1. Thursday, 06th November, 2014FSIA & I am SME of IndiaTeam AGBians

2. SF(RECS) Bill, 2014AT A GLANCETeam AGBians CHAPTERS 14 CLAUSES 55 EXEMPTIONS FORM REGISTRATION UNDER 14SPECIFIC ACTS CREATES SPECIAL CATEGORY OF MANUFACTURERS GAME CHANGER SHOWS THE WILL AND DESIRE TO SET THETREND 3. KEY HIGHLIGHTSNo MoreLaws Clause 54 Ch XIVTeam AGBians The Factories Act, 1947 The Industrial Disputes Act, 1947 The Industrial Employment (Standing orders) Act, 1946 The Minimum Wages Act, 1948 The Payment of Wages Act, 1936 The Payment of Bonus Act, 1965 The Employees State Insurance Act , 1948 4. KEY HIGHLIGHTSNo More Laws Clause 54 Ch XIVThe Employees Provident Funds and Miscellaneous Provisions Act, 1952Team AGBiansThe Maternity Benefit Act , 1961The Employees Compensation Act, 1923The Inter State Migrant Workmen (RECS) Act, 1979(State) Shops and Establishments ActThe Equal Remuneration Act, 1976The Child Labour (Prohibition and Regulation) Act, 1986 5. Small Factory Clause 2(f)Any Premises wherein amanufacturing process iscarried on and whichemploys less than fortyworkers.KEY HIGHLIGHTSTeam AGBians 6. Manufacturing Process Clause 2(e):Making, altering,repairing,ornamenting,finishing, packing,oiling, washing,cleaning, breakingup, demolishing, orotherwise treating oradapting any articlePumping oil,water, sewage orany othersubstanceexcludes petrolpumps workGenerating,transforming ortransmitting powerKEY HIGHLIGHTSTeam AGBians 7. KEY HIGHLIGHTSManufacturing Process Clause 2(e):Composing and processing forprinting, printing by letter press,lithography, offset, photogravurescreen printing, flexography orother similar process or bindingConstructing, reconstructing,repairing, refitting, finishingor breaking up ships orvessels or any other processnotified by Government timeto time in the Official GazetteTeam AGBians 8. KEY HIGHLIGHTSE filing of compliance return Single compliance report for selectlabour lawsTeam AGBians 9. KEY HIGHLIGHTSImplementation Authority Clause 2 (a) Government of the State/ Government of Union Territory Not the Central GovernmentTeam AGBians 10. KEY HIGHLIGHTSWorker Clause 2(j)Team AGBians 11. KEY HIGHLIGHTSRegistering officers Clause3Team AGBians 12. KEY HIGHLIGHTSclause 6 Ch. III1. Registration of Small Factory Intimate the Concerned authority Electronically Within 60 Days2. Change Occurs Intimation to Chief Inspector Electronically within 30 Days3. Close Down Intimate the Chief Inspector Electronically Within 15 daysTeam AGBians 13. clause 6 (2) Certificate of Registration Unique LIN (Labour Identification Number) to theEmployerKEY HIGHLIGHTSTeam AGBians 14. KEY HIGHLIGHTSPayment of Wages Clause 7 Ch IV Cash payments up to 1K Direct transfer into bank account Responsibility of Bank Account shiftedon EmployerTeam AGBians 15. KEY HIGHLIGHTSDeductions from Wages Clause 10 Ch IV Absence from duty Damage to or loss of goods or money House accommodation Amenities and Services as by order of Government Recovery of advance & Over payment of wages Income Tax PaymentTeam AGBians 16. KEY HIGHLIGHTSDeductions from Wages Clause 10 Ch IV By order of Court or Competent Authority Repayment of advances from any provident fund Payment to Co-operative Societies / schemeof Insurance Subscription to Health Insurance SchemeTeam AGBians 17. KEY HIGHLIGHTSPowers of Authority Clause 13 Ch IV All the Powers of a civil court under thecode of Civil Procedure 1908 (5 of 1908) Powers of Code of Criminal Procedure1973 (2 of 1974) Ch. XXVITeam AGBians 18. KEY HIGHLIGHTSWorking hours forwoman Clause 18 (1)(iii)Ch. VI 6 A. M. to 7 P.M.Overtime HoursClause 18 (1) (iv) Ch. VI 96 Hrs. in a quarterTeam AGBians 19. KEY HIGHLIGHTSLeave and Holidays Clause 23 Ch. VIITeam AGBians 20. KEY HIGHLIGHTSWelfare Facilities Clause 40 Ch. XIIFlatted Factories Complex Taken CareOff Common washroom and toiletfacilities for their combined workers Due to constraint in spaceTeam AGBians 21. Group Absence Clause 22 Ch. XI 10 or More Worker at a time Without Notice & Reasonable Cause Cut down 8 Days wages of eachworkerKEY HIGHLIGHTSTeam AGBians 22. KEY HIGHLIGHTSCollective Dispute Clause 27 (2) 51% or more workers directly orTeam AGBiansthrough trade unions Raise General Demand toConciliation officer*Settlement Time 90 Days 23. KEY HIGHLIGHTSMaintenance of Register and Records Clause 43 Ch. XIII Soft or hard Register of workers Attendance register Weekly offs Hours of work Wages paid Deductions made LeavePlace the records on websiteExemption Non submission of records to inspectorTeam AGBians 24. Pain Areas & SuggestionsName of Bill - Small Factories (Regulationof Employment and Conditions of Services)Bill, 2014Team AGBiansPain Area : old story comes back Small Factories became obsolete withIntroduction of MSME Development Act,2006Suggestion :Replace ..Factories with ..Enterprises 25. Pain Areas & SuggestionsDefinition of Small Factory clause 2(f)Pain Area :Team AGBians Minimum No. ofWorkers not given Maximum No. of FortyWorkers are very lessSuggestion : Mention Minimum No. of Workers alsoso that Micro remain out of purview Maximum No. of Workers 100 WorkersSo that seasonal industry is takencare of. 26. Pain Areas & SuggestionsDefinition of Manufacturing process Clause 2 (e)Pain Area :Emerging Sectors will not be benefittedSuggestion :Vibrant sectors should also be included*For Example: Hospitals, Nursing Homes, Educational Institutions Schools, Colleges, coaching centers, ITES Segment, Hotels,Restaurants, Eating Joints, IT Industry call center, BPO/ KPO/ LPO,whole of service sector and many more sectors Team AGBians 27. Pain Areas & SuggestionsDefinition of Manufacturing process Clause 2 (e)Pain Area :Ambiguity Likely to result into differentinterpretation by different stakeholdersTeam AGBiansSuggestion :More clarity by clearly defining the manufacturingprocess 28. Pain Areas & SuggestionsTeam AGBiansDefinition of Worker Clause 2 (j)Pain Area: Seems that workers involved in non-productivework will also be included in thedefinition of workers*For Example : Security Guards / plumbers / mechanicsSuggestion : Definition shall clarify about Positionof Indirect Workers, securitypersonnel, etc. 29. Pain Areas & SuggestionsTeam AGBiansRegistering Officer Clause 3Pain Area: Absence of District level Officer for issuingRegistration Any Central Act implemented by StateGovernments has its own challengesSuggestion : Create the Position of DLO or DFO 30. Pain Areas & SuggestionsTeam AGBiansPowers of Inspector Clause 5Pain Area: Extensive Including invoking Criminal code Non elimination of Inspector RajSuggestion : Random or complaint basedInspections. Time to Move for Self certificationrather than Inspection 31. Pain Areas & SuggestionsRegistration of Small Factory Clause 6Pain Area: Criteria for Registration not prescribed clearly Large Business will take benefit by splitting large factories inTeam AGBianssmall units LIN (Labour Identification Number) not right wordSuggestion : Provide criteria for Registration (Single LIN for each Employer) Define Large Employer in the same Act Change the Word LIN (Labour Identification Number) EIN: (Employer Identification Number) EIN: (Enterprise Identification Number) FIN: (Factory Identification Number) 32. Pain Areas &SuggestionsShifting / ChangesPain AreaShifting form one state to another willrequire closer at one place and new LINat another placeSuggestionInter State shifting of Factories to bedealt under same LINTeam AGBians 33. Pain Areas &SuggestionsPayment of wages clause 7Pain Area: Employer responsible for open of Zero Balance Bankaccount for workers. That means onus on employer to checkcredentials of prospective worker thoroughly.Suggestion : Employer shall help (not responsible) inBank Account openingTeam AGBians 34. Pain Areas &SuggestionsMinimum Wages clausePain Area: Against the work of 12 months Small Factories Owner isexpected to pay for 18 months.Suggestion : Time to move on and adopt the conceptof Cost to the Company (CTC)Team AGBians 35. Pain Areas &SuggestionsYoung person as Trainee clause 15 (2)Pain Area: Requires written authorization of ChiefInspectorSuggestion : Authorization likely to become timeconsuming and money extractingexercise Replace with the word Intimation inplace of authorization.Team AGBians 36. Pain Areas &SuggestionsOvertime Hours Clause 18 (1) (IV)Pain area : No. of overtime hours 96 hours (In aquarter) Very less Seasonal Industries willnot be able to take the benefits of SF(RECS)Bill, 2014Suggestion: 96 hours in a month Different Limits for Seasonal Industries like cracker industryTeam AGBians 37. Pain Areas &SuggestionsPaid leave and holidays clause 23 (1)Pain area : Approx 6 months extra wages without work Employer pays for 18 months and workerwork for 12 monthsSuggestion: Challenge Can we shift to 15for 12 in totality?Team AGBians 38. Pain Areas &SuggestionsNon Application of certain Laws Clause 54 Compliances under 14 Acts RemovedSuggestion : Gratuity Act should also beincluded in the said ActsTeam AGBians 39. Pain Areas &SuggestionsPF and Insurance Clause 25Pain Area : 20% contribution by Employer Boonor Bane? In certain cases contribution will workout even more than presentcontributionSuggestion : Need to rationalize the %ages downward to 8% from 10%Team AGBians 40. Pain Areas &SuggestionsMaintenance of Register and Records clause 43Pain area: Print outs to be compulsorily providedto Inspectors at the time of Inspection Does it mean that Inspectors will remaincomputer illiterate?Suggestion: E-mail or soft form shall be allowedas green InitiativeTeam AGBians 41. Pain Areas &SuggestionsRETRENCHMENT COMPENSATION Cl26Pain Area One month wages/Notice plus15 days salary per year. 240 days in twelve consecutivecalender monthsSuggestionThis is additional burden on SmallFactoriesLet it be consecutive 240 days ratherthan 240 days in 12 consecutive months.Team AGBians 42. AcknowledgementIn addition to inputs form Faridabad, I am SME of Indiareceived inputs form various parts of some India. Fewinputs are acknowledged here Ruchir Gupta/ Ashok Gupta MechcuttersIndia, Indore Rajat Bajaj, Partner Jamuna Udyog, Delhi Suresh kumar Gupta, Owner S.K. Gupta &Co., Gurgaon 43. Team AGBiansagbcorplegal@gmail.comwww.agbcorplegal.com09811386723