Everything You Need to Know About Rule 43A: The New Work From Home Policy For SEZs

Studies have shown that people who work from home have reported feeling more independent and happier because they have the time to care for themselves and they do not feel constantly monitored for doing their work. According to the job site SCIKEY, approximately 64% of employees believe that working from home rather than the office increases their productivity.

The Special Economic Zones Act of 2005 governs the country’s SEZ units. SEZs are areas within a country where trade and business laws differ from the rest of the country in order to improve investment, employment, and trade. It also governs the location of employment for SEZ employees. 

Rule 43A: The New Work From Home Rules

The culture of working from home (WFH) has gained a lot of acceptance since the pandemic. To reap the benefits of the WFH culture, the government of India’s commerce ministry introduced new rules and regulations regarding work from home for SEZ employees in the form of Rule 43A of the Special Economic Zones Rules, 2006.

These rules permit employees to work from home in SEZs for a maximum of one year and allow them to extend this to up to 50% of the total number of employees. In fact, the new rules allow the Development Commissioner (DC) of the SEZs to extend the time period and the number of employees for a legitimate reason that is documented in writing. 

These rules apply to the country’s eight functional special economic zones — Santa Cruz (Maharashtra), Kandla (Gujarat), Chennai (Tamil Nadu), Surat (Gujarat), Vishakhapatnam (Andhra Pradesh), Falta (West Bengal), Cochin (Kerala), and Noida (Uttar Pradesh). 

These regulations apply to the following types of employees who work in SEZs: 

• Employees working in the IT and ITeS (Information Technology Enabled Services) SEZ 
• Employees who are temporarily incapacitated or ill
• Employees who are travelling
• Employees doing their work offsite

These rules also require SEZ units to obtain permission from the special economic zone’s Development Commissioner before allowing their employees to work from home. The SEZ units must submit an application that includes employee information and the dates for which permission is sought from the DC. Except for employees who are temporarily incapacitated or travelling, they must submit this application 15 days before the date of providing work from home.

SEZ units that have already shifted to a work-from-home structure must submit an application within 90 days of the rule’s implementation date, which is July 14, 2022.  The SEZ units are also required to provide laptops and other electronic equipment to employees to help them transition to the WFH environment. 

Employee-Employer Perspective

From the employee-employer standpoint, such a decision should be regarded as a positive step forward because it allows the employer to increase employee productivity while also saving money on logistics and infrastructure. The employee also benefits from such an arrangement because it allows them to work from home, giving them more flexibility and increasing their productivity.

Even employers believe that WFH has become the new norm, with more and more companies posting permanent work from home positions. Companies such as Mondelez and Tata Steel have begun to offer permanent work-from-home positions, whereas Maruti Suzuki and ITC are implementing a hybrid system in which employees are only required to come to the office for a couple of days per week. Employers benefit from the WFH model in the form of lower operational costs, higher employee retention rates, higher productivity, and easier recruitment. 

The new rules appear to be quite comprehensive, as they address the issue of single employment at a time, which was a common issue for employers during WFH. According to the rules, SEZ units must ensure that employees working from home only work for services approved by the respective SEZ unit. 

The Work From Home Challenge

The new rules emphasise the goal of improving work efficiency, but they do not address factors such as minimum working hours and deliverable-based remuneration, both of which help in improving work efficiency. 

The rules specify the number of employees and the time frame for which the SEZ may provide WFH services. Such considerations should also be included, as they will boost employee productivity. 

They are also silent on employee confidentiality. The requirement to provide employee details to the DC for the DC to determine whether an employee is eligible for the WFH model raises concerns about employee information confidentiality.

Authorities may use employees’ personal information to make arbitrary decisions. As a result, the new rules must clarify the approval process further so that privacy and confidentiality concerns can be addressed.

WFH also raises the issue of data security and privacy. While businesses invest heavily in virtual private networks, firewalls, and anti-virus software, home networks are not as capable of providing the same level of security. This puts the companies’ sensitive data at risk of being hacked or leaked.

In fact, nearly 70% of workers working from home during the pandemic experienced IT issues, with 54% having to wait more than 3 hours for the problem to be resolved.  The new rules should include mechanisms and guidance to address such issues. 

A Long Way To Go

Overall, the new rules for work from home in SEZs are a significant step in the right direction. Giving the nearly 2.36 Mn people who work in India’s SEZs the option of working from home will be good for our country’s economic future. In fact, studies show that by 2025, nearly 70% of the working population will be working remotely at least five days per month.

Political systems all over the world have begun to recognise the value of working from home, with the Netherlands recently passing legislation making WFH a legal right. 

The introduction of these new rules was much needed. However, in order to better protect people’s rights and liberties, we still need to improve it and develop guidelines for its implementation in other areas of work.