DECRIMINALISATION OF CERTAIN LABOUR LAW PROVISIONS FOR IMPRISONMENT FOR MINOR BREACHES – IN THE LIGHT OF THE ANDHRA PRADESH LABOUR WELFARE FUND ACT !!!!
Karma Management Global Consulting Solutions Pvt. Ltd. One of the top 5 consultancy firms, established in the year 2004, with headquarters in the business district of Santacruz East, Mumbai, India, and full-scale operation in all the States, having about 200 direct and indirect staff on its roll, is a leading service provider for payroll and payroll compliances, outsourcing, facility services, HR services, Training & Development, Recruitment & Talent Acquisition, Legal and Para legal services, Disputes and Litigation Handling, Inspection Management and Liaisoning, Advisory Services, Social, Environment and Vendor Audits, Regulatory compliances ad Governance.
Compliance with labour and employment laws has become one of the most important issues that many establishments in India have to deal with. Many employment disputes result in litigation.
Karma is an Indian HR, Payroll, and Compliance firm advising clients worldwide on local, regional and global regulatory compliances in relation to their business goals, business strategies, and resolving disputes.
It gives valuable suggestions and advice to Corporates, Investors, Institutions, Contractors, Establishments, Industries, SMEs, etc. on the need for lowering employment risk across all levels and adhering to the laws of the land. It has a lot of expertise on employment-related compliance issues, as well as day-to-day support for the human resource department and in-house counsels. Karma is also into employment agreements and policies, structuring of compensation and benefits, employment aspects of mergers and takeovers, etc.
Karma’s force, strength, and reach have brought in tremendous change over from its earlier image of being a consultancy firm in the period of 2000, to now embarking on setting practices abroad in highly regulated markets and competing in the global arena.
With India overtaking the UK to emerge as the fifth largest economy in the world and setting to become the third largest by2029, Karma Global is all poised for long-term value in terms of clients outreach and giving state-of-the-art technology and excellent services to global clients better than ever before,
Decriminalization of certain labour law provisions for imprisonment of minor – State Labour Welfare Fund acts for minor breaches and what are its consequences but before that, let us understand what “LWF” is all about!
Labour law is the area of law that signifies the relationship between a worker, a trade union, and the government at large. It plays a major important role in protecting the rights of labour, their union, their wages, and moreover building a link between government and workers. It is a protective code for laborers, workers, and employees as well, to make them aware of their rights and also, to establish a standard law regarding labour work practice. Labour law is often incorrectly conflated with Employment law. However, Employment law is the area of law that specifically deals with the relationship between an employer and employee.
What is Labour Welfare Fund?
Labour Welfare Fund is a fund contributed by Employer, Employees and in some states by the Government as well. The purpose of these welfare funds is to provide housing, medical care, educational, and recreational facilities to the workers and their dependents.
How Does Labour Welfare Fund Help Workers?
The Labour Welfare Fund (LWF) is managed by the Labour Board which provides a number of welfare schemes for workers. The schemes provide support in three broad areas as follows.
· Improving Standard of Living
· Offering Better Work Conditions
· Providing Social Security
In which States are the Labour Welfare Acts enacted?
Currently, this Act is enacted and applicable in the States of Andhra Pradesh, Chandigarh, Chhattisgarh, Delhi, Goa, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Tamil Nadu, Telangana & West Bengal.
Labour Welfare Fund Benefits For Employers in brief :
- Refined Industrial Relations
- Improvement in work efficiency
- Elevated Morale
- Improved Mental and Moral Health
- Better Outlook of Employers
- Social Benefits
Decriminalization of certain labour law provisions for imprisonment of minor – Rules and Penalties for Labour Welfare Fund Act in different States :
Rules for Labour Welfare Fund in Maharashtra
Penalties for Non-compliance
The fine of ₹500 and/or imprisonment can be extended up to 3 months
Rules for Labour welfare fund in Andhra Pradesh
Penalties for Non-compliance
There is a provision for a fine of ₹500 and/or imprisonment that can be extended to 3 months period
On further violation of the rules for the labour welfare fund, the imprisonment is extendable to 6 months and/or fine up to ₹1000.
Gujarat and its LWF rules
Penalties for Non-compliance
The punishment of the fine for a person cannot be less than ₹20000
Kerala and its LWF rules
the rules under the labour welfare fund are applicable to any organization registered in the state with the minimum of two employees.
Penalty for the violation of rules
In case of obstructing the inspector while he exercises his duties
Imprisonment of terms up to 6 months and/or a fine of ₹500 can be the punishment for the case of obstructing the inspector while exercising their duties.
Tamil Nadu and its LWF rules :
Applicable to the organizations registered in the state with 5 or more employees
Penalties
For the first time, offense imprisonment can be extended to a period of 3 months and/or a fine up to ₹500
for the second and subsequent offense of the labour welfare fund rules imprisonment that can be extended upto 6 months and /or fine may extend to ₹10000
West Bengal and its LWF rules
Applicable to the companies registered in West Bengal with 10 or more employees
Penalties
Imprisonment for a term that can be extendable to 3 months and/or a fine that can be extendable to ₹ 500
For repeated offenses, the imprisonment can be extended up to 6 months and/or a fine which may extend up to ₹1000
Karnataka and its LWF rules
applicable to companies registered in Karnataka with 50 or more employee
Penalties
The imprisonment for a term up to 3 months and/or a fine up to ₹500
For repeated offenses fine can extend to ₹1000 and imprisonment can go up to 6 months
Delhi and its LWF rules
Companies registered in Delhi with five employees need to follow LWF
Remission of penalty. – (1) Application for remission of penalty shall be made to the Welfare Commissioner within sixty days from the date of payment of the penalty, and shall clearly specify the grounds on which the remission is claimed.
Where the Welfare Commissioner is satisfied that the penalty imposed is likely to cause undue hardship to the employer concerned or that the employer has suffered financially on account of riots, war or through natural calamities or that delay caused in the payment of unpaid accumulations or fines was due to circumstances beyond his control, the Welfare Commissioner may remit in part or whole the penalty payable under sub-section (2) of section 6-B;
Provided that if the amount of penalty to be remitted exceeds five hundred rupees, the remission shall not be made without the prior sanction of the Board.
Haryana and its LWF rules
Applicable to the companies registered in the state of Haryana
Fines and Interest imposed on employers:-
Section 3 (4) (5) of the Punjab Labour Welfare Fund Act, 1965 (same for Haryana) contains provisions for payments of penalties and interests for not complying with the provisions of the Act.
Mode of recovery of sums payable into Fund, etc.–Any such sums payable into the Fund under this Act, shall, without prejudice to any other mode of recovery, be recoverable on behalf of the Board as an arrear of land revenue. Mode of recovery of sums payable into Fund, etc.–Any such sums payable into the Fund under this Act, shall, without prejudice to any other mode of recovery, be recoverable on behalf of the Board as an arrear of land revenue.
Decriminalization of certain labour law provisions for imprisonment of minor – Labour Welfare Fund the Punjab Labour Welfare Fund Act, 1965. (as amended upto 05-04-2021)
Penalty.– Save as otherwise provided, any person, who contravenes any of the provisions of this Act or any rule made thereunder or who willfully obstructs an Inspector in the exercise of his powers or discharge of his duties under this Act or any rule made thereunder or fails to produce for inspection on demand by an Inspector any registers, records or other documents maintained in pursuance of the provisions of this Act or the rules made thereunder or to supply to him on demand true copies of any such document, shall, on conviction, be punished — (i) for the first offense, with fine which may extend to five thousand rupees; but not less than two thousand rupees‖ (ii) for second or subsequent offenses, with imprisonment for a term which may extend to three months, or with fine which may extend to ten thousand rupees but not less than three thousand rupees.
26B. Cognizance of offenses.–(1) No court inferior to that of a Judicial Magistrate of the 1st Class shall try any offence punishable under this Act. (2) No court shall take cognizance of any such offence except on a complaint made by the Inspector.
Decriminalization of certain labour law provisions for imprisonment of minor – We Can Now Go to The Scenario in Andhra Pradesh Where the State Government Is Going to Table Several Bills During Assembly Session Including Passing an Ordinance to Further Amend “Andhra Pradesh Labour Welfare Fund Act 1987”
The bill intends to concentrate on decriminalization of provisions of imprisonment for minor violations as far as the State’s Labour Welfare Act is concerned Almost all the Labour Law Acts have a provision for penalties and imprisonment in case of breaches and the penalties and imprisonment are the same for all the obligations whether the offense is minor or major. There is no redeeming factor if the breach is minor as the punishment is the same as that of a major offense. Of course, some sporadic efforts are made to decriminalize or soften down the provisions relating to offenses but enough clarity does not exist on this front.
Also, in lieu of imprisonment for minor breaches, or for preventing an authority from entering the premises for inspection, or any person who willfully obstructs an inspection in the exercise of his powers or discharge of his duties under the Act or fails to produce for inspection on demand by inspector any register, record or other document maintained in pursuance of the provision of the Act, the penalties or fines are going to be raised up to Rs.25,000 for the first offense and Rs 1 lakh for the second or consequent offense. Similar penalties will also be levied for non-compliance with the direction of the Board. In case the fine so imposed is not paid within 15 days of passing the order by the authority concerned, whether in appeal or otherwise, the fine will be recovered from such person as an arrear of land revenue.
Similarly, another ordinance to further amend the Andhra Pradesh Shops And Establishments Act, 1988 is also expected to be tabled as a bill. The bill intends to focus on the decriminalization of provisions of imprisonment for minor violations. Any employer who makes any false or incorrect statement will be imposed a fine, which may extend up to Rs 10,000. In case the fine so imposed is not paid, it will be recovered from such person as an arrear of land revenue.
Conclusion
The new 4 labour codes have also been passed with a strong provision focusing on fines and penalties rather than imprisonment for minor breaches.
In the existing acts and rules and yet to be implemented, the penalties were in the range of Rs.500 to a maximum of Rs.20,000/- while the 4 labour codes now contain fines ranging from Rs.50,000 to Rs.2,00,000 while for factories, Mines and Dock Workers, it has been increased from Rs.500 to Rs.5,00,000/- thus overruling the provision for imprisonment and replacing the same with larger amounts as fines.
Of course, imprisonments are not absolved for major offenses like PF, ESI, Gratuity, Factories, Mines, Dock Workers, and Industrial Disputes ranging from 6 months to 3 years.
With the intent being shifted for removing the imprisonment clause for minor offenses and replacing the same with larger fines for relatively less serious crimes underlying the shift of viewpoint to punishment according to existing labour legislation, this will further give impetus to ease of doing business which means that the principal punishment, in this case, will be the penalty for a less serious violation.
Prison punishments may lead to poor investment in sectors for such a small offense. Therefore, the prospect of punishing offenses under the new Labour Code in case of minor are likely to be changed which will be good as in case of minor breaches, the employers will be required to pay hefty fines and this may have a bigger impact on the finances of the organizations and likely to feel the pinch, thus avoiding any issue of non-compliance.
Proprietory blog of Karma Global Tech Management Firm
This blog has been compiled by the internal staff of Karma with the knowledge and expertise that they possess, for its monthly newsletter Issue 04 of October 2022 in case of specific or general information or compliance updates for that matter, kindly reach out to the
Marketing Team – Kush@karmamgmt.com / yashika@karmamgmt.com