Labour-intensive industries such as construction, infrastructure building firms, factories, and transport have to wade through a miasma of labour laws while doing the legal auditing. Despite regular audits, the companies and establishments employing labour get stuck in cases on a number of occasions facing charges of non-compliance due to shortcomings. These may range from issues in Provident Fund, ESI, Gratuity, and Maternity Benefits to Fatal Accidents, Hazardous Waste, and Contract Labour.
Normally such cases are handled by the legal departments in the larger establishments and companies or are outsourced to legal firms. But complexity of law is such that company heads who are unaware of the nitty-gritty of the issues, are made to undergo punishments like imprisonment as the onus is finally on them rather than the intermediate functionaries.
Advocate Sribhoomi Yesaswini from Kasturi Associates, Bengaluru, has come up with an online software ‘Labour All’ that enables the establishments to comprehensively address the compliance. The software has been developed by Kartel Innovations which will also market it.
Karnataka has 69 such labour laws that any business establishment has to comply with, failing which proceedings are initiated against them. Sribhoomi worked 11,000 hours during the last four years to shape the product.
Ms. Yesaswini spoke to The Hindu Property Plus on the eve of the launch of the software in Bengaluru earlier this week.
What are the main features of the ‘Labour All’ software?
It is a comprehensive set of software which helps factories, shops and establishments to assess their level of compliance with labour laws, lest any scope is left for prosecution. It makes compliance simpler and is easy to use. It brings together all the 69 State laws that need to be complied with by any registered commercial or industrial establishment employing labour. It cuts through the legal and technical jargon and enables the establishments to generate their reports of compliance.
The software enables the firms to approach the compliance through simple questions which have to be answered in Yes or No.
While manual scrutiny could have scope for missing or skipping some issues, the software totally eliminates the option of skipping. It also provides voice assistance.
On its area of coverage….
The moment an establishment is issued licenses to operate its business or industry, compliance with a number of laws becomes mandatory. Currently, the “Labour All” software, launched on May 1, covers The Factories Act 1948, The Karnataka Shops and Commercial Establishment Act 1961, The Employees PF Act 1952, The Karnataka ESI Act 1948, The Maternity Benefit Act 1961, The Payment of Wages Act 1936, The Payment of Bonus Act 1965, and Equal Remuneration Act 1976.
By the year end, all 69 Acts will be covered. Further on we intend to develop the products for various States.
How serious is non-compliance?
In the calendar year 2014 there were 239,345 inspections, 142,492 violations, and 61,414 rectifications. Finally, 14,984 prosecutions were launched under the Labour Act.
Out of these 6,982 cases have been disposed and in 6,345 cases companies have been convicted. A penalty of Rs. 2.22 crore was recovered from them.
Commission of second offence leads to even imprisonment which may range from one month to two years. Now there is a proposal to extend the period to three years.
Why is the number of prosecutions increasing?
Generally it happens because the firms are not able to address all legal issues in-house while assessing compliance. Most audits are manual.
Technical jargon is difficult to comprehend. Lack of availability of legal tools too is also a notable hindrance. There could be scope for misinterpretation in words such as ‘shall’ which could be mandatory as well as suggestive.
How do the professionals assess the software?
A former Advocate-General of Karnataka has endorsed its value in today’s context when countless laws have increased the rigors of compliance. P.L. Mathew, Senior General Manager, Bosch Limited, has analysed it from the HR angle and found it extremely useful.
K.S. Pranesh of Herbalife has said the software facilitates easy understanding to comply with all relevant provisions of labour laws.
Operational features “Labour All” is an online software wherein everyone will have to log into www.labourall.com and access the software online.
Annual subscribers can log on any number of times into the website and answer the questionnaire in a phased manner. However, only four reports can be generated in a year.
Users can purchase the entire set of law or create a combination of laws of their choice and the pricing would be commensurate to the suits of laws purchased. Voice assistance can read out the questions to the user.
For the real estate sector
Out of 69 Labour laws, 18 are applicable for real estate companies:
* Shops and commercial EST Act
* BOCW Act
* ID Act whenever required
* Minimum Wages Act
* Gratuity Act required
* PF Act
* Inter-state migrant workman Act
* CLRA Act depending on situation
* Employment exchanges compulsory notification of vacancies Act
* Factories Act (if they are manufacturing their own products like carpentry items, bricks etc. )
* Standing orders Act (if they have manufacturing division or they are otherwise covered)
* Maternity benefit Act
* Bonus Act
* Payment of wages Act
* Employees compensation Act (when required)
* Karnataka National and festival holidays Act
* Karnataka Labour Welfare Fund Act