Starting a New Plant: What HR and Legal Steps Should We Take First?

Dear All,

I am working in an automobile company, and we are planning to start a new greenfield project in a different city. Can you suggest what activities need to be carried out regarding HR/IR, laws related to commissioning the plant, or obtaining the factory license before we proceed?

Please respond, it's urgent.

Regards,
Anshu

Dear Anshu,

The following are the activities which you can carry out in a new factory:

1) To get the PF registration form and register the PF of all the employees in the respective PF office.

2) To meet the ESIC & PF Inspector and see/understand the procedure and build good relations with the Inspector.

3) Meeting with Factory Inspector and Labour Commissioner and introducing your Company to him in order to have a good rapport between two parties.

4) To survey the neighboring Industries/Companies to cross-check, verify, or obtain information on the Minimum wages paid to the workers/Operators.

5) To prepare the Code of Conduct/Personal Policy for the new respective unit/Factory.

6) To check the License and Registration of the Contractors (If any employed) to avoid any future problems (License and registration based on the Contract Labour Act).

7) To maintain and check daily the attendance register of the contract workers (If Employed).

8) To maintain the Training Register (If any training is conducted).

9) To maintain the Attendance Register of Employees (if no attendance system is developed for some period of time).

I think I have answered all your questions.

Regards,
Ankit
09869851356

Dear Ankit,

Thank you very much for this information. It would help me. Can anyone advise me on whether it would be better to recruit local workers or workers from outside the city/state, with reasons?

Regards, Anshu

Dear Anshu,

You will have to check with the Labour Department of that State. For example, in Uttarakhand state, 70% of the recruitment or employees should be of Uttarakhand Domicile and 30% from other states. Simultaneously, check with the concerned State Labour Office.

Regards,
Ankit
09869851356

Dear Ankit,

Rightly said, government policies will have an effect on the selection of employees (operatives). However, are there any other factors that we need to take care of before proceeding, like skill availability, discipline (unauthorized absenteeism), etc.? I would appreciate your views on them.

Regards,
Anshu

Dear Anshu,

In addition to the above inputs, you can claim EDLI exemption from PF. You have to take a gratuity policy with LIC and build a Gratuity trust. First, apply for a Factory license and contract labor license. Register the list of contractors with the statutory authorities. For Professional tax, get in touch with the local panchayat or local body, and for property tax, contact the local body.

All the above are related to the statutory part of HR. When it comes to the HR part, the following inputs can help you: getting the manpower requirements, recruitment of operators (decide on qualification, age, and gender criteria), Training for them (NTTF could be a better choice), what type of culture you are going to build? (very important), Team-based setup or supervisor-based setup - need to decide.

Hope the above information could be of some use to you. If you need any further clarifications, you can contact me at +919940339427.

Regards,
Rajesh