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Government proposes major labour law changes for ease of compliance

Government proposes major labour law changes for ease of compliance

Legal & Compliance

Tulika Singh

Tulika Singh

31 Jul 2019, 15:00 — 3 min read

Background: On July 23, 2019, the Minister of Labour and Employment, Santosh Kumar Gangwar, introduced the Code on Occupational Safety, Health and Working Conditions in the Lok Sabha. The Code repeals and replaces 13 labour laws relating to safety, health and working conditions. These include the Factories Act, 1948, the Mines Act, 1952, and the Contract Labour (Regulation and Abolition) Act, 1970.  Companies will soon not require multiple registrations, as they do now, because the government has proposed one licence, one registration, and one return for establishments. In her previous article, Tulika Singh shared the highlights of the Union Budget for startups & MSMEs. Here she explains how the proposed labour law changes will lead to ease of compliance.
 

The Code on Occupational Safety, Health and Working Conditions, 2019 (“OSHW”), introduced by the Ministry of Labour and Employment introduces provisions allowing companies to have a single registration, which will be coupled with a single licence, along with a single return, for executing projects for five years involving contract workers, across the country.

The provision of one licence and one return in place of multiple licences and returns in existing 13 labour laws subsumed in this Code is intended to save time, resources and efforts of businesses.

 

An establishment will require a single registration instead of the around 10 earlier required to be done for all labour laws. This move may help India bolster its “ease of doing business” ranking. Significantly, the Code on OSHW will cover all establishments hiring at least 10 workers, including those in services sector, thereby bringing the information technology sector within its purview.

Also read: Mandatory compliances for a Private Limited Company in India

 

Employers will have to create a security deposit with the government at the time of obtaining such licence and specify the number of contract workers it might require. In case an employer wants to hire more contract workers, it will have to go back to the government to renew the licence and make an additional deposit.

In a further bid to improve ease of doing business, the Centre has proposed assigning “inspector-***-facilitators” outside their jurisdiction “through randomised computer system”.

The provision of one licence and one return in place of multiple licences and returns in existing 13 labour laws subsumed in this Code is intended to save time, resources and efforts of businesses.

 

Also read: Online Udyog Aadhaar registration process


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