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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

Meena Foods employed 8 persons for most of the year but on one day in the preceding twelve months it employed 25 persons. An employer asks how the Act classifies the establishment. Which is correct on the text of the definitions?

Meena Foods is a small establishment. The definitions look at persons employed on any day of the preceding twelve months, not at the average, so the single day with 25 employees takes it outside the very small category and into the ten to forty band.

  1. AVery small, because average employment is below ten
  2. BVery small, because it employs 8 persons on most days
  3. CSmall, because the definition counts persons employed on any day of the preceding twelve monthsCorrect
  4. DNot covered, because employment varied during the year

Explanation

Both definitions refer to persons employed or were employed on any day of the preceding twelve months. The very small definition requires not more than nine persons on any such day, which fails because 25 were employed on one day. The 25 falls within ten to forty, so it is small.

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