Sep 30, 2022

Work From Home Allowed in Special Economic Zones

The Ministry of Commerce and Industry (‘Ministry’) has, by Notification dated July 14, 2022, amended the Special Economic Zone Rules, 2006 (‘SEZ Rules’) issued under the Special Economic Zones Act, 2005 (‘SEZ Act’) to include a new Rule 43A on ‘Work from Home’ (‘WFH’). The amendment seeks to put in place a policy permitting WFH uniformly across all Special Economic Zones. This new rule has come about as a recognition of the WFH arrangements which gained increased relevance since the beginning of the pandemic. As per this Rule, a Unit, as defined under the SEZ Act, may permit up to a maximum of 50% of its total employees, including contractual employees to WFH or from any place outside the SEZ. As per the amendment, a Development Commissioner may permit a higher number of employees to WFH for any bona-fide reason, to be recorded in writing. There is no clarity as yet though, as to what would be recognized as a “bona fide” reason. The new Rule covers the following employees:

  • employees of the Information Technology and Information Technology Enabled Services Special Economic Zone units;
  • employees, who are temporarily incapacitated;
  • employees, who are travelling; and
  • employees, who work offsite.

To avail the exemption, the Unit is required to submit its proposal to allow employees to WFH as per the standard operating procedure (dated August 12, 2022), to the Development Commissioner. The proposal must be submitted in advance and contain the terms and conditions of WFH, including the date from which the permission to WFH is requested and the details of the employees proposed to be covered under such permission. The approval will be valid for a period of one year from the date of such consent, subject to an extension not exceeding one year at a time.




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