Welcome to the fourth edition of the e-Bulletin (Volume V) brought to you by the Employment Labour and Benefits (ELB) practice group of Khaitan & Co. This e-Bulletin covers regulatory developments (including those relating to the upcoming labour codes), case law updates and insights into industry practices that impact businesses from a sector agnostic standpoint.
- LABOUR CODES: STORY SO FAR
In this section, we help you in understanding the developments that have taken thus far on the implementation of the 4 labour codes on wages, social security, industrial relations, and occupational safety, health and working conditions, which received the Presidential assent between the years 2019 and 2020.
Broadly speaking, the labour codes, which aim to consolidate and consequently replace 29 central labour laws, are yet to be brought into force, barring provisions relating to (a) Central Advisory Board on minimum wages, and (b) identification of workers and beneficiaries through Aadhaar number for social security benefits. Moreover, even if the codes are fully brought into effect, the same would require issuance of rules, schemes, and notifications of the relevant governments so as to have a comprehensive revised compliance regime.
Under the labour codes, the 'appropriate government' for an establishment can be the Central Government or the State Government, depending on the nature of its operations or the existence of multi-state operations. Such appropriate government has the power to inter alia issue rules detailing some of the substantive aspects broadly set out under the codes and also prescribing procedural compliances such as filings, maintenance of registers, etc. In the last one year, several key industrialised states such as Haryana, Delhi, Maharashtra, Gujarat, Andhra Pradesh, Telangana, Tamil Nadu, and Karnataka released draft rules under some or all of the labour codes for public consultation (with Gujarat, Karnataka, and Uttar Pradesh also releasing final rules under certain labour codes). Among the industrialised states, notably, West Bengal is yet to release their draft rules under any of the codes.
- REGULATORY UPDATES
In this section, we bring to your attention, important regulatory developments in the form of notifications, orders, bills, amendments, etc. witnessed in the past one month in the context of employment and labour laws.
Telangana allows shops and establishments to operate 24*7
By way of a notification dated 4 April 2023, the Government of Telangana has exempted all shops and establishments, as defined under Section 2(21) of the Telangana Shops and Establishments Act, 1988 (Telangana S&E Act) from the provision of Section 7 of the Telangana S&E Act, which deals with opening and closing hours of shops in the state. The exemption has been made subject to certain conditions, including: (a) giving every employee a weekly off and adhering to the weekly hours provision under the Telangana S&E Act; (b) ensuring adequate safety of women employees, along with requiring written consent from the women employees to work on a night shift; (c) giving a compensatory holiday with wages in lieu of the employees working on a notified national / festival holiday; and (d) providing overtime wages at the stipulated rates, to the employees for the extra hours of work beyond the normal working hours.
Madhya Pradesh exempts industrial units from approvals and inspections
By way of publication in the Madhya Pradesh Gazette on 6 April 2023, the Government of Madhya Pradesh enacted the Madhya Pradesh Udyogon Ki Sthapna Evam Parichalan Ka Saralikaran Adhiniyam 2023 (Act). The Act provides for exemptions to industrial units in Madhya Pradesh from obtaining approval and inspection requirements under several central labour statutes including: (a) Factories Act, 1948; (b) Contract Labour (Regulation and Abolition) Act, 1970; (c) Employees' State Insurance Act, 1948; (d) Minimum Wages Act, 1948; (e) Payment of Bonus Act, 1965; (f) Payment of Wages Act, 1936; (g) Maternity Benefit Act, 1961; (h) Payment of Gratuity Act, 1972; (i) Equal Remuneration Act, 1976; and (j) Madhya Pradesh Shops and Establishments Act, 1958.
To avail such exemption, an entity is required to notify the state nodal agency of its intention to invest by setting up an industrial unit. The nodal agency may issue an acknowledgement certificate on the basis of such notification. The acknowledgement certificate will be construed as an approval for a period of 3 years from the date of issuance of such certificate, during which, no inspection will be conducted at the entity's premises and only approvals for commencement of commercial activities will be required to be obtained from the relevant authorities.
Maharashtra amends penal provisions under various labour laws
The Government of Maharashtra has enacted the Maharashtra Labour Laws (Amendment) Act, 2022 (Maharashtra Act) vide a notification dated 11 April 2023, published in the Maharashtra Government Gazette. The Maharashtra Act revises the penalties under the following legislations: (a) Maharashtra Industrial Relations Act, 1947; (b) Maharashtra Labour Welfare Fund Act, 1953; (c) Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare) Act, 1969; (d) Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981; and (e) Maharashtra Workmen's Minimum House-rent Allowance Act, 1983. The erstwhile penalties have been revised to the new and higher penalties under the aforementioned legislations, in the range of INR 5,000 to INR 10,00,000.
EPFO grants an extension for mandatory seeding of Aadhaar with UAN
By way of a circular dated 18 April 2023, the Employees' Provident Fund Organisation (EPFO) has granted an extension for mandatory seeding of Aadhaar with UAN (universal account number) of the eligible employee-members for filing of ECR up to 31 March 2024. This extension is applicable to the establishments falling in the categories of beedi making, building and construction and plantation industries (tea, coffee, cardamom, pepper, jute, rubber, cinchona, cashew nuts etc.) and for the north-eastern region comprising the states of Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.
EPFO provides further instructions regarding Sunil Kumar Case
By way of a circular dated 23 April 2023, the Employees Provident Fund Organisation prescribed additional guidelines in view of the Supreme Court judgment of Employees' Provident Fund Organisation and Another v Sunil Kumar and Others [AIR 2022 SC 5634] (Sunil Kumar Case). The circular specifies that the online facility has been deployed and is available up to 3 May 2023 for receiving applications from employers towards: (a) validation of joint option in respect of employees who retired prior to 1 September 2014 and (b) joint option in respect of employees who were members of the Employees' Pension Scheme, 1995 (EPS Scheme) on 1 September 2014.
Further, such applications will be examined and verified with the data available in the field offices. Wherever there is a mismatch in data, the same will be informed to the employer and the employee / pensioner and will be accorded a time of one month to provide the necessary information.
Punjab amends its shops and commercial establishment rules
By way of a notification dated 24 March 2023 issued in the Punjab Government Gazette, the Government of Punjab has amended the Punjab Shops and Commercial Establishments Rules, 1958, to include Rule 22, which deals with the exhibition of a name board, and Rule 23, providing a corresponding penal provision. As per the same, every establishment is required to exhibit a name board in Gurmukhi script in Punjabi, and wherever other languages are also used, such version will be included below the Punjabi version (although the name board in the Punjabi version shall be written more predominantly in comparison to the other languages). All establishments are required to comply with this provision within 6 months from the date of the commencement of this amendment (31 March 2023). Establishments not complying with this provision shall be punishable with a fine of INR 1,000 for the first offence and INR 2,000 for every subsequent offence.
ESIC provides guidelines for Aadhaar authentication
By way of a circular dated 17 April 2023, the Employees' State Insurance Corporation in furtherance of its notification dated 13 January 2023 (allowing seeding and authentication of Aadhaar in the system) has provided further guidelines and a user manual to expedite the process of Aadhaar seeding and generation of ABHA (Ayushman Bharat Health Account) number. The ABHA number will be a unique identification number for a person, which will facilitate updating of health records across multiple healthcare service providers.
An employer can seed the Aadhaar number while registering the employee. Further, by obtaining consent of the concerned employee, the ABHA number of the employees can also be generated on the basis of the Aadhaar number.
- CASE UPDATES
In this section, we share important judicial decisions rendered in the past one month from an employment and labour law standpoint.
Proof of joint option under EPF Scheme not required for joint option under EPS Scheme: Kerala High Court (Interim Order)
Through an interim order in the case of Saheer S and Others v Union of India and Others [Writ Petition (Civil) Number 8979 of 2023], the Kerala High Court opined on the requirement of producing copies which evidence exercise of joint option under Paragraph 26(6) of the Employees' Provident Funds Scheme, 1952 (EPF Scheme) for the purpose of exercising joint option for higher pension benefits under the EPS Scheme. This order was issued pursuant to the ruling of the Supreme Court of India in the Sunil Kumar Case.
To the relief of the petitioners (even if temporary), the Kerala High Court took cognizance of the ground realities of the matter and noted the following:
"Thus, when considering all the above aspects, the only view that can possibly be taken is that the petitioners have succeeded in establishing a prima facie case...There cannot be any dispute that if they were not permitted to submit their options before the cut-off date, they would be deprived of their opportunity to claim the benefits of the judgment of the Honorable Supreme Court forever...the Employees Provident Fund Organization and the authorities under the same are directed to make adequate provisions in their online facility to enable the employees/pensioners to furnish the options in tune with the directions of the Honorable Supreme Court, without the production of the copies of option under paragraph 26(6) of the Scheme, 19.
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