2013 is considered as the most significant year in Indian legal framework, when parliament enacted the Companies Act, 2013, bringing it to match global standards. In 2017, Goods & Service Act replaced more than 10 indirect taxes; and significant changes were brought in employment law — these changes have been hailed by many as being both progressive and business-friendly. In current & coming years, it is likely to witness the even greater number of developments in the employment law landscape.
These changes also bring lot challenges for companies operating out of India, especially SMEs. SMEs constantly struggle for keeping track of these changes. Promoters and employees working in SMEs, usually get updates about statutory and regulatory changes through their peers in the industry or newspapers and other media sources. Large & Medium sized organizations face different challenges because of diverse geographical presence, types of operations, the involvement of contractors and sub-contracts in supply chain process and dependence on internal & external teams at different locations for tracking & analysing the impact of the change in laws and statuettes.
Most of the organizations don’t have a formal process for managing updates often results in delay in response. Indian corporates need a reliable, structured and technology-based process to comply with fast-changing statutory & legal compliance requirements.
The organization shall define statutory & regulatory compliance as one of their strategic business objectives and allocate appropriate budget & resources to achieve it. They need to regard statutory & regulatory compliances as the integral part of their regular operations. These changes can impact the organization’s product/service delivery, supply chain, operations, workforce, financials and technology platforms.
There are professional organizations available in every part of the country that supports organizations in tracking statutory & regulatory changes. But, still organizations need to establish a mechanism to
Therefore, availability and integrity of information at right time are the most important factors in managing the changes.
Any organization, small or large, needs to establish statutory & regulatory change management process to mitigate its financial & operational risk. Generally, this process consists of five major activities:
Ideally, the organization shall create cross-functional team (CFT), consisting of employees from different functions, which shall track changes in regulations, laws and statuettes. The regulations, laws and statuettes can be divided into the following categories:
Identified changes shall be immediately shared with central coordinating CFT for assessment & further action.
CFT shall assess the impact of the change in law / regulation or notification; and assess current controls & processes in place for the existing requirement. The assessment shall also look at impact on organization’s enterprise application and information technology environment.
Enactment of new law or statuette; OR Replacement of existing law or statuette; OR Change in existing law or statuette which affects organization’s – product / service delivery / supply chain operations / workforce / financials / technology platforms that requires require signification effort to manage
Change in existing law or statuette which has very less or no impact on organization’s – product / service delivery / supply chain operations / workforce / financials / technology platforms, and required small realignment of current control or process or reporting
Any change which is minor is nature with no operational or financial risk. e.g. Change in date or clarification relating to earlier notification etc.
Change where the immediate action (between 1-6 days) has to be taken
Change where significant time is available to take appropriate action (>= 7 Days)
In case required, CFT shall realign existing control or establish new control. In case required, it shall also assign responsibility for the implementation of new control or making the necessary change in existing control.
Training and communication strategy shall be developed for major and minor changes only. CFT shall identify the employees who have to manage or handle the process/control impacted by the change. The organization must train their employees, especially in critical areas.
In case of major change, the organization shall consider following training to communicate awareness and bring effectiveness.
Top management shall also be communicated about the change and its strategic importance on statutory / regulatory compliances.
As per the requirement of law or statute, change in the process/control shall be rolled out in the organization. The steps involved include:
Compliance Officer (CO) of the organization shall establish reporting change(s) in Compliance requirements and their current status. CO shall also establish escalation process in case of non-compliance. CO shall analysis & provides data to support his/her conclusions.
In case if any non-compliance or repetitive non-performance, corrective action shall be initiated by CFT to make necessary changes in process or control.
Over the last five years, “Proind Business Solutions Private Limited” has been providing legal update services to 30+ customers across the country in different industry verticals. Proind also helps organizations in automating compliance process through its state-of-the-art technology platform “Proind Compliance Management Software”.
Proind legal team keeps its clients informed whenever a new law is enacted or any law is amended or changed or any new notification is released depending on its urgency and impact. Team also assesses the change in legal/statutory requirement as per client’s business, nature of operations & scope and inform client on weekly basis. The information sent includes a copy of notification (if applicable), the executive summary of change and what has changed from compliance prospective.
In case of an urgent requirement, where the impact is immediate, team informs the client immediately and get it updated on the system. In case you need any information or support, please contact Proind @ email@example.com