prosecution, it requires court permission.
8. Recovery Through Revenue Mechanism (Section 17E)
- Any due amounts under this Act can be recovered as arrears of land revenue under the Kerala Revenue Recovery Act, 1968.
⚖️ Implications for Employers and Workers
- Employers must ensure timely compliance to avoid penalties or legal action.
- Workers stand to benefit from stronger fund recovery and welfare protections.
- The State aims to improve fund administration and enforcement without overloading courts.
🗣️ Conclusion
The Kerala Coir Workers’ Welfare Fund (Amendment) Act, 2025 modernizes the enforcement framework, replaces jail terms with monetary penalties, and ensures better compliance through clearly defined administrative procedures. With Kerala being a hub for coir production, this legislation is a key step in safeguarding the rights and benefits of thousands of workers in the sector.