Problems relating to Trade and Investment on India

16. Employment
Issue	Issue details	Requests	Reference

(1) Overly Labour Protective Labour Legislation	- Overly labour protective legislation for workers with many service years, etc. frustrates employers' free hands in flexibly structuring the workforce regime. - Generally the notion of labour protection prevails. Restructuring workforce requires approvals and permits of the competent authorities. FFEs are confronted with a difficulty to invest on human resources with a perspective of future expansion of their businesses in India.	- It is requested that GOI reviews the relevant legislation. - It is requested that GOI restructures itself so that labour issues are resolved at the collective bargaining between employers and Unions (or employee's representatives).	- Industrial Disputes Act 1947
	(Action) - For dismissal of workers (namely, employees in non-managerial or supervisory position), employers are required to observe a number of legal requirements of all forms. Workers are protected from an indiscriminate dismissal by employers. Before proceeding with the dismissal of workers, employers are required to execute departmental disciplinary measures. Moreover, various reconciliation and arbitration institutions for industrial disputes are available under the State auspices, such as Reconciliator, Labour Court, and Court of Industrial Relationship. In general, industrial disputes are bound to take many years between employers and Workers, with the parties taking layer by layer the procedures made available to them, before the disputes reach the Supreme Court's decision. Of course, it is always possible to settle the case at any time. - On 1 March 2001, Finance Minister Jaswant Singh, in his speech on the 2001 FY budget at the Parliament, proposed to deregulate enterprises requiring the governmental approval for reduction in workers and closure of operation limited only to those enterprises with 1,000 or more workers. Minister Singh also proposed to repeal Labour Act, draft amendment, 1947 and Sick Industrial Companies (Special Provisions) Act, 1985 to enable outsourcing in the non-core department. (Each labour union opposed to this in chorus.) - In 2014, Rajasthan State raised the basic number of employees requiring prior governmental approval from 100 to 300 persons. Since then, Madhya Pradesh, Uttar Pradesh, and increasing number of other states have been following suit.
	(Improvement) - The amended Labour Law Rajasthan State in August 2014 has raised the number of employees from 100 to 300 for an enterprise that must obtain the prior State Government approval for dismissal of its employees.

(2) Differing Labour Standard by Each State

- While in general terms Labour Standards and Rules vary by state, there are scarcely few tools available to grasp the contents. It makes labour management difficult.

- It is requested that GOI publishes a book on industrial relationship in India or discloses the requisite information on its website.

(3) Complex, Delayed Visa Acquisition / Renewal Procedures	- It takes too long and too much work to get the Employment Visa (both upon new assignment and renewal). - Upon filing application for business visa, work visa, etc., the authority requires numerous documents, so that advance preparation is prerequisite.	- It is requested that GOI: -- streamlines the visa application procedures as to Japanese applicant by cutting down and simplifying the application procedures, or extending the validity term for the Employment Visa, and -- deregulates the Regulations allowing free entry without visas as to Japanese applicants, to ensure more active India/Japan interchange. - In light of the fact that both India and Japan are signatories to EPA, it is requested that GOI deregulates the requirements for the Visa issuance.
	(Action) - On 20 August 2009, MCI promulgated Notification setting forth the standard for visa issuance to aliens, demanding expulsion of aliens working in India under B-visa. It also compels aliens re-entering India to obtain E-visa (Employment Visa) at the Embassy/Consulate General of the alien's mother country. The scope of persons eligible for Employment Visa has been narrowed down to highly skilled engineers, experts, senior manager, or executive officer. - In April 2010, GOI issued New Guidelines for Visa Issuance, setting forth among others, "The Foreign Worker that is being sponsored for an Employment Visa earns an annual salary exceeding USD 25,000", "Employment Visa may be granted up to two years in general and up to three years for those in IT software or IT enabled Service business." - On 1 March 2016, ministry of tourism initiated implementation of "Tourist Visa on Arrival (TVOA) scheme)" that grants single entry visa (within the visa validity period) to tourists from Japan, etc, whose sole objective of visiting India is recreation, sightseeing, casual visit to meet friends or relatives, short duration medical treatment or casual business visit (participation in conference) etc. and no other purpose/ activity. While this scheme is executed at each international airport, at Indira Gandhi international airport, Japanese speaking Indian staff on permanent duty attends at the TVOA counter, assisting the application protocol, with blank application form available at the counter. By filling in the details and with the picture taken on the spot, and payment of fees, the applicant obtains the Visa on the spot.
	(Improvement) - The renewal time for Employment Visa (Work Permit) that used to take 6-8 months has been reduced to 4-6 months. Also, a single temporary permit (allowing just one trip that required frequent trips to Immigration Office) has been replaced by a multiple-entry-visa. - Since September 2014, the applicant's own appearance has been no longer required for registration and/or renewal of Stay Permit at Alien Registration Office so that applicant's agent or attorney may file such applications. - Since 10 June 2016, Indian embassy has started issuing long term visa to Japanese national, valid for 10-years maximum, provided, however, that the continual stay period per visit to India may not exceed 180-continuous-days maximum.

(4) Delayed Enforcement of Japan-India Social Security Agreement (JISSA)	- While both GOI and GOJ agreed and signed JISSA, it has not yet reached the enforcement. Our member Firm faces increased cost from (1) double payment for subscription to social insurance and no-refund (2) until the insured reaches 58-years in age. Thus the competitive power of Japanese company in operation is inferior to that of Korea which has already enforced the social security agreement between India. - GOI compels foreigners to pay social insurance premium. While the insured can receive payments beginning 58-years in age, the onus of its management and the method of its receipt are both difficult for MFS, the employer. - While JISSA was signed and its ratification completed in December 2013, the deliberation still continues on its implementing regulation so that employers' double payment of pension fund continues. Employers' contribution to the provident funds of 12% cannot be slighted for its impact upon the company's profit and loss. - As it stands, Provident Funds (PFs) employers contribute during an expatriate's stay in India do not get refunded, pending the expatriate's reaching 58-years in age. In November 2011, JISSA was signed between GOJ and GOI, and parliamentary approval was completed in December 2013 as to Japan, (while no parliamentary approval is required as to India). Pending completion of the formalities by exchange of official documents, etc., JISSA comes into force. However, signing the official documents remains pending. After enforcement of JISSA, it is expected that expatriates with less than 5-years stay will get their PFs contributions refunded at the time of return to the home country.	- It is requested that GOJ and GOI get the social security agreement enforced as soon as possible. - It is requested that GOI takes steps to get the JISSA enforced as soon as possible. - It is requested that GOI and GOJ expedite enforcement of JISSA as soon as possible. - It is requested that GOI and GOJ expedite getting JISSA enforced as soon as possible.	- G.S.R 148 and G.S.R 149 Dated September 2010 - Provident Fund Act - The Employees' Provident Funds (Amendment) Scheme 2010 (EPF) and the Employees' Pension (Amendment) Scheme 2010 (EPS)
	(Action) - Government-to-Government talk has begun since July 2011 on Japan-India Social Security Agreement. - On 28 May 2012, GOJ and GOI have reached substantive agreement for signing the Japan-India Social Security Agreement. - On 16 November 2012, the Social Security Agreement between Japan and Republic of India was signed.

(5) Nebulous Refund of Social Security Premium (Pension Fund)

- Foreign expatriates to India have been paying 25% of their income to GOI as reserve for retirement annuity (provident fund). However, it remains nebulous if the social security premium (pension fund) gets repaid upon expatriates' return to Japan, after the JISSA is ratified and enforced.

- It is requested that GOI clarifies this question as soon as possible.

(6) Irrational, Complex Permit Requirement on Each Exit at Immigration

- Foreigners with resident permit in Jharkhand state must obtain, on each exit, exit permit from the police station having jurisdiction over the residence permit. Applicants are unable to cope upon occurrence of events that requires immediate return to the home country. MFS has lodged request to repeal this requirement, Jharkhand being the only state that mandates the exit permit.

- It is requested that GOI takes step to repeal this Jharkhand state rule.

(7) Lack of Thoroughness in Synchronisation of the Validity Period between FRRO and Visa

- Due to the differences in the validity periods between FRRO (Foreigner Regional Registration Office Stay Permit) and Visa, the requisite FRRO procedures for the expatriates were vexatiously complex.
In September 2014, at the Japan-India summit conference, it was formally decided to synchronise the validity periods between FRRO and Visa.
Further request was made to GOI for the thorough synchronisation of the validity period between FRRO and visa, by Suggestions for the government of India by JCCII (December 2014).

- It is requested that GOI ensures a thorough achievement of the Indian government decision of September 2014.

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