Draft Bill clubs 14 labour laws, proposes single legislation for small factories

Taking forward its mission to ease ‘doing business’ in India, the Government is ready with a draft Bill on a single labour law to govern small factories employing less than 40 workers. The proposed draft clubs 14 existing Acts applicable to the sector, making labour law compliance easier for owners of small factories in India.

The Small Factories (Regulation of Employment and Condition of Services) Bill, 2014, which has been uploaded on the Labour Ministry’s website for public comments till November 10, is likely to be introduced in the Winter session next month-end.

The Labour Ministry said the draft was finalised after extensive discussions by the working group constituted by it.

The draft defines a small factory “as any premise wherein a manufacturing process is carried on and which employs less than 40 workers” and seeks to exempt employers from complying with 14 Acts – The Factories Act, 1947, The Industrial Disputes Act, 1947, The Industrial Employment (Standing orders) Act 1946, The Minimum Wages Act,1948, The Payment of Wages Act, 1936, The Payment of Bonus Act, 1965, The Employees State Insurance Act, 1948, The Employees Provident Funds and Miscellaneous Provisions Act, 1952, The Maternity Benefit Act 1961, The Employees compensation Act,1923, The Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service ) Act, 1979, (State) Shops and Establishments Act, The Equal Remuneration Act, 1976 and The Child Labour (Prohibition and Regulation)Act, 1986. In another move, employers can register and even close down their factories by electronically notifying it to the authorities concerned. While mandatory registration of a small factory is to be done within 60 days of its commencement after paying the prescribed fees, in the case of closure, the owner/employer needs to electronically notify this to the chief inspector within 15 days of closing the factory. On ‘financial inclusion’, the draft proposes that wages of over ₹1,000 “shall be paid to the workers by depositing them in the bank account of the worker, electronically”. In case the worker does not have bank account, it shall be the responsibility of the employer to get a zero balance account opened, it adds.

On minimum wages, the draft mandates that no employer shall pay less than the fixed minimum wages, but proposes no penalty for non-compliance, adding that any claim in this matter is to be decided by an authority to be set up by the State Government. The draft includes proposals on child labour, health and safety standards, maternity benefits, leave entitlement, bonus, among other things.

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