More than 20,000 diamond units, which were enlisted under the Bombay Shops and Establishment Act (BSEA), will now have to seek fresh registration under the Factories Act.

The ramifications are immense: While the BSEA, which is governed by the Surat Municipal Corporation, only sanctions leaves of absence, identity cards and salary slips, the Factories Act assures workers of provident funds, bonus, gratuity and benefits under the Employees' State Insurance Scheme. Though skilled diamond workers are paid well, their benefits are no way comparable to those offered under the Factories Act.

The switch has been necessitated by a recent Gujarat High Court judgment on a public interest litigation filed after workers, angered by wage-cuts, went on the rampage in Varachha last year.

"Mostdiamond units are registered as commercial establishments under the BSEA," observed the division bench of K Sreedharan and A R Dave. "Such registration is illegal," they observed. The court also ordered the labour department to carry out a survey and take appropriate action in a time-bound manner.

As stated in the PIL, the survey found only a few diamond units registered under the Factories Act. Labour officials have filed more than 2,500 criminal cases against the diamond units so far. "The survey is in full swing," a senior labour official told The Indian Express. "Thousands of more cases will be filed," he said.

A senior officer of the Gumastadhara (the Gujarati translation for BSEA) department told this paper that at least 20,000 - some 4,000 more are likely to make the grade - of the 1,96,568 establishments registered under the BSEA will lose their licenses. Their details were sent to the Labour Commissioner's office on Tuesday.

All it takes for a unit-owner to acquire an BSEA license isproof of employment of nine workers or less, as 10 or more invite application of the Factories Act. Unscrupulous owners thus seek licenses - these are nominally priced - in the names of their family members, relatives and acquaintances; since there are no checks, they can all end up working in the same unit.

Moreover, said INTUC South Gujarat chief Urmila Rana, who had moved the PIL early last year, "There are many units registered neither under the BSEA nor the FA. Workers don't complain because they get wages. Government officials don't inspect the units, so they get away."

Trade unionist Mahendra Dave agreed. "It's a racket that goes on in connivance with the government machinery," he said, saying that a government campaign way back in 1981 saw the registration of only a few cases.

But the High Court judgment saying no diamond unit will now be registered under the BSEA has changed all that. An SMC officer admitted that the civic department has stopped issuing fresh registrations.