With a view to simplify business regulations and curtail unnecessary visits of inspecting officers, the Labour Department, Haryana Government (“Department”) has issued the Third Party Certification/ Audit Scheme (Amendment), 2018 (“Scheme”).

The Scheme is optional for factories and establishments. There will be no sudden inspection of the factories / establishments which opt for this Scheme. The added benefit of this Scheme is that if any recommendation is made by the Auditor or any non-compliance is pointed out by them, the factory/ establishment will not be penalized for the same. The Scheme provides different timelines for taking necessary steps basis the report of the Auditor. For example, any danger to the life of workers is pointed out by the Auditor it has to be rectified within 72 hours. The details of the Scheme have been covered in the following part of this update.

The Scheme is divided into two parts.

Part A is applicable to factories in Haryana, while Part B is applicable to establishments.

Part A of the Scheme:

This part of the Scheme facilitates entrepreneurs to comply with the provisions of the Factories Act, 1948 and related Rules.

Applicability:

This part of the Scheme is applicable to the following factories:

1. Factories where manufacturing process involves use, storage, handling or processing of toxic or highly inflammable or explosive substances or hazardous chemicals or, where such toxic or highly inflammable or explosive substances are likely to be generated as effluents.
2. Factories where hazardous process is involved.
3. Factories employing more than 250 workers.

Key Highlights:

1. The scheme is optional and the Safety Audit needs to be carried out as per the standards laid down under the Factories Act & Rules and as per IS 14489:1998 in the Indian Standard Code of Practice on Occupational Safety and Health Audit or any such standards prevailing at the relevant time.
2. The occupier of the factory as well as the Safety Auditor must inform the Chief Inspector of Factories, in writing, thirty days in advance before commencement of the safety audit in a factory.
3. Within 30 days of the receipt of the Safety Audit Report, the occupier must take action based on the recommendations of the auditor as pointed out in the report. They also need to submit the action taken report / compliance report along with proof of compliance to the Chief Inspector of Factories within 60 days from the day of receiving the Audit Report.
4. In case there is any hazard posing imminent danger to life of workers or threat to the safety of the workers, the auditor shall immediately inform the occupier and the occupier needs to take corrective action and submit compliance report to the Chief Inspector of factories within 72 hours.
5. The factories that are opting for this scheme will not be inspected till the time it carries out safety audit every year, regularly (unless the statute provides otherwise).
6. In case of any change in the manufacturing process (total or partial) the occupier needs to carry out the safety audit by the Safety auditor within 30 days.
7. No legal action will be taken against the occupier/ manager of the factory for any discrepancies/ observations/ violations of Acts/ Rules pointed out by the Auditor in his safety audit report.
8. The Chief Inspector of Factories may also exempt any factory or category of factories from all or any provisions of this scheme, subject to such conditions as specified in the order.

Part B of the Scheme:

Part B of the Scheme deals with Minimum Wages Act, 1948, Payment of Wages Act, 1936, Contract Labour (Regulation and Abolition) Act, 1970, Payment of Bonus Act, 1965, Payment of Gratuity Act, 1972, Punjab Shops and Commercial Establishments Act, 1958 (As applicable to Haryana), Equal Remuneration Act, 1976, Motor Transport Workers Act, 1961, Punjab Industrial Establishment (National and Festival Holidays and Casual and Sick Leave) Act, 1965 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979.

Key Highlights:

1. The Scheme will be optional and includes compliances under the above-mentioned Acts.
2. A compliance auditor under this part of the Scheme would be a qualified practicing Company Secretary who is / was not an employee of the establishment or has not been a consultant of the company for the last three years. The units which submit third party certification annually shall not be inspected through the random list of inspections. Such units will only be inspected in the event of serious complaints or unrest etc.
3. Within 30 days of the receipt of the Compliance Audit Report, the head of the establishment for which the audit is carried out must take action based on the recommendations of the auditor as pointed out in the report.
4. They also need to submit the action taken report/ compliance report along with proof of compliance to the Labour Commissioner, Haryana within 60 days from the day of receiving the Audit Report.
5. No legal action will be taken against the occupier/ manager of the factory for any discrepancies/ observations/ violations of Acts/ Rules pointed out by the Auditor in his Compliance audit report.

Source: Labour Department, Haryana

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