1. INTRODUCTION

The Ministry of Commerce and Industry, via the notification dated December 08, 2022, (G.S.R. 868 (E)), amended the provisions of the Special Economic Zones Rules, 2006 ("SEZ Rules"), thereby providing certain relaxations under the pre-existing work from home guidelines for eligible employees working in SEZ units ("Amendment Rules"). Earlier this year, on July 14, 2022, the Ministry had introduced Rule 43A to the SEZ Rules and provided explicit guidelines on the permissibility of work from home/ remote working arrangements for eligible employees working in SEZ units ("Guidelines"). The Amendment Rules bring in significant amendments to the Guidelines, making it far easier for employers to implement.

2. HIGHLIGHTS

  1. The Amendment Rules have defined 'employees' to include everybody who is employed on the rolls of an SEZ unit, under a direct contract, or where the SEZ unit is the principal employer under a contract with another organization, such individuals who are expected to report daily for work and the SEZ unit exercises control over their attendance. Therefore, the Amendment Rules are applicable to contract workers as well.
  2. The permission granted to SEZ units to allow its employees to work from home has been extended till December 31, 2023.
  3. As per the Amendment Rules, the remote working benefits can be extended to all employees of SEZ units. Previously, an SEZ unit could only allow 50% of its employees to work from home or remotely.
  4. The Amendment Rules have done away with the requirement for SEZ units to obtain prior approval from the Development Commissioner of the SEZ for allowing its employees to work from home. Now, SEZ units are only required to intimate the Development Commissioner by an email prior to the commencement of such work from home period.
  5. The requirement for SEZ units to submit the names of the employees who have been permitted to work remotely, has been omitted. Under the Amendment Rules, SEZ units are only required to maintain a list of employees who have been permitted to work remotely. This list would have to be made available to the Development Commissioner for verification purposes, as and when required.
  6. The Amendment Rules state that the remote working benefits will be available to an SEZ unit only if it continues to operate from its premises as per the letter of approval originally granted to such SEZ unit.
  7. Under the Amendment Rules, an SEZ unit may provide an employee duty-free goods such as laptop computers, desktop computers and other electronic devices which, are needed by the employees to work remotely, and employees will be allowed to take such duty-free goods out of the SEZ without payment of any duty or integrated goods and service tax. However, the SEZ units are required to maintain adequate records of such duty-free goods. If an SEZ unit fails to bring back such duty-free goods within the stipulated time frame, it will be required to pay the applicable duty on such goods.

3. INDUSLAW VIEW

The Amendment Rules have come in as a relief for businesses, making it very convenient for them to implement the work from home Guidelines for its employees. With the relaxations being provided under the Amendment Rules, it is important for SEZ units to have appropriate internal checks and controls in place to ensure that the employees also adhere to its requirements (e.g. ensuring that the duty-free goods provided to them are returned to the SEZ unit within the stipulated time period). To this end, SEZ units should consider implementing a 'Work from Home/Remote Working Policy' for all its employees and contract workers to ensure compliance with the Amendment Rules.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.