A British MNC (Name with held) had ventured in to India starting a manufacturing business of tools & Equipment. It had acquired a Gala shed in MIDC, Navi Mumbai and had just begun with the manufacturing activity. The size of the unit was 3500 Sq.mtrs employing 12 staff & 50 workers.

The title of the land was not clear and the company was facing trouble from the MIDC authorities. Also troubling the day-to-day functioning were the frequent visits of labour officers with vested interests.

Besides, Laborers kept on moving in and out thereby, disturbing the production cycle.

The company also realized that its profit margins were shrunken compared to the local players in spite of their assumption of cheap labour in India.

The Company in trouble approached Serve HR and assigned us the job of setting things in place on a turn key basis.

We took charge of the company and started first with the audit of the whole set up.

After, thorough research & leverage of our knowledge of labour laws and experience in the business, we came out with the following findings:

1. NOC from labour Commissioner was not obtained and hence the title of land remained unclear.
2. The Company had not obtained registrations under the Acts of ESIC, PF and MLWF. (All 3 Acts mandatory for a company employing more than 10, 20 & 5 employees respectively)
3. Since there were no facilities of ESIC & PF, the workers kept on moving in and out. They viewed the company being an MNC a temporary employer and thus assumed insecurity of job.
4. The company was paying exorbitant wages which was not in tandem with the current market rates & much above the prescribed rate under the Minimum wages act, 1948 which resulted in lower profit margins for the company.

Solution

1. We arranged for a NOC from the labour department and got the title clear from the MIDC authorities.
2. We also arranged for registration under the relevant acts and thus made the company 100% legally compliant in all respects.
3. We also provided the company with invaluable data of the wages paid to the workers in similar business set-ups, which helped them to fix remuneration of future employees.
4. The company also faced the problem of shortage of workers, which we fixed by providing them a work force of 25 labours.

The above solution worked wonders for the Company which is doing very good business and has now expanded its presence in India to 4 units in the state of Maharashtra. The set-up of the new units was done in consultation with Serve HR Corporate Services.