New labour rules propose free annual health check-ups for staff above 40

Companies will soon have to conduct free annual health check-ups for all employees above the age of 40, according to the new labour rules being prepared by the Union government.

“The employers shall arrange to conduct free of cost medical examination annually, i.e., within 90 days from the commencement of the calendar year, for every worker or employee who has completed 40 years of age,” stated the draft rules proposed by officials of the Union Ministry of Labour & Employment at a meeting held on October 24.

The proposal, applicable to all factories, mines, and construction firms, is part of the draft Occupational Safety, Health (OSH) and Working Conditions (Central) Rules, 2020, which will soon be placed in the public domain for comments and feedback.

The health check-up of workers would have to be conducted by a qualified medical practitioner, following which, a medical certificate would be issued to them, a senior labour ministry official said.

The move, aimed at increasing the productivity of workers, may lead to higher costs for companies. “The existing labour laws do not have this mandatory cover, though medical insurance elements are prevalent as industry practice. While this will potentially benefit employees, employers will now need to have a separate cost allocated for this mandatory requirement,” said Parizad Sirwalla, partner and head, global mobility services-tax, at KPMG India.

Again, in a key step towards ‘ease of doing business’, the government has proposed that companies should be registered within seven days of receiving an electronic application for registration. Under the OSH Rules, 2020, no establishment would be allowed to operate without a valid certificate of registration. However, companies would have to register only once, instead of having to go for separate registrations under the labour laws for construction, contracts, plantations, migrant and factory workers.

“The registering officer shall issue the certificate of registration within seven days from the date of receipt of application electronically, failing which, such establishment shall be deemed to have been registered and the certificate of registration shall be auto-generated,” said the draft rules.

“India’s ability to compete with South Asian countries, especially China, will improve with this deemed approval of registrations. It will do away with rent-seeking and corruption, while ensuring that the cost of capital due to delays in approval for starting a business comes down,” said Rishi Agarwal, co-founder and chief executive officer, at regulatory technology solutions company, Avantis Regtech.

At present, it takes four-six months for businesspersons to start a factory from the time they decide to do so. Ideally, this should come down to two months, Agarwal added.

The new labour rules, likely to come into force from April 1, 2021, will require companies to make an online application for registration on the government’s Shram Suvidha portal. The registration certificate will include such information as the maximum number of workers that the establishment will employ, the type of business being carried out, and so on. If the number of workers, whether permanent or contractual, exceeds the maximum limit mentioned in the registration certificate, employers will have to upload that information electronically within 30 days.

Firms already in operation will not have to apply for a registration certificate. However, they will have to submit the necessary details regarding their employees and nature of business within 180 days of the new labour code coming into effect.

In addition, employers will have to issue appointment letters to every worker employed at their units. For existing employees, the appointment letter will have to be given within three months of the new rules being notified. The government will prescribe a format for the appointment letter, which will include particulars such as wages, allowances, health check-up details, nature of the job, leave provisions, among others.

In the absence of such legal documents, workers often find it difficult to establish proof of employment, and this gives companies the room to violate labour laws and ignore their social security obligations. More than two-thirds of India’s workers who earn a regular income do not have a written contract, according to the National Statistical Office’s periodic labour force survey.