Registration Procedure Under the Labour Codes

Introduction

The new labour Codes have introduced a uniform procedure for registration and cancellation thereof. Specifically, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 read with their respective draft rules contain provisions on registration. These two labour Codes have greatly reduced the number of registrations an employer has to maintain and have digitized the entire process to ensure that the same is streamlined.

This article shall examine the procedure under the two aforementioned labour codes to provide employers with clarity on what steps they would have to take when the Codes come into effect and suggestions on how the draft Rules can simplify the process further.

Registration Under the OSHWC and Social Security Codes

The Occupational Safety, Health and Working Conditions Code, 2020 provides for registration under Section-3 and states that every employer of any establishment:-

a)    Which comes into existence after the commencement of the Code;

b)    To which the Code shall apply

Must apply to the registering officer within sixty days from the date of when the Code becomes applicable. The registering officer is given the discretion to entertain applications after the expiry of the above period provided the late fees is paid as prescribed.

The draft OSHWC Code rules provide for the registration procedure in further detail and have two broad procedures:-

a)    Establishments not already registered under a Central labour law in force
With regards to this set of establishments, an employer seeking registration must apply electronically in Form-I on the Shram Suvidha Portal by providing relevant details about the establishment related to registration such as proof of identity and address of the employer as specified in the form. The form shall be signed digitally or as specified on the portal and the applicant is responsible for the veracity of all information submitted. The Permanent Account Number (PAN) of the applicant or the establishment, allotted under the Income Tax Act, 1961 or any other unique number allotted to the establishment under any other Act for the time being in force may be verified online. The certificate of registration shall be issued in Form-II electronically, immediately if the application is complete in all respects. A maximum of seven days from the date of submission of complete application is provided as a period for approval, on the expiry of which the establishment is deemed to have been registered and the certificate of registration is auto generated.

In case the employer has failed to comply with the above, the registering officer may direct the employer to comply with the same within such time as he deems fit.

b)    Establishments already registered under a Central labour law in force
In case of such establishments, the employer is required to update the registration particulars on the Shram Suvidha Portal, within six months from the date on which the Code comes into force.

The procedure of application for registration under the Code on Social Security, 2020 and its draft rules is largely similar. The only difference is that Section-3 of the Code on Social Security, 2020 does not provide for any time limit within which registration should be made.

Conclusion

While the procedure for registration has been simplified and the number of registrations an establishment has to maintain has gone down drastically, the draft rules can still be further simplified. For example, introduction of a provision that allows for registration details provided under the form for application under one Code to be automatically uploaded for registration under the other Code.

Another major change that can be brought is the introduction of a definition for the term enterprise which would mean a group of establishments in different States or the same State, with the same employer. The term can then be included in the registration provisions by adding a clause allowing for enterprise-based registration. This can be done by making the employer declare an office as its Principal Office at the Central level and declaring one establishment in each State as its principal office at the State level. In this manner, registrations for all establishments in a State can be carried out by the Principal Office in that State and registrations for all principal offices across different States can be carried out by the Central Principal Office. This will ensure that enterprises with a pan-India presence can comply with registrations effectively. However, for this to be successful, there would have to be efficient coordination between State labour authorities and the representatives of the Central labour authorities at State-level jurisdictions.

The last change the Government may consider rephrasing the sentence under any other Central labour law for the time being in force, this is because the Central labour laws currently in force shall expire as soon as the new labour Codes are notified. Therefore, adopting the term any other Central labour law in force prior to the introduction of these Codes would eliminate some of the confusion surrounding the same.

Do you think there is a need for an enterprise-based registration? Would it simplify compliance for pan-India entities? What additional measures should be incorporated in the draft Rules?

Drop your thoughts in the comments below.

Disclaimer: This blog is meant for informational purposes and discussion only. It contains only general information about legal matters. The information provided is not legal advice and should not be acted upon without seeking proper legal advice from a practicing attorney. Simpliance makes no representations or warranties in relation to the information on this article.