What the govt guidelines on WFH for SEZ mean for employers and employees

The Union Commerce Ministry on Tuesday came out with a notification allowing work from home for a maximum period of one year in a Special Economic Zone (SEZ) unit, which can be extended to 50 per cent of total employees. The notification said that the Department of Commerce has notified a new rule 43A for WFH in Special Economic Zones Rules, 2006.

Bhuvnesh Seth, Chairman of Export Promotion Council for EOUs and SEZs said that the amendment in rules gives the provision of the ‘work from home’ concept a more certainty and uniformity across the zones. “Work from home for SEZs was permitted as an exception on a temporary basis. It depended upon the discretion of respective Zonal Development Commissioners. It basically allows companies to have upto 50 per cent of its employees working from home. The Development Commissioner may allow work from home for a period of one year which may be further extended by a maximum of one year at a time,” Seth added. 

Currently, there are eight functional SEZs in India at the moment including Santa Cruz (Maharashtra), Cochin (Kerala), Kandla and Surat (Gujarat), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal) and Noida (Uttar Pradesh).

According to the new notification, employees of the IT/ ITeS SEZ units, employees who are temporarily incapacitated, travelling, or working offsite are covered under this.

Explaining the rationale behind the decision, he said, “There was a demand from IT/ITES services units to allow employees the facility of working from home as it gives them more flexibility. A number of employees were leaving the companies if it was not allowed. IT/ITES companies also saw during the COVID-19 period that WFH is good from the companies’ point of view as it reduces their costs of logistics and infrastructure. On the other hand, there was a problem for SEZ developers who made huge investments in world class office spaces, which, if not utilised, could go to waste and they could get into financial problems.”

According to him, the new amendment in rules has now brought uniformity as earlier there was a lot of discretion with the Development Commissioners as the intention was to treat WFH only as an exception and not as a policy. It is very simple. “The company desirous of availing WFH facility for its employees will submit the proposal to the Development Commissioner who will allow it for a period of one year which can be extended further for a maximum period of one year at a time. The company is expected to keep a proper record of the attendance, etc. The Development Commissioner may allow even more than 50 per cent employees working from home in genuine cases,” Seth told Business Today.

The notification also mentioned that SEZ units will provide equipment and secured connectivity for the purpose of WFH to perform authorised operations of the units and the permission to take out the equipment is co-terminus with the permission granted to an employee. Talking about the implication of the new notification, one expert claiming anonymity, said, “It will increase productivity and bring efficiencies and cost savings in the operation of such companies, but it might bring down the demand of transportation and other indirect facilities related to employees working in offices.”

Also read: Commerce Ministry announces new work from home rules for SEZs; check details here