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CS Professional · Labour Laws and Practice · The Labour Laws (Simplification of Procedure for Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988

Kaveri Textiles in Coimbatore employed 38 persons on its busiest day in the last twelve months and 25 on most other days. Which statement correctly applies the Act?

Kaveri Textiles is a small establishment. The Act covers establishments employing not less than ten and not more than forty persons on any day of the preceding twelve months, and 38 persons lies within that range. The old limit of nineteen no longer applies.

  1. AIt is a small establishment, because not less than ten and not more than forty persons were employed on any day of the preceding twelve monthsCorrect
  2. BIt is a very small establishment, because most days it employed fewer than forty persons
  3. CIt is outside the small category, because the upper limit is nineteen persons
  4. DIt is a very small establishment, because the average number is below forty

Explanation

Section 2(e) defines a small establishment as one employing not less than ten and not more than forty persons on any day of the preceding twelve months. The limit of forty was substituted for nineteen with effect from 1-1-2015. The count of 38 and 25 lies within ten to forty, so the firm is small.

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