Human Resource
Audit Scope
2.1.1
Manpower Budget & Planning
2.1.2
Manpower Recruitment
2.1.3
Pay Roll Processing
2.1.4
Payment
of statutory Dues
2.1.13 Statutory
Compliance
2.1.13.1
The Factories Act 1948
2.1.13.2
The Apprentices Act 1961
2.1.13.3
The Contract Labour (Regulation & Abolition)
Act 1970
2.1.13.4
Miscellaneous
Acts
Query Sheet – 1 Payroll
processing
Observations:
We verified the Payroll processing
for the year 2010-11 and following are the observations.
Ø We have taken
sample of Sep-10 and observed that Instances where staff has worked
continuously more than 10days which is amended by law. Refer Annexure -1
Ø As per section 7
(2) of the Payment of Wages Act 1936, Total deductions from wages in any wage
period should not exceed more than 50% of the total wages. However it is
observed that there are instances where % of total deduction on total wages for
workmen is exceeding more than 50% ranging to 99%. Refer Annexure-1A
Query Sheet – 2 Statutory
Payments – ESI & PF & TDS
Observations:
We verified the PF & ESI
deduction and remittances for 2010-11 and following are the observations.
Ø According to ESI
Act the employee covered under ESI can’t get the benefit of medical allowance.
However we observed that there is 1 employee in which “Medical allowances” have
been paid to workmen at Rs.120 each month (April’-Dec 2010) though he is
covered under ESI scheme. It is told to us that this is a system issue which
taking wrongly for particular employee and subsequently deducted from salary in
next month under the head of misc. deduction but it has not been deducted. Refer
Annexure –2
Ø There is a one day delay of filling half yearly return of ESI
statutory dues during Apr’10 to Sep’10 i.e. filled on 12-Nov-10
Ø Delayed remittances of statutory dues during Apr’10 to Sep’10 - ESI
delayed by 1 day for the month of June’10 i.e. on 22nd July’10 & for Oct’10 i.e. on
22nd Nov’10.
Ø It has been
observed that the ESI is deducted from the contractors and paid directly by the
company in own registration number. Future dispute with management needs to be
reviewed.
Ø We have taken sample of Sep-10 where the TDS has not been deducted on
salary of certain employees where there salary exceeding basic exemption which
required by Sec-192 of TDS of income tax Act 1960. Refer Annexure –2A
Ø TDS has not been deducted for none of the employee in the first quarter
(i.e.Apr’10-June’10) and the Quarterly return of same also has not been filled
which is mandatory by law. Refer Annexure
–2B
Query Sheet – 3 Apprentices Act 1961
Observations:
We verified Apprentices documentations for the year 2010-11 and following are the observations.
Ø As per section 3A (1) every designated trade, training
places shall be reserved by the employer for the SC/ST and where there is more
than one designated trade in an establishment, such training places shall be
reserved also on the basis of the total number of apprentices in all the
designated trade in such establishment. Reservations for SC/ST are not done by
the employer and the related provisions for the same.
Ø The employer should send complete bio data and retain
one card with himself and forward within 90 days from the date of engagement of
the apprentice one card to Central Apprenticeship Adviser for registration. We
have taken sample of 20 cases out of 84 apprentices &observed that there is
a delay occurred ranging 74days to 113days. Refer Annexure-3
Work diary of the apprentices is not being maintained
and the related provisions for the same are as follows:
For trade
apprentices:
Ø Rule
14(4) of The Apprenticeship Rules 1991: Work diary in Format-2 as specified in Schedule III shall be
maintained by each trade apprentice and countersigned by his supervisor once a
week. However it is observed that it has not been maintained.
Ø Rule
14(10) of The Apprenticeship Rules 1991: Copy of the “Apprenticeship Contract Registration ” for
knowing maximum apprentice registered by company as acknowledged by the Regional
Central Apprenticeship has not been obtained since 1982 and told to us that HP is a non promotional state
where there is no such verification occurred by the Regional Central
Apprenticeship since 1982.
Ø There are certain irregularities observed in the selection
and appointment procedure relating to documentation.
·
Photo not Affixed
in the Application Form in few cases. (Emp
No-A-1861-Rampal,A-1893-Sunny Rana)
·
Space provided
for Certification by the Employer is not filled .Refer Annexure-3
Query Sheet – 4 Contract
Labour (Regulation & Abolition) Act 1970
Observations:
Every principal employer and every contractor shall
maintain such registers and records giving such particulars of contract labour employed
the nature of work performed by the contract labour, the rates of wages paid to
the contract labour and such other particulars in such form as may be prescribed.
We have demonstrated the Contact register with their attendance register and following are the observations.
Ø
The
following registers which are required to be maintained under The Contract
Labor (Regulation and Abolition) Act 1970 have not been updated for 5 contractors.
Refer Annexure-4
Ø
As per The Labour Act 1970, if the contract of
labour providing more than 20 labour then company should obtain license from
contractor. However the same has not been obtained from any of contractor
during our audit. Refer Annexure-4
Ø
No multiple Quotations have been obtained to select
labour contractors. It is observed that the entire contractor was providing
service from the beginning where there is only renewal process as per contract.
Refer Annexure-4A
Ø
We
observed in case of Beckon securities services, the actual number of labor
employed exceeds the approval obtained for maximum number of contract labor to
be employed. Refer Annexure-4B
Ø
The column of Total working days in the attendance
card of labour contractor Beckon securities services has not filled up any of cases and not duly authorized in specified
column.
Ø
Notices u/s 29, the Contract labour Act, 1970 (Hours
of work, Nature of Duty along with contractor name) of the Contract labour
should display on notice board. However there is notice available without
labour contractor name.
Query Sheet – 5 The Factories Act 1948
Observations:
Ø It is observed that Date of due on in Fire
extinguisher D-18,D-29 has been expired
on 05.01.2011 where the inspection has not yet been carried out during our
audit. (photocopy taken)
Ø Section 108(2) of The Factories Act 1948, A notice
containing abstract of the Factories Act 1948 and the rule made there under, in
English and local language which understood by the majority of the workers
should be displayed. The details of the name and address of the Inspector and
the certifying surgeon should also be displayed on the notice board (Section
108(1)).However it is observed that there is no display of abstract on local
language which understood by the majority of the workers on notice board.
Query Sheet – 6 Miscellaneous
Acts
Observations:
Ø An extract of the Maternity Benefits Act have not been
displayed at the notice board of the factory.
Ø An extract of the Equal remuneration Act 1976 have not
been displayed at the notice board of the factory.
Ø Rule 6 of the Equal Remuneration Rules provides that
every employer shall maintain a register in relation to the workers employed by
him in Form-D. However it is observed that such register has not provided
during our audit but subsequently provided to us and found correct.
Ø Section 108(2) of the Factories Act 1948, notices of
periods of work for adults (Form No – 11) have not been displayed on the notice
board.
Ø Safety committee is not available comprising of workers and management
(Section – 41G of The factories Act)
Query Sheet – 7 Planning
- Manpower
Observations:
We
have verified the manpower planning linked to production and the monitoring of
the same for the year 2010 –11 and following are the observations.
Ø
The
manpower planning is prepared during Annual business plan and the same is
linked to the production for the particular year. If there is any change in the
market plan, the same is communicated to the HR for manpower planning purpose. We
can’t analyze the manpower planning linked to production (the budgeted and
actual production month wise details have not been provided to us). We observed
that during 2010-11, the manpower availability was not in line with the
request. Refer Annexure - 5
Ø
During
Sep’10 and Dec’10, the manpower supply is quite high then the request.
Query Sheet – 8 Over Time
Observations:
The employees are allowed to work for extra hours and the same is compensated either through Over time payment or through compensatory off. All the extra hours worked should be approved by the functional head and GM operation. However it is told to us that there is no overtime system captured even if there is a production loss due to absentism.
Query
Sheet -9 Leave Availment
Observation:
We have reviewed the comp off
cards on sample basis (60 out of 250 workers) and following are the observations.
Ø As per Sec.52
(1) (a) of factories act 1948, Comp off should avail within 2 months. However Policy
is not defined to taking the comp off procedure. It is observed that there is delay
in availing comp off ranging 61 days to 127 days. Refer Annexure-6A
Ø Comp off availed
before working (Leave availed and then compensated the leave) Refer Annexure-6B
Ø Comp off Leave taken but not working during month & Not Approved. Refer
Annexure -6C
Ø It is observed
that there is delay in applying comp off ranging 1days to 107 days. Refer Annexure-6D
Query Sheet – 10 Late Coming & Early Going
Observations:
All the employees are allowed to avail 2 hours permission in a particular month and the same needs to be approved by the functional Head and recorded . All the employees are allowed to avail 15 minute late everyday for taking breakfast purpose .We have verified the late coming & Early going for the month of Sep’10 and following are the observations.
Ø
We have taken
sample of sep’10 & found that the deduction for late coming of employee has
not been deducted from their respective salary .Refer Annexure-7
Ø
Instances
where the employee has availed more permission over allowed norms as per policy
of two hours (Taken sample of Dec-10). Refer Annexure – 7 A
Ø Generally the
short leave needs to be submitted to HR before leave date where as the same
process is not followed. Instances where the short leave are submitted after
joining back the duty. Refer
Annexure – 7B
Query Sheet – 11 On Duty
Observation:
The
employees are sent outside of the factory for official work and the same will
be through EPIC software. All the OD application needs to approve by the
functional Heads. We have verified the OD for the month of Dec 2010 on a random
basis and following are the observations.
Ø
Generally
the OD plan needs to be submitted to HR before OD date where as the same
process is not followed. Instances where the OD applied are submitted after
joining back the duty ranging 1 day to 62 days. Refer Annexure – 8
Ø
It
has been observed that there is a delay of approving ODD application by the
HOD’s ranging 1day to 100 days. Refer Annexure – 8A
Query Sheet 12 Compliance to HR Policy – Recruitment
Observations
Ø The permanent Identity card or police verification
should be collected from employee to avoid future misconvience; it has been
observed that the same procedure is not followed for any of the new employees. Refer
Annexure-9
Ø The PF nomination Form (Form-2) should be collected
from employee to avoid future legal standardization; it has been observed that
the PF nomination form has not obtained for one of the new employees. Refer Annexure-9A
Ø There is a documentary lapse where the column on
Form-2 (PF nomination form) has not filled any of cases.
Query Sheet -13 Compliance to HR policy–
Resignation/Retirement/Termination
Observation:
Ø All the Outgoing employees of both resigned &
retired should have been conducted Exit Interview. However the same is not
followed for any of the outgoing employees. However after discussion they shown us the separation feedback form is
obtained for both resigned & retired employees which are not as like exit interview. Refer Annexure-10
Ø As per HR policy,
Payroll department will settle the dues of the exiting employee. This will be
done after checking for outstanding payments as per “Full & Final
Settlement Statement”. The same has not been available for few .However it is
observed that the cheque detail copy has not been attached in any of F&F settlement file. Refer Annexure-10A
Ø
No Due certificate has not been obtained from any of
employee. Refer Annexure-10B
No comments:
Post a Comment