Labour Law Audit--Effective Tool for Compliance of Labour Laws

Pragya Bhandari

The main thrust of the labour law audit is to ensure efficient and effective implementation of labour laws in India. This article attempts to delineate the need, scope, benefits and procedure of labour law audit.

1. Introduction

Now a days audit has become indispensable part of the company form of business due to a marked increase in the number and size of frauds and malpractices. In general sense, auditing is the independent examination of the books, accounts, vouchers or other documents relating to financial statements of a company, so as to express an opinion as to the true and fair nature of the financial statements of the company. Many entities do not prefer audit unless there is mandatory requirement to do so under the laws. However, larger entities prefer audit to minimise non-compliance as well as to avoid disputes in future.

In India, non-compliance of labour legislations is extremely at large. Many employers try to avoid the compliance of labour legislations, which attract huge penalties. Thus, audit under labour laws has become necessary.