Insurance companies showed that 384 enterprises joined provident fund (PF) scheme this year.
This was after repeated notifications from the labour ministry to incorporate provident fund (PF) schemes in private enterprises by May 31 this year.
Department of labour’s director, Sonam Wangdi, said that most private enterprises are unwilling to join PF schemes as five percent of an employee’s salary gets deducted. “Although it is like saving, people don’t seem to understand this despite awareness campaigns.”
He added that the Act should be taken seriously. “In addition to the PF schemes, we also create awareness on basic rights of the employees such as the working hour, minimum leave entitlement, probation period and termination, occupational health safety, among others.”
As per Section 99 of the Labour and Employment Act of Bhutan 2007, an employee is entitled to PF and gratuity upon retirement from service.
Sonam Wangdi said that the department was creating awareness for the enterprises that have been in the business for some years. “But for those employers who have been in the business for about 10 years, we notify them and talk to them about incorporating the scheme.”
Inspections are carried out all year round, he said. “However, he said that once the awareness is provided to private enterprises, within six months to a year, employees keep on changing.”
During inspection, if a company is found to have not complied with the Act, the ministry first issues an improvement notice to implement PF within a month to 45 days following which a penalty memo equivalent to maximum of 360 days and minimum of 90 days is issued.
Chief labour officer, Hasta Bahadur, said that in the month of June only about 50 restaurants were inspected. It was learnt that no penalty were imposed during the inspection this month.
Inspections are carried out by the category of trade such as hotels, construction and retail, among others.
Records with labour ministry show that about 2,347 members joined PF from 384 enterprises this year.
Of over 15,000 enterprises, about 4,080 enterprises have incorporated insurance schemes with Royal Insurance Corporation Limited, Bhutan Insurance Limited, and National Pension and Provident Fund as of June 28.
Sonam Wangdi said that the increase is the improvement in the compliance on enterprises’ part. “There is rise in the number of enterprises joining this year.”
As of March 14 this year, there were about 15,371 enterprises, excluding micro and small and cottage industries. All of these enterprises consist of five or more employees.
Sonam Wangdi said that everyday the number of enterprises keeps increasing.
As per the department’s Annual Performance Agreement, it needs to inspect about 2,000 work places in a year.
Sonam Wangdi said that the department has plans to collaborate with the trade department to persuade enterprises to comply with the rule. “When enterprises come for the license renewal, we would request them to see if the company has an Internal Service Rules endorsed by the labour ministry.”
Human resource shortage still remain a challenge and there is a need to build inspectors’ capacity, he said.