The average wage among respondents was ₹15,943, but women earned consistently less. Twenty-two per cent of workers earned below ₹13,500 – less than Gujarat’s current minimum wage for even unskilled labour.

A first-of-its-kind systematic study into the enforcement of key labour laws in Morbi, Gujarat’s ceramic hub, has laid bare widespread violations that have left the overwhelming majority of workers without the social security benefits they are entitled to under law. Conducted by the People’s Training and Research Centre (PTRC), the report – titled Laws in Captivity – paints a grim picture of non-compliance with the Employees’ State Insurance (ESI) Act, the Provident Fund (PF) Act, and basic wage documentation rules.

According to the study, which surveyed 2,000 workers from 290 units, 93 per cent of workers’ ESI contributions are not deducted, 92 per cent are excluded from PF benefits, and 90 per cent are not issued salary receipts. All units surveyed met the ESI Act’s applicability criteria – located in notified areas, employing more than 10 workers, and paying wages of ₹21,000 or less – yet compliance remains abysmally low.

The research found entrenched discrimination against women and migrant workers. Out of 1,121 migrant respondents, only 40 (3.57 per cent) were covered under ESI, compared to 107 (12.17 per cent) of 879 local workers. Women earned less on average than men despite performing similar work, in violation of the Equal Remuneration Act.

Ceramics, Dust, and Disease

Morbi accounts for 90 per cent of India’s ceramic production, employing over four lakh workers, many of whom face hazardous exposure to silica dust – a known cause of silicosis, tuberculosis (TB), and other respiratory diseases. Despite this, the study revealed that out of 1729 ceramic workers surveyed, 97 per cent were not covered under ESI, and only 3.47 per cent received PF benefits.

The health risks are not theoretical. The survey found five workers with confirmed silicosis – none of whom were covered under either ESI or PF – and 63 workers who had undergone TB treatment, 62 of them from the ceramic sector. Silica exposure rates were stark: 28.95 per cent of ceramic workers were directly exposed, and another 47.7 per cent indirectly exposed.

A Legal Obligation Ignored for 58 Years

Parts of Morbi were brought under ESI Act coverage in 1967, yet nearly six decades later, enforcement remains negligible. “Neither the industries are ready to implement the law, nor can the government enforce it,” the report observes. The absence of workers’ unions in Morbi’s ceramic belt has further weakened collective bargaining power, allowing employers to bypass legal obligations with impunity.

RTI responses obtained by PTRC underscore the enforcement gap. As of October 2023, 554 units were registered under ESI in Morbi, but no data was provided on the number of workers covered. In 2019, 5,019 workers were registered under ESI; by 2023, new registrations had plummeted to just 54 for the year. Meanwhile, Morbi’s ESI dispensary had four sanctioned medical officer posts – all vacant.

Benefits Denied Despite Deductions

Even among the 147 workers whose wages saw ESI deductions, most were denied identity cards – essential for accessing benefits. None had contributions deducted from their first day of employment, another violation of the Act. Some workers were sent to private hospitals by employers, mistaking this for ESI coverage, but had no official ESI number or documentation.

The lack of wage receipts – reported by 89.9 per cent of respondents – deprives workers of proof of employment, making it impossible to claim compensation in cases of workplace injury or occupational disease. Some workers mistook informal work logs for payslips; others produced slips without a company stamp or signature.

Wage Gaps and Below-Minimum Pay

The average wage among respondents was ₹15,943, but women earned consistently less. Twenty-two percent of workers earned below ₹13,500 – less than Gujarat’s current minimum wage for even unskilled labour. Female workers were overrepresented in the lowest wage brackets; 55.47 per cent of those earning below ₹10,000 were women.

Selective Compliance and Discrimination

Only 27 units partially implemented the ESI Act, and 37 partially implemented the PF Act. Even in compliant units, benefits were often extended to select workers – sometimes only one or two per factory – with no clear rationale. Workers reported a perception that only “permanent” employees were entitled to social security benefits, despite the law making no such distinction.

Service sector units (such as hospitals and malls) showed the highest compliance, with 86.96 per cent ESI coverage, compared to 2.66 per cent in ceramics and 0.64 per cent in other manufacturing.

A Call for Accountability

The report calls the findings “shocking” and a “shame” for both industry and government. It urges the Union Ministry of Labour and the Employees’ State Insurance Corporation to take immediate steps to cover all eligible workers, including those hired through contractors or on piece-rate terms. It also recommends:

• Allowing workers to self-register for ESI coverage, as proposed by the Parliamentary Standing Committee in 2018 and 2019.
• Extending immediate benefits to workers suffering from silicosis.
• Strict enforcement of PF and wage documentation laws.
• Banning the practice of workers employing “helpers” informally.
• Educating workers about their rights and the benefits available under social security laws.

For industry bodies, PTRC recommends collective action to ensure member compliance with ESI, PF, and wage laws, noting that global market access increasingly depends on adherence to human rights and sustainability standards.

“Development at the Expense of Many”

The report concludes with a sobering reflection: “If industrial development means the prosperity of a few at the cost of many, it is not real development.” Without enforcement of basic protections, Morbi’s workers – the backbone of its globally competitive ceramic industry – remain trapped in what the study calls “laws in captivity,” where rights exist on paper but vanish at the factory gate.