Extending the provisions of the Occupational Safety, Health and Working Conditions Code to smaller enterprises will increase their costs and hurt margins, industry body CII said on Tuesday.
As per the Factories Act, establishments must appoint welfare officers if they employ manpower of more than 500 persons.
The Code cuts this to 250 employees, which would impose a high cost burden on MSMEs now coming in this ambit. Other provisions too, such as canteen, face reduction in applicable employee limits, said the chamber.
As an alternative to lowering applicability criteria, the CII suggested that common facilities can be set up for establishments in a locality to avail of on cost basis.
The proposed code enhances coverage of workers manifold as it would be applicable to all establishments employing 10 or more workers, where any industry, trade, business, manufacture or occupation is carried on, including IT establishments or establishments of the service sector.
The Occupational Safety, Health and Working Conditions Code, 2019 (OSH Code) should aim at facilitating MSME sector, said the Confederation of Indian Industry (CII).
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Ease of doing business and simplification and rationalisation of provisions will help smaller enterprises to scale up and create more jobs, the industry body stressed.
The Code proposes lower employee limits for applicability to enterprises for various welfare measures.
Extending the OSH Code's provisions to smaller enterprises will add to their costs and impact their margins. It would also adversely affect expansion, which is seen to have a strong relationship to creation of new jobs, said Chandrajit Banerjee, Director General, CII.
Similarly, the CII suggested to revisit the penalties for contraventions so that the focus is on compliance and deterrence and not through punishments that include incarceration of employer.
Irrespective of the person nominated for and entrusted by a company with the responsibility of compliance, all contraventions/non-conformities which are non-compoundable should be handled by Labour courts and not criminal courts.
The definition of 'occupier' is proposed as the 'person who has ultimate control over the affairs of the factory' including partners of firms and, in the case of a company, any one of the directors, said the CII.
It has suggested to revise the definition for private sector companies and bring it on par with that for central/state government units, PSUs, autonomous government units etc.
This would essentially mean that the responsibilities for compliance with requirements under the new Unified Code may be appropriately assigned by the employer to person or persons who have full operational control and accountability for the units they run in different parts of the country, the chamber stated.
The Code on Wages is one of the four codes that would subsume 44 labour laws with certain amendments to improve the ease of doing business and attract investment for spurring growth.