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INDIAN LABOUR LAW

These sections will introduce you to the fundamentals of labour law in india



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COMPLIANCE - LETTER OF THE LAW

 

• So far, most of the subjects we have addressed relate to the 'spirit of the law'. These matters are largely driven by a National or State Act as well as common law and the legal system. 

• Compliance with the 'letter of the law' are matters related to the numerous documentation and process requirements laid down in the law. These are driven by  national or state rules. Most national acts also have rules for each state with differing compliance requirements.

• Compliance is  quite different in each state.

• Compliance activities can largely be categories as follows:
    • Preventive Compliance - policy matters that need to align with the law e.g. leave, working hours, overtime
    • Registers - Registers that need to be maintained in specified formats - e.g. wage register, attendance register
    • Registration - Registration/Licencing requirements - e.g. Factories Licence, Shop and Establishment Registration, Contract Labour Registration/Licence
    • Notice Board - Abstracts of Acts and other information that need to be put up for display
    • Returns - Quarterly/Half Yearly/Annual Returns of information to be filed with authorities
    • Contributions - Deposit of employer and employees contributions under various statutes - e.g. Provident Fund, Employee State Insurance, Labour Welfare Fund, Profession Tax
    • Triggers - Non recurring items of compliance that come into play based on an event e.g. Injury to a workman, death of a workman etc

• By our estimate, on an average, an office or an establishment has @100-120 unique compliance requirements whereas factories have @200 obligations depending on the state they are located in.

• Upto a decade ago, compliance with the letter of the law was not stricty on the Indian corporate agenda. Enforcement by the government was lazy and reactive, based on employee complaints. Now, with the automation of government departments, online registration and increased awareness and focus on governance, the inspectorate is much more disciplined and organised. Inspectors will visit all registered establishments at least once every year and perform a full audit of the letter of the law.

It is now very important for any responsible organisation to be fully compliant with all items of labour law.

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