Over view of Labour Law Amendments 2014

Long awaited labour laws reforms have taken some shapes after the
emergence of new government.

Some Important Changes

1) Industrial Dispute Act
A. Establishment employing up to 300 can retrench or shutdown without
government notification permission.
B. In case of retrenchment a worker should raise an objection within 3
months. (There is no time limit at present)

2) Factories Act
A. Act will apply with 40 workers, if without electricity 20 workers if with
power.
B. Complaints against an employer about contravention this Act would not
receive cognizance by court without prior permission from the state govt.
C.

A provision for compounding of offences has been added.

3) Contract Labour Act

A. Act applies to establishment employing more than 50 workers.
B.

The industry will be able to hire more temporary workers.

4) Trade Union Act

A. Under the new laws, forming labour unions will also be difficult as it
would require a membership of 30% of the work force against 15%
earlier. The lower limit allowed many unions to emerge often increasing
inter union conflicts and multiplicity

Inspection curtailed

The amendments are made to ensure no inspector can initiate any

proceedings againstany firm without the prior nod of the state

5) Tamil Nadu Labour Welfare Fund Rules, 1973.

In exercise of the powers conferred by sub-section (1) of Section 41 of the
Tamil Nadu Labour Welfare Fund Act, 1972 (Tamil Nadu Act 36 of 1972),
the Governor of Tamil Nadu hereby makes the following amendments to the
Tamil Nadu Labour Welfare Fund Rules, 1973.
The amendments hereby made shall come into force on and from the date of
its
publication
in
the
Tamil
Nadu
Government
Gazette.
In the said Rules, in rule 11-A,(1) for the expression rupees seven occurring in two places, the expression
rupees ten shall be substituted; and
(2) for the expression rupees fourteen, the expression rupees twenty
shall be substituted

II.

Salient features of Apprentice Act (Amendment 2014)

Government will decide the number of apprentices in each industry

Government will provide the syllabus and equipment for PRACTICAL
training, for specific trades.
However, companies free to launch new courses other than designated
trades.
Companies can accept non-engineering graduates and diplomas for
apprenticeship.
Companies free to fix work / leave period for these apprentices.
Multiple companies can come together to give common training. Can
even outsource the basic training (for teens that have received no
institutional training e.g. grownup child laborers.)
After training, the apprentice will have to give a certificate-exam by
National Council forVocational Training (NCVT).

In case of violation Reasonable fines and inspection.

To reduce harassment andinspection raj.
Web portal to file self-compliance reports.

Overall, new act gives more flexibility to companies, and makes

apprenticeship more attractive to youth, and will make them more
employable in future, thus helping India to reap its demographic dividend.

III.

New initiatives in Employees Provident Fund Act

1.

Limit enhanced to Rs. 15000 from Rs. 6500

2.

Minimum family pension is fixed at Rs. 1000 pm

3.

DLI limit enhanced.

4.
Digital signature introduction
can be registered)

(Maximum

5.
Introduction of UAN (Universal
streamline subscribers account

three

Account

persons

Number)

signatures

number

to

6. On line registration of new Pf code. Same day number is allotted and

after three days password will be sent
7.

On line transfer of Pf account introduced which is major step.

8.
Member can view/get his account details on mobile.
Every month
oncethe subscription is credited information available to members on mobile
9. Introduction of New Declaration form which to be obtained and
kept with employer.
10. Introduction of KYC one time with Aadhar, Pan, Ration Card, Bank
account etc as authentication.
11. Expeditious claim settlement within 3-7 days.
12. Earlier State Bank of India only one bank now 57 banks for subscription
payment.

IV.

Factories Act new proposals

V.

Introduction of new terms like hazardous substance, disability etc.

and amendments
To existing definitions of the terms like hazardous process in line with
EnvironmentProtection Act and Disability Act.
Making the manufacturer, supplier as well as the importer responsible
for the safety of the plant and machinery and imposing penalty for
contravention.
Introduction of a new section 35A on provision of Personal Protective
Equipment for workers exposed to various hazards.
Amendment of sections 36 and 37 of the Act namely Entry into
confined spaces andPrecautions against dangerous fumes, gases etc.
Preparation of emergency plan and disaster control measures in
consultation with theworkers representatives in respect of factories
using hazardous substances.
Amendment of Section 40 B regarding appointment of Safety Officers.
Renaming of Directorate General Factory Advice Service and Labour
Institutes as theDirectorate General of Occupational Safety and Health
so as to clearly define its role.
Provision of canteen facilities in respect of factories employing 200 or
more workers instead of the present stipulation of 250 workers.
Provision of Shelters or restrooms and lunchrooms in respect of
factories employing 75 or more workers instead of the present
stipulation of 150 workers.
Amendment of section 59 of the Act relating to extra wages for
overtime
Insertion of provision relating to compounding of certain offences.
Empowering the Central Government to make rules under the
Act on some of the important provisions.
Inspection Schemes for PF & ESI

The Ministry of Labour and Employment on 21st June, 2014 has issued
INSPECTION SCHEMES of Employees' Provident Fund and ESI with criteria of
inspections i.e. mandatory inspections, optional inspections, methodology
and general instructions which will curtail the frequent and irrelevant
inspections by the concerned authorities.

VI. The Small Factories (Regulation of Employment and Conditions

of Services) Bill, 2014

 An Act to regulate the employment and other conditions of

service of employees employed in small factories.
Above bill exempts 14 laws for the establishments thus simplifying and
trying to make all provisions under single act which should ease for
small establishments employing less than 40 workers.

VII.

Compliance of Labour laws: Unique Identification Number

In order to simplify the labour inspections, submission of returns for

compliance of Labour Laws, establishment has been assigned a unique
Labour Identification Number (LIN)/ShramPehchaanSankhya(SPS).

LIN/SPS will be used for all future inspections/returns, view establishment`s

profile on Unified
Portal of Ministry of Labour& Employment i.e.
http://efilelabourreturn.gov.in.
Key features of the scheme:
Filing of self-certified and simplified Single Online Return by the
industry for 16 labour laws, this will be subject to random verification.
Timely redressal of grievances through the portal complete database
at one place to add to informed policy process.
In case of any query/clarifications, see the FAQ on the portal or
contact nearest Office ofRegional Labour Commissioner (Central).
New era of simplified labour laws and transparency in inspections.
ShramSuvidha - Unified Portal, Ministry of Labour& Employment
"websupport- mol@nic.in" <websupport-mol@nic.in>

VIII.

What is wrong with Indian labor reforms

Trade unions oppose labor reforms.

Labor inspector discretionary power that can visit and harass.

IX.

Some new initiatives

1. From October 2014 companies can file bulk of their labor related
returns on line.
2. Tiny Business will be exempted from laws that have high compliance
process.
3. Research study showed that Indian states like Rajasthan and Tamil
Nadu have employer friendly rules as compared to others and have
11% higher productivity in industries.

X.

Industry needs flexibility in hiring and firing-

The changes in labor reforms required to create greater private sector

demand for labor which will boost wages and employment.
What is needed is
1.

Flexible contracts in the labor market

2.

Minimum welfare net for workers who are out of work

3.

Regulation of labor dispute more quickly.

XI.

Labor reforms substantive law

1.

Hire and fire policies.

2.

Disciplinary action.
i) Take out the stigma out of the termination of service.
ii) Reinstatement and back wages.

3.

Wages- living wages.

i) Tamil Nadu Rs. 500/- per day wages prevailing.
ii) Training and renewal fund for workers to rejuvenate their skills after
certain years experience.

On the issue of safety health of workmen there should be no

compromise but stern enforcement is needed in addition to good social
security measure.

XII.

Management rights

The management should be given the following duly legislated rights.

A. Determining from time to time the technology for running the company.
B. Determining the employee numbers
C.

Determining the products and process.

D. Evaluating the employee performance and need to work overtime.

E. Closing industries after
prescribed compensation.

90

days

notice

and

on

paying

the

XIII.
Procedural reforms suggested for SMEs /others in respect of
employment laws
i.

Factories Act

A. After 90 days license to be dispatched to the establishment under any

circumstances, department should not keep license.
a.
Self certification employer can submit information containing self
certification regarding the compliance of various sections of labour law and
submit to the dept with the list of compliance points.
B. State govt can evolve necessary format and conditions of the same and
willing SMEs can avail the facility
C.
Random inspection - state should evolve suitable inspection policy on
the lines of recent inspection policy devised by govt of India.
D. State should ensure advisory/ grievance cell in the Dept of labour and it
should meet at least once in a week to hear the petitions of establishment.

ii.

Shop and establishment Act

Establishment employing less than 10 members should not be liable for

annual return, inspection i.e., but comply the applicable minimum wages and
submit declaration every year to the Dept.

iii.

Industrial Dispute Act and Rules

A. Rules pertaining to lay off retrenchment and closure to be amended

deleting the prior approval till 300 number of employees. Like earlier before
its amendment.
B. Any cases where proper procedures are followed by employers in
absenteeism termination discharge should not be admitted in conciliation.

iv.

Industrial Employment and Standing Order Act

A. Under the central act applicability is for 100 above workman where as in
Karnataka applicability is for 50 members above which to be amended to
100 number but employer can draft suitable employee hand book and
submit to the dept with acknowledgement for being followed reasonable and
good employee policies.

v.

Contract labour (Regulation and abolition) Act

A. The applicability at present is for 20 and above no which to be amended

for 50 on par that of Rajasthan rules. By doing this nobody is at loss except
inspectors.
B. Which are all the operations prohibited in establishments needed not to
engage contract labour to be specified and procedure to be evolved.
C. Renewal of contract license to enhance TO 3 YEARS from one year which
is existing.
D. Contractor has to file two returns in a year (half year) which to be made
yearly or annual
E.
Where ever wage payments are made through bank, rule of monthly
certification by the employer to be removed.
F. State should ensure service conditions and rules to the contract labour
for whichcontractor has to submit this hand book to the dept and have
acknowledgement.

vi.

Inter-State Migrant Workmen Karnataka Rules

A. To be denied in view of globalizations each migrant workman to be

treated of contract workmen and brought under the preview of CLA
regulations.
vii.

Payment of fee

A. Payment of fees for registration, amendment and renewal to be

made throughBangalore one.

viii.

Records for inspection under PF ESI

A. For records submission and scrutiny preceding three years records to

be made mandatory and not unlimited like present situation. Beyond
three years records should not be demanded.
ix.

Penalty and Damage

A.

B.

x.

In PF and ESI in addition to interest for also exist delayed payment;

damage also levied which is not logic. In any financial default in
banking or financial sectors only interest is levied.
Same way
damage should not be levied.
Bank Attachments:
In few case of delayed/default payment
employers bank accounts are ceased/attached thereby the whole
operations of the organization including salary payment etc may be
stalled and pose serious consequences. Hence bank attachment
provision to be deleted.
State IR Policy

A.

xi.

State should evolve IR policy from time to time in consultation with

stakeholders for smooth running of industries and nurturing mutual
trust and cordial relations.
Sakala System

A.

xii.

Sakala system to be strengthened and followed in a strict manner.

Code of Conduct

A.

Code of conduct for employer and employees containing issues like

appointment, productivity, quality, time to time adhering to
production targets, few collective bargaining points. Good governance
to be ensured and followed mutually which to be binding bilaterally.

Reference: Various sources