What happens when the government learns that a company has been operating illegally?
The bitter reality is that not only can the government do little, but the company also pays a penalty that is lesser than a weekend movie plan.
On Tuesday, inspectors of the Labour Department filed a charge-sheet in court claiming that the BPO – where the 22-year-old woman who was allegedly sexually assaulted by two men in a moving vehicle on October 3 – was not registered under the Karnataka Shops and Establishment Act, 1961. In other words, the company is believed to be running illegally. However, according to the Act, this illegality may attract a fine of just Rs. 1,000.
During an inspection following the alleged crime, inspectors described the company as being run out of some rooms of another IT firm in Bommanahalli. It employs less than 15 employees. The company had not provided transportation for women employees working at night.
“The IT and BPO sector is essentially unregulated. Over the years, they have accumulated enough exemptions to be virtually shielded from labour laws. The law is just a paper tiger and it is difficult to ensure compliance,” said a Labour Department official. Among the exemptions is that labour officials cannot conduct surprise inspections on these firms.
Maitreyi Krishnan, a lawyer, believes that the Act needs to be updated with regard to regulations and penalties. “Whether it is minimum wages or other violations, the penalty is too low to be a liability for a company. The law needs to be more strict, have more stringent provisions if it is to have some meaning. The department should have the powers for suo motu complaints rather than wait for a drastic incident to act,” she said.
A NASSCOM representative said that a “best practices” guidelines, including treatment of employees as well as security features, had been circulated among companies. A “road-show” and “awareness drives” are being held to ensure compliance.
