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Monday 22 February 2021

Work From Home - Do the Laws Need to Change?

Work from home
Working from home is the new normal

Covid-19 has resulted in transformational changes to the workplace worldwide. Employees are encouraged to work from home, huge offices are largely empty operating with a minimum necessary workforce and many industries have let portions of their workforce go. While real estate and facility management businesses are struggling to stay relevant, organisations are struggling with health and safety issues as well as internet issues in home offices. 

It is also clear now that this situation is going to last a lot longer than earlier assumed. Employers have realised that the expected drop in productivity has not materialised. Employees are enjoying the time saved on the commute and being more diligent. There is a loss in terms of collaborative ability but organisations are evolving quickly to adopt different technologies on this front. 

In light of this, do labour laws in India need to change to incorporate and facilitate this unforeseen and rapid change? To answer this, we will look at the major areas where employment conditions are covered by the law and see whether anything needs to change.

 

Definition of an establishment or factory or workplace - Yes ✅
As of now, the definitions are quite specific to places which carry on a trade or a business. This could be construed to exclude homes. This could get tricky in the case of any incidents at home. How would you distinguish between incidents which occurred in the process of work and household incidents? Would the Employee Compensation Act need to be amended to take work from home into account? This opens a can of worms and needs resolution. 

Opening and Closing Hours - No ❌
As these pertain to the workplace and not the employee, there is no need for change here.

Working Hours - Maybe ❓
All states have defined the maximum number of hours of work, hours of overtime, interval periods and spread-over (start of work to end of work including intervals). Typically, these are handled through attendance systems/registers which clock your hours. In the transition to work from home, organisations will be challenged in terms of monitoring these. In environments where overtime is paid, this issue becomes even important. In the case of disputes, there is no longer any physical evidence on either side. While this is complicated, I do not see how a change in the law will make this any easier. This requires a technological solution on part of the employer. 

Holidays and Leave – No ❌
While employers should resist the temptation to ask employees to work on off-days just because the office is in the next room, yet again, this is an operational issue which cannot be ameliorated by the law. 

Payment Wages – No ❌
Nothing in the employee-employer relationship with relation to wages changes on account of work from home.

Notices and Abstracts – No ❌
Most acts require that employees are able to access its provisions by requiring employers to put up an abstract on the notice board. Similarly, various notices are required informing the employees of minimum wages, holidays, service conditions and authorities whom they can approach. Employers need to find alternate ways of providing this information to employees.

Contract Labour - No ❌
As contract labour are employees of a contractor, and the act governs the contractor-employer relationship, there is nothing that needs to change here. The vast majority of contract labour in India,  work on the site in any case, and there will be few cases of work from home here.

- While this list covers areas that already exist under the law, a few new areas of concern arise that may need addressing.

Health and Safety 
Health and Safety for employees while working at home is a subject not covered at all by the labour laws. As mentioned in the first point, action needs to be taken to ensure that homes are included in the definition of workplaces. This will automatically ensure that any health and safety provisions that have to be followed in law will also have to be followed in the home workplace.

Further, group insurance policies which cover normal workplace incidents may not cover work from home issues. Similarly, the Employee Compensation Act which covers for injuries arising "out of and in the course of employment" would also need to be amended to account for home being the workplace. 

Flexible Working Hours 
Requests for these are bound to arise in work from home situations. The law does not specifically provide for this and split work hour periods with large intervals could technically contravene spread-over laws. The law needs to provide for this and avoid ambiguities. 

Work from home Infrastructure and Expenses 
This is a big grey area. Are employees required to use their personal internet connections and furniture for work purposes? What of employees with space constraints which make work from home impossible? As of now, employers are not obligated to look at these issues. 

Employee Childcare 
With children also having to stay at home during lockdowns, employees are having to balance work and life at a much more intense level. Employers need to be sensitive to this and the law needs to facilitate this. It could be possible to include extended protection to working mothers  with children of a young age. 


In summary, the law at this moment falls short on dealing with many work from home situations. With the government already busy with the new labour codes, I do not expect any of this to become a priority soon. At the moment, the balance of arguments rests against the employee.

I would love to hear from you on your experiences and insights into the above subject. Do comment on this blog or connect with me on ananth @ comply4hr.com.

Comply4hr.com - taking the labour out of labour law




Tuesday 16 February 2021

Latest Compliance Notifications - 1st February to 15th February, 2021

 

The Central and State Governments continually update and upgrade labour laws to make them relevant, favourable, and convenient.

We bring you a list of the compliance notifications released between 1st February and 15th February, 2021. You may view the complete gazetted notification using the link provided, and access the corresponding Acts, Rules, and Schemes through our Law Library.

If you need any clarifications regarding these laws or anything related to labour law and compliance, do feel free to reach out.

State

Date Released

Details

Maharashtra

5/2/2021

Revised Maharashtra Minimum Wages applicable from 1st January 2021 to 30th June 2021.

http://comply4hr.com/seenoti.asp?dcode=MHMWA2021May2

Maharashtra

4/2/2021

Revision of Form IIIB under Maharashtra State Tax on Professions, Trades, Callings, and Employments (Amendments) Rules, 2021

http://comply4hr.com/seenoti.asp?dcode=MHSTR2021Apr2

Central Government

1/2/2021

New facility by EPFO for employers to monitor compliance of contract employees and EPF submission by contractor.

http://comply4hr.com/seenoti.asp?dcode=EPFS2021Jan2

Chandigarh

27/1/2021

Revised Chandigarh Minimum Wages applicable from 1st April 2020 to 30th September 2020.

http://comply4hr.com/seenoti.asp?dcode=CGMWR2021Jan27

Punjab

4/2/2021

Paid holidays for employees under Shops and Establishments for bye-elections on 14th February, 2021.

https://comply4hr.com/seenoti.asp?dcode=PUSAE2021Apr2

Bihar

4/2/2021

Provisions for eligible construction workers and family under AB-PMJAY vide amendment to BOCW.

https://comply4hr.com/seenoti.asp?dcode=BOCWA2021Apr2

Tamil Nadu

9/2/2021

Extension of medical benefits under ESI rules to districts of Ranipet and Dharmapuri.

https://comply4hr.com/seenoti.asp?dcode=ESIGR2021Sep2

Central Government

12/2/2021

Provision for corrections to member profiles under EPF.  https://comply4hr.com/seenoti.asp?dcode=EPFS2021Dec2  

Andhra Pradesh

12/2/2021

Extension for filing annual returns under Factories Act, submissions to be made online.

https://comply4hr.com/seenoti.asp?dcode=APFR2021Dec2

 

Monday 1 February 2021

Latest Compliance Notifications - 1st January to 15th January, 2021.

  The Central and State Governments continually update and upgrade laws to make them relevant, favourable, and convenient. 


We bring you a list of the compliance notifications released between January 1st and January 15th, 2021. You may view the complete gazetted notification using the link provided, and access the corresponding Acts, Rules, and Schemes through our Law Library.

If you need any clarifications or details regarding these laws or anything related to labour law and compliance, do feel free to reach out.

State

Date Released

Details

Assam

12/1/2021

Online renewal of licenses under Shops and Establishments Act, contract Labour Act, Factories Act, and Inter State Migrant Workmen Act.

http://comply4hr.com/seenoti.asp?dcode=ASSSER2021Dec1

Uttar Pradesh

11/1/2021

Introduction of Centralised Inspection under various laws.

http://comply4hr.com/seenoti.asp?dcode=UPSAE2021Nov1

Andaman and Nicobar

7/1/2021

Revised minimum wages effective 1st January, 2021.

http://comply4hr.com/seenoti.asp?dcode=ANSER2021Jul1

Haryana

5/1/2021

Online procurement of registration and trade license under Punjab Shops and Establishment Act.

http://comply4hr.com/seenoti.asp?dcode=HASAR2021May1

Maharashtra

5/1/2021

Paid holiday for Gram Panchayat elections.

http://comply4hr.com/seenoti.asp?dcode=MHSEAT2021May1

Central Govt.

4/1/2021

Announcement of PF rates for the year 2019/20.

http://comply4hr.com/seenoti.asp?dcode=EPFS2021Apr1

Central Government

4/1/2021

ESI relaxations for claim submission under ABVKY.

http://comply4hr.com/seenoti.asp?dcode=ESICR2021Apr1

Karnataka

2/1/2021

Permission for shops and establishments to remain open 24*7 for next three years.

http://comply4hr.com/seenoti.asp?dcode=KASAR2021Feb1

Central Government

1/1/2021

ESI – relaxation of last date for filing contributions for April – September 2020.

http://comply4hr.com/seenoti.asp?dcode=ESICR2021Jan1


Latest Compliance Notifications - December 15th to 31st December, 2020

 The Central and State Governments continually update and upgrade laws to make them relevant, favourable, and convenient. 


We bring you a list of the compliance notifications released between December 15th and 31st, 2020. You may view the complete gazetted notification using the link provided, and access the corresponding Acts, Rules, and Schemes through our Law Library.

If you need any clarifications or details regarding these laws or anything related to labour law and compliance, do feel free to reach out.

State

Date Released

Details

West Bengal

31/12/2020

Revised West Bengal Minimum Wages – 1st January 2021 to 30th June 2021.

http://comply4hr.com/seenoti.asp?dcode=WBMWA2020Dec31

Uttarakhand

23/12/2020

Uttarakhand Holiday List 2021.

http://comply4hr.com/seenoti.asp?dcode=WHA2020Dec23

Manipur

15/12/2020

Manipur Holiday List 2021.

http://comply4hr.com/seenoti.asp?dcode=WHA2020Dec15

Assam

18/12/2020

Assam Holiday List 2021.

http://comply4hr.com/seenoti.asp?dcode=WHA2020Dec18

Meghalaya

22/12/2020

Online registration and renewal under Meghalaya Shops and Establishments Act, Inter State Migrant Workmen Act, and Contract Labour Act.

http://comply4hr.com/seenoti.asp?dcode=MGSEA2020Dec22

Meghalaya

22/12/2020

Auto renewals of licenses under the Factories Act, initiated by the government of Meghalaya.

http://comply4hr.com/seenoti.asp?dcode=FA2020Dec22

Chandigarh

18/12/2020

Chandigarh Holiday List 2021.

http://comply4hr.com/seenoti.asp?dcode=WHA2020Dec19

Bihar

16/12/2020

Bihar Holiday List, 2021.

http://comply4hr.com/seenoti.asp?dcode=WHA2020Dec16

Andhra Pradesh

15/12/2020

Andhra Pradesh Holiday List, 2021

http://comply4hr.com/seenoti.asp?dcode=APNFHR2020Dec15


Latest Compliance Notifications - 15th January to 31st January, 2021

The Central and State Governments continually update and upgrade laws to make them relevant, favourable, and convenient. 

We bring you a list of the compliance notifications released between January 15th and 31st, 2021. You may view the complete gazetted notification using the link provided, and access the corresponding Acts, Rules, and Schemes through our Law Library.

If you need any clarifications or details regarding these laws or anything related to labour law and compliance, do feel free to reach out.

State

Date Released

Details

Karnataka

30/1/2021

Further extension of date of LWF contribution to 20th February 2021.

http://comply4hr.com/seenoti.asp?dcode=KALWFR2021Jan15

Maharashtra

21/1/2021

Extension of Employees Compensation Act to all establishments under Maharashtra Shops and Establishments Act.

http://comply4hr.com/seenoti.asp?dcode=MHSEAT2021Jan21

Tamil Nadu

21/1/2021

Extension of certain ESI Act provisions in Dharmapuri and Ranipet districts of Tamil Nadu.

http://comply4hr.com/seenoti.asp?dcode=MHSEAT2021Jan21

Tripura

27/1/2021

Amendment to Tripura Factory rules to include safety equipment.

http://comply4hr.com/seenoti.asp?dcode=TFR2021Jan27

Karnataka

15/1/2021

Extension of LWF contributions to 31st January due to technical difficulties.

http://comply4hr.com/seenoti.asp?dcode=KALWFR2021Jan30

Lakshadweep

15/1/2021

Lakshadweep Holiday List 2021.

http://comply4hr.com/seenoti.asp?dcode=WHA2021Jan15


Is Labour Law in India really restrictive?

It is a standard refrain of Indian employers that labour laws hamper them from functioning with ease. This perception gains credibility because the laws originate from an aged British legacy system, and they do not change in keeping with the business landscape.

Is this really the case? Is labour law in India restrictive to business functioning? Let us try to look at this subject analytically and see if we can reach some conclusions.



In order to make some sense of this issue, I have listed the main areas which employers complain about, provided my brief opinion on the issue and then assigned it a ‘Severity Rating’ on the following scale.

1 - Not a real issue;
2 - Minor Issue, does not affect functioning for most employers;
3 - Valid Issue – affects functioning somewhat for many employers;
4 - Major Issue – makes functioning cumbersome for most employers;
5 - Burning Issue – Why hasn’t it been fixed?

1. Ability to hire and fire freely: 
If you employ more than 100 people (300 with the new labour code), you require the government’s permission to let people go. This is technically true but this applies only to ‘workmen’. There are issues around the definition of a workman in different laws, political interference and bureaucracy which add complexity to the process. Yet, if you are reading this and employed, the likelihood is that you can be fired without a problem. Countries where employers can ‘hire and fire’ have unemployment benefits in place which is not the case here. Further, there are no significant cases where permission is refused. This is at best a minor issue.
[Severity Rating: 2/5] 

2. Lack of Freedom to use Contract Labour/Outsource: 
You are generally free to outsource except for a few jobs which are notified by the government as core activities. This list is not really restrictive. You do have to maintain records and comply with minimum wage regulations but that is true for all employees. The complaint is primarily from employers who wish to disguise permanent jobs as temporary. This is not a real issue.
[Severity Rating: 1/5] 

3. Multiple Trade Unions: 
The law allows for multiple trade unions to be formed. This makes it hard for employers to reach agreements quickly. Newer industries and organisations with employee oriented HR policies are not affected by this issue. The number of trade unions has gone down from 40,000+ at the start of the century to less than 13,000 in 2014 as per last published figures. The influence of trade unionism in India is reducing. It does continue to prevail in the industrial belts. This is a major issue causing workers, employers and workplaces to suffer. The new labour codes offer very little mitigation by prescribing thresholds for recognition of a negotiating union.

[Severity Rating: 4/5] 

4. Cost of Minimum Wages:
In the scale of gross minimum wages, India is ranked 107th among 122 countries by the ILO. These minimum wages are in any case applicable only in the formal employment sector. Thus this affects a maximum of 20% of India’s actual employment. The objection to this comes from the regular revisions which make it hard to predict costs at the lowest end of the pyramid. As auditors, we all too often see employers in this sector trying to game the system. In my opinion, this protection for employees is very important and is only a minor issue from an employer’s perspective.
[Severity Rating: 2/5] 

5. Harassment by the Inspectorate:
This used to be a big problem a decade or so ago when enforcement authorities had the freedom to harass you. Employer’s also had lax attitudes towards compliance. Nowadays, inspectors are no longer willing to turn a blind eye towards non-compliance. Employers are also much more inclined to aim for maximum compliance. The government has introduced automated procedures which schedule inspections randomly and prevent the authorities from being able to selectively target employers. This is, therefore, a problem for those who are trying to be non-compliant. Ethical issues are still a concern here as well. 
[Severity Rating: 1/5] 

6. Registrations and Licensing:
As India’s struggle to climb up the ‘Ease of doing business’ rankings shows, obtaining all the registrations and licenses required to start a business or an office is a thankless task. Labour laws are not spared from this mire. Again, things have improved thanks to technology, with application processes and statuses made available through portals but in most cases, you still need to visit the relevant office to obtain the certificate. To be fair, the documentary requirements for the registrations are not too stringent but given the physical difficulty in obtaining a licence and the unpredictability of the process with regard to time and results, this has to be a valid issue.
[Severity Rating: 3/5]

7. State differences in laws:
“Under the Constitution of India, Labour is a subject in the Concurrent List where both the Central & State Governments are competent to enact legislation subject to certain matters being reserved for the Centre” The result of this? While most Acts (spirit of the law) are Central, most Rules (letter of the law) are different for each state. The primary act governing the running of all shops and establishments is also different for each state. This makes having consistent pan-India policies for working hours, overtime and leave impossible. This is a fairly severe and definitely a problem for organisations with establishments across the country.
[Severity Rating: 4/5]

8. Administrative burden:
The number of forms and returns that need to be provided, and their frequency, can often be an irritant to employers. However, in this day and age of automation, this should hardly be a challenge. There are also complaints about the volume and relevance of the data required. It must be realised that the data provided in these returns are critical for labour and employment statistics. If you have managed to become GST compliant, nothing here should provide a challenge. Yet again, for those employers who aim to be compliant, this is not a problem. It is only when the data and the reality doesn’t match, that this becomes an issue.
[Severity Rating: 1/5]



In summary, if we look at the severity ratings above, the total severity score is 18/40 or 45% with an average score of 2.25/5. Further, there are no issues that can be classed as burning issues, and just 2 classed as major issues. The numbers have been provided just to add a layer of analysis, issues like these cannot be boiled down to statistics.


CONCLUSION
While there are a couple of areas that need real and urgent changes, it is hard to conclude that Indian labour law is really restrictive. Employers enjoy substantial freedom albeit regulated. Employees enjoy protection of minimum wages, service conditions and retirement benefits but not full security in their jobs. A few tweaks to the high-severity issues are needed though.

I personally believe that the labour law environment in the country offers more than a fair balance between the needs of both employers and employees. 


I would love to hear from you on your experiences and insights into the above subject. Do connect on this blog or connect with me on ananth @ comply4hr.com.



Comply4hr - taking the labour out of labour law