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Extending workers' safety code to small enterprises will hamper job growth, CII tells govt

CII has suggested government set up common facilities for establishments in a locality to avail on cost basis. Besides, it has suggested labour ministry revisit the penalties proposed for contraventions so that the focus is on compliance and deter...

, ET Bureau|
Nov 12, 2019, 05.14 PM IST
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The industry body has suggested labour ministry revisit the penalties for contraventions so that the focus is on compliance and deterrence and not through punishments that include incarceration of employer.
Industry body, the Confederation of Indian Industry has suggested government retain the eligibility criteria for enterprises to come under the ambit of the Occupational Safety, Health and Working Conditions Code, 2019 (OSH Code) as changes proposed would severely impact the small and medium enterprises.

CII has suggested government set up common facilities for establishments in a locality to avail on cost basis. Besides, it has suggested labour ministry revisit the penalties proposed for contraventions so that the focus is on compliance and deterrence. The industry body has sent its recommendations to the standing committee on labour.

"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," Chandrajit Banerjee, director general, CII said.

According to CII, the code should aim at facilitating MSME sector. "Ease of doing business and simplification and rationalization of provisions will help smaller enterprises to scale up and create more jobs," CII stressed.

The Code proposes lower employee limits for applicability to enterprises for various welfare measures. 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.

"As an alternative to lowering applicability criteria, CII suggests that common facilities can be set up for establishments in a locality to avail of on cost basis," it said.

The industry body has suggested labour ministry 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," it added.

CII has further suggested government 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," CII added.

The Code is one of four labour codes amalgamating 44 Central laws on labour and welfare. It was introduced in Parliament in July 2019 and is currently referred to Parliamentary Standing Committee for consideration. It codifies 13 labour laws regarding occupational health and safety into a single code.

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