TAMIL NADU

Public utility status for special economic zone units

CHENNAI, JULY 24. Industrial units located in Special Economic Zones (SEZs) in the State have been included in the category of "public utility service" by a Tamil Nadu Government notification.

In effect units in the MEPZ (Madras Export Processing Zone), Special Economic Zone (or the Madras Special Economic Zone as a Central Government notification mentions) have been conferred with the status of "public utility service", as they used to be every six months before the MEPZ was converted into an SEZ last year. The July 19 State Government notification, amending Schedule-I to the Industrial Disputes Act 1947 (IDA), is valid for six months (the maximum period allowed under the Act for the purpose) and can be expected to be extended periodically as was done in the past.

The legal meaning (under Section 22 of the IDA) of the special status of a `public utility service' is that strikes or lockouts cannot be launched without giving advance notice as specified or while proceedings are in progress before a conciliation officer. Any notice of a strike/lockout received by the employer/employee has to be reported within five days to the appropriate (State or Central) authorities.

Once an employer or employee reports receipt of the notice, the appropriate authorities (of the State or the Centre) will immediately launch conciliation proceedings. No strike or lockout can be resorted to until the proceedings are over. (In other cases, viz, in respect of units not declared "public utility service", IDA-Section 23 prohibits strikes/lockouts only when the conciliation efforts are on before a board or court or tribunal and not before a conciliation officer and it does not require intimation of receipt of a strike/lockout notice to the Government authorities).

For units in the SEZs (and former EPZs), being meant to promote exports in world markets, where adherence to delivery schedules is considered important, the "public utility service" status is supposed to provide a cushion against sudden and unscheduled strikes/lockouts. This limited restriction is also considered an attraction to investors to set up units in EPZs/SEZs.

The State Government in January 2003 included the category of "information technology, software establishments and export-oriented units" (located outside the export promotion zone or in the domestic tariff area) too in Schedule-I of the IDA.

As of now, Tamil Nadu has only one SEZ, viz, the MEPZ SEZ, out of the 13 recognised by the Union Government. The proposed SEZ at Nanguneri in Tirunelveli district still remains a project idea and its construction (undertaken by an international company and an non-resident Indian firm) is expected to take at least two or three years.

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