The Government of Kerala has officially introduced the Kerala Coir Workers’ Welfare Fund (Amendment) Bill, 2025, aiming to modernize and streamline the enforcement and compliance structure of the Kerala Coir Workers’ Welfare Fund Act, 1987. The proposed amendments are rooted in the recommendations made by the Kerala Law Reforms Commission (19th Report), with a strong focus on improving the Ease of Doing Business in the state’s traditional coir industry.
🔑 Key Highlights of the Amendment Bill:
1. Shift from Criminal to Civil Penalties
- Imprisonment removed for minor procedural offences.
- Offenders will now face monetary penalties:
- Double the due amount for false statements (Section 17(1)).
- ₹25,000 penalty for general non-compliance (Section 17(2)).
2. Omission of Section 13
- The current mode of recovery clause under Section 13 is removed.
- A more structured recovery mechanism is introduced under new Section 17E.
3. Priority of Welfare Dues Modified
- Section 14 now states dues will get priority over other debts, but subject to Section 26E of the SARFAESI Act, 2002, giving precedence to secured creditors.
4. Pre-Penalty Compliance Window
- New Section 17A ensures individuals are given up to 90 days to comply before any penalty is imposed.
- An officer of the Coir Project Officer rank will issue this notice.
5. Introduction of an Appellate System
- Those penalized can appeal the decision within 30 days to an Appellate Authority.
- Appeals can be accepted after 30 days if sufficient cause is shown (Section 17C(3)-(4)).
6. Compounding of Offences Introduced
- Section 17D allows offenders to compound offences before or after prosecution.
- On payment of 75% of the maximum fine, prosecution can be avoided or withdrawn.
- This decision will be made by a Joint Director-ranked officer.
7. Empowered Enforcement Mechanism
- Officers can summon persons or documents for inquiry before levying penalties (Section 17C).
- The penalty proceeds will go to the Consolidated Fund of the State.
8. Efficient Recovery System
- Under Section 17E, any unpaid dues will be recovered as arrears of land revenue, leveraging the Kerala Revenue Recovery Act, 1968.
🎯 Objectives Behind the Amendment
The government’s intention is to decriminalize minor offences, enhance compliance by offering grace periods, and modernize penalty enforcement in alignment with central labour laws. The Bill emphasizes:
- Simplified compliance mechanisms.
- Avoiding unnecessary litigation.
- Providing administrative relief to both coir workers and employers.
- Digitizing and streamlining the welfare fund system.
💰 Financial Implication
According to the Financial Memorandum, the proposed amendments do not involve any additional expenditure from the Consolidated Fund of the State.
⚖️ Background: Extract from the Original Act
The original Act, enacted in 1987, aimed to protect coir workers, ensuring they receive welfare benefits from employers and producers. Over time, provisions like imprisonment for procedural defaults and outdated penalty amounts were seen as barriers to business and difficult to enforce.
📝 Conclusion
This Amendment Bill marks a significant legislative reform that aligns with contemporary governance goals, focusing on compliance over punishment and creating a business-friendly legal environment. If passed, it could serve as a model for reforming other traditional sector welfare laws across India.