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CS Executive · Setting Up of Business, Industrial and Labour Laws · The Code on Wages, 2019

Ravi Textiles Pvt. Ltd., a private company in Surat, has 22 employees on one day in the accounting year but only 15 on all other days. Assuming no exclusion under section 41(1) applies, how does the Chapter apply to it?

The Chapter applies to Ravi Textiles. The Code covers an establishment where twenty or more persons are or were employed on any day during an accounting year, so a single day with 22 employees is sufficient, regardless of the lower headcount on other days.

  1. AIt applies, because twenty or more persons were employed on a day during the accounting yearCorrect
  2. BIt does not apply, because the average strength is below twenty
  3. CIt applies only for the period in which 22 persons were employed
  4. DIt does not apply unless employees exceed twenty for a full quarter

Explanation

Section 41(2) applies the Chapter to an establishment in which twenty or more persons are employed or were employed on any day during an accounting year. One day with 22 persons is enough. Averaging or a quarter-long test is not in the text.

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