Staffing and recruiting industry -legal updates

LABOUR LAW REFORMS-STEP FOR THE FUTURE TO GENERATE EMPLOYMENT AND MAKE INDIA GLOBALLY COMPETITIVE

Recently the Union Cabinet on 31-07-2014 approved the changes to three important labour laws:

FACTORIES ACT:

Proposed changes in the Factories Act are:

(i) Employee’s safety at work place

(ii) Doubling the provisions of overtime from 50 hours a quarter to 100 hours in some cases and 75 hours to 125 hours in work of public interest

(iii) Increasing penalty for violation of the provision of the Act

(iv) Relaxing norms for workmen in some industries at night

(v) Reducing from 90 to 240 days the number of days, an employee needs to work to become eligible for the benefit like live with pay

APPRENTICES ACT:

The scope of employment as apprentices now restricted to Shop floors will be expanded to induction of Non-Engineers as Apprentices. There is a possibility of open the door of other sectors to Apprentices.

Stipend paid to Apprentices is also being increased and in the first year apprentices will get 70% what semi skilled workers get and the second year 80% and third year 90% and for those employees in small scale unit and the Government will pay 50% and the employer the balance.

LABOUR LAWS (EXEMPTION FROM FURNISHING
RETURNS AND MAINTAINING REGISTERS BY CERTAIN ESTABLISHMENTS)
ACT, 1988

The changes to the Act will enable Employer especially thousands of small scale industries to file just one return for compliance of the following labour laws

It will also exempt small-scale industries with less than 40 workers to comply separately with each of the laws. A single page return on compliance is what the amendment seeks to fulfill.The covered laws are as follows:

(1) The Payment of Wages Act, 1936
(2) The Weekly Holidays Act 1942
(3) The Minimum Wages Act, 1948
(4) The Factories Act, 1948
(5) The Plantations Labour Act, 1961
(6) The Working Journalists and Other Newspaper Employees
(Conditions of Service) and Miscellaneous Provisions Act, 1955
(7) The Contract Labour (Regulation and Abolition) Act, 1970
(8) The Sales Promotion Employees (Conditions of Service) Act, 1976
(9) The Equal Remuneration Act, 1976



Stakes for the Contract Staffing Industry on the amendments:-

(i) Blue Collared Staffing will get an impetus on Overtime from Doubling the provisions of overtime from 50 hours a quarter to 100 hours in some cases and 75 hours to 125 hours in work of public interest .

(ii) Due to inclusion of Apprentices in the Non Engineering domain ie other sectors Staffing Industry will be benefited. .

(iii) Implementation of apprenticeship training scheme in those organisations which are operating business/trade in more than four States, will rest with Central Government.Therefore Contract Staffing Companies operating business/trade in more than four States will be benefited.

(iv) The proposal to allow registers/records to be maintained in computer, floppy, diskette or on other electronic media and return submitted through email can be proceeded with.


With Regards

V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry

Hi

Need for Hiring Apprentices –An interesting Conversation

Recently a Manufacturing Company wanted to hire apprentices through their Staffing Service Provider.

The COO called his Procurement Head and told him to hire Apprentices for the shop floor .

Immediately the Procurement Head – Krishna lost no time and talked to the Head of Business of the Staffing Service Provider Company -Arjun and wanted a quote .

Thereafter  Krishna and Arjun had an interesting conversation like this:-.

Krishna- I expect a good quote from you to maintain my margins.

Arjun- Yes, I need to give the quote on the Apprentice –Month Model strictly based on some new developments in the law.

Krishna:- What is that !

Arjun : Do you know -New Apprenticeship Rules have come into effect on 22-09-2014.The whole pay out is now Apprentice friendly.

Krishna-You are getting on my nerves –Tell me how does it affect my procurement pricing policy .

Arjun- Hey Krishna listen –Now you need to pay the following rates to the seconded Apprentices:-

(1) The minimum rate of stipend per month payable to trade apprentices shall be follows, namely:—

(a) During the first year of training : Seventy per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory

(b) During the second year of training : Eighty per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory

(c) During the third and fourth year of training : Ninety per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory:

Krishna - Thanks a lot Arjun for this valuable info –But can you tell me about the old rates !.

Arjun – The old rates were like this:-


During the first year of training -Rs 2100/-per month
During the second year of training –Rs 2400/- per month
During the third year of training –Rs 2800/- per month
During the Fourth year of training –Rs 3100/- per month.



Krishna- Well if what you said is true .Now our CTC per Apprentice goes for a spin , I will need to get back to you after re-working my whole annual budget for Apprentices. I will also get a legal update from my Legal Team on these changes.

Arjun- Okay shall wait for your call.

With Regards

V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry