Section 04 · Inspections
What happens on the day, and what happens six months later
An inspection is a short event with a long tail. What is written in the visit book on the day frames the show-cause notice that follows, and the reply to that notice frames whatever proceeding comes after. Employers who lose these matters usually lose them at the first of those three points, not the last.
The Inspector's powers
Inspectors are appointed under the several enactments — Section 28 of the Delhi Shops and Establishments Act, 1954; Section 28 of the Contract Labour (Regulation and Abolition) Act, 1970; Section 8 of the Factories Act, 1948; Section 45 of the Employees' State Insurance Act, 1948 — and their powers derive from the enactment under which they are acting. An officer inspecting under one statute does not thereby acquire the powers conferred by another, and it is proper to ask, courteously, under which Act and in what capacity a visit is being conducted.
Within their jurisdiction the powers are wide. An Inspector may enter the premises at any reasonable time, require the production of registers, records, notices and wage books, examine any person found on the premises, take copies or extracts, and seize or take copies of records where he has reason to believe an offence has been committed. Obstruction is itself an offence under the relevant penal sections.
What an Inspector may not do is compel a statement in a form the employer has not read, or require signature on an entry that does not record what occurred. Where the employer's representative disagrees with an entry, the proper course is to sign with a contemporaneous note of the disagreement, not to refuse signature.
Who this section applies to
- Establishments that have received a visit intimation, an inspection report, or an Inspector at the reception desk without notice
- Principal employers whose contractor's records were called for during an inspection of the establishment
- Employers holding a show-cause notice, a demand under Section 7A of the EPF Act, or a summons in a prosecution before the Labour Court or Metropolitan Magistrate
- Multi-site employers seeking to standardise the document set held at each location
The visit book entry
The single cheapest protective habit in this field is to photograph the Inspector's entry in the visit book, in full and legibly, before he leaves the premises. A substantial proportion of disputes fought six months later turn on precisely what was written that day — which registers were produced, which were said to be unavailable, what number of workers was recorded as present, and what undertaking, if any, the establishment's representative gave.
Alongside that, keep a short internal note of the visit: the date and time of arrival and departure, the officer's name and designation, the Act under which the visit was stated to be conducted, the documents actually handed over, and the name of the employee who received the officer. Ten minutes of record-keeping on the day frequently decides the matter.
The document set to hold at the premises
Not exhaustive, and not a substitute for the register set prescribed by the applicable rules. It is the folder we ask clients to be able to produce within fifteen minutes of an officer arriving.
| Document | Held by | Authority | Common defect |
|---|---|---|---|
| Shops and Establishments registration certificate | Principal employer | Delhi S&E Act, 1954, s. 5 | Address not amended after relocation |
| Certificate of registration, Form I | Principal employer | CLRA, 1970, s. 7 | Present contractor not named on the certificate |
| Contractor's licence, Form VI | Contractor, copy on site | CLRA, 1970, s. 12 | Expired, or licensed number below actual deployment |
| Register of workmen, Form XIII | Contractor | Central Rules, 1971, r. 75 | Does not reconcile with the gate register |
| Muster roll, Form XVI | Contractor | Central Rules, 1971, r. 78 | Attendance marked in advance for the month |
| Wage register, Form XVII, with wage slips | Contractor | Central Rules, 1971, r. 79 | Rate below the notified minimum for the skill category |
| EPF and ESI challans, last twelve months | Principal employer and contractor | EPF Act, 1952; ESI Act, 1948 | Contractor's challans not collected before releasing payment |
| Notice of periods of work and weekly holiday | Principal employer | Delhi S&E Act, 1954, s. 33 | Not displayed, or displaying superseded timings |
| Minimum wages notification, current | Principal employer | Minimum Wages Act, 1948, s. 5 | Superseded VDA rates left on the notice board |
| Internal Committee order and POSH policy | Principal employer | POSH Act, 2013, ss. 4 and 19 | No external member; policy not displayed |
| Annual return, Form XXV, with acknowledgement | Principal employer | Central Rules, 1971, r. 82(2) | Filed without acknowledgement retained |
| Visit book | Principal employer | Departmental practice | Entries unphotographed and later disputed |
Answering a show-cause notice
A show-cause notice is an opportunity, and it is time-bound. The reply should be filed within the period stated, or an extension sought in writing before that period expires. Silence is treated as an admission in substance even where it is not one in law.
The reply itself should be narrow. Address each allegation in the order in which it is put, state the factual position, annex the document that establishes it, and where a default is admitted, say so plainly and set out what has been done to cure it. A reply that argues jurisdiction at length while leaving the underlying register discrepancy unexplained rarely improves the employer's position.
Cure before the hearing where cure is possible. A licence renewed, a register reconstructed from primary attendance data, arrears of wages actually paid with proof of payment — each of these changes the character of the proceeding. Cure after an order is passed changes very little.
Representation and what follows
We attend inspections with the client rather than sending papers ahead. A field consultant who has read the file can answer a question about a Form XIII entry at the counter, which is generally the difference between a query closed on the day and a query recorded for later.
Where a matter proceeds beyond reply — a determination under Section 7A of the EPF Act, damages under Section 14B, a prosecution under Section 23 or 24 of the CLRA, or proceedings under Section 92 of the Factories Act — the file passes to counsel, and our role becomes the preparation of the record. We say this plainly because employers sometimes expect a compliance adviser to conduct a criminal trial. We do not.
Limitation and delay
Do not assume that delay by the department is a defence. Periods of limitation differ across these enactments and several have none for the initiation of assessment. An unanswered notice from 2023 remains a live file.
References: Delhi Shops and Establishments Act, 1954 (ss. 28, 33 and 40); Contract Labour (Regulation and Abolition) Act, 1970 (ss. 23, 24 and 28); Factories Act, 1948 (ss. 8 and 92); Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (ss. 7A, 13 and 14B); Employees' State Insurance Act, 1948 (ss. 45 and 85).
If a notice is on your desk with a return date, that date is the constraint.
Send the notice, the registration and licence set, and the last two years of returns. We will tell you what can be cured before the hearing and what must simply be answered.