The Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014.

Micro, small and medium enterprises employing up to 40 workers will now be brought under the ambit of a new labour law that is, however, poised to cut down on cumbersome procedures by permitting online registration of units and e-filing of compliance returns by employers through a single unified form.

The labour ministry has drafted the Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, that seeks to regulate small industries but at the same time provide ease of doing business to these units.

“The objective of the Bill is to simplify the law for small manufacturers but at the same time ensure welfare of the workers employed by them,” said a senior labour ministry official.

Accordingly, the draft Bill has sought to provide each employer a labour identification number that would allow him to register online and submit a single compliance report for all 44 labour laws.

Significantly, the new Bill also plans to do away with outdated provisions for labour welfare such as spittoons and washing and drying lines in each factory, that have been included in the new Factories Bill as well.

Instead, taking cognisance of the fact that small units often run out of a single room, the government plans to allow a cluster of small factories to provide washroom and toilet facilities to their combined workers.

“The employer shall provide sufficient latrine and urinals as may be prescribed and they shall be so conveniently situated as may be accessible for the worker employed in the small factory.

Provided that in case it is not possible, due to constraint in space or otherwise several employers, may provide common facilities,” the draft Bill has proposed.

Further to establish an employer-employee relationship as well as step up efforts to financial inclusion, the Bill has proposed that employers must transfer wages into a bank accounts instead of cash payments.

“Often it is seen that workers are not given any benefits as the employer pays them by cash and there is no record of their employment. Ensuring that salaries are paid into bank accounts means that there is proof of employment while at the same time encouraging workers to save a part of their earnings,” said the official.

The ministry has now circulated a draft of the Bill to stakeholders, seeking all comments by November 15. The Bill is likely to be tabled in Parliament during the Winter Session.

“We are hopeful that given the focus on labour law reforms, this bill too will be enacted soon,” said the official, adding that most of its provisions are compliant with the new Factories Bill. The need for a separate labour law for small factories was highlighted by the Second National Commission on Labour, way back in 2000, which felt that not only would it encourage more small scale industries but would also boost employment opportunities in the sector.


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