Update: Issue of notification to allow Work from Home for 50% employees of SEZ units

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Update: Issue of notification to allow Work from Home for 50% employees of SEZ units

Tejasvi

@tejasvi

July 15, 2022

Public Policy

977

The Ministry of Commerce and Industry has issued Notification No. G.S.R 576(E) dated July 14, 2022 to notify amendments to SEZ Rules to enable long term hybrid work model or Work from Home (WFH) for units in Special Economic Zones (SEZs). Summary of the amendments is as follows:

Rule 43A has been introduced to allow IT-ITeS SEZ units to permit its employees (including contractual employees) to work from home or any place outside the SEZ.
50% of total employees of the units, including contractual, are allowed to WFH. Development Commissioner (DC) can allow more than 50% employees to WFH for bonafide reasons.
The Unit is required to submit a proposal for WFH to the DC within 90 days from the date of notification. The proposal shall contain details relating to the terms and conditions of WFH, including the date from which the permission for WFH shall be utilised and detail of employees to be covered by such permission.
The DC may grant the permission to WFH for 1 year, which is extendable for another one year.
The Units can provide laptop, computer, video projection systems, secured connectivity devices to such employees after obtaining permission from Specified Officer to temporarily remove such goods to Domestic Tariff Area without payment of duty or IGST. The duration for movement of assets required for the purpose of WFH will be linked to the WFH duration.

While the amendment to allow WFH for 50% employees in SEZs is a positive move, we believe that the above notification imposes procedural/ administrative compliances which are impractical and burdensome. For example, it is not clear how companies will be able to submit details of employees who are expected to work from home as companies cannot have an inflexible plan in advance as to who will work remotely and who will come to office. These decisions are usually taken based on team specific requirements and suitability and are based on mutual understanding within teams. Second, for even 50% employees to WFH, approval will be required from the DC. It is not clear what criteria would be applied to grant or deny the approval and in what time frame the approval should be expected. As it stands, the procedural aspects in the notification do not reflect an understanding of the WFH/ remote working model in the industry.

During our discussions with Ministry of Commerce, we had highlighted that the Industry needs to be have the flexibility to implement WFH across their employees while ensuring that a certain minimum employees work from the SEZs. We have already communicated our concerns to the Ministry of Commerce and have requested them to clarify them and amend the notification or issue operational directives, which will help the Industry to implement the Notification in the right spirit.

Over the next few days, we will be organising calls to discuss the impact/ implementation challenges this with the Industry. We will continue to engage with Ministry of Commerce to ensure ease of doing business for such units.

Kindly send your feedback/ thoughts on the Notification to tejasvi@nasscom.in

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Tejasvi