Now a days, Company’s reputation is depend upon the level of compliance of various Labour Laws. Due to digitization of various systems & processes in Government Offices, they have become more effective & vigilant and hence pro-actively sending the notices for non-compliances in the Organisations. At the same time, frequent updates are sent from their side for fulfilling their commitment of “ Ease of Doing Business “ and also for providing better facilities to employees and employers as well. Further, due to the social media, employees & other stake holders have also become fully aware about the importance of statutory compliances to be made by every Organisation.
As a result of non-compliances of Labour Laws, negative consequences are as follows:
• It leads to heavy financial penalty to organization.
• Under many Acts, Managing Directors are held personally liable and legal notices are served in their personal names.
• Under the POSH Act, 2013, in case of non-compliance, apart from financial penalty, Authorities can cancel all the licenses, registrations etc. issued to the Organisation.
• Compliance breaches lead to bad publicity and affecting the reputation of the Organization.
• Loss of clients, employees as well as stakeholders’ confidence
• An organisation cannot solve the issue of employee retention as well as employee grievances and also cannot attract the good talent.
In view of all the negative effects mentioned above, every CEO must take personal interest to avoid severe consequences of non-compliance by taking following actions:
• Hire the competent consultant or employee to take care of compliance issues.
• Need to build a compliance dashboard, checklist & MIS.
• CEO should monitor the compliance process.
• Make the compliance part of the Company’s culture.
• CEO has to invest their time in training of compliance to the employees.
• CEO should also invest in effective technology.