RECENT LABOUR REFORMS IN INDIA
05.02.2015
India Desk
Prime Minister Narendra Modi launched a series of reformative labour schemes
on 16 October, 2014 at a program organised by the Central Government’s labour
ministry. The major announcements on this day were:
LAUNCH OF UNIFIED LABOUR PORTAL (in vernacular
known as SHRAM SUVIDHA)
A Unified Labour Portal or in vernacular 'Shram Suvidha' has been
launched. As an initiative on pilot basis, the central labour ministry has
selected certain regulatory authorities covering 16 labour legislations. It
is expected that state governments would join this unified single web
portal subsequently.
The portal provides a web portal for management of labour law
compliances in the areas of labour inspection and its enforcement,
online registration of units, reporting of inspections, submission of
consolidated annual returns and redressal of grievances.
This integrated portal will operate through common Unique Labour
Identification Number (in vernacular ‘Shram Pehchan Sankhya’) for each
establishment. The employers will be allotted Labour Identification
Number (LIN) after registration on web portal. The enforcement agency
will upload the data of inspection on the web portal from time to time.
This web portal will provide for filing of single harmonized annual
return by the employers and also will provide for online reporting of
harmonized inspection report by inspecting officials.
For compliance ease, the portal has a ‘Know your Act’ section. It helps
the establishments to understand the various labour legislations that
would be applicable to them in different states.
Dr. Gerald Reger
Co-Head Capital Markets
Head of India Desk
Rechtsanwalt, Attorney
Specialising in Tax Law
T +49 89 28628155
www.noerr.com
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TRANSPARENT LABOUR INSPECTION SCHEME
A transparent labour inspection scheme has also been announced.
Under this scheme the discretion given to the Labour Inspectors have
been curtailed to some extent. In certain cases, for example in case a
serious accident has occurred at an establishment or a locked down
establishments, inspections would be mandatory. However, in other
cases, these would be optional and based on a computer generated
system. The Labour Inspectors will get auto-generated lists about the
establishments to be inspected by them. These auto-generated names
will appear based on certain factors, data and evidence. Further, apart
from other reforms in the inspection process to bring transparency and
greater accountability, the Inspectors will be required to upload their
inspection reports on to the portal within 72 hours of carrying out an
inspection.
UNIVERSAL ACCOUNT NUMBER
The Government has also announced the launch of Universal Account
Number (UAN) for the members of the Employees' Provident Fund, a
social security fund established by the Government of India under the
Employees’ Provident Fund Act, 1952. The UAN is expected to allow
collation of accounts and viewing of updated provident fund accounts by
beneficiary employees. It will be portable throughout the work career of
members and can be used anywhere in India.
This winter session Parliament had put a keen focus on Labour Laws. As a
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result of which both Houses of Parliament have passed a Bill to amend the
Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by
certain Establishments) Act, 1988 and the Apprentices (Amendment) Bill, 2014.
1. The Labour Laws (Exemption from Furnishing Returns and
Maintaining Registers by Certain Establishments) Amendment Act,
2011 (passed on 28 November 2014)
The Amendment Act attempts to widen the Labour Laws (Exemption
from Furnishing Returns and Maintaining Registers by Certain
Establishments) Amendment and Miscellaneous Provisions Act, 1988
(Principal Act).
Definition of Small Establishments
The Principal Act defines “small establishments” as any place which
employs between 10 and 19 people on any day of the preceding 12
months. A “very small establishment” is a place that employs nine or
less people. However the Bill seeks to amend the definition of “small
establishment” to cover establishments that employ between 10 and
40 people.
Widening the ambit of the Principal Act
Under the Principal Act, small as well as small establishments are
exempt from furnishing returns and maintaining registers under certain
labour laws such as the Payment of Wages Act, 1936; the Weekly
Holidays Act, 1942; Minimum Wages Act, 1948; the Factories Act, 1948;
and the Plantations Labour Act, 1951. Instead, they are required to
furnish returns and maintain registers in a specified format. The
Amendment Act has now added 7 other legislations to this list, which
are, the Motor Transport Workers Act, 1961; the Payment of Bonus Act,
1965; the Beedi and Cigar Workers (Conditions of Employment) Act, 1966;
the Inter-State Migrant Workmen (Regulation of Employment and
Conditions of Service) Act, 1979; the Dock Workers (Safety, Health and
Welfare) Act, 1986; the Child Labour (Prohibition and Regulation) Act,
1986; and the Building and Other Construction Workers (Regulation of
Employment and Conditions of Service) Act, 1996. Only common forms of
returns or registers specified in the Act have to be maintained and
furnished under all these Acts.
Returns can be filed in digital form
Further, the Principal Act states that an employer has to file returns and
maintain registers at the work spot in the specified format. The
employer also has to issue wage slips, amount of work done slips and
file returns related to accidents. The Amendment Act now also provides
for maintenance of registers and returns on a computer, computer disk
or other electronic media. Printouts of these records have to be made
available to the Inspector appointed under the relevant legislations on
demand. The information may also be furnished to the Inspector by
email.
2. The Apprenticeship (Amendment) Act, 2014 (passed on 26
November 2014 and commencement date notified as 22
December 2014) (Apprenticeship Amendment Act)
The Apprenticeship Amendment Act amends the Apprentices Act, 1961
(Apprentices Act) to make apprenticeship more responsive to youth and
industry and the amendments in the Apprenticeship Amendment Act
are based on the Inter Ministerial Group’s recommendations.
Amongst others, the Apprenticeship Amendment Act provides as
follows:
The Apprenticeship Amendment Act amends several definitions
of the Apprentices Act including that of appropriate government
whereby the appropriate government in case of an
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establishment operating in four or more states would be the
central government.
The Apprentices Act had prescribed the minimum age for being
engaged as an apprentice as 14 years. The Apprenticeship
Amending Act has now prescribed the minimum age for
apprenticeship in designated trades related to hazardous
industries at 18 years.
The Apprenticeship Amendment Act removes the requirement
for Adviser’s approval for apprenticeship training program.
The Apprenticeship Amendment Act now limits the requirement
of approval of the syllabus and equipment for practical training
by the central government only in case of hazardous industries.
According to the Apprentices Act, the weekly and daily hours of
work and leave entitlements of an apprentice was to be as
prescribed by Rules. However, the Apprenticeship Amendment
Act allows the employer to determine the hours of work and
leave as per their discretion or policy.
The Apprenticeship Amendment Act has now removed
imprisonment as punishment for violation of the Apprentices
Act by employers.
These amendments seem to be a step towards the proposed simplification of
the laws and efforts towards the success of the ‘MAKE IN INDIA’ program and
increasing focus on effective governance.
We thank Ms. Sarika Raichur, Senior Consultant for India (external) to Noerr LLP, for her
valuable inputs in preparing this article.
The information provided does not substitute legal advice in particular cases.
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