The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988, is a significant piece of legislation in India that aims to reduce the burden of compliance on small and very small establishments. This Act provides exemptions from the requirements of furnishing detailed returns and maintaining extensive registers under various labor laws, thereby promoting ease of doing business for smaller enterprises. This article provides a comprehensive overview of the Act, its key provisions, and its implications for employers and employees.
Purpose of the Act:
The primary objective of this Act is to simplify the compliance requirements for small and very small establishments under various labor laws. By reducing the administrative burden, the Act aims to encourage entrepreneurship and facilitate the smooth operation of smaller businesses. The Act recognizes that smaller establishments often lack the resources to maintain the complex records and furnish the detailed returns required by various labor laws.
Key Definitions (Section 2):
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Employer: Has the same meaning as defined in the Scheduled Acts, and for other Scheduled Acts, it refers to the person required to furnish returns or maintain registers.
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Establishment: Has the meaning assigned to it in a Scheduled Act, and includes industrial establishments, factories, workshops, plantations, and newspaper establishments.
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Form: Refers to a form specified in the Second Schedule of the Act.
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Scheduled Act: An Act specified in the First Schedule of the Act, which is in force in the territories to which the Act extends, and includes the rules made under it.
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Small Establishment: An establishment employing not less than 10 and not more than 19 persons on any day of the preceding 12 months.
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Very Small Establishment: An establishment employing not more than 9 persons on any day of the preceding 12 months.
Exemption from Returns and Registers (Section 4):
This is the core provision of the Act. It exempts small and very small establishments from the requirement to furnish detailed returns and maintain extensive registers under the Scheduled Acts. Instead, these establishments are required to:
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Furnish a Core Return (Form A): In lieu of detailed returns, employers must furnish a simplified Core Return in Form A. This form requires basic information about the establishment, the number of employees, and the gross wages paid.
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Maintain Simplified Registers:
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Small Establishments: Must maintain registers in Form B, Form C, and Form D.
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Very Small Establishments: Must maintain a register in Form E.
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Continued Obligations (Section 4):
Despite the exemptions, employers are still required to:
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Issue Wage Slips: Employers must issue wage slips in the form prescribed under the Minimum Wages (Central) Rules, 1950, and slips related to measurement of work for piece-rated workers as per the Payment of Wages (Mines) Rules, 1956.
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File Accident Returns: Employers must file returns related to accidents as per the Factories Act, 1948, and the Plantations Labour Act, 1951.
Other Provisions:
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Application of Other Provisions (Section 4(2)): Except for the exemptions, all other provisions of the Scheduled Acts, including inspection and submission of copies of registers, apply to the simplified returns and registers under this Act.
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No Penalty for Non-Compliance (Section 4(3)): Employers who comply with the simplified requirements under this Act are not liable for penalties under the Scheduled Acts for not furnishing detailed returns or maintaining extensive registers.
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Savings (Section 5): The Act does not affect the previous operation of any Scheduled Act, any rights or obligations accrued, or any penalties incurred before the commencement of this Act.
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Penalty (Section 6): Employers who fail to comply with the provisions of this Act are punishable with a fine, and for subsequent convictions, with imprisonment or a higher fine.
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Power to Amend Form (Section 7): The Central Government can amend the prescribed forms.
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Power to Remove Difficulties (Section 8): The Central Government can issue orders to remove difficulties in implementing the Act, but not after two years from the date of the President’s assent.
Scheduled Acts (First Schedule):
The Act applies to the following labor laws, among others:
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The Payment of Wages Act, 1936
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The Weekly Holidays Act, 1942
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The Minimum Wages Act, 1948
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The Factories Act, 1948
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The Plantations Labour Act, 1951
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The Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955
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The Contract Labour (Regulation and Abolition) Act, 1970
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The Sales Promotion Employees (Conditions of Service) Act, 1976
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The Equal Remuneration Act, 1976
Simplified Forms (Second Schedule):
The Act provides simplified forms for core returns (Form A) and registers (Forms B, C, D, and E) that smaller establishments can use to comply with the law. These forms are less complex than the detailed registers and returns required under the Scheduled Acts.
Impact of the Act:
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Reduced Compliance Burden: The Act significantly reduces the compliance burden on small and very small establishments.
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Ease of Doing Business: By simplifying the requirements, the Act promotes ease of doing business for smaller enterprises.
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Focus on Core Requirements: The Act ensures that employers still comply with essential requirements like issuing wage slips and maintaining basic records.
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Promotion of Entrepreneurship: By making compliance less cumbersome, the Act encourages entrepreneurship and the growth of small businesses.
Conclusion:
The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988, is a crucial piece of legislation that balances the need for labor protection with the realities of operating small businesses. By providing exemptions from complex compliance requirements, the Act promotes ease of doing business while ensuring that workers’ basic rights are still protected.