STATUTORY UPDATES

Ministry of Labour and Employment classifies certain sectors as public utility service.

The Ministry of Labour and Employment, via a notification dated June 23, 2023, has declared the uranium industry as a public utility service for the purposes of the Industrial Disputes Act, 1947 for a period of 6 months starting from July 09, 2023. Similarly, the copper mining industry has also been declared as a public utility service via a notification dated June 05, 2023. This status is to remain in effect for 6 months starting from June 28, 2023.

SEBI lays down additional guidelines for listed entities.

On June 14, 2023, the Securities and Exchange Board of India (SEBI) issued the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2023 which set out rules regarding appointment/reappointment of Key Managerial Personnel ("KMPs") in listed companies in addition to certain other guidelines. A few of the key amendments are as follows:

  1. In case of vacancy for the position of a CEO, Managing Director, Compliance Officer, Chief Financial Officer, whole-time directors, manager, or any director, every listed company is required to fill in such vacancies within 3 months.

  2. From April 1, 2024, a director is required to seek the approval of the shareholders in a general meeting to continue as a part of the board of a company. Such approval should be obtained at least once in every 5 years from the date of their appointment/ reappointment. Further, if a director is serving on the board of a listed company as on March 31, 2024, without the approval of shareholders in the last 5 years or more, she/he would have to seek the approval in the first general meeting of the company after March 31, 2024.

    The amendment also carves out an exception for certain directors of the company (such as whole-time directors, managing director, independent directors and certain other categories of directors) from complying with the above requirement.

  3. In the event of resignation of a KMP, the letter of resignation along with detailed reasons for the resignation must be disclosed to the stock exchange within 7 days.

  4. In case the Managing Director or the CEO is indisposed or unavailable to fulfil the requirements of the role in a regular manner for more than 45 days in any rolling period of 90 days, this along with the reasons for such indisposition or unavailability, must be disclosed to the stock exchange.

  5. The amendment also stipulates mandatory disclosures of: (i) frauds or defaults by KMP; (ii) the announcement of any material information of the listed entity by KMP where such information has not already been made public; (iii) action initiated against KMP by any statutory, enforcement, regulatory or judicial body; and (iv) agreements entered into by KMP or employees of the entity that have an impact on the listed entity.

Ministry of Education relaxes eligibility criteria for registration of degree/diploma graduates as apprentices under NATS.

The Ministry of Education, via a circular dated June 12, 2023, has relaxed the eligibility criteria for degree/ diploma graduates to register as apprentices under the National Apprenticeship Training Scheme. Graduates earlier could join as an apprentice within 3 years from the date of passing the qualifying examination. However, the graduates can now join as an apprentice within 5 years from the date of passing the qualifying examination.

ESIC clarifies 'inactive' option for companies not meeting the threshold under the ESI Act.

The Employees' State Insurance Corporation ("ESIC"), via a circular dated June 02, 2023, has clarified concerns of compliance posed by employers, who are not meeting the requisite employee threshold under the Employees' State Insurance Act, 1948 ("ESI Act"). As per a previous circular of the ESIC dated November 11, 2022, employers registered on the Ministry of Corporate Affairs portal, without meeting the employee threshold limit under the ESI Act, could be declared as dormant so as to not meet compliance obligations for 6 months or till they meet the threshold, whichever was earlier. These companies can extend the option further before the expiry of 6 months, depending on the status of the company.

Shops and commercial establishments in Punjab permitted to remain open for 365 days a year.

The Government of Punjab, via a notification dated June 02, 2023, has permitted all shops and commercial establishments to stay open for 365 days in a year for 1 year till May 31, 2024. The exemption is subject to the following conditions:

  1. Every employee must be given 1 day's holiday in a week, and a timetable of holidays for a month shall be displayed on the notice board.

  2. Every employee is to be given a rest period of 1 hour after 5 hours of continuous work.

  3. No employee is required to work for more than 9 hours in a day or 48 hours in a week.

  4. Proper safety and security arrangements must be ensured for employees and visitors after 10 PM on any day.

  5. New staff may be appointed for extended timing.

  6. Female employees are to be provided separate lockers, adequate security measures, and rest rooms at the workplace.

  7. Employers hiring female employees are to constitute Internal Complaints Committees as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

  8. Female employees should not be asked to work after 8 PM. If needed, their consent must be taken, and adequate safety and security arrangements must be made.

  9. The Child and Adolescent Labour (Prohibition and Regulation) Act, 1986 must be implemented.

  10. Consent letter is to be collected from all employees and kept on record at the workplace.

  11. The spread over of an employee is not allowed to exceed 11 hours in a day.

  12. Employees must be provided national and festival holidays with wages.

  13. The wages along with overtime wages must be credited to the savings bank accounts of employees.

ESIC notifies implementation of AADHAAR seeding of insured persons.

On May 25, 2023, the Employees' State Insurance Corporation (ESIC) notified the implementation of an online facility within the ESIC employee portal, wherein existing employees can seed their AADHAAR number for themselves as well as their family members on a voluntary basis. The ESIC had previously, on April 17, 2023, provided an online facility for seeding AADHAAR number for newly insured persons, ESIC employees and pensioners. The ESIC had made it mandatory for all employees to link their AADHAAR with their UAN (Universal Account Number) to prevent fraudulent transactions.

Tax exemption limit for encashment of earned leaves has been increased to INR 25,00,000.

The Central Board of Direct Taxes, via a notification dated May 24, 2023, has increased the limit for tax exemption on encashment of earned leave from INR 3,00,000 to INR 25,00,000 for non-government salaried employees. The exemption is claimed on superannuation or otherwise and is specified under Section 10 (10AA) (ii) of the Income Tax Act, 1961.

Tamil Nadu government amends the Tamil Nadu Shops and Establishments (Amendment) Act, 2018.

The Tamil Nadu government, on May 17, 2023, has notified the Tamil Nadu Shops and Establishments (Amendment) Amendment Act, 2023, thereby amending the Tamil Nadu Shops and Establishments (Amendment) Act, 2018. The latest amendment has prescribed the payment of fees for submitting as well as for amending the application for registration. Additionally, the procedure for applying for a duplicate registration certificate (in the event of loss or destruction of the original registration certificate) has also been laid down.

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