Indian labour law is subject to constant change. If you employ or are considering hiring employees in India, it is important to have good information about the latest developments in this area. We are happy to give you an insight into Indian labour law.
Indian Labour Law
In India, the federal and state governments both have the power to legislate on employment and labour relations. In many Indian states there is a Shops and Establishments Act, in which the local government has enacted its own specific laws or amendments to the federal rules. The national rules therefore apply differently in these states. To comply with these rules is difficult for foreign companies.
A unique feature of Indian law is that there are different rules for different categories of industries and employees. Indian labour law divides the “industry” into two main categories, namely factories (production units) and enterprises (nonproduction units). The bifurcation of workers is done into 2 major categories: workers and non-workers. A worker is a person who performs manual, unskilled, skilled, technical, operational or administrative work.
The applicability of the various laws and the protection provided may therefore vary from case to case. Employers should also consider the number of employees they employ in India. This is because many laws apply on the number of employees working for a company. Laws that regulate employment relationships prescribe minimum employment conditions, such as working hours, wages, entitlement to leave, notice and termination rights, health and safety standards, and so on. Employers must provide employees with the minimum rights required by law. It is a recommendation to include all important terms and conditions of employment in the employment contract.
Employment Documentation Is Customization In India
It is crucial for Dutch companies to have labour documentation that is suitable for the intended purpose. There is often a tendency to opt for consistency. Therefore, templates that have already been used in other countries are usually copied. As a result, companies may run the risk of not fully complying with Indian legislation. A thorough review of contractual labour documentation, including company policies and manuals is required. It is done through an Indian lawyer is highly recommended in order to comply with Indian labour laws.
The three labour laws of 2020
Since 2014, the Indian government is trying to bring more structure to Indian labour regulations. They have done it by reducing the 44 federal laws to four overarching codes. After years of resistance by the opposition parties, three new codes were brought into effect in September 2020. They are; The Industrial Relations Code, The Social Security Code and The Code on Occupational Safety, Health and Working Conditions. The aim of the codes is to simplify the country’s outdated labour laws. The codes will help to boost economic activity without endangering workers’ rights.
The Industrial Relations Code
This code makes it easier for companies to hire and fire employees. Whereas previously companies with more than 100 employees had to seek permission from the state government where the company was located to hire and dismiss employees, the new code exempts companies with up to 300 employees from this obligation.
In addition, companies with less than 300 employees no longer need to have a so-called standing order. These are the detailed rules of conduct for workers working in industrial plants, such as on entering and leaving the site, working hours, wages, shift schedules, leave and attendance, misconduct provisions, etc. However, industrial companies with more than 20 employees will be required under the new code. They will need to have one or more complaints committees to settle disputes arising from employee complaints. They also have to set up a fund for employee retraining.
The Social Security Code
With this code, the Indian government responds to the rapid development of the ‘gig economy’. The ‘disorganized sector’, which consists of migrant workers, freelancers and ‘gig workers’, can now also fall back on the social security systems. Gig workers are employees carry out short assignments. They do so through online platforms, such as deliverers working for companies such as Zomato and Swiggy or cab drivers having connection through Ola and Uber.
From now on, these types of companies have to set aside one to two percent of their annual turnover and put it into a social security fund for their employees. The management of this fund will be done by the government. In addition, there is reduction in the period from five to one years for an employee who has worked before he or she can claim benefits.
The Code On Occupational Safety, Health And Working Conditions
This code focuses on the working conditions of the employees and imposes rules on working hours, leave, etc. It gives employers the flexibility to hire employees for a fixed period of time. It was difficult to achieve before, but also stipulates that temporary employees have the same right to social security. And must earn the same salary as their colleagues on permanent contracts. No employee may work more than 8 hours per day or more than 6 days per week in an establishment. In case of overtime, an employee must receive double his or her salary. The code also brings more equality for migrant workers, transgenders and women.
Protection Of Women
Preventing sexual harassment in India must be part of the health and safety policy. Its implementation must be done that is implemented in companies, including preventive and, if necessary, repressive measures. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Act 2013”) provides the necessary direction in dealing with such issues. Under this Act, employers are required, in the event of a complaint, to establish an independent complaints committee at every office or branch of an organization with ten or more employees. If an employer fails to establish an internal complaints committee or violates the law, the employer may be fined INR 50,000, approximately EUR 600. A repetition of the offence is punishable by doubling the fine, writing off the entity or cancelling the legal business licences of the entity.
In addition, most federal laws restrict women from working at night for safety reasons. If women still want to work at night, specific approval must be obtained from the relevant government authority. The employer must also offer door-to-door transportation and meet a number of safety-related requirements.
Privacy and data protection in India
The concept of privacy and data protection is in an emerging phase in India, especially when compared to the abundance of rules and legislation in Western countries. In India, companies holding sensitive personal data or information must implement and enforce reasonable security practices and procedures under the Information Technology Act 2000. Before collection of data, its storage or transfer, express consent of employees must also be taken in accordance with applicable regulations.
How Do You Set Up A Proper Health And Safety Policy For Your Indian Affiliate?
Employees law focus on employee protection in India. . It is therefore wise to seek legal advice before drawing up employment contracts and terms of employment. It is also advisable to seek practical advice on best practices and common practices so that the labour policy within your Indian branch is not only legally compliant, but also hr-friendly. Many foreign companies in India are struggling with high staff turnover. With Appropriate salary you can prevent it. Also providing good working conditions in accordance with Indian regulations. Do you have doubts about your policy or are you not sure whether you comply with the Indian regulations? Our local legal and HR specialists are always up to date with the latest developments. We will be happy to help you find the right solutions for your specific problem. Contact us here!