METHODOLOGY OF CONDUCT OF LABOUR AUDIT :

At the commencement of audit, the Independent Professional like Company Secretary in Whole Time Practice should define the scope of his audit. The scope will certainly differ from employer to employer. Accordingly, if the employer does not own a factory, the provisions of the Factories Act, 1948 will not be applicable. Similarly, certain factories in remote areas may not have the facilities of Employees State Insurance Corporation. In such cases, there is no need to ensure compliance of ESI Act.

As stated Independent Professional like Company Secretary in Whole Time Practice should identify various Central and State Acts and Rules that are applicable to an employer. Based on such identification, he should commence scrutinising the compliance of provisions of various Acts/Rules. It will be in the fitness of things that the Report is drafted in the same manner as PCS do for Compliance Certificate under the proviso to Section 383A(1) of the Companies Act, 1956. Checklist for compliance of each legislation has to be formulated before commencement of his audit.