With the norms of Employees State Insurance (ESI) and Employees Provident Fund (EPF) set to change amid furor by labour organisations, small industrial units on which, heavy penalties were imposed earlier for minor discrepancies, have heaved a sigh of relief.
The Labour Laws Amendment Bill (exemption from furnishing returns and maintaining registers by certain establishments, 2011, was passed in Lok Sabha on November 28 after which the ball has been set rolling for changes in labour laws for small industrial units. The bill is yet to be passed in Rajya Sabha.
With the amendments, a unit or a company employing at least 40 workers would be called a small establishment and the amendments would take place for these units. Earlier, a small establishment was considered to be the one having 10-19 employees.
In Ludhiana, there are thousands of small units employing less than 40 employees that have to furnish details as well as deposit ESI and EPF. As per the industry, it was difficult for many small industrial units to deposit this sum of money due to fewer turnovers.
Prime Minister Narendra Modi had stated that it was necessary to change labour laws that have become very old and there was a need to make new laws.
As per the amendments the limit of labourers in an industrial unit for ESI would be increased from 10 (present) to 40 workers. On the other hand the limit for EPF would be increased from 20 (present) to 40 workers.
Federation of Associations of Small Industries of India (FASII) president Badish Jindal said paper work of a small establishment would also decrease drastically after the amendments.
Jindal said, "At present even a small industrial unit has to do thorough paper work that could be inspected anytime by the officials of industry department. However, now the records would not be required for a small establishment."
According to the amendments, even inspectors of industry department could not directly go and inspect a unit, but have to take prior permission from the higher ups before any inspection at a small establishment.