Obligations of employers for commencement of enterprises

Under the employment relations, employers and workers have contractual and legal obligations. The contractual obligations derive from employment contracts, internal rules and collective bargaining agreements. The legal obligations derive from laws and regulations adopted by government. This article only examines some key legal obligations of employers under the labor laws.

1. Declaration of the opening and closing of the enterprise

Employers must make a declaration of opening to the Ministry in Charge of Labor before the actual opening of the enterprise or establishment. Employers who employ fewer than 8 workers on a permanent basis and who do not use machinery, must make and submit this declaration to the Ministry in Charge of Labor within 30 days following the actual opening of the enterprise or establishment. (Article 17, Labor Law)

For the closing of the enterprise, employers must also make a declaration to the Ministry in Charge of Labor within 30 days following the closing of the enterprise. (Article 18, Labor Law) The Prakas No. 288 dated 05 November 2001 on Declaration of Opening and Closing of Enterprise and Establishment regulates the formality and procedure of declaration on opening and closing of enterprise and establishment.

2. Keep of register of an establishment

Employers must establish and neatly keep a register of an establishment that was numbered and initialed by the Labor Inspector. (Article 20, Labor Law) The employers or its representatives must hand over the register to the Labor Inspector or Labor Administrator to inspect, investigate, advise and set restrictions every time of inspection. The employers must keep the fully used register, whose pages have been fully used for 3 years during which the Labor Inspector or Labor Administrator may demand for inspection at any time. (Prakas No. 268 dated 11 October 2001 on Register of Enterprise and Establishment)

3. Declaration on movement of personnel

Employers must make the declaration to the Ministry in Charge of Labor each time when hiring or dismissing a worker. This declaration must be made in writing within 15 days at the latest after the date of hiring or dismissal of the worker. This period is extended to 30 days for agricultural enterprises. The declaration of hiring and dismissal is not applied to casual employment with a duration of less than 30 continuous days and intermittent employment for which the actual length of employment does not exceed 3 months within 12 consecutive months. (Article 21, Labor Law)

4. Internal regulations of the enterprise

Every employer who employs at least 8 workers must establish internal regulations. (Article 22, Labor Law) Internal regulations implement the general provisions of the Labor Law in accordance with the type of enterprise or establishment and the collective agreements that are relevant to the sector of activity of the aforementioned enterprise or establishment, such as provisions relating to the condition of hiring, calculation and payment of wages and perquisites, benefits in kind, working hours, breaks and holidays, notice periods, health and safety measures for workers, obligations of workers and sanctions that can be imposed on workers. (Article 23, Labor Law)

The internal regulations is established by the manager of enterprise after consultation with workers’ representatives, within 3 months following the opening of the enterprise, or within 3 months after the promulgation of the Labor Law if the enterprise already exists. Before coming into effect, the internal regulations must be [visaed] by the Labor Inspector. This visa is issued within a period of 60 days. (Article 24, Labor Law)

The articles of internal regulations that suppress or limit the rights of workers, set forth in laws and regulations in effect or in conventions or collective agreements applicable to the establishment, are void. The Labor Inspector shall require the inclusion of enforceable provisions in virtue of laws and regulations in effect. (Article 25, Labor Law)

In enterprises or establishments, employing less than 8 workers, where there are no internal regulations, the employer may pronounce, according to the seriousness of the misconduct of the workers concerned, a warning, a reprimand, a suspension of work without pay for not more than 6 days or a dismissal with or without a prior notice. (Article 31, Labor Law)

5. Workbook

Workers must possess an employment card. Employer must not keep a worker who does not possess and employment card. (Article 32, Labor Law) However, possession of an employment card is optional for seasonal farm workers (Article 33, Labor Law) The employment card is for the purpose of identifying the holder, the nature of work for which he has contracted, the duration of contract, the agreed wages and the method of payment, as well as the successive contracts. It is forbidden to use a worker’s employment card for purposes other than those for which it is created. When the worker quits working for the employer, that employer is not allowed to write any appreciation on the employment card. (Article 34, Labor Law)

The employment card is drawn up and issued by the Labor Inspectors at the request of the worker who presents an identity card issued by the competent authorities and a certificate of employment issued by his employer. (Article 35, Labor Law) The hiring and dismissal of a worker, his wage and wage increase must be recorded in his employment card. The above record made by the employer must be presented, within 7 whole days following the date of entry and departure of the worker, for the visa of the Labor Inspector. (Article 37, Labor Law)

The loss of employment card must be declared to the Labor Inspector’s Office. A duplicate must be issued under the same conditions as those laid for the issuance of employment card (Article 38, Labor Law)

6. Payroll ledger

Every employer must constantly keep a payroll ledger whose format is set by a Prakas (ministerial order) of the Ministry in Charge of Labor. Before being used, all the pages of the payroll ledger must be numbered and initialed by the Labor Inspector. The payroll ledger must be kept in the Bureau of Cashier or Head Office of each enterprise so that it is simply available immediately for inspections. The employer must keep the payroll ledger for three years after it has been closed. The Labor Inspector may ask employer to present the payroll ledger at any time. (Article 39, Labor Law)

The payroll ledger records information about each worker employed by the enterprise and all indications concerning the work performed, wage and holidays. (Article 40, Labor Law) Any enterprises that wish to make the payroll ledger in a different way but contains the same type of information and the same method of review, may apply to the Labor Inspector’s Office.  (Article 41, Labor Law)

7. Recruitment of shop stewards

The respresentatives of workers in the enterprise or establishment consist of trade union and shop steward. The establishment of trade union in an enterprise is not required by law. However, the election of shop steward is compulsory. For example, article 283 of the Labor Law provides that in every enterprise or establishment where at least 8 workers are normally employed, the workers must elect a shop steward to be the sole representative of all workers who are eligible to vote in the enterprise or establishment. Under the Labor Law, the employer has the obligation to organize elections. If there are no shop stewards, the employer must set a date for the elections and publicize it within 15 days upon receipt of the request of a worker, a union, or the Labor Inspector. The elections must be organized within 45 days upon receipt of the request. If there is an election to elect all new shop stewards, the balloting must take place in the 15 days period preceding the expiration of the current term. (Article 292, Labor Law)

8. Registration with NSSF

Other than the above obligations, the employer also has obligation to register itself and workers with the National Social Security Fund for the occupational risks and health insurance schemes. (Prakas 448 dated 10 November 2017 on Registration of Enterprises, Establishments and Workers in National Social Security Fund for those who are under the Provisions of the Labor Law)

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