Ease of Compliance Rules: How Narendra Modi government’s move will help establishments cut costs and effort

By: | Updated: May 5, 2017 5:16 AM

Ease of Compliance Rules is a welcome step that will help establishments cut costs and efforts.

Ease of Compliance Rules, Narendra Modi, Narendra Modi government, Economy, Indian economy, labour ministry, Labour Rules 2017, Rajya SabhaEase of Compliance Rules is a welcome step that will help establishments cut costs and efforts. (Source: PTI)

The labour ministry has rationalised and simplified procedures for maintenance of registers that will enable establishments to have combined registers, either in electronic or in physical form, under various labour legislations. The number of registers has been significantly reduced to five from the earlier requirement of 56, thus leading to a sharp reduction in the cost and compliance burden on them. Also, the new registers have 144 data fields as against the 933 filed under the previous set of registers.

The need for combined registers was felt as most of the registers maintained under these legislations were overlapping, time-consuming and not cost-effective. Prior to the enactment of the Labour Rules, 2017, there was a requirement to maintain various registers—muster roll and register of wages, register of persons employed, register of deductions for damages or loss and register of fines—under various labour legislations like Building and other Construction Workers (Regulation of Employment and conditions of Service) Act, 1996, Contract Labour (Regulation and Abolition) Act, 1970, Equal Remuneration Act, 1976, Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, Mines Act, 1952, Minimum Wages Act, 1948, Payment of Wages Act, 1936, Sales Promotion Employees (Conditions of Service) Act, 1976 and Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955.

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Combined registers will now have to be maintained in only Form A (Format of employee register), Form B (Format of wage register), Form C (Format of register of loan and recoveries), Form D (Format of attendance register), Form E (Format of register of rest/leave). Further, if the registers are maintained in electronic form, then their layout and presentation may be adjusted without changing their integrity, serial number and contents of the columns. Welcoming the move, industry experts feel that the government’s proactive step will facilitate ease of compliance by employers and increase transparency.

Even Bandaru Dattatreya, MoS, labour and employment had told Rajya Sabha that these initiatives will improve the wage security, job security and social security of the workers. Legal experts too feel that the Ease of Compliance Rules is a welcome step that will “help establishments cut costs and efforts, and ensure better compliance with labour laws.” However, they feel that effective implementation is still the “key to success.”

“While these amendments will help substantially reduce the number of registers that are required to be maintained by establishments regulated by the specified labour laws, it may take some more time before the scheme of simplification contemplated in Rules is adopted by the state governments,” Anshul Prakash, the associate partner at Khaitan & Co, said. Labour being a subject which falls in the ‘Concurrent List’ of the Constitution of India, both the central and state governments are competent to legislate.

So, the amendments proposed by the Ease of Compliance Rules will become applicable to an establishment only when the state in which the establishment is located adopts such proposed amendments, he said. “This will fine-tune the investment environment of the country especially when foreign companies are keen to invest in India,” Prakash added. The Ease of Compliance Rules is a significant move aimed at improving India’s competitiveness, its labour compliance landscape and also its business-friendly environment. Reforms in labour laws is a continuous process and need amendments for effective implementation and fine-tuning to keep pace with the emerging economic and industrial scenario.

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