Dear Mahesh,
Yours is a very general question but the ultimate answer to which requires a critical analysis on the concept and objective of a certain minimum number of employees in an industrial establishment/entity as a prerequisite for the application of certain labour laws to the same.
Normally, labor laws whose objective is protection of employment rights and resolution of industrial disputes such as the Industrial Disputes Act,1947, laying down of conditions of employment in certain general establishments where non-technical activities are carried on like Shops and other commercial establishments are applicable to all such establishments irrespective of the no. of employees employed therein.
Labor laws providing for long term social security such as EPF, ESI, Gratuity etc., periodical statutory payments over and above regular wages like bonus and providing for industrial safety and health measures in establishments like Factories are made applicable based on a minimum no. of employees once employed therein.
Certain special type of labor like contract labor, certain special employment benefits such as maternity benefit, equal remuneration irrespective of sex also involves the minimum number criterion for application of such special laws to industrial establishments irrespective of the nature of their primary activities.
Within the same Act like the IDA,1947, at times this number criterion comes into play as a restrictive measure in respect of certain aspects of employment like lay off, retrenchment, closure etc.
In my view, the complicated nature of compliance is the primary reason for this minimum number of employees criterion for the application of such labor laws.
I, therefore, request you to make your own efforts to find out the answer depending on the type of your establishment having less than 20 employees.