Government eases India Inc’s labour law compliance burden

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‘The country is facing a major challenge in the area of contracts enforcement.’ (PTI)

Persisting with its labour reforms agenda, the government has pruned the number of registers mandatory for all establishments to maintain under nine central Acts to just five from 56, and the relevant data fields to 144 from 933, a move hailed by the industry as it would ease compliance burden. The decision would also help the country to improve its global (World Bank) ranking on ease of doing business, which improved only a tad in 2016 to 130, from 131 in the previous year. Though the goods and services tax (GST) regime and the bankruptcy code are expected to significantly improve India’s ranking in the coming years, the country is facing a major challenge in the area of contracts enforcement.

Until now, establishments have had to maintain separate registers under different rules. As per a gazette notification issued on Tuesday, a combined register is provided which will facilitate the ease of compliance, maintenance and inspection and “also make information provided thereunder easily accessible to the public through electronic means”. The move would also increase transparency. “Simplification of registers/forms to be maintained & digitally kept under labour laws will lead to sharp reduction of cost & compliance burden,” tweeted NITI Aayog CEO Amitabh Kant.

Industry body CII welcomed the move. “With the notification allowing electronic maintenance of these records, it has further enhanced the ease of maintenance and will increase transparency and support the drive towards the ease of doing business,” it said.

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“This is an important move in reducing regulatory cholesterol. Another follow-up step could be replacing the 25+ numbers issued with a universal enterprise number i.e. an Aadhaar number equivalent for companies,” said Manish Sabhrawal, chairman, Teamlease. “From 56 to five registers is a cheers for both contractors and companies. It is a move towards productivity increase. Welcome aboard, labour reforms,” Genius Consultants’ chairman-cum-director R P Yadav said.

Maintenance of registers would be combined now for the Building and Other Construction Workers Act, Contract Labour Act, Equal Remuneration Act, Inter-State Migrant Workmen Act, Mines Act, Minimum Wages Act, Payment of Wages Act, Sales Promotion Employees Act and Working Journalists Act. Different rules under these Acts would required to be amended in the coming days.

The government is also trying to fast-track the legislative component of labour reforms. The industrial relations code — which will combine four existing Acts — will, among other things, empower units employing up to 300 people (as against 100 now) to opt for retrenchments/closure without government approval. The code also seeks to ban outsiders from taking leaderships of trade unions in the organised sector.

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