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Labour reforms: Govt to scrap inspectors' discretionary powers

It will also launch a portal starting Oct. 2 for e-filing of annual returns and compliance reports

Somesh Jha  |  New Delhi 

Among its initiatives to make doing business in the country easier, the labour ministry will on September 1 launch a scheme to liberalise the way inspection for compliance with labour-related laws is done. In what could be a move to crack down on the so-called inspector raj, the new inspection scheme will take away inspectors' discretionary powers.

The next such initiative will be a unified portal, to be launched on October 2, that will serve as the common platform for employers to file their annual returns and compliance & inspection reports.

"These steps will bring a paradigm shift in the way the country is viewed and help boost India's ranking in ease of doing business," said a senior labour ministry official asking not to be named.

The new inspection system will initially cover 16 of the 44 Acts administered by the Union labour ministry, including the Industrial Disputes Act, 1947. It will have three kinds of inspections - the areas where inspection is mandatory, those where it is optional and the instances where it is based on compliance.

All inspections for the Employees Provident Fund Organisation (EPFO) and the Employees State Insurance Corporation (ESIC), besides those in the ambit of the Chief Labour Commissioner and the Directorate General of Mines Safety (DGMS) will be covered under the new scheme.

Under this system, mandatory inspections will be done only in extreme cases. For instance, if a fatal or serious accident has taken place, or in the cases of continuous strikes or lockouts.

Optional inspections will be automatically generated through a system on the basis of the priorities of the organisation concerned.

For the inspections based on compliance, a Central Analysis and Intelligence Unit (CAIU) will be set up to analyse and collect field data; the cases will be referred to this unit for evidence-based approval for inspection.

An inspector will then have to file his or her report within three days of going to the field. "The inspectors sometimes use their powers to harass both employees and employers. The new system will make them more accountable and take away their discretionary powers. The inspectors cannot go to inspect of their own accord. And their reports will not be considered valid if those are not uploaded within three days of inspection; action will be taken against them in the event of delay," said the official.

The unified web portal will make the compliance process easier for industry and initially cover 16 central laws. Through this portal, the companies could file their annual returns and inspection reports and the format for these would be simpler from those in force at present. This integrated portal will operate through a unique labour identification number for each employer or establishment. The employers will be allotted labour identification number (LIN) after registration on the web portal.

"This will provide easier returns for designated Acts, simpler format for annual returns and a window for inspection reports," the ministry official said.

The annual return has been reduced from an 80-page long format to a five-page document. Similarly, the inspection reports have also been reduced considerably.

"These steps will curb manual interference and encourage the use of technology, so that industry can engage in a better manner with the labour department," the official added.

EPFO, DGMS and ESIC have begun the initial work to put the new systems in place by August 31.


New inspection scheme

What is the aim?
To curb inspector raj, take away inspectors' discretionary powers

How does it work?
Mandatory: Extreme cases
Optional: System-generated
Compliance-based: Only after approval of a separate unit

Unified web portal

What is the aim?
To ease compliance with labour-related laws

What is it and what does it cover?
A common window for online registration of units, reporting of inspections, submission of annual returns and redressal of grievances; covers 16 of the 44 central Acts

First Published: Thu, August 07 2014. 00:50 IST